Passing The Mantle

BMI View: Recent leadership changes at the top echelons of government in Saudi Arabia suggest that the reins of power are increasingly shifting towards a younger generation. However, the February 1 appointment of 69-year old Prince Muqrin bin Abdulaziz as second deputy prime minister - a position that has traditionally made the incumbent second in line to the throne, but does not guarantee his ascension - is unlikely to fully resolve the issue of succession.

Saudi Arabia has seen major changes at the top ranks of its leadership over recent months, amidst continuing concerns over the issue of succession to 89-year old King Abdullah bin Abdulaziz al Saud. On February 1, former intelligence chief Prince Muqrin bin Abdulaziz was appointed as second deputy prime minister, a position that has traditionally made the incumbent second in line to the throne (behind the current heir, Prince Salman bin Abdulaziz ). The 69 year-old Prince Muqrin is the youngest surviving son of the country's founder, Abdulaziz Ibn Saud, and the half-brother of the current ruler. In that sense, his appointment can be seen as a relatively conservative move - broadly promulgating the principle, contained in the Basic Law of 1992, that the country should be ruled by a son or direct male descendant of the first king .

However, other leadership changes in Saudi Arabia suggest that the reins of power are increasingly shifting towards a younger generation, consisting of the grandsons of the founder. In November 2012, Prince Mohammed bin Nayef bin Abdulaziz was appointed as Minister of Interior - replacing his uncle, 71-year old Prince Ahmed bin Abdulaziz, who had himself inherited the post five months earlier. On January 14, 63-year old Prince Muhammad bin Fahd, who had been governor of the oil-rich Eastern Province since 1985, was replaced by Prince Saud bin Nayef bin Abdulaziz, Mohammed bin Nayef's brother.

We regard both of these appointments as significant, given the relative youth of the newcomers - both are in their 50s -, and the importance of their positions. The Ministry of Interior holds effective control over all domestic police and security forces (short of the praetorian National Guard), while the Eastern Province is home to the greatest part of Saudi Arabia's oil production. Furthermore, these are but the latest in a series of reshuffles in senior leadership roles over the last few years, which have seen members of the next generation of royals assume greater prominence in the kingdom (see table below). Sons of King Abdullah were appointed as Commander of the Saudi National Guard and Deputy Foreign Minister in 2010 and 2011, respectively. At a mere 42, the new governor of Medina, appointed on the same day as Prince Saud, is a sapling amongst Saudi royals.

Position and Date of Replacement Newcomer (Age) Previous Incumbent (Age)
Source: BMI
Second Deputy Prime Minister (February 2013) Prince Muqrin bin Abdulaziz (69) -
Governor of the Eastern Province (January 2013) Prince Saud bin Nayef bin Abdulaziz (56-57) Prince Muhammad bin Fahd (63)
Governor of Medina (January 2013) Faisal bin Salman bin Abdul Aziz (42) Abdulaziz bin Majid
Minister of Interior (November 2012) Prince Mohammed bin Nayef bin Abdulaziz (53-54) Prince Ahmed bin Abdulaziz (71)
National Security Council Chief (July 2012) Prince Bandar bin Sultan (63) Prince Muqrin bin Abdulaziz (69)
Crown Prince (June 2012) Salman bin Abdulaziz (77) Nayef bin Abdulaziz (died June 2012)
Head of Religious Police (January 2012) Sheikh Abdul Latif Abdulaziz Al-Sheikh Sheikh Abdulaziz al-Humain
Deputy Foreign Affairs Minister (July 2011) Abdulaziz bin Abdullah (49-50) -
Commander of the Saudi National Guard (November 2010) Prince Mutaib bin Abdullah (60-61) King Abdullah bin Abdulaziz (89)

Over the last few years, growing concerns have emerged over the issue of succession , which have had an impact on business sentiment . Rumours of King Abdullah's clinical death in November 2012 intensified a downtrend in Saudi Arabia's Tadawul All Share Index, which briefly dropped to a 10-month low. Prince Salman, aged 77, is widely reported to be in ill health, while his two immediate predecessors as Crown Prince - Prince Sultan bin Abdulaziz and Prince Nayef bin Abdulaziz - both passed away in less than a year's interval. The Saudi royal family has thousands of members and is divided into several different familial branches. While the Sudairi Seven (the seven sons of the king's favourite wife) have traditionally been the most influential, their number has dwindled to four in recent years. At 77, their average age is increasingly raising questions about political stability in the context of succession .

