VIF Presentation cum discussions on West Asia

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The Vivekananda International Foundation (VIF) organised two sets of interactive discussions on the impact of COVID-19 in West Asia and its implications on India. On 7 May 2020, Amb. D P Srivastava Distinguished Fellow, VIF spoke on the topic, “Geopolitics and Return of Indian workers from the Gulf”. On 12 May 2020 Amb. Anil Trigunayat Distinguished Fellow, VIF spoke on the subject, “Developments in West Asia and impact on India”. Dr. Arvind Gupta, Director, VIF in the opening remarks highlighted the impact of the economic downturn on the Indian diaspora and requested the speakers to visualise a three year long scenario-building for India’s West Asia policy.

The states in the West Asian region prior to the COVID-19 pandemic were facing challenges such as crisis of political legitimacy, intra-regional rivalry, sectarian tensions, radicalisation, terrorism and a downturn in oil prices etc. Geopolitically, the three major regional conflicts in Syria, Yemen and Libya have remained unresolved. In terms of intra-regional rivalry, Iran-Saudi Arabia competition, the boycott of Qatar by the Gulf Cooperation Council (GCC) states and diverging vested interests of Saudi Arabia, the United Arab Emirates (UAE) and Turkey etc have added to the volatility in the region. Moreover, the region witnessed series of anti-protests in Algeria, Lebanon, Iraq and Iran.

The speakers noted that the public dissatisfaction with the regimes may increase after COVID-19 pandemic is contained. Therefore, the crisis in political legitimacy against the ruling regimes is likely to grow and the possibility of Arab Spring 2.0 cannot be ruled out. In case of civil wars currently occurring in Libya, Syria and Yemen, the speakers raised concerns on the impact of the pandemic on the populations due to lack of proper health care infrastructure. The economic costs for the regional actors such as Saudi Arabia, the UAE, Turkey and Iran in the ongoing conflicts have been high. Amb. Srivastava predicted that the poor economic revenue of these external actors due to the pandemic and low oil prices may lead to reduction in military and non-military support in these conflicts. Amb. Trigunayat categorised the states in the region into: strong states with high economic performance such as the GCC states and Israel; strong states with weak economic performance such as Iran, Turkey, Egypt, Jordan and Morocco and weak states with poor economic performance such as Iraq, Lebanon, Algeria, Yemen, Syria and Libya. Therefore, the success in tackling the pandemic is based on the state capacity of these states.

In terms of the external actors in the region, the US’ military objective is repositioned towards the Persian Gulf region. The US relationship with its allies has suffered a jolt due to President Donald Trump administration’s manoeuvring on transactional basis. China prior to the pandemic had re-oriented its strategic posturing towards the region to compliment the Silk Road initiative. The Chinese market, after the pandemic, would be crucial for the economic recovery of the GCC states.

The West Asian region is considered to be India’s most crucial extended neighbourhood. India’s interests in the region are based on energy security, diaspora and remittances, crucial trade and maritime links, strategic cooperation, anti-piracy cooperation, counter-terrorism measures, intelligence-sharing and cyber security etc. Therefore, the negative developments as a result of the pandemic, directly affects India.

The discussion pointed to the size of the India’s strategic petroleum reserves that is currently at 5 million tonnes. Moreover, there are around 7 million tonnes in oil tankers. India has been unable to take advantage of the low prices due to the small size of the reserves. The low prices and lockdown measures have eased pressure on the current account deficit due to low oil prices. It has also reduced pressure on the Indian currency. However, the economic lockdown and the lack of energy demand may deactivate the power plants worth Rs. 21,000 crores in the long term.

In the case of Gulf States, these states are expected to lose revenue and equities in investments worth US$ 500 billion in the current fiscal year affecting the investment commitments towards India. The economic situation in Gulf States is affecting the resident status and the employment opportunities of the 9 million strong Indian diaspora working in the region. The housing and health care conditions of the migrants are largely poor and these areas have emerged as the local hotbeds of the pandemic. The West Asian states have justifiably prioritised the welfare of its own citizens over the migrants including testing.

Around 150,000 Indians have applied for evacuation out of which around 20 percent have lost jobs. The accurate figures are however unclear which may complicate the evacuation efforts. The Indian government is currently facing the challenge of rehabilitating the migrant labourers within India. The resettlement of the incoming migrants from these states would be highly challenging.

Shri S Gurumurthy, Chairman, VIF emphasised on the impact of the decline in oil prices on the Gulf monarchies which are largely single commodity economies. As mentioned earlier, the GCC states in the long-term would have to rely of China and India for economic recovery. Therefore, India could derive leverage from these developments. However, the internal developments within the West Asian states would continue to affect India’s strategic interests in the region.