Pakistan PM Khan expected to boost aid and trade from visit to Saudi Arabia

A Pakistani farmer harvests wheat in a field on the outskirts of Lahore. (AFP)
Updated 30 September 2018
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Pakistan PM Khan expected to boost aid and trade from visit to Saudi Arabia

  • Pakistan imports more than $13 billion of oil
  • Agriculture expected to be key focus

KARACHI: Faced with a financial crisis at home, Pakistan Prime Minister Imran Khan’s first visit to Saudi Arabia could provide a much needed boost to the country’s political and economic confidence, experts said on Tuesday.
The trip, which began on Tuesday, holds even more significance as Khan is expected to seek $2-$3 billion in economic aid from the Kingdom, with an urgent need to inject around $9 billion into the economy — to stabilize external accounts largely inflated from high imports and insufficient exports.
“Pakistan expects an injection of around $2 billion to $3 billion in order to stabilize its foreign reserves position, currency and external balance sheet,” Dr. Bilal Ahmed, senior economic analyst, told Arab News.
He added that Pakistan would largely benefit from the visit, especially if the Kingdom is convinced “to supply oil at concessionary rates which would mitigate pressure on the import bill to a large extent.”
During the last fiscal year, 2017-18, the country’s imports of petroleum stood at $13.27 billion, imported from different countries, including Saudi Arabia. “If Pakistan gets the oil at a deferred payment or at relaxed conditions the issue of the country’s cash will be resolved,” Syed Mazhar Ali Nasir, Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry — an apex body of Pakistan’s industrialists and traders — told Arab News.
Bilateral trade will be another key area of focus.
“We should explore avenues for exports to Saudi Arabia by ending tariff and non-tariff barriers that have decreased the trade of goods and services,” Dr. Ikram ul Haq, a senior economist and expert in legal matters, said.
Despite holding great potential, bilateral trade between Pakistan and Saudi Arabia is only $3.4 billion and largely in favor of Saudi Arabia.
Pakistan imported $3.1 billion worth of goods from the Kingdom during the fiscal year 2017-18, while exports stood at $316.7 million, data shared by the State Bank of Pakistan showed.
Suggesting new means to explore bilateral trade and investment — by relying less on traditional goods and services – Dr. Haq said: “Pakistan should try to win Saudi contracts for IT services as this is the area where we have potential to earn foreign exchange but we never tried. We must come out of traditional items like textile.”
Agriculture is another sector that Pakistan could tap into to seek Saudi investment through joint ventures, Dr. Haq said: “This area has potential to grow fast and create export surplus. Saudis investors can be lured for modern corporate farming in Pakistan to earn substantial profits.”


Egypt inks deal with Cyprus for power link to Europe

Updated 23 May 2019
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Egypt inks deal with Cyprus for power link to Europe

  • It is estimated the project will take 36 months to implement from the start of construction, with the lowest point 3,000 meters below sea-level
  • Phase 1 will see the interconnector carry a capacity of 1,000 MW which can be upgraded to 2,000 MW at a later stage

NICOSIA: Egypt has signed a deal with a Cypriot firm to lay a 310-kilometer (195-mile) cable under the Mediterranean to export electricity to Europe, the company said on Thursday.
Nicosia-based EuroAfrica described the deal, worth an estimated two billion euros, as a “landmark.”
“Cyprus now becomes a major hub for the transmission of electricity from Africa to Europe,” said company chairman Ioannis Kasoulides.
It is estimated the project will take 36 months to implement from the start of construction, with the lowest point 3,000 meters below sea-level.
Phase 1 will see the interconnector carry a capacity of 1,000 MW which can be upgraded to 2,000 MW at a later stage.
“The national electricity grid of Egypt will be linked to the European electricity system through Cyprus and will contribute to energy security,” Kasoulides said.
Following the crises in Crimea and eastern Ukraine, the EU has been keen to develop alternative sources of energy to reduce its dependence on imports from Russia.
In the past year, gas has started flowing from four major new fields off Egypt’s Mediterranean coast, and output is already sufficient to meet domestic needs.
The Arab world’s most populous country is now seeking to develop the infrastructure to export its newfound energy wealth, both as liquefied natural gas and as electricity.
Egypt is also seeking to import gas from fields off Cyprus and Israel to boost the profitability of the new liquefaction and export facilities it is developing on its Mediterranean coast.
In September, Egypt signed a deal with Cyprus to build an undersea pipeline to pump Cypriot offshore gas to Egypt for processing for export to Europe.
The plans have led to closer eastern Mediterranean ties, with Cyprus, Egypt, Greece and Israel holding regular high-level meetings.