Independent Report
The Prime Minister Muhammad Shahbaz Sharif visited Saudi Arabia earlier this week on his first foreign visit since being elected in February.
In Mecca, the Premier and his delegation met with Saudi Crown Prince Mohammed bin Salman. In addition, Shahbaz Sharif held a private meeting with the Crown Prince.
What was discussed at the one-on-one meeting between the Premier and Saudi Crown Prince has not been disclosed, but it is said the two leaders agreed to strengthen ties.
While the PM’s visit to Saudi Arabia was for participation in the World Economic Forum (WEF) held in Riyadh on special invitation of the Saudi Crown Prince, he (Shahbaz Sharif) also held crucial meetings with Malaysian Prime Minister, Anwar Ibrahim, Emir of Kuwait, Highness Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah, President Islamic Development Bank Dr. Muhammad Sulaiman Al Jasser, Managing Director IMF, Ms. Kristalina Georgieva, besides with Mr. BillGates, on sidelines of WEF.
It is customary for the Premiers to visit Saudi Arabia after being sworn into office, underlying the close ties between the two countries. However, Sharif’s recent visit is important for many reasons that go beyond just following a tradition.
To begin with, Pakistan’s current civil-military leadership is keen to persuade its partners and allies that after a turbulent period of political unrest, stability has returned to Pakistan.
It is important to recognize that Pakistan is facing economic challenges. Last year, Pakistan’s economy worsened to such an extent that talks about its defaulting on loans dominated headlines for several months.
During the recent talks, Riyadh may have urged Pakistan to restore monetary stability through an agreement with the International Monetary Fund (IMF) to gauge its commitment to stabilization and reform.
There are signs that Pakistan has succeeded in both areas to initiate talks with Saudi Arabia about future investment. It has successfully concluded its current agreement with the IMF and plans to initiate talks with the organization for a longer program. Similarly, there has been a noticeable decline in political turmoil in Pakistan following the elections and installation of a new government.
These developments are backed by the economic reforms that the country initiated over the last year. During his previous tenure as prime minister (April 2022-August 2023), Sharif took steps to privatize huge loss-making state-owned enterprises like Pakistan International Airlines.
Under the outgoing interim government, the reform process took modest strides and is currently gaining momentum under the current administration. This continuity of policy over the last couple of years has perhaps convinced the Saudi leadership that Pakistan will not only protect its investments, but also become a stable partner.
Pakistan’s policy approach may have begun to pay dividends. After Sharif met the Crown Prince, Riyadh committed to accelerating the initial round of a $5 billion investment package that had been previously discussed but was not materialized, in part because of the political unrest in Pakistan.
In addition, the Crown Prince has agreed to travel to Pakistan on invitation of the Premier Shahbaz.
Several significant initiatives will probably be launched during that visit. This may include the long-discussed Saudi involvement in the Reko Diq mining project and the commencement of construction on a $10-billion oil refinery at Gwadar Port.
Sharif may have requested the Saudis for a new oil subsidy during his recent visit. A fresh subsidy would serve as a hedge against any future increases in the international oil market price that would jeopardize Pakistan’s economic goals.
In a tweet on X, the PM said “had many useful meetings, constructive discussions and productive engagements during my visit to Riyadh for WEF, and heading home now with plenty of ideas and plenty of work to do as we tackle the challenges of today and tomorrow.”
At the outset, PM Shahbaz Sharif’s visit to the Kingdom is expected to restore confidence in Pakistan-Saudi Arabia relations further.
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