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Saudi Arabia steps up effort to replace UAE and Qatar as go-to regional hub

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Saudi Arabia has stepped up efforts to outflank the United Arab Emirates and Qatar as the Gulf’s commercial, cultural, and/or geostrategic hub.

The kingdom has recently expanded its challenge to the smaller Gulf states by seeking to position Saudi Arabia as the region’s foremost sport destination once Qatar has had its moment in the sun with the 2022 World Cup as well as secure a stake in the management of regional ports and terminals dominated so far by the UAE and to a lesser extent Qatar.

Saudi Arabia kicked off its effort to cement its position as the region’s behemoth with an announcement in February that it would cease doing business by 2024 with international companies whose regional headquarters were not based in the kingdom. 

With the UAE ranking 16 on the World Bank’s 2020 Ease of Doing Business Index as opposed to Saudi Arabia at number 62, freewheeling Dubai has long been international business’s preferred regional headquarters.

The Saudi move “clearly targets the UAE” and “challenges the status of Dubai,” said a UAE-based banker.

A latecomer to the port control game which is dominated by Dubai’s DP World that operates 82 marine and inland terminals in more than 40 countries, including Djibouti, Somaliland, Saudi Arabia, Egypt, Turkey and Cyprus, the kingdom’s expansion into port and terminal management appears to be less driven by geostrategic considerations.

Instead, Saudi Arabia’s Red Sea Gateway Terminal (RSGT), backed by the Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, said it was targeting ports that would service vital Saudi imports such as those related to food security.

PIF and China’s Cosco Shipping Ports each bought a 20 per cent stake in RSGT in January.

The Chinese investment fits into China’s larger Belt and Road-strategy that involves the acquisition regionally of stakes in ports and terminals in Saudi Arabia, Sudan, Oman, and Djibouti, where China has a military base.

RSGT Chief Executive Officer Jens Floe said the company planned to invest in at least three international ports in the next five years. He said each investment would be up to US$500 million.

“We have a focus on ports in Sudan and Egypt. They weren’t picked for that reason, but they happen to be significant countries for Saudi Arabia’s food security strategy,” Mr. Floe said.

Saudi Arabia’s increased focus on sports, including a potential bid for the hosting of the 2030 World Cup serves multiple goals: It offers Saudi youth who account for more than half of the kingdom’s population a leisure and entertainment opportunity, it boosts Crown Prince Mohamed bin Salman’s burgeoning development of a leisure and entertainment industry, potentially allows Saudi Arabia to polish its image tarnished by human rights abuse, including the 2018 killing of Saudi journalist Jamal Khashoggi, and challenges Qatar’s position as the face of Middle Eastern sports.

A recent report by Grant Liberty, a London-based human rights group that focuses on Saudi Arabia and China, estimated that the kingdom has so far invested in US$1.5 billion in the hosting of multiple sporting events, including the final matches of Italy and Spain’s top soccer leagues; Formula One; boxing, wrestling and snooker matches; and golf tournaments. Qatar is so far the Middle East’s leader in the hosting of sporting events followed by the UAE.

Grant Liberty said that further bids for sporting events worth US$800 million had failed. This did not include an unsuccessful US$600 million offer to replace Qatar’s beIN tv sports network as the Middle Eastern broadcaster of European soccer body UEFA’s Champions League.

Saudi Arabia reportedly continues to ban beIN from broadcasting in the kingdom despite the lifting in January of 3.5 year-long Saudi-UAE-led diplomatic and economic boycott of Qatar.

Prince Mohammed’s Vision 2030 plan to diversify and streamline the Saudi economy and ween it off dependency on oil exports “has set the creation of professional sports and a sports industry as one of its goals… The kingdom is proud to host and support various athletic and sporting events which not only introduce Saudis to new sports and renowned international athletes but also showcase the kingdom’s landmarks and the welcoming nature of its people to the world,” said Fahad Nazer, spokesperson for the Saudi Arabian embassy in Washington.

The increased focus on sports comes as the kingdom appears to be backing away from its intention to reduce the centrality of energy exports for its economy.

