The “New” Saudi Arabia!

The “New” Saudi Arabia
– By Syed Haider Raza Mehdi
(5 – 7 minute read)

Recently we saw an assertive Saudi Arabia slam Canada with a volley of diplomatic and economic punches which left Canada reeling and a trifle stunned.

They expelled the Canadian Ambassador, recalled their’s, ordered 15000 college and university students and 900 medical students and doctors to leave Canada by September.

They announced they won’t buy Canadian wheat and barley, and also stopped direct airline flights to Toronto.

But they stopped short of halting oil exports to Canada and cancelling a $15 Billion light armoured vehicles deal. Two actions which would have had far more serious economic impact on Saudi Arabia then the other actions they announced.

MBS may appear impetuous and reckless which he is, in my opinion, but he’s also pretty smart as well, when it comes to money!

The Saudis have demanded nothing short of a full and unqualified apology from Canada for “…..interfering in the internal affairs of Saudi Arabia….”

And all this because of an ill thought through tweet by the Canadian Foreign office on the arrest of Samar Badawi, sister of the already arrested and convicted Saudi Blogger and human rights activist, Raif Badawi.

The world’s silence was deafening!

The so-called human rights leaders, the crocodile and hypocritical tear shedding USA and UK, asked Canada to clean up their own mess.

Germany and Sweden, still smarting from Saudi knuckle raps in 2015 and 2017, offered no comment. The EU requested “more information” which really means “Sorry, Saudis, we have to do it for the sake of form, but kindly ignore”

Egypt, UAE and Pakistan announced support.

Pakistan’s stance perhaps the most surprising, indicating the emerging influence Saudi Arabia has again begun to exercise on us, which had considerably waned given our neutral positions on Syria, Iran and Yemen. They likely arm twisted and demanded this statement, in exchange for financial favors to follow.

Pakistan readily obliged given our dire economic condition and our desperation for financial help.

This position, will, in my view, come to haunt us tomorrow when we condemn human rights abuses in Indian held Kashmir or Assam or Myanmar or on Palestinians in Israeli occupied territories.

Smugly, I can then foresee India and Israel turning around and telling us to shut up and “stop interfering in the internal affairs of other countries”.

Whatever our compulsions and whoever the architect, this was a stupid and ill thought through decision!

The three calls from King Salman and Crown Prince MBS to PM elect Imran Khan, and the invitation to visit Saudi Arabia, all within the space of a week are also unprecedented!

But this piece isn’t about the Canadian Saudi dispute but more trying to understand what’s happening in the Kingdom!

So what’s going on in Saudi Arabia?

Kamran Bokhari, Vice President at Center for Global Policy, a Washington-based research and policy think tank and author of Political Islam in the age of Democratization, believes that since MBS’s taking over as Crown Prince in 2017, and effectively the reins of Saudi Arabia, a massive sea change has taken place in their internal traditional power structures and their foreign policy.

For example the 90-year-old symbiotic and close relationship between the Saudi State and the Religious Clergy has ended.

He believes that the power and influence of the ultra conservative Wahabi Clergy was highly overrated to begin with, and today, MBS has easily managed to defang them by either buying them off, browbeating them into submission and in some cases putting the very few who didn’t toe his line, behind bars.

There’s also a common view amongst young Saudis, that MBS is as much a conservative Wahabi or traditional Muslim as is Netanyahu, the Israeli PM, an Iranian Shia!

MBS’s secular outlook is driving his desire to purge Saudi society of its centuries old baggage of religious conservatism and obscurantism and open it to modernization.

But, and here is where the problem lies, at the same time, he wants total and unquestionable power and autocratic control and absolutely no political dissent.

This approach of modernization and religious secularism endears him to a large segment of the 60% Saudi youth of both genders, his main constituency. Hence the widely welcomed curbs on the activities of the religious police, the limitations and restrictions on issuing religious Fatwas and the permission to women to drive cars.

But to retain total power, he realizes that the traditional power sharing structure with other members of the Royal family and power centers in the country would always pose an existential danger to his authority and writ!

Hence in one extremely risky but daring move, he imprisoned thousands of the very rich and powerful from within and without the Royal circle for several weeks, and defanged them by taking away their most lethal weapons, their wealth and their positions in government.

He must have surmised that as long they had wealth and political power, the Royals and other powerful people would continue to be a threat. By taking away their wealth and political clout, he believes he’s neutralized or minimised this threat.

Externally, he’s cleverly allied himself to Trump’s America and Netanyahu’s Israel to forestall any serious external pressures and threats.

