- “If people really stick to the principles of what has been agreed, I think that can happen very quickly,” Saudi Finance Minister Mohammed Al-Jadaan told CNBC in Riyadh.
- Riyadh and Tehran agreed to resume diplomatic relations and reopen embassies in each other’s countries after Chinese-led negotiations in Beijing that culminated on March 10.
- Some observers are skeptical about whether the countries – Iran in particular – will honor the mutual commitments made in the diplomatic agreement, which has yet to be seen.
Saudi Arabia could soon invest in its long-standing regional foe Iran, following a groundbreaking deal between the two countries to restore diplomatic ties, the kingdom’s finance minister, Mohammed Al-Jadaan, said on Wednesday.
When asked by CNBC’s Hadley Gamble in Riyadh how soon the world would see the wealthy Saudi kingdom make significant investments in Iran and vice versa, Al-Jadaan replied, “I would say very soon.”
“If people really stick to the principles of what has been agreed, I think that can happen very quickly. Our goal, and I think this has been made very clear by our leaders before, is to have a region that is stable is, that is, able to care for its people and thrive. And there is no reason not to let that happen,” the minister said.
Riyadh and Tehran agreed to resume diplomatic relations and reopen embassies in each other’s countries after Chinese-led negotiations in Beijing that culminated on March 10.
Iran’s top security official Ali Shamkhani (R), Chinese Foreign Minister Wang Yi (C) and Saudi Arabia’s national security adviser Musaid Al Aiban pose for a photo after Iran and Saudi Arabia agreed after several days of deliberations to to resume bilateral diplomatic relations between the top security officials of the two countries in Beijing, China on March 10, 2023.
Handout of the Chinese Ministry of Foreign Affairs | Anadolu Agency | Getty Images
They also pledged to reaffirm “respect for the sovereignty of states and non-interference in internal affairs of states”, an important step after years of mutual animosity, suspected attacks and espionage between the two countries.
Some regional analysts and Western policymakers doubt whether the countries – Iran in particular – will stick to the pledges, which remains to be seen. The two powers in the Middle East are still ideologically at odds, and both countries’ mistrust of the other will vanish overnight.
Still, the Saudi finance minister seemed optimistic.
“Iran is our neighbour, and has been and will be for hundreds of years,” Al-Jadaan said. “So I don’t see any problem that would prevent the normalization of the relationship, mutual investments, etc., as long as we stick to agreements – you know, respect sovereign rights, don’t interfere in other people’s affairs, respect United Nations treaties and others. So I don’t really see any obstacles.’
The countries also agreed that previous cooperation agreements – namely a 2001 “Security Cooperation Agreement” and a 1998 “General Cooperation Agreement” in the areas of trade, economy, sport, technology, science, culture, sports and youth – would be given new life breathed in.
“The three countries expressed their willingness to make every effort to strengthen regional and international peace and security,” the Saudi statement announcing the deal said, referring to itself, Iran and China.
The two big oil producers face vastly different economic realities: Saudi Arabia, which is investing internationally and launching trillion-dollar mega projects as part of the kingdom’s Vision 2030 plan to take diversity away from oil; and Iran, whose economy and currency have spiraled under years of Western sanctions, government corruption and economic mismanagement.
Investment from Saudi Arabia would likely be a major boon to Iran’s battered economy, though it’s unclear whether existing US sanctions against Iran apply to financial activity between the two countries.
“I think, without going into details, I think we recognize…clearly if you want to focus on your economic development and focus on providing for the people of your country, you need stability, they need need stability,” Al-Jadaan said. “And I think there are many opportunities in Iran, and we will provide them with many opportunities, as long as the goodwill continues.”
Iran and Saudi Arabia have long accused each other of destabilizing the region and view each other as serious threats to security, often on opposite sides of regional conflicts such as those in Yemen, Lebanon and Syria. Riyadh and Washington both accuse Tehran of being behind several attacks on Saudi ships, territory and energy infrastructure in recent years.
Saudi Arabia cut diplomatic ties with Iran in 2016 after Iranian protesters stormed the Saudi embassy in Tehran in response to Saudi authorities’ execution of 47 dissidents, including a leading Shia cleric.