From Petrodollars to Geoeconomic Power Evolution of Saudi Foreign Policy in Pakistan

Abstract

The paper will examine how the foreign policy of Saudi Arabia towards Pakistan changed in adopting a more diversified and geoeconomic approach as compared to the traditional petrodollar-oriented policy. Initially tied to financial assistance, labor remittances, and oil delivery, Saudi Pakistani relations are changing in reaction to the dynamic global energy landscape, Saudi Vision 2030 reforms, and the geopolitical changes in the region. The article contends that Saudi Arabia has transformed its foreign policy to be less rentier-state, based on oil income, and more geoeconomic, encompassing investment diplomacy, infrastructure building, and regional connectivity, programs. This can be seen in Pakistan with massive Saudi investment in energy project and its participation in the China-Pakistan Economic Corridor (CPEC). Moreover, the involvement of Saudi is affected by the rivalry with Iran, the alignment to the Belt and Road Initiative of China, and the revision of relations with the United States. The paper concludes that this change has significant implications to regional stability and rebalancing of the world economy.