Pakistan needs to be wary of Saudi intentions
After differences with the US over Syria, Egypt and Iran and an expected decline in petroleum profits, Saudi Arabia is looking towards east. After visiting Pakistan the Saudi Crown Prince is expected to visit India and Japan.
Pakistan and Saudi Arabia have signed a number of MoUs. The significance of some is clear while that of others will manifest itself in days to come. There are issues over which the interests of Pakistan coincide with those of Riyadh. There are others where the interests conflict. Pakistan must jealously guard its national interests and agree to nothing, openly or secretly, that has the potential to harm Pakistan’s national interests.
With US developing its shale oil reserves and a number of other countries following suit, they would depend less on petroleum inflows from the Kingdom, thus decreasing the Saudi ability to dictate the OPEC oil prices. Saudi Arabia can thus no more depend on entirely oil revenues. It is therefore looking for more sources of revenue including investments abroad. The country has already made investments in Near East and is trying to discover possible avenues of investment in countries like Pakistan, India and Japan. Here the interests of Pakistan and Saudi Arabia converge. There is however little possibility of any large scale private sector investment from the Kingdom as long as terrorist activities continue and power and gas remain scarce. What remains to be seen is if Saudi government will agree to make big investments in Pakistan. Currently whatever trade Pakistan has with Saudi Arabia is skewed in favour of the later. Will the two countries devise ways to reduce the imbalance? There is a perception that if the Kingdom transfers only a fraction of its funds invested in the western banks, the country would be rid of some of its forex headaches.
Saudi Arabia is keen to reach an understanding with Pakistan on regional security. This is a tricky subject. It must have come up during COAS Raheel Sharif’s Saudi visit. On Monday the Crown Prince had yet another meeting with Gen Sharif and CJCSC Gen Mahmud. While Riyadh is free to hold whatever views it likes about Turkey and Iran, no regional security arrangement at the cost of Turkey or Iran will be in Pakistan’s interest which has good relations with both. Similarly Pakistan must in no way be a part of meddling in Arab conflicts and decline to offer any support in suppressing the dissent in the Arab lands. Pakistan may sell weapons to any country but has to refrain from becoming a party in any conflict in the region under whatsoever slogan. Pakistan and Saudia are sovereign countries. It is facetious to maintain, as Defence Minister Khwaja Asif has done, that the defence of Pakistan and the Kingdom of Saudi Arabia is the same thing.
Some of your assumption are far-fetched, particularly about energy. I will be long time before dependence on gulf producers is reduced significantly. Do you have any idea how much investment gulf countries have all over the world.
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The author is right about the gulf power from the barrel of oil that is already diminishing (atleast with the West) …
Gulf invests mostly feeds the royals first — long term it won't be the means for sustaining current life style …
And then, there can be a social and political remapping at any time …
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Let Saudis show good intention and place an order for40 -50 JF Thunder Aircraft, which Pakistan has been trying to sell. Saudis waste billions of dollars on arms purchases from US every year and yet the Americans are likely to slap sanctions on Saudi Arabia, the moment they don't need their oil.
Purchasing JF Thunder Aircraft would mean, Saudis will never come under sanctions for spare parts to keep these planes flying. In addition, Saudis could invest in wind and solar power generation in Pakistan, which are lucrative for investors and economical for Pakistan as running costs are minimal.
According to industry experts the world has about 763 billion "undiscovered" barrels of oil, of which roughly 26 percent indeed belongs to USA.This figure does not include reserves currently being drilled across the globe. Saudi Arabia is estimated to have about 262 billion proven barrels available. In addition to the above there are many other kinds of oil known as “unconventional oil." It includes the billions of barrels of tar sands oil in Canada, heavy oil in Venezuela, and shale oil in USA. Technological breakthroughs coupled with a major search are opening oil and natural gas riches in many countries in South America not usually known as energy producers. Six Persian Gulf suppliers provide just 22 percent of all U.S. imports. We should also take into consideration the power of Technology, improvements in automobile and energy efficiency and an increasing reliance on bio-fuels and alternative sources of energy.
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