The Trump Entourage in Saudi Arabia…Notes from a Radio Interview

Donald Trump and King Salman of Saudi Arabia…two beauties

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Notes..KGNU – May 30, 2017

(A note on “the Notes” – The radio interview took plaee on May 30, 2017 at KGNU. It was a part of an ongoing series “Hemispheres, Middle East Dialogues” hosted by Jim Nelson who has been interviewing Ibrahim Kazerooni and myself since late 2010 from 8-10 times a year for an hour. This particular program was a follow up on the interview done a week earlier, on May 23, 2017, concerning the Trump entourage visit to Saudi Arabia which had just been completed. Given the size of the announce deals made between Saudi Arabia and the United States and the political focus – an attempt to create an anti-Iranian front of some 55 Muslim countries, essentially a Sunni alliance against all the different forms of Muslim Shi’ism, we thought it important to look at the results of this visit in depth and did so over the course of the two program, the full transcripts of which are being prepared.

I take extensive notes for each program and did so for this one. Given the ebb and flow of our dialogues, the notes only partially cover what is discussed in the interviews. When I think that my notes reflect some ideas not covered in the interviews, on occasion, like with this one, I publish them)

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In our last program last week, in looking at the deals that Trump and King Salman agreed to on President Trump’s visit to Saudi Arabia (May 20-21) as a part of his first foreign visit. Besides Saudi Arabia, the Trump entourage also visited Israel, Brussels and two stops in Italy – one at the Vatican to visit the Pope, the second to Sicily to attend a meeting of the G-7 nations. Although Trumpty-Dumpty tweeted that the trip was a roaring success, actually it was the opposite as today’s news, that he pulling the United States out of the Paris Accord on Climate Change testifies. The rest of his trip was also nothing less than a train wreck, even in Israel.

The deals he cut with King Salman in Saudi Arabia – the arms sales, the promise of Saudi investment in U.S. equities and the like are little more than a green light to more Saudi war in Yemen and Saudi meddling and support for ISIS (in the name of course for fighting it) and like organization in Syria. Saudi purchases of sophisticated arms that they are incapable of using without foreign (U.S) advisers will do little to help the deeper problems in the United States and the so-called “Arab NATO” that was announced, actually a “Sunni NATO against all of Shia Islam” began falling apart almost as quickly as it supposedly came together with Pakistan making it clear that it will not target neighbor Iran and with a number of Gulf Emirates announcing in the aftermath of the birth of the so-called alliance that Iran is a good neighbor.

Concerning the visit to Riyadh, the Saudi capitol, we (Kazerooni and Prince) both referred to arrangements that the United States and Saudi Arabia had finalized earlier, in the aftermath of the October, 1973 Middle East War – which informally is called “The Kissinger Deal”. That deal done some 44 years ago sealed much tighter economic and security relations between the two countries. The results of the recent Trump visit simply reinforced the mutual commitments made in 1973.

Returning to the present, the essence of the deals struck on the Trump visit to Saudi are the following:

– a $110 Billion arms sale of all kinds of sophisticated military equipment to Saudi
– a promise of more sales – of up to $380 billion in sales over a ten year period
– a Saudi commitment to invest in U.S. equities and Treasury bonds.
– reports of somewhere between $1.2-1.5 billion in personal gifts given to Trump and his family
– reports of Trump family members benefitting from the trip by getting permits for their business interests.
– the Saudis and the UAE promise $100 million to Ivana Trump inspired World Bank Fund concerned with women’s issues and rights.

Keep in mind that many of these deals were signed as “memoirs of understanding” and not hard contracts…a suggestion that the Saudis are not sure how long Trump will last, thus the hesitancy for harder commitments …but regardless – sizable, if not gigantic arrangements.

Noted how it comes at a time when Trump needed a boost and the Saudi’s needed reassurance of U.S. commitment to the Royal family –

If one looks at the deals struck from a broader perspective…consequences

– Trump has come through for two parts of his base (Wall Street and the military-industrial complex) on which the Saudi deals focus
– The deals tie the economic and political fate of the two countries even tighter than previously.
– The deals act as both Trump Administration support, if not enthusiasm, for Saudi’s immoral war against Yemen and its support of ISIL-like forces in Syria, Iraq and Libya.
– At the heart of the arrangement was a strategic goal – isolating Iran through the establishment of a kind of anti-Iranian coalition.

