October 7, 2018
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
Pakistan: Transcript Diplomacy
September 1, 2018
By Simon Sharaf (BG)
On the eve of US Secretary of State Mike Pompeo’s visit to Pakistan, the controversy surrounding the Transcript Diplomacy has been mutually mulled. Pakistan has shown grace and flexibility so as to make bilateral and regional engagement more objective and fruitful. USA to the contrary has reasserted its bulwark assertion through its department of defence.
Though Pakistan’s foreign office understands the limited agenda of this visit, it is not shying away from diplomacy that has US objectives and Indian interests as its core. Unlike the previous government that leaned heavily on US, played on civil-military divides, the latest is a home grown dispensation which detractors aim to malign home and abroad. The visit is primarily exploratory, but who knows turn up a few surprises?
My single line assessment of the controversy was, “The US readout on telephonic conversation with Prime Minister repeats the above assessment. Pakistan has denied that the subject of terrorism was ever discussed in that context” (Nation 25 August PAKISTAN’S US CHALLENGE). As the US transcript indicates, it was never in the context that was taken up by the media. Certainly some segments of the International and national media picked up the leads and blew a controversy in the direction USA desired. Pakistan has done well to cool it down.
So now USA is doubly careful in averting another diplomatic controversy. It has said it loud and clear. US Defence Secretary James Mattis announced that the US military chief will accompany the top US diplomat when he visits Islamabad next week and the need to fight terrorists would be THE PRIMARY PART of their discussions with Pakistani leaders. This is a diplomatic preemption implying that US means tough business. This is testing nerves of the new government.
Knowing that diplomatic agendas are exchanged and communicated well in advance, this statement was unnecessary and meant for public consumption. I wonder if the primary part to fight terrorists also included terrorism sponsored into Pakistan from Afghan territory mostly through Indian handlers. I am sure, it was intentional and unequivocal.
The vision of Pakistan’s Prime Minister Imran Khan over Afghanistan must have come as a pleasant surprise for many. In the long term Imran Khan wants EU type relations with Afghanistan. As they say, taste of pudding lies in eating it. USA is certainly elated on this vision and keen to explore its credibility. USA will like to test this vision; but then every cake takes time to bake and drawing conclusions too early could be spoiling the broth. The environments for a free international border are yet not shaped and it cannot happen unless trust between Pakistan and USA is restored.
Knowing that Afghan policy has security implications, the US delegation has been bolstered by military diplomacy. Presence of Chairman of the Joint Chiefs of Staff Committee General Joseph F. Dunford in the delegation raises the importance and purpose of the visit from a stopover that India wanted it to be. Yet it is very meaningful that US Defence Secretary James Mattis will join the delegation in India.
Earlier, as per the US transcript, “Secretary Pompeo raised the importance of Pakistan taking decisive action against all terrorists operating in Pakistan and its vital role in promoting the Afghan peace process.” The meaning was left to the media to interpret which they did with unequivocal emphasis on Sanctuaries of Afghan Taliban. Indian press went further by including LeJ and the likes in the same context. Yet the vitriol chose to exclude Pakistan’s sustained efforts against terrorism and restoration of normalcy in the once restive tribal areas now merged into the province of Khyber Pakhtunkhwa. This forgetfulness of convenience is a slap on the interests and sacrifices of the people of Pakistan.
Readers ought to understand that in International Relations, the actual interpretations depend not on what is said but what is left unsaid. It thus provoked a rebuttal from Pakistan. After the release of State Department transcript; the contours of diplomacy have fallen in place. Pakistan has decided to close the subject on the media though it is most likely, it will continuously be broached in diplomatic engagements.
The widening gulf between USA and Pakistan was evident when Secretary Mattis said, “We see the strengthening of India’s democracy, its military, its economy as a stabilising element in the world…and we want to make certain that where we have common interests, we are working together.” The remark obviously excluded any reference to democracy in Pakistan. It is evident that USA is avoiding giving credit to the aspirations of the people of Pakistan, particularly the fact that extreme right has been voted out of the process. To US policy makers the rise of communalism in India and violence in occupied Kashmir under BJP still remains the preferred blocs of building democracy than the evolution that has swept Pakistan.
The visit is also in backdrop of new diplomatic initiatives in the region where Russia, China and Iran figure prominently. From Turkey to Pakistan, a new ring of Muslim countries are showing defiance to US policies in Middle East and Afghanistan. To circumvent this ring, USA minces no words about its long term presence in the region through occupation of Afghanistan with India as a preferred ally. It still continues to ignore the societal factor of Afghanistan that has perpetuated perpetual reactions ever since the Soviet invasion.
However, India is clever enough to bolster a military presence in Afghanistan. It is content to pinch Pakistan here and there to appease USA.
In addition, Pakistan is also playing a key role in circumventing Geostrategy through economic engagements. One Belt One Road Projects under CPEC will open up China and Central Asia to the world. Iran is very keen to join the projects on pattern of RCD and ECO providing shortest overland bridges to Europe. If successful, the narrow and ever vulnerable Persian Gulf will cede its importance to Gwadar and many other ports along the Arabian Sea. Qatar will team up with Iran and Pakistan. Syrian hydro carbons (once in production) will follow this route. Pakistan’s own resources in the continental shelf will change all dynamics. Super Tankers passing through Straits of Malacca will be history.
See also: Pakistan: Pit Stops of US Diplomacy
Recent election in Pakistan: Pakistan: Imran Khan’s turn in the barrel