Saudi Arabia in the New Middle East

Leading regional experts Gregory Gause, III and Toby C. Jones assess the stability of Saudi Arabia, its role in the reshaped region, and the future of U.S.-Saudi relations.

PAUL STARES: Welcome, everybody, to this special roundtable on "Saudi Arabia in the New Middle East." Thank you all for coming here. I'm sure many of you would prefer to be in Davos at the moment, but we will try to do our best and compensate for that.

The focus today is obviously Saudi Arabia. And I think it's fair to say that there are few countries more important to the global economy than Saudi Arabia. And I think it's also fair to say that there are few countries have been a more steadfast ally to the United States in the Middle East for the last six decades. But for all of that importance, I think it's quite remarkable, even shocking, how little we still know about the kingdom. There are very few true experts on Saudi Arabia in the United States, and we're very pleased to have two of them here today to talk about Saudi Arabia.

We're going to be focusing on several, obviously, I think, relevant -- currently relevant issues relating to Saudi Arabia; firstly, the -- you know, what's been happening inside the kingdom since the onset of the Arab upheavals; how this has been received in the kingdom, how they've been adapting, what their new posture in the Middle East has been since the uprisings began; and then finally what this all bodes for the future of the U.S. relationship with the kingdom.

We will begin first with Gregory Gauss. He is a professor political science of the University of Vermont. He has held multiple positions before joining the faculty there. He is the author of three books, most recently, "The International Relations of the Persian Gulf," and, I should say, most importantly, this most -- this council special report that's just come out on "Saudi Arabia in the New Middle East." And there should be rare unsigned copies on your seats. That's for you to take home with you.

He will talk for about 20 minutes or so, 15, 20 minutes, and then will be followed by Toby Jones, who is at the History Department at Rutgers University. Toby has also held several academic positions before joining Rutgers and from 2004 to 2006 was with the International Crisis Group in the Persian Gulf. He, too, is the author of a book focusing on Saudi Arabia, "Desert Kingdom: How Oil and Water Forged Modern Saudi Arabia."

So I think we will begin. I should just say -- mention the ground rules. The discussion today is on the record, unlike usual council policy. And I also ask you to turn off any cell phones, other devices, defibrillators excepted, and we will begin.

So Greg, take it away.

F. GREGORY GAUSS: Thanks very much, Paul.

Am I on here?

STARES: Yeah.

GAUSE: All right. Thanks everybody for coming. If you're disappointed that you didn't get invited to Davos, come on up to Vermont; we've got mountains, we've got a little bit of snow this season -- not as much as usual, but we can recreate the Davos experience for you, and you can get some maple syrup while you're there.

It's a pleasure to be here. I want to thank Paul and the council for allowing me to write this. I think I stretch Paul's patience on numerous occasions. He runs the Center for Preventive Action, and I kind of am an advocate of what I would call "prudent nonaction" in the Middle East. And so he was very tolerant of me on this.

Let me just say a couple of words about these three topics that Paul introduced. One is the internal dynamics within the country. My bottom line is that I think this is a very stable country in terms of regime stability, the political stability of the regime. We have, I think, in the United States a tendency when we see upheavals in the Middle East to automatically assume that Saudi Arabia is going to be next. I think that's largely because they're a monarchy, and we don't understand or appreciate monarchies, having gotten rid of one ourselves some years ago.

Sorry about that, Paul, but -- (laughter) -- and because, I think, they wear funny clothes. And so we just think that they must be on the verge. But I think the regime is quite remarkable in how it has weathered the various storms that it has faced in the modern Middle East.

So how does it do it? Particularly, how did it do it this time? I think that there are three important things to highlight, and the most important and obvious one is money. Right? Not a single oil regime fell of its own accord in the Arab Spring. All right? Libya had -- required Western military intervention to remove that regime. No other oil regime fell in the Arab Spring, and very few oil regimes even faced serious upheaval, Libya being the most notable exception, which just goes to show that the money doesn't spend itself. Right? And if you have an idiot spending the money or not spending the money, the money doesn't do any good. Right?

But it's not just monarchies. Right? It's Algeria, Iraq. These places did not have the same kinds of problems that many of their neighbors had. So with oil at a hundred -- over a hundred dollars a barrel, that gives regimes quite a few carrots and sticks to deal with restive populations.

The second reason I think that the Saudis weathered this is their networks, and money is part of this, but the political skill of maintaining networks is something that is the best of the al-Saud family. They portion this out. They have portfolios for various princes to deal with various groups. They have networks with the business community. They have networks with the -- with the tribes, which are socially important but politically, I would argue, almost completely emasculated. And that has been -- a project of the al-Saud family is to keep -- is to -- is to destroy tribal political power. With Shi'a leaders, with regional leaders in the Hejaz, with intellectuals, with every group that you can imagine, sports clubs, the al-Saud family has its networks here, and it activated all of those networks during this year.

And finally, I think that one of the most important things that distinguishes cases in the Arab world where the regime feel from cases where the regime is still holding on or didn't suffer any crisis at all is the ability of the opposition to overcome its own internal ideological and social, sectarian, ethnic -- whatever you want to call them -- social differences, and unite behind a common -- a common goal of getting rid of the regime. In Saudi Arabia, the opposition has never been able to do that, and the opposition is divided on sectarian lines; it is divided on ideological lines. Even during the upheavals of earlier this year, those who were looking for political change in Saudi Arabia had to put together two major petitions, not one, because they couldn't agree to get together on one petition. If you can't agree to get together on one petition, you're certainly not going to overthrow a regime, it seems to me.

That doesn't mean that the Saudis are out of the woods. They do have some medium-term issues. Obviously, the succession issue is one that we as outsiders have very, very little insight into, but it is a serious problem for the regime. And I don't mean from King Abdullah to Prince Nayef. I mean from this current generation of rulers to the next generation, to the grandsons of the founding kind of the third kingdom. That is a -- that is a transition that has no precedent and will be a very interesting thing to watch. But it's not going to happen this year or next.

Fiscal issues -- all right? Just the other day, Ali Naimi said that a hundred dollars a barrel is what the Saudis' price goal is. Toby and I were talking before lunch. We can -- we're not that old. He's even younger than I am. But we can remember when the price point was $28 a barrel, and it wasn't that long ago. All right?

A hundred dollars a barrel -- that means that the Saudis need that money -- paying these networks to maintain the system, and thus, I think that -- although I'm no -- I wouldn't even claim that I could protect the oil markets; I would -- I would not be a penurious academic if I could predict the oil markets -- we don't know if oil's going to be a hundred dollars a barrel or $110 for the next five or six years. Who knows? A fiscal squeeze, if oil goes down below $80 a barrel or $70 a barrel, would be a very interesting challenge for the Saudis.

Finally, I think that -- one of the things -- to me the most interesting thing that's happened this year, this past year, in the Middle East is I think that -- I mean, Fukuyama's "End of History" finally came to the Middle East. Right? And I think just at a time when Fukuyama has backed away from "End of History," I actually think the thesis is more powerful than ever. Right?

I think that the events in the Middle East this past year have basically said that there is no defensible political system that doesn't have a democratic element to it. That doesn't mean that we're going to have democracy and that doesn't mean people aren't going to push against it. And one of the reasons I say this is because of the reaction of Salafi Islamists to this -- to the events of the past year. Right?

I'm no fan of the Salafis, even though I spent some time in Riyadh. And I was troubled by their -- what a significant portion of the vote they got in Egypt. But if one steps back and says, this was the element of Islamist politics that had been explicitly anti-democratic, that had said on doctrinal grounds that democracy is rejected; it's an innovation; it's un-Islamic; we don't need it -- and now not only do we see Salafis participating in the electoral process in Egypt, but we see Salafi figures in Saudi Arabia signing petitions calling for an elected national legislature. We see Salafi figures in Saudi Arabia publicly praising the Egyptian revolution and supporting it.

This is something that I think in the -- in the longer term will have to trouble the Saudi regime, because it has always based its right to rule on the idea that it represents the true Islam, right, this Salafist strain of Islam. And in the end, it seems to me that coming out of 2011, one of the important turns is that the only people who now argue that there are bases other than some form of popular consent upon which to base regimes are the official clergy in Saudi Arabia, the proponents of Velayat-e faqih in Iran, and al Qaeda. And that doesn't seem to be a winning team in the future. I'm not predicting waves of democracy in the future. I see Mr. Abrams in the back. I'm still not on the team. But I do think that -- I do think that this has been a major shift that will have long-term consequences for Saudi Arabia and the region.

