Pakistan welcomes economic lifeline from Saudi

by admin | May 25, 2021 | Investing, Muslim World, Venture Capital

Islamabad : Pakistan hopes to apply oil to its stuttering economy in the form of a $20 billion investment pledged by the Saudi crown prince during his visit to the south Asian nation, where he was received with pomp and ceremony.

Mohamed Bin Salman’s entourage, which arrived on Sunday evening and left the following day, also vowed to act as a mediator between Pakistan and India.

Tensions between the neighbouring countries shot up last week when 40 Indian police officers in Kashmir were killed in an attack New Delhi laid on Islamabad’s doorstep.

Zahid Hussain, a writer and columnist for the respected newspaper “Dawn,” said Bin Salman’s visit opened another facet to Pakistan-Saudi relations, given their strong bilateral ties already date back over five decades. Indeed, Islamabad’s largest mosque was named after Saudi King Faisal, who financed its construction, Xinhua reported.

“It is the first time that the Saudis have made this kind of investment in Pakistan,” Hussain said, attributing the financial decision to Riyadh’s plan to diversify its economy in its so-called Saudi Vision 2030 project.

“This is not about just Pakistan, it’s about the region, with investments in other countries, like India,” he said.

Rasul Bakhsh Rais, professor of political science at the Lahore University of Management Sciences, also highlighted Salman’s diversification efforts.

“They want to invest in places they have not invested in before,” he said, adding that Beijing’s investment in the China-Pakistan Economic Corridor, which would give the Asian superpower access to deep-water ports on the Arabian Sea, helped prompt Riyadh to make its own investment.

Islamabad welcomed Saudi investments in its energy sectors, especially the $8-billion worth of funding for an oil refinery in the port city of Gwadar.

Pakistan’s economy has been struggling with a budget deficit of around 6.6 per cent of the gross domestic product, a trade deficit and declining foreign reserves, for which it has asked the International Monetary Fund for a loan of $12 billion, although it has not closed that deal due to disagreements with the fine print.

Hussain said there was a “rapport” between Pakistani Prime Minister Imran Khan and Bin Salman.

Khan treated Bin Salman with utmost respect in Pakistan.

His official airplane was escorted into the country by fighter jets and he was welcomed by huge billboards and posters emblazoned with his image.

In return, Bin Salman ordered the release of 2,107 Pakistani prisoners in Saudi Arabia, a gesture well received by Islamabad, given the often difficult conditions suffered by migrant workers in the oil-rich Gulf nation.

The ceremony for the crown prince stood in stark contrast to wider international condemnation Bin Salman has received for his alleged role in the murder of Saudi journalist Jamal Khashoggi in the kingdom’s consulate in Istanbul last year.

In fact, Bin Salman’s image as his country’s modernizer, which he has tried to establish abroad, was tarnished by the events and several international leaders boycotted Saudi Arabia’s business conference dubbed “Davos in the Desert.”

Khan, however, did attend.

—IANS