- ARAB NEWS
- 02 May 2024
Since 1975
The Gulf Cooperation Council-Association of Southeast Asian Nations Summit to be held in Riyadh on Friday has ushered in excitement in the context of Gulf plans to chart new trajectories and plans away from the West. The plans of the GCC states to move beyond oil and diversify their economies are driving them to look to new markets, especially in Asia, given the huge market potential in the region. Economic diversification will be central to the upcoming summit and top of the priorities of the GCC states.
Besides the economic motivations, geopolitical competition is part of the GCC’s strategic calculus, as Iran has shifted to the East against the backdrop of Western sanctions and international isolation. GCC-Iran competition, which has been seen in the Middle East and Africa, has now transferred to Asia, which will add to the tensions in the region. In effect, the GCC is becoming more of a geopolitical player outside the Gulf region now that individual Gulf states have roles in Africa and Asia. At the organizational level, the GCC has had minimal involvement in this, but it wants this to change this via the upcoming summit. Turkiye also has strategies and policies for Asia, which has pushed the GCC to take Asia seriously and to strengthen relations at multiple levels.
These motivations are clear and the importance can be seen from the number of contacts, meetings and interactions between the GCC and the ASEAN post-COVID-19. There have been numerous public and back-channel meetings between the two blocs recently. For example, GCC representatives and ASEAN ambassadors to Saudi Arabia met in Riyadh. The aim of the meeting was to set the wheels in motion for the upcoming summit, with discussions held about the agenda. The overwhelming focus was on expanding trade and commercial opportunities, but other issues were also discussed related to defense, security and digital infrastructure.
Economic diversification will be central to the upcoming summit and top of the priorities of the GCC states
Dr. Mohammed Al-Sulami
The GCC is headquartered in Saudi Arabia and the Kingdom is the key actor within the organization. Saudi Arabia has been driving transformations both domestically and regionally and it is the key catalyst to the GCC looking to Asia. In addition, the UAE has also been a vital actor in pushing the organization to focus on Asia, given the huge economic and commercial potential in the region. The UAE’s motivation is more economic, spurred by diversification, while Saudi Arabia’s motivation is also geopolitical given Iran’s deeper involvement in Asia. Qatar has also competed with Saudi Arabia and the UAE to attract Asian investments and turn itself into a commercial hub in the Gulf. Although the other GCC countries, Oman, Bahrain and Kuwait, have interests in Asia, they are not the key determinants of the GCC’s increased engagement with the ASEAN.
The overlapping interests between the two sides include issues relating to energy, defense, security, digital infrastructure and technology transfers. GCC investors have targeted oil infrastructure, as well as real estate markets and the agriculture, health and tourism sectors in ASEAN countries. Likewise, ASEAN countries have courted GCC states given their surplus oil funds. A strategic plan is likely to be determined at the summit, or soon after, to set the goals and targets to be achieved over two- or four-year periods. This is viewed by both sides as critical to elevating relations and ensuring a smooth trajectory in the future.
The ASEAN is looking at the GCC on multiple fronts, rather than through the prism of oil supplies only, and the GCC members are looking at the ASEAN to diversify their economies and compete with rivals in the region.
The ASEAN is looking at the GCC on multiple fronts, rather than through the prism of oil supplies only
Dr. Mohammed Al-Sulami
The summit will reflect deeper engagement beyond the framework of energy and focus on the mentioned areas. This is a critical part of the Gulf states’ diversification process and is also important for the ASEAN countries as well, as they court GCC investors to increase their domestic capacities. For some ASEAN countries, this is critical as they seek to reduce their dependence on China, especially as supply chains are being tightened and overt dependence on Beijing is dangerous, particularly as the US exerts pressures on its allies to sanction or divert supply chains to other countries. It is believed that the Gulf states could also reach out to the South Pacific islands as an extension of their Asia policy, which would be a real concern for China as they would offer alternative loan and other financial options for these islands.
However, the GCC is not looking to damage relations with China with its move to the ASEAN, as it believes it can balance both relationships. China provides the GCC with up-to-date technology and know-how and can help in building indigenous defense industries. Hence, both are important for the GCC’s diversification process, as China and the ASEAN can simultaneously contribute to its transformation at multiple levels. It is not a zero-sum game for the GCC, which views both relationships as positive-sum games and aims to balance both without causing friction. There is currently no Chinese concern about GCC-ASEAN relations and Beijing is not pressuring the Gulf states to change course.
China does not have the political influence to change the course of the GCC states, nor is the GCC dependent on China. Hence, the GCC is more flexible in its push into Asia without being pressured one way or another. China will view the shift carefully, especially to see if the GCC is investing in areas of Chinese concern and influence, and whether the bloc evolves into playing a geopolitical role in the region. Beijing is not blinded to the close relationship between the GCC and the US and is not naive in thinking its investments in the Gulf and its role in March’s Saudi Arabia-Iran rapprochement deal will turn the tide on US-Gulf ties.
China is pragmatic toward the GCC, taking what it can now and hoping for further inroads in the future. Likewise, the GCC in Asia has not put all its eggs in the Chinese basket, but is looking for diversification and options and it wants to hedge its bets, hence its move toward the ASEAN.