More on all of this later.

But for now, we want to probe some of the history of the U.S.-Saudi relationship and its fundamental dynamic – U.S. support for one of the most corrupt, undemocratic, religiously fanatical governments in the world – in exchange for a steady flow of oil and the profits that come from that industry.

A series of strategic agreements –

– in the early 1940s – Roosevelt – Saud meeting

– 1973 – 4 – the Kissinger Deal

– The Trump Visit…

All of them involved major economic and strategic agreements – in fact the strategic (security) and economic aspects are joined at the hip.

Want to go back to that moment once again and look at it in more detail as from the point of view of regional geo-politics it essentially cemented the U.S.-Saudi alliance which has been one of the pillars of U.S. Middle East policy since…

By 1973, the anti-colonial sentiment in the Third World was nothing short of rampant. Countries shedding their colonial past, either through armed struggle or more peacefully wanted full control of their natural resources as a part of the deal both as a result of the principle of national self-determination and to fuel development.

1973 – the period from around 1970-1975 was a period of transition and growing turbulence in the global economy, including the Middle East..

• it was in this period that U.S. led global growth “the golden years of the postwar global economy came to an end and long period of stagnation began. Profit rates across the board from manufacturing began to decline.
• an event the significance of which is not always appreciated – the end of the era when the dollar ws the fixed global currency – in 1971 the dollar was “floated” beginning a period of financial instability and turbulence that continues until today.
• competition from Japanese and European manufactured products intensified and cut seriously into U.S. manufacturing profits.
• it was also the period in which the utter and complete defeat of the United States in its Vietnam misadventure would take place – 58,000 Americans dead, 3-4 million Vietnamese – and another million or more Cambodians and Laotians – Undermining the model of the U.S. as the beacon of progress and humanity. It would never recover that respectability in the Third World.

Girls demonstrate against the Saudi-led coalition outside the offices of the United Nations in Yemen’s capital Sanaa August 11, 2015. Two years on the Saudi-led bombing campaign and blockade of Yemen continues. Among other things, the Trump visit to Saudi served as “a green light” for Saudi to continue its murderous war…replenished with $150 billion in new sophisticated U.S. military hardware.

• In the Middle East too the United States was losing prestige as its policies became more and more one-sided in support of Israel and against the aspirations of the Palestinian people

• Both economically and politically, in the Middle East and elsewhere U.S. policy consisted in large measure of “damage control” how to minimize the damage.
• It was in the midst of this global shift that the October 1973 War took place which somewhat shifted the balance of power between Israel and its Arab adversaries (Egypt, Syria, the Palestinians)

U.S. concerns in the post October 1973 War were:

How to minimize the political damage to its interests from that war – to that end, the Camp David Accords

How to minimize the economic damage caused by the Arab oil embargo, and growing anti-American sentiment in the Arab World – “The Kissinger Deal” between the United States and Saudi Arabia.

Ultimate achievement – splitting the Arab World into two camps and ending the temporary unity that existed during the October 1973 war.

Leaving Camp David aside… in order to address the economic crisis, the United States understood, or at least certain elements of the U.S ruling class understood that some concessions would have to be made to the Saudis, and Arabs in general ..

The goal was to make as few concessions as possible while exacting the most concessions from the Saudis…

This “concession” – we will talk more about it below – was based on two simple factors:

1. That the price of crude oil had been pathetically low for 3/4 of a century with oil producers being robbed blind by major multi-national oil companies controlled by core countries of the global economy, be the UK, USA, France, Italy, etc.

2. That the movement to nationalize crude oil (and other valuable raw materials) on the part of peripheral and former colonial countries was too powerful to stop. It was going to happen anyway. As a result, rather than continuing to try to “stop history” – which basically meant more military intervention, assassinations a la Lumumba of the Congo – better to find ways to accept the inevitable and manage it to the degree possible.

