Saudi Arabia Tuesday pledged a $6 billion package to Pakistan to uplift it’s stagnant economy, Dawn online reported. The package includes $3bn balance of payments support and another $3bn in deferred payments on oil imports.
On the sidelines of the annual Future Investment Initiative (FII) Conference in Riyadh, agreements regarding the package were signed by both the countries. This comes in straight agreement with Saudi’s decision to seek economic and investment opportunities outside of its oil business as part of its Vision 2030.
The Pakistan prime minister Imran Khan’s primary objective of his trips were to seek financial assistance to deal with impending balance of payments crisis.
The Foreign Office in a statement said: “A MoU was signed between the Finance Minister Asad Umar and the Saudi Finance Minister Muhammad Abdullah Al-Jadaan. It was agreed Saudi Arabia will place a deposit of USD 3 Billion for a period of one year as balance of payment support.”
It was further “agreed that a one year deferred payment facility for import of oil, up to USD 3 Billion, will be provided by Saudi Arabia. This arrangement will be in place for three years, which will be reviewed thereafter”.
Recently, while talking to reporters, Khan had disclosed that the country could immediately need around $12bn to address the $18 billion balance of payments problem.
The situation could further improve if China also makes some commitments to rescue its ‘all-weather friend’. Khan is scheduled to travel to China on Nov 3.
During talks with Khan, the Saudi government reaffirmed its interest in setting up an oil refinery in Pakistan. Talks on setting up of the refinery had started during the prime minister’s visit to the Kingdom last month. Later a Saudi delegation visited Pakistan for studying the prospects of the project.
“Saudi Arabia confirmed its interest in this project, and a MoU will be signed after obtaining cabinet approval,” the Foreign Office said.
