Saudi Arabia has voiced concerns about the safety of its potential investments in Pakistan, especially those in the gold and copper mines of Reko Diq. This has spurred Pakistan into urgent action, looking to secure much-needed investment funds, reported Express Tribune.
Last month, a Saudi team visited Pakistan to discuss funding big projects in the country. However, they want a few things cleared up first.
Key military officials in Pakistan were briefed on these concerns during a top-tier meeting of the Special Investment Facilitation Council (SIFC). In response, Army Chief, General Asim Munir, has called for a plan to pull in this foreign investment, asking the caretaker government to tackle any barriers.
Pakistan hopes to attract a hefty $60 to $70 billion in investments under the SIFC’s watch over the next 3-5 years. It is eyeing about $25 billion just from Saudi Arabia. The Saudi team had pointed out specific issues they wanted to be sorted out during their visit.
Saudi Arabia is interested in a variety of sectors, including mining, power, agriculture, minerals, and plasma products. A major issue is the difficulty foreign investors face in transferring their profits out of the country. The State Bank of Pakistan is being restrictive with the US dollar due to low foreign exchange reserves, which is not sitting well with current and potential investors.
Saudi Arabia is also examining the safeguards in place for its investments and how disputes would be resolved. It is seeking additional benefits for its investment, although it is unclear what these might be.
Two large Saudi firms, Aramco and ACWA Power, are particularly interested in projects ranging from oil refineries to renewable energy.
The SIFC was established to help Pakistan’s economy by attracting foreign investment and reducing the country’s reliance on foreign loans.
However, old-fashioned procedures and bureaucratic red tape are slowing things down. To address this, top officials, including the interim Prime Minister, Anwaar-ul-Haq Kakar, are taking action.
There has been a push for the early commencement of the Reko Diq project, with the goal of including Saudi Arabia sooner. Plans are underway to have the regulatory framework in place by next March. Saudi Arabia is keen on a multi-billion-dollar stake in this project.
For the Reko Diq project, the SIFC has greenlit the hiring of certain advisers, both local and international. These advisers will assist in the project’s financial and legal aspects. Plus, negotiation teams are being set up to hash things out with Saudi Arabia.
Via Express Tribune