Pakistan and Saudi Arabia Advance Plans for CPEC-Style Economic Corridor Following Historic Defense Agreement

Pakistan and Saudi Arabia are advancing plans for a major economic initiative known as the Pakistan-Saudi Economic Corridor, a proposed framework designed to enhance regional trade, investment, and connectivity between South Asia and the Middle East. Modeled after the China-Pakistan Economic Corridor (CPEC), this strategic partnership aligns with Saudi Arabia’s Vision 2030 and Pakistan’s national development goals, aiming to generate economic growth through increased investment, job creation, and technology exchange.

To lead this initiative, the federal government has established an 18-member high-level committee responsible for managing negotiations under the Pakistan-Saudi Arabia Economic Framework. The committee will explore areas of cooperation extending beyond traditional sectors such as defense and energy, with a focus on climate change, environmental protection, and sustainable development. It is jointly chaired by the Federal Minister for Climate Change and the National Coordinator of the Special Investment Facilitation Council (SIFC), with members including federal ministers from key economic ministries and senior representatives from financial and regulatory institutions.

The government directive mandates the formation of dedicated teams for fast-tracked negotiations with Saudi authorities, with all committee members required to be available for engagement starting October 6, 2025. To maintain momentum, the SIFC will provide operational support and ensure that travel approvals for official meetings are granted within one hour. The committee also has the authority to bring in additional experts and must report its progress to the prime minister every fifteen days.

Pakistan is expected to seek renewed Saudi investment in strategic sectors such as oil and agriculture, particularly under a proposed ‘buy-back’ model. Efforts will also focus on increasing Pakistani exports to narrow the current $3 billion trade deficit. One of the key agenda items is the revival of a long-pending oil refinery project that has remained stalled for nearly a decade.

This economic cooperation initiative follows a historic Strategic Mutual Defense Agreement signed between the two nations during Prime Minister Shehbaz Sharif’s recent visit to Riyadh. The pact commits both countries to mutual defense, declaring that an attack on one shall be considered an attack on both. Building on this defense partnership, the proposed economic corridor signals a shift toward deeper and more diversified bilateral relations. Prime Minister Shehbaz Sharif is expected to return to Saudi Arabia in late October to finalize the framework agreements that will shape the next phase of Pakistan-Saudi economic engagement.