Saudi Arabia launches Special Economic Zones

According to Saudi Gazette, Crown Prince and Prime Minister Mohammed bin Salman, who is also chairman of the Council of Economic and Development Affairs, launched on Thursday four new Special Economic Zones in Saudi Arabia.

The announcement about the new economic zones, which are located in Riyadh, Jazan, Ras al-Khair and King Abdullah Economic City, north of Jeddah, is line with the Crown Prince’s commitment to strengthening Saudi Arabia’s prime position as a global investment destination.

In a statement carried by Saudi Press Agency, the Crown Prince said, “Saudi Arabia is open for business, and welcomes investors from all around the world to see first-hand the historic opportunities we have to offer. The new Special Economic Zones, launched today, will significantly impact how business is done in the country, create tens of thousands of jobs, and contribute billions of riyals to our GDP.”

The new zones draw on Saudi Arabia’s strategic location at the heart of global trade, creating new hubs for businesses across key growth sectors to launch and scale the companies and technologies that will shape the future. The Special Economic Zones (SEZs) will support existing national strategies and create new linkages with international frameworks, building on the competitive advantages of each region to support key sectors including logistics, advanced manufacturing, technology and other priority sectors for the Kingdom.

Benefits for companies operating in the new SEZs include competitive corporate tax rates, exemption from customs duties on imports, production inputs, machinery and raw materials, 100 percent foreign ownership of companies, and flexibility to attract and hire the best talent worldwide.

The new SEZs will provide tremendous opportunities to develop the local economy, generate jobs and localize supply chains. They represent a continuation of the Kingdom’s long-running initiatives to transform into a global investment destination, and a vital hub for global supply chains, capitalizing on its position at the heart of global trade routes, at the crossroads between East and West. With a detailed program of regulations and incentives, these SEZs offer rewarding and attractive offers for foreign investment. This program will allow for the acceleration of the required reforms to facilitate doing business in all parts of the Kingdom.

These four SEZs build on previous free zone initiatives in the Kingdom, including the recent launch of the integrated logistics special zone at King Salman International Airport in Riyadh. Together, they represent the first phase of a major, long-term program aimed at encouraging foreign direct investment, attracting the most talented professionals from around the world, and promoting entrepreneurship and economic development within the Kingdom.

The Special Economic Zones, regulated by the Economic Cities and Special Zones Authority, provide new solutions to the challenges facing many global businesses as they look to localize and strengthen their supply chains. They will help the Kingdom take advantage of key macroeconomic shifts to create a truly differentiated business environment, activating new sectors and value chains, the SPA reported.

Biden advisers weigh Saudi Arabia trip for more oil

According to Axios, President Joe Biden’s advisers are discussing a possible visit to Saudi Arabia this spring to help repair relations and convince the Kingdom to pump more oil.

A hat-in-hand trip would illustrate the gravity of the global energy crisis driven by Russia's invasion of Ukraine. Biden has chastised Saudi Arabia, and the CIA believes its de facto leader, Crown Prince Mohammed bin Salman, was involved in the dismemberment of Washington Post columnist Jamal Khashoggi.

The possibility also shows how Russia's invasion is scrambling world's alliances, forcing the United States to reorder its priorities — and potentially recalibrating its emphasis on human rights.

Biden officials are in Venezuela this weekend to meet with the government of President Nicolás Maduro. Some Republicans and Democrats in Washington suggest Venezuela's oil could replace Russia's, according to the New York Times.

Any visit to the Persian Gulf would come amid a busy presidential travel schedule during the next few months.

Biden will likely take trips to Japan, Spain, Germany and, potentially, Israel, Axios has also learnt.

A White House spokesperson told Axios, “We don’t have any international travel to announce at this time, and a lot of this is premature speculation.”

President Obama visited Saudi Arabia more often than any of his predecessors, a total of four trips, but relations frayed over the wars in Yemen and Syria, as well as differences about how to deal with Iran.

President Trump made restoring the relationship a priority, and boasted about arms sales to the Kingdom.

He questioned the CIA's conclusion bin Salman was involved in Khashoggi's murder and defiantly refused to condemn him. "Maybe he did and maybe he didn’t!” Trump wrote on Twitter.

During the 2020 campaign, Biden called the Kingdom a "pariah," and early in his term, released an unclassified report assessing MBS approved the operation to "capture or kill" Khashoggi.

Bin Salman isn't making it easier on Biden to repair their relations.

He appeared to go out of his way to aggravate the White House during an interview with the Atlantic published last week.

“We don’t have the right to lecture you in America,” he said. “The same goes the other way.”

Sanctions against Russia's oil exports, including a possible ban on importing Russian oil into the US, would both elevate worldwide gas prices and stoke domestic inflation.

Biden officials want to preserve options for the president, including the chance to make amends with the Saudis and persuade them to increase their oil production.

Discussions about a potential visit are still in the early phases and officials cautioned a visit is far from finalized and may not happen.

Russian actions are also factoring into the president's other planned travel.

The invasion has sparked an international refugee crisis and raised worldwide prices, so the president wants to ensure US allies remain united. His in-person attendance at summit meetings also highlights how concern about COVID-19 has waned.

