As Pakistan-Saudi relations run into rough weather, Islamabad’s dependence on China increases

<p style="font-weight: 400;">Cash-strapped Pakistan has become more critically dependent on China than ever before for both alms and arms. With the US having cut off aid and its relations with oil-rich Saudi Arabia hitting a rough patch, Pakistan Prime Minister Imran Khan finds himself in a desperate situation amidst a collapsing economy and rising levels of poverty.</p>
<p style="font-weight: 400;">His decision to send Foreign Minister Shah Mahmood Qureshi to Beijing last week forms part of his strategy to capitalise on the Ladakh imbroglio to get more funds and military equipment from China on the pretext of tackling a common enemy.</p>
<p style="font-weight: 400;">Interestingly, Saudi Arabia, which has been bankrolling Pakistan in the past, is refusing to play ball with the former cricketer-turned politician, whose narrow Islam-centric worldview does not sufficiently distance itself from terrorist outfits. Prodded by China, Khan had attempted to indulge in some tough talk against Saudi Arabia for not convening an Islamic nation conference to condemn India’s abrogation of Article 370 in Jammu and Kashmir. However, Saudi Arabia has refused to fall into the trap as it pursues its own national interest in looking ahead to develop a diversified economy that is not solely dependent on oil for its prosperity.</p>
<p style="font-weight: 400;">The Gulf nation sees India, which has been clocking the fastest economic growth in recent years, as a good investment destination.  In June this year, Saudi Arabia’s sovereign wealth fund invested $1.5 billion (Rs 11,367 crores)  to pick up a stake in richest Indian Mukesh Ambani’s Reliance Jio Platforms joining other investors such as Facebook in the venture.</p>
<p style="font-weight: 400;">“We believe that the potential of the Indian digital economy is very exciting and that Jio Platforms provides us with an excellent opportunity to gain access to that growth,” Yasir Al-Rumayyan, governor of Saudi Arabia’s public investment fund (PIF), said while announcing the decision. “This investment will also enable us to generate significant long-term commercial returns for the benefit of Saudi Arabia's economy and our country's citizens, in line with our mandate to safeguard and grow the national wealth of the Kingdom,” he added. Besides, PIF is reported to be in talks with Reliance for another $1 billion investment in Jio’s fibre assets.</p>
<p style="font-weight: 400;">India is also one of the biggest markets for Saudi Arabia’s oil. This aspect has gained greater significance as the international oil market is headed for a sea change with demand expected to decline in the future as countries try to move away from fossil fuels to fight the emerging threat of climate change to the planet.</p>
<p style="font-weight: 400;">Increased production of shale oil in the US has also turned out to be a game-changer and even Indian oil companies have started sourcing more crude from American firms. In such a scenario, oil producing countries will have to take steps to retain their markets.</p>
<p style="font-weight: 400;">It was in this backdrop that the world’s top oil exporter Saudi Aramco had drawn up plans to buy a $15 billion stake in Reliance Industries-owned giant oil refining and petrochemicals complex at Jamnagar on the Gujarat coast. While the deal has been delayed over the valuation of the assets, the Saudi company said it is still interested and the due diligence is on. The Aramco deal was initially expected to be completed by March this year.</p>
<p style="font-weight: 400;">In another important development, Saudi Arabia is scheduled to host the conference of G20 nations in the coming months to be attended by advanced western countries and Japan. This will give the Gulf kingdom an opportunity to discuss its new agenda for diversifying its economy at an international forum. Saudi Arabia would not, therefore, like to get caught up in small Pakistan-centric games with the former cricketer.</p>
<p style="font-weight: 400;">Analysts are of the view that Riyadh would also like to tread carefully as its image took a big hit due to the notorious killing of journalist Jamal Khashoggi in the Saudi consulate at Istanbul.</p>
<p style="font-weight: 400;">The kingdom has been in damage-control mode ever since and would not like to be associated with controversial issues raised by countries like Pakistan and China which stand alienated in the democratic world. Very clearly, a policy that brings Saudi Arabia closer to a democratic country like India serves its national interest far better than an army-dominated Pakistan known to provide support to terror groups.</p>
<p style="font-weight: 400;">Meanwhile, Imran Khan is caught between the devil and the deep blue sea with both the army generals and the extremist jihadi groups keeping him under a tight leash. Pakistan has already fallen neck-deep in debt with the IMF as it does not have enough foreign exchange to pay even for essential imports. The country has managed to get another $1.4 billion lifeline from the multilateral lending institution this year to stave off its balance of payments crisis after having secured a $6 billion commitment in July last year. But these loans have to be repaid and carry strict conditions on how the economy has to be managed.</p>
<p style="font-weight: 400;">Khan is running from pillar to post to get funds for his spluttering economy and is leaning heavily on big brother China for help. But then there are no free lunches and the dragon will draw its pound of flesh with a free run to the Pakistan’s Gwadar port.</p>.