Saudi Arabia’s reaction to adversity a lesson for all
Adversity maketh the man and adversity maketh the country. It is easy to look good when the going is good, but what really tests the mettle of a country, a company or a person is how they react when history/circumstances are unkind. That is when considerate and levelheaded leadership and communication is a necessity.
There are many examples in recent history. All of us, even if we were not alive then, can recall Winston Churchill’s iconic “We shall fight on the beaches” speech of June 4, 1940, where he roused the British people to fight Nazi Germany. The aim was clear: “We shall prove ourselves once again able to defend our island home, to ride out the storm of war, and to outlive the menace of tyranny, if necessary for years, if necessary alone.” He set the stage and it defined the moment.
Similarly, when the US was put to the test during 9/11, it was then-New York Mayor Rudy Giuliani who stood up to be counted. He may encounter controversy in the current divided landscape of American politics, but back then he was the one leader who was visibly present while his city and his country were under attack from the sinister forces of Al-Qaeda. He walked the smoke-filled streets of New York with the fire and police chiefs, displaying clear leadership. He spoke to the American people and the world at large when no one else did. He brought clarity at a time when nobody knew what was going on. Some commentators even called him “Churchillian.”
Brexit Britain is yearning for this sort of clarity. The country is deeply divided and the political discourse is descending into ever greater animosity. The fault lines do not just go through the main political parties; they go through society as a whole, causing divisions in communities and families alike. There is no civility in the dialogue around Brexit, just abuse, nastiness and even death threats. Britons may ask themselves where that one person is who can unite them again and help heal the wounds.
The minister, the company and the country demonstrated that they are as good as their word, which is incredibly important
Saudi Arabia had its own hour of reckoning when drones and missiles attacked the Aramco facilities in Abqaiq and Khurais. Markets reacted sharply and the oil price temporarily overshot the $70 mark. It was important for the country to inform markets and bring clarity to the situation, as 50 percent of the country’s and 5 percent of global oil production had been knocked out in one go. So Energy Minister Prince Abdulaziz bin Salman brought clarity with a calm demeanor when he informed the international media that production would be restored by Sept. 30 and capacity by Nov. 30. While Prince Abdulaziz is one of the longest-serving figures in the ministry and has had a truly distinguished career, he had been in the ministerial hot seat for barely two weeks. He rose to the challenge admirably and was able to calm markets. In the background, Aramco did its job and restored production by Sept. 25, ahead of schedule. The minister, the company and the country demonstrated that they are as good as their word, which is incredibly important.
Similarly, the Ministry of Finance responded calmly and in a matter-of-fact way to the downgrading of the Kingdom’s country rating by credit agency Fitch.
You could argue that the attacks and the resulting downgrade of the country’s credit rating are no Second World War, 9/11 or Brexit. That may be so. However, Saudi Arabia is still measured by how efficiently it produces oil and a lot hinges on the success of Vision 2030, of which the Aramco initial public offering is an integral part. On top of that, the country faces its fair share of detractors in a region that is riddled with strife, geopolitics and instability. Credible communication becomes an important tool under such circumstances, and the powers that be rose to the challenge.
- Cornelia Meyer is a business consultant, macro-economist and energy expert. Twitter: @MeyerResources