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Pakistan wriggles out of IMF clutches

By M. K. BHADRAKUMAR | Indian Punchline | January 13, 2019

The visit by Saudi Arabia’s Energy Minister Khalid A Al-Falih on Saturday to Gwadar to inspect the site allocated for a multibillion oil refinery in the port city suggest that Riyadh and Islamabad are giving the final touch to reaching agreement for a Saudi Aramco Oil Refinery in Pakistan. Reports say that Saudi Arabia will be investing $10 billion in the proposed project.

Without doubt, this is a major development in the region. The Saudi-Pakistan relationship, which has been traditionally close and fraternal, is moving on to a new level of dynamism. The Saudi investment decision can be taken as signifying a vote of confidence in the Pakistani economy as well as in Prime Minister Imran Khan’s leadership. It comes on top of the $6 billion package that Saudi Arabia had pledged last year (which included help to finance crude imports) to help Pakistan tide over the current economic difficulties.

The visiting Saudi minister Khalid al-Falih told reporters in Gwadar, “Saudi Arabia wants to make Pakistan’s economic development stable through establishing an oil refinery and partnership with Pakistan in the China Pakistan Economic Corridor.” This remark highlights that Saudi Arabia is openly linking up with the China-Pakistan Economic Corridor (CPEC). China has welcomed this development, but countries that oppose the CPEC such as the US and India will feel disappointed.

From the Indian perspective, the Saudi investment in Gwadar becomes a game changer for the port city, which was struggling to gain habitation and a name. Inevitably, comparisons will be drawn with Chabahar. India has an added reason to feel worried that its Ratnagiri Refinery project, which has been described as the “world’s largest refinery-cum-petrochemical project” is spluttering due to the agitation by farmers against land acquisition. The Saudi Aramco was considering an investment in the project on the same scale as in Gwadar. Will Gwadar get precedence over Ratnagiri in the Saudi priorities? That should be the question worrying India.

The Saudi energy minister disclosed that Crown Prince Mohammed bin Salman will be visiting Pakistan in February and the agreement on the Gwadar project is expected to be signed at that time. Of course, it signifies that Saudi Arabia is prioritizing the relations with Pakistan. The fact remains that Saudi Arabia has come under immense pressure of isolation following the killing of Jamal Khashoggi.

There is much uncertainty about the dependability of the US as an ally and security provider. Riyadh is diversifying its external relations and a pivot to Asia is under way. Suffice to say, under the circumstances, a China-Pakistan-Saudi axis should not look too far-fetched. There is also some history behind it.

To be sure, Iran will be watching the surge in Saudi-Pakistani alliance with growing trepidation. The Saudi presence in Pakistan’s border region with Iran (such as Gwadar) has security implications for Tehran. Iran has been facing cross-border terrorism.

Tehran cannot but take note that Imran Khan has not shown any interest in reciprocating the overtures it made when he came to power. He is yet to visit Iran. The expectation in Tehran was that Imran Khan who often voiced the political idiom of justice and resistance as an opposition leader would have empathy with Iran. But, as it happened, Imran Khan appears to be far more comfortable as prime minister with the crown princes of Saudi Arabia and the UAE.

Simply put, Tehran misjudged Imran Khan. But Imran Khan’s priorities today are quite understandable. He wants the Gulf Sheikhs to make big investments in the Pakistani economy. He senses that left-wing slogans have served their purpose when he was seeking power but they become liabilities today. Why should he put Pakistan as a torchbearer of resistance politics? In his interview with WaPo, he didn’t mince words in implying that he intended to follow neo-liberal economic policies.

Besides, in strategic terms, one important fallout of the Saudi bailout of Pakistani economy is that there may be no more need for Islamabad to approach the International Monetary Fund for a rescue package. The earlier indication was that Pakistan might seek a $8 billion bailout package. From present indications, the help from Saudi Arabia, China and the UAE will enable Pakistan to avoid seeking IMF assistance. (The UAE and Pakistan formalized a $6.2 billion bailout package last week in Islamabad.)

The US had openly threatened that any IMF bailout would be conditional on a close scrutiny of the CPEC projects. Ironically, it proved counterproductive. As a result, in geopolitical terms, Washington’s capacity to leverage Pakistani policies is significantly diminishing. The impact will be most keenly felt in Afghanistan.

January 13, 2019 - Posted by | Economics | , , , , ,

3 Comments »

  1. Very good news, my very Best Friend Aletho !

    I work daily in a ´locutorio´ run by a young Pakistani entrepreneur (I heard he knows the present Pakistani PM / cricketplayer quite well) in Valencia, Spain. Enter his comfy cybercafe in the morning and say hola, bonas & do my thing.

    India & Pakistan departed in 1947 in a bloody way after the 350 year holidays – 35+ million were killed- of the British in the Indian subcontinent under the ceo ship of the jew bankers who the run East Indian Company.

    After the RotSchild bankers set foot in London in beginning 1800 they establishe >their< Bank of England of which the IMF is a presentday offshoot.

    Following is a part of youtube comments of mine desribing what happened yesterday:

    julien romanovsky 1 day ago

    Now this is very important VED BOOK, you might have noticed that I wrote a additional commentary and that it was all deleted. (I did not yet save it) Not by you, you had removed my comments but restored them.Not by the Pakistani owned internet shop where I sit daily in Valencia, Spain. They know who I am. Where I move about. They means those who are according to conman sjv are not in control.

    I knew btwJacob Rothschild personally, he put a ´mossad agent´ on me. More than one. It is a long story. I will write about it here and elsewhere later. But for now: Mossad , CIA, they call me highest magician. HIMA. In Dutch HOMA (hoogste magier). This is not a feather I put in my own ass. Jacob R. that sleazy old bastard is according to my info already in the hereafter in a special department called hell. If he is still shown on a vid recently, it must be a clone. It is the first time that this sort of hacking happened to me. I went to the guy who is newly working here and who was busy helping other customers. I pointed out : all the I.T. stuff OK but this just happened. now here in your shop. He understood……

    SADHGURU ☜ IS HE A CONMAN 🎃 VEDBOOK

    Sadhguru is a msm icon in India and a public peaker in Western ´spiritual supermarket circles´ 90 % or even more consisting of hardworking good earning (many top) executives who ´have seen & been through it all´ and asks themselves the question is this all there is? Sadhguru Jaggi Vasudev (SJV) is put under a microscoop by the vid & my comments.

    Thw way I see things: a v.i.v. = very important video

    Comment by Julien Romanovsky | January 13, 2019 | Reply

  2. My diminishing mentation makes me increasingly unable to keep pace with near- and far-flung global-scoped events; thanks to MKB, IP, and Aletho News for opening a window for me. I’m extremely uncomfortable with any KSA dalliance these days and can only hope that this reported KSA-Pakistani linkage doesn’t portend fraught unintended consequences (especially, in my mind, for Iran). Meanwhile, a valued activist notified her Facebook group yesterday that multi-millions (160M?!) of Indians have embarked on a strike against Modi’s economic policies and realities…how will such affect the domestic and internal dynamics of India and its neighbors? My head aches….

    Comment by roberthstiver | January 14, 2019 | Reply

  3. They never will. It’s a rogue state.
    https://www.obsoletereality.com/may-allah-save-pakistan-for-no-man-can/

    Comment by Siddhartha Dua | March 11, 2019 | Reply


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