Analysis

Trump May Expect Riyadh to Invest in Peace Deal, but Saudi Dollars Come at a High Price

Trump hopes to raise $68 billion for his 'deal of the century' in Bahrain conference, but it's unclear who's going to be pulling out the checkbook

FILE PHOTO: U.S. President Donald Trump, flanked by White House senior advisor Jared Kushner, meets with Saudi Arabia's Deputy Crown Prince Mohammed bin Salman at the Ritz Carlton Hotel in Riyadh, Saudi Arabia May 20, 2017
\ Jonathan Ernst/ REUTERS

U.S. President Donald Trump’s "deal of the century" will plant its first post in June in the Bahraini capital of Manama, and it’s very likely to be the post on which the entire deal will rest.

The conference's aim, according to American media reports, is to raise $68 billion to invest in the Palestinian Authority, Jordan, Lebanon and Egypt. It is unknown how much each country is meant to receive, or who is going to contribute such huge sums. It won’t be the United States. Perhaps it will be Saudi Arabia or the United Arab Emirates; perhaps European countries, or perhaps no one.

At the beginning of the year, when the question of Syria’s reconstruction was discussed, Trump made it clear that he would not invest American money in rebuilding a country where there’s "nothing but sand and death," but he also thanked Saudi Arabia for agreeing to shoulder some of the burden in the future. Riyadh, meanwhile, has not yet shelled out a single dollar for Syria, nor has it done anything for the residents of Gaza. And of the Arab League's commitment to transfer $100 million a month to the PA so it can cope with Israeli tax cuts, there is so far nothing left but a nice working paper.

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Saudi Arabia only invests in countries that guarantee it influence – and primarily, profit. In February, Saudi Crown Prince Mohammed bin Salman pledged to deposit $3 billion in Pakistan’s coffers and invest $20 billion there, including in Gwadar Port. At the same time, he pledged to invest billions in India, even though investing in Gwadar could undermine the Indian-Iranian port of Chabahar, only 70 kilometers away. Saudi Arabia has a double interest: To halt Iran’s influence and to profit from the shipping to and from the Pakistani port, which is an essential part of China’s “belt and road” strategy.

The Saudis also pledged to invest more than $1 billion in Iraq, with an eye toward developing infrastructure and strengthening influence there, in a bid to counterweight Iran’s economic control. On the other side of the Red Sea, Riyadh recently transferred $320 million to the Sudanese central bank to aid the military regime, which can now get loans from international financial institutions, in the first transfer following the Saudi pledge of $3 billion in aid.

Sudan, a member of the Sunni Arab coalition set up by Prince Mohammed against Iran in 2015, is also important to the Saudis because Sudanese soldiers are fighting in the never-ending war in Yemen. To that end, Saudi Arabia has transferred $2 billion to Sudan when it was controlled by Omar al-Bashir.

Saudi Arabia and the UAE are also helping Khalifa Haftar, the commander of the Libyan National Army. He threatens to conquer the capital Tripoli and aspires to be Libya's president. Egypt has received tens of billions of dollars from these two countries, too. In return, Saudi Arabia got the islands of Sanafir and Tiran and Egypt’s diplomatic obedience.

Every dollar Saudi Arabia puts out has to yield either economic or political value, or both. When this doesn't happen, aid is halted. It froze aid to Jordan when Amman refused to contribute to the war in Yemen or serve as a launching pad for air strikes against the Syrian regime. When Egypt supported a Russian draft UN resolution on Syria, Saudi Arabia stopped the supply of cheap oil for several months. In Lebanon, Prince Mohammed tried to force Prime Minister Saad al-Hariri to remove Hezbollah from the government and even engineered his dismissal, on top of freezing Saudi aid to Lebanon. That proved to be a fiasco and Saudi aid was renewed, albeit sparingly.

As for the PA, the problem is even more complex. Gaza is supported by Qatar, on which Saudi Arabia has imposed strangling economic sanctions together with Bahrain, the UAE and Egypt. It is doubtful that Saudi Arabia will agree to replace Qatar as Hamas’ cash machine in Gaza, and if it decides to help only the PA, which controls the West Bank, before the two parts of Palestine somehow miraculously achieve reconciliation, the kingdom will get no diplomatic benefit.

For Saudi Arabia to uproot Qatar’s influence in the Gaza Strip, it would have to demand that Israel forbid the transfer of Qatari money, but then it will have to transfer its own money to Hamas. On the face of it, it shouldn’t matter to Hamas who provides it with money, but it may refuse to accept funds from Saudi Arabia or the UAE as part of the game Qatar and Saudi Arabia are playing.

In such a case, Israel could face an embarrassing situation in which it would have to agree to transfer Qatari money to the Gaza Strip in order to prevent further violent confrontations, thereby pulling the rug under Saudi involvement.

These are just a few of the landmines expected to explode in the face of the United States and the dignitaries who will come to Bahrain. The notion that an economic plan can be implemented without a realistic diplomatic plan may turn out to be another mirage, courtesy of the U.S president. The hospitality, at least, will be superb.