The Political Economy of Mutual Defense Pacts

Introduction

Mutual defense pacts, formal agreements where signatories pledge to treat an attack on one as an attack on both, represent a cornerstone of international relations, blending security imperatives with economic incentives. These alliances often emerge in contexts of geopolitical uncertainty, and the political economy of such pacts examines how power asymmetries, resource exchanges, and trade dynamics shape their formation, sustainability, and outcomes.

Referenced is the mutual defense pact signed between Saudi Arabia and Pakistan on September 17, 2025, which formalizes decades of security cooperation amid rising Middle Eastern tensions.

This agreement, akin to NATO's Article 5, commits both nations to joint deterrence against aggression, generating asymmetric dynamics where a populous, poorer state (Pakistan) provides military muscle to a wealthier, less populated partner (Saudi Arabia).

Asymmetric Alliances in Context

Mutual defense pacts have historically served as tools for aggregating capabilities against common threats, sometimes in asymmetric configurations where partners differ in military strength, population, and wealth.

However, the Saudi-Pakistan reality inverts the usual pattern: Pakistan, with its large standing army (over 650,000 active personnel) and nuclear arsenal, assumes the protector role for Saudi Arabia's oil-rich but demographically limited kingdom (population ~36 million vs. Pakistan's ~240 million).

A closer regional parallel is the Central Treaty Organization (CENTO), or Baghdad Pact (1955–1979), which included Pakistan, Iran, Iraq, Turkey, and the United Kingdom. Designed to counter Soviet influence in the Middle East, CENTO featured asymmetries similar to the current pact. However, CENTO's dissolution amid the Iranian Revolution underscores risks in such pacts, including domestic instability and shifting alliances.

Historical precedents like the Rio Pact (1947), a hemispheric mutual defense treaty among American states, has been shown to correlate with 20–30% higher bilateral trade volumes.

Other cases highlight a recurring pattern: Wealthy but vulnerable actors outsource security to manpower-rich partners, a dynamic evident in Pakistan's historical deployments to Saudi Arabia during the Gulf War (1990–1991) and Yemen conflict (2015–present).

Political Dynamics in Mutual Defense Pacts

In asymmetric alliances, stronger powers (militarily or economically) may use side payments—such as aid or investments—to secure commitments from weaker allies, reducing the risk of abandonment or entrapment.

Entrapment, where one ally is drawn into unwanted conflicts by the other, is a key risk; for example, in the U.S.-Japan treaty, Japan fears entanglement in U.S.-China disputes.

Applied to the Saudi-Pakistan pact, political dynamics revolve around hedging against Iran and India. Saudi Arabia gains from Pakistan's battle-hardened forces, signaling a shift from U.S. dependency amid perceived American retrenchment.

As in CENTO, this could foster a "joint deterrence" model, but without multilateral oversight, risking escalation.

Political Outcomes of the Pact for Pakistan

While generally positive, especially if the pact is carried out in spirit, possible negative outcomes should not be dismissed:

• The U.S. should not be left out of the emerging equation: Americans have the power and the influence to make this into an ineffective 'rump' agreement. Instead of a true partnership, Pakistan would be on the hook and Saudi Arabia can make it as transactional (read 'nickel and dime') as possible.
• While the public (especially in Pakistan) may see this as an anti-Israel alliance for the 'Ummah', this may not be the case as Saudi Arabia may harbour long-term peace plans with Israel.
• India is not going to sit idly by and, apart from any clandestine efforts to undermine, will be under some pressure: India is a significant trade partner with Saudi Arabia and other GCC countries. Having Saudis in Pakistan's corner, even if on paper, would be a deterrent against Indian aggressive designs against Pakistan.
• Broader implications include straining Pakistan-Iran relations and complicating Israel's anti-Iran coalitions. Potential use of Russian and Chinese early-warning and precision anti-missile systems.
• The situation of human rights and political freedom in Pakistan will worsen, with the military playing an outsized role, and the electorate in awe of the military as the 'Defender of the Two Holy Mosques'.

Asymmetric Economic Dynamics

Economically, defense pacts often promote trade interdependence and resource transfers, according to 'economic theories of alliances,' which posit that alliances optimize defense burdens through burden-sharing and side payments. See bibliography (below) for an interesting selection of these theories.

The Saudi-Pakistan pact exemplifies how a populous, poorer "mercenary" state protects a rich, less populated partner: Pakistan leverages its demographic advantage (large recruitable population) and nuclear capabilities for Saudi's defense, in return for economic stabilization.

No Pakistani bases in Saudi Arabia have been announced, but joint exercises and forward deployments are likely, requiring personnel to operate advanced systems such as anti-drone systems, fighter jets, and hybrid munitions for hybrid threats.

Historically, similar dynamics in CENTO provided Pakistan with U.S. aid, boosting growth but fostering dependency. Risks include over-reliance on Saudi funds, mirroring how Warsaw Pact economies stagnated under Soviet dominance.

Conclusion

The Saudi-Pakistan mutual defense pact, while innovative in its inversion of traditional asymmetries, aligns with historical patterns in NATO, CENTO, and other alliances where security pacts intertwine deterrence with economic gains.

Political dynamics emphasize balancing against rivals like Iran and India, while economic ones highlight trade boosts and side payments that could stabilize Pakistan's economy without immediate basing commitments. However, as seen in dissolved pacts like CENTO, sustainability depends on managing entrapment and external pressures. Future studies will show how this agreement influenced regional stability, and how important it was in reshaping the general area of political economy of alliances in a multipolar world.

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