Saudi Arabia in 2024: Positive Expectations Underpinned by Political Will and Economic Capacitieshttps://english.aawsat.com/features/4753676-saudi-arabia-2024-positive-expectations-underpinned-political-will-and-economic
Saudi Arabia in 2024: Positive Expectations Underpinned by Political Will and Economic Capacities
Saudi Crown Prince Mohammed bin Salman and the South Korean President attend a session of the Future Investment Initiative (SPA)
In an increasingly uncertain world, constants remain our main reference for forecasting the near future. These constants, the factors upon which projections about the future are based, can be summarized into three factors: The first is political will, the primary determinant of the direction a state will take and the objectives it sets.
The second is economic capacity, which enables states to execute their political will and allows them to turn plans into tangible reality.
As for the third factor, it is global changes, which can either positively or negatively affect the implementation of these plans. This is the major cause for uncertainty regarding the future, and state policies play a crucial role in determining it. When applying this perspective to the Kingdom of Saudi Arabia, one can anticipate what the next year might look like.
Saudi Arabia 2023
Starting with political will, domestically, the Kingdom continues to pursue its ambitious Vision 2030 - a pursuit reinforced by the fact that it has achieved targets ahead of schedule. Many of these initiatives have certainly started to bear fruit, especially those that began early in restructuring some of the state's sectors.
The Kingdom did not stop at the programs it launched with the inception of its Vision. It pursued many projects and initiatives in sectors such as tourism, entertainment, and sports. In the latter, the implications of the state's determination to transform plans into reality are particularly evident. In just a few years, the Saudi football league has stolen the spotlight from globally followed football leagues, with the world turning its attention to the Kingdom after the sports sector was restricted and the role of the private sector in the sports system was invigorated.
Since the Vision is comprehensive and encompasses all vital sectors, the interconnections of its different projects and their mutual reinforcement of one another have become evident. For example, recognizing the need for logistical support in the tourism sector, the Public Investment Fund launched Riyadh Air to help the Kingdom reach tourism targets.
This principle of interconnectedness applies to many intersections within the Vision. The progress made in these various sectors is further enhanced by the direct oversight of the Kingdom's senior leadership over national strategies, which ensures the integration and staves off redundancies.
Political will in the Kingdom also has obvious implications for its foreign relations with other countries. For years, the Kingdom has built bridges of communication with the world under the banner of shared interests and the exchange of values. 2022 concluded with the visit of the Chinese President to Riyadh, and these high-level visits continued into 2023, with the Kingdom hosting several major summits, such as the Saudi-African Summit, the Gulf-ASEAN Summit, the Saudi-Caribbean Summit, the Arab Summit, and the Islamic Summit.
The objectives of these summits vary and include political, economic, and cultural aspects. However, the Kingdom takes the same approach to all countries with shared interests and mutual benefits.
The Kingdom also participated in global summits, notably the G20 Summit in India and the Summit for a New Financing Pact in Paris. The impact of these efforts and international visits became apparent when the Kingdom won the bid to host Expo 2030 by attaining the majority of votes from countries and leveraging its strong global relationships.
Economic capacity
The second factor is economic capacity, which may be represented by the state budget for the next year. The Kingdom has continued to expand spending, setting a budget of over 1.2 trillion Riyals, while making conservative revenue projections. The deficit in the state's general budget did not exceed 2 percent, and the government continues to spend on various sectors without making any significant changes, thereby ensuring the continuity of the state's strategies for these sectors and their alignment with the shifts all around us.
While oil revenues decreased due to OPEC's proactive policy to maintain market stability, non-oil revenues continued to increase, reaching 441 billion riyals - about 37 percent of the state's revenues, up from approximately 32.5 percent in 2018.
The Kingdom's capacity to keep up this spending reflects two things: first, it is confident that its economy is solid, and it can sustain this expansionary spending without increasing public debt relative to GDP or depleting its reserves; second, its commitment to pursuing the programs of Vision 2030 and its reassurance about their positive outcomes for the national economy.
Global changes
The third factor is global changes, which can either pose risks or create opportunities for the Kingdom. These changes could be geopolitical, such as the ongoing Russian-Ukrainian war, which affects the stability of oil prices, or changes in the course of Israel’s assault on Gaza, which impacts the entire region, or the Houthi attacks disrupting maritime navigation in the Red Sea.
