A tour of China and India in the last week of January, 2006 by the Saudi King Abdullah heralded an era of “Look East” for Saudi Arabia. King Abdullah used his first trip outside the West Asia since becoming the Saudi ruler in August to visit the two countries whose booming economies need new supplies of oil to ensure their growth.
It was the first visit by a Saudi king to China since the two countries established diplomatic relations in 1990, and the first such visit to India since 1955. In the past, relations were strained by the sway of Marxism in China and India, and by India’s claims over Kashmir, which is mostly Muslim.
Saudi Arabia is a unique country at least in three specific details. One, it possesses more than a quarter of the global oil reserves and has been the largest oil producer for over half a century and today is the only producer with a spare production capacity. Two, the holiest Islamic shrines are located in Makkah and Medina placing the country in the epicentre of the Muslim sacred space. Three, it is one of the last surviving ruling monarchies and the only one that has named the country after its own family name.
The Saudi political system is so clearly identified with the concept of absolute monarchy that one often tends to ignore various other political institutions that qualify it in an appreciable measure. Some of these institutions have been functioning for a very long time, and others are still in the process of evolution. As the political space is only gradually opening up, people’s participation in the system has ranged from polite petitions to mass demonstrations all the way to violent explosions.
The Saudi economy is a one-resource economy, namely the oil. It is a rentier economy, in which the state is the principal recipient of rent from oil. Recently, it was admitted to the World Trade Organisation. It took 12 years for the country to complete the negotiations, the second-longest accession period after China, which negotiated for 14 years. The development heralds major changes in Saudi economy. It will boost foreign investment providing funds for diversification of its largely oil-based economy. It will also bring new export opportunities, especially in the petrochemical industry. At the micro-level, the impact will necessarily be uneven.
Over the decades, its relations with India have steadily improved. During the cold war, India chose to remain non-aligned, whereas Saudi Arabia was firmly in the US-led bloc. The Saudi-led OPEC showed a considerate policy towards India during the oil crisis of 1973. There was no embargo against India. The bilateral relations have been on an upswing since then. The Saudi King Abdullah was the official guest at the Republic Day celebrations on 26 January, 2006. The visit has been significant in many respects. The earlier visit of a Saudi king had been more than 50 years ago. The “Delhi Declaration” signed at the end of the visit spoke of a broad strategic vision between the two countries.
Today, the Kingdom is the largest supplier of oil to India. It is the 14th largest market for India accounting for seven per cent of its total exports. India, in turn, is the fifth largest market for Saudi Arabia accounting for four-an-a-half per cent of its exports. Roughly 1.3 million Indians are working in the Kingdom, who are sending back remittances worth $2 billion annually.
With China a rapprochement is in the works, and it is being fuelled by oil. Saudi and Chinese officials signed an agreement in Beijing that was expected to increase joint investments in extraction in Saudi Arabia and refining in China.
China became an oil importer for the first time in 1993 and, in just over a decade since then, it has become the world’s second largest energy importer; its energy requirements are growing faster than that of any other country. Therefore, the quest for energy security has now become perhaps the single most important driver of Chinese foreign policy. China has been scouting the world buying up energy assets and entering into long term energy tie ups but West Asia has been and will remain China’s largest source of energy imports. According to IEA estimates, China’s oil imports from West Asia would rise by almost 25% from the current figure of 51% to 69.4% of its total imports by the year 2020 despite China’s frenetic worldwide efforts to diversify its sources of oil and gas supply and serious and conscious high priority efforts towards developing alternative energy sources. China will then become the largest importer of the region’s oil and gas. This underlines the hugely increasing importance of West Asia for China’s future. The energy issue has become the primary determinant of China’s policies in relation to West Asia. China has developed the port of Gwadar in Pakistan and pipelines and other transport linkages are being planned to develop an energy corridor to transport Gulf resources to China as an alternative to the vulnerable Malacca Straits chokepoint.
On their part, important West Asian countries, including GCC countries (Saudi Arabia, Kuwait, Bahrain, Oman, U.A.E., Qatar), have been frequently and publicly stressing at the highest leadership levels their deep interest in a growing multi faceted relationship with China. King Abdullah choosing China for his first visit abroad after ascending the throne is a clear message to the world about emerging realities.
Saudi Arabia has its own motives in reaching out. “One fundamental driver seems to be a Saudi desire to move away from a monocultural situation, where they have one big friend, one big product, and they are based on one big idea, the Islamic idea,” as one official said, referring to the United States, the friend, and oil, the product. “They are looking at broad-basing their diplomacy.”
But Arab and American experts say India and China have additional significance for the kingdom: They are low-maintenance customers that buy its oil without meddling – as Washington does – in Saudi affairs, like 11 restrictions on women and lack of elections. What Riyadh calls a “Look-East Policy” is, analysts say, a clear attempt to diversify.
“It’s a very important visit,” said Chas Freeman, the U.S. ambassador to Saudi Arabia during the first Gulf War and a diplomat who has also served in India and China. “The important thing is that monogamy is not enough for the Saudis anymore. They’ve decided to take a couple of other wives. This is a logical move by the Saudis, not one against the United States, but a step away from overdependence on America.” Freeman added, “The relative monopoly of the United States is in the process of being broken.”
“The Arab news media, which often reflect the views of those in power, have called the Asia visit history-making. The Khaleej Times, an English-language daily in Dubai, United Arab Emirates, labelled Abdullah’s visit “a strategic shift in the foreign policy of the country.” The Arab News, an English-language daily in Jeddah, Saudi Arabia, said the visit “heralds a new era.”
Clovis Maksoud, a former Arab League ambassador to the United Nations, United States and India, said, “America will be more deferential to the Saudi and Arab priorities in the future, because they will realise the traditional bilateral relations between Saudi Arabia and the United States, though sustainable, is no longer exclusive.”
Until recently, the United States wanted Saudi oil, offered protection in return and asked little else. More recently, “the simplicity of this bargain became embarnacled with all sorts of other ‘agendas including women’s rights, human rights, religious freedom and other issues that Saudis either find irksome or difficult to address,” said Freeman, the former U.S. ambassador. “None of these issues arises with the Chinese or India.”
Abdulaziz Sager, chairman of the Gulf Research Centre in Dubai, argued in an article that China’s lack of interest in the internal affairs of the countries from which it buys oil is attractive to Riyadh. “Since one of the commonalities between the two sides is the preference for a faster pace of economic reform compared to political change,” he wrote, “and because China has criticised the U.S.’s anti-terror campaign and democracy plans – which too go well with the region’s beliefs – scope for better ties between the two sides remains unlimited.”