Washington got two important reminders this week that it
cannot take anything for granted in the current international
environment. On Tuesday, Saudi Arabia’s intelligence chief, Prince
Bandar bin Sultan,
was reported as saying
that the kingdom is planning to make a “major shift” in its relations
with the
United States. Then on Wednesday, India and China
announced an agreement designed to defuse border tensions. Underlying these two moves is the reality that in a more chaotic, G-Zero world, all countries are going to hedge their bets.
It
is, of course, important not to overreact. Some sources have suggested
that Bandar’s comments may have served more as a warning shot or trial
balloon rather than a reflection of a final decision taken by King
Abdullah, although it is clear that the Saudis
have come to view the United States
as a far more “unreliable” partner. And the Indo-Chinese agreement
comes in the wake of a serious border incident earlier this year that
leaves both countries eager to avoid possible clashes in the future.
Wednesday’s deal certainly does not provide for any sort of definitive
settlement of lingering territorial disputes or an end to both
countries’ extensive military deployments along their respective border.
But
if this week’s developments presage more major shifts in the future,
that certainly would pose a problem for the United States. A close
Saudi-U.S. partnership
has been one of the linchpins
of America’s strategic posture in the Middle East. Moreover, Riyadh
continues to denominate its oil sales in U.S. dollars, fueling demand
for the U.S. currency and providing an important incentive for
preserving its value. And the kingdom has tended to reinvest most of its
state treasury profits from energy sales in U.S. securities, most
notably Treasury notes. In the past, this recycling of petrodollars has
proved to be an important, if unsung, source of strength for the United
States, bolstering the U.S. currency and allowing the United States to
run deficits “without tears,” as French economist Jacques Rueff termed
it.
In the past, the Saudis have also deployed “checkbook
diplomacy” to further both Saudi and U.S. aims, both in the Middle East
and beyond. In addition, Saudi Arabia’s lack of legislative oversight
has meant Riyadh has been able to fund covert activities that U.S.
presidential administrations felt were too sensitive or controversial to
seek congressional approval.
At the same time, one of the key
drivers for improved U.S.-India relations has been concern over China.
In conjunction with the U.S. pivot to Asia, American policy has been,
over the past several years, to encourage the development of closer
strategic relations among Asia-Pacific powers who are leery of China’s
rise. Recognizing that concern about China was an important driver of
U.S.-India relations, the leadership in Beijing is realizing that
decreasing tensions with New Delhi, and accommodating India’s own rise
as a great power, is the best way to ensure that “India adheres to an
independent foreign policy and will not be used as a tool to contain
China,”
as Xie Chao editorialized in the state-run Global Times.
In
both cases, this week’s events are also a reminder that it is easier to
sustain close strategic relations when there is a clear shared
opponent. The Saudi-U.S. partnership was forged during the Cold War when
the Soviet Union was an existential threat to both countries; after the
collapse of the USSR, the Islamic Republic of Iran partially filled
that role. But Washington’s difficulties with Tehran—notably over its
nuclear program and support for groups like Hezbollah and anti-Israel
Palestinian factions—could potentially be ameliorated through some sort
of diplomatic settlement, a prospect that has gained new currency since
the election of Hasan Rouhani as president of Iran. But even if a grand
bargain could be reached that would end U.S.-Iranian enmity, Iran would
still be a strategic rival to Saudi Arabia for regional leadership.
In
the case of India, its preferred international posture is one of
nonalignment, and New Delhi would prefer to keep a degree of balance in
its relations with the other major powers rather than become too closely
linked with any single partner. A much more powerful and threatening
China closely allied with India’s historical foe Pakistan created the
impetus for seeking a closer strategic relationship to Washington. The
extent to which Beijing is capable of defusing that perception will
lessen the rationale for a U.S.-India partnership.
At the same
time, however, we no longer live in a zero-sum world. Saudi Arabia may
seek to diversify its relationships. This may come through shifting some
of its currency holdings out of the dollar and concluding new security
arrangements, including provisions to purchase weaponry with other
states, starting with the Europeans, Russia and China, but Saudi Arabia
will not burn its bridges to the U.S. In the absence of a real global
alternative to the dollar—given the eurozone’s troubles and Beijing’s
refusal to allow the market determine the value of the yuan—the Saudis
will still have important incentives to continue to sustain the role of
the greenback. The U.S. military commitment to keep the Persian Gulf sea
lanes open and navigable is also a security commitment that other
states are not prepared to assume. The Saudis also cannot afford to
deploy a potential “oil weapon” to pressure the United States as they
did during the 1970s. Major cuts in oil supply would not only deprive
the kingdom of energy revenue it cannot afford to forego, especially
with the need to sustain generous welfare services to the kingdom’s
population, but it would also further incentivize the rapid development
of America’s nontraditional energy sources. Keeping “traditional” oil
cheap enough to discourage more expensive—and environmentally
costly—alternatives from being fully tapped is a Saudi imperative.
And
while India may back away from its warmer embrace of Washington,
initiated during the George W. Bush administration, New Delhi’s
orientation is affected by pressure from both sides.
As Xie observed,
“In triangular relations with China [and the] U.S. . . . India can act
as a balancing force, and its choice of flexibility will break the
balance and ensure its interests.”
But it is clear that U.S.
diplomacy will have to become more nimble and agile in the coming
years—and make no assumptions that any friendship or partnership is
eternal.
