With KSA and UAE competing, where does Pakistan stand?

Any miscalculations on Pakistan’s part can impact its economic and geopolitical standing

ISLAMABAD:

Since the launch of war on terror, the Middle East (ME) has been undergoing rapid changes. The unprovoked attacked on Iraq unleashed a series of crises and introduced complicated problems. The Syrian war, which has shattered the dream of sustainable peace, is still going on.

The Arab spring changed the dynamics of the region; it challenged the status quo. Western countries are now trying to use the Arab spring to pressurise traditional allies of the West in the region.

The western media jumped in to facilitate their rulers in exploiting the situation by launching malicious campaigns in the name of terrorism, human rights, and democracy against selected countries from the region.

On other hand, some experts believe that the ME countries could not comprehend the changing dynamics. They remained dependent on Western allies and traditional means of influence. They could not diversify, refine, and modernise their investments or relationship.

The aggravating situation, especially after the Arab spring, compelled the ME countries to look for alternatives and out-of-the-box ideas to mitigate the negative implications.

One of the available options was to diversify their economies and international relations. This started a competition among the regional countries. Although, all countries are diversifying, the Kingdom of Saudi Arabia (KSA) and UAE are at the forefront.

The UAE was the first country to adopt a future oriented approach and launched Vision 2021. The Arab emirate wanted to modernise and improve its healthcare system, infrastructure, education, and endorsed sustainable practices.

It diversified its economy and tried to look for new areas of economic importance. Now, the UAE is considered to be the leading hub of connectivity and financial activities in the region.

Saudi Arabia joined the club by presenting Vision 2030; a comprehensive document encompassing almost all-important areas. It promises a revolution in the economic, social, and environmental fields.

The most interesting part of the vision, however, is entertainment, technology, and tourism. Now, the KSA is allowing music and promoting sports activities. Owning to multiple areas of work, Vision 2030 is dubbed as a pathway to the future. Since the launch of vision, the KSA has been working tirelessly to make it successful.

Meanwhile, after completing Vision 2021, the UAE came up with Vision 2031. This vison is more comprehensive and future looking. It has identified four forwards; society, economy, diplomacy, and eco-system.

The UAE will be working to build human capital and enhancing the capabilities of its citizens to create a prosperous society. It will also be contributing to environment protection and building a healthy eco-system.

It is widely recognised that the UAE’s ambition to enhance its influence in the region has given birth to competition between the KSA and UAE. The KSA, being the custodian of Muslim holy places, considers itself to be the leading player of the region and the Muslim world.

It is also the biggest economy of the region with the biggest consumption market size (population).

In this backdrop, competition has been accelerating during the last few years. The KSA has started to pitch itself as a more attractive investment destination and has taken steps to consolidate its status.

First, Saudi Arabia has announced that it will become a connectivity hub in the coming years. The country will be investing almost $130 billion to restructure and expand its airports and related sectors, along with launching a new airline. This initiative has direct relevance for the UAE, as it is currently one of the biggest hubs of connectivity in region.

Secondly, the KSA is trying to attract major companies to the Kingdom using the “carrot and stick” approach. On one hand, Saudi is offering lucrative incentives for companies and private business; on other though, in 2021, it announced that it will be revisiting its relationship with companies which have not established their headquarters in Kingdom.

Thirdly, the KSA has also revised its concession policy on tariffs and the movement of goods across the border with the UAE. It has announced that goods containing Israeli inputs and those produced in free trade zones, will not receive any concession or preference.

Fourth, is the decision on the oil production is also complicating the situation. It is anticipated that this competition will intensify further in the coming years.

In this context, Pakistan must be conscious of the changing dynamics of the region, both in term of economic and geo-politics. Any miscalculation can impact Pakistan in several ways. Saudi Arabia and the UAE provide livelihood opportunities to millions of Pakistanis. Expats from these countries send billions of dollars back to Pakistan, which play a prominent role in maintaining foreign reserves. Pakistan also has close security linkages and cooperation with Saudi Arabia. Besides, both countries also assist Pakistan off and on, to avoid undesired economic difficulties.

Thus, it is suggested that Pakistan conduct a detailed analysis of the changing dynamics. This will help the country devise a balanced and wise policy. Howbeit, Pakistan should try to avoid picking sides in the region and should instead act as trusted friend of all countries.

The writer is a political economist and a visiting research fellow at Hebei University, China

 

Published in The Express Tribune, February 6^th, 2023.

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