The conflict and rivalry between Saudi Arabia and Iran is mainly due to politics and national interests. However, this conflict is often accompanied and often set to a boiling-poin by Sunni vs Shia sectarian issues and the views of Iranian Islamic groups who are against the monarchy system, as in the policy of Ayatollah Khomeini who supported campaigns and groups in MENA countries to fight the monarchy.[1] The rivalry between these two countries divides the MENA state-countries into two groups, namely the Iran vs Saudi group, whose competition can be seen in the proxy wars that occur in the MENA region, especially in Yemen Conflict (Houthi supported by Iran) and Syria (Assad regime supported by Iran). [2]
Figure 1: Balance of Power between the Sunni vs Shia in MENA. Source: RANE’s Worldview, 2015.
The dynamics of Iran vs Saudi’s competition of interests in MENA experienced significant ups and downs during the time of Muhammad bin Salman. In 2016, the worst point of relations between the two countries occurred when the Saudi Embassy in Tehran was stormed by a raging mob due to the execution of Saudi Shiite religious leader Sheikh Nimr al-Nimr for allegedly supporting acts of terrorism in Saudi.[3][4] However, through normalization efforts mediated by China in March 2023, relations between Iran and Saudi Arabia were bridged and both countries agreed to reopen their embassies in Riyadh and Tehran. Furthermore, according to a report from Saeed Azimi, a journalist in Tehran, it was reported that it was actually the Saudis themselves who “asked for help” from China to mediate the normalization with Iran since Xi Jinping’s visit in December last year. [5]
Given the unresolved proxy conflicts between the two countries in Syria and Yemen, Saudi Arabia’s interests need to be examined in the normalization effort.
Analysis of Saudi Interests
Regional Stability for Development
Saudi Arabia is one of the Arab countries that has abundant natural resources. According to data from the Energy Information Administration, Saudi Arabia is a member states of Organization of the Petroleum Exporting Countries (OPEC) that sells the most oil in 2022 with a value of 311 billion dollars or about 35% of the total income of OPEC countries from selling oil in 2022.[6] However, at the same time, the Saudi economy is highly dependent on oil sales which account for about 40% of the total gross domestic product (GDP) and 70% of the country’s export earnings.[7] Thus, the rise and fall of world oil prices will have a direct impact on Saudi’s main source of income.
Muhammad Bin Salman (MBS) as the leader of Saudi Arabia launched an economic diversification effort through Saudi Vision 2030 which aims to reduce dependence on petroleum by increasing other economic sectors, such as industry, investment and tourism sectors that have potential. These diversification efforts include the development of renewable energy, increasing the private sector, increasing the manufacturing industry, developing the tourism sector, developing maritime hubs by becoming a global logistics hub and others that are non-renewable energy.[8][9] As such, the Saudis expect a 50% increase in total state revenue from the non-oil sector by 2030.[10]
The Saudi Vision plan has great potential to succeed, due to various supporting factors, such as the location of the region which is geographically strategic by being at the confluence of three world continents (world trade routes), is in the middle of a fast-growing and populous region, and has a large budget allocation and strong political will from the government for the development of the knowledge and technology sector (research and development) to carry out development. [11][12]
However, one of the biggest challenges to this development plan is the MENA region’s lack of stability and relatively poor climate for economic development. According to a report from the Peace Research Institute Oslo, the MENA region is one of the most bloody conflict-ridden regions in the world with “consistently” relatively high conflict trends from 2011-2022 (a decrease occured in 2022, but a rise will be projected from 2023 to 2024 due to the ongoing Israeli-Palestinian conflict). [13]
Figure 2: Trends in conflict frequency in the Middle East region. Source: Peace Research Institute Oslo, 2023.
It is known that the Saudi vs Houthi conflict in Yemen and the Free Syrian Army (Saudi-backed) vs Assad (Syrian-backed) both are the Proxy Wars between the two sides (see figure 1) that occurred in the MENA region. In 2022, the Saudi-Yemen ceasefire and the ceasefire in Syria resulted in a decrease in the trend of conflicts occurring in MENA. [14] In the same year, MENA economic growth increased from 3.5% in 2021 to 5.2% in 2022 with Saudi Arabia being the highest in the region with economic growth of 8.7%. [15][16]
Although, the majority of this economic boost is due to increased exports due to sanctions on Russian energy fuel imports by the US and EU.[17] Still, the movement of goods cannot be easy if there is a direct attack on the logistics.
