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Saudi bolstering relations with Asian Countries

February 21, 2019 | Expert Insights

As a part of Saudi Vision 2030, the Saudi Crown Prince Mohammed bin Salman will tour the Asian countries for bilateral talks and strengthening of ties. 


‘Saudi Vision 2030’ is a plan to reduce Saudi Arabia's dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism. 

Saudi Arabia is diversifying its global economic linkages with China, Central Asia and South-East Asia. It increasingly perceives China – Pakistan Economic Corridor (CPEC) as a great opportunity in the emerging Southwest Asian geo-economic setting, which must be fully harnessed by investing in the future of Pakistan as its pivot. Saudi Arabia will be the third "strategic partner" of the $50 billion CPEC. 

Pakistan has been called "Saudi Arabia's closest Muslim ally. Pakistan provides security support to Saudi in return for economic support. Pakistan has benefited enormously from Saudi Arabia’s generous financial aid, the supply of oil on a deferred payment basis and aid during crises. Trade has been the dominant factor in India's relationship with Saudi Arabia, with the import of oil being a major component. While economic ties favored India, Pakistan benefited from close defense relations with Saudi Arabia.

Saudi Arabia has also found receptive audience in the South East Asian capitals. Economic linkages such as funding and oil deals in South-East Asia allows the embedding of their influence, as well as their ideology.


Saudi Arabia’s Crown Prince has planned to tour Asian nations including India, Pakistan, China, South Korea and Indonesia to deepen energy cooperation. Saudi Arabia wants to forge closer relations with Asia, a promising growth market. 

China and India want to strengthen their relations with Saudi Arabia, the world's largest oil exporter, as their energy demand is expected to grow further. South Korea has also attached importance to its relations with the kingdom, competing with Japan, and has pledged to cooperate with Saudi economic reforms.

The Prince is expected to visit New Delhi, along with leading Saudi businessmen, at the invitation of Prime Minister Narendra Modi. Mr. Modi met the prince in November, when they were both in Argentina for a Group of 20 summit. 

Saudi Arabia is India’s top supplier of crude oil but the two countries have expanded ties beyond energy, and their governments have agreed to build a strategic partnership, the foreign ministry said. In a statement, it cited cooperation in areas including energy security, trade and investment, infrastructure, defence and security. 

India is expecting Prince Mohammed to announce an initial investment in its National Investment and Infrastructure Fund (NIIF), a quasi-sovereign wealth fund, to help accelerate the building of ports and highways, an Indian official said. Saudi Arabia has also flagged a desire to invest in India’s farm sector, with products to be exported to Saudi, another official at the trade ministry said.

Prince Mohammed is expected to sign agreements, mostly linked to a refinery and the power sector, during the trip to Pakistan. The memorandums of understanding will include renewable energy projects and investments in petrochemicals and mineral resources. Pakistani Prime Minister Imran Khan was among a handful of leaders who attended an investment conference in Saudi Arabia in October, an event boycotted by many companies and world leaders in protest over Khashoggi’s killing.  In late October, Riyadh offered Pakistan a US$6 billion loan to help keep its ailing economy afloat.

Saudi Arabia has also announced plans for a US$10 billion refinery and petrochemical complex at the coastal city of Gwadar, where China is building a port as part of its vast Belt and Road initiative. “Saudi Arabia has huge resources. Their investment fund is over $1 trillion, so we want just a fraction of that,” said Pakistani minister.


Our assessment is that Saudi’s intervention in Yemen and the human rights situation in the country was met with criticism in the Western countries. Asian nations are likely to keep a distance from this and prioritize the actual benefit of energy cooperation with the Kingdom. We feel that the Crown Prince’s trip to Asia will further integrate Asian states into a Gulf security dynamic that is shifting from a US-dominated order.