The New Battle for the Middle East: Saudi Arabia and Iran’s Clash of Vision (Karim Sadjadpour)

THE LEGACY OF 1979

Saudi officials like to tell a story about their country and Iran. In the late 1960s, Shah Mohammed Reza Pahlavi, Iran’s modernizing ruler, wrote to King Faisal of Saudi Arabia. Faisal, the shah wrote, had to liberalize Saudi Arabia. Otherwise, he might be overthrown.

The king strenuously disagreed. In his response, Faisal suggested that it was Pahlavi—with his secular, more European vision for society—who was actually at risk of being deposed. “Your majesty, may I remind you, you are not the shah of France,” he wrote back, adding: “Your population is 90 percent Muslim. Please don’t forget that.’’

The king proved to be right. In Iran’s 1979 revolution, protesters deposed Pahlavi and transformed the country from a U.S.-allied monarchy into an anti-American theocracy. Although a diverse coalition of forces opposed the shah, the man who emerged as the leader of the revolution, the 76-year-old Ayatollah Ruhollah Khomeini, believed that Western political and cultural influence posed an existential threat to Iran and Islamic civilization. “All the things they used to pervert our youth were gifts from the West,” the cleric said. “Their plan was to devise the means to pervert both our men and our women, to corrupt them and thus prevent them from their human development.” Khomeini died a decade later, but his successor, Khamenei, has kept his vision alive.

As it happened, 1979 was also a pivotal year for Saudi Arabia. Islamist radicals, believing the Saudi royal family had strayed from the path of true Islam, seized the Grand Mosque in Mecca, helping to plunge the monarchy into an existential crisis. Fearing that they would suffer the same fate as the shah, the Saudi government abandoned modernization efforts and redirected vast resources to reactionary forces at home and abroad. The country empowered fundamentalist clerics to exercise control over education and the judiciary, expanded the morality police, shut down movie theaters, and enforced strict gender segregation in schools and public spaces. In exporting these policies, in part with U.S. encouragement to counter the Soviet invasion of Afghanistan, Saudi Arabia spent tens of billions of dollars to fund thousands of mosques as well as jihadi groups that became the antecedents of the Taliban and al Qaeda.

Iran and Saudi Arabia are led by starkly different men with profoundly different plans.

These policies endured for 20 years. But the 9/11 attacks on the United States in 2001—15 of the 19 hijackers were Saudi nationals—and the deadly al Qaeda bombings in Riyadh in 2003 forced a course correction. Both attacks exposed a harsh reality: Islamic fundamentalism, once perceived as an asset, had evolved into a profound threat to the kingdom’s stability. The Saudi government thus attempted to turn off its financial support for external radicalism as well as embark on a costly domestic counter-radicalization campaign. “We try to transform each detainee from a young man who wants to die into a young man who wants to live,” said Prince Mohammed bin Nayef, then one of the key architects of the Saudi counterterrorism strategy, in 2007.

But it was not until more than a decade later, when MBS began his ascent to power, that Saudi Arabia commenced its broader, international transformation. One of more than a dozen children born to King Salman, MBS saw an aging Saudi leadership that was overly reliant on oil and disconnected from its young society. He worried his country was falling behind Qatar and the United Arab Emirates, which were working to become transportation and trade hubs with outsize influence in business, entertainment, sports, and media. In response, MBS had the kingdom launch its own agenda, Vision 2030, aimed at opening the country economically, jettisoning Islamist restrictions, diversifying away from oil, and building a national identity.

The vision’s foundational document is centered on three themes—“a vibrant society, a thriving economy, and an ambitious nation”—and has led to real policy shifts. Beginning in 2018, Saudi women gained the right to drive and travel without a male guardian’s permission. Their presence in the country’s labor force increased significantly, including in senior government positions. The government began investing tens of billions of dollars in plans for data centers and in artificial intelligence and other types of technology. It dramatically boosted youth entertainment—nearly two-thirds of Saudis are under 30—with Formula 1 races, wrestling tournaments, and the recruitment of soccer stars such as Cristiano Ronaldo. New tourist rules were introduced to encourage foreign visitors to explore the country and bring in revenue.

