ISLAMABAD: Saudi Arabia increased financial assistance to Pakistan and signed an agreement of $122 million in economic aid on Thursday, the highest amount Riyadh has officially given to Islamabad in the last five years.
The signing ceremony for the grant, which includes a $67 million package, took place the day Prime Minister Nawaz Sharif and army chief General Raheel Sharif were attending the closing ceremony of the multi-nation ‘Thunder of the North’ military exercise in Saudi Arabia.
Pakistan is a member of the military alliance of Muslim countries that Saudi Arabia formed late last year to fight terrorism. However, officials privy to developments said the signing ceremony had nothing to do with the country’s contribution to the 34-nation coalition.
The $67 million grant is the highest that the Kingdom has given Pakistan in the last eight years. Saudi Arabia had in 2013-14 ‘gifted’ Pakistan $1.5 billion, but the two countries have till date not signed any agreement over the sum even though the amount has been disbursed. Many observers had linked the $1.5 billion grant with Pakistan’s military role in the Gulf.
The $122 million assistance is not part of the $9.2 billon that Pakistan anticipated it would receive during the current fiscal year – budget documents show anticipated Saudi assistance is only $17.5 million, $4.3 million of which Islamabad has already received. This suggests the fresh aid was negotiated over the last few months.
Economic Affairs Division (EAD) Secretary Tariq Bajwa and Vice Chairman and Managing Director of the Saudi Fund for Development (SFD )Yousaf Ibrahim al Bassam signed five grant agreements valuing $67 million and a loan agreement of $55 million, according to EAD. Finance Minister Ishaq Dar witnessed the signing ceremony.
The $6 million grant has been given for construction of the Home Economics and Management Science College in Islamabad, $20 million for the construction of Islamabad General Hospital and $26 million for reconstruction of permanent houses in earthquake affected areas and livelihood restoration in Balochistan. The loan has been given for construction of two tunnels at Chella Bandi-Patika road, Muzaffarabad.
Over the last five years, Saudi Arabia disbursed only $343.8 million to Pakistan, averaging $68.8 million per annum. Out of this sum, the grant component was just $14.3 million or $2.9 million per annum. The remaining amount was loaned. In the last fiscal year, Saudi Arabia gave $55.5 million to Pakistan that includes a $12.8 million grant.
The United Nations Office on Drugs and Crime (UNODC) and the Japanese embassy signed an agreement to provide Pakistan $6.5 million to boost law enforcement agencies’ abilities to disrupt drug trafficking. Japan also announced it will give $3 million to Pakistan to procure vaccines for a three-day campaign.