It’s important to look forward as one year ends and another begins: to make resolutions, regret our mistakes, and to wonder where it could all go wrong in the next 12 months.

There are fewer countries on Earth that have as much explosive potential in 2016 as Saudi Arabia.

Yes, there are failed or nearly failed states like Syria, Iraq, Somalia, the Central African Republic, etc.  But such sores spots are in the blatant open: for them to get much worse seems difficult, considering how bad things are in such places.

Saudi Arabia, on the other hand, has all the sheen of stability and security: massive oil reserves, stable institutions, a powerful monarchy headed up by a king who seems to know what he wants, and an all-important alliance with the United States.

Don’t let any of that fool you.  Saudi Arabia is facing its biggest crisis in its history, and the odds are against the Kingdom navigating it well in 2016.

But first, the cliff notes.

• Saudi Arabia is built very differently from most other countries: it is a conquered human landscape where the rulers built two parallel and incompatible societies.
• One society pretends nothing has changed with modernity, while the other is reaching for the 21st century with tenuous fingers.
• The referee between these two societies has long been the House of Saud, backed by a Western-armed military and vast cash reserves.
• But without those two pillars, the House of Saud is powerless, and Riyadh is rapidly depleting both.
• Sooner rather than later, one of those two pillars will crack, and what happens next is anyone’s guess.

Let’s take a step into the wayback machine and remember that Saudi Arabia as a nation is very, very new.

As in 2005 new.  Yes, that sounds wrong, but let me explain.

While Saudi Arabia as a kingdom has existed since 1932, Saudi nationalism – the process by which the states homogenizes people from many cultures into a single nation – is as new as 2005.  Saudi Arabia has had a National Day – the day the Kingdom was formed – since its beginnings.  But the state never encouraged it celebration until 2005.

This is like the U.S. deciding to hold off on having 4th of July fireworks until the 1850s.

In other words, while people have lived under Saudi rule for nearly 80 years, it was only 10 years ago they were encouraged to even consider nationalism as the glue that held their society together.

This matters for how much social stress the Kingdom can endure.  Kingdoms and empires can endure much less social stress than nation-states; they crack apart at the cultural seams.

That’s because the social contract between rulers and ruled in kingdoms and empires is mostly based on force: kneel before the King or get your head lopped off.  Beyond that, kingdoms and empires offer bribes to select groups, playing one set off against the other, using their superior organizational skills to crush inevitable rebellions.

Empires and kingdoms allow the elite to plunder humanity at will: they survive best when population densities are low, allowing imperial or royal forces to move quickly and wipe out rebels before they have a chance to join up and outnumber the government.

This puts them on the backfoot in the 21st century, where technology has allowed population densities to explode.  They cannot provide modern services for such a population: their governing model is based on a handful of rich elites doling out favors while killing dissidents with impunity.  They simply don’t have the time to solve all the problems that come with a bustling, modern city.

Nation-states, on the other hand, do not center themselves on individuals: they create categories of elites that can be swapped out as needed.  While empires and kingdoms are held together by nobles, nation-states are led by the rich, the educated, and the lucky.  That’s hardly ideal: you’d rather be led by the educated more than anyone else, but we’ve yet to invent a political model that does that consistently.

So when I say Saudi Arabia is very new, I mean it’s only very recently begun the serious process of transformation from a doomed Kingdom to a sustainable nation-state.  And even that may be too late.

And the result of this process is two parallel societies that do not get along.

Saudi Arabia has long had a traditional society of conservative subjects: people who don’t ask for change, expect to have favors doled out to them, and believe that anyone who steps out of line should get their head chopped off.  These sort are compliant, but are tough to educate to 21st century standards: they frankly don’t see the point.  That means they rarely are able to run the industries and perform the jobs necessary to sustain a modern state.

If Saudi Arabia were as isolated now as it was in the 1960s, it could readily accept that situation.  But the Middle East has changed vastly: the Information Age has seeped into even the veiled suburbs of Riyadh.  Once an overlooked backwater, the Kingdom is a strategic prize for anyone who can bring it under its influence.  Islamists, Iranians, Russians, Chinese, Americans, and fellow Arabs all have incentive to meddle.

So Saudi Arabia has been, since the 1990s, actively cultivating a second society: one of modern citizens, who participate in the state, who are easier to educate and bring up to code, and who see their identity as linked to the flag they live under.  This is why Saudi Arabia has had a series of very limited elections, even bringing women into the electorate.  It’s why Saudi has sent tens of thousands of students abroad beyond the useless government schools still dominated by conservatives.

