Pakistan has longstanding strategic and economic relations with Middle Eastern countries. The region employs the biggest Pakistani diaspora and is a key source of foreign remittances.
Similarly, Pakistan has vital security cooperation, especially with Saudi Arabia. In the past, Saudi Arabia and the United Arab Emirates (UAE) have always helped Pakistan with substantial economic bailout packages. Pakistan’s foreign policy has always been proactive in the Middle East. Pakistan links South Asia with Central Asia and the Middle East. Proxy wars in the Middle East ruined Syria, Iraq, and Yemen. The Middle East got nothing but terrorism, militancy, poverty, and massive migrations. Instability in the region has never been favorable to Pakistan therefore it had been trying to bridge by mitigating differences among brotherly countries.
At a seminar “ Developments in the Middle East: Lessons and opportunities for Pakistan” jointly organized by “Islamabad Policy Research Institute” (IPRI) and “We News” at a local hotel, Minister for Planning and Development Ahsan Iqbal said countries in the Gulf Cooperation Council (GCC) have always stood by Pakistan in difficult times and proved to be a reliable partner. Pakistan can improve and modernize its agriculture sector by attracting investment from the GCC. Pakistan has to create a “Green Revolution” in the country where we not only “fulfill our domestic food requirements but also export the agriculture products”.
According to recent developments in the Middle East especially the “joining of SCO by Saudi Arabia and the role played by China in Saudi Arabia-Iran rapprochement, trade between the GCC and the emerging Asian countries would increase to over US $ 600 by 2030”. Ahsan Iqbal said, since Pakistan has a close relationship with all these countries, there are opportunities for the country to align itself with these changes and seek cooperation in the areas of IT, energy, mining, tourism, and skills development. The conference was also attended by the former MoS Board of Investment (BoI), Ambassadors and Dr. Ali Awadh Asseri, former Saudi Ambassador to Pakistan, and other dignitaries.
The year 2023 has been a harbinger of bringing peace and political change within the broader Middle East.
The main regional adversaries move toward engagement and reconciliation rather than disagreement and contestation.
The signs of a new era were noticeable as Saudi Arabia and Iran took the bold initiative and restored diplomatic relations. Tehran reopened its Embassy in Riyadh after they agreed to normalize relations in a Chinese-brokered agreement in March 2023. Since then, the political temperature has been constantly on the mend, and replicating the trend set by the accord, other countries have also moved towards friendship. These developments have significantly reduced the political tensions in the region.
Pakistan’s political leaders have expressed optimism about the agreement between Saudi Arabia and Iran to normalize relations which would lead to greater peace and stability in the Middle East and open up “new opportunities” in the region. This China-mediated deal “augurs well for peace, stability and economic development in the Middle East and Muslim world”.
Foreign Minister Bilawal Bhutto Zardari recently visited Jordan and Iraq. The purpose of his visit was to strengthen the relationship and benefit from economic cooperation, easier travel, and security cooperation.
Saudi Arabia and Iran have been locked in a harsh struggle for regional dominance for decades. In recent years, their rivalry has been heightened by proxy wars across the Middle East and beyond. In Yemen, Saudi Arabia has been supporting pro-government forces in their war against the Houthi rebels since 2015. Iran has denied its involvement. Saudi Arabia has also accused Iran of interfering in Syria, Lebanon, and Iraq, where Iranian-backed Shia militias have amassed huge military and political influence.
Saudi Arabia and Syria have resumed the work of diplomatic missions in both countries. The announcement came after Syria was readmitted into the Arab League. The reopening of Iran’s embassy in Riyadh coincided with a visit to Saudi Arabia by the US Secretary of State, Antony Blinken. The United States (US) and the Gulf Cooperation Council (GCC) have released a joint statement, spelling out shared priorities and finding common ground. In the statement, the US underscored its “enduring commitment” to the Gulf region despite concerns about its waning influence in the Middle East in an increasingly multi-polar world, where Washington is turning its foreign-policy focus to compete with China.
From the Pakistani perspective, these developments are more than welcome as the country has maintained political, economic, strategic, and defense ties with all countries in the Middle East.
Pakistan walked a delicate balancing line and our policymakers found themselves in difficult situations owing to their own misreading of Middle Eastern politics. Therefore with these new positive developments within the Middle East political gamut, Pakistan’s ruling elite needs to have an objective, extensive and analytical debate on Pakistan’s political, economic, and strategic interests in the region.
