Saudi-Pak ties on a cold turn
As the India-Saudi Arabia friendship begins to blossom, the all-weather bond between Pakistan and Saudi Arabia is becoming bitter
By | Dhananjay Tripathi |Published: 6th Sep 2020 12:03 amUpdated: 5th Sep 2020 11:29 pm
Pakistan and Saudi Arabia were regarded as close friends. After 1947, Pakistan approached Saudi Arabia, the oil-rich country, for help in rebuilding the country. Thereafter, whenever Pakistan faced any economic difficulties, it received generous help from Saudi Arabia.
To take a recent example, Pakistan’s economy has been under stress from the last few years and it knocked on the door of the International Monetary Fund (IMF). In 2019, the IMF approved a $6-billion bailout package for the revival of the debt-ridden Pakistani economy. The IMF in its official communique said that the bailout was intended to “put Pakistan’s economy on the path of sustainable and balanced growth and increase per capita income”.
International political economy observers are aware that none of the IMF bailout packages come without a condition. For debt-ridden countries like Pakistan, the IMF always favours stringent regulations. Many in Pakistan criticised the IMF loan and termed it as a compromise with national sovereignty. Pakistan’s economy started sliding from 2017 and, importantly, more than the IMF, it relied on Saudi Arabia for recovery. The Saudi economic assistance to Pakistan was mostly on lenient terms.
Bailing out Pakistan
Even before the IMF intervention, it was Saudi Arabia that came to the rescue of Pakistan. In October 2018, Saudi Arabia announced a $6.2-billion economic package to Pakistan. Of this, half of the amount was in terms of foreign currency support ($3 billion) and another half ($3.2 billion) was in deferred payments for oil imports.
In early 2019 when Pakistan’s economy was left with only $8 billion of foreign reserves, Saudi Arabia sealed an investment deal of $20 billion, thereby, giving it a necessary and timely boost. Saudi Crown Prince Mohammed bin Salman (MBS) signed the deal during his visit to Pakistan. Speaking on the occasion, the Crown Prince had said, “we are creating a great future for Saudi Arabia and Pakistan”.
In the past too, Saudi Arabia gave money to Pakistan for supporting the Madrassa education system and extended help when the international community imposed sanctions on Pakistan after the nuclear test. In 2014, the Pakistani economy faced a similar crisis as its currency crashed. Then too Saudi Arabia had given $1.5 billion to Pakistan. Along with these direct help, Pakistan gets remittance from Saudi Arabia. As per a report in July 2020, Pakistan received $821 million in remittance from Saudi Arabia. This is due to the fact that approximately 1.06 million Pakistanis are employed in Saudi Arabia.
But it’s not just that Pakistan-Saudi Arabia relation only has an economic dimension. Four years after the formation of Pakistan, it signed a friendship treaty with Saudi Arabia. The relationship matured over the years, and both are strategically close to each other.
Saudi Arabia was one of the strongest supporters of Pakistan during its war with India in 1965 and 1971. Pakistan lost both these wars, but in 1971 it suffered massive economic loss as well as credibility. Saudi Arabia at that critical juncture economically supported Pakistan. There are Pakistani army regulars who are deployed in Saudi Arabia.
In 1982, both the countries signed a bilateral security cooperation agreement. As a part of this agreement, the Pakistani army took the responsibility to train Saudi army personnel and also started working towards joint production of military equipment. During the Gulf War-I, almost 15,000 Pakistani troops were stationed in Saudi Arabia. The present number of Pakistani soldiers in Saudi Arabia is comparatively less; nonetheless, they are still an important support base of the Saudi army.
International relations are complex, and it keeps altering its course. The world was bipolar during the Cold War. It became unipolar after the disintegration of the Soviet Union (1991), and we, in all likelihood, are heading towards a multipolar world order. These changes also influence the foreign policy of a country.
India was not much open to the West during the Cold War but at present has a strategic partnership with both the United States and the European Union. Bilateral ties also change, but there are a few exceptions. In the case of Pakistan and Saudi Arabia, it was an all-weather friendship; thus, the contemporary downslide needs to be looked into. Let us see some of the important factors responsible for the present bitterness in Pakistan-Saudi relations.
Things started changing from 2019. Notably, after his visit to Pakistan, Crown Prince MBS also came to India. During this high-profile visit, the Crown Prince announced an investment of “worth in excess of $100 billion” in India in “areas of energy, refining, petrochemicals, infrastructure, agriculture, minerals and mining”.