These changes may also be reflected in the global economy. Global economic growth remains slow due to factors such as inflation, the austere monetary policies adopted by central banks to curb it, and the aftermath of the pandemic, which has had an impact on global supply chains.
Saudi Arabia 2024
The forecasts for the Saudi economy in the next year are generally positive. Fitch predicted that the Saudi economy would grow between 2.6 and 3.3 percent, while Moody's expects growth of around 4.6 percent. The International Monetary Fund (IMF) raised its growth projections for the Kingdom to 4 percent in a short period. The preliminary budget statement from the Ministry of Finance has said that real GDP is expected to grow by 4.4 percent.
These forecasts are driven by several factors, including the events of 2023 and the policies being pursued by the Kingdom. Despite reducing its oil production, the Kingdom's revenues increased this year. This increase was driven by rising non-oil revenues, and these revenues are expected to continue to rise next year, as they have over the past five years.
This increase is due to the increasing role of the private sector, which has been invigorated by various government measures and programs tied to Vision 2030. This approach taken by the Saudi government is to mitigate potential risks in global oil markets. That is among the major axes of Vision 2030, which aims to diversify revenue sources in order to ensure sustainable growth and development in the Kingdom.
The developments seen in 2023 reflect a number of projections. For example, it would not be surprising if Saudi Arabia launched several projects related to its hosting of Expo 2030. These could include determining the location of the event, holding activities such as conferences tied to the Expo, like exhibitions, and strategic plans, and possibly establishing a governmental body tasked with overseeing this major event.
Moreover, we can also expect changes in the Saudi sports sector next year. Given that Saudi Arabia began privatizing clubs by transferring the ownership of four clubs to the Public Investment Fund, this trend could continue next year, with more clubs being transferred to major Saudi companies.
An increase in pace at the Ministry of Sports can also be anticipated in preparation for the expected announcement of its successful bid to host the 2034 FIFA World Cup. This preparation might involve submitting a proposal that includes constructing new stadiums and infrastructure to ensure that the Kingdom provides fans with a distinguished experience and that the sports sector meets the high aspirations that have been set for it.
With Saudi Arabia hosting Expo 2030 and the 2034 World Cup, many infrastructure projects are anticipated. These include ongoing large-scale infrastructure projects in Riyadh, such as King Salman Airport, the Qiddiya Project, King Salman Park, and other significant initiatives. Other cities in the Kingdom that may play an important role, especially in organizing the World Cup, are also expected to see major projects.
Those following the progress being made on Vision 2030 projects can see that it started with several ambitious projects like NEOM, Red Sea, Amaala, and Qiddiya. It began with the launch of numerous projects in Riyadh at the start of Vision 2030, and then we saw other projects in other cities, such as Jeddah Central, Rua Al Medina, and the Sudah and Abha Airport projects.
This might indicate that more projects will be seen in other cities across the Kingdom, whether broad infrastructure projects or sight-specific ones, like agricultural projects suited to cities and their geography and environment. This means that the next year will see the persistence, God willing, of Vision 2030, and the expansion of its initiatives to more Saudi cities that align with their cultural and geographical characteristics.
Flexibility of the Kingdom
The Kingdom has shown itself to be flexible through how it has dealt with economic and political events in recent years. It was not significantly affected by the inflation generated by the pandemic, unlike other countries, and it managed to stave off the negative repercussions of global geopolitical conflicts. Rather, it launched global initiatives aimed at addressing the ramifications of these developments, as it had with its initiatives for global supply chains.
It is not surprising that this approach will continue next year, with precautions being taken to avoid any changes that could negatively impact its economic and strategic interests. The Kingdom will leverage the robustness of its economy and global relationships to find solutions that ensure prosperity, all while maintaining its national project aimed at elevating its strategic and vital sectors.
Behind the Dismantling of Hezbollah: Decades of Israeli Intelligencehttps://english.aawsat.com/features/5096354-behind-dismantling-hezbollah-decades-israeli-intelligence
A banner of Hezbollah leader Hassan Nasrallah near the rubble of a building destroyed by Israel in Beirut’s southern suburbs known as Dahiyeh. (dpa)
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Behind the Dismantling of Hezbollah: Decades of Israeli Intelligence
A banner of Hezbollah leader Hassan Nasrallah near the rubble of a building destroyed by Israel in Beirut’s southern suburbs known as Dahiyeh. (dpa)
Mark Mazzetti, Sheera Frenkel and Ronen Bergman
Right up until he was assassinated, Hassan Nasrallah did not believe that Israel would kill him.
