Riyadh’s evolving approach to international institutions

Riyadh’s evolving approach to international institutions

In the era of great power competition, Saudi Arabian foreign policy has become increasingly non-aligned. Whilst the United States remains the Kingdom’s foremost security guarantor, the rise of China has led to a deep commercial relationship between the two countries.[1] Yet the relationship between Saudi Arabia and the United States has deteriorated since the US’ invasion of Iraq in 2003; the Obama administration’s pursuit of a deal with Saudi rivals Iran to curb their nuclear ambitions; and the (short-lived) pariah status the Biden administration conferred on the Kingdom following the murder of journalist Jamal Khashoggi.[2]

Despite a closer relationship with President Trump, Riyadh grew unconvinced of the US’ commitment to the security of the Gulf following Iranian attacks on Saudi oil facilities. Trump decided against acting punitively against Iran, and Riyadh sought diplomatic engagement as an alternative means of counteracting the Iranian threat.[3] A flurry of diplomatic engagement followed, including the normalisation of relations between Saudi Arabia and Iran. Also high on Riyadh’s agenda were conflict mediation efforts, such as in Sudan.[4]

Riyadh seeks to be internationally recognised as a significant middle power.

The Kingdom is driven in its foreign policy by two factors. Firstly, Riyadh seeks to be internationally recognised as a significant middle power. To do this, Riyadh seeks to secure regional hegemony, in competition with Iran, and increase its global influence. Secondly, Crown Prince and Prime Minister Mohammed bin Salman’s (MbS) ambitious Vision 2030 requires a stability in the region and favourable international rules to foster a more propitious business climate and attract FDI.[5] Vision 2030 is the defining project of MbS’ de facto rule, and it attempts to transform the Kingdom away from its dependency on oil and towards a diversified, dynamic economy- with thriving sports, entertainment, and green energy sectors.[6]

MbS’ emphasis on diplomatic engagement raises a question of Saudi Arabia’s approach to international institutions. International institutions offer states the ability to act with greater legitimacy and credibility.[7] Riyadh’s approach to international institutions has mirrored its foreign policy strategy. Established, Western-led institutions such as the UN and WTO have seen greater involvement from Saudi Arabia. A deepening of diplomatic engagement and co-operation is notable, such as offers to mediate in the Ukraine-Russia conflict. This helps Riyadh to international legitimacy as a significant diplomatic power, and reflects the power of international institutions towards this end. Institutions designed to challenge western institutions, such as BRICS and the New Development Bank, have been embraced by Riyadh. This reflects Saudi Arabia’s hedging strategy, but also a growing voice in international institutions of all forms. The ability to influence international decision making is necessary for Riyadh to make rules in their interests, helping facilitate Vision 2030.

Saudi Arabian foreign policy has sought to hedge between the rise of China and the existing security relationship it has with the United States whilst at the same time looking to become a more independent global player in its own right.[8] This behaviour is evident in the UN. For example, the Russo-Ukrainian war demonstrates Saudi ambitions and hedging. Saudi Arabia voted in favour of an immediate ceasefire in the conflict, following the lead of the United States.[9] However, Riyadh postured itself as a neutral mediator in the conflict, welcoming President Zelenskyy to the Arab League whilst maintaining a close relationship with Russia.[10] Prince Turki Al Faisal, former ambassador to Washington and London, argued that Riyadh was prepared to mediate between Russia and Ukraine due to its strong relations with both countries, and having “contributed to the fund that was established by the UN to provide support for the Ukrainian refugees in Europe”.[11] Dr. Diana Galeeva of the Gulf International Forum has argued that the Kingdom’s focus on mediation efforts is ‘personally linked’ to their ‘figurehead’, MbS.[12] MbS, Dr. Galeeva argues, can thus cast himself and the Kingdom as peacemakers[13] within international institutions such as the UN, and secure his first foreign policy objective – legitimacy as a significant middle power. The talks, held in Jeddah, were attended by officials and policy makers from 40 countries – including the G7.[14] This demonstrates the role of international institutions of legitimising Riyadh’s ambition to be an independent and significant middle power through conflict mediation.

In 2010, Abdulaziz Alwasil, then Saudi Ambassador to the United Nations in Geneva, now Ambassador in New York, argued that Saudi Arabia received widespread condemnation in human rights circles for not voting in favour of the Universal Declaration of Human Rights in 1948, but has not received recognition for its adoption of international human rights instruments, such as the CESCR, CCPR, CERD, CRC, and CEDAW.[15] Alwasil argues that from the 1990s Saudi policy changed from endorsing international human rights instruments, to ratifying human rights treaties, thus becoming more deeply involved in the UN’s human rights architecture.[16] However, in 2020, following the murder of Jamal Khashoggi which the CIA believed to be ordered by MbS, Saudi Arabia lost its seat on the UN human rights council.[17] This represents the weakening of Saudi involvement in international institutions. Saudi Arabia is also routinely criticised for ongoing executions. Yet, domestic politics have also been a source of Saudi legitimacy in international institutions and offer more evidence of deepening and diversified engagement in Saudi involvement in international financial institutions.

