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Will Riyadh Get the Bomb?

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As the impasse over Tehran’s nuclear program worsens, those most likely to be directly effected by an Iranian bomb are showing greater alarm.

While the media fixates on Israel and its possible reaction, other regional players have no less at stake.

Despite Riyadh’s long-held advocacy of making the Middle East a zone free of weapons of mass destruction, there has been much speculation in the last two decades about the possibility of its acquiring or developing nuclear weapons should Tehran obtain the bomb.[1] In the words of King Abdullah: “If Iran developed nuclear weapons … everyone in the region would do the same,”[2] a sentiment echoed by Prince Turki al-Faisal, former head of Saudi Arabia’s General Intelligence Directorate.[3] Has Riyadh decided to go down the nuclear road, or is this bluster a desperate bid to stop Tehran’s nuclear program dead in its tracks?

Why Go Nuclear?

A major deterioration in U.S.-Saudi relations—especially if Washington fails to stop Tehran’s nuclear program or decides to scale back its military presence in the Middle East due to its recent energy discoveries—could force Riyadh to reconsider nuclear weapon acquisition to avoid having to face foreign aggression without U.S. security assurances. However, the relationship between Riyadh and Washington has thus far provided the Saudis with an unprecedented level of protection. From Washington’s perspective, conventional wisdom holds that U.S. security commitments can keep Iran in check, prevent U.S. allies in the Middle East from submitting to Tehran’s demands, and dissuade them from pursuing nuclear weapons. Yet both the willingness and the ability of the U.S. government to defend its partners in the region against a nuclear-armed Iran have been questioned.[4] As an Israeli observer argued recently:

The lack of American will to confront the ayatollahs and stop them in their tracks has given various Arab leaders plenty of incentive, as well as a good excuse, to proceed down the nuclear trail … If the Iranians aren’t stopped, and soon, we may wake up a few years from now to discover that Saudi Arabia and other unfriendly regimes have decided to upgrade their “civilian” nuclear programs into weapons-making industries.[5]

Additionally, the Saudis are increasingly nervous about the strength of any U.S. commitment in light of the Obama administration’s abandonment of such a long-standing regional ally as Egypt’s Hosni Mubarak.[6]

The second issue is a mirror image of the first, namely, the concern over Tehran’s nuclear ambitions. In February 2012, one senior Saudi source told the London Times:

There is no intention currently to pursue a unilateral military nuclear programme but the dynamics will change immediately if the Iranians develop their own nuclear capability … Politically, it would be completely unacceptable to have Iran with a nuclear capability and not the kingdom.[7]

Abdulaziz Sager, head of the Geneva-based Gulf Research Center, argues that the consequences of Tehran acquiring nuclear weapons would result in

turning Iran into a hegemonic power over the [Persian Gulf] states of the region, through its control of Iraq, its holding fast to the continued occupation of the UAE’s [United Arab Emirates] islands, and its intervention in the domestic affairs of countries in the region through the agitated Shiite groups in these countries, which could push the GCC [Gulf Cooperation Council], namely Saudi Arabia, to seek, in turn, the acquisition of a nuclear weapon to confront Iran.[8]

Riyadh is most concerned about Iran’s ambitions especially because it and many other Gulf states have substantial Shiite populations that could potentially become radicalized were a nuclear-empowered Iran to step up its incitement.[9] Many analysts argue that in the event of an Iranian nuclear breakout, Riyadh would feel compelled to build or acquire its own nuclear arsenal. Given Saudi Arabia’s vast wealth and strategic weakness, such a decision might seem logical.[10] Riyadh’s perception of the Iranian threat as serious and immediate was recently expressed by Foreign Minister Saud al-Faisal:

Sanctions are a long-term solution … But we are looking at an Iranian nuclear program within a shorter term because we are closer to the locus of the threat. We are interested in immediate rather than in gradual solutions.[11]

Diplomatic cables obtained by WikiLeaks reveal that King Abdullah privately warned Washington in 2008 that if Iran developed nuclear weapons, Saudi Arabia would do the same.[12]

A third factor in the Saudi calculus is Israel’s nuclear and ballistic missile capabilities.[13] Given Israel’s status as an assumed but undeclared nuclear weapons state, the most immediate consequence of Tehran’s crossing the nuclear threshold would be the emergence of an unstable bipolar nuclear competition in the Middle East.[14] Were Israel to end this ambiguity and admit its possession of nuclear weapons, this might provide a form of deterrence against Iran, which in turn will increase the pressure on Riyadh to acquire its own deterrent vis-à-vis both countries.[15]

Finally, domestic factors must be taken into account. So far, King Abdullah and even Crown Prince Salman favor the continuation of military cooperation with the United States, but the two suffer from old age and poor health, and a change at the top of the pyramid could have a decisive impact on this issue. However, there has long been speculation that the royal family is divided over the nuclear issue. Former intelligence chief Prince Turki al-Faisal favors a secret nuclear program for military uses in cooperation with Pakistan and is supported in this by Prince Bandar Bin Sultan, director of the Saudi intelligence agency and former ambassador to the United States. In contrast to the hawks in Riyadh, there is also a group, headed by Foreign Minister Saud al-Faisal, which opposes establishing a secret nuclear military program reliant on Pakistan and prefers to be defended against Iran under the U.S. nuclear umbrella.[16]

Consumption and Constraints

Perhaps a more critical factor in the nuclear equation is Saudi Arabia’s economic outlook. The country depends almost exclusively on oil export revenues to develop its economy. Jareer Elass and Amy Myers Jaffe of the Baker Institute for Public Policy at Rice University contend that

It is in the Kingdom’s long-term geopolitical and security interests to maintain its leadership role in the global oil arena. Riyadh’s ability to threaten other oil producers that it could flood the oil market is a critical aspect buttressing its leadership role inside OPEC [Organization of the Petroleum Exporting Countries] and gives the country regional clout as well. Saudi Arabia’s ability to single-handedly alter the price of oil gives the Kingdom significant geopolitical power, and it has used its ability to lower the price of oil to its geopolitical advantage on many occasions over the decades. With this oil superpower stature comes much of the global influence that Saudi Arabia enjoys on the international stage.[17]

But the kingdom is an oil-consumer as well as a producer. Burning oil for electricity production currently consumes about a quarter of the crude oil Saudi Arabia produces, which could have very serious implications for the future.[18] In 2011, Saudi Arabia consumed an average of 2.87 million barrels per day (mb/d).[19] The country needs to find at least another 20 gigawatts (GW) of generating capacity by 2020 to add to its existing 40 GW if it is to meet projected demand.[20] As the GCC’s largest economy, Saudi Arabia has more reason than most to turn to nuclear power.

