- Boosting exports in agriculture, IT and renewable energy will help Pakistan reduce its trade deficit with Saudi Arabia
Interview with Senator Saleem Mandviwalla
PAGE: Tell me something about yourself, please:
Senator Saleem Mandviwalla: I have been serving as a member of the Senate of Pakistan since 2015. Over the years, I have had the honour of holding several positions, including Minister of Finance, Chairman Board of Investment, Deputy Chairman of the Senate and Chairman of the Senate Standing Committee on Finance, Revenue, and Economic Affairs.
My focus has always been on advancing Pakistan’s economic policies, enhancing transparency, and promoting fiscal reforms.
With a background in business and finance, I have strived to integrate my expertise into policymaking, particularly in areas related to economic growth, investment opportunities, and international trade. I am also passionate about engaging with international partners and advocating for Pakistan’s interests on the global stage. I believe in the power of parliamentary diplomacy to foster better relations with other countries and to collaborate on solutions to mutual challenges.
PAGE: How would you comment on the trade between Pakistan and Saudi Arabia?
Senator Saleem Mandviwalla: Pakistan and Saudi Arabia have enjoyed warm relations since the birth of the country in 1947. The relations are rooted in the centuries old religious, cultural and commercial links between the two peoples. Both countries enjoy historically significant and strategically important trade relationships.
The main areas of trade include oil and petroleum, food products, textiles and chemicals. Pakistan meets its energy needs from imports of oil and petroleum products from Saudi Arabia. Pakistan exports a range of goods to Saudi Arabia, including rice, textiles, food products, leather goods, and sports equipment. Despite this strong foundation, the trade balance tends to favour Saudi Arabia due to the large volume of oil imports.
I believe that Pakistan has more potential to enhance its exports to Saudi Arabia as there are many untapped areas where the potential of bilateral trade can be enhanced, like areas of agriculture, IT services and renewable energy.
PAGE: How handy are the remittances being sent by the Pakistani diaspora from Saudi Arabia to Pakistan?
Senator Saleem Mandviwalla: Pakistan mainly depends on its remittances from overseas Pakistanis to meet its increased foreign currency demands. The remittances sent by the Pakistani diaspora in Saudi Arabia are incredibly valuable and impactful for Pakistan. Saudi Arabia is one of the largest sources of remittances for Pakistan, contributing significantly to the country’s foreign exchange reserves.
According to the data shared by State Bank of Pakistan, from July 2023 to January 2024, Riyadh contributed $3.8 billion. Most of the labour class of Pakistan went to Gulf countries and Saudi Arabia. The Gulf countries including the Kingdom of Saudi Arabia and the United Arab Emirates have contributed over 54 per cent to overall Pakistan’s remittances. Remittances help in providing the economic and financial support to the families living back in Pakistan. This inflow of remittances helps them to improve their standard of living of many households helping to cover daily expenses, education, and healthcare.
The remittances also play a key role in increasing the Pakistan foreign exchange reserves, which helps in maintaining the economic stability and manage the balance of payments. The remittances then go into the domestic market and hence support the domestic consumption and investments and ultimately start the economic activity contributing to the growth of the economy.
PAGE: What is your take on investment by Saudi Arabia in Pakistan?
Senator Saleem Mandviwalla: As a Senator, I believe that Saudi investment in Pakistan is a tremendous opportunity for mutual growth and collaboration. The relationship between the two countries has been strong and Saudi Arabia has always been key investor in development of Pakistan.
Even recently, Saudi Arabia’s Foreign Minister hinted in investing in various projects in Pakistan. Pakistan has various key investment opportunities that will boost the economy of Pakistan such as agriculture, mining, information technology and aviation.
I further believe that Pakistan and Saudi Arabia lack B2B interaction which could be very essential and important. Both countries should encourage and support efforts to boost B2B interactions. A number of monuments in Pakistan bear testimony to the depth of bilateral relations with Saudi Arabia. The International Islamic University in Islamabad was established with a grant of US$10 million from Saudi Arabia. The Faisal Mosque in Islamabad, the key landmark building in the capital of Pakistan, is named after King Faisal. The third largest city in Pakistan was renamed Faisalabad after King Faisal.
PAGE: Saudi Arabia has undertaken several steps to help Pakistan strengthen its economy. Your perspective:
Senator Saleem Mandviwalla: Saudi Arabia has always provided support and cooperation in times of need to Pakistan. In recent years, the Kingdom has provided a deposit of $200 million to be kept in the State Bank of Pakistan, and a loan amounting to $80 million for the construction of Neelum-Jhelum Hydropower Plant. In addition, Saudi Arabia has contributed $100 million for humanitarian assistance to the Internally Displaced Persons in Malakand region.
To assist the victims of floods in Pakistan, Saudi Government announced $105 million, which is 13.3% of the total amount pledged by the rest of the world. Saudi Arabia became the second biggest donor to Pakistan’s flood victims. The two countries have signed several trade agreements, including a memorandum of understanding (MoU) to increase bilateral trade to $6 billion annually. The two countries have strengthened their strategic partnership, with regular high-level visits and consultations on regional and global issues.