So far, these efforts have had mixed results. Saudi Arabia has been among the world’s fastest-growing major economies in the last several years, with significant growth in non-oil sectors. Yet growth figures are still often tied to the price of oil. Similarly, the Saudi Ministry of Investment has estimated that foreign direct investment increased by over 150 percent from 2017 to 2023. One Saudi businessman, however, told me that “non-oil FDI has gone nowhere.”

TWO MEN, TWO VISIONS

Vision 1979 and Vision 2030 reflect the personalities of Khamenei and MBS. The two men are arguably the most powerful individuals in today’s Middle East, but they have vastly different visions and leadership styles—the former’s based on historic grievances, and the latter’s on modern ambitions. These differences are clear in their animosity toward each other. MBS has called Khamenei the “new Hitler of the Middle East,” and Khamenei has derided MBS as a “criminal” whose “inexperience” will lead to Saudi Arabia’s downfall.

Both have unique backstories. Khamenei was born into a clerical family of modest means, was educated in a Shiite seminary, and spent his formative years as a revolutionary agitator (including several as a political prisoner). Had the Iranian Revolution never happened, he would have been destined for the life of a humble cleric. Instead, he was catapulted to power, becoming Iran’s president in 1981 and supreme leader in 1989. His hypervigilance, born of profound insecurity, has been one of the keys to his longevity. Despite widespread popular discontent and a state of near-permanent external crisis, Khamenei has not deviated from the revolutionary ideals of his mentor, Khomeini. The ideological pillars of Iran’s Vision 1979 remain as they were then: “Death to America, Death to Israel,” as Khamenei’s supporters often chant, and the mandatory veiling of women, which Khomeini once referred to as “the flag of the Islamic Revolution.”

In stark contrast, MBS was born into immense wealth as a son of one of the world’s richest men, King Salman bin Abdulaziz. Although MBS was born after 1979, he said that the radicalism spawned that year “hijacked” Islam as a religion. He aspires for his people to achieve modernity rather than martyrdom. “We will not waste 30 years of our lives dealing with extremist ideas,” he once declared. “We will destroy them today.’’ This decisiveness has sometimes led to grave misjudgments, including the brutal 2018 murder of the journalist Jamal Khashoggi and the devasting war in Yemen. Yet the crown prince has retained the confidence of much of young Saudi society and the momentum of Vision 2030.

One of the most important differences between the Saudi vision and the Iranian one relates to social freedoms. Iranians had long looked down on their Gulf Arab neighbors. Khomeini once referred to the House of Saud as “the followers of the camel grazers of Riyadh and the barbarians of Najd, the most infamous and the wildest members of the human family,” and he denounced them in his last will and testament. No matter how reactionary their regime was, Iranians may have taken some comfort in having more social freedoms than Saudis. But this is no longer the case. The world’s most famous musicians regularly perform in Saudi Arabia, including top Iranian singers whose music is banned in their homeland. Tens of millions of Iranians get their news from Iran International, a Saudi-backed Persian-language satellite news channel. After a 35-year ban, Saudi Arabia reopened movie theaters in 2018. Social media apps are widely available. The country has welcomed more tourists than ever before, while Iran has doubled down on the practice of taking foreigners (often Iranian dual nationals) as hostages.

The difference between the two plans is particularly stark when it comes to the treatment of women. Although Saudi women, once hidden from public life, continue to lag on indices of equality, the advances they have made under MBS are real and significant. Iranian women are better educated than their male counterparts and have often risen to the top of their professions. Yet they are among the few in the world who face more restrictions today than their grandmothers did five decades ago, before the Islamic Revolution. This imbalance erupted during Iran’s 2022 to 2023 “Women, Life, Freedom” protests, which were triggered by the death in police custody of Mahsa Amini, a 22-year-old woman. She had been arrested for allegedly wearing her hijab improperly.

CRUDE POWER

The most dramatic difference in outcomes between Vision 2030 and Vision 1979, however, is in the effect on each state’s economy. Saudi Arabia has used its energy production to fuel its strategic vision. As a result, the Saudis are far richer than their Iranian counterparts by virtually every metric. Saudi Arabia has more than twice the GDP of Iran despite having less than half its population. Iran’s annual inflation rate is consistently among the world’s highest, and Saudi Arabia’s is around two percent. Riyadh has over $450 billion in foreign currency reserves, around 20 times what Tehran possesses.