In February 2024, Muhammed Al-Jadaan will begin his three-year term as chairman of the International Monetary Fund’s International Monetary and Financial Committee.[18] Currently serving as Saudi finance minister, Al-Jadaan was previously chair of the G20 Financial Track in 2020, during Saudi’s presidency of the G20. Al-Jadaan argued in September 2023 that strong multilateral engagement is necessary to combat economic and geopolitical fragmentation, and to respond to economic shocks. In Al-Jadaan’s opinion, “we must utilise multilateral mechanisms and platforms to promote open and fair trade, fostering collaboration among nations and economic blocs, to jointly tackle economic challenges and hence safeguard the stability and resilience of the global economy”.[19]

Engagement in existing international financial institutions is key to Saudi diplomatic strategy.

Evidence of Saudi Arabia’s strong engagement in international financial institutions can be seen in the Kingdom’s 2020 presidency of the G20, in which reforms to the WTO were proposed under the Riyadh Initiative.
[20] Al-Jadaan recognised the importance of Saudi Arabia’s growing multilateral engagement by arguing that “strengthening these global institutions and processes is key to Saudi Arabia’s approach of bridge-building and investment in solutions which benefit us all”.[21] Therefore, engagement in existing international financial institutions is key to Saudi diplomatic strategy. This is especially importance in light of Vision 2030. Saudi Arabia becomes more important to institutions- such as the World Bank, IMF, and WTO- as its economy grows and modernises, and these institutions become more important to Saudi Arabia, as Riyadh benefits from a louder voice in these institutions to make rules in its favour. In October 2023, World Bank president Ajay Banga visited Riyadh to discuss deepening its co-operation with Saudi Arabia.[22] In December, a delegation from the Executive Board of the World Bank Group met with Saudi ministers to discuss enhancing their strategic partnership. Also discussed were digital economy and government policies, and AI and innovation.[23] Vision 2030 is propelling Saudi’s engagement in financial institutions such as the World Bank.

Much like Saudi Arabia’s general foreign policy of diversifying its international relations, the Kingdom has approached new, non-Western financial institutions and other international organisations. In August 2023, Saudi Arabia was invited to join the BRICS group of developing economies Brazil, Russia, India, China, and South Africa.[24] Concurrently, the Kingdom was invited to join the BRICS-led New Development Bank.[25] The addition of Saudi Arabia as a member of the NDB would “turbocharge”, the International Banker argue, the NDB’s ability to compete with institutions like the IMF and World Bank by lending to developing countries at a lower rate.[26] In November 2023, the Kingdom agreed a $7bn currency swap with China, supporting Beijing’s push for the end of dollar dominance and the internationalisation of the Yuan.[27] According to JP Morgan, Saudi Arabia have also reportedly explored accepting payments in other currencies for its oil exports.[28]

Saudi Arabia’s approach to international institutions demonstrate that the Kingdom is committed to diversifying its international relations by hedging between the United States and China, whilst carving out its own independent path as a leading middle power. MbS’ embrace of diplomatic engagement and economic liberalisation has influenced the Kingdom’s approach to international institutions, because these institutions provide international legitimacy to achieve his geopolitical objectives. MbS has looked to deepen his country’s footprint in existing institutions such as the UN and international financial institutions, such as the IMF and World Bank. However, Saudi Arabia has also diversified its multilateral engagement by embracing China-dominated institutions, such as the BRICS alliance and the New Development Bank. Deepening and diversifying is the theme of Riyadh’s approach to international institutions, and its foreign policy more broadly.

