Pak-Saudi trade ties: Potential and prospects

A photo taken on August 13, 2017 in Lahore shows decoration lights to mark Pakistan's Independence day. (AFP)
Updated 13 August 2017
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Pak-Saudi trade ties: Potential and prospects

Ever since its establishment in 1947, Pakistan has enjoyed close relations with Saudi Arabia. The two sides have established time-tested strategic ties.
Saudi Arabia has always extended economic cooperation to Pakistan in the hour of need. Workers remittances from this brotherly Islamic country play a substantial role in strengthening the balance of payment of Pakistan. When seen in the backdrop of this overall picture, one aspect of the ties i.e. bilateral trade seems relatively less pronounced and depicts a story of unrealized potential.
Pakistan mainly imports oil and oil products from Saudi Arabia, which accounts for 90 percent of our total import bill for the Kingdom. In turn, Pakistan supplies rice, meat, meat products, spices and fruit, home textile products, chemicals, footwear and leather goods. The total value of the merchandise being traded between the two countries is around $2.5 billion. Pakistan’s exports to Saudi Arabia are worth about $0.5 billion whereas the rest comprises the value of items imported by Pakistan.
Pakistan’s exports to Saudi Arabia have seen consistent growth and have tripled in value during 2001 and 2014. There has been a slight downward trend since 2014, which may be partly attributed to somewhat slowing down of economic activities in Saudi Arabia due to falling oil prices.
However, even if one disregards the phenomenon of temporary slow growth in Saudi Arabia, it is still palpable that the magnitude of trade relations between the two countries is not in sync with their long-established close-knit ties.

The fact of the matter is that Pakistan caters to a merely 0.3 percent of the import market of Saudi Arabia. Considering the manufacturing base of Pakistan and our thriving services sector, Pakistan has much more to offer to Saudi Arabia and actually, there is a huge potential of bilateral trade lying unrealized between the two countries.
Due to Pakistan’s geographical location, bilateral trade is comparatively feasible both through air and sea routes. Moreover, Saudi Arabia hosts the largest expatriate community of Pakistan in the world. Pakistani citizens are employed in almost all the large business groups and companies where they are offering valuable services and are ultimately contributing to the strengthening of the local economy. The presence of this large expatriate community can play a significant role in furthering the bilateral trade relations.
There are a number of areas in which the trade volume can be possibly enhanced. Pakistan specializes in textiles products, which account for more than half of our total global exports. But in the case of Saudi Arabia, textiles comprise merely 20 percent of our export mix. The share of textiles especially value-added garments can see a big jump if circumstances are aligned. Similarly, Pakistan manufactures state-of-the-art surgical instruments and world-class sports goods, which can easily find their place in the Saudi market. There is also a great scope for food products. Pakistan can easily cater to the rapidly growing sector of organic foods in Saudi Arabia. Similar potentials exist in the services sector be it financial services, insurance sector, facilities management, IT services, entertainment industry etc.
A free-trade agreement between Pakistan and the Gulf Cooperation Council (GCC) is already on the cards. The agreement will help boost trade between Pakistan and the entire Gulf region. The signing of a bilateral investment treaty between Pakistan and Saudi Arabia is also a possibility in near future. This agreement will liberalize, promote and reciprocally protect investments made by companies of the two countries and will help them capitalize on the opportunities arising on both sides i.e. the Vision 2030-related investments opportunities in Saudi Arabia and projects related to China-Pakistan Economic Corridor (CPEC) in Pakistan.
Apart from this, bilateral business bodies are warranted to play an active role. Frequent exchange of business delegations and enhanced business-to-business interactions are guaranteed to accelerate the commercial relations. Liberalized business visa regimes on both sides will greatly facilitate such interactions.
Pakistan and Saudi Arabia both understand the significance of enhanced economic and trade relations and the two sides are already making progress in various areas. Pak-Saudi Joint Ministerial Commission exists since 1970, which serves as the apex body to discuss all bilateral matters relating to trade and commerce. The commission is slated to meet this year.
It is sincerely hoped that coming days shall see Pakistan emerging as a major trading partner of Saudi Arabia.
• The writer is Commercial Secretary at the Pakistan Consulate in Jeddah.


