West Asia News and Discussions

chetak · Post by **chetak** » 02 Mar 2010 15:47

Philip wrote: In other words,the Saudis want India "inside" their tent pissing out,rather than "outside" pissing in.Shashi Tharoor was partly right about Saudi interlocution being of use to India.He failed to mention that Saudi interlocution also helps Pak,its brother in the Islamic fold handsomely through the offer of "fool's gold" to the good doctor,now become a gold digger!

tharoor forgets that "middleman" is also the synonym for interlocutor. Knowledge of the english language is not his father's personal property.

India is already smelling of "piss", with saudi and paki waving it about all over the region.

The pakis provide the nuclear umbrella to the saudis. They in turn provide much free oil to the porkis. The saudis are not going to give this up come what may.
They have a dual threat from iran and israel, depending on which branch of the ROP, shia or sunni, gets its knickers in a twist first.

http://www.tomgrossmedia.com/mideastdis ... 00809.html

It is becoming clear that the first 21st century clash of civilisations – if there is to be one – will not pit Christians against Muslims but one branch of Islam against another. In yet another escalation of the Middle East crisis sparked by the disastrous American-led occupation of Iraq, The Business has learnt that, in response to Shia Iran’s ambitions to possess a nuclear arsenal, Sunni Saudi Arabia has plans to create a nuclear capability of its own. In a development that risks turning the Middle East into a nuclear powder keg, Western and Middle Eastern sources have told this magazine that, if and when it is clear that Iran has the bomb (or is close to it), the Saudis will respond by buying one from Pakistan, a fellow Sunni state. They would also likely purchase Pakistani ballistic missiles to replace the Chinese ones they bought in the 1980s. Everything is already in place for this to happen.

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By buying a nuclear arsenal off the shelf from Pakistan, the Saudis would instantly acquire a deterrent without the hindrances that accompany developing one from scratch. It would wrongfoot any countermove: the country would be in the nuclear club before any effort to prevent it could be mounted. The Saudis would then likely embark on fully developing their own nuclear weapons facilities. They have already announced plans to develop a civilian nuclear energy programme, despite being the world’s largest oil producer sitting on the globe’s biggest reserves.

Saudi Arabia is a signatory to the Nuclear Non-Proliferation Treaty. If it wished to stay within the letter of its obligations Riyadh could demure from acquiring the weapons itself and instead invite Pakistan to station nuclear weapons in the Kingdom. But, considering the volatile nature of the situation in the Middle East, especially following Iran’s emergence as the Gulf region’s first nuclear power, the Saudis will likely opt for direct command and control of any deterrent. Indeed, the current Saudi posture already marks a shift away from the late King Fahd’s strategy of countering any Iranian bomb with an explicit American guarantee that Saudi Arabia fell under the US nuclear umbrella. Riyadh fears that Washington no longer provides a credible guarantee.

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All this accentuates the strategic logic of Saudi Arabia purchasing the bomb. At a stroke, the Saudis would have undercut the nationalist and religious appeal of Iran’s bomb. They would also be challenging Tehran to an arms race in which it could not afford to compete. But a Middle East with a nuclear Iran and Saudi Arabia vying for supremacy would be an intolerably dangerous and unstable place, especially when the Israeli dimension is added. The old cold-war nuclear certainties of deterrence and mutually-assured destruction are less than reassuring in a region where ancient hatreds and religious fervour are so strong. Iran’s President Ahmadinejad, let us note, prayed openly for the apocalypse at the UN General Assembly.

Iraq could easily turn into the battlefield for a proxy war between Iran and Saudi Arabia, with disastrous consequences for global oil supplies and the world economy. Such a conflict would involve countries that produce 13.4m barrels of oil a day – 20% of world oil production – and have 43% of the world’s proven oil reserves. The result would be a price of oil far above $100 a barrel and a deep economic shock for the rest of the world, triggering chaos and crisis from China to Chile.

Philip · Post by **Philip** » 02 Mar 2010 17:12

.self deleted

Philip · Post by **Philip** » 02 Mar 2010 17:14

deleted - copyright

shyamd · Post by **shyamd** » 02 Mar 2010 17:43

I have just read the B Raman assessment on the KSA visit of MMS. Some of it is extremely misinformed and showed that he hasn't been watching the internal politics that has been going on in KSA. KSA is slowly changing its colours and this process started sometime last year. Obviously its difficult to expect things to change overnight. A lot of the names for funding were IM's in KSA. Its not that expensive to attack, Bangalore attacks cost just a few lakh, if that?

B Raman claims that PM should have asked for SIMI guys to be handed over, well WTF was the extradition treaty for?? NIA officials also claim that they are relying on the extradition treaty to bring back SIMI individuals. MEA sources also confirmed that PM will take up the names of SIMI guys directly with King Abdullah. Quite disappointed with Raman's article. Forbes mentioned that LeT head of Finance had been arrested in KSA and deported.

Gagan, you made some good points. Well done.

I reiterate my point, all this is happening because US is down. So India is a hedge, but wouldn't you like to be friends with the next super power in the area? Of course KSA are gonna start being buddy buddy with India. India is no longer impossible to ignore. KSA's main export is oil, and India is going to be a BIG customer in the future. I don't know why people are making a big fuss about the KSA relations, imo these KSA-India buddy buddy started when Pranab visited and KSA guarenteed India oil supplies in any emergency. The same deal that the US had got in the 80's?

