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As Marsha Lazareva languishes in jail, foreign businesses will “think twice” before investing in Kuwait

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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.

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The Changing Political Dynamics of the Middle East

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It is often said that the politics of the Middle East is as clear as mud. The fresh events that unfolded in the region indicate the significance of this assumption. The strict and hyper-strategic alliances that characterized the region during the Cold War are now vanishing as a new order seems to emerge that is much more hybrid, unpredictable, and pragmatic. With Russia’s invasion of Ukraine, the Middle Eastern states are keen on keeping their distance as they refuse to take sides. The dynamics were quite opposite in the Cold War era and during the unstable period that dominated the region afterward. The shift evident in the region today is thoroughly complex and complicated but it is different from the Cold War period.

The Middle East was a playground for the two dominant sides during the Cold War. It was subjected to major foreign invasions and large-scale conflicts. The Iranian Revolution in 1979 added further spices to the bitter Saudi-Iran rivalry and the race continued throughout the war. Unlike other parts of the world, the post-Cold War era was even further devastating for the Middle East as Arab Spring ignited some of the world’s deadliest conflicts. The wars in Yemen, Syria, and other countries portray the arch rivalry of global and regional players to dominate the region. However, today it seems that the major actors in all these conflicts are tired and fatigued. As the regional crisis meets dead ends, a new geo-political environment is emerging in the Middle East.

In the last few months, the two major powers, the United States and Russia have focused comprehensively on the Middle East as it is a major economic and strategic zone. The trilateral summit between Iran, Russia, and Turkey and the American-Arab summit held in Jeddah demonstrate the efforts. The summit in Jeddah signaled a divergence and lack of trust between the United States and its partners in the region. Unlike the previous talks, the environment lacked confidence and the actors could not agree on most of the views. It was more of a stage to blame each other as the Saudi Prince defended himself against the opprobrium of Biden by mentioning the war crimes committed by the United States in Iraq. Riyadh and Cairo also questioned the strategic competency and power of the United States given its humiliating withdrawal from Afghanistan and Iraq. President Biden also tried to convince and pressurize Saudi Arabia, the United Arab Emirates, and Egypt to cut off all ties with Russia and cease all cooperation. Although increasing oil production was agreed upon but no party indicated to stop dealing with Russia on trade and energy. More surprisingly, Israel, Washington’s closest ally in the region has also shown a diversion from following the orders of the United States. It is a tipping point in history where it seems that the United States has lost its hegemony in the Middle East, and it has become a client state of the Saudis. The events delivered a clear message that countries in the Middle East only want America’s aid and arms, not its advice.

In the same way, another important ally of the United States in the region, Turkey has been following a hybrid model for quite a time. The trilateral summit held in Tehran was a milestone in strengthening Turkey’s ties with Russia and Iran. Turkey has even proposed arms sales to Iran which shows a clear diversion from a major NATO member. Turkey has also turned towards Russia to attain the S-400 system after NATO refused to sell the air defense system. More importantly, Saudi Arabia has also shown the intention to get the system from Moscow. As is the case with other states, Iran is also keen on building good ties with China and Russia. The country is collaborating with the European nations to reestablish the Nuclear Deal on acceptable terms. Despite having disagreements over most of the issues, Iran and Saudi Arabia are involved in diplomatic talks to de-escalate the tensions in the region. MBS is looking for diplomatic accommodations with Iran to help the region in development through trade. While speaking with CNN, Saudi Foreign Minister Faisal bin Farhan Al Saud said that they are hoping for a kind response from Iran in order to build a diplomatic solution. He favored giving incentives to Iran on the negotiations table to have a peaceful future in the region. UAE’s normalization of ties with the Assad regime in Syria and exit from the war in Yemen also indicate the concerns of the major powers in the region about the instability. It is indeed the beginning of a changing regional order in the Middle East where the Cold War model is evaporating.