Furthermore, according to the IMF report, these conflicts have disrupted the running of the world economy with a decline in various sectors such as tourism, export-import (logistics) and fuel prices (oil and natural gas). The IMF predicts a decline in economic growth from 5.2% in 2022 to around 2% in 2023. [18]
It can be seen that there is a causal relationship between stability in the region and economic growth. If there is stability, then development can be easily carried out because a peaceful situation can allow countries to focus on development without being threatened by potential aggression and invasion. A clear example of this can be seen in the following map created by the Global Peace Index,
Figure 3: Data on conflicts (including demonstrations and armed violence) around the world. It can be seen that the majority are in Africa and the Middle East. Source: Vision of Humanity, 2023.
It can be seen that the average developed country, such as in Europe, has a trend of peace and minimal conflict, thus supporting the economic growth of the country to become a developed country.[19] Prosperous lives and infrastructure development can be carried out more easily, because the absence of conflict forces European countries to increase large defense budgets for defense and security and focus on economic improvement (It is known that there has been an increase in the military budget since the Russian-Ukrainian conflict in 2022). [20][21]
Thus, regional stability is an important agenda that Saudi Arabia needs to pursue in order to carry out its economic development and Saudi Vision 2030 plan. Through normalizing relations with Iran, Saudi Arabia can open more engagement and cooperation with Iran (and its proxies) in achieving peace in the region, given Saudi’s position in the middle of the MENA region, so that any conflict that occurs has the potential to adversely affect the Saudi economy which is based on oil export-import activities and is focusing on economic development.
Demonstrating the Existence of Saudi Sovereignty: Enhanced Ties with China
Furthermore, the Saudis now appear to be playing two-legged politics with pragmatic measures that “capitalize” on the two great powers of the world today, the United States (US) and China. Under Presidents Obama and Biden, the focus of US foreign policy was shifted from the MENA region to the Asia-Pacific region, as written in Obama’s Pivot to Asia policy and Joe Biden’s Indo-Pacific Strategy 2022. [22] In contrast, China’s relations with Saudi have improved with MENA countries, including Saudi following China’s Belt & Road Initiative multilateral policy.[23]
Economically, China is showing a supportive stance towards Saudi and countries in the MENA region. China is looking for sources of oil imports to fuel its large industries, while increasing engagement with the region through investment and cooperation.[24] China also invited Saudi, Iran, the United Arab Emirates and Egypt to join BRICS. Moreover, the trade relations trend between MENA countries and China has shown a sharp increase. From the year 2000-2021, the value of trade with China rose from 15 billion dollars to 284 billion dollars, compared to “only” 63 billion dollars to 98 billion dollars in the same period with the US. Furthermore, there was a 360% increase in Chinese investment in 2021, while construction projects by China saw a steady 116% increase year-on-year. [25] Furthermore, China is Saudi’s largest non-oil trade with trade value reaching 106 billion dollars in 2022, a 21% increase from 2021. [26]
It can be seen that there is an increase in China’s engagement with the MENA region as a whole in the economic sector compared to the US which tends to “avoid” to be intertwined too much on the region due to its focus on the Indo-Pacific region. Thus, the power that China has can make the Saudi political complexion become two-legged with the pragmatism of approaching the two countries for its personal national interests. This is because the US itself appears to be “returning” to the MENA region by giving assurances that “the US will not leave MENA” during Biden’s visit to Saudi. [27]
Then, it is still in line with efforts to achieve regional stability in MENA. Reported by CBSNews media, Saudi political analyst Salman Al-Ansari said that “the Saudis have spent 40 years begging the US to help stop Iranian terror against the MENA region, but did not get the desired results”.[28] Therefore, the Saudis shifted to China to try to get different results in normalizing relations with Iran, because compared to the US, China has more leverage against Iran. [29] [30] The Saudis also believe that China can guarantee Iran’s compliance not to “cheat” in normalization because it is in danger of losing access to investment from China, as Iran’s largest economic partner. [31]
Therefore, the Saudi-Iranian normalization with Chinese mediation clearly shows Saudi independence and desire to do politics pragmatically in pursuit of its national interests, without being dependent on solely on one power, and has the intention to open up more “diversified” international relations by opening up opportunities to become closer to China.
