Leadership turnover fuels new uncertainty as Mideast economies navigate Gaza fallout

May 2024 Al-Monitor Trend Report 

2,298 words

A region beset by unending upheaval faced more in May 2024, with top Mideast powers bracing for major leadership changes after the sudden death of Iranian President Ebrahim Raisi. That came as Saudi Arabia’s 88-year-old King Salman simultaneously fell ill, underlining potential for an imminent royal succession.

Alongside the obvious geopolitical ramifications of these developments, there are economic and investment factors to consider. In Iran, a similarly hardline replacement to Raisi is unlikely to rescue a struggling economy burdened by sanctions, although the rial’s free-market exchange rate suggested there wasn’t much concern among domestic stakeholders. 

A Saudi succession could be a different story for Mohammed bin Salman, or MBS, the country’s de facto ruler since 2017. Although his father has reportedly recovered for now, MBS could soon become fully empowered as king at a pivotal moment for Vision 2030, his sweeping economic transformation agenda that’s increasingly facing big question marks amid reports detailing mounting delays and financial pressures (not to mention a potential management shakeup inside the country’s $1 trillion Public Investment Fund).

Any turbulence around the ascent of MBS to the throne could imperil Vision 2030 — for instance, by potentially scaring away hotly sought foreign investment from global players (like Goldman Sachs and its new regional headquarters in Riyadh). Upheaval could also hurt domestic buy-in for his national overhaul. That will make his first moves as king a key storyline to watch, especially after his initial rise as crown prince boldly upended the Saudi status quo.