♪ [captioning performed by the national captioning institute, wiich is responsible for its caption content and accuracy. visit ncicap.org][captions copyright national cable satellite corp. 2015] >> on the next washington journal we will tie death penalty information center robert donovan about nebraska's decision to get rid of the death penalty. and this week's newly announced presidential candidates with democratic consultant liz chatterton and republican consultant ford o'connell. >> here are some of our future

programs for this weekend on the c-span networks. politicians, white house officials and business leaders offer advice and encouragement to the class of 2015. speakers include former president george w. bush and the chair of dreamworks animation. and at 9:15 p.m., former staff members reflect on the presidency of george h.w. bush. former secretaries of state give commencement speeches. book tv isn't new york city with events from book expo america beginning at 10:00 a.m. and live call-in segments throughout the day. sunday evening at nine, on afterwards we look at the case hollingsworth d perry -- v perry.

and not american history tv, on c-span3, this evening at t 7:00 p.m. eastern, first ladies have had the most impact on the executive mansion. as of the afternoon, the life and death of our 20th president who served almost two decades as a congressman from ohio and was assassinated 200 days into his term as president. >> last month saudi arabia's interior minister was named nexen line to the throne ahead of the king's son who serves as defense minister. a panel of foreign policy analyst discuss with this move needs for saudi politics and the country's monarchy. this is an hour and a half.

>> i think we ought to start, folks. if i can have your attention. i think we'll begin. there will be a few more drifting in i'm sure as we are talking. good morning, everybody. and welcome to the atlantic council. we are pleased to have you here this morning to discuss this very timely and important issue in the world of energy geopolitics. and i think the importance of this issue is emphasized by the large crowd that we have this morning and i think it's also a credit to the incredible panel that we have. today's event will focus on the recent leadership changes in saudi arabia and what these changes mean for global energy markets, as well as regional stability and security. and i'd also like to mention that today's event is a cross center collaboration between three of the centers here at the council. i guess i should have introduced myself, i'm dick morningstar founding director of our global

energy sector. we are involved in this program, but also the rafik hariri center for the middle east, and frank richard, former ambassador to turkey and to egypt is the director. he will be part of the panel. and the brent scowcroft center on international security. i want to thank all the centers here for their cooperation in organizing this event. i want to give a special welcome to the only two-time ambassador to saudi arabia, i'm sure many of you know and remember ambassador walter cutler, who is here. as well as our esteemed board member, o'dea aberdeen who is also a true expert on the middle east. we have really an outstanding panel of experts to discuss these important issues today. the discussion will be moderated

by david goldwyn who i'm sure most of you know who is the chairman of the atlantic council's energy advisory board and the president of the global goldwyn strategies which is an energy advisory consultancy. david has had -- i have known him for 20 years basically. and has had a long and distinguished career in both the public and private sectors. we were colleagues in the state department. while david was the special envoy for -- and coordinator for international energy affairs while i was doing eurasian affairs. we cooperated and worked together going back to the 1990's on things like the baku, tbilisi pipeline and many other things. today's panelists including dr. anthony cordesman who is at

csis. as you know is an expert on u.s. security, energy, and middle east policies and the author of more than 50 books. he's also served as a consultant to both the state department and defense department during the iraq and afghanistan wars. and he's worked extensively throughout saudi arabia and the gulf. i mentioned ambassador richard the vice president here at the council and director of the rafik hariri center for the middle east. prior to joining the council frank was a long time career foreign service officer, has been ambassador to turkey, egypt. philippines. a very distinguished career. finally, dr. jean francois who

is teaching at the mcdonough school of business at georgetown. also at johns hopkins at the psych school at johns hopkins. he's an expert on energy based industries in the gulf. he has over 25 years experience in international banking and finance. and i'm also happy to announce very happy to announce, that as of officially last night, dr. seznek has joined the global energy center as a senior fellow. we couldn't be happier to have such an esteemed expert. so let me just finally say that for the audience, for the audience here and those watching the live webcast, you can contribute to the conversation on twitter by utilizing the hashtag a.c. energy and a.c. middle east. i extend a warm welcome to the

panel. the panel will come up on stage and i will turn it over to our moderator, david. thank you. [applause] david: thanks, and welcome. we are here to talk about the leadership changes in saudia arabia. the air central to regional stability, and the diplomacy in

reacting to the p-5 plus one deal with iran and the containment of isil as well. so that's why we have this panel here today. i guess i want to start with a leadership changes, tony because people were used to very slow, steady changes in saudi arabia leadership. when they removed the crown prince it caused vibrations across the diplomatic community about whether or not this was pretty fast, whether it signaled something. i wonder if you can take us through the leadership changes and what they mean and what this says about the stability of leadership in saudi arabia. >> i think one needs to be careful. the king is probably not in perfect health.

he is old. he faces a time period in which consolidating power, achieving something as a leader pushes him toward decisive action. i think having been through this again and again, watching this focus on the royals, we need to be extremely careful, because these changes do matter.

but often we do not really pay attention to changes, because they involve a minister of defense, or a significant shakeup in the ministry of the interior. for your polish the national security council and create a whole new top security structure and it produces absolute indifference on the part of the media except for a few experts who write commentary that does not give much pickup. the most dramatic is you have a very young minister of defense. that is an uncertainty. but looking back at this over the years, we have done about as well in understanding these shifts as people do in picking the fantasy football team.

