MBS in ASIA

MYTHS AND REALITY

by Antonino Occhiuto

By Antonino Occhiuto - Saudi Arabia’s Crown Prince, Mohammed bin Salman bin Abdulaziz Al-Saud (MBS), has recently made an important trip to Asia visiting, in this order, Pakistan, India and China. Much has been speculated on the reasons behind this visit. Several international media outlets have gone as far as suggesting that Saudi Arabia is now moving closer to the proverbial East and away from the West as a result of criticism from the United States (US) and the European Union (EU) with regards to Saudi Arabia’s handling of the war operations in Yemen and the Khashoggi affair. Such conclusions, however, lack a specific understanding of what is at stake for Saudi Arabia in Pakistan, India, China, and wrongly underestimate the depth of the relationship Riyadh maintains to Washington which, is both dynamic and ironclad.

Pakistan

Pakistan is a long-standing ally of Saudi Arabia. Military and intelligence ties between the two countries are deeply rooted and date back to the early 1980s. The historic bond between Riyadh and Islamabad was certainly reinforced by the recent election of Imran Khan as Pakistan’s Prime Minister. Khan was one of the most important leaders who attended the conference on trade and investment organised by Saudi Arabia and nicknamed "Davos in the Desert." Consequently, Saudi Arabia agreed to concede a $6 billion (USD) bail out to ease Pakistan’s economic woes, thus cementing the MBS-Khan friendship. Saudi Arabia’s willingness to economically support Pakistan has not corresponded to the level of military backing Riyadh hoped to receive from Islamabad. For instance, in the fight against the Iran-backed Houthi rebels in Yemen, the Saudi Arabia-led Arab coalition is having to rely primarily on Western support. Inside Pakistan, Saudi Arabia retains an array of economic interests. The Crown Prince signed agreements in Islamabad for $20 billion (USD) of investments, including an agreement to establish an oil refinery in the south-western coastal city of Gwadar. Strategically, the presence of Iran, Saudi Arabia’s arch-rival in the Gulf and the wider Middle East, as Pakistan's neighbour is another reason why the Saudi leadership is keen to keep the closest possible level of cooperation with Islamabad. Gwadar is also a key part of the China-Pakistan economic corridor, intertwining the interests of Saudi Arabia and China. MBS is certainly working to ensure that Saudi Arabia becomes a key player in Gwadar’s and Pakistan’s future development, including to prevent Tehran’s plan to join the China–Pakistan economic corridor through the construction of the planned Iran–Pakistan natural gas pipeline. The pipeline, by exporting Iranian gas, would increase Tehran’s leverage over Islamabad.  

India

MBS’s visit to India must be carefully contextualised. It comes on the heels of the 2016 visit by India’s Prime Minister, Narendra Modi, to Saudi Arabia. That visit had already highlighted that the new economic realities worldwide could push Riyadh and New Delhi closer together.  Saudi Arabia already provides around 20% of India’s annual oil needs, critical for the country’s economic growth. The importance of the Indian market for Saudi Arabia is set to grow increasingly in the next decade, as Western economies move towards a greater reliance on renewable energies. Riyadh has already committed large sums of investment in India via Saudi Aramco, the state owned oil giant, developing an important refinery and petrochemicals project in Ratnagiri. In relation to the Vision 2030 programme, MBS would also be interested in New Delhi’s know-how with regards to technical and market expertise that contributed to India’s economic growth. From the perspective of India’s private sector, MBS’s efforts to render Saudi Arabia a more foreign-investment-friendly country is certainly attractive. Recently, India-Saudi cooperation also focused on issues related to defence and counterterrorism. Today, some three million Indians live in Saudi Arabia. Indian workers have long constituted an important labour force, instrumental to the development of the Saudi economy. Despite warming ties, the scope for India to increase its military involvement in the Gulf remains limited. Worsening relations with powerful neighbours such as China and Pakistan and the obsolete status of India’s Air Force and Navy, make it impossible for New Delhi to aspire to a greater role in Gulf security affairs, for the time being.

China

Speculations were most focused on the Crown Prince’s visit to Beijing. These normally considered MBS’s intentions as directed at finding alternatives to Saudi Arabia’s partnership with Washington. However, as with the Islamabad and New Delhi legs, this visit should be understood in the context of specific China-Saudi common interests. China’s President, Xi Jinping, is trying to push his Belt and Road initiative, under which huge amounts of Chinese trade would pass through the Gulf and the Red Sea en-route to Europe, and Saudi Arabia retains a key role as a transit area in that regard. The Crown Prince also wants to promote the Vision 2030 economic plan, which would surely benefit from Chinese investment and technology transfers. As such, Beijing and Riyadh signed a series of agreements in trade, energy and, crucially, the two agreed to specific steps of cooperation for both the Belt and Road and Vision 2030 projects. MBS also signed a $10 billion(USD) refinery and petrochemical project deal. Even before the Crown Prince’s visit and the signing of these new deals, China was already Saudi Arabia's largest trading partner. Each year, Beijing imports some $46 billion (USD) from Saudi Arabia, including much need oil supplies. China however, enjoys a particularly close political and economic relationship with Iran. Beijing is unwilling to downsize such relationship, as demonstrated by its staunch support for the Joint Comprehensive Plan of Action. Shortly before receiving MBS, Xi Jinping had hosted Mohammad Javad Zarif, the Foreign Minister of the Islamic Republic of Iran. Despite the fact that China is slowly beginning to increase its military presence in regions close to the Gulf– its Djibouti base is a clear example of such trend–Beijing remains, to date, unwilling to challenge or substitute US leadership in security affairs outside of East Asia. This and the Iran-China connection are enough to offset future prospects of Saudi Arabia edging further towards China and away from the West.

 

***

East Asia and the Indian subcontinent are the fastest growing economic spaces globally. Their relevance is therefore set in increase in all areas of the world and the Arab Gulf is no exception. The Euro-Gulf Information Centre will continue to monitor the status and the advancement of Gulf-Asia relations. To date, the new relationship is based on specific complementary economic interests while there is little to no appetite, even in countries with global ambitions such as China, to replace the US-led, Western role as a pillar of the Gulf’s security architecture.

08 March 2019

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