During the Davos conference, the Saudi Finance Minister made clear statements expressing the kingdom’s refusal to pay more aid or financial grants to its allies without those countries carrying out economic reforms.
A day later, the leaders of the UAE, Qatar, Bahrain, Oman, Jordan and Egypt met in the UAE capital for a meeting titled “Stability and Prosperity in the Region” with the aim of “consolidating and deepening cooperation between their countries,” according to the official Emirates News Agency (WAM).
Analysts who spoke to Al-Hurra website had different opinions about the significance of the remarkable Saudi and Kuwaiti absence. Gulf analysts saw that it was a “consultative” session on the urgent issues and challenges facing the region at the present time, and that the Kingdom’s absence does not mean that it has reservations or objections to its content, and they also stressed the existence of high coordination between the UAE and Saudi Arabia.
On the other hand, analysts believe that there is a clear divergence in the economic visions between Riyadh and Abu Dhabi, especially in the matter of aid to Egypt and Jordan, which prompted the Kingdom and Kuwait to be absent from this meeting.
A member of the Foreign Affairs Committee in the Egyptian Parliament, Emad Gad, ruled out that the Abu Dhabi meeting focused on political issues, stressing that the economy was the main concern of the meeting, especially in light of the financial crisis in Egypt.
Jad told Al-Hurra that the absence of Saudi Arabia and Kuwait from the meeting represents a “message” that they will not contribute to aid to Egypt, especially after the statements of the Saudi Finance Minister and deputies in the Kuwaiti National Assembly, he said.
He pointed out that “the Gulf countries are no longer willing to provide more grants and aid, especially to countries like Egypt.”
And last month, the International Monetary Fund agreed to grant Egypt a loan of three billion dollars, to be paid over 46 months. However, this loan is only a drop in the ocean, as the debt service burden that Cairo must pay during the fiscal year 2022-2023 is about $42 billion, according to the World Bank.
Egypt is suffering from a severe economic crisis since the Russian invasion of Ukraine, which contributed to the flight of foreign capital and the drop in the value of the pound against the US dollar by about half over the past year, which made Cairo request a loan from the International Monetary Fund.
In a related context, the Jordanian economic researcher, Amer Al-Shobaki, said, “The economic vision is clearly different between the UAE and Saudi Arabia, even if some meetings and statements concealed it.”
Al-Shobaki evidenced his opinion in the absence of the President of the UAE from the three summits that Riyadh took place with the Chinese leader, Xi Jinping, last month, which resulted in Riyadh signing a number of agreements and understandings.
Saudi position
The Saudi Minister of Finance, Muhammad Al-Jadaan, said, on Wednesday, that the Kingdom will change the way it provides aid to its allies from providing direct grants and deposits without conditions.
He added during his participation in the World Economic Forum in Davos, Switzerland: “We used to give grants and direct aid without conditions, and we are changing that. We are working with multilateral institutions to really say that we need to see reforms. We tax our people and expect others to do the same and make an effort.” We want to help, but we want you to do your part.”
As for the Kuwaiti parliamentarian, Osama Al-Shaheen, he denounced what he described as the “orders of the International Monetary Fund” to allocate new financing resources to Egypt at a value of $14 billion by the Gulf Cooperation Council countries.
The International Monetary Fund had issued a press statement calling for facilitating the granting of 14 billion dollars to Egypt from international partners. Al-Shaheen said that these directives are not consistent with the will of the people and their representatives to recover the “broken” funds that are parked there.
Kuwait deposits $4 billion with Egypt in its central bank, in the form of short and medium-term deposits, according to “Kuwait”.Masrawy“.
Thus, Kuwait occupies the third place in the list of Gulf countries deposited with Egypt, compared to the UAE ($10.6 billion), then Saudi Arabia ($10.3 billion). Qatar also deposited $3 billion in the Central Bank of Egypt over the past year.
Al-Shaheen said, “We warn against previous bad habits towards workers, whether with regard to our brothers in Egypt or other countries… Controlling public money and demographics are red lines.”
