The dynamics of relations between the United States and Saudi Arabia, and Washington’s plans to once again ramp up sanctions on Russia reflect the military-political and financial-economic factors underlying the Trump Administration’s foreign policy. The key aspects of President Donald Trump’s “business approach” are the lack of clear-cut, principled and comprehensive rules of the game and prioritization of specific trade and economic gains while politically downplaying areas that do not promise immediate financial bonuses and, therefore, can be sacrificed to domestic political considerations and hang-ups.
Suffice it to mention Washington’s response to the international scandal associated with the October 2 death of the Saudi opposition journalist Jamal Khashoggi at the Saudi consulate in Istanbul. The Turkish authorities blamed the journalist’s disappearance on a group of Saudi nationals. In wasn’t until October 20 that Saudi Arabia finally admitted Khashoggi’s death at its consulate, adding that he had died as a result of a “conflict.” Al Ekhbariya TV channel quoted Saudi Arabia’s Attorney General as saying that Jamal Khashoggi died “in a fight with people who were in the building” of the Saudi consulate.
Immediately after getting word about the disappearance of a Saudi journalist, US President Donald Trump, in his usual manner, threatened to “severely punish” Riyadh if the reports of Mr. Khashoggi’s murder were confirmed. However, just a few days later, Trump, without waiting for the results of the ongoing investigation and even before Khashoggi’s body was found, suddenly toned down his statements.
After a telephone linkup with Saudi King Salman bin Abdulaziz Al Saud, Trump suggested that the journalist could have been killed by “certain people” without Riyadh’s knowledge, since the Saudi monarch “assured” him that he was completely unaware of the incident. The next day, on October 16, US Secretary of State Michael Pompeo traveled to Saudi Arabia to meet the King and Crown Prince Mohammed Ibn Salman. After the meeting, the US State Department issued a statement thanking the Saudi monarch for his “desire to help in a thorough, transparent and timely investigation into the disappearance” of Jamal Khashoggi.
Still, the incident split the political elite of the United States with a separate investigation into the circumstances of the incident launched by the Senate, and a number of Congressmen demanding severe sanctions against Riyadh, including a ban on the sale of US arms.
Meanwhile, the Trump Administration clearly wants to stand up for Riyadh, even at the expense of alienating some members of Congress.
Trump has already made it clear that an arms embargo against Saudi Arabia is out of the question because such contracts are too important for the United States. Saudi Arabia is the first foreign country Donald Trump went to after his election. Following the talks, the sides inked a ten-year deal for the sale of $350 billion worth of US arms to the kingdom, with contracts worth $110 billion meant for “immediate implementation.” The agreement provides for the sale of tanks, air defense systems, radar installations, military communications gear and cyber security technology.
It is clear, however, that, despite President Trump’s efforts, US-Saudi relations will come under strong pressure in the United States itself.
In March, a proposal to suspend the implementation of arms deals with Saudi Arabia over Riyadh’s poor human rights record and its support for radical Islamists in the Middle East was put to the vote in the US Senate with 44 Senators voting for a freeze and 55 voting against.
However, according to The Wall Street Journal, many Senators, who previously supported Riyadh, have recently been reconsidering their position. The newspaper cites Senator Lindsay Graham as saying that Crown Prince Salman, who has concentrated in his hands all the key levers of power in Saudi Arabia, is “too toxic a figure. He can never be a leader on the world stage.”
“Mohammed bin Salman had paid millions of dollars to create a specific image of himself, and Jamal Khashoggi destroyed all this with just a few words,” Saudi journalist Azham Tamimi said in an interview with The New York Times.
In addition to major arms sales with Saudi Arabia which, according to the White House, will help create about 450,000 new jobs in the US, interdependence in oil is another reason why Washington does not intend to have a serious conflict with Riyadh. Currently, the United States is importing 800,000 barrels of Saudi oil a day and the Saudis have already hinted that they will reduce or even stop oil sales to the US if Washington attempts to impose sanctions on it. In this event, according to the most conservative estimates, the United States would lose about 5 percent of its energy resources.
Moreover, cooperation with Saudi Arabia in oil has a deeper geopolitical significance for the United States, because it allows Washington to exert influence on the world oil market and OPEC.