There are many reasons for Iran’s terrible economic performance. But they all relate to Vision 1979. Thanks to its hostility toward the West, Iran has come under heavy sanctions that have crippled its foreign currency holdings and made it hard to sell its main two commodities, oil and gas. In 1978, the year before the revolution, Iran was producing almost six million barrels of oil per day, roughly five million of which were exported. Since the revolution, Iranian production and exports have averaged less than half these amounts. Although Iran has the world’s second-largest reserves of natural gas, after Russia, it does not rank among the world’s top 15 exporters. And Tehran has sought to use the energy resources it does have as a weapon. In the aftermath of the Russian invasion of Ukraine, Iranian officials repeatedly reminded an energy-strapped Europe that “winter is coming’’ to try to threaten the continent’s leaders into acceding to Tehran’s nuclear demands.

Yet the greatest tragedy of Vision 1979 for Iran has been the waste not of its natural resources but of its human resources. In 2014, Iran’s minister of science and technology claimed that the country’s annual brain drain—estimated at 150,000 people leaving annually—cost the economy a staggering $150 billion every year, more than four times its oil revenue from 2023. In contrast, most of the estimated 70,000 Saudi students studying abroad return home when their studies are finished. Vision 1979 often sees its country’s educated minds as a threat, but Vision 2030 treats them as an asset.

Saudi Arabia has spent heavily on ambitious plans to modernize its economy, such as on the introduction of smart cities. That includes its Neom project, focused on creating a large urban area in the desert that could transform the kingdom into a global technology hub and drive economic diversification. Although both governments have built strong surveillance states, Tehran’s technology innovations and investments have been employed mostly to repress its people, arm its proxies, and attack its enemies.

ORDER VS. DISORDER

Saudi Vision 2030 has clearly outperformed Iran’s Vision 1979 in advancing the economic well-being and satisfaction of citizens. But when it comes to international influence, the story is very different. The Middle East’s regional power vacuums and chronic instability are threats to Vision 2030, yet they have been boons to Vision 1979.

This difference makes sense. Vision 2030 is contingent on building, whereas Vision 1979 is content with destroying. The power vacuums and instability caused by the Lebanese civil war, the Iraq war, and the 2011 Arab Spring have thus all furthered Iranian ambitions, and Iranian influence has in turn deepened the disorder and chaos across the Arab world. Although opinion polls have suggested that Saudi Arabia enjoys significantly more popular support than Iran in the Arab world, including in countries where Iran wields the most influence, Riyadh’s efforts to counter Tehran’s ambitions—using hard power, soft power, or financial co-optation—have largely failed.

Over the last two decades, Iran and Saudi Arabia have been on opposing sides of the deadliest conflicts in the Middle East. The two have backed rival groups in Iraq, Syria, and Yemen, as well as in Lebanon and the Palestinian territories. In each of these arenas, Iranian-backed hard power prevailed. Saudi Arabia has largely opted out or been defeated. The most humiliating of these defeats was in Yemen. Between 2015 and 2019, Riyadh spent over $200 billion on a military intervention to counter the power grab of the Iranian-backed Houthis. That intervention contributed to tens of thousands of civilian deaths. Yet it failed to weaken the group. Today, the Houthis, whose slogans wish death to America and Israel, not only remain entrenched in power but have also bottlenecked the global economy, diverting an estimated $200 billion in trade by harassing ships in the Red Sea (ostensibly to protest Israel’s war in Gaza).

As the Middle East’s lone theocracy, Iran uses Islamist radicalism as an asset. Virtually all Shiite radicals, from Lebanon to Pakistan, are willing to fight for Iran. Meanwhile, most Sunni radicals, including al Qaeda and the Islamic State in Iraq and Syria, also known as ISIS, seek to overthrow the government of Saudi Arabia despite its Sunni lineage. In fact, Tehran has proved willing and able to work with Sunni radical groups that share its opposition to Israel and the United States. The current head of al Qaeda, Saif al-Adel, has resided mostly in Iran for two decades.

