Saudi minister announces $2.2 billion investment deals with Pakistan enhanced to $2.8 billion

Prime Minister Shehbaz Sharif and Saudi Investment Minister Khalid bin Abdulaziz Al-Falih address a joint presser at the Saudi Royal Court Mohammad Bin Mazyad Al-Tuwaijri on the sidelines of the 8th Future Investment Initiative Conference in Riyadh on October 30, 2024. (PMO)
Short Url
Updated 30 October 2024
Follow

Saudi minister announces $2.2 billion investment deals with Pakistan enhanced to $2.8 billion

  • The deals between Saudi and Pakistani companies were signed during Saudi investment minister’s visit to Islamabad earlier this month
  • Saudi Crown Prince Mohammed bin Salman this year reaffirmed his commitment to expedite $5 billion investment package for Pakistan

ISLAMABAD: Saudi Minister for Investment Khalid bin Abdulaziz Al-Falih said on Wednesday $2.2 billion in agreements and memorandums of understanding (MoUs) signed between Saudi and Pakistani businesses earlier this month had been enhanced to $2.8 billion.
The business-to-business collaborations were signed on Oct. 10 during Al-Falih’s visit to Islamabad with a delegation of top investors and entrepreneurs from the Kingdom.
Pakistani Prime Minister Shehbaz Sharif is currently on a two-day visit to Riyadh where he attended the Future Investment Initiative (FII) forum on Tuesday and also held a bilateral meeting with Saudi Crown Prince Mohammed bin Salman who earlier this year reaffirmed the Kingdom’s commitment to expedite a $5 billion investment package for Pakistan.
“When we came to Pakistan, we concluded in three days 27 MoUs valued at $2.2 billion,” Al-Falih said in a televised press talk with Sharif. 
“And I mentioned during that time at various events that this was only the beginning. To prove that, here we are two or three weeks later, and I would like that that number has increased from 27 MoUs and agreements to 34 MoUs.
“So, we have been able to add another seven, almost two per week. And I think more importantly, the value of those agreements has also increased to $2.8 billion.”
The Saudi minister said five agreements signed during his trip to Pakistan were already operational and had resulted in exports from the South Asian state to the Kingdom. Al-Falih said Saudi Arabia would also absorb a greater and more qualified Pakistani workforce, especially in the health sector, in the foreseeable future.
“Remittances back to Pakistan will be on the rise,” the official said. “The first results will be seen in the next few weeks.”
Al-Falih said Saudi Arabia would also seek help from Pakistani technology firms to transform the way digital artificial intelligence was used for business and the economy.
Sharif thanked the Saudi government, especially Crown Prince Mohammed, for helping Pakistan secure a $7 billion International Monetary Fund (IMF) program last month by helping Islamabad meet its external financing needs.

The PM added that he planned to return to Saudi Arabia next month for more discussions on bilateral engagements.
“Together we are marching forward, together we are strengthening our brotherly relations,” he said.
The Pakistani PM’s visit takes place at a time when Islamabad is seeking to strengthen trade and investment ties with friendly nations, particularly the Kingdom, which has promised a $5 billion investment package that cash-strapped Pakistan desperately needs to shore up its dwindling foreign reserves and fight a chronic balance of payment crisis.


Pakistan hires two US law firms for Iran gas pipeline arbitration — attorney general

Updated 5 sec ago
Follow

Pakistan hires two US law firms for Iran gas pipeline arbitration — attorney general

  • Wilkie Farr & Gallagher and White & Case have been hired as Iran starts arbitration hearings before International Court of Arbitration
  • Tehran is seeking damages for Pakistan’s failure to fulfill its obligations, Islamabad reportedly faces potential penalty of $18 billion 

KARACHI: Pakistan has hired two prominent US law firms, Willkie Farr & Gallagher and White & Case, to defend its position in an international arbitration case initiated by Tehran over the stalled Iran-Pakistan gas pipeline project, the attorney general confirmed on Monday.

The dispute stems from a gas sales and purchase agreement (GSPA) the neighboring countries signed in 2010 to build a pipeline to transport natural gas from Iran to Pakistan. Known as the Peace Pipeline, the project has faced delays and funding challenges for over two decades. Pakistan said in March it would seek a US sanctions waiver for the pipeline, to which the US responded publicly, saying it did not support the project and cautioning about the risk of sanctions in doing business with Tehran.

