Featured Pakistan approaches Riyadh for renewal of $3.2b oil facility

[OIO]

@Ace of Spades

Let us try to disect/deconstruct.. in detached, dispassionate manner... freezing all our biases..

Statecraft.

PakStatecraft is finding its feet after a long coma... so the wobbles are to be expected.

Now...the matter at hand as you correctly framed it... let us Contextualise this!

Deconstructing OIC:

ArabLeague's Oil Embargo made long lines for gasoline in the CombinedWest led by the US...with clear economic consequences... King Faisal got assasinated... the rest is History.

Hence, it was imparative for the US led CombinedWest to NEVER allow any actions by the Core Oil Producers to EVER use Oil as Weapon...

The OIC was/is a US PolicyInstruement to allow the so-called IslamicWorld to vent its Frustrations and be resinged to its Impotence.

As brought to attention of Paks before...once again... the US was the Force behind hiring and positioning the good Indians in the GCC... thus keeping the ImpericalGeoConstruct aka India afloat..

This was the same PolicyInstruement which has been allotting generous Visas to the good Indians in the US...

When the KosherAfghanJihad ended ... we all know what happened after that.

The OIC becoming more of free-lunch-shop than a talk-shop was a natural development.

The ones who gives Free-Lunch also demands something in return.

Therefore, we cann't allow ourselves being surprised or disappointed by the OIC... it would only result in disappoinment and more...
Since, the foundation of any expectation from OIC would be based on pure Emotion than the Ground-Reality!

The Net Comprehensive Strength of OIC is such that it will never be allowed to function as UnifiedPlatform... because that would upset the Overal Global Power Architecture and the Long Term Plans.

Great/SuperPowers ONLY work for their own interests and their own interests alone... rest is just CannonFodder or PolicyInstruements.

The US has been trying to get the good Indians into all types of Fora to enhance its position for sometime now... from NSG to OIC!

When last time the OIC invited Indian FM Pakistan took a firm stand... simply, because we had NO other Choice left...

Indian incorporation into OIC will solve many strategic headaches for not only India but also for the US.

With growing Sino-US ColdWar 3.0 dynamics .. the US needs to prop up India not only militarily but also diplomatically and economically.

Therefore, we do see a DirectedEffort to invest in India by the GCC... the force behind it is not only possible RoI for the GCC Investments but larger US Strategic Calculus.

India dumping Iran and joining the GCC on strategic level is also a US Construct...

Please, do see that PetroDollar Recycling and FinancialCapitalism are mutually dependent... incorporation of India into the exisiting Financial Architecture is of Vital Importance to the US.

Please, do note that it was the US and India who votted against SDR while the Sino-Rus Axis were pushing for SDR dominance @ps3linux

Seeing OIC anything other than a PetroDollar Component/PolicyInstruement will cause Strategic Blindness.

As long as OIC Core stays committed to the Agreed DollarSystem... red carpets.. otherwise... well we do know already!

Now this Sino-Iranian Deal is not new ..this has been in the offing long before Pres. Xi visited Tehran and expressed it.

Pakistan is a labour exporter to the OIC Core and due to Our Own Economic Mismanagement and extremely poor Statecraft of past two decades... well... Begger's Bowl... Free-Lunches come at a price.

EconomicTerrorism in Pakistan, MoneyLaundering and then the Investments by the EconomicTerrorists ... made our situation worse!

Can we Blame others?

Regardless, OIC is what it is. And That is That!

We can jump high and low... based on Expectations or Common ReligeousEthos won't make a dent to the PolicyInstruement that OIC is... and in its current form the OIC shall continue to serve this purpose.

This is the very SimpleReason that there is NO meeting by the OIC for the plight of PakKashmiris in IoJK or Collective Condemnation of the IndianFacistRegime.

Sooner we accept these FACTS the better!

OIC is a US Construct and shall remain so.

The growing Disconnect between Turkiye and GCC and IranianDynamics... is essentially making OIC making more deader than dead for any Collective Action. It shall only grow further...with Tukiye n Egypt squaring off!

Another OIC in the Making:

The Sino-American Last Tango is accelerating faster than expected...at least by the BemusedObserver.

This Acceleration has deep implications for the so-called IslamicWorld ...including the Core of OIC!

ASEAN including China is the EconomicGrowthEngine for the GlobalEconomy.

