Misplaced optimism.

PAKISTAN can take comfort in the decision taken by Iran and Saudi Arabia, after mediation by China, to restore diplomatic ties. Pakistan has long been struggling to maintain a balance in its ties with the two states, although it has always maintained a clear tilt towards Riyadh because of its constant financial and political support. Pakistan has not fully exploited the potential of its economic and trade engagement with Iran evidently on the pretext of factors concerning Saudi Arabia and the US.

It is too early to predict whether the restoration of Saudi-Iranian ties will put an end to their politico-ideological rivalry; it is also too simplistic to assume that it will resolve sectarian tensions in Pakistan, which have largely been abetted by the Saudis and Iranians in the past.

Many in Islamabad also describe the development as a game changer for Pakistan based on the perception that normalcy between the two archrivals in the Middle East will ease some economic difficulties. Pakistan needs to review its relationship with both countries; it may discover that the restoration of diplomatic ties between Iran and Saudi Arabia cannot change much for Pakistan as the problem lies in its own (bilateral) relations with each of the two countries.

Some optimistic analysts in the Middle East and China have portrayed the development as a major shift in the global and regional political landscape and have hinted at the formation of a new power bloc. Others see this as part of the larger Saudi effort to diversify its strategic, economic and political options, change its global image, and decrease dependency on traditional strategic allies, including Pakistan, which maintain a position of neutrality when it needs help. Saudi Crown Prince Mohammed bin Salman, who is the architect of the ongoing transformation of the ideological state, may have learned this 'lesson' when Pakistan decided to stay neutral during the Yemen war.

The Saudi-Iran peace deal may not change things for Pakistan.

Iran is also looking for avenues to reduce international pressure and expanding economic cooperation with the Gulf states. It faces constant impediments in expanding ties with its neighbours, including Pakistan and Afghanistan which limits it potential to build a solid export base.

Pakistan needs to realise that Saudi Arabia broke off relations with Iran in 2016, while Pakistan already had a problematic relationship with it. It never capitalised on the economic cooperation...