05.05.2022

MBS goes ballistic

Disillusioned with the US, Riyadh refuses to condemn Russia, threatens to become a nuclear power and pivots towards China. Yassamine Mather investigates the shifting politics of the Middle East

In many ways the last few months have been both the best of times and the worst of times for the Kingdom of Saudi Arabia.

The war in Ukraine and the global shortages of oil and gas have led to massive price rises and that has no doubt benefited the Saudi economy, which had been facing serious problems. Year-on-year gross domestic product rose by 9.6% in the first quarter of 2022 - the fastest in a decade. World leaders from the UK’s Boris Johnson to Turkey’s Recep Tayyip Erdoğan and new Pakistani premier Shehbaz Sharif have been amongst recent visitors to Riyadh. In the case of Johnson, attempting to please the oil-producing host, the UK’s hypocritical claims of concern for human rights were left back at home. Pakistan’s premier wanted the extension of the terms of a $3 billion deposit in the country’s central bank.

As for Erdoğan, as he arrived in Riyadh begging for cash, he did not mention a word about the brutal assassination of journalist Jamal Khashoggi in 2018. Of course, the two countries had been allies in a number of regional conflicts: Syria, Iraq, Iran, Lebanon … until the killing of Khashoggi inside the Saudi consulate in Istanbul soured relations. But all that is now forgotten, as Turkey is desperate for cash and Erdoğan’s popularity is falling. But the Saudis also needed Turkey. Unlike Trump, Joe Biden and the current US administration are not great fans of crown prince Mohammed bin Salman. However, relations have worsened in the last few weeks, not least because Saudi Arabia and its close ally, the United Arab Emirates, have refused to increase oil production - which would have led to a reduction of global oil prices.

The Saudis have also refused to condemn the Russian invasion of Ukraine. The UAE’s ambassador to Washington, Yousef Al Otaiba, has hinted that the Gulf Cooperation Council - particularly Saudi Arabia and the UAE - will continue to resist pressure from Washington to condemn the invasion and side with Ukraine.

In what would have seemed unbelievable a few years ago, there are widespread rumours in the Middle East that the Saudi and Qatari leaders have rejected calls from the US administration to abandon Opec+ (the loosely affiliated group consisting of the 13 members of the Organisation of Petroleum Producing Countries and 10 of the world’s other oil-exporting states, including Russia, of course). Its purpose is to ‘regulate’ the supply of oil in order to set the price on the world market.

China

In the United Nations, the UAE, which has held a seat on the security council since January, has joined China and India in abstaining on a resolution condemning Russia’s invasion. One explanation is the Persian Gulf countries’ close relations with China. Since 2020 China has been the largest trading partner of the Gulf Cooperation Council - its biggest oil buyer and a major source of direct investments following the now infamous Belt and Road initiative. China is helping GCC countries with maritime security as well as supplying them with advanced military and telecommunications technologies. The US is also concerned about allegations that China is building a major military facility in an Abu Dhabi port. Then there are satellite images of what is alleged to be a site built by China in Saudi Arabia for manufacturing ballistic missiles.

Saudi leaders are also unhappy - not least with Biden’s insistence on getting a new Iran nuclear deal signed, which they opposed in 2015. However, the Saudis are currently investigating the possibility of developing their own nuclear capability. In this respect, last week’s visit by the Pakistani premier’s to Riyadh was significant.

According to Jim Phillips, a senior research fellow at the Heritage Foundation, “If Iran went nuclear tomorrow, the next day the Saudis would probably buy a nuclear weapon from Pakistan or ratchet up their nuclear programme”.¹

The internal situation is not that great either. In late March the Saudi authorities executed 81 political prisoners - amongst them a detainee who was 13 at the time of his arrest. In April the Middle Eastern media reported that many Saudi princes were selling their assets in fear of another crackdown by MBS. According to these reports, yachts, jewels, works of art and holiday homes were sold in Europe and the US. The panic sales coincided with rumours that access to royal funds will be slashed and there will be a cut-down on royal privileges.

Those selling assets include senior figures such as prince Bandar bin Sultan, the former Saudi ambassador to Washington. According to The Wall Street Journal, quoting an unnamed Saudi source: “These people don’t work, they have huge staffs and they’re afraid of MBS and they prefer cash in their back pocket and not to have visible wealth.”²

Of course, amongst all this Saudi princes remember the events of 2017, when members of the extended royal family, ministers and tycoons were held in the Excelsior hotel in Riyadh, in what the authorities called an ‘anti-corruption’ action. The reality was more straightforward: they had not paid their dues to the king and his crown prince, and most of them were only released after they accepted the terms of the ‘financial settlements’ proposed by MBS.

Iran

If you follow Middle Eastern news you will know that the regional media is reporting that years of conflict between Iran and Saudi Arabia is nearing an end - or at least that is what Iraq’s prime minister Mustafa al-Kadhimi is telling the world.

Saudi Arabia cut off relations with Iran in January 2016 soon after Iranian protestors, allegedly supported by government forces, stormed the Saudi embassy in Tehran after Riyadh executed the dissident Shiite cleric, Nimr al-Nimr.

Over the last 12 months, the supposed arch-enemies, Sunni Saudi Arabia and Shiite Iran, have held five rounds of talks in Iraq and it does look as if the two neighbours will resume diplomatic relations very soon. Of course, none of this takes away the bitter taste of recent bloody conflicts in Iraq, Syria, Lebanon and Yemen and the talks could collapse at any time. However, the question remains: what prompted the Saudis to enter these talks and how can we explain their silence, when it comes to the Russian invasion of Ukraine? One senior Saudi royal, prince Turki al-Faisal, told Reuters that the country feels “let down by the United States in tackling security threats to the kingdom and wider region by Yemen’s Iran-aligned Houthi movement”.³

There is also the continued association of MBS with Trump’s son-in-law, Jared Kushner. Faced with continued, albeit mild, criticisms from the Biden administration, the Saudis are clearly hoping for the return of Donald Trump or of a close ally, and a recent deal with Kushner is widely reported as a ‘political investment’. According to The New York Times, “a Saudi sovereign wealth fund led by Saudi crown prince Mohammed bin Salman” invested $2 billion in Kushner’s fledgling private equity firm six months after Trump left office. It is clear from the details that, while MBS’s expenditure did not make financial sense, it made political sense as payback for favourable treatment:

It’s a bad deal for MBS financially. Kushner is inexperienced in private equity (and had a middling record in real estate), and the seriousness of his new outfit was questionable. So questionable, in fact, that when MBS’s [sic!] vetted the funds tied to Kushner’s firm, a screening panel expressed concerns about the wisdom of such an investment after finding a bunch of major problems.⁴

In some ways the Iran-Saudi talks also reflect the disillusionment of US allies with the west’s strategy in the region. In the last few decades US policy has mainly concentrated on destruction, while China is engaged in ‘constructive development’ projects, through importing technology, etc. All this is presented as deals between ‘equal partners’, irrespective of the actual, often exploitative nature of such economic and political engagements.

Meanwhile, slowly but surely China is becoming a major player in the region and the uncooperative attitude of the US’s traditional allies, such as Saudi Arabia and the UAE, in response to calls for increased oil production, along with these countries’ refusal to express condemnation of Russia, reflect this changing landscape.