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Analysis

Qatar’s Economic Diplomacy with Pakistan

Tuesday 25 June 2019
Qatar’s Economic Diplomacy with Pakistan

Alwaght- On Saturday, Qatar’s Emir Sheikh Tamim bin Hamad Al Thani arrived in Islamabad heading a high-ranking political delegation. He met with the Pakistani President Alif Alvi and Prime Minister Imran Khan in the capital. The last time the Qatari leader visited Pakistan was in 2015, two years after he took the rule in the Persian Gulf emirate.

The visit to Pakistan was important as Qatar is still under an all-out blockade of an Arab alliance led by Saudi Arabia which is seen as a strategic ally to Pakistan. This visit gives rise to the question as what place Islamabad has in Doha’s foreign policy and what goals bin Tamim eyes behind the trip to Pakistan.

Pakistan in the politics of Arab states

Pakistan, the second most populated Muslim country with a military ranking 17 among the world’s most powerful militaries, is under the military focus of the Arab countries, mainly Saudi Arabia. The country has only $8 billion hard currency reserves. This relative financial weakness pushes Islamabad leaders to seek foreign financial help. Here Saudi Arabia finds a place. Riyadh has always tried to instrumentalize the financial aids to bring Pakistan into a strategic alliance with the Saudis. Pakistan is significant as it assists, though indirectly, the Saudis in their conflicts and also it has been turned by the Saudi ideological apparatus into a nurturing hub for Wahhabi fundamentalist militants in a bid to create strategic depth in the region and deal blows to rivals.

By 2006, Saudi Arabia founded 12135 madrasas, religious centers, teaching and spreading Salafi ideology, the main source of radicalism in Islam, in Pakistan. In January, the UAE Crown Prince Sheikh Mohammad bin Zayed visited Islamabad and promised $6 billion in aids to the Pakistan's economy. But shortly after him, King Salman of Saudi Arabia flew to Islamabad, carrying with him cash to invest $8 billion in a major Pakistani oil refinery and promising to deliver an aid package of $10 billion to help the country tackle economic crisis.

Doha-Islamabad relations

Pakistan is also in desperate need for gag as it has to import 6,000 million square feet of gas annually. That is while currently only 4,000 million square feet are imported to the country. Despite obstacles set by the US ahead of Iranian gas line to Pakistan, Islamabad still insists on importing gas from the Islamic Republic. But it has turned to Qatar for a short-term solution as the US pressures continue on the Pakistani leaders.

Qatar is the world’s largest Liquefied Natural Gas (LNG) exporter. In 2015, the country signed a $16 billion contract to sell 1.5 million square feet to Pakistan. As Pakistan seeks an increase in its gas consumption, Qatar increases its gas delivery to Pakistan. Qatar, reports suggest, can address 26 percent of the Pakistani energy needs.

On the other side, PM Imran Khan, who has counted on nearly $30 billion in promised aid from Saudi Arabia and the UAE, now is disappointed as the Arab states gave failed to realize their commitments. What really was delivered to Islamabad was very smaller than what was pledged. This opens the door to expand ties with Doha as Qatar can help the PM create a balance between the Arab rivals each of which seeks to deepen its influence in Pakistan.

Pakistan has always sought a balance in its regional ties. Despite its strategic alliance with Riyadh, for example, Islamabad did not join the Saudi-headed war on Yemen despite insistence by the Kingdom. Pakistani leaders seem to know that financial dependence on the Saudis will both harm their principle of partiality and also due to the Saudi pro-Salafi policies can challenge Islamabad’s rule at home.

After the 2017 Saudi blockade on Qatar which came under the claims of Doha support for terrorism and also because of friendly relations with Saudi Arabia’s major regional rival, Iran, Doha-Islamabad trade exchange grew 230 percent in 2018, the figures say, going beyond $2.5 billion. In his last year meeting with Qatar’s army chief Ghanem bin Shahin Ghanem, Imran Khan announced that Qatar's move to open business offices across Pakistan has created 100,000 job opportunities for the Pakistanis. He also talked about the increase in exports to Qatar by 73 percent. Qatar also hosts a large number of Pakistani workers active in 2022 world cup projects. Add to this security cooperation, shortly after the Saudi anti-Qatari measures, Pakistan said it will send 20000 forces to the Arab state.

Future of political relations

By founding the Tehreek-e-Insaf party, Imran Khan initiated a focus on the citizens' welfare. He is eyeing trade deals instead of being busy with involvement in tensions with others. Just against Saudi Arabia, Qatar seeks national interests under stability and de-escalation. The two countries are expected to pave the way for $22 billion in Qatar investment in Pakistan, the largest pact an Arab country has ever signed with Islamabad. The deal will deepen the bilateral relations on the long run and cut Saudi Arabia’s sway over Pakistan. Qatar needs Pakistan’s help to secure the 2022 world cup and from this window some 100,000 are expected to be employed by Qatar. Qatar-caused employment in Pakistan will automatically make Islamabad sensitive about regional stability and Qatar’s security. This amounts to success in Qatar policy in the face of Saudi and Emirati overbearing policies.

One of Pakistani Premier's promises was the fight against money laundering. Pakistan needs some legal and financial reforms to set up a cooperative relationship with the international financial institutions like the International Monetary Fund (IMF). Partnership with Qatar, for Doha’s successful experience in its fight against money laundering, can help Islamabad with its international financial relations and even investment attraction. One of the parts of the recent visit’s statement was an agreement on fighting illegal monetary resources and organized financial crimes.

Since its blockade, Qatar has been working hard to play a more active role in regional developments. Next week, the fifth round of peace talks with the Taliban will be held in Doha. Qatar is eager to join hands with Pakistan in Afghanistan case to eject Saudi Arabia from the peace efforts.

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Qatar Pakistan Diplomacy Blockade Influence

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