Pakistan: Now or Never?
Perspectives on Pakistan
Not too long ago, you could have predicted relatively easily how regional rivalries would play out in Afghanistan. Saudi Arabia would line up alongside Pakistan while Iran and India would coordinate their policies to curb the influence of their main regional rivals.
But that pattern has been shifting for a while — the row over Indian oil payments to Iran is if anything a continuation of that shift rather than a dramatic new departure in global diplomacy. And as two foreign policy crises converge, over Iran’s nuclear programme and the war in Afghanistan, the chances are that those traditional alliances will be dented further. It is no longer a safe bet to assume that rivalry between Sunni Saudi Arabia and Shi’ite Iran will fit neatly into Pakistan-India hostility so that the four countries fall easily into two opposing camps come any final showdown over Afghanistan.
India, which has been working to improve its relationship with the United States for much of the last decade, already earned Iran’s wrath by voting against it at the International Atomic Energy Association (IAEA) over its nuclear programme, first in 2005 and then again in 2009. Though India has since been trying to repair the damage, comments by Supreme Leader Ayatollah Ali Khamenei late last year criticising India over Kashmir soured the mood further between the two former allies.
The decision by the Reserve Bank of India (RBI) last week to suspend payments for oil imports made by Indian companies from Iran that use the Asian Clearing Union (ACU), a clearing house used to process multilateral payments between South Asian countries and Iran, was pretty much in line with that trajectory of slowly deteriorating relations.
A report in the Financial Times that Saudi Arabia has agreed in principle to defer payments for crude oil sales to Pakistan worth $5.9 billion has raised speculation about what it is looking for in return.
The Daily Times suggests that the Saudis are buying political stability in Pakistan, which may include throwing a lifeline to President Pervez Musharraf. “Apparently, the immediate impact will be on PML-N chief Nawaz Sharif’s politics of confrontation with Musharraf, which will have to be diluted significantly in line with ground realities,” it says. ”The Saudis, like the Americans, want a stable transition to civilian rule and no confrontation between the politicians and the military, including Musharraf.”
But the idea appears to be gaining momentum. Saudi Arabia is holding talks with officials in Pakistan, among other countries, to set up projects to grow wheat and other grains to protect itself from crises in world food supplies. Dubai-based private equity firm Abraaj Capital has already said it is looking at investing in agriculture in Pakistan and other Gulf countries are also showing an interest.