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Economy, Geopolitics

In recent years, one of the biggest buzzwords at the crossroads of urban planning and technology has become the “smart city.” Across the globe, governments and institutions are developing plans, making pitches, and closing deals to make cities more technologically advanced or “smart”.

The United Nations projects that 68% of the world’s population will live in urban areas by 2050, an enormous increase over the span of just 100 years when roughly 30% of the world’s population were urban dwellers. Mass growth across the globe and especially in the growing economies of Asia and Africa will have innumerable impacts on the world economy, environment, and how we live.

Smart cities are pitched as a way to bring cities into the future with an emphasis on sustainability, economic growth, and improved quality of life.

One region that has been heavily focused on rapid urban expansion and economic diversification seems almost tailor-made for the advent of the smart city, the Persian Gulf.

As Gulf nations fight against growing worries over the impact of climate change and a global turn away from oil, various leaders have set out some bold, ambitious plans to reinvigorate economies and reduce emissions.

But there are many concerns surrounding smart cities and their implications for citizens. Smart city proponents offer plenty of bold solutions, but many question marks remain including if it’s simply a very effective marketing campaign for big technology.

Nonetheless, a whole gamut of futuristic smart city plans is in the works, and we will take you through some of the plans in the Gulf, and what their impact may be on the region, its citizens, and geopolitics.

Saudi Arabia and the UAE

The most well-known smart city projects in the Gulf region are found in Saudi Arabia and the UAE. Saudi Arabia’s NEOM project has received plenty of media coverage for its lofty goals, and the UAE has a host of plans under the umbrella of the Economic Vision 2030.

Both plans promise futuristic, sustainable cities that will both help the countries reach short-term environmental goals and diversify their oil-dependent economies. Plenty of commentators have called into question the feasibility of some of the more ambitious goals, but certainly many elements of smart cities are already under construction and use.

Saudi Arabia’s NEOM and the UAE’s Masdar City are the headliners for the respective country’s smart city plans. Both are being constructed from scratch and have received mixed responses from an environmental and economic standpoint.

Masdar City has been in the works since 2006 and was pitched as both a smart and zero-carbon city. Ten years later, The Guardian ran a headline declaring that the futuristic city might, in fact, become the “world’s first green ghost town”.

While Masdar City has not lived up to all the hype and has been classified by many as a failure, the company behind it, Masdar (Abu Dhabi Future Energy Company) is still active in 30 countries. The UAE still holds up Masdar City and the company behind it as playing a pivotal role in Abu Dhabi’s ambitions to become a world leader in sustainability.

Masdar City is still of great interest to urban planners, but it may end up as a cautionary tale and giant showpiece rather than a functional city.

Urban planners and government officials descended on the planned smart city in February 2020 during the UN World Urban Forum held in Abu Dhabi. But as reported in Bloomberg, Masdar City is still far off from feeling like a real city, “the streets of Masdar City seem to be occupied mostly by tour groups coming to check out the master-planned clean-tech hub near Abu Dhabi’s international airport.”

According to Masdar’s website, only 1,300 residents call Masdar City home.

And while its futuristic, carbon-zero plans have wowed the world, the UAE is emitting more than it ever has. The country’s global carbon emission share is steadily increasing, and per capita, it has the fifth-highest CO2 emissions per capita, sandwiched between many of its Gulf neighbours.

Both Masdar City and NEOM have received plaudits for their ambitions, but plenty of sceptics remain concerned considering both country’s rising emissions.

Saudi’s NEOM project is newer and tops Masdar City’s ambitions. Neom is a smart city that includes several marquee projects including The Line, which promises to make the city car and street-free, built completely in a line rather than a typical concentric city.

The Line and NEOM have left plenty of urban and city planners scratching their heads, but there is big money behind the project, the Saudi Public Investment Fund has pledged $500 billion to the project.

And while there are questions about feasibility and sustainability, NEOM is the perfect place to consider smart city’s true potential and danger, surveillance.


Smart City aka the Surveillance City

Smart city plans dazzle the public with shiny new technology and promise to greatly improve the daily lives of urban dwellers with new-fangled gadgets and transport out of The Jetsons. There are plenty of definitions of what a smart city actually is, the most defining feature is the use of interconnected information communication technologies. And for those who look deeper, the real potential and driving force behind smart cities is data collection and surveillance.

According to Foreign Policy, “56 countries worldwide have deployed surveillance technologies powered by automatic data mining, facial recognition, and other forms of artificial intelligence.”

One of the key technological components of this AI surveillance that is the backbone of many smart cities is the burgeoning industry of 5G. 5G has been beleaguered by an array of often bizarre conspiracy theories, but the potential of the new technology is to be the backbone of a more interconnected data collection apparatus.

As Sue Halpern writes for the New Yorker, “a system built on millions of cell relays, antennas, and sensors also offers previously unthinkable surveillance potential.”

This potential has led to a gold rush for the latest AI technology with American and Chinese firms competing over the multi-billion dollar and growing industry.

Neom’s data collection potential is billed as the beefiest in the world. Joseph Bradley, head of technology and digital at Neom, told ZDNet that Neom’s 5G infrastructure Neos will collect 90% of the communities’ information compared to the paltry 1% collected by contemporary smart cities.

In the plan, each Neom resident would receive a unique ID number to process data from “heart-rate monitors, phones, facial-recognition cameras, bank details, and thousands of internet-of-things devices around the city.”

Bradley assured that residents would be given the option to opt-out, and the whole project is pitched as a way to improve the lives of citizens, giving city services the ability to know when you fell down and eliminating the need for keys, a simple fingerprint scan will do.

But as the public becomes increasingly more aware and potentially paranoid about data collection, experts are left wondering whether residents will want to move into these smart cities.

 

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Economy, Geopolitics, Investment

For Middle East watchers, the conflict between Saudi Arabia and Iran seems to manifest itself in nearly every area. From proxy wars and blockades, diplomatic rows and everything else in between, Saudi Arabia and Iran jostling for regional dominance is a familiar topic of conversation.

 

But Crown Prince Mohammed bin Salman struck a different tone in a recent interview with Saudi state television. MBS focused on diplomatic possibilities and stated, “we are working now with our partners in the region and the world to find solutions for these problems. At the end of the day, Iran is a neighbouring country. All what we ask for is to have a good and distinguished relationship with Iran.”

 

The news comes as American President Joe Biden is seeking to repair the multilateral nuclear deal with Iran, which his predecessor Donald Trump pulled out of. Analysts have regularly pointed to the election of Biden as a marked changed in American diplomatic relations with Saudi Arabia, which had enjoyed especially close ties with America under Trump.

