DUBAI: A record investment package being prepared by Saudi Arabia for Pakistan will likely provide welcome relief for its ‘cash-strapped’ brother country, while also addressing regional geopolitical challenges, analysts say.
At the heart of the investment is a reported $10 billion refinery and oil complex in the strategic Gwadar port on the Arabian Sea, the ultimate destination for the massive multibillion-dollar China Pakistan Economic Corridor (CPEC), which lies not far from the Indo-Iranian port of Chabahar.
Two Saudi sources have confirmed that heir apparent to the Gulf kingdom’s throne, Crown Prince Mohammed bin Salman, will visit Islamabad shortly, without giving a date.
And a number of major investment deals are expected to be signed during a visit, officials from both countries have told media.
Riyadh and Islamabad, decades-old allies, have been involved for months in talks to hammer out details of the deals in time for the high-profile visit.
“The outcome of the talks so far has been very positive and this is going to be one of the biggest-ever Saudi investments in Pakistan,” a senior finance ministry official said.
“We hope that an agreement to this effect will be signed during the upcoming visit of the Saudi crown prince to Pakistan,” said the official, requesting anonymity.
The Wall Street Journal reported last month that both Saudi Arabia and the United Arab Emirates (UAE), Islamabad’s biggest trading partner in the Middle East, have offered Prime Minister Imran Khan some $30 billion in investment and loans.
Riyadh investments are expected to provide a lifeline for Pakistan’s slumping economy which was downgraded in early February by S&P ratings agency from a B to a B-, Saudi economist Fadhl al Bouenain said.
“Saudi investment to Pakistan comes within an economic aid package aimed at relieving the stress of external debt and a shortage of foreign currency, besides boosting the sluggish economy,” Bouenain said.
The OPEC heavyweight also aims to achieve strategic and commercial goals with investments in infrastructure and refinery projects, he said. Saudi Arabia and its Gulf partner, the UAE, have already deposited $3 billion each in the State Bank of Pakistan (SBP) to help resolve a balance of payments crisis and shore up its declining rupee. —Agencies