How to boycott Saudi Arabia
After the brutal murder of Washington Post columnist Jamal Khashoggi, the British state is under increasing pressure to break ties with the regime responsible.
But the symbolic slight of not attending investment conferences in Riyadh isn’t likely to undo an alliance that goes back almost a century. With an inflow of cheap oil, inward investment estimated at $90 billion at multiple levels of the British economy and not to mention additional regular arms sales, Anglo-Saudi business links run deep.
We spoke to David Wearing, author of AngloArabia – the only comprehensive study on the Western-Saudi relationship written – about how Britain could disentangle itself from the House of Saud.
Where do you think the disparity between the Western outrage at the Khashoggi killing and the Saudis' brutal war in Yemen comes from?
[Khashoggi was] a well-connected guy – that’s the reason for the disparity. He was well-connected within Saudi elite and in Washington. So his criticisms were really telling because people could say he knows what’s going on within the regime. A lot of the people who were making a noise about his disappearance were people who knew him personally – his editors at the Washington Post, his fellow journalists, people from the think-tank circuit. I believe President Erdogan knew him personally actually.
It’s kind of black humour but the thing I keep saying is that if those 40 kids who’d been killed by a bomb on their school bus in Yemen a month ago had networked better in Washington….
Do you think there will be a shift in foreign policy from Washington?
The Saudis need a lot of inward investment from the West to diversify their economy. Loads of business people they want to get involved in their economy pulled out of the investment conference last week. It was a real disaster for them. So in terms of the message at the business level, it has changed – not massively, but enough to give them a fight I think.
At the diplomatic level we’ve seen pressure from the Americans basically saying to the Saudis this war in Yemen isn’t working – it’s got to stop. And the statement [the Americans] put out was basically saying the Houthis have to stop fighting first and then the Saudis will stop fighting, so they’re still siding with the Saudis but they’re basically saying the war needs to end.
That’s quite a big change. And I think it’s down to embarrassment over the Khashoggi affair, and also a fear that if the war continues it will be a catastrophic famine and everyone will not only blame the Saudis but also the West for it too. So that’s a short-term change, pressure on the Saudis, recalibration of support for the war in Yemen. Generally I think alliance with the regime will stay.
A lot of the relationship is based on Saudi wealth – all of those petrodollars that they earn from selling oil and gas. But with climate change, that money’s going to dry up with decarbonisation, a move to electric cars – the Chinese in particular are decarbonising. Loads of Gulf oil and gas goes to East Asia. The money’s going to stop coming in to those Gulf regimes, and if the relationship between say Britain and the Gulf is based on Gulf wealth and that wealth isn’t there anymore, in the long-term that could result in big changes.
The Kingdom has been positioned as a business partner and a partner in counter-terrorism efforts, by calling it a ‘stabilising influence’ in the region. Questions about the latter are pretty easy to debunk. But how do you flesh out the argument that you don’t need to sell arms to balance the books or fund a welfare state?
We’ve got this real problem in our political discourse where people seem to think there’s a legitimate trade-off to be made between economic benefits in Britain, one of the richest countries in the world, and the lives of Yemeni people, one of the poorest countries in the world. It’s demeaning, it’s dehumanising. I think we have to say that. We have to call out the fact that it’s a horrific way to think about people’s lives….
And yet it’s also important to point out that those arguments do fail on their own terms. British exports to Saudi Arabia in 2015/16 – that was the peak year for British arms exports being licensed by the British government – was 1.3 per cent of Britain’s total exports worldwide so even in a big year it's just 1.3 per cent of our total exports. So it’s not as significant as people think.
I think the other thing to point out is: is it beyond our wit as a country to find other things for those engineers and technicians to do than to make weapons to kill Yemenis with? It can’t be.
There’s a question about soft power that the regime has. They make numerous donations to universities, they have a huge PR network, one Saudi prince is Twitter’s second largest shareholder. Jadaliyya published a great piece detailing 70 years of the New York Times calling the Saudis reformers. It was hilariously depressing. How do you counter that?
