The government of Pakistan has been rigorously engaged with so many internal and regional issues of survival, regional predominance, energy supplies and the last not the least grand regional conciliation for the last two months. Its active drive for conflict resolution, track II diplomacy, arbitration and developing regional consensus is the hot topic in Islamabad, Kabul, Tehran and Riyadh.
(a) US withdrawal from Afghanistan
Regional regrouping has been initiated to reassess the regional situation and collective preparedness to counter its strategic ramifications. There are many power brokers in the region to secure their lion share on the issue of Afghanistan. Conflict resolution is being carried out by arbitration between the two different poles of entities i.e. Saudi Arabia and Iran. Its harmonious stance on Afghanistan would create new era of peace and socio-economic integration in the region. The government of Pakistan is making every possible diplomatic effort to avoid any misadventure in the region.
Directly and indirectly the government of Pakistan has conveyed its concerns over Afghanistan’s changing situation and asserted that Washington should not contemplate any reconciliation process in Afghanistan sans Pakistan.
(b) Sever Energy Crisis
Pakistan is badly suffering from the ongoing sever energy crisis in the country. Easy and smooth supply of energy resources is the official mantra in Islamabad. Pakistan is currently witnessing an energy shortfall of approximately 4,680 MW (24 per cent) which may reach to 5600 MW in its peak season. Dearth in natural gas supply stands at 1,295 MMCFD (25 per cent). Sincere efforts are being carried out to reactive IP (Iran-Pakistan) gas pipeline by avoiding the looming sword of the US.
(c) Political Turmoil and Arab Spring
From Manama to Hama, the political map of the Middle East is being redrawn. Political turmoil in one of the important country of the Gulf Cooperation Council (GCC) is also one of the main reasons for that diplomatic surge carried by different important countries in the region. The government of Pakistan played a substantial role to put an end to any expected proxy war arrangements in the region. The government of Pakistan reiterated that Pakistan supports all efforts for peace and stability in the Islamic world so as to promote development and prosperity of the common people. The rigorous track II diplomacy on the issue of Bahrain raised Pakistan’s regional stature which opened greater job opportunities for Pakistani expatriate workers in the GCC states, economic assistance from the petrodollar GCC states, oil supplies on concessionary terms, budgetary support for Pakistan’s ailing economy and the last but not the least its key role in the collective security shield in the GCC states security apparatus.
(d) The US inclination towards India
The US continued inclination towards India badly forced Pakistan to research for reliable regional alternatives. So, Pakistan-Saudi Arabia-Iran Axis was sought. Although, it seems to be unnatural and unholy alliance but still a greater realization at the top levels and dominance of convergence over divergence has played a crucial role in it. Sincere efforts are being carried openly and secretly to reach at some functional arrangements of regional political cooperation, stable socio-economic integration and above all sustainable geo-strategic accommodation in the days to come.
(e) Collective stance of regional terrorism
Regional terrorism is a permanent threat to all the countries. Levels of fears are sky-high that ongoing anarchy in many regional countries may lead towards terrorism nexus has also brought regional countries close to one and another.
(f) Greater socio-economic relations
Greater socio-economic integration in order to mitigate the ongoing global economic recession and financial crunch played significant role in current greater regional reconciliation. High qualms of geo-political and geo-strategic isolation in the affairs of power politics made them united.
Emerging Pak-Saudi strategic relations (recent surge)
Saudi Arabia is our strategic partner which is rooted in culture, shared values and common faith. Close geographical propinquity, historic trade ties, religious acquaintance and the economic support have created a strong ties based on trust and mutual respect between the two countries.
In recent extensive diplomatic spells between the two countries, Saudi leadership reaffirmed its commitment towards Pakistan’s cause and assured that it will continue its cooperation and assistance to Pakistan in all the fields and even agreed to enhance bilateral trade. The government of Pakistan also sought Saudi Arabia support for early finalization of Pakistan-GCC Free Trade Agreement (FTA). Matters relating to foreign direct investment, finance, trade, defence and export of manpower from Pakistan were also thoroughly discussed. Over 1.5 million Pakistanis are working in Saudi Arabia and it was also agreed that Pakistan would send more trained manpower for the development of Saudi Arabia. Moreover, Saudi leadership agreed to provide financial support for the construction of Bhasha Diamir Dam and also assured to extend help for other energy projects.
