Saudi Deputy Crown Prince Mohammed bin Salman (L) meeting with British Prime Minister Theresa May in the capital Riyadh 4 April 2017 - AFP/Bandar al-Jaloud/Saudi Royal Palace
Saudi Deputy Crown Prince Mohammed bin Salman (L) meeting with British Prime Minister Theresa May in the capital Riyadh 4 April 2017 - AFP/Bandar al-Jaloud/Saudi Royal Palace

MBS’s visit begins, but what governs the UK’s relationship with Riyadh?

Wed, Mar. 7, 2018
CAIRO – 7 March 2018: “Money, money, money; I got love in my tummy, and I feel like a-lovin you.” Maybe these were not the exact words sang by Ohio Express in their 1968 chart-topping hit, but they have been championed by every U.K. prime minister for many decades. On account of its empire and colonial expansion, British excursions in the Arabian Peninsula go back centuries, and after the Anglo-French betrayal of the Sherif of Mecca, the U.K. helped facilitate the creation of the modern Saudi state. Whilst Winston Churchill characterized the Al-Saud tribe as “austere, intolerant, well-armed and bloodthirsty” to the House of Commons in July 1921, strategic benefits prevailed and over the past century the relationship has been mutually prosperous.

The U.K.-Saudi relationship was subsequently founded upon oil and arms deals, which have pulled the two countries closer together politically. Westminster serves as an important ally for the Saudi state, providing crucial international support. In reciprocity, Saudi Arabia has pumped billions into the U.K. economy through arms deals and investment.

However, British Prime Minister Theresa May is facing a public challenge for welcoming Saudi Crown Prince Mohamed bin Salman (MBS) onto British soil.

Campaigners are calling

on Theresa May to challenge the Saudi state’s human rights record, as well as suspend arms sales to the state amid its involvement in the war in Yemen. However the longstanding U.K.-Saudi relationship has many threads that make it unappealing for Westminster to break ties with its ally.

It appears seeds of change are blossoming in the Arabian Desert. Mohamed bin Salam, Saudi Arabia’s new Crown Prince and de factor leader of the state, has received warm support for the wave of reforms he has instigated in the deeply conservative country. Although there is a still a long way to go, MBS has set the country on an upward trajectory with his promises to provide equal opportunity to all citizens and

stamp out corruption

; the infamous ban on women driving will be lifted in 2018, as has the rule prohibiting women from attending public sporting events.

The Saudi-led coalition’s military involvement in Yemen has deepened the U.K.’s predicament in the eyes of campaigners. Saudi Arabia and its allies intervened in Yemen in March 2015 in an attempt to repel Iran-backed Houthi rebels; the conflict in Yemen is increasingly multifaceted, with many actors involved. The U.N. estimates that over 10,000 people have been killed in the conflict, including over 5,000 civilians, and 3 million displaced; British-made weapons have played an essential role. Fighting in Yemen has left 20.7 million people in need of humanitarian aid, creating the world's largest food security emergency, while inhumane conditions have created the worst cholera epidemic on record, with around one million people infected.

d583bcb2-7929-4e54-94d3-b8c2e4943ef0_16x9_788x442
British Queen Elizabeth II welcomed Saudi Crown Prince Mohammed bin Salman at Buckingham Palace on Wednesday - AFP

"The lives of millions of people, including 8.4 million Yemenis who are a step away from famine, hinge on our ability to continue our operations and to provide health, safe water, shelter and nutrition support," said Jamie McGoldrick, the U.N.'s humanitarian coordinator for Yemen. Save the Children reported in November 2017 that 130 children were dying every day, with 50,000 children believed to have died in 2017. Starvation, disease, and a lack of access to healthcare and medical aid are principal contributors.

