Haaretz: Opinion | Israel and Biden Shouldn't Panic Over China-brokered Iran-Saudi Deal

Haaretz.

Opinion | Israel and Biden Shouldn't Panic Over China-brokered Iran-Saudi Deal

By Daniel B. Shapiro

For the U.S. and Israel, the China-brokered deal between Saudi Arabia and Iran is big and unsettling news, but it is far from disastrous for their national interests

The news hit like a bolt from the blue, and was initially jarring.

It was not just that Iranian and Saudi officials signed a deal to resume diplomatic relations between the two Middle East rivals. It was the images of them doing so in Beijing, under the auspices of the Chinese government, which hinted dramatically at the beginning of a new phase of Chinese involvement in the Middle East.

Immediately, questions were raised about an erosion of the united Israeli-Arab front against Iran, and even more so, about a Chinese challenge to U.S. leadership in the region.

But upon closer inspection, some of the initial reactions sound overheated. The agreement, and China’s role in it, is big news, and poses some challenges to U.S. and Israeli interests. But it is nothing to jump off a bridge over.

Washington can see both full and empty halves of the glass in the announcement of this deal. The full half: Reducing Iranian-Saudi tensions is a goal the United States has endorsed, having given its backing to previous rounds of such talks in Iraq and Oman.

• Saudi-Iran rapprochement: In China's Middle East, Israel has little influence
• Iran and Saudi Arabia: What their dramatic accord means for Israel and Biden
• Saudi Arabia seeks U.S. security promises, nuclear aid in exchange for ties with Israel
• Netanyahu blames former government, Biden, for Saudi-Iranian rapprochement

If implemented—a key caveat—it could help bring an end to the war in Yemen, as the United States has sought, and bring to an end, for now, the threat of Houthi missile and drone attacks against Saudi targets. The United States Central Command has labored to help defend Saudi Arabia from such strikes, but the main relief from them has resulted from U.S.-led diplomatic efforts to achieve and extend a ceasefire.

Those goals include regional dominance, and the sustained intimidation of all other parties in the region to accept it. That goal is buttressed by Iran's nuclear program, which continues to expand, to the point where Iran has effectively achieved the status of a nuclear threshold state. Iran has also served its ambitions by the wide extension of its influence through terrorist proxies in Lebanon, Iraq, and Yemen. And it maintains a posture of open hostility to Israel, a key partner of Arab Gulf states, even if, as in the case of Saudi Arabia, only unofficially.

The prospect of Iran shelving these barely deniable means to undermine its neighbors and challenge the United States’ role in the region is not remotely plausible.

So Riyadh and Beijing face two fundamental questions, before the ink on the deal has even dried: Will the Saudi-Iranian rapprochement survive the first reversion to form by Iran to carry out its unchanged strategic vision? And what tools can China bring to the table when the agreement’s terms and spirit are violated by Tehran?

Saudi Arabia needs an answer to the first question. But its options will be limited by China’s lack of an answer to the second.

When that inevitability occurs, it will be a potent reminder to Riyadh that Beijing, for all its economic and now diplomatic influence, is an unreliable partner to ensure the Kingdom’s security. Which, ironically, may reinforce Saudi Arabia’s dependence on its strained partnership with the United States.

The Saudis may hope that their turn to China gives them leverage in demanding more weapons, security guarantees, and civil nuclear technology from the United States—perhaps packaged as compensation for a normalization deal with Israel.

A second, although less reliable, benefit of the Iranian-Saudi agreement could be a reduction of tensions in Iraq which have led to the targeting of U.S. forces.

The empty half: Seeing China’s influence rise by demonstrating its ability to leverage its constructive relationships with both sides of Middle East conflicts is unsettling. It suggests that China is moving beyond seeing its interests in the Middle East exclusively through an economic lens, and is moving to establish a diplomatic leadership role.

That trajectory could lead, over time, to a more assertive security posture in the region in a more direct challenge to decades of U.S. supremacy. More fundamentally, the willingness of a Saudi Arabia — whose partnership with the United States is under stress, but remains salient for both countries nonetheless — to highlight China’s leadership role can be taken as further evidence of the doubts in the region, even among U.S. partners, about the United States’ staying power.