The United States “is getting used to the role of a regulator of the world oil market,” Rosneft CEO Igor Sechin said in his report to the Eurasian Economic Forum in Verona, Italy.According to him, the Trump Administration proceeds from “far from impartial” interests and uses “absolutely non-market methods” in an effort to secure its own financial and economic interests.
“Moreover, the US wants to become a major oil exporter. We are essentially talking about the emergence of a US-PEC structure, especially when we have in mind the impact of the recent events on the scope of relations between the US and Saudi Arabia, which are hard to overestimate,” Sechin emphasized.
Also important is the “Iranian factor” and the Turkish aspect in the US foreign policy. The Trump Administration does not want to undermine Saudi Arabia’s position as Tehran’s main adversary in the Middle East and play up to Turkish President Recep Tayyip Erdogan, who is competing with the Saudis for leadership in the Islamic world. Erdogan has already said that what is now happening to Saudi Arabia only proves that Turkey is “the only country, which can lead the Muslim world.
The Washington Post hit the nail on the head when it wrote that Jamal Khashoggi’s murder has changed the power balance in the Middle East.
According to available information, in the course of the tense US-Saudi diplomatic contacts of the past few days, the Trump Administration has been trying to persuade Riyadh to come up with a mutually acceptable formula to ease the scandal around the disappearance of the opposition-minded journalist and avoid endangering the strategic cooperation between the two countries. It was Washington’sscenario whereby the Saudi authorities acknowledge the death of Jamal Khashoggi during an interrogation at the Saudi consulate in Istanbul but blame it all on some Saudi intelligence agencies going too far. The impression is that Donald Trump is “helping cover up for Riyadh,” former CIA analyst told The Financial Times.
The White House’s stance on an event that grabbed international attention clearly contrasts with its obsessive desire to slap ever new sanctions on Russia for Moscow’s alleged meddling in the 2016 US presidential election and its equally unproved role in the recent poisoning incidents in Britain.
By covering up Riyadh, the Trump Administration proceeds primarily from financial and economic considerations, while by increasing pressure on Russia under far-fetched pretexts, it seeks to bolster its own positions ahead of next month’s mid-term Congressional elections.
Under the present circumstances, Russia has rightfully assumed a restrained position with regard to what is happening inside the Saudi-US-Turkey triangle, while simultaneously trying to safeguard its own interests. During their October 25 telephone exchange, President Vladimir Putin and Crown Prince Salman bin Abdulaziz Al Saud discussed further bilateral cooperation, including in energy. According to the Kremlin press service, the two “exchanged views on the conflict in Syria and the situation in the Middle East, as well as the murder of Saudi journalist Jamal Khashoggi.” The Saudi monarch reiterated his invitation for the Russian leader to visit the kingdom.
Vladimir Putin and Saudi king last met in Moscow in October 2017. During the visit, the two countries signed an agreement which, among other things, envisaged the establishment of a joint foundation by the Russian Direct Investment Fund and the Public Investment Fund of Saudi Arabia (PIF).
Russia and Saudi Arabia can build up their economic cooperation against the backcloth of Western companies’ refusal to participate in Saudi projects.
Saudi Arabia and Western companies planned to ink a raft of multibillion contracts at the three-day Future Investment Initiative international forum, which opened on October 23 in Riyadh. However, the IMF and World Bank executives, the leaders of JPMorgan Chase, Credit Suisse, Standard Chartered, BlackRock, EL Rothschild, Blackstone, Uber, Ford Motor, as well as Virgin Hyperloop One CEO Richard Branson, who was going to sign an agreement with Riyadh, backed off on the construction and launch of high-speed vacuum trains in Saudi Arabia.
With Western businessmen absent from the investment forum, Russia’s active participation in it, as well as China’s readiness to latch on to a number of relevant projects in Saudi Arabia, was not lost on Riyadh.
Therefore, it was agreed that the sovereign investment fund of Saudi Arabia would invest $500 million into the Russian-Chinese Investment Fund (RCIF), jointly created by the Russian Direct Investment Fund (RDIF) and the China Investment Corporation, to bring the RCIF’s capital to $2.5 billion.
“Three leading sovereign funds are coming together to jointly implement investment projects. Such an arrangement will not only bring together the expertise of investors in Europe, Asia and the Middle East, but will also allow the fund’s portfolio companies to simultaneously receive support in several key markets,” the Russian Direct Investment Fund’s head Kirill Dmitriev said. He added that the Russian-Chinese Investment Fund (RCIF) would now be renamed the Russian-Chinese-Saudi Investment Fund.
