Pakistan caught in a bind by Sharif’s Saudi debt

Stung by his complete failure to muster the parliamentary support needed to join in a Saudi-led intervention in Yemen’s civil war, Pakistan’s Prime Minister Nawaz Sharif is now counting the costs of his $1.5 billion folly.

Sharif was put on the spot when the official Saudi news agency released a statement, after King Salman and Sharif spoke by phone last week, stating that Pakistan promised to place its military potential at Saudi disposal. The Saudis requested airplanes, ships and ground troops in support of its operations in Yemen. In the absence of a denial and with an active ministerial campaign in support of Saudi Arabia, it is near certain that Sharif did give an understanding of this nature to the Saudi King, when Sharif visited Saudi Arabia at short notice during March this year.

Sharif and the Saudi royals have cultivated good relations for some time. The Saudis softened their nuclear sanctions on Pakistan in 1998 when, as prime minister, Sharif decided to conduct Pakistan’s first nuclear testing. They gave billions of dollars worth of oil to Pakistan on deferred payment terms but effectively free for five years. The Saudi government later denied this facility when General Pervez Musharraf, who succeeded Sharif, asked for its extension.

The Saudis made a calculated investment. After saving the Sharif family from Musharraf’s jails, they hosted them in style during their years in exile. They backed Sharifs to set up multi-million dollar enterprises based in Saudi Arabia and elsewhere. When the political space opened up in Pakistan, they sent Sharif back in 2007 on board a royal Saudi plane to prevent his deportation. Musharraf had thwarted Sharif’s earlier attempt to return, breaking what had been a solid commitment of a maximum ten-year exile. Sharif and his family owe much of their new billions to Saudi patronage. As such, Sharif ‘is very much Saudi Arabia’s man in Pakistan,’ as a Saudi prince put it.

And in 2014, when the Pakistani rupee was sinking, a mysterious deposit of US$1.5 billion showed up in Pakistan’s central bank reserves — ‘from a friend’, who did not wish to be named. Pakistanis who questioned the wisdom of accepting this money were misleadingly told there was no quid pro quo. But it is now payback time for Sharif’s debt to the Saudis.

There were signs that something was afoot. Saudi Arabia was the first country that Army Chief General Raheel Sharif visited after assuming command in 2014. The Saudi Foreign Minister and the Crown Prince, now King Salman, visited Pakistan early last year in quick succession. Reports of Saudi purchases of Pakistani arms rapidly gained currency. Last month before the Saudi offensive was launched in Yemen, Sharif was literally summoned to Saudi Arabia at short notice and in a most unusual departure from protocol the Saudi King Salman, the Crown Prince and the whole cabinet received him at Riyadh airport.

Pakistan’s economy is not picking up. Pakistan is in need of money, which the Saudi regime is ready to pay in return for renting out the services of Pakistan’s military. In fact, Pakistan has done this deal before and seems poised to do it again. Pakistan Air Force pilots flew Saudi airplanes as early as 1969, repelling a South Yemeni incursion reportedly supported by Saudi nemesis Egypt’s Gamal Abdel Nasser. At the height of deployment during the 1980s Pakistan reportedly rotated about 50,000 troops in Saudi Arabia.

There is also a constant supply of retired servicemen (resembling US ‘contractors’) in Saudi Arabia, as well as a little fewer than a thousand servicemen from Pakistan who remain there in technical support and medical roles.

The Saudis hold another strong card. Pakistani expatriates living in the kingdom send over US$8 billion home annually, a figure that represents almost half of Pakistan’s total US$16 billion in offshore remittances and helps to shore up the sagging economy.

Yet again, despite pretentions otherwise, Sharif’s personal obligation to the Saudi royal household is casting a heavy shadow over issues of national interest. Pakistan’s wariness in joining another war is understandable. Pakistan’s involvement as a proxy, beginning with the ‘Afghan Jihad’ against the Soviets, has come at a serious and high cost to Pakistan as a state and society. Radicalism has spread in the form of intolerant versions of Islam, the Taliban, a drugs and gun culture and massive funding directed to Saudi-sponsored seminaries. The latter has promoted sectarianism by financing murderous Sunni campaigns against the Shia minority.

Since the Iranian Revolution, Pakistan has become the ideological battleground between Saudi Arabia and Iran. An already fractured society, Pakistan would be better off staying out of this combustible adventure.

Sajjad Ashraf is an adjunct professor at the Lee Kuan Yew School of Public Policy, National University of Singapore. He was a member of the Pakistan Foreign Service 1973–2004.