US backs off speedy Iran sanctions promised Israel

Make no mistake the big welcome for MMS is being watched by other GCC members. The KSA has basically given the all clear for everyone else to huddle up close with India. GCC will become "strategic" partners in the next 2-3 years as it has with Oman. Folks, the writing is on the wall, India has an extremely bright future in extending its influence over the next 5 - 10 years in the GCC region. Lets just hope that the MEA guys don't leave it dormant. Our power can push the pressure points on TSP. Lets hope we play our cards right - A lot of this depends on us.

shyamd · Post by **shyamd** » 02 Mar 2010 20:07

India plays Saudi tune

RIYADH: In what seems to be a clear indication of the strategic partnership in the making with Saudi Arabia, India in the Riyadh Declaration has endorsed the Saudi position on the question of Palestine by backing the Arab plan and asking that all key issues be addressed comprehensively “within a definite time frame”. And that these comprehensive discussions should lead to the establishment of a “sovereign, independent, united, and viable Palestinian state, in accordance with the two-state solution”.

This is the first time, diplomatic observers say, that India has used the term “united” as a prefix to Palestine. India further joined the Saudi king in emphasising that “the continued building of settlements by Israel constitutes a fundamental stumbling block for the peace process”. In other words New Delhi has categorically asked that Israel stop building settlements, a new tone.

The mention of a time frame, which sources say is a new wrinkle in India’s usual formulation on this issue, is sure to raise hackles in Tel Aviv which is likely to seek clarification on another departure from standard practice. This pertains to that portion of the Riyadh Declaration in which India joins the host country in endorsing “regional and international efforts focusing on making the Middle East and the Gulf region free of all nuclear weapons and all weapons of mass destruction”. In effect New Delhi has called to make the region free of Israeli nuclear weapons.

Previously India has endorsed efforts to eliminate nuclear weapons and weapons of mass destruction in a region as long as there was consensus in the region for such efforts. It is unheard of that New Delhi should endorse in a political document a nuclear weapons- free West Asia while continuing to swear by deterrence in its own case. Neither India nor Israel is a signatory to the discriminatory NPT and Israelis are going to wonder what is going on in New Delhi.

The statement is all the more significant considering that Saudi Arabia has routinely endorsed at various fora the Pakistani stance for a nuclear-free South Asia which targets Indian nuclear weapons. This is sure to upset Pakistan no end and undoubtedly there will be many demarches issued to Riyadh on this count as well.

Pakistan is further likely to be miffed to discover that Saudi Arabia ringingly endorsed the Indian role in Afghanistan by expressing its “full support” in the joint statement for efforts aimed at helping Afghanistan achieve social and economic development. Saudi Arabia also seems to have given up its support for the Taliban by agreeing to a formulation that condemns terrorist organisations.

In the next days there are sure to be Israeli demarches to New Delhi, Pakistani demarches to Riyadh and Iranian demarches to both Riyadh and Delhi.

Interesting view. But nothing is going to come of these demarches, Israel knows full well what India meant. Pakistan can't afford to demarche to anyone. Iran - can they really afford to lose a friend like India and vis-e-versa India can't lose Iran.

Gagan · Post by **Gagan** » 02 Mar 2010 20:14

Two more points I want to add here. This is from the Saudis POV:

1. Having good relations with India means that saudi sea trade (IOW Oil) with China will not be blocked by India should India and China get into a shooting match on the borders. It is better from their POV to have a stake within India so that they can pre-empt such an occurence. The Indian Navy is a hugely potent force, and one of the first oil tankers that the Indian navy rescued from the somalian pirates was a Saudi supertanker.

Moreover so far India has conducted itself very well militarily and diplomatically. No shrill cries out of Delhi, no saber rattling. The IN protects the sea lanes, and the saudis saw that India chose not to respond militarily after 26/11, a situation where everyone's said, that India had valid reasons to do so.

2. The Israel-Iran-Arab states axis.
Something tells me that the Arab governments have made up with Israel. Although their stated hatred for Israel is a bit of a monkey trap, internally they can live with a nuclear armed Israel for the time being. More so because the US guarantees Israeli good behaviour towards the arabs, just as the US protects Israel.
Iran is a different entity. Nobody likes or trusts Ahmedinijad. That guy has clearly gone overboard with his statements and his actions. Sheer recklessness on his part. There is a very strong possibility of the powers attempting a regime change in Iran.

Today, in the current geopolitical situation, if it came down to the arabs having to choose between Israel and Iran, they will favour the Israelis any day.

From India's POV, it is heartening to see India stepping into the thick of the things in the middle east. India's diplomacy will be tested to the limit in maintaining a balance between the Arabs and the Israelis and the Iranians, a task that current superpowers manage to do every day. It would be so easy to sit in New Delhi and issue an odd statement on what is happening around the world. But when you build deep ties and build deep dependencies with nations in different regions, your stakes go up too. Indian diplomacy is getting ready to be an active participant in a future multipolar world as one of the poles.

