ISLAMABAD (The Thursday Times) – Saudi Arabia’s Investment Minister Khalid Al-Falih announced plans to allocate a significant portion of its $200 billion annual construction and material procurement contracts to Pakistan, signaling a major step in strengthening economic cooperation between the two nations.
Al-Falih heads to Islamabad
Speaking at a joint business forum in Islamabad, Al-Falih revealed that Saudi Arabia expects to finalize $2 billion in business proposals during his three-day visit. As the Kingdom continues its economic diversification under Vision 2030, it is projected to become the world’s largest construction market, with total construction output expected to reach $181.5 billion by 2028, a nearly 30% increase from 2023.
“Saudi Arabia is the largest construction site in the world,” Al-Falih said at the Pak-Saudi Business Forum 2024. He added that Saudi Arabia will award $1.8 trillion in construction and material procurement contracts over the next few years, with annual contracts expected to reach $200 billion. A large portion of these contracts will require imported inputs, with Pakistan positioned as a key supplier.
The announcement comes as Pakistan seeks to bolster its economy amidst an ongoing financial crisis. Strengthening economic ties with Saudi Arabia is seen as a strategic move, with Crown Prince Mohammed bin Salman committing to a $5 billion investment package for Pakistan earlier this year.
25 agreements to boost Pak-Saudi economic ties
During Al-Falih’s visit, the Pakistani president’s office announced that 25 agreements will be signed, focusing on sectors such as construction, infrastructure, mining, agriculture, and information technology. The visit is expected to open new avenues of investment and cooperation between the two nations.
Al-Falih’s delegation, comprising over 130 members from sectors including energy, mining, tourism, and industry, will meet with key officials and representatives from Pakistan’s private sector. These discussions aim to finalize important mutual agreements and memorandums of understanding (MOUs) to deepen trade and investment ties.
“Private companies in Pakistan are eager to capitalize on investment opportunities with Saudi Arabia,” said Abdul Aleem Khan, Pakistan’s Privatization and Investment Minister.
PIF’s role in Saudi Arabia’s Vision 2030
The Public Investment Fund (PIF) is central to Saudi Arabia’s Vision 2030, the initiative aimed at reducing the Kingdom’s dependency on oil by diversifying its economy. The PIF is expected to benefit from the Kingdom’s large-scale construction projects, which will further boost Saudi Arabia’s economic transformation.
Saudi Arabia’s investment in Pakistan aligns with its broader goals, particularly as the Kingdom’s construction market continues to expand. The PIF is also involved in numerous other investments within Pakistan, including infrastructure and mining projects.
Saudi backs Pakistan for IMF deal
This economic cooperation comes at a crucial time for Pakistan, which recently secured a $7 billion bailout package from the International Monetary Fund (IMF). The bailout, contingent on the implementation of key economic reforms, emphasizes the importance of continued support from bilateral partners like Saudi Arabia.
As Saudi Arabia continues to pursue its ambitious Vision 2030 agenda, its collaboration with Pakistan in the construction sector is expected to generate significant economic benefits for both countries.