Biden's first trip this year is likely to Japan, potentially in May. He's set to meet with the other leaders of the Quad: Japan, India and Australia.

In June, he's scheduled to attend a G7 meeting in Germany. That will be followed by a NATO summit in Spain.

The European itinerary could also be expanded to include a stop in Israel, where Biden told Prime Minister Naftali Bennett he wanted to visit this spring.

Why United States is shy in imposing sanctions on Saudi Arabia?

Saudi Crown Prince Mohammad bin Salman (MBS) “approved an operation … to capture or kill Saudi journalist Jamal Khashoggi,” according to a scathing new report from Joe Biden administration. Yet the President says the US will not sanction the Saudi government, cognizant of the fact that any direct punishment could risk Saudi Arabia’s cooperation in confronting Iran.

Biden is grapple with the reality that Saudi Arabia is needed to achieve certain US objectives in the Middle East. This is a change from Biden’s criticism of Saudi Arabia on the campaign trail. The Khashoggi affair highlights a persistent oddity in the US foreign policy.

The Trump administration was reluctant to confront Saudi Arabia over the killing of Khashoggi. Beyond revoking the visas of some Saudi officials implicated in Khashoggi’s death, Trump did nothing to punish the kingdom for Khashoggi’s torture, assassination and dismemberment. Trump and other White House officials reminded critics that Saudi Arabia buys billions of dollars weapons from the US.

 Biden has taken a slightly tougher line, approving the release of the intelligence report that blames MBS for Khashoggi’s murder and sanctioning 76 lower-level Saudi officials. Saudi Arabia isn’t the only nation to get a free pass from the US for its terrible misdeeds. The US has for decades maintained close ties with some of the world’s worst human rights abusers.

Ever since the United States emerged from the Cold War as the world’s dominant military and economic power, consecutive American presidents have seen financial and geopolitical benefit in overlooking the bad deeds of brutal regimes. Before the Islamic revolution in 1979, Iran was a close US ally. Shah Reza Pahlavi ruled harshly, using his secret police to torture and murder political dissidents. President Nixon hoped that Iran would be the “Western policeman in the Persian Gulf.”

After the shah’s overthrow, the Reagan administration in the 1980s became friendly with Iraqi dictator Saddam Hussein. The US supported him with intelligence during Iraq’s war with Iran and looked the other way at his use of chemical weapons. And before Syria’s intense bloody civil war – which has killed an estimated 400,000 people and featured grisly chemical weapon attacks by the government – its authoritarian regime enjoyed relatively friendly relations with the US Syria has been on the State Department’s list of state sponsors of terrorism since 1979. But US presidents i.e. Nixon, Carter, Bush and Clinton visited President Bashar al-Assad’s father, who ruled from 1971 until his death in 2000.

Why Saudi Arabia matters

Before the alleged assassination of Khashoggi by Saudi operatives, the 35-year-old crown prince was cultivating a reputation as a moderate reformer. He has made newsworthy changes in the conservative Arab kingdom, allowing women to drive, combating corruption and curtailing some powers of the religious police. Still, Saudi Arabia remains one of the world’s most authoritarian regimes.

Saudi Arabia ranks just above North Korea on political rights, civil liberties and other measures of freedom, according to the democracy watchdog Freedom House. The same report ranks both Iran and China ahead of the Saudis. But its wealth, strategic Middle East location and petroleum exports keep the Saudis as a vital US ally.

President Obama visited Saudi Arabia more than any other American US president – four times in eight years – to discuss everything from Iran to oil production.

American realpolitik

This kind of foreign policy – one based on practical, self-interested principles rather than moral or ideological concerns – is called “realpolitik.” Henry Kissinger, secretary of state under Nixon, was a master of realpolitik, which drove that administration to normalize its relationship with China. Diplomatic relations between the two countries had ended in 1949 when Chinese communist revolutionaries took power. Then, as now, China was incredibly repressive. Only 16 countries – including Saudi Arabia – are less free than China, according to Freedom House. Iran, a country the US wants Saudis to help in keeping in check, ranks ahead of China. But China is also the world’s most populous nation and a nuclear power.

Nixon, a fervent anti-communist, sought to exploit a growing rift between China and the Soviet Union. Today Washington retains the important, if occasionally rocky, relationship Kissinger forged with Beijing, despite its ongoing persecution of Muslim minority groups. American realpolitik applies to Latin America, too. After the Cuban Revolution of 1959, the U.S. regularly backed Central and South American military dictators who tortured and killed citizens to “defend” the Americas from communism.

US not ‘so innocent’

 US presidents tend to underplay their relationships with repressive regimes, lauding lofty “American values” instead. That’s the language former President Barack Obama used in 2018 to criticize Trump’s embrace of Russia’s authoritarian president, Vladimir Putin, citing America’s “commitment to certain values and principles like the rule of law and human rights and democracy.” But Trump defended his relationship with Russia, tacitly invoking American realpolitik. “You think our country’s so innocent?” he asked on Fox News.

The US has maintained close ties to numerous regimes, and still does, who’s values and policies conflict with America’s constitutional guarantees of democracy, freedom of speech, the right to due process and many others.