Pakistan to get more than $10bn Saudi investment — BoI Chief

This file photo shows a general view of Gwadar port on April 13, 2016. (AFP)
Updated 10 January 2019
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Pakistan to get more than $10bn Saudi investment — BoI Chief

  • A “very high-level” delegation is expected to visit Gwadar on Saturday
  • Economists suggest government should offer lucrative incentives to lure more foreign companies

ISLAMABAD: There seems to be more good news for Gwadar in the pipeline.
Officials said on Thursday that Pakistan government has finalized the documents for the Memorandum of Understandings (MoUs) which Islamabad is expected to sign with Saudi Arabia this month for investments in various sectors, including a billion-dollar oil refinery in the Gwadar port.
“We have done our work and the actual signing of the investment agreements will be finalized soon with mutual consent of both the states – Pakistan and Saudi Arabia,” Haroon Sharif, Board of Investment Chairman (BoI), told Arab News on Thursday.
He said that Saudi Arabia has expressed an interest to invest in the petrochemical, renewable energy, mining, and several other sectors, with formal agreements to be signed next month.
“The inflow of Saudi investments for an oil refinery and petrochemical complex in Pakistan is estimated to be around $10 billion,” he said, adding that “the total volume of Saudi investments will be much more than $10 billion.”
Sharif said that the additional source of revenue would help strengthen the economy and create job opportunities for the youth in the country, too.
Arab News has also learnt that a “very high-level Saudi delegation” will visit Gwadar – the deep port city in restive Balochistan province – on Saturday to examine the feasibility of setting up an oil refinery there. Saudi firm, Aramco, is expected to invest in the project.
In October last year, during Prime Minister Imran Khan’s visit to Saudi Arabia, Riyadh extended a $6 billion financial package to Islamabad to help the country overcome its balance of payments crisis.
Sharif, however, said that Saudi’s investment in the oil refinery and other sectors will be in addition to the financial package and “initial negotiations for the investment between both the countries have already been finalized.”
PM Khan presided over a meeting on Wednesday to discuss the ease of doing business wherein he was informed that “the MoU with the Kingdom of Saudi Arabia is expected to be signed this month whereas the investment framework MoU with the UAE is expected in February 2019”.
Discussing the prospective sectors which Saudi Arabia might invest in, Sharif said that Saudi firm ACWA Power has shown an interest in financing certain renewable energy projects in different areas of Pakistan, including Sindh and Punjab provinces. Likewise, Saudi Arabia is also willing to invest in the country’s mining sector, he added.
Pakistan and Saudi Arabia have expressed a renewed interest in enhancing bilateral, strategic, and trade engagements after PM Khan chose the Kingdom for his maiden foreign trip in September last year, which was followed by another visit in October.
“Pakistan can overcome its chronic economic crisis only if it succeeds in luring huge foreign direct investment in the next couple of years, besides doubling its tax revenue,” Dr. Athar Ahmed, a senior economist, told Arab News.
He said that Pakistani authorities were expecting more than $40 billion in investments from Saudi Arabia, the UAE, and China in the next three to five years but that “all this exists on the papers only so far.”
“The government needs to offer lucrative incentives to foreign investors and create a conducive environment for businessmen in the country to tackle economic challenges,” he added.


Filipino remittances from the Middle East down 15.3% in 2018

Updated 17 February 2019
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Filipino remittances from the Middle East down 15.3% in 2018

  • Cash remittances from OFWs in Saudi Arabia fell 11.1 percent last year to $2.23 billion from $2.51 billion previously
  • Personal remittances are a major driver of domestic consumption

DUBAI: Money sent home by overseas Filipino workers (OFWs) in the Middle East went down 15.3 percent to $6.62 billion in 2018 from $7.81 billion a year earlier, latest government data shows.
Lower crude prices, which affected most OFW host countries in the region, the job nationalization schemes of Gulf states and a deployment ban last year of household service workers to Kuwait were the primary reasons for the decline, a reversal from the 3.4 percent remittance growth recorded in 2017.
A government study has noted that Saudi Arabia was the leading country of destination for OFWs, with more than a quarter of Filipinos being deployed there at any given time, together with the United Arab Emirates (15.3 percent), Kuwait (6.7 percent) and Qatar (5.5 percent).
Cash remittances from OFWs in Saudi Arabia fell 11.1 percent last year to $2.23 billion from $2.51 billion a year before; down 19.9 percent to $2.03 billion in the UAE from $2.54 billion in 2017; 14.5 percent lower in Kuwait to $689.61 million from $806.48 million and 9.2 percent down in Qatar to $1 billion in 2018, from $1.1 billion a year earlier.
The Philippine government issued a deployment ban for Kuwait early last year, and lasted for five months, after a string of reported deaths and abuses on Filipino workers in the Gulf state.
OFW remittances from Oman, which implemented a job nationalization program like that of Saudi Arabia and the UAE, dove 33.8 percent to $228.74 million in 2018 from $345.41 million a year before. In Bahrain, cash sent by Filipinos rose 2.2 percent to $234.14 million last year from $229.02 million previously.
Meanwhile, overall OFW remittances grew 3 percent year-on-year to $32.2 billion, the highest annual level to date.
“The growth in personal remittances during the year was driven by remittance inflows from land-based OFs with work contracts of one year or more and remittances from both sea-based and land-based OFs with work contracts of less than one year,” the Philippine central monetary authority said.
Personal remittances are a major driver of domestic consumption and in 2018 accounted for 9.7 percent of the Philippines’ gross domestic product.