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Saudi-Iran rapprochement: An opportunity for Pakistan?

  • By Al Mayadeen English
  • Source: ModernDiplomacy
  • 18 Mar 2023 19:31
  • 1 Shares
4 Min Read

The situation in Pakistan has in recent years been that of unprecedented turmoil on all fronts, including the political front, the economic front, and the humanitarian front. 

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  • A view of the Presidential Palace in Islamabad, Pakistan, Monday, June 20, 2022 (AP Photo/Anjum Naveed)
    A view of the Presidential Palace in Islamabad, Pakistan, Monday, June 20, 2022 (AP Photo/Anjum Naveed)

A report published by Modern Diplomacy on Saturday revealed that the Saudi-Iran peace deal may open the door for new opportunities for both economically and politically crisis-stricken Pakistan.

When the China-brokered peace deal was announced, Pakistan said it welcomed the restoration of diplomatic ties between the former arch-rivals, noting that the peace agreement would promote regional stability. 

In the past, the country attempted to rekindle Tehran and Riyadh's diplomatic ties. In 2016, Nawaz Sharif, then Prime Minister, played the role of mediator between the two countries - but to no avail. Again in 2019, PM, Imran Khan paid a visit to both countries separately - but again, no developments emerged out of these efforts. 

With this one-of-a-kind peace agreement, which kicked off discussions on the revival of the two countries' 2001 security cooperation agreement, Islamabad considers the potential on boosting the country's already fragile economy, particularly since Pakistan entertains good trade and economic relations with both Iran and Saudi Arabia.

What opportunities lie ahead?

The report states that the Iran-Saudi rapprochement may open the door to multiple opportunities for Pakistan, such as bringing forth the Muslim world to align closer for the Kashmir cause, ensuring the success of the China-Pakistan Economic Corridor and China's Belt and Road Initiative (BRI), as well as improve overall regional security. 

The rapprochement may also contribute to reducing religious tensions within Pakistan's population, where 20-25% of the total population identify as Shia.

Pakistan's diversity and historical affiliations with both Tehran and Riyadh can further enhance regional peace and dialogue between Iran and Saudi Arabia. To maintain such a role, the report says, Pakistan will have to continue to engage with both parties while considering relevant interests and concerns. 

In doing so, it will enhance its own position as a regional player, the report concludes.

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Can Pakistan really exert any impact?

The situation in Pakistan has in recent years been that of unprecedented turmoil on all fronts, including the political front, the economic front, and the humanitarian front. 

The country has been suffering from an acute shortage of foreign reserves and its inflation is currently at a 50-year high.

China has recently asked Pakistan for a $1.5 billion loan to be paid back, while Saudi Arabia declined to provide any further assistance as no deal with the IMF has been in sight. 

The country's relations with Saudi Arabia have mainly been shaped by an influx of job-seeking migrant workers who have not received the fairest of treatment.

Pakistan has suffered one of the worst environmental disasters last year in June which caused thousands of people to be killed and millions to be displaced. 

Pakistanis have been forced to leave behind their homes as their crops and livestock were washed away, and hundreds of miles of roads have been destroyed, thus leaving areas impossible to access for emergency services.

Rampant corruption in the government has made it difficult for affected people to receive the assistance they need. 

As for relations with Iran, their economic ties have mostly been defined as an ongoing work in progress.

On December 24, 2022, Iran's Consul General Hassan Nourian said that Iran and Pakistan are aiming to achieve a trading volume of $5 billion per annum considering that the current volume of $1.5 billion was deemed "unsatisfactory".

In order to achieve that target, the two countries signed two MoU: one for setting up a Joint Business Council between Iran and Pakistan, and the second to facilitate the arbitration of commercial disputes.

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