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The Belt & Road Initiative: Speed Bumps in the Middle East

 7 min read / 

Whilst the world’s attention is focused on the outcomes of the 9th BRICS summit, Saudi Arabia and Qatar have quietly begun to repair their relationship. Yet, the two countries could remain divided for some time. What role can China, the growing regional power, play in bringing long-term stability to the region and in the current Belt & Road Initiative?

China and the Middle East are interdependent.  China is the world’s largest importer of energy resources; the Middle East is the world’s largest exporter of energy. President Xi’s ‘1+2+3’ framework focuses Sino-Middle Eastern cooperation on energy, infrastructure and high-tech fields. The high-priority plan will increase trade between China and Arab states to $600 billion by 2023. Nearby, China and Iran have a $600bn trade deal in the works.

Whilst China and the Middle East are in an economic matrimony, Middle Eastern states themselves are struggling following a bitter divorce. Iran and Saudi Arabia have shown ongoing enmity towards each other for some time. More recently, the Gulf Cooperation Council (GCC) were divided by the Qatari Diplomatic Crisis, leading Qatar to further aggravate Saudi Arabia by establishing closer ties with Iran.

Sticking to Principles

Both the GGC and Iran are crucial partners for Xi’s Belt & Road Initiative. China needs these rivalrous states to demonstrate a degree of cooperation if the Belt & Road Initiative is to run smoothly. China’s idealistic foreign policy purports that they will not interfere with other nations’ sovereignty and promote cooperation. Will China stick to its principles, or take the lead as the principal economic superpower in the Middle East in propagating it’s Belt & Road initiative.

Political idealism is futile. Indeed, Thucydides has known this since the 5th century.  China may use pragmatism to achieve their visionary goals through abandoning their dreamy directive to cut a deal. Yet China’s diplomatic competence is obvious, and the Middle Kingdom has adhered to their foreign policy principles when brokering the P5+1 Iranian nuclear deal. Additionally, China has organised the Shanghai Cooperation Organisation (SCO) and the Asian Infrastructure Investment Bank (AIIB). Insofar, China has successfully acted on its idealistic intentions. This leads one to conclude that China could stick by their principles and step-in to the power vacuum to become the Middle East’s economic leader. This task would be much harder if China’s SCO allies weren’t sharing the burden.

Following in Putin’s Footsteps 

The SCO is essentially a tool for a Sino-Russian duumvirate to exert economic and political influence in the Far East, Central Asia and the Middle East. Established in 2003, the SCO is committed to regional economic, political and military integration with the ultimate goal of “moving towards the establishment of a democratic, fair and rational new international political and economic order.” The US’s gradual withdrawal from the Middle East has left a growing, and increasingly unstable, power vacuum. In an environment that is no longer unipolar, but multi-polar, the SCO is well-positioned to bring relative stability to the region. Whilst the USA has enforced its will on the Middle East’s many factions, the SCO can offer a multilateral solution wherein the SCO’s various members, led by China and Russia, work together to bring about peace.

Russia’s recent success has evidenced that the Janus-faced Middle East is turning away from the USA. Lakhdar Brahimi, UN ex-envoy, feared the ‘Somaliazation’ of Syria but Putin’s intervention helped prevent this. In 2013, Russia led chemical weapon disarmament talks in Syria. Presently, they’re pushing for  Iranian nuclear disarmament and have undermined the US’s traditional authority through successful military intervention. Russia’s intervention in late 2015 achieved its original objectives, with minimal casualties and minimal costs by early 2016. This is in stark contrast to the US’s prolonged and unsuccessful intervention in contemporary conflicts.

The secret to Russia’s success? Using unilateralism to enforce multilateralism. Wielding their regional influence, Russia forced actors in the Middle East to cooperate. China could copy Russia’s approach, leveraging their economic hegemony to force states to cooperate and utilising the SCO’s smaller members to reach multi-lateral solutions to conflict.

Frayed Ends

Taking on board Russia’s example, China could reach a win-win solution for all countries within their foreign policy framework. Despite this promising outlook, the New Silk Road’s ends are beginning to fray.

The Belt & Road Initiative has already met its first speed bump- the Qatari Diplomatic Crisis. To help resolve this calamity, China has to understand what is driving these events.

The House of Saud’s ascent to the throne would have most likely not have been possible without the Nejd tribe’s support.  The Nejd tribe’s are major members of the Ikhwan  (the Muslim Brotherhood).The Nejd’s support of the Saudi monarchy is highly conditional and dependent on handouts. Depressed oil prices have only further threatened this fragile relationship, which led to Qatar manipulating the situation to their advantage by facilitating for Ikhwan dissenters as it has done so historically.

Saudi Arabia’s oil-based economy is a poisoned chalice, and the Saudi monarchy does not have the antidote. Unable to effectively raise money with oil, the House of Saud’s options are limited. Devaluing the riyal to raise funds may trigger significant deterioration of the domestic economy.  Paradoxically, it appears Saudi Arabia can only survive if they allow their intravenous pipelines to pump poison into their failing financial framework for a while longer.

In a recent CNBC interview, Prestige Economics President Jason Schenker said that:

“If you wanted to know where the downside risk is, it is not in OPEC’s decision or in U.S. driving demand or in global inventories rebalancing. I think China is a big source of concern 

 

Without China, the Middle East’s oil economy would struggle and further destabilise. Just like Russia, Xi can use unilateralism to enforce multilateral solutions to conflicts. If Beijing was to accelerate its domestic oil output decline, or buy GCC oil to store in their Strategic Petroleum Reserve (SPR), then the situation in the Middle East could improve. Saudi Arabia could quell internal dissent with monetary incentive and successfully act on their Saudi Vision 2030. Doing so would limit their internal enemy’s power, and create a strong foundation for stable GCC relations.

Making this loss-lead, Xi would reap benefits in the long-term.  The majority of Gulf States are AIIB. China will see a massive boom in their Belt & Road Initiative’s growth if they enforce multi-lateral cooperation unilaterally. Additionally, Middle Eastern states are likely to join the SCO. Egypt and Syria have submitted observer applications, and Turkey was given the responsibility of managing the SCO Energy Club this year. Saudi Arabia, the UAE, Bahrain and Egypt have already joined an Anti-Terror Quartet that could be easily integrated with the SCO to meet regional security aims. In doing so, China would not deviate from their foreign policy principles because they are not violating the country’s sovereignty and are encouraging mutually beneficial cooperation.

Admittedly, one might postulate that the GCC and Iran would never join the SCO together. After all, they are bitter rivals. In June 2017, Pakistan and India, both hostile neighbours, joined the SCO. There is an economic incentive for the GCC and Iran to do so as they will have access to the markets along the Belt & Road.

Conclusion 

There are many speed-bumps on the road ahead for China. It is unreasonable to suggest China can resolve the Israel-Palestine conflict or discord between Turkey and the Kurds. Yet, it is evident China does have an important role to play in Middle Eastern diplomacy. Using unilateralism to enforce multilateralism, China can take a leading role in the region, stay true to their foreign policy principles and ensure that the Belt & Road not only survives, but also thrives.

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