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East Is A Stroke Of Business For Saudis

  • Ben Hubbard
  • Apr, 2019
  • 601
  • Riyadhs change of heart


In his swing through Asia in February, Crown Prince Mohammed bin Salman of Saudi Arabia vowed to invest billions of dollars in Pakistan and pushed to sell more oil to India. He will also explore deepening economic ties with China.

The trip, by the de facto ruler of a wealthy Arab kingdom that has long considered America its most important ally, highlights the extent to which Saudi Arabia is increasingly looking to Asia for political and technological support that it cannot always count on from the West, analysts say.

Saudi Arabia’s need to diversify its alliances has grown more acute amid the Western backlash over the killing of the Saudi dissident Jamal Khashoggi by Saudi agents in Istanbul in October 2018. Congress has pursued measures to blame Prince Mohammed for the killing and limit military aid to the kingdom, while American tech companies that the prince heavily courted for projects in the kingdom have stepped back for fear of damaging their reputations.

But the countries that Prince Mohammed visited in February - Pakistan, India and China - have expressed no such concerns, prioritising economic ties with the kingdom over concerns about its respect for human rights.

In turning east, the Saudis are also sending a message to the West, the analysts add.

Mohammed Turki al-Sudairi, a Hong Kong-based researcher for the King Faisal Centre for Research and Islamic Studies, says, ‘The Saudi leadership recognizes that it’s integral to diversify its relationships. The message is that there are other options out there.’

Historically, Saudi Arabia’s relationship with Asia was mostly transactional, with the kingdom selling crude oil to power Asian economies while importing manufactured products. Since his father, King Salman, came to the Saudi throne in 2015, Prince Mohammed, 33, has been seeking to deepen the kingdom’s relationships with Asian countries and has made previous visits to the region.

He began this tour in Pakistan, a fellow Islamic country that welcomed him like a hero, with a 21-gun salute and fighter jet escort. President Arif Alvi granted him Pakistan’s highest award, and the head of the Senate gave him a gold-plated assault rifle.

Prime Minister Imran Khan had spoken about Pakistan’s dire need for Saudi funds to ward off an economic crisis, and Prince Mohammed delivered, signing tentative agreements for investments of up to $20 billion in mining, agriculture, energy and other sectors and promising to free thousands of Pakistanis in Saudi prisons.

Adel al-Jubeir, the Saudi Minister of State for Foreign Affairs, says, ‘This is not charity, this is an investment. There is benefit for both sides.’

How much benefit remains to be seen, as many of the agreements were nonbinding memorandums of understanding that are often not fulfilled.

Prince Mohammed then travelled to India, where he was welcomed with drumming and a bear hug from Prime Minister Narendra Modi. India is an important provider of labor for Saudi Arabia, with millions of Indians working in the kingdom.

During the visit, the prince was expected to press India to buy more Saudi oil to fuel its fast-growing economy and to take market share away from Iran, the kingdom’s primary rival.

Later, Prince Mohammed set to land in China for talks with President Xi Jinping and other officials. China is the largest buyer of Saudi crude oil, and ties between the two countries have been expanding to other sectors like technology and e-commerce.

The relationship has grown because both countries have ambitious development plans that they believe the other can help achieve. Along with seeing Saudi Arabia as a stable source of oil, China hopes that the kingdom can play a role in its Belt and Road Initiative, an ambitious plan by Mr. Xi to build rail lines, power networks and roads to better connect China to allies in Europe and Africa.

On the Saudi side, Prince Mohammed has begun plans to open up the kingdom and diversify its economy, a project called Vision 2030, and he hopes that Chinese companies will help it succeed.

Li Guofu, a researcher on Middle Eastern issues at the China Institute of International Studies, a research organisation overseen by the Chinese Ministry of Foreign Affairs China has the experience, funds, technology and talents for the Vision 2030, says the Chinese-Saudi cooperation has already moved into new fields. The two countries agreed in 2017 to open a factory in Saudi Arabia to build Chinese drones. And last year, China launched two observation satellites for Saudi Arabia.

Facilitating the Chinese-Saudi ties is a shared outlook ...

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