New Delhi, Sep 13: In an era defined by shifting geopolitical landscapes and divisive world orders, Saudi Arabia has emerged as a compelling nexus for nations seeking to secure their positions on the global stage. The Kingdom's proactive engagement in international partnerships, coupled with its embrace of liberal ideals and progressive reforms, has pushed it into a position of growing global significance. We have seen their relevance growing in BRICS, SCO and now G 20.
This evolving prominence of Saudi Arabia is not merely reshaping regional power dynamics but also exerting a substantial influence on international politics and trade, and equally, they remain relevant in the OIC and GCC nations.
India - Saudi Arabia deepening relations
India has witnessed a deepening economic and strategic partnership with Saudi Arabia for a decade. This expanding relationship took centre stage early this week at the successful India-Saudi Arabia Investment Forum 2023 in New Delhi.
Bilateral trade between the two nations has surged to remarkable heights, reaching an impressive USD 52.75 billion during the fiscal year 2022-23 and growing. This economic synergy underscores the mutually beneficial nature of their collaboration. The foreign remittance from the Indian diaspora is also enormous from Saudi Arabia.
The success of the recent G20 summit in New Delhi garnered considerable attention. The presence of leaders from Saudi Arabia and other critical West Asian nations, including the United Arab Emirates (UAE), Egypt, Turkey, and Oman, emphasized the growing importance of West Asian representation within the G20 forum. Even though there was much attention towards the African Union representing 54 African nations and the global South, West Asian nations were a dark horse, increasingly asserting their voices on the international stage.
The state visit of Saudi Crown Prince and Prime Minister Mohammed bin Salman bin Abdulaziz Al Saud to India marked a significant milestone in this evolving partnership. More than 500 companies from both nations convened to explore collaborative opportunities in India, signifying a deepening trust between the two countries. The formalization of the first investment agreement between India and Saudi Arabia, with the Crown Prince's commitment to invest approximately $100 billion across various sectors of the Indian economy, has further solidified this relationship and significantly reshaped trade and transportation routes.
During the Saudi Crown Prince's visit, more than 45 Memorandums of Understanding (MoUs) were signed to enhance economic engagement and accelerate investment flows between the two nations. These agreements encompass a broad spectrum of areas, from energy and digitalization to finance and security. The depth and breadth of these agreements signify the comprehensive nature of the India-Saudi partnership.
In parallel, on the sideline, the announcement of the India-Middle East-Europe Economic Corridor (IMEEC), with the United States, the European Union, and India as major stakeholders, underscores the transformative potential of this partnership. This initiative promises to enhance connectivity and foster economic growth across regions. And more so in Saudi Arabia and UAE.
Implementation of the Projects
While these agreements are in the early stages, they have attracted significant attention in response to China's Belt and Road Initiative and potentially challenge China's influence in Gulf countries. Several other countries may join the network once a blueprint and project report transforms into a practical groundwork.
The practical implementation of these agreements, discussions on investment in various projects, collaboration with participating countries, blueprint development, and the establishment of timelines will be crucial.
In recent years, Saudi Arabia has embarked on a meticulous transformation journey, moving away from the strict tenets of Wahhabism toward a more progressive and open society. This transformation is most evident in the Kingdom's commitment to achieving gender balance, with significant advancements in women's rights and participation in various spheres of life.
This shift has not only reshaped Saudi society but has also thrust the Kingdom into the global spotlight. Major world powers, including the United States, Europe, China, and India, recognize Saudi Arabia's evolving role in the region's geopolitics and the world.
Each major player is eager to foster a strategic partnership with Saudi Arabia, acknowledging its financial capacity potential as a linchpin in the quest for regional stability, economic prosperity, and a more interconnected global order.
India acknowledges the significance of Saudi Arabia's transformation, as it has the potential to influence and exert pressure on radical elements in neighbouring countries like Pakistan and Afghanistan. Saudi Arabia's efforts to diversify its partnerships extend beyond its borders, with investments in mineral extraction projects in Pakistan and Afghanistan.
China in Saudi Arabia
China, too, has made substantial inroads into Saudi Arabia's evolving landscape, positioning itself as a potential alternative to the United States and the West. Saudi Arabia's recent Saudi-Iran peace deal has further solidified China's presence in Saudi Arabia, opening new avenues for cooperation.
Saudi Arabia's growing relationship with China needs to be monitored cautiously. Considering its participation in China's Belt and Road Initiative, its membership in the BRICS and SCO group this year, and its growing appeal to China for doing business in Chinese currencies yuan to counter the U.S. dollar. The recent inauguration of the Bank of China's branch in Riyadh exemplifies China's interest in expanding the use of the Chinese yuan in Gulf finance and trade.
Furthermore, other Arab nations, such as the UAE and Egypt, are increasingly engaging with emerging economic blocs. The UAE and Egypt are already members of the BRICS New Development Bank, and Saudi Arabia is poised to join.
Asia and Africa hold particular importance for Arab nations because they are home to the top two trading partners, India and China, the most significant oil markets.
Saudi Arabia and the UAE, the two leading economies in the Arab world with a combined GDP of approximately $1.5 trillion, provide employment opportunities to millions of people from Asia and Africa.
However, the relationship between the United States and Saudi Arabia has encountered challenges since 2019 when the U.S. held Saudi Crown Prince Mohammed bin Salman responsible for the killing of Saudi journalist Jamal Khashoggi.
More threats and security challenges persist in the Gulf region, encompassing unresolved issues such as the Palestinian conflict, tensions in Syria and Iraq, the economic crisis in Lebanon, etc.
In addition, the threat of Al Qaeda and ISIS re-emergence is always there when neighbouring states are weak and failing.