Why Rich Saudis Are Turning East

Sneered at by the French, disrespected in Brexit Britain and blamed for 9/11 in the USA, the Saudis are taking their petrodollars East.  

Photo Illustration by Kelly Caminero/The Daily Beast

Theresa May, the British Prime Minister, embarked on Tuesday on the most sensitive diplomatic mission of her premiership so far.

Meeting Donald Trump or announcing the terms of Brexit was a mere formality compared to her visit to Saudi Arabia, which kicked off on Tuesday.

May raised some eyebrows by opting not wear a headscarf as she deplaned in the desert, even though she was following the example of others including Hillary Clinton and Michelle Obama.

Indeed, it is unlikely to ruffle too many feathers in Riyadh. Women in Saudi are subject to unimaginable sanctions by democratic Western standards—they are famously forbidden to drive—but senior Saudi officials are well used to foreign women with uncovered heads by now.

And May, we can be quite sure, would do nothing to risk annoying the Saudis, although she told the BBC she would be raising human rights issues with her hosts, because "if we have the relationship we are able to do that".

But May’s business in Saudi may be more fraught than usual. For, after decades of aspiring towards Western life, investing in Western economies and holidaying in the big cities and beach towns of Europe and the US, the Saudi Arabian elite have fallen out of love with the Western world, and are turning their affections to the East instead.

There was perhaps no clearer indication of this salutary reality than the epic state tour recently concluded by the King of Saudi Arabia, King Salman.

Accompanied by a 1500-person entourage and 500 tons of cargo (a local freight company handling the King’s luggage had to lay on an additional 572 workers to cope) including two Mercedes-Benz S600 limousines and two electric elevators for the elderly and increasingly infirm monarch, Salman travelled to six eastern nations on the month long tour, visiting Indonesia, Japan, China, Malaysia, Brunei, and Jordan.

A stop off in the Maldives was cancelled at the last minute; the official excuse was an outbreak of bird flu in the nation, but many commentators saw a diplomatic attempt to avoid inflaming tensions over a multi-billion dollar investment (headed up by his son) in a remote chain of islands that activists fear the Saudis are attempting to ‘buy’ by stealth.

Everywhere Salman went, he was greeted with adoration and gratitude—rose petals were strewn in his path, elaborate ceremonies of welcome were held, and government ministers queued up for moments of face time.

Contrast that to the reception the King received in the South of France two years ago when he went on holiday to his palace—Château de l’Horizon—on the French Riviera with his entourage.

Socialist-minded French officials got things off to a bad start by quibbling with the decision to close a section of the beach for him and his family—a not unreasonable security request for a visiting head of state--and he was widely sneered at, and portrayed as a tacky member of the nouveau riche by both the press and grandstanding local lawmakers.

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Nice’s Mayor Christian Estrosi, for example, told local media: “A head of state should be received with courtesy and safety measures, but there is no excuse for allowing a public space to be taken over.”

A petition condemning the closure of the beach attracted 120,000 signatures in hours.

This did not go down at all well with the King, who ultimately packed up his not inconsiderable bags and left for Morocco where he could be among fellow Arabs just one week into what had been projected to be a three week stay—privately vowing never to return, according to insiders.

Patriotic Saudis have followed suit and are increasingly choosing to vacation in countries with significant Muslim populations such as the Maldives, Indonesia, Sri Lanka and India.

“It was very insulting to the Saudis,” says one source who knows many members of the family. “They employ thousands of people, they have supported the merchants, the chauffeur services and the casinos of Nice for decades and then they are treated in this demeaning way.”

The USA has also fallen out of favour with Saudi Arabia. Trump’s anti-Muslim rhetoric hasn’t helped, but Salman is said to be far more enraged that the Trump administration appears to be poised to allow Saudi Arabia to effectively be officially blamed for 9/11, and the country now risks being held financially responsible by US courts for paying reparations to the families of 9/11 victims, thanks to the passage of the "Justice Against Sponsors of Terrorism Act," or JASTA (it was vetoed by Obama, but the veto was overridden and Trump is thought to be a supporter of the act, which is firmly now back in play with the first cases making their way through the system).

The bill may ultimately allow families of Sept. 11 victims to sue Saudi Arabia's government for damages in US courts.