President Asif Ali Zardari and King Abdullah of Saudi Arabia agreed to work with greater cooperation in the wake of major developments in the region. The two leaders held extensive discussions on bilateral ties, situation in the Middle East and South Asia and the fight against militancy. The issues related to Iran, Afghanistan, situation in Bahrain and its security implications for the region came under discussion during the meeting.
National political scientists, regional strategists and international security experts termed President Zardari’s visit as significant because it immediately follows his visits to Iran and Afghanistan. According to them it is all about the ‘end game’ in the Afghan war, the turmoil in Bahrain and worsening relations between Saudi Arabia and Iran and the President Zardari’s visit is being seen as an effort to evolve a joint strategy on these sensitive issues.
It seems that the recent regional geo-political and geo-strategic developments have played important role bringing both the countries closer than they were about a year ago. The government of Pakistan has been doing track-II diplomacy for the last few months to bring Saudi Arabia and Iran on board and achieve regional harmony and greater peace.
Saudi Arabia has been helping Pakistan in many fields since 1947. Saudi Arabia and Pakistan are leading members of the Organization of the Islamic Conference (OIC). Saudi Arabia supported Pakistan on the issue of Kashmir and encouraged both the countries to start confidence building measures. It openly opposed partition of Pakistan and creation of Bangladesh. Both the countries were at same wave-length at the time of Afghan War and remained closed allies fighting against communism during 1980s. During the 1990-1991 Persian Gulf War, Pakistan on request, sent troops to protect the Islamic holy sites in Saudi Arabia. Both the countries played important role in recognition of Taliban rule in Afghanistan. Pakistan offered its political, moral and diplomatic support on many regional Islamic and international issues.
Saudi Arabia came to our rescue even in May 1998 (nuclear test) and promised to supply 50,000 barrels per day of free oil to help Pakistan cope with likely economic sanctions in the aftermath.
Saudi Arabia extended its humanitarian assistance on many times of natural calamities in the country. Saudi Arabia donated SR245 billion between 1973 and 1993, which equals 5.5 percent of its average annual production during that period. In recent years, both countries have exchanged high-level delegations and developed plans to expand bilateral cooperation in trade, education, real estate, tourism, information technology, communications and agriculture.
Saudi Arabia has provided assistance in form of fuel donation, fuel credit. Both the countries strongly advocate dialogue among cultures, civilizations and faiths, so as to remove misperceptions among the followers of different faiths. Saudi Arabia has been among the first countries to acknowledge Pakistan as a newly developed country and extended a helping hand to strengthen its development drive.
Pak-Saudi Trade Volumes
Exports to Saudi Arabia Principal items
Rice, ready made garments, cotton fabrics, synthetic fabrics, made up textiles, tents and canvas, fruits and vegetables, spices, towels, carpets and rugs, sports goods, fish and fish preparations, handicrafts, leather manufactures and printed matters
Imports from Saudi Arabia Crude petroleum, polythene, plastic moulding powder, aluminum waste, urea, dates, copper wire and rods, ships and boats, ether and its derivatives, chemicals machines, paper waste, parts of aircraft and sulphur.
Saudi Arabia is among the 15 export partners of Pakistan with which bilateral trade volume has gone above US$ 4 billion per annum and it would be further increased in future.
It is strongly recommended that cargo flights between both of the countries should be increased to save extra tax expenditure as well as quality of a product. There should be close coordination and information sharing between the local business community and the Saudi business men to further boost trade in the fields of surgical instruments, furniture, leather goods, fruit and vegetable. Simplification of the visa process would further facilitate the business community in the country. Moreover, there were 350 Pakistani investors in the Saudi Arabia have already obtained licenses from Saudi Arabian General Investment Authority and have established companies in various fields.