Israel is one of the biggest international points of contention between the two countries. Vision 2030 is open to normalization with Israel, whereas Vision 1979 is opposed to Israel’s very existence. Iran was the lone country in the world that explicitly praised Hamas’s invasion of Israel on October 7, 2023. Although it remains unclear to what extent Tehran was involved in the planning of the operation, Iran funds most of Hamas’s military budget, so U.S. officials have said Tehran is “broadly complicit.” The attack succeeded in delaying, and perhaps sabotaging, a Saudi-Israeli normalization agreement.

FRIENDS IN HIGH PLACES

The outside countries that will likely play the greatest role in determining the fate of these two visions are the United States and China. Vision 2030 needs Washington as an ally, but Vision 1979 wants it as an adversary. Vision 2030 is contingent on U.S. security support, while Vision 1979 cannot survive without Chinese economic support. An estimated 90 percent of Iranian oil exports are bound for China.

Given Iran’s economic and strategic dependence on China, any U.S. strategy to counter Tehran’s nuclear and regional ambitions will probably require some collaboration with Beijing. There is reason to believe that such cooperation is possible despite Beijing and Washington’s global competition. China and the United States ultimately have common interests in the region: namely, political stability and the free flow of trade and energy. (Russia, by contrast, benefits from regional instability and tumult in the oil markets.)

Yet the United States ultimately has even more in common with Saudi Arabia. American liberals may historically be deeply ambivalent about the country, but the United States’ great-power competition with China and Russia’s 2022 invasion of Ukraine changed Washington’s perceptions. Once seen as a problematic partner, Saudi Arabia is now viewed as a coveted ally. The possibility of a historic Israeli-Saudi normalization agreement under the umbrella of a U.S.-Saudi defense treaty ratified by the Senate will likely remain a signature aspiration of any future American administration, Democratic or Republican.

In the current environment, however, the domestic political costs to Saudi Arabia of a normalization deal with Israel could outweigh the benefits of a U.S. security umbrella. A public opinion poll conducted in November and December 2023 showed that 95 percent of Saudis believed that Hamas did not kill Israeli civilians on October 7; 96 percent of Saudis agreed that “Arab countries should immediately break all diplomatic, political, economic, and any other contacts with Israel.” These sentiments have forced MBS to increase his negotiating demands. He recently declared that Riyadh would not establish diplomatic relations with Israel before the “establishment of a Palestinian state.” MBS may be an autocrat, but he cannot afford to be insensitive to public opinion. Egyptian President Anwar Sadat, after all, was an autocrat. That did not prevent him from being assassinated after normalizing relations with Israel.

Still, there is reason to think that the Saudis will eventually strike a bargain with the Americans and the Israelis. Despite Saudi Arabia’s vast commercial ties to China and its friendship with Russia, it can count only on the United States to protect it from external adversaries, and it needs such protection. The September 2019 Iranian attacks on Saudi Aramco, Saudi Arabia’s national oil company, exposed just how vulnerable the country and its vision are. In the absence of U.S. security guarantees, Saudi Arabia could spend half a trillion dollars over a decade to build Neom, intended to be 33 times the size of New York City, and Iran and its proxies could destroy it in days with cheap missiles and drones.

THE DANGER OF EXPECTATIONS

Numerous civil unrest indices have ranked Iran among the least stable governments in the world. In the past 15 years alone, Iran has experienced three major national uprisings—in 2009, 2019, and 2022—that brought millions of citizens into the streets. Yet Khamenei is one of the world’s longest-serving autocrats, having ruled since 1989, and the regime has consistently defied predictions of its imminent demise. History suggests, perhaps counterintuitively, that revolutionary dictatorships are often more enduring than rapidly modernizing monarchies. As the political scientists Steven Levitsky and Lucan Way have written, revolutionary regimes born from “sustained, ideological, and violent struggle” tend to endure because they destroy independent power centers, produce cohesive ruling parties, and establish tight control over formidable security forces. In Iran, all these factors apply, helping to shield the Islamic Republic from elite defections and from military coups. Up to now, the regime has consistently crushed mass protests.

The past also suggests that successful popular uprisings tend to happen not in states suffering from constant deprivation, as Iran is, but in countries where improved living standards create elevated expectations. As the social theorist Eric Hoffer has written, “It is not actual suffering, but the taste of better things which excites people to revolt.” Political reforms can also open the door to sudden change, something Iran has studiously avoided. Machiavelli observed that there is nothing “more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” For this reason, Khamenei, a student of the fall of the Soviet Union, has been firmly committed to the ideological principles of the 1979 revolution, believing that diluting them would precipitate the Islamic Republic’s downfall.

