DAVOS: After extending the term of a $3 billion deposit to boost its foreign-currency reserves late last year, Saudi Arabia’s finance minister has said his country is also discussing with the World Bank and other institutions how can it be “more creative to provide that support” to Pakistan.

Speaking at the World Economic Forum, Mohammed Al-Jadaan also indicated the kingdom is changing the way it provides assistance to allies, shifting from previously giving direct grants and deposits unconditionally.

“We used to give direct grants and deposits without strings attached and we are changing that. We are working with multilateral institutions to actually say we need to see reforms,” the minister said.

“We are taxing our people, we are expecting also others to do the same, to do their efforts. We want to help but we want you also to do your part.”

Earlier this month, Saudi state media reported the kingdom could boost its investments in cash-strapped Pakistan to $10 billion, from the $1 billion announced in August, as well as increase the ceiling on deposits into the Pakistan central bank to $5 billion.

“We are providing even oil and derivatives to support their energy needs,” Al Jadaan said. “So there is a lot of efforts, but we wanted this to be conducted.”

Separately, the minister also indicated that Saudi Arabia is open to discussions about trade in currencies other than the US dollar.

“There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Al-Jadaan told Bloomberg TV on Tuesday.

“I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world,” he said.

The world’s largest oil exporter, which has maintained a currency peg to the dollar for decades, is seeking to strengthen its relations with crucial trade partners including China. The kingdom is a pillar of the petrodollar system established in the 1970s that relies on pricing crude exports in the US currency.

Asked about Saudi ties with major trade partner China, Jadaan said Riyadh was taking a “wider approach” in which relations with both Beijing and Washington were important as well as building ties with other countries.

“We are looking to enhance our relationship with Europe. We are actually advancing our relationship with Latin America, with Asia,” he said.

During President Xi Jinping’s visit to Riyadh last year, the two countries agreed to boost coordination on energy policy and exploration. During that trip Xi said that China would make efforts to buy more oil from the Middle East and also wanted to settle that trade in the yuan.

“We enjoy a very strategic relationship with China and we enjoy that same strategic relationship with other nations including the US and we want to develop that with Europe and other countries who are willing and able to work with us,” Al-Jadaan said.

Published in Dawn, January 19th, 2023