The big investment is a reflection of the growing India-Saudi partnership. This can also be read as the building of trust between the two sides. Interestingly, the announcement to invest in India came after the Crown Prince declared an investment of $20 billion in Pakistan. Going just by the figures, Saudi Arabia’s planned investment in India is five times more in comparison with Pakistan. Looking at this data, one may ask as to what are the reasons for this new intimacy between India and Saudi Arabia.
To get an answer, we have to see the recent diplomatic moves of New Delhi. An MoU on defence cooperation was signed between India and Saudi Arabia in 2014. This MoU was the first major move in strengthening the strategic ties of these two countries. Prime Minister Narendra Modi visited Saudi Arabia in 2016. During this visit, the two sides signed an MoU on cooperation in “exchange of intelligence related to money laundering, related crimes and terrorism financing”. Again in October 2019, Modi, at an official invitation, visited Saudi Arabia.
The most noteworthy outcome of the 2019 visit was the establishment of the Strategic Partnership Council between India and Saudi Arabia. Moreover, Saudi is also interested in diversifying its economic activities and India is viewed as an appropriate destination for business.
No Support on Kashmir
Pakistan was expecting a strong response from Saudi Arabia on the revocation of Article 370. Contrary to Pakistan’s wish, Saudi Arabia asked for a peaceful settlement of the issue. Saudi Arabia was not an exception, other West Asian countries like Kuwait, Oman, and Bahrain also avoided siding with Pakistan on revocation of Article 370. The United Arab Emirates (UAE) even termed it as an internal matter of India. Islamabad had hoped that the Organisation of Islamic Cooperation (OIC) will vehemently oppose the revocation and will put pressure on India.
Pakistan ignored the growing economic and strategic relation of India with West Asian countries, including with Saudi Arabia. The Saudi-led OIC is a powerful organisation of Islamic countries, and Pakistan’s intent was to use it against India on Kashmir.
Pakistan’s initial diplomatic efforts to involve the OIC in the matter of revocation of Article 370 met with little success. Unhappy with this, Pakistan indicated siding with other influential Islamic countries like Malaysia, Turkey and Iran. Interestingly, these three countries are the main challengers of Saudi’s leadership role in the Islamic world.
Frustrated with not getting a favourable resolution from the OIC, Pakistan last year accepted Malaysia’s invitation to join a summit of Islamic countries. The Malaysian attempt was seen by many as a competition with Saudi Arabia. However, Pakistan, despite accepting the invitation, skipped the summit in Malaysia under pressure from Saudi Arabia.
In short, not many in the world paid heed to Pakistan’s complaints on Kashmir. Instead, the international community keeps advising Pakistan not to support cross-border terrorism in Kashmir. This has irked the Pakistani establishment.
Last month, Pakistan’s foreign minister Shah Mahmood Qureshi again attacked the OIC. Qureshi called for a Council of Foreign Ministers (CFM) meeting of the OIC on Kashmir. He also threatened that Pakistan may opt to organise a summit of Islamic nations where it can discuss Kashmir. This rage of Qureshi was against Saudi Arabia. As the attack from the Pakistani side was sharp, Saudi Arabia retaliated and recalled its $1 billion loan. Pakistan repaid the loan with the help of China. Moreover, Saudi Arabia has also not renewed the oil credit facility to Pakistan.
Fearing long term repercussions, the Pakistani government swung into action to placate Saudi. Pakistani Army Chief General Qamar Bajwa visited Riyadh on August 17 to address the controversy. In the last week of August, Qureshi also praised the Pakistan-Saudi Arabia relations and termed Pak-Saudi ties as historical and “people-centric”. Still, it looks like Saudi Arabia is not willing to let this go so easily. General Bajwa failed to meet Crown Prince MBS during his stay in Riyadh.
China Chipping In
In the past, it is Saudi Arabia that helped Pakistan on critical occasions, more than China. But it now appears that Pakistan is tilting towards China, and the reason for this is its anti-India orientation. However, a section in Pakistan is unhappy with this development. They are not in favour of putting all the eggs in one basket and are advocating for better ties with Saudi even if it means replacing Qureshi.
Undoubtedly, there is internal pressure on the Imran Khan government. It cannot afford to lose a friend like Saudi Arabia at the time when its economy is in the doldrums. On the other hand, ties between India and Saudi Arabia in all likeliness will grow further as it is mutually beneficial for both. Let us see how soon Pakistan reconciles with this new reality.
(The author is Senior Assistant Professor, Department of International Relations, South Asian University, New Delhi)