Saudi sports diplomacy is proving to be a mirror image of the kingdom’s challenged domestic, regional and foreign policies.
Overlorded by sports czar Turki al-Sheikh, Saudi sports diplomacy, like the kingdom’s broader policies, has produced at best mixed results, suggesting that financial muscle coupled with varying degrees of coercion does not guarantee success.
Mr. Al-Sheikh, a 37-year old brash and often blunt former honorary president of Saudi soccer club Al Taawoun based in Buraidah, a stronghold of religious ultra-conservatism, and a former bodyguard of crown prince Mohammed bin Salman, is together with Saud al-Qahtani among the king-in-waiting’s closest associates.
Prince al-Waleed bin Talal, one of the kingdom’s wealthiest investors, acknowledged Mr. Al-Sheikh’s ranking in the Saudi hierarchy when he made a donation of more than a half-million dollars to Saudi soccer club Al Hilal FC weeks after having been released from detention.
Prince al-Waleed was one of the more recalcitrant detainees among the scores of members of the ruling family, prominent businessmen and senior officials who were detained a year ago in Riyadh’s Ritz Carlton Hotel as part of Prince Mohammed’s power and asset grab.
Prince Al-Waleed said on Twitter at the time that he was “responding to the invitation of my brother Turki al-Sheikh.”
Mr. Al-Qahtani, who was recently fired as Prince Mohammed’s menacing information czar in connection with the killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul, was banned this week from travelling outside the kingdom. Mr. Al-Sheikh has not been linked to the Khashoggi murder.
Nevertheless, his sports diplomacy, exhibiting some of the brashness that has characterized Prince Mohammed as well as Mr Al-Qahtani’s approach, has largely failed to achieve its goals. If anything, it appears to have contributed to the kingdom’s growing list of setbacks.
Those goals included establishing Saudi Arabia as a powerhouse in regional and global soccer governance; countering Qatari sports diplomacy crowned by its hosting of the 2022 World Cup; projecting the kingdom in a more favourable light by hosting international sporting events; becoming a powerhouse in soccer-crazy Egypt, the Arab world’s most populous nation; and using the competition for the 2026 World Cup hosting rights to bully Morocco into supporting the Saudi-United Arab Emirates-led boycott of Qatar.
To be sure, with the exception of a cancelled tennis exhibition match in Jeddah between stars Rafa Nadal and Novak Djokovic, most scheduled sporting events, including this season’s opening Formula E race in December and the Italian Supercoppa between Juventus and AC Milan in January, are going ahead as planned despite a six-week old crisis sparked by the killing of Mr. Khashoggi.
Yet, if last month’s friendly soccer match in Jeddah between Brazil and Argentina and this month’s World Wrestling Entertainment’s (WWE) Crown Jewel showpiece are anything to go by, major sporting events are doing little to polish the kingdom’s image tarnished not only by the Khashoggi killing but also the war in Yemen that has sparked the world’s worst humanitarian crisis since World War Two. The sports events have so far failed to push Mr. Khashoggi and Yemen out of the headlines of major independent media.
Mainstream media coverage of Saudi sports has, moreover, focussed primarily on Saudi sports diplomacy’s struggle to make its mark internationally. One focus been the fact that Gianni Infantino, president of world soccer body FIFA, has run into opposition from the group’s European affiliate, UEFA, to his plan to endorse a US$25 billion plan for a new club tournament funded by the Saudi and UAE-backed Japanese conglomerate SoftBank.
If adopted, the plan would enhance Saudi and Emirati influence in global soccer governance to the potential detriment of Qatar, the host of the 2022 World Cup. Saudi Arabia and the UAE spearhead a 17-month old economic and diplomatic boycott of Qatar designed to force it to surrender its right to chart an independent course rather than align its policies with those of its Gulf brothers.
Saudi Arabia and the UAE have sought to engineer a situation in which Qatar is either deprived of its hosting rights or forced to share them with other states in the region, a possibility Mr. Infantino has said he was exploring.
Mr. Infantino has also said he was looking into implementing an expansion of the World Cup from 32 to 48 teams already in 2022 rather than only in 2026. An expansion of the Qatari World Cup would probably involve including others in the Gulf as hosts of the tournament. Qatari officials have all but ruled out sharing their hosting rights.