Boss this is a new India emerging.

putnanja · Post by **putnanja** » 03 Mar 2010 02:55

OLD IDEA, NEW INITIATIVE - A balanced diplomacy in the volatile Gulf augurs well for India - K.P.Nayar

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But nothing that Singh has done in his entire career as a politician beats the dogged determination with which he has pursued another of his pet foreign policy ideas for almost 17 years: the idea of bringing India closer to Saudi Arabia. Very few members of Singh’s cabinet have read a historic joint communiqué that was issued in April 1982 at the end of Indira Gandhi’s visit to Saudi Arabia. In part, their reason for not reading this document is that the only copy of it, which was in the possession of Talmiz Ahmad when he was India’s ambassador in Riyadh between January 2000 and July 2003, has been misplaced following Ahmad’s departure as envoy to Oman. His successors obviously did not think the communiqué was worth preserving or archiving.
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It is a fact that when India was under assault by terrorists in the late 1980s and thereafter, it got little sympathy from Saudi Arabia. What India had to say in those years was not heard with any seriousness in Riyadh. But there is a clear sense today that the implications of the November 2008 terrorist attacks on Mumbai are understood in Saudi Arabia and elsewhere in the Gulf, in states which have vulnerable coastlines and domestic jihadis who want to overthrow their governments. Singh’s visit to Saudi Arabia is opportune because this is the right time to explore the space for a strategic alliance between Riyadh and New Delhi.
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However, if India is to guard its flanks, it must balance its overtures to Saudi Arabia by equally putting some substance into its moribund relations with Iran. There is a long-pending invitation for the prime minister from President Mahmoud Ahmadinejad to visit Iran. In November last year, the Iranian foreign minister, Manouchehr Mottaki, came to India to renew that invitation. India cannot hope to make the most of what Singh has started in Riyadh unless he completes the circle, so to speak, by going to Tehran as well and working out a viable strategy for dealing with the Taliban’s resurgence in Afghanistan.
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Gagan · Post by **Gagan** » 03 Mar 2010 04:32

Talmiz Ahmad

Carl_T · Post by **Carl_T** » 03 Mar 2010 04:59

I have not been to the middle east, so pardon me. To those in the know: I had thought women in the middle east wear burqas and hijabs and aren't allowed to drive and other things etc. So how are videos such as this one, or ones by Suzanne Amin acceptable and popular there? Are women in the ME freer than we imagine or is this only restricted to music videos?

[youtube]6nK_CfCYGvU&feature=related[/youtube]

Gagan · Post by **Gagan** » 03 Mar 2010 05:21

Amr Diab.
This guy is an egyptian. The egyptians are quite liberal. In the middle east, the lebanese will put nai dilli to shame by their openness in terms of women. Beirut was quite a sex and booze watering hole before it was destroyed.

In the rest of the arab world, I have this bit of info by personal communication by individuals who've lived there for several years.
Underneath the hijabs and burqas, the arab women wear the shortest minis skirts and the most beautiful clothes. (sorry for this, but you get the picture). The upwardly mobile women are said to be as health conscious as the western women, and they have grabbed all things western in terms of fashion with both hands.

They have the money and the nations allow all western goodies in.

And the women are crazy about the indian film heroines.

Carl_T · Post by **Carl_T** » 03 Mar 2010 05:24

That's interesting, although this one, Amr Diab is actually from Egypt, like Suzanne Amin. Hence the surprise, I guess social class makes the difference.

abhischekcc · Post by **abhischekcc** » 03 Mar 2010 11:38

All the media programming for ME is done in Lebanon, with Syria as junior partner. The hot arab videos you see are from there. The peninsular arab countries are conservative.

Underneath the hijabs and burqas, the arab women wear the shortest minis skirts and the most beautiful clothes.

I can confirm this. I was once walking behind an Arab woman, and the silhouette underneath her burqa showed a hot pant

Just google for Carole Samaha

abhischekcc · Post by **abhischekcc** » 03 Mar 2010 11:47

But nothing that Singh has done in his entire career as a politician beats the dogged determination with which he has pursued another of his pet foreign policy ideas for almost 17 years: the idea of bringing India closer to Saudi Arabia.

However, if India is to guard its flanks, it must balance its overtures to Saudi Arabia by equally putting some substance into its moribund relations with Iran. There is a long-pending invitation for the prime minister from President Mahmoud Ahmadinejad to visit Iran.

Read the two statements together and you will understand the thrust of MMS's foreign policy. Even then I am giving too much credit to the man - because he does not have a foreign policy of his own. He just does what someone else tells him. In this case, as in every other 'major' policy decision that is credited to MMS, the US hand is visible.

The Poodle Minister strikes again.

It was a sad day in Indian history when this man was made PM. APJ has a lot to answer for. Sonia Gandhi is not answerable to the Indian public.

Carl_T · Post by **Carl_T** » 03 Mar 2010 11:59

abhischekcc wrote:All the media programming for ME is done in Lebanon, with Syria as junior partner. The hot arab videos you see are from there. The peninsular arab countries are conservative.

Just google for Carole Samaha

So Egypt is not as liberal as Amr Diab would have us think...

Carole Samah is aight, that Princess Rania is better. There was also this one Saudi Princess I think, maybe AlWaleed's daughter....dayummmm. Suzanne tamim wasn't bad either.

abhischekcc · Post by **abhischekcc** » 03 Mar 2010 12:33

It will be illuminating to compare foreign policy under MMS with PVNR's foreign policy. (Note the difference in crediting).

PVNR took over as PM and had to face the crisis created by Ayodha demolition. He used it strengthen ties with KSA by pointing out that it was a Shia mosque

. He used the crisis created by Pakistani posturing over Kashmir in the HR Conference in Geneva t odraw Iran (and China) closer to India. AND he opened diplomatic relations with Israel. Considering that these countries cant stand each other - it is commendable feat.

And look at the unimaginative policy followed by MMS.

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But this deal makes more sense when you consider Congress' domestic politics. Congress has always made nice with Muslim elite, both in India and abroad - it helps their vote bank politics. Remember MMS' knee jerk statement when Mohamed Haneef was arrested in Australia for terror plot? That his night's sleep has gone (mera raton ki neend haram ho gayi hai).
This was also appeasement of domestic muslim lobby.

