Confusion From The Western Private Sector Could Push Saudi Arabia Towards Pakistan’s Public Sector

While Donald Trump continues to insist that Riyadh’s role in the murder of Saudi born journalist Jamal Khashoggi will not adversely effect lucrative arms deals between the United States and Saudi Arabia, both the alleged gruesomeness of the journalist’s murder as well as public feelings in the west turning at least temporarily sour in respect of Saudi Arabia have already led to several high profile cancellations of trips to Saudi Arabia by prominent western businessmen including by Britain’s Richard Branson whose company is no longer interested in building a rail project in the Kingdom.

But however temporary the western private sector’s negative stance on engaging in commerce with Riyadh may be, Saudi public opinion makers have already taken the opportunity to remind both western businesses and governments that China and Russia’s position regarding Saudi Arabian business deals has not changed.

But while China and Russia are key partners for future development in Saudi Arabia, a trend that has only increased under the de-facto rule of Crown Prince Mohammad bin Salman, cash strapped Pakistan is also changing the nature of its relations with a long standing partner in the Arab world.

Saudi Arabia’s state owned oil company ARAMCO has just committed to invest $10 billion into the development of a major oil refinery in Pakistan’s Gwadar. Gwadar is already home to the southern terminus of the China-Pakistan Economic Corridor (CPEC) and as such, China views Riyadh’s investment in Gwadar as an important step towards integrating Riyadh into the Belt and Road trading and logistics initiative.

While for Pakistan, China and Saudi Arabia, the oil project in Gwadar appears to be a long term financial win-win-win, the fact that Pakistan’s Prime Minister Imran Khan will attend a major economic conference in Riyadh in three days time while prominent westerners have cancelled their appearances, offers a clear insight into a possible if not probable Saudi pivot to the east in terms of its future commercial relationships.

In many ways, the Saudi-Pakistani partnership has entered a new phase as Pakistan now represents Saudi Arabia’s best opportunity to both diversify its geo-economic partnerships while crucially Pakistan is Riyadh’s gateway to the all important Belt and Road initiative. At the same time, as Pakistan still seeks to strike a deal with a state partner for an emergency loan so as to avoid going back to the IMF, Saudi Arabia and Pakistan both clearly have something to offer each other at a time when Pakistan’s relations with the US continue to decline and Saudi Arabia’s image among western businesses has clearly been tarnished by the Khashoggi murder.

In this sense, at a time when Pakistan is looking at the bleak possibility of having to contend with the draconian terms of an IMF loan whilst Saudi Arabia looks keen to project the optics of not being overly reliant on western business partners, the largely hypocritical (except where Turkey is concerned) international outcry over the Khashoggi murder actually presents a golden window of opportunity for Riyadh and Islamabad to take advantage of. Crucially, as Pakistan has long balanced good relations with both Saudi Arabia, Turkey and Qatar, it is unlikely that a Saudi loan to Pakistan would negatively effect the other relations in question.

Imran Khan has already visited Saudi Arabia in late September. His return visit in the coming week will be crucial for both states. Pakistan can now seize the moment and work with Saudi Arabia at a time when Riyadh is finding that some of its closest partners may not be as amiable as they were in the past.

Comments are closed.