OK, regionally, briefly, I don't see Saudi Arabia as counterrevolutionary. I think that that's too easy a trope. And my friend Toby Jones will tell me why I'm wrong in a minute, but let me set out why.

I think that Saudi Arabia's clearly counterrevolutionary when it comes to monarchy. It sees monarchy as absolutely essential. It sees the preservation of monarchy, particularly in its geographical area, the Gulf -- and we'll include Jordan in that -- as absolutely essential to its own domestic regime security and stability. And thus for Saudi Arabia, the preservation of monarchy in the Gulf Cooperation Council and in Jordan is a domestic political imperative.

However, once we get beyond that, it seems to that what Saudi Arabia -- the lens through which Saudi Arabia is looking at the Arab -- the events of 2011 is through its regional competition with Iran. And thus it's more than willing to support regime change in a place like Syria. It was willing to support regime change, obviously, in Libya -- but that was, I think, more because of the distinctive characteristics of the brother leader and his past history with Saudi Arabia -- and was willing, however reluctantly and however cautiously and non-democratically -- very happy to admit that -- to ease or try to ease Ali Abdullah Saleh out of power in Yemen. So to me, that's not counterrevolutionary. That's a country that's confused, defensive and basically looking through -- looking at the region through the prism of a political competition with Iran.

Finally, the American agenda -- I stole the word "transactional," which if you looked at the pamphlet, is the kind of keyword for the -- my recommendations for the U.S.-Saudi relationship. I stole that from the irrepressible Chas Freeman, who was the chairman of our advisory group. But I do think it captures something important in that the relationship with Saudi Arabia is -- has been going through a slow-motion change since the end of the Cold War, really since the 1970s, I would say, when the Saudis in effect took over their old -- their own oil industry.

The two great pillars historically of American-Saudi cooperation were Saudi operation of -- I mean, American operation of the Saudi oil industry and a common Cold War understanding of the globe. And that doesn't mean we agreed on everything -- oil embargo in 1973. Right? But those two pillars are no longer.

We have numerous common interests geopolitically in the region, but I don't think that we can assume that the Saudis are going to be with us on everything the way they were in the '80s, when we were partners in all sorts of anti-Soviet activities. I don't think that the Saudis should assume that we'll always be with them. I think we have to take it issue by issue.

I think that one of the dynamics that is becoming increasingly apparent is that Saudi Arabia is no longer an oil moderate; it's no longer a dove in the oil market. It doesn't play the role that it seemed to -- that it played in the '80s and '90s. It's always been more complicated than that.

But when Ali Naimi, the oil minister, says the other day that the target price for Saudi Arabia for oil is a hundred dollars a barrel, that's not what I would call a price moderate. So I think that on those issues, the assumption -- as we're entering an election year, American presidents like to call Saudi kings during election years and say, hey, do something about those oil prices. I'm not sure that that kind of thing is going to fly anymore.

Two issues that I think are extremely important in which we have common interests but also different viewpoints that are going to require a lot of conversation with the Saudis: One is the rise of sectarianism in the politics of the Arab East. This is Bahrain. This is Iraq. This is Syria. This is -- North Africa, thank God, is immune to this because of its own demographic profile, but the Arab East is riven with sectarianism now. Sectarianism is not a new thing, but its salience rises and falls over time, and it's extremely high right now. And Saudi Arabia is pushing it. One of the reasons that sectarianism is so salient now is Saudi Arabia's chosen to play that card. I think that that's very dangerous for American interests.

Sectarian -- this atmosphere of sectarian hospitality is a breeding ground for Sunni radicalism of the al Qaeda variety. I also think that it's very negative in terms of the future of Iraq. I think that if there's a practical policy issue here -- I think getting the Saudis to engage with the Iraqi government, as distasteful as they find that government, is an imperative. And I also think it's self-defeating because, you know, frankly, you push -- you know, Arab Sh'ia are not particularly important, except in the Gulf region and Lebanon. Right?

And to the extent that sectarianism dominates politics, that drives them toward Iran. Framing things in an Arab-versus-Persian context can actually help bring these folks in. And I know that there are people in Saudi Arabia who are troubled by this, too, and see this as a difficult problem.

And finally, the nuclear question: I think that there are very strong incentives among Saudi leaders that if Iran were to cross the nuclear threshold, however we define that crossing, then there would be enormous support within the Saudi elite for trying to obtain their own nuclear weapons. I don't think that's inevitable. I think a lot depends on their relationship with us, but I think that that's a conversation we have to start having with them, because I think that if that happens, if they come to an understanding that Iran is now a nuclear power, however they define that -- and I understand that that's a complicated question -- then things could move very quickly and uncharacteristically for the Saudis. I think things could move very quickly on their side, and I think that that's a conversation that's worth having with them right now.

Thanks, Paul.

STARES: Great. Thanks very much, Greg.

Toby?

TOBY JONES: Thanks, also, to Paul and the council for bringing me down. I'm an unenviable position, because I'm pressed to respond or charged with the responsibility of responding with somebody on key points that I agree with. So it's sort of hard, in one sense, to kind of point to what I think are critical weaknesses or points in divergence in Greg's -- you know, this excellent report.

But I do think there are places where there are opportunities for at least considering if not more nuance at least more uncertainty. Where I'm not -- it's not quite as clear to me that things will move in a direction or have moved in a direction that necessarily point to either stability or the indefinite necessity of maintaining a strong relationship -- for the Americans to maintain a strong relationship with Saudi Arabia.

So I'm going to speak on two sets of issues, both of which Greg raised in his report and that he spoke about today. And I'm going to, on the first one, suggest an alternative viewpoint on Saudi Arabia's stability and where it may or may not go in the short to medium term. I'll offer this as a sort of preliminary comment for the kind of analytical view that I'll offer up in just a few moments.

Past stability is no predictability of future stability. I'm a historian and so I don't predict the future. But boy, if the Arab Spring taught historians anything, it's that autocratic Arab regimes are not stable and that long-standing claims that these were durable political systems surely hasn't weathered 2011. And we have to think about the various possibilities for places like Saudi Arabia, oil producers and others, who have yet to experience the kind of political mobilization and mass uprising and ask the question, are they in fact vulnerable to the sorts of shocks that brought down regimes elsewhere, whether it's a combination of domestic or external forces that bring them down.

The second issue and set of questions that -- second set of issues that I want to touch on is, I want to sort of encourage a more critical and perhaps revisionist view of the U.S.-Saudi relationship not necessarily historically but grounded in more recent events, and the role that Saudi Arabia -- and to sort of encourage thinking about the role that Saudi Arabia actually plays in the Middle East, and the way that the United States has talked about its interests and raised the question. Are they actually the same? And I don't think they are.

So on the first set of issues, who no -- which I think can be boiled down to this question: Why was there no Arab Spring in Saudi Arabia? Or more directly in response to Greg's report, was Saudi Arabia in fact little affected by the events of 2011? It's true that there were no street protests of any consequence, the regime was not toppled, nor was it ever seriously threatened by the kind of social and political mobilization that took place elsewhere.

But I want to suggest that in fact if you revisit the events of early 2011, a period of great uncertainty in the region, when friendly regimes were falling from power, Mubarak most notably, but not only Mubarak. It also was important to recall that the first indications of uprisings in Yemen, Bahrain and Syria also first materialized in February and early March, that Saudi Arabia was deeply anxious and certain about what its own political future was vis-a-vis its regional neighbors. And in fact, it in responded with alarm.

I had a piece that appeared at Foreign Policy that made the case that there was a deep sense of anxiety that had settled in over Riyadh and that they were acting with some sense of desperation and trying to both preempt mobilization at home, as well as to figure out what was going on in the rest of the region. And yes, I was one of the early proponents of Saudi Arabia as a counterrevolutionary force. I'll come back to that, thinking regionally. But I think just as important is, how did Saudi Arabia handle its domestic affairs, and why was there no mass political mobilization?

