Saudi Arabia has pledged a substantial $25 billion investment in Pakistan over the next two to five years, as announced by interim Prime Minister Anwaar ul Haq Kakar during a press conference on Monday.
Prime Minister Kakar laid out the country’s ambitious plans to channel these funds into key sectors, including mining, agriculture, and information technology. Pakistan is currently grappling with financial challenges, and this initiative is aimed at attracting more Foreign Direct Investment (FDI).
If realized, this investment would mark Saudi Arabia’s most significant financial commitment to Pakistan. The urgency for additional funds during the current fiscal year is driven by Pakistan’s pressing need to address trade imbalances and meet international loan obligations.
While specific projects were not disclosed during the conference, there have been indications of interest from Barrick Gold Corp in collaborating with the Saudi Arabian wealth fund on the Reko Diq mine in Pakistan.
Prime Minister Kakar emphasized the significance of Pakistan’s untapped mineral resources, conservatively estimating their total worth at $6 trillion. Additionally, the government aims to fast-track two privatization agreements within the next six months, including state-owned entities in the power sector, with plans to divest another unrelated business.
Selling state assets is a politically sensitive matter, and previous elected governments in Pakistan have often been cautious about pursuing such initiatives, which has hindered privatization efforts in the past.
Under the stewardship of a caretaker administration, Pakistan is striving to achieve economic recovery after securing a $3 billion loan plan from the International Monetary Fund in July, averting a potential sovereign debt default. With a widening trade deficit and mounting debt, Islamabad faces a pressing balance of payments crisis and requires immediate access to substantial financial resources.