As he hunkered inside a Hezbollah fortress 40 feet underground on Sept. 27, his aides urged him to go to a safer location. Nasrallah brushed it off, according to intelligence collected by Israel and shared later with Western allies. In his view, Israel had no interest in a full-scale war.
What he did not realize was that Israeli spy agencies were tracking his every movement — and had been doing so for years.
Not long after, Israeli F-15 jets dropped thousands of pounds of explosives, obliterating the bunker in a blast that buried Nasrallah and other top Hezbollah commanders. The next day, Nasrallah’s body with a top Iranian general based in Lebanon. Both men died of suffocation, the intelligence found, according to several people with knowledge of it.
The death of Nasrallah, who for decades commanded Hezbollah in its fight against the Israeli state, was the culmination of a two-week offensive. The campaign combined covert technological wizardry with brute military force, including remotely detonating explosives hidden in thousands of pagers and walkie-talkies used by Hezbollah, as well as a withering aerial bombardment with the aim of destroying thousands of missiles and rockets capable of hitting Israel.
It was also the result of two decades of methodical intelligence work in preparation for an all-out war that many expected would eventually come.
A New York Times investigation, based on interviews with more than two dozen current and former Israeli, American and European officials who spoke on the condition of anonymity to discuss classified operations, reveals just how extensively Israeli spies had penetrated Hezbollah. They recruited people to plant listening devices in Hezbollah bunkers, tracked meetings between one top commander and his four mistresses, and had near constant visibility into the movements of the group’s leaders.
It is a story of breakthroughs, as in 2012 when Israel’s Unit 8200 — the country’s equivalent of the National Security Agency — stole a trove of information, including specifics of the leaders’ secret hide-outs and the group’s arsenal of missiles and rockets.
There were stumbles, as in late 2023 when a Hezbollah technician got suspicious about the batteries in the walkie-talkies.
And there were scrambles to save their efforts, as in September, when Unit 8200 collected intelligence that Hezbollah operatives were concerned enough about the pagers that they were sending some of them to Iran for inspection.
Lebanese soldiers outside a hospital where injured people were being taken after a wave of pager explosions in September in Beirut, the Lebanese capital. (EPA)
Worried that the operation would be exposed, top intelligence officials persuaded Prime Minister Benjamin Netanyahu of Israel to give the order to detonate them, setting in motion the campaign that culminated in the assassination of Nasrallah.
Israel’s decimation of Hezbollah was a significant victory for a country that, one year earlier, had suffered the greatest intelligence failure in its history, when Hamas-led fighters invaded it on Oct. 7, 2023, killed more than 1,200 people and took 250 hostages.
The Hezbollah campaign, part of a broader war that has killed thousands of people in Lebanon and displaced more than a million, defanged one of Israel’s greatest adversaries and dealt a blow to Iran’s regional strategy of arming and funding paramilitary groups bent on Israel’s destruction. The weakening of the Iran-led axis reshaped the dynamics in the Middle East, contributing to the fall of Bashar al-Assad's regime in Syria.
The contrast between Israel’s approaches to Hezbollah and to Hamas is also stark and devastating. The intense intelligence focus on Hezbollah shows that the country’s leaders believed that the Lebanese group posed the greatest imminent threat to Israel. And yet it was Hamas in the Gaza Strip, a group Israeli intelligence believed had neither the interest nor the abilities to attack Israel, that launched a surprise attack and caught the nation unprepared.
Israel was in a standoff with Nasrallah and his top commanders of Hezbollah for decades, and Israeli intelligence assessments have concluded that it will take years, possibly more than a decade, for the group to rebuild after their deaths. The group of leaders now in charge has far less combat experience than the earlier generation.
And yet the new leaders, like Hezbollah’s founders, are driven by a central animating principle: conflict with Israel.
“Hezbollah can’t continue to get support and funding from Iran without being in a war against Israel. That’s the raison d’être for Hezbollah,” said Brig. Gen. Shimon Shapira, a former military secretary for Netanyahu and the author of “Hezbollah: Between Iran and Lebanon.”
