CPEC and the Saudis

While details remain scant for now, Pakistan has reached out to Saudi Arabia to participate in the China-Pakistan Economic Corridor (CPEC). The government appears confident that Saudi interest is firm. With no confirmation from Saudi Arabia or Beijing for now, one can only speculate what Saudi investment in CPEC would look like. In principle, the good part of the story is that a project such as CPEC could only be successful if there is high international participation. The hope always was that more countries would be willing to join in the economic extravaganza. Saudi participation makes logical sense given the close relationship Pakistan has enjoyed with the kingdom, but any serious judgement should be withheld until a confirmation of any formal agreement between the two countries. One must also wonder whether the invitation has come from Pakistan or whether the Saudis have been pushing behind the scenes for some concrete returns on the assistance they regularly provide Pakistan. Saudi Arabia has provided cash support as well as delayed oil payments as a way to ease Pakistan’s financial crunch. It could be thinking that it is time to reap the returns.

Friendships in the international arena are about the alignment of selfish interests. Pakistan’s long relationship with Saudi Arabia has come with both good and bad. One of the key questions going forward will be how Pakistan will balance its relationship with neighbouring Iran in a context of increased Saudi investment in the country. Similar questions might be asked of our relationship with Qatar, which remains a crucial source of liquefied gas. Both Iran and Qatar have found themselves isolated by the Saudis, a conflict where Pakistan has tried to insist that it is playing a neutral role. Trade and security cooperation has been thought to be key amongst issues discussed by delegations from the country set to visit Pakistan next month. Behind the CPEC headlines, it is also crucial to remember that Pakistan has asked Saudi Arabia for financial assistance amidst its ongoing fiscal crisis. It must be clarified what Pakistan is willing to offer the Saudis in return for facilities such as five years of deferred oil payments. It is good to see Pakistan opening up CPEC to other countries. But more details are awaited to understand what bringing Saudi Arabia on board would really mean.