The ever resilient alliance: Pakistan and KSA

It is no secret that Pakistan is facing a multidimensional economic crisis and unsurprisingly has turned to Saudi Arabia for much-needed foreign direct investment in order to breathe life into the economy. Recently, the country’s army chief, while speaking to a group of Pakistani businessmen, stated that Saudi Arabia had assured the army chief of investing $25 billion in Pakistan under the Special Investment Facilitation Council (SIFC) aimed at attracting investment in the agriculture sector by offering land and ensuring exports. This welcome news has arrived at a time when the people of Pakistan are facing the crunch of inflation and are going through a cost-of-living crisis.

In the realm of international relations, alliances and coalitions between nations play a direct role in shaping up the contours of global politics. Among these, the time tested and multifaceted bilateral relationship between Pakistan and Saudi Arabia stands out as a demonstration of shared values, cooperation and goodwill. The two nations have cultivated a deep-rooted partnership spanning over decades, bolstered by mutual interests, while sharing a strong religious and cultural affinity and beliefs. The brotherhood and solidarity shared between the two countries transcends traditional geopolitical considerations.

Saudi Arabia has always held an influential position in the Muslim world. But since 2015, when King Salman bin Abdulaziz Al Saud took over the kingdom, the country’s prominence in the international domain has increased multi-fold.

Policymakers in Pakistan need to focus on formulating workable proposals which can be achieved before presenting them diplomatically.

Sehar Kamran

The Saudi rise in the international sphere has also been propelled because of the vision and ambition of its Crown Prince and Prime Minister, Mohammad bin Salman. Since assuming the position, the young prince has introduced many structural reforms and is revolutionizing Saudi Arabia’s socioeconomic landscape. The International Monetary Fund (IMF) in a recent press release stated that Saudi Arabia was the fastest-growing economy among G20 countries, with an overall growth rate of 8.7 percent

Today, Saudi Arabia is a trendsetter with its own national priorities and targets. It would not be wrong to state that Prince Mohammad bin Salman has set the tone and direction for Saudi Arabia to become a major global power in the very near future.

In this regard, KSA’s independent foreign policy decisions such as the joining of regional organizations like the Shanghai Cooperation Organization and BRICS are indications that the Kingdom has embraced the world’s emerging multipolarity.

As Saudi Arabia embarks on its journey toward being a new global heavyweight in the realm of international politics, it needs trustworthy allies and strategic partnerships to cement its position as a major power. In this regard, Pakistan can play a constructive role because the two countries have strong cultural, defense and economic ties, deeply rooted in history and religion. The Kingdom is home to over two million Pakistanis, making it the largest contributor to remittance inflows into the South Asian country. The Pakistani diaspora have played a significant role in the development of the Kingdom over the decades and have always been at the forefront to defend the holy sites.  

Similarly, KSA has always offered Pakistan both support and cooperation in its time of need. Most recently, Riyadh helped Islamabad secure an IMF bailout package in April by depositing $2 billion dollars in the country’s central bank.

Saudi interest to invest in Pakistan especially in these financially troubled times is a breath of fresh air for Islamabad. In August 2023, a Saudi delegation led by Deputy Minister for Mining, Industries and Minerals visited Pakistan and expressed keen interest in the investment potential of Pakistan’s mining, energy, agriculture, and information technology sectors.

In addition, in April 2023, four Pakistani state-owned petroleum companies signed a memorandum of understanding (MoU) with Saudi giant ARAMCO to facilitate a $10 billion Saudi investment in a new oil refinery in Gwadar, Balochistan. They have signed the MoU to join hands and provide confidence to the Saudi firm to enter Pakistan with a major investment. Reportedly, it will have a production capacity of 300,000 barrels per day – the first in more than a decade and the largest in the country. Negotiations are said to be in the last stages, and we will hopefully see some development in the coming months. It is important to note that no new refinery project has materialized in Pakistan for more than a decade and only two refineries have been added in the last 40 years.

It is no secret that Pakistan and Saudi Arabia possess substantial untapped potential for expanding their collaboration in infrastructure development, including the exploration of opportunities through partnerships between the public sector and private enterprises. But it needs to be planned and executed properly if we want to see positive results.

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 done, as establishing a reliable, stable, and secure investment and business environment is a key to sustainable investments.

The future of both Pakistan and KSA is linked together. To achieve peace and prosperity, both countries need to work together.  Through their united efforts, Pakistan and Saudi Arabia can serve as an inspiring model for relations within the Muslim world and the global community.

- Sehar Kamran is the President of the Centre for Pakistan and Gulf Studies (CPGS), she is a prominent politician, academician, and practitioner in the areas of regional, international defense, and strategic studies. Twitter @SeharKamran