Pakistan has very close and longstanding relationship with Saudi Arabia. Saudi Arabia has already invested substantially in some Pakistani key sectors of the economy and basic industries which are given below as: Saudi Arabia is interested in investing in Pakistan’s energy and agriculture sectors.
infrastructure, key production industries, banking, irrigation, energy, fertilizer and port development like Mirpur Mathelo Fertilizer Plant, Pipri Thermal Power Project, Tarbela Dam repairs, Port Qasim etc
Since form the beginning, both the countries maintain close military ties by providing extensive support, arms and training for the military of Saudi Arabia. Pilots of the Pakistan Air Force flew aircraft of the Royal Saudi Air Force to deter an raid from South Yemen in 1969. In the 1970s and 1980s, approximately 15,000 Pakistani soldiers were stood tall in Saudi Arabia. Saudi Arabia showed great interests to purchase of Pakistani ballistic missiles capable of carrying nuclear warheads. Pakistan and Saudi Arabia have information mechanism on different subject.
Pak-Iran Bilateral Cooperation
Pakistan and Iran enjoy strong cultural, religious, historic, economic, political and geographical relations which bind them in eternal friendship and brotherhood. It is hoped that Pakistan and Iran can help each other a lot on a variety of regional issues. Prominent researchers and think-tank centers are of the opinion that Pak-Iran relations will help bring peace in the region, especially in Afghanistan. Security experts and energy advisors have already stressed that Pakistan cannot resolve its energy crisis without assistance of Iran. In this regard, Iranian gas supply can help resolve energy crisis in the country.
The growing stronger bilateral relations between Pakistan and Iran showed Pakistan’s strategic defiance of the US. In recent times, frequent officials visits of the President of Pakistan irked the US. In order to create balance of force in the end game of Afghanistan, Pakistan initiated rigorous diplomatic efforts in the region and consulted with main power stakeholders. Elements of displeasure, political uncertainties, and geo-strategic overlapping created sense of insecurity between Tehran and Riyadh and Pakistan played very important role to minimize the widening conflicting approach.
With the dawn of globalization, conflicts and confrontations have been replaced by the economic and political diplomacy. In the economic arena, energy seems to be centre point as more energy means more power industrial and political. Hot pursuits of the energy resources have also been instrumental for peace building. It was most recently observed in the case of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) and also Iran-Pakistan (IP) pipelines.
Energy resources of Pakistan
In chilly winter season, households and industrialist are used to face shortage of gas supply. Life and machine both suffers immensely. The government is planning to import gas supply from different sources. Gas supply in Pakistan is currently 71m cubic meters per day, which is estimated to increase by 50 per cent in the next five years.
At the same time, gas production in Pakistan is expected to increase substantially. It is assumed that in the near future Pakistan will face a shortfall of 600 mmcfd of natural gas by the year 2009 despite recent gas discoveries, which would be insufficient to meet the rising demand. So, Pak-Iran gas pipeline would be a viable alternative option to fulfill the rising demands in the days to come.
Geo-political and geo-strategic implications
The agreements also showed Pakistan’s will to come out of the total subordination to the US. Pakistan needs to build peace with its neighbours to ensure a stable future for itself. The trilateral deal envisaging the supply of gas to China through Pakistan is also a good omen for regional cooperation that will work to everyone benefit. On the political front, the pumping of Iranian gas into Pakistan, India and China at a time when the US opposes such dealings with Iran Islamic regime is significant.
It also shows the revival of regionalism against the onslaught of brutal globalization. It reflects the demise of uni-polarity arena. It also shows the defiance of US imperialisms drive.
Through IPI gas pipeline project it is hoped that Pakistan would be successfully normalize their relations with Iran. The completion of IP gas pipeline will open the door for the energy wealth of the region-coal in India, gas in Pakistan and Bangladesh, hydropower in Nepal and Bhuta and renewable energies in Sri Lanka and Maldives that need to be pooled and used in many ways that are more conducive to the prosperity of the people than their exploitation separately.
Receiving final nod from Iran, Pakistan has geared up its efforts to ensure smooth supply of imported gas to the country till 2012 under the proposed multi-billion dollar Iran-Pakistan-India gas pipeline project (IPI).