According to analysts at Riyadh-based Jadwa Investment, oil demand in the kingdom rose by 22 percent between 2007 and 2010, outpacing China’s oil demand growth rate despite the latter’s economy expanding almost three times as fast.[21] While official data shows Saudi oil consumption rising by more than 5 percent a year in 2003-10 to an average of 2.4 mb/d in 2010,[22] analysts at British Petroleum put it at 2.85 mb/d in 2011,[23] (see Tables 1 and 2) making Saudi Arabia the world’s sixth-largest oil consumer. On a per capita basis, its oil consumption is sky-high;[24] its consumption in 2011 is set to jump by 5.6 percent, way above the global average of 1.4 percent.[25]

Some economists argue that if Saudi Arabia’s energy consumption continues at its current rate, within twenty years the kingdom will burn the equivalent of almost all its recent daily output—more than 8 mb/d —or around two-thirds its total production capacity.[26] Citigroup goes further to say that Riyadh could be an oil importer by 2030. Oil and its derivatives account for 50 percent of Saudi electricity production, mostly for residential use. According to Citigroup analysis, if nothing changes, the Saudis may have no available oil for export by 2030.[27] The head of Saudi Aramco has admitted that unless internal demand is controlled, the amount of oil left for export could fall to less than 7 mb/d by 2028.[28] Jadwa Investment paints an even bleaker picture, declaring that the kingdom could face a serious revenue crisis within the current decade, forced to cut exports to meet rising demand. By 2020, it expects exports available for the global market to fall to less than 5 mb/d.[29]

(Table 1): Saudi Oil Production Demand (2001-2011 million barrels per day)

 

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Production

9,15

8,87

10,10

10,56

11,03

10,77

10,37

10,76

9,80

9,95

11,16

Consumption

1,62

1,66

1,78

1,91

1,97

2,04

2,16

2,33

2,55

2,74

2,85

Source: Adapted from BP Statistical Review of World Energy, (June 2012), pp. 8-9.

Given rising spending needs, the International Monetary Fund (IMF) estimated the break-even oil price for Saudi crude in 2011 to be US$80 a barrel, a rise of US$30 a barrel from three years ago; this would increase to US$98 by 2016.[30] The Washington-based Institute of International Finance suggested that Saudi Arabia will need at least US$110 for oil by 2015 to balance its budget.[31] But even these figures look conservative; the sheer scale of the kingdom’s spending commitments now necessitates a substantially higher oil price.[32]

It is within this context that Riyadh’s recently declared intention to launch its own nuclear program makes sense. In December 2011, Abdullah Zainal, minister of commerce and industry, announced that the equivalent of US$100 billion would be spent on building sixteen nuclear power plants to generate electricity in different parts of the kingdom.[33] Riyadh has signed nuclear technology agreements with several states for research reactors and nuclear power plants. Abdullah M. al-Shehri, governor of the Electricity and Co-Generation Regulatory Authority (ECRA), recently outlined Saudi Arabia’s road map in building its nuclear capabilities for peaceful means:

First, we need to secure international cooperation; second, come up with long-term planning; third, study the required safety measures mandated by the international community; fourth, ensure we have the needed fuel supply; and fifth, we must prepare a national work force that is educated in nuclear engineering and operation.[34]

Such projects would, however, enable the Saudis to enrich uranium. With the aid of their Sunni allies in Pakistan, they could then obtain knowledge of bomb-making capabilities and the relevant technologies.[35]

Saudi nuclear ambitions crystallized in the run-up to the 2009 Copenhagen summit when it was realized that global efforts to control climate change could end up punishing countries that put off including non-carbon-based energy sources in their power portfolios.[36] According to the World Trade Organization, the Saudi economy is increasingly dependent on international trade: The ratio of merchandise and services trade (exports and imports) to gross domestic product (GDP) rose from 88.7 percent in 2005 to a peak of 104.9 percent in 2008 and reached 97.4 percent in 2010. Riyadh’s export base is highly concentrated in fuels (petroleum and gas). The share of fuels in total merchandise exports depends largely on the evolution of world oil prices and Riyadh’s quota production within OPEC. In value terms, the share of fuels in total merchandise exports (including re-exports) went from 89.5 percent in 2005 to 85.7 percent in 2010.[37]

(Table 2): Saudi Break Even Oil Forecast at Current Spending Patterns

 

2005

2010

2015F

2020F

2025F

2030F

Oil Indicators (million barrels per day)

Oil Production

9.4

8.2

9.3

10

10.7

11.5

Oil Exports

7.5

5.8

6.3

6

5.6

4.9

Domestic Consumption

1.9

2.4

3.1

3.9

5.1

6.5

Breakeven Oil Price (US$ per barrel)

Saudi Export Crude

30.3

71.6

90.7

118.5

175.1

321.7

Source: Adapted from Brad Bourland and Paul Gamble, “Saudi Arabia’s coming oil and fiscal challenge,” (Jadwa Investment, Riyadh), July 2011, p. 24. F= forecast

Third Party Connections

There have been suggestions that, rather than develop an indigenous nuclear program, Saudi Arabia would simply seek to buy nuclear warheads from Pakistan or China. According to a news media report, Riyadh is beefing up its military links with Islamabad to counter Tehran’s expansionist plans either by acquiring atomic weapons from Islamabad or a pledge of nuclear cover,[38] a claim also reported earlier in The Guardian.[39]

