Riyadh wants to prevent Pakistani rapprochement with Tehran
The possibility of Iran expanding its sphere of influence and establishing contacts with countries such as Pakistan is an idea that Saudi Arabia is going to do everything it can to prevent from coming to fruition. The first step has been to resume its oil deal with Islamabad, according to a report in the Financial Times. Beyond the benefits that this resumption may have for both sides, the main motive seems to be to prevent the country led by Arif Alvi from moving closer to the Iranians. However, it seems that the position of the country that just held elections a few days ago has changed, and it is not so opposed to negotiating possible future plans with Riyadh.
The value of the new agreement reached between the Saudis and Pakistanis is expected to be worth at least $1.5 billion per year and is expected to be re-launched in July. The situation has changed significantly since last year. It should be recalled that relations between the two countries were not at their best and the previous oil credit of $3.4 billion was suspended. The reason for this disagreement was Saudi Arabia's failure to convene a meeting of the Organisation of Islamic Cooperation (OIC) over India's cancellation of Kashmir's special status, which did not sit well with Pakistan.
"Our relations with Saudi Arabia have recovered from (an earlier) recession', a senior Pakistani official said of the change that has taken place between the two countries over the past year. According to the same official, Riyadh's intention goes beyond, not only an attempt to isolate Iran, but also the agreement itself, as the Saudis intend to resume certain investment plans in their country: "Saudi Arabian support will come through deferred payments (on oil) and the Saudis are looking to resume their investment plans in Pakistan".
It was not until last May that they began to move closer together. Pakistani Prime Minister Imran Khan met with Saudi Crown Prince Mohammed bin Salman in Jeddah. The main topic at the time was the tension that existed - and continues to exist - between Palestine and Israel. Both sides reaffirmed their support for the Palestinians in an official communiqué issued after the meeting: "The two sides reaffirmed their full support for all the legitimate rights of the Palestinian people, especially their right to self-determination and the establishment of their independent state with pre-1967 borders and with Jerusalem as its capital, in accordance with the Arab Peace Initiative and relevant UN resolutions”.
Although it was not the most important issue at the time, some ideas were already mentioned at the May meeting that now, according to the Financial Times, may see the light of day in the very near future. The offer issued by Saudi Arabia is more or less half that of the previous one. And while the first impression from the Pakistani side was not the best, at present "any amount of dollars helps because time and again we face a current account crisis. And with these prices above 70 dollars a barrel, anything helps", is the idea repeated from Islamabad.
Pakistan's reserves are currently in a difficult situation. The country's foreign exchange reserves amount to 16 billion dollars (as of June), a figure that is much higher than in 2019, when it was less than 10 billion dollars. It should also be borne in mind that at that time it had not entered the International Monetary Fund (IMF) loan programme.
That is why, among other things, a return to this agreement is also crucial for Pakistan. Although Saudi Arabia, despite having taken the first step towards resuming this agreement, is not entirely clear about the type of relationship it can establish with the Pakistanis in the coming years. One of the most important open fronts for the Saudis is the war in Yemen, and they do not forget that in 2015 Pakistan refused to send its troops to fight in favour of the coalition led by Riyadh against the Houthi militias supported by Iran.
In fact, over the last few years, Islamabad has established a very fruitful relationship with another of the actors involved in Yemen -although in this case, it is rare that it is not involved in every international conflict there is- such as the country presided over by Recep Tayyip Erdogan. Turkey has become Pakistan's fourth largest source of arms between 2016 and 2019, surpassing even the United States. But the case of Erdogan's people is very peculiar, as there are many negotiations and interests that they manage from Ankara, one of them being the rapprochement between Saudi Arabia itself and Egypt.
Saudi Arabia's concern in this case, far from being with Egypt, is -as on most occasions- with its regional rival Iran. The relationship between the two countries may undergo a significant change following the elections that took place in Iran on 18 June. The new president and head of the Judiciary, Ebrahim Raisi, won a landslide victory in an election marked by low turnout, the main reason being political disillusionment and the country's long-standing serious economic problems.