Energy minister Prince Abdulaziz bin Salman, Prince Mohammed’s brother, recently ridiculed an International Energy Agency (IEA) report that “there is no need for investment in new fossil fuel supply” as “the sequel of the La La Land movie.” The minister went on to ask, “Why should I take (the report) seriously?”

Putting its money where its mouth is, Saudi Arabia intends to increase its oil production capacity from 12 million to more than 13 million barrels a day on the assumption that global efforts to replace fossil fuel with cleaner energy sources will spark sharp reductions in US and Russian production.

The kingdom’s operating assumption is that demand in Asia for fossil fuels will continue to rise even if it drops in the West. Other Gulf producers, including the UAE and Qatar, are following a similar strategy.

“Saudi Arabia is no longer an oil country, it’s an energy-producing country … a very competitive energy country. We are low cost in producing oil, low cost in producing gas, and low cost in producing renewables and will definitely be the least-cost producer of hydrogen,” Prince Abdulaziz said.

He appeared to be suggesting that the kingdom’s doubling down on oil was part of strategy that aims to ensure that Saudi Arabia is a player in all conventional and non-conventional aspects of energy. By implication, Prince Abdulaziz was saying that diversification was likely to broaden the kingdom’s energy offering rather than significantly reduce its dependence on energy exports.

“Sports, entertainment, tourism and mining alongside other industries envisioned in Vision 2030 are valuable expansions of the Saudi economy that serve multiple economic and non-economic purposes,” “ said a Saudi analyst. “It’s becoming evident, however, that energy is likely to remain the real name of the game.”

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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Middle East

The Absence of Riyadh in the Turbulent Afghanistan

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As the situation in Afghanistan becoming increasingly turbulent, the NATO allies led by the United States are fully focused on military withdrawal. As this has to be done within tight deadline, there have been some disagreements between the United States and the European Union. Josep Borrell, High Representative of the European Union for Foreign Affairs and Security, publicly accused the U.S. military in Afghanistan, which was responsible for the internal security of Kabul Airport, of deliberately obstructing the EU evacuation operations.

China and Russia on the other hand, are more cautious in expressing their positions while actively involving in the Afghanistan issue. This is especially true for Russia, which after both the Taliban and the anti-Taliban National Resistance Front of Afghanistan (NRF) led by Ahmad Massoud have pleaded Russia for mediation, Moscow has now become a major player in the issue.

Compared with these major powers, Saudi Arabia, another regional power in the Middle East, appears to be quite low-key. So far, only the Ministry of Foreign Affairs of Saudi Arabia has issued a diplomatic statement on the day after the Taliban settled in Kabul, stating that it hopes the Taliban can maintain the security, stability and prosperity of Afghanistan. Considering the role that Saudi Arabia has played in Afghanistan, such near silent treatment is quite intriguing.

As the Taliban were originally anti-Soviet Sunni Jihadists, they were deeply influenced by Wahhabism, and were naturally leaning towards Riyadh. During the period when the Taliban took over Afghanistan for the first time, Saudi Arabia became one of the few countries in the international community that publicly recognized the legitimacy of the Taliban regime.

Although the Taliban quickly lost its power under the impact of the anti-terror wars initiated by the George W. Bush administration, and the Saudis were pressured by Washington to criticize the Taliban on the surface, yet in reality they continuously provided financial aid to the Taliban and the Al-Qaeda organization which was in symbiotic relations with the Taliban.

However, after 2010, with the Syrian civil war and the rise of the Islamic State, the Riyadh authorities had decreased their funding for their “partners” in Afghanistan due to the increase in financial aid targets.

In June 2017, after Mohammed bin Salman became the Crown Prince of Saudi Arabia and took power, Saudi Arabia’s overall foreign policy began to undergo major changes. It gradually abandoned the policy of exporting its religious ideology and switched to “religious diplomacy” that focuses on economic, trade and industrial cooperation with main economies. Under such approach, Saudi Arabia’s Afghanistan policy will inevitably undergo major adjustments.