And if we add EmergingMarkets of Pakistan and Turkiye then the depth and dimensions of the GrowthPotential changes.

ASEAN is so deeply integerated with the ChineseEconomy that pricing it away is now not possible for the US led Quad.

EU desperately needs this GrowthEngine to come out of Deep Deflation.

Now this KL Conference was a Chinese attempt to Construct another OIC Core for its own GeoStrategic Goals... the Sino-IranianDeal needs to be seen through broader lens than just narrow ones.

SCO has already incorporated the CentralAsian 'Muslim' countries into the Sino-Russian Framework and they shall remain there. Further incorparation of Iran and Tukiye and later on ASEAN will grow.

With Sino-Russian trade increasingly settled in their national valuta is indictive of this Acceleration...which at this stage is nuanced and calculated..NOT Reactive.

Eurasia combined with ASEAN is both the Consumer and Producer of Oil/Gas/Uranium.

IF the Sino-Rus Axis succeeds in turning this into Consolidated EconomicShpere with Yuan/DigitalYuan as Trading Vechile then the effects will be not mere Historic but Paradigm Shattering.

Smack in the Middle is Pakistan... Young in population and blessed with PivotalPosition in the Eurasian Landmass...

The recent PakState PolicyPositions made public by the esteem and colourful SMQ or the repayment of loans earlier than required with the Help of China ... this tells us the direction of the Flow!

Russia's increasing muslim population or expanding StrategicFootprint in ME and NorthAfrica or the recent OilWar between KSA and Russia..

Or Russo-Turk rivalary in NorthAfrica/Syria... the Game for Oil/Gas resources and then 2023 is now almost here...

The Chinese investments in 'Islamic' countries and the need for BRI to go into a higher gear along with DigitalBRI ...

When we actually look at the EurasianMap then we can see with Clarity that a New OIC with a New Core is extremely valued by both Russia and China as it neatly binds the SCO, EurasianEconomicBlock and Decoupling with $.

Mr. Putin's defence of Islam of on regular basis is, once again, indictive of the an emerging and supported New Core of the New OIC.

Now that the IndianState has officially joined the AntiChina Quad and Galwan is active... India will be forced further to embrace the US... and in return the US PolicyInstruement old OIC will continue to shield India from MuslimAnguish for its CrimesAgainstHumanity in IoJK or increasing brutalities against the Muslims of MaqboozaHindustan.

BD and SL already embeded with BRI and BD showing signs of taking a positive view of Sino-Pak Axis!
Thus BD, with its large muslims population, shall be courted further to join the New OIC.


The above Deconstruction might appear ColdHearted but then the world we have been living in has been nothing else!

PakStatecraft's Choices and Consquences:

Pakistan has been Tounge Living Among Teeth for past 73yrs... with mixed bag of results... We can lament or wail all we want, it is what it is... and we have to Deal with it!

Pakistan's Choices:

• IMF
• FATF
• DebtServicing
• IPPs
• KhooniVirus
• Rent-a-KhooniLiberal
• Rent-a-MullhaMaffia
• MarasiMedia
  
• EconomicTerrorist still at large
• Colonial System of Governance
• FBR a liability
• Permanent Headache of Kabulistan
• IndianTerrorism in Pakistan
• Political-Instability
• Economic Recession and Inflation

The above is the Shardes which are piercing us and walk we must on these nails...

All of this is the ConfiningLandscape in which Pakistan is to make StrategicChoices:

• Pakistan has made the StrategicChoice of BRI i.e CPEC
• Pakistan has made ForeignPolicy choice of aligning with PRC and dovetail PakEconomicDiplomacy including focus on Africa
• RetaliationDoctorine towards Kabulistan and India
• NoMoreWars for someone else
• Re-engaging BD and SL
• More focus on ASEAN for trade and investments in Pakistan's SEZs
• High profile and consisten exposing of HindutvaFacism
• Taking a coordinating approach towards IoJK resultion with China
• SMQ giving last chance to Old OIC to act Now or Loose Pakistan Forever
• PakMilitaryDiplomacy to try to act as a bridge between Iran and KSA
• Facilitating AmericanExit from Kabulistan
• Accepting that Regional Powers i.e Russia, China and Iran are stakeholders in AfghanPeace
• Treating GCC and Turkiye as equal partners
• Ruling out any engagement with India which is for show and not concrete results
• Keeping the Voice of PakKashmiris alive...regardless, whether its enough or not
• Using Yuan as payment vehicle with the Chinese firms
• Standing with China on HK, Ladakh and SouthChinaSea
• Engaging Russia in the context of Eurasia and not through Indian angle
• Building Dams with the Chinese Investments
• Offering CPEC infrastructure to all CARs
• Accelerating oil/gas exploration within Pakistan
• Slowly moving into CPEC Phase2