there are all kinds of theories about what this leader will be, there are all kinds of extrapolations based on what they did in the past. people turn to one expert or another, and anyone who has in in saudi arabia realizes that characterizing the royals is almost an ongoing sport. as long as you only talk to one saudi, you get a very clear explanation. my background is in areas like planning, dealing with the national security, the intelligence, the defense structure, and i have not focused on things like education or many other areas that really matter in the kingdom. but what i have seen is an awful lot of structural consistency. and you do have very powerful institutions. you have budgets. you have plans that have a drive

ing impact on a lot of what the kingdom does. and i think that the shift here, frankly, it was time, really time that you had a younger prince, and it's not really that young, made crown prince. you needed a figure that could handle the transition, handle the security issues, that was strong enough to lead and provide some degree of bridging. so i think in the case of muhammad you have somebody who had proven his capability in what today in the kingdom may be the most critical focus, which is its immediate concern with security rather than internal development or the structural problems i think that frank will get into. the most serious shift had already taken place. he had become minister of

defense. he had displaced vandar. you have gotten rid of a much more risk oriented approach to dealing with syria than was the case under muhammad. you had less focus on taking a kind of independent and somewhat risk oriented security structure. all of that happened long before this sudden shift. putting a relatively young man in as minister of defense -- well, the problem is when you look back at this, it has always been a very odd job in saudi arabia. because the ministers of defense have always had something else to do by way of

appointments, or they have been somewhat transitional and the decisionmaking structure has, in many ways, been technocratic and professional within the services, or it has moved up into a more consensus oriented structure. remember if you go back to -- who certainly didn't review all major decisions, procurement activity, and so on, he was not at the same time by any means a micromanager. his son did not become the minister of defense. he was followed by someone, who again, did not emerge as a strong central controlling figure. and that has been a pattern which may or may not continue.

we'll find out in several ways. one of them is going to be what happens in the areas where the kingdom faces immediate security challenges. iraq, syria, dealing with lebanon, dealing with yemen. the whole problem of relationships with jordan, egypt -- these are issues where at any given time a relatively young man may be confronted with some serious defense oriented decisions. but my guess would be that these will almost immediately move upwards and into a kind of royal court, senior leadership position. now, one thing that will be a major change is the shift to a foreign minister. i don't think there's anyone who would challenge the personal competence of the minister, but he's not a member of the royal family.

one of the key questions will be when the first real crisis arises, what will the role of the foreign minister actually prove to be? and that may be a matter of influence as much as a matter of competence. and we'll find out because in the real world that's what happens when you have a shift in leadership. now, there are a whole host of other shifts in leadership. when i looked at the actual announcement that came out of the palace and then the next three days, there's something like more than 30 people who were affected one way or the other by these shifts. and a lot of them really mattered in areas like education, health, we'll hear about energy later. what i didn't see was anything which would address the fundamental structure of how the

department or rather the kingdom deals with defense. i didn't see a major shift that would affect the national guard, although that may come. i didn't see a solution to creating a meaningful national security council equivalent because there's been this building and then you try to figure out what the hell actually happens at these buildings, and it seems to be somewhat personal and not where the decisionmaking is structured. saudi intelligence is going to be, i think, an open question. we'll see whether that emerges as better organized, more advanced. we have problems of our own in dealing with this region. and it certainly isn't simple. so i'm not in any sense particularly in a place where i

would say, ok, we had one very dramatic midnight event and it's fundamentally going to affect the security of the kingdom in predictable ways because of personalities. i don't think the midnight event was anywhere near as important as the changes that took place in the intelligence and national security structure before this. i have no way to know whether a young man is going to emerge as a more proactive, successful, or failed minister of defense in a system where the minister of defense's role was always a little anomalous in terms of actual exercise of tolerance by the standards of other governance.

one thing i am sure of is that when it comes down to actually allocating money, that's going to be a critical issue. we'll hear about that in terms of oil revenues. we'll hear about it in terms of how the kingdom has to deal with the other security issues we are going to discuss. but you spent about $81 billion a year of the kingdom's budget directly on defense. you steadily expanded internal security to the point where it now in many ways is a counterpart to the ministry of defense. the ministry of the interior is as important to saudi security in a lot of ways as the ministry of defense is. how that will play out in an era of declining oil revenues, i don't know. the other issue is that when you look at this, you're also having to absorb something on the order of $90 billion worth of new arms

orders from the united states alone over the next three to five years. and that is an immense challenge, and it is only the beginning. since you're talking about $12 billion to $18 billion worth of arms orders a year. if you would like me to bet on which royal wins or which royal succeeds the last royal, david i'm going to have to give up because quite frankly you could write all the op-eds or one page summaries of this you want, but let's go back to the fantasy football image. those of you who are lucky enough to get it right, if you ever bothered to play that game, congratulations. david: i won't ask you to predict the future, but let me

come back with this decision on crown prince. it did seem that some of these questions were foreseeable, the leadership decisions were foreseeable. did something happen between january and april? something in the external environment? some greater sense of urgency? was it a greater sense ever mortality on the part of the king that led to that shift? it does seem anomalous even taking what you say into consideration about the reality of the rest of the leadership changes. anthony: first, there hadn't been a deputy crown prince before. second, for all this talk of the group that was supposed to review, the selection, that was king abdullah. guess what? there is a different king. i think many people were very surprised by the appointment in the first place. given the pressures on the kingdom, again, the need for stability, for change, to go

from an old king that does have some health problems to a stable succession at a time you face serious security challenges on all of your borders, i think if i had been suddenly shifted from crown prince to king, i would have done something very similar and done it very quickly. david: jean francois, turn to you and talk about some of the changes in leadership in the oil sector. if you could take us to the changes at ramco and the ministry. and i think what underlines that, what's the connection

between these changes in leadership and any likely change in saudi oil policy? are we also looking at steady as she goes? jean françois: i totally agree with dr. cordesman. in the case of the oil policy, i think we are seeing a very, very strong technocratic structure in place. in my view somewhat reinforced unlike what we have seen in the press at times whereby some people are saying he's just king trying to put his sons on each side of the saudi ramco, and the minister who then will -- could become minister and then chairman of saudi ramco. it's not what happened. the changes was that the minister of oil, that's the big changes, the one who's been controlling oil policy in saudi arabia the past 20 years, he's been replaced. he's been trying to resign for a long time because he wants to

retire, he's 79 years old. but he has been removed from the board of directors. he's still minister of oil, but it has been announced that oil will no longer be handled by ministry of petroleum and minerals. so the ministry of petroleum and minerals is becoming the ministry of minerals. and energy in general, i suppose. but the c.e.o. of saudi ramco has been named minister of health, which is a very difficult position in saudi arabia. a huge budget. somewhat dysfunctional ministry. and his responsibility is to make it work. at the same time, they named him chairman of saudi ramco. now saudi ramco is technocratic.

