Leaving political and military analysis to the professionals
in the respective fields let me look at how this mutual defence treaty would
influence geoeconomics in the respective nations and beyond:
First and foremost, Saudis have an assured supply
of military hardware & software from a diversified source, no longer tied
to the American military establishment. Pakistan uses some of the top tier
weapons sourced from China and part of it is jointly produced within Pak.
Ostensibly, Pakistan has already moved out from US as major supplier of
weaponry to the tight embrace of China. Now Saudis can also follow suit by
getting out from American tentacles into the Pak-China duo seamlessly. In
nutshell, geoeconomics of both Pak & China gets a major boost.
Secondly, China Pakistan Economic Corridor (CPEC) is
now planned to be extended to Afghanistan on the North and Iran to the West
would be easily connected to the Persian Gulf and thence to the Red Sea. CPEC therefore is destined to
become a major trade route next to the Arctic passage for the global
trade.
A dedicated oil supply route comes into being, in
the offing as the sea-land corridor between oil producing countries in the Middle
East is directly connected to Eastern shore of China alleviating nagging fears
of what Chinese leader Hu Jintao lent expression to as “Malacca dilemma" in
2003. Ever since Presidents of
China have been working on mitigation if not total eradication of this dilemma.
Before long almost all the countries in the
Middle-East would be covered either in the BRI or CPEC or both achieving
remarkable synergies in the trade & transportation areas by way of road,
rail and sea connectivity.
While the winners are Middle-East, South Asia
including India and Far Eastern countries including China, Vietnam, North Korea
etc., the losers would be
mainly America, the West and Israel in geoeconomics, explicitly in terms
of losses in revenue and potential for wealth accumulation.
Future of petro dollar is hanging by a thread. This
system came about in early 1970s when USA assured military protection to KSA in
exchange of Saudis billing oil sales in US Dollars. The current mutual treaty
rubbishes this as KSA would move out from US military umbrella to Pakistan nuclear
umbrella. In geoeconomics, the
phasing out of petro dollar is going to be a major blow to the overall dollar
domination globally.
Pak gets two type of boons: one is related to her energy profile as she needs to import so much of oil and Saudis would take care of Pak energy security. Second boon is the debtor-creditor relationship. As you are aware Pakistan is a debtor nation with close upon USD 60 Billion to be serviced. In contrast, Saudi is a creditor nation having more than USD 925 Billion of assets under management. In point of fact a match made in heaven!
Cheers!
Muthu Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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