“They will rearm and rebuild,” he said. “It’s only a matter of time.”
Building a Network of Sources
The 2006 war between Israel and Hezbollah was a bloody stalemate. Israel withdrew from Lebanon after 34 days of fighting, which began after Hezbollah kidnapped and killed two Israeli soldiers. The war, which did not achieve Israel’s objectives, had been something of a humiliation, forcing an investigation panel, resignations of top generals and a reckoning inside Israel’s security apparatus about the quality of its intelligence.
But operations during the war, based on Israeli intelligence gathering, formed the foundation for the country’s later approach. One operation planted tracking devices on Hezbollah’s Fajr missiles that gave Israel information about munitions hidden inside secret military bases, civilian storage facilities and private homes, according to three former Israeli officials. In the 2006 war, the Israeli Air Force bombed the sites, destroying the missiles.
In the years after the war, Nasrallah projected confidence that Hezbollah could win another conflict against Israel, likening the nation to a spider web — menacing from afar but a threat that could be easily brushed aside.
As Hezbollah rebuilt, the Mossad, Israel’s foreign intelligence service, expanded a network of human sources inside the party, according to 10 current and former American and Israeli officials.
Specifically, the Mossad recruited people in Lebanon to help Hezbollah build secret facilities after the war. The Mossad sources fed the Israelis information about the locations of hide-outs and assisted in monitoring them, two officials said.
The Israelis generally shared Hezbollah intelligence with the United States and European allies.
A significant moment came in 2012, when Unit 8200 obtained a trove of information about the specific whereabouts of Hezbollah leaders, their hide-outs and the group’s batteries of missiles and rockets, according to five current and former Israeli defense and European officials.
That operation raised confidence within Israeli intelligence agencies that — should Netanyahu make good on threats to attack Iran’s nuclear sites — the Israeli military could help neuter Hezbollah’s ability to retaliate.
Netanyahu visited the Tel Aviv headquarters of Unit 8200 shortly after the operation. During the visit, the head of Unit 8200 made a show by printing out the trove of information, producing a tall stack of paper. Standing next to the material, he told Netanyahu, “You can now attack Iran,” according to two current and former Israeli defense officials with knowledge of the meeting.
Israel did not attack.
During the years that followed, Israeli spy agencies worked to refine the intelligence gathered from the earlier operation to produce information that could be used in the event of a war with Hezbollah.
According to two Israeli defense officials with knowledge of the intelligence, when the 2006 war ended, Israel had “target portfolios” for just under 200 Hezbollah leaders, operatives, weapons caches and missile locations. By the time Israel launched its campaign in September, it was tens of thousands.
A photo taken on September 18, 2024, in Beirut's southern suburbs shows the remains of exploded pagers on display at an undisclosed location. (AFP/Getty Images)
Turning Pagers into Deadly Devices
To gain an advantage in an eventual war with Hezbollah, Israel also developed plans to sabotage the militia from within. Israel’s Unit 8200 and Mossad championed a plan to supply Hezbollah with booby-trapped devices that could be detonated at a future date, according to six current and former Israeli defense officials.
Within the Israeli intelligence community, the devices were known as “buttons” that could be activated at Israel’s moment of choosing.
Designing and producing the buttons was relatively straightforward. Israeli engineers mastered placing PETN explosives within the batteries of electronic devices, turning them into small bombs.
The more difficult operation fell to the Mossad, which for nearly a decade tricked the group into buying military equipment and telecommunication devices from Israeli shell companies.
In 2014, Israel seized an opportunity when the Japanese technology company iCOM stopped producing its popular IC-V82 walkie-talkies. The devices, originally assembled in Osaka, Japan, were so popular that replicas were already being made across Asia and sold in online forums and in black market deals.
Unit 8200 discovered that Hezbollah was specifically searching for the same device to equip all of its frontline forces, according to seven Israeli and European officials. They had even designed a special vest for their troops with a chest pocket tailored for the device.
Israel began manufacturing its own replicas of the walkie-talkies with small modifications, including packing explosive material into their batteries, according to eight current and former Israeli and American officials. The first Israeli-made replicas arrived in Lebanon in 2015 — and more than 15,000 were eventually shipped, some of the officials said.
