Pakistan’s longstanding ties with Saudi Arabia drew Prime Minister Shehbaz Sharif to the kingdom for his first foreign visit since taking office. Following his pilgrimage to the holy cities, Sharif met Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, on Sunday in Makkah. Discussions covered various topics, but the joint statement highlighted Saudi Arabia’s intent to “expedite” investment in Pakistan and its desire for “peace and stability” in South Asia.
The proposed Saudi investment stands at $5 billion, following earlier discussions about a $25 billion commitment channeled through the military-backed Special Investment Facilitation Council. While specific sectors remain undisclosed, mining, particularly the Reko Diq project, and other areas have emerged as potential targets. Additionally, the meeting emphasized the “importance of dialogue between Pakistan and India,” hinting at a possible Saudi role in de-escalating regional tensions.
Talk of significant Saudi investment has been a recurring theme, dating back to the previous PTI government. However, apart from emergency assistance, concrete investments have been scarce. The new government might see these funds materialize. Nevertheless, attracting foreign investment, be it Saudi or otherwise, requires a trifecta of factors: political stability, security guarantees, and consistent economic policies. Dissonance or inconsistency on these fronts will deter investors.
Pakistan boasts immense potential across various sectors. However, the state must tackle barriers that hinder foreign investment and create a business-friendly environment free of red tape and corruption. Foreign investors aren’t philanthropists – they seek profit. Facilitating smooth repatriation of profits is crucial for sustained foreign investment.
A few billion dollars won’t significantly alter Pakistan’s economic landscape. Long-term strategies by all stakeholders are needed to break free from dependence and unlock Pakistan’s full economic potential. Saudi Arabia’s interest in mediating the India-Pakistan dispute can also be viewed through a geo-economic lens. With a $100 billion investment plan in India, Saudi Arabia desires regional peace. Whether the lure of Arab investment can incentivize India’s leadership to engage in peace talks with Pakistan remains to be seen.
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