Consequences for Pakistan:

• FATF sword will hang for a while
• IMF will do IMF on Pakistan
• EconomicTerrorists will continue to invest in unstability within Pakistan
• IndianTerrorism will become more focused on CPEC/China-in-Pakistan
• GCC will extert all the pressure possible for Pakistan to comply with their strategic objectives
• Pakistanis might be deported from GCC (this will be the extreme measure but cann't be ruled out)
• Pakistan's Ultimatum to OIC will not result in anything Condusive to Eleviate Plight of PakKashmiris in IoJK
• Pakistan can see the Oil Facility withdrawn if Pakistan continues with Policy outlined by SMQ
• The GCC $$ in SBP could be withdrawn
• The possible Investments in Pakistan from GCC could be withdrawn
• Should Pakistan invite OIC FMs on its own... only a few will turn up
• When Pakistan Officially becomes the Core of the New OIC the relationships with GCC will take a deep hit
• The US will keep Pakistan under pressure through all of its PolicyInstruements to give India a breathing space as Frontline state against China
• To keep a Balanced and Equal level relationship with Iran and GCC or Turkiye and GCC will be a Monumental Task for PakDiplomacy
• Price of Not abandoning CPEC or Sino-Pak Axis will have trade and diplomatic consequences from the US led CombinedWest in the short term

In short to become Pakistan, Pakistan shall have to pay dear price... accute pain in the short term.. more Independence in the Long Term!

All of this depends if Pakistan can put its house in Order... from Economy to Judiciary to Governance to Education to Rapid Industrialisation...

Every Choice exacts an Equal Price!

@Ace of Spades it is The Momentum of History in Acceleration ... ThirdActorDynamics in Great ME from Med to Gulf to SouthChinaSea ... nothing exists on its own in Geopolitics!


Mangus

@Arsalan

America, India, Saudi Arabia is a minimum dollars circle.

 

[The Accountant]

seems majority of pakistani want that..
it is no secret that had there not been election engineering in south Punjab(either pushed by military or by feudal themselves) PTI would have easily lost the election ..

despite all this combined PMLN and PPPP still won more votes especially in highly educated class

I dont know what is your definition of majority but votes of PTI even in absolute terms r mich higher than PPP and PMLN.

Funny is despite no significants by both PMLN and PPP feon Karachi, peshawar, quetta islamabad you claim that educated people didnt vote for PTI.

Your post reflects the low IQ of the voters of PMLN

 

[Imran Khan]

This effects the common man directly, since petroleum prices have a multiplier effect, and this unfortunate news is "funny to you." Would you care to elaborate?

At one side our FM bashing saudi on other side we beed loan from saudi

 

[ziaulislam]

I dont know what is your definition of majority but votes of PTI even in absolute terms r mich higher than PPP and PMLN.

Funny is despite no significants by both PMLN and PPP feon Karachi, peshawar, quetta islamabad you claim that educated people didnt vote for PTI.

Your post reflects the low IQ of the voters of PMLN

is wikipedia banned in pakistan? i mean original research is difficult but wikipedia should be avaialbe

2018 election
Pakistan Tehreek-e-Insaf 16,903,702 31.82 116 28 5 149 +114
Pakistan Muslim League (N) 12,934,589 24.35 64 16 2 82 –84
Pakistan Peoples Party 6,924,356 13.03 43 9 2 54 +12
Muttahida Majlis-e-Amal 2,573,939 4.85

PTI got 31% of votes..the opposition alliance almost 50%

and i haven't even put in the south punjab situation where fuedal lords suddenly switched allegiances under whom pressure or they saw PML N in trouble? may be?

 

[ziaulislam]

so technically PTI enjoys just 25% of votes that were put in/casted if we take out south Punjab

so only 1/4th person would support PTI while 1/2 will support the alliance of PMLN/PPPP/JUI

 

[ziaulislam]

and this is karachi

 

[ziaulislam]

go to twitter you will see a storm of Phd, elites supporting democracy and PPPP

 

[HAIDER]

As said before SMQ has some deep frustrations ....which he is not openly addressing in media.

