- “When people actually stick to the agreed-upon principles, I think it could happen very quickly,” Saudi Finance Minister Mohammed al-Jadaan told CNBC in Riyadh.
- Riyadh and Tehran agreed to resume diplomatic ties and reopen embassies in each other’s countries after China-led talks in Beijing, which ended on 10 March.
- Some observers are skeptical that whether the countries – especially Iran – will stick to the mutual promises made in the diplomatic settlement remains to be seen.
Saudi Arabia may soon invest in its longtime regional foe Iran, following a successful agreement to re-establish diplomatic ties between the two countries, the kingdom’s finance minister, Mohammad al-Jadaan, said on Wednesday.
Asked by CNBC’s Hadley Gamble in Riyadh how soon the world could see the wealthy Saudi kingdom making significant investments in Iran and vice versa, al-Jadaan replied: “I would say very soon.”
“When people actually stick to the agreed-upon principles, I think it can happen very quickly. Our objective, and I think it’s already been made clear by our leadership, is an area that is stable, i.e. able to provide for and prosper its people. And there is no reason why it shouldn’t be,” the minister said.
Riyadh and Tehran agreed to resume diplomatic ties and reopen embassies in each other’s countries after China-led talks in Beijing, which ended on 10 March.
Iran’s top security official Ali Shamkhani (R), Chinese Foreign Minister Wang Yi (C) and Saudi Arabia’s National Security Advisor, after Iran and Saudi Arabia agreed to resume bilateral diplomatic ties after several days of consultations Security Advisor Musaid Al Eban poses for a photo. Between top security officials of the two countries in Beijing, China on March 10, 2023.
Chinese Foreign Ministry handout | Anadolu Agency | Getty Images
They also pledged to reaffirm “respect for the sovereignty of states and non-interference in the internal affairs of states”, a major step forward. After years of mutual animosity, suspected attacks and espionage between the two countries.
Some regional analysts and Western policy makers doubt whether the countries – especially Iran – will stick to the promises remains to be seen. The two Middle Eastern powers are still at odds ideologically, and neither country’s suspicion of the other will disappear overnight.
Still, the Saudi finance minister appeared optimistic.
Al-Jadaan said, “Iran is our neighbor and has been for hundreds of years and will be.” “So I don’t see any issue that should prevent normalization of relations, cross-investment, etc., as long as we stick to agreements – you know, respecting sovereign rights, not interfering in other people’s affairs, Respecting UN conventions and so on. So I don’t really see any hindrance.”
The countries have additionally agreed that previous cooperation agreements – namely a “Security Cooperation Agreement” from 2001 and a “General Agreement for Cooperation” from 1998 – in the fields of trade, economy, sports, technology, science, culture, sports and youth will cover to be revived
“The three countries expressed their willingness to make all efforts towards enhancing regional and international peace and security,” said a Saudi statement announcing the agreement.
The two major oil producers face starkly different economic realities: Saudi Arabia, investing internationally and launching mega-projects worth trillions of dollars to diversify away from oil as part of the kingdom’s Vision 2030 plan; and Iran, whose economy and currency have spiraled under Western sanctions, government corruption and years of economic mismanagement.
Investments from Saudi Arabia would likely be a major boon to Iran’s battered economy, although it is unclear whether existing US sanctions on Iran will apply to financial activities between the two countries.
“I think, without going into details, I think we recognize … clearly that it’s important for you to be able to focus on your economic growth and to be able to focus on providing for the people in your country.” For that, you need stability, they need stability,” Al-Jadaan said. “And I think there are a lot of opportunities in Iran, and as long as there is goodwill, we provide a lot of opportunities for them.”
Iran and Saudi Arabia have long accused each other of destabilizing the region and regard each other as serious security threats, often on opposite sides of regional conflicts such as Yemen, Lebanon and Syria. Both Riyadh and Washington accuse Tehran of being behind a series of attacks on Saudi ships, territory and energy infrastructure over the past few years.
Saudi Arabia severed diplomatic ties with Iran in 2016 after Iranian protesters stormed the Saudi embassy in Tehran, in response to which Saudi authorities executed 47 dissidents, including a prominent Shia cleric.