But the glass is not completely full for China and the Saudis either. Both are taking a big gamble here, putting significant chips on the risky bet of Iranian good intentions. While Iran has at various times chosen to de-escalate tensions with its neighbors, driven by short-term considerations, there is zero indication of a change in the strategic goals of the regime in Tehran.

But their need for U.S. support will not diminish and will require them to demonstrate to a skeptical administration, Congress, and American public that they are not turning to align their interests with China more than with the United States. At some point, that will require Saudi moves to balance this announcement with moves that reinforce the U.S. leadership role in the region, and clearer commitments not to undermine core U.S. interests. Partners need to act like partners — in both directions.

For Israel, the notion that something major has been lost in this turn of events — the collapse of an anti-Iran coalition or even a threat to its Abraham Accords alliances — is overstated.

Israel’s leading Arab Gulf partner, the United Arab Emirates, has long made clear that it does not want to be seen as taking part in a military coalition against Iran, and it resumed its own diplomatic relations with Iran months ago. Saudi leaders, who share the UAE’s suspicion of Iran, and perhaps harbor even more animus, but also have no intention of provoking or participating in a military conflict, are pursuing a similar strategy of de-escalation.

Washington and Jerusalem both need to view the Iranian-Saudi announcement not as crisis, but as a reinforcement of the common approach they must pursue: Deterring Iran from crossing further thresholds on the path to a nuclear weapon; exposing, and increasing Western sanctions against, Iran over its suppression of peaceful Iranian protesters and its provision of weapons to support Russia’s brutal attacks on Ukrainian civilians (efforts Arab governments and China were never going to join); and working to expand Israel’s normalized relations with additional Arab states, including Saudi Arabia.

To keep focus on these tasks, there is no benefit to being distracted either by handshakes in Beijing, or for these critical priorities to be derailed by the raging domestic turmoil in Israel over judicial overhaul legislation and escalating Israeli-Palestinian tensions in the West Bank — both of which Israeli leaders should do everything actually in their power to de-escalate.

Daniel B. Shapiro is a distinguished fellow at the Atlantic Council, where he directs the N7 Initiative. He served as U.S. Ambassador to Israel from 2011 to 2017.

Israel and Biden Shouldn't Panic Over China-brokered Iran-Saudi Deal - Middle East News - Haaretz.com

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Affordability and supply security key to achieving energy transition: Aramco CEO  

"Green hydrogen and blue hydrogen are expensive for the market."

RIYADH: As achieving net-zero greenhouse gas emissions high on the global agenda, the chief of the world’s biggest oil producer Saudi Aramco said the energy transition will happen only if affordability, security of supplies and sustainability are being ensured.  

Talking about carbon capture and storage, Aramco President and CEO Amin H Nasser said the company is trying to build one of the world's biggest hub for carbon capture and storage. "But we need to scale carbon capture and storage globally. Without scaling, you cannot achieve your net-zero target. Hopefully, I am confident that with technology and with innovation, we will be able to do that.” 

The energy giant reported a record net profit growth of 46.46 percent in 2022 to SR604.01 billion ($161 billion), driven by higher oil prices, increased volumes sold and improved margins for refined products. 

During a press conference after announcing the financial results, Nasser told Arab News that material transition supported by technological advancements and innovation is pretty much necessary to achieve energy transition goals within the stipulated target time.  

“We are heavily investing in technology. We have 12 global centers, most of those work on sustainability. Material transition is critical for Aramco and others, because, without material transition, it will be difficult to achieve the aspirations of climate change,” he told Arab News.  

He added: “Aramco is heavily involved in different sectors to reduce the costs. Green hydrogen and blue hydrogen are expensive for the market. So, we are looking at how can we reduce the cost of time, and how can technology help to reduce the cost and make the transition affordable.” 

Replying to a query on market demand, Nasser said that the global oil market is recovering, as China is opening up, and the market is expected to remain tightly balanced in 2023.  

“The profit for 2023 is all dependent on the market. And the production target is very difficult to predict. We receive production targets every month. We are cautiously optimistic about the market,” Nasser told Arab News, adding that they are seeing more demand from China.  

He added: “We are recovering. If you consider China opening up, a pick-up in jet fuels, and very limited spare capacity, we are talking about 2 million barrels. So, I think, we are optimistic in the short to mid-term, and the market will remain tightly balanced.”  

