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India, Saudi Arabia and the Riyal 20: The Intent and the Repercussions

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Adding fuel to the South Asian boiling waters Saudi Arabia has quite recently, released a 20 Riyal banknote to commemorate its presidency of organizing the G-20 Summit. What is interesting for the world and irks India, Pakistan and China is that on the world map shown on the banknote Ladakh, Gilgit-Baltistan and Kashmir have been removed from Pakistan and India. The Saudi move has roused angst amongst the three and has serious repercussions if not mended soon. Saudi Arabia opened new vistas of strategic relations with India as it slices a significant chunk away from the Muslim world in favour of Indian position on Kashmir. In view of the US, Israel and UAE understanding and Nagorno-Karabakh alignments India and Saudi Arabia have peddled forth towards a new era of relations where they pose a serious threat to Sino-Pakistan vision of South Asia and OBOR expansion in the Middle-East. The Riyal 20 banknote has some intent behind and the repercussions on their bilateral relations as also on the politics of South Asia and Middle East.

The Backdrop

India and Saudi Arabia, the two regional giants have shared historical cultural relations since past but in the post-World War II scenario they developed distances on Kashmir and OIC politics. Kashmir determined the Indo-US, Indo-Pak and Indo-Saudi Arabia relations till the collapse of USSR and continues to influence the strategic shifts in the post-cold war era. Saudi Arabia, till recently, supported Pakistan’s stand on Kashmir. It also provided frequent economic packages to Pakistan to bail it out of critical situations like conflict with India, internal turbulences and jihadi operations. The Soviet intervention in Afghanistan and India’s proximity with the former also irked it. However, after the economic depression of 2008 Saudi Arabia has changed its policy towards Indian subcontinent as it can’t rely on a weak partner at the cost of rising India, the world’s largest prospective market.

It was in the nineties that the two sides took serious steps over improvisation of relations when Saudi Arabia helped India (home to second largest Muslim population in the world) attain the observer status in the Organization of Islamic Cooperation (OIC). It also became critical of Pak sponsored terrorism in India in the following years.   King Abdullah of Saudi Arabia became the first state head to have visited India after a period of 52 years in 2006, thus finally breaking the ice. The move was coincided with a shift in India’s strategic relations with United States when India signed a nuclear deal with US in the same year.  The Saudi king and the Indian Prime Minister Manmohan Singh also signed an agreement forging a strategic energy partnership that was termed the “Delhi Declaration”. The pact provides for a “reliable, stable and increased volume of crude oil supplies to India through long-term contracts” (CNN January 27, 2006). Both nations also agreed on joint ventures and the development of oil and natural gas in public and private sectors. An Indo-Saudi joint declaration in the Indian capital New Delhi described the king’s visit as “heralding a new era in India-Saudi Arabia relations” (BBC, January 27, 2006).

Saudi Arabia is India’s fourth largest trade partner (after China, USA and Japan) and is a major source of energy as India imports around 18% of its crude oil requirement from the Kingdom. In 2018-19 (as per DGFT), India-Saudi bilateral trade has increased by 23.83 % to US$ 34.03 billion. Indo-Saudi bilateral trade reached US$36 billion in the financial year 2019-20. The Indian investments in the Kingdom have grown significantly, especially after the signing of Bilateral Investment Promotion Agreement (BIPA) and Double Taxation Avoidance Agreement (DTAA) in 2006. However, the trade surplus is in favour of Saudi Arabia and recently it has focused on exploring more fields except oil in India. During the visit of Saudi Prince to India in February 2019, the declaration of a mammoth investment of US $100 billion in the next few years in different sectors like energy, refining, petrochemicals, infrastructure, agriculture, minerals and mining, manufacturing, education and health have paved a way for further consolidation of their mutual relations. The Ministry of Finance also signed an MoU with the Saudi Ministry of Energy, Industry and Mineral Resources in February 2019 to invest in India’s National Investment and Infrastructure Fund Limited (NIIF). The NITI Aayog-Saudi Centre for International Strategic Partnership workshop in Riyadh on 17-18 February, 2019 identified 40 potential projects for investments. Subsequent to the Framework Agreement signed between Invest India and SAGIA in February 2019, the Invest India Team visited the Kingdom multiple times and held wide interactions with the major players in the Kingdom in diversified sectors (Embassy of India, Riyadh, Saudi Arabia).

