Saudi restores full ties with Thailand after diamond dispute

Saudi Arabia on Tuesday ordered the restoration of full diplomatic ties with Thailand and said the countries agreed to trade ambassadors, closing the chapter on three decades of mistrust and hostility between the nations that stemmed from a sensational jewelry heist.

The rapprochement came during Thai Prime Minister Prayuth Chan-ocha's official visit to the kingdom, which marked the highest-level meeting between the countries since relations soured over the 1989 political scandal. Saudi Arabia downgraded its diplomatic relations with Thailand over the theft that led to a string of mysterious killings and became known as the Blue Diamond affair.

Saudi Crown Prince Mohammed bin Salman, the country's de facto leader, agreed to bury the hatchet with Prayuth and boost the nations' economic, security and political ties, said a statement published on the official Saudi Press Agency, SPA, late Tuesday after talks at the royal palace.

The countries will explore joint investment in fields ranging from energy and petrochemicals to tourism and hospitality, the statement added. Tourism is a key element of Vision 2030, Saudi Arabia's economic reform plan meant to wean the kingdom off oil.

Saudi Arabian Airlines, meanwhile, said it would start direct flights from Riyadh to Bangkok in May, promoting Thailand in a Twitter post as "the land of culture."

Prince Mohammed has ventured into diplomatic territory where previously the government refused to go. In 1989, priceless 50-carat blue diamond was among an estimated $20 million worth of gems and jewelry pilfered by a Thai janitor from a Saudi prince's palace in the heist that wrecked relations between the countries.

The kingdom stopped issuing and renewing visas for hundreds of thousands of Thai workers, suspended permits for thousands of Thai Muslims hoping to make the annual hajj pilgrimage to Mecca and warned its citizens not to travel to Thailand.

Three Saudi diplomats seeking the valuables' return were shot dead in Bangkok. A Bangkok-based Saudi businessman believed to have been hunting for the missing jewels also disappeared, and was presumed killed. No one was convicted for the killings.

The Thai government on Tuesday expressed "regret over the tragic incidents that occurred to Saudi citizens in Thailand between 1989 and 1990" and stressed "its keenness to resolve issues related to these events," the joint statement said.

The Thai police claimed to have solved the case, but many of the jewels they sent back to Riyadh were fake. Thai media crackled with reports that the wives of top officials had been spotted wearing diamond necklaces that bore an uncanny resemblance to the stolen jewels. The fabled blue diamond was never recovered.

Thailand promised that it would raise cases with competent authorities if any "new and relevant evidence" related to the killings emerged, SPA added.

The saga exposed the graft and abuse of power that runs rampant in Thailand's police forces as speculation mounted that senior officers and members of the elite had kept the stones and ordered a cover-up.

Thailand, deprived by the dispute of billions of dollars in badly needed tourism revenues and workers' remittances, long has wanted to patch up relations with oil-rich Saudi Arabia.

The young, ambitious Prince Mohammed has increasingly focused on winning allies abroad and mending rifts with regional rivals, including Iran, Qatar, Turkey and Pakistan.

Saudi Arabia, in a push to modernize and diversify its oil-dependent economy, is trying to draw foreign tourists and investors and overhaul its reputation as one of the world's most closed countries with a bleak human rights record.