Although differences still remain, frequent meetings of Russian and Saudi officials are clearly marking a new era of Saudi (GCC)-Russian relations. While some analysts stress that Russia’s general foreign policy toward these issues is meeting resistance in some parts of the region, others notice clear signs of rapprochement between the two sides.

During the cold war and after it, relations between the Gulf countries and the Soviet Union/Russia were chilled due to ideological differences and opposite views on global and geostrategic rivalry with the US, the Gulf’s closest ally.

After the Cold War ended, Russia lacked the political strength necessary to set up a firm presence in the Gulf.

Moreover, relations with some of the GCC countries, such as Saudi Arabia, increasingly turned sour with Russian intervention in Afghanistan and alleged Saudi support to Islamic insurgents in Chechnya in the early 2000s.

Since then many things have changed, and it seems both sides have decided to open a new chapter in the history of their relations. A series of meetings between Saudi and GCC officials and their Russian colleagues indicates a proactive policy of Moscow aimed at being more involved in issues in the Middle East.

Fighting ISIS not enough of a common ground

For Sarah Lain, research fellow at the Royal United Services Institute (RUSI) for Defence and Security Studies, this is in part due to the weakening of Russia’s relations with the West over Ukraine and the need for Russia to build up new alliances. It also stems from a desire to find cooperative solutions over Syria and Yemen.

“Although Russia is keen to demonstrate its own influence and significance in international affairs, and not least because ISIS has clear ramifications for Russia itself, such cooperation is also a way for Russia to, in turn, maintain dialogue with the US on the issue of terrorism at a time of poor relations. Although no solution was found as a result of the meeting, such attempts were reflected in the recent trilateral meeting on the subject between the Foreign Minister of Russia Sergei Lavrov, with the Foreign Minister of Saudi Arabia H.H. Adil Al-Jubeir and the US Secretary of State John Kerry in Doha in August.”

Russia has been deeply concerned with the spread of ISIS and extremist ideologies, as the country had witnessed a series of terrorist attacks in the past. According to Russian press agency Interfax and Chief of the Anti-Terrorism Centre of Commonwealth of Independent States (ATC-CIS), Andrey Novikov, more than 2000 Russian citizens have joined Islamic state militants, while experts believe the actual number is far greater – approaching 5000.

The return of Islamic fighters to the Russian territory poses a great danger for Russian security. Moscow had therefore called for increased cooperation with Western and GCC countries, and proposed the creation of a broad international coalition to counter ISIS in the region.

Anna Borshchevskaya, Ira Weiner fellow, Washington Institute for Near East Policy
Anna Borshchevskaya, Ira Weiner fellow, Washington Institute for Near East Policy

But this idea was neither supported by the Western states nor by the Saudis as this coalition would have had to include armed forces of current president Bashar Al Assad. “While the Saudis see Assad as part of the problem in Syria, Russia continues supporting Assad. Indeed, Assad praised Russia’s unwavering support earlier this week,” Anna Borshchevskaya, Ira Weiner fellow from the Washington Institute for Near East Policy tells BQ magazine.

According to Russian Foreign Minister Lavrov, the Islamic State of Iraq and the Levant (ISIL) is the main danger in Syria and Iraq and this is why Russia has been supporting the governments of both countries. But as the GCC’s opinions on Syria and Yemen differ to those of Russia, Russia’s influence in swaying the GCC on their proposed solution to these conflicts is likely to be limited, states Lain.

In the beginning of September, following a Russian proposal and after the failure of Western states to find any meaningful solution to the crisis in Syria – which became evident that after the newest refugee crisis – Russia decided to act unilaterally and caught everyone by surprise by sending expeditionary forces to Syria. Only time will tell if this Russian manoeuvre will bring any meaningful success. 

Russian Bear gaining ground

Meanwhile Russia has gotten ever more involved in Middle Eastern matters, regaining much of the former Soviet influence – some analysts believe Russia has out-manoeuvred Western states.

“Russia has already benefited substantially at the expense of the United States. It has taken advantage of our indecisiveness and lack of will to get more involved, especially in Syria. As a result, Russia has been able to keep Assad in power and gain the position of an influential power in the region, without whom key critical decisions cannot be made, and ones that stand in opposition to the US,” says Borshchevskaya.

“As long as the United States continues on its course of policies, Russia will continue to gain benefits at the expense of the United States. For (President) Putin, this is a zero-sum game, even if (President) Obama does not see it that way,” she adds.

Search for alternative markets

One of the biggest motives for this sudden and “unexpected” friendship with the GCC block, besides fighting extremism, can be explained by the economic sanctions imposed on Russia, forcing it to expand to markets in Asia and the Middle East, with the GCC and its prosperous economies being an obvious target.

Trade is an area where Russia has already made gains as demonstrated by the agreements signed with Saudi Arabia in June this year. These included agreements to cooperate in the civilian nuclear sector, wider energy cooperation and also space exploration. However, the details are vague and they appear mainly to be framework agreements rather than concrete deals, explains Lain.

Russia is particularly interested in raising its arms exports to the GCC countries which over the past years have become the largest military equipment buyers in the world.

Saudi Arabia’s Foreign Minister Al-Jubeir officially confirmed his country’s interest in Russian missiles in August, such as the Russian Iskander-E missile system.

In addition, according to IHS Jane’s 360 defence analysis group, the Saudis are interested in a wide variety of hardware, including new frigates for their navy. The countries have talked about huge arms deals in the past, but no deals have ever been signed in the end.

Russian analysts from the Centre for the Analysis of Strategies and Technologies, for example, are highly sceptical about the possibility of selling Russia’s top missile Iskander system to the Saudis as Russia is cautious about selling. Despite current tensions with the US, Saudis are still closely allied with the Americans, who could get a chance to inspect the Russian system and develop counter weapons.

