Should Saudi Arabia take interest in the CPEC?

Should Saudi Arabia take interest in the CPEC?

Executive Summary

Saudi Arabia has a highly oil-dependent economy with trembling growth rates since last few years. It is finding a way to spur a recovery. Vision 2030 has been announced to restructure the economy and hence achieve sustainable growth in forthcoming years. The epochal CPEC has been envisaged as a tool to moderate the complexities of the Kingdom’s oil-reliant economy. China with $26.7 billion and America with a figure of $20.9 billion had remained the top two oil-importers of Saudi crude oil. Both nations have been engaged in the new economic game. China commenced the revival of its ancient Silk route and is developing a new maritime route through its Belt and Road initiative, holding mammoth investment opportunities; the CPEC is a significant part of this project. The US on the other hand is rapidly becoming self-sufficient in oil after the discovery of shale oil reserves in the Permian Basin. The political relations between the US and the KSA encountered high tensions in the recent past (September 2016) when the US alleged the Kingdom for 9/11 attacks and Saudi Arabia in return threatened America to sell $750 billion worth of US assets held by the KSA. China, an economy of $21.27 trillion and the second biggest crude oil consumer required energy and Riyadh could be a competitive oil supplier. In this dynamic geo-economic arena, Saudi Arabia has a great prospect to become a part of CPEC. Pakistan’s geo-strategic location along with its economic resourcefulness would help the KSA to get a place in the new world order, in the diversification of their economy and accomplishment of Vision 2030. CPEC is a way forward to reach about half of the world’s population and a pilot-plan of connectivity, embracing diverse economic opportunities. The SEZs, industrial estates and the business-friendly atmosphere enables countries to establish new industries in Pakistan, incurring minimum cost and securing maximum profits, producing export-quality products. Gwadar Port, also known as the Golden Bird, empowers Saudi Arabia to get easy access to world markets. The corridor would boost the Kingdom’s trans-lateral relations and secure its markets. CPEC entails phenomenal opportunities for Saudi Arabia, putting it on a path of sustainable growth.

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Junaid Roshan Tanoli
is a graduate of Pakistan Institute of Development Economics (PIDE). His field of expertise is Economics. Currently, he is working as Research Trainee. He also worked for Prime Minister National Health Program. He tweets @junaidroshan786.

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