Oil is no longer the only focus! Why do foreign leaders rush to visit Gulf countries? Türkiye | President | Gulf

In just five days from July 15 to 19, the Prime Minister of India, the Prime Minister of Japan, the President of Türkiye and the President of the five Central Asian countries successively visited the Middle East Gulf countries.

In fact, after the Russia-Ukraine conflict in 2022, foreign leaders also flocked to the Gulf countries, hoping to ensure their own energy supply. However, most of the people who flocked to the Gulf countries were Western countries, while this time they were Asian countries.

The visit of Asian leaders, although "energy diplomacy" is one of the motivations, is more about strengthening bilateral trade and cooperation, hoping to attract investment from Gulf countries or gain a share in the process of economic diversification among Gulf countries.

According to Niu Song, a researcher at the Middle East Research Institute of Shanghai Foreign Studies University, leaders of major countries in East Asia, West Asia, South Asia, and Central Asia have visited Gulf countries intensively, which clearly reflects the important position of Gulf countries in global economic development. The Middle East and the resolution of the tide have laid an important foundation for the stable development of the Gulf situation, which has significantly boosted the confidence of countries in engaging in cooperation with Gulf countries.

Riyadh, the capital of Saudi Arabia

Diplomacy on "New Energy"

Japanese Prime Minister Fumio Kishida's visit to Gulf countries began in Saudi Arabia. On the 16th, he held talks with Saudi Crown Prince Mohammad bin Salman, and on the 17th and 18th, he held talks with UAE President Mohammad bin Zayed Al Nahyan and Qatar Emir Tamim, respectively. This is the first visit of the Japanese Prime Minister to the Middle East in three years.

After the Russia-Ukraine conflict in 2022, Japan's energy dependence on the Gulf countries will further increase. Back then, 93% of Japan's total crude oil imports came from the Middle East, of which 42% came from Saudi Arabia and 34% came from the United Arab Emirates.

Fumio Kishida's visit is undoubtedly an important consideration for ensuring Japan's energy security. But at the same time, Japan will make decarbonization technology cooperation the main selling point of this trip, promoting Japan's new energy technology to Gulf countries.

During this visit, Japan reached a consensus with Saudi Arabia and the United Arab Emirates on providing hydrogen and ammonia related decarbonization technologies, and signed a series of agreements to develop clean hydrogen, produce ammonia, and regenerate fuels. The Saudi Ministry of Energy has also issued a statement stating that Saudi Arabia will ensure its oil supply to Japan.

Niu Song told First Financial reporters that in addition to their traditional advantages in oil and gas trade, Gulf countries also have broad international cooperation space in areas such as new energy, digital economy, defense industry, and investment. Energy diplomacy still plays a crucial role in the foreign exchanges of Gulf countries, but the proportion of cooperation in other fields is constantly increasing.

Japan urgently needs to "brush its presence" in the Middle East. Officials from the Japanese Ministry of Foreign Affairs have previously stated that "Japan's visits to Middle Eastern countries such as Saudi Arabia cannot be further postponed." Saudi Arabia has announced investment and technology cooperation with China and South Korea.

NGC International Consulting CEO Bach told First Financial reporters that in Gulf countries, both trading companies and science and technology innovation companies are considering introducing some technologies and projects from China to accelerate their development.

Saudi Crown Prince Mohammad bin Salman visited South Korea in November 2022 and signed 26 investment agreements and memorandums on cooperation in fields such as petrochemicals and environmental protection technology. South Korea also reached a $30 billion cooperation project with the United Arab Emirates in January 2023.

economic cooperation

One day later than Kenxiong Kishida, President Erdogan of Türkiye arrived in Saudi Arabia on the 17th, opening a visit to Saudi Arabia, the United Arab Emirates and Qatar. This is his first visit to the Middle East since winning re-election in the May presidential election.

Last year, inflation in Türkiye exceeded 85%, the highest level in 24 years. In order to mitigate the impact of long-term inflation and weak local currency, Türkiye urgently needs to introduce foreign investment, and the Gulf countries with abundant funds have become an important target of Erdogan.

So the core of Erdogan's trip is financial issues. Previously, the Gulf countries had helped Türkiye ease its ongoing foreign exchange crisis through currency swap or direct deposit of funds into the Turkish government account. In return, Türkiye signed a series of memorandums of understanding with Saudi Arabia on the 17th, including the production of Türkiye's UAVs and supporting system equipment in Saudi Arabia.

Indian Prime Minister Modi visited the United Arab Emirates on the 15th, marking his first visit in over 30 years. Both sides have made breakthroughs in fiscal and financial issues, and the central banks of the two countries have reached an agreement to settle cross-border transactions in their domestic currencies, namely the dirhams and rupees.

On the 19th, the presidents of the five Central Asian countries gathered in Jeddah, a coastal city in Saudi Arabia, to attend the first Gulf Cooperation Council Central Asian Summit. In the joint statement issued after the meeting, it was emphasized that bilateral and multilateral political consultations should be strengthened to achieve regional and international security and stability, and to address various challenges. At the same time, security in supply chain, logistics, communication, food, energy and other fields should be ensured, cooperation in green and renewable energy should be strengthened, and business and investment opportunities should be increased.

In the past three years, the situation in the Middle East has been continuously easing. Saudi Arabia and Iran resumed diplomacy, Gulf countries shook hands and made peace, and the situation in Yemen continued to cool, all of which have gradually moved the Middle East away from past turmoil and confrontation.

Niu Song told reporters from First Financial that it is precisely under the combined force of political and economic factors that countries are eager to engage in specific cooperation with Gulf countries, which to some extent has led to almost simultaneous visits of leaders from multiple countries across regions to Gulf countries.