Alternatively, Pakistan might offer a deterrent guarantee by deploying its own nuclear weapons, delivery systems, and troops on Saudi territory. This arrangement could be particularly appealing to both Riyadh and Islamabad, allowing the Saudis to argue that they are not violating the nuclear nonproliferation treaty (NPT) since the weapons would not be theirs. A Pakistani presence might also be preferable to a U.S. one because stationing Muslim forces on Saudi soil would not trigger the kind of opposition that has in the past accompanied the deployment of “infidel” U.S. troops.[40]

Despite these rumors, the Pakistanis know as well as anyone that the principal threats to the security and stability of Saudi Arabia are domestic against which nuclear weapons have no value but rather might stir up more trouble than they alleviate. But, a good Pakistani working relationship with Washington is essential. The Enhanced Partnership with Pakistan Act of 2009 (also known as the Kerry-Lugar-Berman bill) authorized a massive increase in U.S. civilian assistance to Islamabad, tripling it to US$1.5 billion a year.[41] In spite of tensions between the two states, Pakistan remains keen on developing its relationship with Washington, and continued proliferation of nuclear technology is unlikely to encourage either economic or military aid.[42] Indeed, selling complete nuclear weapons would come at great political cost. Islamabad might forfeit U.S. foreign assistance and drive Washington into closer cooperation with its mortal enemy India.[43]

Providing Riyadh with a Pakistani nuclear umbrella would also increase the likelihood of convergence between New Delhi and Tehran as both nations might view the move as part of a larger Sunni threat. In addition, Saudi nuclear acquisition could prompt a preventive strike by Israel—especially if the sale became known before the weapon was activated. Finally, although relations with Islamabad are improving, the House of Saud has no great trust in Pakistan’s intentions; on the contrary, many of the WikiLeaks documents revealed Saudi dissatisfaction with Pakistani politicians and policies.[44]

In theory, the Saudis could pursue a nuclear option with the Chinese, but in the current strategic environment, it is hard to imagine this as a realistic scenario. Beijing and Riyadh have never had close military relations largely because Washington has provided the Saudis with advanced military equipment as well as security assurances against international threats that China cannot provide. While Beijing and Washington do not see eye-to-eye on many issues, including the severity of the Iranian threat, it is unlikely that Beijing would jeopardize its trade and other relations with Washington by supplying the Saudis with nuclear weapons.

Additionally, China is a member of the NPT system and thus obliged “not in any way to assist, encourage, or induce any nonnuclear weapon State to manufacture or otherwise acquire nuclear weapons or other explosive devices, or control over such weapons or explosive devices.”[45] Under the Nuclear Proliferation Prevention Act of 1994, Beijing would face revocation of the U.S. nuclear cooperation agreement it worked so hard to secure, as well as the possible imposition of economic sanctions, if it were deemed to have “aided or abetted” the acquisition of nuclear weapons.[46]

If U.S.-Saudi relations should falter, the Chinese would doubtless view it as an opportunity to take a more active role in Saudi affairs. However, there is no evidence suggesting that this relationship will sour in the near future; in fact, as shall be seen, it is clearly improving.

Domestic Constraints

Technical barriers for entry into the nuclear club are high, and it is difficult for states to completely hide a clandestine military program from foreign intelligence observers. For example, the West successfully (albeit belatedly) detected Tehran’s secret uranium enrichment facility constructed in tunnels under a mountain near Qom.[47] Indeed, many analysts believe that Riyadh’s talk about developing nuclear arms may be more intended to focus Western attention on its concerns about regional risks than to indicate any kind of definitive action to go nuclear.[48]

It is unlikely that the Saudis would want to proliferate at the present time; doing so would deeply strain the U.S.-Saudi relationship, perhaps to an irrevocable degree.[49] Doing so would also place Riyadh in breach of a memorandum of understanding signed with Washington in 2008, promising U.S. assistance with civilian nuclear power on condition that Riyadh not pursue “sensitive nuclear technologies.”[50] Riyadh’s desire to maintain a strong relationship with Washington, especially in light of the royal family’s desire to prevent unconventional terrorism within its borders, inhibits any strong appetite to develop nuclear weapons.[51]

There is also strong evidence that Washington is committed to defending Saudi Arabia. President Obama notified Congress on October 20, 2010, of the largest ever arms sales to Riyadh, including the proposed sale of fighter aircraft and upgrades to existing Saudi fighter aircraft, attack and utility helicopters, and related weaponry and services. If all options are exercised, the proposed sales may be worth more than $60 billion dollars over a period of ten to fifteen years.[52] The Saudis will also get help with training, logistics, and maintenance. The Obama administration hopes the sales will help “sustain long-term relationships to ensure continued U.S. influence for decades,”[53] or as the Economist put it:

the package of sales would not only tilt the balance of conventional weaponry in the Gulf decisively against Iran, whose suspected bid to acquire atomic bombs frightens its Gulf neighbors as well as Israel and the West. It would signal the return to normal of America’s tight, 70-year-long alliance with Saudi Arabia. This had frayed following the revelation that 15 of the 19 hijackers who attacked American cities on September 11, 2001, were Saudi nationals. Fearing congressional opposition, Saudi Arabia had in recent years sought weaponry from other sources.[54]

Riyadh will also feel more secure from Tehran’s missile capabilities once it acquires the Terminal High Altitude Area Defense (THAAD) system. This system is intended for shooting down short-, medium-, and intermediate range ballistic missiles in their terminal phase, using a “hit-to-kill” approach. At the same time, a potential $30 billion upgrade of the Saudi navy would greatly strengthen the latter’s power projection in the Persian Gulf and the Red Sea. Ultimately, the U.S. arms package will increase Riyadh’s confidence and capabilities in countering Tehran’s rising power in the Middle East.[55]

Further, the character of the Saudi establishment militates against taking the drastic step of nuclear proliferation; the House of Saud is simply too conservative to undertake such a bold and controversial step. As Thomas Lippman argued,

The Saudis’ weapons of choice are cash and diplomacy. It is difficult to imagine the princes of the House of Saud deliberately positioning themselves as global outliers and inviting reprisal from countries capable of inflicting serious damage on them.[56]

