A high-profile visit with vision in mind

Updated 26 August 2016

A high-profile visit with vision in mind

Saudi Arabia’s links with Asia are interesting. The Kingdom established diplomatic relations with China in 1939. In 1946 a friendship treaty was signed. Links with Japan are only a little more recent. Both Beijing and Tokyo saw the virtue in friendship with the Middle East’s key economic and political player.
Thus when Deputy Crown Prince Mohammed bin Salman, second deputy premier and minister of defense, visits Japan and China next week, he will be greeted as an old friend.
The Kingdom has been a major oil supplier to both countries. These contracts have been notable for their stability. Even as its economy has slowed, China’s demand for energy has remained strong. Saudi crude imports continue to be a trusted source. The Kingdom is Beijing’s largest oil supplier. China has a Saudi trade deficit. In 2014, its Saudi imports were $48.5 billion. This was principally for oil and petrochemicals. By contrast, China’s sale of goods and services to Saudi Arabia was $20 billion.
Japan has no domestic hydrocarbon reserves. It is therefore reliant on oil and its imports. Much of Japan’s gas is supplied as LNG from Indonesia. But Saudi Arabia has long been a key oil supplier. In 2014, Japanese imports from Saudi Arabia were worth $14.5 billion while the Kingdom bought $9.9 billion worth of goods from Japan.
These figures hint at the important role that China and Japan can play in Saudi Vision 2030. This January, Chinese president Xi Jinping began his Middle East tour in Riyadh. He arrived almost ten years to the day after the late King Abdullah broke new diplomatic ground by visiting Beijing.
Officials on both sides had done a great deal of preparatory work. No less than 14 separate agreements and memoranda of understanding were signed. Among them was a framework agreement between Saudi Aramco and the Chinese National Company for Petrochemicals. Other projects ranged from energy to science and technology, satellite navigation, renewables and nuclear power. Beijing will provide an important technology input for development of our non-oil economy. Two deals covered Saudi investment in ground-breaking Chinese environmental schemes. The technological benefits of these projects will ultimately feed back to the Kingdom.
Japan already has an extensive record of investment in Saudi projects. As early as 1957, a Japanese oil firm was granted an exploration and production license. In 1971, the late King Faisal paid a state visit to Tokyo. Commercial links have since grown steadily. Japan’s involvement in the Kingdom has focused principally on petrochemicals. It now has 74 Saudi joint ventures with projects capitalized at SR67.4 billion.
Japanese trading companies have a reputation for careful research and analysis. They will establish themselves in a country and patiently watch and assess market opportunities. They are prepared to wait for the right deals, not the first deals that come along. Thus Japan is well equipped to understand the Saudi market. Its trading companies fully appreciate the potential for their country’s companies. The extent of Japan’s existing commitments fully demonstrates this.
After concluding his visit to Japan, the deputy crown prince will go to China for the G-20 summit in Hangzhou. The leaders of the world’s major economies have much to discuss. Global growth is once more slowing. There are fears of a return of recession. But Prince Mohammed will bring some positive news. He has already made successful presentations of his Vision 2030 in the United States and France. This will be the first time that he has been able to set out Vision during the G-20 summit.
The Kingdom is fortunate. Despite weak oil prices, it has sufficient resources and the political will to invest for growth. The increase in the Kingdom’s wealth generation will come from the non-oil economy. The Vision cannot be achieved without foreign financial and technological investment. Since it became a full World Trade Organization member in 2005, Saudi Arabia has steadily honored its obligations under WTO rules. It now conforms to global corporate and regulatory standards. It has a stable business environment.
So at a time when international companies are casting around for profitable new opportunities, Saudi Arabia offers considerable prospects. This key message to his G-20 colleagues will doubtless be inspirational. Instead of pulling in its financial horns, the Kingdom has decided to go invest for growth. By the time the international confidence picks up, Saudi Arabia will be well into its ambitious economic transformation.

Editorial: Iran must not go unpunished

Updated 16 May 2019

Editorial: Iran must not go unpunished

  • Arab News argues that while war is always a last resort, an international response is a must to curb Iranian meddling
  • US strikes worked well when Assad used chemical weapons against his people

The attacks on Tuesday by armed drones on Saudi oil-pumping stations, and two days beforehand on oil tankers off the coast of Fujairah in the UAE, represent a serious escalation on the part of Iran and its proxies, should the initial conclusions of an international investigation prove to be accurate. 

Riyadh has constantly warned world leaders of the dangers that Iran poses, not only to Saudi Arabia and the region, but also to the entire world. This is something former President Obama did not realize until the Iran-backed Houthis attacked the US Navy three times in late 2016. The recent attacks on oil tankers and oil pipelines were aimed at subverting the world economy by hitting directly at the lifeline of today’s world of commerce. Tehran should not get away with any more intimidation, or be allowed to threaten global stability. 

It was in 2008 that the late King Abdullah bin Abdulaziz called upon the US to “cut off the head of the snake,” in reference to the malign activities of Iran. Nearly a decade later, Crown Prince Mohammed bin Salman referred to Iran’s supreme leader Ayatollah Ali Khamenei as the “new Hitler of the Middle East.” We are in 2019 and Iran continues to wreak havoc in the region, both directly and through its well armed proxies. Crown Prince Mohammed was therefore clearly correct when he argued that appeasement does not work with the Iranian regime, just as it did not work with Hitler. The next logical step — in this newspaper’s view — should be surgical strikes. The US has set a precedent, and it had a telling effect: The Trump strikes on Syria when the Assad regime used Sarin gas against its people.

We argue this because it is clear that sanctions are not sending the right message. If the Iranian regime were not too used to getting away with their crimes, they would have taken up the offer from President Trump to get on the phone and call him in order to reach a deal that would be in the best interests of the Iranian people themselves. As the two recent attacks indicate, the Iranians insist on disrupting the flow of energy around the world, putting the lives of babies in incubators at risk, threatening hospitals and airports, attacking civilian ships and putting innocent lives in danger. As the case always is with the Iranian leadership, they bury their heads in the sand and pretend that they have done nothing. Nevertheless, investigations indicate that they were behind the attack on our brothers in the UAE while their Houthi militias targeted the Saudi pipelines.

Our point of view is that they must be hit hard. They need to be shown that the circumstances are now different. We call for a decisive, punitive reaction to what happened so that Iran knows that every single move they make will have consequences. The time has come for Iran not only to curb its nuclear weapon ambitions — again in the world’s interest — but also for the world to ensure that they do not have the means to support their terror networks across the region. 

We respect the wise and calm approach of politicians and diplomats calling for investigations to be completed and all other options to be exhausted before heading to war. In the considered view of this newspaper, there has to be deterrent and punitive action in order for Iran to know that no sinister act will go unpunished; that action, in our opinion, should be a calculated surgical strike.