The statements of Saudi Arabia and Kuwait come at a time when a number of other Arab countries that met in Abu Dhabi are suffering from various economic crises.
Jordan is witnessing difficult economic conditions, exacerbated by foreign debts that exceeded $50 billion and the Covid-19 pandemic, which hit tourism, one of the most important sources of income in the Kingdom, according to AFP.
In Bahrain, the balance of the state’s public debt increased in 2021 to about 17 billion dinars (about 45 billion dollars) compared to about 15 billion dinars in 2020, an increase of 13 percent, according to official data issued recently.
Oman expects a deficit of 1.3 billion riyals ($3.39 billion) in the 2023 budget, or 3 percent of gross domestic product, according to Archyde.com.
Economy first
According to the UAE statement, the Abu Dhabi summit reviewed “regional and international issues and developments of common concern and the challenges the region is witnessing politically, security and economically, and the importance of coordinating positions and strengthening joint Arab action…”.
In his interview with Al-Hurra, Al-Shobaki said that in addition to political issues, part of the meeting may be how to provide aid to those Arab countries that are experiencing economic crises.
The Jordanian researcher repeated a serious opinion after he demonstrated that the six-party meeting in the UAE coincided with the statements of the Saudi Finance Minister in Davos.
Jad believes that “the UAE cannot be bet on pumping more grants as it pumped 8 years ago. The aid may be in the form of investments or the purchase of assets that I think the UAE has already identified,” adding that “Qatar will not advance” grants to Egypt as well.
On the other hand, Professor of Political Science at the UAE University, Abdul Khaleq Abdullah, said, “The UAE and the rest of the Gulf countries are fully aware that Egypt, Jordan and other Arab countries are suffering from economic and financial crises and difficulties.”
In his interview with the “Al-Hurra” website, he added, “The UAE, Saudi Arabia, Qatar and even Kuwait were, are and will be at the forefront of countries that will support and provide aid.”
Numbers don’t lie.
However, Al-Shobaki indicated that the change in the Saudi aid approach was noticeable over the past year, especially with Jordan and Egypt, indicating that the trend in the UAE was the opposite.
He added that the meeting represents “an attempt by the UAE to gather countries under an economic roof and save them to replace the former Saudi place… Saudi Arabia did not attend after it distanced itself from providing aid in the current period because it was preoccupied with Vision 2030.”
Since 2016, Saudi Crown Prince Mohammed bin Salman has launched an economic vision aimed at reducing the kingdom’s dependence on oil as a major source of income.
However, Gulf analysts go in a different direction and stress the strength of relations between Riyadh and Abu Dhabi, and that coordination between them continues at a high level, despite the Kingdom’s non-participation in the UAE capital summit.
And the Saudi political analyst, Mubarak Al Aati, ruled out the existence of differences in visions between the two countries, adding in his interview with Al-Hurra that “coordination continues at a high level between the leaderships.”
In response to a question about the reason for Saudi Arabia’s absence from this meeting, Al Aati said, “There is no urgent justification for holding such a summit, especially since positions are agreed upon and coordination between countries continues at a high level, and visions about threats in the region are compatible.”
He explained, “Riyadh and Kuwait are concerned with these decisions (which result in the meeting), given the strength of coordination between the Gulf states.”
In turn, Abdul Khaleq Abdullah believes that “Saudi-Emirati coordination is at its best,” even in the absence of the Kingdom. He said, “I am sure that Riyadh was invited to the summit and is aware of the discussions that took place, and it will be informed of the details of what has been agreed upon.”
He added, “The Abu Dhabi Summit coincided with the passage of one year since the Houthi terrorist attack on the UAE,” noting that the occasion is important given that the meeting is “solidarity with what the UAE has gone through.”
The Bahraini political researcher, Abdullah Al-Junaid, agrees with the opinion of Abdul-Khaleq and Al-Aati, saying, “We should not look at the issue of the absence of a country the size of Saudi Arabia as an absence or a different position on the summit or its goals.”