Widespread media reports this year suggested Iran had slapped Pakistan with a final notice to finish its part of the cross-border gas pipeline or face international arbitration. Iran has now initiated proceedings before the International Court of Arbitration in Paris, seeking damages for Pakistan’s failure to fulfill its obligations. Islamabad reportedly faces a potential penalty of up to $18 billion.

Attorney General for Pakistan, Mansoor Usman Awan, confirmed the government had hired the two US law firms, Willkie Farr & Gallagher and White & Case, to fight the case.

“We believe we have a strong case to defend,” Awan told Arab News, declining further comment.

Willkie Farr & Gallagher, commonly known as Willkie, is a white-shoe, international law firm headquartered in New York City. Founded in 1888, the firm specializes in corporate practice and employs approximately 1200 lawyers in 15 offices across six countries. 

White & Case LLP is a global white-shoe law firm based in New York City. Founded in 1901, the firm has 46 offices in 31 countries worldwide

The pipeline deal with Iran envisaged the supply of 750 million to a billion cubic feet per day of natural gas for 25 years from Iran’s South Pars gas field to Pakistan to meet its rising energy needs. The pipeline was to stretch over 1,900 kilometers (1,180 miles) — 1,150 km within Iran and 781 km within Pakistan.

Tehran says it has already invested $2 billion to construct the pipeline on its side of the border, making it ready to export. Pakistan, however, did not begin construction and shortly after the deal said the project was off the table for the time being, citing international sanctions on Iran as the reason.

Iran’s oil minister at the time responded by saying that Iran had carried out its commitments and expected Pakistan to honor its own, adding that Pakistan needed to pick up the pace of work.

In 2014, Pakistan asked for a 10-year extension to build the pipeline, which expired in September this year.

Faced with a potential fine, Pakistan’s government earlier this year gave the go ahead in principle to plans to build an 80 km segment of the pipeline. In March, Pakistan announced it would seek the US sanctions’ waiver. 

Pakistan, whose domestic and industrial users rely on natural gas for heating and energy needs, is in dire need for cheap gas with its own reserves dwindling fast and LNG deals making supplies expensive amidst already high inflation.

Iran has the world’s second-largest gas reserves after Russia, according to BP’s Statistical Review of World Energy, but sanctions by the West, political turmoil and construction delays have slowed its development as an exporter. 

Originally, the Pakistan-Iran deal also involved extending the pipeline to India, but Delhi later dropped out of the project.


Iranian FM arrives in Pakistan to discuss bilateral ties, Middle East tensions 

Updated 28 min 14 sec ago
Follow

Iranian FM arrives in Pakistan to discuss bilateral ties, Middle East tensions 

  • Seyed Abbas Araghchi to meet Pakistan’s premier, deputy PM during two-day visit 
  • Visit takes place amid rising tensions between Iran and Israel as Gaza war rages on 

ISLAMABAD: Iran’s Foreign Minister Seyed Abbas Araghchi arrived in Islamabad on Monday for a two-day visit to discuss bilateral relations and the evolving Middle East situation, Pakistan’s foreign office spokesperson said in a statement, amid Tehran’s surging tensions with Israel. 

Araghchi’s Islamabad visit takes place after last month’s escalation in hostilities between Iran and Israel, with both countries firing missiles at each other. Israel carried out strikes against Iran on Oct. 26, saying it was responding to missile attacks conducted by Tehran earlier in the month.

Since the deadliest attack in its history on Oct. 7, 2023, Israel has been fighting Hamas in Gaza and since late September, it has been at war with Hezbollah in Lebanon. Both Hezbollah and Hamas are allies of Iran. Pakistan, a major ally of Saudi Arabia, shares a long border with Iran.

“Iranian Foreign Minister Seyed Abbas Araghchi arrives in Pakistan today on a two-day official visit,” Baloch wrote on social media platform X. “The two sides will discuss the situation in the Middle East and Pakistan-Iran bilateral relations.”

Baloch said the Iranian envoy will meet Pakistan’s Prime Minister Shehbaz Sharif and Deputy Prime Minister Ishaq Daq during his visit to the country. 