Greg outlined what I think are the key points in terms of its instrumental approach to dealing with domestic crisis and the possibility of political ferment: money, patronage, the mobilization of Islam in important ways, and also the ways it moved Saudi domestic pieces on the chessboard. The al-Saud have historically demonstrated nothing if they're not masters of dividing and pitting various domestic constituencies against one another.

But it's also important to note that it was no guarantee that this was going to work. And I'll come back to how I think this actually played out in important ways -- that in fact Saudi Arabia is an incredibly diverse place. It's diverse religiously, culturally, politically, geographically, ethnically -- well, maybe not ethnically, but, you know, let's not push it too far. I mean, so -- but you know, this is a large place, and it's controlled by a group of political elites that have often understood that they are sort of presented with the challenge of dealing with and managing a society and a population that often sees itself at odds with their political masters. And don't be fooled by the absence of kind of public declarations of disillusion with the Saudi regime. There is a deep sense of frustration in Saudi Arabia with political corruption, with the absence of political possibility, with the nature of autocracy at home and all of the excess that it means. These have been long-standing concerns amongst important sectors of the Saudi population.

From the late 1970s, we've seen episodes of political dissent at home that, sure, of course, it hasn't materialized in a widespread revolutionary movement, but that nevertheless has been persistent over the last three or four decades. The reason that Saudi dissidents, not only the opposition but other political forces, have not been able to mobilize or come together in any meaningful way is not indication of the absence of the political will to do so.

I think it comes down to two things. One is that the state has tremendous coercive power. Greg mentioned in the report the power of its security forces. It's important to note that in early March the Saudis deployed thousands of police forces to preempt the day of rage that was called for. If I'm a Saudi and I live in Riyadh -- and Riyadh doesn't have the kind of public sphere that Cairo has -- where am I going to converge? Where is that public space where we can make a united, you know, sort of demand, or call on political reform? There isn't one. I mean, Riyadh is sort of mapped out and laid out much like Chicago. It's a big grid, except for the old city. There are no obvious places for people to mobilize.

Double that or couple that with the presence of a large number of security forces. Of course there was no day of rage in Saudi Arabia. If Saudis needed any indication of how they would have been treated, they could have easily imagined a Syria-like scenario unfolding or a Bahrain-like scenario unfolding to keep them from doing so. Right? So there was a powerful security apparatus and disincentives for people to take to the public square, and there was a limited public square to take to in the first place.

The other -- and I think this is much more important in some ways, speaking to both Saudi Arabia's political strategy, as well as the legacy of a certain a kind of politics that has gripped the country or that has guided the country over the last three, four decades, and that is the various ways that Saudi Arabia's leaders have mobilized both Islam and culture in order to accomplish short-term political goals.

If you think of who the two most restive groups in Saudi Arabia were in 2011, it was Shi'ites, and it was women -- troubled communities, unlikely revolutionaries and certainly unlikely to capture the attention of tens of thousands or even millions of their fellow citizens. Women's issues are polarizing in Saudi Arabia. They mobilize people in support of women as much as they mobilize people in opposition to women's rights.

The question of gender and gender relations is highly charged and problematic, and the Saudi state understands this. And when it can put women rather than political reform or constitutional monarchy or equal rights or participation at the center of analysis in political discourse, it knows it's got a winning strategy.

The same thing is true when it comes to sectarianism and Shi'ites. Greg mentioned that Saudi Arabia is in many ways problematic in the way that it plays the sectarian card. I mean, it's important to know. Shi'ites are a minority in Saudi Arabia. Perhaps they make up 10, 15 percent of the population. That's a pretty significant number of folks -- a million, a million and a half, maybe at the outside 2 million people. When they became active in March -- late February, early March 2011, the regime rushed in very quickly to mobilize on this moment and to use their activism as a way to discredit other potential civic or civil disobedience or public dissent.

So the state then plays upon both the question of women and religious difference as a way to divide society. Greg mentioned sort of the division -- sort of divide-and-conquer mentality and approach to domestic politics that has long characterized Saudi Arabia's approach to its own citizens. This was on fully display earlier this year, and it's incredibly effective.

Saudi Arabia has a highly atomized society in which people don't necessarily identify with one another across gender or class or sectarian lines, religious lines. And so I think to a large extent, the state's ability to play upon these, manipulate them and fan the flames of uncertainty about Shi'ism, as well as to use women as a wedge issue, also explained a kind of political paralysis that didn't necessarily displace the importance of concerns about political -- about corruption and reform and all those other things, at least not permanently, but managed to do so in the short term.

On the second question, was Saudi Arabia a little affected? I actually don't agree with this. I think that Saudi Arabia was deeply affected by the events of 2011. And if we look at the way that Abdullah managed the issues in March, we see an important recalibration of Saudi domestic politics and the various political forces that are often at play there.

Most importantly was not the spending of money, was not necessarily the mobilization of certain patronage networks. It's how the money was spent. Abdullah announced what would amount to a $140 billion bailout package for Saudi institutions and citizens in March as a way to preempt, and bonuses to public employees -- convinced businessmen to give similar kinds of bonuses to those in the private sector.

But most importantly was the redistribution in intensified fashion of money to religious institutions, accommodating not only institutions like the religious police but as well as others -- talking about tens of millions of dollars being re-funneled into old Islamist networks that had enjoyed some favor in the 1980s and early 1990s but that had increasingly come under pressure in the leadership of Abdullah.

If we think about Saudi Arabia's modern history as characterized in phases, its most important modern moment was 1979. Events in the region, as well as events at home, put the al-Saud under tremendous pressure. Particularly one moment in November, when Sunni radicals seized Mecca mosque, the state was put in a defensive position where it felt like it had to accommodate Islamists in order to preempt any kind of Islamist revolution.

Over the course of the 1980s and early 1990s, this meant moving money out of development projects and other kinds of consumer projects and into Islamist networks and projects -- jihad in Afghanistan but also the support for charitable and other kinds of intellectual and religious networks at home. The result was that by the end of the 1980s, there were hundreds of thousands of Saudi men who had been educated and trained in the Islamic arts, in the Islamic sciences, to the detriment of things like business and more technical fields.

But it also meant the politicization of Islam in important ways. Saudi Arabia is fully realized, I think, as an Islamic state only in the 1980s and early 1990s. When Abdullah became king in 2005, he initially took several bold measures in order to undo that arrangement. He announced that Islamic law in the courts would be codified; they'd be systematized under the direct leadership of the state. He made high-profile decisions about personnel, on the Supreme Islamic Council, as well as within the religious police, and seemed to indicate that he was willing to pursue if not what we might call a more liberal political path, at least one that was softer on issues of tolerance and the importance of Islam more generally. All of that was undone earlier this year in the context of the bailout package.

So in many ways, what I'm arguing is that Saudi Arabia return to a familiar playbook, one that was first mapped out in the late 1970s in response to an earlier moment of domestic crisis. So Saudi Arabia is now sort of playing a game that it played in the early 1980s and throughout that decade and that also produced all kinds of pathologies and sets of political sort of tendencies that we should be concerned about, not the least of which was the rise of militancy, sectarianism and all that other stuff.

Right, so I don't agree that Saudi Arabia was little affected. It's true that the kingdom didn't enjoy or experience mobilization and that Saudi citizens haven't come to realize political rights or opportunity, but the state has undergone a significant transition back to one that -- to something that resembles, you know, an earlier moment and one that we should be concerned about.

The second set of concerns -- and I'll deal with this very quickly -- has to do with the U.S.- Saudi relationship. How should we think about Saudi Arabia and its alliance -- or the way -- how should the U.S. think about its approach to Saudi Arabia in the region? And here, too, Greg has outlined I think a number of ways that we have historically thought about Saudi Arabia and that seem sort of pressing in the moment, two of which I think are transparent and very clear.

One is on the issue of nonproliferation. Clearly, it's not in the United States's interests to see Saudi Arabia follow the path of Pakistan or Iran, if Iran is in fact pursuing nuclear weapons. And the other is counterterrorism. The second of the third is counterterrorism, where I think American and Saudi interests have very clearly aligned since at least 2003, when Saudi Arabia was forced to deal with its own phenomenon of domestic terrorism.

