Pakistan PM Sharif's Pilgrimage Trip Sparks Economic Momentum with Saudi Arabia

In his first foreign trip since his election, Pakistan's Prime Minister Shehbaz Sharif visited the Muslim holy city of Mecca to perform the Islamic pilgrimage known as Umrah. His delegation included several senior ministers from the newly formed government.

Following the pilgrimage, the prime minister was invited by Crown Prince and Prime Minister of Saudi Arabia, Mohammed bin Salman, to an iftar dinner at the Al-Safa Royal Palace in Mecca where they also held a private meeting to discuss bilateral relations of the two countries. Pakistan's prime minister also extended an invitation to the crown prince to visit Pakistan soon.

"Shehbaz Sharif is in Saudi Arabia but not on an official visit. He went for Umrah and on the sidelines of that, the Saudi crown prince invited him to dinner after which the two held a private meeting. According to released statements the two leaders have agreed to expedite the first part of a planned $5 billion Saudi investment package for Pakistan," former unit manager of Engro Corporation and political analyst Dr Shahid Rashid told Sputnik India in a commentary.

Comprehensive Strategic Partnership

According to the analyst, in addition to increasing economic cooperation, Islamabad has also attached great importance to strategic military cooperation with Riyadh. The two nations have been working towards strategic cooperation in various fields, including defence cooperation, training and joint exercises. For example, just a few weeks ago, Pakistan's Chief of Army Staff Asim Munir visited Riyadh and held talks with the Crown Prince.

"Although these meetings and talks are ongoing at the highest level it is important to note that these promises are yet to materialize and for now it remains unclear as to when exactly they will take place," the analyst said.

Looking realistically at what Saudi Arabia can give Pakistan in the near future, Dr Rashid said it was highly likely that the kingdom would help Pakistan buy petrol and help roll over some of Pakistan's huge debt.

"At this point it feels like Pakistan will only receive enough to keep it slightly afloat. Saudi Arabia will not give Pakistan anything that will make the country strong and independent because that goes against the US policy. The United States will never want Pakistan to achieve real independence or total stability as it wants Pakistan to be dependent on the United States or on those countries that are friendly with the US," the analyst explained.

FILE - In this March 18, 2017 file photo, local officials visit the gold and copper mine site, in Reko Diq district in southwestern Pakistan's Baluchistan province. Pakistani officials say on Friday, Sept. 18, 2020, an international tribunal has granted it a stay pending a final decision on a $5.8 billion penalty. The fine was imposed for denying a mining lease to an Australian company. (AP Photo/Naseem James, File)

Saudi Financial Investment in Pakistan's Mining Sector

Following the recent meeting between the two Prime Ministers, Pakistani media reports have suggested that Saudi Arabia is interested in investing around $1 billion in the Reko Diq gold and copper mine in Pakistan's south-western province of Balochistan.

Reko Diq is one of the world's largest undeveloped copper-gold projects. It is 50 per cent owned by Canada's Barrick Gold Corporation, 25 per cent by three state-owned companies, 15 per cent by Balochistan on a fully-funded basis and 10 per cent by Balochistan on a free-carried basis, according to Barrick.

Although the gold mines represent enormous wealth, local Balochis and the Balochistan National Party (BNP-Mengal) have staged repeated protests against their development.

Moreover, the BNP-M leaders stressed that the people of Balochistan have been facing serious economic problems and security threats for the past several years and the main reason for this is that the so-called rulers, who have usurped and exploited the mineral resources of Balochistan without giving anything back to the local people.

"A meeting between the two businessmen-turned-political leaders was inevitable as Pakistan is in dire need of investment while Saudi Arabia is only too happy to oblige with many mega projects lined up in Pakistan, including the treasure trove – the Reko Diq gold and copper mines," Scotland-based political analyst and writer Parvez Salik told Sputnik India.

Long Road Ahead?

The writer further explained that in September 2023, the then caretaker prime minister Anwaarul Haq Kakar had said that Saudi Arabia would invest up to $25 billion in Pakistan over the next two to five years in various sectors, including mining, agriculture and information technology.

However, the analyst expressed that it is best to keep a "cautious optimism" regarding the big plans as "ongoing security threats and economic instability in Pakistan may put a damper on the projects or delay them indefinitely".

Nevertheless, the Pakistan Stock Exchange (PSX) hit a new all-time high of 69,620 points on Monday, which equity analysts attributed to hopes of the Saudi crown prince's visit to Pakistan and investment in the Reko Diq gold mine project.

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