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Pakistan This Week


Photo Source: Dawn/PTI Twitter

Pakistan Reader# 174, 16 May 2021

Saudi Arabia and Pakistan



Imran Khan and Gen Bajwa visit Riyadh to mend the ties

Sneha M

What happened?
On 12 May, Saudi Arabia announced $500 million for Pakistan during Prime Minister Imran Khan's three-day visit to Riyadh. In the light of the visit, Prince Mohammad Bin Salman and PM Imran Khan have signed various MoU's emphasizing and intensifying their bilateral cooperation and provided a new impetus to their strained relations. The foreign office, in a statement, said: "the two foreign ministers reaffirmed their mutual desire to further strengthen their diplomatic relations between the two countries". 

On the same note, both sides have also agreed to establish Saudi-Pakistan Supreme Coordination Council (SP-SCC), which would bolster higher coordination between the countries. According to the spokesperson of the Ministry of Foreign Affairs: "for this purpose, the Saudi Arabia Development Fund will finance projects worth $500 million". Adding to this, Foreign Minister Qureshi said that "Riyadh administration has decided to allocate a large chunk of economic opportunities to Pakistani people and create newer job openings".  Also, Pakistan's special representative for Middle East Affairs, Sheikh Tahir Mahmood Ashrafi told the Saudi Press Agency (SPA): "the visit is a step in the right direction in joint cooperation in order to achieve desired interest and contribute to developing the political, military, diplomatic, economic, and commercial cultural coordination and cooperation."

What is the background?
While the two countries have been close allies, bilateral ties have faced severe setbacks in recent years.

Pakistan had refused to get involved in the ongoing conflict in Yemen. Besides, a major blow to the bilateral relations came when Pakistan's Foreign Minister resorted to publicly criticizing Saudi-led OIC in its lukewarm support of Pakistan on the Kashmiri issue.

Besides the above two political issues, another problem in the bilateral relationship was when Saudi Arabia unprecedently demanded Pakistan to re-pay its loan immediately, which it had dispensed in 2020. 

What does it mean?
First, with the two countries trying to reset and refocus their relations, it reflects Pakistan's economic interests in Saudi and vice-versa. Though the bilateral relationship is said to intensify in the coming days, the uncertainty between them is bound to continue unless these economic deals turn into actions. In other words, if Pakistan does not understand its economy's potential to provide space for Saudi to diversify and boost its economy, then there are chances of fallout in the economic cooperation again. 

Second, traditionally Saudi Arabia has always come to Pakistan's financial rescue. Islamabad has repeatedly received a considerable amount of aid from Riyadh when compared to any other countries in the region.  Hence, strengthening ties with Saudi Arabia essential means a better inflow of capital in the form of foreign aids and loans.

Third, it also mirrors Pakistan's growing rush to settle disputes with Saudi Arabia, as India has revitalized its ties with Riyadh. Following Narendra Modi's visit, the relations between India and Saudi Arabia have been on an upscale trajectory, focusing on multiple areas - infrastructural developments, oil projects, and holistic cooperation in counter-terrorism. 

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