Saudi Arabia's dominance: A pivotal force shaping the Asian and global geopolitical landscape

New Delhi: India and Saudi Arabia have solidified their economic and strategic partnership during the India-Saudi Arabia Investment Forum 2023 held in New Delhi early this week.

Equally, at the G20 Leaders' Summit, India, the United States, Saudi Arabia, and the European Union unveiled an initiative – the India-Middle East-Europe shipping and railway connectivity corridor. This initiative has the potential to reshape global trade and transportation routes significantly.

This gathering followed the successful G20 summit in New Delhi, which included more than 45 countries' leaders, including the US, France, the UK, Australia, and representatives from the Global South.

Notably, the presence of leaders from Saudi Arabia, the United Arab Emirates (UAE), Egypt, Turkey, and Oman underscored the significance of West Asian representation at the G20, akin to the importance of the African Union's voice with 54 African countries and the global South.

Saudi Arabia on ascending role

Saudi Arabia is strategically seeking to carve out a significant role in the evolving global landscape, marked by balancing between the US, the West, India, and the growing influence of China supported by Russia.

However, it is essential to note Saudi Arabia's emerging relationship with China with caution, as they are already participants in China's Belt and Road Initiative, along with the UAE and now a member of the BRICS. With the inclusion of Saudi Arabia in the BRICS group, Chinese interest in the Gulf region has surged.

The recent Saudi Arabia -Iran peace deal has allowed China to strengthen its presence in Saudi Arabia. Despite past tensions, Saudi Arabia's efforts to improve relations with its neighbours are a positive development for Gulf regional stability.

Bank of China recently inaugurated its first branch in Riyadh, Saudi Arabia, demonstrating China's interest in expanding the use of the Chinese yuan in finance and trade in the Gulf region.

Saudi Arabia, too, is keen on diversifying its partnerships beyond reliance on a single country. Saudi Arabia is to invest in mineral extraction projects in Pakistan and Afghanistan, an aspect that should not be overlooked.

Saudi Arabia is also working to broaden its ties with Global South countries as Arab nations increasingly engage with emerging economic blocs. Notably, the UAE and Egypt are already members of the BRICS New Development Bank, and Saudi Arabia is expected to join soon. Asia and Africa hold particular importance for Arab nations, especially Asia, as it is home to their top two trading partners, India and China, and the largest oil markets and human resource services.

The UAE and Saudi Arabia, the top two economies in the Arab world, boast a combined GDP of around $1.5 trillion. They give jobs to millions of people from Asia and Africa.

The relations between the US and Saudi Arabia have gone spirally down since 2019 when the US blamed Saudi Crown Prince Mohammed bin Salman for killing Saudi journalist Jamal Khashoggi.

Saudi Arabia has gradually transitioned towards a more liberal image, embracing change and greater gender inclusivity. This transformation is crucial for global security, as it paves the way for long-term economic progress in a globalized world.

They no longer depend on the US or any Western country, unlike a decade ago when the US would dictate terms to Saudis.

India recognizes the importance of this change, as it can potentially influence and pressure radical elements in neighbouring countries, such as Pakistan and Afghanistan.

State Visit of Crown Prince an achievement

The state visit of Saudi Crown Prince and Prime Minister Mohammed bin Salman bin Abdulaziz Al Saud to India resulted in over 500 companies from both nations discussing collaborative opportunities in India.

It marked the first formal investment agreement between India and Saudi Arabia, with commitments to invest approximately $100 billion across various sectors of the Indian economy.

The bilateral Strategic Partnership Council's Leaders' Summit, along with the Department for Promotion of Industry and Internal Trade from India and the Saudi Ministry of Investment, jointly organized the event.

During this period, both countries signed eight agreements covering various areas, including energy, interconnectivity, digitalization, electronic manufacturing, finance, and security. More than 45 Memorandums of Understanding were signed to strengthen economic engagement and boost investment flows between the two nations.

Though in the Memorandum of Understanding stage, these developments are grabbing headlines as a response to China's Belt and Road Initiative and pose a potential challenge to China's influence in Gulf countries.

Way Forward

The following steps involve practical implementation, discussions on investment in various projects, collaboration with participating countries, blueprint development, and establishing timelines. India must also ensure the smooth execution of the 45 MOUs through bilateral meetings.

Given the fluid geopolitics and efforts to strengthen multilateral platforms alongside the United Nations, the Arab world's growing influence is significant.

Countries like the US, India, Russia, and China seek strategic, economic, and political support from Arab nations in shaping a new world order.

Saudi Arabia holds a prominent position in the Arab world as the top economy and the world's largest oil exporter, with substantial oil reserves. It is a crucial member of the G20 and leads OPEC, while the Sovereign Wealth Funds (SWF) of the UAE and Saudi Arabia rank among the world's top 10.

The UAE is another major regional player, one of the largest trading nations and the 11th largest exporter globally. It is also among the top six oil exporters, with a significant share of global oil reserves.

With Saudi Arabia and the UAE taking a more proactive stance in international affairs, they are positioning themselves as pivotal players in transitioning to a multipolar global order. Their growing economic influence is reflected in their active participation in various platforms, including the G20, BRICS, SCO, OIC and the World Economic Forum.

Despite these positive developments, challenges persist in the Gulf region, including unresolved issues like the Palestinian conflict, tensions in Syria and Iraq, the economic crisis in Lebanon and the attempt to reemerge Al Qaeda and ISIS.

With India's increasing engagement with Saudi Arabia and its continued partnership with the UAE, the role of the Indian diaspora in these countries has become crucial. India's presence and acceptance in the Gulf region hold significance not only in strategic and geopolitical terms but also in bolstering the economic prospects of the entire area.