Conclusion
In a nation state system that has its own national interest, national interest is the foundation and main reference considered when launching a foreign policy. Through the analysis presented above, Saudi national interests are economic development efforts through the Saudi Vision 2023 plan which requires regional stability and minimal conflict in MENA so that development can be fully focused without the threat of interference from international actors in the MENA region. Through normalizing relations with Iran, Saudi Arabia can open more engagement with Iran which has the potential to end the proxy war between the two countries through peaceful approaches.
In addition, the Saudis chose to normalize through the China to show their attitude to the international community as a fully sovereign nation without a dependence on the US through a two-legged pragmatic strategy by approaching China. Not only that, because of the leveragethat China has over Iran (Iran’s dependence on China) makes the Iran-Saudi deal more guaranteed not to be violated by Iran.
[1] Fozia Bibi. 2018. Iran-Saudi Relations: From Rivalry to Nowhere. Global Social Sciences Review. Vol. III (IV) pp. 50. (49-67)
[2]United Kingdom House of Lords. 2017. The Middle East: Time for New Realism. Pp. 45-47
[3] Syed Zafar Mehdi. 2023. “Saudi Embassy resumes operations in Tehran after over 7-year hiatus: Report”. Accessed via https://www.aa.com.tr/en/middle-east/saudi-embassy-resumes-operations-in-tehran-after-over-7-year-hiatus-report/2965408
[4] BBC. 2016. “Sheikh Nimr al-Nimr: Saudi Arabia executes top shia cleric”. Accessed via https://www.bbc.com/news/world-middle-east-35213244
[5] William Figueroa. 2023. “Iran-Saudi Normalization: A Regional Process with Chinese Characteristics. Foreign Policy Research Institute. Accessed via https://www.fpri.org/article/2023/03/iran-saudi-normalization-a-regional-process-with-chinese-characteristics/
[6] U.S. Energy Information Administration. 2023. “OPEC net oil export revenues”. Accessed via https://www.eia.gov/international/analysis/special-topics/OPEC_Revenues_Fact_Sheet
[7] Saudi Arabia Ministry of Economy and Planning. 2022. State of the Saudi Economy Annual Report, p. 10.
[8] Kingdom of Saudi Arabia. (n.d.). Saudi Vision 2030. Accessed via https://www.vision2030.gov.sa/en/
[9] Saudi Arabia Ministry of Economy and Planning. 2022. State of the Saudi Economy Annual Report, p. 10.
[10] Fakhri J. Hasanov, M. Javid and F. L. Joutz. 2022. Saudi Non-Oil Exports before and after COVID-19: Historical Impacts of Determinants and Scenario Analysis. Sustainability 2022, Vol. 14 (4).
[11] As an illustration, Saudi Arabia is ranked 48th in the world based on the Global Innovation Index 2023 assessment. Indonesia, in the same year, was ranked 61st.
https://www.wipo.int/edocs/pubdocs/en/wipo-pub-2000-2023/sa.pdf (Saudi Ranking) https://www.wipo.int/edocs/pubdocs/en/wipo-pub-2000-2023/id.pdf (Indonesia Ranking)
[12] Compass. 2020. Saudi Arabia: A strategic location at the crossroads of Europe, Africa and Asia”. Accessed via https://www.compassdigimag.com/2020/june/saudi-arabia-a-strategic-location-at-the-crossroads-of-europe-africa-and-asia/
[13] Anna Marie Obermeier. 2023. Conflict Trends in the Middle East, 1989-2022. Peace Research Institute Oslo.
[14] Anna Marie Obermeier. 2023. Conflict Trends in the Middle East, 1989-2022. Peace Research Institute Oslo.
