SAUDI ARABIA - IRAN PEACE DEAL

Introduction :

• Saudi and Iranian officials recently agreed to revive the 2016 Saudi-Iran peace deal. China-initiated two-way discussions in Beijing resulted in the Saudi-Iranian normalization.
• The rivalry between these two countries has long been a source of instability in the region, and the potential normalization deal has been a topic of speculation in recent years.
• The intentions "to resume diplomatic relations between them and re-open their embassies and missions within a period not exceeding two months", as well as respect "the sovereignty of states and the non-interference in internal affairs of states."
• In addition, the two sides also agreed to implement two bilateral agreements, the General Agreement for Cooperation in the Fields of Economy. Trade, Investment, Technology. Science, Culture, Sports, and Youth, and the Security Cooperation Agreement, which were signed in 1998 and 2001, respectively.
• Although this deal could be complex and challenging to implement, it could have significant implications for global stability and economic growth, including Pakistan.

Why in the News?

Recently, Saudi and Iranian officials held bilateral talks that concluded with an agreement to restore diplomatic ties which have been severed since 2016. The major diplomatic break through negotiated by China in Beijing.

• It comes as diplomats have been trying to end a long war in Yemen, a conflict in which both Iran and Saudi Arabia are deeply entrenched.

What are the Conflicts Between Iran and Saudi Arabia?

1. Religious differences :

Iran is a predominantly Shiite Muslim country, while Saudi Arabia is predominantly Sunni Muslim. The two sects have different beliefs and practices, and this has led to tensions and conflicts between the two countries.

2. Political influence :

Both Iran and Saudi Arabia are major powers in the Middle East and have sought to increase their political influence in the region. This has led to competition and conflicts over issues such as control of oil resources, support for different political factions and proxy wars in countries like Yemen, Syria and Iraq.

3. Ideological differences :

Iran is an Islamic republic with a revolutionary government, while Saudi Arabia is an absolute monarchy with conservative religious values. These ideological differences have contributed to tensions between the two countries.

4. Historical grievances :

Iran and Saudi Arabia have a long history of animosity, dating back to the early days of Islam. They have been involved in conflicts and power struggles for centuries.

5. Oil Prices :

Iran and Saudi Arabia are both major oil producers, and their competition for market share has led to disagreements over production levels and prices. This has further strained relations between the two countries, particularly as oil prices have fallen in recent years.

6. The assassination of a famous Saudi journalist :

The killing of a Saudi journalist and dissident in 2018 was allegedly carried out by Saudi agents. This has further soured relations between the two countries. Iran has condemned the killing and accused Saudi Arabia of human rights abuses.

About the Saudi-Iranian Normalization Deal :

The key outcomes of the Saudi-Iran peace deal are,

1. Both countries plan to reopen their embassies in Riyadh and Tehran,

2. Both countries will respect the sovereignty of other countries and not get involved in each other's business. For example, Saudi Arabia agreed to rein in Iran International, a satellite news channel. On the other hand, Iran has agreed to curb cross-border attacks on Saudi Arabia by Houthi rebels in Yemen,

3. Agreed to implement a security cooperation agreement signed in 2001 and a general economic, trade, and investment agreement signed in 1998. 

Apart from these measures, both countries will also get together to work out the details of the peace deal.

China will organize a conference between Iran and the six Gulf monarchies to help maintain peace in the region.

Diplomatic Challenges in Implementing the Saudi-Iranian Deal :

1. Reviving the Resolving regional tensions :

There are ongoing rivalries and conflicts in the region, particularly between Saudi Arabia and Iran, that require diplomatic efforts to manage and reduce tensions.

2. Reviving the JCPOA :

The Joint Comprehensive Plan of Action (JCPOA), a nuclear agreement with Iran, needs to be revived and renegotiated to ease sanctions and address concerns about Iran's nuclear program. However, domestic politics in the US and Israel could pose challenges to this process.

3. Managing Israel's aggressiveness :

Israel's actions in the region, particularly its hostility towards Iran, need to be managed to ensure regional stability.

4. Engaging with China :

China's growing role in West Asian affairs poses challenges for Indian diplomacy. India needs to engage with China in the region and work together to further mutual and regional interests while also prioritizing the management of its ties with China.

Global Implications of Saudi-Iranian Deal:

1. Regional stability :

The two nations are involved in conflicts in Syria, Yemen, and Iraq., among other places. Normalization could lead to a de-escalation of these conflicts and a reduction in regional tensions.

2. Global energy markets :

Saudi Arabia and Iran are two of the world's largest oil-producing nations, and their relationship impacts global energy markets. Any agreement between the two nations could affect the price of oil and gas globally.

3. Religious divide :

The Sunni-Shia divide has been a source of tension between Saudi Arabia and Iran, and it has fueled conflicts in the region. The Saudi-Iran peace deal could help ease this divide and reduce religious tensions.