Kirill Dmitriev also said that Riyadh was ready to invest around $5 billion into the construction of NOVATEK Company’s Arctic LNG 2 liquefied gas production plant, as proposed by the new Saudi Arabian Energy Minister Khalid Al-Falih.
All this is in Russia’s best interest both in terms of strengthening ties with Saudi Arabia and its partners in the Middle East and the Persian Gulf region, and of a further diversification of their own trade, economic and foreign policy priorities.
First published in our partner International Affairs
Weakness or calculation? How the pandemic undermined the US world leadership
Anyone watching the numerous doomsday movies, happily churned out by Hollywood, will see American doctors saving the planet from space-borne viruses and the plague epidemic that turn people into zombies. However, the very first serious test in a decade has shown that the US healthcare system is actually inferior even to the Russian one, created during the Cold War years. And this despite the fact, that for the past 30 years, the Russian medical system has been suffering from “optimizations,” cuts and underfunding. Moreover, while the Kremlin, even for propaganda reasons, has managed to provide real assistance to a number of European countries, and has been the first to launch a vaccine on the market, Washington’s actions can be regarded as a sign of weakness, and a very dangerous one to its allies at that.
More than a year after the start of the global lockdown, we can already sum up the initial results, which look disappointing to Washington. The US healthcare system has collapsed under the pressure, thus laying bare the country’s inability to bring the outbreak of a less-than-deadly disease under control. As for Russia, despite its lack of America’s vast resources, it still managed to win the vaccine race and become the first to come up with a viable antidote.
More importantly, Moscow has also come out on top in the information “war” with the West, with its Sputnik V vaccine proving to have far fewer side effects than its Pfizer and Moderna counterparts. Therefore, the US and British lobbying of their own vaccines, and their attempts to close the European market for the Russian vaccine look unethical, to say the least, all the more so amid numerous European media reports about people having died from side effects after being inoculated with Western vaccines. At the same time, there are simply no reports about similar complications caused by the Russian vaccine, even though the European Commission and Brussels have been keeping a close eye on the effects of its use in European countries, including Serbia and Hungary, which have already taken the first deliveries of the Sputnik V vaccine.
What is the reason for the US demonstrating its weakness? How come that in the midst of the epidemic Washington was unable to find the resources to demonstrate its readiness to lend a helping hand to its European allies? Unfortunately, one of the reasons was that the Americans simply freaked out. The truth is, the US healthcare system is rather decentralized and unorganized. People with good health insurance have little to worry about. However, in a situation of a pandemic, the US medical facilities are pretty hard to manage, so one has to do it manually. Compounded by the general atmosphere of panic and the fact that the poorest strata of society, who have no health insurance and constitute the main risk zone (obesity due to malnutrition, advanced chronic diseases and other COVID-inducing conditions), the system simply collapsed. Therefore, it is not surprising that the Trump administration tried to keep maximum resources at home. Moreover, the businessman-turned-president, who had openly spoken about “exporting security,” never missed a chance to make it clear to his allies that US assistance is never free. As a result, he was replaced by Biden, a Democrat who advocates maximum support for all democratic forces. However, Democrats usually provide moral or military support, but they have proved equally unprepared to line up any serious assistance to the countries hit the hardest by the pandemic.
Moreover, it was actually at the suggestion of the United States and the UK that the COVAX system, a global initiative aimed at providing equitable (but not free) access to COVID-19 vaccines for countries in need, stalled. It turned out (who might have guessed?) that both the US-developed Moderna and the British AstraZeneca vaccines are primarily needed by their own electorates, and only then by countries that need them, but are unable to produce their own vaccine. Meanwhile, India with a population of over 1 billion, managed to fulfill its obligations, and Russia is ready to launch the production of vaccines in Europe. However, bending under Washington’s pressure, the European Union has banned the import of Russian, Indian and Chinese vaccines, without bothering to explain the reasons for this ban.
A country, claiming world domination cannot lead in everything, of course. Therefore, it is not surprising that the healthcare systems of many European countries, like Sweden and Switzerland, are way better that what they now have in the United States. That being said, the world leader still bears full responsibility for its allies and cannot leave them to their own devices, not only in the event of a military conflict, but also in the midst of a pandemic. However, this is exactly what it did…
From our partner International Affairs
The legacy of 2020, and 2021 in the prospects of the United States and China
2020 was a crucial year because of Covid-19, which disrupted the evolution of the world order in the direction of differentiation and transformation. This is the most severe crisis the human world has faced since the Second World War.