The Middle East

After the US move of withdrawing from active role in the region the new aspirants for dominance like Iran and Saudi Arabia are looking for diversification and intensification of relations with the prospective prolific partners. PM Modi’s visits to Middle East have also given significant energy to India’s policy objectives. India is a strategic partner of Iran, Saudi Arabia and Israel and has a tremendous scope of playing crucial role with its highly demanded soft power resources. In the meantime the increased Chinese presence and its ambitious OBOR project have triggered a new wave of strategic thinking in the region with the debilitated US and rejuvenating Israel.

In response to abrogation of special status under article 370 by India to Jammu & Kashmir  Pakistan government had released a new political maps in September that claimed the Indian territories of Junagadh, Sir Creek, and Manavadar in Gujarat, Jammu and Kashmir and a part of Ladakh.  Pakistan also proposed November 15, 2020 as the date for elections in disputed Gilgit-Baltisatn area which receives strong Indian protests. The revocation of Article 370 had the backing both of Saudi Arabia and UAE for whom India has emerged as a significant trade and strategic partner. The Saudi Arabian step of showing Kashmir as an independent state is just to disgrace the stakeholders especially Pakistan which had challenged its leadership recently over its Kashmir policy among the members of OIC. This led to the revocation of huge loans to Pakistan by Saudi government and the retaliation doesn’t end here. It also seems to be adapting to the new developments and alignments, the emergence of which takes shape in view of Turkish-Iranian dream of leading the Muslim world.

With the announcement in August of the U.S.-brokered Israel-UAE ‘normalization deal’ it appears that a new corridor of co-operation is being developed from the U.S. (and Israel), through the UAE (and Kuwait, Bahrain, and in part Saudi Arabia) through to India, as a regional counterbalance to China’s growing sphere of influence (Simson Watkins). India is likely to leave China behind as the top driver of growth in oil demand by 2024. India has also shored up its energy investments in the region. India’s ONGC Videsh has acquired a 10% stake in an offshore oil concession in Abu Dhabi, UAE, for $600 million (Economic Times).  The August deal of ‘Israel-UAE thaw’ appears to have crafted a new zone of collaboration among US, Israel, UAE, Saudi Arabia and India in order to deal with the OBOR challenge from China. In the meantime the Saudi move highlights Kashmir as a major issue yet to be settled keeping the stakeholders away and pleading for the voices looking for a space in the highly volatile region. The move may have further ramifications for the region as it might have worked on behest of a clandestine director looking for ‘another Kuwait’ and entrench a strong foothold as part of a larger geostrategic plan. After receiving Indian protests to the move it would be wise for Saudi Arabia to mend the flaw and negotiate furtherance of bilateralism.

References

BBC. “New era for Saudi-Indian ties”.  27 January 2006. Retrieved on 14 Aug. 2020.

CNN. “India, Saudi Arabia in energy deal”. 27 January 2006. Retrieved on 4 June 2020.

Economic Times. November 3, 2019.

Embassy of India, Riyadh, Saudi Arabia. “India-Saudi Arabia Economic and Commercial Relations”.  Retrieved on November 10, 2020. https://www.eoiriyadh.gov.in/page/india-saudi-business-relations/.

Watkins, Simson. “Two Major Power Blocs Are Vying For Power In The Middle East.” Oilprice.com.  Retrieved on November 8, 2020. https://oilprice.com/Energy/Energy-General/Two-Major-Power-Blocs-Are-Vying-For-Power-In-The-Middle-East.html

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A little acknowledged clause may be main obstacle to revival of Iran nuclear accord

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A little acknowledged provision of the 2015 international agreement that curbed Iran’s nuclear program explains jockeying by the United States and the Islamic republic over the modalities of a US return to the deal from which President Donald J. Trump withdrew.

