 Hello everyone. Welcome to another episode of International Relations Capsule for the Shankar IAS Academy. Today we discuss a surprising development which took place on the 20th of March. This is the time when there are major geopolitical changes, changing alliances, new friends, new arrangements, new groupings, etc. taking place. Because the old order has changed and the new order is taking place or changing also. So many surprising developments take place and one of them was the signing of an agreement between Saudi Arabia and Iran in of all places, Beijing. So Saudi Arabia and Iran have not been friends for some time basically because of the sectarian differences. And also both Saudi Arabia and Iran belong to different alliances. Saudi Arabia was very close to the United States and Iran was of course inimical to the United States for a long time and Iran and the United States have also been in confrontation. But what has now happened is Iran and Saudi Arabia after about seven or eight years of estrangement have signed an agreement to have normalized a relationship. The agreement is signed in Beijing and obviously it was negotiated with the support of China. We noticed that last time when President Biden went to Saudi Arabia, he did not get a very warm welcome. On the other hand, when President Xi Jinping went to Saudi Arabia, there was much fanfare and there was celebration and there was a clear indication that Saudi Arabia is moving away from the United States and getting closer to China. And Iran and Saudi Arabia were virtually at war because both in Syria and Yemen, they were fighting proxy war in both countries. And so this agreement which was signed in Beijing on March 20, 2023 was a significant development. The wording is not very surprising or new. It talks about re-establishing diplomatic ties which was broken for several years, respect each other's sovereignty and maintain non-interference in each other's domestic affairs. So this is normal. This is the principles in the United Nations. This is the kind of relationship that you should have. But given the background of a strange relationship between the two countries and the near war engagement that they had in Syria and Yemen, this has come as a major development. It of course goes back to the days while signing this agreement, they also restated two previous agreements which were signed in 2001 and also in 1998 showing that there was kind of normal relationship in the past. So it was an agreement on security cooperation that Iran and Saudi Arabia had signed in 2001 and in 1998 an economic technical scientific and cultural ties was also signed. So both these were reiterated and after seven years of strange relationship, they decided not to interfere in each other's affairs and also develop close and friendly relationship. This is a big change in West Asia in the Middle East because the United States has been the guarantor of security in the region and Saudi Arabia very closely linked with the United States. But recent developments showed that there was some kind of unease among the relationship because they still continue to be very close in many ways. And since the two countries, Iran and Saudi Arabia, were close to a conflict. In fact, particularly in 2019, when Iranian agents were suspected to have attacked Saudi oil facilities. So that is the closest. In Syria and Yemen, they were fighting proxy wars and there was even a situation of near conflict in 2019. So at the signing of this agreement, Mr. Wang Yi, the former foreign minister, he is not foreign minister anymore, described the agreement as a victory for dialogue, a victory for peace. In a sense, taking the credit of this particular agreement or having negotiated it. And Saudi Arabia foreign minister said that his country favored political solution and dialogue. And this was quite obvious that the idea is to establish normal relationship between the two countries. Before the dialogue, before the signature itself, there were meetings between Saudi and Iranian officials in Baghdad and Muscat. They had some meetings in 2021 and 2022, obviously leading to the agreement that we now have with us. But there was no progress, particularly because of the wars in Syria and Yemen. And also Saudi Arabia was concerned about Iran's activities, some terrorist activities, and also particularly because of the suspicion that the Shia communities in the Arab region will be exploited by Iran. It has happened in Iraq and elsewhere that there are Shia populations and Iran is particularly close to these populations and therefore there was some kind of fear that they might be using the Shia populations in these countries to destabilize the region. But all these seem to have been resolved and decided to resolve the problems without US involvement. That is the new thing because normally in such a situation, US would have been the important power to intercede. But in the case of Iran, Iran-US relations are not good at all. While China-Iran relations are being good, there is almost an axis of China, Iran, Russia and Pakistan in the case of Afghanistan also. So China has been gaining ground in this region and this is a sign of that. And this partly because of the disenchantment that Saudi Arabia has towards the United States as a security provider. And there are some strong messages from the United States also to Saudi Arabia that it was not very enthusiastic about being a regional security provider for Saudi Arabia. So the combination of US lack of interest in Saudi Arabia and the Middle East and Iran's own relationship with Saudi Arabia was strained. The new situation has brought in this change. Of course the US failures in Iraq and Afghanistan are also a factor because Iran realized that it is not very reliable to have the United States as a credible security partner. So that may also have been a factor. Of course regional countries are not going to disengage from the US. US will continue to be a major actor in that region, but they're also interested in broadening their options to build new relationships. And China is an attractive partner in many ways. It has China has substantial energy trade investment in technology related ties is the largest buyer of crude oil from the region and a major trade and industrial partner and also a technology part. So China has considerable economic involvement in the region. And therefore they are more interested in China and China is becoming a more significant player in the region. And US pressure is building. You also know about the BRI Belt and Road Initiative of China, to which most with most of the station countries are signed up. And there is considerable investment in logic, logistical connectivity, consultancy and contracting partnerships between China and several of these Middle Eastern countries. But still recently China was reluctant to engage itself with regional countries. But two years ago, China indicated that China was looking for greater political involvement with the region on the basis of what they called a quasi mediation diplomacy. That means they were willing to wherever there were problems in the region, they were willing to help the countries concerned to come to agreements and also to promote commercial trade and political interests rather than just security concerns. Security concerns have always been there, but in addition to that in the chain circumstances, the countries in the Middle East, particularly Saudi Arabia has been interested in normalizing relations with Iran. Of course, they know that there are several issues still the war is still raging in Yemen, and both of them are on both two different sides but quick resolution was not possible. But they have decided to engage in discussions and agreements to be reached through diplomacy, not to escalate it