Creating new perspectives since 2009

What will Pakistan-Middle East ties be like under Shehbaz Sharif?

April 26, 2022 at 4:55 pm

Pakistan’s Prime Minister Shehbaz Sharif in Islamabad. [AAMIR QURESHI/AFP/Getty Images]

Frenzied political activity in Pakistan this month concluded with Imran Khan being ousted as prime minister and replaced by Shehbaz Sharif on 11 April. The leader of the Pakistan Muslim League (Nawaz) was sworn in as the 23rd prime minister of the country. His new cabinet draws heavily from the Pakistan People’s Party (PPP) and to a small extent from the Jamiat Ulema-e-Islam-F. Hina Rabbani Khar is the new Minister of State for Foreign Affairs and it is likely that Bilawal Bhutto Zardari will be Foreign Minister.

These changes will have an impact on Pakistan’s foreign policy, and we can expect careful recalibration in ties with the Gulf countries. During his maiden speech, Sharif mentioned some important countries, which included all Gulf Cooperation Council members, the leaders and officials of which were quick with their congratulatory messages.

The Sharif family has long-held ties with Gulf countries, especially Saudi Arabia. When former Pakistani Prime Minister Nawaz Sharif (the new prime minister’s elder brother) was deposed by the then Army Chief of Staff Pervez Musharraf in 1999, the Sharif family went into exile in the Kingdom. It has significant assets and investments in both Saudi Arabia and the UAE. However, after Nawaz Sharif returned to power in 2013, there was a rift with the GCC when his government refused to send Pakistani troops to join the Saudi-led coalition fighting in Yemen since 2015. The UAE was particularly vocal in its criticism, which prompted Pakistan to shift towards building ties with Turkey and Qatar. Nevertheless, Shehbaz Sharif’s first official overseas trip as prime minister will be to Riyadh on 27 April.

Imran Khan’s government was initially welcomed by all stakeholders in the Gulf, with visits to Saudi Arabia and the UAE. He established a good rapport with Crown Prince Mohammad Bin Salman in Riyadh, which resulted in Pakistan getting crucial financial support to stabilise the economy. Bin Salman’s subsequent visit to Islamabad in 2019 concluded with the announcement of investment projects worth $20 billion.

READ: Will Khan’s ousting be Pakistan’s Mosaddegh moment?

Relations with the UAE were also restored somewhat when Crown Prince Mohammad Bin Zayed became the first Emirati leader to visit Pakistan for more than a decade. With Iran, too, there were notable developments; the opening of border markets, for example, aimed at increased economic engagement. During the course of his premiership, Khan also developed cordial ties with Turkey and Qatar. On the economic front, Egypt sent its first business delegation to Islamabad which resulted in a $2 billion investment in a housing estate by billionaire Naguib Sawiris.

However, despite this promising start, Khan was unable to maintain the momentum. One factor was his leaning towards Iran, much to Saudi and UAE annoyance. Moreover, the Saudis were visibly perturbed at his attempts to form an alliance with Malaysia, Turkey and Iran as an alternative to the Jeddah-based Organisation of Islamic Cooperation (OIC). In 2019, Imran Khan cancelled his scheduled attendance at the Kuala Lumpur Summit after pressure was applied by Riyadh. Furthermore, the Gulf countries were not happy with Khan’s criticism of their silence about Indian and Israeli atrocities in Kashmir and Palestine respectively. In 2020, when former Foreign Minister Shah Mahmood Qureshi called out the OIC for dragging its feet on the Kashmir issue, the Saudis responded by demanding early repayment by Pakistan of a $3 billion loan. Islamabad repaid $1bn after borrowing it from Beijing.

With Shehbaz Sharif at the helm, there is likely to be some recalibration towards replicating the previous friendly ties. He has taken office at a time when the country is suffering from major financial deficits. Even though the International Monetary Fund yesterday extended the bailout programme for Pakistan by a year and increased the loan from $6 billion to $8 billion, the situation is deteriorating fast. Pakistan is in desperate need of boosting its foreign exchange reserves which can only cover imports for two months at most. It also needs to manage rising fuel costs.

READ: Erdogan congratulates new Pakistan PM, dropping ousted Imran Khan

The GCC is home to a large Pakistani diaspora, so its significance cannot be underestimated. Remittances from expat workers account for nearly 86 per cent of the secondary income balance of the Pakistani economy; nearly 60 per cent of these remittances are from Gulf countries. Furthermore, these states are vital for meeting Pakistan’s energy needs. It depends on the UAE and Saudi Arabia for oil imports, and on Qatar for Liquid Natural Gas. Hence, the new premier is expected to channel his efforts towards developing close relationships with the GCC and get much needed aid, as well as an upgrade for the existing oil credit facility provided by the Kingdom.

In addition, Sharif’s focus will be on accelerating the completion of the projects under the China Pakistan Economic Corridor (CPEC), particularly the development of its Special Economic Zones (SEZs). Like the previous government, he will likely seek to attract Gulf investment for CPEC projects, specifically those related to food and energy security. Moreover, in 2021 it was said that a masterplan for an oil city which would include a $10 billion Aramco oil facility was underway. While nothing came of it, the project is likely to be taken up by the new government.

In terms of relations with Iran, Prime Minister Sharif seems to be engaging with cautious neutrality. Under no circumstances can Iran be discounted, primarily because of its geographical congruity with Pakistan and the situation in neighbouring Afghanistan. He is likely to pursue the completion of the 2,775 km Iran-Pakistan pipeline. In 2011, Iran announced that it had completed its part of the $7.5 billion project. Pakistani officials attribute the delay in completion to US pressure as well as financial constraints. The non-completion of the pipeline has caused an element of distrust between Islamabad and Tehran, which Sharif will need to address without delay. He has already invited Iranian President Sayyid Ebrahim Raisi to visit Islamabad while voicing his intentions to strengthen ties between the two neighbours.

Pakistan’s relations with Turkey are likely to keep the focus on economic cooperation, rather than Khan’s Islamic focus.

With regards to defence ties, despite the current political disorder, military ties with Gulf partners are expected to grow. As evidenced from last year alone, Pakistan engaged with several joint military exercises (both on land and sea) with Gulf nations. Moreover, Pakistani defence equipment exports are also continuing to grow. An example is the Pakistan-Turkey warship deal worth $1.5 billion in May 2021 which to date is the biggest single military export contract of Turkey.

It is a fact that Imran Khan is dynamic and charismatic, whereas Shehbaz Sharif’s reputation as a workaholic dynamo precedes him. He knows that the length of his government’s term in office depends upon his performance in the lead up to elections next year.

While there is broad goodwill for the new government, the end result will be determined by what foreign policy trajectory Islamabad adopts and how it is reciprocated. However, economics is the mainstay in international relations, especially in a world which is yet to recover from the Covid-19 pandemic. Pakistan for one is anticipating a turbulent landing.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.