Geopolitics, the black swan in Saudi-Indian relations

When Saudi Crown Prince Mohammed bin Salman meets Prime Minister Narendra Modi next week, the elephant in the room is likely to be what weighs more: the issues the two men agree on or the ones that divide them.As a matter of principle, Prince Mohammed and Modi are likely to take their strategic partnership to a new level as a result of changing energy markets, a decline in American power, the rise of China and the transnational threat of political violence.Discussions with the crown prince and his delegation of Saudi businessmen on energy and investment will prove to be the easy part. Saudi Arabia is investing $44 million in a refinery in Maharashtra’s Ratnagiri and supplies 20 percent of India’s crude oil. India, moreover, expects the Saudis to invest in ports and roads while Saudi Arabia is interested in Indian agriculture that would export products to Saudi Arabia.At first glance, security issues should be a no-brainer. The two countries hold joint military exercises, share intelligence and cooperate on counterterrorism. They are also working to counter money laundering and funding of political violence. Things get complicated, however, when geopolitics kicks in. Prince Mohammed arrives in Delhi on the back of a visit to Pakistan, where he is expected to sign a memorandum of understanding on a framework for $10 billion investments, primarily in oil refining, petrochemicals, renewable energy and mining.[caption id="attachment_4949921" align="alignleft" width="380"]

File image of Saudi Arabia's Crown Prince Mohammed bin Salman. AP[/caption]The memo follows significant Saudi aid to help Pakistan evade a financial crisis that included a $3-billion deposit in Pakistan’s central bank to support the country’s balance of payments and another $3 billion in deferred payments for oil imports.The tricky part are the investments in the memorandum that include a plan by the Saudi national oil company Aramco to build a refinery at the Chinese-backed port of Gwadar, close to Pakistan’s border with Iran and the Indian-backed Iranian port of Chabahar. Both Pakistan and Saudi Arabia are closely monitoring Chabahar’s progress.A potential Saudi investment in troubled Balochistan’s Reko Diq copper and gold mine would strengthen the kingdom’s hold in the strategic province that both Prince Mohammed and US president Donald J Trump’s hardline national security adviser John Bolton see as a launching pad for efforts to destabilise Iran. Taken together, the refinery, an oil reserve in Gwadar and the mine would also help Saudi Arabia in efforts to prevent Chabahar from emerging as a powerful Arabian Sea hub.Saudi funds are flowing into ultra-conservative anti-Shiite, anti-Iranian Sunni madrassas in Balochistan. It remains unclear whether the money originates with the Saudi government, Saudi nationals of Baloch descent or the two million-strong Pakistani diaspora in the kingdom.The money helps put in place building blocks for possible covert action should the kingdom or the US — or both — decide to act on proposals to support irredentist action.Such a covert action could jeopardise Indian hopes to use Chabahar to bypass Pakistan, enhance its trade with Afghanistan and Central Asia and create an antidote to Gwadar, a crown jewel in China’s Belt and Road initiative.Pakistani analysts expect around $5 billion in Afghan trade to flow through Chabahar after India in December started handling the port operations. It could also further strain ties with Pakistan that accuses India of fomenting nationalist unrest in Balochistan.The funds take on added significance in the face of Saudi concerns about Chabahar and India’s support for the port. The money continues to flow even though the crown prince has significantly cut back on the kingdom’s global funding of ultra-conservative Sunni Muslim groups to bolster his assertion that the kingdom is embracing a more moderate, albeit as yet undefined, form of Islam.The money started coming in at about the time the Riyadh-based International Institute for Iranian Studies published a study by that said Chabahar posed a “direct threat to the Arab Gulf states” that called for “immediate countermeasures”.Written by Mohammed Hassan Husseinbor, a Washington-based Iranian Baloch lawyer and activist, the study warned that Chabahar would allow Iran to step up oil exports to India at the expense of Saudi Arabia, raise foreign investment in the Islamic Republic, increase government revenues and allow Tehran some muscle-flexing in the Gulf and the Indian Ocean. Noting the expanse of Iran’s Sistan and Balouchestan province, Husseinbor said “it would be a formidable challenge, if not impossible, for the Iranian government to protect such long distances and secure Chabahar in the face of widespread Baluch opposition, particularly if this opposition is supported by Iran’s regional adversaries and world powers”.Published in a country that tightly controls the media as well as the output of think tanks, the study stroked with a memorandum drafted a year later by Bolton before he assumed office. The memo envisioned US support “for the democratic Iranian opposition”, including in Balochistan and Iran’s Sistan and Balouchestan province.Iranian officials believe that Saudi Arabia and the US have a hand in a string of recent attacks by Baloch, Kurdish and Iranian Arab nationalists but have so far refrained from producing anything beyond allegations. Most recently, they point to a rare suicide bombing in Chabahar in December that targeted a Revolutionary Guards headquarters, killing two people and wounding 40.Writing in the Pakistan Security Report 2018, journalist Muhammad Akbar Notezai said, “to many in Pakistan” concerns about Indian support for the Baloch “were materialized with the arrest of Kulbushan Jadhav, an Indian spy in Balochistan who had come through Iran. Ever since, Pakistani intelligence agencies have been on extra-alert on its border with Iran”.The journalist warned that “the more Pakistan slips into the Saudi orbit, the more its relations with Iran will worsen… If their borders remain troubled, anyone can fish in the troubled water”.Notezai implicitly put his finger on the pitfalls Prince Mohammed and Modi will have to negotiate to ensure that their ever closer economic, energy and security relations can withstand the challenges posed by the escalating and intertwined rivalries that link the West and South Asia.James M Dorsey is a senior fellow at Singapore’s S Rajaratnam School of International Studies and co-director of the University of Wuerzburg’s Institute of Fan Culture.