In short, the changes undergoing in the Middle East do not look similar to the hyper and rigid order during the Cold War. More governments in the region are opting for hyper, hybrid, and pragmatic policies that favor their national interests and regional stability over the benefits of foreign powers. The Middle East is a powerhouse of the world and the shifting plates in the region would surely influence world politics. It is still unsure so make predictions about the future since the ongoing situation is very complicated and complex. The political dynamic of the Middle East is unpredictable and it will further complicate global affairs. What might come next is a mystery and where the next explosion would occur is a sheer guess.

To conclude, the world seems to be changing now as China is threatening the position of the United States and the resurgence of Russia is a clear challenge to the dominance of the United States. In such an uncertain environment, the Middle East is a center of gravity for the “haves” of the world. President Biden’s visit to the region and the trilateral talks between Russia, Iran, and Turkey mark the significance of dominating the region today. An evaluation of the recent events portrays that the rigid and hypersensitive environment of the Middle East is converting into a hybrid, pragmatic, and unpredictable domain. The divergence of the allies of the United States in the region from the dictated course and tilt towards Russia signals a tectonic shift. Iran’s involvement in the affairs is another point of importance to decide the future of the region. It is impossible to correctly predict the rapid changes in the Middle East, however, the years ahead are surely of vital significance.

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Winter sports in Saudi Arabia? An unproven concept except for the surveillance aspect

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Temperatures in north-western Saudi Arabia, on average, seldom, if ever, drop below eight degrees Celsius except in the 2,400-metre high Sarawat mountains, where snow falls at best occasionally. However, that hasn’t prevented Crown Prince Mohammed bin Salman from envisioning Saudi Arabia as competing for winter sports tourism.

The kingdom would do so by including winter sports in Mr. Bin Salman’s US$500 billion Neom fantasia, a futuristic new city and tourism destination along the Red Sea in a mostly unpopulated part of the kingdom.

In the latest mind-boggling Neom-related announcement, Saudi Arabia’s Olympic committee said it was bidding to host the 2029 Asian Winter Games in the city, essentially still a project on paper that has a science-fiction feel to it in a country that has no winter sports facilities and whose plans so far envisioned only ones that would be indoors.

The games would be held at Trojena, a yet-to-be-built resort on mountain peaks overlooking Neom slated to be home to 7,000 people by 2026 and annually attract 700,000 visitors. Trojena would be the Gulf’s first outdoor ski resort.

Powered by renewable energy, Trojena expects to create an outdoor ski slope by blasting artificial snow at the mountains.

Plans for the resort also include a ski village, luxurious family and wellness facilities, the region’s largest freshwater lake, and an interactive nature reserve. Trojena would also feature a yoga retreat and an art and entertainment residency.

Executive director Philip Gullett predicts that Trojena will offer a “seamless travel experience” in which “we are looking into delivering luggage via drones, using biometrics to fulfill security requirements, and allowing interested parties to explore the site first using the latest virtual reality.”

In Mr. Gullet’s anticipation, visitors will be able to scuba dive, ski, and hike or climb, all on the same day.

At least 32 Asian nations compete in the Asian games that include alpine skiing, ice hockey, biathlon, cross-country skiing, and figure skating competitions.

To be fair, Saudi Arabia sent its first winter Olympics team to the Beijing games in February, where Fayik Abdi ranked number 44 in the men’s giant slalom.

The winter sports bid is part of a big-splash Saudi effort to establish itself as the Gulf’s foremost player in international sports, a position so far occupied by Qatar with its hosting of this year’s World Cup and the United Arab Emirates that, like Qatar, owns one of the world’s top European soccer clubs.

Saudi Arabia recently bought English Premier League club Newcastle United and sparked controversy by attracting with vast sums of money some of the world’s top golf players to compete in a new tournament that kicked off in one of former US President Donald J. Trump’s resorts.