In his interview with Al-Hurra website, Al-Junaid said, “The presence of the Emirates represents the presence of Saudi Arabia, and the presence of Saudi Arabia represents the presence of the Emirates.”
However, Al-Shobaki has a different opinion, saying that “the numbers do not lie” in this context, despite showing that relations are still “participatory” between the two countries, whether in OPEC Plus or through meetings of officials.
And he added, “Saudi Arabia imposes restrictions on the products of the UAE free zones, and chose a route through Oman to neutralize the UAE from some ways to export its goods.
He also evidenced Saudi Arabia’s decision to force companies to open regional headquarters in Riyadh, starting in 2024, in order to benefit from government contracts.
The New Israeli Government and the Threat of War
The prominent Emirati academic believes that the issue of the new right-wing government in Israel was a topic of discussion in the meeting with the aim of “preemptive work to” stop the Israeli advance to annex the West Bank because it leads to abnormal regional instability.
Al-Shobaki goes in this direction as well, saying that the meeting also discussed the “extremist government of Israel” and fears of a military clash between Israel and Iran that would affect all countries in the region.
Al Aati also agrees, saying that “Saudi Arabia stands with the gathered countries in criticizing the state of Israeli extremism,” in the meeting that discusses several files without focusing on one particular issue, according to the Saudi analyst’s expression.
At the end of December, the Israeli government considered the most right-wing in the country’s history was sworn in after weeks of negotiations led by the returning Prime Minister, Benjamin Netanyahu, with the ultra-Orthodox parties.
In this regard, the Qatari political analyst, Saleh Gharib, inferred the tweets of his country’s former foreign minister, Sheikh Hamad bin Jassim Al Thani, in which he warned of an Israeli military action against Iran that would “shake security and stability in our region and will have dire economic, political and social consequences.” “.
The situation in our Gulf region has become fraught with dangers and requires everyone to pay constant attention in anticipation of any possibilities. The West, led by the United States, has not yet reached an agreement that will restore the nuclear agreement with Iran to life.
– Hamad bin Jassim bin Jabr (@hamadjjalthani) January 14, 2023
Gharib added, “The summit discussed the possibility of moving the nuclear agreement forward in light of the Israeli threats to strike Iran, and this matter is not sought by the countries of the region, as they want to cool the atmosphere between Iran on the one hand and the United States and Israel on the other hand, and to prevent a war or attack that may affect the entire region.” “.
The Qatari analyst touched on the departure of the leaders from the official protocols in this meeting, “with the aim of discussing and finding solutions to the pressing issues of the countries of the region.”
“deep disagreement”
In addition, the Bahraini researcher, Al-Junaid, believes that the Abu Dhabi summit dealt with the issue of the dispute between Manama and Doha, saying: “There may be a breakthrough in some outstanding issues that Bahrain was calling for to be dealt with seriously.”
Since the Al-Ula summit in early 2021, which ended 3 years of estrangement between Saudi Arabia, the UAE, Bahrain and Egypt with Qatar, relations between Doha and Manama remain rigid, unlike the other three countries.
Diplomatic relations between the two countries are still completely severed. Nor did flights resume even with Qatar hosting the FIFA World Cup recently.
Gharib said that among the “outcomes of the consultative meeting was a declared handshake between the King of Bahrain and the Emir of Qatar,” which indicates the possibility of “movements towards resolving this crisis.”
However, Gharib stressed the importance of a clear statement from the Bahraini government and stopping the media escalation through newspapers close to the royal court and the Bahraini demands for Zubarah, adding: “This is something that disturbs the reconciliation initiatives.”
For his part, Abdullah, an Emirati professor of political science, said that the Bahraini-Qatari file needs a joint Gulf effort led by “the UAE and Saudi Arabia mainly” to resolve what he described as a “deep dispute” between the two countries.
He said that reconciliation between Doha and Manama is “a Gulf matter that must be pursued, given that in order for the Gulf reconciliation train to reach its final destination, this dispute must be fixed,” adding: “The UAE is seeking that.”