Pakistan and Saudi Arabia: An exceptional relationship
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On January 10, the Foreign Ministry of the Kingdom of Saudi Arabia announced that the Saudi Crown Prince and Prime Minister Mohammed bin Salman has directed a study to increase Saudi Arabian investments to $10bn. He also asked the Saudi Development Fund (SDF) to consider raising the ceiling for Saudi deposits into the State Bank of Pakistan (SBP) from $2bn to $5bn as part of measures to support Pakistan’s struggling economy. The SDF provides ‘soft loans and grants to developing countries as a means to bolster allies and cement new relationships.’
This announcement was not made in isolation, as the kingdom has recently undertaken several steps to help Pakistan strengthen its economy. Just last month, KSA extended the terms of an existing $3 billion deposit in the SBP, which it made in 2021. In addition, in the latest Geneva meeting co-hosted by the United Nations and Islamabad to help Pakistan recover from devastating floods last year, KSA alone has committed over $1 billion out of the total $9 billion.
It is no secret that Pakistan is facing one of its worst economic crises seen in recent years. The country’s reserves have dropped to the lowest in almost nine years to $5.6 billion, which is an alarming situation.
History stands witness that the kingdom has always extended a hand of help to Pakistan and its people, in their time of need. Be it the 2005 earthquake or the 2010 floods, KSA was among the first countries to offer humanitarian aid and assistance. As the floods last year ravaged 2/3rd of Pakistan, affecting more than 33 million people and killing over 1,500 Pakistanis, Saudi Arabia’s King Salman Humanitarian Aid and Relief Center immediately launched a campaign to provide assistance to Pakistan by establishing an air bridge for relief operations in the country.
Pakistan and the Kingdom of Saudi Arabia’s progress and prosperity are linked together. The future of the two states’ bilateral relations is bright and intertwined. By standing together, Pakistan and the kingdom can become a shining example of relations within the Muslim Ummah, and the world at large.
Sehar Kamran
Pakistan and Saudi Arabia’s cooperation and strategic partnership date back decades and cover numerous sectors, especially defense cooperation. The people of Pakistan hold great love and reverence for KSA because it is home to the holiest Muslim sites. Besides, the country is home to more than 2 million Pakistani expatriates and is one of the biggest sources of remittances to Pakistan. In 2021, Pakistani expatriates living in the Kingdom contributed $7.66 billion in remittances. Pakistani experts, engineers, and doctors have played a major role in the development and progress of Saudi Arabia and have been at the forefront to defend the holy sites.
Despite all constraints, Pakistan has always stood with KSA on international issues and pressures. Even on issues of conflicts involving KSA and another Muslim country, Pakistan has — despite pressure — never left KSA alone diplomatically. The South Asian nation has always maintained a diplomatic relationship based on trust and respect with the GCC countries despite the member countries being at odds with each other.
Undoubtedly, KSA has always offered Pakistan both support and cooperation in its time of need, but Pakistan, being an important strategic ally and a brotherly country, can also offer a number of services to the Kingdom of Saudi Arabia in different sectors which align with the Kingdom’s ‘Vision 2030’.
The foremost is creating an enabling environment for Saudi companies to invest in Pakistan. As the Public Investment Fund (PIF) remains the main vehicle for Saudi investments abroad, Pakistan should present concrete proposals to PIF and its subsidiary companies for investment, particularly in Infrastructure, agriculture and livestock, information and technology, and banking and finance.
There is also a dire need to establish effective institutional mechanisms — an active joint ministerial commission, a joint economic commission, and bilateral political consultation forums — which will streamline bilateral cooperation and help open new areas of joint ventures and cooperation. There is a need to urgently identify cooperation opportunities, connect and coordinate with the board of investment, and establish a follow-up mechanism to make maximum use of the existing opportunities between the two.
It is essential that Pakistan must work to resurrect the signed memoranda of understanding (MoUs) for Saudi investment in Pakistan worth $20 billion, including an oil refinery in Gwadar, when Crown Prince Mohammed bin Salman paid a state visit to Pakistan in 2019.
The policymakers in Pakistan need to focus on formulating workable proposals which can be achieved before presenting them diplomatically. In this regard, proper homework should be ensured before finalizing any visit of an international dignitary. We have witnessed time and again that project announcements are made but they never materialize on the ground. It must be avoided.
Pakistan and the Kingdom of Saudi Arabia’s progress and prosperity are linked together. The future of the two states’ bilateral relations is bright and intertwined. By standing together, Pakistan and the kingdom can become a shining example of relations within the Muslim Ummah, and the world at large.
— The writer is Patron in Chief of a non-partisan think tank, the Center for Pakistan and Gulf Studies (CPGS), she is a prominent politician, academician, and practitioner in the areas of regional, international defense, and strategic studies. She has served as an elected Member of the Upper House of Parliament of Islamic Republic of Pakistan from 2012-2018, until May 2019 she was the Member Senate of Pakistan Forum for Policy Research (SFPR). She has also remained the member of Senate committees on Defense, Foreign Affairs, Human Rights and the convener of the Pakistan-Saudi Parliamentary Friendship Group at the Senate of Pakistan. Twitter @SeharKamran
