With all due respect to Ms. Kinninmont, and the recent somewhat impressive advances Iran has made in military technology and in particular with missile technology, I would still bet on the latest and greatest in cutting-edge military technology (and boatloads of it, in the case of the Kingdom) against Iranian bravado and 'fighting experience' dating back to the Iran-Iraq conflict. Iran might just command the best asymmetrical capabilities in the region, but in any conventional all-out, winner-takes-all existential conflict with the Saud Kingdom, they would be mercilessly crushed by the RSAF. Just sayin'... US-Saudi arms deal ripples from Iran to Israel http://news.yahoo.com/s/ap/ml_saudi_facing_iran
Look for Jordan to get in on this somewhere down the line, although Saudi and Egypt are the two states which have taken a far more hardline approach to what they believe is Iranian belligerence in the region (in regards to Lebanon and Iraq, especially). Disclaimer: Debka tends to exaggerate claims from time to time, but reports of this first-ever joint military readiness exercises/war games between the two largest Arab states and U.S. allies is accurate. Israel, by the way, is said to have -- for the first time ever -- shared some intelligence from its Iranian files with the Egyptian and Saudi mokhabarat ahead of these military exercises, and has apparently been doing so for the past year. To Egypt and Saudi, clearly the potential of an Iranian threat far outweighs their opposition to Israeli policies. The bottom line is, both states view Israel as a 'neutralized' threat to both countries, while Iran is anything but 'neutralized' and its influence in the region is far-reaching and growing with time. Combine this with the defense spending binge by Gulf Arab states (Saudi and UAE, to be more specific), and you need not be Henry Kissinger to see how things could go very wrong very fast in what seems to be a 'trigger-happy' region. http://www.debka.com/article/9100/
That would be reassuring if I didn't think the 'Ninsula wasn't at risk of becoming Iran at some point.
A side benefit, of course, are the thousands of jobs in the defense industry Saudi Arabia is helping to keep on the assembly lines. I wouldn't be complacent about Iran, though. Look at what happened in the past, when countries confident in their air power were subjected to a surprise attack that suddenly took that advantage away. As an example, google September, 1939. Still, nice point. One must add, however, that the Saudi government is one lugnut short of medivalism in modern times. It's neck and neck between them and the Iranian theocracy.
I think you are underestimating the number of Saudi Arabians in Saudi Arabia who would be willing to assist Iran in an attack on the current Saudi government. When you say Iran-Saudi, you are not capturing the entire picture because there are humongous pockets of trained, angry, oppressed shiite Saudis (15% of nationals) who are just waiting for the opportunity to get rid of the wahhabist domination. Remember that wahhabists believe that shiites are non-Muslims or 'infidels'. Also, in an all-out offensive, I'm certain that the tensions on the Yemeni border would spill into Saudi Arabia causing more headaches than anticipated. On top of that, Saudi essentially plays the role of 'big brother' to the rest of the GCC countries (Bahrain, Qatar, UAE, Oman) for military help. Iran knows this and would not hesitate to attack strategically and mobilize all the oppressed shiite people in the region (pretty much every single GCC country). Saudi is certainly arming itself, but you would be a fool to think that it's just for Iran. These purchases, IMO, are made by recommendation of Western countries. Essentially, they want Saudi to pay for these things rather than having to spend money on it themselves. It is no coincidence that these deals are always with American corporations, and that the frequency of these purchases are negatively correlated to the state of the American economy. It's all a giant mess, but I think it's good for the region that these capabilities are spread around.
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Of course Saudi Arabia, a hotbed of Islamic fundamentalism, get our support. It's ruled by thugs who kowtow to US corporate interests. We like those guys. If they ever go Noriega on us, then the story might change.
Our foreign policy is a joke, especially in the ME, and doubly so when it comes to selling military equipment.