UK ties with Saudi Arabia: costs and alternatives

From the liberal centre-left to the more chauvinistic reaches of the political right, the dominant view of British power is as a benign force for good in the world. As David Miliband recently put it, “if the world is increasingly divided between firefighters and arsonists, then Britain has for centuries been a firefighter”. The empirical record, of course, leaves us spoiled for counter-evidence, not least of which is the UK’s long-standing support for Saudi Arabia and the other Gulf Arab monarchies, particularly in respect of the current war in Yemen.

In March 2015, a coalition of states led by Saudi Arabia and including the United Arab Emirates (UAE) intervened in the civil conflict in Yemen, with the aim of restoring the recently overthrown president. Warnings that Yemen needed national dialogue not military escalation went unheeded as the country quickly attained the status of the world’s worst humanitarian catastrophe. Over twenty million Yemenis are now in need of aid while eight million teeter on the brink of famine. War crimes and serious violations of international law have been documented on all sides, with Saudi aerial bombing thought to be responsible for the majority of the thousands of civilian deaths. Experts reporting to the UN security council accuse the Saudis of “widespread and systematic” attacks on civilian targets, with hospitals, schools and residential areas struck repeatedly; a picture corroborated by a number of careful reports from the leading humanitarian and human rights NGOs.

Throughout, Britain has lent vital, material support to the Saudi campaign. Around half the Royal Saudi Air Force comprises of military jets supplied under multi-billion pound deals signed by Conservative and New Labour governments. Under the terms of these contracts, the UK provides technical and logistical support helping to keep these planes in the air, including maintenance, components and, naturally, replenishments of bomb and missile stocks. The value of these arms transfers has shot up since the start of the war, coming to around £4.6bn in three years. The then foreign secretary Philip Hammond pledged in 2015 to support the Saudis “in every practical way short of engaging in combat”. When the UN and aid agencies raised the alarm last month over a threatened assault on Yemen’s main port which they warned could tip the country into the abyss, endangering tens of thousands of lives, the British teamed up with the Trump administration in the UN Security Council to thwart demands for a ceasefire.

The significance of UK relations with Saudi Arabia and the other Gulf Arab regimes goes well beyond the economic value of arms sales, important though that consideration is. The history and political economy of these ties have much to tell us about how precisely Britain fits into the world system as a modern capitalist power.

British imperial forces first entered the Persian-Arabian Gulf in the early nineteenth century, establishing a wider buffer zone to exclude rival powers from its Indian possessions. A treaty system created a network of local client rulers which in turn evolved into the Gulf state system that we know today. When Saudi-led forces burst out of the central Arabian desert, conquering much of the peninsula and imposing their unique brand of puritanical rule on its diverse populations in the early twentieth century, the British were on hand to provide decisive economic and military support as the new Saudi state was created.

Once oil had become the lifeblood of the industrialised world economy, the vast reserves of the Gulf region were widely recognised as a major strategic prize in great power competition. Britain and the US worked to shore up the local monarchs against the threat of nationalist challenges rooted in a popular appetite for domestic economic development and geopolitical independence. This extensive collaboration between global north powers and local elites, through the crucial years of state formation up to and including the present day, does more to explain the persistence of authoritarian rule in the region than casual and simplistic references to cultural difference between the ‘West’ and the ‘East’.

The 1973-74 oil crisis marks the beginning of the current chapter of UK-Gulf relations. As the monarchies took control of oil production, and as revenues skyrocketed, Britain worked its long-standing alliances to ‘recycle’ these ‘petrodollars’ to its own benefit, in various ways. The post-2000 oil price boom, which has proven resilient despite the fluctuations of recent years, has deepened and developed that relationship further.

Britain’s chronic and growing current account deficit, a symptom of the neoliberal turn, is mirrored by the vast sovereign wealth accumulated by the current account surpluses of its Gulf allies. Net inward investment from the Gulf, particularly from Saudi Arabia, plays a major role in financing that deficit and stabilising an increasingly vulnerable pound. The City’s (and the wider economy’s) appetite for Gulf capital is matched by the Gulf elites’ desire to strengthen ties with their global north allies, particularly in the wake of the Arab uprisings. Notable events from the purchase of Manchester City and the Shard to the 2008 Qatari-Emirati rescue of Barclays Bank should be seen in this wider context. Meanwhile, British exporters have been actively assisted by the government in taking advantage of the consumer and infrastructure boom in the Gulf, now the UK’s leading global south export market with which it runs a rare trade surplus, thus reducing somewhat the overall deficit on the current account.

British ‘free market’ capitalism has therefore developed, in part, in symbiotic relationship with authoritarian Gulf rentierism. The petrodollars financing the current account deficit flowed not only because Britain had the world-leading financial industry to absorb and process them, but also because Gulf elites knew that Britain was one of a tiny few major powers that they could rely upon to ensure their survival. Britain’s key strategic aim after World War Two – to remain a global power in spite of imperial decline - rests to a high degree on its rare ability to project military power on an intercontinental basis. This in turn requires a domestic military industrial base, which has become increasingly reliant economically on major export orders. Those orders have been drying up everywhere since the Cold War ended, except, that is, for the Gulf, which now accounts for around half Britain’s military exports.

High profile exports such as the military jets now pulverising Yemen form part of a wider relationship of military cooperation encompassing the arming and training of human rights abusing security forces, and a series of extensive defence commitments to the regimes. Britain’s de facto support for the violent crushing of a peaceful and broad-based pro-democracy movement in Bahrain in 2011 was a striking example of the strength of its commitment to the conservative regional order. Its active involvement in the catastrophe in Yemen is another.

None of this is inevitable, but rather consists of a series of choices to which there are alternative paths – difficult to take no doubt, but far from impossible. A rebalancing of the British economy from financial services to visible exports could shrink the current account deficit and reduce the significance of Gulf capital inflows. An industrial rebalancing from the state-dependent military sector to the development of green technology would not only retain good, skilled jobs but also directly address the single greatest security threat of all time. It would also help wean Britain off a post-imperial addiction to military power projection that most prosperous countries manage perfectly well without.

In any event, if the world gets serious about dealing with climate change, Gulf hydrocarbons will become stranded assets and the petrodollars will quickly dry up. The carnage in Yemen should be more than enough to concentrate British minds on a strategic break with the Gulf monarchs, irrespective of our own narrow interests. The fact that the two coincide should make change inevitable.

Dr David Wearing is a Teaching Fellow in International Relations at Royal Holloway, University of London. His book, ‘AngloArabia: Why Gulf Wealth Matters to Britain’ is out in September, published by Polity.