August 1988, Page 7

Special Report

A Turning Point: British-Saudi Arms Deal

By Robert Hazo

The recently announced agreement of a transfer of arms and equipment from Great Britain to Saudi Arabia raises more questions than it answers. At one stroke, Britain has become the chief supplier of arms to Saudi Arabia, overtaking the United States, despite the allegedly close relationship between President Reagan and Prime Minister Thatcher. The US government, if it was even aware that negotiations were going on between Saudi Arabia and Britain, was not aware that they would result in anything of this magnitude.

"We would prefer to buy weapons from the United States ... But we are not going to pay billions of dollars to be insulted.”

The figures still differ at this writing. ABC television news announced the deal as $30 billion. Other estimates range from more than $17 billion to a "potential" total of $36 billion. Both Britain and Saudi Arabia are minimizing the economic loss the US will suffer. Official Saudi spokesmen argue, in a rather convoluted way, that the Saudi-American relationship may be improved as a result of bypassing the Israeli lobby and, thus, relieve the strain, irritation, and even humiliation involved in getting an arms package through Congress.

Other Saudis are less ingenuous. One high-ranking Saudi said bluntly: "We would prefer to buy weapons from the United States. American technology is generally superior. But we are not going to pay billions of dollars to be insulted. We are not masochists." He was undoubtedly recalling the time, energy, and expenditure of influence the Reagan administration used to ram the AWACS sale, which amounted to a mere $8 billion, through the Senate by the narrowest of margins. AIPAC, the Israeli lobby, is not making any public comment. But privately it does not regret in the least its opposition to arms sales to Saudi Arabia and other friendly Arab countries. By contrast, the State Department is deeply disturbed. A State Department official said: "The kind of military association we have had with Saudi Arabia is one of the bedrocks of our political relationship with that country. As the military relationship atrophies, the overall relationship will become more brittle and more susceptible to political stresses." He is, of course, correct.

Deal of the Century

Although it is one of the largest arms deals of this century, the British Saudi agreement has generated relatively little editorial comment. This, in part, may be due to the fact that it was announced in the aftermath of the downing of the Iranian airliner, and the controversy about the US compensation for that mistake. The economic implications for US employment and the balance of payments are also not subjects US apologists for Israel want to examine editorially.

In fact, there is precedent for the British-Saudi arms deal. An agreement for more than $8 billion was signed in 1985. At the time, much was made of the fact that the Saudis were proceeding with the Reagan administration's blessing. By contrast, this time there is every reason to think that the Reagan administration, rather than being consulted by either Britain or Saudi Arabia, was simply presented with a fait accompli.

If so, that would constitute a major precedent reflecting poorly upon an administration proud of its role in helping US industry.

Although the estimates of the total deal vary, clearly the higher figures are closer to the truth. The agreement calls for the transfer of 50 Tornado fighter-bombers, 60 Hawk jet trainer aircraft, 80 Wetland Blackhawk helicopters, and six mine sweepers. More significantly, it calls for construction of the facilities at which these weapons systems will be based, as well as leaving open the training of personnel and the supply of spare parts. Omitting the cost of the infrastructure may account for the varying estimates of the gross costs of the agreement. By any measure, however, the US is the major political and economic loser.

Political Loss to the United States

Except for a short time under King Faisal, during whose reign the oil embargo took place, the Saudis have always looked to the US first and foremost for helping American corporations have always taken the lion's share of Saudi contracts. When Saudi Arabians asked for an "over-the-horizon force" they got it through the establishment of a long-range bomber base at Diego Garcia. During both the Carter and Reagan administrations, however, Saudi arms requests were either shelved or trimmed. When reduced sales did get through in 1978, 1981, and 1986, increased weaponry or aid was given to Israel to preserve its strategic superiority.

The US has lost from 425,000 to 750,000 jobs, not to mention a golden opportunity to lower the US trade deficit.

Politically, Israel did what it wanted, and militarily it got what it wanted and more. Saudi Arabia, on the other hand, sought to adapt its policies to US wishes, but got little of what it wanted no matter how accommodating it tried to be. Weaponry for Israel was first supplied on long-term, low or no-interest loans (with no payment at all for 10 years while inflation shrank the principal). Repayment was frequently written off, and, finally, Israel was simply provided all of its military and economic aid as an outright Oft. Saudi Arabia, by contrast, was rebuffed even though its purchases were for cash. By any normal logic, the turn of the Saudis and other friendly Arab states to non-American suppliers was long overdue. But then, chickens take a long time to come home to roost in the Middle East. The British Saudi deal strongly suggests that the economic consequences of congressional obeisance to Israel's US lobby have come home to stay.

No one should be surprised. Kuwait gave a lesson to all the gulf states when it jolted the US into action by inviting Soviet protection for its maritime fleet. The arrival of Chinese missiles in the Arabian peninsula was another dear hint that something was happening.

