As plans are afoot by oil-rich desert nations to acquire and develop lands beyond their borders, the Kingdom of Saudi Arabia has found favor with Pakistan in doing so. They realized investing in countries those are rich in natural resources, such as water, arable fields, etc., paid higher dividends as compared to developing their own lands. Developing the desert stretches either for farming or other purposes did not have any correlation between the investment and returns. And this has alerted Saudi Arabia to make their foray into the highly productive farmlands of Pakistan.
In response to the bilateral needs Saudi Arabia has agreed to extend their special oil facility that Pakistan had enjoyed since the world community imposed sanctions, soon after the nuclear tests of 1998. Saudi Arabia is likely to supply crude oil worth about $5 billion on soft terms to Pakistan, to ward-off any further deterioration of the countries financial health. In return, Pakistan will make available their farmlands on business model which will be deemed well by both parties. Several Saudi companies have promised to invest billions of dollars in Pakistan’s infrastructure, if the government provided political stability, and improved law and order.
Pakistani Premier Yusuf Raza Gilani said after his visit from Saudi Arabia that the talks had been successful and he was able to ensure deferred payment on at least $2 billion worth of crude to be delivered during the fiscal year starting from July 1. However, he declined to divulge any details on the business model his government would opt for the exchange of farmland. There is also widespread rumor that a large private equity company on behalf of the United Arab Emirates is planning to buy farmland in Pakistan.
Analysts opined, this is a great opportunity for Pakistan to gain billions of dollars as investment, but warned that they should design the policy in such way, only a proportion beyond domestic consumption would be made available for exports. An agricultural trader from Pakistan said, the Saudis need food grains and we need oil, and if we can team up for a right cause, it will create a win-win situation for both countries.