it always was. the board of directors doesn't have a single prince. so the minister of oil no longer the chairman. in terms of the change, the big change, supposedly, it's now a supreme council for saudi ramco which is supposed to be this sort of committee that sort of handles major decisions at saudi ramco. that's been presented as being something very new. it was not new. in fact, there was such a committee last year already. before that there was a supreme oil petroleum council which was chaired by the king, co-chaired by the crown prince, with the minister of foreign affairs as one of the major princes in charge of the committee. that committee never did anything because everybody's too

busy and never had the time to do anything. today, the council for saudi ramco, the supreme council, is now controlled, chaired i should say, by muhammad. and that is viewed as a very important position, which it is. but the fact is muhammad has very little time on his hand to really manage oil policy especially since it is so technocratic, so difficult to handle. however the man in charge of this council is really the secretary-general of the council is a commoner. a doctor who is basically in my view, in my view, handle the policy. the committee is supposed to be composed of 10 people, five from the board of saudi ramco, the prince, and i don't know who else will be there yet. i haven't read it even if it has been announced i haven't read it.

what i'm saying is that nothing much has changed. and therefore i don't expect policy to change very much either. so, yes, indeed, he's not directly involved in saudi policy, this may a good thing in the long-term. and halil, much more of a technocrat will be handling some basic policies. the new c.e.o. is a temporary c.e.o. he's now on the board of saudi ramco and senior vice president, and he will be handling the day to day relations, day-to-day business at saudi ramco. what's interesting to me is that halil is known for having put saudi ramco into chemicals. he has negotiated petrol which will is today a $20 billion company, it was $10 billion.

it doubled the size, $20 billion company. mostly the big joint venture with dow chemical also a $20 billion project. those are very advanced chemicals. him it's putting saudi arabia in the a totally different pattern of production. it's making saudi ramco look a lot like exxonmobil. i'm not sure the saudis would like to hear that, but i think that's what's happening. in fact it's a very good thing. that may bring a lot of changes in the kingdom in terms of running the economy, because the company which is now the second largest chemical company in the world after b.s.f., they have lost their chair, c.e.o. the c.e.o. is now working in the minister of defense. what he's doing there, i'm not sure.

i believe and perhaps dr. cordesman would know better, i believe he's working on appropriations and things of this nature. which means it's part of the professionalization of some of the problem ministry health and ministry of defense. so i would not be surprised if there was some reorganization in saudi arabia of maybe saudi ramco becoming much more of a chemical company because of him. or on the other hand maybe take the chemicals away and put them into sabic. in terms of the ministry itself, now that the ministry's not supposed to be supervising saudi ramco, they still have to supervise the rest of their purview, which is the minerals.

a very important company in saudi arabia, still relatively small, but it is one of the largest fertilizer manufacturers in the world today. and it's doubling production. that is also a joint venture today and with mosaic of the united states, i think there will be a lot of reorganization at that level as well. making it much more professional and we'll see how that develops. the purpose of all this is to end up having this large state companies provide facilities for smaller companies to create jobs. one of the key issue of course is security as has been mentioned, but the second biggest issue, if not the biggest in saudi arabia today, is creating jobs for their young saudis. i would not be surprised if muhammad is now in place because the need to create jobs for 60% of the population, which is the age of 30, so they provided one job already.

they need to -- i think that's what's going to happen. david: let me come back to you. i could read the moving of the deck chairs in two ways. one is saudi ramco will be more autocratic and look at increasing solar, less of the oil for power generation finding ways to access gas. the other way to read it is that there isn't a c.e.o. of saudi ramco yet, the chairman has never been traditionally the leader of the organization, and he has two jobs. the role of the ministry is undefined. and muhammad is at the top of the chain with in determined leadership. you wrap that together, who really is in charge, then, of oil policy in deciding how low can you go? jean françois: i think the policy, which was in my view anyway, defined the past few years will continue. i don't think they have to make much of a decision at this point.

i think the saudis have decided that they were going to keep producing in order to create -- impose its will on the markets and basically on the noneffect producers and not just chair but mostly russia, but we have talked about this in the past. they may not concede. but that's the policy, i think. who is going to make future policy? i think very much a combination of halid and prince muhammad. definitely. i think that's where the policy is going to be made. frankly, that's not much of a change. david: prince abdullah is not really a player in this? jean françois: if the minister of oil resigns, leaves, the ministry because of age, and so on, maybe could be replaced by prince aziz who has rank of minister as deputy but he doesn't have oil.

by removing the ministry from saudi ramco, they remove him just as much. i think there will be almost no change. i would agree, though, that maybe he might be named to the council of 10 people. it is not a huge position. yes, i would agree that the ministry may go to other things like solar. bought it's very big and trying to do more. nuclear, maybe, maybe increase prices on natural gas. a few odds and ends which would create a lot of issues in the kingdom. but it's still a bit unsettled. we'll see a lot more changes as

i started hinting in terms of changes at least in the industry side of things. but also on the oil side. david: we have been warned by tony not just to focus on the royals. and we have seen a bit of a generational change. you're back from saudi arabia and i think you have seen a little bit of this generational change up close. can you tell us about what you saw and think it means? frank: i can. i'd like to start by confessing to the people in this room particularly not only this panel but in the front row here, people like ambassador cutler and others who have forgotten more about saudi arabia than i'll ever hope to learn. and making probably only my sixth trip to the kingdom over the span of a career doesn't make me an expert.

