Geopolitical Insight - The Business Impact
- analyticalinsight
- May 5, 2015
- 2 min read
Saudi Arabia - The Game of Thrones Continues
King Salman bin Abdulaziz Al Saud has reshuffled the Cabinet and promoted the Deputy Crown Prince to Crown Prince and inserted his son as Deputy Crown Prince. His half-brother, Prince Muqrin bin Abdel-Aziz al-Saud has been removed from the succession line.
Key Business Impacts
Business Continuity – The risks from political instability in Saudi Arabia are likely to DECREASE in the short to medium term as the newly appointed Crown Prince and Deputy Crown Prince seek to amass power within the government and gain internal and external support. Business Risk – Businesses with contracts affiliated with Princes, which have been removed from office or will likely be removed from office face a higher risk of cancellation. Business networks within the Kingdom may be affected by the recent cabinet change. Security – The security situation is unlikely to be affected by the recent political movement, however the situation in Saudi Arabia still remains unstable and the risk from terrorism remains HIGH, Travel Security – Saudi Arabia remains a HIGH risk travel destination due to the ongoing military action in Yemen and the increased threat from domestic and international terrorism.
Background
King Salman carried out a major cabinet reshuffle last week and removed the current Crown Prince from power. The King promoted the Deputy Crown Prince, Interior Minister Mohammed bin Nayef al-Saud to Crown Prince and promoted his son Prince Mohammed bin Salman to Deputy Crown Prince. The current King and late King Abdullah’s brother - Prince Muqrin bin Abdel-Aziz al-Saud – the former Crown Prince - has been removed from the cabinet.
Business Impact Consolidation of Sudairi Clan power – King Salman’s appointment of his son - Mohammed bin Salman - to Deputy Crown Prince and Mohammed bin Nayef al-Saud to Crown Prince increases the influence the Sudairi faction has within the house of Al Saud. This may affect businesses currently operating in Saudi Arabia who may have strong affiliation with other factions within the Al Saud family. It is important that businesses operating in the Kingdom understand the political alliance of their business. Medium Term political instability – Although this shuffle is likely to reduce political instability in the short term, the longer term outlook is less attractive. Once the two Princes have consolidated their power, it is likely that they will begin to fight for succession causing factions within the ruling family and political stalemate. Precedent for removal of Crown Princes – The removal of Prince Muqrin may set a precedent going forward for the future removal of appointed Crown Princes. Despite King Abdullah’s effort to ensure transparency within the succession line, the appointed Allegiance Council appears to hold little power over the King’s wishes. The removal of Crown Prince Muqrin may lead to political turmoil going forward, as a lack of transparency within the succession line will likely cause periods of political instability in the long term. Strategic business planners should consider the possibility of ongoing political instability during successions and regular changes to business influencers within Saudi Arabia.
Comments