Saudi Arabia hints at Pakistan bailout

Crown prince directs SDF to study increasing Saudi deposits in SBP; COAS meets UAE president

RIYADH:

 

Saudi Arabia on Tuesday hinted at once again rescuing Pakistan from the precarious balance of payment problem, as Crown Prince Mohammed bin Salman directed authorities to consider increasing the cash deposit with the State Bank of Pakistan (SBP) as well as investment in the country.

According to the Saudi state media, the crown prince directed the Saudi Development Fund (SDF) to study increasing the amount of the deposit provided by the kingdom in favour of the Pakistani central bank, which had previously been extended on December 2, 2022 to hit a $5 billion ceiling.

“Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister, has directed to study augmenting the Kingdom of Saudi Arabia’s investments in the sisterly Islamic Republic of Pakistan, which have previously been announced on August 25, 2022 to reach $10 billion,” Saudi Press Agency (SPA) said.

The move was part of the kingdom’s effort to support the economy of Pakistan and its people. The media report said. “This came within the framework of the existing communication between HRH the Crown Prince and Muhammad Shehbaz Sharif, Prime Minister of Pakistan.”

Saudi Arabia already rolled over $3 billion last month and the provision of an additional $2 billion would shore up the country’s depleting foreign reserves, which last week came down to $4.5 billion – enough to cover only three weeks of imports.

COAS meets UAE president

The Saudi Arabia’s announcement came just a day after army chief Gen Asim Munir met the crown prince during his maiden visit to Saudi Arabia. It is, however, unclear whether the cash deposit will be done immediately or Saudi Arabia will first wait for Pakistan to restore the International Monetary Fund (IMF) programme.

On Tuesday, the army chief visited the United Arab Emirates (UAE) on the second and last leg of his tour. The army chief met UAE President Sheikh Mohamed bin Zayed Al Nahyan, a statement carried on the Emirates News Agency (WAM) said.

“The two sides reviewed cooperation relations and joint work between the UAE and Pakistan in defence and military affairs, as well as ways to strengthen them to serve the common interests of the two friendly countries,” the statement said.
Gen Asim was received by the UAE president at Qasr Al Shati Palace. President Nahyan congratulated the army chief on his appointment, wishing him luck in his new duties to serve his country and the people. The WAM reported that Gen Asim expressed his thanks and appreciation to the president for congratulating him.

It is believed that Pakistan is also seeking the UAE’s help in averting the economic crisis. Islamabad has to repay $2 billion to the UAE in the coming weeks but the government is hoping the Gulf state would roll over that debt.

PM to visit UAE

Following the visit of the army chief, Prime Minister Shebhaz Sharif will visit the Gulf country on January 12 and 13, the Foreign Office confirmed.

Shehbaz will be accompanied by a high-level delegation, including key cabinet members, on his third visit to the country after assuming the PM Office.

“During the visit, the Prime Minister will meet the President of the UAE, His Highness Sheikh Mohamed bin Zayed, with particular focus on advancing economic, trade and investment ties between the two brotherly countries and creating increased opportunities for the Pakistani workforce in the UAE. The two leaders will also exchange views on a range of regional and global issues of mutual interest,” according to the FO.

The premier will also meet with the Prime Minister and Vice President of the UAE and Ruler of Dubai, Sheikh Muhammad bin Rashid Al Maktoum.

Shehbaz is also scheduled to hold meetings with Emirati businessmen and investors to discuss ways to enhance bilateral trade and investment.

The UAE is home to around 1.7 million Pakistanis, who have been playing a pivotal role in the success story of the UAE for the last five decades, contributing to the progress, prosperity and economic development of the two brotherly countries.

Pakistan and the UAE enjoy close and fraternal ties based on common faith and traditions, shared history and heritage; deep-rooted cultural affinities, geographic proximity and identity of view on several regional and global issues. Regular high-level exchanges and visits are a key feature of this relationship.