West Asia Round up: February 2019

Saudi Crown Prince Mohammed bin Salman’s pivot to Asia

The popularity of Crown Prince Mohammed bin Salman (MBS) soared due to his efforts to arguably relaxing restrictions on Saudi women as well as opening avenues for international firms to invest in the Gulf state. However, the Crown Prince’s alleged complicity in the murder of a journalist, Jamal Khashoggi, Saudi government’s role in perpetuating its war against Houthis in Yemen and harsh punishments and human rights violations has cornered the Gulf monarchy’s attempts to diversify its economy to non-oil sector. In its efforts, the Crown Prince’s pivot to Asia, namely Pakistan, India and China, can be seen as Saudi attempt to reclaim a positive atmosphere for enhancing economic, energy and trade investment defying any possible diplomatic isolation elsewhere. The visit to Malaysia and Indonesia was however postponed. MBS had probably not anticipated flaring of tensions between India and Pakistan in the wake of 14 February 2019 Pulwama attack that killed 40 CRPF soldiers.

MBS in Islamabad

During the Crown Prince’s first stop to Pakistan on 17 February 2019, shortening his visit by a day, he announced his vision of economic diversification and turning Saudi Arabia into a hub of tourism. Pakistan is presently suffering from a balance of payments crisis and a weak domestic economy. According to the State Bank of Pakistan, the total foreign reserve is US$ 8.2 billion. During Prime Minister Imran Khan’s visit to Saudi Arabia in October 2018, the Saudi government committed to providing US$ 3 billion in loans and US$ 3 billion in deferred oil payments. During the Crown Prince’s February 2019 trip, both states signed investment deals worth US$ 20 billion as well as MOUs in finance, internal security, culture and sports, media, renewable energy etc. Saudi Arabia also agreed to invest US$ 10 billion on building a refinery and petrochemical complex in Gwadar.

MBS in India

During his visit to India, both states signed five agreements on infrastructure, tourism, housing, investment and broadcasting. The Crown Prince condemned the attack in Pulwama and raised concern over terrorism but stayed short of criticizing Pakistan. Both sides also agreed to cooperate in sharing intelligence and increasing counter-terrorism efforts. They also held a discussion on the peace process in Afghanistan.

Since his State visit was taking place in the backdrop of Pulwama attacks, as expected, in India, MBS decried terrorism and offered to help in intelligence exchange against terror groups but refused to be drawn in naming and shaming of Pakistan. For that matter even Indian side only mentioned Pakistan by default and insinuation while urging the world to pressure Pakistan in taking action against the JeM and other terrorist groups.

Saudis and other rich gulf nations are looking for the emerging opportunities in India and China as their own hydrocarbon generated petro dollars, and gigantic though depleting sovereign wealth funds are coming under financial stress due to lower oil prices and their expensive wars, conflicts and mutually destructive blockading outreach in the region. Hence India as the fastest growing major economy is a viable choice. This was clearly evident when the Saudi’s announced their intention to invest around US$ 100 billion in India and they signed a dozen MoUs and expression of interest during the business meet and CEO’s interactions.

Indian majors have tremendous opportunities in the run up to the ‘Vision 2030’ of MBS. While the $ 44 bn Ratnagiri Petrochemicals and Refinery complex with Abu Dhabi National Oil company (ADNOC) and Indian consortium has yet to take off, the Reliance industries were talking of another refinery with Aramco. Strategic oil reserves are an important area of cooperation. Renewable energy emerged as a major area for cooperation as Saudi acceded to International Solar Alliance. Also housing and agriculture sector and tourism were also scoped for enhanced cooperation. Hence there is tremendous scope in the Artificial Intelligence (AI) driven Industrial Revolution 4.0 for the two countries to collaborate in the future.

MBS in China

After his visit to India, the Crown Prince met with the Chinese leadership in Beijing on 21 February 2019. China signed a US$ 10 billion deal with Saudi Aramco to set up a refinery and petrochemical project in Panjin. Both sides held a discussion to align China’s Belt and Road initiative (BRI) with Saudi’s Vision 2030. Presently China is Saudi Arabia’s largest trading partner totaling US$ 63.3 billion in 2018.

The Crown Prince also supported China’s right to fight against terrorism and vowed to engage in counter-terror and de-radicalization efforts indicating Saudi backing of the Chinese government’s policy in the Uyghur dominated areas in Western China that might not go down well with the Muslim world.

Governmental crisis within the Palestinian Authority (PA)

On 29 January 2019, Palestinian Authority (PA) Prime Minister Rami Hamdallah and his cabinet resigned from the Unity Government formed in 2014 questioning the effectiveness of reconciliation between Fatah and Hamas. The resignation came two days after the recommendation by Fatah Central Committee to form a new government consisting of members from Palestinian Liberation Organization (PLO) and independent candidates due to Hamas’ failure to comply with the agreed transfer of power in Gaza strip to the PA. Both Fatah and Hamas have been political rivals after Hamas won the political verdict in Gaza in 2007 that led to ousting Fatah’s presence in the strip. Both parties have signed on several agreements to push for reconciliation and bring together West Bank and Gaza under single government however such efforts have failed. Hamas criticized Hamdallah’s decision to resign as it would lead to the formation of a cabinet that would serve the interest of PA President Mahmoud Abbas and the Fatah Party and exclude the group from Palestinian politics.

