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countries could use a chance to become a unifying center of Asia. In this context, in the view of these authors, it would be quite logical to set up with participation of the CSTO and SCO a cooperative security system which could allow Russia, China, Central Asian countries and their allies in Asia effectively to tackle the problems of Afghanistan and other security problems in Asia. It is also necessary to improve the measures, methods and forms of opposing religious Islamist currents of Central Asia, which are a grave threat to security.
2019.01.009. ALEXANDER ROGOZHIN. ARAB COUNTRIES OF PERSIAN GULF - COURSE TO ASIA // "West - East - Russia 2014. Yearbook IMEMO RAS," Moscow, 2014, P. 116-121.
Keywords: Arab countries, Persian Gulf, Saudi Arabia, Qatar, Kuwait, Bahrain, Oman, OAE, Asia, PRC, India, negotiations, contracts, trade, investments, fast-developing countries, migrants, immigrants.
Alexander Rogozhin,
PhD(Economics),
Head of the Sector for Socio-Economic Problems, Center for Development and Modernization Studies, IMEMO RAS
The author examines the stepping up of diplomatic activity of Arab countries in Asia, primarily in their relations with China and India.
In September the Foreign Minister of Saudi Arabia, Crown Prince Saud Al-Faisal held talks with his Chinese colleague Wang Yi, in which he promised to contribute to speeding up the creation of a free-trade zone of Cooperation Council of Persian Gulf Arab States - PRC and take part in the formation of the Asia Infrastructure Investment Bank, a new financial, institution, in which China has shown a great interest. In November the Emir of
Qatar Tamim bin Hamad Al Tani and the Chairman of the PRC Xi Jinping signed an agreement on the setting up of strategic partnership of China and Qatar. In the course of the negotiations the Emir spoke in favor of the speedy formation of the Persian Gulf Arab states - PRC free-trade zone and expressed a desire to take part in the Chinese project of the Maritime Silk Road and enter the board of the founders of the Asia Infrastructure Investment Bank.
Last January Saudi Arabia was visited by India's Minister of Finance P. Chidambaram to discuss questions connected with financing investments projects of mutual interest,
A reply visit was made to India by the Vice Premier and Minister of Defense of Saudi Arabia, Crown Prince Salman ben Abdel Aziz al-Saud, who had negotiations on cooperation with India in the defense industry, science and technology. At the beginning of 2014 Qatar and India prolonged their contract valid since 2004 on supplying India with liquefied natural gas, and in November the Qatar Minister of trade and industry Taufiya Fauzan al Rabiah headed a delegation of the business circles of his country to the 4th Indian-Arab conference on cooperation in New Delhi. Following a visit to India of the Prime Minister of Kuwait Sheikh Jaber al-Mubarak al-Hamad as-Sabah in 2014, a meeting of the Intergovernmental commission was held which resulted in signing numerous contracts envisaging the construction of joint enterprises in such spheres as oil extraction, petrochemistry and transport, and energy infrastructure. The biggest of them all will be an iron-and-steel combine which India will build in Kuwait. In February 2014 the King of Bahrain Hamad ben Isa al-Halifa made his first royal visit to India during which a number of agreements were reached on investment cooperation in various branches of the manufacturing industry, in information-communication technologies and in banking.
In the view of the researcher, the stepped-up activity of member-countries of the Cooperation Council of the Arab States of the Gulf is connected with potential threats (especially for mid-
term) to the sale of their oil and gas in Asia from new competitors -the United States and Russia. The former may emerge on the Asian markets of oil and gas due to technological innovations and full self-sufficience in energy by 2020 and begin to export its hydrocarbons to Asian countries. Russia is undertaking a no small effort to come out to the oil and gas markets of China (primarily) and such markets in other Asian countries. The CCASG forecast that quite soon Russia may become a major actor on the Asian market of oil and gas. At the same time the Gulf states concentrate attention on the economic sphere of cooperation with Asian countries, not confining to regarding them as purchasers of oil and gas only.