The Cornet-EM is a multi purpose anti tank guided missile system
The Cornet-EM is a multi purpose anti tank guided missile system

But buying Russian arms may also be seen as a message to the US and Iran, and a clear expression of dissatisfaction with recent Iran deal in which the US and other countries agreed to soften economic sanctions against the country. Also, the Gulf States, especially Saudi Arabia, are aiming to diversify their arms supply strategy and are engaged in similar talks with France.

“Bahrain, for example became the first to purchase the Kornet-EM anti-tank guided weapon (ATGW) system from Russia in 2014, and several years before, Russia’s defence industry agreed, for the first time, to sell tens of millions of dollars’ worth of weapons to Bahrain, primarily AK-103 grenade launchers and ammunition, although these are still relatively small-scale purchases. Since traditional US allies in the region have been disappointed with its policies in recent years, it is possible this arms trade may increase in the future,” Borshchevskaya says.

Qatar & Russia reach agreement

Qatari Foreign Minister, HE Dr. Khalid bin Mohammed Al Attiyah, at a joint press conference with Russian Foreign Minister, Sergei Lavrov, on 2 August, 2015 in Doha.
Qatari Foreign Minister, HE Dr. Khalid bin Mohammed Al Attiyah, at a joint press conference with Russian Foreign Minister, Sergei Lavrov, on 2 August, 2015 in Doha.

In August, Interfax quoted Russian Foreign Minister Sergei Lavrov saying Russia and Qatar have reached an agreement on the coordination of their actions on the world gas market. This agreement has gone relatively unnoticed and very few agencies have reported it.
The reason may be, as Edward Chow, a senior fellow in the Energy and National Security Program at Centre for Strategic and International Studies, tells BQ: “Such statements have been made many times before without any effect. I expect most countries will ignore this statement, which mainly signals Russian concern. Both Qatar and Russia will continue to pursue what is in their separate, respective best interests in the global gas market.”

Untapped trade potentials

There are huge expectations in the nuclear sector as well.

Saudi TV reported on the possibility of Russia’s state nuclear enterprise Rosatom operating up to 16 nuclear power reactors.

If true, this would be an extremely lucrative contract for the Russians, as well as for the Saudis, who would be able to export huge amounts of oil and gas, currently used to feed domestic consumption.

Moreover, there is a huge unrealised trade potential, as GCC-Russia trade has been very modest in comparison to GCC-China or GCC-US trade volumes. There are indeed signs that relations between Russia and Saudi Arabia may be changing on the economic front, particularly in light of last month’s agreement for Saudi Arabia to invest up to USD 10 bn in Russia. Similar agreements have been signed in the past with other GCC countries.

Several years ago, Abu Dhabi’s Mubadala and the Russian Direct Investment Fund (RIDF) created a joint investment fund worth USD 2 bn whose main objective has been to invest in Russia. In addition, the Abu Dhabi Department of Finance signed a cooperation deal, committing to invest up to USD 5 bn in Russian infrastructure projects under an investment partnership with RDIF.

Last year, RDIF signed a cooperation deal with the Bahraini sovereign wealth fund, Mumtalakat Holding, to pursue potential joint investment opportunities. But shortly after the agreement was signed, the United States issued a statement raising concerns about it.

Nevertheless, many see Manama as a vital link in Russia’s business interests in the Gulf States. However, as foreign investments in Russia are facing increased risks, this is probably one of the reasons why, for example, no joint deals between Mubadala and RDIF have been executed yet.

“Part of Russia’s problem has been the inability to demonstrate that Russia is a stable place in terms of investments. Russia’s economy only continues to deteriorate, and from this perspective, it certainly does not look like a place of stable investment,” notes Borshchevskaya.

In light of high risks and sanctions, Lain does not believe the GCC countries would jeopardise relations with other partners, to side with Russia in a new alliance.

In addition to arms sales, potential areas of cooperation could be energy and infrastructure.

Despite being fierce rivals in the oil and gas sector, competing for market share in Europe and Asia, the most promising sectors for future cooperation still lie in energy, such as the electric power industry, atomic energy and alternative energy.

According to Dr Theodor Karasik, a Gulf-based analyst, the Russians continue to build robust transport and logistical chains with the Gulf Cooperation Council states, a multitude of transport and logistics capabilities mostly centred in the United Arab Emirates. UAE is taking the lead in investing in various sectors of the Russian economy and is planning on boosting its presence in Russia’s food production sector; other GCC countries are likely to follow suit.

Glimpse to the futures

It is clear that Russia is vitally interested in forging closer relations with GCC countries and developing economic and geopolitical ties, countering US hegemony in the region. Saudi-Russian closer ties may be a signal that Saudis are shifting away from the US which is losing its key player position in the Gulf.

Saudi Arabia´s Foreign Minister Al-Jubeir officially confirmed his country´s interest in Russian missiles in August, such as the Iskander E-missile system.
Saudi Arabia´s Foreign Minister Al-Jubeir officially confirmed his country´s interest in Russian missiles in August, such as the Iskander E-missile system.

Borshchevskaya believes these signals certainly indicate the Saudis’ disappointment with US policies, and in this context, there is a possibility of Russia-Saudi relations strengthening, although the two countries continue to disagree over a number of key issues. Participants of a round table organised by Trends Research & Advisory noted that the GCC can develop a more constructive engagement with Russia through inter-regional cooperation.

Russia is a prominent member of regional projects, such as the Eurasian Economic Union and the Shanghai Cooperation Council, both relevant to the GCC countries. Cooperation at the regional level between these organisations and the GCC will be an effective means for furthering engagement without compromising any core national interests for either side.

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