Saudi investments to aid cash-strapped Pakistan

A Pakistani vendor arranges his stall near vehicles covered with snow during a snowfall in Murree, some 65 km north of Islamabad, on January 5, 2019. (File/AFP)
Updated 17 February 2019

Saudi investments to aid cash-strapped Pakistan

  • At the heart of the investment is a reported $10 billion refinery and oil complex in the strategic Gwadar Port on the Arabian Sea
  • Riyadh and Islamabad, decades-old allies, have been involved for months in talks to hammer out details of the deals in time for the high-profile visit

DUBAI: A record investment package being prepared by Saudi Arabia for Pakistan will likely provide welcome relief for its cash-strapped Muslim ally, while also addressing regional geopolitical challenges, analysts say.
At the heart of the investment is a reported $10 billion refinery and oil complex in the strategic Gwadar Port on the Arabian Sea, the ultimate destination for the massive multi-billion dollar China Pakistan Economic Corridor, which lies not far from the Indo-Iranian port of Chabahar.
Two Saudi sources have confirmed to AFP that heir apparent to the Gulf kingdom’s throne, Crown Prince Mohammed bin Salman, will visit Islamabad shortly, without giving a date.
And a number of major investment deals are expected to be signed during a visit, officials from both countries have told AFP.
Riyadh and Islamabad, decades-old allies, have been involved for months in talks to hammer out details of the deals in time for the high-profile visit.
“The outcome of the talks so far has been very positive and this is going to be one of the biggest-ever Saudi investments in Pakistan,” a Pakistani senior finance ministry official told AFP.
“We hope that an agreement to this effect will be signed during the upcoming visit of the Saudi crown prince to Pakistan,” said the official, requesting anonymity.
The Wall Street Journal reported last month that both Saudi Arabia and the United Arab Emirates, Islamabad’s biggest trading partner in the Middle East, have offered Pakistani Prime Minister Imran Khan some $30 billion in investment and loans.

Riyadh investments

Riyadh investments are expected to provide a lifeline for Pakistan’s slumping economy which was downgraded in early February by S&P ratings agency from a B to a B-, Saudi economist Fadhl Al-Bouenain said.
“Saudi investment to Pakistan comes within an economic aid package aimed at relieving the stress of external debt and a shortage of foreign currency, besides boosting the sluggish economy,” Bouenain told AFP.
The OPEC heavyweight also aims to achieve strategic and commercial goals with investments in infrastructure and refinery projects, he said.
Saudi Arabia and its Gulf partner, the UAE, have already deposited $3 billion each in Pakistan’s central bank to help resolve a balance of payments crisis and shore up its declining rupee.
They have also reportedly deferred some $6 billion in oil imports payments as Islamabad has so far failed to secure fresh loans from the International Monetary Fund.
Khan has already visited Riyadh twice since taking office in July and in October attended a prestigious investment conference widely boycotted by other political and economic figures after the murder of journalist Jamal Khashoggi.
Khan also visited Saudi rivals Qatar and Turkey, as well as China seeking investments.
“One of the goals for Saudi Arabia expanding investments in refining worldwide is to secure market share and sustainable exports in the face of international competition,” Bouenain said.
Saudi Energy Minister Khalid Al-Falih visited Gwadar in January and inspected the site for the proposed oil refinery at the deep sea port, just 70 kilometers (45 miles) away from its Iranian competitor, Chabahar.
He was quoted by local media as saying the kingdom was studying plans to construct a $10 billion refinery and petrochemicals complex in Gwadar.