Saudi crown prince extends condolences to Kuwaiti counterpart on death of Sheikh Mohammed Abdulaziz Al-Jarrah Al-Sabah

Updated 26 November 2024
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Saudi crown prince extends condolences to Kuwaiti counterpart on death of Sheikh Mohammed Abdulaziz Al-Jarrah Al-Sabah

RIYADH: Saudi Crown Prince Mohammed bin Salman sent a cable of condolences to Kuwaiti Crown Prince Sheikh Sabah Khaled Al-Hamad Al-Sabah on the passing of Sheikh Mohammed Abdulaziz Hamoud Al-Jarrah Al-Sabah.
In the cable, the crown prince extended his deepest sympathy to Sheikh Sabah and the family of the deceased.


Saudi tech diplomat meets Iraqi PM to discuss digital cooperation

Updated 25 November 2024
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Saudi tech diplomat meets Iraqi PM to discuss digital cooperation

  • Deemah Al-Yahya, head of the multilateral Digital Cooperation Organization, commended Iraq’s investment in human capital as driver for growth and expansion of digital economy
  • Iraq has been working in recent years to develop a strategy for digital transformation to help support the private and public sectors and grow the economy

RIYADH: Saudi senior tech diplomat Deemah AlYahya, the secretary-general of the multilateral Digital Cooperation Organization, held talks on Monday with Iraq’s prime minister, Mohammed Shia Al-Sudani, about support for Baghdad’s plans to develop its digital business and artificial intelligence sectors.

They discussed Iraq’s strategy for digital transformation, and the need to create and develop a workforce with the tech skills required to help grow the Iraqi economy effectively, the Saudi Press Agency reported.

Though Iraq is not a member of the DCO, an international body that focuses on the digital economy, Al-Sudani said his country is keen to work with the organization to meet the nation’s needs for a skilled workforce in the business sector.

AlYahya commended Iraq for the progress it has already made in terms of investment in the human capital needed to develop the digital skills that are essential to drive growth in a digitized economy.

Iraq has been working in recent years to develop a strategy for digital transformation to help support the private and public sectors and grow the economy. Authorities this month organized the first Digital Space Iraq Forum, which focused on the use of advanced technologies, including AI, to help build a comprehensive digital economy.

The DCO says that since it was founded in November 2020, it has been at the forefront of efforts to curate policies and initiatives to support the digital economy in several countries. Currently, 16 nations are members, including Saudi Arabia, Jordan, Pakistan, Bahrain, Bangladesh and Oman. It also has 39 observer partner organizations.

DCO member states have a collective gross domestic product of $3.5 trillion and serve a combined market of nearly 800 million people, more than 70 percent of whom are under the age of 35.


Saudi FM pushes for regional stability at G7-Arab foreign ministers meeting

Updated 25 November 2024
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Saudi FM pushes for regional stability at G7-Arab foreign ministers meeting

  • In his address, Prince Faisal highlighted the ongoing crises in Gaza and Lebanon

RIYADH: Saudi Foreign Minister Prince Faisal bin Farhan took part in an expanded session of the second meeting between G7 foreign ministers and their counterparts from Arab nations on Monday, the Saudi Press Agency reported.

The meeting was hosted in Italy under the theme “Together for the Stability of the Middle East.”

The session, which addressed pressing regional and international challenges, was held with the participation of Saudi, Jordanian, Emirati, Qatari and Egyptian officials, as well as the secretary-general of the Arab League.

In his address, Prince Faisal emphasized the importance of strengthening partnerships to address these challenges effectively.

He highlighted the ongoing crises in Gaza and Lebanon, urging the international community to act immediately to secure a ceasefire, facilitate unrestricted humanitarian aid, and progress toward establishing an independent Palestinian state.

He also called for respect for Lebanon’s sovereignty, and renewed international efforts to resolve the crisis in Sudan and alleviate the resulting human suffering.

The meeting was also attended by Prince Faisal bin Sattam bin Abdul Aziz, Saudi ambassador to Italy, the SPA reported.


