Saudi overtures to wary Biden team driven by worries over Iran, economy

After months out of the spotlight, Saudi Crown Prince Mohammed bin Salman has returned centre stage with diplomatic and economic moves which diplomats say are aimed at showing the new US president he is a valuable partner who can get things done.

Within the span of a few weeks, the kingdom announced an Arab deal to reconcile with Qatar, voluntary cuts to Saudi crude output to help stabilise markets and new momentum on an economic diversification plan that stumbled due to political controversy, low oil prices and Covid-19.

Whether behind the scenes or front and centre chairing a Gulf summit for the first time, the young prince, known as MbS, is moving to present an image as a reliable statesman and set a pragmatic tone with a less accommodating Biden administration, especially on foe Iran, three foreign diplomats said.

The Saudi government's media office did not immediately respond to a Reuters request for comment.

Prince Mohammed's initial image as a bold reformer was battered by the 2018 murder of Washington Post columnist Jamal Khashoggi at the hands of Saudi agents seen as close to MbS, and moves to crush dissent and sideline royal rivals. He denies ordering Khashoggi's killing while saying he ultimately bore responsibility as it happened under his watch.

The kingdom's de facto ruler knows "a new era has started" without the buffer granted by President Donald Trump and that Riyadh needs to make some concessions on contentious issues like human rights in order to push for priorities like the Iran nuclear accord (JCPOA), a Western diplomat in the region said.

President-elect Joe Biden, who is expected to re-engage with Iran, has said he would take a firmer stand on Saudi's human rights record and the Yemen war.

Saudi Foreign Minister Faisal bin Farhan told CNBC in November that Riyadh wants to partner with the Biden administration on a potential new nuclear pact which he said could be labeled "JCPOA++", to include Iran's ballistic missiles and "malign activity".

Saudi Arabia does not want the 2015 deal back on the table, the diplomat said, adding that recent positive gestures by Riyadh appeared to be related to the change of administration in Washington.

He said that included recent sentences handed by Saudi courts for a prominent women's rights activist and a US-Saudi physician, with the convictions signalling Riyadh would brook no dissent while reduced jail terms served as a nod to Washington.

Rules Of The Game

Another foreign diplomat said Riyadh's nervousness over Biden's Iran policy was one reason it lobbied the Trump administration to blacklist Yemen's Iran-aligned Houthi group, which has launched cross-border attacks on Saudi Arabia.

Prince Mohammed was keen to impose some rules for addressing the Iran question and Yemen while also presenting Saudi Arabia as a high profile member of the global community that should be defended, the diplomat said.

Riyadh welcomed the Houthi designation as a foreign terrorist group, saying this would "neutralise" a threat posed by the Houthis by depriving them of arms and funds and bringing them back to the negotiating table.

UN officials warned that the designation, which takes effect on Jan. 19, may push Yemen into a large-scale famine and urged Biden to revoke it.

Saudi Arabia and its Gulf allies, concerned about Iran's missiles and regional proxies, supported Trump's maximum pressure campaign on Tehran and hailed his decision in 2018 to quit "a flawed" international nuclear deal. They have stressed that this time, they should be part of any talks.

The Sunni Muslim kingdom has been locked in a decades long rivalry with Shi'ite Iran for regional influence that has shaped conflicts in Yemen, Iraq, Syria and Lebanon.

A major US arms buyer, Saudi Arabia was shaken by attacks on its energy installations in 2019, and in the aftermath received stepped up defence support from Trump.

Currying Favour

Security, vital for regional economic prospects, is also a key consideration for other Gulf leaders who have been preparing for a Biden presidency by positioning themselves as a moderating force in a turbulent region and hedging their bets.

The United Arab Emirates, wary of Iran and the perceived threat posed by Islamist movements, struck a US-brokered deal to establish ties with Israel that created a new anti-Iran dynamic and opened the door for Abu Dhabi to new US arms and bipartisan goodwill. Bahrain followed suit.

Although the UAE's divisions with Qatar run deep, it fell in line with a US and Saudi push to end a more than three-year row and restore ties severed over issues including Qatar's ties with Iran and Turkey and its support of the Muslim Brotherhood.

Efforts to resolve the rift had been going on for over a year but gained momentum in recent months.

"The Qatar deal is a way to have the Gulf states aligned with Israel to oppose the nuclear deal in particular and Iran in general," the Western diplomat said.

Qatar's foreign minister recently said it was the right time for talks with Iran and that Doha could facilitate discussions.

Distractions

Saudi Arabia also wants to make up for lost time, and money, a fourth diplomat said, as coronavirus frustrated plans in 2020 to refocus attention on MbS' ambitious diversification drive after some foreign investors were spooked by the Khashoggi murder and a secretive anti-corruption purge.

MbS made a rare TV appearance on Jan 13. to unveil a zero-carbon city as the first major construction project for NEOM, the $500 billion flagship business zone that has seen little progress since it was announced to fanfare in 2017.

A few days later he was shown alone in his private desert camp announcing investment opportunities worth $6 trillion in a virtual speech at the World Economic Forum.

"Saudi Arabia faces an enormous challenge in transforming its domestic economy and after Covid-19 the path is much more perilous. They need money and partners and they need global engagement," said Kristin Smith Diwan, senior resident scholar at the Washington-based Arab Gulf States Institute.