In a surprise move by Riyadh, Saudi Arabia’s government has imposed a total ban on importing goods and a freeze on bilateral trade exchanges with Turkey. Although the real reason behind this Saudi step is totally clear, it also reflects a high degree of dissatisfaction with a major regional trade partner and is bound to have some serious economic as well as political ramifications on Turkey’s ailing economy and on President Recep Erdogan‘s internal posture.

Saudi Arabia and Turkey have often described their economic ties and trade exchanges as being strong and steadfast, as reflected by the magnitude of their $8 billion USD annual trade relationship. This is bolstered by huge bilateral investments and the sheer numbers of Saudi tourists who flock to Turkish resorts every year, as well as the large Turkish workforce operating on some key Saudi projects. Leaders of both nations often exchange visits and a number of economic and trade agreements were signed during King Salman of Saudi Arabia’s visit to Turkey in April 2016, and Erdogan’s visit to Riyadh in July 2017.

What Happened Since 2017 That Led to the Saudi Ban?

A number of incidents took place over the past few years that have influenced relations between Turkey and Saudi Arabia, both politically as well as economically. Most notable of those incidents were the failed coup attempt against Erdogan in 2016 – Ankara accused some Arab Gulf regimes, mainly the United Arab Emirates and Saudi Arabia, of supporting the coup attempt.

Then came the brutal assassination of Saudi journalist turned dissident and Washington Post columnist Jamal Khashoggi at the Saudi General Consulate in Istanbul on October 2, 2018 by agents of the Saudi government.

Ankara’s siding with and crucial support of Saudi Arabia and the UAE’s arch enemy and key Arab rival and GCC (Gulf Cooperation Council) member, Qatar, under a stifling embargo from its “sisterly” nations since June 2017, has added fuel to the raging fire of regional rivalry between Turkey on the one hand, and Saudi Arabia and the UAE on the other.

Both Riyadh and Ankara have cherished the role of leading the so-called “moderate” Islamic world for decades; a rivalry that has reached new and unprecedented levels under Erdogan and Saudi Crown Prince MBS’s firm grip on power in recent years. Both nations are deeply involved in a number of ongoing regional crises, conflicts and wars, from Syria, Iraq, Lebanon, Libya to Yemen and beyond.

How Significant is Trade Between Turkey and Saudi Arabia?

At its golden era in 2012, the trade balance between Ankara and Riyadh stood at $8 billion USD per year, however it started to decrease over the following years. Before the Saudi ban, it was believed to stand at $6 billion a year; still an indication of the large bilateral trade between the two countries. Saudi imports from Turkey totaled $3.5 billion, while its exports to Ankara stood at $2.5 billion, bringing the overall trade balance between them over the past eight years to over $50 billion. Turkey and Saudi Arabia have often expressed their aspiration to bring their bilateral trade size over the next few years to $10 billion a year, however that was before everything was brought to a sudden halt by Riyadh’s latest move.

While only 11 Saudi companies existed on Turkish soil in 2011, recent studies estimated that some 1,000 Saudi companies operate in Turkey where they have invested some $6 billion in an array of solo projects as well as some joint ventures. The sharp rise in Saudi as well as Gulf nations’ investments in Turkey came only after Ankara had amended its laws in 2012 allowing foreign investors to own their own projects in Turkey. (As Syria’s ambassador to Turkey, I was part of the intense negotiations between Arab ambassadors and Turkish authorities on this issue at the time).

Key Sectors of Saudi Investment in Turkey

One quarter of Saudi companies in Turkey, 249 in all, focus their investment in the thriving real estate sector where they have invested over $11 billion so far. Saudi Arabia retreated last year from the 12^th to 17^th place on the list of foreign capital investors in Turkey. It was not all Ankara’s fault; the decline was a result of Saudi Arabia’s own economic hardships exacerbated by the colossal cost of its war efforts in Yemen, for the fifth year running, and elsewhere.

Tourism is another sector where Saudis have invested heavily in Turkey over the past eight years, with over 650,000 Saudi tourists flocking into Turkey last year alone. However, the number of Saudi tourists who visited Turkey in 2018 was 35% higher than that of last year, despite the fact that many Saudis seem to have fallen in love with Turkey and have chosen to settle there, mainly in Istanbul, Trabzon, Antalya, Bursa and elsewhere.

On the other side, some 100.000 Turks work and live in Saudi Arabia which is the sixth most common destination for Turkish expats. They are spread over variety of projects, ventures, and activities including construction, restaurants, fashion, hotels and medical care. How much will they be affected by the recent Saudi ban and its ramifications remains to be seen. The only definite outcome so far, is that Saudi-Turkish ties appear to be taking an economic nosedive that is bound to affect bilateral and regional politics at least for the foreseeable future.

L'articolo Economic and Political Ramifications of the Saudi Ban on Turkish Imports proviene da InsideOver.

American President Donald Trump welcomed Brazilian leader Jair Bolsonaro Saturday, March 7 to his Mar-a-lago estate in Florida where the two reportedly talked about Venezuela and closer cooperation between Brasilia and Washington, particularly on trade.

