'Zardari to discuss economic bailout with Saudis'

Written by:
Subscribe to Oneindia News

Islamabad, Nov 4: Pakistan President Asif Ali Zardari is to hold talks with top Saudi leaders on an economic bailout package for the country during his two-day visit to the kingdom beginning from Tuesday, Nov 4.

His visit to Saudi Arabia is being seen as the last hope for avoiding the highly unpopular option of an IMF loan, which Pakistan will have to obtain if it runs out of all options including help from the 'Friends of Pakistan' forum launched in New York in September. Pakistan urgently needs 3-4 billion dollars to avoid the balance of payment crisis. Pakistan entered into negotiations with the IMF primarily as a standby arrangement for funds to avert the crisis. According to finance ministry officials it has never been a preferred option because of stringent conditions attached to IMF loans.

President Zardari's visit to Saudi Arabia, therefore, comes at a crucial time before the government takes a final decision whether or not to seek IMF loan, particularly because the West has told Pakistan that it would assist only after IMF's involvement.

The two basic objectives of the President's two-day visit to the kingdom are to solicit Saudi support for the 'Friends of Democratic Pakistan' initiative and to seek crude imports of 5.9 billion dollar on deferred payment during the current fiscal year.

The Saudis have bailed Pakistan out of similar economic woes in the past, but their relationship with the PPP-led government has not been warm so far, although owing to their commitment to the people of Pakistan they came up with a generous 100 million dollar assistance for the victims of last week's quake in Balochistan.

Besides, there has always been an element of uncertainty about the outcome of visit by Pakistani leaders to Saudi Arabia because there is no bilateral forum where issues of interests to the two countries could be discussed. Almost all issues are, therefore, decided at the summit level.

Sources in the Foreign Office here said Pakistan has requested an 'influential friend' to intercede with the Saudis to allay their concerns. A positive response from Riyadh would reinforce what Saudi Ambassador Ali Awadh Asseri calls 'eternal commitment of the Saudi leadership to the people of Pakistan' and what Pakistan sees as a 'very special relationship', according to local media reports. Pakistan is pinning high hopes on the Abu Dhabi meeting of the 'Friends of Pakistan' later this month and wants Saudi Arabia to take the lead role in the forum.

Mr Zardari expressed the same desire in an interview with the Saudi Gazette and said, ''I would solicit Saudi support for the 'Friends of Pakistan' initiative. I sincerely hope that with the steadfast support of the Saudi government, it will achieve the desired objectives.'' Pakistan needs from the forum, comprising Britain, France, Germany, the US, China, the UAE, Canada, Turkey, Australia and Italy plus the UN and the EU, to inject up to five billion dollar in cash to help it avoid defaulting on sovereign debt due for repayment next year.

However, it does not appear that the Saudis, who did not attend the inaugural meeting of the forum in New York, will change their position much.

This impression was somewhat reinforced by the Saudi Ambassador to Pakistan Ali Awadh Asseri who told Dawn from Riyadh, ''To my knowledge and understanding bilateral relationship is always more fruitful than going to any forum.'' Besides, he stressed, the Saudi-Pak relationship went beyond any forum of this sort.

President Zardari would also reiterate a request for oil on deferred payments. The request was originally made by Prime Minister Syed Yousaf Raza Gilani during his visit to Riyadh in June.

On a question about the oil facility, Mr Asseri cautioned against reaching any conclusion at this stage whether the request would be accepted.

''Such a request has a number of formalities that have to be met,'' the ambassador said. Mr Zardari, some diplomats here said, would realise the advantage of having his former ally Mian Nawaz Sharif on his side. In that case, they believe, it could be easier for him to proceed with the Saudi leadership.

Increase in the volume of trade and investment, export of manpower to Saudi Arabia and further avenues of cooperation will be on the agenda of the talks Mr Zardari will hold in Riyadh.


Please Wait while comments are loading...