There is some great news for Pakistan as some $13 billion will hit its coffers. It is an outcome of generosity exhibited by Saudi Arabia and China, in an earnest attempt to salvage the country’s economy as it hangs at the cliff of a likely default. This additional financial support from the two traditional friends is an indicator that Pakistan’s potential cannot be underestimated, irrespective of its fallacious economic approach in the current milieu, and at the same time illustrates the indispensability of its geopolitics. A staggering $9 billion from Beijing and over $4 billion from Riyadh instant cash flows sit on top of assurances for about $20 billion investments.
The package of assistance has come in the backdrop of a landmark visit by Prime Minister Shehbaz Sharif to China, and the upcoming air-dash of Crown Prince Mohamad bin Salman, Prime Minister of Saudi Arabia. It is appreciated that both the leadership of both the countries understand Pakistan’s tough phase of economic circumstances, and are forthcoming as usual to bail it out. It is no small gratitude that Chinese President Xi Jinping reportedly told the visiting Pakistani delegate, “don’t worry, we will not let you down.” So is the benevolence of the Royal leadership that agreed to increase its financing up to a maximum of $6 billion and doubled its deferred oil facility of $1.2 billion. The Kingdom had also agreed to revive the $10-12 billion petrochemical refining project at Gwadar, which will strategically upbeat Pakistan’s future prospects.
The Chinese rollover of $4 billion in sovereign loans, refinance of $3.3 billion from commercial banks and a currency swap of $1.45 billion is a blessing in disguise in times of exigency. Beijing’s thrust in buoying Pakistan’s infrastructure is never lost, and is evident from the $9.8 billion ML-1 rail project, which will embolden CPEC’s success story. This entire exercise is meant to harness the desired $35 billion in order to sit pretty cool while handling debt and liabilities during the current fiscal year. Statistics in sight hint at smooth-sailing.
Published in The Express Tribune, November 8th, 2022.
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