Pakistan is going to return back the last installment of Saudi 3 billion dollar loan. It will be payable tomorrow. Earlier Pakistan has already returned back two installments. Saudi Arabia has demanded to be repaid as the Kingdom wanted Pakistan to return the favour by establishing ties with Israel, but Pakistan staunchly refused to recognize the Jewish state. Moreover, The Kingdom grew weary of Pakistan’s growing shift towards Iran, Turkey and Malaysia. Though, the relationship started deteriorating from the time Pakistan refused to send its forces to Yemen, the ties between the two countries hit rock bottom when Pakistani FM Shah Mehmood Qureshi bitterly criticized Saudi Arabia on TV. He was heard saying
“Pakistanis, who are always ready to sacrifice their lives for Mecca and Madina, need Saudi to play a leading role on the Kashmir issue. If they will not play their role, then I will ask Prime Minister Imran Khan to go ahead with or without Saudi Arabia.”
After the statement Qureshi immediately visited Beijing and requested their help in dealing with Saudi pressure. Pakistan during this hard time was bailed out by China. By receiving emergency financial assistance from China Pakistan started returning the Saudi loan.
Moreover, China used its leverage over Saudi Arabia because of its being largest oil importer from the Kingdom. In order to pressurize her she reduced its oil imports from the Kingdom. China had already filled its strategic reserve tanks during the pandemic oil price fall. This caused a fall in oil revenue for the kingdom. China descended from being the largest Saudi’s oil importer to the third largest.
This was one of the best diplomatic move from Pakistani side in decades.
China as a growing economic powerhouse has become second largest oil importer after United States. This gives China a Monopsonistic power over the oil markets.
Read more about Monopsony.
After the enormous Chinese investment in China Pakistan Economic Corridor (CPEC), Pakistan has become the most important ally of China. China is looking forward to become super power and Pakistan being its strategic and most trusted ally. Chinese wanted Pakistan to take lead and make a block of Muslim countries so, that they may become Chinese block indirectly.
Read more about Saudi importance to Pakistan
Both countries are heavily invested in each other. Saudi Arabia has invested billions in more than 24000 seminaries and has millions of supporters. Similarly Saudi Arabia is dependent on Pakistan for its security. Till now Pakistani move has been a success and the Kingdom failed to bring Pakistan to its knees.