Let us remember that it later emerged that when the Saudi’s agreed to participate in the oil embargo during that war in protest of the one-sided U.S. support of Israel in 1973 War that there was talk in the Nixon cabinet of sending in the U.S. marines to seize the Saudi oil fields. It was none other than the evil genius – and he was/is both – Henry Kissinger, who opposed such a move as dangerous to the world economy, and proposed a complex alternative economic and political economy the essence of which is as follows:

In exchange for the United States agreeing to permit the Saudis – and with them – other major oil producing countries both to nationalize, to one degree or another, oil production at the well head (but not transportation, refining, wholesaling and marketing) and to dramatically raise the price of crude oil by some 300%.

This “concession” – we will talk more about it below – was based on two simple factors:

1. That the price of crude oil had been pathetically low for 3/4 of a century with oil producers being robbed blind by major multi-national oil companies controlled by core countries of the global economy, be the UK, USA, France, Italy, etc.

2. That the movement to nationalize crude oil (and other valuable raw materials) on the part of peripheral and former colonial countries was too powerful to stop. It was going to happen anyway. As a result, rather than continuing to try to “stop history” – which basically meant more military intervention, assassinations a la Lumumba of the Congo – better to find ways to accept the inevitable and manage it to the degree possible.

Put another way – Kissinger, who understood all this better than the rest of the cabinet – was acknowledging that the anti-colonial legacy of past century was about too powerful to crush – as he tried to do in Indochina..better to accept the inevitable and then to negotiate as many concessions as possible from the Saudis, understanding that any U.S.-Saudi arrangement would set the standard for the relations between all producing and consuming nations…which it essentially did.

Those few countries that tried to break from this new consensus – Iraq, Libya, post Soviet Russa – and now post Islamic Revolution Iran – ie, refused to “play the game” according to the Kissinger rules – would be targeted for “regime change” – or immense security pressure.
So what were the basic elements of the arrangement that was agreed to…

1. That the Saudis will never again participate in an oil embargo, use the oil weapon politically to cripple the global economy that the U.S, as hegemonic power, was managing – and continues, although not very well at all, to manage

2. That the Saudis will furthermore assure, to the degree that the market allows, the lowest possible price for crude oil moderating the efforts of OPEC members to raise the price. This they would achieve repeatedly over the decades by flooding the market with crude (almost always as a result of pressure from Washington) as oil prices skyrocketed.

3. That Saudi Arabia – which was already doing this – would agree to act, along with the Shah’s Iran at the time, Israel and Turkey – as regional allies of the United States, to be a part of “the team” to counter radical nationalism that would threaten Washington’s interests.

4. That a good chunk of the additional profits that would be won from higher oil prices would be “recycled” to the United States (and other core countries) in the following manner (as Ibrahim noted last week)

• large purchases of sophisticated military hardware from Western arms manufacturers – mainly American but also from a number of European countries
• investing in both the U.S. stock market and in U.S. treasury bonds to help artificially prop up the value of the dollar. It also gave Western bank ultimate control over money from Saudi and other oil producing countries that did likewise
• giving preference to U.S. and other Western construction companies (Bechtel was the name of the company I forget last week) in the mega-construction projects that would take place in Saudi as a result of increased oil profits.

What were the main consequences of the deal
1. It further integrated Saudi Arabia into the U.S. economic sphere giving the U.S. authorites, banks and financial institutions considerable power over the Saudi Arabian economy

2. Although there has been significant infrastructural development in Saudi since 1973 – there can be no doubt about that – it stunted the growth of an independent agro-industrial sector of the economy – as was developing in neighboring Iraq prior to Saddam Hussein’s wars – . Funding that might have gone to preparing Saudi for a “post oil” economic situation and ending its position, despite its wealth as a peripheral player in the global economy – instead went to foreign manufacturers – mostly Americans – and in large measure for non – productive purchases – weapons, in particular…

We should keep in mind here the enormous drain on Saudi resources that is a result of the pervasive corruption and extravagance of the Saudi royal family, one of the most spectacularly wasteful in the world.

3. Saudi plays an increased security role in defense of U.S. interests both throughout the region and beyond (Afghanistan)…but it will backfire.