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All his actions are determined by Congress' desire to rebuild the old style vote bank politics it practiced in the heydays of the dynasty. No sir, this is not the new India rising. This is the old India reasserting itself after defeating the only serious democratic challenge - aka the Hindu Nationalist movement.

Congress still has not learnt that India has changed.

Suppiah · Post by **Suppiah** » 03 Mar 2010 12:40

The problem with getting too close to KSA and the like the 'scope creep' - they will try to gradually increase influence over IMs and also over how India does things, perhaps even interfere in Mandir-Masjid kind of disputes and so on...not that they anyway do not do it...but it will become officially sanctified...

The problem with getting too hostile with these are also that their devious agenda will then be pursued full blast without any scope for us to moderate it. And allow TSP to dictate the course of events.

What MMS is hopefully trying to do is to strike a balance and keep them at safe but reliable distance. Handled sensibly I do not rule out a possible grand Yindoo-Islam reconciliation and bargain that gives India a leadership role over all of ME plus favorable oil and so on...the cultural influence is already there.

We can teach Unkil that two can play the game of using, abusing and channeling political Islam for tactical and strategic purposes...without caring a damn for so-called strategic allies.

abhischekcc · Post by **abhischekcc** » 03 Mar 2010 12:52

The only test of success of this new friendliness is whether KSA will charge significantly less rate (below market price) for the oil they sell us.

Suppiah · Post by **Suppiah** » 03 Mar 2010 13:45

abhischekcc wrote:The only test of success of this new friendliness is whether KSA will charge significantly less rate (below market price) for the oil they sell us.

That demand is unrealistic and should not be the goal post. That also means we are going with begging bowl a la TSP and not as strategic partner and strong economy. Access to oil fields in KSA as investment, investment of KSA in petrochemical and refining and plastics or other downstream value add production etc., fertilizer, which depend on oil from KSA should be the primary focus. The bottom line is western oil middlemen and co's should be shut out - that will send a strong message to Unkil not to fool around with our strategic priorities and dance to ISI/TSPA tunes.

Keeping part of Saudi reserves in INR, infra investment by KSA or them buying our GOI bonds to encourage growth of market etc., are also good goals to pursue...

Key condition is that any 'donation' from KSA should be to fund secular activities not targeted at IM or Sunni etc.

abhischekcc · Post by **abhischekcc** » 03 Mar 2010 14:55

That demand is unrealistic and should not be the goal post.

Not a goal, but an indicator.

That also means we are going with begging bowl a la TSP and not as strategic partner and strong economy.

Not true, it indicates what is our negotiating strength in this relationship. If we pay market price even after a so called strategic relationship with KSA, then we have no say in the relationship.

somnath · Post by **somnath** » 03 Mar 2010 15:50

^^^Only beggar nations ask for discounts in tradeable commodities..(Ram Naik made a stupid plea during NDA's first stint to OPEC to reduce it for India - it was pathetic!!) An emerging power should be looking for bigger things than doles..

Having said that, Suppiah, much of this is also unrealistic/impossible:

Keeping part of Saudi reserves in INR, infra investment by KSA or them buying our GOI bonds to encourage growth of market etc., are also good goals to pursue...

We are not looking to make INR a reserve currency (far from it - we want high controls!), GOI does not borrow externally - it only issues INR bonds and foreign investment in them is capped at a microscopic level..

But this is a qorthy goal:

Access to oil fields in KSA as investment,

If I had to look for a silver bullet strategic partnership goal, this will be it..SAudis do not parcel out oil fields to anyone, not even the Americans anymore..If we can wrangle a concession on that, it will really be a big deal..The oil market is reaonably competitive at the "middleman" level - the prices are reasonably transparent and individual middlemen (western or otherwise) cant really mess around too much...But access to oil exploration concessions (Sakhalin I, Sudan type) do give a certain amount of strategic advantage (though even there the merits are heavily debated - but thats a different story)..

I would say that the "flow" wopuld be the other way - from India to KSA, in terms of IP and investment..There is a lot that KSA can use from us in terms of tech...

abhischekcc · Post by **abhischekcc** » 03 Mar 2010 16:06

KSA (and other ME countries) have been interested in investing in India since 9/11. Old timers will recall that in the immediate aftermath of 9/11, several ME countries had made a joint proposal to GOI to make USD 200 bn of investment every year. GOI turned it down, fearing lose of control over the economy.

KSA had made a proposal (IIRC, last year) inviting India to provide defence for the kingdom. Nothing came of this proposal either.

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They have been looking for a viable long term partner for their countries, and nothing fits the better than India. Our large muslim population becomes a strength we can use to our advantage here, unlike China.

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Saudi overtures have been long term and GOI has taken its own sweet time to respond to them.

So, at least we can understand that Uncle is not the driving force behind this marriage. Which should be a source of stability for both countries - because Uncle tends to behave like a mercenary (no wonder they are good friends with pak-sitam).

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This is Congress meeting its old friends in the Islamic world - the condemnation of Israel is a pointer to the same.

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Only beggar nations ask for discounts in tradeable commodities

And fools pay full price.

Sanku · Post by **Sanku** » 03 Mar 2010 16:13

whats discount in this context ? The price is demand and supply, if we can convince them to sell it for less, what is the itch to be TFTA and pay more?

But nahi jee we are a super power, we must be throwing money around onlee no? Just like on all those imported Nuke reactors full of riders and issues and expensive power?