Scientists awarded for sustainable water innovation at Saudi conference

Updated 25 November 2024
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Scientists awarded for sustainable water innovation at Saudi conference

  • Research aims to improve desalination efficiency
  • Makkah’s deputy emir in attendance

JEDDAH: Scientists were awarded prizes for their work in researching desalination and wastewater treatment technologies during an event in Jeddah on Monday.

The third edition of the Innovation-Driven Water Sustainability Conference was attended by 480 experts, scientists, researchers, specialists and 40 leading organizations in the water sector, from 20 countries.

The grand prize — the Global Prize for Innovation in Desalination 2024 — went to Lee Nuang Sim from Singapore’s Nanyang Technological University for his project “uncovering the power of centrifugal reverse osmosis,” and Sue Mecham, CEO of NALA Membranes, for her project “chlorine stable new membranes for sustainable desalination and wastewater treatment/reuse.”

Visitors attend the third Innovation-Driven Water Sustainability Conference in Jeddah on Nov. 25, 2024. (Supplied)

Mecham, from North Carolina, US, spoke to Arab News after receiving her award, saying: “We are honored to be selected for the Global Prize for Innovation in Desalination 2024. Our mission is to bring new membranes to market and reduce the cost and complexity of water purification.”

Meanwhile, Saudi Ghadeer Al-Balawi from the University of Tabuk was another one of this year’s prizewinners with her project “novel heterogeneous catalysts for improving wastewater treatment plants in Saudi Arabia.”

Al-Balawi told Arab News: “I am incredibly honored to be one of the recipients of the Global Prize for Innovation in Desalination 2024. This recognition means so much to me. This project has been conducted at the University of Sheffield with hard work and dedication with the assistance of my supervisor, Dr. Marco Conte.”

The event’s opening ceremony was attended by Makkah Deputy Emir Prince Saud bin Mishal and Minister of Environment, Water and Agriculture Abdulrahman Abdulmohsen Al-Fadley, as well as other senior officials.

Following the opening, Abdullah Al-Abdulkarim, chairman of the Saudi Water Authority, said that the event reflects the Kingdom’s commitment to promoting scientific and research innovation as a pillar for achieving water sustainability and security.

Through the conference, the SWA aims to share the impact of innovation in promoting the sustainable supply of water, according to SWA spokesperson Sultan Al-Rajhi.

“This conference discusses the latest global practices and innovative solutions in the water industry, with the participation of experts, scientists and specialists, who emphasize the pivotal role of innovation in accelerating the future prosperity of water and achieving the Sustainable Development Goals for water and the environment,” he said.

The two-day conference will continue to feature discussions on more than 180 research papers, as well as a water hackathon organized by the Saudi Water Innovation Center.

 


PSC members visit Gulf Cooperation Council in Riyadh

Updated 25 November 2024
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PSC members visit Gulf Cooperation Council in Riyadh

  • The EU and the GCC held a political dialogue session, co-chaired by Pronk and Jasem Albudaiwi, secretary-general of the GCC

RIYADH: Members of the EU’s Political and Security Committee, including its chair, Ambassador Delphine Pronk, and ambassadors of EU member states, paid an official visit to the Gulf Cooperation Council headquarters in Riyadh on Monday.

The delegation was accompanied by the European External Action Service Managing Director for the Middle East and North Africa Helene Le Gal, and EU Special Representative for the Gulf Luigi Di Maio.

The EU and the GCC held a political dialogue session, co-chaired by Pronk and Jasem Albudaiwi, secretary-general of the GCC.

The two parties discussed matters of mutual interest and the need to increase joint efforts to tackle global challenges.

This included the situations in Israel, Gaza and Lebanon, Gulf security and Iran, maritime security in the Red Sea region, Iraq, Sudan and the Horn of Africa, as well as Russian aggression against Ukraine.

The committee delegates and the GCC also agreed on strengthening the EU-GCC regional security cooperation.

The political dialogue constitutes an important step forward following the successful first EU-GCC Summit in Brussels on Oct. 16.