Saudi Arabia Looks East with Crown Prince’s Visits
Saudi Arabia's Crown Prince Mohammed bin Salman visits the Great Wall of China. (Photo: Reuters)
By Aditi Bhaduri

Saudi Arabia Looks East with Crown Prince’s Visits

Mar. 22, 2019  |     |  0 comments

In February 2019, the Kingdom of Saudi Arabia’s Crown Prince and Deputy Commander of the Supreme Forces Mohammed bin Salman, or MBS as he is popularly known, traveled to three Asian capitals: Islamabad, New Delhi, and Beijing. Two more capitals had featured on his itinerary initially — Jakarta and Kuala Lumpur — but were later removed. In each of the three capitals that he visited, the Crown Prince signed deals worth billions of dollars.

In Pakistan, he oversaw the signing of deals worth up to USD 20 billion worth of Saudi investments in the Pakistani economy. This also included USD 8 billion for the funding of an oil refinery in the Pakistani city of Gwadar where China is developing a deep sea warm water port as part of the China Pakistan Economic Corridor, which is an important project of China’s Belt and Road Initiative (BRI). Earlier too, soon after Imran Khan took over as prime minister in Pakistan following general elections in July 2018, he visited the Kingdom — his first state visit abroad as prime minister — and then soon after again to participate in the Riyadh investment summit. The two sides inked a deal for a USD 6 billion aid package from the kingdom to Pakistan.

The promise of USD 20 billion worth of investment has come as a shot into the flailing Pakistani economy. Khan himself had minced no words that Pakistan needed funds; he had inherited a Pakistan whose external debt had ballooned to USD 91.9 billion and was set to rapidly increase. He had been negotiating for an IMF loan which carried with it many riders. The deal with the Saudis has allowed Pakistan to walk away from the IMF negotiations, as also to ride over a deficit caused by US President Donald Trump’s refusal to release about USD 300 million in aid to Pakistan because of its covert support to the Taleban, wreaking havoc in Afghanistan. In turn, the deal paves the way for Pakistan’s subservience in military matters to the Saudis, patching up the rift caused by Pakistan’s refusal to join the Saudi coalition’s war in Yemen in 2015.

In India, the Crown Prince oversaw the signing of five agreements, including investments into India’s National Infrastructure Investment Fund (NIIF), a sovereign fund created to finance much needed infrastructure projects in India, with a promise of investments up to USD 100 billion. Saudi Aramco is also interested in the setting up of an oil refinery in India’s Ratnagiri region in the west of the country. Further, the visit of the Crown Prince in India saw the establishment of the Strategic Partnership Council, meant to cover critical issues of mutual interest, which includes investment, energy security, infrastructure and defense where several MoUs are expected to be signed.

In their joint statement, India and Saudi Arabia “called on all states to reject the use of terrorism against other countries; dismantle terrorism infrastructures where they happen to exist and to cut off any kind of support and financing to the terrorists perpetrating terrorism from all territories against other states; and bring perpetrators of acts of terrorism to justice.”

Beijing was the final stop of the Crown Prince on his Asia tour. China is the Kingdom’s largest crude importer, and the Crown Prince’s visit came when Chinese oil imports from Saudi Arabia are expected to rise to 1.67 million barrels a day in 2019 and China is initiating the launch of the petro-yuan, that is, pricing of oil in yuans, even as it has been raising its profile the Middle East. In Beijing, the Crown Prince called China “an important strategic partner” and oversaw the finalizing of a USD 10 billion Saudi Aramco deal for establishing a refinery and complex in China’s Panjin region. Thirty-five other agreements for economic cooperation were signed between the two sides, Saudi state news agency SPA announced. While Saudi Arabia is also interested in joining China’s ambitious BRI, what was particularly interesting for observers was the announcement made by the Saudi Foreign Ministry that the kingdom will be implementing Chinese language programs in schools across the kingdom — signaling its long term interest in developing relations with China.

The Saudi prince’s visit came at a pivotal time for the region, with many different currents streaming across the region.

In the shifting geo-political and geo-strategic alignments and realignments in the region, one thing is certain — Middle Eastern monarchies will increasingly be looking to deepen ties with Asia.