Tiger Woods reportedly turned down a US$700 to 800 million offer to join the Saudi-backed LIV Golf Invitational Series. However, others, including Greg Norman, Phil Mickelson, Dustin Johnson, and Bryson DeChambeau, have jumped on the Saudi bandwagon.

Saudi Arabia has also signed a 10-year, $650m deal for a Formula One motor racing event, partnered with World Wrestling Entertainment for annual shows, and hosted the world heavyweight championship rematch between Anthony Joshua and Andy Ruiz.

Less than a year after signing with Qatar-owned Paris Saint-Germain, soccer superstar Lionel Messi has emerged as the tourism ambassador for the Saudi Red Sea port of Jeddah.

Families of activists and dissidents imprisoned in Saudi Arabia unsuccessfully tried to persuade Mr. Messi not to engage with the kingdom. “If you say ‘yes’ to Visit Saudi, you are in effect saying yes to all the human rights abuses that take place today in modern Saudi Arabia,” they said in a letter to the player.

A Saudi national and former Twitter employee is currently on trial in the United States for spying for the kingdom on Saudi users of the social media platform.

Areej Al-Sadhan said the information potentially provided by the former employee may have led to the arrest of her brother Abdulrahman Al-Sadhan because of his satiric social media posts. Mr. Al-Sadhan was tortured and sentenced to 20 years in prison.

Saudi officials killed journalist Jamal Khashoggi in Istanbul in 2018 in what the kingdom has said was an unauthorized rogue operation. However, others, including US intelligence, assert that it was anything but.

Adding to Neom’s futurism, Saudi sources said last month that the city, funded by the kingdom’s sovereign wealth fund, the Public Investment Fund, would be home to the world’s largest buildings, twin 500-metre-tall skyscrapers dubbed The Line that would stretch horizontally for dozens of miles.

By 2030, Mr. Bin Salman expects some 1.5 million people to live in the skyscrapers.

Everything about Neom…seems fantastical. From flying elevators to 100-mile long skyscrapers to a floating, zero-carbon port, it seems to owe more to Coruscant and Wakanda than to any urban forms outside of science fiction,” said Bloomberg columnist David Fickling, referring to Star Wars’ city-covered planet and Fantastic Four’s fictional country in East Africa.

In Mr. Bin Salman’s mind, Neom – derived from the Latin word neo for new and the first letter of the Arabic word for future, Mustaqbal, and built with advanced smart city technologies — will likely not only be an example of artificial intelligence increasing life’s conveniences but also the creation of the perfect surveillance state.

Speaking to Bloomberg in 2017, Mr. Bin Salman envisioned residents and visitors managing their lives with just one app. Neom, Mr. Bin Salman said the city would have no supermarkets because everything would be delivered.

“Everything will have a link to artificial intelligence, to the Internet of Things – everything. Your medical file will be connected with your home supply, with your car, linked to your family, linked to your other files, and the system develops itself in how to provide you with better things,” Mr. Bin Salman envisioned.

“Today all the clouds available are separate – the car is by itself, the Apple watch is by itself, everything is by itself. There, everything will be connected. So, nobody can live in Neom without the Neom application we’ll have – or visit Neom,” he added.

Mr. Bin Salman’s vision of Saudi Arabia as the world’s latest top-of-the-line winter sports destination attracts headlines but has yet to be proven as a concept. That is true for much of the futurism embedded in plans for Neom except for the surveillance state – that is already a reality in various parts of the world.

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How Russia’s Policy in the Middle East and North Africa is Changing After February 24

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Image source: Ministry of Foreign Affairs, Saudi Arabia

U.S. President Joe Biden has now visited the Middle East, and this week, President of Russia Vladimir Putin also pays a visit to Iran, where he is expected to hold trilateral meetings with President of Iran Ebrahim Raisi and President of Turkey Recep Tayyip Erdogan on Syria’s Astana process.

