Saudi Arabia Is Investing $20 Billion in Pakistan. Here’s What It’s Getting in Return

(Time.com) By JOSEPH HINCKS

Saudi Arabia’s Crown Prince Mohammed bin Salman has been shunned by much of the world after the murder of dissident journalist Jamal Khashoggi in October, which the CIA concluded he had ordered. A-list executives pulled out of his Riyadh investment forum (dubbed ‘Davos in the Desert’), street protests greeted his arrival in Tunisia in November, and there were reports Morocco’s King Mohammed VI snubbed him on a visit to the North African country. That wasn’t the case earlier this week in Pakistan, however, which bestowed its highest civilian award on the young Saudi prince, gave him a gold-plated gun, and declared Monday a public holiday in honor of his two-day visit to Islamabad.

“Saudi Arabia has always been a friend in need, which is why we value it so much,” Pakistani Prime Minister Imran Khan said Sunday, while seated next to MBS, as the crown prince is known. Earlier Saudi’s de-facto leader had announced investments in Pakistani petrochemicals, power generation, and mining projects worth more than $20 billion.

In addition to the staggering financial package, MBS — on Khan’s request — ordered the “immediate release” of more than 2,000 Pakistani prisoners incarcerated in the Kingdom. He “won the hearts of the people of Pakistan,” the prime minister — who broke protocol to personally drive MBS to his official residence — later gushed on Twitter.

MBS’s visit to Islamabad is widely regarded as an attempt to repair his tarnished credentials as an international statesman. It precedes stops in India and China, which—like Pakistan—have not spoken out about Khashoggi’s murder. But Saudi Arabia’s investment in the nuclear-armed South Asian state is more than just a PR exercise.

Why does Pakistan need Saudi funds?

Saudi Arabia has a long history of providing financial support to Pakistan. That includes funneling money through Pakistan’s madrassa education system, cushioning the impact of international sanctions following its nuclear test in the late 1990s, and loaning Islamabad $1.5 billion when the Pakistani rupee crashed in 2014.

But the latest round of investment comes at a critical time for Islamabad, which is in the middle of an economic crisis. The foreign exchange reserves that Pakistan uses to purchase crucial fuel imports have dwindled to less than $8 billion. Since he was sworn in as prime minister last August, the populist Khan has been engaged in a highly public “austerity drive” while appealing to friendly nations for financial support.

In fact, in October his government received Saudi funds to the tune of $6 billion, including $3 billion import payment deferrals. The Kingdom proffered that support package after Khan’s visit to Riyadh, when Pakistan’s central bank reserves had plummeted 40% on the previous year’s figures. Islamabad is currently negotiating a bailout from the IMF—the country’s 13th since the 1980s.

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