For Pakistan, Saudi Arabia has gone beyond the traditional expectations of international brotherhood
The Saudi Development Fund and Pakistani Economic Affairs Division recently concluded a $240 million loan for a multipurpose dam under construction in Pakistan’s northwestern province of Khyber Pakhtunkhawa. This dam will not only help Pakistan move toward energy self-sufficiency but will also create a useful water storage facility-- a great help to the agricultural sector in a province where 80 percent of the population lives in the rural areas. The Mohmand dam will generate 800 MW of electricity and create employment facilities for local manpower. An additional benefit would be flood control in the summer season, when Pakistan gets excessive water through melting glaciers and seasonal rains.
In another example of a true ally in the arena of international relations, Saudi Arabia has assured the International Monetary Fund (IMF) that it will provide $2 billion to Pakistan as balance of payment support. This is in addition to an earlier rollover of $3 billion by the Kingdom.
The IMF has made its assistance to Pakistan conditional on Pakistan securing assurances on external financing from friendly countries and multilateral partners to fund its balance of payment gap for this fiscal year. An undertaking of $2 billion in assistance has been made by the Kingdom while more help has been subscribed by the UAE and China.
By going above and beyond the traditional role of international friendship and brotherhood, Saudi assistance to Pakistan at this moment is help the country needs most during a difficult juncture in its history.
- Javed Hafeez
Similarity of views on major international issues, common stakes in regional peace and security and a feeling of mutual empathy created by spiritual and cultural bonds have led to a symbiotic relationship of trust between Pakistan and Saudi Arabia, time and again. Both nations are a source of strength for each other in various international forums. But it is the strong bilateral ties that provide an ideal environment of understanding and promote mutual cooperation. There are also clear indications that bilateral economic ties will soon graduate from financial assistance to Saudi investments in Pakistan. A new era of peace, understanding, amity and co-operation is dawning in the Middle East.
Pakistan’s economy is currently passing through a recessionary phase. Exports have decreased by 10 percent in the last six months. Remittances from overseas Pakistanis are down by 11 percent. Imports too are lower as letters of credit are being opened selectively, due to the foreign exchange crunch. However, shrinking imports also means less machinery and vital raw materials coming into Pakistan. This combined with the international recession has impacted Pakistan’s economic indicators negatively. The balance of payment support from the Kingdom and the IMF should greatly uplift a sagging business sentiment and create a necessary psychological environment for economic recovery.
Overall, the strategic environment is changing in the region. Regional countries do not want to keep all their eggs in one security basket and are seeking more nuanced and balanced foreign policy options. They are also acutely conscious of the fact that regional tensions invite a role of foreign powers. Chinese economic and commercial interests have multiplied, over the years. This has enabled China to play a vital role of peace maker in the region. Pakistan has welcomed these positive developments and has been playing an active role in keeping the Gulf and Arabian sea waters calm for the secure transport of energy resources to all corners of the world.
As Chinese interests in the Gulf increase, Pakistan’s role as provider of North-South connectivity and a participant in maritime security will also gain more traction. It is therefore natural that the Kingdom and China will perceive a future Pakistan role positively. An economically vibrant and prosperous Pakistan will be able to play its role in regional security more effectively. The Kingdom’s assistance for Mohmand Dam and balance of payment support reflects its desire to see Pakistan economically stable, which in turn will lead to political stability. By going above and beyond the traditional role of international friendship and brotherhood, Saudi assistance to Pakistan at this moment is help the country needs most during a difficult juncture in its history.
- Javed Hafeez is a former Pakistani diplomat with much experience of the Middle East. He writes weekly columns in Pakistani and Gulf newspapers and appears regularly on satellite TV channels as a defense and political analyst. Twitter: @JavedHafiz8