13 Sep in New Delhi: Saudi Arabia has become an appealing hub for governments looking to solidify their standing on the international arena in an era marked by changing geopolitical landscapes and polarising world systems. The Kingdom has risen to a position of increasing global relevance as a result of its aggressive participation in international alliances, adoption of liberal principles, and adoption of progressive reforms. Their importance has increased in the BRICS, SCO, and now G 20.
In addition to altering regional power dynamics, Saudi Arabia’s growing importance is also having a significant impact on world politics and commerce, and they continue to be important in the OIC and GCC countries.
Indian and Saudi Arabian ties are improving
Since a decade ago, India and Saudi Arabia have cultivated a stronger economic and strategic relationship. Early this week in New Delhi, during the inaugural India-Saudi Arabia Investment Forum 2023, this burgeoning connection took centre stage.
Trade between the two countries has increased dramatically, reaching an astonishing USD 52.75 billion for the fiscal year 2022–2023 and continuing to rise. This economic synchronicity emphasises how their cooperation is mutually advantageous. The Indian diaspora in Saudi Arabia also sends huge amounts of money home abroad.
The success of the recent G20 conference in New Delhi drew great attention. The leadership of Saudi Arabia and other significant West Asian countries, such as the United Arab Emirates (UAE), Egypt, Turkey, and Oman, were present at the G20 summit, underscoring the region’s rising significance. West Asian countries were a dark horse, gradually establishing their views on the world arena even while the African Union, which represents 54 African countries and the global South, received a lot of attention.
A crucial turning point in this developing alliance was the official visit to India by Mohammed bin Salman bin Abdulaziz Al Saud, the Saudi Crown Prince and Prime Minister. A proof of the growing confidence between the two countries was the gathering of more than 500 firms from both countries in India to look into possible joint prospects. With the Crown Prince’s pledge to invest roughly $100 billion across various sectors of the Indian economy, the formalisation of the first investment agreement between India and Saudi Arabia has further solidified this relationship and significantly altered trade and transportation routes.
More than 45 Memorandums of Understanding (MoUs) were signed to increase economic cooperation and speed up investment flows between the two countries during the Saudi Crown Prince’s visit. These agreements cover a wide range of topics, including energy, digitization, finance, and security. These agreements’ depth and scope reflect how extensive the Saudi-Indian collaboration is.
The launch of the India-Middle East-Europe Economic Corridor (IMEEC), which includes the United States, the European Union, and India as significant participants, highlights the revolutionary potential of this alliance in parallel and on the periphery. This programme seeks to improve connections and promote regional economic development. much more so in the UAE and Saudi Arabia.
Projects are being carried out.
Despite being in their early stages, these accords have garnered a lot of attention in reaction to China’s Belt and Road Initiative and may pose a threat to China’s influence in Gulf states. Once a plan and project report become a workable foundation, a number of other nations may join the network.
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.
Saudi Arabia has been meticulously transforming itself in recent years, eschewing the stringent beliefs of Wahhabism in favour of a more modern and open society. The Kingdom’s dedication to reaching gender parity, together with notable improvements in women’s rights and involvement in numerous aspects of society, is where this transition is most clearly seen.
This change has altered Saudi society and brought the Kingdom into the international limelight. The United States, Europe, China, and India are among the major international powers that are aware of Saudi Arabia’s changing position in both regional and global geopolitics.
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.