JOIN USSaudi king mounts a travelling circus to Asia
Undaunted by a crumbling economy at home, Saudi King Salman mo-unted an air-borne expedition to Asia, with a stop in Jordan on the way back to his kingdom.
He has taken an entourage of 1,500 with 450 tonnes of cargo, including two limousines, on seven aircraft during this month long trip to Malaysia, Indonesia, Brunei, Japan, China and the Maldives.
The delegation includes 10 ministers and 25 princes, clerics and 100 security personnel. At each stop, the Saudis take over several luxury hotels and hire fleets of cars and buses to transport family and retainers.
The king’s father Abdel Aziz ibn Saud (1875-1953), founder of the kingdom, would have been appalled over this show of wealth. During his lifetime, he was highly critical of the profligacy of his sons and other relatives. By mounting a travelling circus, King Salman clearly seeks to counter the impression that the kingdom is in austerity mode due to the low price of oil and the drain on the kingdom’s coffers posed by the costly, destructive and deadly war in Yemen.
Last year, the three major Saudi construction firms were unable to pay their foreign and local workers due to the failure of the government to pay for completed projects. Some payments remained in arrears early this year. The majority of unpaid workers come from countries not on his tour: India, Pakistan and the Philippines. He might have faced protests if he had visited their capitals.
The king’s main aim is to demonstrate that the kingdom is still a major economic and political player on the world stage. He seeks to shore up relations with the six Asian nations on the tour. They, along with India, consume 70% of Saudi Arabia's oil exports.
The king seeks to persuade Asian banks and companies to pour money into projects in the kingdom’s non-oil sector, diversifying the economy to reduce dependence on oil. The Saudis have embarked on a major economic reform plan with the intention of transforming their economy by 2030.
Riyadh is particularly eager to interest investors in the 2018 share flotation of Saudi Aramco, the state-run oil firm with an estimated worth of $2 trillion. The Saudi aim is to convince Asian investors to buy 5% of the shares in the firm. Energy Minister Kahlid al-Falih and Aramco executives are accompanying the king.
China and Japan, along with the US, are the largest importers of Saudi crude. Each bought $20 billion of Saudi oil products in 2015. Saudi Arabia seeks to defend this market share against competition from discounted oil from Iran, the kingdom’s rival in oil exports as well as political influence in West Asia.
Last August, Riyadh signed agreements with China for house construction, water
projects and oil storage facilities in the kingdom during a visit by the king’s favourite son, Muhammad who is deputy crown prince, defence minister and economic czar. Saudi Arabia has already agreed to invest $45 billion in a technology fund to be set up by Japan's SoftBank Group.
During visits to Muslim countries, the Saudis have had talks on expanding tourism and increasing pilgrimage delegations. However, the Saudis have also to reassure the governments of these countries that mosques and religious schools built and funded by the Saudis are not making converts to the puritanical Wahhabi sect adhered to by Islamic State and al-Qaeda.
Oil refinery
During the king’s halt in Malaysia, the first country on his tour, he proposed to invest $7 billion in an oil refinery established by the Malaysian firm Petronas. King Salman was warmly welcomed in Kuala Lumpur by Prime Minister Najib Razak who has faced down a scandal caused by a personal gift of $681 million from Saudi royals.
In Indonesia, King Salman promised to increase investments in that country to $25 billion. Jakarta seeks to secure funds of a refinery and deepen relations between its state-owned petrol company and Saudi Aramco.
As King Salman has embarked on this trip ahead of a visit to Washington, former Saudi diplomat Abdullah Shammary told The Wall Street Journal that Riyadh seeks to send a message to the US, saying, “Yes, you are our friend. But we also have alternatives.”
However, it is unlikely the Saudi monarch would have to send such a message as he was one of the first world leaders to speak to Donald Trump following the US president’s inauguration. The king has been assured that the US will resume deliveries of cluster munitions and guided bombs suspended by the former Obama administration due to the kingdom’s brutal war on rebels in Yemen.
Saudi Arabia’s “pivot” to the east began with the January 2006 trip to India and China by the late King Abdullah, the current monarch's predecessor. Riyadh aims to not only diversify its economy but also expand its collection of allies after more than seven decades of relying on the US, a tie forged in 1945 when King Abdel Aziz
met president Franklin Roosevelt on a ship in Egypt’s Great Bitter Lake.