He also revealed that Aramco is looking at major expansions including in the gas sector, adding that the company is looking for investment opportunities globally in Liquified Petroleum Gas.  

Affordability and supply security key to achieving energy transition: Aramco CEO (arabnews.com)

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Wall Street.

OPINION  

And Now for a Little Bank Panic

After the credit mania, the monetary reckoning takes two casualties.

By The Editorial Board - March 10, 2023 6:55 pm ET

There’s nothing like a bank panic to make for a relaxing weekend. Markets took another header on Friday, as regulators closed Silicon Valley Bank ( SVB ), the 16th largest U.S. bank and the biggest to fail since the 2008 crisis. This came days after Silvergate Capital announced it is liquidating its bank. Cracks in the financial system emerge whenever interest rates rise quickly after an easy-credit mania, and the surprise is that it took so long.

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The Federal Deposit Insurance Corporation took over SVB on Friday and may have to collect more bodies by the time the Federal Reserve is done correcting its easy-money mistakes. At least that seems to be the fear of investors, judging by the sharp selloff in regional bank stocks like First Republic Bank (-14.8%) and PacWest Bancorp (-37.9%).

SVB’s customers include leading venture-capital firms and tech startups, including some Chinese firms that need offshore accounts to raise foreign capital. San Diego-based Silvergate is smaller but grew in recent years by serving crypto companies.

What the two have in common is that they lacked diverse deposit bases and fell victim of a classic banking strategy of borrowing short and lending long. Although their liabilities were backed by putatively safe assets like Treasury bonds, when interest rates rise the bonds that banks hold lose value. They have to be held to maturity or incur losses when sold.

SVB and Silvergate incurred steep losses as they sold bonds to compensate for fleeing deposits. A regulatory crackdown on crypto also spurred Silvergate customers to bail, sticking it with even bigger losses.

Silvergate on Wednesday said it would liquidate “in light of recent industry and regulatory developments.” Its crypto ties may have made it too politically toxic for another bank to take over. While regulators will surely flog Silvergate’s failure as a warning not to serve the crypto industry, its concentrated deposit base was the main cause of its demise.

SVB’s business model was more durable but still vulnerable to market shocks. Rising interest rates have made it hard for its startup clients to raise fresh equity. As its customers drew down deposits, SVB had to sell bonds at a loss. SVB disclosed this week that it had lost $1.8 billion on securities sales and would need to raise $2.25 billion in equity.

This stoked fears of insolvency, which caused customers and investors to bolt. It was reportedly searching for a buyer on Friday, and we hope regulators didn’t pre-empt potential private investors by closing SVB so quickly on the same day.

Bank of America and J.P. Morgan rescued smaller banks during the 2008 crisis. But banks may be reluctant to do that again since regulators last time punished them for the sins of their foster children. The takeover of SVB will presumably cost the FDIC money to repay insured depositors.

But if SVB was doomed, it is better to let it fail than have the government bail it out, despite what one hedge-fund lord suggested this week. Didn’t we learn from the 2008 crisis that the feds’ rescue of Bear Stearns encouraged everyone to believe that Lehman Brothers would be rescued too?

There doesn’t appear to be any obvious systemic risk to the financial system from the SVB and Silvergate failures, and market discipline needs to prevail unless there is danger of a larger financial breakdown. SVB investors and customers benefited from the government’s easy money. Why should they also benefit from a government lifeline after taking risks with that easy money?

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This week’s bank failures are another painful lesson in the costs of a credit mania fed by bad monetary policy. The reckoning always arrives when the Fed has to correct its mistakes. That was the story of 2008, and it’s the eternal lesson that economic historian Charles Kindleberger taught in “Manias, Panics, and Crashes.” We saw the first signs of panic in last year’s crypto crash and the liquidity squeeze at British pension funds.

Now it’s hit the U.S. financial system, and there are likely to be more casualties. Treasury Secretary Janet Yellen said Friday that the U.S. banking system “remains resilient,” but that’s what Fed officials Ben Bernanke and Tim Geithner thought before the 2008 panic.

While big banks today are much better capitalized than before the 2008 financial crisis, some regional and small banks with less diverse deposit bases may be vulnerable to shocks. Some may be over-exposed to industries such as commercial real estate that are under stress. The Fed will have to be careful as it continues its anti-inflation campaign.

