11 September 2003 02:49
The Prince and Putin
 Saudi Crown Prince Abdullah Bin Abdul Aziz Al-Saud's three-day visit to Moscow last week made headlines across the globe. And rightly so. Diplomatic relations between Russia and Saudi Arabia were restored in 1990, but Prince Abdullah's visit was the first by a Saudi ruler since 1932 and a strong indicator of improving relations between the two countries.
The potential significance of increased Russian-Saudi cooperation is enormous. They are, after all, the world's top two producers and exporters of oil. Saudi Arabia's enormous influence in the Muslim world also makes it a desirable strategic partner. If Russia and Saudi Arabia join forces, their alliance will have a major impact on world energy markets as well as on geopolitical relations between the northern and southern hemispheres, or in religious terms, between the Christian and Muslim worlds.
The visit of Prince Abdullah, de facto ruler of Saudi Arabia since his half-brother King Fahd suffered a stroke in 1995, takes on additional significance in light of continued tensions between the Saudi Arabia and the United States. The United States has long viewed Saudi Arabia as an important strategic partner in the Middle East, and it is the largest importer of Saudi oil. But of late, relations have chilled amidst U.S. accusations that the Saudis are sponsors of international terrorism. The arrival of Saudi Arabia's de facto leader in Moscow has therefore been seen as evidence of the beginning of a Saudi realignment. Such speculation is probably justified, but it remains to be seen how far this realignment will go. After all, the Saudis have been putting all their eggs in one basket, so to speak, for some time. Saudi investments and bank deposits in the United States are estimated at $400 billion to $600 billion, and this situation will not change overnight.
As Prince Abdullah visited Moscow, the U.S. media were firing off a salvo aimed at discrediting Saudi Arabia and the monarchy. The Christian Science Monitor and Time magazine ran reviews of Gerald Posner's recently released bestseller, "Why America Slept." What is America supposed to have slept through? The ostensible transformation of its trusted ally Saudi Arabia into a bulwark of terrorism. Now the United States must try not to "sleep through" a likely exodus of Saudi capital. On Aug. 15, 600 relatives of those who died in the Sept. 11, 2001, attacks on New York and Washington filed a series of lawsuits in U.S. courts against three Saudi princes, eight Muslim charities and a number of Saudi companies, accusing them of financing al-Qaida. Total damages sought in the lawsuits amount to tens of billions of dollars, and it is possible that Saudi assets in the United States could be frozen if the courts rule in favor of the victims' families. According to reports in the Western press, Saudi oligarchs have already begun to pull their money out of the United States, though officially the Saudis deny this, dismissing the lawsuits as groundless. Optimists in Russia believe that if things go well Saudi Arabia could redirect some $200 billion into the Russian economy in the near future. While such investment would be welcome, these are still early days.
During Prince Abdullah's visit, the two countries agreed to work together to stabilize world crude markets. They also agreed to simplify the process of creating joint venture companies in the oil and gas sector. Yet to date the only Russian company to strike a deal with the Saudis is Stroitransgaz, the pipeline building affiliate of gas monopoly Gazprom, which set up a venture with construction company Saudi Oger Ltd. to jointly bid to provide services for state-owned oil giant Saudi Aramco.
A leading role in promoting Russian-Saudi cooperation will be played by the Russian Chamber of Commerce, headed by Arab specialist Yevgeny Primakov. In late January, the chamber took a delegation of some three dozen Russian businessmen to an economic forum in the Saudi city of Jeddah. The delegation consisted of representatives from the Agriculture Ministry, Vneshekonombank, AFK Sistema, Stroitransgaz, the Urals Mining and Metals Co. and the Baltic Construction Co. financial group, among others. Meetings were held with Saudi businessmen and top officials from the Saudi Chamber of Commerce.
The business climate will only improve as Riyadh tries to shake off charges of supporting terrorism. On the eve of Prince Abdullah's visit, Saudi Arabia's top Muslim clerics issued a religious ruling, or fatwa, condemning terrorism. The ruling rejects the notion of jihad widely used by Islamist extremists to justify their crimes. The Council of Senior Clerics ruled that practices such as bombing and murder are "serious criminal acts" that violate sharia law. "These acts have nothing to do with jihad for the sake of God," said the council, which is headed by the kingdom's highest religious authority, Grand Mufti Sheikh Abdul-Aziz al-Sheikh. The ruling can be seen as a gesture of goodwill toward countries such as Russia, which have been shaken by terrorist attacks in recent years. During Prince Abdullah's visit, the two sides built on this goodwill, agreeing to form a joint working group on combatting terrorism.
It is premature to speak of a budding "strategic partnership" between Russia and Saudi Arabia, however. The energy sector may unite Moscow and Riyadh, but it also divides them. Russia reiterated last week that it had no intention of joining OPEC any time soon. What's more, Russian oil producers like LUKoil have big plans for expansion into the U.S. market, where they compete directly with the Saudis. According to U.S. Department of Energy figures, Russian oil exports to the U.S. soared to 424,000 barrels per day in June, a record jump that catapulted Russia into the top six exporters on the U.S. market, joining Saudi Arabia, Canada, Mexico, Venezuela and Nigeria. For now, Moscow is maneuvering carefully between Riyadh and Washington. The potential windfall that could come from closer economic ties with Saudi Arabia is like a mirage in the desert, luring some Russian companies and frightening others. Moscow's strategic partnership with the United States, on the other hand, is much more than a mirage. It extends beyond the energy sector to geopolitics, including the war on terrorism.
There is no question that preserving this partnership is more important to Russia's national interests than developing ties with the Saudis. Yet as regards the summit between Presidents Vladimir Putin and George W. Bush later this month, Prince Abdullah's visit should actually strengthen Moscow's position. This was, after all, a positive step toward improving relations with moderate Arab countries and stepping up cooperation with them in combatting Muslim extremism. And a step in that direction will not go unnoticed in Washington.
Alexander Shumilin is director of the Center for the Analysis of Middle East Conflicts and editor of www.mideast.ru
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