Saudi Arabia, Pakistan sign seven investment MoUs worth $21 billion

Prime Minister Imran Khan and Saudi Crown Prince Mohammed bin Salman watch officials of the two countries sign seven memoranda of understanding worth $20 billion in Islamabad on Sunday. (PM Office)
Updated 18 February 2019

Saudi Arabia, Pakistan sign seven investment MoUs worth $21 billion

  • Short-term projects include $4 billion RLNG plants, $2 billion investment in renewable energy, $1 billion Saudi Fund for Pakistan
  • Package also includes $1 billion each for petrochemical and food, agricultural projects, $10 billion oil refinery in Gwadar, $2 billion for minerals sector Aamir Shah

ISLAMABAD: Pakistan and Saudi Arabia have signed short-, mid- and long-term investment agreements worth $21 billion during the visit to Islamabad of Saudi Crown Prince Mohammed bin Salman, the Pakistani government said on Monday.
The crown prince is on a two-day visit to Pakistan as part of a rare tour of Asia which includes trips to India and China.
“Pakistan and Saudi Arabia today are entering into a new economic partnership which will lead to shared prosperity, regional stability and mutual respect based on long term investment, strategic and social ties,” the government of Pakistan said in a tweet from its official Twitter account.
The government also provided a breakdown of the seven memorenda of understanding (MoUs) signed between Pakistan and Saudi Arabia on Sunday night.
Short-term projects include two Re-Gasified Liquefied Natural Gas plants for $4 billion, a $2 billion investment by Saudi power producing company ACWA Power in Pakistan’s renewable energy sector and a $1 billion Saudi Fund for Pakistan.
Mid-term projects include $1 billion each for petrochemical and food and agricultural projects. The long-term investments are $10 billion for the construction of the multi-billion-dollar Saudi Aramco oil refinery in Gwadar and $2 billion for the minerals sector.
The total investment comes to $21 billion, according to government figures.
“These agreements will lay the foundation for enhanced economic cooperation between Pakistan and the Kingdom of Saudi Arabia,” Pakistan’s Foreign Office said in a statement shortly after the signing of the agreements in the presence of Pakistani Prime Minister Imran Khan and the Saudi crown prince on Sunday night.
Saudi Arabia and Pakistan are historically close allies, and Riyadh’s investment comes at a time when Islamabad is facing a balance-of-payments crisis and a widening current account and fiscal deficit. Saudi Arabia and the United Arab Emirates have already extended $6 billion ($3 billion each) in cash assistance to Islamabad to stave off its economic meltdown.
In a press conference last week, Pakistani foreign minister Shah Mehmood Qureshi said Saudi Arabia would give Pakistan a total of $9.6 billion in loans and oil on deferred payments in the next three years. 
Announcing the Saudi investment in Pakistan, the crown prince said on Sunday night: “It’s big for phase one, and definitely it will grow every month and every year, and it will be beneficial to both countries.”
“I want to thank you for the way you helped us when we were in bad situation,” PM Khan said.
Senior economist Muzamil Aslam said the Saudi investments were “good news for all Pakistanis” and would help stabilize the country’s economy and create job opportunities for skilled and unskilled youth.
“Saudi investment in different sectors will help Pakistan lure businessmen from other countries as well,” he told Arab News. “More Middle Eastern countries, especially the U.A.E., will invest in Pakistan in the coming months and years following the Kingdom.”  


Moment of truth: FATF to decide on Pakistan’s ‘gray list’ status today

Updated 1 min 52 sec ago

Moment of truth: FATF to decide on Pakistan’s ‘gray list’ status today

  • FATF in 2018 placed Pakistan on its gray list of countries with inadequate controls over terror financing
  • Pakistan had until October to complete a 27-step action plan on international anti-terrorism financing norms

ISLAMABAD: The global financial watchdog, the Financial Action Task Force, will today, Friday, conclude a three-day plenary to decide whether to keep Pakistan on a terror financing gray list or move it to a blacklist. 
In 2018 the FATF placed Pakistan on its gray list of countries with inadequate controls over money laundering and terror financing, and gave it a 27-step action plan to implement. 
In February, Pakistan won an extra four months, until June this year, to meet the international anti-terrorism financing norms. That deadline was extended to October due to the coronavirus pandemic. 
“The FATF strongly urges Pakistan to swiftly complete its full action plan by June 2020,” the FATF had said in a statement issued after a meeting in Paris in February. “Otherwise, should significant and sustainable progress especially in prosecuting and penalizing TF (terrorism financing) not be made by the next Plenary, the FATF will take action.”
It said such action could include calling on its member states to order their financial institutions to give particularly rigorous attention to business relations and transactions with Pakistani clients.
Being placed on the FATF black list would put Pakistan in company with Iran and North Korea and see it shunned by international financial institutions.
Pakistan has long been accused of nurturing and supporting militant groups for use as proxies, charges Islamabad vehemently denies. But with a minimum of three votes by FATF members needed to avoid the organization’s blacklist, Pakistan has been able to avoid punishment so far with support from major ally China and other friendly countries including Malaysia and Turkey.