Enron anyone?

somnath · Post by **somnath** » 03 Mar 2010 18:53

abhischekcc wrote:And fools pay full price.

Really sir! the global oil futures market trades tens of billions of dollars every day - participants range from the Saudi Aramcos, Shells, Totals, Reliances of the world to financial instituions and hedge funds - they must all be fools to be trading at "full price"!!!

In recorded memory (at least mine), there are only a couple of instances of "discounted" oil - Venezuela to Cuba and Bolivia and Saudi (from time to time) to Pakistan...not precednets that we want to follow, are they?

Dont be fooled by the "condemnation" Of Israel - thats a standard line, neither KSA nor India really mean anything barrign lip service..It was a Congress govt that established full relations with Israel, wasnt it? There is alway posturing to satisfy various audiences..

BTW, didnt know of this:

KSA (and other ME countries) have been interested in investing in India since 9/11. Old timers will recall that in the immediate aftermath of 9/11, several ME countries had made a joint proposal to GOI to make USD 200 bn of investment every year. GOI turned it down, fearing lose of control over the economy.

Any source? Most investments (capital and current a/c) are on "automatic route" - they were so even in 2001...dont understand why anyone has to formally apply to the GOI to make these investments..they can be made normally through usual (and fairly quick and efficient) channels..

But SA is a pivot player in the Middle East, goes without saying...and they are mighty scared about Iran...Coming to think of it, India is one of very few countries that have "equilibrium" level of ties on both sides of the Shia-Sunni divide....Using Shashi tharoor's lexicon, we can be a very effective interlocutor for KSA for their insecurities etc vis a vis Iran...the only other power that can do so is China, but I think we have greater congruencies with Iran and KSA, including cultural ones...It positions us as an important pivot player...

abhischekcc · Post by **abhischekcc** » 03 Mar 2010 20:03

Really sir! the global oil futures market trades tens of billions of dollars every day - participants range from the Saudi Aramcos, Shells, Totals, Reliances of the world to financial instituions and hedge funds - they must all be fools to be trading at "full price"!!!

Now, you are stretching the context. I was talking sovereign countries, not companies. If India and KSA are the new new best friends in town, why not reduce the price of oil.

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Any source? Most investments (capital and current a/c) are on "automatic route" - they were so even in 2001...dont understand why anyone has to formally apply to the GOI to make these investments..they can be made normally through usual (and fairly quick and efficient) channels..

They were probably looking for political assurances that their investments would be safe in the country, given the level of opposition (to muslims and arabs) they experienced in the aftermath of 9/11.

This is an assurance that China cannot give. Incidentally, China's authoritarian regime is poles apart from the 'balance of power' politics that ME countries are familiar and comfortable with. This is also a cultural comfort level that India has an advantage in.

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With benefit of hindsight, Shashi Tharoor's statement on KSA as interlocutor seems to be a trial balloon, floated to judge the level of opposition in the country to a smooch-up with KSA.

Tharoor should be worried, as this indicates that he is expendable.
(Of course, for that family, everybody, except themselves, is expendable. remember Natwar Singh).

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There are many reasons that India and KSA have for cooperating, that goes without saying. So, there is no need to accuse anyone of selling out, at least for now.

I am more happy about the railway agreements. GCC countries have been talking about a gulf railway system for decades. But only now are they serious about doing it. India can easily get a large pie of this. Again, incidentally, KSA is the only country to have implemented the skybus system, developed by Konkan Railway Corp, even as India itself goes for the vastly costlier Metro system (more kickbacks in a costlier system). It is used for transporting Hajjis. And yet again, incidentally, the Saudi construction firm most likely to have implemented this is the Bin Laden family, since they have all or most of the large contracts around the religious cities.

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The most intriguing part of this relationship is its impact on India's defence posture:
1. Does it reduce paksitan's influence, or raise it, in India's 'internal matters'?
2. Does India provide troops to defend SA royal family and oil fields? If yes, will it make Indian muslim population a mroe attractive target for AQ propoganda? How will impact the Indo-Pak dynamic? Will it actually make Pakistani state weaker domestically - as it weighs the options to either cooperate with AQ or oppose it?
3. What about China's posture? Does this meet signal the fizzling of China's aggressive wooing of ME countries? Will they now step on the gas, or let it slide as Iran scenario hots up?
4. How does it impact our special relationship with Russia? Russia is ambivalent towards KSA, seeing it as a partner and competitor in the energy market. But it views muslim countries (especially those with large wallets) with suspicion because of historical reasons.
5. And finally, what about Uncle? What is their role in all this? They have been demanding that Asian countries pony up the defence bill for ensuring their energy supplies. Japanese public has been vigorously opposed to this. Not sure about SK public opinion. So, does this mean India is now going to provide security on behalf of the US for KSA/other oil rich countries/oceanic oil lanes? IN already have a strong presence in the IOR, which is generally welcomed by all countries. Will IA and IAF assume a similar role?

Gagan · Post by **Gagan** » 03 Mar 2010 20:22

The saudis have for years been offering to refurbish the Jama Masjid in Delhi and convert that entire area into a neat and clean area with libraries, parks etc.

Currently if you go around that area, you are bound to be shocked by the stench and the dirtiness there.

Jama Masjid's shahi Imam is pissed that GOI is not allowing saudi funds to come in. GoI has said that GoI or ASI or Delhi Gov will do the maintenence etc.

So GoI does try to keep extraneous religious influence at bay, which they see as unwanted. But the whole process has to be very carefully done so that people don't feel offended

shyamd · Post by **shyamd** » 03 Mar 2010 20:43

Gagan is right, GOI is more than aware about extremist funding.

