Saudis to give Pak $3 bn in aid, defer oil payments

ISLAMABAD: Saudi Arabia agreed on Tuesday to give Pakistan $3 billion in foreign currency support for a year and allow it to defer payments for oil imports to help stave off a current account crisis.

The agreement came as Prime Minister Imran Khan attended a Saudi investment conference that has been boycotted by several other leaders over the death of dissident Saudi writer Jamal Khashoggi in Istanbul.

Khan had said before departing that his country is “desperate” to shore up its foreign currency reserves, which are at a four-year low. Pakistan finance minister Asad Umar earlier this month requested talks with the International Monetary Fund (IMF) for the country’s second bailout in five years.

Khan had, however, sought to avoid going to the IMF and appealed to “friendly countries” for bilateral financial support.

Pakistan’s foreign ministry on Tuesday night announced Khan’s visit to Saudi Arabia had met with success.

“It was agreed Saudi Arabia will place a deposit of US $3 billion for a period of one year as balance of payment support,” the ministry said. “It was also agreed that a one year deferred payment facility for import of oil, up to US $3 Billion, will be provided by Saudi Arabia. This arrangement will be in place for three years, which will be reviewed thereafter.”

Earlier, Saudi Arabia’s crown prince Mohammed bin Salman, known as MbS, declared the Future Investment Initiative, which has drawn investment deals worth $50 billion despite a boycott over the killing of Khashoggi, a success, saying the event was “great - more people more money”.

A number of Western politicians and global business chiefs stayed away from the premier investment event over the Khashoggi case. The prince arrived at the conference late on Tuesday after attending a meeting at which the king received members of Khashoggi’s family, including his son Salah.

Many in the audience of over 2,000 clapped or cheered as the prince entered the main hall, smiling as he sat down.

Energy Minister Khalid al-Falih assured the conference that the world’s top crude exporter was passing through a “crisis of a sort” but would power ahead with economic reforms.