This week a Pakistani business leader called on Saudi investors to increase investment in Pakistan's food processing industry, during a visit to Islamabad from Saudi Crown Prince Salman Bin Abdul Aziz.
Shaukat Ahmed, acting president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), spoke to a delegation of Saudi business people travelling with the Crown Prince, and highlighted that while Pakistan is a leading exporter of milk, only 4-5% of its production is processed in the country, with even lower percentages for other food products such as meat and dates.
Open to investment
“All Pakistani sectors are open to foreign investment except specified industries; we ensure equal treatment to local and foreign investors; 100% foreign equity and full remittance of capital, profit and dividends are allowed,” Ahmed told the delegation.
Crown Prince Salman's tour follows a visit to Pakistan last month by UAE President Sheikh Khalifa and Saudi foreign minister Saud Al Faisal, where they met Pakistani Prime Minister Nawaz Sharif.
During that visit, their delegations brokered a number of trade deals, including an agreement from Saudi Arabia to provide US$125m in export credit to Pakistan for the purchase of Saudi fertiliser.
Earlier in January the Saudi Agricultural and Livestock Company (SALIC) agreed to make a number of investments in Pakistan's livestock, wheat and rice production sectors, according to Sikandar Hayat Khan Bosan, Pakistan's federal minister for national food security and research.
Potential agricultural deals
Pakistan has long been angling for agricultural investments from GCC countries, and enacted a number of legal reforms in the early part of the last decade to make such investments more attractive, including easing restrictions on profit repatriation. But to date the country has not seen significant agricultural investment activity from the gulf states.
Late last month some Pakistani media outlets also reported Pakistan had agreed to lease 100,000 acres of farmland to Saudi Arabia, in exchange for 250,000 barrels of oil a day – however this has not been verified by official news sources in either country.
While this deal remains nebulous, the dramatic increase in diplomatic activity between the two countries, along with Saudi Arabia's stated aim to eliminate domestic wheat production by 2016, means some form of land deal may not be far off.