Journalist Richard Nield has noted that Riyadh has committed itself to a major industrialization and economic diversification campaign that will require sustained engagement with the rest of the world. “It’s not rational that they would jeopardise this in favour of a preemptive strike against the theoretical possibility of a nuclear-armed Iran.”[57] The same idea is echoed by Kate Amlin, who believes that Saudi leaders would not want to incur the political and economic backlash resulting from pursuit of a nuclear arsenal at a time when they are trying to integrate further into the international economy.[58]

Finally, it would take many years and considerable financial cost for Riyadh to develop nuclear weapons. There exists a relatively strong consensus regarding the immature state of the Saudi nuclear technology infrastructure. The country lacks the human expertise and technical knowledge necessary to develop a nuclear weapons program on its own.[59] It does not operate nuclear power facilities, and its scientists do not have the necessary experience to enrich uranium for reactor fuel, to convert nuclear fuel, or operate nuclear reactors.[60] A recent Citigroup report warns that several complex issues are likely to result in delays to Saudi Arabia’s target nuclear power launch of 2019:[61] the lack of available nuclear power experts; cost overruns or high capital costs, and above all, plant safety risks such as keeping plants cool in desert conditions since there is no history of successful execution in such conditions.[62] According to Citigroup, the “safest location for a nuclear plant in Saudi Arabia is deep in the desert between Riyadh and Jeddah. Water would have to be piped over 30 miles to this region and under conditions that keep the pipes and plants cool.”[63]

There have, however, been clear signs recently of the Saudis’ intent to enter the nuclear arena. In June 2010, the kingdom commissioned Finnish management consultancy Poyry to offer a strategy for nuclear and renewable energy use and to study the economic and technical feasibility of becoming involved in all aspects of the nuclear power chain, including uranium enrichment.[64] Earlier that year, the Saudi government said it planned to build a new technology centre, the King Abdullah City for Nuclear and Renewable Energies, in Riyadh.[65] Despite this, it will be years before it is developed. In a 2007 visit to Saudi Arabia, Mohammed ElBaradei, then-director general of the International Atomic Energy Agency, estimated that the Saudi nuclear civilian plan might take up to fifteen years.[66]

Conclusion

Given that it is the world’s top oil exporter, handling a nuclear Saudi Arabia would be a delicate manner. But, at least for now, the Saudis have no alternative but to rely on a U.S. defense umbrella. Still, it would be contrary to Riyadh’s practice to put all its eggs in one basket. Thus, the kingdom will work in two parallel routes, strengthening its military, particularly the air force and navy, and aggressively seeking to buy the civilian nuclear technology that will in the future provide the technical capacity and human resources for dealing with nuclear weapons.

Riyadh is currently linked to arms deals with Washington for at least the next decade. It could also take a decade to develop the potential human and technical resources needed for a civilian nuclear program. At present there is no solid evidence that Riyadh has taken firm steps to go down this route, nor is there any evidence of Saudi acquisition of weapons of mass destruction

Overall, though not insurmountable, the obstacles to Saudi nuclearization are considerable. Much depends on Tehran’s ambitions and the West’s determination to stymie them.

Naser al-Tamimi is a U.K.-based Middle East analyst with research interest in energy politics and Middle East-Asia relations. He holds a PhD degree in International Relations from Durham University, U.K.

