As Saudi Arabia’s Crown Prince, Mohammad bin Salman (MbS) wraps up his week-long tour of Pakistan, India and China, many have been left contemplating the implications of his travels in light of the region’s evolving geo-politics. For Western observers, MbS’s attempts at shoring up Saudi Arabia’s alliances with these states are being seen as an attempt at shifting Riyadh’s focus eastwards as an alternative to his ties to the West. This ‘pivot to Asia’ has been further characterized as the result of MbS being snubbed and sidelined by Western powers as part of the condemnation and fallout resulting from the death of dissident journalist Jamal Khashoggi. As evident from his interactions (or lack thereof) with world leaders at the G20 Summit held in Buenos Aires last November, the more immediate objective of this visit appears as an attempt to disassociate the crown prince from the personal ignominy he faced at the summit.
However, looking beyond the timing and contextual background of MbS’s current standing in the West, there exist a broad range of long-term objectives which Riyadh appears to be working towards within the ambit of the crown prince’s ‘Vision 2030.’ While Western media outlets have termed this tour as MbS’s attempts at bolstering and re-affirming his relevance as the Middle East’s premier strongman, the Crown Prince’s statements otherwise suggest a clear acknowledgment of the shifting strategic and economic dynamics of Asia vis-à-vis the rest of the world.
His focus has thus not only been on consolidating and re-affirming past relationships such as with Pakistan, but also on laying the foundations of key trade and economic partnerships with India and China. In the case of the latter two, these partnerships are understandably based on the growing energy needs of two of the world’s fastest growing economies. This in turn bears both economic and strategic implications, especially considering how both China and India are also two of the largest importers of oil from the Kingdom’s arch-rival, Iran.
Hence, out of the key agreements signed during the Crown Prince’s tour, the most salient investments that stand out are the ones aimed at developing long-standing partnerships around the three countries’ expanding energy sectors. In China, this entails the $10 billion refinery and petrochemical complex to be developed jointly by Saudi Aramco and Norinco in the Chinese city of Panjin. In India, there is the $44 billion refinery being built in Ratnagiri, Maharashtra in which Saudi Aramco holds a joint 50% stake with the Abu Dhabi National Oil Company. And in Pakistan there is the $10 billion oil refinery planned for Gwadar, a key component of the China Pakistan Economic Corridor (CPEC) and China’s Belt and Road Initiative (BRI).
All of these investments represent Saudi Arabia’s attempts at building more long-term economic ties in line with the growing energy needs of these countries. The scale of these investments, along with the crown prince’s own statements given during this tour mark the stark reality that it is Asia rather than the West that is to serve as an increasingly important market for the Middle East’s energy supplies in the years to come. Even in the case of Pakistan, whose economic capacity for large investments pales in comparison to the economies of China and India, the Saudi Crown Prince was unequivocal in stating that Saudi investments in Pakistan were representative of his firm belief that Pakistan is to play an increasingly important role in the region’s future.
This role is likely to emanate directly from the key geo-economic and geo-strategic position Pakistan holds as part of China’s Belt and Road Initiative. Hence, out of all the investments in energy outlined above, the recently announced Saudi investment in Gwadar holds immense significance within the region’s broader strategic and economic dynamics. It is in effect a clear indication of Saudi Arabia’s willingness to play a more prominent role within the BRI framework set by President Xi Jinping,
This however does come with its own set of implications for China. On the one hand, China is actively looking for external investors and sources of funding to help shoulder the risks and liabilities being incurred by BRI projects. On the other hand, China’s ties with Iran both within and outside the BRI framework, would require it to carefully balance its relationship between both countries. China’s willingness to engage with Saudi Arabia under the ambit of the BRI is also likely to be determined by the extent to which Riyadh is willing to do business beyond its attempts at isolating Iran. This would in turn also be determined by the extent to which Saudi Arabia’s long and historic ties with the US play into its equation with respect to both China and Iran.
At present, both Saudi Arabia and the US are equally aligned on the issue of Iran. As US sponsored sanctions against the import of Iranian oil begin to gradually take effect, for Saudi Arabia there in lie the benefits of economically isolating Iran while filling the resulting supply gap with Saudi crude. Based on these dynamics however, even though India may be more amenable to US pressures on curbing its imports of Iranian oil, China remains a completely different story.