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Saudi Arabia signs $ 20 billion agreement with Pakistan

  The Crown Prince of Saudi Arabia Mohammad bin Salman and the Prime Minister of Pakistan Imran Khan in Islamabad in February 2019

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Saudi Arabia has signed investment agreements worth USD 20 billion (1

965) £ 15.5bn) with Pakistan, as the country wants to strengthen its fragile economy.

It takes place as part of a high-profile Asian tour of the Kingdom of Crown Prince Mohammed bin Salman.

Pakistan urgently needs to deal with a balance of payments crisis and seeks support from international donors.

Offers include an oil refinery of $ 8 billion in the important port of Gwadar.

The two sides signed several other parties' preliminary agreements and memorandums of understanding in the energy, petrochemical and mining sectors.

"It's big for Phase One and definitely it will grow every month and every year, and it will be beneficial for both countries," said the Crown Prince.

Pakistan is desperate for cash. The central bank of the South Asian country has only $ 8 billion in currency reserves and faces a balance of payments crisis.

Prime Minister Imran Khan sought help from friendly countries to reduce the rescue package of his country from the International Monetary Fund in very severe conditions need.

The country has been seeking its 13th rescue operation since the late 1980s, and Saudi Arabia has already provided a $ 6 billion loan.

Charm Offensive

Pakistan is the first stop of an Asian tour of the Crown Prince known as MBS. He should be in India by Tuesday and travel to China on Thursday and Friday.

The prince tries to transform his international image after the Jamal Khashoggi affair. The journalist was assassinated in October at the Saudi Consulate in Istanbul.

  • The Story of Jamal Khashoggi
  • Who is Saudis Crown Prince Mohammed bin Salman?

Against this backdrop, the current tour can be considered a charming MBS offensive that seeks to strengthen relationships with trusted allies while spending cash, Abid Hussain told the BBC.

While Pakistan Can Benefit The South Asian country of Saudi Arabia is also important to the kingdom.

  • Read more about Abid Hussain.

The two countries have a long-standing military relationship, and the MBS visit comes at a time when geopolitics are shifting in the region – including concerns about Iran's influence.

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