CONSIDERING the decades-old ties between Pakistan and Saudi Arabia, it is not surprising that Prime Minister Shehbaz Sharif chose to visit the kingdom as his first foreign destination since returning to power.
Along with visiting the holy cities for pilgrimage, Mr Sharif met Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler, in Makkah on Sunday. A variety of topics were discussed between the two leaders. Perhaps the most important points from the joint readout issued after the meeting were talk of “expediting” Saudi investment in Pakistan, and Riyadh’s desire to see “peace and stability” in the subcontinent.
The figure mentioned for Saudi investment, after the meeting, was $5bn. Earlier the Saudis had pledged to bring $25bn to Pakistan through the military-backed Special Investment Facilitation Council. It has not been specified where Riyadh will put its money, but it is said the Saudi funds could end up in mining, specifically the Reko Diq project, while the Arab state is also reportedly interested in other sectors. Meanwhile, “the importance of dialogue between Pakistan and India” was stressed during the meeting, indicating a possible Saudi role to facilitate de-escalation of tensions in South Asia.
Various figures for Saudi money have been cited several times, and talk of major investments goes back to the time of the PTI government. But other than bailouts and emergency deposits, little substantial investment has been made. Perhaps with a new government in power, these funds will start to materialise.
But whether it is the Saudis or someone else, if we want foreign countries to invest in Pakistan, three things are essential: political stability, security guarantees, and continuity of economic policies. Unless there is continuity and consonance on all these fronts, few will be willing to put their funds into Pakistani projects.
The potential for investment in several sectors is considerable; the issue is that the state has to address the barriers that stand in the way of attracting foreign investment, and create a pro-business environment, minus the red tape and corruption.
Also, if foreign players invest in Pakistan, they will not be looking to dole out charity. They will come to make money, which is why profit repatriation must be smooth to ensure continued foreign investment. A few billion dollars will hardly turn around our economy.
What is needed is long-term thinking by all stakeholders to help Pakistan break the shackles of dependence, and realise its economic potential. As for Saudi mediation in our dispute with India, this should also be seen in the context of geo-economics.
Riyadh is eyeing a $100bn investment plan in India, and wants peace in the neighbourhood. It remains to be seen if the allure of Arab money can convince India’s leadership to talk peace with Pakistan.
Published in Dawn, April 10th, 2024
