Improving Saudi-Pak relations

Amidst many speculations about the ‘real’ reason behind Saudi Crown Prince Salman bin Abdul Aziz’s visit, let’s not forget the comfortable nature of the Kingdom’s relations with the current Pakistan Government.
And, while these speculations might have given rise to heated political debate, one thing is apparent from the repeated Saudi visits since the May elections: the PML-N government seems to go all-out to improve its bilateral relations with Saudi Arabia that remained largely lukewarm during the previous PPP-led regime.
The joint statement on the Crown Prince’s visit is very vocal about how the two countries want to further augment their deep-rooted brotherly relations. Main areas of discussion during the visit were not confined to bilateral cooperation in areas of defence. Discussions about signing of MoUs regarding investment, trade, infrastructure, energy and agriculture also remained very much part of the meetings.
One key request raised by the Pakistani government during the talks was the restoration of one-year deferred oil payment mechanism, which would increasingly be a source of relief for Pakistan’s dwindling foreign exchange reserves if agreed by the Saudis.
While such decisions have yet to be made, the reliance of the country on oil and petroleum imports from Saudi Arabia is not overstated. Overall, the imports from Saudi Arabia constitute between 10 to 12 percent during the past four fiscal years. Besides, improving trade relations could also bolster the otherwise smaller export share of Pakistan to the Kingdom, which stands at around two percent.
Then, the history of the two countries regarding the home remittances is not overplayed either. The share in total remittances received by Pakistan from Saudi Arabia touched 30 percent of the total overseas receipts in FY13. It is important that labour and manpower issues are resolved as these remittances serve as a lifeline for Pakistan’s balance of payments.
Though Foreign Direct Investment (FDI) from Saudi Arabia has significantly remained below par during the last five years, there exists tremendous potential in areas like energy, infrastructure and real estate that the Arabs could invest in.
Whether due to the Saudi Arabia’s genuine attitude towards Pakistan or its current government, one should hold positive hopes for the relationship at least on the economic front.
And unlike countries namely India and USA-–with which the process of improving relations invites criticism from some quarters at home-–there is a generally favourable view towards improving relations with Saudi Arabia. According to a 2013 Pew Research on global attitudes, 95 percent of Pakistanis have a favourable perception of the desert Kingdom. In that context, deepening bilateral economic ties are all the more needed and welcome!