PM in Saudi Arabia

The discussion centred around investment

Prime Minister Shehbaz Sharif’s visit to Saudi Arabia was his first foreign visit after taking office at the beginning of last month. It was perhaps only fitting, for though Pakistan’s relations with Saudi Arabia are based on the religious affinity created by Pakistan being the second-most populous Muslim state and Saudi Arabia being home to the two most sacred sites of Islam, Makkah and Madinah, there is much more to the relationship. There is a very strong security dimension as well, because of the number of Pakistani armed forces personnel who are serving in the Saudi armed forces. There is an important economic dimension as well, for apart from a large number of Pakistani workers there, Saudi Arabia has been crucial in ensuring that Pakistan does not default, depositing $3 billion with the State Bank of Pakistan, Saudi Arabia has made the deposit on condition that the IMF give Pakistan a package.

Mr Sharif held talks in Makkah with Saudi Crown Prince and Prime Minister Muhammad Bin Salman, and the talks centred around economics, for among other things, the two agreed to expedite the $5 billion investment package from the Kingdom, supposed to centre around increased trade and commerce. However, there are other agreements where the Saudi government will be more deeply involved. For a start, there is the decision to enhance the Saudi deposit with the State Bank to Rs 5 billion, a $2 billion increase which will play a key role in Pakistan’s getting a fresh package from the IMF. Then there were further talks about Saudi Arabia investing $21 billion in an oil refinery and $7 billion in copper mines.

Clearly, the oil refinery would operate on Saudi oil, and the products would be shipped to China through CPEC, thus providing China the energy security it is seeking. The Riko Diq project is another Saudi target, or rather a share in it, with the SIFC mechanism playing a crucial getting Saudi Arabia to commit to the investment. Though Mr Sharif had gone with the primary target of obtaining the spiritual benefit of umrah during Ramadan, which is supposed to equal that of the Hajj itself, the visit has also brought tangible benefits. Apart from the bilateral relationship, Pakistan also expressed its support for the Saudi stance on the Palestine issue, which remains one of the need to establish a Palestinian state with East Jerusalem as its capital.

The Editorial Department of Pakistan Today can be contacted at: [email protected].


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