For MBS, meanwhile, the most applicable cautionary tale from history may be the experience of the shah of Iran, a fellow modernizing leader who alienated key constituencies, including the clergy, the bazaar, and intellectuals, that would conspire to unseat him. Yet the lessons learned from the shah’s downfall are mixed. As the historian Abbas Milani argued in his biography of the shah, Pahlavi was too authoritarian when he didn’t need to be and not authoritarian enough when he needed to be.

MBS with Egypt’s and Bahrain’s leaders in Sakhir, Bahrain, May 2024Bahrain News Agency / Reuters

For many Saudi elites, the greatest fear is not a mass popular uprising like Iran’s 1979 revolution, but a targeted internal plot against the crown prince—a scenario with historical precedent in the kingdom. In March 1975, King Faisal, another modernizing monarch, was shot and killed by his nephew. This act of revenge was motivated by the death of the assassin’s brother, an Islamist who had been killed roughly a decade earlier while protesting Faisal’s introduction of television in Saudi Arabia.

MBS has put his stamp on the country’s leadership. He has faced down Saudi political and business elites more than any leader in his country’s history. He downsized the royal family, and his 2017 detention of hundreds of prominent Saudi businessmen at the Ritz-Carlton hotel—called a “sheikhdown” in Western tabloids—reportedly yielded over $100 billion in recovered assets.

But MBS may be unaware of the hazards awaiting him. To avoid internal challenges, autocrats often prioritize loyalty over competence when appointing advisers, creating an echo chamber that results in dangerous blind spots. The shah, for example, was bewildered by the anger against him and later lamented that he had been misled by sycophantic aides who shielded him from the truth. MBS may already be falling into this trap. One consigliere to the crown prince—a former European head of state—privately told me that the longer MBS rules, the more confident he becomes in his own judgment and the less need he feels to heed constructive criticism.

MBS faces other risks, as well. Ongoing judicial reforms in Saudi Arabia still lag behind economic and social reforms (and international standards). Training a new generation of secular Saudi lawyers and judges is a much more laborious process than hiring foreign consultants to transform the economy and build cities of the future. Many Saudi men feel resentment about losing power over women. This uneven progress—rapid economic and social reform without concurrent political reform—can also be a source of unrest. As Samuel Huntington warned in his book Political Order in Changing Societies, political instability is commonly triggered by “rapid social change and the rapid mobilization of new groups into politics coupled with the slow development of political institutions.”

The Saudi crown prince may be unaware of the hazards awaiting him.

For now, MBS is strong and seemingly popular. Although credible public opinion polling in Saudi Arabia is rare, one November 2023 survey suggested that a solid majority of Saudis have trust in their government. In contrast, a recent government poll in Iran reported that more than 90 percent of the country’s citizens feel dissatisfied or hopeless. Targeting prominent Saudi businessmen for corruption, shrinking the entitlements of the royal family, imprisoning fundamentalist clerics, and diminishing the religious police have all earned the crown prince some support. Yet MBS has also cracked down on members of what should be his natural constituency: Saudi liberals, including Khashoggi and the women’s rights activist Loujain al-Hathloul. This could backfire. “A social and economic reformation on overdrive is at too high a risk of failure without the parallel legal and procedural transformation occurring at the same pace and intensity,” warned Mohammed al-Yahya, a senior Saudi Foreign Ministry official and friend of Khashoggi, after Khashoggi’s killing.

The murder of the journalist no longer looms large inside Saudi Arabia. But it continues to taint MBS’s reputation in the West. Externally, his most vociferous critics, much like those of the shah, are Western liberals, many of whom liken him to the Iraqi dictator Saddam Hussein. In 2020, U.S. Senator Bernie Sanders, an independent, even said that Saudi Arabia’s leaders were “murderous thugs” and that the regime was “one of the very most dangerous countries on the face of this earth.” Inside Saudi Arabia, however, the group more likely to eventually challenge MBS’s authority is not liberals who believe he is undemocratic, but Islamists who believe he is far too liberal. As the author David Rundell wrote, “If a successor government came to power by the ballot, it would almost certainly be an Islamist populist regime. . . . If a new government came to power through violence, it would most likely be a jihadist organization such as ISIS or al-Qaeda.”