The Saudis are naturally worried on a purely financial basis: there’s no telling how much hostile U.S. courts might decide to award to the families of the nearly 3,000 people killed in those attacks.

But there is a moral issue for the Saudis too.

“It’s a matter of record that 15 of the 19 hijackers were Saudi Arabian,” says Robert Lacey, one of the UK’s most knowledgeable experts on Saudi affairs and the author of The Kingdom: Arabia and the House of Sa’ud. “And it’s also true that Saudi Arabia promulgates an intolerant brand of Wahhabism, and they pour money into the building of Wahhabist madrassas (schools) abroad.

“But to suggest the 9/11 hijackers were agents of the Saudi state is a fallacy. They were as far from being state-sponsored terrorists as it is possible to be. They were explicitly dedicated to the overthrow of the House of Saud as one of their top priorities--as are ISIS and al-Qaeda today.”

The Saudis have already suggested they might sell up to $750 billion in U.S. securities and other American assets—such as the vast ARAMCO oil refineries—in retaliation if JASTA becomes law.

Even London, post-Brexit, is being seen as a less welcoming place for conservative Saudis.

“Some rich Saudis are selling up apartments in London and buying in Dubai,” says a source. “There’s an increasing anti-Muslim feeling in London. Many would rather be with their fellow Arabs.”

There is, of course, sound business case for refocusing energies on the East. You don’t have to be an honors economics student to know that the future is China, and some analysts say that the Saudi’s change of direction is purely about following the money.

Gerald M. Feierstein, a Senior Fellow and Director of the Center for Gulf Affairs at the Middle East Institute in Washington told the Daily Beast: “I think the Saudis are looking to diversify economically and see China and Japan as good alternatives to dependence on the West. But the trip also served to shore up alliances with important Sunni partners in Jakarta and Kuala Lumpur. The Saudis also want to improve their political and security ties to Beijing seeing China as an increasingly important player in the region, and want to draw the Chinese away from Iran a bit. While all of these steps aren't explicitly aimed at the U.S., it does give the Saudis options if things don't work out here.”

Feierstein points out that while the King was on his eastern tour, his son and heir, Mohammed bin Salman “was having a good visit” to the USA at the same time.

One of Feierstein’s colleagues at the MEI, Thomas W. Lippman, told the Daily Beast: “I guarantee it has nothing to do with JASTA,” saying it was simply about the growth of the markets in the East, especially China and Korea.

David Ottaway, a Saudi expert and Woodrow Wilson Middle East Fellow, told the Daily Beast: “Were they piqued by their treatment in France? Yes, sure, they were piqued—but this change of direction is not fundamentally because of these insults. Trying to rebalance trade with Asia is a policy that has been actively going on since the early 2000s. A lot of what is happening now is just a continuation of what they started to do then. Asia is their key oil export market. They want to assure those exports by owning refineries in those countries.

“That said, they are very concerned about JASTA. They do consider it unfair that they are blamed for 9/11. And nobody knows what President Trump is planning to do with JASTA. He may cancel it. But it may have some impact on future investments. For example, when it comes to investing their new sovereign wealth fund, they are actively looking for places other than America to invest it in specifically because of JASTA.”

In a deeply conservative, traditional plutocracy like Saudi Arabia, the political and the personal are more closely entwined than many in the West can imagine.

Says Lacey: "It is all part of an enormous shift eastwards in terms of investment and economic and political alliance undertaken by King Salman. It's about a pivot in Saudi policy away from its traditional dependence on the judgmental and increasingly anti-Muslim West.

“Why sit there and endure self-righteous lectures from people who only see you as a customer for their arms? If you look east from Riyadh, there is an enormous Muslim constituency of growing wealth and influence—and votes at the UN.

“The Middle East has been looking west for the past few decades, but it is just as easy for them to look east, to people who are actually grateful for their investments and sympathetic towards their religion, and who come on pilgrimage to Mecca and respect Saudi Arabia as, to some extent, the Vatican of Islam.

“The House of Saud has always used religion to underpin their domestic legitimacy. Now they are using it internationally as well. And the fleshpots of Hong Kong (or the Maldives) have as much fun and wickedness to offer as London or New York--and more anonymously too.”