Deepening Pak–Saudi ties
According to a report by Dawn… On Sept 17, Pakistan and Saudi Arabia signed a mutual defence pact, formalising decades of military cooperation into a binding framework. Both countries can gain far more from their pact if they also lay the foundation of a joint growth strategy built on agriculture, energy, labour, industry, and infrastructure. Encouragingly, 2025 has already seen a shift: financial aid is giving way to strategic investment.
In March, Riyadh signed a $1.2 billion deferred oil facility, releasing $100m monthly until February 2026. Islamabad is also seeking a rollover of $5bn Saudi loans — $2bn maturing in December 2025 and $3bn in June 2026 — at a concessional 4 per cent interest rate.
A Saudi business delegation is coming this month to explore ventures in energy, information technology (IT), agriculture, finance, semiconductors, and food, according to media sources.
The Special Investment Facilitation Council has streamlined processes, contributing to a 22pc rise in Pakistani exports to Saudi Arabia, now worth over $700m. Analysts see this as the end of the “aid era,” with investment flows aligned with Riyadh’s Vision 2030.
Islamabad’s long-term security will not come from arms alone, but from embedding itself in the broader Gulf economic transformation
Saudi Arabia remains one of Pakistan’s top trading partners, with annual trade fluctuating between $5bn and $6bn depending on oil prices. Yet the trade basket is narrow. Oil and petroleum dominate Pakistan’s imports, while exports are mostly rice, textiles, leather, and surgical goods. Untapped opportunities exist in pharmaceuticals, IT-enabled services, and processed agriculture. But weak planning, low productivity, and the absence of preferential agreements keep trade stagnant.
Riyadh’s sovereign wealth funds are expanding into infrastructure, mining, and technology. But Pakistan has captured little of this capital. Pledges such as the $10bn refinery announced in 2019 have also suffered delays in the past due to political instability, regulatory bottlenecks, and weak contract enforcement.
Islamabad claims to have removed many legal and administrative hurdles, though concerns over local rights and political stability remain unresolved. Pakistan’s hybrid regime must address these issues, starting with improving its polarised domestic climate.
If Pakistan modernises its agriculture — with better seeds, efficient irrigation, and cold-chain networks — it could become a key anchor for Saudi food supply. Gulf investment in Pakistani farms and processing facilities could, in turn, uplift rural livelihoods.
Energy is an equally pressing domain. Under its Vision 2030, Saudi Arabia is investing heavily in renewables, hydrogen, and smart cities. Pakistan remains mired in energy crises, circular debt, and costly fossil-fuel imports. The overlap is obvious: Riyadh needs partners to expand its green portfolio, while Islamabad needs affordable, sustainable energy. Pakistan’s solar and wind corridors could attract Saudi capital, with Islamic green bonds offering innovative financing. Yet no major renewable venture has materialised so far.
Remittances from Saudi Arabia remain a lifeline. In FY25, Pakistani workers in the Kingdom sent home more than $9.3bn. But of the 2.5 million Pakistanis employed there, most hold low- or semi-skilled jobs. As Saudi Arabia automates and shifts to knowledge industries, this model is becoming obsolete.
Without re-skilling, Pakistan risks losing its place in Riyadh’s labour market. Joint vocational centres and digital academies could prepare Pakistanis for healthcare, IT, and engineering jobs — raising both remittance quality and Saudi productivity.
Religious ties between the two nations are profound, with hundreds of thousands of Pakistanis performing Hajj and Umrah annually. Yet beyond pilgrimage, cultural exchange remains limited. Saudi Arabia is now opening its cultural and tourism sectors, while Pakistan offers one of South Asia’s richest heritage trails. Joint tourism circuits, cultural festivals, and academic exchanges could strengthen people-to-people connections.
What is equally important is not to see Pakistan-Saudi cooperation in isolation. The future of Pakistan’s economic resilience lies in deeper engagement with the entire Gulf Cooperation Council (GCC) — Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Bahrain, and Oman.
Collectively, the GCC is a $2 trillion economy with among the world’s largest sovereign wealth funds and fastest-growing energy transition programmes. Pakistan’s trade with the bloc remains concentrated in oil imports and labour exports, leaving enormous untapped potential in IT, food processing, engineering services, and renewable energy.
Saudi Arabia’s Vision 2030, the UAE’s diversification drive, and Qatar’s investment in knowledge industries all point to a region hungry for partnerships that Pakistan could provide — if it can ensure political stability and regulatory clarity. Gulf states are also investing heavily in artificial intelligence, fintech, and biotechnology.
Pakistan, with its youthful population and IT talent, could position itself as a natural partner. But this requires Islamabad to think of GCC ties not as fragmented bilateral tracks but as part of a regional strategy.
At the same time, GCC countries face their own food security challenges, and Pakistan can emerge as a dependable partner if it reforms its agriculture sector. Joint GCC-Pakistan food corridors, supported by Gulf investment in infrastructure, could benefit both sides. For Islamabad, this would also diversify economic dependence.
Seen this way, the September defence pact is more than just a milestone in Pak-Saudi ties. It is also a reminder that Pakistan’s long-term security will not come from arms alone, but from embedding itself in the broader Gulf economic transformation.
Published in Dawn, The Business and Finance Weekly, October 6th, 2025 complete report is on below link. Source: https://www.dawn.com/news/1946808/deepening-paksaudi-ties