Pakistan’s strategic ties with Saudi Arabia have been paramount for these brotherly states for many decades, whether Islamabad had military-led or politically elected governments. The two nations need each other, especially on the diplomatic, defense and economic fronts.
New Pakistani Prime Minister Imran Khan’s visit to the Kingdom last week was the latest reinforcement of this strategic relationship. It was his first foreign visit as PM and it was overwhelming with regards to the warm reception he received.
Like the previous government, Khan has pinned high hopes on the government of Saudi Arabia in a bid to obtain its support in bolstering Pakistan’s economy, which is currently on the verge of a crisis.
At the end of the PM’s visit, the government revealed that it had offered a handsome opportunity to Saudi Arabia, opening its doors for investment in the multibillion-dollar China-Pakistan Economic Corridor (CPEC). It claimed that the Kingdom will be the third strategic partner in this project, with tentative investment inflows of $10 billion likely through different projects, including in energy and infrastructure.
If this partnership becomes a reality, it is a win-win situation for both countries, as it will help foster their business relationship on a long-term basis, besides the diplomatic, strategic and military advantages.
The Saudi investment will play a pivotal role in helping the economy of Pakistan overcome its issues related to debt repayments, the depletion of its foreign exchange reserves and the depreciation of the rupee against the dollar.
Investment in energy projects will help Pakistan meet its hyper-growing demand for petroleum products. Besides investment, deferred payment on oil imports is also the best option to contain Pakistan’s ballooning imports bill, which could lead to a wider current account deficit and further loss of foreign exchange.
The inflows of handsome foreign direct investment and deferred payments might not only shore up a few definite macroeconomic areas of Pakistan, but it would also help avert an ill-fated assistance program from the International Monetary Fund (IMF).
The new government is keen to set a good example for the bilateral relations between the two countries and it is lucky enough to offer a very lucrative deal to the Kingdom.
Muhammad Yasir
In 2014, soon after his Pakistan Muslim League-Nawaz (PML-N) government came to power, then-PM Nawaz Sharif also chose Saudi Arabia for his first foreign visit. He was also welcomed warmly and received a grant of $1.5 billion from the Kingdom to help the country’s flagging economy. The PML-N government also borrowed heavily from various international agencies and banks, but it was successful in keeping itself away from the assistance of the IMF due to the generosity of the Saudi government.
Gen. Pervez Musharraf, the former president and army chief, also made his first foreign visit to Saudi Arabia. He also built a healthy relationship with the Saudi government, whose support of Pakistan after it proclaimed itself a nuclear power is well remembered.
Pakistan-Saudi Arabia military and strategic cooperation goes a long way back. Gen. Raheel Sharif, Pakistan's former army chief, who moved last year to Saudi Arabia to serve as commander-in-chief of the Islamic Military Alliance is the latest example of this strategic cooperation.
Now, the new government is keen to set a good example for the bilateral relations between the two countries and it is lucky enough to offer a very lucrative deal to the Kingdom. The proposed oil hub at Gwadar, the port city located on the southwest coast of Balochistan, will help Saudi Arabia serve two long-term buyers of petroleum products —Pakistan and the biggest consumer, China. The inclusion of Saudi Arabia in CPEC will significantly benefit Beijing.
China could greatly reduce its reliance on oil supplies from different countries. Importing its petroleum products from Saudi Arabia through Gwadar will not only reduce its costs by decreasing the distance shipments must travel by a third, but it will also lead to a fast oil supply corridor through Pakistan.
• Muhammad Yasir is Pakistani journalist with working experience of more than a decade. Twitter: @sirfyasir
