Good news was in the offing on the Prime Minister’s recent visit to the Kingdom of Saudi Arabia. Mr Shehbaz Sharif was on a personal visit to the Gulf country as he was performing the Umrah pilgrimage in the month of Ramzan. But the spiritual visit turned into a working on when the PM, still clad in his ihram, met with Saudi Crown Prince Muhammad bin Salman.
During the meeting, the two leaders agreed to expedite the first wave of a planned $5 billion Saudi investment package for Pakistan. While such statements are quite run of the mill normally, with the government regularly promising such investment is coming any time, what makes this different is that the two countries issued a joint statement on the issue.
A joint statement from both countries is an important indication that Saudi Arabia is serious about the proposed investment. In January last year, the crown prince had directed the Saudi Development Fund (SDF) to study increasing the deposit amount in the State of Bank of Pakistan (SBP) to $5bn.
Later on there was also news that the Saudis were planning on investing a mammoth $25 billion in Pakistan in different projects. Many thought that the Saudis were going to be using the Special Investment Facilitation Council (SIFC) as its avenue of this investment. As per the initial moves of the SIFC, the investment was expected to come towards either the agricultural sector or towards mining and natural resources in Pakistan. Corporate farming and mining, particularly in newly discovered regions, have been a focal point of the council’s methodology.
One must consider this a success. In the past few years, it had seemed that even friendly countries like Saudi Arabia were losing patience in investing in Pakistan. The joint statement and the nod from the Crown Prince indicates that the SIFC might have restored some of this confidence since the council is supposed to guarantee stable policies and a stable platform in the absence of political stability.
For now, the news of KSA putting money up to bolster Pakistan’s reserves is good. It means that in addition to the IMF’s money, this will give Pakistan coverage for some time. In this time, however, the government must not get lax at all and instead focus on fostering this investment and fixing the economy’s systemic issues.
