Saudi Arabia’s Footprints in Southeast Asia

Recent Features

Features | Diplomacy | Southeast Asia

Saudi Arabia’s Footprints in Southeast Asia

Saudi Arabia’s increased influence in Muslim-majority countries will have wider ramifications for ASEAN.

Saudi Arabia’s Footprints in Southeast Asia

Saudi Arabia’s King Salman, left, stands next to Malaysian Prime Minister Najib Razak during a welcoming ceremony at Parliament House in Kuala Lumpur, Malaysia (Feb. 26, 2017).

Credit: AP Photo/Vincent Thian

When King Salman bin Abdulaziz Al-Saud of Saudi Arabia embarked on a month-long trip to Asia in February this year, Western media outlets led with incredulous stories about the monarch’s large entourage and their mountain of luggage. Traditionally obsessed with the desert kingdom’s human rights record and the state-sponsored brand of Islam, those same outlets took delight in touting the trip as a sign of Saudi economic weakness.

However, they missed out on a far more important development – in venturing eastward, Saudi Arabia seeks to secure its leadership of the Islamic world. In doing so, its engagement with Southeast Asia is likely to have significant short-term ramifications for the region’s politics and, in the long run, deepen the cultural divide while raising difficult questions about ASEAN’s unity and security.

Besides the economic powerhouses of China and Japan, the King chose to visit only Muslim-majority countries in Southeast Asia – Brunei, Malaysia, and Indonesia. It might have been easier to corral investments from other Southeast Asian markets like Thailand or Singapore; that the King chose to skip those destinations illuminates the fact that this trip was organized with more than just economic motivations in mind.

Saudi Arabia has long seen itself as the leader of the Islamic world, but since the ascendance of a theocratic Iranian government in 1979, that position has consistently been challenged. With the Obama administration’s conclusion of the Joint Comprehensive Plan of Action with Iran and the P5+1 countries, the threat of a resurgent Iran has been looming large in the Saudi psyche. The King’s February trip was undoubtedly a means of cementing the desert kingdom’s leadership status before Iran is fully reintegrated into the world order. While Southeast Asian Muslims are predominantly Sunni and thus unlikely to come under Iranian influence, making a big show of its leadership and influence across the world will go some way in securing Saudi Arabia’s stature.

And what better way of cementing one’s leadership of the Islamic world than by backing leaders who have made a concerted effort to court Muslim voters and further Islam as a way of life in their countries? Sultan Hassanal Bolkiah introduced Shariah law in Brunei to an international human rights outcry in 2014. The first-ever visit by a Saudi King to Brunei thus took on a symbolic significance, indicating approval of the Sultan’s religious legitimacy and support for his policies.

In Malaysia, Prime Minister Najib Razak has been aggressively courting the Islamic vote since the 1Malaysia Development Berhad (1MDB) corruption scandal broke. In December 2015, Rayani Air, Malaysia’s first Shariah-compliant airline was launched to much fanfare. Half a year later, the government stoked outrage, especially among ethnic minorities, by introducing a bill that would implement hudud, punishments such as amputation and stoning determined by Shariah law, in Shariah courts. In a clear attempt to woo hardline Muslim voters, Najib voiced his support for the bill. Finally, in December 2016, he led a boisterous rally in Kuala Lumpur, expressing solidarity with the persecuted Rohingya Muslims of Myanmar. He cried, “We want to tell Aung San Suu Kyi that enough is enough! ” before adding that “ASEAN must uphold human rights… The world cannot just sit by and watch genocide taking place.”

Rather than merely bolstering the short-term political fortunes of leaders like Najib and Sultan Hassanal Bolkiah, however, Saudi Arabia has committed to greater economic engagement with these Southeast Asian nations. This comes at a welcome time. Southeast Asian leaders are belatedly waking up to the realization that their decades-old strategy of depending on China’s economic performance to spur domestic growth is anachronistic. The slowdown of the world’s second largest economy since 2014 has dealt a huge blow to Southeast Asian economies. Indonesia, in particular was hard hit, with exports to China falling by 22.5 percent in 2014 from the previous year. Far from being arrested, that figure slid a further 34 percent in the first quarter in 2015.

In that light, Saudi investment in Indonesia presents an alternative source of funds to fuel economic growth. During the King’s recent visit, the two governments inked a slew of agreements, the most notable of which were a $6 billion refinery joint venture in Cilacap in central Java between the two countries’ state-owned oil companies, Pertamina and Saudi Aramco, and the promise of $1 billion in Saudi financing for Indonesia’s economic development. In the midst of the 1MDB scandal, Malaysia received a generous injection of Saudi money during the King’s visit, with seven memoranda of understanding worth more than $2 billion concluded in a range of sectors. The Saudi interest presents a much-needed opportunity for both countries to diversify their economies and reduce dependence on China. Bolstered religious legitimacy could also open the floodgates of investment from other Muslim-majority countries in the Middle East, following Saudi Arabia’s lead. In fact, Qatar’s emir is undertaking his own tour of Southeast Asia this month.

In engaging with Southeast Asia, Saudi Arabia is primarily acting in its own self-interest, to preserve its leadership of the Islamic world and grow trade ties. However, this commitment has plenty of ramifications for the region. For Indonesia and Malaysia, it offers them the ability to regain some autonomy in their security and geopolitical decisions. Both countries have been abnormally quiet on the South China Sea conflict playing out in their backyards. Undoubtedly, this is partly because of their lopsided economic dependence on China. In Malaysia’s case, China has become its top trading partner and source of foreign direct investment. Furthermore, China has demonstrated extreme generosity in helping to bail out the heavily-in-debt 1MDB, spending over $4 billion to acquire an energy company and property project in 1MDB’s portfolio. In the absence of other willing financiers, Najib seems to have decided that silence on territorial issues is a small price to pay for political survival.