What Did Trump and Bolsonaro Agree On?

In addition to discussing the crisis in Venezuela and the US-Brazil perspective on it, the focus of the meeting was economic. Specifically, Brazil and the United States are hoping to pass a large bilateral trade deal this year. Trump is also throwing his considerable weight behind Brazil joining the ranks of the Organization for Economic Cooperation and Development (OECD), which would be a big step up for the economically important nation.

Brazil is the ninth-biggest economy on the planet and the United States is Brazil’s second-biggest trade partner after China. Brazil and the US did a whopping $103.9 billion in two-way trade in goods and services in 2018 alone, for example. Brazil is also the eighth-biggest source of visitors to the United States and the two governments cooperate in many respects including on technology, space exploration and medical research. Trump and Bolsonaro further agreed last March that they will be hosting further talks in the future about bringing American and Brazilian energy and investment closer together.

Trump and Bolsonaro: Peas in a Pod

The two also ironically spoke about a project called the Trillion Trees Initiative to stop deforestation and save one trillion trees by 2050. Trump has systematically and significantly slashed environmental regulations and funding to the Environmental Protection Agency in the United States, while Bolsonaro drew widespread opposition for his lackluster response and initial denial of massive forest fires that burnt down 20,000 hectares of the Amazon jungle. Both leaders rode to victory on a populist wave including angry denunciations of China and global trade only to soften and backpedal their approach once in office. Both have also relentlessly stoked cultural and political anger to increase enthusiasm for their movements and promise to be safeguards against any attempts at resurgence by the left.

Further similarities include the close involvement of the Trump and Bolsonaro families in their patriarch’s affairs, also known as nepotism. Bolsonaro tried to install his son Eduardo as ambassador to the United States, despite the fact that Eduardo barely speaks English and Bolsonaro’s eldest son Senator Flavio Bolsonaro has been accused of extensive corruption and had his former office raided last December in response to 24 related warrants. On the Trump side, numerous credible accusations of corruption in the Trump family including easy acquisition of coveted Chinese patents by Ivanka Trump have long been on the radar of investigative journalists.

More Similarities on the Domestic Front

Trump and Bolsonaro are both strongly supported and opposed in their own countries. In Brazil, the left calls Bolsonaro supporters “Bozominions” and it is common to see the term used in a derogatory way toward those on the right. In contrast, right-leaning Brazilians consider the left to be incompetent moochers who spent years milking Brazil’s economy dry and are not worthy of a seat at the table. Speaking to Inside Over on March 2, Uber driver Manasses said that Brazil’s socialist left had enough years in power and that now it is Bolsonaro’s turn and — even though he does not regard the leader as perfect by any means — he is doing a good job of helping the economy and keeping the country in order. A member of Brazil’s PSOL (Socialism and Liberty Party), meanwhile, who preferred to remain unnamed, said that Bolsonaro is a dictator and thug who does not deserve to be in office.

The US-Brazil Approach to Venezuela

Venezuela is currently suffering under tightening US sanctions and an embargo, plunging millions into food insecurity and extreme instability. Unsuccessful coup attempts by recent State of the Union guest Juan Guaido have done little to ease the iron grip of leader Nicolas Maduro who holds onto power from Caracas. There is no question the US wants Maduro out: the question is how far Washington and its allies are willing to go and how many civilians they are willing to see suffer and die in the process.

Last spring Brazil backed a “negotiated exit” for Maduro, which was clearly unsuccessful. Bolsonaro has also stated support for Guaido and urged allies to follow suit, decrying that the Venezuelan people are “enslaved by a dictator” on Twitter. However, Brazil has not taken the step of deploying members of the Brazilian military to intervene in Venezuela. In February of 2019 — just over one year ago — Trump said US military deployment in Venezuela was “an option.”

Venezuelan Refugee Crisis

In January of this year Washington supported a plan to resettle Venezuelan refugees in Brazil, contributing significant funding and resources via USAID. The program is called Economic Integration of Vulnerable Nationals from Venezuela in Brazil. So far an estimated 4.6 million Venezuelans have run away from the poverty and violence in the country with nearly one million escaping to Brazil. Hundreds are still entering each day, particularly in Brazil’s border states like Roraima, where violence has also broken out with a devastating impact. Most Venezuelans continue on to Spanish-speaking nations elsewhere on the continent, but almost 300,000 have applied to stay in Brazil permanently.

The Trumponaro Show: Double-Talk Deluxe

As in so many other conflicts around the globe, it is odd to see nations such as the United States aping humanitarian responses to conflicts which they helped to significantly worsen and enable. Taking the United States and Brazil at their word on environmental action, refugee aid and collaboration on Venezuela for reasons of human rights is difficult to do when Washington’s decades of Latin American policy and undermining of governments and national economies contributed so much to the situation today — not to mention the obvious and ongoing relevance of Venezuela’s oil industry to America and Brazil’s interest in Caracas’ crisis. Nonetheless, the fact remains that for millions of Venezuelans and Brazilian and American workers — particularly those whose jobs may not be overly environmentally-friendly — Trump and Bolsonaro may be the best friends they’ve currently got.

