Interim Prime Minister Anwaarul Haq Kakar on Monday said the Kingdom of Saudi Arabia (KSA) will invest up to $25 billion in Pakistan over the next two to five years, Reuters reported.
Speaking to media persons on Monday, Kakar stated that Saudi Arabia’s investment would be in the mining, agriculture, and information technology sectors, as part of an effort to enhance foreign direct investment in Pakistan.
If confirmed, the $25 billion investment would be KSA’s largest ever in Pakistan.
Pakistan is facing a money crunch and needs billions of dollars to finance its trade deficit and settle international loans in the current fiscal year. In this context, the prime minister during the meeting did not identify which projects Riyadh was considering for investment, but Barrick Gold Corp indicated last month that it was willing to include Saudi Arabia’s wealth fund as one of its partners in Pakistan’s Reko Diq mine.
PM Kakar opined that Pakistan’s undeveloped mineral deposits are conservatively valued at $6 trillion.
He further stated that his government would try to finalize two privatization transactions in the next six months, most likely for state-run power sector companies, and would also look to privatize another government-owned company preferably outside the energy sector.
Pertinently, the privatization process in the country has largely remained frozen, with the sale of state assets a politically sensitive matter that several elected governments have so far avoided.
The country is on a difficult path to economic recovery under a caretaker administration after the International Monetary Fund authorized a $3 billion loan plan in July, averting a sovereign debt default.
Islamabad is currently experiencing a balance of payments crisis and requires billions of dollars to cover its trade imbalance and settle its debts. If accepted by Riyadh, the $25 billion investment would be Saudi Arabia’s largest ever in Pakistan and one of the most critical inflows of precious greenback for the cash-strapped South Asian economy.