Analysis

Mohammed Bin Salman Looks East but Worries About the West

The cooperation agreement with Pakistan is only the first step in the Saudi ‘expansion to the east.’ The bad news: A U.S. Congress that may end funding for the war in Yemen

Pakistan's Prime Minister Imran Khan and Saudi Crown Prince Mohammed Bin Salman riding in a carriage during a welcome ceremony in Islamabad, February 18, 2019.
Bandar AL-JALOUD / Saudi Royal Palace / AFP

For the pigeon farmers of Islamabad it was a celebration. The authorities bought 3,500 pigeons from them for the birds to be released at this week’s reception ceremony for Saudi Crown Prince Mohammed bin Salman. Some 750 rooms in the capital’s grand hotels were reserved for the entourage, and it seems all the BMWs in the city were enlisted to drive the guests around.

Pakistan’s highest civilian award was polished well before it was awarded to Mohammed, a one-off national holiday was declared, and fighter jets escorted the royal plane to the airport.

Any Israeli official planning a future visit by Saudi Arabia’s de facto ruler should learn from the Pakistanis so we can meet expectations. After all, Mohammed didn’t arrive empty-handed. Deposits of $3 billion with Pakistan’s central bank to help with the budget deficit, another $3 billion in oil sales, a pledge to invest $20 billion in local projects and a strategic cooperation deal are just the appetizers of Saudi Arabia’s planned “expansion to the east.”

The trip to Pakistan, India and China was supposed to include visits to Malaysia and Indonesia, but at the last moment these junkets were postponed to an unknown date without any explanation.

>> Saudis pour money into superpower dream, but miss a key ingredient | Analysis ■ Yemen's war is a mercenary heaven. Are Israelis reaping the profits? | Analysis

The prince came to India from Riyadh after returning from Pakistan so he wouldn’t fly directly between the two rivals. The ranting and raving by those two countries has reached a new high after last week’s attack in Kashmir in which 40 Indian police officers were killed. Delhi is accusing Pakistan and its prime minister, Imran Khan, of sheltering terrorists of the group Jaish-e-Mohammed, while Pakistan is demanding that India provide proof.

The crown prince, via his foreign minister, promised to try to reconcile the two sides, but it seems he must first reconcile himself with the West and especially the United States, which is threatening to stop aiding his endless war in Yemen.

Pakistani Prime Minister Imran Khan and Saudi Crown Prince Mohammed bin Salman in Islamabad, February 18, 2019.
Pakistan's Prime Minister House / AFP

The turning east and the royal visit will help Mohammed and Saudi Arabia salvage some of their standing after the murder of journalist Jamal Khashoggi. This is a front on which Russia, the United States and especially China are playing, so Saudi Arabia has to tread very carefully amid the parties’ conflicting interests.

A tale of two ports

An example of such a clash is the huge investment in two large ports around 70 kilometers [43 miles] from each other. Chabahar in Iran is an Iranian-Indian project intended to open a vital trade route between India, Central Asia and China. Gwadar in Pakistan is part of China’s Belt and Road initiative to expand China’s influence in the Middle East and Central Asia.

Saudi Arabia’s decision to invest billions to build refineries at Gwadar makes Pakistan and China very happy. This decision can also strengthen the ring fence that Saudi Arabia is trying to impose on Iran by making Chabahar seem second-rate.

But what’s good for Pakistan is bad for India, which has invested billions of dollars in Chabahar. Also, a port in Iran, a country already afflicted by sanctions, would be less attractive to traders.

The competition expected between the two ports is only the showcase of the struggle between India and Pakistan, which are entangled in their relations with Iran, Saudi Arabia and the United States. India, which until recently bought most of its oil from Iran, has been forced to significantly reduce its purchases due to the U.S. sanctions; Saudi Arabia is making up for the shortfall.

Indian Prime Minister Narendra Modi, who breached protocol by receiving Mohammed at the airport, received a warm statement by Saudi Energy Minister Khalid al-Falih, who said India is Saudi Arabia’s number one investment destination and the kingdom will invest in India far beyond the new $44 billion refinery project.

The diplomatic price that India will have to pay, especially in its relations with Iran, isn’t clear, but when India asks for a significant reduction in the price of Saudi oil, Iran has something to fear. At the same time, India can’t be calm in view of the Saudi investment bonanza in its enemy Pakistan.

Saudi Arabia is seen in India as a state that supports not only the Sunni Pakistani regime but also radical Islamic organizations, including those that allegedly carried out the attack in Kashmir. Saudi Arabia has built madrassas in Pakistan, millions of Pakistanis work in Saudi Arabia, Pakistani pilots fly Saudi planes and Pakistan is a member of a coalition that King Salman formed in 2015 against Iran.

Saudi Crown Prince Mohammed bin Salman being greeted by Indian Prime Minister Narendra Modi in New Delhi, February 20, 2019.
Bandar aL-Jaloud / Saudi Royal Palace / AFP

Mohammed assumes that the tens of billions his country invests in India and Pakistan will buy him the influence to block Iran’s trade routes and leave him Asia’s key markets even in the post-U.S.-sanctions era.

Nuclear technology

But the embraces and grandeur with which the crown prince was greeted won’t ease the growing tension in Washington, where early next month the Senate is expected to approve a decision to halt its military and financial involvement in the war in Yemen. To this was added the investigation of the administration’s plans to provide Saudi Arabia with technology to build nuclear reactors, which was launched after Trump’s former national security adviser, Michael Flynn, helped mediate the deal, a congressional report says.

According to the report released by the House Committee on Oversight and Government Reform, it was Flynn and Jared Kushner, Trump’s son-in-law, who pushed the administration to approve the building of a dozen nuclear reactors in Saudi Arabia and the passing to the kingdom of nuclear technology.

Interestingly, no protest was heard from Israel over this deal, which could grant Riyadh threatening nuclear capabilities. The tense relations with Washington were compounded by Germany’s decision not to sell weapons to Saudi Arabia due to its role in the war in Yemen, in which more than 10,000 people have been killed as a direct result of the fighting, with a further tens of thousands of civilians, including children, dying of hunger and a lack of medication.

Germany’s decision is a problem for Britain as well, as it fears it might not be able to provide Saudi Arabia with Typhoon and Tornado fighter jets because some components are made in Germany.

It’s hard to estimate how much money Saudi Arabia has invested in the war in Yemen, which is entering its fifth year with no sight of peace. But the government’s decision to borrow more money from local banks and the huge public debt topping $181 billion in 2014 indicate something of the war’s economic implications.

Saudi Arabia may have very deep pockets – its foreign currency reserves are estimated at above $130 billion – but since 2014 this is a decline of more than 40 percent. Foreign investment in the kingdom has also diminished in the past year and the official unemployment rate is 12.8 percent.

These figures don’t affect the average Saudi’s standard of living and can’t block Riyadh’s planned investments in Asia and the Middle East. But Saudi Arabia hasn’t managed to turn its checkbook into leverage that will grant it the status of a regional power. The list of Mohammed’s diplomatic failures includes the fiasco in Lebanon, the pointless boycott of Qatar, the Khashoggi affair that undermined the prince's relations with the West, his deprioritizing of the Israeli-Palestinian peace process and the war in Yemen.

These failures require a re-examination of the kingdom’s reputation as a country that can help in the struggle against Iran. The expansion to the east that Mohammed is planning as part of that struggle test the country’s ability to translate its economic power into strategic action against Iran. But don’t hold your breath.