Jobs Lost and Financial Benefit Missed

The economic loss accompanying America's political loss is awesome. Robert Neumann, the Reagan administration's first ambassador to Saudi Arabia, called the British-Saudi deal "a colossal loss in American jobs and investments." Calculated at one job for every $40,000 lost (or 25,000 jobs lost for every $1 billion lost), the United States has lost from 425,000 to 750,000 jobs, not to mention a golden opportunity to lower the US trade deficit.

What conclusions can be drawn? First, it is now even clearer that the primacy and even occasional exclusivity given to Israel by the US government (or, if you wish, forced upon the president, the Pentagon, and the departments of State and Commerce by a captive Congress) has become even more of an intolerable political and economic burden. Politically, this development creates enormous, perhaps insurmountable problems in the gulf for American foreign policy, which is, or was, anchored in Saudi Arabia. Further, the problems may increase. Kuwait, already anticipating cuts in, or possibly even the elimination of the Kuwaiti arms package the administration is trying to get through Congress, has quietly arranged for a small but precedent-setting arms We from the Soviet Union.

The British-Saudi deal is a giant Saudi step away from automatic compliance with US wishes.

During his just-completed visit to the US, Kuwait's prime minister publicly deplored congressional action in dropping 300 Maverick air-to-ground missiles from its requested arms package. He said pointedly in a speech at the National Press Club, "The ability of our friends to deliver is a barometer of friendship and cooperation." He added ominously that there should be no surprise if Kuwait "tomorrow or next week or next month (purchases its arms) from Moscow or from France or from Britain." A statement such as that would have hitherto been taken as an empty threat.

The Saudi and Kuwaiti actions will influence thinking in the other Gulf states, as well as in Jordan and Egypt. The original triad of Islamic American allies was Egypt, Saudi Arabia, and Iran. When Iran left the orbit of American influence, Israel, by contorted logic, was mentioned as its replacement. That reorientation however, made little strategic sense since Israel and Saudi Arabia will remain at odds until the Israeli-Palestinian problem is solved. For the same reason, the peace treaty between Egypt and Israel amounted to little more than a cease-fire.

Former Secretary of State Alexander Haig's strategic consensus was shown up for the imposed, synthetic concept that it was when it became clear that not one Middle Eastern country (including Israel) regarded Soviet aggression or communist insurrection as its primary or even secondary concern. Now, with the change in US-Soviet dynamics, and US strategic interests in the Middle East shaken, a total strategic review is required. It is now abundantly clear that the American-Israeli axis has served the US very poorly as the primary strategic stake.

As if the strategic burden Israel imposes upon the US were not enough, Israel continues to be a drain on US foreign aid expenditures. And now it is becoming a massive obstacle to US trade income from some of Americas best customers.

It is noteworthy that this development is assuming a domestic political dimension, with the Republican administration unequivocally blaming the economic loss squarely on a Democratic Congress.

Competition from a Friendly State

Another obvious conclusion is that the friendliest of states can be as much a competitor as any other when massive amounts of income are involved. Prime Minister Thatcher went all out to promote this deal, including encouraging members of the British royal family to exchange visits with Saudi royalty. Her efforts paid off and may continue to do so until the US concludes that turnabout is fair play and places its own interests first in the Middle East as elsewhere within the boundaries of justice.

It was Saudi Crown Prince Abdullah who went to England to discuss the arms deal. His public statements indicate that, within the bounds of family loyalty, he and Foreign Minister Prince Saud ibn Faisal do not desire a break with the United States, but will not tolerate being treated as second class allies. That is an orientation with widespread appeal to Arab honor and Arab independence.

Sen. Joseph Biden observed during the 1982 Israeli invasion and occupation of Lebanon that if the Arabs could tolerate American policy there, they could tolerate anything. Recent events have shown that he and other US congressional leaders seeking to justify their own pro-Israel excesses by underrating the Arabs have been dramatically wrong.

What happens next depends on leadership both in the United States and in the Arab world. England and Europe generally are militarily and economically weaker than the US, but hold the inestimable advantage of not having an aggressively cultivated anti-Arab sentiment in their countries. The Europeans also know and are not afraid to say what has to be done to solve the Palestinian problem—still at the core of Western problems in the Middle East. Europeans also are more than willing to work with the Soviet Union under Gorbachev to reduce the risks of a Middle East conflict which threatens world peace.

If the US does not heed the implications of the British-Saudi deal, and continues to deal with all the problems of the area from the restricted confines of an Israel-first policy, then there will be many more Mideast shocks in America's future. They will decisively affect the areas, and possibly the world's, balance of power, and America's political and military future within both.

Robert Hazo is chairman of the Middle East Policy Association. He has lectured extensively on the Middle East both in the US and abroad.