The provision’s magic date is 2023, when the Biden administration if it returns to the agreement, would have to seek Congressional approval for the lifting or modification of all US nuclear-related sanctions against Iran.

Both the administration and Iran recognize that Congressional approval is likely to be a tall order, if not impossible, given bi-partisan US distrust, animosity, and suspicion of the Islamic republic.

As a result, the United States and Iran have different objectives in negotiating a US return to the accord.

The Biden administration is attempting to engineer a process that would allow it to sidestep the 2023 hurdle as well as ensure a negotiation that would update the six-year-old deal, limit  Iran’s controversial ballistic missiles program and halt Iranian support for non-state actors in Lebanon, Iraq, and Yemen.

A pro-longed negotiation would allow President Joe Biden to focus Congress on his domestic legislative agenda without Iran being a disruptive detraction.

Mr. Biden “needs something to get beyond 2023. So, he wants a process that would take a number of steps that could take…a number of years to accomplish. During that time, the United States could ease some sanctions… These small things along the way could happen in a process but the key is going to be to have a process that allows the Biden administration to draw this out for some time,” said former State Department and National Security Council official Hillary Mann Leverett.

An extended process would, moreover, make it easier for Mr. Biden to convince America’s sceptical Middle Eastern partners – Israel, Saudi Arabia, and the United Arab Emirates – that a return to the deal is the right thing to do.

Mr. Biden sought to reassure its partners that, unlike Mr. Trump, he would stand by the US commitment to their defence with this week’s missile attack on an Iranian-backed Shiite militia base in Syria. The strike was in response to allegedly Iranian-backed militia attacks on US targets in Iraq as well as the firing of projectiles against Saudi Arabia reportedly from Iraqi territory.

The US attack also served notice to Iran that it was dealing with a new administration that is more committed to its international commitments and multilateralism as well as a revival of the nuclear agreement but not at any price.

The administration has reinforced its message by asking other countries to support a formal censure of Iran over its accelerating nuclear activities at next week’s meeting in Vienna of the International Atomic Energy Agency’s (IAEA) board of governors.

The United States wants the IAEA to take Iran to task for stepping up production of nuclear fuel in violation of the nuclear accord and stalling the agency’s inquiries into the presence of uranium particles at undeclared sites.

While risking a perilous military tit-for-tat with Iran, the US moves are likely to reinforce Iranian domestic and economic pressures, in part in anticipation of the 2023 milestone, to seek an immediate and unconditional US return to the accord and lifting of sanctions.

Pressure on the Iranian government to secure immediate tangible results is compounded by a public that is clamouring for economic and public health relief and largely blames government mismanagement and corruption rather than harsh US sanctions for the country’s economic misery and inability to get the pandemic under control.

The sanctions were imposed after Mr. Trump withdrew from the nuclear accord in 2018.

The pressure is further bolstered by the fact that recent public opinion polls show that the public, like the government, has little faith in the United States living up to its commitments under a potentially revived nuclear deal.

The results suggest that neither the government nor the Iranian public would have confidence in a process that produces only a partial lifting of sanctions. They also indicated a drop of support for the deal from more than 75 per cent in 2015 to about 50 per cent today.

Two-thirds of those polled opposed negotiating restrictions on Iran’s ballistic missile program as well as its support for regional proxies even if it would lead to a lifting of all sanctions.

Public opinion makes an Iranian agreement to negotiate non-nuclear issues in the absence of a broader effort to restructure the Middle East’s security architecture that would introduce arms controls for all as well as some kind of non-aggression agreement and conflict management mechanism a long shot at best.

Among Middle Eastern opponents of the nuclear agreement, Israel is the country that has come out swinging.

The country’s chief of staff, Lt. Gen. Aviv Kochavi, last month rejected a return to the deal and signalled that Israel would keep its military options on the table. Mr. Kochavi said he had ordered his armed forces to “to prepare a number of operational plans, in addition to those already in place.”

Israel’s ambassador to the United States, Gilad Erdan, suggested a couple of weeks later that his country may not engage with the Biden administration regarding Iran if it returns to the nuclear agreement.