IP gas pipeline has created a new paradigm of friendship which may put an end to some regional concerns and worries on the future relationship and political understanding between neighbouring countries. All said and done terrorism may be one of the main hurdles in the completion of IP gas pipelines.
Economic benefits are the most potent factor of the whole project as it provides cheap energy (gas) for Pakistan, low transit fee, and access to energy markets. It is estimated that the IP project will reduce poverty by expanding the use of natural gas resources and enhancing sub regional economic cooperation among the regional countries.
The IPI gas pipeline ($ 7.4 billion) has been finalized. In addition to it, Tehran would provide Pakistan 1100 MW of electricity per day which would be used to control the high ratios of energy shortage. It will bring economic prosperity to all the involved countries. Especially Pakistan can enhance its strategic and economic significance by permitting its territory to be used for the transit. Transit fees ranges from $400 million to $750 million a year and Pakistan may be able to earn, as much as $500 million a year if the proposed gas pipeline is to materialise. In fact, Pakistan stands to earn about $14 billion in 30 years, including $8 billion in transit fee, $1 billion in taxes and $5 billion in savings. It would initially transport 60 million cubic metres of gas (2.2 billion cubic feet) daily to Pakistan but capacity would be raised later to 150 million cubic metres.
The 2,775-km pipeline was proposed to start from Asalouyeh and stretch over 1,100 km through Iran. In Pakistan, it was proposed to pass through the restive Balochistan Province and Sindh. In Khuzdar in Pakistan, a branch was to extend to Karachi, while the main pipeline would continue towards Multan. From Multan, the pipeline could be expanded to Delhi.
Pak-Iran currency swap
Most recently, President Asif Ali Zardari proposed a currency swap agreement between Pakistan and Iran to further strengthen bilateral trade and economic ties between the two brotherly countries. Pakistan was already in the dialogue process with Turkey, Sri Lanka and China for the currency swap arrangement. The Union of Small and Medium Enterprises (UNISAME) has said the proposal for currency swap with Iran will boost up trade as it will resolve the problems faced by Pakistani exporters.
Currently, due to the embargo imposed on Iran, Pakistani exporters were facing many dimensional problems and compelled to ship goods through UAE to Iran as letter of credits (LCs) of Iranian banks were not accepted and negotiated by Pakistani banks, which curtailed the trade volumes to and from Iran as Pakistan and moreover, trade through an intermediary proved costly and involved maneuverings.
The agreement between Iran and Pakistan to swap currencies is a wise decision and should have taken place long ago. It is hoped that it would make both the countries independent in terms of debt adjustment for import and export to one another comfortably both in the private and public sector. It is a very pragmatic decision and this system may be adopted with other countries.
Integrated Border Management Regime
The government of Pakistan proposed to the Iranian government to consider creating an Integrated Border Management Regime (IBMR) between both the countries because it is need of the hour to intensify consultations and take practical measures for meeting the challenge of terrorism, militancy and extremism.
Iran has the potential to undertaking joint economic projects in Afghanistan in order to enhance connectivity, build infrastructure, rail and road links as well as trilateral cooperation in other mega projects which may open new window of opportunist for Pakistan. A bilateral Pakistan-Iran Free Trade Agreement would provide ideal platform for regional socio-economic prosperity and political stability. In addition to this a business council for the promotion of trade between Pakistan and Iran will be established soon. Iran is keen to invest in Pakistan’s power, gas and ‘Halal’ meat sectors.
Regional stakes are very high, complicated and overlapped which demands collective political wisdom, spirits of conflict resolution, operational collaboration and above all strategic accommodation. Respect for national sovereignty, territorial integrity and above all denial of blame game must be mantra of each and every powerbroker in the region. Regionalism should be preferred on imperialism which would open new doors of socio-economic interaction, geo-political stability and geo-strategic sustainability in the days to come. Pakistan-Saudi Arabia-Iran alliance would guarantee larger regional conciliation and stronger ties of survival, production and socio-economic prosperity. Generosity of Saudi Arabia, mediation of Pakistan and rational policies of Iran hold the