GCC States Should Cultivate Strong Ties with South Asia, Even as They Continue Engagement with China

Despite a long period of diplomatic estrangement during the Cold War, GCC states’ relations with China have in recent years become the focal point of their Asia policy. Although the GCC’s focus on China reflects the Asian power’s rising status and position as the GCC’s single-largest trading partner, it overlooks certain long-term trends that position South Asian countries as more durable strategic partners for the GCC.

Over the past few years, GCC states have channelled much of their diplomatic energy in Asia toward China. In August 2016, Saudi Crown Prince Mohammed bin Salman paid Beijing a visit where he explored opportunities for Saudi Arabia under China’s Belt and Road initiative. This was followed by a visit by King Salman the following March, during which $65 billion worth of deals were signed with the Chinese. More recently, the Emir of Kuwait appeared in Beijing in July, establishing a “strategic partnership” and reportedly signing an agreement for China to develop key islands located to the north of Kuwait. The UAE has appointed a special envoy to China, having upgraded the status of their relations to a “comprehensive strategic partnership” during a visit by Chinese President Xi Jinping in July.

By comparison, relations with India and other South Asian countries have taken a backseat. Whereas Indian Prime Minister Narendra Modi has made four separate trips to the region since 2015, during which he paid visits to Riyadh, Abu Dhabi (twice) and Doha, the only GCC leader to have appeared in New Delhi since Modi took office is Abu Dhabi Crown Prince Mohammed bin Zayed of the UAE.

GCC states’ relative neglect of South Asia, however, misses key long-term trends that position South Asian countries as more realistic strategic partners for GCC states in the long run. Economically, South Asia has begun to outpace the rest of the Asia Pacific region in terms of GDP growth, a trend that is expected to persist over the next few decades. In 2017, the Asian Development Bank estimated GDP growth in South Asia to have reached 7 percent, a level at which the region is expected to remain for the medium-term, according to the World Bank. By comparison, the pace of Chinese economic growth has slowed and is likely to fall below 6 percent over the next decade, according to the IMF’s baseline estimate.

As China invests heavily in clean-energy technology – it is currently the world’s largest spender on clean energy, according to the Economist magazine, outstripping the US and the EU combined – less of its future economic growth is likely to translate into demand for fossil fuels. India, by contrast, is slated to become the main driver of growth in oil demand from 2025 onward, according to the IEA’s World Energy Outlook 2017 report. For GCC states, therefore, India – more so than China – is likely to constitute their largest source of growth of oil demand in the years to come.

Given the presence of a large South Asian diaspora – estimated at 9.5 million people in 2012; India believed it alone had 8.7 million in the Gulf last year – South Asian states have a vested interest in the stability of GCC nations. These migrants, most of whom are low-skilled workers, constitute a vital source of foreign remittances for their countries of origin. In 2017, Indians living in GCC states sent $37 billion back home, accounting for over half of India’s total inward remittances for the year. In other South Asian countries, 2016 remittances from the GCC stood as a share of total inward remittances at 69.7 percent in Pakistan, 54 percent in Bangladesh and 50.6 percent in Sri Lanka.

Beyond economic and diasporic interests, South Asia’s geographic proximity to the Gulf region affords large South Asian players such as India and Pakistan a potentially privileged position in the region’s future security architecture. As the US dials down its military presence in the Gulf, India, whose naval capabilities are on the rise, could potentially emerge as a key security partner for states in the region.

Indian officials often describe the Gulf as part of India’s “extended neighborhood”; meanwhile, India has already signed defense cooperation agreements with several GCC states, including Oman, Qatar, Saudi Arabia and the UAE. By contrast, China’s strategic vision, which manifests in the Belt and Road initiative, largely bypasses the GCC states as its two main corridors in the region – the China Central Asia West Asia Corridor and the China Pakistan Economic Corridor – end at Turkey and Iran respectively.

Yet, this does not imply that GCC states should lessen their priority vis-à-vis China. Afterall, China could overtake the US as the world’s largest economy – and, incidentally, as the world’s largest oil consumer – by 2030. Its authoritarian system, moreover, seemingly allows it to pursue its strategic ambitions and adapt to the region more effectively, especially when compared to India’s painstakingly complex decision-making process. Such ambitions might include a greater Chinese foothold in the Indian Ocean, where its financing of port projects near the Straits of Hormuz and the Bab Al Mandeb is suspected by critics to enable its military ambitions. GCC states could also benefit from a close relationship with China in its dealings with its Asian rival, India, using the one side to balance off the other.

Nevertheless, GCC states should begin to view South Asia as a potentially long-term strategic partner, one that could match or even exceed China’s importance to the region. Given their economic, diasporic and geographical bonds, South Asia and GCC states are, for the foreseeable future, bound at the hip. It is high time they woke up to that reality.

Hasan Alhasan is a PhD researcher at King’s College London and the National University of Singapore, where his work focuses on Indian foreign policy in the Middle East. Previously, he served as a senior analyst at the office of the first deputy prime minister of Bahrain.