maybe more typical of what i was, a foreign service officer who can sometimes be a mile wide and inch deep. sometimes we flip and go the other way, we get very deep in a particular subject. i'm not deep in saudi arabia but i have strong impressions. because what i saw there was so counter my prejudices going in. i had followed the kingdom mostly from ringside seats in egypt or iraq or elsewhere in the region over a number of years. all of us tend to think, all of us americans of saudi arabia is the most change resistant, most conservative of all the gulf states. among those conservative of all the arab players. we watched the center of gravity of the arab world in so many fields, business, education, art, science, medicine, ideas, communications, media shift from the -- my beloved cairo and increasingly toward the gulf.

we explain yes, of course, money will do that. all those petro dollars. why is the kingdom evidently so resistant to change? we make so much when a ruler goes and this son or that person gets named. we speculate so much about the role of individuals. i came with a lot of questions. one of the conceptual frameworks that used to bring to the great privilege of the service i had as an american diplomat foreign service officer was sort of crystallized in a book about 15 years ago that probably most people here have heard about called "the tipping point" malcolm gladwell. the job of diplomats, good

businesspeople, good analysts and think tanks, is to look for trends. much as the changes are happening but one of the changes that are going to happen. not just the threats of instability and revolution, when we think about tipping points, but the opportunities. where are tomorrow's explosive trends and fashions and business opportunities going to come from? if you think about the work of malcolm gladwell, there's been some writing over the years, things like the law of the few. there are things that hide in plain sight. often trends are counter intuitive until they become obvious and break out. one of them is the law of the few. it doesn't take a majority of people starting to think in a certain way to make the trend. by the time it's the majority the trend is well under way. so there's a few people that he calls them the mavens, or the salesmen, connectors, people are passionate about something, see something, want others to understand. in a short visit, such as i had there's no hope of having a representative sample, ok.

that wasn't the point. the point was to expose me, to educate me to some interesting things going on. the proximate reason to go there was something that i thought would be very stayed. it was something called the institute for diplomatic studies. a bit of a relationship with the atlantic council. principally heretofore through the scowcroft center. going to the saudi institution and usual ways of dealing with them. i had my expectations firmly under control. we went, several day conference, very well organized, more than just older guys. people speak -- four women from the council, very outspoken, very articulate. not just saudi officials. people from the world of business, private sector. and a really rich interchange, respectful, but not inhibited in the way that i expected to find. a lot of interesting ideas and banter and so forth of -- i had been to the kingdom before, but it was just fresher and better. i thought, this is a positive impression. one swallow doesn't make us drink. i had been in touch with the prince.

he wasn't available so i met with his son who is one of the leaders of something called the king fissel center for research. in islamic studies. he pointed out to me that for research was added to the title. it used to be the king fissel center for islamic studies. they collect venerable copies of the koran. but what he wanted to talk about, and one of his scholars wanted it talk about was their research. it was research a stack ever publications, which i actually looked through to assess how they stack up what we do in washington, they were in english, strikingly. they do some in arabic as well.

i thought they were pretty good. pretty interesting. including assessments on american foreign policy in the region. it was pretty insightful and thoughtful. and assessments on, as you would expect, iran, syria, egypt, the region. not simply justifying the kingdom's outlooks on things but really pretty thoughtful legitimate scholarships. the conversation itself was wide ranging, interesting, very probing in the way of the prince himself. i could see the father and the son, princeton educated. that was again just positive. not another swallow making this right. finally i went to something that was startling. even in its very title, even after the title my expectations were this can't be for real. the title of this institute, which is at a university, all male campus, they haven't built

a female campus yet, 70% majority of female students on that campus, that was interesting for me intermingled. not visibly segregated to me. there is an institute called the institute for the study, in english they call it the study of innovation and government. and ours is even more startling than that. it's governmental creativity. governmental innovation, had a -- ha, ha, ha. how impossible. how counter. something like that. it started for when the prince oman center for innovation in government. and i met about a dozen people. i think all americans were

women. i will mention two women in my remarks here. one of them is an american named ann hadibi, who is a real management consultant in organizational change. she has her own consultant she's from harvard. goes from boston and riyadh to do this work. i think it's called, one world, all the world. all worlds live network. serious professional, long established track record working in the field in the united states. they hired her of all people to lead this effort. she brought in other people who had experience with deloitte and maybe the -- different management consulting firms. but it wasn't just these few americans. there were then the thing that

gets to the point about a tipping point that makes me wonder, maybe come back and ask my staff to do more research and i put it out here for anyone else in -- i wanted to do research on the question of is there a tipping point happening or several in different fields in the kingdom as well as across the gulf, perhaps more broadly? i mean a positive tipping point. i don't mean a tipping point toward revolution. not negative. political revolution. i mean positive revolution. that is this. there were over half a dozen i'll say about eight saudis, ranging in age from their 20's into probably approaching 40. one of them had come back from study at oxford. the others had all come back from study in the united states. one was a woman, didn't cover her hair amongst the other men in the room. much less her face.