On February 24, 2022, the Russia–Ukraine military conflict began. Five months into it, the world has undergone global changes. Under the new conditions, Russia’s foreign policy in regions of the country’s strategic interest is changing as much. Among such regions are the Middle East and North Africa (MENA), which are traditionally in the focus of the Kremlin’s attention. Arab countries have taken an intermediate position in responding to Russia’s actions in Ukraine. Some of them supported the UN General Assembly resolution condemning Russia. However, unlike the U.S. and countries of the EU, the Arab world did not impose sanctions of their own. There are some difficulties on trade, but this is due to the desire of the Arab states to reduce the sanctions risks.

In recent years, the claim that the United States is leaving the Middle East has been popular in expert and academic circles. Some of them even spoke of Russia filling the emerging vacuum. However, the likelihood has now increased that Moscow’s activity in the MENA region will also significantly decrease. Nowadays, almost all the attention of Russia, and of the whole world, is focused on Ukraine. Some countries have already managed to use this to realize their own ambitions. In particular, Turkey announced the start of new military operation in Syria. Although Moscow has asked Ankara to abandon the operation, this is unlikely to influence the decision of President of Turkey Recep Tayyip Erdogan.

It seems to me that, at least in the coming months, and possibly years, we can expect a sharp decline in Russia’s efforts to resolve the humanitarian crisis in Syria. The involvement of the Kremlin in Libyan affairs will also decrease. Moscow may not have the resources to defend its interests in Libya by military-political means in the event of another possible escalation.

Big changes await Russia’s economic cooperation with the Arab countries. On the one hand, due to problems with logistics and sanctions, cooperation may be difficult. On the other hand, Russia is reorienting its economy towards the East, which could have a positive effect on economic cooperation with the Arab East. The most interesting thing is how the food supply situation will develop. Arab countries are highly dependent on Russian and Ukrainian grain exports. That is why the conflict between these countries has such a strong impact on the MENA region. This will have an impact on how Russian-Arab relations will change in the future.

There is some contradiction. On the one hand, dependence on Russian and Ukrainian food exports continues to persist. On the other hand, in the short term, the conflict creates the prerequisites for a reorientation to other markets—in particular, to buy grain from India. However, it should be taken into account that India, like other major food exporters, may not have enough resources to cover the needs of the Arab states quickly.

Moscow’s influence may be reduced in matters related to military-technical cooperation with the countries of the MENA region. Previously, the United States reacted quite sharply if someone bought Russian weapons. Among the most striking examples are the deal between Russia and Turkey for the purchase of S-400 long-range surface-to-air missile systems or the agreement with Egypt for the purchase of Su-25 aircraft. Washington opposed such purchases and responded with a threat of sanctions in order to force the countries of the Middle East to abandon Russian weapons. After February 24, the reaction to such purchases will be much stronger, and this may expand from traditional U.S. partners in the region to a wider range of states. Sanction risks are highly likely to lower the level of military-technical cooperation between Russia and the MENA countries.

Of course, the Arab countries take into account the risks of sanctions in economic matters, which can negatively affect trade as well as investment cooperation with Russia. At the same time, Russia and the MENA countries have a number of large long-term infrastructure and industrial projects. There are many projects in oil and gas, as well as in nuclear energy. Let’s pay attention to the position of Saudi Arabia. It shows that Riyadh values cooperation with Russia under the OPEC+ deal. It did not increase oil production despite requests from Washington.

Some political cooperation will continue. This is especially evident in the example of the Arab countries of the Gulf. Not so long ago, the 5th Ministerial Meeting for Strategic Dialogue between GCC and Russia took place. The meeting discussed the situation in Yemen and Libya. In addition, the participants considered issues of further elaboration of Russian proposals for the creation of a collective security system in the Gulf zone. Thus, Russia’s political influence in the region still remains, and it is possible that Moscow will be involved in a number of political projects. However, in my opinion, in the long term, this influence will be reduced gradually. The main question now is how much Russia will be considered a security provider after February 24.

From our partner RIAC

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