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What Happens If Iran And Saudi Arabia Join CPEC

By Polina Tikhonova. Originally published at ValueWalk.

Saudi Arabia says it’s keen to cooperate with Pakistan on CPEC, but what does it mean for Iran? Can Saudi Arabia join CPEC and would it bring Tehran and Riyadh together?

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In a meeting with Pakistani Finance Minister Ishaq Dar on Monday, Saudi Arabian Ambassador to Pakistan Admiral (retd) Nawaf Ahmad Al-Maliki said Riyadh was interested in cooperating with Islamabad on the $54 billion China-Pakistan Economic Corridor (CPEC) project.

What Happens If Iran And Saudi Arabia Join CPEC
3dman_eu / Pixabay

While the magnitude of Saudi Arabia’s potential cooperation with Pakistan remains under wraps, Al-Maliki said his nation is eager to play its role in the game-changer project that connects China’s Xinjiang province to Pakistan’s Gwadar Port through a network of rail and road projects.

“We think that Pakistan will make progress through this project,” Al-Maliki said, adding that Saudi Arabia wants to assist its long-time ally Pakistan with development and progress. But should Saudi Arabia join CPEC to work together with its historic ally to improve connectivity in the region and benefit from an investment-friendly platform of economic prosperity?

Pakistan holds the key to resolving Saudi Arabia-Iran row

If China and Pakistan saw Saudi Arabia join CPEC it would help Islamabad bring Saudis closer to their traditional rivals Qatar and Iran, both of which have also expressed interest in becoming part of the multi-billion project.

Foreign policy analysts believe that given Pakistan’s warm economic and strategic ties with both Saudi Arabia and Iran, Islamabad could help patch up the long-running cracks in Saudi-Iranian relations. Earlier this year, Tehran said it was interested in joining CPEC “with its full capabilities, possibilities and abilities.”

Qatar, which has also been a long-time ally of Pakistan, is looking to boost strategic partnership with its South Asian friend as well. As the Gulf state is seeking to find new trade routes in the wake of a three-month-long land, air and sea blockade from Saudi Arabia and its allies, a Qatari shipping company launched a fast direct service between Doha and the Pakistani port city of Karachi earlier this month.

While Saudis and their Arab allies severing all diplomatic and trade ties with Qatar this summer put Pakistan into an awkward position given the nation’s brotherly ties with both Saudi Arabia and Qatar, Islamabad could actually serve as a bridge between the two rivals without having to pick sides in the diplomatic crisis.

And if both Qatar and Saudi Arabia join CPEC, Pakistan will have a richer set of tools to bridge the gaps between the two nations. However, given the absence of government-level talks on this matter, it’s unclear if Riyadh and Doha would be willing to put their differences behind them and benefit from the joint China-Pakistan project.

If Iran and Saudi Arabia join CPEC, it could unify the Muslim world

Having both Iran and Saudi Arabia onboard of CPEC would not only help resolve the centuries-old rivalry between the two Islamic maritime neighbors, but also bring vast contributions to the game-changer project.

Iran, where oil accounts for 80% of its export revenues, could put its rich energy resources to use for the development of CPEC projects. Not to mention Tehran’s impressive advances in science and technology, which in combination with the bright minds of Pakistani and Chinese technology experts would revolutionize the region.

In fact, if both Iran and Saudi Arabia join CPEC, not only will they improve connectivity and trade ties in the region, but also lay out the groundwork for peace and tranquility. Besides, having the two key Islamic nations onboard of CPEC would most likely prompt other Islamic nations join the project and potentially unify the Muslim world.

Iran one step closer to joining CPEC

Islamabad and Tehran have been keen to increase their bilateral trade in the wake of the international community lifting economy-crippling sanctions against Iran due to the nuclear deal reached in 2015. In 2016, Pakistan and Iran agreed to boost their bilateral trade to $5 billion by 2021.

Before Tehran was slapped with sanctions, Pakistan-Iran bilateral trade stood at around $1.6 billion annually, and plummeted to around $300 million after the sanctions were introduced.

Why Saudi Arabia joining CPEC is a big deal

While Pakistan-Iranian trade is slowly recovering, Saudi Arabia could turn to its long-time ally, Islamabad, to recover the rather unsteady growth rates of its oil-dependent economy. If Pakistan and China saw Saudi Arabia join CPEC, it would not only strengthen connectivity in the region, but also boost Saudi’s economy.

CPEC could bring new economic opportunities for Riyadh, whose vision 2030 envisioned restructuring of the economy and achieving sustainable growth by 2030. While China and the U.S. remain the top two oil importers of Saudi Arabia’s crude oil with over $26 billion and over $20 billion respectively, Saudi Arabia could get access to world markets after joining CPEC.

By joining CPEC and having access to Gwadar Port in Pakistan, Saudis would be entering the geo-economic arena that could create numerous economic opportunities for the kingdom.

In fact, Saudi Arabia leads the pack in the list of countries sending remittances to Pakistan at $4.52 billion in the current fiscal year, according to Pakistan’s central bank. Saudi Arabia is home to nearly 2 million Pakistani expatriate workers.

Saudi Arabia in CPEC could bridge the gaps between US and Pakistan

If Pakistan succeeds in bridging the gaps between Saudis and Iranians, it could potentially solve Islamabad’s differences with the West. Pakistan-US relations have hit rock bottom in the wake of U.S. President Donald Trump delivering a national address on the Afghan strategy and blaming Pakistan for providing “safe havens” to terrorists.

Since Saudi Arabia is in tight partnership with the Trump administration on the matters of regional security and anti-terrorism operations, improved Saudi-Pakistan relations could potentially pave the way for Washington dropping its criticism against Islamabad regarding what it calls Pakistan’s unsufficient fight against terrorism.

If Iran and Saudi Arabia join CPEC, it will create more platforms for Saudis and Iranians to meet, shake hands and talk. This could potentially bring the two rivals closer to reaching a peace pact and putting their hostilities behind them. As for Pakistan, Saudi’s participation in the game-changer project could help bridge the gaps between Washington and Islamabad regarding Pakistan’s war on terrorism.

The post What Happens If Iran And Saudi Arabia Join CPEC appeared first on ValueWalk.

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