“We will not be able to be part of such a process if the new administration returns to that deal,” Mr. Erdan said.

By taking the heat, Israel’s posturing shields the Gulf states who have demanded to be part of any negotiation from exposing themselves to further US criticism by expressing explicit rejection of Mr. Biden’s policy.

To manage likely differences with Israel, the Biden administration has reportedly agreed to reconvene a strategic US-Israeli working group on Iran created in 2009 during the presidency of Barak Obama. Chaired by the two countries’ national security advisors, the secret group is expected to meet virtually in the next days.

It was not immediately clear whether the Biden administration was initiating similar consultations with Saudi Arabia and the UAE.

In a confusing twist, Israel has attracted attention to its own officially unacknowledged nuclear weapons capacity by embarking on major construction at its Dimona reactor that was captured by satellite photos obtained by the Associated Press.

Some analysts suggested that Israel’s hard line rejection of the Biden administration’s approach may be designed to distract attention from upgrades and alterations it may be undertaking at the Dimona facility.

“If you’re Israel and you are going to have to undertake a major construction project at Dimona that will draw attention, that’s probably the time that you would scream the most about the Iranians,” said non-proliferation expert Jeffrey Lewis.

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Will the New Interim Government Lead Libya Out Of A Long-Standing Crisis?

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Last week, February 17, Libyans celebrated the 10th anniversary of the revolution that ousted the long time leader Colonel Muammar Gaddafi. The decade that followed the violent change of power has not brought Libya any closer to the desired outcome. Instead, the country plunged into endless wars and economic turmoil, the consequences of which did not cease to plague Libya until recently.

In June 2020, after the Libyan National Army (LNA) led by Marshal Khalifa Haftar and the forces loyal to the Government of National Accord (GNA) de facto established a ceasefire, the United Nations intensified its peacekeeping efforts to resume the political process. Jump started by Stephanie Williams, interim head of the UN Support Mission in Libya, the Libyan Political Dialogue Forum paved the way for a step-by-step solution to the impasse in which Libya has found itself after almost a year and a half of non-stop hostilities. From the first meeting in Tunisia in early November of 2020 up to the last one held in Geneva this February, 75 forum members representing the Libyan society in its entirety have been working to determine the fate of the war-weary nation.

Finally, to the great surprise of many foreign observers familiar with the Libyan agenda, the forum participants managed to agree with little effort on the lists of potential candidates for positions in a transitional government, which is supposed to replace both rival administrations in Tripoli and Al-Bayda. By doing this, the representatives actually accomplished two main tasks: filling in the vacuum of legitimacy of the GNA conditioned by the expiration of the Skhirat agreement, as well as ending the vicious struggle for power, putting the implementation of reform under international supervision.

It’s worth noting that the winning list of candidates comprised of the chairman of the Presidential Council (PC), his two deputies, and prime minister, appeared to be starkly different from the expectations of many. The vote gave victory to politicians with little fame not only among foreign pundits, but even Libyans themselves. Muhammad Younis Al-Manfi, a former diplomat, became the head of the PC, while Abdullah Al-Lafi and Musa Al-Quni took over as his deputies. In turn, Abdelhamid Al-Dabaiba, a prominent Libyan businessman hailing from an influential family of the city of Misurata, was appointed as prime minister. Al-Dabaiba is supposed to oversee the appointment of ministers and the formation of the so-called government of national unity, which will lead Libya to the national elections scheduled for December 24.

Holding general elections is the primary mission of the new government, along with the reform of the armed forces, which mainly implies their unification, as well as the disarmament and elimination of illegal armed groups. In order to fulfill this ambitious task, something their predecessors failed to do since 2015, the current leaders of the interim government should make every effort, keeping in mind that any manifestation of bias or flirtation with foreign powers at the expense of the aspirations of the nation can annihilate all achieved progress and spark the conflict anew.

