Newly elected PM Shahbaz Sharif made his first foreign visit to Saudi Arabia which was spread over three days. Relations with Saudi Arabia are important for Pakistan because the kingdom hosts some 2.7 million Pakistanis, more than any other country. Remittances from expat workers to Pakistan are projected to reach $32 billion this year. What is more, Pakistan eyes investments from Saudi Arabia.
Shahbaz Sharif’s visit was aimed at renewing the bonds that weakened under the PTI government due to, among other things, former foreign minister Qureshi’s impolitic remarks regarding creating an alliance other than OIC. Ironically, a day earlier Turkish President Erdogan too had concluded a two day visit to the kingdom to mend frayed ties with the Saudi government.
In a joint statement Pakistan and Saudi Arabia agreed to continue exchanging support and coordination in international organisations and forums. Regarding the Kashmir issue, Saudi Arabia welcomed the statements of Pakistan showing keenness to find a solution to all disputes with India, including the Jammu and Kashmir dispute. The joint statement stressed the importance of dialogue between Pakistan and India to resolve the outstanding issues to ensure peace and stability in the region. On its part Islamabad appreciated the continued strong support of the Kingdom to Pakistan.
There were no dramatic announcements of financial support by Saudi Arabia. The Saudi government however agreed to discuss extending the term of $3bn loan. It also affirmed its continuous support to Pakistan and its economy, including a discussion of augmenting $3bn deposit with the central bank through term extension or otherwise, exploring options to further enhance the financing of petroleum products and supporting the economic structural reforms for the benefit of Pakistan and its people.
Hopefully the discussions on Pakistan’s requirements will start apace. There is however a need on the part of the allied government to realize that the county’s economy cannot be run on loans for long. It is time the government concentrated on activating and expanding the CPEC export zones. There is also a need to further improve the ease of doing business and create a large pool of skilled manpower to encourage investments not only from the Gulf but also from the US and EU. Unless Pakistan turns into a big exporter of high value goods and services there would be no end to its economic woes.
