New Saudi King Brings His Own Team to Security, Economy Jobs

Saudi Arabia’s King Salman brought his own team into government a week after succeeding to the throne, replacing key security and economic officials amid twin threats from Islamic State and plunging oil prices.

Salman named Mohammed Al-Jadaan as head of the Capital Markets Authority, one of a series of changes made in royal decrees announced on state television late Thursday. He fired the kingdom’s intelligence chief and the head of the National Security Council, and announced bonuses for civil servants worth billions of dollars.

The new king is facing domestic and internal challenges including the rise of Islamic State in neighboring countries, sparking a series of attacks within the kingdom. The plunge in crude prices has also slashed revenue for Saudi Arabia, the world’s biggest oil exporter.

“Salman is moving extremely quickly to restructure the higher reaches of the decision-making process,” said Gregory Gause, head of the International Affairs Department at Texas A&M University, in an e-mailed response to questions. The moves amount to a “consolidation of power in his hands.”

Al-Jadaan, the new market regulator, replaces Mohammed al-Sheikh, who’d been overseeing the planned opening of the bourse, the Arab world’s largest with a market value of more than $500 billion, to foreign investors. The move is due in the first half of this year, the regulator said earlier this week.

Stability First

The change of personnel “was to be expected with a new king,” Emad Mostaque, a strategist at Ecstrat Ltd. in London, said by phone. “What Saudi Arabia is aiming for is stability more than anything else, so I wouldn’t expect it to affect the plans to open the market.”

Salman also announced electricity and water investment projects worth 20 billion riyals ($5.3 billion), according to the official Saudi Press Agency, as well as additional grants for the Ministry of Social Affairs and other agencies. Government employees, students and pensioners will all receive two months’ worth of salaries as a bonus.

Al Arabiya television estimated the total value of the package at 110 billion riyals. The Finance Ministry had said last month that the government would curb spending on wages and allowances, which account for about half of its spending.

Intelligence Chief

Salman named his son, Prince Abdulaziz bin Salman, as deputy to Oil Minister Ali al-Naimi, who kept his job. The king fired the chiefs of the intelligence service and the national security council, Khalid bin Bandar and Bandar bin Sultan, and set up new committees to oversee security, political affairs and economic development.

Saudi security chiefs have been involved in the civil war in Syria, where the kingdom has backed rebels fighting to oust President Bashar al-Assad. Militant groups such as Islamic State and al-Qaeda have emerged as the dominant force in the Syrian opposition, and critics have blamed Saudi Arabia and its Gulf allies for enabling their rise.

Salman also merged the ministries of education and higher education, appointing Azzam al-Dakheel as the head, and changed the governors of Riyadh, Mecca and the central province of Qassim.

“A reshuffle this extensive probably was at least partly in the works, or discussed among senior family members, even while King Abdullah was still alive,” said Paul Pillar, a professor at Georgetown University in Washington and former U.S. intelligence officer for the Middle East. “Some of the changes appear to be a rebalancing or adjustment of the domains of different parts of the royal family, rather than a significant accretion of power of any one faction.”

New Regulator

Al-Jadaan, the new chief market regulator, was previously a member of the agency’s advisory board. He’s also chair of Saudi Arabia’s General Investment Authority, and a special adviser to the board of directors at Morgan Stanley Saudi Arabia, according to the website of law firm Al-Jadaan, of which he’s the founder and managing partner.

“I don’t foresee big changes in the market any time soon and certainly no derailing of plans al-Sheikh carried out, including the market opening to foreign investors,” said Mohammed al-Omran, a financial analyst and president of the Gulf Center for Financial Consultancy in Riyadh. “That will happen. Al-Jadaan will just continue with the same progressive path, I believe.”

(An earlier version of this story corrected the title of analyst quoted in the fourth paragraph.)

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