The third, though, I think, is less clear to me, and it's less clear to me, although it enjoys a kind of hegemonic status within the analytical community. And that's that the United States and Saudi Arabia see the question of regional security in the same terms. Greg outlined one approach to this, and that was countering or containing Iranian ambition and hegemony in the region. And it's certainly true that the U.S. and Saudi Arabia agree that Iran has the potential to do great harm, and that it seeks -- and that the Saudis and the Iranians are engaged in a balance of power struggle. And the U.S. would like to see Iran not win that -- not win that competition. But there's more to security than this. There's more to security for the Americans, and there's more to security for the Saudis.

Greg mentioned that I've been an advocate of sort of making sense of Saudi Arabia's response to the Arab Spring through the lens of counterrevolution. I think this is a semantic difference between us. And I don't think -- and I think Greg sort of not unfairly but I think mistakenly concludes that by calling Saudi Arabia a "counterrevolutionary power," that I necessarily attributed the ability to accomplish those things. Success shouldn't necessarily be conflated with its desire to achieve a certain political outcome.

So what is it that Saudi Arabia wants to achieve in the Middle East? Yes, it supported the overthrow of Qadhafi. But much like Gates -- you know, Robert Gates said about Libya, it was relatively easy for the U.S. to make a decision about intervention in Libya because it's pretty far removed from our core area of interests.

The same is true for Saudi Arabia. Qadhafi wasn't loved in Riyadh. It doesn't necessarily change the balance of power either in the Levant or in the Persian Gulf for the Saudis to have supported his overthrow. So, you know, I don't necessarily agree that just because Saudi Arabia promoted or supported regime change there that it isn't in fact a counterrevolutionary power.

Closer to home -- and I do think Bahrain is a very clear example where Saudi Arabia has been -- but even in Yemen and Syria, where Saudi Arabia has allegedly been behind part of the negotiations to have Saleh step down, and it remains to be seen if he'll actually do so or on what terms he'll actually do so -- as well as in Syria -- my argument would be not that the Saudis have supported a transition of power; rather, they have specifically supported the preservation of a certain kind of either political status quo, as in the case of Yemen -- the Saudis don't want to see democracy or reform come to Yemen. They want to see somebody like Saleh take over there. It's the same "Mubarakism" without Mubarak.

And in Syria, this has little to do with what kind of political system follows the fall of Assad. It has everything to do with, I think, as Greg rightly pointed out, the ability to check Syria off the potential box of Saudi friends in the region. It has very little to do with the kinds of political structures -- structures of power -- that will take place after Assad goes away, if he in fact does.

So if Saudi Arabia's a status quo power and if the Arab Spring suggests to us that the political status quo was no longer viable and that autocratic regimes are inherently unstable -- and maybe the Arab Spring will hasten all of this, the unfolding of autocratic regimes elsewhere -- I mean, this seems to me to be not a key or an indicator of future stability but, rather, the -- rather the sort of permanent realization or pursuit of an inherently unstable arrangement of regional alliances that may only be stable for six months to a year at a time. That's not the kind of place that I think the U.S. should put its political emphasis or make its policy objectives.

The last thing I want to talk about -- with respect to security, Greg mentioned oil and sort of the importance of oil in Saudi Arabia's shifting nature as an oil power. I happen to think that when we talk about security, historically what the U.S. has emphasized since the mid-20th century by energy security is that it seeks to protect the flow of oil from the Persian Gulf. Right? I mean, there's a reason that when Iran threatens to close the Straits of Hormuz, it sort of evokes this response not only from many of us but from policymakers that this is a terrible thing. And it is. I mean, if Iran was actually interested, or able, in closing the Straits of Hormuz, don't get me wrong, global oil markets would be devastated, at least in the short term. I know it would prove problematic for the global economy, as well as for the American economy, in a whole host of related ways.

But is in fact Saudi Arabia's commitment when it comes to regional energy security to making sure that oil in sufficient quantities gets out of the Persian Gulf and to global markets. This has long been its claim and this has long been our claim. And I'll just raise this as a point of discussion that's maybe worth following up, so that I don't belabor it too long. The reality is is that not only in the last five years but since the 1970s, Saudi Arabia has not in fact been practicing or participating in the provision of oil in sufficient quantities to stabilize global oil prices. Rather, it's been engaged in the manufacture of oil scarcity.

Resources scarcity is something that guides much of our thinking, and I used to be a believer in peak oil and that this was a -- this was a resource that would quickly disappear. I was convinced that that's -- you know, basically through empirical evidence -- that's really not true, and that what Saudi Arabia and many of its oil producers engage in is a sort of restrictive approach or a limited approach to global oil markets in which they're looking not for sort of stability or security in the sense that we think about; rather, they're thinking about the maximum price that they can achieve in order to maintain global dependence on oil, which means that they limit the quantity of oil that get to the market.

And the reality is that, absent all other factors, Saudi Arabia, Iran, Iraq, Kuwait, the Emirates, Qatar, Oman and the other oil producers in the region are in a much more delicate position than the United States is in the Persian Gulf, even though it seems the opposite is true. Why? Because they have to sell their oil in order to maintain their political systems at home. They're under incredible scrutiny and pressure to maintain a price structure that allows them to maintain all of the elaborate political systems that Greg outlined.

And in fact American militarism, the presence of our military in significant numbers in the Persian Gulf provides them cover to manufacture scarcity. It doesn't work the other way around. We're not providing them cover to make sure that oil gets to market in sufficient quantities; in fact, we provide them cover to do the opposite.

So if this is true -- and I think it's open for some discussion -- if it is true, then what security means to us in the region is very different from what it means to Saudi Arabia, and it should be thought of as something that's worth criticizing and scrutinizing, rather than assuming what's true today might have been true three decades ago.

I'll stop there.

STARES: Great. Thanks very much, Toby, for that contrasting assessment of Saudi Arabia.

We have about 50 minutes of -- for Q&A. Those of you who want to ask a question, do the usual thing; wave your placard there. I see Judith has already offered to start. I will try to get you in the order that you put them up.

Those in the bleachers should wave frantically if they want to be recognized. And I will try to call on you.

So Judith, take it away.

QUESTIONER: Just a quick point to Toby. I'm not sure I could go with the oil scarcity theory, but I think we also need to recognize that Saudi Arabia's in the middle of an energy crisis of its own, which is why they're going for alternative and nuclear. They're using today 4 million barrels a day for domestic purposes. Their population doubles every 20 years. They're going to be using 9 million within 10 years, and that means they have no income.

So you know, the question of what's going on and how they're selling their oil I think deserves to be examined very, very closely.

And Greg, excellent report and so on, but I think in your presentation -- I haven't had a chance to fully devour all of the report yet. You may talk about it there. I think you can't talk about Saudi -- you know, promoting sectarianism (Iraq ?) and Bahrain without recognizing that between 2000 and 2008, they had very serious problems with the U.S., the catastrophe of, I think, the Iraq War, the unequivocal, unconditional choice of Maliki by the U.S. and the continued support for Maliki, who the king doesn't trust -- thinks he lied to him and that he's an agent of Iran, some of which may be true, some of which is not true -- and also Bahrain. I mean, when Bahrain blew, it seems to me that the United States and Saudi Arabia made really catastrophic mistakes. I mean, that was the moment for the U.S. to call up the king and tell him the prime minister has to go; let the crown prince do a dialogue. And I think the violence could have been avoided because I think the Khalifa family has some very, very important limitations. They've ruined the way the government has run. And there are some very real issues in Bahrain that could have been handled. They can't now, but they could have been, but we -- you know, we don't have a Middle East policy.

I would say in terms of threat, of course they're petrified. They're so allergic to Shi'ite you can't even mention it to the Ph.D.s. You know, I'm sure you've had that experience, so there's no point even to talk about it. Iran of course scares them to death.

But I think that the biggest threat to Saudi Arabia is demographic. They're old guys, succession, et cetera. They simply cannot handle the demography. As I said, population doubles every 20 years; seven children average per woman; 60 percent under the age of 20; 40 percent under the age of 13. And even if oil is $300 a barrel, they cannot keep them down and out and quiet by paying them off. So how they handle their education is the key to the security and stability in the future.

STARES: All right. I want you to digest that. Do you want to -- (off mic) -- or do you want to respond?

