Russian-Saudi Relations: Complexities, Opportunities, Prospects

04.10.2017

In the beginning of the 21st century, as fast-paced changes in the system of international relations are underway, conditions have emerged for the rapprochement of an array of countries, which previously had, it would seem, insurmountable disagreements. In the Middle East, a new geopolitical configuration is being built. Russia’s positions are becoming stronger, a Moscow-Ankara-Tehran triangle is emerging, and Saudi Arabia and Qatar are fighting for leadership as leading regional powers become weaker. There is a desire to increase one’s positions by reforming the national economies in the emerging global economic model. I believe that the upcoming visit of the Saudi leader should be seen in the context of these changes.

Our countries are connected in many ways. The Soviet Union was the first non-Islamic country to recognize in 1926 the state that in 1932 became the Kingdom of Saudi Arabia. The state’s founder, Abdel Aziz ibn Saud greatly appreciated the role of our country in the world and sought to develop relations with it. However, soon after that, relations were broken and the two countries were for a long time divided by the wall of the bipolar world.

Active political contacts between Russia and Saudi Arabia and other GCC countries began relatively recently. The historic visit of Saudi Crown Prince Abdullah ibn Abdel Aziz in September 2003 created a new basis for long-term prospects in the relations of two states, Russia in the world and Saudi Arabia on the Arab Peninsula. In 2007, the first-ever Russian presidential state visit to Saudi Arabia, Qatar and UAE took place. The sides strengthened the international treaty framework, discussed the state and prospects of cooperating in oil and gas, military-technical cooperation and the development of transportation infrastructure. The next increase of the level of engagement took place during Russian Foreign Minister Sergei Lavrov’s visit to the UAE in November 2011, when the first ministerial session on strategic dialogue between GCC foreign ministers and the Russian foreign minister took place.

There are reasons to believe that the upcoming visit of the Saudi king will not only further the rapprochement of our countries, but also allow us to more clearly define areas of cooperation and create an effective mechanism for engagement. What can these negotiations put emphasis on? I believe that in first place will be problems of international security and coordination on the oil market to develop upon the OPEC-Russia oil market stabilization agreement.

Russia will also promote its plans for improving regional security. Arab countries noted the 2007 Russian idea for providing collective security in the Persian Gulf area that includes all regional and interested parties. Signing such an international agreement with Persian Gulf Arab states and Iran would not only decrease the acuteness of Iran-Arab contradictions, but also increase Russia’s authority on both sides of the Gulf. In any case, relations in the Russia-Saudi Arabia-Iran triangle will be one of the main topics of discussion.

Our countries are reconciling their positions on fighting international terrorism that hides behind the banner of Islam. Working together in this area is hindered by Moscow and Riyadh’s differences in approaches to Syria and Iran’s regional policy, which must be a topic of discussion at the talks. There are compromises possible, as in the case of the changing balance of power in Syria and Russia’s ability to be an intermediary in conflict resolution talks on both sides of the Persian Gulf.

There needs to be a new level of economic relations. There was a time when the main Soviet export to Saudi Arabia was kerosene. International economic relations are already at a new level of development. For over a year, Saudi Arabia has lived in accordance with Vision 2030, a program of radical economic and social reforms that will define the Kingdom’s development in the years ahead. Its essence is in diversification, liberalization, increasing economic competitiveness and departing from state paternalism in the social sphere. Today, our countries are united in having similar economic goals. Another benefit is that Riyadh did not join economic sanctions against Russia.

Here are some of the key directions for economic cooperation what may be discussed:

• Investments and industrial cooperation. Ample financing will allow a transfer of capital from KSA’s hydrocarbon sector (90% of fiscal revenues) to the investment market. Transferring funds from the privatization of Saudi Aramco into the Private Investment Fund will make it the world’s largest sovereign fund.

• Creation of a stock market would allow for the diversification of the economy, including high-tech, manufacturing, services (primarily telecom and transport) and agriculture. The goals of Russian and Saudi leadership are similar here.

• Of special interest for Russian producers is the Saudi goal of creating a modern national arms industry. There is a goal of localizing over 50% of defence procurements by 2030. Today, the kingdom, which has the third-largest defence budget in the world, spends only 2% of these funds on domestic procurements. Russia’s effective use of modern weaponry against terrorists in Syria created a visible impression. Our competitive advantages should be strengthened through industrial cooperation and technology transfer. For the KSA, this is a mandatory condition for cooperation.

• Scientific and technical cooperation, training of specialists.

• A major area could be nuclear energy, in which Russia has leading positions.

• Continuing creation of joint projects on peaceful exploration of space.

• Such areas as water and agriculture.

• The Saudi leadership is interested in Russia’s potential in building and operating a transportation network, considering the Kingdom’s strategic location at the intersection of Asia, Europe and Africa. Of special interest are ground transport lines that connect the KSA with African countries through Africa.

• Our goals coincide in encouraging small and medium-sized businesses, the participation of which in Soviet/Russian-Arab economic cooperation was traditionally minimal.

If economic agreements are signed, Russia will have to compete with other bidders for Saudi contracts. In reforming their economy, the Saudis will adhere to the multi-vector approach, as King Salman’s visits to Malaysia, Indonesia, Japan and China in February-March 2017 and Donald Trump’s visit to Saudi Arabia in May 2017 can attest.

Forecasting the outcome of upcoming talks, a weighted approach should be used. Considering past experience and the complexity of the international situation, Russian-Saudi rapprochement will take some time and will have to overcome many hurdles. However, the two countries’ ambition to move in this direction is obvious.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.

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