Riyadh’s cooperation is being sought for bailing out Pakistan in the Reko Diq copper-gold mine project, where Islamabad would like Saudi Arabia to buy its shares while the rest are owned by Tethyan Copper Company. This could result in an initial investment of $1 billion. During one of the recent visits of Prime Minister Shehbaz Sharif to Riyadh, the latter indicated a commitment to investing an additional $5 billion. Then there is prospective investment in agriculture and safe energy projects.
Here is a case of mutual benefit. While Saudi Arabia is keen to explore avenues for investment to escape its dependency on oil capital, Pakistan is keen to see some flow of money and investment that is not Chinese and which would not add to its debt burden. However, it is not just all about money.
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The election for Pakistan
Pakistan and Saudi Arabia are joined together in their appreciation of American significance for the Middle East and South Asia. In some respects, the Islamabad-Riyadh relationship is not just bilateral but a trilateral linkage in which Pakistan will use Saudi Arabia as a window for greater communication with Washington. There is even a possibility that training opportunities for Pakistan’s military officers may increase within the Western system as the US National Defense University campus opens in Riyadh. It is important to reiterate that Saudi Arabia is not just the source of money for Pakistan but also the peg to keep it closer to the Western strategic bloc, hence, keeping a balance as far as China is concerned.
Beijing, in any case, is facing challenges in investing in Pakistan due to security reasons. Since 2017, attacks against Chinese workers have increased, with Islamabad seeming slow, almost reluctant, to bolster the level of security provided to its ‘all-weather’ friend, whose support is critical for keeping Pakistan financially afloat. The military establishment has consistently refused to allow the Chinese to bring their security. Interestingly, Saudi Arabia will be investing in almost the same areas, particularly Balochistan, where the Chinese face serious security threats.
The security problem could also be because the Chinese are more visible due to the presence of their workers. One wonders what form the Saudi presence in these areas will take and if Pakistan provides better security for those proposed projects. One other possible scenario is that the Saudi investment may include a partnership with the Chinese. Even in such a situation, Riyadh’s investment will minimize Chinese influence and not expand it. One could call this management of Chinese influence.
The visits from the Saudi foreign and deputy defense ministers were to establish a relationship in which regional security and Middle East affairs are part of the conversation. In the context of the ongoing turbulence in the Middle East, Saudi Arabia would like to shield Pakistan from any increase in Iranian pressure or influence that may happen by default rather than by design.
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What Pakistan can’t afford now
There was a difference in how the two visits played out in Pakistan. Despite an invitation by the Prime Minister, the Iranian President Ebrahim Raisi was received at the airport by a minister. The meeting with Sharif was comparatively brief and ended with the signing of some Memorandums of Understanding (MoUs) and some statements about increasing bilateral trade. The problem with trade, though, is caused by American sanctions, which makes it difficult for the banking system to function. Later, there was a statement by Pakistan’s defense minister, Khawaja Asif, about his government’s commitment to building the gas pipeline. It was Iran signaling to Pakistan to be cautious regarding the stance it takes vis-à-vis the situation in the Middle East, certainly not to get involved in any subversive plots against Tehran.
Not that Raisi could tempt the Pakistani leadership, whose hands are tied both vis-à-vis its military and the Western strategic bloc, to be part of an alternative bloc in which Iran and China have a role. The Iranians, in any case, are skeptical of the Sharifs, who prefer Saudi Arabia. It was the third Pakistan Muslim League (PMLN) government that stopped the pipeline project, which was initially signed in 2010 by the Pakistan People’s Party (PPP)’s Asif Ali Zardari, who was the president then. The gas pipeline was meant to provide gas to both India and Pakistan. Delhi later wriggled out of the project, citing pricing and other concerns.
Undoubtedly, the project is very significant for Islamabad as it could meet its energy concerns. However, it finds itself now stuck between the devil and the deep blue sea – the American government insisting that importing gas or trading with Iran would result in sanctions, and Iran gently threatening Pakistan with a penalty of $18 billion if it doesn’t carry out part of its contractual responsibility of building its side of the pipeline.
The present-day Pakistan government is not even able to increase negotiations between Iran and Saudi Arabia. As far as larger Middle East politics is concerned, perhaps Raisi got more out of the visit than Shehbaz Sharif. The joint statement of the two leaders in which Gaza was mentioned was more to Iran’s benefit than Pakistan’s, as the latter has been comparatively more docile about the issue. The general impression among the Pakistani public is greater sympathy for Iran’s position regarding Israel. The ordinary people, especially those sympathetic to the Palestinians, are more critical of their military and government’s relative caution on the matter. For Islamabad, the benefits of engaging with next-door neighbors, including Iran, are visible. However, this is not a relationship it can afford now.
Ayesha Siddiqa is Senior Fellow at the Department of War Studies at King’s College, London. She is the author of Military Inc. She tweets @iamthedrifter. Views are personal.
(Edited by Prashant)
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