This alignment gave him the space to play havoc with hapless Yemen, launch a political and economic boycott of Qatar, kick Canada in the shins, and assert Saudi Arabia’s new-found independance of no longer being a USA appendage, but an emerging regional power and partner.

A partner which, he thinks, will look after US interests and by proxy, Israel interests, as a regional policeman, especially in the context of Iran, Syria, Iraq and perhaps even Afghanistan.

The above makes sense to him, as the USA attempts to exit from very expensive operations in the Region, such as in Afghanistan, a $45 Billion hole. MBS believes this is the time to assert Saudi credentials as a regional power. The last more significant now given the serious disputes between Turkey and USA.

Easier said then done!

So who is MBS? This is how I read him!

He’s first and foremost a complete autocrat, wanting total and absolute power like a Kim Jong un of North Korea.

He’s secondly a Saudi, wanting to modernize the country but in his own way and style, much like the opening up of China by the Chinese Communist leadership and harshly stamping out any dissent by activists like Rauf and Samar Badawi, who can potentially snowball a tiny movement into a major political reform movement in which he is not a player!

Third, he’s an ambitious Arab nationalist, wanting to dominate the Region vying against Iranian or Turkish or even Pakistani, domination and influence.

And last and definitely the least, he’s a secular, indifferent Muslim who doesn’t really care a flying frog about religion or Muslim Unity or the so-called mirage of the Ummah, a daily dream of many simple Pakistanis!

So the big question is?

Will he succeed in his objectives in modernizing Saudi Arabia, becoming a dominant regional player and simultaneously retaining absolute and total control of the country?

I think he will partially succeed in opening up the country to modernization but not at the pace and manner he would want. A genie or movement once let loose no longer listens to its master and takes a life of their own. I don’t think he will be able to manage or control this “guided modernization”!

On becoming the Regional Policeman, the environment is even harsher!

His support from a more inward looking USA will no longer be a long-term guarantee. And may become even more questionable if Trump doesn’t win a second term.

The Turkish-USA divide, while seemingly an opportunity for MBS’s ambitions will create more instability as the battle heats up and as the big boys, Russia and China also step into the fray.

A post USA withdrawal Afghanistan conjures up several nightmare scenarios of the Warlordism of the 90’s or even Balkanization of the country but most likely the collapse of the Ghani government.

In any of these scenarious, Saudi Arabia has much less influence in Afghanistan then say, Pakistan and their arch-enemy, Iran.

So pretty much, no dice here.

And as we are seeing they will not be able to exercise any influence over an increasingly assertive Assad ruled Syria, now silently supported by the US, fearing a return of the Daesh phenomenon and their alliance with the Kurds, as well as a much more stable Iraq.

And finally closer to home in Pakistan.

Here we have a PM elect like Imran who unlike Nawaz, owes no personal loyalty or obligation to them, has no financial interests at stake in the Kingdom, and importantly has publicly stated to take a neutral policy in inter regional disputes and act as a mediator!

Given all this and their extremely limited military clout, despite their modern weaponry but poor training and small size, I don’t think his dream of being a regional Arab power will come true.

But he may get some short-term traction as he continues to exercise his economic clout, and for want of a better word, economic blackmail as used against Qatar and Canada, and silently against the Europeans and now becoming more visible in our case as well.

This clout becomes more potent given the recently imposed US sanctions on Iran and US tariffs on Turkey!

Internally, he will continue his path to modernization, which is quite the Catch-22 for him!

The more he modernizes Saudi society and “we are open for business” the stronger will be the demand by people for even more reform and more rights, especially given the large number of Saudis educated in Western Universities and the vibrant and extensive use of social media, especially Twitter in the Kingdom.

This will, in my opinion, set in motion harsher repressive measures by him to stamp out such activism and here is where I fear, the proverbial tipping point will happen.

Either towards a much more open society or leading towards an internal implosion.

If the former than its great for everybody, except MBS, unless he morphs his role into a Constitutional Monarchy. This seems unlikely given his style and character and autocratism!

The latter is a very real possibility given the presence of a large number of highly militant elements of the DAESH ilk stepping in and taking advantage of the chaos.

This, in my opinion, will be a far more serious nightmare scenario than any we have seen unfolding in the Middle East, thus far!

Young MBS must remember that controlled change or controlled chaos, has never succeeded! He will become a victim of his own change! And there’s no turning back now, as he rides the Saudi Tiger!

And Pakistan?

While we must retain our close ties and relations with the Saudi state, we must closely and privately work with MBS to ensure he takes measures which don’t implode Saudi society, resulting in its horrifying consequences for the Region and Pakistan.