In 2018, a female Israeli Mossad intelligence officer drafted a plan that would use a similar technique to implant explosive material into a pager battery. Israeli intelligence commanders reviewed the plan, but determined that Hezbollah’s use of pagers was not widespread enough, according to three officials. The plan was shelved.
Over the next three years, Israel’s increasing ability to hack into cellphones left Hezbollah, Iran and their allies increasingly wary of using smartphones. Israeli officers from Unit 8200 helped fuel the fear, using bots on social media to push Arabic-language news reports on Israel’s ability to hack into phones, according to two officers in the agency.
Worried about smartphones being compromised, Hezbollah’s leadership decided to expand its use of pagers. Such devices allowed them to send out messages to fighters but did not reveal location data nor have cameras and microphones that could be hacked.
As it did, Hezbollah began looking for pagers hardy enough for combat conditions, according to eight current and former Israeli officials. Israeli intelligence officers reconsidered the pager operation, and worked to build a network of shell companies to hide their origins and sell the products to the militia.
Israeli intelligence officers targeted the Taiwanese brand Gold Apollo, well known for pagers.
In May 2022, a company called BAC Consulting was registered in Budapest. One month later, in Sofia, Bulgaria, a company called Norta Global Ltd. was registered to a Norwegian citizen named Rinson Jose.
BAC Consulting bought a licensing agreement from Gold Apollo to manufacture a new pager model known as the AR-924 Rugged. It was bulkier than the existing Gold Apollo pagers, but it was promoted as waterproof and with a longer-lasting battery life than competitors’ devices.
The Mossad oversaw production of the pagers in Israel, according to Israeli officials. Working through intermediaries, Mossad agents began marketing the pagers to Hezbollah buyers and offered a discounted price for a bulk purchase.
The Mossad presented the gadget, one without any hidden explosives, to Netanyahu during a meeting in March 2023, according to two people with knowledge of the meeting. The prime minister was skeptical about their durability, and asked David Barnea, the Mossad chief, how easily they might break. Barnea assured him they were sturdy.
Not convinced, Netanyahu abruptly stood up and threw the device against the wall of his office. The wall cracked, but the pager did not.
The Mossad front company shipped the first batch of pagers to Hezbollah that fall.
Israel's Prime Minister Benjamin Netanyahu addresses the 79th United Nations General Assembly at UN headquarters in New York, US, September 27, 2024. (Reuters)
Conducting War Games
The pager operation was not fully in place in October 2023, when the Hamas-led attacks ignited a fierce debate within the Israeli government about whether Israel should launch a full-scale war against Hezbollah.
Some, including Defense Minister Yoav Gallant, argued for striking at Hezbollah, which began launching missiles at Israel on Oct. 8 in solidarity with Hamas. It was an opportunity, he said, to deal with the “hard enemy” of Hezbollah before turning to what he considered the less difficult enemy of Hamas, according to five Israeli officials familiar with the meetings.
After a phone call with President Joe Biden on Oct. 11, 2023, Netanyahu, along with his newly formed war cabinet, decided for the time being against opening another front with Hezbollah, effectively ending high-level debate about the topic for months.
Even as Israel focused on Hamas, military and intelligence officials continued to refine plans for an eventual war with Hezbollah.
Israeli intelligence analysts, who were constantly monitoring the use of the devices, discovered a potential problem with the operation. At least one Hezbollah technician began to suspect that the walkie-talkies might contain hidden explosives, according to three Israeli defense officials. Israel dealt with it swiftly this year, killing the technician with an airstrike.
For nearly a year, Israeli intelligence and the air force also ran roughly 40 war games built around killing Nasrallah and other senior Hezbollah leaders, said two Israeli officials. They wanted to be able to target them at the same time, even if they were not in the same place.
Along the way, Israel collected mundane and intimate details about Hezbollah commanders, including the identities of the four mistresses of Fuad Shukr, a founding member of Hezbollah long ago identified by the US government as one of the planners of the 1983 bombing of the barracks in Beirut, Lebanon, that killed 241 American Marines.
At one point this year, apparently feeling uncomfortable about his situation, Shukr sought assistance from Hezbollah’s highest religious cleric to marry all four women, according to two Israeli officials and a European official. The cleric, Hashem Safieddine, arranged four separate phone-based wedding ceremonies for Shukr.