[1] Robert Shuey and Shirley A. Kan, “Chinese Missile and Nuclear Proliferation: Issues for Congress,” U.S. Congressional Research Service, Nov. 16 , 1995; The New York Times, July 10, 1999; The Guardian (London), Sept. 18, 2003; The Washington Times, Oct. 21, 2003; Dan Blumenthal. “Providing Arms: China and the Middle East,” Middle East Quarterly, Spring 2005, pp. 11-9; Cicero (Hamburg), Mar. 28, 2006; Ha’aretz (Tel Aviv), May 30, 2012.
[2] The Guardian, June 29, 2011.
[3] Reuters, Dec. 6, 2011.
[4] Eric S. Edelman, Andrew F. Krepinevich, Jr., and Evan Braden Montgomery, “The Dangers of a Nuclear Iran,” Foreign Affairs, Jan./Feb. 2011, pp. 66-81.
[5] Michael Freund, “When Saudi Arabia Goes Nuclear,” The Jerusalem Post, Apr. 29, 2010.
[6] The Wall Street Journal, June 23, 2011.
[7] The Times (London), Feb. 10, 2012.
[8] Abdulaziz Sager, “Alwady’a fi al-khaleej: Derasa Isteshrafeya 2025,” paper presented to the Manama (Bahrain) Development Forum, Feb. 8-9, 2008, in al-Wasat News (Bahrain), Feb. 13, 2008.
[9] “Saudi Arabia Defense and Security Report Q1,” Business Monitor International (London), Jan. 2011, p. 55.
[10] Thomas W. Lippman, “Nuclear Weapons and Saudi Strategy,” Middle East Institute, Policy Brief, no. 5, Jan. 2008.
[11] Associated Press, Feb. 15, 2010.
[12] The Guardian, June, 29, 2011.
[13]Avoiding a Nuclear Arms Race in the Middle East,” Report to the U.S. Senate Committee on Foreign Relations, Washington, D.C., Feb. 2008.
[14] Edelman, Krepinevich, and Montgomery, “The Dangers of a Nuclear Iran,” pp. 66-81.
[15] Kathleen J. McInnis, “Extended Deterrence: The U.S. Credibility Gap in the Middle East,” The Washington Quarterly, Summer 2005, pp. 169-86.
[16] Ha’aretz, Sept. 8, 2011.
[17] Jareer Elass and Amy Myers Jaffe, “Iraqi Oil Potential and Implications for Global Oil Markets and OPEC Politics,” James A. Baker III Institute for Public Policy, Rice University, July 2011.
[18] Mark Hibbs, “Saudi Arabia’s Nuclear Ambitions,” Carnegie Endowment, Washington, D.C., July 20, 2010.
[19] “Oil Market Report,” International Energy Agency, Paris, Nov. 13, 2012.
[20] Petroleum Economist (London), Dec. 14, 2010.
[21] Brad Bourland and Paul Gamble, “Saudi Arabia’s Coming Oil and Fiscal Challenge,” Jadwa Investment, Riyadh, July 2011.
[22] Reuters, Oct. 12, 2011.
[23] “BP Statistical Review of World Energy Report,” British Petroleum, London, June 2012, p. 9.
[24] Bourland and Gamble, “Saudi Arabia’s coming oil and fiscal challenge.”
[25] Financial Times (London), Feb. 28 2011.
[26] The Wall Street Journal, June 23, 2011.
[27] Heidy Rehman, “Saudi Petrochemicals: The End of the Magic Porridge Pot?” Citigroup, London, Sept. 2012, p. 1.
[28] Reuters, Oct. 12, 2011.
[29] Bourland and Gamble, “Saudi Arabia’s Coming Oil and Fiscal Challenge.”
[30] “Regional Economic Outlook: Middle East and Central Asia,” International Monetary Fund, Washington, D.C., Sept. 2011, p. 22.
[31] Elass and Jaffe, “Iraqi Oil Potential.”
[32] Middle East Economic Digest (MEED, Dubai and London), Dec. 23, 2011.
[33] Al-Akhbar (Beirut), Feb. 9, 2012.
[34] Saudi Gazette (Riyadh), Feb. 22, 2012.
[35] The Daily Mail (London), Feb. 24, 2012.
[36] Saurav Jha, “China’s ‘Third Island’ Strategy,” World Politics Review, Jan. 6, 2010.
[37] “The Kingdom of Saudi Arabia,” Trade Policy Review, World Trade Organization, Geneva, Dec. 21, 2011.
[38] United Press International, Sept. 15, 2011.
[39] The Guardian, May 11, 2010.
[40] Edelman, Krepinevich, and Montgomery, “The Dangers of a Nuclear Iran,” pp. 90-1.
[41] Alexander Evans, “Pakistan and the Shadow of 9/11,” RUSI Journal, Aug./Sept. 2011, pp. 64-70.
[42] “Saudi Arabia Defense and Security Report Q4,” Business Monitor International, Jan. 2012, p. 66.
[43] James M. Lindsay and Ray Takeyh, “After Iran Gets the Bomb: Containment and Its Complications,” Foreign Affairs, Mar./Apr. 2010, pp. 33-49.
[44] See, for example, Associated Press, Dec. 3, 2010.
[45] Treaty on the Non-Proliferation of Nuclear Weapons, U.N. Office for Disarmament Affairs, New York, July 1, 1968, art. I.
[46] Lippman, “Nuclear Weapons and Saudi Strategy.”
[47] Ian Jackson, “Nuclear Energy and Proliferation Risks: Myths and Realities in the Persian Gulf,” International Affairs, Nov. 2009, p. 1157.
[48] The Guardian, June 29, 2011.
[49] Sammy Salama and Gina Cabrera Farraj, “Secretary General of Arab League urges Arab countries to exploit nuclear power, enter ‘nuclear club'” WMD Insights, May 2006.
[50] The Times, Feb. 10, 2012.
[51] Kate Amlin, “Will Saudi Arabia Acquire Nuclear Weapons?” James Martin Center for Non-proliferation Studies, Washington, D.C., Aug. 1, 2008.
[52] “The Middle East: Selected Key Issues and Options for the 112th Congress,” U.S. Congressional Research Service, Washington, D.C., report R41556, Jan. 3, 2011, p. 6.
[53] The New York Times, Dec. 29, 2011.
[54] The Economist (London), Sept. 15, 2010.
[55] Business Monitor International, Sept. 14, 2010.
[56] Lippman, “Nuclear Weapons and Saudi Strategy.”
[57] MEED, Dec. 17, 2010.
[58] Amlin, “Will Saudi Arabia Acquire Nuclear Weapons?”
[59]Avoiding a Nuclear Arms Race in the Middle East,” Report to the U.S. Senate Committee on Foreign Relations, Washington, D.C., Feb. 2008.
[60] Yana Feldman, “Saudi Arabia Country Profile: Nuclear Facilities Profiles,” Stockholm International Peace Research Institute, July 2004.
[61] Rehman, “Saudi Petrochemicals: The End of the Magic Porridge Pot?” p. 36.
[62] Ibid, p. 35.
[63] Ibid.
[64] “Saudi Arabia: Going Nuclear,” Country Monitor, Economist Intelligence Unit, London, June 7, 2010.
[65] Petroleum Economist, Dec. 14, 2010.
[66] The New York Times, Apr. 15, 2007.

Middle East

The role of Guangdong Province in the Egypt – China relationship

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For the past few years, Egypt-China bilateral trade has witnessed a big leap where Egypt has opened up its markets to the Chinese products. There are many aspects that impressed me the most about the economic and trade cooperation between Egypt and China, regarding the recent important role of Guangdong in the Egypt – China relationships.

  Guangdong has special relations with Egypt, as they work together to advance and strengthen economic and commercial exchange and cooperation with the continent of Africa, and in particular with Egypt, as Egypt was keen to work and conduct many discussions and joint meetings with officials of Guangdong Province on enhancing investment and trade between Guangdong, China and Egypt. The trade and economic cooperation talks of Guangdong Province with Egypt came under the supervision of the (People’s Government of Guangdong Province), in cooperation with the Foreign Trade and Economic Cooperation Authority of Guangdong Province and the General Authority for investment and Free Zones in Egypt. The (General Federation of Egyptian Chambers of Commerce) is also keen to open prospects for joint economic and investment cooperation with Guangdong Province.

 Both Egypt and the officials at Guangdong have already held (a conference on investment and trade between the Chinese province of Guangdong and Egypt) to identify the most important joint investments between the two parties.

 The Guangdong provincial government has prepared an unprecedented large-scale trade and economic delegation to visit Cairo, which included more than 60 institutions with great weight covering all disciplines to participate in the talks with the Egyptian side. This Chinese delegation represented a number of leading and important institutions in Guangdong Province, in the field of communications, household electrical appliances, building and construction, the manufacture of motorcycles, furniture, spinning, weaving and other light industries, to transfer their expertise and investments to the Egyptian side.