IN is taking over from the US of IOR policing... this is openly said.

It was Cheney who was pushing GCC into Indian arms as I had reported 2 years ago.

BTW, Just learnt from a reliable source that Yindu's offered KSA cooperation on bissful nuke program (similar to what was offered to Oman in the Shashi Tharoor visit) and missiles (Yindu strategic ones).

Looks like KSA might take one, reject another or something along those lines. Waiting to see if other sources will confirm.

jerry · Post by **jerry** » 03 Mar 2010 22:00

Yindu's offered KSA cooperation on bissful nuke program (similar to what was offered to Oman in the Shashi Tharoor visit

btw off topic but nuclear energy, power is going to be big big for the next few years, all the arabs have finalized plans or even in some cases handed out contracts for nuclear plants.Those bfrites who are looking out for a profession better watch out! there is gonna be a lot of demand for human resources even from the khans.

D Roy · Post by **D Roy** » 03 Mar 2010 22:30

KSA has already kissed and made up with the russkis. it is investing in russki caspian fields and will help with chechnya.

KSA is buying serious arms from the russkis and it is possible that VVERs will be looked at as well.

India will probably have a role in both.

when people talk about history, they forget one thing- the main ally of India has always been the old bear.
and the bear and the elephant move in the same direction. especially when the old guard is at the helm of both countries.

The nuke deal was not simply an american lolly. the bear wanted it in place as well.

satya · Post by **satya** » 03 Mar 2010 22:59

Other than for trading/ speculation , crude oil is 99% times bought on discount be it Saudi light or Ural crude from Russia or woodoo crude from Nigeria ( this one is entirely in hands of her majesty's royal subjects & level of discounts they give is beyond imagination but payment method not for faint hearted ). Normal discounts at peak of crude prices were 2-3 $ Rotterdam and depending on supply scenario sometimes reached as high as 6-7$ . One factor people often miss is the number of princes in KSA who happen to get pocket oil contracts for sale to keep their cronies & co. satisfied apart from keeping german autobahns busy .

Anyhow back to topic.

Suppiah · Post by **Suppiah** » 04 Mar 2010 08:00

Asking for discount without any strategic or tactical or business quid pro quo is begging, let us not put a spin on it. Of course, there are beggars that see their begging as entitlement (as TSP tries to spin 'it is the international community's responsibility to keep us from blowing ourselves up') but I hope pray India is not in that list. Let us also not confuse normal trade volume and quality discounts with anything else..

Re. reserve currency, somnath ji yes I know our currency is a closed one now, but it is not far fetched. It is practically open and free on several fronts (personal transfers, property purchases, education, even investments in shares abroad and so on) and has come far far from the days when you have to beg for U$50 per day as 'travel allowance' every time you go out of country. I have known even senior executives unable to host lunches for their business partners because of pathetic entitlements...It is not convertible on capital account in some aspects, but that too is dying sooner than later..

KSA does not trust Unkil, it is a mutual hate-hate relationship that keeps going because of various compulsions on both side. It may not trust the Chinese as much because of cultural distance. We yindoos are harmless rice eaters, with similar outlook to life, so trust levels are actually higher once the religious animosities are overcome with smart bargain. Contrary to some other religions, Islam is not a seriously evangelistic or converting one (when not in power), so even RSS types should have no issues with it...provided of course, 10 feet walls and barbed wires are erected to protect IMs from Wahabi influences.

Carl_T · Post by **Carl_T** » 04 Mar 2010 08:06

Suppiah wrote:
KSA does not trust Unkil, it is a mutual hate-hate relationship that keeps going because of various compulsions on both side. It may not trust the Chinese as much because of cultural distance. We yindoos are harmless rice eaters, with similar outlook to life, so trust levels are actually higher once the religious animosities are overcome with smart bargain. Contrary to some other religions, Islam is not a seriously evangelistic or converting one (when not in power), so even RSS types should have no issues with it...provided of course, 10 feet walls and barbed wires are erected to protect IMs from Wahabi influences.

Dhimmi!!!

Suppiah · Post by **Suppiah** » 04 Mar 2010 08:16

Carl_T wrote: Dhimmi!!!

Was expecting this!

somnath · Post by **somnath** » 04 Mar 2010 08:45

Suppiah ji,

OT, but there isnt any roadmap for making INR a reserve currency yet..Even the Tarapore committee roadmap for capital a/c convertibility has been put firmly in the backburner..But yes, broadly the ccy is far more liberalised today...

But agree with you on the other points..

satya wrote:Other than for trading/ speculation , crude oil is 99% times bought on discount be it Saudi light or Ural crude from Russia or woodoo crude from Nigeria ( this one is entirely in hands of her majesty's royal subjects & level of discounts they give is beyond imagination but payment method not for faint hearted ). Normal discounts at peak of crude prices were 2-3 $ Rotterdam and depending on supply scenario sometimes reached as high as 6-7$ . One factor people often miss is the number of princes in KSA who happen to get pocket oil contracts for sale to keep their cronies & co. satisfied apart from keeping german autobahns busy .

Anyhow back to topic.

Sir, what you are referring to are "logistics discounts", dependent on what is the state of inventory in VLCCs in high seas...As the crude carriers have to pay very heavy charges unless thy can offload their gas and do another run, there are market discounts available to buyers depending on quantity, credit terms etc..Thats a commercial spot Txn - what is being referred to here are "please give me discounts as I am friend" - only Cuba and Pak indulge in such behaviour these days...(Caveat - my knowledge of the crude oil market is fairly limited - not an energy trader, so happy to be educated on the intricacies!)..