 

In early April, it was revealed that Saudi Arabia and Iran held secret talks in Baghdad in an attempt to restore official diplomatic relations between the two countries after they were broken five years ago. The talks were not immediately confirmed by either state, but the MBS’s recent interview suggests the two nations may be seeking closer ties.

 

Saudi Arabia and Iran still have plenty to hash out, and the question remains as to how much American foreign policy has changed, but for now, it looks like both sides are at least interested in coming to the diplomatic table.

 

Recalibration

            Iran-Saudi relations have been strained, and they have culminated in various proxy conflicts and a Saudi-led blockade against Qatar, which the Saudi-led coalition argued was becoming too close to Iran.

 

The blockade against Qatar lasted three-and-a-half years, but the Saudi coalition did not get the outcome it was looking for. Qatar became closer with Saudi’s regional rivals Iran and Turkey, and the small country was able to withstand the crushing blockade.

 

Combine the failed Qatari blockade with brutal and seemingly never-ending proxy conflicts in Syria and Yemen, and Saudi Arabia and Iran may see their costly and destructive path as bad for business.

 

Attracting foreign investment to Saudi Arabia has proven difficult. The assassination of Jamal Khashoggi has loomed large in Western media, and the Kingdom is still struggling to recover from it on a diplomatic front.

 

Saudi Arabia’s much-publicized turn from oil-dependency to a more diversified economy relying on tourism and green technology necessitates better relations. Saudi Arabia is looking to become a regional economic hub but has thus far found it difficult to compete with other Gulf states.

 

A diplomatically keen Saudi Arabia is not a surprise considering their continued intervention in the region is racking up high costs while delivering more instability to the region. If a deal can be hashed out with Iran, Saudi Arabia might stand to gain immensely in the short term.

 

However, in Iran, the latest development around leaked tapes from Foreign Minister Javad Zarif has divided the political establishment. On the leaked audio tapes, Zarif complains that the Islamic Revolutionary Guard Corps has more power than him over military and diplomatic decisions.

 

Iranians are set to head to the polls for a presidential election in June, and the frank statements from Zarif have divided Iranian political parties on how the country should act in regards to the nuclear deal.

 

Vienna has been the host to renewed talks on the Iranian nuclear deal and if reincorporating the United States into the deal and lessening sanctions against Iran is possible. As Trump unilaterally pulled the United States out of the agreement, Zarif and President Hassan Rouhani have been pushed into a corner, especially after Zarif’s comments were leaked. Due to the upcoming elections, and the United States’s assassination of popular General Qasem Soleimani in early 2020, President Rouhani and Zarif may be compelled to resist a renewed deal with the Americans due to political concerns.

 

Saudi Arabia wants to see the nuclear deal strengthened and has expressed a desire to be consulted on the negotiations. With increasing pressure on Iran, it is difficult to imagine a strengthened deal that would also pull in other regional countries like Saudi Arabia.

 

If re-entering the deal may already be a step too far, then providing concessions to Saudi Arabia is unlikely to fly.

 

Relations with America

            When President Biden entered the Oval Office, many believed it would drastically change the country’s relations with Saudi Arabia and Iran. The US would no longer provide Trump’s blank chequebook to Saudi Arabia, and Biden was keen to re-enter the Iran deal thus lifting some sanctions against Iran.

 

While both countries have made adjustments to the new administration, it is unclear whether it will yield different results.

 

MBS has insisted that there only minor differences between Riyadh and Washington. Despite calls from members of his party, Biden has balked on taking action against the Crown Prince for his alleged involvement in the Khashoggi assassination.

 

And while the US House of Representatives voted to limit arms sales to Saudi Arabia, the Biden Administration approved a $23 billion weapons sale to the Kingdom. Biden is allowed to continue sales to Saudi Arabia if he certifies that the country is not involved in killing dissidents.

 

Biden’s half-baked stance on America’s involvement in supporting Saudi Arabia in Yemen, pulling offensive forces while keeping defensive missions in place, has been criticized as murky and continuing to aid Saudi Arabia with its offensive efforts.

 

And while there seems to be interest from the Biden Administration and Democrats for re-entering the Iran nuclear deal, it’s unclear whether that can be achieved under the same agreement. With the United States pulling out of the Iran deal and assassinating the most powerful general in Iran, the Iran nuclear deal was always going to be difficult.

 

Making it shakier are reports of US Coast Guard ships off the Iranian coast being ‘harassed’ by the Revolutionary Guard Corps. Iran undoubtedly views the United States as an aggressor, and if that does not change or political realities in Iran do not allow for improved relations, Biden may not see improved relations with Iran.

 

A slight recalibration may see a better relationship between Saudi Arabia and Iran, but if too many geopolitical factors do not change, it is equally likely that the bloody stand-off continues.

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Economy, Geopolitics, Investment

A futuristic, sustainable city to house one million residents without cars, streets, or emissions and all built in a straight 170-kilometre line? It sounds like something out of a science fiction novel, but it’s part of Saudi Arabia’s plan to diversify its economy.

 

Saudi Crown Prince Mohammed bin Salman unveiled his most ambitious project, a 170-kilometer city called The Line, related to the proposed city Neom in January 2021 with a slick promotional video.

 

A diverse megacity with an emphasis on sustainability, contouring urban life to nature, and artificial intelligence-driven public services, the project is not short on ambition. But, international media and independent observers have noted the lack of details thus far.

 

Furthermore, critics question the feasibility of the project considering past Saudi projects to build cities in the desert including the incomplete King Abdullah Economic City.

 

The Line and Neom are also not being built on ‘virgin land’ as some consultants claim, with activists and tribal community members outraged as the Huwaitat tribe is forced off their land. Activist and Huwaitat tribal member Abdul-Rahim al-Howeiti was killed by Saudi police forces in April 2020.

 

So why build a $500 billion speculative city project on desert land partially occupied by tribal members? Is it part of MBS’s plan to modernize the Saudi economy and revolutionize Saudi society or is it a cash grab for Western firms as Saudi Arabia spends its petrodollars?

 

Forward Thinking or Petrodollar Problem?

 

During the Crown Prince’s tenure thus far, Saudi Arabia has aggressively emphasized economic diversification. Saudi’s Public Investment Fund has been routinely injecting cash into tourism projects and paying Western influencers to promote Saudi tourism to American and European travellers.

 

Since the inception of the petrodollar, OPEC nations and other oil-producing nations are paid for oil in US dollars, Saudi Arabia has been a frequent investor in American firms. In 2016, Uber received $3.5 billion from the Public Investment Fund.

