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Wednesday, 13 November 2019

Russia not replacing US in the Gulf

Russian President Vladimir Putin concluded a tour of Saudi Arabia and the United Arab Emirates this week with the signature of dozens of business agreements, writes Ahmed Mustafa

Ahmed Mustafa, Tuesday 15 Oct 2019
Russia not replacing US in the Gulf
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Russian President Vladimir Putin concluded a two-day tour of the Gulf this week that took him to Saudi Arabia and the United Arab Emirates (UAE), where he advanced Russia-Gulf relations while keeping up Moscow’s ties to Iran and Turkey.

Many analysts and observers of Gulf affairs were ecstatic in hailing Putin’s visit as “strengthening Russia’s role in the tension-clouded region that is being abandoned by the United States.”

However, the US still has many vested interests in the region, and local partners are smart enough not to annoy Washington or risk losing their special relationship with America in developing ties with Moscow.

Ahead of Putin’s tour, Saudi Minister of State for Foreign Affairs Adel Al-Jubeir said when asked if cosying up to Russia could come at the expense of Saudi relations with the US that there was no contradiction.

“We don’t believe that having close ties with Russia has any negative impact on our relationship with the United States,” Al-Jubeir told reporters, adding that “we believe that we can have strategic and strong ties with the United States while we develop our ties with Russia.”

It was not a coincidence, at least in timing, that Washington preceded the visit by announcing the arrival of 3,000 troops and air defence equipment in Saudi Arabia. Though nothing was publicly mentioned, Putin might have proposed in Riyadh that the Saudis buy the advanced Russian surface-to-air missile system the S-400.

As US President Donald Trump has said, “if we don’t get these [arms] deals with them [Saudis], they will go to someone else [most likely Russia].”

But the Saudis and Emiratis are becoming more pragmatic in their foreign policy projections, especially as they see that America is disengaging from the region at least militarily.

They cannot be blamed if they seek to strengthen their own capabilities to defend themselves in a volatile region facing the prospect of war and foes building up their military power, such as Iran.

Some reports have said that Saudi Arabia might be interested in Russia’s nuclear expertise in its ambition to build its own nuclear industry, though of course none of this was mentioned in public statements.

Egypt, an ally of Saudi Arabia and the UAE, has already contracted Russia for its first major nuclear facility on the Mediterranean shores.

In an interview with Arab broadcasters in Moscow ahead of the Gulf visit, Putin said that “there are also relations in a very sensitive field, which requires mutual trust, namely, technical military cooperation. We have been negotiating this for a long time.”

The core of Putin’s Gulf tour was business, and this was claimed as a success with the signing of dozens of agreements worth billions of dollars in 48 hours. Putin was accompanied by Russian business leaders and Energy Minister Alexander Novak and head of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev.

An advance team of a few hundred CEOs of Russia’s major companies was in Riyadh and Abu Dhabi ahead of the visit.

In Riyadh, Putin witnessed the announcement of a new OPEC+ charter that strengthens cooperation between OPEC, the international oil cartel, and its Russia-led partners that has helped stabilise the oil markets since 2016 and has benefited the two major energy giants.

The OPEC+ agreement of curbing production by 1.2 million barrels a day that expires in March can now be enhanced and more cuts agreed to in order to prop up oil prices.

The second important business aspect was the joint investment plans between the RDIF and the Saudi Arabia General Investment Authority (SAGIA).

Business between Riyadh and Moscow has been fast developing over the last few years, and Putin said ahead of the visit that Russian-Saudi economic cooperation had grown by 38 per cent in the first half of this year.

“We are studying good joint projects. Our Direct Investment Fund and the General Saudi Investment Fund have laid a joint base of $10 billion,” Putin said. So far, only $2.5 billion has been invested, but the 20 new agreements signed on Monday in Riyadh doubles that figure.

The agreements ranged from petrochemical industries, as Saudi Arabia is looking to diversify its economy and invest more in its oil sector, especially in downstream projects, to other trade aspects.

Russia’s energy company Gazprom has also been showing interest in cooperating with Saudi firms on natural gas. Moscow, the world’s largest wheat exporter, made progress in accessing the Saudi and Middle Eastern markets when Saudi Arabia agreed in August to relax its specifications for wheat imports, opening the door to Black Sea imports.

Similar agreements and memoranda of understanding were signed in Abu Dhabi to enhance already ongoing cooperation. As the UAE economy is more diversified, the cooperation with Russia focused more on non-energy trade and investment.

The UAE previously committed a $7 billion investment in the Russian economy, where the Abu Dhabi investment fund Mubadala invested $2 billion four years ago. As Russia embarks on $100 billion infrastructure plans over the coming years, the UAE is investing another $5 billion in this regard.

Politics were not absent from Putin’s discussions in the two Gulf capitals, covering all regional issues but mainly focused on Iran and consequently on Syria and Yemen.

Yet, the prospect of Russia mediation in defusing tensions between the Arab Gulf countries and Iran ought not to raise high expectations. It will be necessary to wait and see, especially on Russia’s main goal of swaying the Saudi position on Syria.

If Russia succeeds in making this breakthrough, this will help Moscow to play a bigger role in settling matters with Iran. However, this will not happen away from US and European involvement, which the Gulf countries want.

 

*A version of this article appears in print in the 17 October, 2019 edition of Al-Ahram Weekly.

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