Another media focus has been alleged Saudi piracy aimed at undermining Qatar-owned BeIN Corp, the world’s biggest sports rights holder, including the rights to broadcast last summer’s Russia World Cup in the Arab world.
Mr. Al-Qahtani reportedly played a key role in the sudden emergence of BeoutQ, a bootleg operation beamed from Riyadh-based Arabsat that ripped live events from BeIN’s feed and broadcast the games without paying for rights. The Saudi government has denied any relationship to the pirate network.
The piracy has sparked international lawsuits, including international arbitration in which BeIN is seeking US1 billion in damages from Saudi Arabia. The company has also filed a case with the World Trade Organization.
FIFA has said it has taken steps to prepare for legal action in Saudi Arabia and is working alongside other sports rights owners that have been affected to protect their interests.
Mr. Al-Sheikh’s effort to create with funds widely believed to have been provided by Prince Mohammed an international Saudi sports portfolio that would project the kingdom as a regional power broker collapsed with fans, players and club executives in Egypt furious at the Saudi officials buying influence and using it to benefit Saudi rather than Egyptian clubs.
“No one, no one at all — with all due respect to Turki or no Turki … will be allowed to interfere in the club’s affairs,” said Mahmoud el-Khatib, chairman of Egyptian club Al Ahli SC, one of the Middle East’s most popular clubs with an estimated 50 million fans. Mr. Al-Sheikh had unsuccessfully tried to use his recently acquired honorary chairmanship of Al Ahli to take control of the club.
Al Ahli’s rejection of his power grab persuaded Mr. Al-Sheikh to resign in May and instead bankroll Al Ahli rival Pyramid FC. He invested US$33 million to acquire three top Brazilian players and launch a sports channel dedicated to the team.
The club’s fans, like their Al Ahli counterparts, nonetheless, denounced Mr. Al-Sheikh and the kingdom and insulted the Saudi official’s mother in crass terms during a match in September. Mr. Al-Sheikh decided to abandon his Egyptian adventure after President Abdel Fattah el-Sisi ignored his request to intervene. “Strange attacks from everywhere, and a new story every day. Why the headache?” Mr Al-Sheikh said on Facebook.
Mr. Al-Sheikh’s attempt to form a regional powerbase by creating a breakaway group of South Asian and Middle Eastern soccer federations beyond the confines of FIFA and the Asian Football Confederation (AFC) collapsed five months after the formation of the South-West Asian Football Federation (SWAFF) when seven South Asian nations pulled out with immediate effect.
The collapse of SWAFF and Mr. Al-Sheikh’s withdrawal from Egypt were preceded by his backing of the US-Canadian-Mexican bid for the 2026 World Cup against Morocco after he failed to bully the North Africans into supporting the boycott of Qatar.
Adopting a Saudi Arabia First approach, Mr. Al-Sheikh noted that the United States “is our biggest and strongest ally.” He recalled that when the World Cup was played in 1994 in nine American cities, the US “was one of our favourites. The fans were numerous, and the Saudi team achieved good results.”
That was Mr. Al-Sheikh’s position six months ago. Today, men like Prince Mohammed and Messrs. Al-Sheikh and Al-Qahtani are seething. US President Donald J. Trump is proving to be an unreliable ally. Not only is he pressuring the kingdom to come up with a credible explanation for Mr. Khashoggis’ killing, Mr. Trump is also seemingly backtracking on his promise to bring Iran to its knees by imposing crippling economic sanctions.
Saudi distrust is fuelled by the fact that Mr. Trump first asked the kingdom to raise oil production to compensate for lower crude exports from Iran and then without informing it made a 180-degree turn by offering buyers generous waivers that keep Iranian crude in the market instead of drive exports from Riyadh’s arch-rival down to zero.
Seemingly cut from the same cloth as Prince Mohammed, Mr. Al-Sheikh, drew his pro-American definition of Saudi Arabia First from the crown prince’s focus on the United States. Prince Mohammed, Mr. Al-Sheikh and other senior Saudi officials may be considering whether putting the kingdom’s eggs primarily in one basket remains the best strategy.