With the reformation initiated by the Crown Prince, Saudi Arabia has drastically reduced its financial aid to the Taliban. In addition, Riyadh also further ordered the Taliban to minimize armed hostilities and put its main energy on the path of “peaceful nation-building”. This sudden reversal of the stance of Saudi Arabia means that Riyadh has greatly weakened the voices of the Taliban in the global scenes.

In recent years, the Taliban have disassociated with Saudi Arabia in rounds of Afghanistan peace talks. After Kabul was taken over by the Taliban on August 19, a senior Taliban official clearly stated that the Taliban does not accept Wahhabism, and Afghanistan has no place for Wahhabism. Although this statement means that Al-Qaeda’s religious claims will no longer be supported by the Taliban, it also indicates that the Taliban has reached the tipping point of breaking up with Riyadh.

Under such circumstance, for the Riyadh authorities under Mohammed bin Salman, the most appropriate action is probably wait-and-see as Afghanistan changes again.

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Middle East

Gulf security: It’s not all bad news

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Gulf states are in a pickle.

They fear that the emerging parameters of a reconfigured US commitment to security in the Middle East threaten to upend a more-than-a-century-old pillar of regional security and leave them with no good alternatives.

The shaky pillar is the Gulf monarchies’ reliance on a powerful external ally that, in the words of Middle East scholar Roby C. Barrett, “shares the strategic, if not dynastic, interests of the Arab States.” The ally was Britain and France in the first half of the 20th century and the United States since then.

Sheikh Zayed bin Sultan Al-Nahyan, the revered founder of the United Arab Emirates, implicitly recognised Gulf states’ need for external support when he noted in a 2001 contribution to a book that the six monarchies that form the Gulf Cooperation Council (GCC) “only support the GCC when it suited them.”

Going forward question marks about the reliability of the United States may be unsettling but the emerging contours of what a future US approach could look like they are not all bad news from the perspective of the region’s autocratic regimes.

The contours coupled with the uncertainty, the Gulf states’ unwillingness to integrate their defence strategies, a realisation that neither China nor Russia would step into the United States’ shoes, and a need to attract foreign investment to diversify their energy-dependent economies, is driving efforts to dial down regional tensions and strengthen regional alliances.

Israeli foreign minister Yair Lapid and Abdullah bin Zayed Al Nahyan, his UAE counterpart, are headed to Washington this week for a tripartite meeting with US Secretary of State Antony Blinken. The three officials intend “to discuss accomplishments” since last year’s establishment of diplomatic relations between the two countries “and other important issues,” Mr Blinken tweeted.

The Israeli foreign ministry suggested those other issues include “further opportunities to promote peace in the Middle East” as well as regional stability and security, in a guarded reference to Iran.

From the Gulf’s perspective, the good news is also that the Biden administration’s focus on China may mean that it is reconfiguring its military presence in the Middle East with the moving of some assets from the Gulf to Jordan and the withdrawal from the region of others, but is not about to pull out lock, stock and barrel.

Beyond having an interest in ensuring the free flow of trade and energy, the US’s strategic interest in a counterterrorism presence in the Gulf has increased following the US withdrawal from Afghanistan. The US now relies on an ’over the horizon’ approach for which the Middle East remains crucial.

Moreover, domestic US politics mitigate towards a continued, if perhaps reduced, military presence even if Americans are tired of foreign military adventures, despite the emergence of a Biden doctrine that de-emphasises military engagement. Moreover, the Washington foreign policy elite’s focus is now on Asia rather than the Middle East.

Various powerful lobbies and interest groups, including Jews, Israelis, Gulf states, Evangelists, and the oil and defence industries retain a stake in a continued US presence in the region. Their voices are likely to resonate louder in the run-up to crucial mid-term Congressional elections in 2022. A recent Pew Research survey concluded that the number of white Evangelicals had increased from 25 per cent of the US population in 2016 to 29 per cent in 2020.

