COAS reaches out to UAE, Saudi Arabia for bailout package

Days after speaking to the US deputy secretary of state, army chief General Qamar Javed Bajwa has now reached out to Saudi Arabia and the United Arab Emirates (UAE) as part of efforts to ensure financial assistance for Pakistan.

As the Executive Board of the International Monetary Fund (IMF) is set to meet later this month to formally approve the next tranche of $1.2 billion instalment, the international lender wants Pakistan to ensure it receives commitment from its friends for financial assistance.

It is believed that the IMF has asked Pakistan to provide firm guarantees that its friends would provide $4 billion for its external requirements.

Gen Bajwa, the chief of army staff (COAS), received a telephone call from UAE President His Highness Sheikh Mohamed bin Zayed al-Nahyan, the Inter-Services Public Relations confirmed in a statement issued on Friday.

Also read: IMF toughens stance on loan tranche release

“His highness expressed deepest condolences over the tragic loss of precious lives due to the helicopter crash in Lasbela,” the military’s media wing said.

Pakistan is in talks with Saudi Arabia, the UAE, and China to provide the necessary funding. When Prime Minister Shehbaz Sharif travelled to Saudi Arabia in April, he returned empty-handed as Riyadh had not given any firm assurance. The UAE was reluctant to come to the rescue. Instead of providing loans, the UAE offered Pakistan to buy shares and assets.

Against this backdrop, the army is believed to have spoken to the authorities both in Saudi Arabia and the UAE for financial help.

The army chief in the past acted as a key interlocutor on financial matters as he travelled to the Gulf countries seeking financial assistance for the government of Prime Minister Imran Khan in 2018. It was because of his military diplomacy the UAE and Saudi Arabia extended financial bailout packages.

Also read: Pressure on rupee to ease after IMF deal

The reported move by the army chief came days after he spoke to US Deputy Secretary of State Wendy Sherman seeking Washington’s help for an early meeting of the IMF Executive Board.

The reason the army chief had to play a role stemmed from the fact that other countries perhaps were not ready to accept the assurances of the civilian leadership.

Saudi Arabia, the UAE and China in the past always supported Pakistan in difficult situations but this time they linked their assistance with certain conditionalities.

Saudi Arabia and the UAE are particularly working in tandem with the IMF and other Western countries on financial assistance for Pakistan.

But with the army’s chief outreach, sources are confident that Pakistan would get the required financial assistance to pull the country out of the current economic crunch.

After weeks of uncertainty, there has been a positive shift in the stock exchange and foreign exchange market. In an unprecedented move, the Pakistani rupee against the US dollar regained Rs16 in just four days.

Also read: IMF loan most effective solution

The development came despite the fact that the IMF’s new instalment has yet to arrive and other assistance to be provided by the friendly countries is still awaited.

Market players suggest that the rupee will gain more value in the coming weeks. Sources said since the change of government in April, the markets were reacting erratically and there was an impression created that the country was going down with the fall of the PTI government.

“That is not true,” a source commented. It was a wrong perception that one man or one party could turn the economy around. There were several other factors, the source insisted, saying that more positive developments were on the way in the coming weeks.