4. Relationship with U.S. :

Saudi Arabia and Iran have different relationships with the United States, and normalization could affect the U.S. policy towards the region.

For example, The US, which traditionally held significant power in the region, has deprioritized West Asia due to bigger foreign policy challenges such as Russia's war in Ukraine and China's rise in the Indo-Pacific.

5. Geopolitical balance :

Saudi Arabia and Iran are two of the most influential countries in the Middle East, and their normalization could shift the balance of power in the region.

6. China "quasi-mediation diplomacy" :

China has signaled a shift in its approach towards the Middle East. It is moving away from hard security concerns towards "quasi-mediation diplomacy". The strategy aims to promote China's commercial, diplomatic and political interests. The recent Saudi-Iran accord is the first manifestation of this approach, reducing regional tensions and paving the way for further dialogue.

7. Good for Afghanistan :

The successful completion of the Chabahar-Helmand-Kabul-Termez railway line will open the vast and resource-rich Central Asian region to the Global South.

Implications for Pakistan :

• Iran and Saudi Arabia attempt to resolve their differences through negotiation. Improved regional peace and stability may increase Pakistan's commercial and economic engagement potential with the Middle East and Central Asia.
• Pakistan can use this opportunity to seek crucial investments from both countries to ensure the China-Pakistan-Economic-Corridor's success. Saudi Arabia and Iran are participants in the BRI.
• This normalization would bring both parties to resolve issues through negotiations, which could help reduce sectarianism and extremist groups' influence outside their border through proxies.

Iran and Saudi Arabia also enjoy cordial relations with Pakistan and India and could use their influence to ease tensions between the two South Asian countries.

Investing in Pakistan :

Iran has vast reserves of untapped natural gas and energy resources that could help develop Pakistan's gas and electricity transmission systems to overcome the burgeoning energy crisis.

Similarly, it would benefit Pakistan to attract investments from Saudi Arabia to develop its oil and gas sector-particularly in exploration and production-which could help reduce the country's reliance on imported oil, shoring up foreign exchange reserves.

Support multilateral forums :

Pakistan and India are members of the Shanghai Cooperation Organization (SCO); Iran recently joined, and Saudi Arabia has agreed to participate as a dialogue partner. Increased collaboration between lran and Saudi Arabia within the SCO could create an opportunity for Pakistan and India to engage in constructive dialogue.

For instance, in a recent positive development, Pakistan's foreign minister agreed to attend the May 2023 SCO foreign ministers meeting in India.

What Can be done to fully reap the benefit of the Saudi-Iran Peace Deal?

1. Confidence-building measures(CBM) :

Both countries could take steps to build confidence and demonstrate their commitment to reducing tensions. This could include diplomatic gestures, such as opening embassies or exchanging visits between officials, as well as practical steps, such as reducing military deployments or easing economic sanctions.

2. Diplomatic negotiations :

After CBM, both could engage in formal negotiations to work out the details of a potential normalization deal. This could involve mediation from third-party countries or international organizations to help bridge the gap between the two sides.

For example, Pakistan can play a constructive role in promoting dialogue and cooperation between these two countries, which can help in achieving regional stability

3. Addressing sensitive issues :

A normalization deal between Saudi Arabia and Iran would likely require both sides to address sensitive issues, such as regional security arrangements and Iran's nuclear program. These issues would need to be tackled in a way that addresses the concerns of both sides and promotes mutual trust and cooperation.

4. Building public support :

A normalization deal between Saudi Arabia and Iran would need to be supported by both societies, as well as by the broader international community. Therefore, efforts to build public support and engage civil society actors would be critical to the success of any potential deal. 

Pakistan will need to carefully monitor the situation and adapt its policies accordingly to maintain its interests in the region.

How the situation in parts of the Middle East where Iran and Saudi Arabia have been involved in proxy conflicts could be affected by a Beijing-brokered deal?

1. Yemen :

Restored ties between Riyadh and Tehran could facilitate agreement between Saudi and the Houthis.

2. Syria :

The Saudi-Iranian deal comes as Arab isolation of Assad is thawing. Saudi Arabia has said more engagement could lead to Syria's return to the Arab League. Syria's foreign ministry welcomed the deal as an "important step" that could boost regional stability. The opposition's umbrella body did not comment.

3. Lebanon :

Lebanon has since sunk deeper into financial melt down and now faces an unprecedented political crisis, with no president for months and a cabinet operating with limited powers. The rapprochement between Tehran and Riyadh has sparked hope that paralysis could end.

4. Iraq :

Iraq is hope for a general regional detente that would allow their country to rebuild, instead of being destabilized by U.S., Gulf Arab and Iranian score-settling.