What Pakistan's Industries Has To Offer For Saudi Arabia's Delegation Looking To Invest

What Pakistan's Industries Has To Offer For Saudi Arabia's Delegation Looking To Invest

With high expectations that billions of dollars would be invested in the cash-strapped nation, a sizable delegation of Saudi Arabian businessmen arrived in Pakistan on Sunday.

Vikrant DurgaleUpdated: Monday, May 06, 2024, 02:02 PM IST
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Saudi Arabia explores investment opportunities in pakistan |

With high expectations that billions of dollars would be invested in the cash-strapped nation, a sizable delegation of Saudi Arabian businessmen arrived in Pakistan on Sunday to investigate investment opportunities in a range of sectors, led by deputy investment minister of saudi arabia Ibrahim Almubarak.

Under Vision 2030, Saudi Arabia wants to diversify its income sources. Saudi Arabia is mostly an oil-based economy. Cash-strapped Pakistan is in dire need of trade partners. Saudi Arabia can become one of those partners, which can help them develop and boost their economy.

Major Industries In Pakistan

Textiles

The foundation of Pakistan's manufacturing sector is its textile industry, which employs 40% of the workforce and generates $15.4 billion in export revenue annually. Pakistan is the world's fourth-largest producer of cotton and the eighth-largest textile exporter from Asia. The growing middle class and increasing urbanization have increased demand for textiles.

The economy's contribution is equivalent to about 8.5% of GDP. Approximately 45% of the labor force in the nation is employed in the textile sector. The textile industry's exports increased by $4.4 billion in 2017–18. Pakistan ranks third globally in terms of cotton consumption. Pakistan has 464 textile mills in total, five of which are listed on the PSX.

The processing capacity of textiles is 5.2 billion square meters overall. International companies such as H&M, Levis, Nike, Adidas, Puma, Target, and others collaborate with local textile mills in Pakistan.

Construction

The Pakistan Credit Rating Agency report states that between FY16 and FY21, the country's population increased at a CAGR of 2.1%. In FY23, the amount would reach 231.58 million based on the current trend.

One of Pakistan's largest provinces, Punjab, has a housing shortage of about 2.3 million units as of 2017. By the end of 2047, this number is predicted to rise to 11.3 million units.

The main causes of the shortages are migration from rural to urban areas, population growth, reduced interest rates, tax incentives, low-quality properties that are on the market, and urban subsidy programs like Roshan Apna Ghar, Mera Ghar Mera Pakistan, etc.

The value of Pakistan's real estate market is estimated at $1.8 trillion. Less than half of all construction output, or 2% of GDP, is accounted for by housing, according to the Pakistan Bureau of Statistics. Urban planning is becoming more and more necessary given Pakistan's rate of urbanization.

Mining

The industry generates around $6.5 billion, or 0.15% of the GDP, and employs 0.15% of the labor force. In FY21, The industry saw a recession of -6.49%.

Early in 2006, significant gold and copper reserves were found in the Reko Diq region of Balochistan. There are 20 million ounces of gold and 2 billion tons of copper in the Reko Diq mining area, according to verified estimates. The value of the deposits has been estimated at about $65 billion based on the current market price, creating thousands of jobs.

According to estimates, the Rekodiq project will yield 400,000 ounces of gold and 200,000 tons of copper annually, valued at $1.25 billion at current market prices.

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