 Officials in the Chinese province of “Guangdong”, which represents the largest province in China in terms of the volume of foreign trade exchange, signed many agreements for investment cooperation with Egyptian businessmen.

  The agreements included the establishment of a number of joint venture companies between the Egyptian and Chinese sides in the field of electronics, motorcycles and information technology, in addition to one agreement stipulating the acquisition of 32.5% of the shares of the Egyptian “Raco” electronics company by the Chinese “GD Media” holding company and Carrier for the manufacture of refrigerators.

 The total value of the agreements signed yesterday amounted to about 400 million dollars and comes within the framework of activating the role of Chinese companies in the economic zone northwest of the Gulf of Suez, which is being developed by TEDA-Egypt.

 Most of the agreements between Egypt and Guangdong are aiming to transfer the Chinese manufacturing technology to the Egyptian market, provided that it is re-exported to the Middle East and African markets with an Egyptian mark of origin, to enjoy the incentives offered by the governments of neighboring countries for exported and locally manufactured products.

 The first of these agreements between Cairo and Guangdong was an agreement between the Ministry of Foreign Trade and Economic Cooperation in Guangdong Province and the TEDA Egypt Investment Company to promote the economic zone in the northwest of the Gulf of Suez to Chinese companies.

 The Chinese Guangdong Group also signed an agreement with Egypt China Friendship Motorcycle Company to export motorcycles, in addition to another agreement to establish a factory to assemble bicycles locally.

 The same group also signed another agreement with Metal Technical Company to export electronic devices and freedom products, while Guangzhou Environstar Company signed an agreement with “Teda Egypt Company” to set up a non-woven fabric factory.

And the Guangzhou Dayun Motorcycle Company signed an agreement with the “Ibrahim Mahmoud Ibrahim” group to establish the “Egypt-dayu” company for motorcycles.  The China National Research Institute of Electrical Appliances also signed a joint cooperation agreement with Rajamec Mechanical and Electrical Works Company.

 Guangzhou Wuyang Motors CO. also signed an agreement with the “United Brothers” company for the distribution of motorcycles and spare parts, while Finmek Electronics signed an agreement with the economic zone in the northwest of the Gulf of Suez for investment cooperation.

 Shoppingmode Huawei for Communications and Information Technology signed 3 agreements, the first with the Suez Economic Zone to undertake the work of an integrated technology system for the region, in addition to an agreement with the National Center for Communications to conduct a training program on telecommunications technology, as well as signing an agreement with Luxor Governorate in the presence of Governor Samir Farag to establish  E-learning project in the province.

 Guangdong Winone Elevator entered into a partnership agreement with Megastar Elvato to export electric elevators.

 Guangdong VTR Buo-Tech signed an agreement with Delta Vet Center for Feed Export, in addition to Guangdong Han’s Yueming Laser Technology Company and Sharjah General Trading Company signed an agreement to export machinery.

 Zhongshan City Fudi Electrical Equipment Company signed an agreement with Al-Fas Engineering Company to export home appliance accessories, in addition to TCL Overseas Marketing Company signing an agreement with the Engineering Company for Electronics and Technological Industries to export color televisions, while Zhaoqing Foodstuffs Company for export and import agreed with Al-Jasr Herbs Company  for the export of agricultural products and the company “GAC-QHD (Meizhou)” for auto components, in agreement with the Matrix Engineering Company for the export of auto parts, while the Chinese Victory Furniture Factory signed an agreement with Beni Suef Governorate to establish a furniture company in the governorate.

 In connection with the above, we reach an important conclusion that it is not possible to talk about Chinese investments in Egypt in isolation from addressing the tangible role of Chinese companies in the giant Guangdong Province in the process of economic and social development in Egypt, and the distinguished results they achieved in this regard. The Suez canal Zone for economic and trade cooperation between China and Egypt, known as TEDA, has become an industrial zone that enjoys the best comprehensive environment, the highest investment intensity and the highest production unit in Egypt, assisted by a large number of companies and investments in the Chinese province of Guangdong operating for years and after the launch of the Belt Initiative.  And the Chinese road in Cairo, which had a special role in strengthening the special relations between Cairo and Guangdong as a special Chinese economic zone.

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Middle East

Iran: A major Replacement of Human Resources

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Since 1979, when the mullahs seized power, Iran has topped the list of countries affected by the “brain drain”. What appeared to be local bleeding at the time may now become total bleeding affecting other sectors of the population.

The headline of one of the stories in the official news agency, IRNA, was: “It is not only the elite that migrate.” The daily newspaper, Javan, affiliated with the Iranian Revolutionary Guards, warned that Iran was losing some of its best-educated people, and stated that mass immigration of “elite elements” “costs the nation millions of dollars.” But immigration now attracts Iranians with less skills or devoid of skills.

According to the best semi-official estimates, since 1979 some eight million people, roughly 10 percent of the population, have left Iran, including an estimated 4.2 million highly educated and highly skilled people.

In the past four years, the brain drain has accelerated, with an average of 4,000 doctors leaving each year.

According to IRNA, at present, 30,000 general practitioners and senior nurses are awaiting the “good professional standing” certificates that developed countries require from those wishing to immigrate from so-called “developing countries”, such as Iran.

A study conducted by two researchers from the University of Tehran, Adel Abdullah and Maryam Rezaei, showed that almost all Iranians who immigrate seek to enter the European Union or the so-called “Anglosphere” countries such as Britain, Canada, the United States, New Zealand and Australia.

Only 10 percent of potential immigrants are willing to go “anywhere else” to get out of Iran.

The immigration requests did not include a single request who wanted to go to a Muslim country, and the only exception is Iraq, which attracts thousands of Iranian mullahs and students of theology who go to Najaf and Karbala to escape the government’s domination of religion in Tehran.

Potential immigrants also avoid China, India and Russia, while the only two Asian countries still attracting Iranians are Malaysia and Japan.

For many potential immigrants, the first destination they want to go to is Dubai, then Istanbul, then Cyprus and until recently Yerevan (the capital of Armenia), where visas are being applied for to desired destinations. Some immigrants may have to wait two or three years to obtain visas from the European Union, Canada and the United States.

