Our new Foreign Secretary "helped drum up global investment for every corner of the capital"by Andrew Cryan, Jane Kinninmont / July 21, 2016 / Leave a comment
Initial reaction to the appointment of our new Foreign Secretary has focused on “Boris’ hilarious gaffes”—there has been a dredging up of quotes considered offensive to everyone from Hillary Clinton to the entire continent of Africa. Much less time has been spent considering why Theresa May has made him Foreign Secretary, especially when such a reaction was predictable.
Part of the answer must surely lie in the success that Boris Johnson had as Mayor of London—travelling the world and convincing foreign governments, from the Gulf to China, to pour money into the city he ran.
Johnson helped drum up global investment for every corner of the capital—from desperately needed housing stock, to the Emirates Air Line—a branded cable car that crosses the River Thames. There was even an (eventually unsuccessful) plan to rebuild the Crystal Palace with Chinese cash.
As Mayor, Johnson took to the part of the job he called “Banging the Drum for London” with enormous enthusiasm. In 2013, the BBC discovered that he had visited Doha (twice) more than the less unfashionable London suburb of Dagenham (not at all).
City Hall robustly defended the decision, saying each visit abroad was directly linked with millions flowing into London. At a time when the UK government trumpeted a policy of fiscal tightening, foreign money filled a gap in public spending. Johnson went so far as describing the UK government’s National Infrastructure Plan as a “huge shopping list” for the Gulf countries and joked about London’s “unofficial title” as “the eighth emirate.”
And while the colourful Mayor’s “gaffes” made headlines, when selling London abroad he largely managed to avoid them—particularly in highly politically sensitive environments like Dubai, Kuwait and Abu Dhabi, where being in the good books of the governments is an essential precondition for business success.
Back home, however, these investments did manage to generate controversy.
The Emirates-backed cable car turned out to have a contract effectively blocking the Mayor’s office from selling the scheme to Israeli investors—a clause described by Labour politicians as “clearly discriminatory” and which was rewritten after some embarrassment.
It was telling, perhaps, of Johnson’s broader approach, that when signing off on a mayoral decision to allow the London Fire Brigade to sell consultancy services to Qatar, he wrote, “There is not a clear cut argument to say that refusing to trade with a country with a questionable human rights record would result in an improvement to that record.” The same attitude was perhaps detectable too when London’s Metropolitan Police started selling their training services on a for-profit basis to a similar range of countries, including Qatar.
Perhaps of all the foreign powers, it was the lavishly gas-endowed emirate that visibly bought more of London than any other during the Johnson mayoralty. Boris praised a controversial deal that saw the Qatari royal family’s property company buy the Olympic Village for many millions less than it cost the taxpayer to build.
The appointment of Boris as Britain’s new Foreign Secretary is one of the early indicators that the UK post-Brexit will have a more trade-driven foreign policy.
Oil-rich Gulf countries may well be quietly pleased with some of the new faces driving this approach; development secretary Priti Patel is a former lobbyist for Bahrain, and Brexit Secretary David Davies has called for the UK to move quickly to sign trade deals with Gulf states.
The EU and the Gulf Co-operation Council (GCC) started free-trade talks 26 years ago—but these have gone nowhere, partly because of the EU’s human rights requirements. A UK—GCC free trade deal wouldn’t have much material significance since tariffs on the goods are already extremely low—but the symbolic contrast with the EU would matter.
The Gulf governments already let it be known that they think the UK has a mercantile foreign policy. There may be a danger for Britain that post-Brexit it looks a little more desperate; more malleable to foreign governments that want to use trade to push other agendas.
For instance, BP’s exclusion from a major contract opportunity in Abu Dhabi in 2012 was widely believed to reflect the UAE anger at the UK media coverage of the Arab Spring, which broadly portrayed the uprisings in a positive light. Leaked UAE government documents from the same year suggest that they promised the UK government more investment and arms purchases if it took action against the Muslim Brotherhood.
So what now?
Following a major terrorist attack in France and a near-coup in Turkey in his first 48 hours in the job, working with the wealthy GCC states may seem like plain sailing. But already challenges are mounting. This week, Bahrain confirmed it was banning its main opposition party—and while the EU called for the decision to be reversed, a mild statement in Boris’s name simply expressed “concern.”
The global squeeze on oil revenues mean that Gulf governments are likely to face more domestic discontent, even as the UK will have to work harder for Gulf trade and investment in a tougher and more competitive environment. This will intensify the debate over balancing trade priorities with concerns about human rights and, ultimately, political stability in countries with very different attitudes to politics.
Boris is likely to find himself in a number of awkward situations in this part of the world.