We must caution and advise him against any further foolhardy military adventurism in the region, or exacerbate existing ones. More importantly, urge him to pull back and stop where they are involved, such as Yemen. It’s here where we can play a very effective mediation role!

We must not take or be seen taking sides and or partisan positions in regional disputes or get drawn into major military arrangements with Saudi Arabia or any other country in exchange for money.

And it will truly be a crowning glory for Pakistan if we can bring Iran and Saudi Arabia closer and to the negotiating table!

As the current Army Chief, General Bajwa stated in a conference in Germany in February 2018, with reference to regional conflicts:

“……… the Frankenstein was actually created by the liberal free world, with willing, but myopic cooperation from our side after the Soviet invasion of Afghanistan in 1979…..”

Let not any myopic policies be adopted today!

Imran and Pakistan have to walk a very tight rope with great care, keeping our long-term national interests, paramount!

The three calls from the King and the Crown Prince and those from the Iranian President must be seen in this context as well !

Pakistan must not punch above its weight, but work for peace all around, including with India!

More later, on options with India!

Salaams and Prayers
Haider Mehdi

“Jashn e Azadi Mubarak”

By Syed Haider Raza Mehd

As we celebrate our 71st Independance day with a feeling of much greater hope and renewed vigour as a new administration takes over under Imran’s leadership, here’s something from 14th August, 1944, three years before Independance to the day.

On 14th August 1944, 3 years before Pakistan, a young, passionate supporter of Pakistan, then 23 year old, Lt. S.G. Mehdi (our father) of 1/15 Punjab Regiment, writes to our great Quaid e Azam on his Regiment’s letterhead, completely unafraid of the disciplinary consequences of writing openly to a political leader in British India.

The letter is in Urdu but even today quickens the pulse and the heart as we experience young Mehdi’s raw emotion as he bares his heart out to the Quaid praying for the establishment of Pakistan.

The Quaid’s reply, in English, dated 24 August 1944, is also attached. The Quaid’s reply was rare, according to late Khalid Shamsul Hassan saheb, son of late Shamsul Hassan the Quaid’s Private Secretary, because of the emotional overtones expressed by the Quaid, something he was not known for.

Such was this great hope, emotions and expectations about Pakistan in those days and such is our hope and expectations as we restart our journey.

As Imran said “Inshallah this country will rise and one day fulfil its great potentiai. I see great times ahead”.

I have often wondered how our father felt when he wrote those words, 74 years ago in 1944, as a young 23 year old, filled with hopes for Pakistan!

I think I do now. At 2:40 am on Monday, 13th August (also our 37th wedding anniversary as well), I sat in front of the TV in Toronto, Canada, watching history unfolding and seeing Imran and his team sitting on the treasury benches in the National Assembly!

It was the culmination of the first part of Imran’s dream, a dream which people thought was near impossible and delusional, to finally get to a position to lead this great Nation to great heights!

I don’t think he ever had doubts about his destiny! And if he did, he certainly didn’t show them!

But, I also thought about how my generation had failed Pakistan, Quaid e Azam, Allama Iqbal and the hopes and dreams of all those who sacrificed so much for this country. I’m ashamed to admit that most from my generation including myself, who could have done so much more for our country, lead extremely selfish and self centered lives!

But miraculously, it seems, Imran, from our generation may just redeem us.

His unbelievable and superhuman strength of character, faith, discipline, persistence and committment has brought him to this place. I have no doubts that Allah SWT has Blessed him to lead this nation to good fortune!.

I know he will not fail Allah SWT’s Trust. Nor will he fail his own conscience. And Insha Allah will not fail this Nation, especially its poor and exploited!

It will not be easy, but if there’s anyone who can do it, its this man with the Blessings of the Almighty. Ilahi Aameen.

Its a time to rally around Imran, putting our political differences aside and help rebuild this country. If he falls, help him up. Not keep him down. If he errs, correct him, not let him go astray.

This is not a match in which one side wins or loses. Either both win or both lose. We have been given a God Given chance to change this country, save it from the loot, plunder, rape, pillage and corruption and take it to great heights!

May Allah SWT Bless Imran and his team and all those working for a Better and Brighter Pakistan. Ilahi Aameen!

May Allah SWT Bless Pakistan and the people of Pakistan. Ilahi Aameen!

Pakistan Zindabad!

Salaams and Prayers
Haider Mehdi

Judicial and Institutional Witchunt! A short note!

*Judicial and Institutional Witchunt! A short note!

*By Syed Haider Raza Mehdi*

In recent months we have seen a plethora of actions by the Superior Judiciary and NAB in taking cognizance of an offence, conducting inquiries and investigation, conducting prosecution and convicting people.