Its not about providing physical security to KSA, its about influencing events...No one has the same sort of equilibrium vis a vis KSA and Iran as us...KSA would be wooing us just for this one factor...

Rudradev · Post by **Rudradev** » 04 Mar 2010 09:19

Suppiah wrote:Asking for discount without any strategic or tactical or business quid pro quo is begging, let us not put a spin on it. Of course, there are beggars that see their begging as entitlement (as TSP tries to spin 'it is the international community's responsibility to keep us from blowing ourselves up') but I hope pray India is not in that list.

Where on this thread has anyone suggested that we ask for a discount "without any strategic or business quid pro quo"? Abhishekcc has said the willingness of the Saudis to provide oil at discount rates would be an indicator of the relationship's success... not that the Saudis should give it away for nothing.

And indeed it would be an indicator, as much as the Roosevelt-Ibn Saud agreement of 1935, whose legacy continues to keep American gasoline cheaper than any other Western nation's to this day. For that matter, rhetoric aside the Pakis do indeed provide a strategic quid pro quo to the Saudis... including manpower and nuclear weapons technology, in return for all the bankrolling and handouts the Saudis have furnished. I don't think any self respecting nation would put out what Pakistan has but they're a rentier state earning the Saudi's largesse in the same way as they earn everyone else's.

Contrary to some other religions, Islam is not a seriously evangelistic or converting one (when not in power), so even RSS types should have no issues with it...provided of course, 10 feet walls and barbed wires are erected to protect IMs from Wahabi influences.

Interesting. How would we pursue the maintenance of so exacting a cordon as selectively kept out "Wahhabi influences" while simultaneously permitting a sufficient degree of laissez-faire to keep up a meaningful business relationship? And where does one draw the line? Will one even be able to draw the line at all, when the business relationship has reached a stage where powerful interests are vested in the status quo?

Forget the Saudis... close encounters of the Batla House kind, when the outrage of a particular community was mobilized in the defense of "innocent minority youth" who later turned out to be Indian Mujahedin terrorists, makes me wonder if we can draw the line even now. The political costs of 10 feet walls and barbed wire fences are almost too much for our current political "leadership" to pay, even without factoring in a bunch of Saudis running around and flashing money.

Suppiah · Post by **Suppiah** » 04 Mar 2010 12:16

Rudradev wrote: The political costs of 10 feet walls and barbed wire fences are almost too much for our current political "leadership" to pay, even without factoring in a bunch of Saudis running around and flashing money.

Americans or for that matter anglo-saxons get cheap oil thru access to oil fields, for three reasons

1. Historical Incumbent technology advantage they being first to explore, prospect on corporate large scale etc.
2. Ability to use CIA and political muscle to do anything including overthrowing Mossadegh type regimes or bankrolling corrupt regimes...
3. Low taxes and oil lobby controlled policies that keep oil cheap for end users and yet guarantee huge profits to oil co's...(which they are reversing now knowing the links to ME terror and oil wealth. GWB knew the links but was too tied to the oil lobby to do something about it, Obama knows the link and is too left wing to speak about it but nevertheless BOTH gave push to non-oil future in their own way)..

You can assign any % to these factors as you wish.

Apart from these factors, and the usual volume factors, there is no special Unkil discount for oil they buy as anyone else....if oil states were as much controlled by China as they are by US we would have to beg Beijing for any one drop of oil.

That is what we should aim for - access to oil fields.

Re. the political (not religious) Islam effect and IM angle, fact is we are already dealing and living with it, whether or not KSA is friendly officially or not. Both on Shia (Iran) side and on Sunni (KSA) side. It is not as if we have a choice there. Remember the ruling Sultans are s..t scared of progress in ME. So it is possible to strike a bargain to say lay off Indian domestic issues, we lay off your hide...and let you guys make more money and we scratch each other back...

They will gladly do it...heard the joke about Palestinians in KSA? If you are a Palestinian driver killing a Saudi in road accident, it is death penalty. If the other way around, go to nearest police station and collect your reward..

Suppiah · Post by **Suppiah** » 04 Mar 2010 12:19

somnath wrote:Suppiah ji,

OT, but there isnt any roadmap for making INR a reserve currency yet..
Anyhow back to topic.

Sorry final remark on OT aspect forgive me for that, in India you dont publish roadmap and get shot. You quietly do it and explain later..

somnath · Post by **somnath** » 04 Mar 2010 12:42

On the issue of access to oil fields, KSA has stopped giving anyone access to their oilfields for a long time now...Their primary oil company, Saudi Aramco, is HUGE and fully capable of any incremental exploration effort. And of course, they have no shortage of capital to do all the digging that they need to..

So if we can get access to a Saudi oil field, that would be a big prize - I hope we are playing for such large stakes...In exchange, our main pitch could be in terms of a grand interlocutor between Iran and KSA, and who knows, maybe even the offer of a protective nuke umbrella over both!!

Suppiah wrote:Sorry final remark on OT aspect forgive me for that, in India you dont publish roadmap and get shot. You quietly do it and explain later

Suppiah ji, not in the financial markets...there are far too many variables, and institutions need a road map to move towards...Look at liberalisation of the current a/c, or new pvt bank licenses, or even the new indirect tax code...

Suppiah · Post by **Suppiah** » 04 Mar 2010 13:06

Basically the game should be to reduce middlemen (aka western oil firms) and increase mutual stakes to mutual advantage, so access to oil fields is but one approach.