[1] Munassar, Omar (2023), ‘Hedge and Wedge: Saudi Arabia Approaching China and Russia’, Manara Magazine, 31 December, retrieved from; https://manaramagazine.org/2023/10/hedge-and-wedge-saudi-arabia-approaching-china-and-russia/
[2] Jacobs, Anna (2023), ‘Understanding Saudi Arabia’s Recalibrated Foreign Policy’, International Crisis Group, 14 September, retrieved from: https://www.crisisgroup.org/middle-east-north-africa/gulf-and-arabian-peninsula/saudi-arabia/understanding-saudi-arabias
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Borck, Tobias (2023), ‘Kingdom of Change: Saudi Arabia’s Evolving Foreign Policy’, RUSI, 5 June, retrieved from: https://rusi.org/explore-our-research/publications/commentary/kingdom-change-saudi-arabias-evolving-foreign-policy
[7] Baldota, Khushi (2021), ‘Why Powerful States Act Through International Organizations’, The Diplomatist, 5 June, retrieved from: https://diplomatist.com/2021/06/05/why-powerful-states-act-through-international-organizations/
[8] Atta, Ibrahim (2023), ‘From Confrontation to Subtle Diplomacy: The Reorientation of Saudi Foreign Policy’, Gulf International Forum, 10 May, retrieved from: https://gulfif.org/from-confrontational-to-subtle-diplomacy-the-reorientation-of-saudi-foreign-policy/
[9] The Embassy of The Kingdom of Saudi Arabia, Washington D.C. (2023), ‘Saudi Arabia Votes in Favor of UNGA Resolution Calling for Russia to Withdraw from Ukraine’, The Embassy of The Kingdom of Saudi Arabia, Washington D.C., 23 February, retrieved from: https://www.saudiembassy.net/news/saudi-arabia-votes-favor-unga-resolution-calling-russia-withdraw-ukraine
[10] Al Jazeera (2023), ‘Saudi Arabia kicks off Ukraine talks that exclude Russia’, Al-Jazeera, 5 August, retrieved from: https://www.aljazeera.com/news/2023/8/5/saudi-arabia-kicks-off-ukraine-talks-that-exclude-russia
[11] Al Faisal, Turki quoted in ‘Frankly Speaking | S4 E1 | Prince Turki Al-Faisal, Former chief of General Intelligence Directorate’, YouTube, uploaded by Arab News, 1 May 2022, https://www.youtube.com/watch?v=62U3EUSK_ok
[12] Galeeva, Diana (2022), ‘Saudi Arabia’s Mediation in the Ukraine War’, Gulf International Forum, 19 October, retrieved from: https://gulfif.org/saudi-arabias-mediation-in-the-ukraine-war/
[13] Ibid.
[14] Akita, Hiroyuki (2023), ‘How Saudi Arabia’s mediation efforts heap pressure on Russia’, Nikkei Asia, August 26.
[15] Alwasil, Abdulaziz (2010), ‘Saudi Arabia’s engagement in, and interaction with, the UN human rights system: an analytical review’, The International Journal of Human Rights, Vol.14, No.7, pp.1072-1091.
[16] Ibid.
[17] Wintour, Patrick (2020), ‘Saudi Arabia fails to join UN human rights council but Russia and China elected’, The Guardian, 13 October, retrieved from: https://www.theguardian.com/world/2020/oct/13/saudi-arabia-fails-to-join-un-human-rights-council-but-russia-and-china-elected
[18] International Monetary Fund (2023), ‘Press Release No.23/443: IMFC Selects Saudi Arabia’s Minister of Finance Mohammed Aljadaan as New Chair’, International Monetary Fund, 13 December, retrieved from: https://www.imf.org/en/News/Articles/2023/12/13/pr23443-imfc-selects-saudi-arabias-minister-of-finance-mohammed-aljadaan-as-new-chair
[19] Al-Jadaan, Mohammed (2023), ‘Mohammed al Jadaan: Multilateral solutions to build a more prosperous and secure world’, The Banker, 27 September, retrieved from: https://www.thebanker.com/Multilateral-solutions-to-build-a-more-prosperous-and-secure-world-1695802414
[20] Ibid.
[21] Ibid.
[22] Arab News, (2023), ‘Saudi Arabia, World Bank explore areas of cooperation’, Arab News, 24 October, retrieved from: https://www.arabnews.com/node/2397046/business-economy
[23] Arab News, (2023), ‘Saudi Arabia, World Bank discuss stronger digital economy growth partnership’, Arab News, 14 December, retrieved from: https://www.arabnews.com/node/2425926/saudi-arabia
[24] Reuters (2023), ‘BRICS invites six countries including Saudi Arabia, Iran to be new members’, Reuters, 24 August, retrieved from: https://www.reuters.com/world/brics-invites-six-countries-including-saudi-arabia-iran-be-new-members-2023-08-24/
[25] Leahy, Joe, and Alum, Arjun N. (2023), ‘Saudi Arabia in talks to join China-based ‘Brics bank’, Financial Times, 28 May, retrieved from: https://www.ft.com/content/45abe561-a6cc-4058-b0a1-ecdc46a2d839
[26] Larsen, Nicholas (2023), ‘Why Saudi Arabia’s Imminent Membership Is Crucial For The Brics’ New Development Bank’, International Banker, 31 July.
[27] Soni, Aruni (2023), ‘China and Saudi Arabia sign a $7 billion currency swap agreement, adding to de-dollarization push’, Business Insider, 20 November, retrieved from: https://markets.businessinsider.com/news/currencies/dedollarization-china-yuan-dollar-currency-swap-renminbi-saudi-arabia-oil-2023-11
[28] JP Morgan (2023), ‘De-dollarization: Is the US dollar losing its dominance?’, JP Morgan, 31 August, retrieved from: https://www.jpmorgan.com/insights/global-research/currencies/de-dollarization

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