Saudi Arabia to invest $1 billion in Pakistan, following UAE and Qatar

Saudi Arabia has announced plans for a major investment in Pakistan.

Saudi King Salman bin Abdul-Aziz Al Saud issued a directive today to invest $1 billion in the Pakistani economy. The move followed a phone call between the Saudi and Pakistani foreign ministers, the official Saudi Press Agency reported. 

Why it matters: The agency did not mention specifics of the investment. However, the South Asian country is facing a major economic crisis. Specifically, Pakistan’s foreign currency reserves have fallen dramatically, which is leading to difficulties paying for imports.

Pakistan is therefore seeking cash from its wealthy allies in the Gulf and has had some success so far. Yesterday, Qatar announced plans to invest $3 billion in Pakistan’s commercial and investment sectors. Earlier this month, the United Arab Emirates said it would invest $1 billion in Pakistani companies in the gas, logistics, finance and other sectors. 

Earlier this week, a Pakistani official said they are actively seeking investment from Muslim-majority countries, with a target of $30 billion, according to the Associated Press of Pakistan. 

Saudi Arabia and Pakistan have been close allies for several years, making it no surprise the kingdom has come to Pakistan’s aid. Saudi Arabia was Pakistan Prime Minister Shehbaz Sharif’s first foreign visit in April. The same month, the two countries started discussions on a long-term business strategy. 

Know more: Pakistan is also growing closer to Saudi Arabia’s chief geopolitical foe, Iran. The two countries signed several cooperation agreements this month. They have also been working together on border security since the Taliban returned to power in 2021, two decades after US-led forces toppled their regime.