The PM in KSA

Although the special relationship between the UK and the US has (historically) taken pride of place, it is clearly not the only relationship deserving of the word. Whilst the Prime Minister’s travels to the Gulf (shortly after the decisive notification that the country is departing the European Union) evidences a special relationship, it may not be a special relationship that takes pride of place in the manner that trans-Atlantic relations have done; indeed the government perennially receives criticism for dealings with the Arab Gulf countries. In actuality efforts such as the diplomatic and trade oriented visit this week are more than a recognition of economic necessity: they are also legitimately defended as a means of constructive engagement.

Whether it is Saudi Arabia, Qatar or the UAE, or another of the other GCC states, flows of capital and people between Britain and the Arab Gulf are significant predictors for both government and corporate engagement and business in the region. Given the subject matter of IDRAK and this blog the potential consistency and growth of Islamic finance in connection with Gulf investment into the UK is central to this post. Investment in property especially in London is an important source of tax receipts and appears to continue unabated since the Brexit referendum last June.

When the recent venture in the Arab Gulf is compared with other less successful efforts to engage in the wake of Brexit (planned and actually triggered) the importance of the former comes into relief — and the absence of the penetrative colonial history which casts a shadow over attempts to engage with India, which nevertheless remains hugely important for Britain. However as is reported in the Financial Times and elsewhere this week the diplomatic handling of discussions directed towards a trade deal in India has been more clumsy; it has not seemed to fully recognise the change in the relationship (with much made of the internal appellation Empire 2.0) by means of, for example, liberalised immigration arrangements. The calculation that the government is making in this regard — which is politically prudent if not inevitable — is that wealthy investors who are small in number, are eminently more sustainable than larger numbers of immigrants who may bring labour but cannot compete in capital investment.

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