Pakistan is poised to sign agreements worth approximately $2 billion with a Saudi delegation later this month, as announced by Prime Minister Shehbaz Sharif on Tuesday. The Saudi delegation, led by Minister for Investment Khalid Bin Abdulaziz Al-Falih, is scheduled to visit Pakistan from October 9 to 11, ahead of the Shanghai Cooperation Organisation (SCO) meeting hosted by Pakistan on October 15-16. This visit is expected to include representatives from both government and private sectors, indicating a significant expansion of economic ties between Pakistan and Saudi Arabia.
Positive Economic Developments
During a federal cabinet meeting, Prime Minister Sharif highlighted several encouraging developments, particularly the role of China, the UAE, and Saudi Arabia in helping Pakistan secure the International Monetary Fund (IMF) program by providing timely financing assurances. He noted that the recent visit from the Malaysian Prime Minister was also productive, contributing to the strengthening of diplomatic and economic relationships.
Sharif also addressed the recent clashes involving the Pakistan Tehreek-e-Insaf (PTI) party and law enforcement in Islamabad, suggesting that such unrest was aimed at gaining attention as the country’s economic situation begins to improve. He emphasized that the country is witnessing the initiation of its homegrown growth program, which he claimed is being undermined by these disruptions.
Saudi Arabia’s Financial Support
In August, Pakistan had requested Saudi Arabia to increase its lending by approximately $1.5 billion from its existing $5 billion portfolio to help bridge the external financing gap necessary for the IMF’s 37-month bailout package. In response, Saudi Arabia, along with China and the UAE, confirmed to the IMF their commitment to rollover $12 billion in loans to Pakistan.
Economic Impact of Unrest
During a televised address, Finance Minister Muhammed Aurangzeb discussed the negative economic implications of the recent PTI clashes and a terrorist attack in Karachi, which resulted in the tragic loss of two Chinese nationals. Aurangzeb stated that the unrest has caused considerable harm to the economy, estimating a loss of Rs190 billion per day due to disruptions, including impacts on GDP, business activities, and information technology sectors.
He stressed the importance of stability for economic growth and urged the public to engage in constructive dialogue rather than protests that could harm the economy. Aurangzeb expressed condolences to the families of the victims of the Karachi attack and highlighted the significance of cooperation with Chinese investors who have been instrumental in supporting Pakistan’s energy sector.
Conclusion
As Pakistan prepares for the upcoming Saudi delegation visit and the SCO meeting, the government faces the dual challenge of fostering economic partnerships while managing internal unrest. The impending agreements with Saudi Arabia could provide much-needed financial support, but stability and cooperation are crucial for the country’s economic recovery and growth.
