Daily Management Review

Saudis Could Shift Eastward Due To US Sanction Threat


10/25/2018




Saudis Could Shift Eastward Due To US Sanction Threat
International alliances that had formed and existed over decades are being put to the test because as a result of the killing of Saudi journalist and U.S. resident Jamal Khashoggi.
 
Even while the United States president Donald Trump is not really ready yet to let the fall out of the incident impact the US-Saudi arms relationship, a section of the Congress have openly called for imposing of sanctions on the Middle east country – which is the largest buyer of US weapons. 
 
A temporary moratorium has been announced by Germany with respect to its arms trade with the kingdom which has been welcomed by a large section of the international community. However there are now fears that the Saudis would just be forced to look east to procure arms with the sanctions against selling it weapons in the west.
 
"If the U.S. and West in general move toward some meaningful sanctions of Saudi Arabia, we would be joking to imagine that the Saudis would just sit down and accept it," Ayham Kamel, head of Eurasia Group's Middle East and North Africa practice, said in an interview.
 
"The Saudis I think will begin to tilt — they were already doing that beforehand — they'll be doing more business with China and Russia. I doubt Mr. Putin would've given the Saudis much trouble with this crisis as Mr. Trump has."
 
A critic of the Saudi royal family and a columnist for the Washington Post, Khashoggi had last been seen entering the Saudi embassy in Istanbul on October 2 and had been claimed to have been missing since. He was declared to be dead by the Saudi authorities just recently. According to Turkey, the journalist was allegedly murdered while still inside the Saudi consulate by Saudi assassins. While admitting the death of the scribe, Saudi officials have provided very little else apart from saying that he was killed in a "fistfight" inside the building.
 
As a fall out of the scandal, a number of ministers from foreign countries and captains of industries boycotted a major investment meet that is ongoing in the Saudi Capital of Riyadh. But even as many bureaucrats and business leaders of the West boycotted the summit, the event is being attended to by the top bosses of Russia's direct investment fund (RDIF).
 
In recent years, there is increased trade between Saudi Arabia and Russia and China.  Saudi monarch — King Salman, visited Russia for the first time in October of last year. That visit saw the creation of a joint investment fund of $1 billion and the signing of 15 cooperation agreements in areas of technology, defense and agriculture. Russia also agreed to sell its S-400 missile defense system to Riyadh.
 
On the other hand, currently, the largest trading partner of Saudi Arabia is China. In 2017, the two countries notched $42 billion in bilateral trade. A number of deals in the fields of energy, space technology, etc worth $65 billion were signed between the two countries in March this year. There is a section in Riyadh that have put forward the idea of trading in the yuan – the Chinese currency, instead of the US dollar if there are sanctions from the US. However, in terms of arms trade, China has a long way to go compared to the US. According to the Stockholm International Peace Research Institute, in 2017, the US sold weapons to Saudi Arabia worth $3.4 billion compared to just $20 million by China.
 
(Source:www.cnbc.com)






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