Whatever the case, Mr. Al-Sheikh’s sweep through regional and global sports has left Saudi leaders with little to leverage in the kingdom’s bid to pick up the pieces and improve its image tarnished first and foremost by Mr. Khashoggi’s killing but also by the trail the sports czar has left behind.
Battling for the Future: Arab Protests 2.0
Momentous developments across Arab North and East Africa suggest the long-drawn-out process of political transition in the region as well as the greater Middle East is still in its infancy.
So does popular discontent in Syria despite eight years of devastating civil war and Egypt notwithstanding a 2013 military coup that rolled back the advances of protests in 2011 that toppled Hosni Mubarak and brought one of the country’s most repressive regimes to power.
What developments across northern Africa and the Middle East demonstrate is that the drivers of the 2011 popular revolts that swept the region and forced the leaders of Egypt, Tunisia, Libya and Yemen to resign not only still exist but constitute black swans that can upset the apple cart at any moment.
The developments also suggest that the regional struggle between forces of change and ancien regimes and militaries backed by the United Arab Emirates and Saudi Arabia is far from decided.
If anything, protesters in Algeria and Sudan have learnt at least one lesson from the failed 2011 results: don’t trust militaries even if they seemingly align themselves with demonstrators and don’t surrender the street until protesters’ demands have been fully met.
Distrust of the military has prompted an increasing number of Sudanese protesters to question whether chanting “the people and the army are one” is still appropriate. Slogans such as “freedom, freedom” and “revolution, revolution” alongside calls on the military to protect the protesters have become more frequent.
The protests in Algeria and Sudan have entered a critical phase in which protesters and militaries worried that they could be held accountable for decades of economic mismanagement, corruption and repression are tapping in the dark.
With protesters emboldened by their initial successes in forcing leaders to resign, both the demonstrators and the militaries, including officers with close ties to Saudi Arabia and the UAE, are internally divided about how to proceed.
Moreover, neither side has any real experience in managing the crossroads at which they find themselves while it is dawning on the militaries that their tired playbooks are not producing results.
In a telling sign, Sudan’s interim leader Abdel Fattah Abdelrahman Burhan praised his country’s “special relationship” with Saudi Arabia and the UAE as he met this week with a Saudi-Emirati delegation at the military compound in Khartoum, a focal point of the protests.
Saudi Arabia has expressed support for the protests in what many suspect is part of an effort to ensure that Sudan does not become a symbol of the power of popular sovereignty and its ability to defeat autocracy.
The ultimate outcome of the dramatic developments in Algeria and Sudan and how the parties manoeuvre is likely to have far-reaching consequences in a region pockmarked by powder kegs ready to explode.
Mounting anger as fuel shortages caused by Western sanctions against Syria and Iran bring life to a halt in major Syrian cities have sparked rare and widespread public criticism of president Bashar al-Assad’s government.
The anger is fuelled by reports that government officials cut in line at petrol stations to fill up their tanks and buy rationed cooking gas and take more than is allowed.
Syria is Here, an anonymous Facebook page that reports on economics in government-controlled areas took officials to task after state-run television showed oil minister Suleiman al-Abbas touring petrol stations that showed no signs of shortage.
“Is it so difficult to be transparent and forward? Would that undermine anyone’s prestige? We are a country facing sanctions and boycotted. The public knows and is aware,” the Facebook page charged.
The manager of Hashtag Syria, another Facebook page, was arrested when the site demanded that the oil ministry respond to reports of anticipated price hikes with comments rather than threats. The site charged that the ministry was punishing the manager “instead of dealing with the real problem.”
Said Syrian journalist Danny Makki: “It (Syria) is a pressure cooker.”
Similarly, authorities in Egypt, despite blocking its website, have been unable to stop an online petition against proposed constitutional amendments that could extend the rule of President Abdel Fattah el-Sisi until 2034 from attracting more than 320,000 signatures as of this writing.
The petition, entitled Batel or Void, is, according to Netblocks, a group that maps web freedom, one of an estimated 34,000 websites blocked by Egyptian internet service providers in a bid to stymie opposition to the amendments.