First, India-Pakistan tensions had ratcheted up very quickly in the wake of the Pulwama terror attack in the state of Jammu and Kashmir in which 42 personnel of the Indian para-military force the Central Reserved Police Force (or CRPF) perished. The Pakistan based Jaish-e-Mohammed terrorist organization claimed responsibility. India blamed Pakistan for the attack, alleging that Pakistan was either not willing or was unable to take action against terror groups operating on its soil and for giving such groups sanctuary. In an election year, such a massive attack was bad optics for the Narendra Modi government. Further, with the mediocre performance of the Indian economy, the government needed some diplomatic and economic props which the Crown Prince’s visit promised. Equally important was the fact that with its economic largesse towards Pakistan, Saudi Arabia seemed to be perfectly poised for exerting pressure on Pakistan to rein in the terror groups operating on its soil.

Next, both Pakistan and China have been facing a downslide in their relations with the US, as has the Crown Prince. Pakistan has been blamed for not doing enough to rein in the Taliban who continue to wreak havoc against Afghan armed forces and civilians, and USD 300 million in aid money has been withheld from the cash-strapped South Asian country by the US. The US has further pressured the International Monetary Fund to attach stringent conditions to badly needed loans that Khan’s government has been trying to negotiate with the financial institution. On the other hand, China has been embroiled in an escalating trade war with the US, and is also haunted by the spectre of expanding US influence in the newly coined “Indo Pacific”.

And finally, as the Saudi-Iran rivalry plays out in the Middle East, China, India, and Pakistan are carefully nurturing their relations with Iran.

Hence, though the reasons were varied, for all three Asian nations, the Crown Prince’s visit carried enormous significance — in the anticipated investments and, for China and India in particular, in boosting their energy security, in which the Crown Prince did not fail them.

On his part, Mohammed bin Salman has been having his share of differences with the US. Beginning with his “clean-up act” of holding a number of Saudi princes and industrialists under house arrest on charges of corruption to the more recent gruesome murder of Saudi dissident and journalist Jamal Khashoggi in the Saudi consulate in Istanbul by Saudi intelligence, the Crown Prince came under pressure from the US and other Western powers to have his powers in the kingdom curtailed. Most western countries, for instance, either boycotted or sent a low profile representation to the prince’s much touted “Davos in the Desert” economic summit in 2018. By contrast, Prime Minister Imran Khan himself graced the occasion in person, while India and China both participated in the summit. Hence for Mohammed bin Salman, as US-Saudi relations appear increasingly strained, shoring up support in the world’s economically fastest growing region was just a matter of course.

Economically too, the Kingdom of Saudi Arabia has been looking towards the non-Western economies to invest in, in anticipation of the post-oil future. The investments in refineries in Gwadar, Ratnagiri and Panjin reflect the trend, as they also seek to hedge, if not wean away, the Asian powers from Iranian influence.

Having ambitiously embarked on charting a new course for the kingdom with his Vision 2030, the Crown Prince is also eager to make his mark on international affairs. With the Saudi-led coalition’s war in Yemen entering a stalemate, the India-Pakistan crisis presented the perfect opportunity for Mohamed bin Salman to demonstrate his statesmanship, through joint statements and by dispatching his minister of state for foreign affairs Adil al Jubeir to Islamabad and New Delhi on follow-up visits. In Islamabad, he called himself Pakistan’s ambassador in the Kingdom; in Delhi he became Prime Minister Narendra Modi’s “younger brother”.

Similarly, counter-terrorism played a big role in the Crown Prince’s tour. In Delhi, he agreed to deepen cooperation with India in counter-terrorism, and both sided agreed to constitute a “Comprehensive Security Dialogue” at the level of National Security Advisors and set up a Joint Working Group on Counter-Terrorism. In Beijing, as reported by Xinhua, the Crown Prince said that the Kingdom of Saudi Arabia respected and supported “China’s rights to take counter-terrorism and de-extremism measures to safeguard national security”. Notable in this was the total absence of any reference to China’s alleged mistreatment of its Uighur Muslim minority — an issue that Muslim powers like Turkey as well as many Western countries had been raising frequently.

What Crown Prince Mohammed bin Salman’s visit therefore demonstrated was an inevitable re-orientation, no puns intended, of Saudi foreign and economic policy. In the shifting geo-political and geo-strategic alignments and realignments in the region, one thing is certain — Middle Eastern monarchies will increasingly be looking to deepen ties with Asia.

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