dressed in sort of black robes. and the conversation was, was really insightful, full of passion for what they are doing. they really wanted us to understand what they were about and how important it was. so this king solomon center for innovation and government started as an idea in 2013 revved up in 2014. 2015 they published a catalog of the 227 agencies that they found of the kingdom's government. they fought to actually survey what is the government here? what does it look like? then they took, i don't recall about 30 of those, and dug down into how they were working. best practices compared to worldwide management best practices. what's working, what's not

working? e-governance, apps, how is it serving the people? what's working, what needs to be thrown out. what needs to be abolished consolidated? who are the best leaders? how to hold them to account. they published on this and they are doing more work, and these young saudis are fired up. and evidently feel released and empowered to do it. again, the data that i think merits some analysis, some gathering of analysis come from the work of the other -- just touched upon by a small piece by one of our staff.

a young lady, stephanie, who couldn't join us today. she's off. i don't know whether anna is in boston or the kingdom at this moment. perhaps we can have her come here. it is about the numbers of saudis who have studied in this country or europe and gone back. if you go back to gladwell's work, you see the different things matter in examining and analyzing trends, tipping points before they reach the tipping point. one of them is numbers do matter, but they don't have to be really great. they just have to reach a

certain threshold. in 2005, king abdullah and president bush got together at his ranch and decided to have a major scholarship program to send people to the united states. they sent 5,000 or 6,000 the first year. by now there are about 100,000 saudis actively studying in the united states, many of those now over this decade have returned. similar stories across the gulf. the numbers were small in earlier years, they grew, grew grew. it is quite a trend, a fashion a movement if you're a well-to-do person in the gulf to send your kids not just to the west, but to the united states and typically very ambitiously for the best places. and then they come back. they are not all immigrating to the united states. they are going back, running the family businesses. they are not going -- famously a lot of employment in gulf is made work. get it. the people i saw were not those jobs. they were fired up. they weren't working for their pay. they were passionate about what they were doing in the way that people at the atlantic council are or other institutions around the united states.

i guess that's the area for further study to look at. not just the demographics. we all know there's a youth demographic across the arab world, particularly in places of the gulf. that starts to taper off as they urbanize. but what is the subset who have studied not visited, tourism lived among americans, british and i choose the english speaking world advisedly, why? that's how the link the world to the internet and ideas and you read everything that's out there. some are going to france and other countries in the west. what are those numbers? david: major occurrence of modernization. frank: what are the channels there? how many are they? where are they concentrated? surveying them, what are their experiences? we get a lot of episodic stuff foreign service officers when they report.

get some data, but a lot is impressionistic. you talk with three, four, five people and make some vast conclusions from these things like i'm doing here. i'm saying it should be tested. look at the numbers. and are they reaching a tipping point where people are coming back, male and female, and having an impact on institutions of civil society, and even government. and big companies. famously been in the oil industry over a long time, of course. i put that question for further research.

stephanie is doing it with us. i just was blown away by the work that ann is doing in saudi arabia. david: thank you. tony? tony: i have to say that having done some surveys, it's always

interesting to be sent by the saudis to places where saudiization is supposed to have occurred. it is also a fact that no five-year plan from the last four, five-year plans has reflected a serious improvement in saudiization. you've got, i'm going to give you the c.i.a. figures approximately 11 million people in the labor force. it's hard to estimate. 80% of those are foreign. approximately 600,000 saudis reach job age every year. youthful employment among saudis, 24 and under, is rated at close to 30%. now, you have a lot of money going in to job creation economic cities. but you also have the oddity that more women graduate from secondary school and university and they take far more serious courses because it isn't dominated by religious instruction. you look at those demographics and you take them into account because, yes, we have those people. we also can look at significant parts of the kingdom where that development hasn't occurred where there are constant security problems, where there has been a difficulty with al qaeda in the arabian peninsula and now rising attacks that have begun to emerge from the islamic state. not all of them are out in rural

areas or the border. there are serious security problems in areas like riyadh in the kingdom -- and the kingdom has had to react. yes, we need to get to the numbers, but -- and there are a lot of positive trends, but i think we have to be very, very careful about the demographics here. and this is a country that's gone through an incredible amount of population pressure. it's technically more than 84% urbanized going from something like less than 10% in 1950. and you get an idea of the stress involved. so, yes, there are tipping points but i think we need to be very careful. they can tip in two directions. david: let's talk about yemen and iran and come back on oil policy before we open it up. we have seen sort of a new level of engagement by the saudi military in local conflict. in particular the air campaign in yemen may not have gone as well as far as they intended. i wonder if you could talk about what this means for saudi's role in the region? is this a vulnerability? muhammad has been the face of this campaign. he's been more personalized maybe than is traditional in saudi politics, but if it goes badly, is the vulnerability for him?

and is it an opening for further iranian aggrandizement if it looks like the campaign goes poorly? tony: i think we need to be careful in looking at this. it's an air campaign which has begun. looking at the claims it's very difficult to figure out what has actually happened. but certainly they have hit quite a number of military and security targets. what if anything they accomplished in dealing with the huties and shiites is hard to determine partly because it's a very mixed population the area in the y.a.r. 35% of the population of yemen roughly, nobody knows precisely, is shiite. part of a much broader movement and the head of state, remember, was a shiite.

for many, many years. dancing on the head of snakes was done by a shiite. not by a sunni. the other side of this is at the end of this did they seriously think they could bring the previous leader back? i don't think that was something you can blame on the minister of defense. and i'm not sure anybody thought they could. if the bombing campaign is followed by some kind of political deal.

