Toward reimagined global financial architecture: Progress and challenges

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The Saudi-American bilateral relationship has been seriously strained in the past three years by tensions underlying the Arab Awakening, and President Barack Obama has serious fence-mending ahead of him when he meets with King Abdullah in Riyadh in March. The relationship is not broken and both sides still need each other.

Barack Obama’s first trip as President to an Arab capital was in 2009 when he visited Riyadh before going to Cairo to deliver his now famous speech on American relations with the Islamic world. It was an indicator of how critical and important Obama deems the Saudi role in the region from Morocco to Indonesia. The US President has appreciated the Kingdom not just as a key energy source (one in four barrels of oil on the market comes from Saudi Arabia), but it is also home to Islam’s two holiest cities and thus has enormous soft power in the Muslim world.

Arab Spring and the Winter in Bilateral Relations

But the Arab spring severely damaged America’s ties to the royal family, which was shocked to its core when Obama urged President Hosni Mubarak to leave office. For the House of Saud this was a betrayal of a key ally. Thus, the Saudis were very quick to welcome the military coup in Egypt this past summer which they saw as restoring order in Cairo and strengthening their own position at home by removing a dangerous example of revolutionary change in the Arab world. The return to autocratic rule in Cairo reduced the danger of upheaval in other Arab states. Abdullah recognised the coup leaders, especially General Sisi, hours after they took power and Riyadh rapidly put together a multibillion aid programme for Egypt and enlisted Kuwait and the United Arab Emirates to help fund it. The aid comes with no rider that Egypt restore democratic rule; to the contrary, it is intended to undermine American efforts to use US aid to help foster reform and democracy.

When the Arab spring spread to Bahrain, and America urged reform there as well, the Saudis sent troops across the King Fahd Causeway to back the minority Sunni ruling family. Almost three years later, Saudi troops continue to back up the Sunni minority regime in Manama and King Abdullah has spoken openly about a closer union between the Kingdom and Bahrain. The Saudis have become increasingly irritated by American criticism of the Bahraini government’s poor human rights record.

More Anger with Washington

Riyadh is especially disappointed in American policy toward Syria where they want Washington to take robust steps to oust the Assad regime and replace it with a pro-Saudi Sunni government. The Saudis are arming the opposition much more aggressively than Washington and want Obama to be more vigorous in fighting Assad.

At the same time, Riyadh is anxious that Washington is prepared to appease Assad’s backer Iran and conclude a deal with Tehran on its nuclear programme. Senior Saudi officials like intelligence chief Prince Bandar bin Sultan have been increasingly outspoken in criticising American policy, and the Saudis refused to take up a seat on the United Nations Security Council this January because they argued the US was not doing enough on Syria or the Palestinian issue. Saudi officials made it clear that this unusual decision was intended to signal anger with Washington.

Despite these public tensions, in private robust cooperation continues on counter terrorism and other issues. The Americans and Saudis cooperate closely against al-Qaeda, especially in Yemen. CIA Director John Brennan enjoys very close and productive relations with the Saudi counter terrorist chief and Interior Minister, Prince Muhammad bin Nayif. Saudi intelligence was critical in foiling the last two plots by al-Qaeda to smuggle explosives onto aircraft flying in the United States. This year, the Kingdom has also tried to take steps to prevent Saudi citizens from travelling to Syria to join al-Qaeda jihadists there.

The burden of bucking up weak autocratic regimes and other allies is becoming more costly for Riyadh. Saudi officials say the Kingdom spent more than $25 billion subsidising its allies in Jordan, Bahrain, Yemen, Pakistan and elsewhere in 2012, and expect that burden to rise to over $30 billion in 2014 with the addition of the Egyptian account. Almost all of this aid is budgetary support so there is virtually no economic development return. The cost of supporting the counter revolution in the Arab and Islamic worlds adds greatly to the challenges facing the House of Saud in the years ahead.

A Disharmonious Alliance, But No Divorce

The Arab Awakening has demonstrated clearly that Washington and Riyadh do not share common values, but they do still share some common interests. Neither has a viable alternative partner to secure those interests like fighting al-Qaeda and containing Iran. It is likely to be an increasingly disharmonious alliance, but not a divorce.

Obama will try to persuade Abdullah to support two of his key initiatives – the nuclear talks with Iran and the peace negotiations with Israel, and the Palestinians. The Saudis are very worried that the P5+1 talks with Tehran will produce a weak deal that allows Iran to be on the verge of nuclear weapons status while lifting most of the sanctions. Riyadh has made it clear that it will seek its own nuclear deterrent if Iran gets the bomb, almost certainly from Pakistan.

Obama’s Challenges

The President must assure the Saudis that he will not make a bad deal and the deal he wants to reach will ensure Iran is not just a short step away from the bomb. Obama must also assure the King that the United States has no intention of ignoring Iranian behaviour in supporting Assad in Syria, Hezbollah in Lebanon and dangerous Iranian subversion in Bahrain and Yemen. Since the US is committed to thwarting Iranian aggression, the two should be able to agree on a shared strategic consensus on this issue.

On the peace process with Israel and the Palestinians, Obama’s goal is to convince Abdullah that he and Secretary of State John Kerry are really serious about achieving a breakthrough this year. The Saudis in general and the King in particular want Washington to press Israel to accept a two state solution based on the 1967 lines with a Palestinian capital in Jerusalem. Their concern on this issue is not that Obama and Kerry are not trying enough now but whether they will be willing to put pressure on Israel to accept a deal when the talks get to decision time. The Saudis were deeply disappointed in the first Obama term when he spoke tough about an Israeli settlements freeze as a condition for negotiations, but backed away when Israel balked.

Abdullah is the principal author of the Arab League’s peace initiative that promised Arab recognition of Israel within secure borders in return for a just and fair peace with the Palestinians. The King is passionate about the Palestinian cause and deeply disappointed that America has done too little to press Israel to end the occupation of the West Bank and East Jerusalem.

Stability in South Asia

A third issue will probably get attention mostly behind the scenes. The two leaders will need to address how to help ensure stability in South Asia when American and other NATO forces leave Afghanistan at the end of this year. Riyadh has enormous influence in Pakistan and hosted Prime Minister Nawaz Sharif during his years in exile. Washington has little influence in Islamabad and needs Saudi help.

The American-Saudi relationship dates back to 1945 when the modern kingdom’s founder Abdul Aziz Ibn Saud met with President Franklin Delano Roosevelt on an American warship, the USS Quincy, in the Suez Canal at the end of World War II. The two agreed on a basic formula for the partnership, American security help to Saudi Arabia in return for Saudi management of a reliable and affordable energy supply to the world.

The partnership has had its highs and lows. Probably the peak was the joint covert programme to back the mujahedin in Afghanistan with Pakistan to defeat the Soviet Union in the 1980s. That partnership won the final and decisive battle of the Cold War. Probably the nadir was King Feisal’s decision to shut off oil exports to the US in 1973 over American support for Israel. Some American pundits suggested seizing the oil fields of the Kingdom in retaliation. Cooler heads prevailed.

Today’s difficulties are not as serious as the 1973 low point, but they do need attention and care. Obama will need to convince his hosts that he is serious about keeping the relationship healthy, curbing Iran’s nuclear ambitions and, above all else, securing a breakthrough in the Israeli-Palestinian conflict.

Editor’s note: This article was originally published by the
Diplomatist
.