GAUSE: Yeah, yeah, sure. I mean, I think this demographic issue is fascinating because I think for years the Saudis lied about their population, right, and they exaggerated it, so we thought there were more Saudis than there actually were.

Now it seems we're getting down to a relatively reliable number. Right? About 30 million now, 22 million of them Saudis. The demographics are not great. There's no question about it. But they probably aren't as bad as many people think they are, because we tend to think back to the inflated figures that they pushed up until the '90s. But without a doubt, there's a demographic issue here.

How they deal with it, of course, is -- the approach from the last oil crash of the late '90s was we're going to let the private sector do this. And the Saudi private sector has become an extremely powerful creator of jobs. Unfortunately, all those jobs go to foreigners, and that's part of the deal in Saudi Arabia. Right? Unless the Saudi government can do a political deal with its private sector, which is a dependent private sector but a much more sophisticated and interesting one than in the oil boom of the '70s, and a much more globalized one -- unless the Saudis can get this deal done, where they can increase the price of foreign labor and thus increase the incentives for their own private sector to hire Saudis, train them -- because they're not being trained in the schools -- and give them jobs, then I think that that's a huge problem. It's not that people don't realize this. People talk about this all the time. It's a question of political will, and it hasn't been summoned yet.

JONES: But there's no mechanism.

GAUSE: Well, there's a mechanism. The king could -- the mechanism in Saudi Arabia is the king says, and it happens, right?

JONES: Well, no.

GAUSE: Except for codification of Shari'a --

JONES: Which hasn't happened.

GAUSE: -- which he says -- and it hasn't happened.

JONES: I mean, there's no pressure on the royal family to take these steps. I mean, I don't think there's a sense -- I think there's a -- there's a recognition --

GAUSE: Everybody talks about this all the time.

JONES: Well, then -- you know, then they're not rational actors, right? And we know this -- that because they won't --

GAUSE: Well, no, they're short-term actors.

JONES: -- they won't very clearly sort of undertake what's necessary.

I'm not sure education's the answer. I mean, we're -- I mean, that's a cultural sort of -- you know, that's offering up a cultural explanation that if we could retrain them in certain ways that they might find their way forward to more serious and sort of what might be more recognizable forms of development and economic practice. The reality is this is all political. The Saudis were very calculated about how they both structured the political/economic system but also how people seek to siphon rents off of it. I mean, this is -- this is completely reasonable behavior, given the centrality of oil.

I mean, I'm not going to speak for Greg. But I mean, I think the Saudis are stuck. I think they're fundamentally stuck in a dilemma that they cannot figure a way out of. And they don't have the political will to do it, which means it's going to come about spectacularly at some point. It may not be five years from now, but eventually.

STARES: Michael?

QUESTIONER: Panelists barely touched on the subject of succession. Let's accept Greg's definition that the -- that the real serious issue to talk about is the succession to the next generation of leaders. I'd like -- I'd be interested in the panelists' comments on how successful that new generation is in terms of the very complicated set of political skills that Gregory outlined as being essential to stability if we want to accept that just for a moment in Saudi Arabia.

GAUSE: The next generation is too big to generalize about. I mean, there's incredibly competent people and interesting people. There are wastrels. There are people who would -- who we would consider to be radical extremists. And there are people who would be much more comfortable in Mayfair or in Georgetown than they are in their own country. It is such a diverse group that I'm very uncomfortable in generalizing about it.

The only thing that I would say is I've never met a single one of them -- and I've met some of them -- who doesn't think that it's their family's right to rule the country. They are -- they're not political reformers the way we would understand political reform, it seems to me.

My bottom line on succession is that those who talk about it don't know about it, and those who know about it don't talk about it. So I'll prove that I don't know about it by talking a little bit about it. And it seems to me that there's an untested -- you know, that they've -- trying to institutionalize it with this allegiance commission, the Bay'ah committee, commission, but this is a completely untested institution.

And the smoothest way that this would happen is while the old guys, the remnants of the old guys are alive, that they do a deal and that that deal then gets ratified by this new institution and that in that deal they make clear that there's a number of lines in the family that are going to continue to have an important role.

But this is also a question of political will. Toby talked about how they -- you know, they don't have the political will. If they have the political will to do this, I think that the next generation's succession could be smooth. But if they keep kicking the can down the road and then they all die, then I don't know. I mean, it's a wide -- it's wide open at that point.

The Saudis have been pretty good at dealing with succession since the problems of the late '50s and early '60s, which was very touch and go. Toby said 1979 as the turning point of modern Saudi history; frankly, I think the late '50s and early '60s was the most dangerous time for the al-Saud family. They were beset by regional -- real regional enemies in Nasser's pan-Arabism. They had a civil war going on in Yemen from the early '60s. And they were profoundly split domestically. And they had as much opposition I think domestically, and perhaps even at a more elite level, than they have now.

And, you know, they go through that through luck. And if this generation remembers that dicey time, the coming generation, maybe they'll be able to work it out. But I don't make any predictions on that.

STARES: Toby, anything you want to add on -- OK.

I think -- (name inaudible) -- and then Elise.

QUESTIONER: Thank you. Well, thank you to both of our presenters, and thank you to Paul for convening such a stimulating and really excellent panel here. It seems that since the Arab uprisings began, we've seen a different type of Saudi foreign policy if -- in style if not in substance.

The objectives may be status quo. They may be counterrevolutionary. But at least it seems to be a style of activism that we've not seen before -- be it the approach it took vis-a-vis Qadhafi, the approach it took in Bahrain, the approach it's taken elsewhere in calling for the U.N. to intervene in various conflicts.

One, is this in fact a phenomenon, or is this just an ahistorical observation? And if indeed it is true, is this a function and a reaction to a perceived absence of American activism and role? Or how do you explain it, if in fact -- an accurate description of reality?

GAUSE: Yeah, you know, I think that this activism actually predates the Arab Spring. It's just they've failed on most of their initiatives. I mean, I think that there are three areas where -- once the king decided -- '07 -- '06, '07 that he couldn't do any deals with the Iranians and they were not to be trusted, I think he made three initiatives, all of which failed, right, all aimed at rolling back Iranian influence in the Arab world. One was in Iraq -- very strong support for Allawi. He backed Allawi in '05 but strong support for Allawi.

The second was Lebanon -- strong support for Hariri in March 14, and in Palestine trying to bring Hamas and Fatah together in an effort to, you know, cut off this Iranian-Hamas developing relationship. He failed on every one of those.

You know, one of the jokes I tell is that, you know, you can understand why the Saudis are so reluctant about democracy. I mean, you know, they back Allawi. He wins the elections, gets the most seats, doesn't become prime minister. They back March 14. It wins the election. Hezbollah runs the government. Of course they don't think democracy works. When they pay for democracy and their guys win, they don't get to rule.

So I think that the Saudis have been more active, but they've failed. They've failed. And one of the reasons they played up the Houthis in Yemen so much, it seemed to be, is because they thought that they needed a victory. You know, they're going to make this bunch of guys in Yemen into clients of Iran. You know, they use Iranian revolutionary rhetoric, but there's no great evidence that the Houthis are clients of Iran. So they make them into clients of Iran and they go pound them. "We won one." And I think that that was a large impetus behind the publicity that the Saudis gave to the Houthis.

So I don't see this activism now -- in fact, I see them in the Arab Spring as being incredibly discombobulated. Right? They weren't at the front on Libya; they were in the back, and they came along. It took them months to decide that Bashar was not their guy. You know, this innate desire for nothing to change really was not -- they were not well-suited to deal with the events of 2011 because so much was changing everywhere.

I think the only new thing that we see in 2011 -- you know, and Toby and I here disagree. Right? The only new thing we see is a willingness to use Saudi forces beyond their borders to protect regimes that they think are key to them.

Now, this isn't the first time Saudi troops have been in Bahrain. Right? In the mid-'90s --

JONES: '96.

GAUSE: Right, when the GCC summit -- that first -- that intifada -- the mid-'90s intifada started in Bahrain. The Saudis sent troops into Bahrain as well. Right? But the very public way with which it was done, they made no secret about it. They were not apologetic about it. That is the only new thing that I see.

JONES: Yeah. No, I do think that sort of the scope or the breadth of Saudi activism is new; I mean, moving on multiple fronts at one time. And I'll address, Rob, the sort of second part of your question, and that is: How does this -- what does this tell us about what the Saudis think about the U.S.?