“New developments in the region provide an excellent opportunity for Pakistan” to place itself at the diplomatic center stage of the Middle East. Shall we not go for “developing an effective and workable economic vision including pooling human resources potential offered by Pakistan to Saudi Arabia, UAE, and Qatar” for a better future for our generations to come? I think we can and we must do it now.
There is a need for greater cooperation with the GCC on the ongoing regional socio-political developments. Pakistan can learn and benefit a lot. “Europe despite deep rooted animosity has moved towards a geo-political union in the form of a 27-member European Union (EU)”. Pakistan has some lessons to learn. Human Resource (HR) management and Information Technology (IT) start-ups are some of the avenues where Pakistan has immense potential in the new era. These strengths can be used towards a friendly business environment.
“At present transformation process is going on under the dynamic leadership of Crown Prince Muhammad Bin Salman (MBS) into a modern developed state under the Vision 2030 bringing huge happenings not only in Saudi Arabia but also in the region at large”. Riyadh is moving towards reconciliation with Tehran. It is a promising development for trade and collective prosperity.
“Three important developments are changing the region, China is emerging as a major investor in the region, which has come with political muscles; Saudi Arabia experiencing a complete socio-economic transformation under MBS vision and diversifying its relationship with the US and China”. Reportedly around US $ 250 billion is being invested in the region, and China is one of the largest trading partners of Saudi Arabia.
“Saudi-Pak cooperation, Belt and Road Initiative (BRI) and the Saudi Vision- 2030 are interlinked; Pakistan must use this opportunity to integrate its economy with Central Asian Republics (CAR) and other countries”. There are over 2.5 million Pakistani workers in Saudi Arabia, and the remittances are to the tune of US $ 5 billion annually. However, Pakistan and Saudi Arabia have very low trade volumes and it is less than US $ 3 billion. Saudi Arabia is a land of opportunities under Vision 2030. “Saudi Arabia and Pakistani interests are aligned with rising China”.
There is a paradigm shift in US policy vis-a-vis Gulf, and the renewed interest of China is changing the landscape of the region. Pakistan has to formulate progressive and business-centered policies.
Saudi Arabia is now a US $ one trillion economy, and “non-oil revenue is up to Saudi Riyal of 900 billion with a tourism potential of US$ 49 billion in the year 2022”.
We need to create a one-window process for executing Pak-Saudi collaborative projects so that success could be achieved. “Incompetence and an unproductive bureaucracy are at the root cause of our backwardness”. Facilitating local and foreign investors and creating a business environment is a must.
With its Vision 2030, Saudi Arabia is now heading towards liberalizing its society and diversifying its economy. Saudi Arabia’s Vision 2030 reflects its determination “to become a global investment powerhouse”. The vision offers “better opportunities for partnerships with the private sector”. These elements of the Vision 2030 create opportunities for Pakistani stakeholders, construction and mining companies, and other industries to operationalize their production in the Kingdom.
Saudi Arabia also seeks to position its location as a connecting point for the three continents of Asia, Africa, and Europe. Pakistan provides a vital geo-economic bridge for Saudi Arabia to expand the economic activity of Aramco and other major corporations across South and Central Asia.
Pakistan can also benefit from GCC overseas expansion of its economy to seek investment in the CPEC and related development and energy infrastructure projects. It is therefore favorable for Pakistan that Saudi Arabia is going to be the economic partner in the CPEC. The convergence of interests of these countries can bring huge dividends.
Another critical element for Pakistan’s interest is that the Kingdom has vowed to offer more rights to foreigners to live and work in the country. This shows that the Kingdom is seeking to reduce dependence on an unskilled workforce. Most of the Pakistani manpower presently working in the GCC constitutes unskilled labor. Islamabad needs to invest in the skill development of its human resource. The government needs to increasingly invest in the knowledge economy and produce more professionals and skilled workers for their employment in the GCC. This will reduce unemployment in the country and increase foreign remittances.
Iran and Pakistan need to grapple with the security challenges and address other border security concerns. Cross-border terrorism and sectarian clashes are issues of serious concern. Promoting dialogue in a polarized society and opting for greater regional cooperation are avenues that are the need of the hour. New areas of cooperation can be explored, as dialogue serves as the “cornerstone for building bridges to dispel misconceptions”.
“Chambers of Commerce and other stakeholders between the two countries are required to cooperate more frequently and take interaction to a new level”.
With regional tensions in the Middle East easing off and new alignments taking shape, it is imperative for the Pakistani leadership to maintain its political, strategic, and security relevance in the region. Last but not least, Pakistan and Saudi Arabia need to work closely toward increasing their reciprocal investments in CPEC.