As of 10 May 2021, According to the Hopkins University Global New Crown Epidemic Statistics Report, as of May 10, 2021 there have been 158,993,826 confirmed cases worldwide and 3,305,018 deaths.
The pandemic is like a fatal global social test. On the basis of a world order that has already undergoing a crisis, it has not only caused a pause and thus a deceleration of economic development, but it has also stepped up social division and the transfer of power from the political to the technical sphere.
Although the most experienced analysts and leading research institutions have published various reports, currently none of them can accurately predict in detail the huge impact of the pandemic on the history of the 21st century.
The pandemic, however, will bring about major changes in four areas.
Firstly, it will accelerate the general trend of global economic recession and differentiation. This is due to the currency over-issue policies adopted by several countries and to intensified domestic social polarisation. Since 2018 the global economic and financial crisis has not yet been solved. On the contrary, the crisis has only been concealed by the short-term response of monetary policy.
Secondly, the pandemic will speed up internal changes and the reorganisation of the international political and economic order precisely due to internal social differentiation. Owing to the turbulent influence of domestic and international policies, economic and political risks in fragile regions of the world will intensify or have knock-on effects.
Thirdly, the pandemic will strengthen the digital society and competition between countries in building new technologies will become more intense. The most significant impact of digital society is the silent arrival of a transparent society that exists but has no human contacts.
Fourthly, the pandemic promotes the rise of vaccine nationalism and accelerates the revival of the community value of East Asian countries, which has epochal significance from the perspective of the history of world civilisation.
The most influential political and economic event in 2020 was the US elections and the related change of Administration. The US elections represented the sharpest but also the most frustrating change in US history. Although Donald Trump lost the election, 74,216,154 citizens voted for the outgoing President.
For the United States, the change in direction cannot be seen as the advent of a resolute and determined policy along one single line, as the basic reality of the highly divided American society was not changed, but indeed strengthened due to the general election. The huge impact promoted the spread of political violence and protests in the United States.
First of all, Donald Trump lost the election, but the spectre of Trumpism has remained in the United States and even in Europe, which is generally not conducive to advancing the strategy of developing relations with China.
Secondly, the “antagonism” of the US strategy towards China has not changed radically. Trump hadopened a political-economic dispute with China. Itisparticularlynoteworthythat the younger generation of the Republican leadership isgraduallybecominghostile and negative towards China, and exertsgreatinfluence in Congress.Thisdoesnotfavours world peace.
Thirdly, if this attitude is not contained, it will lead to negative long-term impacts between high-tech decoupling and ideological competition. Finally, China’s policy towards the United States has been perfected and refined: although the government is still adopting a wait-and-see attitude, the voice of seeking cooperation and being rational and pragmatic is still the mainstream in China.
Besides the issue that China will reduce its dependence on the world and increase world’s dependence on China itself, China will reduce its dependence on traditional growth models and increase its care for social, green and environmental sustainability.
The year 2021 is proving that the focus of the analysis of global political and economic trends will still be competition between China and the United States. President Biden’s Administration still regards China as its main strategic competitor, but the methods of addressing the issue are quite different from those of Trump’s Administration. The main difference lies in the fact that President Biden focuses on solving domestic problems and does not exclude the most important issues with China.
President Biden’s Administration has adapted its strategy for China as the influence of major lobbies and interest groups – such as the US finance and military industry – on policy is constant compared to the previous Administration. Nevertheless, the Chinese factor in the chain of global interests keeps higher levels.
Indeed, voices from both parties in the US Congress calling for curbing China’s rise are also increasing.
In short, in terms of China’s policy direction, President Biden’s Administration is expected to oppose a trade war because it harms the core interests of the US business community. However, there are likely to be problems for Taiwan, Xianggang (Hong Kong), Xinjiang Weiwu’er (Uyghur), South China Sea, Xizang (Tibet), as well as other issues.
The possibility of renewed trade negotiations between China and the United States is expected to increase significantly in the future and the US strategy of constructive competition will be reformed.
