Saudi-Iran rivalry will see their fortunes fluctuate in a changing world order

The death of King Abdullah in January 2015 gave way to the undeniable rise in power and authority of Saudi Arabia throughout the Middle East and North Africa (MENA) region under his successor, King Salman. Those uncomfortable with Iran’s mission to become a hegemonic regional power heaved a sigh of relief when he took the throne. The Saudi monarch has made it clear that the kingdom will no longer play a minimal role in standing up to Tehran’s mission to dominate the region.

Within weeks of the start of Salman’s reign, Riyadh launched its first ever independent military operation. On 26 March, the kingdom surprised the world, including London and Washington, with a Saudi-led coalition operation to remove the Iranian-backed Houthi rebels from power in neighbouring Yemen and restore President Abdrabbuh Mansur Hadi. Analysts everywhere rushed to anticipate what would happen next. Did the war symbolise the rise of Saudi’s own hegemony? Would Iran retaliate on Saudi soil? What was the real strength of the Houthi’s military capabilities? And, most commonly, was Yemen going to be “Saudi Arabia’s Vietnam”?

As the months unfolded, apart from pushing back the Houthis and forces loyal to ousted President Ali Abdullah Saleh from southern Yemen, it became more apparent that the coalition’s idea of defeating them through aerial bombardment alone were not as viable as was first anticipated. Houthi and Saleh fighters began to intensify their siege on Taiz, intercepted all attempts by pro-Hadi government and local resistance groups to advance into the capital city Sana’a, and even began to intensify attacks on Saudi soil. Rather than limiting their cross-border attacks to frontier areas like Jizan and Najran, by this autumn the Houthis began to go deeper inside Saudi Arabia and targeted Taif and Makkah, proving that they are also capable of hitting Jeddah should they so choose. It is understandable that many have assumed — mistakenly — that the kingdom is in permanent retreat.

In 2006, UN Security Council resolution 1696 demanded that Iran should end its nuclear enrichment programme. This led to sanctions imposed by the UN, member states and other international organisations, targeting Iran’s nuclear ambitions and economic growth. Just as many think that the Saudis are now in retreat, before the recent easing of the sanctions there were many who anticipated that the sanctions against Iran would “cripple” the Islamic republic.

Despite this, Iran still managed to secure its interests by arming, training and funding proxies all over the Middle East, especially in Syria, Iraq, Yemen and Lebanon. With the sanctions lifted, the economic forecast for Iran improved, with the International Monetary Fund (IMF) reporting that Iran’s economy for 2016-2017 looks to be “improving substantially” and that “real GDP is projected to grow by at least 4.5 per cent in 2016-17”. Inflation is also predicted to continue to stay below 10 per cent. Tehran proved wrong those who predicted that sanctions would lead to its long-term downfall.

Given that Iran’s economy has bounced back with the easing of sanctions, it may seem unrealistic to compare it with Saudi Arabia, because the perceived retreat of the latter is a product of its own actions, rather than those of the international community. Furthermore, Saudi has to be viewed in the context of it being a regional power and one of the world’s largest oil exporters sitting on just under 20 per cent of the world’s known petroleum reserves. Its military is not far behind Iran’s, ranking 24th in the list of the world’s most powerful, compared to the Iranian’s 21st.

Riyadh released a budget statement on Thursday, showing that it has reduced its deficit by a third. Today, the fiscal deficit stands at $79 billion, as opposed to a record breaking $98 billion in 2015. Riyadh is proud to have gone beyond its target of $87 billion this year, surpassing it by $8 billion. Hence, while it may be easy to claim that Saudi Arabia is in “retreat” after “a year of boldness”, many signs suggest that this discourse can be challenged.

The common comparison of Saudi’s war in Yemen with the US and Vietnam has many flaws. Comparing Saudi-Iran rivalry with the dynamics of the Cold War is unhelpful. The Cold War was between two global powers within a bipolar world order. For the United States and the Soviet Union, the wars they fought to secure power and interests were all-or-nothing scenarios. The USSR’s invasion of Afghanistan left a scar that damaged its power permanently. Iran and Saudi Arabia however, have the luxury of exercising their rivalry militarily in the knowledge that there are more powerful countries standing by and looking to secure their own interests in the MENA region.

What is unique about the rivalry between Tehran and Riyadh today is that it is happening in a world that is no longer quite bipolar, albeit not yet multipolar. Both countries have shown enough autonomy by taking control of their proxies and even starting a war without notifying the US. At the same time, they are still largely affected by the foreign policies of other powers.

It remains unclear how Donald Trump’s presidency will affect the region, but both Saudi Arabia and Iran have reason to worry about the future. The hawkish and anti-Iran sentiments of Trump’s proposed Defence Secretary James Mattis have left Tehran feeling apprehensive; he regards Saudi Arabia’s Foreign Minister Adel Al-Jubeir as a personal friend. When Iranian agents tried to assassinate Jubeir in 2011, Mattis was quick to express his anger and support for the then Saudi ambassador.

At the same time, Trump has called repeatedly to block all oil imports from Saudi Arabia. It is unclear how and when he will do this if, indeed, he actually plans to do so. He has also shown support for the JASTA bill, which would allow US citizens to sue Saudi Arabia for alleged complicity in the 9/11 attacks. When Obama vetoed the bill, Trump branded his action as “shameful… [it] will go down as one of the low points of his presidency.”

If anything, both countries must prepare for the best while expecting the worst from Trump’s presidency. This includes a foreign policy that will most likely try to keep Tehran and Riyadh on their toes about what is going to happen next; Trump will keep both apprehensive about whose side Washington is really on.

The rise and retreat of both Saudi and Iran cannot be measured by their economic performance alone. Sanctions have been placed on both Saudi and Iran in the past, with the aim of impairing their growth in various ways. As the rivalry between them continues to be manifested through proxy wars, both Saudi Arabia and Iran are going to see their stability and status fluctuate in a changing world order.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.