KARACHI: Zahid Saleem was a young boy when his family moved from the crooked shanty where they had always lived into a new house they were allocated in Saudabad in the teeming port city of Karachi.
It was the late fifties and the housing scheme had just been built with largess from Saudi Arabia’s King Shah Saud Bin Abdul Aziz.
“I was a child but I still remember that day,” Saleem, 70, told Arab News at the house where he has lived for over half a century.
Less than ten years after the partition of India, the new neighborhood with its 1,800 homes was a dream come true for thousands of Muslim migrants to Karachi, struggling to settle after leaving everything behind in India, Saleem said.
“Saudi Arabia has been our friend in need from day one,” he added.
King Saud laid the foundation stone of the housing project in April 1954 during a ten-day state visit, according to Pakistan Chronicle, a historical encyclopedia, “to express his resolve of friendship with Pakistan.”
This was not King Saud’s first visit to Karachi. As crown prince, he had visited the seaside metropolis in April 1940, seven years before Pakistan came into being, and was warmly welcomed by leaders of the All India Muslim League, the political party whose advocacy for a separate Muslim-majority nation-state led to the partition of British India in 1947.
It was there that the foundations of Pakistan-Saudi ties were first laid, as the then crown prince met with leaders of the Pakistan Movement, including MAH Ispahani, MA Maniar and Karim Bhai Ibrahim in Karachi.
On February 22, 1974, Pakistan hosted some of the most important leaders of the Muslim world at an Islamic Summit Conference at which King Shah Faisal was also present. Soon after the conference, the name of Drigh Road, the main boulevard that runs from the famed Hotel Metropole to Star Gate, was changed to Shahrah-e-Faisal.
“To recognize his remarkable services for the Muslim Ummah, especially Pakistan, the government of Pakistan named Shahrah-e-Faisal in the name of King Faisal Bin Abdul Aziz,” said Yahya Bin Zakria, a journalist who lives in Saudabad.
Another densely populated neighborhood called Drigh Colony, one of Karachi’s early settlements constructed for Muslim migrants in 1952, was also renamed Shah Faisal Town.
Mazhar Ahmed, a 68-year-old resident of Shah Faisal Town, said Shahrah-e-Faisal was initially a one-lane road that saw massive traffic snarls and was inconvenient for commuters.
“King Faisal extended financial help and the 18-kilometer long thoroughfare was reconstructed, making it good for two way traffic,” Ahmed said. “The air base at main Shahrah-e-Faisal was also named Faisal Airbase.”
“Names like Saudabad, Shah Faisal Town, Faisal Airbase and Shahrah-e-Faisal,” Ahmed said, “will keep reminding us of the Saudi Kings who helped the newly created Pakistan settle its homeless migrants and get good roads.”
In Pakistan’s Karachi, many neighborhoods and roads in Saudi Kingdom’s name
In Pakistan’s Karachi, many neighborhoods and roads in Saudi Kingdom’s name
- King Saud laid foundation stone for the Saudabad neighborhood in April 1954
- Karachi’s Drigh Road and Drigh Colony renamed Shahrah-e-Faisal and Shah Faisal Town after King Faisal attended Islamic Summit in Pakistan in 1974
Pakistan secures $1.2 billion as IMF clears reviews, flags gains on stability and reforms
- IMF praises Pakistan’s policy implementation despite challenging global environment and climate-driven shocks
- The Executive Board urges faster energy, SOE and governance reforms for macroeconomic and fiscal sustainability
KARACHI: The International Monetary Fund (IMF) approved Pakistan’s second review under its Extended Fund Facility (EFF) and the first review of its Resilience and Sustainability Facility (RSF), said a statement on Tuesday, unlocking about $1.2 billion in new financing while praising the country’s progress in stabilizing the economy despite recent floods.
The decision taken by the IMF Executive Board allows Islamabad to draw $1 billion under the EFF and $200 million under the RSF, bringing total disbursements under both arrangements to about $3.3 billion. The Fund said Pakistan’s policy implementation had improved financing conditions, strengthened reserves and preserved stability even as the country faced a challenging global environment and climate-driven shocks.
Under the 37-month EFF, approved last year in September, the IMF noted strong fiscal performance, including a primary surplus of 1.3 percent of GDP, a rebound in gross reserves to $14.5 billion by end-FY25 from $9.4 billion a year earlier and progress on rebuilding confidence. It noted a surge in inflation due to flood-related food price spikes but said it was expected to ease.
“Pakistan’s reform implementation under the EFF arrangement has helped preserve macroeconomic stability in the face of several recent shocks,” IMF Deputy Managing Director Nigel Clarke said. “Real GDP growth has accelerated, inflation expectations have remained anchored, and fiscal and external imbalances have continued to moderate.”
Clarke said Islamabad’s commitment to meeting its FY26 primary balance target while also addressing urgent post-flood relief signaled strong fiscal intent. He urged continued tax policy simplification and base broadening to build space for climate resilience, social protection and public investment.
The IMF official maintained a tight monetary stance should be continued to keep inflation within the State Bank Pakistan’s target range, while allowing exchange-rate flexibility and deepening the interbank market.
Additionally, he said financial regulation enforcement and capital market development were essential for a resilient financial sector.
The IMF also flagged energy sector reforms as “critical to safeguarding viability,” noting that timely tariff adjustments had helped curb circular debt but that Pakistan must now focus on reducing electricity production and distribution costs and addressing operational inefficiencies in both the power and gas sectors.
The statement also welcomed the publication of Pakistan’s Governance and Corruption Diagnostic report, a detailed IMF-supported assessment that maps out where government systems are vulnerable to inefficiency or misuse and recommends reforms to improve transparency, accountability and service delivery.
Further priorities include the privatization of state-owned enterprises and strengthening economic data quality.
Clarke said reducing Pakistan’s climate vulnerability was vital for long-term stability, referring to the RSF, a financing tool that provides long-term, low-cost loans to help countries address climate risks.
“The RSF arrangement is supporting efforts to strengthen natural disaster response and financing coordination, improve the use of scarce water resources, raise climate considerations in project selection and budgeting, and improve the information on climate-related risks in financing decisions,” he said.
Pakistan faced a prolonged economic crisis in recent years before it began implementing stringent IMF-recommended reforms, which have driven a gradual improvement in macroeconomic indicators over the past two years.
The country also remains one of the world’s most climate-vulnerable nations despite contributing less than one percent of global greenhouse-gas emissions.
It has endured a series of extreme weather events in recent years, most notably the 2022 super-floods that submerged one-third of the country, displaced millions and caused an estimated $30 billion in losses.
This year’s floods killed over 1,000 people and caused at least $2.9 billion in damage to agriculture and infrastructure, underscoring the scale of climate pressures facing the economy.
Economic experts told Arab News a day earlier that the Fund’s disbursements under the two loan programs would support the cash-strapped nation, which has relied heavily on financing from bilateral partners such as Saudi Arabia, China and the United Arab Emirates, as well as multilateral lenders.
“It obviously will help strengthen the external sector, the balance of payments,” said Samiullah Tariq, group head of research at Pakistan Kuwait Investment Company.
Another analyst, Shankar Talreja, head of research at Karachi-based Topline Securities, said the move was likely to send a positive signal to domestic and international investors about the government’s commitment to its reform agenda.
“This will help strengthen reserves and will eventually help a rating upgrade going forward,” he said.
