Cash-strapped Pakistan rolls out red carpet for Saudis

For a country running out of foreign reserves, facing a yawning current account deficit and fighting to secure its financial future, Pakistan is putting on quite a show for Saudi Arabia’s most powerful man – Crown Prince Mohammed bin Salman.

And it’s easy to see why: Prime Minister Imran Khan needs money, and he needs it fast.

MBS, as he’s known, is coming to town promising billions – with Pakistan the first stop on a four-country Asian tour that also includes Malaysia, Indonesia and India.

But money is just one dimension of a relationship that goes much deeper.

The last time a Saudi royal visit was marked with this much fanfare was in 2006, when then Saudi ruler King Abdullah bin Abdulaziz toured the nuclear-armed nation.

And security is being taken seriously – with Imran Khan making a point of saying that he is personally taking care of the arrangements. The visit comes amid heightened tensions in the region, after India blamed Pakistan for the deadliest attack on its security forces in Kashmir in decades.

JF-17 Thunder fighter jets will escort MBS’s fleet on Sunday as they enter Pakistani airspace – with all other flights grounded.

Hundreds of five-star rooms in Islamabad are believed have been booked out for the 1000-strong delegation. There are even reports that thousands of pigeons have been caught for a welcome ceremony.

The Pakistani government, which last year organised an auction to raise money by selling off its fleet of luxurious cars, has arranged 300 Toyota Land Cruisers.

And for the two-day trip, the Saudi crown prince will stay at the official residence of the prime minister – something that no state guest has ever done before.

Why is Pakistan desperate for cash?

The central bank has only $8bn (£6.2bn) left in foreign reserves and faces a balance of payments crisis.

Since he was sworn in last August, former star cricketer Imran Khan has been aggressively pursuing help from friendly countries in order to reduce the size of the bail-out package that Pakistan will likely need from the International Monetary Fund, under very strict conditions.

The country is seeking its 13th bailout since the late 1980s.

The visit of MBS comes soon after Abu Dhabi’s Crown Prince Mohammed bin Zayed al-Nahyan was in town.

The United Arab Emirates pledged to provide $6 billion to support Pakistan’s battered economy. In total, Pakistan is hoping to get $30bn in loans and investments from the two Arab kingdoms, the Wall Street Journal has reported.

It’s unclear exactly what deals will be signed while MBS is in town – but the crown jewel is a new $8bn oil refinery in southern port city of Gwadar.

Gwadar is the nerve centre of China’s $60bn China-Pakistan Economic Corridor. Chinese money is much valued by Pakistan’s government but analysts say it comes with strings attached – Chinese workers normally build Chinese projects. There are also concerns about Beijing having too much influence.

Funds from Saudi Arabia and the Gulf are hence very welcome.

What’s in it for the Saudis?

While it is easy to see Pakistan as a country which is benefiting from the largesse of its allies at the cost of its sovereignty, the story is not so simple.

Saudi Arabia needs Pakistan too.

The crown prince’s tour comes at a peculiar time for the kingdom, which is currently facing a global reputation crisis of its own due to the humanitarian catastrophe of its war in Yemen and the killing of journalist Jamal Khasoggi in its Istanbul consulate.

Against this backdrop, the current tour can be seen as a charm offensive by MBS, who is seeking to bolster relationships with dependable allies while doling out cash.

And it’s important not to forget that Pakistan is very important to the Saudis.

The two countries have a military relationship which goes back decades. When Islam’s holiest site in Mecca was attacked by militants four decades ago, it was Pakistani troops who were deployed to eliminate them.

“There has always been the assumption that Pakistan would be able to provide manpower if Saudi Arabia faced a major security crisis or a major attack,” says Shashank Joshi, a South Asia expert and defence editor of The Economist magazine.

“Saudi Arabia, like some of the other gulf countries, has lots of cash but not necessarily a particularly strong army. Pakistan has not very much cash but a very strong and powerful army.”

He adds that it has long been suspected – but never proven – that the two sides have a longstanding nuclear relationship that Saudi Arabia could draw upon if it one day needed access to the technology – for example if regional rival Iran became a nuclear-armed power.

The Saudis have an strong religious influence in mostly Sunni Muslim Pakistan and after the Soviet-Afghan war in the 1980s, they were able to set up a large network of religious seminaries, in part to counter Iran’s influence.

In fact, a week before MBS’s visit to Pakistan, the main avenues of Islamabad were dotted with posters and banners commemorating the 40th anniversary of the Iranian revolution. Since then, those have been replaced with pictures of MBS.

The presence of Iran as Pakistan’s next door neighbour is another reason why the Saudis want to keep up the relationship.

“Saudi Arabia would like to ensure Pakistan remains closer to Riyadh than it does to Tehran,” says Mr Joshi.

It’s true that Pakistan’s decision not to heed Saudia Arabia’s call to join its war in Yemen four years ago damaged the relationship. But this visit – coming amid a generational shift in the Saudi leadership – “represents a turning of the page”, says Pakistani newspaper columnist Mosharraf Zaidi.

The Taliban question

What makes the timing of this tour even more significant is that it comes at a time when geo-politics in the region are shifting.

Unprecedented talks are taking place to bring an end to the war in Afghanistan – where Pakistan, Saudi Arabia, Iran, India and the US all have a stake.

The next meetings between Taliban and US officials could take place in Islamabad on the day MBS leaves – and the Saudis do not want to be silent spectators sitting on the sidelines.

The high-level talks were previously held in Qatar – the Gulf country with which Saudi Arabia has an ongoing rift – and Saudi officials will want to find out exactly what has been going on from Pakistan, says Joshi.

“Saudi Arabia will be keen that as the peace process continues that it is factions [of the Taliban that they are close to] who are empowered, rather than those who are close to Iran.”

On his trip MBS will also be meeting Pakistan’s powerful army chief, General Qamar Javed Bajwa – where the Taliban issue is expected to be discussed.

Source: BBC News