Imran has not lost hope on Saudi aid

PM will undertake two-day visit to Riyadh from Oct 22

ISLAMABAD: Prime Minister Imran Khan would visit Saudi Arabia -- his second in less than five weeks -- to seek financial aid, with the aim to avoid the International Monetary Fund (IMF) bailout programme, or at least negotiate with the fund from a position of ‘strength’.

“The prime minister will visit the Gulf country from October 22 to 23,” said sources in the PM’s Office.

The visit will take place two weeks before the start of talks with the IMF for a bailout package, scheduled for November 7.

“The prime minister will try to convince the Saudi royal family to approve some financial assistance, as the country is in looking fo at least $5 billion in cash from Saudi Arabia and China,” said the highly-placed government sources.

Pakistan faces a total financing gap of $12 billion for the remainder period of the current fiscal year that it wants to fill by exploring various options.

The news of the second visit to Saudi Arabia came a day after the prime minister disclosed that his government may still avoid going to the IMF. He gave the statement during a meeting with the media bodies held on Wednesday.

However, on the same day, Finance Minister Asad Umar told a private news channel that the IMF programme was still on the government’s agenda.

Last week, Pakistan formally requested the IMF for a bailout package.

Federal Minister for Information, Broadcasting and National Heritage Fawad Chaudhry confirmed to The Express Tribune that the prime minister would visit Saudi Arabia next week.

However, he described the purpose of the visit as attending an international investment conference being held in Riyadh.

Pakistan faces grave challenges in meeting its international financial obligations, as the country’s gross official foreign currency reserves have further decreased by $219 million to $8.1 billion.

Such low reserves have weakened the country’s negotiating position with the IMF that is demanding steep currency devaluation and double-digit interest rate.

The minister said the government had declared attracting foreign investment as one of its top priorities.

“Last year, $22 trillion investment commitments were made at the Riyadh investment conference and this year there are expectations for $23 trillion investment commitments,” said Chaudhry, hoping that Pakistan would also succeed in winning commitments from foreign investors.

Responding to a question whether Pakistan can still avoid the IMF programme after the Saudi visit, the minister replied, “The [PM’s] visit to Saudi Arabia will help strengthen Pakistan’s negotiating position against other institutions.”

Chaudhry said certain things were happening at some fronts that would reduce Pakistan’s reliance on others.

Replying to another question, the minister said it was the considered opinion of the prime minister and the finance minister that Pakistan would meet its $12 billion financing gap from friendly countries and some institutions.

Unlike last year, the Saudi investment conference is overshadowed by the disappearance of Saudi journalist Jamal Khashoggi from a Saudi Consulate in Turkey.

Senior ministers from Britain, France and the Netherlands have announced pulling out of the conference in protest over the disappearance of the Saudi journalist.

Treasury Secretary Steven Mnuchin pulled out of the Saudi conference after a backlash over his plans to attend despite Jamal Khashoggi's disappearance, according to a New York Times report.

Before coming into power, Prime Minister Imran Khan had vowed not to beg from other nations to run the country’s economic affairs.

Adviser to the Prime Minister on Commerce Abdul Razak Dawood had described his experience of ‘begging’ from Saudi Arabia for a financial bailout package as “awful.

“I was upset when we were flying to Saudi Arabia to seek support,” said the adviser while recalling those moments.

After the prime minister’s first visit to the kingdom, a Saudi delegation had visited Pakistan in the first week of October to discuss investment opportunities and provide oil on deferred payments. However no breakthrough could be achieved.

Pakistan had turned down Saudi Arabia’s offer to acquire two LNG-fired power plants only under a sovereign deal.

Saudi Arabia also demanded Pakistan to provide free land, complete security and utility facilities for setting up an oil refinery of over 100,000 barrel per day capacity at Gwadar.

On Saturday, Finance Minister Asad Umar said that supply of oil on deferred payments from Saudi Arabia was still on the table.