Who migrates and why?

Some of the answers came from a three-year study conducted by Sharif University (Ariamher) in Tehran. According to the study, a survey of 17,078 people across all 31 provinces of Iran showed that 70 percent of senior managers and highly skilled employees in the public sector wish to immigrate.

In the projects and businessmen sector, 66 percent expressed their desire to emigrate. This figure drops to 60 percent among doctors, nurses and other medical personnel.

The study shows that the majority of potential immigrants are highly educated, unmarried youth from urban areas, i.e. the higher the education of the individual, the greater the desire to leave.

Among those who express “dissatisfaction with the current situation,” 43 percent of them want to leave the country. This figure drops to 40 percent among those who feel “great satisfaction”, which reveals that the desire to leave is deeper than occasional social and political concerns, which is confirmed by other figures in the same study.

Of those who felt “despairing about the future in Iran,” 42 percent want to leave, a figure that drops to 38 percent among those who still have some hope for the country’s future.

The study shows that the desire to flee Iran is not caused by economic hardship as a result of unemployment or inflation. It is not only the poor or the unemployed who wish to flee, but also those with good jobs, or candidates for well-paid jobs and a seat on the mullahs’ train and their security and military partners.

The largest number of immigrants comes from the provinces of Tehran, Isfahan and Qom, where per capita income is 30 percent higher than the average income in the country. Poorer provinces such as Sistan Baluchistan, Boyer Ahmad, Koh Kiluyeh, and South Khorasan are at the bottom of the list in terms of immigrant numbers.

The study does not provide figures, but there is anecdotal evidence that tens of thousands of immigrants, especially to Canada and the United States, are descended from ruling Islamic families.

None of the studies we looked at suggested other reasons as potential attractions for immigrants, such as the great success stories of Iranian immigrants around the world. A study conducted by Nooshin Karami revealed that more than 200 politicians of Iranian origin now occupy senior positions in the political structures of 30 countries, including those of the European Union and the Anglosphere. 1000 Iranians hold senior positions in international companies, while thousands more are active in the media, scientific research and academic circles in the leading industrialized countries. Dozens of Iranian writers, poets, playwrights, and filmmakers have built successful careers for themselves outside of Iran.

At the other end of the spectrum, Iran also attracts immigrants from neighboring Iraq, from the Kurdish and Shiite Arab regions, the Nakhichevan enclave, Afghanistan and Pakistan, while hosting thousands of religious students from Yemen, Syria, Lebanon and Nigeria. Qom.” According to state media, many students remain in Iran after completing their studies and marrying Iranian women.

All in all, Iran hosts more than six million “foreign guests,” including Afghan, Pakistani, and Iraqi refugees. Interestingly, the desire to leave seems to have reached the “guests” as well. Between March 2021 and March 2022, more than half a million Afghan refugees returned to their homes.

To deal with the consequences of this “brain drain,” the Islamic Republic unveiled a program to attract highly educated and skilled people from “anywhere in the world” with the promise of one-year contracts, good salaries, and enjoyment of “all citizenship rights except the right to vote.”

An estimated 300,000 fighters who served under the Iranian command in Lebanon, Syria, and Yemen were promised permanent residence in Iran and access to agricultural land to start a new life.

Critics claim that the Khomeinist regime is pleased that so many potential opponents among the urban middle class are leaving Iran, as Iran can compensate for the loss of population with newcomers from poor Muslim countries who aspire to a better standard of living under what they see as a “true Islamic” regime.

It is worth noting that other authoritarian regimes, notably the former Soviet Union, communist China, North Korea, Vietnam, and Cuba, benefited from the exodus of what they saw as potential enemies from the middle class, allowing them to implement a scheme of “great replacement.”

On this, Iranian Revolutionary Guard General Mohammad Reza Najdi said: “Let those who do not love us leave the country, to make room for those who love us.”

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Middle East

‘Saudi First’ aid policy marries geopolitics with economics

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When Mohammed al-Jadaan told a gathering of the global political and business elite that Saudi Arabia would, in the future, attach conditions to its foreign aid, the finance minister was announcing the expansion of existing conditionality rather than a wholly new approach.

Coined ‘Saudi First,’ the new conditionality ties aid to responsible economic policies and reforms, not just support for the kingdom’s geopolitics.

For the longest time, Saudi Arabia granted aid with no overt strings. The aid was policed by privately demanding support for the kingdom’s policies, often using as a carrot and stick quotas for the haj, the yearly Muslim pilgrimage to the holy city of Mecca allotted to countries across the globe.

As a result, over the years, Saudi Arabia poured tens of billions of dollars into black holes, countries that used the aid as a band-aid to address an immediate crisis with no structural effort to resolve underlying causes.

For countries like Lebanon, Egypt, and Pakistan, this meant stumbling from one crisis to the next.

“We are changing the way we provide assistance and development assistance. We used to give direct grants and deposits without strings attached, and we are changing that. We are working with multilateral institutions to actually say, we need to see reform,” Mr. Al-Jadaan told this month’s World Economic Forum in the Swiss resort of Davos.

Saudi First serves multiple Saudi purposes.

It ties geopolitical drivers of Saudi aid to economic criteria that are likely to enhance the kingdom’s influence, create opportunities for Saudi investment and business, and enhance the kingdom’s ties to recipient countries.

In doing so, the additional conditionality positions the kingdom as a constructive, forward-looking member of the international community. It aligns Saudi Arabia more closely with multilateral institutions like the World Bank and the International Monetary Fund (IMF), regional development banks, and major donors such as the United States and the European Union.

It also enables Saudi rulers to circumvent the implications of the principle of ‘no taxation without representation’ that traces its roots to the American revolution.

Saudi Crown Prince Mohammed bin Salman’s social and economic revamping of the kingdom while tightening the political screws as part of his plan to diversify the kingdom’s economy has involved introducing taxes with no political participation.

“Saudi people see their resources going abroad while they’re being asked to pay taxes, have their benefits cut, and so on. So, I think this Saudi first stance really serves as a way to both court and contain populism,” said Gulf scholar Kristin Smith Diwan.