L'articolo Trump and Brazilian Leader Bolsonaro Meet to Talk Trade, Venezuela proviene da InsideOver.

Two men gaze out over the Bay of Bengal. They might’ve been chums on a coastal stroll, but Xi Jinping and Narendra Modi aren’t old friends. Locked in a ceaseless jostle for regional supremacy, the planet’s most populous nations have, it seems, little in common. A yawning trade deficit irks Indian lawmakers, while China bristles at New Delhi’s American love-in. Festering border tensions – now in their sixth decade – do little to improve the picture. But meeting informally earlier this month, both leaders called for a new era of cooperation. If accord is achieved between the ascendant superpowers, the shape of the region – and the wider world – could be changed for good. 

For six hours President Xi and Prime Minister Modi talked, breaking at times to amble through the eighth-century Mamallapuram rock carvings on India’s south-eastern coast. They hoped to mend ties tarnished by New Delhi’s division of the Jammu & Kashmir state, which saw Ladakh – a region claimed in part by China – carved out and stripped of its autonomy. But economics came to dominate the discussion. The pair’s bilateral trade is set to cross $100 billion by 2020 – but a gaping imbalance, $53 billion in Beijing’s favour, bedevils Indian business. 

In a world of soundbites, the meeting was a success. Much agreement was achieved during the freewheeling tête-à-tête Mr Modi said afterwards, hailing a fresh “era of cooperation”. Both promised to “remain sensitive to each other’s concerns,” and a commitment was made to address the trade deficit. “[The] dragon and the elephant dance is the only correct choice for China and India,” effused the Chinese side as talks concluded. 

But restive Kashmir – the other elephant in the room – remained undiscussed. The timing was perhaps too uncomfortable – just before the trip President Xi had held talks with Modi’s arch-nemesis, Pakistan’s Imran Khan. The two are close allies: Islamabad has bought $6 billion of Chinese weapons in recent years, and has won Beijing’s backing for its staunchly anti-Indian Kashmir stance.  

For its part, China is no fan of India’s friend-making. Under Modi, the south-Asian heavyweight has aligned ever closer with the United States, happily endorsing its divisive Indo-Pacific strategy. The two are united in their condemnation of Beijing’s territorial claims in the South China Sea, and – alongside Japan – seem happy to ruffle Chinese feathers with their annual Malabar military exercises. 

But commercially, India risks being hamstrung between Presidents Xi and Trump. The latter, bloody-minded in his trade war with China, is pressuring New Delhi to keep telecoms giant Huawei out of its 5G infrastructure. Responding in kind, Beijing has publicly warned India of “reverse sanctions” should they kowtow to D.C. demands.  

Eventually, lacking a viable alternative, Modi might have to plump for Huawei – but his suspicion of Chinese meddling won’t easily dissipate. Regionally, India stands alone in its rejection of Beijing’s much-heralded Belt and Road Initiative (BRI) – an ambitious foreign infrastructure investment scheme. Indians are particularly perturbed by the China Pakistan Economic Corridor project, which passes through a sliver of land upon which they lay claim.

Modi’s misgivings go further however, viewing BRI less as a vehicle for development than regional hegemony. His fears aren’t baseless – states historically under Indian auspices are now among those most reliant on Chinese money. In Sri Lanka, Beijing’s billions helped build a cutting-edge new port, only for it to be repossessed by Chinese firms when debts began to mount.

Then there is Nepal, perhaps the most long-standing of New Delhi’s dependants. For decades India has been the Himalayan nation’s commercial crutch – but Mr Xi is prowling. It was his first stop after meeting Modi, and he arrived bearing gifts: $500 million in development aid. A trans-Himalayan corridor is in the offing – another BRI blockbuster – that would connect the Tibetan and Nepalese capitals.

But amid the clutter of conflicting interests, China and India have common ground. Both fear the growth of Islamic radicalism within their borders. Modi used the spectre of terrorism to legitimise his Kashmir crackdown, and Beijing’s ‘re-education camps’ for China’s Uighur Muslim minority are well documented. Both, in a way, blame Pakistan. India seethes at Islamabad’s supposed support of armed separatists, while China is increasingly uncomfortable with its ally’s lawless Afghan border region, which it fears could become a launchpad for Uighur militancy.   

Ultimately, though, it will be finances that define the future of Indo-Chinese relations. Both countries are embroiled in something of an economic crisis. India’s mid-decade meteoric growth has lost steam, dipping to its slowest pace in six years. In China, where businesses are being battered by US tariffs, GDP rise is at a quarter-century low. But together, their populations account for one-third of humanity – an inestimably large and diverse market. That’s what each can offer the other, billions of consumers with untold purchasing power. 

This won’t have been lost on the men strutting the Bengali coast – and both will have been needled by a nagging thought: I need you more than I know.

L'articolo India and China’s Love-Hate Relationship Enters ‘New Era’ proviene da InsideOver.