Saudi Involvement in CPEC - Gwadar Central

Saudi Involvement in CPEC

Introduction

The China-Pakistan-Economic-Corridor is witnessing a new turn of events under the Khan Administration. Soon after Prime Minister, Imran Khan’s debut visit to Riyadh in late September, it was announced that The Kingdom of Saudi Arabia had given an affirmative response to the premier’s invitation of becoming an investor in the CPEC, expecting it to bolster the Pakistani economy. However, not even a week had lapsed, that State minister for Information and Broadcasting, Fawad Chaudhry backtracked on his initial announcement.

Initially, similar invitations to become part of the CPEC were extended towards Tehran and Washington, but no avail. This makes Riyadh’s assent first of its kind in a rather interesting turn of events. However, the recurring question- Why Saudi Arabia would diverge from its prevalent foreign policy and actually acquire stakes in the Pakistani economy still stands.

The Historical Narrative

Saudi Arabia stood by Pakistan, following the 9/11 attacks, assuring that it would provide financial assistance if need be. Similarly, in the 1990’s Pakistan maintained economic stability during the Washington led attacks, with the Saudi aid in the form of subsidies in oil imports.

However, it Pakistan has not been a unilateral beneficiary in these arrangements. Time and time again, it has provided military support to the Saudi government in order to battle terrorism, to train their troops as well defending its internal sovereignty.

The Present Situation

In light of the aforementioned facts, a number of reasons can be deciphered in order to comprehend Saudi interest in Pakistan’s

economic expansion through CPEC. It is not a clandestine matter that neither Saudi Arabia nor Pakistan would voluntarily sabotage their bilateral relations, while Pakistan can also not afford to anger the Chinese leadership, funding the entirety of the endeavour.

Continuity of Pakistan’s Military Assistance

Saudi-Pak bilateral relations entail the former serving as a financial backer, while the latter providing military assistance. Pakistan’s military support to Saudi Arabia is one of the fundamental reasons for its interest. Following the Pak refusal to send military troops to Yemen in 2015, Saudi Arabia is likely to feel compelled to restructure their relations with Pakistan in ways that eliminate the possibilities for any such refusals in the future.

Strengthened Saudi Position in the Region

However, as the CPEC invites investments in lieu of loans, the Saudi Kingdom will not be able to make any actual financial input, thus disabling them from creating any direct influence over the country. Though the consequent economic prosperity in Pakistan and China, following Saudi assistance will allow it to strengthen its foothold in the region.

According to the minister of Information and Broadcasting, Fawad Chaudry, the Saudi party was so eager to be a contributing party to the CPEC that they settled a deal requiring months to finalise, within days. The accords to be signed were reported to involve redemption of Riqo Diq copper and gold mines, oil refinery plants, as well as construction of the oil city mega venture.

China’s Interest Analysed

Saudi Arabia has been a long term economic partner for China as 80% of China’s energy consumption thrives upon crude oil supplies imported from the gulf. Recently, the two countries also became signatories to investment deals in the refineries and petrochemical sector. A similar deal has been struck between Pakistan and Saudi Arabia entailing the development of the mega oil city, which will

ultimately be most beneficial for China in terms of reduced transportation costs while also being the possible answer to its Malacca Dilemma.

Therefore, a tripartite partnership can be foreseen in light of Saudi Arabia’s cordial terms with China along with its potential investment in the Gwadar Mega Oil city project.

Khan Administration’s Changed Stance

With September turning in to October the PTI leadership also turned back on their statements upon the matter. The proclamation about Saudi Arabia becoming a partner in the project was then translated as being a completely independent agreement. The minister for planning and development along with minister for information and broadcasting, together in a press conference, retracted their previous statements and denied any plans to involve third-parties in the project.

Attempting to hold on to their title as China’s “iron brother”, Pakistan affirmed that there were many options to transform the bilateral agreement in to a trilateral one, where countries like Germany, Japan and Saudi Arabia could be become part of potential infrastructural developments.

Implications of Saudi Investment

While the three nations benefit in one way or another by it, the Saudi involvement may become a reason for augmented regional tension. Due to the sectarian conflicts, Iran, an important part of the BRI, may be perturbed by Saudi involvement in the endeavour.

Conclusion

The PTI government fears that the CPEC will always be an insignia of the Sharif administration. Therefore, bringing in Saudi investment might create a new political narrative in its favour. However, the PTI leadership is yet to show a definitive stance and plan of action upon the matter.

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