Pakistani poker: Playing Saudi Arabia against China
Credit: Gwadar Real Estate
By James M. Dorsey
Desperate for funding to fend off a financial crisis fuelled
in part by mounting debt to China, Pakistan is playing a complicated game of poker
that could hand Saudi Arabia a strategic victory in its bitter feud with Iran
at the People’s Republic’s expense.
The Pakistani moves threaten a key leg of the USD60 billion
plus Chinese investment in the China Pakistan Economic Corridor (CPEC), a crown
jewel of Chinese President Xi Jinping’s Belt and Road initiative.
They also could jeopardize Chinese hopes to create a second
overland route to Iran, a key node in China’s transportation links to Europe.
Finally, they grant Saudi Arabia a prominent place in the Chinese-funded port
of Gwadar that would significantly weaken Iran’s ability to compete with its
Indian-backed seaport of Chabahar.
Taken together, the moves risk dragging not only Pakistan
but also China into the all but open war between Saudi Arabia and Iran.
Pakistan’s first move became evident in early September with the
government’s failure to authorise disbursements for road projects,
already hit by delays in Chinese approvals, that are part of CPEC’s Western
route, linking the province of Balochistan with the troubled region of Xinjiang
in north-western China.
In doing so, Pakistan implicitly targeted a key Chinese
driver for CPEC: the pacification of Xinjiang’s Turkic Muslim population
through a combination of economic development enhanced by trade and economic
activity flowing through CPEC as well as brutal
repression and mass re-education.
The combination of Pakistani and Chinese delays “has
virtually brought progress work on the Western route to a standstill,” a
Western diplomat in the Pakistani capital of Islamabad said.
Pakistani Railways Minister Sheikh Rashid, in a further bid
to bring Pakistani government expenditure under control that at current rates
could force
the country to seek a $US 12 billion bailout from the International Monetary
Fund (IMF), has cut $2 billion dollars from the US$8.2
billion budget to upgrade and expand Pakistan’s railway network, a
key pillar of CPEC. Mr. Rashid plans to slash a further two billion dollars.
“Pakistan is a poor country that cannot afford (the) huge
burden of the loans…. CPEC is like the backbone for Pakistan, but our
eyes and ears are open,” Mr. Rashid said.
The budget cuts came on the back of Prime Minister Imran
Khan’s Pakistan Tehreek-e-Insaf (PTI) party projecting CPEC prior to the July
25 election that swept him to power to as
a modern-day equivalent of the British East India Company, which
dominated the Indian subcontinent in the 19th century.
PTI criticism included denouncing Chinese-funded mass
transit projects in three cities in Punjab as a squandering of funds that could
have better been invested in social spending. PTI activists suggested that the
projects had involved corrupt practices.
Pakistan’s final move was to invite
Saudi Arabia to build a refinery in Gwadar and invest in Balochistan mining.
Chinese questioning of Pakistan’s move was evident when the Pakistani
government backed off suggestions that Saudi Arabia would become part of CPEC.
Senior Saudi officials this week visited Islamabad and
Gwadar to discuss the deal that would also involve deferred payments on Saudi
oil supplies to Pakistan and create a strategic oil reserve close to Iran’s
border.
"The incumbent government is bringing Saudi Arabia
closer to Gwadar. In other words, the hardline Sunni-Wahhabi state would be
closer than ever to the Iranian border. This
is likely to infuriate Tehran," said Baloch politician and
former Pakistani ports and shipping minister Mir Hasil Khan Bizenjo.
Pakistan’s game of poker amounts to a risky gamble that
serves Pakistani and Saudi purposes, puts China whose prestige and treasure are
on the line in a difficult spot, could perilously spark tension along the
Pakistan-Iran border, and is likely to provoke Iranian counter moves. It also
risks putting Pakistan, Saudi Arabia and Iran, who depend on China economically
in different ways, in an awkward position.
The Saudi engagement promises
up to US$10 billion in investments as well as balance of payments relief.
It potentially could ease US
concerns that a possible IMF bailout would help Pakistan service debt to China.
A refinery and strategic oil reserve in Gwadar would serve
Saudi Arabia’s goal of preventing Chabahar, the Indian-backed Iranian port,
from emerging as a powerful Arabian Sea hub at a time that the United States is
imposing sanctions designed to choke off Iranian oil exports.
A Saudi think tank, the International Institute for Iranian
Studies, previously known as the Arabian Gulf Centre for Iranian Studies
(AGCIS) that is believed to be backed by Saudi Crown Prince Mohammed bin
Salman, argued last year in a study that
Chabahar posed “a direct threat to the Arab Gulf states” that called for
“immediate counter measures.”
Written by Mohammed Hassan Husseinbor, an Iranian political
researcher of Baloch origin, the study warned that Chabahar would enable Iran
to increase its oil market share in India at the expense of Saudi Arabia, raise
foreign investment in the Islamic republic, increase government revenues, and
allow Iran to project power in the Gulf and the Indian Ocean.
Mr. Husseinbor suggested that Saudi support for a low-level
Baloch insurgency in Iran could serve as a countermeasure. “Saudis could
persuade Pakistan to soften its opposition to any potential Saudi support for
the Iranian Baluch... The Arab-Baluch alliance is deeply rooted in the history
of the Gulf region and their opposition to Persian domination,” Mr. Husseinbor
said.
Noting the vast expanses of Iran’s Sistan and Baluchestan
Province, Mr. Husseinbor went on to say that “it would be a formidable
challenge, if not impossible, for the Iranian government to protect such long
distances and secure Chabahar in the face of widespread Baluch opposition,
particularly if this opposition is supported by Iran’s regional adversaries and
world powers.”
Saudi militants reported at the time the study was published
that funds
from the kingdom were flowing into anti-Shiite, anti-Iranian Sunni Muslim
ultra-conservative madrassas or religious seminaries in Balochistan.
US President Donald J. Trump’s national security advisor,
John Bolton, last year before assuming office, drafted
at the request of Mr. Trump’s then strategic advisor, Steve Bannon, a plan that
envisioned US support “for the democratic Iranian opposition,” including in
Balochistan and Iran’s Sistan and Balochistan province.
All of this does not bode well for CPEC. China may be able
to accommodate Pakistan by improving commercial terms for CPEC-related projects
and Pakistani debt as well as easing Pakistani access to the Chinese market.
China, however, is likely to find it far more difficult to prevent the Saudi-Iranian
rivalry from spinning out of control in its backyard.
Dr.
James M. Dorsey is a senior fellow at the S. Rajaratnam School of International
Studies, co-director of the University of Würzburg’s Institute for Fan Culture,
and co-host of the New Books in Middle Eastern Studies podcast.
James is the author of The Turbulent World
of Middle East Soccer blog, a book with the same title and a co-authored
volume, Comparative Political Transitions between Southeast Asia and
the Middle East and North Africa as well as Shifting
Sands, Essays on Sports and Politics in the Middle East and North Africa
and just published China
and the Middle East: Venturing into the Maelstrom
Comments
Post a Comment