Prince Position Age/Date of Death
Source: BMI
Fahd bin Abdulaziz Al Saud Former King Died August 2005
Sultan bin Abdulaziz Al Saud Former Crown Prince Died October 2011
Abdul-Rahman bin Abdulaziz Al Saud Former Deputy Defence Minister Age 81
Nayef bin Abdulaziz Al Saud Former Crown Prince Died June 2012
Turki (II) bin Abdulaziz Al Saud Former Governor of Riyadh Age 80
Salman bin Abdulaziz Al Saud Crown Prince and Minister of Defence Age 77
Ahmed bin Abdulaziz Al Saud Former Minister of Interior Age 71

The shifting of power to the third generation of the ruling branch of the royal family is therefore largely driven by necessity, given the dwindling pool of direct descendents to Ibn Saud. It is also likely aimed at consolidating King Abdullah's political and social reforms, while improving efficiency and the speed of decision-making within the regime. The king has undertaken an array of incremental reforms over the last few years, which have proven unpopular amongst conservative elements in both the royal family and the powerful religious establishment. The replacement of the head of the religious police (the mutaween ) in January 2012 has led to a clampdown on the force's powers, with several functions handed to other state bodies. A royal decree on January 11 appointed women to the consultative Shura Council for the first time, granting them a fifth of the seats. Concurrently, the reshuffles at the Interior Ministry and National Security Council can be seen as attempts to improve intelligence capabilities at a time of intensifying domestic and external challenges, particularly given the persistent ill-health of Prince Saud al-Faisal, the world's longest-serving foreign minister (see our online service, September 14 2012, 'Rising Domestic and External Challenges') . One of King Abdullah's sons was appointed at Deputy Foreign Affairs Minister in 2011.

The appointment of Prince Muqrin as second deputy is unlikely to fully resolve the issue of succession. Indeed, given that the post does not formally guarantee his ascension, the regime has effectively delayed the decision about which branch of the royal family will be put on the throne. In theory, this should give the next generation time to become proficient in their portfolios, while ensuring a safe pair of hands in charge of day-to-day government affairs. Furthermore, any major changes to economic policy are in our view unlikely - with the regime likely to favour a broad continuity in economic affairs.

Nevertheless, the longer-term succession risks remain elevated, given the perpetual risk of infighting between rival family branches, and the lack of formal mechanisms to smoothen sudden changes. To be sure, the regime has attempted to formalise the process of appointing the Crown Prince, establishing in 2006 an Allegiance Council made up of senior family members to approve the king's nominated heir. However, whist the process was successfully tested following the death of Prince Sultan in 2011, the council was not called together following the appointment of Prince Salman in July 2012 - while Muqrin's appointment was made through royal decree.

Source: BMI
System of Government Absolute Monarchy headed by the House of Saud (Sunni).
Allegiance Institution - committee of princes created in 2006 to vote for one of three princes nominated by the king to succeed him.
Council of Ministers - 20 ministers, two ministers of state, and a small number of advisers and heads of major, autonomous organisations. Appointed by and responsible to the king. Advises on the formulation of general policy and directs government activities.
Municipal councils - 178 municipalities, half of the members elected by male and female citizens over 21, other half appointed by the king.
Consultative Assembly - ( Majlis al-Shura) 150 members appointed by the king for four-year terms, advisory powers only. Women are to hold at least one fifth of the seats, following a January 2013 royal decree.
Head of State King Abdullah bin Abdulaziz Al Saud
Head of Government King Abdullah bin Abdulaziz Al Saud
Last Election Municipal - 29 September 2011
Next Election Municipal - 2015
Key Figures King; Crown Prince - Salman bin Abdulaziz Al Saud; Second Deputy Prime Minister - Prince Muqrin bin Abdulaziz Al Saud; Minister of Finance - Dr Ibrahim bin Abdulaziz bin Abdullah al-Assaf; Minister of Foreign Affairs - HRH Prince Saud al-Faisal bin Abdulaziz Al Saud; Minister of the Interior - Prince Mohammed bin Nayef bin Abdulaziz; President of the Consultative Assembly - Saleh bin Abdullah bin Humaid; Royal Court Chief of Staff - Khalid al-Tuwaijri
Ongoing Disputes Israel (economic boycott), Regional border disputes - UAE, Qatar, Yemen, Kuwait (ownership of Qaruh and Umm al Maradim islands)
Key Relations/ Treaties GCC, UN, OPEC, Organisation of the Islamic Conference and Islamic Development Bank (both located in Jeddah), Pakistan & China (close economic ties), Iran and Iraq (limited diplomatic ties), US-ally
BMI Short-Term Political Risk Rating 76.9
BMI Structural Political Risk Rating 57.0
This article is tagged to:
Sector: Country Risk
Geography: Saudi Arabia, Saudi Arabia

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