BEIJING: Saudi crown prince Mohammed bin Salman’s lavish offer of $20 billion to Islamabad is bound to overpower and limit the strong influence Beijing has built over the years with the China-Pakistan Economic Corridor (CPEC).
For Islamabad, filling a financial gap of $12 billion that has bogged down the government has been of far more importance than making long-term investments in CPEC. This is where the Saudi help beat Beijing’s, which did not respond when PM Imran Khan went knocking on its doors for aid to tide over the funds crisis November last. It is only recently that China announced a $2.5 billion aid apart from its investments on CPEC.
But this pales in comparison to the Saudi purse on offer. Even last year, Riyadh’s assistance of $6 billion was more than Beijing’s.
“For Pakistan, it (Saudi assistance) does represent a gentle rebalancing away from dependency on China, which some on the Pakistani side think had grown excessive – even if China will remain a critically important partner,” Andrew Small, an expert on Chinese policy in south Asia and author of “China-Pakistan Axis: Asia’s New Geopolitics”, told TOI. The new fund “is a notably larger infrastructure investment than anything new that is expected from China in the next few years,” he said.
Half of the $20 billion will go into establishing a refinery in Gwadar, the Chinese-promoted port built to give Chinese exporters access to the Arabian Sea. Gwadar is the endpoint and ultimate purpose of CPEC from Beijing’s point of view. To that end, China has reason to worry about Saudi involvement in Gwadar city next to the port. “In practice, a major additional investor in or close to Gwadar should represent a boost for CPEC but Beijing will be a little politically wary nonetheless,” Small said.
Taking a different view, Imtiaz Gul, executive director of the Islamabad based Center for Research & Security Studies, said it was China which had sought Saudi Arabia’s involvement in consultation with the Pakistani government. “Multilateral relations are not determined by faith and ideology. They are determined by economic interests,” he said.