The simmering conflict boiled over this summer, when a Hezbollah rocket attack in July killed a dozen Israelis, including schoolchildren, in Majdal Shams, a town in the Golan Heights.
Israel responded days later with an airstrike in Beirut that killed Shukr. It was a provocative step to take, to assassinate a top commander of Hezbollah’s forces.
‘Use it or Lose it’
After the back-and-forth attacks, the debate renewed inside Israel’s government about opening a “northern front” against Hezbollah. The Israeli military and the Mossad drew up different strategies for a campaign against Hezbollah, according to four Israeli officials.
In late August, Barnea, the Mossad chief, wrote a secret letter to Netanyahu, according to a senior Israeli defense official. The letter advocated a two-to-three-week campaign that included eliminating more than half of the group’s missile abilities and destroying installations within about six miles of the Israeli border. At the same time, senior military officials began their own effort to lobby Netanyahu to intensify a campaign against Hezbollah.
New intelligence disrupted the planning. Hezbollah operatives had become suspicious that the pagers might be sabotaged, according to several officials.
On Sept. 11, intelligence showed that Hezbollah was sending some of the pagers to Iran for examination, and Israeli officials knew it was only a matter of time before the covert operation would be blown.
On Sept. 16, Netanyahu met with top security chiefs to weigh whether to detonate the pagers in a “use it or lose it” operation, according to four Israeli security officials. Some opposed it, saying it might prompt a full Hezbollah counterattack and possibly a strike by Iran.
Netanyahu ordered the operation. The following day, at 3:30 p.m. local time, the Mossad ordered an encrypted message to be sent to thousands of the pagers. Seconds later, the pagers detonated.
At the time the pagers exploded, Jose, the Norwegian who was the head of one of the Mossad front companies, was attending a technology conference in Boston.
Within days, Jose was identified in news articles as a participant in the operation, and the Norwegian government announced that it wanted him back in Norway for questioning.
Israeli officials secretly pressured the Biden administration to ensure that Jose could leave the United States without going back to Norway, according to one Israeli and one American official.
Israeli officials would not disclose Jose’s location. One senior Israeli defense official said only that he was in a “safe place.”
Approving an Assassination
After the pager operation, the Netanyahu government, with the support of high-ranking defense officials, opted for all-out war, a campaign marked by a series of escalations.
The day after detonating the pagers, the Mossad blew up the walkie-talkies, most of which were still in storage because Hezbollah leaders had not yet mobilized fighters for a battle against Israel.
In all, dozens of people were killed by the pager and walkie-talkie explosions, including several children, and thousands were wounded. Most of the casualties were Hezbollah operatives, sowing chaos among the top ranks of the group.
Days after, on Sept. 20, Israeli jets struck a building in Beirut where commanders of Hezbollah’s elite Radwan Force were meeting in a bunker, killing several of them along with Ibrahim Aqeel, the head of Hezbollah’s military operations.
On Sept. 23, the Israeli Air Force conducted a major campaign, hitting more than 2,000 targets aimed at Hezbollah’s stores of medium and long-range missiles.
The most consequential decision remained: whether or not to kill Nasrallah.
As senior Israeli officials debated, intelligence agencies received new information that Nasrallah planned to move to a different bunker, one that would be far more difficult to hit, according to two Israeli defense officials and a Western official.
On Sept. 26, with Netanyahu set to fly to New York for a meeting of the United Nations General Assembly, the prime minister gathered with his top political, intelligence and military advisers to discuss approving the assassination. They also had to decide whether to tell the Americans in advance.
Netanyahu and other top advisers opposed notifying the Biden administration. They believed that US officials would push back against the strike, but that regardless, the United States would come to Israel’s defense in case Iran retaliated.
They agreed to keep the Americans in the dark.
Netanyahu approved the assassination the next day, after he landed in New York and only hours before standing at the podium at the United Nations.
In his speech, he spoke about the grip that Hezbollah had over Lebanon. “Don’t let Nasrallah drag Lebanon into the abyss,” he told the presidents and prime ministers gathered.
Soon after, the Israeli F-15 jets above Beirut dropped thousands of pounds of explosives.
*The New York Times
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