By Daniel Silverberg, Co-head of Capstone’s National Security Practice
Few in Washington noticed in early April the visit of Brett McGurk and Amos Hochstein to Riyadh for discussions on China, Yemen, 5G, and, of course, energy.
The diplomatic mission by President Biden’s two Saudi “whisperers” was significant because it reflects the White House’s increasingly realpolitik approach to combating Chinese economic aggression and advancing the energy transition. The administration’s basic theory: Safeguarding the supply chains that will power the green transition requires not just securing critical minerals, but also protecting the infrastructure to access those supply chains, including hard infrastructure such as railroads and 5G network technology. In the eyes of the White House, the Saudis are critical to this effort and must be kept within the US orbit amid Chinese inroads.
This full-throated, Kissinger-like embrace of “economic realism” requires difficult tradeoffs for Democrats, particularly on human rights. President Biden is making the case that if China constitutes the threat that many Democrats agree it is, engaging with leaders such as Mohammed bin Salman (MBS) is worth the risk, especially if Saudi capital can help shore up struggling economies globally and incentivize investment by Western companies on continents most vulnerable to Chinese economic influence.
A pillar of 20th-century US defense policy was protecting the Kingdom of Saudi Arabia to safeguard oil access. The green transition has inverted this approach. China controls the critical minerals supply chains and technologies powering the energy transition. Unless the US wrestles control of African mines from China, the railroads to transport minerals from those mines, and the telecommunications infrastructure underlying green energy systems, the US will simply replace dependence on foreign oil with reliance on Chinese components. In the words of Hochstein, the president’s special coordinator for the Partnership for Global Infrastructure and Investment (PGII), “We cannot have a monopoly in the energy sector just to [face] the same national security risks we faced in the 20th century.”
This notion of an integrated infrastructure approach is axiomatic to any corporate conglomerate (see Walmart) but novel to the US government. The Biden team’s goal is to create an integrated, allied partnership in infrastructure, touching every aspect of the green transition. Jake Sullivan, President Biden’s national security adviser, pointed out in a speech this week that by “mobiliz[ing] hundreds of billions of dollars in energy, physical, and digital infrastructure financing,” the administration intends to outcompete China and “close the infrastructure gap in low- and middle-income countries.”
Diluting Chinese inroads in Saudi Arabia is key to President Biden’s approach. The Saudis control oil that is needed in the short term to power the green transition, and they bring extensive capital to the table to compete against Chinese bidders on African mines, help build solar projects in Angola, and fund power generation in Zambia. The need for a working relationship with the Royal Court was what forced President Biden to turn the other cheek after the Saudis twice announced production cuts in the last six months and likely led to the Hochstein-McGurk visit.
This approach could yield direct security benefits. It allows the administration to keep the Saudis in the US camp on issues of dire consequence to the US. Administration officials are pushing for Saudi engagement precisely because they can help the US with critical minerals mining, 5G, and global infrastructure—the drivers of the global green transition and diversification from China.
Of course, realpolitik requires tradeoffs. In addition to their abysmal human rights record, the Saudis recently made clear they are willing to reestablish ties with Syria’s murderous ruler, Basher al-Assad, and continue engagement with Beijing, epitomized by China’s lead role negotiating detente between the Saudis and Iran. The Saudis also signed a memorandum of understanding with Huawei Technologies in December 2022, and the Chinese telecom giant is considering a regional hub in the kingdom.
Furthermore, there are practical questions about whether the Saudis can reliably implement the projects they intend to fund. The Biden approach on Saudi Arabia makes sense only if the Saudis provide sufficient capital for infrastructure projects and help develop a Western-based 5G network in developing countries via the PGII, not give Huawei preeminent position. If MBS cannot or will not deliver, then the gamble will be for naught.
Notwithstanding these concerns, the tradeoff could be worth it. There are signals that the Saudis are serious about their PGII investments. For example, the Saudis came to the US in February to visit with 5G companies and then followed up with extensive meetings at the Mobile World Conference. They also are rolling out their own 5G networks, independent of China. If China is as threatening to the US as many Democrats and Republicans contend, then securing Saudi cooperation, or even neutrality, could have rippling geopolitical effects and be a worthwhile price to pay.
The Saudi rapprochement affirmed President Biden’s willingness to eschew purist policies, to the consternation of fellow Democrats, and pursue a realist policy approach on security and energy. Such a move leaves a gap in areas that have little political or economic urgency, including Syria, where bipartisan voices are calling for stronger US leadership. However, it also reflects the administration’s willingness to rethink its own positions and pursue flexible, centrist positions that could positively impact US energy supply and US security interests for decades to come.
Daniel Silverberg, Co-head of Capstone’s National Security Practice
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