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Blinkered Vision

Blinkered Vision

Muha jp.jpg

SAUDI ARABIA principally means one thing for the British and US governments. It is not stability in the Middle East - Saudi Arabia’s regional aggressions have created wars in neighbouring countries.

It is not domestic security within Europe and the US - militant fundamentalism continues to receive extensive support from within the Saudi political elite. And it is certainly not human rights - those who dissent within the country continue to be locked up, lashed or beheaded.

The close ties that the May government and the Trump administration have pursued with Saudi Arabia are driven instead by the perception that the massive wealth generated from its oil sales can be routed into their national economies.

When the plans for the partial privatisation of Aramco, the Saudi national oil company, were announced, the US and UK competed with each other for its listing on their stock exchanges, to provide a boost to their financial sectors.

Trump’s first foreign visit was to Saudi Arabia to lobby for a US listing of Aramco. A month earlier, in April 2017, Theresa May accompanied the head of the London Stock Exchange on a visit to Riyadh to lobby Saudi ministers, and the LSE even watered down its governance rules to enable it to host the flotation there.

The UK issued a £1.5 billion loan credit to Aramco, in what was seen as a transparent effort to woo it to London. The economic plan for Saudi Arabia - branded as ‘Vision 2030’ - was devised by McKinsey, an American management consultancy firm, in 2016. This plan would use the £1.5 trillion from the partial privatisation of Aramco to create the largest sovereign wealth fund in the world, which would in turn pour money back into western countries through investment in high value facilities. True believers in the UK, including the Prime Minister, saw the future of the London financial sector and infrastructure investment heavily tied to good relations with King Salman, and his ambitious young son, Prince Muhammad who has become the country’s de facto ruler. Since the publication of Vision 2030, sceptics have labelled it wholly unrealistic. Saudi Arabia’s rulers - or more commonly, their offspring - have often announced grand new projects, like new cities or major building projects, generating considerable international attention, but quietly dropping them later as the practical problems mount. It is difficult for Saudi advisors to caution prudence to a reckless prince when he launches another hare-brained scheme. This is what comes from a deeply authoritarian political system. The idea that Saudi Arabia would subject its national oil company, the source of domestic graft for the ruling family, to the strictures of market discipline and shareholder transparency, always seemed like another such scheme.

So when in August, the Saudi energy minister announced the indefinite postponement of Aramco’s privatisation - officially a rethinking rather than an abandonment, but the prospects of it ever happening are clearly receding - the head-scratching in London and Washington was revealing. Vision 2030 now seems to be little more than an egotistical hustle by a political novice.

For Britain, the effort that had gone into courting Saudi leaders suddenly seemed to have been wasted, premised on a false understanding of how the Saudi government works, or fails to do so. That effort was not just the resources sunk into attracting Saudi money to the UK, nor the high-profile visit of Prince Muhammad in March with gaudy placards around London shamelessly praising him.

Instead, it was the subordination of British foreign policy to this particular policy goal. Earlier in August, Saudi Arabia responded to Canada’s mild expression of concern at the arrest of two Saudi women rights activists with the severance of diplomatic, transport and trade links. The international reaction was near-silence: the UK neither supported the arrested activists nor endorsed Canada’s position, calling instead simply for ‘restraint’.

The most egregious UK policy has been the lack of a response to the world’s worst man-made catastrophe, the humanitarian crisis in Yemen caused by the Saudi-led bombardment and blockade. Just days before the reversal of the policy on Aramco, the British-serviced Saudi air force dropped a 227kg bomb made by US company Lockheed Martin on a school bus in Yemen. It killed 40 children, aged between six and eleven years old, as well as eleven adults. Alistair Burt, the UK foreign office minister, claimed to be “deeply concerned”, but his statement did not even mention Saudi Arabia, let alone announce a cessation of arms exports to it.

Vision 2030 no longer provides a reason for British ministers to flatter Saudi princes, and yet the vision of the UK government is limited to faded delusions of a huge pot of resources there for the grabbing.

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