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October 23, 2019
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Pakistan to get $32bn in loans, investment from Saudi Arabia, UAE: WSJ

ISLAMABAD: The PTI-led government has turned to the Arab Gulf nations to help keep the economy of the country afloat, Wall Street Journal reported.

According to the newspaper, Pakistan is expected to get roughly 32 billion dollars in loans and investment from the two Gulf countries.

The report said that Saudi Arabia and the United Arab Emirates have offered Pakistan over $30 billion in loans and investments.

Saudi Crown Prince Mohammed bin Salman will be visiting Pakistan in February to sign off on the kingdom’s deals.

The new government sees the Saudi investment plan as a sign that Khan’s pledge to “open Pakistan for business” is working.

“This is our first major breakthrough,” said Haroon Sharif, Pakistan’s investment minister. “Saudi Arabia is taking a long-term strategic economic position here,” he added.

The plan includes a $10 billion Saudi investment to build an oil refinery and petrochemicals complex.

Also in the mix is Qatar, which is looking to build on its liquefied natural gas sales to Pakistan and also make investments. Saudi Arabia and the UAE have sought to isolate Qatar—but Khan accepted an invitation to visit the Gulf nation, meeting the ruler in Doha on Tuesday, a trip that could rile Riyadh and potentially fuel the bidding for Pakistani’s favours.

Pakistan had long relied on its alliance with the US to help keep its economy afloat; when that relationship soured in recent years, Khan’s predecessor turned to China, signing on to a massive infrastructure plan that critics say was too expensive, with projects picked for political reasons.

Khan’s government says it wants China to set up factories in Pakistan rather than build more infrastructure.

Now, Khan is turning to Gulf nations as key benefactors. He was one of the few high-profile international leaders to attend an investment summit called by the Saudi crown prince in October when others shunned the event over the killing of Saudi journalist Jamal Khashoggi.

Pakistan has close ties to Saudi Arabia and the UAE, but hasn’t previously received financial support on the scale now being promised. A $20 billion investment package from Saudi Arabia would roughly match what China has already spent in Pakistan in its current infrastructure drive, though China’s programme amounts to up to $62 billion altogether. Separately, the UAE is also working on a multi-billion refinery investment plan, according to UAE and Pakistani officials.

In addition, Saudi Arabia and the UAE are set to provide immediate loans to Pakistan of up to $12 billion, Pakistani officials say. Islamabad says there are no hidden geopolitical costs to the Saudi splurge. Pakistan has helped bring these two Gulf nations, which are also close US partners, into the peace process underway for Afghanistan. In recent years, Pakistan increased its soldiers stationed in Saudi Arabia, for training local forces and bolstering defences.