If that is ruled out because KSA as you rightly pointed out neither needs technology (which in any case we are not global leaders) nor the money...then we look for other ways to skin the cat...KSA can invest in Reliance type refineries that can cater to global market using cheaper Indian engg skills instead of refining on their own. And so on....in exchange for stability in supply and perhaps prices, India can go slow on non-oil options such as nuclear or coal or a variety of other scenarios (not that I recommend one over the other, just throwing some possibilities)...in an environment where because of tech advance or clear political mandate, western consumption stays same or even declines, as it is likely to, then demand management becomes a key part of any oil state's strategy..that is where we come in because we are behind the curve..

somnath · Post by **somnath** » 04 Mar 2010 14:32

Suppiah wrote:in exchange for stability in supply and perhaps prices, India can go slow on non-oil options such as nuclear or coal or a variety of other scenarios (not that I recommend one over the other, just throwing some possibilities)...in an environment where because of tech advance or clear political mandate, western consumption stays same or even declines, as it is likely to, then demand management becomes a key part of any oil state's strategy..that is where we come in because we are behind the curve

Thats a good point Suppiah..Something akin to what India's new policy is anyway trying to do in the climate change discussions..the fact is that the sort of iron-clad reductions demanded by the NGO lobby is not favoured by the US..And conversely, it works to the max detriment of oil producers, so they are pissed off as well..The US is trying its hands at an understanding which leaves ample scope for it to retain its current trajectory..Which dovetails reaosnably well with oil producers as well..And we now are trying to break a bit away from the G20 crowd and trying to cut a deal with the US...So very superficially also ties in with an increased alignment with KSA!!

Rudradev · Post by **Rudradev** » 04 Mar 2010 21:10

Suppiah wrote:
Americans or for that matter anglo-saxons get cheap oil thru access to oil fields, for three reasons

1. Historical Incumbent technology advantage they being first to explore, prospect on corporate large scale etc.
2. Ability to use CIA and political muscle to do anything including overthrowing Mossadegh type regimes or bankrolling corrupt regimes...

Not anymore, really.

The American/ "Anglo Saxon"/British/European dominance of West Asian oil fields is a phenomenon that peaked after World War I and has declined steadily since the 1950s. Not just Mossadegh and the Ba'ath/Nasserite Arab-nationalist governments, but even such US allies as Shah Reza Pehlavi and the Saudis aggressively pursued policies that amounted to nationalization of oil wealth. By the time the energy crisis of 1973 made OPEC a household name, there was little the CIA or Western political muscle could do about it. Today, access to West Asian oil fields is tightly controlled by the governments who run those countries; they realize that such control is the entire foundation of their power.

Central Asia is another matter, where impoverished former-Soviet republics are possibly willing to provide more actual access to oilfields than in any West Asian country (where the oil game has been played for over a century).

3. Low taxes and oil lobby controlled policies that keep oil cheap for end users and yet guarantee huge profits to oil co's...(which they are reversing now knowing the links to ME terror and oil wealth. GWB knew the links but was too tied to the oil lobby to do something about it, Obama knows the link and is too left wing to speak about it but nevertheless BOTH gave push to non-oil future in their own way)..

True, but taxes in the US are lower than taxes in Western European nations across the board. This does not by itself account for the large differential in domestic oil prices between the US specifically and Western Europe (not to mention the rest of the world).

Apart from these factors, and the usual volume factors, there is no special Unkil discount for oil they buy as anyone else....if oil states were as much controlled by China as they are by US we would have to beg Beijing for any one drop of oil.

Again, not quite. As a result of the Abdulaziz/Roosevelt agreement of 1945 (apologies, I said 1935 in the previous post)... the US received a commitment from the Saudis that the US Dollar would be preserved as the currency in which oil was priced.

Much better than a discount, and a major part of the muscle that allowed the Americans to forge an international economic system on their own terms, at Bretton Woods the following year.

That is what we should aim for - access to oil fields.

Then we should be aiming towards Central Asia, not West Asia... those guys won't give us access to oil fields anytime soon, not for any price that we can possibly offer.

Re. the political (not religious) Islam effect and IM angle, fact is we are already dealing and living with it, whether or not KSA is friendly officially or not. Both on Shia (Iran) side and on Sunni (KSA) side. It is not as if we have a choice there. Remember the ruling Sultans are s..t scared of progress in ME. So it is possible to strike a bargain to say lay off Indian domestic issues, we lay off your hide...and let you guys make more money and we scratch each other back...

They will gladly do it...heard the joke about Palestinians in KSA? If you are a Palestinian driver killing a Saudi in road accident, it is death penalty. If the other way around, go to nearest police station and collect your reward..

We are already living with it and dealing with it (it is controversial how well) in the present situation. But the present situation is one in which Saudi access and influence within India is limited, and even (I hope) scrutinized to a certain extent in terms of who is putting how much money where and for what purpose.

Having a business relationship with the Saudis implies, necessarily, that a lot of institutional perimeters... red tape, babucracy, government oversight etc. will be cut down particularly with regard to Saudi money flows.

The Saudi government may pledge to lay off Indian domestic issues, in fact if there is enough business opportunity for them they certainly will. It's the vast number of private individuals and business families with Wahhabi connections in the back pocket that we should be wary of. After all, until the mid-'90s the name "Bin Laden" was synonymous with a well respected construction firm with operations in many countries. Can we open the door wide enough to give Saudi business interests access to the Indian economy and yet keep out the elements that would be dangerous to the Indian polity?