 

But as concerns about Saudi Arabia’s dependency on oil grow, or if read more generously, growing worry about climate change and resulting ecological disaster, MBS and Saudi Arabia have looked to depart from their traditional petrodollar economy.

 

As the petrodollar became widely used in the 1970s, Saudi Arabia became awash in US dollars. Since it’s not easy to simply convert the massive amounts of US dollars into local currency, oil-rich nations had to turn to different spending measures.

 

During periods of peak oil prices, a phenomenon known as petrodollar recycling was employed. The Saudi Public Investment Fund was founded in 1971, giving the Saudi state the ability to spend this money abroad on foreign firms that could use American dollars.

 

This economic model has also led to a wide array of ambitious vanity projects as OPEC nations periodically are pumped with more petrodollars than they can efficiently spend in their domestic economy.

 

This economic structure has largely remained intact and the PIF has ratcheted up investments in foreign firms in recent years including a shrewd $7.7 billion purchase of blue-chip American stocks during the COVID-fuelled stock market downturn.

 

But recently, MBS has shown a preference to perhaps turn away from this oil-dependent petrodollar model. Saudi Arabia announced a plan called “Programme HQ” a project to lure multinationals away from Dubai and increase foreign investment in their country.

 

The plan highlights the Kingdom’s struggle to attract large foreign investment outside of the oil industry. Saudi Arabia has always been able to attract foreign companies to throw petrodollars at, but it has long been a one-way street.

 

Even under Programme HQ, Saudi Arabia is offering massive tax breaks, but due to political controversies, foreign money might elect to stay away from investing in Riyadh.

 

Neom and The Line are incredibly ambitious, but they are not completely unprecedented in Saudi or regional history. If it succeeds, the project would be a great shift in the economy of Saudi Arabia, and a potential way out of the petrodollar trap as it would greatly increase foreign investment.

 

However, this is dependent on turning the ambitious plans on paper into reality and convincing the international community that a line city in the middle of the desert is a desirable location to visit, do business in and move to.

 

Can it Succeed

 

As stated before, The Line is scant on details. A promotional video on the official Neom YouTube channel mentions “invisible technology” that will generate “carefree and open urban space” as an animated underground network called “The Spine” displays a metro and high-speed rail.

 

The project is also billed to be zero emissions and powered by “100% clean energy” while preserving 95% of the surrounding nature. Alongside the environmental promises, developers say The Line will create nearly 400,000 jobs and massively increase the country’s GDP.

 

The Line is part of the larger Neom project, a metropolis being built in Tabuk, Saudi Arabia in the northwest of the country.

 

Without getting too far into the weeds on the feasibility of the speculative city based on the limited public information, what we can investigate is what geopolitical ramifications such a project could have.

 

Neom and The Line are set to be built on the Gulf of Aqaba, an area of water that borders Jordan, Israel, and Egypt.

 

Saudi Arabia has been one of the leading Arab nations seeking rapprochement with Israel in recent years. Some of the more ambitious plans for Neom and The Line would require normalized diplomatic relations with Israel, a prospect that would anger Palestinians.

 

Riyadh has also shifted its diplomatic tone in recent months as it prepared for the new Biden Administration in Washington. President Biden said he would be much harsher on Saudi Arabia than his predecessor as the US and Saudi Arabia enjoyed close ties during President Trump’s four years in the Oval Office.

 

But President Biden has refused to sanction Saudi Arabia or the Crown Prince despite American intelligence linking MBS with the 2018 Jamal Khashoggi assassination.

 

The Khashoggi assassination continues to dog bin Salman’s public image, but the West’s reluctance to exact retribution exemplifies Saudi Arabia’s close ties with the West and the pivotal role it plays diplomatically in the region.

 

If Neom and The Line are to even get off the ground, MBS will likely have to regularly pull out the pocketbook and continue splashing the cash in foreign economies. Whether or not they will return the favour to Saudi Arabia is the massive bet the Crown Prince is making with Neom and The Line.

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Economy, Geopolitics, Investment

It’s no secret that Saudi Arabia is making moves to diversify its economy away from a reliance on oil. Riyadh has heavily focused on tourism, but also hinted at ventures in sports, invested large sums in blue-chip Western firms, and is now turning its attention to luring large multinational firms to the nation’s capital.

 

Saudi Arabian Crown Prince Mohammed bin Salman is pushing for “Programme HQ”, a plan to draw in multinationals from the regional business hub of Dubai, UAE, according to the Financial Times.

 

The laundry list of incentives includes a 50-year tax holiday, scrapping the tough quotas to hire Saudi nationals for foreign firms, and protections against an array of future regulations. MBS is hoping to attract regional offices of companies like Google.

 

But the Saudis face stiff competition from Dubai, an established business hub with quick flight connections to Europe and a more Western education system for the children of foreign executives.

 

The ambitious project is part of the Kingdom’s even more ambitious Vision 2030, a program led by MBS to diversify and modernize Saudi Arabia’s economy and infrastructure.

 

With strong competition from the UAE and a damaged reputation abroad after the Jamal Khashoggi assassination, Saudi Arabia may face an uphill battle in its quest to meet its lofty goals by 2030.

 

Brewing Rivalry?

In recent regional geopolitical matters, the United Arab Emirates has been cast as a strong Saudi ally. Relations have not always been rosy in the past, but the two Gulf states have found cooperation against Iran as a fruitful venture.

 

The two were the most important players in the blockade of Qatar that spanned three and a half years and attempted to economically strangle their neighbour. The blockade, originally put in place due to the Saudi coalition’s concerns about the growing relationship between Qatar and Iran, was ended at the start of 2021. While the Saudis led the charge for reconciliation, some analysts say to appease the incoming Biden administration, the UAE expressed more reluctance.

 

The allies have also become deeply involved in the Yemeni Civil War, an ongoing conflict that has left Yemen in ruins, over 200,000 Yemenis dead, and over 3 million citizens displaced. The active role of the two states in the death and destruction has also led to concerns on the world stage that have already spilled over into other areas.

 

Both Italy and the United States recently blocked arms sales to Saudi Arabia and the UAE for their active role in Yemen.

 

After years of close relations and an expanding footprint in the region, the Saudi-UAE partnership is being put to the test by its worsening international standing. As Saudi Arabia continues its push for economic diversification it may need to tamper the ratcheting tensions with Iran, a game that might require more diversification in terms of allies and partners.

 

Not only Qatar, but even Israel is looking to benefit from improved relations with the Gulf states as a potential realignment in the Middle East takes place.