These considerations must at all times remain at the top of the agenda of the transitional authorities, since many influential domestic players appear to be not fully satisfied with the current distribution of power and the appointment of ‘undesirable’ persons to senior positions. Among these ‘undesirables’ is a native of Misurata Abdelhamid Al-Dabaiba. After the 2011 revolution, the city exploited the seaport and ready access to the state budget to achieve a virtual independence, building an army of numerous and well-equipped militias. It is generally accepted that it was the Misurati groups that made a deciding contribution to lifting the blockade on Tripoli in 2020 and forcing Khalifa Haftar to withdraw his troops from western Libya. The election of Al-Dabaiba was only logical, as it represents an outcome of the conflict that ended in favor of a coalition where Misurata played a key role.

There is another circumstance that could potentially cause a démarche of the elites in eastern Libya, who still remember the bitterness of defeat. The Al-Dabaiba family has close ties with the Turkish leadership and personally President Erdogan. In particular, Ali Al-Dabaiba, cousin of the new prime minister Abdulhamid Al-Dabaiba and once mayor of the city of Misurata (1989-2011), who headed the Organisation for Development of Administrative Centers (ODAC) and granted Turkish companies 19 billion dollars in Libyan construction contracts during his tenure. The issue of Turkey’s involvement still constitutes a main obstacle for normalizing relations between parties to the conflict. Ankara actively supported the GNA in the fight against the LNA, sending thousands of mercenaries, military equipment and advisers to Libya. The LNA repeatedly listed the withdrawal of the Turkish forces as a condition for national reconciliation. In addition, Ali Al-Dabaiba has almost succeeded in subversion of the work of the Libyan Political Dialogue Forum in Tunisia, after he attempted to bribe its participants to make them vote for his cousin. This incident provoked uproar from the Libyan public, forcing the UN to open an investigation into the forum members.

In this regard, Prime Minister Abdelhamid Al-Dabaiba along other officials of the newly formed government will face a difficult challenge of meeting the expectations of the Libyan people and the international community. Although the recent reforms of governmental organs did not actually change the balance of power, keeping those loyal to the established allies of the GNA within the leadership structure, they sidelined the existing differences between the warring parties, allowing to prolong the fragile truce and relaunch the political process.

In the nearest future Libya’s current leaders should make it their priority to minimize the dictate of Turkey or the West, and, if possible, prevent their further interference, as well as maintain the transparency of the interim government before the general elections. Even the slightest retreat from neutrality and independence, two principles the new head of Presidency Council Mohammed Al-Manfi appear to be keen on upholding, may entail catastrophic consequences and lead to an indefinite delay in settling the Libyan conflict.

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Gender in the GCC — The Reform Agenda Continues

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In my previous Op-Ed about the road map for reforms in the Gulf Cooperation Council (GCC), I talked about the importance of the human capital. Today, and as the world celebrates International Women’s Day this March 8th, it is a good moment to take stock of the impressive progress that some countries in the GCC are making in expanding opportunities for women in order to utilize all their human capital to achieve the developmental goals that they set for themselves. Saudi Arabia and the UAE have emerged over the last couple of years as the region’s leaders in this effort. Along with Bahrain, they have introduced groundbreaking reforms that are allowing women to more fully participate in economic activities, as they also support equal treatment for women in their personal lives.

The benefits of such trendsetting reforms for the societies and economies of these three countries cannot be overstated. Furthermore, a spillover effect is being seen in the rest of the Middle East and North Africa (MENA) region. The reforms focused on gender not only allow reforming countries’ economies to tap into the productivity of 50% of their populations, they also contribute to poverty reduction, sustainable growth and, most importantly, gender equity for women in both the public and private spheres. To ensure the maximum impact of these benefits, those GCC countries that have introduced reforms must keep a laser focus on effective implementation, while those in the region that have yet to expand opportunities for women can look to their neighbors for inspiration.

