Via Future Directions International, an article looking at Saudi Arabia and China’s investment influence in Pakistan:

Background

During his visit to Pakistan in 2015, President Xi of China entered into an agreement with Islamabad to invest around US$46 billion in the country. It was estimated that a full 80 per cent of that sum – between $35 and $37 billion – would go towards addressing Pakistan’s desperate electricity deficiency. It was anticipated that the power generation facilities that were proposed to be built would, apart from alleviating the Pakistani industrial sector’s need for power, take some of the pressure off Prime Minister Nawaz Sharif, whose electoral promises included developing power projects to enable the industrial sector to work to its full potential. China proposed to build an oil and gas pipeline from Iran to its western Xinjiang province, along which the power generation and other facilities would be constructed. This became known as the China-Pakistan Economic Corridor, or CPEC.

While this is good news for Pakistan by any evaluation, it raises some issues that need to be addressed urgently. While internal issues, such as subduing the ongoing violence in the western province of Baluchistan that borders its namesake province in Iran, predominate in the media, external issues also exist and, likewise, demand urgent attention.

Comment

Prior to obtaining its windfall investment from China, Pakistan had a close relationship with Saudi Arabia. The matter of expatriate Pakistani workers who send part of their salaries back to Pakistan aside, it was long believed that Saudi Arabia had financed Pakistan’s nuclear programme, including to the country’s missile and nuclear laboratories. According to at least one report, Saudi Arabia financed up to 60 per cent of Pakistan’s nuclear programme. It was believed that Riyadh had, in return, the option of purchasing five or six nuclear warheads from Pakistan if it felt that were warranted. So widespread did this perception become that the Pakistani authorities were forced to issue a statement denying it. The perception prevails, nevertheless, despite their protestations. It is still widely believed that Pakistan has agreed to provide Saudi Arabia with nuclear weapons in the event of a military crisis. What remains unknown, however, is whether Pakistan could or will keep its end of that agreement.

The influence that Riyadh wielded over Islamabad extended past the military sphere, however. In 2013, for instance, after Islamabad had entered into an agreement with Tehran to construct a pipeline in their respective countries, which was to be joined at their common border, Riyadh objected to the agreement. It sought out every opportunity to block Iran’s economic progress. Islamabad lost little time in complying with this “request” from Riyadh, albeit it provided a different reason for doing so. At the personal level, the current Prime Minister of Pakistan owes his life to the House of Saud, they having offered him sanctuary after he was forced to flee Pakistan in the wake of a military coup engineered by then Chief of the Pakistani Army, Pervez Musharraf.

Those ties notwithstanding, China’s investment in Pakistan has forced Nawaz Sharif to re-evaluate the country’s ties to Saudi Arabia. Thus, when China entered into an agreement with Iran for the purchase of its energy products, it simultaneously sought to circumvent its “Malacca Dilemma”, the potential risk posed by the Strait of Malacca to its energy imports via tankers. Since China already had Pakistani permission to access the Indian Ocean port of Gwadar, it sought to build a pipeline through Pakistan into Xinjiang province. It did not take a great deal of effort – Xi’s investment of US$ 46 billion underlining this point – to persuade the Government of Pakistan to enter into an agreement to pipe those energy products through its territory.

One consequence of this has been the need for Pakistan to reassess its ties with Iran. Whereas previously Pakistan was prepared to forego those links, it now appears to have rejuvenated them. One outcome has been the joint naval drills between Pakistan and Iran, together with other countries, called Aman-17.

Tensions remain, nevertheless, over the perceived treatment by Sunni-majority Pakistan of its Shi’a minority by Shi’a-majority Iran. Saudi Arabia is also upset, moreover, over Pakistan’s seeming refusal to take part in its operations against the Houthi insurgency in Yemen. Despite these tensions, Pakistan continues to insist that it would protect Saudi sovereignty if and when required to do so.

It would appear at this stage that Pakistan is hedging its bets, not wanting to offend its traditional ally, Saudi Arabia, and not wanting to disillusion its major investor, China. Pakistan is indeed walking a diplomatic tightrope but appears to have so far managed that feat fairly well.