and by buying off the right amount of power brokers and calling a -- call yemen a democracy is, shall we say, one of those spending -- one of those americans supplications that does not reflect reality, it may be somewhat successful. but the broader problem in yemen is -- what you do not see reflected in the bombing campaign is, for years they have been debating whether there should be a truly massive barrier defense along the border. the answer no scenes to not only be yes, but to try to create a buffer zone on the you many -- on the yemen side to try to block the flow of illegals. but it is mostly to try to

contain the problem while essentially insuring you do not have major iranian influence. the saudis have a much more negative view of iranian influence in the booth the -- in the houti movement than the u.s. we do not see that level of arms transfers or presence. but we can agree there is a bombing campaign. i think it is fair to say that yemen is one of the few countries in the world that most people who are development experts have given up. there is no way to deal with the population pressure, the failed economy. the other factors involved. it is going to be unstable and a mess indefinitely into the future. and that is something that has gotten lost in this focus on the air campaign, which seems to have been, incidentally, for

what they were trying to do, reasonably effective, which is a message being sent. it did reveal some other problems which had nothing to do with this young minister of defense. saudi arabia needed to turn its

red sea fleet into a real fleet they need to give their fleet in the gulf the same level of modernization that they have given their air force. they have not done it. these are basic structural problems that affect their security, that need solution. whether this has anything to do with the appointment of a young prince is an open issue.

they have a major problem in their military cities, which are reorganizing by trying to put a new one in yemen combined with the newport, but they tend to be static. -- with the new port, but they tend to be static. yemen is today's headlines. they have been deeply involved in the syrian civil war from the start. but they say that prince bandar was a bit of a disaster. it was an open contest as to who could do the worst by trying to intervene in syria. the obama administration -- there is a great thesis to be written on comparative incompetence, if any of you are trying to have a doctorate. [laughter] anthony: you have the problem of iraq, where i think we have done better and they have been too isolated, unwilling to engage.

but iraq is on their border. it is real. and the islamic state, the al nusra front, they are real threats. they are active. they have attacked. they have a very effective, i think, counterterrorism force, but they also have terrorist. -- terrorists. you have very weak partners. nobody wants to talk about oman, but it has a very weak, ill head of state, growing security problems, its own demographic and economic problems. they are caught up with bahrain, where you have a deeply divided royal family that paralyzes movements toward real reform. you have qatar, which seems to be a little more balanced, but frankly depends on us for real

defense. it is not really part of the gulf cooperation council in an integrated sense. you have a q8 -- a kuwait with its own divided royal family less visible, which is undergoing its own internal political problems and is right on the border of iraq and iran. and from a saudi viewpoint whatever you may think of yemen, understand that if we solve the nuclear problem the way we are planning to, what we are really saying is we will keep them at something approaching the breakout level, with about two years morning, indefinitely into the future. -- about two years' warning indefinitely into the future. we will not solve a massive buildup of iranian missile capabilities, a major buildup in asymmetric warfare capabilities in the gulf. we are not going to deal with the expansion of iranian influence. let me say, in all of these issues, which when i talked to

the saudi's dominate their perceptions of securities -- security, along with their own internal shiites and internal security problems, focusing on the age of the current minister of defense and focusing only on yemen is not terribly realistic. and one problem we need to remember is, yes, this is a long way away from us. it is right on their borders. on all their borders. and these are debates which go far beyond all of this focus on the leadership. and when i think there is a lot of continuity, but no good answers. none of these problems seem likely to go away in the next half decade, and that is probably optimistic. anthony: on that happy note, -- david: on that happy note, jean-francois, it does not look like accord is much in the offing. how does this play out? in the pt plus -- the p5 plus 1 agreement, late in 2016, iraq is

reported to be able to deliver one million barrels of oil a day if the revamped takes off as planned, which is in question. how is this going to play out, given the challenges in the regional dynamics? is this a race to the bottom? or does revenue maximization trump everything else and we will see a production cut at some point? jean-francois: not very easy questions, but i think in this question to bring back the yemen issue, i think that one of the reasons the saudis are so intent on making a show of force in yemen is really to show to the iranians that they exist as a military power. maybe not very strong, but they exist, and they have to be accounted with in any kind of settlement. if the p5 plus one arrangement takes place, i would not be surprised if there is an

arrangement between iran and saudi arabia on many other subjects, because i think everybody understands that you cannot fight the islamic state just with saudi arabia alone. you have to have a saudi-iranian arrangement. if that does not happen, the

islamic state will continue to survive really well. so if the arrangement works out and the saudis move forward with the iranians on developing a more stable situation in syria in particular, and in iraq, i think a lot of things will happen at the same time. if terms of the oil production definitely the iranians can produce 600,000, 700,000 barrels more in a year or two years, and the saudis have time to deal with that. let's remember, i think that -- and there are people in this room who know this much better than i do, anyway. but i think the focus of iran is really on natural gas. if saudi -- if iran can find some capital to reestablish their gas yields, they can start producing. today, iran is a net importer of natural gas, and it has the second-largest reserves in the world. they could start exporting their gas to pakistan and through turkey to europe. there is an enormous amount of possibilities for iran.

they could develop their liquid natural gas industry, which is nonexistent at this point. a lot of people would be quite happy to help them develop this if the gas can be produced. so i think the gas angle of this could be one of the part of the deals they work out with the saudis. so i am not too worried about a race to the bottom in terms of price. part of the deal is the saudis could reduce a little bit to make up for an increase in iranian production targets. iraq is a problem, as iraq has much more capacity to increase production if there was some kind of arrangement with iraq. today i was reading in the middle east economics and -- survey yesterday, i think, kurdish territories are unhappy with iraq because iraq stopped paying according to the agreement they made in january. the kurds are basically being pushed out again. they could start producing not big production -- we have our own companies up there. they have their own pipeline to go to turkey. it is not huge amounts of oil, but it could mount to have a million cup -- half a million, maybe million barrels over the years. iraq is in trouble. they do not have the security arrangement completely worked out. i do not see much risk of iraqi oil. last month, they were producing and exporting board -- more than

ever, but that was with kurdish oil, and with a field indicated by the kurds. maybe i should not, but i actually discount iraq as a problem in terms of the race to the bottom at this point. if the iranian-saudi deal never takes place, there might be some arrangement in iraq, who then could produce more. what we are talking five years down the line, an eternity in terms of oil. david: let's turn to the audience. we can start with ambassadors row, and we can take two or three questions at a time. everybody, yes? >> i am on the board of the atlantic council. one thing not mentioned in this discussion king salman comes to experience -- comes to power with more experience in domestic policy than his processors. he has worked with the u.s., with arab countries. he was governor of riyadh. he has excellent relationships with the tribal community. this should be emphasized. you have a king who is experienced. you have a king that has traveled.

