Saudi Arabia has pledged a substantial investment of up to $25 billion in Pakistan over the next two to five years, according to caretaker Prime Minister Anwaarul Haq Kakar. The investment will be directed towards sectors such as mining, agriculture, and information technology, with the aim of boosting foreign direct investment in Pakistan.
This significant investment comes as Pakistan faces an economic recovery challenge under its caretaker government. In July, Pakistan was able to avoid a sovereign debt default through a $3 billion loan program approved by the International Monetary Fund (IMF).
While the specifics of the investment projects were not disclosed by Prime Minister Kakar, there are indications that Saudi Arabia’s wealth fund could participate as a partner in Pakistan’s Reko Diq gold and copper mine, owned by Barrick Gold Corp.
Pakistan holds significant untapped mineral deposits valued at approximately $6 trillion, according to Kakar. The investment from Saudi Arabia is expected to aid Pakistan in its balance of payments crisis, financing its trade deficit, and repaying international debts in the current financial year.
Furthermore, Kakar’s government plans to revive the privatisation process, focusing on the power sector entities in the next six months. Additionally, they aim to privatise a government-owned enterprise outside the energy sector. The privatisation of state-owned enterprises has been a long-standing concern in Pakistan, as it adds financial stress to the country. Notably, struggling state-run Pakistan International Airlines has been added to the privatisation list once again.
This substantial investment from Saudi Arabia in Pakistan’s various sectors not only demonstrates continued bilateral ties between the two countries but also offers significant opportunities for economic growth and development in Pakistan.