Although the crown prince is trying to turn the page on Islamic fundamentalism, he has not been able to eliminate it wholesale. MBS “put the Wahhabis in a cage,” said the Saudi author Ali Shihabi, referring to the country’s ultra-orthodox school of Islam. Yet just as the Taliban bided their time for two decades in Afghanistan, Saudi Arabia’s Islamists are dormant but not dead. In an interview with The Economist, one Saudi religious commentator likened Islamist opponents of MBS to ants building an underground kingdom. “The prince has closed their mouths,” he said, “but he hasn’t ended their kingdom.”

WHITE ELEPHANTS AND BLACK SWANS

Over the last half century, the Middle East has consistently defied the predictions of forecasters. The whims of individual autocrats and the volatile mix of oil wealth, religion, and great-power politics have made the region uniquely vulnerable to black swan events with global ramifications. Those events include Iran’s 1979 revolution, Iraq’s invasion of Kuwait in 1990, the September 11 terrorist attacks in the United States, the Arab Spring, the rise of the Islamic State in Iraq and Syria, and the October 7 attacks in Israel.

In this context, the future of both Vision 2030 and Vision 1979 will hinge on the fate of Saudi Arabia’s and Iran’s leaders and the global energy demands that sustain their ambitions. Should MBS’s grand projects become white elephants—costly, unproductive endeavors—or should oil prices experience a prolonged decline, rising public dissatisfaction may compel the Saudi crown prince to prioritize regime stability over transformational reforms. Although MBS is young, he is acutely aware of the occupational hazards that come with absolute rule, including the unforeseen pressures that have brought down autocrats in the past. The shah’s political downfall stemmed from myriad forces, but also partly from a terminal cancer diagnosis that he concealed even from his family, which undoubtedly impaired his decision-making during crises.

In Iran, meanwhile, the future of the Islamic Republic and Vision 1979 remains uncertain beyond the lifespan of the 85-year-old Khamenei. Although there is a possibility that power may transfer smoothly to loyal clerics and military leaders committed to revolutionary ideals, there is also a chance of a shift toward a leadership that prioritizes Iran’s national and economic interests over its revolutionary doctrine. Efforts by some supporters of Mojtaba Khamenei, Khamenei’s 55-year-old son and potential successor, to compare him to Iran’s MBS are risible. But they suggest that even Tehran’s younger-generation revolutionaries recognize that a forward-looking vision is more appealing than a backward-looking one.

An Iranian missile next to a poster of Khamenei, Tehran, October 2024Majid Asgaripour / West Asia News Agency / Reuters

The success or failure of these competing visions will have broad global ramifications. A world in which Vision 2030 fails dramatically, leaving the vast energy resources of both Saudi Arabia and Iran under the control of Sunni and Shiite extremists, would make the Middle East and the global economy less prosperous and stable. Conversely, if Iran’s post-Khamenei leadership prioritizes the economic welfare and security of its people, Iran has the potential to one day become a G-20 nation and a pillar of global stability.

The failed American experiments in Afghanistan and Iraq, coupled with the failures of the Arab Spring, have largely dispelled illusions among U.S. officials that Washington has the capacity to meaningfully shape, at least in a positive way, the politics of the Middle East. It will be local actors who determine which visions prevail. But given that Vision 2030 seeks to uphold the U.S.-led liberal world order and Vision 1979 seeks to defeat it, the United States has a vested interest in the success of the former and the failure of the latter. It is also in the global economic interest to see stable, prosperous governments in Saudi Arabia and Iran that are at peace with one another and themselves. This means the world should help the people of Iran move beyond an oppressive ideological regime that has caused internal stagnation and regional unrest, and help Saudi Arabia navigate political reforms that will help sustain its social and economic transformation.

The best outcome for the United States, the Middle East, and the world is two sustainable, representative, forward-looking visions in both countries. The worst outcome is two backward-looking regimes clinging to past grievances. The former may be difficult to achieve. But the consequences of the latter would be nothing short of catastrophic.

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