you have a king that has good relationships with many leaders in the arab world. that is something that should be emphasized. david: let's take a couple more. professor heller? >> very interesting discussion. i go way back with saudi arabia, and managed to experience it once in a while. i go back to the days when king salman was prince salman governor of riyadh. what is a governor? he was much more than a governor of the capital or the province. he was on the inside of policymaking in the royal family for years and years. at the same time, crown prince then king philip, he was the number two. i tried to keep in touch with him. i thought, this bedouin -- how can he ever run a country? i was astonished to see how he took over. he had hardly traveled outside the arab world. and i think instituted a lot of very important reforms. some people can say they were not enough, but whatever. i think the leadership is very good. let me go to the one question which you raised, and that is education. saudi arabia has done

marvelously on educating. in the 100,000 saudis who are studying in the united states, it is very good for our bilateral relationship and for the country. but it does relate to something called jobs. we just had the president of tunisia here last week, and he made that point. in tunisia, he said, under the president and then afterwards, there were two reforms -- women and education. women is ok, but now we have so many educated people without jobs. i think obviously this is a risk for saudi arabia. you mentioned the whole idea you have to get away from having this ship of state run by a crew of people from other countries. it has to be done.

when i was there, we tried hard, and i think since then, we have helped them with establishing a vocational training program, working with your hands. it was not very successful. i think there is this tipping for. i hope it is going to be a positive one. last point -- yes, you have two very young future leaders there. and i think that is a good thing. i think basically all that i have heard is that, look, that is good. we can now look ahead not just for a couple years with a leader, but maybe a couple decades. there is a feeling of, keep us safe, and maybe this will. random thoughts. david: thank you. let's take a couple more. right here in the front row. and back there. >> ok? david: go ahead. >> particle dictates? david: introduce yourself. >> sorry. i'm out of practice. to a guy that is getting ready to go in a couple of days to the king in a role i am still trying to grasp as ambassador --

specifically, it is going to be in a training and advisory role with the saudi arabian national guard. advice, counsel? we do not need to bore the rest of the scholars here, but i would like a few minutes afterwards if either of you gentlemen would be so inclined. david: ariel? ariel: ariel cohen, atlantic council. excellent presentation. thank you very much. can you please drill down a little bit about the saudi-iranian dynamics in view of possible agreement on the saudi -- on the iranian nuclear program? specifically to what extent the saudi counterpart of a nuclear program can appear and where will it go?

and on a separate note, in terms of the yemen scenario, to what extent do you think they affect shipping of oil around the peninsula and to the red sea? thank you. david: we have got king salman's pedigree, education and job risk. tony, you want to start? anthony: first, i think there is no question you have a king who is both proven and a very competent technocrats. -- technocrat. but something i am not sure and i think we all need to worry about is, saudi arabia is not the only problem with leadership. you look around and you have obvious uncertainty in the

region. there are fewer questions, but certainly the saudis are concerned about both. you do not have a stable leadership in iraq. i think we have underestimated our problems in oman. there is a study by brookings that at least surfaced some of the issues, but it has been something of a black hole in terms of actual coverage. problems in kuwait, problems in bahrain -- these are very real. the failure of initiatives to bring the gulf cooperation councils together into an effective security party or deal with these issues, issues that king abdullah took -- these have continued. i have been listening to good ideas raised since the early 1980's. and to the extent i have seen efforts at integration into the security structure, they have largely been a technocratic earlier and a waste of money some of them extraordinarily expensive. so the problem for the saudi

leadership is a lot broader. the tensions locally are bad enough. one area where i have seen improved cooperation is dealing with the syrian opposition. i hope that continues. it is still now a high risk, because you are talking. so exactly what is the relationship between saudi arabia and syria, or iraq and lebanon? that assumes we can ignore safely the palestinian and israeli issues, which do not lead me to that. so i get worried about the idea of continuity here. i get worried about how well the kingdom can deal with a king, a new foreign minister, and the security issues. it is not that i have any pessimism about it, but i have concerns. i think we have to be careful.

let me go back to a couple of other issues. on the jobs side, looking at the five-year plan data, the budget data, and the saudi arabian monetary fund data, and anything else i can find, they are not making progress. and it is critical. i mean, women are a key aspect of a productive labor force when they are more than half of the educated population. the rate of youth unemployment in women is twice the rate of men. that is a lot of talent that is not being used. but young saudi men are not getting the jobs. let me say, and this will get me in trouble with various universities -- there is an amazing lack of correlation

globally between education and job creation. education for jobs, when the economy is creating them, is very valuable. education for the sake of education has almost no historical impact in moving countries toward development. and this is not popular, but it is unfortunately something where nobody trots out numbers to contradict it. and the kingdom has to face this. just to go back to the saudi-iranian issue, let me just say that every conversation i have with people who are involved in defense, intelligence, or foreign affairs -- do not see this nuclear agreement as having any positive

effect. they are focused exclusively on what they see is the expansion of iranian influence in the region. and they see us, at least, as partially to blame. a lot of that, i think, is unfair. that they see us as having failed to contain iranian influence. some of the more recent meetings may or may not have helped to deal with this. but i also, when i talk to them, and constantly reminded, yes the nuclear issue is very high profile. a lot of it is driven by our focus on proliferation, the politics of u.s. and israeli relationships, by the history of some very key figures as supporters of arms control. but when you go to a different level, the focus is on asymmetric warfare capabilities, missiles, and expansion of influence. and you have to be careful here,