NAB has all these powers vested in one person, the NAB Chairman.

While we have seen laudable and necessary actions both by the Supreme Court and NAB, it has also created an environment of fear, intimidation and helplessness amongst those who are clean, honest and competent, both in the public and private sectors!

Many such people have had their reputations torn to shreds, insulted and humiliated by institutions and their leaders because of unbridled power and authority vested in one person.

The old adage about power corrupts and absolute power corrupts absolutely is very relevant in this context.

Information is deliberately leaked to the media and the media trial commences at the very early stages of taking cognizance of a potential crime, even before basic fact finding and inquiries commence. Forget formal investigation, prosecution and conviction.

With the advent of the new administration in Pakistan, it is imperative that the NAB law is totally reviewed to ensure that while the guilty are speedily brought to justice, the innocent are not destroyed!

Pakistan today desperately needs top professional talent from the private sector who are honest and competent to become an active part of the new administration.

But such is the fear of being hauled up and made to stand like errant schoochildren or common criminals, that many will baulk at taking up critical roles in government!

And even more importantly, honest and competent public servants will not work without fear or favor! Everyone will play safe, not take required decisions and only cover their posteriors!

No organization or institution should have unlimited, unbridled power and authority to play havoc.

In the hands of incompetent or even competent people such absolute power will corrupt anyone, absolutely! And corruption does not mean financial corruption.

Corruption of the ego, and misguided Jihad is far more dangerous!

Imran’s core fundamentals are that transparency, competency, due diligence and due process is essential for Justice to be served, as was done in Nawaz Sharif’s case!

This must be the norm not the exception!

Salaams and Prayers.
Haider Mehdi

Where do we start- Good governance and performance?

By Syed Haider Raza Mehdi.

As we enter a new phase in governance in Pakistan, expectations are high as are the challenges we face.

Here’s a high level view!

At the top of the pyramid, at a macro level, is the looming economic crisis Pakistan faces. The immediate challenge being the balance of payment crisis and the need for $12 billion inflow to plug this near existential gap.

The obvious options are a recourse to the IMF for the bailout. Recent reports suggest a $4 billion from the Islamic Development bank, IDB. There’s also talk of issuing and floating conventional and Sukuk bonds, internationally. Some reports are about additional help from China and Saudi Arabia etc.

Personally my view is that the new administration will somehow manage to overcome this immediate challenge and plug the hole.

But the really big question is what then?

This is where we will see whether the new administration can deliver.

The answer lies in putting in place the foundations of a long term, sustainable system which kick starts industrialization in a big way, increases exports, generates much larger volumes of income from domestic and international sources and stops the hemorrhaging of state enterprises.

To generate more domestic income requires a major overhaul and reform of our tax regime, both policy making and collections. Creating separate policy making and collection will be key, now both currently under the FBR. A clear conflict of interest. Agricultural tax will be key. Broadening the tax base vs taxing the same segments is essential

The next is a complete overhaul of economic, development and banking and credit policies which take a long term view and are sustainable, to revive local industry. This results in huge dividends such as establishment of new industries, expansions in existing ones and revival of sick industries.

This generates more employment, more tax revenue and on the international front, with the right policies results in significant import substitution (less imports of foreign goods now being produced locally), resulting in critical foreign exchange savings. An agriculture revolution is the big one. We import $500 million of nuts and fruits and over $2 billion worth of palm oil and soya bean oil. A major push towards local cultivation is essential and stoppage of subsidies on crops such as wheat and cotton!

One of the biggest benefits of such policies will be a significant increase in exports, earning highly valuable foreign exchange. In this area providing competitive energy tariffs and renegotiating our Free Trade Agreements with other countries, especially China and Turkey would be critical.

A critical and thorough review of the terms planned for the Special Economic Zones, under CPEC is essential to ensure our local industry doesn’t suffer or become uncompetitive!

There’s talk of a 10 year tax holiday, lower energy rates and lower labor rates for companies operating in these zones. While these are important to attract Chinese and other companies to come and invest, it is important that it does not come at the expense of our local industry.

Any policy for these SEZ’s must deliver three things for Pakistan. Net increase in tax revenue. Net increase in our local industrial growth. Net increase in exports. Anything else means we’ve handed over these benefits to others and killed our local industry. A corollary is a clearly defined non negotiable policy on the use of local Pakistani labor.

Plugging the resource gap which senselessly feeds, bleeding state owned enterprises from State revenues is critical. PIA, Steel Mills symbolically represent this terrible terrible rot. The strategy here is simple. Classify these State Owned Enterprises (SOE’s) into three categories.