Pakistan and Iran have had a rocky relationship despite several commercial pacts between them related to trade, energy and security cooperation. Both countries signed the $7 billion Iran-Pakistan gas pipeline project agreement in 2004 but 20 years on, the project remains incomplete. Tehran has completed the pipeline’s construction on its side of the border while Pakistan is seeking a US waiver to go ahead with it due to sanctions targeting Iran. 

Araghchi’s visit takes place hours after an Iranian Revolutionary Guards general and pilot were killed in a helicopter crash during an anti-terror operation in the Sistan-Baluchestan province bordering Pakistan. 

Pakistan and Iran are also often at odds over instability on their shared porous border, with both countries routinely trading blame for not rooting out militancy.

Tensions surged in January when Pakistan and Iran exchanged airstrikes, both claiming to target alleged militant hideouts in each other’s countries. Late Iranian president Ebrahim Raisi visited Pakistan in April on a three-day visit aimed at strengthening bilateral relations and easing tensions. The two sides also signed memorandums of understanding in the fields of trade, science technology, agriculture, health, culture, and judicial matters.


Pakistan set to deliver fourth consecutive rate cut today to revive economy

Updated 04 November 2024
Follow

Pakistan set to deliver fourth consecutive rate cut today to revive economy

  • All 15 investors and analysts surveyed by Reuters expect the central bank to cut rates next week
  • Policymakers continue efforts to revive a fragile economy as inflation eases off recent record highs

KARACHI: Pakistan’s central bank is expected to cut its key interest rate further at its policy meeting today, Monday, with policymakers continuing their efforts to revive a fragile economy as inflation eases off recent record highs.
The central bank, the State Bank of Pakistan, has slashed the benchmark policy rate to 17.5 percent from an all time-high of 22 percent in three consecutive policy meetings since June, having last reduced it by 200 basis points in September.
All 15 investors and analysts surveyed by Reuters expect the central bank to cut rates. Two expect a 150 bps cut, twelve predict a 200 bps reduction, and one forecasts a 250 bps cut.
Economic activity has stabilized since last summer when the country came close to a default before an eleventh hour bailout by the International Monetary Fund (IMF).
The IMF, which in September gave a boost to Pakistan’s struggling economy by approving a long-awaited $7 billion facility, said that the South Asian nation had taken key steps to restore economic stability with consistent policy implementation under the 2023-24 standby arrangement.
While the economy has started to gradually recover, and inflation has moved sharply down from a multi-decade high of nearly 40 percent in May 2023, analysts say further rate cuts are needed to bolster growth.
Mustafa Pasha, Chief Investment Officer at Lakson Investments, said rates must drop under 15 percent and hold below that for six months to have a material impact.
The IMF in its latest October report forecast Pakistan’s gross domestic product growth at 3.2 percent for the fiscal year ending June 2025, up from 2.4 percent in fiscal 2024.
The government expects annual inflation to have come in at 6-7 percent last month and slow further to 5.5-6.5 percent in November.
However, inflation could pick up again in 2025, driven by electricity and gas tariff hikes under the new $7 billion IMF bailout, and the potential impact of taxes on the retail and wholesale sector proposed in the June budget.
Ahmad Mobeen, senior economist at S&P Global Market Intelligence, said that while lower rates will offer some relief to the manufacturing sector, the benefits may be limited due to “elevated input costs, driven by high electricity and gas tariffs, combined with global supply and shipping constraints.”


PM praises security forces for successful operation against militants in Pakistan’s Balochistan

Updated 04 November 2024
Follow

PM praises security forces for successful operation against militants in Pakistan’s Balochistan

  • Pakistani forces killed three separatist militants and arrested two others in Balochistan’s Musa Khel district on Sunday
  • Balochistan, home to a long-running separatist insurgency, has witnessed a spike in militant attacks in recent months

