IN a remarkable display of quiet diplomacy, Saudi Arabia and Iran have announced their intentions of normalising bilateral relations. China, which had lately taken steps to deepen its political and economic ties with both nations, was a natural choice as mediator.

Will this rapprochement last long enough to underpin a much-needed regional stability? Will it work this time, considering many such efforts in the past failed? Will the US make counter moves to check the growing influence of China in the Middle East? And, how would this affect Pakistan? These are important questions, the answers to which will profoundly affect the region and the world at large.

Saudi Arabia of recent years has been changing at a rapid pace. Its young and dynamic crown prince, Mohammed bin Salman, is spearheading the ‘transformation’. The country is diversifying its economy and reducing its reliance on oil exports. The Saudi Vision 2030 envisages its role as a hub that would “connect three continents: Africa, Asia and Europe”. Socially, Saudi society is shedding much of the conservatism that had come to define Arabia under the House of Saud.

To implement its ambitious agenda, Saudi Arabia is adapting its foreign policy by rationalising its security relations with the US and reaching out to other major powers, especially China.

Secondly, it is taking steps to create a peaceful neighbourhood. Normalising ties with Turkey, Qatar, and even potentially Israel, as well as the recent outreach to Iran, are in sync with the ambitious but prudent domestic and foreign policy agenda it is pursuing.

For its part, Iran, too, has an interest in normalising ties with Saudi Arabia. Iran is under deep economic stress due to the US sanctions, which are hurting every segment of its national life.

There are also signs of society wearying of social restrictions, as evidenced by the widespread women-led protests in the country. Further, supporting and funding proxies in Lebanon, Syria, Iraq and Yemen has been costly for cash-starved Iran. Understandably, therefore, Iran seeks to reduce tensions with its Arab neighbours and counter US attempts to isolate and marginalise it.

Pakistan can benefit from the Saudi-Iran deal if it puts its economic house in order.

China’s diplomatic initiative to play the role of mediator makes profound geopolitical and geoeconomic sense. Saudi oil meets the bulk of China’s energy requirements.

Riyadh welcomed President Xi Jinping last December, signing 34 deals for investment in green energy, IT, cloud services and other sectors, estimated at around $30 billion. Riyadh also hosted Xi’s meeting with 30 heads of state and businesses of the region.

China is also engaging Iran in a multifaceted relationship. Iranian President Ebrahim Raisi recently visited Beijing and concluded 20 substantial agreements under the 25-year comprehensive strategic partnership agreement signed in 2021, with potential Chinese investments in Iran to the tune of $400bn. China has also called for lifting of US sanctions against Iran, restoring the nuclear deal, and has supported Iran’s entry into the Shanghai Cooperation Organisation and BRICS.

The US, locked in a competition with China, has cautiously welcomed this development but may regard it as an attempt by China to increase its influence around the world. In that context, this development represents a setback to US policy in the Middle East.

For decades, the US was Saudi Arabia’s key defence supplier and security guarantor. Of late, some cracks had appeared in the relationship after Washington failed to persuade Saudi Arabia to increase oil supplies, pushing up the oil price, which the US felt would support Russia in its war against Ukraine.

More notably, the US had increased its criticism of human rights in the kingdom following the 2018 murder of Saudi journalist Jamal Khashoggi. President Joe Biden even vowed to make Saudi Arabia a pariah state. The kingdom’s pragmatic moves to normalise relations with Iran and enhance ties with China are a reality check for Washington.

The US, which is determined to contain China through its Indo-Pacific strategy, will surely make a counter move in the months ahead though its options are shrinking due to its overreliance on military muscle rather than diplomacy.

Even India, which the US had chosen as its partner of choice in South Asia, prefers to pursue what it calls ‘strategic autonomy’ in its relations with China and Russia. With the Middle East also drifting away from the US, the latter might want to explore its options to improve relations with other countries in the region, including Pakistan.

Israel may also not be happy with the development, but it has kept its options open. While it remains determined to isolate Iran, it has taken steps towards rapprochement with the Arab world and steadily increased its economic linkage with China.

What does this development mean for Pakistan? Our government has rightly welcomed the news as Pakistan has close ties with Saudi Arabia as well as Iran. Our collective efforts in the Muslim world will also receive a fillip.

As the economic and commercial linkages between China and these two countries grow, Pakistan, which lies right next door to these three states, can benefit the most if its economic house is put in order and industrial zones and agricultural fields are ready to absorb potential investments from these countries.

Saudi Arabia has been willing to set up an oil refinery in Pakistan for which ground work must be expedited. With Iran, we must expand border markets and optimally use barter trade. Urgent steps are required to make Gwadar port fully functional to enable it to serve as the regional hub of commerce and trade.

Special economic zones must also be expedited to position Pakistan to receive industrial investments from China, Saudi Arabia and other countries. On the diplomatic plane, we should also learn how result-oriented and pragmatic diplomacy is conducted — quietly and discreetly.

The writer is a former foreign secretary and author of Diplomatic Footprints.

Published in Dawn, March 18th, 2023