All eyes on Saudi Arabia, UAE and Qatar to bail out Pakistan’s struggling economy

ISLAMABAD – Pakistan is looking towards the Gulf countries including Saudi Arabia, UAE and Qatar that had promised to bridge the financing gap.

The International Monetary Fund (IMF)’s condition for Pakistan to bridge the gap of $6 billion is simply an attempt to ensure its credibility. Otherwise, Pakistan will slide into default.

The global lender was forced to put forth this condition on the negotiating table because representatives of these countries on the Executive Board had made commitments before the approval of the seventh and eighth reviews for providing financial assistance to Islamabad in different forms. However, they failed to materialise their commitments despite several months passing in the current fiscal year.

The IMF has informed Pakistan that its credibility would also be at stake if the staff-level agreement is finalsied and Pakistan fails to materlise its commitment from the bilateral partners.

In this scenario, the approval of Saudi Arabia, UAE and Qatar can only help Pakistan in striking a staff-level agreement.

Only China had come forward to rescue Islamabad by fulfilling its commitments on the re-financing of its commercial loans 

On the other side, Finance Minister Ishaq Dar on Thursday announced that documentation for the disbursement of a $500 million commercial loan from China had been completed.

Taking to Twitter, Ishaq Dar said, “Out of Chinese ICBC’s approved rollover facility of $1.3 billion (which was earlier repaid by Pakistan in recent months), documentation for second disbursement of $500 million has been completed by the Finance Ministry for release of funds to the State Bank of Pakistan.”

Out of #Chinese ICBC’s approved rollover facility of US$1.3 billion (which was earlier repaid by Pakistan to ICBC in recent months), documentation for second disbursement of US$500 million has been completed by Finance Ministry for release of funds to the State Bank of Pakistan!

— Ishaq Dar (@MIshaqDar50) March 16, 2023