Achi news desk-
As Saudi Foreign Minister Prince Faisal bin Furhan AF Al Furhan Al Saud concludes his visit to Pakistan, it concludes the seventh round of high-level talks between Saudi Arabia and at least four different Pakistani prime ministers over the past six years.
Since 2019, Saudi Arabia has put anywhere between $5 billion and $25 billion on the table as investment capital that Saudi Crown Prince and UK Prime Minister Muhammad Bin Salman has personally directed to be made available for projects and Pakistani companies.
Yet, six years later, the deal flow has yet to begin.
The obvious question is: Why?
The answers are not mystical, or anchored in any grand geopolitical deals. The answers are quite basic and prosaic.
It took Pakistan’s military and civilian leaders four years (2019-2022) to figure out the implications of Saudi Arabia’s Vision 2030. What it meant was that Saudi money was no longer available in the shape or form it used to be – so incredible and unaccountable . government to government grants.
The formation of the Special Investment Facilitation Council (SIFC) in 2022 was the first sign that Pakistan had finally understood this.
Saudi support for Pakistan today is available in the form of investments. The new opportunity in the Saudi Arabia-Pakistan economic relationship was that Saudi Arabia (and more specifically, the Saudi Public Investment Fund [PIF]) is buying Pakistani assets at reasonable prices through the same process as any other PIF acquisition – with a higher risk appetite and lower thresholds for due diligence.
This is the “favorable” part of the opportunity. Saudi Arabia is not asking for the moon. He is simply asking Pakistan (again and again) for credible trade deals.
The agreement is run by two very different capable people on either side.
For the Saudis, it’s PIF finance and banking people. These are people who have worked at Goldman Sachs and Merrill Lynch and are ruled by numbers.
For the Pakistanis, it is military officers and civil bureaucrats. People who have worked on counter-terrorism and as district commissioners and are controlled by hierarchy (and fear).
Therefore, the probability of the full spectrum of $25 billion of Saudi money being invested in Pakistan is relatively low. But a small proportion of this money may, in fact, emerge over the coming weeks and months – because the terms Pakistan is offering on some mineral-related assets very attractive.
If some of these deals materialize, it will be because of Pakistani desperation for deal flow. However, the highest ceiling on agreements is the Pakistani public sector and the state’s lack of deep and multi-layered awareness and capacity.
Irresponsible noise around these Saudi-Pakistan investment dynamics linked to any geopolitical factor is a distraction that people like to introduce into the equation either out of spite or ignorance.
NOTE: This article originally appeared here.