Mr. El-Sisi is a reminder of how far Arab militaries and their Gulf backers are potentially willing to go in defense of their vested interests and willingness to oppose popular sovereignty.
Libyan renegade Field Marshall Khalifa Belqasim Haftar is another, Mr. Haftar’s Libyan National Army (LNA) is attacking the capital Tripoli, the seat of the United Nations recognized Libyan government that he and his Emirati, Saudi, and Egyptian backers accuse of being dominated by Islamist terrorists.
The three Arab states’ military and financial support of Mr. Haftar is but the tip of the iceberg. Mr. Haftar has modelled his control of much of Libya on Mr. El-Sisi’s example of a military that not only dominates politics but also the economy.
As a result, the LNA is engaged in businesses ranging from waste management, metal scrap and waste export, and agricultural mega projects to the registration of migrant labour workers and control of ports, airports and other infrastructure. The LNA is also eyeing a role in the reconstruction of Benghazi and other war-devastated or underdeveloped regions.
What for now makes 2019 different from 2011 is that both sides of the divide realize that success depends on commitment to be in it for the long haul. Protesters, moreover, understand that trust in military assertions of support for the people can be self-defeating. They further grasp that they are up against a regional counterrevolution that has no scruples.
All of that gives today’s protesters a leg up on their 2011 counterparts. The jury is out on whether that will prove sufficient to succeed where protesters eight years ago failed.
As Marsha Lazareva languishes in jail, foreign businesses will “think twice” before investing in Kuwait
IF THERE IS one thing to glean from the case of Marsha Lazareva, it’s that foreign businesses must now think very carefully before investing in Kuwait.
For more than a year, Lazareva, who has a five-year-old son and is one of Russia’s most successful female investors in the Gulf, has been held in the Soulabaiya prison by Kuwaiti authorities. Those authorities claim she ‘stole’ half a billion dollars, a claim she strenuously denies.
Human rights groups and prominent officials, including the former FBI director, Louis Freeh, and Jim Nicholson, former Chairman of the Republican Party and former US Ambassador to the Vatican, have called for her release and expressed concerns about the apparent absence of due process in a country where Lazareva has worked for over 13 years. Both Freeh and Nicholson visited Kuwait in recent weeks with Neil Bush, son of the late President George H. W. Bush. Bush has said Lazareva’s incarceration ‘threatens to darken relations between the U.S. and Kuwait, two countries that have enjoyed a long and prosperous relationship.’
Russian officials have been equally concerned. Vladimir Platonov, the President of the Moscow Chamber of Commerce and Industry, confirmed that a single witness gave testimony in Kuwaiti court, and only for the prosecution. ‘I myself worked in prosecution for more than eight years, and I cannot imagine any judge signing off on an indictment like this,’ he said. ‘One fact of particular note is that Maria was given 1,800 pages of untranslated documents in Arabic.’
Serious questions surrounding the safety and future viability of investing in Kuwait are now being raised. Through The Port Fund, a private investment company managed by KGL Investment, Lazareva has contributed hundreds of millions of dollars to local infrastructure and economic development projects during her time in the country. Until 2017, when a Dubai bank froze $496 million without cause, she had worked largely unobstructed.
But as things stand, more foreign investment is unlikely to be forthcoming. Jim Nicholson has said that the ‘imprisonment and harassment’ of Lazareva ‘threatens’ U.S. support. adding that the ‘willingness of the U.S. to do business with Kuwait’ is based on ‘its record as a nation that respects human rights and the rule of law’. Mark Williams, the investment director of The Port Fund and a colleague of Lazareva’s, has called on international investors to ‘think twice before doing business in this country’.
These comments will surely concern the Kuwaiti government, who said last year that FDI was ‘very crucial’ to the success of its Kuwait Vision 2035 road map. In September 2018, the FTreported that the government planned to reverse its traditional position as an investor in order to diversify its economy, carrying out a series of reforms designed to facilitate foreign investment and assist investors.
