SINGAPORE - As China and India jostle for influence in the Middle East, this could lead to friction in the region between the two Asian powers, said Senior Minister Teo Chee Hean.

Speaking at the Middle East Institute's (MEI) annual conference on Wednesday (May 18), SM Teo noted the entry of new strategic players in the geopolitical competition in the region.

Both China and India have made moves to partner the Middle East, he said.

China's Belt and Road Initiative has seen it enter into many top-level partnerships with Gulf countries and Iran, and India has begun to look West again to its "near abroad" in the Middle East with its large diaspora in the Gulf, he added.

"Both China and India, as have many other countries in Europe, recognise the importance of engaging the Middle East to secure energy supplies in the face of uncertainties over Russian supplies," said SM Teo.

"As the Asian giants compete in the Middle East, particularly with the recent flare-up in China-India border disputes, the potential for friction in the Middle East between the two Asian powers has grown."

He sketched out three important areas where Asia and the Middle East can work together.

First, instead of picking sides, nations should take principled positions to uphold a rules-based, inclusive, open and connected global order based on international law, mutual respect and mutual benefit.

Second, small countries can come together to help shape the global order.

SM Teo said that these nations can uphold and update the global security architecture and trading system, even if the major powers are unable to reach an agreement.

And third, both Asia and the Middle East can work together to strengthen mutual understanding and people-to-people exchanges.

Given how it is the birthplace of Islam, the Middle East understands religion, and Islam's relationships with other faiths will shape the practice of Islam all over the world.

"We should work together to promote a better understanding of Islam - in particular, its fundamental beliefs and values - around the world," said SM Teo.

He noted that Middle Eastern countries have responded to changes in their external environment by recognising that an internal adjustment is necessary, and many of them are relooking their domestic policies.

Such plans include diversifying their economies and creating new jobs.

These countries are also reducing the over-reliance on hydrocarbons, as part of the growing global call for climate action and sustainability.

But at the same time, there is a continued need for subsidies and to maintain social stability in the light of rising inflation, especially in food prices.

SM Teo said that new sources of state revenue will have to be found, and nations like Bahrain, Oman, Saudi Arabia and the United Arab Emirates (UAE) have already introduced a value-added tax.

In order to prepare for the future economy, Middle Eastern countries have realised that change at the social and religious level is also needed.

SM Teo cited how the UAE has started a major drive to position itself as an oasis of tolerance.

In Asia, which is home to most of the world's Muslims, these shifts are being studied closely - in Muslim-majority countries as well as in countries where people of such faith are a significant minority.

The Abraham Accords, which are formal declarations of diplomatic and economic normalisation signed by Bahrain, Israel, the UAE and the United States in 2020, have an important economic motivation, said SM Teo.

But he added that closer readings of the communiques that have emerged from the Negev summit, which was held in late March to discuss these accords, point to a future where these agreements will become an instrument of geopolitical competition.

On Wednesday, SM Teo also participated in a dialogue with retired diplomat Bilahari Kausikan, chairman of the MEI.

The conference this year, which is themed The Middle East: A New Arena For Asian Competition?, will end on Thursday.

In that regard, the question of Palestine will continue to be salient, stressed SM Teo.

He added that the issue remains ripe to be seized upon by various parties, and forced back onto the international stage.

"The issue continues to have deep resonance and support among Muslims in South-east Asia," he said.

"Singapore has taken a principled stand on the Palestinian issue - as we have done with Ukraine - to seek a peaceful and negotiated solution."