Letter From Riyadh
NORAH ALAJAJI — FRIDAY, JUNE 30, 2017
Strategic Europe continues its Capitals Series exploring how EU foreign policy is viewed by major non-European countries. We have asked each of our contributors to give a frank assessment of their country’s relations with the EU and rank five key issues in order of their importance in those relations. This week, the spotlight is on Saudi Arabia.
Saudi Arabia has undergone a massive transformation in recent years. A country that was once known as a rentier state fully dependent on oil is now venturing into an era of postoil economic diversification powered by a young generation. The 2016 launch of Saudi Vision 2030, a government plan that aims to position the kingdom as “the heart of the Arab and Islamic worlds, the investment powerhouse, and the hub connecting three continents,” is a testament to Riyadh’s commitment to social and economic reform. The June 21 announcement of Prince Mohammad bin Salman as the youngest crown prince in Saudi Arabia’s history further demonstrates the kingdom’s determination to venture into new directions and worthwhile shifts.
The EU has a long-established and stable relationship with Saudi Arabia. The union and its member states recognize the kingdom as an influential political, economic, and religious actor in the Middle East and the Islamic world; the world’s leading oil producer; and a founder and prominent member of the Gulf Cooperation Council (GCC) and the G20. This relationship continues to form the foundation of the political dialogue between the two partners.
GCC policymakers have held various discussions with their EU counterparts on their experiences of economic cooperation and ways to facilitate trade and fiscal policies. Topics discussed have included how to implement a single currency and move from a customs union to a single market. In addition, the EU and the GCC have established expert groups to tackle sectoral matters such as macroeconomic challenges and energy cooperation.
Over the past ten years, Saudi Arabia has transitioned dramatically from a relatively closed economy dominated by hydrocarbons and resistant to foreign direct investment to an open economy that welcomes inflows of foreign capital. The removal of some investment barriers following the kingdom’s 2005 accession to the WTO has played a major role in EU-Saudi trade relations. Riyadh now enjoys better security, a rapidly expanding domestic consumer market, and major investment projects supported by government incentives. The launch of Saudi Vision 2030 has meant that regulations have been streamlined to encourage even more foreign investment.
There has also been a dramatic deepening and widening of defense relations between Saudi Arabia and EU member states. With political turmoil spreading across the Middle East, Saudi Arabia has adopted a more rigid stance toward regional conflicts. The growing EU-Saudi defense relationship stems primarily from the region’s instability, coupled with the rise of terrorist groups such as the self-proclaimed Islamic State. Combating this group is at the heart of European and Saudi counterterrorism efforts, especially following its involvement in terrorist attacks in Europe and Saudi Arabia.
Riyadh’s defense and security relations with individual EU member states vary, with the UK and France being the union’s key defense exporters. Saudi Vision 2030 aims to increase the country’s military industries and enable Riyadh to supply half of its own equipment through domestic production by 2030. To achieve this, it is expected that the kingdom will continue to cooperate with the EU on defense training, communication, and technology transfers.
This being said, there seem to be sharp disagreements among EU countries about selling arms to the kingdom, especially given the Saudi-led military campaign in Yemen.
Although the two regions have a strong and generally positive relationship, tensions between the EU and Saudi Arabia have emerged in some areas. As the refugee crisis worsens and refugees continue to make dangerous journeys across the Mediterranean in search of a new home, the international community — including the EU — has criticized countries such as Saudi Arabia for not doing enough to help.
But the international community fails to portray Riyadh’s efforts to tackle the refugee crisis. In 2015, the kingdom launched the Saudi National Campaign to Support the Brothers in Syria, which established 57 relief programs and projects for displaced Syrians across the world. As of late 2015, there were 500,000 Syrians in Saudi Arabia, which grants these residents considerable latitude: in many cases, they are allowed to extend their stays beyond their visa deadlines and bring their families to Saudi Arabia on visitor visas. However, it is equally true that no Syrians claiming asylum have so far been able to seek refuge in the GCC.
Other European criticisms have emerged of Saudi Arabia, specifically in the areas of human rights and women’s rights. While many of these criticisms are valid, others seem to stem from Western-centric views of rights and women that bear no sensitivity to history or cultural norms. Women in Saudi Arabia have achieved significant accomplishments in recent years. The situation for women in the country has started to change in line with moves to diversify the economy, increase female labor force participation, and cut reliance on oil.
The Saudi government’s Advisory Council now consists of more than 30 percent female representatives. Saudi women head major banking institutions, while Saudi female doctors and medical practitioners are winning worldwide recognition for their achievements. There is also a considerable and refreshing rise of creative female filmmakers and artists as well as leading entrepreneurs and tech experts. Despite the major challenges facing women in the kingdom, there is much to celebrate.
Amid growing political and economic crises and the changing distribution of global power, it is more important than ever for Saudi Arabia and the EU to strengthen their relationship and explore new ways to diversify their trade and investments. The EU has an excellent record of recovering from crises and moving ahead more strongly than before thanks to firm political will. Saudi Arabia is keen to learn from these lessons as it positions itself as a global leader at the heart of the Arab and Islamic worlds.
Norah Alajaji is a public policy consultant.