 

[Ace of Spades]

As said before SMQ has some deep frustrations ....which he is not openly addressing in media.

Again i would reiterate; though he is very incompetent like the rest of the lot. But foreign office supporting his statement later can't be just a coincidence. If state wanted to give another message, there had to be a rebuttal or atleast some clarification from FO later. But that didn't happen

 

[The Accountant]

is wikipedia banned in pakistan? i mean original research is difficult but wikipedia should be avaialbe

2018 election
Pakistan Tehreek-e-Insaf 16,903,702 31.82 116 28 5 149 +114
Pakistan Muslim League (N) 12,934,589 24.35 64 16 2 82 –84
Pakistan Peoples Party 6,924,356 13.03 43 9 2 54 +12
Muttahida Majlis-e-Amal 2,573,939 4.85

PTI got 31% of votes..the opposition alliance almost 50%

and i haven't even put in the south punjab situation where fuedal lords suddenly switched allegiances under whom pressure or they saw PML N in trouble? may be?

Common sense is curse when u r talking to idiots. If u r talking about opposition alliance then why not counting government alliance ?

 

[Dr. Strangelove]

"Political power without economical power is sterile"
Pakistanis need to understand this simple fact. I have been saying that we need to decrease our Economic dependence on GCC but things on the ground point towards a different trend For Now. Our Remittances from KSA has actually Increased this year. There is no Wider policy shift coming from Pakistan in regards to KSA as things stand today.

Pakistan as a Nation tends to Follow others and even if we somehow Ditch KSA we will find someone else to Follow. Had we not wasted so much time in Political turmoil and Experimenting with Demagoguery these last few decades we could have had the Economic Influence to Force GCC hand to our favor.

 

[HAIDER]

Again i would reiterate; though he is very incompetent like the rest of the lot. But foreign office supporting his statement later can't be just a coincidence. If state wanted to give another message, there had to be a rebuttal or atleast some clarification from FO later. But that didn't happen

His statement fully backed by COAS . It seems KSA ditch and backoff from his 10 billion investment commitment. Plus India has huge influence in Royal Palace.

 

[HAIDER]

"Political power without economical power is sterile"
Pakistanis need to understand this simple fact. I have been saying that we need to decrease our Economic dependence on GCC but things on the ground point towards a different trend For Now. Our Remittances from KSA has actually Increased this year. There is no Wider policy shift coming from Pakistan in regards to KSA as things stand today.

Pakistan as a Nation tends to Follow others and even if we somehow Ditch KSA we will find someone else to Follow. Had we not wasted so much time in Political turmoil and Experimenting with Demagoguery these last few decades we could have had the Economic Influence to Force GCC hand to our favor.

I doubt, after Corona, a huge manpower already returned. Now major chunk of remittances come from Europe and North America.

 

[Clutch]

An agreement between Pakistan and Saudi Arabia for provision of $3.2 billion worth of oil on deferred payments per annum has expired two months ago and decision about its renewal remains pending with Riyadh, sources told The Express Tribune.

The $3.2 billion Saudi oil facility was part of the $6.2-billion Saudi Arabian package announced in November 2018 to ease Pakistan’s external sector woes. Pakistan has already prematurely returned $1 billion Saudi loan - four months ahead of its repayment period.

Sources said that Pakistan could also return $2 billion remaining Saudi cash loan, subject to availability of similar facility from China.

The agreement over $3 billion cash support and $3.2 billion oil facility per annum had the provision of renewal for two more years.

The sources said that Saudi Arabia has not provided the oil on deferred payments since May this year. The budget estimates suggested that the government was hoping to receive minimum $1 billion worth of oil in fiscal year 2020-21, which started from July.

A spokesman of the Petroleum Division has also confirmed the development about expiry of the facility.

“The agreement expired in May 2020,” said Sajid Qazi, the spokesman of the Petroleum Division. The spokesman further stated that the efforts were being made by the Finance Division to renew the facility.

The spokesman said that the response from Saudi Arabian government was awaited over Pakistan’s request to further extend the facility, in line with the provision of the agreement.

