On Nov. 17, Saudi Arabia’s absolute and often brutal monarchy will take a crucial step toward transparency and accountability. It plans to sell shares in its state-owned oil company, Aramco. The public offering is only a small percentage of one of the world’s largest companies. And it is only on a local stock market. Yet if the sale meets expectations, it could lead to more Aramco shares being sold on global exchanges. Private investors could then start to make demands on the kingdom’s crown jewel – and perhaps on the country’s de facto ruler, Crown Prince Mohammed bin Salman.
In many other Arab countries, from Algeria to Iraq, massive protests have recently challenged strong-arm rulers to hold them to account for basic rights and liberties. In Saudi Arabia, any challenges to the ruling Saud family are more subtle and slower, a result of swift crackdowns on dissent. They often show up on Twitter or in groups of women pushing the boundaries of rules that restrict their freedom. “The Saudi feminist movement has proved to be the most organized and articulate civil society in the country,” writes Saudi professor of social anthropology Madawi al-Rasheed in The Guardian.
Yet the monarchy’s biggest vulnerability is the economy. After world oil prices fell in 2015, it launched massive reforms under a new crown prince to diversify the economy and create jobs for a massive youth population. The regime plans to transfer a quarter of its economy to private hands. The sale of Aramco shares will not only provide needed cash for reforms, it will also be the ultimate example of the country being forced to open itself to the world – and to new values and expectations of the global market.
Saudi Arabia is the Arab world’s largest economy and Aramco is in charge of the world’s second-largest proven crude oil reserves. Both may soon need to treat private investors well by ensuring open, responsive, and clean governance. The shares being offered are available to both common Saudis and foreign buyers. With more public offerings worldwide, many investors may not like the arbitrary killing of dissidents or the way Saudi Arabia conducts its war in Yemen. Such troubling behavior could cause instability. Investors might also push the country to diversify more rapidly toward a post-oil future.
The Aramco offering is hardly a cathartic moment for Saudi Arabia. Yet it reflects a quiet revolution in Saudi identity, driven from both the top and the bottom. Young Saudis are not in the streets protesting. But many will be lining up to buy shares in Aramco.