Saudi Arabia's spat with Qatar just a distraction to protect the ruling family, political analyst says

Saudi Arabia change of secession to distract from domestic issues: Chatham House

Saudi Arabia's blockade of neighboring Qatar is a distraction as the Arab world's biggest economy shores up its monarchy and attempts to shift away from reliance on oil exports, according to one analyst.

The country's royal family adjusted its order of secession earlier this week, paving the way for Defense Minister Mohammed bin Salman to lead the House of Saud in the future.

Salman promotes an "ambitious reform agenda designed to protect … and stabilize the Kingdom after the Arab Spring," Sanam Vakil, associate fellow at Chatham House's Middle East and North Africa Programme, told CNBC Thursday.

Vakil suggested that Saudi Arabia's recent diplomatic spat with Qatar, in which the Kingdom and several other Arab countries accused their Gulf neighbor of supporting terrorist groups, was an attempted distraction from "the real challenge at home which is declining oil prices (and) a very young population in need of one thing, jobs, jobs, jobs."

She said that the Kingdom's smoke and mirrors game was "about the future and protecting the internal stability of the House of Saud."

At the age of 31, Crown Prince Salman is the world's youngest defense minister. Experience on the international stage, with Saudi Arabia actively involved in conflicts, will prime Salman in his future role as king as "The threat (to stability) is always internal," said Vakil.

Vakil forecast that "We're going to see much more of a robust and ambitious Saudi Arabia building on a number of events that have already taken place over the past year," notably U.S. President Donald Trump visiting the Kingdom on his first overseas foreign trip in May.

Vakil described Saudi Arabia's Vision 2030, its long term project to diversify the economy and move away from dependence on oil, as potentially changing the fabric of the country's deeply religious Sunni Muslim society. While attempting to generate 1.2 million jobs, "at the same time (the government is) offering the youth fun," she said. Vakil spoke of the building of cinemas and theme parks, which would "rock the boat a bit, challenging some of the conservative elements within the Kingdom and at the same time reducing subsidies."

Vision 2030's acknowledgement of the pastoral care of citizens signifies a wider attempt by Gulf countries to "make themselves relevant, and of course to create vibrant societies while enshrining (their) very closed political systems," Vakil explained.

RBC Capital Markets: Don't bet against the new Saudi Crown Prince

Helima Croft, managing director at RBC Capital Markets, shared Vakil's view that deliverance on domestic economic reform and creating a swathe of new jobs for young people would be key to Salman's success.

Croft spoke positively to CNBC's Worldwide Exchange Wednesday of the new leader in waiting. Referring to Salman's appointment to defense minister in 2015, Croft said that "He has defied all of the skeptics with his staying power." She also pointed out Salman's successes with the Vision 2030 project, one example being the expected IPO of Saudi Aramco, the world's largest oil company.

"I think he's going to be leading Saudi Arabia for the next few decades at this point," she said.

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