But nobody, least of all central bank oracles, should be surprised that there are now bodies washing up on shore as the tide goes out. Investors will have to brace for what could be some heavy weather ahead.

And Now for a Little Bank Panic - WSJ

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Saudi Arabia, Cyprus discuss opportunities for joint cooperation in different sectors

RIYADH: Saudi Arabia and Cyprus discussed possibilities for joint cooperation in various sectors as the Kingdom’s Investment Minister Khalid Al-Falih and Cyprus President Nicos Anastasiades held a meeting in Nicosia, the capital city of the Western Asian nation.

During the meeting, the two countries reviewed the bilateral relations, and discussed opportunities for joint cooperation, and ways to develop them in the field of investment, Saudi Press Agency reported.

Al-Falih also met Finance Minister Makis Keravnos and signed a framework cooperation agreement aimed at generating mutual investment opportunities between the Kingdom and Cyprus

According to the report, the ministers also discussed investment opportunities in the Kingdom and Cyprus in energy, transport, telecommunications, information technology, and health, among others.

The top Saudi official also met with a number of government officials and CEOs several Cypriot companies to promote cooperation and expand prospects of investments between the two countries.

 2030, Saudi Arabia is strengthening its trade ties with several countries.

Earlier in March, Saudi Arabia and Bulgaria signed an agreement to establish a “Saudi-Bulgarian Joint Committee” to implement general cooperation in various fields.

The joint committee will work toward strengthening bilateral economic relations between the two countries, along with enhancing cooperation opportunities in various sectors.

In February, a meeting between the former president of Croatia, Colinda Grabar, and members of the Saudi business community at the headquarters of the Federation of Saudi Chambers in Riyadh decided to form a joint Saudi-Croatian business council to tap new areas of economic cooperation between the two countries.

Saudi Arabia, Cyprus discuss opportunities for joint cooperation in different sectors (arabnews.com)

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New initiative to boost Emiratization in industrial sector launched -

The MoU aims to empower talent, develop skills, and provide job opportunities for UAE nationals as part of the National In-Country Value  program.

RIYADH: Seeking to build local capacities and increase Emiratization in the industrial sector, the UAE has launched a new initiative called the “Industrialist Program.”

This training initiative, which aims to upskill national cadres and help them access skilled jobs in the industrial sector, is the result of a memorandum of understanding signed between the Ministry of Industry and Advanced Technology, the Ministry of Human Resources and Emiratization and the Emirati Talent Competitiveness Council, also known as Nafis.

The MoU aims to empower talent, develop skills, and provide job opportunities for UAE nationals as part of the National In-Country Value  program.

The three enitites will collaborate to implement goals, legislation and special programs. 

The MoU was signed by undersecretary of MoIAT Omar Al-Suwaidi; Assistant Undersecretary of MoHRE Ahmad Yousuf Ahmad Al-Nasser; and Nafis Secretary-General Ghannam Al-Mazrouei. 

“As an initiative of the National ICV program, the Industrialist Program will help to increase the availability of skilled jobs for UAE nationals,” Al-Suwaidi said.

“The Industrialist Program will train national talents, providing them with the skills needed to thrive in technical and specialized jobs. The program will align national training programs to meet the requirements of factories.” 

“All our efforts are aimed at supporting the objectives of this MoU, including Nafis’ unique initiatives, which join other national initiatives, such as the ICV Program, in supporting Emirati talents in the private sector,” added Al-Mazrouei.

“This MoU aims to accelerate the Emiratization rate and create new job opportunities in the private sector, especially in areas that shape the future. It also encourages our youth to take the path of industry entrepreneurship,” Al-Nasser commented. 

New initiative to boost Emiratization in industrial sector launched (arabnews.com)

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Biban sees signing of deals worth billions of dollars to propel Saudi SME sector

RIYADH: The Biban 23 Forum witnessed the signing of more than 10 deals and memorandums of understanding worth over SR10.6 billion ($2.8 billion) on its third day, the Saudi Press Agency reported.

The agreements aim to contribute to the growth and sustainability of Saudi Arabia’s pioneering SME sector. 

During the forum, the Small and Medium Enterprises Bank announced the provision of financing products for enterprises with a value of SR10.5 billion for a period of 3 years.

The Saudi Export and Import Bank signed an agreement with the Saudi National Bank with the aim of providing financing solutions for the export of non-oil commodities with a value exceeding SR99.3 million. 

