Pakistan, a struggling country financially, will gain significant financial aid from Saudi Arabia and Qatar to aid their economy at this time of tremendous pressure on Pakistan.
The funds are part of the overall aid package to help bolster Pakistan’s already shaky economy by providing crucial support as it currently prepares for repayment of its $3.5 billion loan owed to the United Arab Emirates (UAE), which is due later this month.
The current economic conditions in Pakistan are historically unprecedented and unrelenting due to the number of external payments yet to be made along with the overall decrease in foreign currency reserves.
Pakistan Financial Crisis: Debt Pressure Mounts on Pakistan Economy
Officials indicated that the financial support being received from Saudi Arabia and Qatar would assist the government in “averting further financial hardship on the country’s already depleted foreign reserves”; this financial assistance does not only help Pakistan stablise it also serves as a “critical buffer” against further economic calamity in light of all the recent external debt obligations that will reduce their reserves to record low levels.
Pakistan is undergoing a financial crisis, and the efforts to resolve the crisis are taking place at the same time as various global events. Finance Minister Muhammad Aurangzeb is currently travelling to Washington, DC for the IMF-World Bank Spring Meetings to be held on April 13-18.
Pakistan Financial Crisis: IMF Talks and Global Outreach by Pakistan
The purpose of the finance minister’s visit is to meet with IMF and World Bank officials in order to secure continuing international financial assistance for Pakistan. The Pakistan government has committed itself to continuing to satisfy the global requirements of the IMF as part of the country’s ongoing financial program.
Pakistan Financial Crisis: IMF Conditions Shape Pakistan Strategy
The IMF has stipulated that the principal bilateral lending countries of Pakistan that include Saudi Arabia, China and the United Arab Emirates (UAE), that they must keep their deposits in Pakistan for the duration of the program.
However, reports indicate that Qatar may replace the UAE as a principal source of financial assistance for Pakistan; this indicates a major change in Pakistan’s economic relationships and provides evidence of a changing global financial order.
Pakistan Financial Crisis: Saudi Support Remains Key for Pakistan
Saudi Arabia continues to play a major role in lending Pakistan money. According to reports, the country has already rolled over $5 billion worth of deposits for Pakistan previously, proving they have supported Pakistan during tough times consistently.
Before leaving for Washington, Aurangzeb had a brief meeting with the Saudi Finance Minister, Mohammed Bin Abdullah Al-Jadaan, in Islamabad to underscore their continued cooperation as Pakistan proceeds to settle its “UAE debt.”
Pakistan Financial Crisis: Pakistan Looks to Stabilise Economy
As indicated by the above situation, Pakistan must find ways to rely on constructive relationships with other countries to deal with their economic difficulties. Therefore, the $5 billion aid will allow Pakistan to meet its international payments and alleviate pressure on its reserves.
As Pakistan attempts to balance its financial obligations with IMF conditionality and debt repayments, they are also working to create stability for themselves as Pakistan tries over the next few weeks to improve its economy working with their global allies.
Khalid Qasid is a media enthusiast with a strong interest in documentary filmmaking. He holds a Master’s degree in Convergent Journalism from AJK MCRC. He has also written extensively on esports at Sportsdunia. Currently, he covers world and general news at NewsX Digital.
