Rulers hope to buy stability and prevent Arab Spring from reaching their borders
Saudi Arabia and the other oil-rich kingdoms of the Gulf are emerging as bankers of counter-revolution, dispensing aid to governments, investing in business, making charitable donations and selling subsidized oil to countries under pressure from Arab Spring street protests and sagging economies.
Jordan, whose king is fending off calls for democracy, is the latest beneficiary of the largesse. On Monday, it received a $1 billion check from Saudi Arabia to cover its budget deficit and help prop up its economy. The donation brings total aid to Jordan this year to $1.4 billion and more is likely to come, including selling it oil at reduced prices, the Amman-based daily Al Arab Al-Yawm reported today.
“Saudi Arabia and the GCC as a whole want to insulate themselves from the secular and tribal and sectarian forces that are being unleashed by the revolt,” Theodore Karasik, director for research at the Dubai-based Institute for Near East and Gulf Military Analysis, told The Media Line. “They are watching with extreme caution in their near abroad because of the impact it has on their own states.”
The Arab Spring has created both threats and opportunities for Saudi Arabia and the other Gulf monarchies. On the one hand, it is has toppled old allies, like Egyptian President Husni Mubarak, and made other autocrats are vulnerable to an increasingly vociferous street. The mass protests and violence have undermined economies, increasing pressure on regimes.
On the other hand, the Arab Spring has raised oil prices – benchmark Brent crude was trading at $118 on Wednesday, filling the coffers of Saudi Arabia and other oil exporters enabling them to disburse money to allies. At home, Riyadh has committed to spending $125 billion on created jobs and other programs just in a bid to keep its population content.
Jordan’s King Abdullah is a prime candidate for aid. A moderate, pro-Western monarch, he has been buffeted by protests that call for everything from an end to corruption to his job. Meanwhile, Jordan’s economy is sinking. Tourism and construction, two mainstays of the economy, are contracting and unemployment rose above 13% in the second quarter. Inflation is accelerating and gas imports from Egypt needed to power generating plants have been repeatedly interrupted.
Saudi aid, however, has enabled the government to contain its budget deficit even as it has increased subsidies to pacify the population.
"Saudi Arabia’s stand at Jordan’s side during the difficult global economic circumstances, that witnessed a sharp rise in oil prices that adversely affected Jordan’s economy, underscores your true vision for the nation’s solidarity,” Abdulla said in a statement on Monday.
Not surprisingly, Egypt has been the biggest recipient of financial aid. The Arab world’s most populous and influential country, Egypt faces critical choices about how much freedom and democracy will prevail, the role of Islam and economic policy even as the country struggles with chronic strikes and protests, rising unemployment and inflation and a growing budget deficit. The results may well set the direction of the Arab Spring throughout the region.
In the last several weeks, it has been offered $4 billion in aid from the Saudis, including a $1 billion deposit at the Central Bank of Egypt, $500 million in bond purchases, $500 million for budgetary purposes and a soft loan worth another $500 million. The United Arab Emirates (UAE) is kicking in another $3 billion in aid and soft loans to boost job opportunities and housing projects. Qatar announced that it will fund projects amounting to $10 billion or more.
Other have benefitted as well. Tunisia, the cradle of the Arab rebellion, is getting a part of a $10 billion package from Saudi Arabia, Qatar and Kuwait to be shared with Egypt that was announced at the end of May. The poorer Gulf countries that have witnessed unrest have been helped, too. Bahrain and Oman have been promised $10 billion each over a decade.
Not all autocrats are being helped. Syria Bashar Al-Assad, an ally of Saudi Arabia’s arch-foe Iran who has failed to douse a four-month rebellion, isn’t known to have received any aid, nor has Libyan strongman Muammar Al-Qaddafi. In fact, in Libya, the rebels have been getting humanitarian aid and advice from Qatar and the UAE on how to use the oil under their control.
“On the Qatari side, there appears to be old family connections with the folks in Benghazi,” Karasik said. “The UAE is doing this because of proactive foreign policy regarding revolts in the region.”
Government-to-government funding isn’t the only way Saudi Arabia and the other Gulf monarchies give aid. Jordan as well as Morocco, whose king has so far succeeded on containing demands for reforms, were invited in May to join the Gulf Cooperation Council (GCC), a grouping if six Gulf countries. Membership would not only include more aid but make it easier for jobless Jordanians and Moroccans to work in the Gulf.
Jordanian Foreign Minister Nasser Judeh is scheduled to fly to Saudi Arabia next week for talks with the GCC on a framework for Jordan’s membership.
Some analysts and activist contend that private donations coming out of Saudi Arabia through government-supported charities are being used to create pro-regime messages via Islamic groups that assert that Muslims must obey their rulers and regard democracy as a violation of religion.
What do the Saudis want in return for their help?
That is left unstated, at least publicly. But it has been a source of concern for opposition leaders in recipient countries. When Egypt turned down help from the International Monetary Fund in June and agreed to take assistance from Gulf countries instead, its then- finance minister, Samir Radwan, had to defend the deal.
Asked in an interview with Al-Jazeera television whether money from the Arabian Peninsula came with any conditions, he answered: “None whatsoever.”