Soon after taking office last summer, the new Pakistani government led by Prime Minister Imran Khan confronted mounting economic challenges and the prospect of a balance of payments crisis. The government has delayed accepting an International Monetary Fund bailout and sought additional sources of financial assistance from Saudi Arabia and the United Arab Emirates, among others. Saudi Crown Prince Mohammad bin Salman recently visited Pakistan to finalize agreements on new projects in the energy sector and other areas, which solidified a $20 billion Saudi investment in Pakistan’s economy to match the scale of China, Islamabad’s principal ally. Pakistani military cooperation with Saudi Arabia has also remained strong, with the former Pakistani chief of army staff Raheel Sharif now heading a Saudi-sponsored military coalition.
The deepening relationship between Pakistan and the Gulf states comes at a period of high tension between Saudi Arabia and Iran, whose border with Pakistan has also been the site of periodic clashes and whose past efforts to launch a gas pipeline project linking the two countries remains stalled. A February 13th terrorist attacked, which killed 27 members of Iran’s Revolutionary Guard and was linked to Pakistani-based militants, only further escalated tensions between the two countries. While Prime Minister Khan has professed a desire to serve as a mediator between Saudi Arabia and Iran, Pakistan faces an increasingly challenging diplomatic balancing act.
Courtesy: (usip.org)
