The Saudi Arabia-Pakistan Strategic Mutual Defence Agreement

Addressing renewed Saudi security concerns and creating economic opportunities for both nations

Written by Anais Brakha, BSc International Social and Public Policy

Last month, Saudi Arabia and Pakistan concluded a mutual defence pact at Riyadh's Yamama Palace. The agreement followed a period of heightened regional tension after Israel’s strike on Qatar and renewed doubts about the reliability of USA security guarantees in the Gulf. The pact affirms that an attack on either state will be treated as an act of aggression against both; representing an attempt by both governments to consolidate long-standing cooperation that ranges from military training to labour migration. For Pakistan, the deal offers a channel for additional economic support and access to Saudi investment; for Saudi Arabia, it strengthens ties with a long-standing military partner that supplies skilled and semi-skilled labour to the Kingdom.

Strengthening Saudi and Pakistani economic ties

Saudi Arabia has been one of Pakistan’s consistent political and financial partners, but its investment record in the country remains limited in implementation. The 20 billion refinery project announced in 2019 ① has not proceeded to construction, and several of the 34 memoranda ② of understanding valued at $2.8 billion signed in 2023 have not yet reached the operational stage. Frequent changes in policy direction and recurring financial stress have made investors cautious about Pakistan’s ability to deliver stable conditions for large projects.

Under the new framework, an 18-member economic committee ③ will manage coordination between Saudi and Pakistani agencies, particularly in the fields of energy, mining, and infrastructure. The initiative coincides with Riyadh’s effort to institutionalise investment decisions under Vision 2030 and Islamabad’s broader ④ campaign to restore confidence among international lenders and investors.

Remittances and Pakistan’s Dependence on the Kingdom

How efficiently the new framework operates will determine its real value. Past projects have struggled to progress from signing to execution due to slow administrative approvals in Pakistan; therefore, the new committee must demonstrate that it can coordinate across ministries and maintain momentum long enough for projects to reach implementation.

Nearly 2.6 million Pakistanis live and work in Saudi Arabia ⑤, making up the largest expatriate community in the Kingdom and the single greatest source of remittance ⑥ inflows into Pakistan. Remittances from Saudi Arabia rose from $7.39 billion in 2020 to $8.59 billion in 2024 according to Pakistan, accounting for roughly a quarter of total inflows. This expansion is linked to the surge in construction demand generated by Vision 2030 which has created large demand for semi-skilled labour.

Saudi Arabia recalibrating alliances

The defence pact with Pakistan marks another step in Saudi Arabia’s quiet effort to recalibrate its alliances. The Kingdom has grown cautious about relying too heavily on any single partner, choosing instead to spread its bets across a wider field.

Saudi Arabia has always played a long game with its allies, but the past few years have forced an adjustment. The United States remains central to the Kingdom’s defence architecture, yet USA tolerance of Israel’s regional assertiveness, coupled with its own domestic distractions, has prompted a change. The attack on Qatar in September revealed how fragile the Gulf’s old security assumptions had become. Saudi Arabia’s response aims to broaden ties with partners it already relies on economically.

The financial side of the Saudi-Pakistan relationship remains central to its durability. In

February 2025, Riyadh renewed a $1.2 billion deferred oil payment ⑦ facility that releases around $100 million per month until early 2026, providing Pakistan with short-term relief for its foreign exchange reserves. At the same time, discussions are underway for the rollover of $5 billion in Saudi deposits: $2 billion maturing in December 2025 and another $3 billion in mid-2026. Together, these measures have again placed Saudi liquidity at the centre of Pakistan’s economic stability. This support gives Riyadh quiet influence over Pakistan’s financial policy and its external alignments, while reinforcing its position in the region.

The policy fits within Vision 2030’s emphasis on strategic investment abroad. By supporting governments facing economic pressure, Saudi Arabia strengthens its political ties and regional influence.  Saudi investment in financially distressed states has become a consistent means of shaping regional politics. The defence pact gives this method a clearer institutional form, allowing economic dependency to be managed as part of a planned foreign policy.

The labour connection between the two states gives this partnership social depth. 2.6 million Pakistanis live and work in the Kingdom, remitting billions of dollars that sustain Pakistan’s foreign reserves. That dependence cuts both ways. For Saudi Arabia, migrant labour has long been the invisible infrastructure beneath its growth model. Yet the demand for foreign labour will not last indefinitely.