 

Biden

Arguably one of the biggest catalysts for Saudi Arabia’s geopolitical realignment in the last months has been the anticipation of the new Biden administration. While Biden’s Secretary of State seems keen on remaining hawkish on Iran, a public reversal on the Trump administration’s cosy relations with the Kingdom has already been established.

 

The Biden campaign team said the Trump administration “wrote Saudi Arabia a blank cheque,” and the Biden presidency is looking to focus more on human rights concerns in Saudi Arabia.

 

Much of the increase in the Saudi’s purchasing of arms sales began under the Obama administration, and the current pause on arms sales to Saudi Arabia was pitched by Secretary of State Antony Blinken as a routine reassessment of the country’s arms sales to Saudi Arabia and the UAE.

 

While President Biden was Vice President from 2008-2016, he and the administration were not known to have a particularly strong stance on Saudi Arabia.

 

Further than just arms sales, a hardened relationship with the United States could damage Saudi’s chances of attracting foreign business headquarters under their Programme HQ plans.

 

Some businesses like Google, Alibaba, and Western Union have announced increased office space and investment in Saudi Arabia, but Riyadh has yet to convince a major firm to move their regional headquarters to the country. And deals like Google’s cloud service made with Saudi oil company Aramco have led to public dismay among employees.

 

“The biggest challenge MBS has in remaking the Saudi economy is getting foreign companies to invest in Saudi Arabia… Despite all these enticements, it hasn’t happened,” MBS biographer Justin Scheck told The Daily Beast.

 

Before the Khashoggi assassination, Saudi Arabia was already struggling to attract foreign investment, and this already with the “blank cheque” from the Trump administration in full effect. The Kingdom’s most ambitious plans are still hampered by a poor image internationally, and with a new administration, MBS and Saudi Arabia have had to seek a new path internationally.

 

Whether the Kingdom will be able to pull foreign firms away from their allies in Dubai largely depends on how much Saudi Arabia can mend their reputation and how receptive foreign governments and businesses are to the public relations offensive.

 

While Saudi Arabia may struggle to find foreign firms to move to Riyadh, recent history has shown that foreign firms are eager to cover for the potential of heavy investment from the Public Investment Fund of Saudi Arabia. But now the task lies ahead for MBS to reverse the course and convince foreign firms to invest in his country.

 

 

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Geopolitics

After nearly four years of a harsh blockade, a Saudi-led coalition lifted its blockade against Qatar, opening its air, land, and sea borders to Qatar. The changes went into effect on January 4, 2021.

 

Kuwait and the United States mediated the deal between the two sides which resulted in the resumption of diplomatic and economic relations between Qatar and the Saudi-led bloc of the United Arab Emirates, Bahrain, and Egypt.

 

The blockade began in 2017 after Saudi Arabia accused Qatar of supporting terrorist groups including ISIS and al-Qaida. While support for terrorism was the official reason for the blockade, relations between Saudi Arabia and Qatar had chilled over the previous years with Saudi Arabia fearing that its power in the region was threatened.

 

Not only did the blockade have an immense impact on geopolitics, but it also challenged Qatar economically. Despite the blockade, Qatar performed well economically with the International Monetary Fund stating Qatar “successfully absorbed the shocks” from the Saudi-led blockade.

 

While Qatar looked inward economically during this period, the renewed connections between economic powers in the region will give a major boost to certain flagship industries in the region.

 

Air Travel

 

Qatar Airways, owned by the state of Qatar, is the most well-known Qatari-owned entity around the world, and it suffered massively due to the blockade.

 

Due to the blockade, Qatar Airways had to not just avoid landing in Saudi Arabia and other countries, but it had to completely avoid flying in their airspace. This resulted in roundabout routes for Qatar Airways that hampered its ability to provide its service.

 

After one year of the blockade, Qatar Airways reported a $69 million loss in 2018 due to the Gulf State blockade.

 

With 2020 dealing a devastating blow to the airline industry at large, the lifting of the blockade could not come at a better time for Qatar Airways. Even before all impacts of the coronavirus pandemic are factored in, the financial year ending on March 31 saw record losses for Qatar Airways, with nearly $2 billion in losses.

 

The airline has not wasted time in rebuilding air routes with Saudi Arabia lifting the air space ban. Four days after the announcement was made, Qatar Airways began rerouting through Saudi airspace.

 

While air links between the countries have yet to be restored, the opening of airspace to Qatar means the next step will be commercial flights between Qatar and the other Gulf States.

 

Iran

 

One of the major sticking points between Saudi Arabia and Qatar has been the latter’s close ties with Iran. However, Qatar has stated that it will not change its relations with Iran or Turkey, two of Saudi Arabia’s biggest regional rivals.

 

Qatari foreign minister, Sheikh Mohammed bin Abdulrahman al-Thani, told the Financial Times, “bilateral relationships are mainly driven by a sovereign decision of the country… [and] the national interest.”

 

While he insisted that Qatar made few concessions in the diplomatic deal, al-Thani said that Qatar would cooperate with the Saudi-led coalition on counterterrorism and regional security.

 

The Saudi blockade listed many demands related to Iran, including demands for Qatar to shut down diplomatic relations with Iran, kick out Iranian military members, and abide by the United States sanctions on Iran. Despite Qatar refusing to do so, the two sides were able to strike a deal to start the new year.

 

Throughout the blockade, Iran and Qatar’s ties deepened as Qatar became more reliant on Iran’s air space and economy while it was shunned by its neighbours.  The blockade clearly failed to pull Qatar away from Iran, and the Saudi-American coalition may see the resumption of diplomatic relations as a necessity to decrease Qatar’s reliance on Iran.

 

During the blockade Qatar and Turkey have also strengthened ties, a development seen as unfavorable for Saudi Arabia as its rift grows with Turkish President Recep Tayyip Erdoğan.

 

Why Now?

 

Qatar stood strong and conceded very little of what it was asked to do when the Saudi coalition first released its list of demands in 2017.

 

Reports have indicated that Saudi Arabia is leading the push to reopen relations with Qatar in order to impress the incoming Biden administration. Others in the coalition including the UAE have expressed reluctance considering Qatar’s growing ties with Turkey.

 

Along with Kuwait, the United States was a mediator in the dispute between the two sides with the Americans concerned about Iran’s potential to gain due to the dispute. The Trump administration, continuing in America’s traditional foreign policy, has been hawkish towards Iran and saw the blockade as strengthening its foe.

 

However, the Trump administration has worked closely with Saudi Arabia and infamously failed to distance itself from Crown Prince Mohammed bin Salman after journalist Jamal Khashoggi was killed in the Saudi consulate in Turkey.

