Pakistan and Saudi Arabia in talks for major investments in mining, refinery, agriculture, and technology

Pakistan is engaged in G2G negotiations with Saudi Arabia for investment in four key sectors including mining, refinery, agriculture, and technology.

Ali Fareed Khawaja, Chairman of K-Trade, confirmed this in an interview with Nukta, noting that Pakistan’s Special Investment Facilitation Council (SIFC) is also prioritizing these areas.

Saudi Arabia has consistently supported Pakistan’s economy, including providing a deferred payment oil facility, bolstering foreign exchange reserves during IMF negotiations, and offering a $1 billion grant in recent years.

Additionally, a significant portion of overseas workers' remittances comes from Saudi Arabia, where 1.2 million Pakistanis are employed. The indirect contributions from Saudi Arabia to Pakistan’s economy have grown considerably.

Khawaja said Crown Prince Mohammad Bin Salman has committed to investing in Pakistan, and the market is confident of incoming funds.

Although major investments are anticipated, the market is still awaiting their arrival.

Saudi Arabia offers vast opportunities for the Pakistani government and citizens, including job openings and business ventures across various sectors due to its growth aligned with Vision 2030, announced in 2019.

This vision aims to diversify Saudi Arabia's economy beyond oil, with goals of creating a vibrant society, a thriving economy, and an ambitious nation.

Last year, Saudi Arabia was the fastest-growing economy among the G20 nations, presenting ample opportunities that Pakistanis must seize.

Riyadh's growth is a significant aspect of Vision 2030, with plans to double its population by adding 7 million residents.

While Pakistanis missed out on economic booms in China, Russia, and India due to barriers like language, there is nothing preventing them from benefiting in Saudi Arabia.

Many Pakistani companies are already operating there, with sectors such as accounting, finance, technology, medical, and construction offering immense opportunities.

Addressing the Riko Diq project, Khawaja stated that Saudi investment is expected, with geological surveys currently underway to determine the future course. Foreign investment in Riko Diq will enhance regional infrastructure and create numerous jobs for locals, leading to exponential growth in the mining sector.

There have been discussions of significant Saudi investment in a new refinery in Pakistan since 2018. Khawaja acknowledged that bureaucratic hurdles, policy discontinuation, and red-tapism have frustrated foreign investors, with opposition from Pakistan's bureaucracy against tax concessions for new projects.

Nonetheless, there is hope that a deal with Saudi investors for upgrading Pakistan Refinery Limited (PRL) will materialize.

Pakistan’s resilient private sector stands to benefit from Saudi investment, with existing investments in GO Petroleum and potential future investments in other sectors. A Saudi healthcare group, which owns hospitals in Saudi Arabia, is also planning to establish two hospitals in Pakistan.

Saudi Arabia’s Public Investment Fund (PIF), with a goal to become the world's top sovereign wealth fund at $2 trillion, indicates their substantial investment potential.

Regarding digital currency, Chairman KTrade said the Pakistani parliament has suggested that the State Bank of Pakistan (SBP) examine the matter.

Khawaja explained that while digital currency falls under SBP’s purview, digital assets represent a broader investment category valued at $2 trillion globally. In Pakistan, approximately 20 million people are investing in digital assets through Binance, despite the lack of regulation for digital assets in the country.