Saudi aid package for Pakistan

Saudi aid package for Pakistan

Saudi Arabia has provided a $ 4.2 billion financial package to shore up foreign exchange reserves of the Pakistan. The good will gesture comes at a time the country’s economy is struggling against the fallouts of the corona pandemic and the Afghan crisis following the US withdrawal. The Saudi Develo-pment Fund has pledged 3 billion to the SBP, while the kingdom will provide $ 1.2 billion for the purchase of oil products throughout the year. Energy Minister Hamad Azhar has said Saudi aid will help keep trade and financial accounts in balance. Pakistani desperately needed this support amid a yawing trade deficit mostly originating in the imports of products like pulses, edible oil and petroleum. Pakistan, like most countries of the world, has been severely affected by the corona epidemic which has negatively affected economic activity. Produc-tion has slowed down, employment rates nosedived and inflation soared high. The debt burden has increased to the extent that the country hardly affords to pay interest on loans incurred by international financial institutions. In this difficult hour, Saudi’s helping hand is reassuring and crucial for Pakistan to pull its economy from the brink. Saudi Crown Prince Mohammed bin Salman and Prime Minister Imran Khan in a meeting in May this year, had reaffirmed the importance of brotherly relations emphasizing on the need to expand and intensify bilateral cooperation and coordination in various fields. Prime Minister Imran Khan has always praised Saudi Arabia’s positive role in promoting unity and resolving issues facing Muslim nations. Pakistan is right now appears ready more than ever create investment opportunities in light of Saudi Arabia’s Vision 2030 and Pakistan’s development priorities and to work out ways to enhance and strengthen economic and trade ties between the two countries. Further, cooperation is being promoted to strengthen bilateral military and security ties in the backdrop Pakistan’s infallible commitment to guard the territorial integrity of Saudi Arabia. A memorandum of understanding has been signed between the Saudi Fund for Development and the Islamic Republic of Pakistan on investments in energy, infrastructure, transport, water and communication projects. Regarding Saudi Arabia’s depositing $3 billion in Pakistan’s state-owned bank, Shaukat Tarin, the advisor on Finance, has said that 3.2% interest would have to be paid on the money received from Saudi Arabia. It should be noted that this ‘economic package’ has been announced by Saudi Arabia after the recent visit of the Prime Minister of Pakistan Imran Khan to Saudi Arabia. Saudi aid will stabilize rupee-dollar parity. The government cannot spend this money, but the advantage is that it has been made part of the country’s foreign exchange reserves to boost financial integrity of Pakistan in the market. Saudi Arabia had earlier paid $2 billion in this regard, which was returned back on lenders demand, including interest. Of course Saudi aid package is meant for a relief and is no alternate to the investment it has pledged to boost various sectors of Pakistan’s economy. Let this pledge be fulfilled to take Pak-Saudi bilateral ties further.