Islamabad has invited Saudi Arabia to become the third partner in the Beijing-funded Belt and Road corridor of major infrastructure projects inside Pakistan.
The announcement comes on the back of a two-day trip to Saudi Arabia by new prime minister Imran Khan, who had been expected to push for financial assistance from Islamabad’s ally to help Pakistan deal with a brewing currency crisis.
Information minister Fawad Chaudhry did not reveal if Saudi Arabia would be loaning money to Pakistan to help top up its dwindling foreign currency reserves, but said he expected Saudi Arabia to invest in Pakistan in a major way.
“Saudi Arabia is the first country whom we have invited as third country partner in CPEC,” Chaudhry said, referring to the China-Pakistan Economic Corridor (CPEC), the Pakistan leg of China’s vast Belt and Road infrastructure initiative.
Beijing has pledged $60bn to build power stations, major highways, new and upgraded railways and higher capacity ports, to help turn Pakistan into a major overland route linking western China to the world.
Mr Chaudhry said a Saudi delegation will be coming to Pakistan in the first week of October, including the Saudi minister for finance and energy, and that should lay down a “foundation for a very big partnership”.
“God willing, very big investments will be coming to Pakistan from Saudi Arabia this way,” he added.
Mr Khan’s term began with new doubt over the CPEC projects, when his commerce minister was quoted as saying Pakistan would suspend them for a year and review them. The minister later said his comments were taken out of context, and Pakistani officials reassured Beijing there would be no delay.
Pakistan has in the past suggested that other countries could join CPEC, but the response has been lukewarm due to concerns that China would dominate any relationship.
Saudi Arabia has a history of bailing out Pakistan financially. In 2014, six months after Pakistan obtained its last IMF bailout, Saudi Arabia loaned it $1.5bn that the government used to strengthen its rupee currency.
Ahead of Mr Khan’s visit to Saudi Arabia speculation was rife that Islamabad will be asking for a loan to help Pakistan avoid being forced to seek another IMF bailout.