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Raja Mandala: MBS’s reform-driven Saudi offers India room to strengthen bilateral ties

The ambition of MbS is to diversify the Saudi economy from its historical reliance on the oil business and develop manufacturing and service sectors through liberalisation at home, and deeper integration with the world.

Written by C. Raja Mohan |
Updated: October 29, 2019 10:38:19 am
Narendra Modi, Narendra Modi saudi visit, Saudi Arabia on Jammu and Kashmir situation, Saudi Arabia reforms, Mohammed bin Salman Mohammed bin Salman reforms India has a huge stake in the successful economic and social modernisation of Saudi Arabia. (Illustration by C R Sasikumar)

The first order of business for Prime Minister Narendra Modi in Saudi Arabia this week is business. But the PM should also be interested in the wide-ranging social and religious reform initiated by Crown Prince Mohammed bin Salman over the last few years. Saudi Arabia’s economic transformation envisaged by Prince Mohammed, also known by his initials MbS, opens up huge new opportunities for India’s economic cooperation with the kingdom that has been limited for far too long to the import of oil and export of manpower.

Even more consequential over the long term is Prince Mohammed’s ambitious agenda to modernise the Saudi society that has come under the domination of religious conservatism since 1979, when Islamic radicals came close to destabilising the kingdom.

Given the deep interconnections between the Gulf and the Subcontinent, the drift towards conservatism in the Arabian peninsula has had multiple negative effects on India and its neighbours, especially in altering the balance between religion, politics and the state.

The reform of the Saudi society, at the very heart of the Islamic world, will hopefully help to reverse some of these negative effects. Western liberals are dismissing the MbS agenda as cosmetic while some religious conservatives in the Middle East are denouncing it as radical. Meanwhile, the regional rivals of Saudi Arabia, especially Turkey and Iran, are mounting relentless pressures against MbS.

India, however, has a huge stake in the successful economic and social modernisation of Saudi Arabia. For a modern and moderate Arabia will reinforce similar trends in the Subcontinent. Prime Minister Modi has every reason, then, to extend strong political support to Prince Mohammed’s reform agenda during his visit to Saudi Arabia.

Modi will be joining Brazil’s president, Jair Bolsonaro, President Donald Trump’s senior adviser and son-in-law, Jared Kushner and many other leading international figures at the annual international forum popularly known as “Davos in the Desert”.

The forum, formally called the Future Investment Initiative, seeks to elevate Saudi Arabia’s international economic engagement and was launched in 2017. It is part of Prince Mohammed’s efforts to rapidly transform Saudi economy under the “Vision 2030” that he unveiled in 2016.

The ambition of MbS is to diversify the Saudi economy from its historical reliance on the oil business and develop manufacturing and service sectors through liberalisation at home, and deeper integration with the world. It is founded on a tripod — the kingdom’s special status in the Arab and Islamic worlds, its strategic location at the trijunction of Africa, Europe and Asia, and its expansive investment capability. The objective is to generate significant and sustainable benefits for the young and rapidly growing Saudi population.

The last few years have seen some important initiatives, including the attempt to turn Saudi Aramco, the national oil producing company, into a global conglomerate. Other reforms include easing the restrictions on foreign direct investment, promoting tourism and the entertainment industry, development of the debt market, a bankruptcy law, introduction of VAT to enhance non-oil revenue generation, cuts in water and power subsidies, cash handouts to the needy, and a massive anti-corruption campaign.

The World Bank, in its latest report on the ease of doing business, offered praise for Saudi Arabia’s economic reforms and named the kingdom one of the top ten “global business climate improvers” in 2019. Saudi Arabia is now ranked 62 in the global rankings, just above India.

An important element of Vision 2030 is the idea of strategic partnerships with select countries like the US, China, Japan, India, South Korea, Germany, France and the UK.

The MbS impact on Saudi Arabia’s international policies is already evident in the growing Saudi interest to deploy massive capital into India. Aramco’s decision to take a large stake in the oil business of Reliance could be the beginning of a new economic era in bilateral relations if Delhi can create the conditions for rapid growth in Saudi investments in India.

Even more interesting, from the South Asian perspective, is Prince Mohammed’s commitment to strengthen the moderate trends in Islam. At the first round of the FII summit in 2017, MbS declared that, “We are returning to what we were before — a country of moderate Islam that is open to all religions, traditions and people around the globe”. The crown prince further added that, “We want to live a normal life. A life in which our religion translates to tolerance, to our traditions of kindness”.

Some of the social reforms implemented in the last three years include limiting the power of the religious police in public places, granting more rights to women, lifting the 35-year-old ban on cinema halls, letting restaurants play music and permitting large music concerts.

For many outside, this may look for trivial: But for those who live in Saudi Arabia, it’s a big deal. Ask, for example, the 20,000-odd Pakistanis and Indians who were thrilled to be at a musical evening last week in Riyadh with Pakistani singers Atif Aslam and Rahat Fateh Ali Khan. Yoga schools are now flourishing in Saudi cities. For MbS, the agenda is about mobilising the Saudi youth with the prospect of a different and a little more liberal future.

Ending the severe austerity of social life in Saudi Arabia is only one small part of Prince Mohammed’s effort to restore the equation between god and Caesar in favour of the latter. A more important part of his strategy is to strengthen the “nationalist” themes of the kingdom’s narrative about itself. Nationalism is by no means seen as a counter to the deep religiosity of the people, but is seen as important to bring a much-needed balance into the Saudi worldview.

Developing stronger ties with Saudi Arabia has been an important diplomatic achievement in Modi’s first term. The reform agenda of Prince Mohammed offers an opportunity for the PM to lend the relationship a durable strategic dimension.

This article first appeared in the print edition on October 29, 2019 under the title ‘Prince and the PM’. The writer is director, Institute of South Asian Studies, National University of Singapore and contributing editor on international affairs for The Indian Express

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