In These New Times

Time the Gulf looks east

The future for Arab Gulf states lies in strengthening ties with China, writes Mohammed Herzallah*
May 14-20 edition Al Ahram
The widely anticipated decline of the United States as a global hegemonic power over the next few decades is likely to precipitate a considerable measure of instability in many parts of the world including the Middle East. However, this transition also offers tremendous opportunities for a few Arab states. Being rich in natural energy reserves and unique in their immediate access to vital trade routes, Arab Gulf states are well positioned to take advantage of ongoing corrections and realignments in international power relations. A major question for policy strategists in these countries is how they can carve out a greater role for their states in the new international order.

One of the most visible signs of the erosion of US power internationally is the current economic crisis. Because the current distress originated in the financial sector, there is a consensus among economists that the economic downturn is likely to be both deep and long. The US government’s accumulation of trillions of dollars in national debt has made the downturn all the more bitter, since it has necessitated a growing financial dependence on foreign creditors, including China and sovereign wealth funds in the Middle East. American taxpayers are anxious about the fact that they will eventually have to pay back all this debt either through increased taxes, inflation, or cuts in welfare and social services spending.

A significant side effect of these negative developments is growing public resentment at US foreign entanglements. Public opinion polls in the US consistently show that the majority of Americans do not want their country to be the “policeman” of the world. Considering the current financial distress and mounting national debt in the US, the enterprise of maintaining over 700 military bases in more than 130 countries around the globe is progressively becoming unsustainable. Moreover, the country’s military overstretch in the Middle East and Afghanistan has reduced its readiness to deal effectively with potential violent developments in the Korean peninsula and other hotspots around the world.

The Pentagon’s most recent budget indicates that the US government is gradually coming to terms with this new reality. Among the many changes outlined in the new defence budget, the US is cutting the stealth F22 Raptor programme, reducing the number of active aircraft carriers, and postponing the development of the next generation of cruisers. In contrast, China has been expanding its military and naval capacity at astonishing rates. Beijing’s military budgets have doubled between 2000 and 2008. The Chinese navy, estimated to be the second largest in the world, has over 600 active combat vessels that include an impressive number of advanced nuclear submarines, destroyers, frigates and missile boats. Reportedly, China is in the process of building and developing a number of aircraft carriers. More than that, China is venturing farther out into the Indian Ocean and has built a number of ports in Pakistan, Myanmar, Sri Lanka and Bangladesh, and is operating naval and surveillance stations on islands in the Bay of Bengal and the South China Sea.

China is also expanding its economic reach abroad, especially in Africa, Latin America, and the Middle East. China now ranks as the African continent’s second-highest trading partner, and is investing substantially in oil exploration projects in Angola, Equatorial Guinea, Nigeria, the Republic of Congo and Sudan. Similarly, China ranks as Latin America’s third-highest trading partner, and has pledged to invest over $100 billion in the continent over the next few years. In the Middle East, Chinese-Iranian economic relations appear the strongest. China has signed a $100 billion agreement with Iran to import 10 million tonnes of natural gas over the next two decades and has acquired a substantial stake in the development of the Yadavaran oil field in southwest Iran. The two countries are also negotiating the possibility of a direct pipeline between them via Kazakhstan.

The decline of the United States and rise of China raises important questions for Arab Gulf states that — along with Iran — provide China with more than half of its annual energy supplies. Taking a conservative approach when it comes to deepening relations with China runs the risk of losing an emerging superpower to Iran, which already enjoys robust economic, military and political ties with China. Embracing a more active approach, on the other hand, has the potential to put in danger the Arab Gulf’s friendly relations with the United States, especially in the context of rising tensions between the two superpowers.

What is needed is a balanced approach that takes into account the many complications and risks associated with building cooperative economic, military and political partnerships with China. This approach must be based on developing economic ties rapidly by finalising the free trade agreement between the Gulf Cooperation Council and China, extending more gas and oil exploration opportunities to Chinese firms, and opening new doors for substantially greater numbers of unskilled and skilled Chinese labour in the region. Meanwhile, partnership building should proceed at a slower rate in other sensitive areas, especially military affairs, but such possibilities should not be discounted indefinitely. Politically, Arab Gulf states should lead the way in encouraging a greater involvement for China in mediating the Arab-Israeli conflict, resolving disputes over Iran’s nuclear programme, and restoring order and peace in Southern Sudan.

Ongoing realignments in international power relations offer great opportunities for Arab Gulf states. Their abundant energy resources and immediate access to critical trade routes make them indispensable to both rising and declining superpowers. If grasped wisely, the new opportunities that present themselves in this context of transition can enhance the Arab Gulf’s traditionally modest role on the international political scene.

* The writer is a graduate student at the Fletcher School of Law and Diplomacy. He is a former research fellow at the Carnegie Endowment for International Peace.

© Copyright Al-Ahram Weekly. All rights reserved