In Jakarta, President Joko “Jokowi” Widodo’s relatively clean government has precluded Indonesia from being beholden to China in the same manner, though it is still reliant on Chinese goodwill. Since coming to office in October 2014, Jokowi has met with Chinese President Xi Jinping on at least five different occasions. The leaders’ rapport has seen Chinese investment in Indonesia rise from $628 million in 2015 to $2.6 billion in 2016, making China the third largest investor in Indonesia. China is also funding and executing a host of infrastructure projects across the archipelago, helping Jokowi fulfill a key campaign promise.

Despite these close economic ties, Indonesia is wary of China’s claims in the South China Sea. China’s vague “nine-dash line” seems to put 30 percent of the exclusive economic zone generated by Indonesia’s Natuna Islands in a potentially disputed zone and despite numerous efforts to clarify Beijing’s stance on the issue, the Indonesian government has continually been frustrated by the Chinese refusal to clear the air. This has led to confrontations between fishing boats and naval officials from both sides over the past few years. Nonetheless, for all the browbeating, there is certainly a sense that Indonesia can ill-afford a full-blown conflict with China, or even a trade war.

Saudi engagement with Southeast Asia offers both Malaysia and Indonesia the opportunity to wean themselves slightly off their deep-seated economic dependence on China and provide them a measure of flexibility in defending their sovereign interests in the South China Sea. In the longer run, if a deeper shared sense of Islamic identity is indeed cultivated and able to transcend historical grievances, the relationship between Malaysia and Indonesia could fundamentally change to one grounded in religion, offering fraternity and support in regional forums and the international arena.

What this augurs for ASEAN, however, is quite a different question. While it may give ASEAN a realistic opportunity to address difficult issues like the South China Sea as a bloc, it also seems to signal the entrance of yet another power broker in the region. Saudi Arabia’s cultural and religious influence will continue to shape the trajectories of Southeast Asian nations, both those with Muslim majorities and otherwise. In Indonesia and Malaysia, the King agreed to raise the hajj quotas, and in the latter, tripled full university scholarships for Malaysian students to study in Saudi Arabia. The reach of existing Saudi cultural influence in both countries should not be underestimated either. In 2013, there were almost 2,000 Saudi students studying in Malaysia while in Indonesia, the desert kingdom has built over 150 mosques, and established a free university in Jakarta that educates 3,500 students each year.

A 2016 New York Times report noted that Saudi teachings have “shifted the religious culture in a markedly conservative direction” in Southeast Asia. One has to look no further than the recent case of a launderette in Johor, Malaysia declaring that it would only serve Muslim customers for proof of increasing Islamization. Only at the behest of the Sultan of Johor did the launderette owner apologize and reverse the exclusive policy. The incident so concerned Malaysia’s nine sultans that they issued a rare statement a few days later, saying that such actions “can undermine the harmonious relations among the people of various races and religions” and that “[u]nity among Malaysia’s multi-ethnic and multi-religious people is key to ensuring the country’s ongoing stability.”

Similarly, in Indonesia, the contentious election of Anies Baswedan as Jakarta governor in April 2017, in part due to the support of hardline Muslim groups, demonstrates their growing significance in the world’s largest Muslim country. Douglas Ramage of the public policy consultancy BowerGroupAsia told The Diplomat that the influence of more moderate Islamic institutions in Indonesia like Muhammadiyah and Nahdlatul Ulama “has waned a bit.” Even Jokowi himself was criticized by the Ulema Council’s deputy secretary-general for saying that “politics and religion should be well separated so that people could differentiate between political and religious matters.” With the fresh injection of Saudi funds, the growing conservatism in the region looks likely to continue.

Najib’s diatribe against Myanamr’s Aung San Suu Kyi was one window into how ASEAN leaders have had to respond to this cultural development. If religiously-driven voters are to serve as a key part of Najib’s base, he will likely continue to position himself as a defender of Muslims across the region, awakening a heretofore dormant force in Southeast Asian relations that will outlive his tenure. This will probably cause significant tensions with countries where sizable Muslim minorities are present, including Myanmar, the Philippines, Singapore, and Thailand. These countries are already on edge after a spate of recent attacks and foiled terrorist plans, and they will certainly advocate for the Muslim-majority countries to embrace a more moderate brand of Islam.

Finally, Najib’s diatribe was bizarre given ASEAN’s steadfast adherence to the principle of non-interference in other member states’ affairs. ASEAN’s founders were explicit in their insistence that each state should be given the latitude to govern as they saw fit, stemming from a desire to send a message to the then-superpowers, the Soviet Union and the United States, that sovereignty was sacrosanct. In this instance, Najib was able to evoke a response from Myanmar and ASEAN but it sets a dangerous precedent.

Saudi Arabia’s engagement with Southeast Asia signals the uncertainty and instability characteristic of today’s global order. With the United States absolving itself of international leadership and calling into question the very tenets of the postwar world, a host of state actors have devised various means to protect their nations’ interests, including other Middle Eastern states. Saudi Arabia is no different in that respect but its renewed engagement – and the increasing religious influence it wields as a result – poses difficult questions for an already-weakened ASEAN.

An earlier version of this piece was published in the Brown University Political Review

Naishad Kai-ren is currently studying in the Schwarzman Scholars Program at Tsinghua University.