The Saudi monarchy is not short of international support, and MBS made his first visit to the U.K. on March 7. Three factors underpin the U.K.’s relationship with the Kingdom, which put together make it exceedingly difficult for the U.K. to split the bond. Firstly, arms sales. Historically, U.K. arms sales to Saudi Arabia have been motivated by strategic interests in the region and not allowing the U.S. to monopolize the market. Year-upon-year arms sales multiplied and the Al Yamamah deals in the late 1980s set the U.K. on course as a global leader in military hardware, and Saudi Arabia is now a mainstay of the U.K.'s arms trade. Since 1966, arms sales drastically increased, and Saudi Arabia is the third largest recipient of British military hardware, behind the United States and India, according to the SIPRI database.

The number of British-made bomb and missile sales has

increased drastically

by almost 500 percent since the start of Saudi Arabia’s conflict in Yemen in March 2015. Through this period, the U.K.

government has granted

almost £4.7 billion ($6.5 billion) in arms export licenses headed for the Saudi state. Arms deals with Saudi Arabia helped the U.K. to become the

second largest arms dealer

in the world in 2016.

The British Ministry of Defense is also

closely involved in training

the Royal Saudi Air Force.

While humanitarian groups have called on the U.K. government to stop licensing arms exports to Saudi Arabia, the High Court ruled in 2017 that the government is not breaking the law by continuing to approve arms sales licenses to the Kingdom. The ruling came after a challenge was put forth by the Campaign Against the Arms Trade (CAAT).

Over the last decade, Saudi Arabia has been

the largest importer

of British military hardware, more than doubling that United States in second position.

Secondly, the Saudi state has substantial investments in the U.K., which cannot simply be taken for granted. When Saudi Arabia’s economic expansion began in 1974, funded by its substantial oil rents, then-Prime Minister Harold Wilson painted the U.K. as the ideal place to invest. Over four decades later, and

Saudi investments in Britain

now amount to an estimated £60 billion.

Photo 3
A large banner shows Saudi Vision for 2030 as a soldier stands guard before the arrival of Saudi King Salman at the inauguration of several energy projects in Ras Al Khair, Saudi Arabia, November 29, 2016 - REUTERS/Zuhair Al-Traifi

“Vision 2030” is the path Saudi Arabia is set to follow in the coming decade, one in which it will be a “tolerant country with Islam as its constitution and moderation as its method.” The ambitious initiative will restructure the economy and diversify away from oil in an unprecedented shakeup of the Saudi economy. Theresa May is set to capitalize on this and strengthen the relationship as the U.K. pulls out of the European Union.

The United Kingdom is Saudi Arabia’s

second largest investor

, with around 200 joint ventures estimated to be worth around £11.5 billion. With MBS’s vision to diversify the economy, there is billions of dollars worth of investment opportunities on the horizon, and the U.K. is well placed to take advantage of this opportunity.

The third reason is Saudi Aramco. The

world’s largest oil company

is preparing for what could be the biggest initial public offering (IPO) in history, as it is set to float in 2018. Aramco is the world’s largest oil producer, pumping 12 percent of the world’s oil supplies, and it is expected to have a market value at around $2 trillion. In order to bring in international capital, the majority of the IPO will be offered on one or more international exchanges, and Theresa May hopes that the London Stock Exchange will be the favored location. London's listing rules state that more than 25 percent of a company's shares should be listed; however, it possible rules could be changed to accommodate for Aramco.

Saudi Aramco was nationalized in the 1970s and has remained under government control ever since. The Saudi government intends to initially float 5 percent of the oil company, with its proceeds going to the Saudi Public Investment Fund (PIF); if successful, it will become the largest Sovereign Wealth Fund in the world. This is essential to ensure the successful of MBS’s “Vision 2030” and diversify the economy away from oil and gas.

In the formation of the U.K.’s foreign policy, realpolitik prevails. The commercial and strategic benefits of the bi-directional relationship are increasingly unavoidable, and they stand first and foremost not just in the upper echelons of the U.K. government but in the vast majority of governments across the globe. As MBS continues down his path of progress and rapid change, the U.K. cannot leave the kingdom by the wayside and miss the economic fruits that follow.

 
There are no comments on this article.

Leave a comment