Similarly, like Afghanistan, the fading hope for a revival of the 2015 international agreement to curb Iran’s nuclear programme, from which former President Donald J. Trump withdrew in 2018, and the risk of a major military conflagration makes a full-fledged US military withdrawal unlikely any time soon. It also increases the incentive to continue major arms sales to Gulf countries.

That’s further good news for Gulf regimes against the backdrop of an emerging US arms sales policy that the Biden administration would like to project as emphasising respect for human rights and rule of law. However, that de facto approach is unlikely to affect big-ticket prestige items like the F-35 fighter jets promised to the UAE.

Instead, the policy will probably apply to smaller weapons such as assault rifles and surveillance equipment, that police or paramilitary forces could use against protesters. Those are not the technological edge items where the United States has a definitive competitive advantage.

The big-ticket items with proper maintenance and training would allow Gulf states to support US regional operations as the UAE and Qatar did in 2011 in Libya, and, the UAE in Somalia and Afghanistan as part of peacekeeping missions.

In other words, the Gulf states can relax. The Biden administration is not embracing what some arms trade experts define as the meaning of ending endless wars such as Afghanistan.

“Ending endless war means more than troop withdrawal. It also means ending the militarized approach to foreign policy — including the transfer of deadly weapons around the world — that has undermined human rights and that few Americans believe makes the country any safer,” the experts said in a statement in April.

There is little indication that the views expressed in the statement that stroke with thinking in the progressive wing of Mr. Biden’s Democratic Party is taking root in the policymaking corridors of Washington. As long as that doesn’t happen, Gulf states have less to worry about.

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Reducing Middle East tensions potentially lessens sectarianism and opens doors for women

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Two separate developments involving improved relations between Sunni and Shiite Muslims and women’s sporting rights demonstrate major shifts in how rivalry for leadership of the Muslim world and competition to define Islam in the 21st century is playing out in a world in which Middle Eastern states can no longer depend on the United States coming to their defence.

The developments fit into a regional effort by conservative, status quo states, Saudi Arabia, the United Arab Emirates and Egypt; and proponents of different forms of political Islam, Iran, Turkey, and Qatar; to manage rather than resolve their differences in a bid to ensure that they do not spin out of control. The efforts have had the greatest success with the lifting in January of a 3.5-year-long Saudi-UAE-Egyptian-led diplomatic and economic boycott of Qatar.

The reconciliation moves also signal the pressure on Middle Eastern players in what amounts to a battle for the soul of Islam to change perceptions of the region as being wracked by civil wars, sectarian tensions, extremism, jihadism, and autocracy. Altering that perception is key to the successful implementation of plans to diversify oil and gas export dependent economies in the Gulf, develop resource-poor countries in the region, tackle an economic crisis in Turkey, and enable Iran to cope with crippling US sanctions.

Finally, these developments are also the harbinger of the next phase in the competition for religious soft power and leadership of the Muslim world. In a break with the past decade, lofty declarations extolling Islam’s embrace of tolerance, pluralism and respect for others’ rights that are not followed up by deeds no longer cut ice. Similarly, proponents of socially conservative expressions of political Islam need to be seen as adopting degrees of moderation that so far have been the preserve of their rivals who prefer the geopolitical status quo ante.

That next phase of the battle is being shaped not only by doubts among US allies in the Middle East about the reliability of the United States as a security guarantor, reinforced by America’s withdrawal from Afghanistan. It is also being informed by a realisation that neither China nor Russia can (or will) attempt to replace the US defence umbrella in the Gulf.

The battles’ shifting playing field is further being determined by setbacks suffered by political Islam starting with the 2013 military coup that toppled Mohammed Morsi, a Muslim Brother and Egypt’s first and only democratically elected president and brutally decimated the Muslim Brotherhood. More recently, political Islamists suffered a stunning electoral defeat in Morocco and witnessed the autocratic takeover of power in Tunisia by President Kais Saied.

A just published survey of Tunisian public opinion showed 45 percent of those polled blaming Rachid Ghannouchi, the leader of the Islamist Ennahada party, for the country’s crisis and 66 percent saying they had no confidence in the party.