What has caused some to be disconcerted and others to mistrust the ultraconservative's openness to the possibility of rapprochement with Saudi Arabia as soon as he became President. The existing discrepancies between the Sunnis and Shiites that have long plagued relations between the two countries may find themselves facing a new conciliatory front. But when it comes to Iran, one has to be very optimistic to trust that all the talk from Tehran is sincere. The new government has enough to do with the Joint Comprehensive Plan of Action (JCPOA) without having to plunge into new diplomatic labyrinths, something that has never been a problem for Hassan Rohani's government.
The future of the JCPOA is one of the pillars of Raisi's new policy, even though the new president's campaign spokesman, Alireza Afshar, wants to downplay its importance by describing the negotiations on the nuclear deal as "a marginal issue that should not be associated with the country's problems or other state affairs". A pact that was signed with the intention of preventing Iran from developing nuclear weapons and that lost all value when the former US president, Donald Trump, decided that his country should unilaterally leave the agreement.
The expectation is that an agreement can be reached with the new government and, moreover, as soon as possible. The hope is that Raisi's demands will not be like Rohani's, with whom it has not been possible to reach any middle ground, since he demanded the lifting of all sanctions imposed by the United States, something that has been categorically rejected by Washington on repeated occasions. But the reality is that even if the Joint Comprehensive Plan of Action is restored, many of the sanctions imposed by Trump may remain in place, as US State Department Secretary Antony Blinken explained: "Even if the JCPOA is restored, hundreds of sanctions against Iran, including those imposed by Trump, will remain in place. If those sanctions are not inconsistent with the JCPOA and if Iran does not change its behaviour, they will remain in place.
There is great concern within different organisations, such as the International Atomic Energy Agency (IAEA). And although "there is currently no information to indicate that at the moment", in reference to the possible existence of an active Iranian nuclear weapons plan, "when you enrich (uranium) to 60 per cent, you are very close. It is technically indistinguishable from weapons-grade material", is what IAEA Director General Rafael Grossi argued.
Grossi himself has said that even with the monitoring work being carried out, there is no sense of confidence about Iranian activities as the assurances are not -and never seemed to be- transparent. Despite the fact that Iran's current nuclear programme is ostensibly being pursued for peaceful purposes, confidence in Tehran is virtually non-existent. The UN itself has also expressed concern that the assurances offered by the Iranians to monitor their actions are very weak.
Raisi, for the moment, has not prioritised sitting down to talk about resuming the Joint Comprehensive Plan of Action, as he has done with relations with Saudi Arabia. Riyadh has preferred to get down to work as soon as possible in order to draw up its own roadmap without having to depend on the unpredictable actions that Iran might take. The rapprochement with Pakistan is the first of the initiatives taken by the Saudis in a plan that could be much more extensive in its intention to distance as many countries as possible from Iranian influence.
The new government in Tehran is expected to take action in the near future in response to the moves orchestrated from Riyadh. However, there is also the possibility that the new government will continue with its apparent conciliatory approach and formally offer a rapprochement with Saudi Arabia, something that at the moment still seems difficult, even if Raisi's face is much closer to Riyadh than Rohani's. The return to the agreement with Pakistan demonstrates that Iran's return to the Pakistan-Pakistan agreement is a sign of the country's commitment to the Middle East and the Middle East. The return to the agreement with Pakistan shows that Arabia wants to return to pre-pandemic economic data as soon as possible without having to wait for false moves from its Iranian rivals. Following last year's plunge in oil demand as a result of the pandemic, they have managed to revive other financial sectors in the country, achieving for the first time this June an economic upturn since the virus hit.
The first quarter saw a rise of 2.9% in the non-oil sector, a very important figure for the diversification of the economy that Saudi Arabia is carrying out, with the ambitious Vision 2030 as the cornerstone of its project. However, the oil sector, which, unsurprisingly, is once again the protagonist in Saudi-Iranian relations, continues its decline, with a drop of almost 12% compared to the same quarter last year. This, together with what is possibly the real reason for the rapprochement with Pakistan to isolate the Raisi regime, means that Saudi Arabia has already made its move without even leaving room for the new government in Tehran to make its first decisions.