Automation, localisation, and the gradual professionalisation of Saudi industries will eventually narrow the space for large expatriate populations. But in the meantime, Vision 2030’s construction boom and the 2034 World Cup have created a window of intense need. Pakistan is seeking to fill it through skill-verification programmes and vocational partnerships, hoping to maintain relevance before that window closes. For Saudi policymakers, the arrangement achieves two strategic aims: maintaining control over labour flows essential to domestic development and ensuring that Pakistan’s financial health remains closely connected to Saudi choices.

The agreement also broadens Saudi Arabia’s strategic options in ways that have received little attention. Pakistan’s military experience, including its capabilities in counterinsurgency and nuclear deterrence, gives Saudi Arabia access to expertise and potential support without requiring direct involvement. This partnership functions as a form of indirect deterrence, signalling to rivals that Saudi Arabia can draw on capable partners beyond its immediate region.

It is important to note that Pakistan’s goal in signing this agreement is not mainly to secure additional defence guarantees. While tensions with India continue to shape its security outlook, Pakistan does not see the pact as a tool for direct military support. Instead, it is using the partnership to turn its strategic and military value into economic benefits, attracting investment, increasing labour opportunities, and deepening financial ties with Saudi Arabia.

Financial leverage as strategic influence in Pakistan

Talk of a possible “nuclear umbrella” remains speculative, but the political message itself is significant. In a regional environment shaped by Israeli military assertiveness, Iranian missile development, and uncertainty about USA commitments, an alignment with a nuclear-armed state sends a clear signal of deterrence, even without any formal arrangement. It also shows that Saudi Arabia is moving beyond reliance on Western security guarantees and is instead building a wider network of strategic relationships.

The partnership also serves a domestic goal. Crown Prince Mohammed bin Salman has aimed to present Saudi Arabia as an independent and self-reliant actor. Cooperation with Pakistan helps to support that image without damaging relations with the United States. The deliberate ambiguity of the pact focuses on defence but is not explicitly confrontational.

Beyond labour and security, the agreement also reflects Saudi Arabia’s economic priorities. Pakistan gives Saudi Arabia opportunities to invest in sectors that support its diversification agenda. Access to mineral resources such as copper and rare earth elements is increasingly important for Saudi industries, particularly those linked to electric vehicles and renewable energy. The inclusion of cooperation on mining, energy, and infrastructure shows that Saudi Arabia is planning for future supply needs as part of its industrial strategy.

For Pakistan, this creates the possibility of attracting significant investment at a time when many Western investors remain cautious. But it also means that Saudi Arabia gains influence over Pakistan’s regulatory and industrial decisions. Placing these investment plans within a defence agreement increases their political weight, ensuring they are treated as strategic rather than purely commercial.

The agreement illustrates a broader approach to security in Saudi policy, where economic resilience and strategic partnerships are treated as core components of national stability. Deepening ties with Pakistan is part of an effort to create structures of interdependence that strengthen Saudi Arabia’s position in a volatile region.

If Pakistan’s fiscal survival depends on Saudi financing while Saudi development projects draw heavily on Pakistani labour, both states have an interest in preserving the arrangement. Yet this interdependence is structurally imbalanced. Pakistan’s dependence exposes it to external pressure in ways that Saudi Arabia’s does not; labour supply can be diversified or replaced, but access to large-scale financial support cannot.

The agreement’s real significance lies in how it links economic leverage to regional security concerns. Saudi Arabia can now shape Pakistan’s policies through sustained financial support and labour demand while also signalling to the USA and Israel that it has alternative partnerships in place. In a volatile environment, where external guarantees cannot be assumed, this approach offers Riyadh a degree of strategic flexibility. Any stability achieved under these conditions will reflect priorities set in Saudi Arabia. 

Sources

① « Saudi Arabia signs $20bn in deals with Pakistan », The BBC, 18 February 2019.

② « MoUs signed with Pakistan increased to 34, says Saudi investment minister », Dawn.com, 30 October 2024.

③ Sanaullah Khan, « Pakistan forms 18-member committee for economic engagements, negotiations with Saudi Arabia », Dawn.com, 6 October 2025.

④ « Pakistan's skilled labour can support Saudi Vision 2030: Finance minister », Tribune, 16 February 2025.

⑤ Waseem Abbasi, « Pakistan plans to double manpower exports to Saudi Arabia », Arab News, 6 October 2025.

⑥ Ismail Dilawar, « Saudi Arabia leads Pakistan’s August worker remittances as inflows hit $3.1 billion », Arab News, 8 September 2025.

⑦ Saima Shabbir, « Saudi Arabia agrees to defer Pakistan’s $1.2 billion oil payment », Arab News, 3 February 2025.