Has Saudi Arabia provided $6 billion assistance to Pakistan to avoid isolation?
New Delhi, Oct 24: Pakistan has been able to receive $6 billion financial assistance from Saudi Arabia during the investor's summit in Riyad. Pakistan is in a complete financial mess needs $12 billion to bail out its economy. With this much money in its kitty, Pakistan will be able to negotiate in a better way with Indian Monetary Fund (IMF).
Pakistan Prime Minister Imran Khan has gone to Saudi Arabia to attend the investor's summit to seek financial assistance from Saudi Arabia. The Saudi Arabia government has agreed to give $6 billion support package after Prime Minister Imran Khan made his second visit to Riyadh seeking aid. Saudi Arabia will deposit $3 billion directly with Pakistan as balance of payment support while rest of the $3 billion will be one-year deferred payment facility for oil imports, as per the memorandum of understanding signed by the finance ministers of both the countries.
Despite the Pakistan government announcing that it would seek assistance from the IMF earlier this month, Khan has again recently voiced his reluctance to turn to the fund for Pakistan's 13th bailout since the late 1980s. Pakistan is facing serious balance-of-payments crisis as imports for Chinese-financed infrastructure projects rise while its exports lag the region.
But strategic experts on Pakistan matter Ashish Shukla told Oneindia that had the matter of Jamal Khashoggi not racked up and other players would not have boycotted the investors summit in the country, the situation would not have been like this. It seems that the Saudi Arabia government has spent this money to avoid isolation.
Shukla said that the visit of Imran Khan to Saudi Arabia has been successful as far as Pakistan is concerned. Actually it is being talked about that Saudi Arabia was planning to deposit around $8billion to Pakistan account to deal with its declining foreign reserve ratio but now it has provided it assistance. Now for the further assistance, they will have to negotiate with the IMF where Pakistan will be in a slightly better position to negotiate. They won't be on the back foot as they have some money at their disposal.
Reportedly the IMF was asking for details about its deal with China before bailing out Pakistan but China was very cautious about Pakistan dealing with the IMF as the role of the US in IMF is very crucial. So the financial mess of Pakistan is closely to be watched for.