into a conflict. So that is really the meaning of this agreement. Xi Jinping had given this message when he visited Saudi Arabia. He had said that he had said to the Arab interlocutors, he met many of them at three occasions by bilateral meeting with Saudi Arabia. Then there were meetings with the Gulf leaders and also the Arab League during his visit to Saudi Arabia. So that means in all these three occasions, Xi Jinping said that China's objective is to consolidate the consensus on global governance, development of society and other crucial time. So they were announcing, China was announcing a particular interest in Saudi Arabia, Iran and generally the region as a whole. So this reduces regional tension and that is welcome from many perspectives. And most serious regional confrontation, particularly the Xi Sunni differences are also important to the result. So Saudi Arabia also has a sense of vulnerability since the US is not so committed to Saudi Arabia and they seem to be losing interest in Saudi Arabia and therefore Saudi Arabia has a sense of vulnerability, particularly with the Iran. And so some kind of a mediation between China and Iran helped both these countries to reach some kind of a stability in a relationship. And that is why this agreement is significant in the new world order which is developing around the world. So the credibility that China has acquired in the region is of course a factor and the engagement with regional countries is something new. But in the case of Iran, there are other difficulties and problems. As you know, the agreement signed between the United States and Iran and others of course some European countries. What is called the Joint Comprehensive Plan of Action, JCPOA on the question of Iran's nuclear capability. It was of course signed and sealed but the President Trump came and withdrew from it and the JCPOA is not effective anymore. And according to this agreement, Iran had given a commitment not to develop nuclear weapons at least for 15 years. And President Trump felt that that was not enough, he wanted this to be stopped altogether and therefore he came out of it and he imposed sanctions against Iran. And since it imposed sanctions, the whole idea of getting the JCPOA in place was to escape the sanctions from the United States and President Obama had agreed to that. But President Trump decided not to observe the JCPOA and impose sanctions and therefore Iran after a couple of years was forced to renegotiate JCPOA. You know, this is on the one side the Europeans and Iran on the other side. So and also another factor is suppose Israel is on aggressive. Israel itself was not very keen that JCPOA should be renewed. So these are all other complexities that is unless Iran signs that agreement, it will be difficult even for China or Saudi Arabia to have close and friendly relations because Iran's nuclear capability is a matter of concern for the whole region. And the negotiations are taking place in Vienna but obviously there are some difficulties and so it has not been signed as yet. In between there was another development that the IAEA announced that they noticed that Iranians were enriching uranium at a much higher level than was permitted. And they suspected that it had even reached 84% capability for enriched uranium which can be used in bombs. And it is just a little below the weapons grade of uranium. But following that the director general of the IAEA visited Iran to Iran and obtained an Iranian agreement to allow verification and monitoring of activities by the IAEA because Iran is a member of the NPT. The IAEA has the right to inspect and monitor activities. But so there is some ground has been prepared by the IAEA for the talks to resume. But whether it will be possible at this time to have these talks and have an agreement reached is not very clear, particularly because of the domestic politics both in the US and Israel. The US is becoming more and more tough with Iran on the nuclear aspects. And of course Israel itself dominates this and in Israel there is a right wing government very active. And also before the presidential election in the United States whether President Biden will be able to reach an agreement on this JCPOA is also not very certain. So that remains as an issue. But if that also moves forward, then there could be a more holistic approach to run by the Middle Eastern countries. China has affirmed that its role in West Asia affairs gets more active and substantial, even though on major issues like Palestine, etc. China has very strong views. But the Chinese influence increasing in the Middle East is of some concern to India also since India's own relationship with China is not normal of late. So we may have to see this as a challenge to Indian diplomacy. We have been very close friends of the Middle Eastern countries and the US had no difficulty with that. But if China becomes the major power in the region and that may cause some kind of concern about us. So it is a diplomatic priority for them now and broad agreement has been reached on energy security, free and open sea regional stability, etc. Which may bring these countries together. Of course, there is a possibility of India and China working together in the Middle East, which are several issues on which we agree. But we know that China's interest is particularly through BRI, its interest is to increase influence in the whole world. And though BRI has suffered some setbacks, many countries still remain in that and they do engage in trade and other aspects through the facility of the BRI. So reduced runs importance to the US and strong relationship with China is also significant. So from India's perspective, this can be considered negative because instead of US, which we are familiar and friendly, if it is China, which is going to call the shots in the region through Saudi Arabia and Iran, that will naturally affect us. We know already that the rail track that India was building in Iran has been now given to China. So this could be considered inroads into the situation that we have at the moment. So China, Russia, Iran access may be a possibility as a result of this movement. But objectively speaking, we can certainly say that reduction of tension between Saudi Arabia and Iran is a matter of some comfort. Because if it doesn't, if it does control the estrangement between the two countries, it may also result in the end of the Yemen war. And even in Syria, the Saudi Arabian engagement and Iranian influence, etc. could also be turned. And therefore, in objective terms, we can say that this is a positive development. But since it changes the orientation of the situation in the Middle East, we have to be very active and we have to be very careful as to how this develops. Our own relationship with China is very difficult and therefore there may be no easy way for us to cooperate and join together in any of these efforts. But since we have good relations with Iran and Saudi Arabia, things may not move in a direction which is in the middle class. So we can take comfort in the fact that another area of conflict is getting reduced in tension. To that extent, this is welcome, but this is a development which we have to watch and act accordingly because we did not lose the advantage that we have in this region for many years. Now we have good relations with Israel also. And therefore our ability to play a role in the Middle East should not be curbed by this new development. But both Saudi Arabia and Iran are friendly to us. And even if China is negotiating and reaching this agreement, hopefully they will not act in a way which is inimical to India. So that is the perspective we have. It is a major development changing the alliance situation in the Middle East, but at the same time in a positive direction. Thank you.