Saudi King Removes Crown Prince From Post

Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman has replaced his cousin as heir to the throne in an abrupt shakeup that consolidates the 31-year-old leader’s growing power in the world’s biggest oil exporter.

The new crown prince, who already controls the defense, oil and economy portfolios, took over from Muhammad bin Nayef, 57, who also lost his post as Interior Minister. King Salman, 81, also retroactively reinstated all allowances and bonuses that were canceled or suspended to civil servants and military personnel.

The move clears the path for Prince Mohammed bin Salman to push ahead with reforms to reduce oil dependence in the OPEC powerhouse. It also suggests a harder foreign policy line for the key U.S. ally in the region. The new crown prince has led the war in effort in Yemen against Iran-backed rebels and was a key figure in isolating Qatar.

“Saudi has tried to assert its authority over a range of regional events, and by cementing the question of succession at this time, the region is on notice that this direction will be pursued for the long term,” said Rodger Shanahan, a research fellow at the Lowy Institute for International Policy in Sydney. He “has been a very public proponent of a robust Saudi presence in the region.”

While state television showed the new crown prince kissing the hands of his cousin, portraying a smooth handover, the surprise timing raises questions about why the change was made now. It’s also unclear how broad the support is within the broader ruling family. Thirty-one of the 34 members in the Allegiance Council, which decides on matters of succession, voted in favor of the appointment.

The royal orders didn’t name a new Deputy Crown Prince, leaving the post of second in line to the throne vacant. They also included a change to the kingdom’s basic law, stipulating that going forward, the King and the Crown Prince cannot be from the same branch of the royal family. That means that any third in line to the throne would need to be from a different family branch than King Salman and his son.

The decrees were issued hours after the dawn meal that starts the daily fast in the Muslim holy month of Ramadan, and the streets of downtown Riyadh were quiet Wednesday morning, with no sign of increased security presence.

Saudi Arabia has been grappling with a 60 percent drop in crude prices in the past three years, prompting the government to cut spending and tap bond markets to reduce a budget deficit that ballooned to about 15 percent of economic output. MSCI Inc. last night included the kingdom in its watch-list for a potential upgrade to its emerging markets index. The benchmark Tadawul stock index rose 4.1 percent today, headed for its biggest gain in almost two years.

“Prince Mohammed bin Salman has really been the powerful man in Saudi Arabia ever since his appointment as deputy crown prince,” Ghanem Nuseibeh, founder of Cornerstone Global Associates, said by phone. The decision “removes impediments that he had, in that he had someone more senior to him who was perhaps a bit more conservative. Now he’ll have a freer hand,” Nuseibeh said.

Source: Bloomberg


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