EDITORIAL: The April 15-16 visit of a high-powered Saudi delegation – headed by Foreign Minister Prince Faisal bin Farhan – appears to have yielded fruitful results for both countries. The visit built upon the foundation laid during Prime Minister Shehbaz Sharif’s parley with the Saudi Crown Prince Mohammad bin Salman earlier in the month where the two countries had committed to expediting “the first wave of an investment package worth $5 billion”. Now this latest round of consultations may pave the way for further cooperation across multiple spheres.
While the main agenda behind this visit was to explore the various investment opportunities that Pakistan has to offer, discussions regarding the precarious regional condition were bound to have featured prominently as well given the volatility in the Middle East with respect to the situation in Palestine and the Iran-Israel face-off.
In fact, a sojourn by prominent officials of the Saudi state at this delicate moment in global geopolitics – which will soon be followed by Mohammad bin Salman also visiting Pakistan next month – underscores the importance that Pakistan holds in the region, and its potential to further enhance its standing provided we get our house in order on both the political and economic fronts.
Apart from meeting with the president, prime minister and other functionaries, Prince Faisal also attended a meeting of the Special Investment Facilitation Council (SIFC), as well as co-chaired what proved to be the main highlight of the visit, the Saudi-Pakistan investment conference, where the Pakistani side underscored the various investment opportunities available across several sectors, including in agriculture, IT, mining as well as in public sector entities.
The Saudis now appear set to invest up to $1 billion in the Reko Diq Copper Gold project and are reportedly also looking into acquisitions of certain state-owned entities. While the trip did not result in any MoUs being signed, declarations of commitment have been made with respect to several investment opportunities, which is highly encouraging. One now expects the requisite MoUs to be signed during the Crown Prince’s trip to the country.
It is pertinent to note that recent years have seen a paradigm shift in how Saudi Arabia is charting the future trajectory of its economy and society, which has also had an impact on how it now deals with other countries.
The focus has moved away from granting aid packages and towards investing in various productive avenues across the world. The $5 billion investment package for Pakistan, therefore, also indicates this changed reality and our policymakers must ensure that we take full advantage of this fundamental transformation that the Saudi polity is going through.
For that to happen, we need to resolve our perennial problems related to political instability and the structural issues plaguing our economy, with special focus on improving the ease of doing business for foreign investors. Our approach to conducting politics and structuring the economy has hindered us from ever fully leveraging the country’s potential.
Perhaps, we should take a leaf out of India’s book, where Saudi Arabia has made massive investments in recent years, with our neighbour standing as the kingdom’s second-largest trading partner in 2022-23. The two countries have deepened their economic relationship across a variety of sectors, ranging from oil and petroleum to agriculture, renewable energy, infrastructure development and information technology.
We need to similarly strategise to attract comparable interest in the various spheres of our economy. A case in point here could be our long-stagnant agriculture sector, which may present an especially significant opportunity for revitalization, given that recent years have seen Saudi Arabia making huge investments internationally to ensure access to key commodities not produced domestically in a bid to safeguard its food security. Needless to say, the opportunities presented by the Saudi interest in our economy could prove to be boundless and must be seized without delay.
Copyright Business Recorder, 2024
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