Asia today is the major trade partner of the CCASG countries as far as the export of oil and gas and import of industrial commodities and food products are concerned. The share of Asia (excluding Japan) in the total volume of trade of the CCASG countries amounts to 40 percent and tends to grow. The growing trade ties of these countries with the developing countries of Asia are accompanied with the intensification of bilateral relations in the sphere of investments. Being supported by the further growth of the share of Asia in the structure of global demand for energy in the nearest decades, the present shift of the CCAGS trade toward Asia is expected to continue. It is precisely the growing demand for energy-carriers of Asian countries that will help these countries maintain economic growth and retain important oil and gas markets. Asia is rapidly becoming the main trade partner of the Persian Gulf monarchies, having left the United States and the European Union countries far behind. During the past decade significant changes in the structure of the CCASG countries' trade were noted. Japan remains the major export direction for these countries, however its share lowered from 23 percent in 2000 to 15 percent in 2012. At the same time India moved from 10th to 2nd place, and now it accounts for more than ten percent of the export of the CCASG countries. This change of the trade structure reflects a shift of the global economic weight
in favor of rapidly developing countries, especially in Asia, which now account for more than forty percent of the entire CCASG export. More than half of it is now delivered to rapidly developing and developing countries. China and India become the biggest trade partners of the CCAGS countries.
The importance of trade relations with the Asian continent is reflected in the trade policy of the CCASG member-countries toward Asia. A milestone was the beginning of the operation of the agreement on free trade in September 2013 between the CCAGS and Singapore. It became the first such agreement signed between the CCAGS and non-Middle Eastern country. It is exempt from customs duties by 99 percent of the total goods volume imported from Singapore to the CCAGS countries. This agreement envisages preferential relations in other spheres, including trade in services, investments, rules of determining the country of origin of commodity, and customs procedures. At present talks are conducted on these subjects with other Asian trade partners, including India and China.
The PRC Chaiman Xi Jinping in January 2014 called on other states to speed up the signing of an agreement on free trade between China and the CCAGS, and this is a subject of negotiations for a decade. As to China, this agreement will not only secure a large import of oil by more favorable price, but also open up for it new opportunities in the sphere of investments and business.
The growing trade ties of the CCAGS countries with Asian developing countries were accompanied with the increasing flow of mutual investments. For the Arab countries of the Persian Gulf investment projects in Asia promise access to expanding markets of energy-carriers, as well as other attractive sectors of the economy, such as the financial sector (including the "Islamic" one), and telecommunications. In turn, Asian countries, and first and foremost China, are striving to bolster up their energy security through strategic investments in the CCAGS zone. China's direct investments in CCAGS countries by the end of 2014 reached almost $30 billion, having comprised about eight percent of the total
flow of investments to the region. Thus, China has taken 6th place in the group of the leading foreign investors in the CCAGS, outstripping Germany and Britain. Almost fifty percent of all Chinese investments were channeled to the energy sphere of countries of the region, more than one-third to infrastructure objects - from telecommunication to entertainment centers. Over fifty percent of Chinese investments to the monarchies of the Persian Gulf were channeled to Saudi Arabia and about thirty percent - to the UAE.
In 2011 India became the seventh investor in size to the UAE, having accounted for three percent of the total volume of investments to that country and fourth source of investments by volume in Oman, which received $06 billion. It is indicative that if the means of the main investors - Britain and the United States -are channeled preferably to oil and gas prospective work, Indian investments are concentrated in industrial production (almost fifty percent) and financial services (21 percent). The volume of Indian investments in Saudi Arabia in 2014 reached $1.6 billion.
As to direct investments of the CCASG states to Asian countries, they not only grow in volume, but are also diversified by branches, going beyond the boundaries of the traditional spheres -energy and the transport infrastructure. The UAE is the 10th in volume investor in India: they amounted to $2.6 billion by 2014. Qatar is also quite active in this respect in Asia. The head of the Qatar Investment Authority Ahmad Mohamed Al-Sayed has announced the plans of his fund for cooperation with the Chinese investment corporation CITIC Group, and also of its intention to invest $10 billion within the framework of diversifying assets. Qatar investments in Asia in health service, construction of infrastructural objects, and also an intention to invest $20 billion more in Asia within the next five years. In the next three-to-four years Qatar will invest $5 billion in Malaysian petrochemical enterprises.
Apart from trade, and investments another important linking elements between the Persian Gulf monarchies and Asian developing countries is a vast community of migrants from Asia living and working in the CCASG countries. They form a