In addition, the Small and Medium Enterprises General Authority — also referred to as Monsha’at — signed an MoU with Riyadh-based business management consulting firm Accenture Saudi Arabia Ltd. 

Monsha’at also signed another MoU with the Youth Club Investment Co. to propel cooperation in providing initiatives and projects supporting SMEs specifically in the field of sports.

Nusaned Investment Co. and Banque Saudi Fransi signed an SR200 million cooperation deal with the objective of financing emerging SMEs in which the company invests and in the companies that benefit from SABIC’s localization initiative, also known as NUSANEDTM.

Moreover, Monsha’at sealed a deal with King Faisal University to provide a set of programs and projects supporting entrepreneurship and innovation, in addition to an agreement with GoDaddy to enhance the capabilities of SMEs in the field of e-commerce. 

“We have seen exceptional entrepreneurial resilience, determination, and creativity in Saudi Arabia and GoDaddy would like to support their potential every step of the way to help them create and grow their businesses online with the aim of achieving Saudi Arabia's '2030 Vision', which envisions a sophisticated digital infrastructure to boost fundamental competitiveness of the Saudi economy,” said Selina Bieber, GoDaddy commercial strategy senior director, International Markets.

A cooperation agreement was signed between Monsha’at, SEDCO Holding Co., and the Agricultural Tourism Association to provide training programs for entrepreneurs through the Monsha’at Academy platform.

An MoU was also signed with Zoho Trading Software Ltd. to accelerate 30,000 SMEs’ digital transformation and e-commerce adoption.

This partnership aims to make Saudi businesses more digital-savvy and lead a smooth transition to a fully digitized and cashless ecosystem.

“By leveraging Monsha'at digital platforms and reach, we will work with Zoho to accelerate the digital transformation of Saudi SMEs, providing them with a set of cloud-based solutions, self-based learning, and services of added value," General Manager of Retail at Monsha'at Mahmoud Mazi said

Another similar MoU was signed with Global Digital Solutions Co. to provide financing solutions and electronic payments to retail and online stores.

The authority also launched a cybersecurity challenge with the Saudi Information Technology Co. and announced the launch of the program for developing the capabilities of SMEs in the export field in cooperation with the Saudi Export-Import Bank and the International Islamic Trade Finance Corp.

On the fourth day of the event, Diriyah Gate Development Authority signed an MoU with Monsha’at to boost entrepreneurship in and around the city of Diriyah.

“This MoU’s importance lies in its potential to promote collaboration, data, and information exchange, and greater coordination across several joint initiatives,” said Guy Perry, president of Diriyah Development Co.

On the fourth day of the event, Sadara Chemicals signed an agreement with Monshaat to join the authority’s Jadeer portal to facilitate the access of SMEs to purchasing opportunities at Sadara to develop local content and achieve economic diversification in line with the Kingdom’s Vision 2030.

“These partnerships highlight Monsha’at’s keenness to enhance cooperation with the public and private sectors and to create an environment that stimulates the growth and prosperity of small and medium-sized enterprises,” Mohammed Alamro, general manager of entrepreneurship planning, at Monsha’at said.

Biban sees signing of deals worth billions of dollars to propel Saudi SME sector (arabnews.com)

Also read:

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Saudi Arabia launches $1bn initiative for SMEs supply chains 

RIYADH: Saudi Arabia’s Ministry of Industry and Mineral Resources plans to invest SR4 billion ($1.07 billion) in specialized local supply chains for small and medium enterprises in the Kingdom as part of the investment opportunities initiative, the Saudi Press Agency reported quoting a ministry spokesperson. 

Jarrah bin Muhammad Al-Jarrah said the investment initiative aims to study 10,000 locally manufactured and imported products and set standards for their associated value chains. The ministry official explained that as many as 100 investment opportunities targeting small and medium factories would be generated, covering several sectors supporting the National Industrial Strategy. 

The strategy seeks to expand the industrial base of the Kingdom and ensure the establishment of 36,000 factories by 2035. 

The initiative also includes providing more than 600 investment opportunities for entrepreneurs and concluding 100 agreements with potential investors for targeted opportunities, Al-Jarrah noted. 

Saudi Arabia launches $1bn initiative for SMEs supply chains (arabnews.com)

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