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Friday, December 15, 2006

Saudi Arabia politics: Under wraps


The British government has been prepared to pay a high price in terms of public and international perceptions of its political integrity in order to preserve its close relationship with Saudi Arabia and keep its huge military supply programme with the kingdom intact. The politically motivated decision of the Serious Fraud Office (SFO) to abandon its investigation of allegations of false accounting in connection to the 20-year-old Al Yamamah programme has been widely criticised by politicians of all stripes and in the media. The government's defence that it needs to "balance the need to maintain the rule of law against the wider public interest" has come in for particular disdain, with its implication that Western arms firms and their oil-rich clients are somehow above the law.

Security, security, security

The British government has been careful to avoid any reference to commercial expediency in its explanations of the decision, even though Saudi Arabia had made clear that the successor to Al Yamamah, a deal to supply the Royal Saudi Air Force with 72 Eurofighter Typhoons (manufactured by a venture owned by the UK’s BAE Systems, the German/Spanish EADS and Italy’s Alenia), could be placed in jeopardy by the ongoing SFO investigation. Instead, it claimed that the decision was based on national security considerations, and on the judgment of the Attorney-General, Lord Goldsmith, of the chances of the investigation leading to a successful prosecution (slim, according to him). To have admitted any commercial or economic interest in the decision would have opened the UK up to charges of breaching international conventions on tackling corruption.

"Our relationship with Saudi Arabia is vitally important for our country in terms of counter-terrorism, in terms of the broader Middle East, in terms of helping in respect of Israel and Palestine," the UK prime minister, Tony Blair said. "That strategic interest comes first."

Would upsetting the Saudi government really have such dire consequences for UK security and the stability of the Middle East, however, and if so, is such a high level of dependence on an absolute monarchy ruling on the basis of a deeply conservative interpretation of Islam a healthy state of affairs?

As the possessor of the largest oil reserves in the world, Saudi Arabia is of crucial importance to global energy security. Its role has grown even more important in recent years as the safety margin of spare oil production capacity has shrunk. Saudi Arabia is the only country capable of making up for a significant shortfall in production, and its new oilfield development projects account for a large portion of the extra oil needed to meet project increases in demand in the future. Saudi Arabia is also the only substantial ally of the West in the Middle East (other than Israel) capable of acting as a counterweight to Iran's drive to assert its regional influence.

Saudi Arabia also has a special status as both an originator of the extremist Islamist ideology of al-Qaida and as a victim of al-Qaida-inspired attacks. The UK has provided specialist assistance to Saudi Arabia in its drive to root out al-Qaida cells in the kingdom, and Saudi Arabia has reciprocated with help to the UK in tackling the threat posed by home-grown Islamist radicals, for example in sharing lessons from its programme of "re-educating" al-Qaida activists.

A further reason for maintaining close security ties with Riyadh is the growing alarm expressed by Saudi officials about the situation in Iraq. It has long been suspected that money and recruits from Saudi Arabia have been flowing steadily to the Sunni Arab insurgents in Iraq. However, there has been no suggestion that this was happening with official sanction. Saudi Arabia is now hinting at a shift in its approach, warning that if Iraq's Sunnis were left high and dry as a result of a precipitate US withdrawal, it would not hesitate to lend them its support.

The final justification offered by Mr Blair related to the Saudi role in promoting a Middle East peace settlement, a presumed reference to the 2002 peace plan drawn up by King Abdullah bin Abdel-Aziz al-Saud and approved by the Arab League.

The UK government has not attempted to explain why allowing the SFO probe to continue would have been so damaging. The remit of the investigation was originally limited to the accounts of two travel agencies that had done work for BAE. However, it is possible that if the scope of the inquiry had been widened, it might have brought unwelcome scrutiny to the affairs of senior Saudi royals, carrying the risk of provoking discord within the Al Saud family and of inflaming Saudi public opinion.

Squeaky clean

However, it is hard to escape the conclusion that the new Eurofighter deal is at the heart of the affair. The British government has highlighted the collaborative nature of this project, involving substantial transfer of technology to Saudi Arabia and the creation of thousands of high-skilled Saudi jobs. The Saudi government, for its part, has emphasised that the contract terms will be simple and transparent, as all transactions will be handled directly by the Saudi Ministry of Finance--in contrast to the elaborate and opaque structure set up for the earlier Al Yamamah deals.

After a decent interval, it seems likely that the formal contracts for the Eurofighter will at last be signed.

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