Pakistan and Saudi Arabia enjoy excellent bilateral relations. The close geographical proximity, historic trade ties, religious affinity and the complementary nature of economic needs have created a strong bondage of trust between Pakistan and Saudi Arabia. In addition, there is a convergence of views and interests of the two countries on most of the regional and international issues.
In the commercial and trade sector, Pakistan and Saudi Arabia maintain good relations that are improving with the passage of time. Kingdom is among the top 15 major export destinations of Pakistan. Saudi-Pak annual bilateral trade stands above $4 billion. Major items of exports from Pakistan to Saudi Arabia include raw cotton, cotton yarn, cotton cloth, readymade garments, knitwear (hosiery), bed linen, towels, tents and canvas, art silk and synthetic textiles, leather garments, furniture, carpets and rugs, footwear, sports goods and surgical goods, rice, fish, fruits, vegetables, spices, biscuits, jams, juices etc.
Pakistan imports major requirements of its petroleum from Saudi Arabia. Other items of import from Saudi Arabia include petrochemicals, organic chemical products, plastic and plastic products, fertilizers, steel products, electrical equipment and materials, raw skins, tanned leather, boilers and heavy equipment, copper and copper products, aluminum and aluminum products, chemicals (in-organic), components, precious metals, steel castings, tractors and other floor coverings of man-made fibers, various chemical products, rubber and rubber products etc.
The increase in our exports is due to the aggressive export promotion efforts, the organization of Pakistan specific week catalog show and participation by Pakistani companies in specialized exhibitions.
Besides this, there were visits of trade delegation organized by TDAP and Pakistani chambers of commerce which helped in improving our position and share in the market. Last year, a 32-percent increase in our exports have been achieved as compared to exports during 2006-2007. This progress achieved after a lot of efforts needs to be maintained and pushed up for further development.
In spite of all this visible growth in exports from Pakistan to Saudi Arabia, there still exists wider bilateral trade imbalance. The major cause of overwhelming imbalance in trade transaction is due to bulk import of petroleum by Pakistan from Saudi Arabia.
Bilateral investment
Pakistan’s business community has made substantial investment in industrial sectors.
There are more than 350 Pakistani investors in the Kingdom who have obtained license from Saudi Arabian General Investment Authority (SAGIA) and have established companies in various fields of construction and services.
In addition, Pakistani and Saudi businessmen have made substantial joint investment in industrial sectors. Major joint venture investments both in Saudi Arabia and Pakistan include companies like HUBCO, Pak Electron, Attock Cement, National Tiles and Ceramics, Saudi-Pak Industrial and Agricultural Investment Company, Prime Commercial Bank, Falcon Cement, Attock Oil Refinery, Pak-Arab Refinery, Pakistan Cables Limited, Faisal Islamic Bank, Sanaullah Woolen Mills, Al-Dahlawi Sana Co. for manufacturing Surgical Strings, National Fabric Products Factory, United Spinning & Textile Factories Co., Al-Olyan Descon Engineering Co. etc.
Ministerial commission
There exists an institutional arrangement between Pakistan and Saudi Arabia in the shape of joint ministerial commission. The 8th session of the Pak-Saudi Joint Ministerial Commission was held in Riyadh from 20 - 21st February, 2007. Both the delegations reviewed the existing and recent past implementation status and worked out the measures for quick realization and capitalization of common objects especially in the area of bilateral trade enhancement indicatives, trade market access, agriculture, agro-technology, sanitary, livestock/animal husbandry, cooperation to capitalize the investment opportunities, hydro projects & carbon, health and medicines, education etc.
Joint business council
Saudi Arabia and Pakistan have felt the pressing need that more interaction was required at the level of the business communities to bring qualitative and quantitative improvement in balanced trade. Therefore, it was decided to set up Pak-Saudi Joint Business Council (JBC) to promote bilateral trade and economic relations between the two countries. Consequently an MOU was signed and this brought the JBC in concrete shape/existence from June 28, 2000.
Though our exports to Saudi Arabia are growing but a lot more has to be done to bring our economic relations at par with political relations. In this regard several programs and projects are in the pipeline, which can be a turning point in bilateral relations. Presently, Pakistani companies are in negotiations and trying to get some share in mega infrastructure projects in the Kingdom. Similarly, Saudi government is interested in cooperation in the agriculture sector for its food requirements and negotiations are under way for leasing farmland in Pakistan.
Other joint venture projects include development of dairy and livestock sector and tourism and resort development in Pakistan. We also expect some sizeable investment from Saudi Arabia in energy sector.
Also in the field of economic and trade relations, gains are expected in view of the increasing marketing activities of Pakistan trade mission and in view of Saudi interest in privatization of state owned enterprises in Pakistan specially in banking and telecommunication sector.
— The author is Commercial Counselor at the Consulate General of Pakistan in Jeddah.
