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Saudi Arabia, France to Increase Cooperation in Technology, Energy, Industry

The Chairman of the Saudi French Business Council at MEDEF, Laurent Germain (Asharq Al-Awsat)
The Chairman of the Saudi French Business Council at MEDEF, Laurent Germain (Asharq Al-Awsat)
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Saudi Arabia, France to Increase Cooperation in Technology, Energy, Industry

The Chairman of the Saudi French Business Council at MEDEF, Laurent Germain (Asharq Al-Awsat)
The Chairman of the Saudi French Business Council at MEDEF, Laurent Germain (Asharq Al-Awsat)

Saudi Crown Prince Mohammed bin Salman's visit to France reflects the desire of both countries to enhance comprehensive cooperation, underlining the strong bilateral ties shared by Paris and Riyadh.

Laurent Germain, Chairman of MEDEF's Saudi French Business Council and CEO of the Egis Group, told Asharq Al-Awsat that boosting economic relations between France and Saudi Arabia tops the agenda of discussions between President Emmanuel Macron and the Saudi Crown Prince.

He explained that over the past years, the areas of cooperation between the two countries have developed and diversified.

The official recalled that in April 2018, France and Saudi Arabia signed an intergovernmental agreement on developing the AlUla region and turning it into a significant cultural and tourist destination in the Middle East.

- Private sector

The CEO expected the France-Saudi Arabia Investment Forum on June 19 to provide an excellent opportunity for related discussions between the private sectors.

The Saudi Ministry of Investment, with the support of the French International Business Confederation, will organize the France-Saudi Arabia Investment Forum in Riyadh.

Germain recalled that the total trade between the two countries amounted to €10.7 billion in 2022, noting that the Kingdom was France’s 29th partner and the 25th supplier in the same year.

He asserted the need to boost economic relations between the two countries.

He said over 100 French companies of all sizes and sectors currently operate in Saudi Arabia, adding that French companies are keen to invest in the Kingdom and move their headquarters there.

- Strong interest

Germain reiterated that French companies are interested in the Kingdom, and Vision 2030 offers a wide range of cooperation opportunities in areas such as infrastructure and renewable energies, including hydrogen, industries, and mining.

Some French companies already provide the most innovative solutions to achieve giant projects throughout the Kingdom, such as the NEOM, AlUla, and Qiddiya.

France is also a land of opportunities for Saudi investors, according to Germain, who indicated that France 2030, the investment plan unveiled in 2021, offers foreign investors direct participation in transforming sectors of excellence.

- Dynamicity

The visit of Crown Prince Mohammed to Paris will support the dynamics of the French Saudi movement.

MEDF International, a leading business network in France, and the Saudi French Business Council are closely cooperating with their partners in the Kingdom and will continue to work to enhance economic exchanges between the two countries.

He noted that MEDEF organized for more than 30 years high-level meetings between French companies and Saudi officials in Paris and organized trade missions in the Kingdom.

The events are always an occasion for French companies to understand the economic ambitions of Saudi Arabia better and explore investment opportunities, Germain said.

- Collective actions

MEDEF International gathers every year about 7,100 French companies already operating in the world in 85 Business Councils headed by 55 CEOs of major international French companies.

It aims at promoting French companies’ know-how abroad through collective actions.

MEDEF International supports trade, technological cooperation, investments, and long-term partnerships, especially in emerging and developing markets and reconstruction markets.

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Business

Will the IMF’s Bailout Stabilize Pakistan’s Economy?

Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (Reuters file)
Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (Reuters file)
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Will the IMF’s Bailout Stabilize Pakistan’s Economy?

Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (Reuters file)
Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (Reuters file)

Pakistan this week secured a new $7 billion loan from the International Monetary Fund (IMF) aimed at helping the South Asian nation stabilize its ailing economy.

But the country now faces challenging budget targets it has pledged to the IMF under the loan deal.

Kristalina Georgieva, the head of the IMF said the new bailout package approved for Pakistan is aimed at assisting the government in economic recovery and reduction in inflation along with employment creation and inclusive growth.

“Very productive meeting with Pakistani Prime Minister Shehbaz Sharif!” she wrote on her X account.

“We discussed Pakistan's new Fund-supported program helping ongoing recovery, disinflation, increased tax fairness, and reforms to create new jobs and inclusive growth,” the top IMF official said, referring to her meeting with the PM.

Georgieva’s remarks came after the IMF’s Executive Board has approved a $7 billion loan for Pakistan under the Expanded Fund Facility (EFF).

The loan — which Islamabad will receive in installments over 37 months — came after the Pakistani government’s commitment to implementing the agreed-upon reforms.

Last Thursday, the global lender said its immediate disbursement to Pakistan will be about $1 billion.

The office of the Pakistani PM said later the immediate release will be about $1.1 billion.

Assurances

The significant financing assurances provided by Saudi Arabia, UAE and China have facilitated the IMF's approval of the new loan.

IMF Pakistan Mission Chief Nathan Porter declined to provide details of additional financing amounts committed by the three countries but said they would come on top of the debt rollover.

Sharif, on the sidelines of the United Nations General Assembly, told Pakistani media that the country had fulfilled all of the lender’s conditions, with help from China and Saudi Arabia.

“Without their support, this would not have been possible,” he said, without elaborating on what assistance Beijing and Riyadh had provided to get the deal over the line.

Challenging targets

The South Asian country has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures.

Pakistan has set a tax revenue target of 13 trillion rupees ($47 billion) for the fiscal year that began on July 1, a near-40% jump from the prior year, and a sharp drop in its fiscal deficit to 5.9% of gross domestic product from 7.4% the previous year.

Minister of State for Finance, Revenue and Power Ali Pervaiz Malik said earlier that the point of pushing out a tough and unpopular budget was to use it a stepping stone for an IMF program, adding the lender was satisfied with the revenue measures taken, based on their talks.

“Obviously they (budget reforms) are burdensome for the local economy but the IMF program is all about stabilization,” Malik said.

Pakistan’s trade deficit decreased by 12.3% in FY2024, dropping to $24.09 billion from $27.47 billion in FY23, according to data released by the Pakistan Bureau of Statistics (PBS).

The Pakistani Geo News website stated that during July 2023-June 2024, total exports, however, saw an increase of 10.54%, reaching $30.645 billion, while imports shrank by 0.84%, amounting to $54.73 billion.

In June 2024, exports of Pakistani products abroad increased by 7.3% to $2.529 billion compared to $2.356 billion in the same period last year, marking the tenth consecutive monthly rise in exports, it added.

In a statement last Thursday, the IMF praised Pakistan for taking key steps to restore economic stability. Growth has rebounded, inflation has fallen to single digits, and a calm foreign exchange market have allowed the rebuilding of reserve buffers.

But it also criticized authorities. The IMF warned that, despite the progress, Pakistan’s vulnerabilities and structural challenges remained formidable.