Region holds its breath

The Middle East and North Africa has been gripped by political turmoil over the past few weeks. The most high-profile development was the launch of an anti-corruption crackdown in Saudi Arabia, led by Crown Prince Mohammed bin Salman (MbS), which has implicated more than 200 ministers, princes and businessmen. While efforts to tackle corruption are clearly welcome, the speed and breadth of the crackdown threatens to deal a blow to the Saudi economy – investment could be delayed and wealthy individuals may defer purchases of luxury items. There’s also a risk of a backlash against MbS that ultimately derails his Vision 2030 reform plans. At the same time, MbS has ratcheted up tensions with Iran and Lebanon has been caught up in the crossfire – the Saudis appear to have been behind Lebanese Prime Minister Saad Hariri’s resignation (which Mr. Hariri has now postponed). Investors have been unnerved by these developments, although the impact has been more acute in financial markets in the rest of the region than it has been in Saudi Arabia itself.