I think the Saudis are in a difficult position. I think the way they think about this is that they have a complicated place, that historically they believe they've had a special relationship. But since 2001 and, arguably, from the Clinton administration, they felt like it's been a relationship under pressure in various ways. So they've been put in a position where they have to balance that uncertainty with a kind of desperate sense that they want to preserve it as best as possible.

The Chinese aren't a reasonable alternative to the U.S. The Chinese can't project kind of military power, the political will to do the sorts of things that the U.S. has historically been willing to do. But at the same time, as Judith pointed out, the U.S. doesn't have a Middle East policy. We don't have a clear approach. We don't know what our priorities are, and Andrew has said the same thing in multiple settings, right, that you know, it's kind of ad hoc; it's convoluted. Are we committed to democracy at this point, or are we a status quo power ourselves? Is Iran going to shape our policy, or it is going to be some combination of things?

I think the Saudis understand very clearly, perhaps better than most, the uncertainty that characterizes the American position. And that activism that I think you've correctly identified -- and I think Greg's right, too; it has its roots elsewhere but -- is partly a reflection of a power in the Middle East that's got a lot of resources. It's got a lot of money, even if it's convoluted, to be able to attempt to shape outcomes.

Again, I wouldn't attribute to the Saudis necessarily a level of success that they've been effective, but I think they're trying.

STARES: OK, Elise and the Michelle (sp).

QUESTIONER: Thanks so much, both of you, for this really interesting discussion. And Greg, I really enjoyed the report.

A just quick follow-up on the succession issue, and then I -- a question about the Salafists. On the succession issue, I mean, I don't want to call King Abdullah a reformer, but when I -- when I use --

GAUSE: Not when you're sitting next to Toby Jones, you don't, no.

QUESTIONER: Exactly. But when I say that, you know, I think if there was any anybody that thought that King Abdullah on the scales tipped more towards reform than not -- and I think the death of the crown prince -- a lot of people were very concerned that -- about Prince Nayef. And does that take Saudi Arabia -- you know, instead of begrudgingly going along with small reforms, are we going to see under -- as we move towards succession, are we moving even farther away from that? Or do you think that the new leadership eventually will have to begrudgingly accept some more freedoms for the people?

And then on the Salafists, I was wondering if you could touch upon Saudi funding for some of these groups, political groups, throughout the region. And does that -- does the rise of more Islamic parties help Saudi consolidate its leadership position in the region? Or are we seeing in the region -- as we've seen Qatar and Turkey take greater leadership roles in the region, is it too late for that?

JONES: Let me just offer this up: My understanding of the Saudi role in the -- in terms of who it's supporting and who it's not supporting, they're not supporting the Salafis or the Islamists at all. The Saudis are --

QUESTIONER: I was wondering. I thought maybe they were giving --

GAUSE: I'm sure that they raise -- I'm sure plenty of these Salafists -- everybody in Egypt --

QUESTIONER: A lot of people -- a lot of people are wondering where the money is coming from.

GAUSE: Everybody in Egypt says all this money for the Salafists come from Saudi. They never have any evidence.

JONES: But state funding went to SCAF.

GAUSE: Yeah, state funding is a different story and not as -- but not as much as they promised.

JONES: But the Saudis are --

GAUSE: They promised ($)4 billion and they probably haven't even given a billion.

JONES: Right, well, it's only a billion. (Laughter.) The Saudis have been very clear, I mean, in spite of Nayef's comments that we will maintain our commitment to Salifism -- which, by the way, is a new thing. The Saudis haven't always called it Salifism --

GAUSE: Right.

JONES: -- so this is kind of an innovation.

The kingdom's position, historically, on the Islamists, while they've cultivated relationships with some sectors of it, have been deeply nervous about the power of Islam and the Muslim Brotherhood in particular. And that has to do with their own domestic experience, as well as events in the region.

I think they're -- you know, the obvious thing might be to say in Egypt, with the success of the Islamists in the parliamentary elections, is that the Saudis are pleased. I think the Saudis are in fact very anxious and would like to see SCAF ultimately hold onto power and not give up.

GAUSE: Yeah, I have no doubt that the Salafists have networks into Saudi Arabia and raise money there. How could they not. Right? There are all sorts of sympathetic people in Saudi Arabia. I get no indication that it's a government policy to back the Salafists.

And I think that -- I agree with Toby here; I think that the Saudis are profoundly nervous about this, because if you get the whole -- if you get the Salafist movement basically saying, "Yeah, democratic politics all good," that's troublesome to them in a way that goes beyond the tactical.

So, yeah, I think that, you know, the fact that the Salafis in Egypt sometimes run up the Saudi flag at their rallies and all, it must -- the king must see that on TV and go, "Good" -- (laughs) -- you know, but I don't think that they're banking on the Salafists to be their lever in Egypt.

And the Brothers, I mean, Nayef has publicly, on more than one occasion, said the brothers are the cause of everything bad that's happened in the Middle East. So he -- he doesn't like them at all. So the thing with the brothers is even more complicated, in terms of how the Saudis view this.

JONES: In fact, the most powerful potential opposition force in Saudi Arabia is the Saudi analog to the Egyptian Muslim Brothers.

GAUSE: Really? You think so?

JONES: Well, I mean, well --

GAUSE: I don't think so.

JONES: You don't think that the sahwa still has the potential capacity to mobilize?

GAUSE: I mean, I think the sahwa only can do that. This word, sahwa, awakening, is something that gets thrown around in the Middle East all the time. Now, the Arab Spring is the sahwa. Right? And then there is the sahwa in Iraq, right, where the Sunnis --

JONES: Should've trademarked --

GAUSE: -- somebody should've -- but the sahwa in Saudi Arabia, which Toby has written about, and the best book on it is Stephane Lacroix's book, was this kind of Muslim Brotherhood-influenced but also Salafi-influenced bunch in the '80s who come up and start to give a political critique of the regime. And in the '90s, after the Gulf War, they come into their own as very critical of the regime.

After 9/11, all of these guys come back and rally to the regime and become big supporters of the regime. Right? I would argue because they saw al-Saud rule under pressure. Right? If there was going to be some international reaction to 9/11 against Saudi rule, they were going to be with the regime, because in the end, these Salafists cannot -- you know, the reason they're not bin Laden is that none of these guys can imagine a Salafi state in Arabia that is not ruled by the al-Saud. And I think that that's why I don't think of them as the biggest problem for the Saudis.

On the succession thing, I'll demonstrate my ignorance even more by talking more about this. (Laughter.)

Look, Nayef has been the chief of police for 38 years, right? Thirty-three years, something in there. And when you're the chief of police for that long, you develop a certain view of politics, I think. We're not going to see any political reform the way we would understand political reform, in terms of voting, in terms of legislatures. I don't think we're going to see that under Nayef.

On the other hand, I'm very reluctant to say that he's going to roll back the small but real social changes that Abdullah has allowed, particularly on the issue of women. These guys don't like to repudiate their predecessors. I mean, they do have that sense of family cohesion and we've got to stick together.

You know, even after King Saud was bounced, they named the airport and the university and all sorts of things -- Faisal named all those things after him. Right? And so I would be reluctant to say that Nayef is, you know, the opposite of Abdullah. But I don't think that Nayef is a political reformer, but I don't think Abdullah is a political reformer.

I do think that a long-term consequence of the events of 2011 are that eventually Saudi Arabia is going to have an elected legislature. I think that the political trends regionally are moving in that direction. I think that the political ideological trends in Saudi Arabia are moving in that direction.

I think that in the next generation, there will be more acceptance of that notion. I think it will be -- and then it will be problematic, just like the legislature in Kuwait is problematic, just like the legislature in other of these monarchies can be problematic for the monarch. But I think -- and this is a change in my view. Before 2011, I didn't think the Saudis would go that way at all, but now I think they probably will, just not under Nayef.

STARES: OK. Michele Dunne?

QUESTIONER: Thank you. Elise actually asked my question about the Salafis, but I just wanted to add a note on something else.

