Investment Minister Khalid Al-Falih announces major opportunities during joint business forum in Islamabad

Saudi Arabia is set to allocate a substantial portion of its $200 billion annual construction and material procurement contracts to Pakistan, according to Investment Minister Khalid Al-Falih. Speaking at the Pak-Saudi Business Forum 2024 in Islamabad, Al-Falih expressed optimism about finalizing at least $2 billion in business proposals during his three-day visit to the country.

Saudi Arabia is positioning itself to become the world’s largest construction market, with significant investments aimed at diversifying its economy. A recent report from global property consultancy Knight Frank projected that the Kingdom’s total construction output is expected to reach $181.5 billion by the end of 2028, marking a nearly 30% increase from 2023 levels.

Al-Falih stated, “Saudi Arabia is the largest construction site in the world, and in the next few years, we will be awarding construction and material procurement contracts amounting to approximately $1.8 trillion.” The minister revealed that the construction and engineering, procurement, and construction (EPC) values for the previous year were around $150 billion, with estimates for this year climbing to $180 billion and expected to rise to $200 billion annually in the future.

A significant highlight of Al-Falih’s remarks was the emphasis on sourcing materials from Pakistan, as he noted that a substantial portion of inputs for these contracts would be imported, with a strong preference for local sourcing.

This visit comes at a critical time for Pakistan, which is seeking to strengthen its trade and investment ties amid a prolonged economic crisis that has severely affected foreign exchange reserves and led to a weakening of its national currency. In recent months, both countries have stepped up efforts to enhance bilateral trade and investment, with Crown Prince Mohamed bin Salman reaffirming his commitment to expedite a $5 billion investment package for Pakistan in 2024.

During his visit, it was announced by the Pakistani president’s office that 25 agreements will be signed, signalling a new era of economic cooperation. These agreements will focus on various sectors, including construction, infrastructure, mining, agriculture, and information technology.

“The Saudi minister’s schedule will be packed with meetings with representatives from private companies and top government officials from both countries. Important mutual agreements and memorandums of understanding are expected to be finalized,” stated the Pakistani Prime Minister’s Office, following the Saudi delegation’s arrival.

Pakistan’s Privatization and Investment Minister Abdul Aleem Khan mentioned that private companies in Pakistan are eager to engage in investment and business opportunities with Saudi Arabia, indicating a robust interest in the collaboration.

Accompanying Al-Falih is a delegation of over 130 members representing various sectors such as energy, mining, agriculture, business, tourism, industry, and manpower. The Saudi minister’s engagements will likely lead to significant partnerships that could benefit both nations.

This announcement follows the recent approval by the International Monetary Fund (IMF) of a long-awaited $7 billion bailout for Pakistan, contingent on the implementation of sound policies and reforms aimed at enhancing macroeconomic stability and addressing structural challenges. The IMF highlighted the importance of continued support from Pakistan’s development and bilateral partners, reinforcing the need for initiatives like the one announced by Al-Falih.

With both nations poised to deepen their economic ties, the upcoming agreements and collaborative efforts signal a promising trajectory for Pakistan’s economic landscape and Saudi Arabia’s ambitions in the global construction market.