Petrochemicals projects

Like most oil suppliers, the world’s top crude exporter has been investing heavily in refinery and petrochemicals projects across the globe to secure long-term buyers of its oil.
A pipeline from Gwadar to China would cut the supply time from the current 40 days to just seven, experts say.
Developed as part of China’s Belt and Road Initiative with investments worth some $60 billion, Gwadar is being billed as a regional industrial hub of the future, easily accessible for Central Asia, Afghanistan, the Middle East and Africa.
“Pakistan needs a rich partner to enter as a third party besides China, capable of injecting needed cash,” Bouenain said.
But so far China has rejected other partners for the corridor that seeks to connect its western province Xinjiang with Gwadar, including Saudi Arabia and UAE, said James M. Dorsey, a senior fellow at Singapore’s S. Rajaratnam School of International Studies.
This is despite calls by Khan “for the Chinese investments to be restructured to include agriculture and job-creation sectors and not only in infrastructure,” Dorsey told AFP.
Any Saudi investment in Gwadar will also have geopolitical dimensions, Dorsey said.
Iran late last year inaugurated Chabahar which provides a key supply route to landlocked Afghanistan and allows India to bypass its historic enemy Pakistan.
India has seen Chabahar as a key way both to send supplies to Afghanistan and to step up trade with Central Asia as well as Africa.
But Riyadh is not expected to get involved in any Indo-Pakistani rivalry and the kingdom also has major strategic energy deals with New Delhi, where demand for oil is growing fast.
Indeed in April, the Saudis signed a $44 billion deal to build a huge refinery and petrochemicals complex in western India.


A Jordan startup delivers eco-friendly alternative to dry cleaning

Updated 05 December 2019

A Jordan startup delivers eco-friendly alternative to dry cleaning

  • Products used by WashyWash are non-carcinogenic and environmentally neutral
  • Amman-based laundry service aims to relocate to a larger facility in mid-2020

AMMAN: A persistent sinus problem prompted a Jordanian entrepreneur to launch an eco-friendly dry-cleaning service that could help end the widespread use of a dangerous chemical.

“Dry cleaning” is somewhat of a misnomer because it is not really dry. It is true that no water is involved in the process, but the main cleaning agent is perchloroethylene (PERC), a chemical that experts consider likely to cause cancer, as well as brain and nervous system damage.

Kamel Almani, 33, knew little of these dangers when he began suffering from sinus irritation while working as regional sales director at Eon Aligner, a medical equipment startup he co-founded.

The problem would disappear when he went on vacation, so he assumed it was stress related.

However, when Mazen Darwish, a chemical engineer, revealed he wanted to start an eco-laundry and warned about toxic chemicals used in conventional dry cleaning, Almani had an epiphany.

“He began to tell me how PERC affects the respiratory system, and I suddenly realized that it was the suits I wore for work — and which I would get dry cleaned — that were the cause of my sinus problems,” said Almani, co-founder of Amman-based WashyWash.

“That was the eureka moment. We immediately wanted to launch the business.”

WashyWash began operations in early 2018 with five staff, including the three co-founders: Almani, Darwish and Kayed Qunibi. The business now has 19 employees and became cash flow-positive in July this year.

“We’re very happy to achieve that in under two years,” Almani said.

The service uses EcoClean products that are certified as toxin-free, are biodegradable and cause no air, water or soil pollution.

Customers place orders through an app built in-house by the company’s technology team.

WashyWash collects customers’ dirty clothes, and cleans, irons and returns them. Services range from the standard wash-and-fold to specialized dry cleaning for garments and cleaning of carpets, curtains, duvets and leather goods.

“For wet cleaning, we use environmentally friendly detergents that are biodegradable, so the wastewater doesn’t contain any toxic chemicals,” Almani said.

For dry cleaning, WashyWash uses a modified hydrocarbon manufactured by Germany’s Seitz, whose product is non-carcinogenic and environmentally neutral.

A specialized company collects the waste and disposes of it safely.

The company has big ambitions, planning to expand its domestic operations and go international. Its Amman site can process about 1,000 items daily, but WashyWash will relocate to larger premises in mid-2020, which should treble its capacity.

“We’ve built a front-end app, a back-end system and a driver app along with a full facility management system. We plan to franchise that and have received interest from many countries,” Almani said.

“People visiting Amman used our service, loved it, and wanted an opportunity to launch in their countries.”

WashyWash has received financial backing from angel investors and is targeting major European cities initially.

“An eco-friendly, on-demand dry-cleaning app isn’t available worldwide, so good markets might be London, Paris or Frankfurt,” Almani said.

 

• The Middle East Exchange is one of the Mohammed bin Rashid Al-Maktoum Global Initiatives that was launched to reflect the vision of the UAE prime minister and ruler of Dubai in the field of humanitarian
and global development, to explore the possibility of changing the status of the Arab region. The initiative offers the press a series of articles on issues affecting Arab societies.