 

Foreign policy observers believe a Biden presidency will be less forgiving to Saudi Arabia while still focusing on containing Iran. Therefore, rapprochement with Qatar is viewed as a necessity in Riyadh to stabilize relations with Washington.

 

According to Reuters, Saudi Arabia is the only country in the blockade coalition that is actively opening airspace to Qatar.

 

With other countries still more critical and less concerned about their American relations, the diplomatic crisis is not completely over for Qatar. The UAE is looking to remain critical of Qatar for its links with Turkey and Iran.

 

“The thaw may do little to dampen competition between Qatar and the UAE, and their respective allies in regional hotspots,” said Elham Fakhro, senior Gulf analyst at International Crisis Group.

 

With that said, business will be returning to Qatar with airspace and travel expected to be opened by other states in the coalition despite their cold feet compared to the most powerful in the group, Saudi Arabia.

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Geopolitics

On November 13, Morocco launched a military operation into the disputed Western Sahara region to quell protests in border regions.

 

The Polisario Front, a rebel liberation movement, cited the military operation as the final straw to break the 29-year ceasefire between Morocco and the Sahrawi independence movement. Polisario Front’s secretary-general Brahim Ghali declared the “resumption of armed struggle in defence of the legitimate rights of our people.”

 

Moroccan forces exchanged fire with separatist forces, sparking fear of wider conflict in the region.

 

Amnesty International released a call for independent human rights monitoring as Moroccan military and police forces have harshly cracked down on Sahrawi activists. “Now, more than ever, impartial and independent UN human rights monitoring and reporting in Western Sahara is desperately needed,” wrote Amnesty International researcher Yasmine Kacha.

 

The international press rarely gains access to the region, but no civilian casualties have yet been reported. Nonetheless, with the Moroccan state increasing action against civilian activists and the Polisario Front committing to military action, the conflict zone has quickly turned from cool to potentially hot.

 

Directly after tensions flared in mid-November, regional partners and international organizations weighed in with attempted diplomatic solutions.

 

Days before the ceasefire was broken, a spokesperson for UN Secretary-General António Guterres said, “the secretary-general remains committed to doing his utmost to avoid the collapse of the ceasefire.”

 

Despite the commitment from the Secretary-General and years of aborted diplomatic solutions, the Western Sahara question has persisted. Without an easy solution in sight, the conflict between Morocco and the independence movement also has implications for regional partnerships and diplomacy.

 

Algeria

 

Algeria has been Polisario Front’s most ardent international ally for decades, so much so that Morocco has attempted to paint the independence movement as simply Algerian-backed and not an organic movement. Algeria officially supports the region’s right to self-determination and over the years has trained Polisario fighters and set up refugee camps for those fleeing from the conflict.

 

Prominent Algerian and Moroccan intellectuals released a statement advocating for increased dialogue between the nations as recent military operations have increased tensions between the neighbors.

 

But recent news suggests the states are still preparing for the worst, with reports that Algeria finalized a $2 billion deal with Russia to purchase stealth bombers after a year of negotiations. Morocco claimed the purchase was triggered by its purchase of 25 F-16 Vipers from the US in August.

 

Algerian politicians have also raised questions about other state’s actions in Western Sahara, including the UAE opening a consulate in Laayoune, the largest city in the region. Algerian diplomat Abdelaziz Rahabi had harsh words for the UAE in a press conference, “I consider any hostile position to the fundamental interests of Algeria from any Arab or foreign country as an aggressive stance towards Algeria.”

 

Algerian President Abdelmadjid Tebboune has been in Germany for over a month receiving treatment after contracting coronavirus, and the country has also been engulfed in domestic political uncertainty. Some Algerian diplomats and politicians have expressed concern that other nations are looking to take advantage of its president’s absence.

 

In contrast to Algeria, most Arab nations have expressed support for Morocco’s military action in Western Sahara including Bahrain, Jordan, Kuwait, Oman, and Yemen. But this time around some typical supporters of Morocco in the conflict have expressed a level of reluctance to back Morocco.

 

Egypt and Turkey

 

Noticeably, Egypt did not immediately release a statement of support for Morocco and instead expressed concern and called on all sides to restrain from increasing provocations. Over the past decade, relations between Morocco and Egypt have become more strained with Morocco participating in Libyan peace agreements against the wishes of the Egyptians and for Egypt’s growing ties with Algeria.

 

Egypt has continually shifted to a more neutral stance on Western Sahara in an attempt to balance relations between Algeria and Morocco, however, the calculation is likely supported more by Algeria than Morocco.

 

Egyptian ambassador Mona Omar told Al-Monitor, “Egypt’s position on this [Western Sahara] issue is unlikely to budge, no matter how criticized it is inside Morocco.”

 

Turkey’s relations with both Morocco and Algeria are also in the balance as President Erdoğan plays a delicate game in the country’s diplomatic and potential proxy conflict spats between Iran and Saudi Arabia.

 

To the dismay of Ankara, Morocco and Saudi Arabia have grown closer in recent years, potentially jeopardizing Turkish attempts to strengthen bonds across the North African region. The recent resurgence in conflict in Western Sahara has made it more difficult for Turkey to balance its interests in both countries.

 

Erdoğan has stated previously he will never support or recognise the Polisario Front, but with relations being stronger with Algeria at the moment some wonder if Turkey will soon switch allegiances.

 

On the potential switch to more strongly supporting Algeria over Morocco, an AKP bureaucrat told Al-Monitor, “now we may have to make a choice because the military establishment in Algeria is strong and for Algiers support for the Polisario Front is crucial, especially if we want to sell them arms and drones.”

 

While a potentially renewed war in Western Sahara has been sparsely covered in Western media, the tensions in the region have important consequences for regional diplomacy even if skirmishes do not spill over into war.  And with Morocco and Algeria potentially squaring up, powerful actors may be forced to choose a side, at least temporarily, that would have implications on other regional and global disputes.

 

And for the people in Western Sahara, a quick and easy resolution seems far away as Morocco still has not faced enough pressure to return to the negotiating table.

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Geopolitics

In a bid to placate over a year of widespread protest that began in February 2019, the Algerian government proposed a constitutional referendum that took place on November 1st. Algerians resoundingly passed the reform, but that is far from telling the whole story.

 

The referendum vote saw historically low voter turnout as opposition leaders and groups advocated a boycott from the referendum with many viewing it as simple window-dressing that would only make matters worse. Opposition campaigners were barred from holding meetings, calling into question the democratic legitimacy of the vote.