One for fire sale. Sell them as is. Don’t spend any more time and money to try to resurrect them. These are one’s that are purely commercial. Let whoever in the private sector wants to buy them, as is. If no buyers. Close them. There will be social fallouts as employees lose jobs. Can be mitigated by handsome golden handshakes, but we can’t afford to keep shovelling precious state resources into this never ending, bottomless pit!

Two. Fix and sell. These require professional, honest and competent management to turn them around, make profitable and then sell. These are also organizations that are purely commercial but will get a better price if turned around. Again social impact of job losses etc and golden handshakes to mitigate the issue.

Three. Fix and retain for strategic and national interest reasons. These are those that represent critical national interests and even if they have a commercial aspect, should be retained. But they must be managed under independent boards, competent and honest management and free of undue political and government control.

Then is fixing the energy issue. The current circular debt by some accounts is now over Rs 1 trillion. This requires not just fixing the distribution and collection system but also building dams, using wind and solar, changing the fuel mix, implementing net metering and renegotiating tariffs with the IPPS.

The current tariffs are unsustainable. Both residential and commercial consumers cannot sustain these extraordinary high tariffs. A huge cement block around Industry’s ability to regain international export competitiveness are these very high tariffs, nearly double of countries like India, Bangladesh, Vietnam etc.

While renegotiating tariffs may give us breathing space, the long term solution, as said earlier lies in building dams, adopting wind and solar power generation, fuel substitution from liquid fuels to gas!

Exploration in oil and gas must be a top priority, including inviting foreign firms to invest. ExxonMobil has returned to Pakistan after nearly 40 years and investing heavily in oil and gas exploration. Estimates range from 3 to 7 billion dollars of investments over 5 to 7 years with a potential of making Pakistan an LNG exporter and increase its current oil production seven fold!

A country that generates huge income from its domestic and international activities, creates the right environment for its economic and industrial engine will then have much more resources to spend on its infrastructure, law and order, clean drinking water, better health care and education and jobs for its people.

If the country has resources to spend on its people, then for a committed and honest administration to organise the key elements of good governance become minor details. Right structure, with the right people, implementing right processes, using appropriate technologies to deliver the right solutions.

Organisation. People. Process. Technology. Solutions. It’s that simple

I’ll offer my views on issues of law and order, justice, transparency and accountability, civil military relations, foreign policy etc in a subsequent article!

Salaams and Prayers
Haider Mehdi

Short note on nomination of Mehmood Khan as CM KP

 

-Haider Mehdi

I’ve been burning the wires for several hours today, talking to people who are much better informed than I am, seeking insights on Mehmood Khan’s surprise and unexpected nomination as CM PK, especially given some of the social media chatter against it.

Here’s what I’ve discovered. Mehmood comes from a very humble background from Matta in Swat, where the TTP had its strongest hold. Interestingly Matta is perhaps one of the most feudal areas in KP where the entire land was owned by just three families, most well known being Afzal Lala or Afzal Khan of ANP. In the recent rout, Afzal’s nephew and son both lost miserably in the elections

Mehmood and his family were the few rare ones that stood their ground and fought the TTP when most people had left Matta.

Mehmood is also credited with the clean sweep that PTI achieved in the district. 8 MPA’s and 3 MNA’s and has the reputation of being a very honest and capable person, loved by his people.

Clearly, the nomination was a surprise given the tussle and tug of war between Pervez Khattak on the one hand and the Atif Khan / Shahram Tarakai combine on the other and an expectation that the nominee would be either Atif or PK.

However, as I’ve always maintained, Imran always takes a decision which he thinks and believes is in the best interest of Pakistan and in this case, the province and its people and lastly the party. Mehmood checked all three boxes.

There’s absolutely no authenticity in the conjecture that Mehmood is Pervez Khattak’s proxy or that a past financial transaction, when he was Minister of Sports, tars his integrity.

It would be suicidal for Imran to nominate a questionable character or play party politics.

Given all that we know about Imran, he could make a wrong decision, and he has made some faulty ones.

But he has never done so, knowingly or deliberately compromising the interests of Pakistan, but more perhaps due to lack of due diligence, ill advice and poor process.

In this case, my view is that Imran took a very well thought through, comprehensively considered and correct decision, given the time he took to announce his choice. Of course, only time will tell whether it was the correct choice.

Of course the anti Imran brigade have unsheathed their daggers and will continue to question it, alluding darker motives and compromises other than the fact that he is a decent and honest fellow and the best choice, under the circumstances!

Don’t underestimate Imran! Most everything that he’s done these last 22 years have brought him to this stage. Do you think he’ll throw it all away on such a decision?

Salaams and Prayers.
Haider Mehdi