Saudi Arabia pledges $3bn to Pakistan, defers oil payments

In this handout photograph released by Pakistan’s Press Information Department (PID) on October 23, 2018, Saudi King Salman meets with Pakistan’s Prime Minister Imran Khan during a meeting in Riyadh. Saudi Arabia. (AFP)
Updated 24 October 2018
0

Saudi Arabia pledges $3bn to Pakistan, defers oil payments

  • It was agreed Saudi Arabia will place a deposit of $3 billion for a period of one year as balance of payment support: statement
  • Pakistan is seeking foreign aid to help plug a massive budgetary gap which the Pakistan prime minister has blamed on the mismanagement of the previous administration

RIYADH: Saudi Arabia has pledged $3 billion in support to Pakistan and allowed for deferred oil payments to help stave off a budget crisis.

The deal came as Pakistani Prime Minister Imran Khan attended the opening of the Future Investment Initiative (FII) in Riyadh on Tuesday.

Earlier Khan met with King Salman and Crown Prince Mohammed bin Salman to discuss bilateral issues. It was his second visit to the Kingdom in just over a month.

“It was agreed Saudi Arabia will place a deposit of $3 billion for a period of one year as balance of payment support,” Pakistan’s Foreign Ministry said in a statement.

“It was also agreed that a one-year deferred payment facility for import of oil, up to $3 billion, will be provided by Saudi Arabia. This arrangement will be in place for three years, which will be reviewed thereafter.”

During his address to the gathering of global business executives, Khan also confirmed that Pakistan was in talks with the International Monetary Fund (IMF) for a new bailout.

Pakistan is seeking foreign aid to help plug a massive budgetary gap which the Pakistan prime minister has blamed on the mismanagement of the previous administration. During his election campaign, the former cricketer vowed to create 10 million jobs and establish an “Islamic welfare state.”

After a consultative visit last month, the IMF had warned that Pakistan needed to quickly secure “significant external financing” to avert a crisis. 

Saudi Arabia and Pakistan have also discussed potential investment in mineral resources in Balochistan, the largest of Pakistan’s four provinces which borders Iran and Afghanistan.

Further discussions were held about a refinery project in Pakistan, the Finance Ministry said in the statement.

Pakistan’s external balance of payments represents one of the biggest challenges facing Khan.

The country’s current account deficit has ballooned as its central bank’s foreign reserves dropped to about $8.1 billion in October.

That was barely enough to meet the country’s sovereign borrowings between now and the end of the year.

The IMF expects Pakistan’s economic growth to slow to about 4 percent in 2019.

Pakistan is seeking to attract increased inward investment to help shore up its finances and Khan used the event as platform to talk about opportunities in sectors such as tourism, minerals, coal and gas exploration.

He also highlighted what he said were the successes of Pakistan in the fight against terrorism, which has brought peace and stability to the country, and pointed to the significance of the China-Pakistan Economic Corridor (CPEC).

China has become an increasingly high-profile investor in Pakistan as Beijing pushes ahead with major projects such as the CPEC.


Saudi Arabia, UAE agree on joint program to test supply chain and security systems

Updated 17 min 47 sec ago
0

Saudi Arabia, UAE agree on joint program to test supply chain and security systems

  • The test is in preparation for a crisis or disaster

JEDDAH: Supply chains and security systems are to be tested in preparation for a crisis or disaster in Saudi Arabia and the UAE, one of several initiatives agreed on Saturday by a body representing both countries.

The Saudi-UAE Coordination Council held its first executive committee meeting in Abu Dhabi. 

It was chaired by Minister of Economy and Planning Mohammed bin Maziad Al-Tuwaijri from the Saudi side, and Minister of Cabinet Affairs and the Future Mohammed bin Abdullah Al-Gergawi from the UAE side.

Al-Tuwaijri said the meeting was a continuation of the achievements made in bilateral relations.

A joint security cooperation program was signed to test the supply chain and security systems in the major sectors during a crisis or disaster, identify the points for improvement and develop a plan to address them.

It was agreed to introduce and market the products of small traders through joint events.

A virtual e-currency project was launched, but only on a trial basis. It will be restricted to trading between some banks in the Kingdom and the UAE in order to explore and prepare for future technologies.

Al-Tuwaijri also visited the Saudi Arabian pavilion at Expo 2020 in Dubai, heading an official delegation from the Kingdom.

The group was received by the minister of state for international cooperation and director general of the expo, Reem bint Ebrahim Al-Hashimy.

Saudi Arabia was the first international participant to begin building its pavilion for the event.

The Kingdom and the UAE have the two largest economies in the Gulf Cooperation Council and a combined gross domestic product of around $1 trillion.

There was a Saudi-UAE Coordination Council meeting last June in Jeddah that was chaired by the Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed and the Kingdom’s Crown Prince Mohammed bin Salman.  

The two main goals set out at that meeting were to enhance the domestic economy of both nations and counter threats to Gulf and Arab security.