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Page added on October 10, 2010

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The House of Saud: rulers of modern Saudi Arabia

The House of Saud: rulers of modern Saudi Arabia thumbnail

Crumbling mud-brick walls mark the ancestral fortress of the Saudi royal family in Diriyah, north-west of Riyadh. The opulent palaces of the offspring of King Abdul-Aziz bin Abdul-Rahman al-Saud, the founder of the modern kingdom, are dotted around this lush valley.

The contrast between the palaces testifies to the remarkable transformation brought about by the Al Saud family since Saudi Arabia’s birth in 1932. Named after an 18th-century ancestor, the Saudi royal family has crafted an absolute monarchy, ruled by consensus within the family and by its alliance with the clerics. Family members have selected the king from the many sons of Abdul-Aziz, according to seniority.

The current King Abdullah – who is also prime minister – succeeded his brother Fahd in 2005. His brother, Crown Prince Sultan, is deputy prime minister and minister of defence. Another brother, Prince Naif, is second deputy prime minister and minister of the interior. The chain proceeds down the line, with key posts held by the extended family.

King Abdul-Aziz is thought to have had roughly 70 children, with at least 16 sons still alive. They and their offspring form a core of about 200 princes who wield most of the power. But estimates of the total number of princes range anywhere from 7,000 upwards, with most receiving stipends from Saudi oil revenues. Their unchallenged power and lavish lifestyles have stoked criticism outside and inside the kingdom.

The history

King Abdul-Aziz bin Abdul-Rahman al-Saud (who was born in 1876 and died in 1953), led a band of zealous warriors who forged the modern kingdom, with the capture of his ancestral city of Riyadh from a rival family in 1902. The western Hijaz region was taken next, along with the holy cities of Mecca and Medina in 1925. His many – politically astute – marriages helped shape and control his vast kingdom, exploiting tribal loyalties that persist to this day.

But it was his close alliance with the US that helped him ward off threats towards the nascent state. He signed a concession agreement with Standard Oil of California (now Chevron) in 1935. Standard Oil later established a subsidiary in Saudi Arabia called the Arabian American Oil Company (Aramco), now fully owned by the Saudi government.

Abdul-Aziz was succeeded by his eldest son, Saud, in 1953, who reigned until he was ousted by his half-brother Faisal in 1964. King Faisal initiated numerous reforms in the kingdom, introducing universal education and television, that ultimately led to deadly protests by conservative elements. He was assassinated in 1975 by a disgruntled nephew, whose brother had been killed in those protests (the assassin was publicly beheaded in Riyadh’s central square).

King Khalid, who reigned between 1975 and 1982, deployed the country’s massive oil profits in a momentous building spree, while King Fahd (1982-2005), helped reverse Saddam Hussein’s invasion of Kuwait and opened his country to western troops.

King Abdullah, who ascended to the throne in 2005, is a popular monarch, widely seen as pushing for gradual social and legal reforms. Yet the current age of most senior figures in government raises questions about the future of the kingdom; King Abdullah is in his 80s, as is Crown Prince Sultan, who spent much of last year on medical leave.

One powerful clan within the royal family is the so-called “Sudairi seven”, brothers by the same mother. King Fahd was the oldest of this group, followed by Crown Prince Sultan, next in the line; his sons include Prince Bandar, formerly a prominent Saudi ambassador to the US.

The next most senior royal, and another member of the Sudairi clan, is Prince Naif, interior minister since 1975 and credited with leading the domestic fight against al-Qaeda. In 2009, Prince Naif was appointed as second deputy prime minister, positioning him de facto as third in the line of succession, although any actual appointment as such awaits a decision by the Allegiance Council, a group of the sons and grandsons of King Abdul-Aziz established by King Abdullah in 2006 to “safeguard” the succession.

The wealth

Saudi Arabia holds 20 per cent of the world’s proven oil reserves, and its oil exports, the world’s largest, prop up its $400bn economy.

Much of this wealth is concentrated in the royal family and the hands of a few other well-positioned families. The royals receive stipends of varying amounts, depending on their position in the bloodline of King Abdul-Aziz.

Nevertheless, King Abdullah has reined in the family’s access to public funds. He stopped summer vacation allowances and free phone services, and instructed the national airline to stop holding business-class seats for the royals, says an expert on the family.

Still, their most important sources of income are commissions on business deals and land grants deeded by various consecutive kings, which are either resold or rented to the government or to private investors, providing a considerable income for many princes.

The members of the royal family tend to keep a low profile with respect to their wealth, hiding it behind the walls of their palaces and majestic villas. Some of King Abdullah’s personal wealth, estimated by Forbes magazine at $19bn, has been lavished on new university endowments and similar public edifices.

Prince Al-Waleed bin Talal, the king’s nephew, is among the world’s most prominent investors; his Kingdom Holding Company owns stakes in Citigroup, News Corporation and numerous other enterprises. This year, Forbes calculated his personal worth at $19.4bn, the vast bulk of which was earned through his own enterprises.

Prince Bandar, the former ambassador to Washington, is reported to have put one of his mansions in Aspen, Colorado, up for sale for $135m (he also owns Glympton Park in Oxfordshire).

In spite of the king’s efforts, the lines between the state and personal wealth of senior princes have become blurred. In the past, some princes used to borrow from banks and neglect to repay the loans, causing financial problems for the banks and embarrassing other family members, according to a western expert who asked not to be identified. This led to the banks refusing to lend to them.

“The king and the state really are the same – asking how rich the king of Saudi Arabia is a bit like asking how rich parliament is in Britain,” says another expert. “In many respects, Abdullah is quite austere in his spending – and he has done a great deal to curb royal extravagance in recent years.”

What they say

“King Abdullah is the ruler. If he wills it, it will be done.’’ – Prince Talal, April 2009

What others say

“The government is pouring an increasing portion of its wealth into mega infrastructure projects to diversify the oil-dependent economy and ease unemployment pressures in one of the world’s fastest-growing populations.”’ – Roula Khalaf, Financial Times
FINANCIAL TIMES



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