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Pakistan, Saudi Arabia co-operate

on advancing infrastructure

INVESTMENT IN a recent meeting at the Tashkent International As of 2020, bilateral trade between Islamabad
Investment Forum in Uzbekistan, Pakistani and and Riyadh stood at just under $2.2bn, although
Saudi officials met to discuss long-anticipated fields including agriculture, renewable energy
investment proposals by the Middle Eastern investment and petrochemical production
country into Pakistan’s oil infrastructure, in are now thought to be likely areas for renewed
addition to other areas. The discussions came as Saudi investment. The BOI’s chairman, Azfar
economic ties between the two countries con- Ashan, has since indicated that measures are
tinue to improve. now underway within Pakistan to permit such
Working under the umbrella of the National investments.
Companies Promotion Program (NCPP), Saudi “Saudi Arabia and Pakistan are historically
Minister for Investment, Khalid Al-Falih and close allies, and Riyadh’s investment comes to
Pakistan’s Board of Investment (BOI) chair, make Pakistan’s economic development stable
and Minister of State, Azfar Ashan discussed and strong,” said Saudi Elite Group’s president,
a range of investment opportunities. The BOI Mohammed Alhamed, in comments to the
announced to media later that it “was agreed that US-based newspaper Al-Monitor.
shovel-ready projects, including the expansion “The Saudi investments in Pakistan today are
project of Pakistan Refinery, will be evaluated by an example of a power, security and economic
the Saudi government”. partnership which will lead to shared prosperity,
Dating to the early 1960s, the Pakistan Refin- regional stability and mutual respect based on
ery in Karachi has remained largely unchanged long-term investment, strategic and social ties,”
in the decades since. Alhamed added.
Back in 2019, eyeing investment in Pakistan, In part the result of years of regional tensions,
the Saudi government initially released plans however, Saudi-Pakistan ties since the turn of the
aimed at the construction of a $10bn refin- century have been strained, not least because
ery near the port of Gwadar in the disputed of Riyadh’s $27bn bilateral trade balance with
Balochistan region in the south-west of the neighbouring India.
country. No official reasoning was given for a This has led one researcher at the Center for
later de-facto suspension of the project, although Applied Research in Partnership with the Ori-
one report by state-owned Saudi Aramco high- ent in Bonn, Germany, Sebastian Sons, to tell
lighted the costs required to build a connecting Al-Monitor that “the current thaw in relations
600-km pipeline to Pakistan’s largest city, Kara- between Saudi Arabia and Pakistan is based
chi, as a significant obstacle to the plans moving on the general calculation of the kingdom to
ahead. promote closer co-operation with regional
As a result of the Tashkent talks, though, it is partners amid rising tensions with the United
now understood that Pakistan will receive help States. Against this backdrop, Pakistan still
on a smaller scale across multiple areas of infra- serves as a key partner, traditional ally and a
structure development as part of widespread potential security provider in times of regional
advancements to the country’s energy sector and stability.”
related industries. As Sons says, this means the Saudi govern-
Work on the ageing Pakistan Refinery is just ment needs to “follow a balancing act in order to
one project being highlighted alongside recipro- preserve close ties with both India and Pakistan.
cal deals allowing investors from Saudi to enjoy In this regard, the current investments need to
incentives in yet to be revealed economic zones. be considered as part of the balancing efforts.”™

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