Saudi Arabia’s assurance of financial support to Pakistan has been conveyed to the International Monetary Fund, and talks with the United Arab Emirates are also ongoing over their support. One the UAE talks achieve finality, it will be conveyed to the IMF. This was disclosed on Thursday by Minister of State for Finance, Dr Ayesha Ghaus Pasha. The details of the commitments by these two countries to Pakistan had been demanded by the IMF, and were the last remaining conditions for the IMF to resume its programme, and not just release a tranche of Rs 1.1 billion, but open the door to Pakistan getting assistance from other multilateral agencies, such as the World Bank.
The Saudi assistance, of about $ 2 billion, is new money, not merely a rollover of debt which has fallen due: that it has already done. However, this will not be spending money but a fresh deposit with the State Bank of Pakistan. While it will swell the figure of foreign exchange reserves, this money is not meant to be spent. In short, its only purpose will be to make the for reserves look better, and meet the target of $10 billion in reserves by end-June. They stood at $4.2 billion in their latest reading. This is the last conditionality given by the IMF prior to receiving the programme, unless it comes up with something else. As visit, Pakistan finds itself in a difficult place. The IMF loan now does not depend on Pakistani actions, but those of other countries. It might be noted that the IMF is able thus to play a role in economies from which it had been excluded because those economies were too strong to ever approach it for a loan. The peculiar reaction of Finance Minister Ishaq Dar, who has cried off attending the World Bank’s and IM’s annual meetings in Washington this year seem a little more triumphant than they should. True, there are important political issues at home, such as the current political crisis, and Thursday’s National Security Committee demanded his presence, but Senator Dar should realize that the government’s political troubles are largely because the economy has been sputtering, which is owed partly to his failure to get the IMF tranche so far. He may well be Mian Nawaz Sharif’s eyes and ears in the Shehbaz Cabinet, but he has failed to do what he was sent to do: kickstart the economy.