[15] The World Bank. (n.d.) “MENA Economic Update“. Accessed via https://www.worldbank.org/en/region/mena/publication/mena-economic-monitor
[16] International Monetary Fund a. 2023. “IMF Executive Board Concludes 2023 Article IV Consultation with Saudi Arabia”. Accessed via https://www.imf.org/en/News/Articles/2023/09/05/pr23302-saudi-arabia-imf-exec-board-concludes-2023-art-iv-consult
[17] Ifimes. 2023. “2023 Ukraine Crisis: Implications of Russia-Ukraine War on Middle East”. Accessed via https://www.ifimes.org/en/researches/2023-ukraine-crisis-implications-of-russia-ukraine-war-on-middle-east/5186#
[18] International Monetary Fund b. 2023. “Middle East Conflict Risks Reshaping the Region’s Economies”. Accessed via https://www.imf.org/en/Blogs/Articles/2023/12/01/middle-east-conflict-risks-reshaping-the-regions-economies
[19] It is known that the last war fought in Europe (apart from the conflict in the Balkans in the 1990s) was the Second World War in 1945. https://spice.fsi.stanford.edu/docs/why_war_has_become_obsolete_in_europe
[20] By 2022, the average military budget of Middle Eastern countries will be around 3.9% of total GDP. This is quite high compared to the world average of 2.2% and the European average of 2.5%.
https://www.sipri.org/sites/default/files/2023-04/2304_fs_milex_2022.pdf
[21] However, before the Russia-Ukraine War (in 2021) Europe’s military budget was only 1.3% per year. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Government_expenditure_on_defence (European countries’ budgets) https://www.sipri.org/yearbook/2022/08 (MENA budgets).
[22]Meheer Commuri. 2023. “One Step Forward, Two Steps Behind: The US Shift Away from the Middle East”. Perry World House. Accessed via https://global.upenn.edu/perryworldhouse/news/one-step-forward-two-steps-behind-us-shift-away-middle-east
[23]Catherine Sancho. 2023. “A US Perspective: The Effect of China’s Growing Presence in the Middle East”. Accessed via https://sites.lsa.umich.edu/mje/2023/11/08/a-us-perspective-the-effect-of-chinas-growing-presence-in-the-middle-east/
[24] Meheer Commuri. 2023. “One Step Forward, Two Steps Behind: The US Shift Away from the Middle East”. Perry World House. Accessed via https://global.upenn.edu/perryworldhouse/news/one-step-forward-two-steps-behind-us-shift-away-middle-east
[25]Ahmed Shawkat and Khaled Wassef. 2023. “How Iran and Saudi Arabia’s diplomatic breakthrough could impact the entire Middle East” Accessed via https://www.cbsnews.com/news/iran-saudi-arabia-diplomacy-why-it-matters-israel-lebanon-yemen-iraq-middle-east/
[26] Marwan Bishara. 2023. “The Middle East: Goodbye America, hello China”. Accessed via https://www.aljazeera.com/opinions/2023/6/6/the-middle-east-goodbye-america-hello-china
[27] Aljazeera. 2022. “US will not walk away’ from Middle East: Biden at Saudi Summit”. Accessed via https://www.aljazeera.com/news/2022/7/16/biden-lays-out-middle-east-strategy-at-saudi-arabia-summit
[28] Ahmed Shawkat and Khaled Wassef. 2023. “How Iran and Saudi Arabia’s diplomatic breakthrough could impact the entire Middle East” Accessed via https://www.cbsnews.com/news/iran-saudi-arabia-diplomacy-why-it-matters-israel-lebanon-yemen-iraq-middle-east/
[29] Meheer Commuri. 2023. “One Step Forward, Two Steps Behind: The US Shift Away from the Middle East”. Perry World House. Accessed via https://global.upenn.edu/perryworldhouse/news/one-step-forward-two-steps-behind-us-shift-away-middle-east
[30] Ahmed Shawkat and Khaled Wassef. 2023. “How Iran and Saudi Arabia’s diplomatic breakthrough could impact the entire Middle East” Accessed via https://www.cbsnews.com/news/iran-saudi-arabia-diplomacy-why-it-matters-israel-lebanon-yemen-iraq-middle-east/
[31] William Figueroa. 2023. “Iran-Saudi Normalization: A Regional Process with Chinese Characteristics. Foreign Policy Research Institute. Accessed via https://www.fpri.org/article/2023/03/iran-saudi-normalization-a-regional-process-with-chinese-characteristics/