It’s also why Saudi Arabia has gambled on a war in Yemen.  When properly conducted and manipulated through propaganda, war is a fine tool for building a nation.  Much of American nationalism, after all, is rooted in its World War II victory.

These two societies, however, do not get along, which is why a strong House of Saud must remain.

Traditional conservatives despise the society Riyadh is quietly building; for that matter, Saudi liberals don’t much care for the Wahhabi clerics who say dumb things that embarrass them internationally.  To keep the peace, the House of Saud, backed by Western military kit, Western-trained security forces, and large stocks of cash, keeps the peace, bribing who needs to be bribed and shooting who needs to be shot.

Despite the obvious tension, this formula has worked: nobody within Saudi Arabia is capable of challenging the royals and winning.  The al-Qaeda uprising in the 2000s failed because it lacked much support among ordinary Saudis.  Thus far, the Islamic State has yet to foment a similar rising.

But much of this strength is based on perception, as well.  Saudis believe two things: that the alternative to their royals is chaos, and that their own royals would go just as far as Syria’s Bashar al-Assad to retain power.  They are probably right.  There is no political model readily available to replace the monarchy.  Conservative Saudis would reject a European-style democracy as un-Islamic: liberal Saudis would despise an Iran or Islamic State-style theocracy.  One faction must prevail; in the 21st century, the liberals have the long game.

And that’s mostly what the royals wants.

The royals quietly favor the liberals – up to a point.  They want the economic and military skills liberalism brings without any of the political consciousness.

In other words, they want smart stock brokers, teachers, and soldiers, but they don’t want them to vote the monarchy out of power.

This won’t work; on a long enough timeline, liberals will realize they are better off sans the monarchy.  If done properly, they will compel the royals to adopt a constitutional monarchy and peacefully push them from power.

But that requires a great deal of time, and time is not something the regime has.

Because the cash to bribe and to buy guns is fast running out.

Saudi Arabia has been extraordinarily generous to its citizens: free housing, plush government jobs, far-from-rigorous schooling, and coddled sensitivities have created a swath of emotionally and socially immature people unprepared for the great changes that must come.  They are not cleanly liberal or conservative but straddle the line between the two: the spoiled brat may be just as likely an Islamist as they are a closet democrat.

And they are the place where society will crack if the Kingdom runs out of money.

Saudi Arabia is currently gambling it can restore, or at least preserve, its market share by plunging oil prices to desperate lows and drive out competition.  It hopes to thwart the growth of alternative energy and fracking as long-term foes.  It may slow fracking, but alternative energy is politically popular and is not motivated wholly by oil prices: people genuinely want cleaner skies and cities.  Such a war is folly and doomed to fail.

This means the days of fat oil-driven bank accounts are gone forever.  Saudi Arabia has already begun to cut subsidies; it will have to go further, making the sorts of hard choices that will upset the spoiled class long used to being taken care of.  Their resentment is the tinder that could ignite a greater flame.

But losing subsidies won’t be enough; rather, Saudis will have to see their government is incompetent.

That is where the war in Yemen kicks in.

Rather than demonstrating the awesome might of the Kingdom, it will expose its military incompetence.  If the all-mighty King cannot cow the Houthis, it stands to reason there are many others who, if properly organized, could just as readily stand up to him.

Unhappy subjects denied their cherished subsidies will make up the foot soldiers of a protest movement: their leaders, meanwhile, will be the liberals and conservatives who will recognize that a race has begun to replace the monarchy with a new social contract.  Both will aspire to write it; both will go to great lengths to get there.

The conservatives are favored to use violence first, but that depends on when Saudi society realizes it no longer needs the monarchy.  If the liberalization project has carried on long enough, there could be enough liberal soldiers and cops to allow such a faction to arrest and wipe out the remaining conservative forces.  But that seems unlikely; the process that would create such a society takes generations, time the monarchy doesn’t have.

And 2016 is the beginning of this long road.

These are the trends: how the monarchy responds will accelerate or decelerate them.  But King Salman cannot freeze time, nor can he reverse it.  Saudi Arabia as we know it will grow increasingly untenable over the next 12 months; it mostly likely won’t totter, but the signs of its cracking will be there.  Watch for a humiliating retreat from Yemen and for further subsidies to be cut.  Then listen to Twitter.  The grievances will grow; the regime will lash out; and the spiral downwards will continue.