News Analysis |
Crown Prince Mohammed Bin Salman has warned that if the punitive measures are taken against the Kingdom on the charges of alleged murder of Journalist Jamal Khashoggi, Saudi Arabia will respond with stern actions. “The kingdom confirms its categorical rejection of any threats and attempts to harm it by threatening to impose economic sanctions or the exercise of political pressure,” a Saudi official told the press.
The Kingdom is feeling the heat after the alleged murder fiasco of a renowned contributor of Washington Post, who is believed to have been murdered inside the Saudi consulate in Istanbul. The United States of America along with Britain, France, and Germany have threatened the Kingdom with severe punishment if the state is found complicit in the disappearance of the journalist.
There is a higher degree of truth when Mohammed Bin Salman says that he will go on the retaliatory mode if his country is subjected to the economic and political pressure.
On the economic front, the uncertainty after the debacle led to the downward trend in the Saudi Stock Market which experienced a negative growth of about 7% during the mid-trading. Saudi Arabia, under the vision of Crown Prince Mohammed Bin Salman, is envisaging to steer its oil-based economy toward technology and innovation-driven model.
For the purpose, Prince Mohammed Bin Salman presented the world with his multi-billion worth dream tech city which was termed as the future of Saudi Arabia. On the same lines an investment conference, Future Investor Initiative (FII), is supposed to commence in order to draw foreign investments into Prince’s dream project.
Read more: Saudi Arabia denies killing Jamal Khashoggi
But the crisis has led the backing out of some of the major companies like JP Morgan, Ford Motors, and Uber and media giants like CNN and Bloomberg. The conclusive establishment of the fact about to the disappearance of journalist Jamal Khashoggi is yet to happen but, as of now, all leads are pointing to the state resources been used to carry out this heinous crime.
As per the international law, the consulate building is considered to be as sovereign as the country it belongs to. The authorities of the host country, Turkey, in this case, cannot simply barge in with a warrant to search the place. The due process required could have provided the Saudis to remove the remnant clues, if any, relevant to Jamal Khashoggi.
The most likely result of the fiasco is Saudi Arabia getting away with the matter due to insufficient evidence to reach a conclusive judgment.
There has been news about the possession of some conclusive video and audio evidence in the custody of Turkish authorities but none of it has been made public so far. No matter how much the circumstantial evidence points toward Saudi Arabia, to implicate a sovereign state, a substantial proof is needed. As long as it is not provided, it is hard to pin down the Kingdom of Saudi Arabia which can hurt those who impose the sanctions on it in the first place.
How will the Economic Sanction Against Saudi Arabia Play Out?
In case of a strict action which the current Saudi Allies, USA, and Britain, might decide to punish KSA, economic sanctions are most plausible. And in layman’s explanation, it will restrict the export of the oil out of the country. But an oil embargo is not as such convenient even for the USA to impose as it has the potential to be counterproductive.
Donald Trump’s deadline for Iran is less than a month away which implies a shortage of oil in the global market since supply would be cut down. If the USA goes on to eliminate another major supplier from the market, Saudi Arabia as a result of the embargo, the global oil prices will be skyrocketing in no time.
Per barrel price of oil is already around $80 dollar which has led to the massive devaluation of currencies like Indian Rupees and China Yuan. Therefore, the USA and its western allies will take due deliberation before going with such an option.
Will Saudi Retaliatory Measures be Enough to Hurt the USA?
Even if the resultant sabotage of strategic alliance, which has its own deep consequences, is left out of the equation for simplicity, the cancellation of arms deals which President Trump brought after his first official visit as president to Saudi Arabia could hurt the US economy. U.S defense contractors have already expressed their concerns over the discourse which Trump administration is seeking in the light of unfolding events.
There is a higher degree of truth when Mohammed Bin Salman says that he will go on the retaliatory mode if his country is subjected to the economic and political pressure. Given the recent example of the expulsion of the Canadian diplomatic mission, there is not a shred of doubt about the words of Saudi monarch turning into action.
The situation is particularly troubling for the U.S as it can neither brush the issue under the carpet as it would unleash a precedence which may have more gruesome implications in future. And on the other side, punishing a state like Saudi Arabia also has its own repercussions. The most likely result of the fiasco is Saudi Arabia getting away with the matter due to insufficient evidence to reach a conclusive judgment.