ISLAMABAD: A 50-member business and official delegation from the Kingdom of Saudi Arabia (KSA) is due on Sunday (May 5) to hold business-to-business (B2B) meetings with focus for trade deals and investment in joint ventures with Pakistani entrepreneurs.
Talks are scheduled for May 6-7 in various sectors of economy, and some progress is also expected on government-to-business (G2B) and government-to-government (G2G) deals.
Prime Minister Shehbaz Sharif has formed a 16-member steering committee regarding the upcoming visit of the Saudi business delegation to Pakistan. The petroleum minister has been appointed as the chairman of the committee. The committee has been entrusted with other responsibilities including conducting business meetings and finalising security arrangements for the Saudi delegation.
According to official sources, the federal ministers of trade, privatisation, power and industry and production are included in the committee, while the Pakistani ambassador to Saudi Arabia, secretary SIFC [Special Investment Facilitation Council] and chief protocol of the Ministry of Foreign Affairs are also part of the committee.
Deputy chairman Planning Commission, minister of state for IT, secretaries power, petroleum, home, trade and investment board are also included in the committee.
According to the terms of reference (ToRs) of the steering committee, the committee has been given the task of business meetings and security arrangements for the Saudi business delegation. The committee will finalise the Pakistani business delegation for meetings with the Saudi business delegation.
The PM also ordered for taking necessary steps to make the visit meaningful and fruitful. The Ministry of Commerce will provide secretarial support to the committee.
Meanwhile, federal ministers of commerce, food security and industry, privatisation, Board of Investment, petroleum and power divisions held the preliminary meetings to assess preparations for the upcoming Saudi delegates and give them final touches for meaningful B2B talks between the KSA and Pakistan’s entrepreneurs.
“Yes, a sizeable number of Saudi businessmen is coming to Pakistan and would hold meaningful business interactions with Pakistan’s leading business leaders in some important sectors such as IT, energy, food, chemicals, meat, mining, agriculture and other sectors and the B2B talks would be held in Islamabad on May 6-7, 2024,” senior officials of Energy and Commerce and SIFC told The News.
Kingdom of Saudi Arabia Foreign Minister Prince Faisal Bin Farhan Al Saud, heading a delegation, arrived on a two-day visit in Pakistan and held talks on April 16-17, in which Pakistan pitched many projects including upgradation of Pakistan Refinery Limited (PRL), Petrochemical Complex, Machhikay-Taru Jabba white oil pipeline, and power division put its project of Thar-Matiria-Rahim Yar Khan electricity transmission line. However, Ministry of Water Resources had sought $3.5 billion investment in Diamer-Bhasha Dam.
Apart from the above projects, the government had also persuaded the KSA to purchase the PIA and also asked for joint ventures for the country’s lucrative airports apart from seeking investment in hotels in Islamabad. The First Women Bank had also been offered for doling it out to the KSA.
The first and largest-ever business delegation of top business groups of Pakistan earlier visited the KSA for Riyadh for the B2B Conference held on February 21, 2024 in Riyadh. Pakistan businessmen developed networking with Saudi entrepreneurs in Riyadh. “Now we have extended the scope of B2B avenues to more sectors such as IT, services, minerals and environment and logistics.”
Pakistan is facing a huge deficit in trade with the KSA -- the biggest economy in the Gulf countries and would try to increase export from Pakistan to KSA through B2B trade on a big scale. The investment and impetus in trade would increase on a large scale once the initiative taken by Pakistan with GCC (Gulf Cooperation Council) member countries which include Kingdom of Saudi Arabia, the UAE, Oman, Kuwait, Bahrain and Qatar that will pave the way for signing formal free trade agreement (FTA) with all said countries. There are some protocols for GCC FTA, which the authorities in the commerce ministry are aggressively pursuing to complete.
Pakistan and the Gulf Cooperation Council (GCC) earlier on September 28, 2023 in Riyadh, signed a “preliminary” FTA draft.
The relevant officials said that the KSA is the biggest economy in the Gulf region with GDP reaching $1.1 trillion in 2022 and Pakistan entrepreneurs need to make more inroads in the KSA market on B2B contracts basis.
“The main products exported from Pakistan to Saudi Arabia were rice ($86.2 million), bovine meat ($32.7 million), and spices (25.3 million). During the last 26 years, the exports of Pakistan to Saudi Arabia have increased at an annualised rate of 4.62pc, from $146M in 1995 to $472M in 2021. In 2021, Saudi Arabia exported $3.4B to Pakistan.”
In 2021-22, the bilateral trade remained at $5.581 billion as Pakistan exports to the KSA stood at $428 million and imports from the KSA stayed at $5.152 billion showing a trade deficit of $4.723 billion. However, in 2022-23, the bilateral trade between the two countries declined to $4.753 billion because of less imports from the KSA, which stood at $4.190 billion due to restrictions on imports in the wake of dollars’ availability crisis. “However, the country’s exports in 2022-23 slightly increased to the KSA registering growth at $563 million. The trade deficit in 2022-23 with the KSA stayed at $3.627 billion.
“During the first half of the current fiscal 2023-24, the bilateral trade stayed at $2.482 billion during July-December period 2023-24 as the imports stood at $262.58 million and imports from the KSA remained at $2.219 billion showing a deficit in trade of $1.957 billion. The major export products from Pakistan are rice, meat of bovine animals, fruit and vegetables tents and camping. However, major imports from KSA are POL products, polymers of propylene and polymers of ethylene.”