The Ministry of Finance did not respond to The Express Tribune’s question about the updated status of Pakistan’s request. The State Bank of Pakistan and the Ministry of Finance have not yet taken the media into confidence about these developments.

(So from more than two months request isn't entertained)

In May last year, Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh had announced through his twitter handle that “from July 1, 2019 KSA is activating the deferred payment for petroleum products facility of $275 million per month amounting to $3.2 billion per year for three years”.

Saudi Arabia had rolled over its $3 billion loan from between November 2019 to January 2020, according to the International Monetary Fund (IMF) report. The IMF has termed the rollovers of Saudi Arabian, United Arab Emirates and Chinese assistance critical for Pakistan’s debt sustainability.

Pakistan’s repayment of $1 billion Saudi Arabian loan after borrowing from China and expiry of the oil facility underscores challenging relations between two Islamic nations.

Pakistan was paying 3.2% interest on Saudi Arabia loan. It has now arranged $1 billion loan from State Administration Foreign Exchange (SAFE) of China at London Interbank Offered Rate (LIBOR) plus 1%, which at current rates comes to around 1.18% due to near zero interest rates in the world.

The Saudi oil facility that had been secured after hectic backdoor lobbying with the royal family remained underutilised in the last fiscal year. The $769 million deferred payment facility on supply of oil was availed from Saudi government, according to the spokesman of the Petroleum Division.

The Saudi facility faced roadblocks since the beginning. Initially, both the countries had a plan to make the facility operational from January 2019. But it actually became operational from July last year.

The United Arab Emirates (UAE) had also announced a $6.2 billion package for Pakistan in December 2018, including $3.2 billion oil facility. But later on, the UAE reduced its financial assistance to $2 billion and also shelved the plan to give $3.2 billion oil facility on deferred payments.

The UAE and Saudi Arabian oil credit facilities were part of the $14.5-billion package agreed with three friendly countries, including China. After coming into power, the Pakistan Tehreek-e-Insaf (PTI) government faced an immediate challenge of filling a $12 billion hole, which the Pakistan Muslim League-Nawaz (PML-N) government had left behind due to a widening current account deficit.

Under the Saudi agreement, the Pak-Arab Refinery Company (Parco) and the National Refinery Limited (NRL) were required to procure crude oil from Saudi Aramco Product Trading Company. Similarly, Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) were supposed to procure petroleum products and LNG from the Saudi company, respectively.

The two countries inked a financing agreement for the import of petroleum products, crude oil and LNG on February 17, 2019 during the Saudi crown prince’s Islamabad visit.

Pakistan faces challenging situation at a time when its IMF programme also remains technically suspended for the last five months. Returning of Saudi loans and expiry of the oil facility could strain the official reserves of the central bank, which are built purely by taking loans.

@Mangus Ortus Novem it's all coming together; like small pieces of puzzle. Interesting times ahead. If you recall, i kept saying keep an eye on GCC, the pressure will come from there to rescue India... and here it comes. Ladakh fiasco is going on from last two months... china making deal with Iran...and now Pakistan reacting.

Pakistan really needs to plan ahead; the incompetency of foreign office will be very fatal at this point in time.

This is Pakistan calling the Saudi bluff. The Saudis were able to present Pakistan with token investments and fake MOUs ... While they made the real investments in Hindutva India.

Past corrupt pakistani government were happy with such token Saudi 'investments' as it gave them them the news cover to fools the masses .

This government has just called the Saudi bluff....

 

[Dr. Strangelove]

I doubt, after Corona, a huge manpower already returned. Now major chunk of remittances come from Europe and North America.

That is a Momentary Phenomenon due to Covid as soon as its over they will go back and bulk of Paksitanis living in GCC are still there only those who could afford to live there without work have come back. Most of You are Ignoring the Elephant in he Room 10 billion Dollars that we get in Remittances from Gulf wont be replaced by some other nation and even if they are how are we going to provide Millions of People with Livelihood when we have an Unemployment crisis going on inside Pakistan. People will throw the GOP out if something like this happens.

Lets be realistic and dont blow things out of Proportion SMQs remarks were intended to send a message of displeasure from the Pakistani Side. Right now Both Saudis and Pakistanis are trying to put each other in pressure to get what they want we have to wait to see who blinks first nothing dramatic is going to happen. Relations between Nations arnt something that could be Reset in a heartbeat.