Greg, you were mentioning that the failure of the opposition, or the inability of the opposition in Saudi Arabia to unite being one of the reasons why you weren't expecting -- or why you think it's stable. And that's empirically true, that they failed to unite. But I just wanted to point out that in Tunisia and Egypt, this happened very quickly. You know, all of a sudden we're -- you know, these disparate opposition forces had tried and failed and they looked weak and they looked feckless and, you know, all that kind of thing. And then, just, you know, overnight or over the course of days and weeks, it happened. So it's not -- again, as Toby said, I think, you know, the fact that it didn't happen in the past -- you know, it won't.

GAUSE: You're right. And I'm one of those people who was very enamored of the literature on the stability of Arab authoritarianism. And so I've had to do a rethink all this past year about, you know, what we got wrong on that literature. I think that literature is still very valuable for explaining why these regimes lasted as long as they did, but we certainly missed things that were happening. And there are the hints of that in Saudi Arabia, of people trying to cross ideological and sectarian lines to talk to each other. And, you know, occasionally even issuing, you know, little proclamations.

But to me, here -- to me, for Saudi Arabia here was the moment that crystallized the fact that nothing was going to happen: As Ben Ali fell -- right after Ben Ali fell and as Egyptians were starting the Tahrir Square revolt, there was a big flood in Jeddah, killed 10, 12 people. This is on top of a flood a couple years before, which killed over 100 people, after which, the king himself said, this will not happen again; we will make sure that this does not happen again. And then it happened again.

I said, "Wow, if there's ever a time when people should come into the streets in Jeddah, the ones that aren't flooded anyway, this is it." Ben Ali, down -- the Egyptians, in the streets and everyone in Saudi Arabia watching them. And here, the regime has failed in a promise that should have been easy for them to keep, because it's just spending money getting the engineering right and, you know, stopping this. And they didn't do it. Nothing happened. I was floored. I was flabbergasted. I thought this was a moment that something might happen in Saudi Arabia. Nothing happened.

JONES: Well, I think, you know, Egypt happened spontaneously. I think that's right. But there was also -- there were forces on this sort of -- it was a civil society in Egypt that could mobilize different sectors. Maybe they hadn't previously thought of one another as kind of being like-minded, at least on the question of revolution or political change, but nevertheless had the capacity to organize.

Saudi Arabia doesn't historically have the same kind of vibrant -- there's not the ability or the space for Saudis to come together. But I think we're seeing those institutions and organizational efforts begin to materialize. And the Jeddah floods might be the impetus in one place, but the prospects are that it's going to have to take some time before all of this can mature or be realized in a meaningful way.

And let's face it, the Saudis also learned, like others in the region did, from the Egyptian example in particular, about how to -- at least how to attempt to preempt it from happening quickly. I think the jury's still out. I don't think the Arab Spring's over, by any means. You know, I'm not predicting that Saudi Arabia in the next six months is going to have a revolutionary moment. But I wouldn't say it's impossible either.

STARES: Doug and then Mark.

QUESTIONER: With respect to a relationship between Saudi Arabia and Iraq, how much of it is personal and how much political? Is there some type of policy that Iraq could realistically do? I mean, Maliki's figured out he doesn't have to share power with the Sunnis and he's not going to, not for a generation. I think that's pretty clear. Is there something else he could do, you know, vis-a-vis reaching out to the Saudis or taking some firmer stand against Iran? And is that just -- with the current regime, does that calculus change three, five years from now?

JONES: I just had a piece come out at a USIP edited volume, with Scott Lasensky and Phebe Marr and others, that argues that the Saudis approach this in a couple of ways, the Iraq dilemma for them. One is certainly personal and it has to do with the way Maliki talked about Iran and about Saudi power in the region. And certainly for Abdullah, I think that's the case.

But I think there are other -- there are at least two other political calculations, one big one, and that is that the Saudis are uncertain about whether the U.S. is going to abandon them in the region. And the Saudis, as late as last year, believed that the U.S. would maintain some kind of political-military commitment to Iraq and wanted it to do so. All right, they don't want the Americans to leave Iraq. They don't want -- well, too late.

GAUSE: They didn't want us to go in. They didn't want us to leave.

JONES: Right, so part of this was also an attempt to wedge the Americans to maintain sort of an ongoing commitment to Iraq, that if you leave, this could become a conflagration point. And the other part of that is is that the Saudis also, I think, calculated wrongly that if they were unwilling to work with the Americans or think constructively about how to build a better relationship, they might have some leverage over the U.S. on Palestine. And that's -- if the Arab Spring didn't obviate that, then it was never going to happen anyway. Right? So I think that's also part of what the Saudis were thinking.

GAUSE: Yeah, I mean, I think that -- this is a guess on my part, but Abdullah has been pretty flexible on all sorts of things. But on this one he seems to have really dug in his heels. And I don't -- I just don't think that -- I mean, any new Saudi initiative toward Iraq I think is going to depend on a change in leadership at the top.

I think there are people in Saudi who recognize that their approach to Iraq is self-defeating, that it is, in effect, leaving the field open to Iran. And I think that that's an argument that is not publicly articulated in Saudi Arabia, but it is articulated at high enough levels that perhaps there might be a rethink after the current king goes.

STARES: Mark Finley?

QUESTIONER: Thank you. The sentiment expressed throughout the conversation, by both the speakers and the guests, about -- you know, for a variety of demographic and social reasons, you know, whatever the status quo is, you know, the logic is inexorable that, you know, the price of oil needed to sustain it goes higher. Obviously the price of oil can't go higher forever, and so my question is -- at some point the regime has to deal with coping mechanisms. And here's my question: Among the array of coping mechanisms that I can think of, cutting subsidies, pursuing -- somebody mentioned nuclear power, other forms of energy, raising production capacity, inviting in foreign investment -- which of these coping mechanisms is likely to be most -- least unattractive to the Saudi body politic?

JONES: Least --

GAUSE: Least unattractive? Nuclear power.

JONES: That's it.

GAUSE: Build as many plants as you want.

JONES: Yeah, I mean, I think it's the only route that would basically -- it would not affect Saudi citizens in any meaningful way.

GAUSE: Look, there are other things that can be done. This is not -- see, this is where I think Toby and I differ. I don't think this is a fragile regime. I think that this regime could in fact reduce subsidies, especially now in a time of, you know, pretty good economic time. I mean, with all the unemployment issues and all, this is not a bad economic time in Saudi Arabia.

They could do it. They just -- they have to summon the political will. And there are ways to do it that can lessen its impact on those who would be most affected. All right? And then there are some technical fixes that have to be done. Right? There are some -- these aren't sexy and they aren't political, but you know, aging infrastructure uses more energy than new infrastructure. And, you know, you can get more natural gas if you actually -- I mean, I know they drill dry holes and all, but you can presumably get more natural gas in Saudi Arabia and stop burning so much oil to generate electricity.

But no, the easiest thing is just build all those nuclear power plants. But they're slow off the dime on that. I think that they can deal with the subsidy issue and it won't shake the regime. But this would be a good time to do it, frankly.

JONES: Well, but the only time they can sort of end the sort of -- what is really a systematic and structural sweeping subsidy regime that wouldn't affect people is to dip into their savings.

GAUSE: They've got plenty right now.

JONES: And they've got plenty right now, but you said yourself that there's, you know, the oil market may not bear $110 a barrel oil for the foreseeable future. I mean, that brings into play alternative energies, whether it's shale oil or whether it's natural gas or whether it's other things, that may make the Saudis no longer competitive. It may render irrelevant the question of spare capacity. And then the Saudis really lose their ability to manage.

So if they think they can end subsidies, let them try. I think it unleashes all kinds of things that would be problematic for them at home, as well as their place in the global economy. In fact, I think we should advocate for that and then see what happens. (Laughter.)

GAUSE: You and I can get behind this policy, but for different reasons.

STARES: (Off mic.)

QUESTIONER: Thank you.

Thank you both for your presentation and given the Saudis' interest in the status quo, and certainly stability in the region, it was easy to understand their concern with the Mubarak fall, maybe also with Qadhafi, given kind of the peripheral of Libya and Saudi Arabia. I'd be interested in hearing more about how you think they are looking at Syria. Bashar al-Assad may not be a very well-loved entity in Riyadh, but still, the Syria question --

GAUSE: That's an understatement.

QUESTIONER: -- is a lot more complex in terms of what could happen. So they're watching the (off mic) in Egypt or al-Nahda, in Tunisia. But what could happen in Syria would be very different.