In 2019, Saudi Arabia’s ranking in the World Bank Group’s Women, Business and the Law report jumped by the largest number of points of any country in the world, as compared to its 2018 ranking. This was in large part due to Saudi Arabia’s historic enactment in July 2019 of a raft of measures to expand women’s roles in Saudi society and give them unprecedented economic freedoms. The reforms included increasing freedom of travel and movement by giving women the right to obtain passports on their own; enabling women to be heads of households in the same way as men and allowing them to choose a place of residency; a prohibition on the dismissal of pregnant women from the workplace; a mandate of non-discrimination based on gender in access to credit; the prohibition of gender-based discrimination in employment; the equalization of retirement ages between women and men; and a removal of the obedience provision for women. A year later, amendments to the Labor Law followed, which lifted restrictions on women’s ability to work at night and opened all industries to women, including mining.

As for the UAE, in September 2020, it became the first country in MENA to introduce paid parental leave for employees in the private sector. This historic reform was part of a broad package enacted by the UAE to support women’s labor force participation, which, at 57.5%, is one of the highest in the MENA region. The 2020 reform package builds on work the UAE has engaged in since 2019 to prioritize gender equality and women’s economic empowerment. In 2019, the UAE introduced a first set of reforms, including guaranteeing equality between women and men in applying for passports; allowing women to be heads of households like men; passing legislation to combat domestic violence and impose criminal penalties for sexual harassment in the workplace; prohibiting gender-based discrimination in employment and the dismissal of pregnant women; and removing job restrictions for women in specific sectors such as mining. These reforms were recognized in the World Bank’s Women, Business and the Law 2021 report, in which the UAE was the highest-ranked country in the MENA region.

The additional reforms introduced in 2020 address persistent legal inequalities, including those related to women’s mobility, their rights within the marriage and with respect to parenthood, and their ability to manage assets. Specifically, the reforms include the amendment of the Personal Status Law to remove the provision on women’s obligation to obey husbands and to lift restrictions of women’s ability to travel outside the country, new provisions to allow women to choose where to live and to travel outside the home in the same way as men, and an amendment to the Labor law that mandates equal pay for work of equal value across different industries and sectors.

Lessons Learned and Ingredients for Success

Three common elements underpin the success of these reform efforts: strong government commitment, effective collaboration across ministries, and the deployment of information campaigns supporting the reforms.

Strong government commitment is crucial because it ensures not only that reform-minded legislation is passed in the first place, but that it is underpinned by tools to ensure implementation. In the UAE for example, the government updated the Explanatory Note of the Personal Status Law to support the effective implementation of family-related reforms in the courts and to ensure accurate interpretation of new provisions by judges. To support implementation in Saudi Arabia, the government updated all employment regulations to reflect the new legislative reforms.

Effective collaboration and cooperation among government ministries is also key. In both Saudi Arabia and the UAE, the recent reforms were championed by a broad swath of government entities. And in Saudi Arabia specifically, a June 2019 royal decree established the Women’s Empowerment Committee, which includes representatives from a wide range of ministries and has as its mandate the coordination of efforts to achieve women’s empowerment through legal reforms.

Such cooperation among ministries is important because it can help support governments’ effective decision-making going forward. Specifically, all ministries whose mandates touch on issues related to women can collect reliable, uniform data to be used to support policy choices aimed at helping both women and the economy. In the UAE, for example, ministries are collecting gender disaggregated data on topics ranging from women’s opportunities for entrepreneurship to their dropout rate from the labor market to the incidence of domestic violence.

Effective implementation efforts have also included strong communication and information dissemination campaigns. The governments of the UAE and Saudi Arabia have placed great emphasis on raising awareness of the new provisions to ensure compliance with the legal framework and to show the economic and social benefits of these reforms. The reforms were widely covered by local and international media. The government also used social media, government websites, and government-sponsored seminars and workshops with various stakeholders to spread the word.

Throughout history, women have played a critical role in economic recovery following global crises. As the world continues to adapt to the impact of the COVID-19 pandemic, the legal reforms in the Gulf are enabling women to contribute more effectively to recovery this time, as well. The role of regional leaders like Saudi Arabia, the UAE and Bahrain will be critical going forward, not just for inspiring reforms, but for sharing reform experiences, success factors and lessons learned from the reform effort. These three countries can play a transformational role in the MENA region and beyond in encouraging and supporting the implementation of gender-neutral laws.

World Bank

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