June 17 (Bloomberg) -- Crown Prince Nayef bin Abdulaziz Al Saud, who led Saudi Arabia’s terrorism fight while in his dual role as interior minister, has died. He was in his late 70s.
The death of the heir to King Abdullah was announced yesterday by state television, which cited a Royal Court statement. Details of his death weren’t given. The Saudi royal family has started to gather in Mecca ahead of the funeral today, the Saudi Press Agency said. Abdullah was met by his sons and other princes in Islam’s holiest city, it said.
Nayef had been Saudi Arabia’s most powerful prince amid the turmoil that has rocked the region. He put down attacks by al-Qaeda and backed the religious police in the Sunni Muslim kingdom, the world’s largest oil producer.
He was the second crown prince to die in less than a year, renewing questions about succession as the Saudi leadership ages. The king named him Oct. 28 to succeed Sultan bin Abdulaziz Al Saud. Prince Salman bin Abdulaziz, who was born in 1935, followed Crown Prince Sultan as defense minister.
“I don’t think this will have any impact on the stability of the country,” said Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Military Analysis. “The selection process is pretty clear. Prince Salman will most likely become the next crown prince.”
Nayef left Saudi Arabia last month for scheduled medical tests and a vacation, the Royal Court said at the time. Nayef met with a number of the kingdom’s princes and officials at his residence in Geneva, the Saudi Press Agency reported on June 12. The Swiss government said he died there, according to an e-mailed statement.
His death comes as Saudi Arabia confronts unemployment, an issue cited by some activists during the unrest that led to the toppling of leaders in Tunisia, Egypt, Yemen and Libya during the so-called Arab Spring that began in December 2010. Joblessness reached 27 percent for Saudis between 20 and 30 years old in 2009, according to official data.
King Abdullah unveiled a $130 billion spending plan in the first quarter of 2011, including allowances for government workers and salary increases for military personnel.
Six kings have ruled Saudi Arabia since it was established in 1932. Abdullah changed the kingdom’s succession rules in 2007 to give an appointed commission of princes, the Allegiance Council, more power to select a new ruler.
Nayef was one of the influential brothers known as the Sudairi Seven, the sons of the kingdom’s founder, King Abdulaziz Al Saud, and one of his wives, Hassa bint-Ahmed al-Sudairi. The late crown prince was born in 1934, according to the website of the Saudi Embassy in Washington. His Institute for Research and Consulting Services at the Al-Imam Muhammad Ibn Saud Islamic University said he was born in 1933. Neither provided his date of birth.
Prince Salman is a Sudairi brother who was a former governor of Riyadh province. Other senior royals include Foreign Minister Saud Al-Faisal, who was born in 1940, and Khaled al-Faisal, governor of the Mecca province.
King Abdullah’s son Mutaib is head of the National Guard, a 110,000-man Bedouin force loyal to the royal family, and another son, Abdul Aziz, is the deputy foreign minister. Sultan’s son Khaled is deputy defense minister, and Nayef’s son Mohammad is the deputy minister for security affairs.
“Succession is very complicated,” Mohammed al-Qahtani, a democracy advocate and economist, said by phone from Riyadh, the capital. “They will think about stability. Salman will make a good candidate for crown prince for the royal family.”
Bahrain’s King Hamad bin Isa Al Khalifa announced a three-day mourning period for the Saudi crown prince, the official Bahrain News Agency reported.
Nayef pledged in February last year to stand by the people and government of Bahrain against all that affects its security, stability and national unity as security forces confronted Shiite Muslim protesters, the Saudi Press Agency reported. About a month later, Saudi Arabia sent troops to the neighboring Sunni country as part of a Gulf Cooperation Council force to help put down the Shiite protests.
“Nayef was known for his courage and dedication to the security of his country,” U.S. Ambassador to Saudi Arabia James Smith said in a statement on the website of the American Embassy in Riyadh. “Crown Prince Nayef was a strong leader and a good friend to the United States.”
In September 2010, Nayef, who had led the Interior Ministry since 1975, said Saudi Arabia was able to “crush” the ideology of terrorism. The ministry’s forces had arrested 11,527 people since Sept. 11, 2001, for their alleged involvement in terrorism, according to an April 2011 statement. Under Nayef, the ministry set up a 35,000-strong unit to protect energy infrastructure and oil reserves, which were the world’s largest.
After the announcement of Nayef’s death yesterday, Saudi Arabia’s Tadawul All Share Index fell as much as 2.7 percent to 6,565.82, the lowest intraday level since Jan. 31. The benchmark was up 0.2 percent to 6,735.89 at 11:54 a.m. in Riyadh.
“Saudi institutions are well established to ensure the continuity of economic policies,” Jarmo Kotilaine, chief economist at the Jeddah-based National Commercial Bank, said by phone. “The key strategic goals are widely shared and well anchored.”
OPEC’s June 14 decision to keep its output quota unchanged puts the onus on Saudi Arabia to cut supply should crude prices extend their drop below $100 a barrel. Increased production from Saudi Arabia has been blamed for plunging prices by members including Shiite-led Iran, a regional rival whose exports will be subject to a European Union embargo starting July 1.
Saudi Arabia will make sure there is enough supply in the global crude market, Saudi Oil Minister Ali al-Naimi said at last week’s OPEC meeting. Crude for July delivery rose 12 cents to $84.03 a barrel on the New York Mercantile Exchange June 15.
The kingdom’s economy expanded 6.8 percent last year as it benefited from additional government spending of 224 billion riyals ($60 billion) and oil prices that averaged $95 a barrel, up from $80 in 2010. Economy Minister Muhammad al-Jasser said on May 22 that he hopes the kingdom’s real gross domestic product growth will be about 6 percent this year.
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