The resignation of Prime Minister Hamdallah comes under the shadow of increasing tensions with the US administration that has shifted the embassy from Tel Aviv to Jerusalem on 14 May 2018 and the uncertainty involving Israel’s national election to be held in April 2019.

Iran ready for Dialogue

Kamal Kharazi, the head of Iran’s Strategic Council of Foreign Relations speaking in the seminar of Al Jazeera Centre for Studies in Doha, Qatar on 11 February 2011, admitted about Iran’s influence in Arab and non-Arab States. According to Kharazi, Iran due to its course of progress without external help has become a source of inspiration for other states. He expressed that Iran is ready to engage in dialogue with all the states and urged other states in the region to engage in order to achieve peace and security without foreign intervention. Kharazi also pointed out that the inter-regional rivalry has only benefited Israel and harmed the Arab States including Saudi Arabia as US support for the Gulf States is based on the extraction of resources (Petroleum).

Iran condemns US’ pressure tactics in Venezuela

Iranian President Hasan Rouhani on 2 February 2019 criticized the US for attempting to impose global hegemony and blamed it for conspiring to overthrow Venezuela’s President Nicolas Maduro. Iran is a long-term ally of Venezuela and has expressed support for Maduro who is facing demands by the US and few European states to step down and hand over power to his political rival, Juan Guaido. Iran said that it would continue to deepen bilateral ties with Venezuela. Venezuela is seen as a crucial ally for the Islamic Republic to dilute the US global efforts. According to Rouhani, the US is opposed to all popular revolutions and is aimed at seeking global hegemony to suppress independent states.

US upset over Armenian troop deployment in Syria

The US has expressed its concern over the deployment of Armenian troops in Syria complying to the request by President Bashar Al Assad government to provide humanitarian assistance in Aleppo. The US said that while it understands Armenia’s concerns about the protection of religious minorities in Syria, it is worried about Armenia’s military coordination with Syrian troops. It also raised an objection to Armenia’s military engagement with Russia which according to the US has triggered a humanitarian catastrophe.

Yemen: Talks broke down over Prisoner Swap

The UN-brokered talks between the representatives of President Abdrabbuh Mansur Hadi government and Houthis over the exchange of prisoners broke down in Amman, Jordan on 9 February 2019. Both sides blamed each other for undermining the peace process, lying and submitting fake lists of detainees. Earlier in December, the warring factions met in Sweden in which both sides agreed to swap 15,000 prisoners. Houthis, during this talks in Amman indicated its unwillingness to release any high ranking government and military official in the custody. After the talks broke down, both sides, however, agreed to continue with the negotiating process in the coming days.

Warsaw Conference corners Iran

On 13 and 14 February 2019, Warsaw in Poland hosted a conference on peace and security with the official title namely “Ministerial to Promote a Future of Peace and Security in the Middle East” intending to further alienate Iran on a regional and global level. In its efforts, the US wanted its European allies to sever the nuclear deal and cut down energy and trade links with Tehran. The conference, however, met with the lukewarm response with several states only sending low-level officials undermining the US attempts at coalition-building against Iran. Poland attempted to underplay the agenda against Iran and cited that conference tackled pressing issues in the West Asian region namely humanitarian crisis in Yemen and Syria and countering Islamic State (IS) and international terrorism. However, the absence of crucial stakeholders in the Syrian and Yemeni battleground such as Russia and the Houthis had dampened any serious initiative towards regional stability.

Terrorist Attack in Iran

On 13 February 2019, 27 soldiers belonging to Iran’s Islamic Revolutionary Guards Corps were killed in a suicide attack in Sistan-Baluchestan province. Furthermore, 20 soldiers were wounded in the attack. The suicide attack was similar to the attack in Pulwama on 14 February 2019 in which a car laden with explosives rammed into the bus. The Pakistan based terror group Jaish-al-Adl claimed responsibility for the attack. The attack coincided with the Warsaw conference in which the US sought to gain momentum to dilute Iran’s influence in the region. The Iranian government blamed Saudi Arabia and the US for trying to stir dissent in the Islamic Republic. Iran accused and warned Pakistan and reportedly undertook some strikes against the militants.

OIC’s invite to India

In a historic first, On 24^th February the UAE, hosting the 46^th meeting of Organization of Islamic Cooperation (OIC) Foreign Ministers invited India as the ‘Guest of Honour’ which was held on 1 and 2 March 2019 in Abu Dhabi. External Affairs Minister Mrs. Sushma Swaraj accepted the invitation. This has been seen as a major diplomatic victory for India as Pakistan has continuously opposed its entry in OIC despite the fact that India hosts the third largest Muslim population in the world. In 1969, India’s participation was stalled after Pakistan’s President Yahya Khan lobbied against India’s participation in the organization. At the behest of Pakistan, OIC has been issuing rabid statements against India for its alleged excesses in J&K which have been outright rejected by India.