World Economy

A purge, a resignation and declarations of war: What's going on in the Middle East?

Key Points
  • An anti-corruption purge in Saudi Arabia in which 11 princes were arrested, the resignation of the Lebanese prime minister, and a perceived 'declaration of war' by Iran – just some of the news coming out of the Middle East in the last few days.
  • CNBC explains what the tumultuous events in the region could signify.
Here's what Saudi Arabia's power purge means for the kingdom

An anti-corruption purge in Saudi Arabia in which 11 princes were arrested, the resignation of the Lebanese prime minister, and a perceived 'declaration of war' by Iran – just some of the news coming out of the Middle East in the last few days.

CNBC explains what the tumultuous events in the region could signify.

Saudi Arabia purge

The most powerful regime in the Middle East surprised many at the weekend by conducting an anti-corruption purge among the highest levels of the establishment.

The purge on Saturday was overseen by Crown Prince Mohammed bin Salman, the king's son and heir, who is leading a newly-created anti-corruption committee.

Despite the royal origin of the crackdown, members of the Saudi royal family weren't spared. As well as four current, and scores of former, government ministers, as well as businessmen, being detained during the crackdown, 11 princes were among those arrested, including the billionaire nephew of King Salman, Prince Alwaleed bin Talal.

US urges Saudi Arabia to be fair in corruption probe

Some analysts have viewed the purge as an attempt by Crown Prince Mohammad bin Salman, who has a reform agenda, to consolidate his power ahead of his ascension to the throne when his 81-year-old father King Salman abdicates, an event expected in the next few months.

There is also the view that the crown prince has aimed to get rid of conservative rivals who might try to halt his plans for change in the country. In a signal that there could be more to come in Saudi Arabia's push against corruption, the country's chief legal advisor said Sunday that the crackdown was the completion of "phase one of our anti-corruption push."

There are fears though that the crackdown could spook investors. Emad Mostaque, co-chief investment officer at Capricorn Fund Managers, told CNBC on Tuesday that there was a question mark over whether the crown prince could go too far.

"He (Mohammed bin Salman) has been incredibly decisive at the moment in getting things sorted but the question is does he veer over the line and go beyond what the law says - which he, of course, can change - to overdoing it in terms of the crackdown?"

An 'act of war'

If Saudi Arabia wasn't busy enough with its corruption purge, on Monday the Kingdom accused Iran of being behind a ballistic missile attack carried out by Houthi militias in Yemen. The missiles were intercepted as they headed to the Saudi capital Riyadh, Saudi Arabia said.

Saudi crown prince being incredibly decisive but risks attacking minorities: Pro

Condemning the missile launch, Saudi Arabia said Monday that its regional arch-rival Iran was to blame for what it called "flagrant military aggression," and that it had supplied the Houthi militias in Yemen with missiles.

There is an ongoing civil war in Yemen, mainly between rebel Houthi militias and allied forces backing Yemeni President Abdrabbuh Mansour Hadi. However, the conflict is also something of a proxy war between Saudi Arabia and Iran and their competing ideologies of Sunni and Shia Islam, respectively.

While Sunni-ruled Saudi Arabia backs the government of President Hadi, its rival Iran backs the pro-Shia Houthi movement that is loyal to the country's former president Ali Abdulla Saleh.

On Tuesday, Saudi Arabia's Crown Prince bin Salman was reported to have told British Foreign Secretary Boris Johnson in a phone call that his country considered the Houthi missile directed at Riyadh a "a direct military aggression by the Iranian regime" and said it "may be considered an act of war against the Kingdom," according to comments reported by the Saudi Press Agency.

Lebanese prime minister resigns

The religious divergences and competition for influence in the Middle East has caused Saudi Arabia and Iran to back opposing sides, not only in Yemen but in Syria, Qatar and Lebanon. The latter is the latest country to become the epicenter of hostile relations between Saudi Arabia and Iran.

Prince Alwaleed Bin Talal among arrested in Saudi Arabia

Lebanon's Prime Minister Saad Hariri, a long-term Sunni ally of Saudi Arabia, surprised the world by resigning Saturday, citing assassination threats and blaming Iran for interference in Lebanon.

He also criticized the growing dominance of Iran-backed Shia militia and political party Hezbollah, which was part of Lebanon's fragile coalition government that has now collapsed. Iran rejected Hariri's remarks, according to Press TV reports.

Moody's ratings agency said in a note on Monday that Hariri's resignation "threatens to disrupt the fragile political balance in place" in Lebanon and that the resignation has occurred within the context of "an intensifying power struggle" between Saudi Arabia and Iran.

Saudi Arabia sees war from Lebanon

As if one declaration of war wasn't enough for Saudi Arabia, the country said Monday that Lebanon had effectively declared war against it because of aggression from Hezbollah, which is represented in the Lebanese parliament and was part of Hariri's coalition government.

Saudi Gulf Affairs Minister Thamer al-Sabhan said the Lebanese government would "be dealt with as a government declaring war on Saudi Arabia" and made a thinly-veiled threat of further action, Reuters reported, citing comments from an Al-Arabiya TV interview with Sabhan.

"Lebanese must all know these risks and work to fix matters before they reach the point of no return," he said, although he did not specify what Saudi Arabia could do.

The war of words has prompted concerns in the Middle East that there could be a dramatic escalation of tensions between the countries and, by proxy, between Saudi Arabia and Iran. Egypt's President Abdel Fattah al-Sisi called for stability in the region, telling CNBC in an interview at the weekend that many countries would be vulnerable to an escalation of tensions.