- “If people really stick to the principles that have been agreed, I think that 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 following China-led negotiations in Beijing, which culminated on March 10.
- Some observers are skeptical that the countries – especially Iran – will stick to the mutual promises of the yet to be seen diplomatic agreement.
Saudi Arabia could soon invest in its longtime regional foe Iran after a landmark deal was reached between the two countries to resume 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 might see the wealthy Saudi kingdom making significant investments in Iran and vice versa, Al-Jadaan replied, “I would say very quickly.”
“If people really stick to the principles that have been agreed, I think that can happen very quickly. Our goal, and I think this has been made very clear by our leadership before, is to have a stable region, to be able to support its people and to thrive. And there is no reason why it shouldn’t happen,” the minister said.
Riyadh and Tehran agreed to resume diplomatic ties and reopen embassies in each other’s countries following China-led negotiations in Beijing, which 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 to end bilateral diplomatic ties after several days Consultations to resume between senior 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,” an important step after years of mutual animosity, alleged attacks and espionage between the two countries.
Some regional analysts and Western politicians are skeptical that countries – Iran in particular – will live up to the pledges, which remains to be seen. The two powers in the Middle East are still at odds ideologically, and each country’s distrust of the other will disappear overnight.
Nevertheless, the Saudi finance minister was optimistic.
“Iran is our neighbor and has been and will continue to be for hundreds of years,” Al-Jadaan said. “So I don’t see any problem that would prevent normalization of the relationship, mutual investments, etc., as long as we stick to agreements – you know, respect sovereign rights, don’t interfere in the affairs of others, respect United Nations conventions and others . So I really don’t see any obstacles.”
The countries have also agreed that previous cooperation agreements – namely a 2001 “Security Cooperation Agreement” and a 1998 “General Cooperation Agreement” covering trade, economy, sport, technology, science, culture, sport and youth – will apply would be revived.
“The three countries have expressed their willingness to make every effort to improve regional and international peace and security,” the Saudi statement announcing the deal said, referring to itself, the Iran and China.
The two big oil producers face vastly different economic realities: Saudi Arabia is investing internationally and launching trillion-dollar mega-projects as part of the kingdom’s Vision 2030 plan to diversify away from oil; and Iran, whose economy and currency have spiraled from years of Western sanctions, government corruption and economic mismanagement.
Investments from Saudi Arabia would likely be a major boon to Iran’s struggling economy, although it’s unclear whether existing US sanctions on Iran would apply to financial activities between the two countries.
“I think without going into details, I think we recognize … clearly that you need stability so that you can focus on your economic development and taking care of the people of your country, you need stability, you need stability,” Al -Jadaan said. “And I think there are many opportunities in Iran and we offer them many opportunities as long as the goodwill endures.”
Iran and Saudi Arabia have long accused each other of destabilizing the region and view each other as serious security threats, often on opposite sides of regional conflicts such as those in Yemen, Lebanon and Syria. Both Riyadh and Washington have accused Tehran of leading multiple attacks on Saudi ships, territory and energy infrastructure in recent years.
Saudi Arabia severed diplomatic ties with Iran in 2016 after Iranian protesters stormed the Saudi embassy in Tehran in response to the execution by Saudi authorities of 47 dissidents, including a leading Shia cleric.