So Foreign Policy magazine is one of the most respected mainstream politics magazines in the United States. And they’ve just run an article comparing Mohammed Bin Salman to Saddam Hussein.
MBS has spent so much Saudi money on PR agents and consultants and this huge rebranding exercise for Saudi Arabia. He’s toured the world, visiting Theresa May, Donald Trump; he’s gone out to California and shaken hands with the CEOs of all these big tech companies. At the end of all this, he’s been compared to Saddam Hussein in one of the mainstream’s most prominent magazines on foreign policy. This is history’s biggest example ever of, ‘You can't polish a turd.’
I think the way to counter their ability to project soft power is just to keep bringing people back to the facts. It took the Khashoggi thing to wake people up. They’ve had a month of the worst press possible. Deep down people know what that regime is like. There’s no way they can gloss it.
Suppose we have a general election and a Corbyn government is elected. A political class that’s aligned itself so closely with the Gulf states for so long probably isn’t going to take Gulf divestment sitting down. What do you expect the challenges to be?
[The Left of the Labour Party] said quite clearly that they want to suspend arms sales to Saudi Arabia on the basis on the Yemen war. Now, if the Yemen war stops, which it might do in the next few weeks and months, then that particular rationale for not arming Saudi Arabia might fall away… so that might make it harder for Labour and Corbyn in particular to make the argument.
One of the groups of people who would push back is unions with workers in the defence industry. There are Labour MPs that very strongly support arming these regimes who would push back against it. And Labour’s position on foreign policy, if you look at the last manifesto, is a bit of a compromise with the old Labour Right. It’s a compromise with the more militaristic aspects of the party.
On the other hand, this young mass membership, activist membership that’s got involved in the party would strongly support [stopping selling arms]. So there’d be a battle within the party for that.
The other aspect of that is, if you tell the Saudis we’re not arming you anymore because of the way you’ve behaved in Yemen or for whatever other reasons, what if the Saudis pull their investments out of the British economy? And what if that put downward pressure on Sterling? That’s a potential worry, I think they probably wouldn’t because if they did that they’d be sending a message to, say, the French and the Americans that they’re not a trustworthy economic partner. So they could damage their relations with the West more generally.
If the [Saudis did pull out investment] the government would probably be okay because Labour have an industrial strategy and because they’re planning a huge amount of public investment into developing that strategy; I think they’re going to attract capital from the rest of the world anyway.
Could you flesh out the idea that a Labour industrial strategy would encourage foreign capital investment? That runs counter to say, the editorial line of the Financial Times that foreign capital is being scared off by just the idea of a Corbyn government.
Let’s say Labour comes in, and they say, ‘We’re going to invest in high-speed broadband. We’re going to make the country as well-connected as possible – transport links, rail, stuff like that, we’re going to boost people’s ability to get an education and develop a whole new set of green industry and pour money in to that.’
International capital is going to look at the British economy and say that economy is going to start growing. And to the extent that it’s growing, there’s going to be opportunities for us. The investment that we make in that economy will get a return. Because the economy will be driven and grown by the state with a particular strategy. I mean, look at China, you have growth driven by the state having a particular strategy for growth. And that economy delivers significant returns on investment as a result. So, I don’t think capital is going to be flying away from the British economy because they think, ‘Oh people are going to have their taxes put up.’
Britain has the second-lowest corporation tax rate in the G8. So how come international capital still invests in Germany and Sweden? They invest in an economy because they think these workers are well-educated, well-supported by a social safety net and that the country has a big infrastructure with a booming economy, so it’s a good place to invest.
They don't just invest on the basis of, ‘What’s the level of corporation tax? We'll only go in if it’s as low as possible.’ That's not really how it works. That’s how we’re told it works to scare us from putting the corporation tax up, but I think the reality is it’s not the only way to attract foreign investment.
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