Regardless of changes in Sino-US relations, China will certainly promote greater bilateral and multilateral investment cooperation, while seeking new development and shaping new models of cooperation.
The key areas which are currently the most important and noteworthy are, firstly, China’s joining the Regional Comprehensive Economic Partnership (RCEP) and seeking to adhere to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which shows that China’s top leadership has decided to continue the reform strategy of internal and external promotion.
The RCEP is a free trade agreement in the Asia-Pacific region between the ten States of the Association of South-East Asian Nations (Brunei, Cambodia, Philippines, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam) and five of their free trade partners: Australia, China, the Republic of Korea (South Korea), Japan and New Zealand. These Member States account for approximately 30% of world’s population and GDP, thus making it the largest trading bloc.
The CPTPP, instead, is a draft regional investment and regulatory treaty in which negotiations, until 2014, twelve Pacific and Asian countries participated: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the USA and Vietnam.
Indeed, between the RCEP and the CPTPP, there is not only the interconnection of the industrial chain and commonality -and more reasons for unity than differences – but also the influence of great powers’ strategic factors.
The main difference between the two is that the CPTPP has higher economic quality requirements, while the RECP is more inclusive. Secondly, the China-EU trade and investment agreement is likely to be signed, which has clear short-term interests for Europe and long-term strategic interests for China. China, however, still needs to take a cautious attitude towards European policy and its legal systems based on double standards. Thirdly, China and Russia are strengthening comprehensive strategic cooperation and there will be new opportunities for their cooperation in the energy and military sectors.
Why Congress should be rough on Chris Miller at his testimony on Wednesday
FBI director Chris Wray’s weak congressional testimony in March left most of the Capitol attack questions unanswered and most of us scratching our heads: if the chiefs of the intelligence agencies don’t know, then who does?
As I argued back in March, before Senate Wray picked the low hanging fruit questions — such as confirming that the Trump mob that stormed the Capitol was indeed Trump’s mob and not some other people — while conviniently glazing over the real questions.
This is why the congressional testimony by former acting Secretary of Defense, Chris Miller, this Wednesday matters. The national guard mystery is still the elephant in the room that’s still sitting in the corner in loud, deafening silence.
The House Oversight and Reform Committee has been looking for answers from federal intelligence agencies on Trump’s role in the Capitol insurrection since day one. They have knocked on pretty much any door they could think of, requesting information from sixteen offices in total. That brings us to Wednesday when the Committee will hear from Chris Miller, as well as Jeff Rosen, former acting Attorney General, and Robert Contee III, District of Columbia Police Chief, in a hearing titled “The Capitol Insurrection: Unexplained Delays and Unanswered Questions.”
Back in March, when Senate grilled Wray, the FBI director could not answer why the national guard was not sent in to quell the attack. Wray vaguely put the decision on local policy makers, conveniently circumventing federal responsibility.
Then months later, defense officials actually stated that the national guard was delayed for reasons of “optics” and worries over how it would look if Trump’s mob was pushed out forcefully, as they should’ve been. Miller dragged his feet for hours before giving the green light, as he wanted to imagine what exactly the national guard’s intervention will look like. The actual deployment took only 20 minutes, logistically speaking.
Miller has already spoken about Trump’s “cause and effect” words responsible for inciting the Capitol attacks. And some commentators like Sarah Burris at Raw Story already predict that Miller is about to throw Trump under the bus on Wednesday.
But that’s not enough. Where was Miller back then? The delay was his decision and no one else’s. The Congressmen and Congresswomen of the House Oversight and Reform Committee chaired by Congresswoman Carolyn Maloney, should not go easy on Miller only because now, after the fact, he is willing to speak up against Trump. Now it’s easy. Now it doesn’t count.
Trump removed Secretary of Defense Esper over his objection to sending the national guard on the Black Lives Matter movement that sparked up exactly one year ago. That’s why Trump replaced Esper with Miller. Miller could have also said no to Trump but he played along. That’s why Miller doesn’t get to play hero now. There are no heroes in the Trump Administration’s aftermath. Some “cause and effect” talk and hypocritical outrage after the fact don’t count. Now doesn’t count. The House Oversight and Reform Committee shouldn’t buy this. The time for cheap spins and late awakened conscience is up. Now is the time for real answers. Miller and Rosen should get a rough ride on Wednesday. Anything else would not be acceptable.
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