 

The Algerian government and political elite have been scrambling since popular protests ousted former president Abdelaziz Bouteflika in early 2019. While large-scale protests persisted, Abdelmadjid Tebboune was eventually elected in December 2019, succeeding Bouteflika’s 20-year reign.

 

However, Tebboune is hardly a new face to Algerian politics, he served as a minister under Bouteflika’s government and even served a short stint as Prime Minister. Suffice to say, Tebboune has failed to capture the support of the social movement that ousted his predecessor.

 

In March, protests died down as the COVID-19 pandemic became a public health emergency for Algeria, and the military enforced a nationwide ban on protests. And in a story similar to many other countries in North Africa, Algeria’s economy is struggling thanks to a drop in oil prices and the COVID-19 malaise on the day-to-day economy.

 

The public health crisis, economic downturn, and unpopular government quickly became the breeding ground for a return to street protests.

 

A Resurgent Frustration

 

In early October, protesters marched in the capital, Algiers, defying the nationwide ban on protests due to COVID-19 concerns. The protests continued through October despite increasing coronavirus cases in the country.

 

The frustration has not only manifested in the streets, but also in the ballot box with less than 20% of voters turning up for the constitutional referendum vote.

 

Constitutional researcher Massensen Cherbi told Al Jazeera that the referendum would make Algeria’s constitution “the most authoritarian constitution in the entire Mediterranean.”

 

The “authoritarian” document was crafted largely without input from Hirak, the largest protest organization that emerged in 2019.

 

Without the ability to meet and hold demonstrations against the referendum, the opposition’s strategy turned to a boycott, and with historically low voters, many activists see the result as a rejection of the government.

 

“I hope men and women within the system will understand this lesson and do what is needed to listen to the peoples’ demands. The people want their own constitution and institutions,” Mustapha Bouchachi, a lawyer and human rights activist told Reuters.

 

Current Presidential Woes

 

While the government hailed the result as a big win, that message has fallen on deaf ears for much of the country and the international press. With low turnout and still angry social movement, Algeria’s president still has a tall task to attempt to stabilize society.

 

This fluid situation is also not aided by the President’s health. President Tebboune has been in a German hospital bed for a week with COVID-19 complications. Government sources finally confirmed Tebboune has COVID-19 after nearly a week of speculation over the health of the 74-year-old who regularly smokes.

 

Such a diagnosis would be difficult to handle in the best of times, but as the country continues to fight its own battle against the virus, its leader is MIA.

 

Beyond personal and public health, the economic conditions are exacerbating the current government’s instability.

 

Low crude oil prices have been a thorn in the Algerian economy’s side. As a member of OPEC, Algeria came out in favor of extending supply cuts in hope of staving off further price decreases.

 

The second wave of coronavirus in Europe, combined with a looming second wave in Algeria has given the state enough worry to cut supplies in anticipation of decreased demand. The final decision rests with Russian President Vladimir Putin who has expressed interest in curbing production.

 

The International Monetary Fund (IMF) has also expressed concerns about Algeria’s economy and the impact of COVID-19 on the country.

 

President Tebboune has been reluctant to call on help from the IMF, likely worried about saddling the country with debt and potentially unpopular austerity measures.

 

And the People in the Streets?

 

The popular protest movement that ended the reign of the longest-serving president in Algerian history has been hamstrung by the pandemic. A more robust military presence and legal bans on gatherings have decreased protest activity.

 

But the same complaints persist in Algerian society with the government unable or unwilling to take on many of the movement’s requests.

 

While the ouster of Bouteflika was hailed as a great achievement, the aftermath is yet to substantially change the reality of many Algerian citizens. President Tebboune is from a Bouteflika background, and while he’s given lip service to the protest movement, the constitutional referendum has done little to inspire hope in the men and women who took to the street.

 

If substantial change is not offered, it becomes a question of if not when the protests begin again. The Algerian government is working against the clock.

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Geopolitics

 

 

In a whirlwind of global news, the Azerbaijan-Armenia conflict over the Nagorno-Karabakh region has fallen out of the spotlight, if it was ever there to begin with. Not only is the conflict devastating for those in the conflict zone—it also has large implications for the European, Central Asian, and Middle East politics.

 

The majority ethnic Armenian autonomous region within Azerbaijan has long been a flashpoint for conflict between ethnic groups in the Soviet and post-Soviet era. Both the Azeri and Armenian governments have claimed the other side started the most recent conflict, which began on 27 September.

 

Since then, fighting has increased and again both countries have accused the other of targeting cities and endangering civilians. Viral footage has shown the capital of Stepanakert allegedly being shelled by Azeri cluster bombs.

 

As tensions ratchet up, Western powers have mostly remained mum on the topic, but Turkey threw their military weight behind their Azeri allies quickly. The forceful military support from Turkey marks a departure from previous conflicts over the region which were primarily of Russian interest.

 

The latest iteration of conflict leaves regional powers scrambling as Russia, Iran, and Turkey all share borders with the two nations in the Caucuses.

 

The Nagorno-Karabakh fighting has also roped in the Syrian National Army fighting on behalf of Turkey. The Turkish-backed force is fighting in opposition to the Assad regime in Syria, while Russia has been one of the Syrian leader’s biggest backers.

 

Russia-Turkey relations threaten to worsen as the Nagorno-Karabakh situation makes the third armed conflict in which the two countries are on opposing sides, with Libya and Syria as the others. Russia has been an ally of Armenia, but thus far it has not supplied Armenia the same military support as Turkey has given Azerbaijan.

 

Turkey Flexes Power

 

Turkey’s latest moves to support Azerbaijan are part of a much larger increase in the country’s military presence in the last decade under the leadership of President Recep Tayyip Erdoğan.

 

Turkey’s military expansion has extended beyond Syria and Libya, as Erdoğan has increased tensions with Greece and Cyprus over Mediterranean gas reserves, much to the dismay of Egypt and other regional players. Greece has drawn support in the form of military exercises from Italy and France as other European Union members attempt to solve the crisis diplomatically.

 

The increasing military exploits in Syria, the Mediterranean, and Nagorno-Karabakh come as the Turkish lira is in freefall against the US dollar and the Euro. The coronavirus pandemic has accelerated the fall of the lira which has been trending down against other currencies for years.

 

As the Turkish economy has stuttered and domestic crises run amok, Erdoğan has run a tight ship at home and attempted to both appease voters and business interests by flexing Turkish military might in the region. An attempt to secure gas rights in the Mediterranean is a business calculation, nevertheless one that threatens relations with European counterparts.