because seen from an iranian viewpoint, they don't see themselves as a successful stable military power in other ways. they realize a hell of a lot of their air force is stuff they were buying when i was serving in iran, and that was for obvious reasons -- the early to mid 1970's. airships, their surface to air missiles, are obsolete and the standards of the gulf. this is a power which has reason to be concerned. and then you look at the rising level of shiite-sunni tension, which is only partly related to islamic extremism in groups like isis. and there are serious problems within the kingdom, some of which i think they have perhaps

been too strict about dealing with, in terms of the way they treat their shiites. but these problems are not going away, and are not going to be solved by the nuclear agreement. and when i look at that agreement, i think from what i have seen of the tentative structure, i would certainly support it, that it is not going to contain the iranian nuclear capability, and there are a host of things they will be able to do under any of the frameworks i

have seen today. and the saudis are aware of this. the practical problem is, if you buy reactors, and you get yourself into a fuel cycle, and you then have to create the capability to actually develop and produce a reliable nuclear weapon that is safe to put on a delivery system, if there is no resentments whatsoever to the kind of nonsense i see coming out of think tanks in washington, which is all based on a specious idea that all you need is enough fissile material and you have a successful bomb -- as a collective intellectual community, we sort of deserve an f minus for the lack of serious analysis in dealing with this issue. and it is going to be a very major problem for the gulf states. what are the options?

people like the prince have talked about, if iranians can have the fuel cycle, we have to have the fuel cycle. fine. that puts saudi arabia into buying reactors and being able to manage its own fuel cycle. i would not hold my breath. and of course that does not move them anywhere toward getting a bomb. they do have missiles, as you know, a strategical missing -- strategic missile force. but it is not something they have the technical background to attack areas and the operators seem to have a fairly heavy chinese presence. there is no other arab country that has capabilities in these areas. so where can you turn? and there is only really one clear place, and that is pakistan. whether pakistan has missiles the nuclear weapons, i don't know. they will have significant capacity in fissile material relative to the current nuclear weapons program. fairly quickly, so there is that potential. it would be a dangerous game changer. but it is something that could present us with a real crisis if this nuclear agreement does not take place, or if it is cheated

on. all of which is something we may or may not discover in the next month or so. david: we have just got a couple minutes left. i want to give you an friend swap a chance, and then i will shut up. frank: if i can come back to the lack of correlation for jobs, we did something yesterday called hiding in plain sight. sometimes, it you see things. you are looking for something, and you miss something else. there is an old joke about a watchman, a guard at the gates of an establishment of a factory, watching a man, with a wheelbarrow every day full of straw. he looks under the straw and does not see anything there. every day, this guy comes out with a real barrel of straw. he knows there is something

wrong. he checks every day under the straw. there is nothing hidden. finally, he interrogates the guy. what is he doing here? you are taking out straw, but what are you hiding? the guy finally admits he is stealing wheelbarrows. by not watching the wheelbarrows, by looking at the straw, you can miss it. i am a product of one of the best things the u.s. senate ever did. i got into global affairs thanks to fulbright. he was famous when i was a young guy for being against the vietnam war. but he established the fulbright scholarships. the educational and cultural exchange that came from that when the u.s. used to fund that sort of thing, was hugely impactful on americans and the foreigners who came here.

the education, i think, was in some ways the straw. yes, there is knowledge being transferred. the saudis who are coming here are studying. maybe someone doing poetry and humanities, but many are getting mba's, engineering, medicine. all that is important, the tech transfer and knowledge. what is really important, the wheel bear -- wheelbarrow, is living in your 20's among americans, and seeing how americans think. for example, they are not going to school necessarily to get a job in government. in egypt, they crank out half a

million graduates every year that are expected to take government jobs. most americans go to school and they do not go out for government jobs. they are starting businesses. there is this whole different way americans think about work education, gender roles, gender participation. so, i have found when foreigners come back from living in the u.s., it almost does not matter what they study, they come back really changed. that is what we are getting to. how many tens of thousands are coming back, what it means to be male, female, and adult, and economic actor, how you run your family, how you engage with the world. there is important stuff from inside the classroom or the syllabi. i do not mean to say that these changes are not real. they are. >> the last word -- you can be an optimist or a pessimist.

jean-francois: for once, a may not agree totally. i think not that long ago, iran and saudi arabia were trying to establish rapprochement. the first visit of king of dello when he became king was to iraq. and there was the sense that things would be improving. frankly, i think this could be arranged in a way, because again, abdulla made a huge effort. i think if the situation overall calms down a little bit, things will start improving, and my experience on shia-sunni relations in bahrain for many years, and before the prime

minister really pushed the sectarian issues, the shia and the sunni always had problems and you knew about it, but they lived in together. they got married. i think we can see the same things developing in saudi arabia. i'm not so concerned about that. just a last note on the ministry of foreign affairs, because someone mentioned -- i think the minister of foreign affairs [indiscernible] there was no other one. all of those decisions went to them. you can have someone in the ministry who can actually write, until then, you did not have that.

i think that is going to be the most difficult job, to create a ministry with people. >> thank you to our panelists. thank you to all of you for listening. [applause] [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> and dale and c-span washington journal's lives next with your phone calls. then former governor martin o'malley announces decision to enter the 20 16th residential race -- 2016 presidential race. in about 45 minutes we will talk to the death penalty information

center director robert donovan about nebraska's decision to get rid of the death penalty. host: good morning to you. it is saturday, may 30. here are the headlines out of washington. longtime house speaker hastert is accused of using hash money. the united states is taking strides towards democratic relationships with cuba by taking office terrorist list. and, authority for the patriot act program will extend on sunday night lawmakers