And the other thing I was interested in to hear your comments on, the dynamics between Saudi Arabia and Qatar, given the rising role of Doha in dealing with issues like Syria and Libya and others. And how are those two playing, as they see their role in regional politics?

GAUSE: Well, okay, I'll take the first swing, Ambassador.

Syria: I think that if the Saudi media is any indication of official thinking, and I think given the uniformity in which -- with which I see the Saudi media dealing with Syria, I think it probably is -- they've washed their hands of Bashar al-Assad. I mean, the worst things are said about him every day, even in the most mainstream, you know, kind of -- the most responsible Saudi media, the worst things are said about Bashar al-Assad.

And it seems to me that, despite the uncertainties of his fall, the elites have basically come to the conclusion that they're better off without him than with him. And I think that this is largely driven by their view of their regional competition with Iran.

Will there be problems in reconstructing? Obviously. I think the Saudis feel that they have levers that they can exercise.

JONES: But if they have a plan --

GAUSE: We don't see it.

JONES: -- for a post-Assad Syria, what's it look like? Who takes power?

GAUSE: Who does have a plan?

JONES: And if --

GAUSE: Nobody has a plan for -- not even the Syrian opposition has a plan for --

QUESTIONER: Not even the opposition.

GAUSE: -- has a plan for a post-Assad Syria.

JONES: Right, so I mean, what is the end game in Syria for the Saudis and the --

GAUSE: The end game is to get the damn Shi'ites out and cut the Iranians down to size, right?

JONES: So it's just to replace Assad with a group of elites that are more favorable to the Saudis. At least that seems --

QUESTIONER: And are more Sunni.

JONES: -- and you figure out who that is, I suppose.

GAUSE: I mean, that could be generated through elections. That could be generated any number of ways. I think that the Saudis are realistic enough to know that given what's happened this year, it would be very, very hard anywhere to have a change of regime that doesn't have at least some kind of an election. Now, you know, they can try to manipulate it and things like that, but, I mean, I don't think that they're powerful enough to prevent that and I think that they realize that they've got to swim with this tide. Maybe the tide changes after a while, but this is a tide they have to swim with.

STARES: What is their pre-Assad plan? That's what I'm more interested in, rather than the post one? We jumped over a major event here.

GAUSE: Oh, you mean the fall of the regime?

STARES: What do they do now? Yeah, what do --

GAUSE: I don't think anybody has any bright ideas. I think they do more of the same. They're going to ask us, "What are you going to do about this?"

JONES: There is some symbolic capital that's earned by supporting, right, the fall of a quasi-unpopular -- I don't know, is Assad unpopular at home?

GAUSE: Seems to be unpopular in certain circles.

JONES: Syria is certainly divided, I think, on the viability of Assad going forward, right? But the Saudis also, I think, generate some symbolic capital outside of Syria by saying that they support and that they're not a counterrevolutionary force, especially at home. There's also -- I mean, the most cynical side of me says that the Saudis actually benefit a great deal by making sure that if there's going to be crisis in the region that it happens somewhere else. If they're seen to be involved and attempting to manage things, then that maybe pays dividends. But if you're talking about the Saudis being ineffective, I mean, this would be a terrible way to approach foreign policy, right?

GAUSE: Do you think the Saudis are powerful enough that they can cause uprisings in Syria?

JONES: No. But there were already uprisings in Syria.

GAUSE: Yeah.

JONES: So you throw the weight of the Arab League behind it and for Syrian opposition forces, that's a pretty powerful indication of what's possible, if you sustain the fight. Now ultimately, the Arab League has made, you know, very clear gestures that the next stop is the U.N. Security Council.

GAUSE: Look, I think that it's useful to talk about how the Saudis approach Syria, but it's not nearly as important as how some other countries approach Syria. And Turkey is a lot more important than Saudi Arabia on the immediate question of where this uprising goes and where this regime goes.

JONES: I think the question of Qatar's role has gotten a lot of attention.

GAUSE: Too much.

JONES: And perhaps there is -- you know, historically there's been a rivalry. But it's interesting that Qatar hasn't been particularly assertive -- (inaudible) -- right, close to the Saudi hegemonic heartland. You don't see a --

GAUSE: Absolutely silent on --

JONES: Qatar's not pushing on issues that the Saudis really think are a point of emphasis, and I don't think they would. I think the Saudis are content to let them -- in fact, I don't think Saudi has all that -- or historically has had all that much influence in Yemen. And if the Saudis believe that the Qataris could come in and negotiate some kind of compromised transition of power, more -- the Saudis can't do it. You know, but I don't --

GAUSE: I disagree about Yemen.

STARES: Yeah, I do, too.

GAUSE: I think the Saudis have had lots of power in Yemen. But I wrote a book about that, so I have a stake in it. (Laughter.)

Look, Qatari foreign policy is a vanity project by a couple of guys who are -- who want to play a big role in the world. And thus, I find it very difficult to analyze it. (Laughter.) I mean, it's not based upon some kind of state interest. Right? It's based on a splash. And more power to them.

And many of the things they've done, including Al-Jazeera, have been extremely positive for the region. But it's an irritant sometimes to the Saudis, but I don't think it's anything more than an irritant. I think we all spend too much time talking about it. I don't think it's that important.

STARES: OK. We're coming to the end.

(Arnold ?), you have the last question.

QUESTIONER: Yeah, I wonder if you could quickly address the problem of succession after Prince Nayef. How many of the Sudairi Seven are left, and does that line still hold?

GAUSE: Yeah, Prince Salman, who is now defense minister, long-time governor of Riyadh, one of the full brothers. You know, if I were a betting man, I would put him next.

There's -- Simon, help me. Prince Ahmed at interior --

MR. : Abdul Rahman.

GAUSE: There's Abdul Rahman at interior, right? Deputy minister of interior?

MR. : (Off mic.)

GAUSE: Yeah, Ahmad at interior, right? Because he's the only one, other than Salman, who has a government job, right?

MR. : Yeah.

GAUSE: I mean, I think it's interesting that Salman has moved to the defense ministry, you know, because now he can say, having been governor of Riyadh, which is one of the most important positions in the kingdom, for a long, long, long, long time, he's now a member of the Cabinet. He's dealing with foreign policy. In many ways, one could see this almost as a grooming. But the internal dynamics of this are opaque to me and the actuarial tables are -- do not give us good indication as to how this line will go.

JONES: I think there's two -- and I think this is cross-generational. I think there's two things that are fundamentally true about the royal family. One is that they're not ideological. They're pragmatists. Right? And the second is that they are primarily, overwhelmingly, in total agreement, concerned with self-preservation.

GAUSE: Those are two points or one? (Laughter.)

JONES: Those are two.

GAUSE: Oh, OK.

JONES: Right. So they're not ideological, although they'll play ideology. Right? And they'll use it for their purposes. And they're interested in preserving their power and their privilege. And, you know, that's incentive for people to sort of stick together.

STARES: Okay. Well, this has been a fascinating discussion. I've certainly learned a lot from it. I want to thank you all for coming here today. (Applause.)

-------------------------

(C) COPYRIGHT 2012, FEDERAL NEWS SERVICE, INC., 1000 VERMONT AVE. NW; 5TH FLOOR; WASHINGTON, DC - 20005, USA. ALL RIGHTS RESERVED. ANY REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION IS EXPRESSLY PROHIBITED.

UNAUTHORIZED REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION CONSTITUTES A MISAPPROPRIATION UNDER APPLICABLE UNFAIR COMPETITION LAW, AND FEDERAL NEWS SERVICE, INC. RESERVES THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO IT IN RESPECT TO SUCH MISAPPROPRIATION.

FEDERAL NEWS SERVICE, INC. IS A PRIVATE FIRM AND IS NOT AFFILIATED WITH THE FEDERAL GOVERNMENT. NO COPYRIGHT IS CLAIMED AS TO ANY PART OF THE ORIGINAL WORK PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS PART OF THAT PERSON'S OFFICIAL DUTIES.

FOR INFORMATION ON SUBSCRIBING TO FNS, PLEASE CALL CARINA NYBERG AT 202-347-1400.

THIS IS A RUSH TRANSCRIPT.