 

And much like Mediterranean gas, Turkey’s interest in the Armenia-Azerbaijan conflict lies further than the historic, ethnic, and cultural ties between Turkey and Azerbaijan. Recently, Azerbaijan became Turkey’s top gas supplier, as part of Erdoğan’s diversification from Russian gas dependence.

 

Russia and Europe

 

While Armenia does not enjoy a level of support from any country equivalent to Turkey’s support of Azerbaijan, it can count several ‘allies’ on its side.

 

French President Emmanuel Macron spoke most forcefully of Western leaders and called for a ceasefire in the region. Macron also called the deployed of Turkish-backed Syrian forces a “jihadist” deployment. In recent days, Macron has been outspoken against “Islamist radicalism”, drawing ire from Muslims in France and around the world.

 

Russia and the United States have also called for a ceasefire in Nagorno-Karabakh, but no foreign power has rushed to their aid and offered direct military support. NATO also joined the calls to cease fighting.

 

Turkish Foreign Minister Mevlut Cavusoglu was very critical of the international community’s call for a diplomatic solution after ten days of fighting. While visiting Baku, Azerbaijan’s capital, Cavusoglu said, “we look at the calls coming from around the world, and it’s ‘immediate ceasefire’. What then? There was a ceasefire until now, but what happened?”

 

While international leaders duke it out on the international stage, deaths are mounting. And, Azerbaijan and Armenia have both been adamant that a ceasefire cannot occur.

 

On the Ground

 

For Azerbaijan and Armenia, the fighting seems to be intractable, with both sides taking hardline stances.

 

Armenia is particularly wary of Turkey’s involvement in the fight considering the Ottoman Empire committed a genocide against ethnic Armenians, a fact Turkey still denies over 100 years later.

 

The Armenian diaspora and government officials have linked the current battles as a continuation of the genocide which spanned from 1914-1923. Armenia’s Prime Minister Nikol Pashinyan said Turkey is “once again advancing on a genocidal path.”

 

Armenia seems to want nothing less than the removal of Azeri and foreign troops from the autonomous region.

 

For Azerbaijan, they have a similar request, the removal of all Armenian troops from Azeri territory (Nagorno-Karabakh is internationally recognized as a part of Azerbaijan).

 

So, the two sides have hardened stances with Armenia arguing they cannot leave the region as Azeri-Turkish control is a threat of genocide in the region, and Azerbaijan insists that the territory is under their control.

 

And thus far, the international community has been unable to broker a diplomatic solution, with Turkey the only major power to take a commanding role. With regional and global powers from the European Union, Iran, Russia, and the United States attempting to play a balancing act between interests in the region, Armenia finds itself up against a more populous Azerbaijan with the military backing of Turkey.

 

Without a diplomatic answer on the horizon, the conflict threatens to grow out of control and spill into conflicts in other arenas.

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Economy, Geopolitics

With a historic peace deal announced between the United Arab Emirates and Israel in mid-August, US Secretary of State Mike Pompeo embarked on a whirlwind tour of the Middle East in search of more peace deals with Israel.

 

The normalizing of relations between UAE and Israel was met with fanfare from the Trump administration, with President Trump’s senior adviser and son-in-law Jared Kushner on the first direct flight from Israel to the UAE.

 

The next step for the United States government was to send Pompeo to the UAE, Bahrain, Oman, and Sudan in search of more good news for the administration. But Pompeo was unable to secure any further declarations and the Secretary of State went back to Washington empty-handed.

 

Each state has relations with the United States beyond Israel, and some viewed them as a roadblock to further negotiations. For example, the Sudanese Prime Minister said the issue of normalization of ties with Israel should not be linked with the country’s removal from the US state sponsors of terrorism list.

 

The best news Pompeo received was from Oman, whose leader Sultan Haitham bin Tariq al-Said praised the UAE-Israel deal but did not comment on his own country’s relations with Israel.

 

Ahead of Pompeo’s visit to the region, Israel announced it expected Bahrain and Oman to follow in the UAE’s footsteps, but hopes have been tempered slightly after no new big announcements.

 

Before Pompeo’s visit, Israel said it also expected to normalize relations with several Muslim-majority African countries.

 

With some expectations that the UAE-Israel peace deal might cause some diplomatic issues in the Arab world for the UAE, it has been Palestinians who have voiced the biggest concerns.

 

Palestine

 

The peace deal is a great concern for many Palestinians considering the decades-long agreement between countries in the Arab world to put pressure on Israel to return annexed land. 

 

Palestinian President Mahmoud Abbas said he “rejects and denounces the surprising announcement by Israel, the United States and the UAE,” and called it a “betrayal of Jerusalem, Al-Aqsa Mosque and the Palestinian cause.”

 

Palestinian officials also insist they were not consulted about the UAE deal before it was announced.

 

The UAE has billed the normalization as a measure to stop further annexation in the West Bank. However, Israeli Prime Minister Benjamin Netanyahu said annexation was “still on the table” after the UAE deal.

 

Furthermore, a discrepancy in the English and Arabic versions peace deal has triggered skepticism among Palestinians. The Arabic version of the deal released by UAE state media, said, “the agreement … has led to Israel’s plans to annex Palestinian lands being stopped.” But in English, the agreement was only said to “led to the suspension of Israel’s plans to extend its sovereignty”.

 

This small detail is of immense importance as Palestinians fear Israel could continue annexation at a later date after a suspension of its plans.

 

Egyptian President Abdel Fattah al-Sisi, among other leaders of Arab countries, spoke in support of the deal while calling on Israel to drop plans to further annex portions of the West Bank.

 

The United States, while always an ally of Israel, has become a very vocal and outward supporter of Israel and has sought to shift the state of regional politics in Israel’s favor. The UAE deal was a huge win in this direction, and with other countries supporting the deal, other leaders may follow suit.

 

What has been hailed as a huge win for the Israelis has been met with condemnation and worry from many Palestinians. The New York Times characterized the deal as swapping one nightmare for another, instead of annexation, the Palestinians now have to fight for their struggle to be viewed as relevant with unanimous support faltering. 

 

The Grand Mufti of Jerusalem resigned from a UAE forum promoting peace after he called the UAE’s normalization of relations with Israel, “a stab in the back of Palestinians and Muslims, and a betrayal for Muslim and Christian holy sites in Jerusalem.”

 

However, whether the Trump administration has permanently realigned the geopolitical situation in the region remains to be seen.

 

Pompeo, Trump Use Israel as Foreign Policy Victory

 

Pompeo was not only busy with diplomatic events; the Secretary of State also spoke to the Republican National Convention from Jerusalem to tout the President’s foreign policy credentials.

