PakistanSaudi Loan: The condition of Pakistan is pathetic… Best friend left in bad times, Saudi Arabia said – will not get loan! – News India Live
Pakistan Economic Crisis: The inflation rate in Pakistan is going to reach 33 percent in the next one month. Khaqan Najeeb, a former advisor to Pakistan’s Finance Ministry, said that Saudi Arabia wants Pakistan to sign an agreement with the IMF. Only then will they consider any kind of loan or investment.
Whenever Pakistan needs a loan, a crisis arises in front of it. Saudi Arabia had earlier helped Pakistan but this time it does not seem to be happening. Saudi Arabia has refused to give any bailout or interest-free loan to Pakistan. The Islamabad government is shocked by this decision of its Muslim friend. Pakistan’s Finance Minister Ishaq Dar complains that even friendly countries are not ready to help Pakistan to get out of the economic crisis. Pakistan urgently needs a big loan to avoid default. The country’s foreign exchange reserves currently stand at only $3 billion.
Pakistan is locked in “difficult negotiations” with the International Monetary Fund over its 13th bailout package since the 1980s. If there is no agreement soon, it will be difficult for Pakistan to get international loans as its creditworthiness will be tarnished. Analysts familiar with the latest developments told Middle East Eye that Saudi Arabia has offered new interest-bearing loans and investment terms to Pakistan while implementing stricter monetary and fiscal reforms, which include a sharp reduction in the current account deficit. This is similar to the terms of the IMF.
Pakistan’s army chief is also ‘neutral’
Umar Karim, associate fellow at the King Faisal Center for Research and Islamic Studies, said Pakistani officials were shocked. Karim told MEE that till now Saudi Arabia and other Gulf countries used to come forward to help on the call of the Prime Minister and Foreign Minister of Pakistan, but this time it does not seem to be happening. It is believed that even Pakistan’s army chief could not persuade Saudi Crown Prince Mohammed bin Salman for financial help to Pakistan during his recent visit.
Saudi Arabia changed policy
Karim believes this will set a new precedent. He said Pakistan’s army chief has so far been a “source of reassurance” for the allies. At the World Economic Forum in Davos in January, Saudi Arabia’s finance minister explained the country’s new economic policy. Mohammed Al-Jadaan said, ‘We used to give grants and deposits directly without any conditions but we are changing that. We tax our people, we expect others to do the same. He clarified, ‘We want to help but we want you to do your part too.’