Arms, and oil, are significant—but our financial gains come at a geopolitical costby David Wearing / June 19, 2017 / Leave a comment
One of the signs that something unusual was happening in the run-up to the general election came when the terrorist attacks in Manchester and London failed to boost Theresa May’s fortunes in the polls. Instead, Jeremy Corbyn was able to push back forcefully against criticism of his national security credentials, in part by highlighting a suppressed Home Office report thought to implicate Saudi Arabia in the funding of extremism. That the UK-Saudi relationship came up as a negative in such a high-profile context will have alarmed officials in London and Riyadh. The question now is whether this key strategic alliance is becoming a liability to the British government.
Saudi Arabia’s primary value to London is related to the recycling of “petrodollars” (oil export revenues) to the UK in various ways. Lucrative arms sales help to sustain a domestic weapons industry that is central to Britain’s capacity to remain a global military power. With sales to the rest of the world in long-term decline, the Gulf has become a crucial market with Saudi Arabia now accounting for a third of British arms exports over the last decade.
In addition, Saudi capital inflows are a major source of financing for Britain’s chronic current account deficit, and the combined Gulf market is more significant for British exporters than China, as well as being a rare net contributor to Britain’s balance of trade.
These strategic and economic factors explain why the Conservatives have moved to strengthen Britain’s ties with the Gulf monarchies, first under David Cameron and then, after the Brexit vote, under Theresa May.
A diplomatic crisis
The question is whether this is strategically wise or, more importantly, morally defensible. Returning to the issue of security, the problem is not only that the Saudis have poured money into promoting an extreme, puritanical form of Islam, indirectly feeding terrorism at an ideological level. It is also that wider Saudi foreign policy is contributing to the socio-political conditions in the Middle East in which jihadi groups flourish.
The current diplomatic crisis in the Gulf is a symptom of this. Qatar has been ostracised by the UAE and Saudi Arabia for maintaining cordial relations with Riyadh’s geopolitical arch rival Iran, and for supporting groups within the broad Muslim Brotherhood family, also…