The Middle East’s rivalries and shifting sands lend added significance to a planned visit in the coming weeks to Najaf, an Iraqi citadel of Shiite Muslim learning and home of 91-year-old Shiite religious authority, Grand Ayatollah Ali Al-Sistani, by Ahmed El-Tayeb, the grand imam of Al-Azhar, Sunni Islam’s foremost historic educational institution.

The visit takes place against the backdrop of Iraqi-mediated talks between Saudi Arabia and Iran, the two major centres of Islam’s two main strands, that are aimed at dialling down tensions between them that reverberate throughout the Muslim world. The talks are likely to help the two regional powers manage rather than resolve their differences.

The rivalry was long marked by Saudi-inspired, religiously-cloaked anti-Shiite rhetoric and violence in a limited number of cases and Iranian concerns about the country’s Sunni minority and its opting for a strategy centred on Shiite Muslim proxies in third countries and support for the regime of Syrian President Bashar al-Assad.

Implicit in Saudi and Iranian sectarianism was the perception of Shiite minorities in Saudi Arabia and other Sunni majority countries, and Sunnis in Iran and Iraq after the 2003 toppling of Saddam Hussein, as fifth wheels of the other.

Imam El-Tayeb’s visit, a signal of improvement in long-strained Egyptian-Iraqi relations, as well as a possible later meeting between the Sunni cleric, a Shiite cleric other than Ayatollah Al-Sistani who is too old and fragile to travel, and Pope Francis, are intended to put sectarianism on the backburner. Ayatollah Al-Sistani met with the pope during his visit to Iraq in March.

The visit takes on added significance in the wake of this week’s suicide bombing of a Hazara Shiite mosque in the northern Afghan city of Kunduz that killed at least 50 people and wounded 100 others. The South Asian affiliate of the Islamic State, Islamic State-Khorasan, claimed responsibility for the attack, the worst since the Taliban came to power in August. It was likely designed to fuel tension between the Sunni Muslim group and the Hazara who account for 20 percent of the Afghan population.

Imam El-Tayeb’s travel to Najaf is likely to be followed by a visit by Mohamed al-Issa, secretary-general of the Saudi-dominated Muslim World League. The League was long a prime vehicle for the propagation of anti-Shiite Saudi ultra-conservatism. Since coming to office, Crown Prince Mohammed bin Salman has recast the League as a tool to project his vaguely defined notion of a state-controlled ‘moderate’ Islam that is tolerant and pluralistic.

In a similar vein, hard-line Iranian President Ebrahim Raisi took many by surprise by allowing women into Tehran’s Azadi Stadium to attend this month’s World Cup qualifier between Iran and South Korea. Iran is the only country to ban women from attending men’s sporting events. It was unclear whether the move was a one-off measure or signalled a loosening or lifting of the ban.

Mr Raisi was believed to see it as a way to rally domestic support and improve the Islamic republic’s image as much in China and Russia as in the West. No doubt, Mr. Raisi will have noted that China and Russia have joined the United States, Europe, and others in pressuring the Taliban in Afghanistan to recognize women’s rights.

To be sure, women in Iran enjoy education rights and populate universities. They can occupy senior positions in business and government even if Iran remains a patriarchal society. However, the ban on women in stadia, coupled with the chador, the head to foot covering of women, has come to dominate the perception of Iran’s gender policies.

Allowing women to attend the World Cup qualifier suggests a degree of flexibility on Mr. Raisi’s part. During his presidential campaign Mr. Raisi argued that granting women access to stadiums would not solve their problems.

It also demonstrates that the government, with hardliners in control of all branches, can shave off sharp edges of its Islamic rule far easier than reformists like Mr. Raisi’s predecessor, Hassan Rouhani, were able to do.

The question is whether that is Mr. Raisi’s intention. Mr. Raisi may be testing the waters with this month’ soccer match, only time will tell.

It may be too big a leap in the immediate future but, like Imam El-Tayeb’s visit to Najaf, it indicates that the dialling down of regional tensions puts a greater premium on soft power which in turn builds up pressure for less harsh expressions of religion.

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