Saudi circumvention of the American revolutionary principle, irrespective of whether it helps pacify Saudis, has already had unintended consequences.

Earlier this week, the Jordanian parliament fired a deputy, Mohammad Al-Fayez, for asking Mr. Bin Salman to stop aiding Jordan.

“All your aid lands in the pockets of the corrupt. Your donations pay bills that have nothing to do with the Jordanian people. We hear about aid coming in for the state. However, this aid only goes to a corrupt class that is getting richer at the expense of the proud Jordanian people,” Mr. Al-Fayez said in a letter to the crown prince.

The Jordanian parliament’s measure coincided with the Saudi finance minister’s announcement. Mr. Al-Fayez wrote his letter in December at the height of clashes in the southern city of Maan between security forces and protesters angry about rising fuel prices and poor governance.

Countries like Lebanon, Pakistan, and Egypt that are potentially most impacted by the new conditions for Saudi aid illustrate the geopolitical complexities of the change.

For Saudi Arabia, Lebanon is about countering Iran and its Lebanese Shiite proxy, Hezbollah, a powerful militia and political movement with significant influence in government and the country’s power structure.

Saudi Arabia hopes that the new conditionality will force a change in Lebanon’s power dynamics.

“The whole world knows what the kingdom offered Lebanon…until it…was back on its feet. But what can we do if current Lebanese policy chooses to surrender the reins of an ancient Arab nation to Iran’s proxy in that country?” asked Saudi columnist Hammoud Abu Taleb.

To be sure, the Lebanese establishment is responsible for the country teetering on the brink of collapse.

The World Bank has described the crisis fuelled by corruption, waste, and unsustainable financial policies as one of the worst globally since the mid-19th century.

This week’s judicial battle over holding powerful figures accountable for the 2020 Beirut port explosion that has spilled onto the streets of the Lebanese capital reflects the establishment’s determination to shield itself no matter the cost to Lebanon as a whole.

The explosion in a warehouse in the port housing hundreds of tons of ammonium nitrate, a material used in fertilizers, killed 218 people, injured more than 6,000, and damaged large parts of Beirut.

A Saudi contribution to forcing political change, a sine qua non for putting Lebanon on a path toward recovery, would be welcome.

It would also go some way towards the kingdom taking responsibility for its role in fighting a decades-long proxy war with Iran that helped bring the Mediterranean nation to its knees.

That is, if the conditions imposed by Saudi Arabia are tailored in ways that contribute to change while seeking to alleviate the pain the Lebanese endured, with the Lebanese pound losing 95% of its value, prices skyrocketing, and purchasing power demolished.

One way would be making accountability for the Beirut blast a condition for future aid.

Recent Saudi standoffishness towards the regime of Egyptian general-turned-president Abdel Fattah al-Sisi, was evident in the kingdom’s conspicuous absence at a gathering of regional leaders in Abu Dhabi earlier this month. Mr. Al-Sisi was one of the attendees.

The standoffishness reflects the fact that Egypt is a black hole. Saudi Arabia, the United Arab Emirates, and other Gulf states have injected tens of billions of dollars with few tangible results except for keeping in power a regime that emerged from a 2013 military coup supported by the kingdom and the Emirates.

Saudi Arabia and the UAE backed the coup as part of a campaign to roll back the achievements of the 2011 popular Arab revolts that toppled four leaders, including Egyptian President Hosni Mubarak.

The coup also ended the flawed presidency of Mohammed Morsi, Egypt’s first and only democratically elected leader. Because he was a member of the Muslim Brotherhood, Mr. Morsi was like a red cloth to a bull in the two Gulf states.

The UAE recognised early on that it needed to ensure its billions were judiciously deployed. So it based a Cabinet-level official in Cairo to advocate reforms and assist in crafting policies that would help put the economy back on track.

The Emirati effort came to naught, with Egypt continuously needing additional funds from the Gulf and the IMF, and the UAE, allowing Mr. Al-Sisi to turn the military into the country’s foremost economic player.

The impact of the Covid-19 pandemic and the Ukraine war on commodity and energy prices only aggravated Egypt’s economic crisis that is largely the result of Mr. Al-Sisi’s economic mismanagement

Mr. Al-Sisi unsuccessfully tried to manipulate Egypt’s currency, set misguided spending priorities, launched wasteful megaprojects, and expanded disruptive state and military control of the economy.

Time will tell what lessons the Saudis may learn from the Emirati experience. Unlike Lebanon, the question is whether Saudi Arabia will strictly impose its news aid policy conditionality or continue to view Egypt as too big to fail.

The problem for Saudi Arabia and the Gulf states is that popular discontent is simmering just below the surface in Egypt and could explode at any time. What makes things potentially more volatile is the possibility of the plight of the Palestinians, aggravated by the policies of Israel’s new hardline, Jewish nationalist government, becoming the catalyst for anti-government protests.

Such demonstrations have a life of their own, and in a moment, they can turn into a protest against the government, against poverty and waste, and we have a direct confrontation whose results can be lethal,” said an Egyptian journalist.

One factor in Saudi thinking about Egypt may be the perception that the North African country, which refused to get sucked into the kingdom’s war in Yemen, may no longer be the security buffer in Africa it once was together with Sudan, a country in transition following a 2019 popular revolt.

That seemed to be one reason for this month’s signing of a memorandum on defence cooperation between Saudi Arabia and Chad, a nation in a region wracked by ethnic and jihadist insurgencies.

The memorandum signals a potential Saudi interest in playing some security role in West Africa at a time that France is on the retreat while Turkey, Iran, and the Wagner Group, Russian mercenaries with close ties to President Vladimir Putin, are on the march.

Last year, Qatar mediated a peace agreement between the Chadian government and more than 30 rebel and opposition factions. However, nine groups, including the Front for Change and Concord in Chad (FACT), the most powerful insurgent faction, refused to sign the deal.

The likelihood of Saudi Arabia taking on an expanded security role far from its shores may be slim in the immediate future.

Even so, creating building blocks that include tighter relations with recipients of Saudi foreign aid through sensible strings attached is one step towards cementing the kingdom’s geopolitical influence.

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