Saudi Crown Prince Mohammad Bin Salman will arrive in Islamabad in several weeks to sign a huge Memorandum of Understanding (MoU) with Pakistani officials.
The US$10 billion MoU is for the Gwadar oil refinery – a petrochemical complex not far from the border with Iran. It holds major geostrategic importance given the turbulence in the Middle East.
Pakistan Minister of State and chairman of the national Board of Investment (BoI) Haroon Sharif confirmed that a 15-member Saudi delegation had already visited Gwadar as part of the investment process for the Aramco oil refinery. He also revealed that arrangements for an MoU for construction of the oil refinery had been finalized, saying a formal agreement would be signed during the Crown Prince’s visit next month.
Pakistani officials are upbeat about the Saudi investment, which they say will boost foreign direct investment in the country, but some political observers think differently.
They view the latest development in the context of Saudi-Iran rivalry and fear that Riyadh’s economic focus on Gwadar will escalate tensions in the region, where anti-Shi’ite extremist forces have been fighting a pitched battle with Iranian border security forces.
The Saudi venture, they say, could inflame the troubled Balochistan province and reinforce anti-Saudi sentiment in Iran’s Sistan and Khuzestan regions.
Rahimullah Yousafzai, a senior Pakistani journalist and political and security analyst, told Asia Times: “It’s a very sensitive issue and Pakistan needs to carry out its homework diligently to avoid slipping into an ongoing conflict between the Kingdom and neighboring Iran.” He also said that Pakistan and the Kingdom should both declare, in unequivocal terms, that the investment in Balochistan has no political intent.
Pakistan officials are apprehensive because of the Chabahar port – several hundred kilometers west of Gwadar, which was formally commissioned in Iran recently, despite little being said publicly about the “rival” port.
Rival port backed by India
“India, which is a major investor in Chabahar, will use the port to bypass Islamabad in forging economic and political ties with Iran, Afghanistan and Central Asian nations,” Yousafzai said, adding that despite India’s growing interest in the region, Pakistan preferred not to discuss India’s involvement with Tehran in Chabahar.
“As far as Saudi involvement in Gwadar port is concerned, Iran was never involved in a regular war with the Kingdom, hence their level of sensitivity will be far less than with Pakistan, which has fought three wars with India,” Yousafzai said.
In late 2017, a Saudi-backed think tank, the International Institute for Iranian Studies, added an additional layer of complexity to the issue. IIIS scholars argued that Chabahar posed a “direct threat to the Arab Gulf states” that called for “immediate counter-measures.”
In October last year, the Kingdom rewarded Pakistan Prime Minister Imran Khan for attending a foreign investors’ summit in Riyadh, promising billions to help Islamabad overcome its financial crisis.
The conference was avoided by bosses of many western financial institutions, tech entrepreneurs and media magnates, plus government leaders due to the scandal raging at that time over the brutal slaying of journalist Jamal Khashoggi in the Saudi consulate in Istanbul.
Khan returned from the summit with a $3 billion deposit in Pakistan’s central bank as a balance of payments support and a deal allowing deferred payment for $3 billion worth of oil imports.
Sectarian tension stirred up?
Reports carried by national and international media have said that ultra-conservative anti-Shi’ite and anti-Iranian seminars have been held by Sunni Muslims in Balochistan and that they receive Saudi funding through official channels or via Saudi nationals of Baloch descent. They have also suggested that this may be to destabilize the Islamic republic by inspiring unrest among its ethnic minorities, including the Baloch.
There is a growing concern within official circles in Pakistan that Iran could support Baloch nationalists to raise the stakes for Islamabad – in response to an alleged Saudi-US ploy to destabilize Iran.
Pakistan is also worried that its diminished regional standing – in dire economic plight and minus US support – could encourage India to steer around the $45-billion China Pakistan Economic Corridor (CPEC), the flagship project of the Chinese’s Belt and Road Initiative.
‘Extremists already in Balochistan’
Afrasiab Khattak, a political analyst, columnist, and a left-wing politician, said: “Pro-Saudi religious extremists have already penetrated Balochistan. Lashkar-e-Jhangvi (LeJ) is operative in the Brahui belt of Quetta, Kalat, Mastung and Khuzdar and the Balochi-speaking belt in Makran division in the vicinity of the Pak-Iran border.”
He said pro-Saudi terrorists recently abducted 14 Iranian border security personnel and their fate is still unknown.
“Economic cooperation between Pakistan and Saudi Arabia is fine as long as it does not undermine the interest of our neighbors, because we cannot choose our neighbors and we have to live with them,” Khattak said, adding that unfortunately regional rivals always play to the gallery.
“Chabahar and Gwadar are not a zero-sum game. Given the huge population of Western China, four Central Asian States and Afghanistan, these two ports alone, cannot handle the growing business potential of this region. We need more ports and cargo terminals to meet the mounting demands from a huge consumer market,” he added.
Khattak believed it was not rational to construe Chabahar port as a threat to the interest of Gulf states, as some Saudi newspapers have tried to claim. Chabahar port aimed to capture trade from Afghan and Central Asian markets and had absolutely nothing to do with the Gulf or Saudi economy, he argued.