Tuesday, September 12, 2017

What Happens If Iran And Saudi Arabia Join CPEC

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By Polina Tikhonova on September 12, 2017 3:24 pm in Politics

  

Saudi Arabia says it’s keen to cooperate with Pakistan on CPEC, but what does this mean for Iran? Can Saudi Arabia join CPEC, and if so, would it bring Tehran and Riyadh together?

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In a meeting with Pakistani Finance Minister Ishaq Dar on Monday, Saudi Arabian Ambassador to Pakistan Retired Admiral Nawaf Ahmad Al-Maliki said Riyadh is interested in cooperating with Islamabad on the $54 billion China-Pakistan Economic Corridor (CPEC) project.

While the magnitude of Saudi Arabia’s potential cooperation with Pakistan remains under wraps, Al-Maliki said his nation is eager to play its role in the game-changing project that connects China’s Xinjiang province to Pakistan’s Gwadar Port through a network of rail and road projects.

“We think that Pakistan will make progress through this project,” Al-Maliki said, adding that Saudi Arabia wants to assist its long-time ally Pakistan with development and progress. But should Saudi Arabia join CPEC to work with its historic ally to improve connectivity in the region and benefit from the investment-friendly platform of economic prosperity?

Pakistan holds the key to resolving Saudi Arabia-Iran row

If China and Pakistan saw Saudi Arabia join CPEC, it would help Islamabad bring Saudis closer to their traditional rivals Qatar and Iran, both of which have also expressed interest in becoming part of the multi-billion-dollar project. Foreign policy analysts believe that, given Pakistan’s warm economic and strategic ties with both Saudi Arabia and Iran, Islamabad could help patch up the long-running cracks in Saudi-Iranian relations. Earlier this year, Tehran said it was interested in joining CPEC “with its full capabilities, possibilities and abilities.”

Qatar, which has also been a long-time ally of Pakistan, is looking to boost its strategic partnership with its South Asian friend as well. As the Gulf state seeks new trade routes in the wake of a three-month land, air and sea blockade by Saudi Arabia and its allies, a Qatari shipping company launched a fast direct service between Doha and the Pakistani port city of Karachi earlier this month.

Saudis and their Arab allies severed all diplomatic and trade ties with Qatar this summer, which put Pakistan in an awkward position. Given the nation’s brotherly ties with both Saudi Arabia and Qatar, Islamabad could actually serve as a bridge between the two rivals without having to pick sides in the diplomatic crisis. And if both Qatar and Saudi Arabia join CPEC, Pakistan will have a richer set of tools to bridge the gap between the nations. However, given the absence of government-level talks on this matter, it’s unclear if Riyadh and Doha would be willing to put their differences aside to benefit from the joint China-Pakistan project.

If Iran and Saudi Arabia join CPEC, it could unify the Muslim world

Having both Iran and Saudi Arabia onboard with CPEC would not only help resolve the centuries-old rivalry between the two Islamic maritime neighbors but also bring vast contributions to the project. Iran, where oil accounts for 80% of its export revenues, could put its rich energy resources to use for the development of CPEC projects. And let’s not forget Tehran’s impressive advances in science and technology; if combined with the bright minds of Pakistani and Chinese technology experts, those advances would revolutionize the region.

In fact, if both Iran and Saudi Arabia join CPEC, not only would they improve connectivity and trade ties in the region, but they would also lay out the groundwork for peace and tranquility. Additionally, having the two key Islamic nations onboard with CPEC would most likely prompt other Islamic nations to join the project and potentially unify the Muslim world.

Iran one step closer to joining CPEC

Islamabad and Tehran have been keen to increase their bilateral trade since the international community lifted the economy-crippling sanctions against Iran due to the nuclear deal reached in 2015. In 2016, Pakistan and Iran agreed to boost their bilateral trade to $5 billion by 2021.

Before Tehran was slapped with those sanctions, Pakistan-Iran bilateral trade stood at about $1.6 billion annually, but it plummeted to about $300 million after the sanctions were introduced.

Why it would be a big deal for Saudi Arabia to join CPEC

While Pakistan-Iranian trade is slowly recovering, Saudi Arabia could turn to its long-time ally Islamabad to recover the rather unsteady growth rates of its oil-dependent economy. If Pakistan and China saw Saudi Arabia join CPEC, it would not only strengthen connectivity in the region but also boost Saudi Arabia’s economy.

CPEC could bring new economic opportunities for Riyadh, which envisioned the restructuring of its economy and achieving sustainable growth by 2030. China and the U.S. remain the top two importers of Saudi Arabia’s crude oil, with over $26 billion and over $20 billion, respectively, but Saudi Arabia could get access to world markets after joining CPEC. By joining CPEC and getting access to Gwadar Port in Pakistan, the Saudis would be entering the geo-economic arena, which could create numerous economic opportunities for their kingdom.

In fact, Saudi Arabia leads the pack in the list of countries sending remittances to Pakistan, at $4.52 billion in the current fiscal year, according to Pakistan’s central bank. Saudi Arabia is home to nearly 2 million Pakistani expatriate workers.

Saudi Arabia in CPEC could bridge the gaps between U.S. and Pakistan

If Pakistan succeeds in bridging the gaps between the Saudis and Iranians, it could potentially solve Islamabad’s differences with the West. Pakistan-U.S. relations have hit rock bottom since U.S. President Donald Trump delivered his national address on his Afghan strategy and accused Pakistan of  providing “safe havens” to terrorists.

Since Saudi Arabia is in tight partnership with the Trump administration on the matters of regional security and anti-terrorism operations, improved Saudi-Pakistan relations could pave the way for Washington to drop its criticism of Islamabad regarding what it sees as an insufficient fight against terrorism.

If Iran and Saudi Arabia join CPEC, it would create more platforms for the Saudis and Iranians to meet, shake hands and talk. This could bring these two rivals closer to a peace pact and putting their hostilities behind them. As for Pakistan, Saudi Arabia’s participation in the project could help bridge the gap between Washington and Islamabad regarding Pakistan’s war on terrorism

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