Saudi announces over 100 projects for Pakistan

Context:

Saudi Arabia has announced 118 humanitarian projects worth over $123 million for cash-strapped Pakistan in food security, health, education and water during Prime Minister Imran Khan’s two-day visit.

Relevance:

GS-II: International Relations (India’s Neighbors, Foreign Policies affecting India’s Interests)

Dimensions of the Article:

1. Economic and Strategic Aspects of Saudi-Pakistan Relationship
2. 2015 Strains in the Relationship
3. India-Saudi Relations

Economic and Strategic Aspects of Saudi-Pakistan Relationship

• Pakistan has benefited enormously from Saudi Arabia – the Muslim world’s wealthiest nation – through generous financial aid, the supply of oil on a deferred payment basis and aid during crises.
• For instance, the Saudis provided a grant of US$10 million during the 2005 earthquake, $170 million during the 2010/11 floods, and a $1.5 billion grant when Pakistan faced an economic crisis in 2014.
• Besides, there are around two million Pakistani expatriates in Saudi Arabia, and they send back remittances worth over $5 billion every year.
• Not only has Saudi Arabia helped Pakistan avoid major economic crises, it has also supported Pakistan’s defence by providing logistic support and financial assistance. For instance, the Kingdom assured Islamabad that it would supply 50,000 barrels of crude oil per day on a deferred payment basis in case Pakistan’s nuclear tests resulted in US and other European sanctions in 1998.
• Pakistan has been importing mainly oil from Saudi Arabia and exports rice, meat, meat products, spices and fruits, footwear and leather goods, and chemicals.

2015 Strains in the Relationship

• When, in 2015, Saudi Arabia asked Pakistan to join the coalition it was leading to undertake the ground offensive in Yemen against the Iran-backed Houthis, Islamabad refused and let it be known that it would prefer to stand “neutral” in the Iran-Saudi rivalry.
• The decision was taken keeping in mind the possible implications of joining the coalition on domestic politics and on bilateral relations with Iran.
• The Saudi-Iran conflict in West Asia has serious ramifications for Pakistan’s relationship with Saudi Arabia. Saudi Arabia sees Iranian involvement and growing salience in regional politics as a threat to its security.
• Pakistan, for its part, is worried about India’s improving relations with West Asian countries in general and Saudi Arabia in particular. While Pakistan wants to maintain a delicate balance between Saudi Arabia and Iran, the Saudis are not happy with this balancing game and want Pakistan to support them.

India-Saudi Relations

• The geostrategic position of Saudi Arabia makes it an important country for India, with trade and cultural links dating back thousands of years.
• There is a rational calculation regarding Saudi interest in expanding trade and investment in India and collaboration in the energy sector.
• Saudi Aramco is interested in partnering with the Abu Dhabi National Oil Company in developing an integrated refinery and petrochemicals complex at Ratnagiri in Maharashtra, a $44 billion joint venture with Indian public sector involvement. Saudi Arabia is already one of the three largest suppliers of oil to India.
• That the two countries are moving beyond the traditional buyer-seller relationship is best exemplified by the joint venture for the $44 billion worth Ratnagiri refinery and petrochemical project.
• The assumption that Saudi Arabia is tilted towards India is nothing more than an unrealistic hope.
• The Saudi Foreign Minister’s statement in Islamabad during MBS’s visit that Riyadh is committed to “de-escalating” tensions between India and Pakistan over Kashmir must not be read as an endorsement of the Indian stand but as an attempt to intervene in the dispute rather than accept its bilateral nature.
• Good relations with Riyadh and other West Asian capitals is essential for the welfare of the expatriate Indian community and their emergency evacuation should there be such a need. West Asia is also an important partner in the domains of counterterrorism and maritime security in the western Indian Ocean.
• Indians in Saudi Arabia are the second-largest providers of remittances to their home country. They are also an important aspect of our soft-power diplomacy in the region.

-Source: The Hindu