But despite these changes, which have propelled Kuwait to 96th—higher than the Middle East average—in the World Bank’s ‘Ease of Doing Business’ report, investors may be unwilling to take the risk so long as Lazareva remains in jail. Lazareva’s lawyers have accused Kuwait of violating international law by breaching a long-standing bilateral investment treaty with Russia. Lord Carlile of Berriew, QC has brought the case to the attention of the British public and the EU, writing in The Times that ‘there is no evidential basis to justify any claim of dishonesty, corruption or any other criminal wrong’. He added: ’Anyone thinking of doing business in Kuwait should read on with mounting concern.’
What’s worth remembering is that Kuwait is an important, long-standing ally of the UK, and a country generally seen as stable and fair. It is equally a major non-NATO ally of the United States, where there are more than 5,000 international students of Kuwaiti origin in higher education. But these relationships, and the investment to which they have historically led, have been cast into doubt. And it now seems certain that relations will continue to sour so long as Marsha Lazareva languishes in Soulabaiya.
Economic reform in the Gulf: Who benefits, really?
For Gulf leaders, long-overdue economic reforms were never going to be easy.
Leaders like the crown princes of Saudi Arabia and the United Arab Emirates, Mohammed bin Salman and Mohammed bin Zayed, quickly discovered that copying China’s model of economic growth while tightening political control was easier said than done. They realised that rewriting social contracts funded by oil wealth was more difficult because Gulf Arabs had far more to lose than the average Chinese. The Gulf states’ social contracts had worked in ways China’s welfare programmes had not. The Gulf’s rentier state’s bargain—surrender of political and social rights for cradle-to-grave welfare—had produced a win-win situation for the longest time.
Moreover, Gulf leaders, struggling with mounting criticism of the Saudi-UAE-led war in Yemen and the fall-out of the killing of journalist Jamal Khashoggi, also lacked the political and economic clout that allowed China to largely silence or marginalise critics of its crackdown on Turkic Muslims in the troubled northwestern province of Xinjiang.
The absence of a welfare-based social contract in China allowed the government to power economic growth, lift millions out of poverty, and provide public goods without forcing ordinary citizens to suffer pain. As a result, China was able to push through with economic reforms without having to worry that reduced welfare benefits would spark a public backlash and potentially threaten the regime.
Three years into Mohammed bin Salman’s Vision 2030 blueprint for diversification of the economy, Saudi businesses and consumers complain that they are feeling the pinch of utility price hikes and a recently introduced five per cent value-added tax with little confidence that the government will stay the course to ensure promised long-term benefit.
The government’s commitment to cutting costs has been further called into question by annual handouts worth billions of dollars since the announcement of the reforms and rewriting of the social contract to cushion the impact of rising costs and quash criticism.
In contrast to China, investment in the Gulf, whether it is domestic or foreign, comes from financial, technology and other services sector, the arms industry or governments. It is focused on services, infrastructure or enhancing the state’s capacities rather than on manufacturing, industrial development and the nurturing of private sector.
With the exception of national oil companies, some state-run airlines and petrochemical companies, the bulk of Gulf investment is portfolios managed by sovereign wealth funds, trophies or investment designed to enhance a country’s prestige and soft power.
By contrast, Asian economies such as China and India have used investment fight poverty, foster a substantial middle class, and create an industrial base. To be sure, with small populations, Gulf states are more likely to ensure sustainability in services and oil and gas derivatives rather than in manufacturing and industry.
China’s $1 trillion Belt and Road initiative may be the Asian exception that would come closest to some of the Gulf’s soft-power investments. Yet, the BRI, designed to alleviate domestic overcapacity by state-owned firms that are not beholden to shareholders’ short-term demands and/or geo-political gain, contributes to China’s domestic growth.
Asian nations have been able to manage investors’ expectations in an environment of relative political stability. By contrast, Saudi Arabia damaged confidence in its ability to diversify its oil-based economy when after repeated delays it suspended plans to list five per cent of its national oil company, Saudi Arabian Oil Company, or Aramco, in what would have been the world’s largest initial public offering.
To be sure, China is no less autocratic than the Gulf states, while Hindu nationalism in India fits a global trend towards civilisationalism, populism and illiberal democracy. What differentiates much of Asia from the Gulf and accounts for its economic success are policies that ensure a relatively stable environment. These policies are focused on social and economic enhancement rather than primarily on regime survival. That may be Asia’s lesson for Gulf rulers.
Author’s note: first published in Firstpost
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