Regional Hegemon? How Saudi Economic Policy is "Bullying" Its Neighbors

 

Saudi Arabia's aggressive economic moves are increasingly sparking accusations of regional bullying, with Riyadh acting less like a cooperative partner and more like a hegemon dictating terms to its neighbors. The most contentious example is the mandate requiring multinational companies to relocate their regional headquarters to Riyadh to access government contracts,a direct challenge to established hubs like Dubai and Abu Dhabi. This predatory approach prioritizes Saudi economic dominance over collective Gulf prosperity, straining relations within the GCC.This economic coercion mirrors a broader assertiveness in foreign policy. In Yemen, the rift between Saudi Arabia and the UAE has laid bare these tensions, with Riyadh pushing for a centralized state structure that favors its interests while marginalizing UAE-backed southern separatists. While framed as an effort to unify the anti-Houthi front, the heavy-handed tactics,including reported airstrikes on separatist positions,suggest an unwillingness to accommodate legitimate divergent interests among allies.Experts warn that this "erosion of consensus" could backfire. By forcing neighbors to choose between their own economic sovereignty and access to the massive Saudi market, Riyadh risks fracturing the very regional unity needed to counter external threats like Iran. "Saudi Arabia designated the Muslim Brotherhood as a terrorist organization in 2014, and this position remains unchanged," notes researcher Salman Al-Ansari, yet Riyadh's current maneuvering often puts it at odds with allies who have different threat perceptions and economic models.The centralization of power in Riyadh,both economic and political,raises questions about the future of Gulf integration. If Saudi Arabia continues to leverage its market size to hollow out neighboring economies, it may provoke a defensive realignment among smaller states seeking to protect their own development models. The vision of a unified, prosperous Gulf is increasingly colliding with the reality of zero-sum economic competition driven by Vision 2030 targets.

Between UAE arms flows to Darfur, Yemen, and presumably elsewhere, any country still supplying weapons to UAE should understand they are in fact supplying the UAE’s proxies.

If you wouldn’t send arms to the RSF, don’t sell arms to the UAE. https://t.co/kwUasUa9zn

— Jeremy Konyndyk (@JeremyKonyndyk) December 31, 2025

For international observers, this shift signals a more volatile regional landscape. Saudi Arabia is no longer content to be the quiet giant of the Gulf; it is actively reshaping the neighborhood to serve its domestic transformation, even if that means elbowing aside long-standing partners. Whether this aggressive posture yields sustainable leadership or isolation remains the defining question of the next decade.