There are “no limits” to what Pakistan and Saudi Arabia’s economic partnership can achieve. That is, according to the Kingdom’s Investment Minister Khalid A. Al-Falih. He said this to a crowd of Saudi and Pakistani businessmen in Islamabad as he confirmed that the two governments would sign 27 “organic agreements” and memorandums of understanding (MoUs) worth around $2b.
Pakistan’s Prime Minister Shehbaz Sharif and Chief of Army Staff General Asim Munir attended the signing ceremony in the country’s capital. The agreements span across the sectors of industry, agriculture, information technology, food, education, mining and minerals, health, petroleum, energy and other areas.
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Sharif assuaged fears that the MoUs would be symbolic as he assured there would be “no delay or red tape-ism” in the implementation process.
Pakistani officials highlighted the country’s improved macroeconomic indicators in an effort to signal that, despite the economic crisis that has cast a shadow for the past few years, things were looking up.
The country’s Finance Minister Muhammad Aurangzeb credited the Kingdom as having played a “very important and critical role” in that recovery.
IMF to the rescue, again
Pakistan has been reeling from a stark economic crisis that has hit been felt across the economic divide.
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By GlobalDataBetween 2022 and 2023, a series of crises unleashed a period of political and economic instability. There was the aftermath of COVID-19, the floods of 2022, the arrest of former PM Imran Khan, and accusations of election rigging earlier this year.
Recently, the IMF approved a $7b loan to Pakistan to be distributed over the next three years. It will be the 25th bailout loan the country has received since its independence. While the loan was agreed upon in July, it was only approved by the DC-based lenders two weeks ago.
However, the loan comes with strict conditions that already have been affecting the country’s population. Increasing taxes by a record 40%, one of the requirements for the loan, has brewed frustration and panic across the country. In anticipation of the deal, the price of milk in Karachi surpassed what it would cost in Paris.
The IMF has defended the deal. A spokesperson said, “the task is to pursue reforms which underpin stability and sustainably strengthen the living standards for low- and middle-income households.”