 

Pompeo called the UAE-Israel peace deal “a deal our grandchildren will read about in their history books.” He also held up the Trump Administration’s decision to move the United States Embassy to Jerusalem.

 

Domestically, there was more concern about potential violation of the Hatch Act, a law that prohibits civil service employees in the federal government from engaging in some forms of political activity, than the contents of the speech. Pompeo has denied any legal wrongdoing, but Democrats in the House have said they intend to pursue an investigation.

 

This episode sheds some light on the limitations of viewing the Trump administration’s policy as a blip.

 

With Trump facing reelection in two months, according to polls his days in the Oval Office may be numbered. Despite this reality, the UAE plowed ahead with the Israel peace deal, and some comments from other Arab states may suggest a more permanent realignment in the region.

 

With that said, Pompeo and Kushner have been yet unsuccessful in securing further public affirmations that point in the direction of similar deals.

 

The reluctance on some states to join in can be chalked up to multiple reasons, including domestic politics, regional relations, American relations, and the uncertainty surrounding the Trump administration.

 

However, Pompeo’s trip to the region and the UAE-Israel peace deal show that Israel is currently able to achieve a deal with an Arab country with favorable terms. Unfortunately for the Palestinians, Arab solidarity is shakier than ever before in modern memory.

 

While current events spell out more potential peace in the region, what it means for peace within Israel is up in the air.

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Economy, Geopolitics, Investment

A Saudi-led consortium’s bid to purchase Newcastle United failed after months of controversy surrounding the planned takeover.

 

The biggest sticking point was the Premier League viewing the Saudi Public Investment Fund (PIF), the group behind the bid, as a proxy for the Saudi state.  Saudi Crown Prince Mohammed bin Salman is the chairman of the Saudi Public Investment Fund.

 

But the group cited “this difficult phase marked by the many real challenges facing us all from Covid-19,” as a chief reason for the deal falling apart.

 

The deal falling through was a surprise to many as the deal was in its final stages. Newcastle’s current owner Mike Ashley, CEO of Sports Direct, will keep the £17 million deposit put down by the Saudi-group. The final deal would have seen the club sold for £300 million.

 

The collapse of the deal is a major setback for Saudi’s sovereign wealth fund, as the purchase of a Premier League club could have been a huge public relations coup. Saudi Arabia has struggled in the public eye of the West after the murder of Jamal Khashoggi in a Saudi consulate in Turkey.

 

Some recent investments from the fund have also decreased massively in valuation. In May, Softbank announced its Vision Fund, in which the Saudi sovereign fund invested $45 billion, lost $17 billion in the last fiscal year after it wrote down the value of WeWork and Uber.

 

Despite the setbacks, the Saudi Public Investment Fund announced it was still keen to continue the takeover if the Premier League gave the deal the green light. Newcastle United fans have also petitioned the Premier League to provide more details as to why the takeover deal was abandoned after four months of negotiations.

 

While the deal might not be completely dead, the prolonged process and massive money put up shows the PIF and the Saudi state are still keen on further diversifying their economy and wealth. However, that process may come at a higher price due to strained diplomatic relations and poor public relations.

 

Economic Diversification

 

The Saudi state and the PIF have long been pushing for more diversification in order to lessen the country’s dependency on oil. The push has been spearheaded by Crown Prince bin Salman, who has deployed a charm offensive on Western companies and politicians.

 

But in the wake of Khashoggi’s murder, the business relations between foreign companies and the Saudi state have become more difficult.

 

Shortly after the incident in 2018, an array of businesses, media companies, politicians, and international organizations pulled out of business deals or refused to attend business forums in Riyadh.

 

The private ventures most supportive of the Saudi state also found themselves in hot water in the wake of the scandal. Uber, who received a $3.5 billion cash injection from the PIF in 2016, stepped into the scandal when its CEO Dara Khosrowshahi dismissed the murder as a “mistake”.

 

Not only has the push for economic diversification come with diplomatic headaches, but some of its most high-profile investments have resulted in massive losses that predate the coronavirus economic crisis. As of late 2019, the PIF had lost $1 billion due to its investment in Uber.

 

Spending Big in the Crisis

 

But big losses and the current economic crisis have not scared off the sovereign wealth fund. The PIF has been pouring money into many ventures as the worldwide economic impact was beginning to hit, attempting to snap up shares in deflating industries.

 

According to the Financial Times, Yasir al-Rumayyan, governor of Saudi Arabia’s sovereign wealth fund, said at a virtual investment conference in April, “you don’t want to waste a crisis . . . So, for us, definitely we are looking into any opportunities.”

 

The PIF invested in a wide range of industries including the hardest hit, acquiring a 5.7% in Live Nation, an American events promoter, and a 7.3% stake in Carnival, the American cruise line.

The Saudis have also been snapping up shares in blue-chip companies with household names like Disney, Facebook, BP, Boeing, and Citigroup.

 

But critics abroad and domestically are beginning to criticize the tactic of splashing cash in foreign companies as it simultaneously funds proxy wars and potentially ignores economic damage at home.

 

The Footprint of Saudi Wealth Domestically and Abroad

 

The PIF’s expanding international investments and its interest in purchasing an 80% stake in a top-flight English football club have drawn attention to the Saudi’s aggressive strategy during uncertain times.

 

The coronavirus crisis has been a devastating period for the Middle East, at first for economic reasons, and now due to a rise in infections for public health reasons. The world economy was brought to a standstill for several months, and it is still far from reaching its pre-pandemic levels.

 

Oil prices have picked up in recent days and weeks, but they are still far off of pre-pandemic levels.

 

And while oil prices were slowly recovering, the rate of coronavirus infections took off in Saudi Arabia. The number of cases is currently stabilizing at over 1,000 a day after peaks of over 4,000 daily confirmed coronavirus cases.

 

$1 billion was pumped into Saudi businesses to keep them afloat during the crisis, but the near-term, as in many countries, still looks grim.

 

The economic developments may put a damper on some of Saudi Arabia and MBS’s more ambitious goals, including Neom, a $500 billion futuristic city planned to be built in the country’s barren northwest.

 

Saudi Arabia’s international engagements may also serve as a thorn in their side. While the Khashoggi murder has proven to be a much worse diplomatic hit, the Kingdom’s involvement in worsening the humanitarian crisis in Yemen through war still draws harsh criticism from many corners.

 

With an aggressive and risky strategy during an unprecedented economic standstill globally, the PIF and Saudi Arabia may pay for its bet against the house. But with growing economic sway in many Western institutions, MBS and Saudi Arabia could be playing a long game that will see them sheltered from their gravest sins.     

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