ISLAMABAD: Prime Minister Shehbaz Sharif on Sunday praised Pakistani security forces and law enforcement agencies for a successful operation against militants affiliated with the Baloch Liberation Army (BLA) separatist group in the country’s restive Balochistan province.
Pakistan’s Frontier Corps (FC) paramilitary force and the Counter-Terrorism Department (CTD) of the police intercepted a group of up to 12 militants in Rarhasham area of Balochistan’s Musa Khel district, according to Balochistan CTD.
An ensuing heavy exchange of fire three militants were killed and two were apprehended, while the rest managed to get away. The arrested suspects were being interrogated to “develop further leads.”
In a statement issued from his office, PM Sharif said timely action by the CTD and security forces foiled a major “sabotage” by the militants.
“Security forces have rendered great sacrifices to eradicate the menace of terrorism from Balochistan,” he said. “The entire nation, including me, pays tribute to the officers of FC, Police and CTD.”
The development came two days after at least seven people, including children and a police constable, were killed and nearly two dozen others injured in a roadside blast in Balochistan province, officials said.
Balochistan, which borders Iran and Afghanistan and is home to major China-led projects such as a strategic port and a gold and copper mine, has been the site of a decades-long separatist insurgency by ethnic Baloch militants. The province has lately seen an increase in attacks by separatist militants.
On Oct. 29, five people were killed in an attack by armed men on the construction site of a small dam in Balochistan’s Panjgur district. The BLA, the most prominent of several separatist groups, claimed responsibility for the attack along with the killing of two other persons in Kech and Quetta districts.
The separatists accuse the central government of exploiting Balochistan’s mineral and gas resources. The Pakistani state denies the allegation and says it is working to uplift the region through development initiatives.
 


Australia in driving seat after dismissing Pakistan for 203 in first ODI 

Updated 04 November 2024
Follow

Australia in driving seat after dismissing Pakistan for 203 in first ODI 

  • Mohammad Rizwan top-scores with 44 while former captain Babar Azam makes 37 runs 
  • Mitchel Starc, Pat Cummins return figures of 3/33 and 2/39 to put Pakistan on back foot 

ISLAMABAD: Pakistani batters floundered against a mix of impressive pace and spin bowling by Australia on Monday as the visitors were dismissed for an unimpressive 203 runs in the first ODI at the Melbourne Cricket Ground (MCG). 

Australian fast bowlers Mitchel Starc and Pat Cummins returned figures of 3/33 and 2/39, respectively, to deal early blows to Pakistan and put Australia in the driving seat of the match. Spinner Adam Zampa took 2/64 while Marnus Labuschagne and Sean Abbott finished with 1/5 and 1/34, respectively. 

Pakistani openers Abdullah Shafique and Saim Ayub fell for 12 and 1, respectively, while former captain Babar Azam and Mohammad Rizwan put up some resistance before the former was dismissed by Zampa for 37 (44). Rizwan, Pakistan’s new white-ball captain, made 44 from 71 balls before he was sent to the pavilion. 

Fast bowler Naseem Shah scored 40 runs from 39 balls in a brave effort to ensure Pakistan crossed the 200 threshold before Aussie skipper Cummins removed him. Debutant Irfan Khan and Shaheen Shah Afridi scored 22 and 24 runs, respectively. 

“Naseem Shah makes a valiant 40 featuring four sixes as Pakistan make 203,” the Pakistan Cricket Board (PCB) said. “Over to the bowlers.”

Australia's Pat Cummins, left, celebrates after taking the wicket of Pakistan's Kamran Ghulam during their one day international cricket match in Melbourne, on November 4, 2024. (AP)

Earlier, Cummins won the toss and put Pakistan to bat first. The second ODI between the teams will be played at the Adelaide Oval in Adelaide on Nov. 8 while both teams will travel to Perth where the third ODI will take place on Nov. 10.

The ODI series will be followed by a three-match T20I series, which will be played on Nov. 14, 16 and 18.

Pakistan and Australia last met in the 50-over format during the ICC Cricket World Cup 2023 on Oct. 20 where Australia defeated Pakistan by 62 runs at the Chinnaswamy Stadium, Bengaluru. The last time both sides featured in a bilateral ODI series was in March/April 2022, when Australia visited Pakistan and the hosts won the series 2-1.

Playing XI:

Australia: 1 Matt Short, 2 Jake Fraser-McGurk, 3 Steven Smith, 4 Josh Inglis (wk), 5 Marnus Labuschagne, 6 Glenn Maxwell, 7 Aaron Hardie, 8 Sean Abbott, 9 Pat Cummins (captain), 10 Mitchell Starc, 11 Adam Zampa

Pakistan: 1 Saim Ayub, 2 Abdullah Shafique, 3 Babar Azam, 4 Mohammad Rizwan (wk, captain), 5 Kamran Ghulam, 6 Salman Ali Agha, 7 Irfan Khan, 8 Shaheen Shah Afridi, 9 Naseem Shah, 10 Haris Rauf, 11 Mohammad Hasnain