‘We Misled You’: How the Saudis Are Coming Clean on Funding Terrorism

On his latest trip, a former senior U.S. official finds a new attitude in Riyadh. But will it stick?

By Zalmay Khalilzad, POLITICO

On my most recent trip to Saudi Arabia, I was greeted with a startling confession. In the past, when we raised the issue of funding Islamic extremists with the Saudis, all we got were denials. This time, in the course of meetings with King Salman, Crown Prince Nayef, Deputy Crown Mohammad Bin Salman and several ministers, one top Saudi official admitted to me, “We misled you.” He explained that Saudi support for Islamic extremism started in the early 1960s as a counter to Nasserism—the socialist political ideology that came out of the thinking of Egypt’s Gamal Abdel Nasser—which threatened Saudi Arabia and led to war between the two countries along the Yemen border. This tactic allowed them to successfully contain Nasserism, and the Saudis concluded that Islamism could be a powerful tool with broader utility.

Under their new and unprecedented policy of honesty, the Saudi leadership also explained to me that their support for extremism was a way of resisting the Soviet Union, often in cooperation with the United States, in places like Afghanistan in the 1980s. In this application too, they argued, it proved successful. Later it was deployed against Iranian-supported Shiite movements in the geopolitical competition between the two countries.

But over time, the Saudis say, their support for extremism turned on them, metastasizing into a serious threat to the Kingdom and to the West. They had created a monster that had begun to devour them. “We did not own up to it after 9/11 because we feared you would abandon or treat us as the enemy,” the Saudi senior official conceded. “And we were in denial.”

Why this new frankness? First, it’s fair to ask how far the new policy really goes. Clearly, there are some questions about whether some extremist Sunni groups, such as al-Nusra in Syria, are still getting Saudi money. But as the Saudis described it to me, this new approach to grappling with their past is part of the leadership’s effort to make a new future for their country, including a broad-based economic reform program.

In their current thinking, the Saudis see Islamic extremism as one of the two major threats facing the kingdom—the other threat being Iran. On Iran, there is continuity. I remember when King Abdullah asked me to pass on to President George W. Bush in 2006 that he needed to cut the “serpent’s head” and attack Iran and overthrow the regime. The new leadership, like their predecessors, blames Iran for regional instability and the many conflicts going on.

The new Saudi leadership, in other words, appears to be downgrading ideology in favor of modernization. In fact, one senior Saudi official explicitly said that the Kingdom was pursuing a “revolution under the cover of modernization”—meaning that modernization was now the driver of Saudi policy.

Can it succeed, when so little has changed politically in a country still run autocratically by the House of Saud? The biggest unknowns are the temptations of the past—whether the Saudi leadership is united behind the new program and whether those who benefited from the old order will attempt to derail the reform agenda and thus destabilize the country. The opposition could come from the powerful religious establishment, which might oppose the opening of entertainment centers, the reform of religious institutions, even limited co-education and increased female participation in the workforce.

There have been many reform programs announced before in Saudi Arabia, only to fade into insignificance. Also, modernization undermines two pillars of Saudi political legitimacy, the endorsement of the Wahhabi clerical establishment and the traditionalism that undergirds any monarchical government. As modernization creates economic uncertainty for those benefiting from the present inefficient order, the result could be political turmoil. And it is an open question as to whether the Saudi people have been sufficiently prepared at all relevant levels in terms of education and skills to compete in the world economy, as they will need to do in a modernized economy.

If not, social tensions and unrest may arise among those who are not prepared to compete.
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This was not my first trip to Saudi Arabia. I have been going there since the 1980s, when I was working at the State Department. I became even better acquainted with the Saudi leadership during my ambassadorship to Iraq from 2005 to 2007. I visited the kingdom often and developed cordial relationships with King Abdullah and other senior officials.

For many years, I was accustomed to Saudi officials being vague and ambiguous. Now, our interlocutors were straightforward and business-like in discussing their past and their future plans. In past decades, my impression had been that the Saudis did not work hard. Now a team of highly educated, young ministers works 16- to 18-hour days on refining and implementing a plan to transform the country. The plan is the brainchild of Mohammad bin Salman and focuses both on domestic and regional fronts. Salman and his ministers exude commitment and energy.

Across the Islamic-majority countries there has been an ongoing struggle between modernization and Islamism. Riyadh views modernization as the vehicle through which the Saudi state, at long last, can confront and defeat extremism, foster a dynamic private sector and master the looming economic challenges.

The Saudi program includes:

• New limits on the ability of the religious police to arrest dissidents.
• Purges of extremists from the government and greater efforts to monitor their influence in security institutions.
• The appointment of new religious leaders to counter Islamic extremism on theological grounds.
• The transformation of the world Muslim League—a key Saudi arm for supporting Islamic movements abroad—by the appointment of a new leader and a decision to stop supporting Islamist madrassas abroad.

On the economic front, the new leaders have developed plans for economic transformation and reduced dependence on oil. Their Vision 2030 and National Transformation Program 2020 focus on shrinking the country’s enormous bureaucracy, reducing and ultimately removing subsidies, expanding the private sector including attracting investment from abroad by becoming more transparent and accountable and by removing red tape.

It plans to transform its giant oil company Aramco, including the public listing of it and raising perhaps as much as 2 trillion dollars for its investment fund, with the thought that income from its investments can reduce dependence on revenue from oil. To encourage more Saudi money being spent at home, the government is opening entertainment facilities in the kingdom and intends to attract big names from the U.S. An agreement has already been signed with Six Flags. It plans to increase the number of women in the workforce. I visited King Abdullah city, a new city planned and being built by private sector. Here, men and women will attend college classes together, and facilities important for foreign companies are being constructed to the specifications of interested international companies.

One byproduct of the Saudi focus on ISIL and Iran seems to be a more enlightened view by Riyadh toward Israel. Israel and Saudi Arabia share a similar threat perception regarding Iran and ISIL, and that old hostility need not preclude greater cooperation between the two states going forward. The Saudis stated with unusual directness that they do not regard Israel as an enemy and that the kingdom is making no military contingency plans directed against Israel. They did emphasize the need for progress on the Palestinian issue, but the tone on this subject was noticeably less emotional than in the past. The clear priority was on defeating ISIL and balancing Iran from a position of strength.

On some levels, the prospects for planned reforms are more promising in Saudi Arabia than they are in most other parts of the Middle East. Saudi Arabia has oil reserves and is not roiled in conflict: two important advantages. My visit left me convinced that key segments of the Saudi leadership are serious about their modernization plans and are pursuing it with vigor and professionalism.

There are, as I said, plenty of reasons to be skeptical of ultimate success. However, if the reform effort does work, Saudi Arabia is poised to become more powerful than before, enabling it to play a bigger role in regional dynamics including in balancing Iran and perhaps negotiating about ending the civil wars in the region. A true change in Saudi Arabia’s policy of supporting Islamist extremists would be a turning point in the effort to defeat them. Given the kingdom’s role, Saudi success can provide a model for the rest of the Sunni Arab and Islamic world on how to pursue reform and succeed. That could, in turn, help launch the reformation that is so badly needed. The region and the world have a stake in Saudi success, and should do what we can to encourage and support them on this new path.

Zalmay Khalilzad is a former U.S. ambassador to Afghanistan, Iraq and the United Nations. He is the author of “The Envoy: From Kabul to the White House, My Journey Through a Turbulent World,” from St. Martin’s Press. This trip was arranged by the Washington Institute for Near East Policy.