Pak-Saudi Relations: New Horizons

Mehmood-Ul-Hassan Khan

Saudi Arabia is our strategic partner, which is rooted in common faith and culture. Close geographical proximity, historic trade ties, religious association and the economic facilitation have developed trust-worthy relations based on mutual respect. More than 1.5 million Pakistanis are working in Saudi Arabia.
Right from the beginning, the leadership of Saudi Arabia and its government has been coordinating with Pakistan on many important issues of socio-economy and geo-politics and share similarities on different regional and international topics. Saudi Arabia has always been keen interested in the social and economical development of Pakistan and it provided financial assistance during the earthquake of 2005,
and floods of 2010 and 2011. It also pledged $700 million for Pakistan in the Tokyo Donors.

respect. More than 1.5 million Pakistanis are working in Saudi Arabia.
Right from the beginning, the leadership of Saudi Arabia and its government has been coordinating with Pakistan on many important issues of socio-economy and geo-politics and share similarities on different regional and international topics. Saudi Arabia has always been keen interested in the social and economical development of Pakistan and it provided financial assistance during the earthquake of 2005, and floods of 2010 and 2011. It also pledged $700 million for Pakistan in the Tokyo Donors’ Conference.

The Embassy of Saudi Arabia in Pakistan and especially H.E. Abdul Aziz bin Ibrahim Al-Gadeer is passionately facilitating many ongoing mega projects of education, health, housing, infrastructure, clean drinking water and electrification in different parts of the country. Most recently, Pakistan and Saudi Arabia inked two loan agreements amounting to $172 million for import of urea fertilizer $100 million and initiating development projects $72 million. Both loans have multiplier effects on the socio-economic conditions of these areas. It would reduce high ratios of poverty. It would generate more employment in these troubled areas. It would support business activities in these areas and improve their living standards by providing better education, health and housing facilities.
It is worth mentioning that with signing of the two agreements Saudi Arabia has become the only country that has fully disbursed the entire amount of $700 million committed at the Friends of Democratic Pakistan (FODP) forum two years ago. Saudi Ambassador Abdul Aziz bin Ibrahim Al-Gadeer said the SFD’s decision to give two soft loans reflects the Kingdom’s continuous support to Pakistan and its people. He thanked Custodian of the Two Holy Mosques King Abdullah for the humanitarian gesture.
To honor its financial commitments, last year, Saudi Arabia pledged an additional $400 million at the Pakistan Development Forum (PDF). The $100 million credit for urea fertilizer import was part of that commitment while for remaining $300 million Pakistan has selected some social projects, which have been sent to Saudi Arabia for assessment.
Utility of Loan Facilities
To fulfill the requirements of agriculture, Saudi Arabia has provided Urea loan which is for a short period at an interest rate of London Interbank Offered Rate (Libor) plus 1.25 per cent. Under the agreed loan/program, the Trading Corporation of Pakistan (TCP) will import urea from Saudi Arabia and provide the fertilizer to National Fertiliser Marketing Limited (NFML) for its fair distribution.
Saudi Fund for Development Vice-Chairman Engineer Yousef Ibrahim Al-Bassam signed the two agreements in Islamabad. Yousef Ibrahim Al-Bassam said that these agreements will further deepen the bilateral cooperation and enhance good relations between the two countries. He mentioned the strong commitment of the Saudi Arabian government towards supporting the sincere and extended continued efforts of the Pakistan government in promoting the well-being and economic prosperity of its people. Al-Bassam was of the opinion that the urea fertilizer credit facility ($100 million) would benefit the agricultural sector of Pakistan, boost food production and maximise farmer income with the use of qualitative Urea fertilizer.

He said that the second loan of $72 million would be spent for reconstruction in the Malakand Division, Bajaur Agency and North and South Waziristan. He told the reconstruction activity, including repair of roads, would contribute to increasing agricultural productivity and enhance educational and health standards for the people of the region. He shared that rehabilitation work includes construction of 283 kms of major roads and 887 kms of other roads along with 43 bridges and 78 culverts.
According to him the loan will also be used for construction of main and branch canals with flood protection work, water storage, supply of lift pumps, construction of educational facilities in South Waziristan, North Waziristan and Bajaur and rehabilitation of power network and transmission lines.
Saudi Arabia is among the 15 export partners of Pakistan with which bilateral trade volume has gone above US$ 4 billion per annum and it would be further increased in the days to come.

Exports to Saudi Arabia Principal items
Rice, ready made garments, cotton fabrics, synthetic fabrics, made up textiles, tents and canvas, fruits and vegetables, spices, towels, carpets and rugs, sports goods, fish and fish preparations, handicrafts, leather manufactures and printed matters
Imports from Saudi Arabia
Crude petroleum, polythene, plastic moulding powder, aluminum waste, urea, dates, copper wire and rods, ships and boats, ether and its derivatives, chemicals machines, paper waste, parts of aircraft and sulphur.
Source: FBS

Sector Available for Investments

Energy, oil and gas exploration, infrastructure, key production industries, banking, irrigation, fertilizer and port development like Mirpur Mathelo Fertilizer plant, Pipri Thermal power project, Tarbela Dam repairs, Port Qasim, Basha Dam construction etc

Concluding Remarks
Pak-Saudi Arabia friendship is time tested. It signifies socio-economic development of its people, harmony of its governments and strength of its bilateral relations. The recently concluded two loan agreements would provide strategic cushion for the betterment of our people, struggling for survival

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