Source:
http://www.thenational.ae/opinion/comment/why-king-salmans-asia-tour-is-so-significant
Why King Salman’s Asia tour is so significant
Sholto Byrnes
February 28, 2017
There was no mistaking the arrival of King Salman of Saudi Arabia and his entourage in Malaysia on Sunday morning. Traffic stood still for 30 minutes as we waited for the 600-strong royal party to make their way from the airport to the centre of Kuala Lumpur – a near endless stream of limos, lorries, outliers and ambulances, sirens screaming.
This is King Salman’s first trip to South East Asia and the region since ascending the throne in 2015. As the destination for umrah and the Haj, his country has a very special place in the hearts of the Muslim-majority countries he will be visiting, which also include Indonesia, Brunei and the Maldives. But the king’s actual presence is something different – something rare, momentous and significant in a number of ways.
On a practical and quantifiable level, the Asian tour is about trade. In Kuala Lumpur on Tuesday, Malaysia’s Petronas signed a deal for Saudi Aramco to invest $7 billion (Dh25 bn) into an oil and petrochemical refinery in the southern state of Johor. Other agreements and opportunities for businesses in both countries will also be announced, and Malaysia’s prime minister Najib Razak has already used this to hit back at critics who accused him of "selling" the country by securing massive investment from China on his visit to Beijing in November.
The Saudi deals show the level of confidence other countries such as the kingdom have in Malaysia, he has said. Indonesia’s president Joko Widodo will make a similar claim if, as expected, $25 billion worth of Saudi investment in his country is unveiled when the touring party moves on to Jakarta.
The king’s visit and the huge amount of new trade being generated around it are also very public votes of confidence in the economic reform programmes in the two South East Asian nations.
Both have undertaken measures to improve long-term resilience and competitiveness, such as the rationalisation or removal of subsidies. Malaysia has also introduced a goods and services tax to widen the tax base. But neither of these moves have been popular – who likes paying more for anything? – and opponents have been quick to try to exploit discontent at their impact.
The arrival of King Salman draws attention to the fact that his government has been undertaking almost the exact same reforms, removing or cutting key subsidies last year, and agreeing in January to impose a new 5 per cent value added tax – in essence, the same as GST. If Saudi Arabia now deems it wise to emulate the reforms of the Malaysian and Indonesian governments, that is an even greater vindication than the plaudits of the IMF and World Bank officials who have already commended the moves.
It is also an acknowledgement that the "new normal" of lower growth and a need to broaden sources of revenue affect a wide range of countries, Saudi Arabia as well as Malaysia, Indonesia and China, which King Salman is also to visit.
At a time when the United States has been sending mixed – and sometimes distinctly unfriendly – signals to many countries, including allies, the Saudi King’s tour also suggests that links in Asia need to be strengthened and may prove more reliable than with the "America First" of Donald Trump.
Militarily, Saudi Arabia’s Muslim counterterrorism coalition may well receive a boost, with several countries likely to offer more concrete participation than thus far. All states on the tour have vested interests in sharing domestic and international counter-radicalisation and deradicalisation programmes, in which Saudi Arabia and Malaysia have particular expertise.
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