After being extended multiple times, Germany’s ban on arms exports to Saudi Arabia will be up for debate.
A G20 gathering is usually a chance for the host nation to promote itself in the best possible light. But the leaders’ summit taking place this weekend is happening under the pall of a pandemic.
Due to COVID-19, the summit will be held virtually, depriving its host, Saudi Arabia, of the opportunity to blanket screens around the world with orchestrated scenes of a forward-looking kingdom in the throes of an exciting transformation – an image its de facto leader, Crown Prince Mohammed bin Salman (MBS) has long sought to project.
Like most rebranding efforts, Saudi Arabia’s is driven in large part by economic necessity.
As the world gets better at limiting greenhouse gas emissions, fossil fuels will fall out of favour – bad news when more than 80 percent of your government revenues come from selling crude oil.
The kingdom needs to diversify its economy and it does not have long to do it. The ticking clock is reflected in the name of MBS’s ambitious plan for economic transformation: Vision 2030.
The blueprint entails weaning Saudi Arabia off oil by reinvesting crude profits into sustainable industries of the future to create jobs for its youthful population.
Some long-overdue reforms, such as letting women drive, were made with that metamorphosis in mind. Saudi Arabia needs its citizens to get jobs and contribute to the nation’s output of goods and services. It is easier to get to work on time if you can drive your own car.
But reorienting the Saudi economy is no mean feat. Trying to fundamentally remake any economy in a decade is a massive undertaking. Those that derive most of their income from a single commodity – like oil – have a lousy track record at it, because the outsized influence of that natural resource salts the earth where other productive industries – like manufacturing and high tech – could take root.
That has certainly been the case in Saudi Arabia. MBS is trying to change that, and a big part of his plan pivots on convincing foreigners to invest in his vision.
Attracting foreign investors has been made more difficult by the pandemic. But even before COVID-19 gutted global crude demand and knocked economies sideways, Saudi’s reformist image had already been indelibly tarred by MBS himself.
The infamous milestones on the Crown Prince’s march to consolidate power read like a rap sheet:
Of course, the last item on the list, the brutal murder and dismemberment of Washington Post columnist Jamal Khashoggi – that US intelligence concluded was ordered by MBS – has been the most damaging to the Crown Prince’s reputation.
World leaders who had embraced MBS and turned a blind eye to starving children in Yemen in the hopes that he would transform the kingdom for the better were suddenly not interested in photo opportunities with “Mr Bone Saw”.
Now, the leaders of the world’s 20 largest economies are poised to stand square-by-square with him in zoom calls – hardly the class photo Riyadh had likely envisioned when Saudi assumed the G20 presidency last December.
Since that time, activists have urged other G20 leaders to hold Riyadh accountable for its abysmal human rights record – calls that have grown louder as the summit has neared.
Human Rights Watch launched a social media campaign #G20SaudiArabia.
“Instead of signaling its concern for Saudi Arabia’s serious abuses, the G20 is bolstering the Saudi government’s well-funded publicity efforts to portray the country as ‘reforming’ despite a significant increase in repression since 2017,” said HRW’s deputy Middle East director in a blog post.
Amnesty International, meanwhile, is drawing attention to the kingdom’s hypocrisy on women’s rights.
“Women’s empowerment features prominently on Saudi Arabia’s G20 Agenda, despite the fact the activists who spearheaded campaigns for women’s rights are languishing in jail or facing trial,” said an Amnesty blog post.
Upholding human rights is not only about doing what is right morally. Studies have shown a strong correlation between human rights abuses and reduced economic growth. And if there is one thing Saudi Arabia and the world cannot afford right now, it is a further reduction in economic output.
Last month, the International Monetary Fund revised its forecast for global growth to negative 4.4 percent – less severe than its previous call for a 5.2 percent contraction, but still the sharpest plunge since the Great Depression.
The Saudis – like other countries that depend heavily on energy revenues to stuff state coffers – are facing a serious budget crunch from the double-whammy of COVID restrictions and the hit to oil demand (not to mention an oil price war launched by Riyadh which triggered an overnight price crash earlier this year).
To shore up its budget, the kingdom has slashed spending on Vision 2030 projects and introduced austerity measures including some subsidy cuts and a tripling of VAT.
It has also sold bonds, both sovereign and corporate. This week, state-controlled oil giant Aramco sold $8bn worth of bonds to fund some $75bn in dividends it has committed to pay shareholders this year- the lion’s share of those go to the Saudi government.
This year’s summit promises to be dominated by the human and economic toll COVID-19 has taken, and the pressing need to redress inequalities both within and between nations that exacerbated the virus’s spread and are worsening as economies recover.
Solving these problems will require meaningful dialogue between G20 leaders when they meet, which does not bode well for official rebukes over human rights violations.
That is not to say Saudi Arabia won’t pay a price down the road for MBS’s behaviour. The country does not have all the time in the world to transform its economy – especially when the world is watching it so closely.