The Saudi largesse

Riyadh’s generosity to come up with a soft loan of $240 million to fund a water reservoir project is a welcome gesture. The fact that the tranche has been released at a time when economic uncertainty is at its apex in the country simply hints at the confidence of the Kingdom in Pakistan’s development. The multipurpose Mohmand Dam Project is part of initiatives to promote sustainable development goals, and will go a long way in buoying agriculture and energy requirements of vast rural areas in Khyber Pakhtunkhwa, apart from stemming to a great extent the threat of flash floods.

Saudi Arabia’s role in Pakistan’s developmental mosaic is no secret. It has expressed its keen interest in investing in petroleum products, and installing an oil refinery in Gwadar as well. But what makes the Royal benevolence part and parcel of Pakistan’s socio-economic dispensation is its largesse to stand fast in times of crisis and exigencies. This is why the cash rollover tranches that come Islamabad’s way off and on continue to act as a lifeline, and the last of such a courtesy is the $3 billion package that is holding the anchor of the economy in pestering adversity. Last but not least is the referral letter from the Saudi leadership to the IMF, endorsing release of funds to the country to the tune of $1.1 billion.

The Saudi inventiveness for the big-ticket project has luckily coincided with the Finance Minister’s assertion that a deal with the IMF has been ironed out, and Pakistan will escape the threat of bankruptcy. The country’s foreign exchange reserves have slumped to less than $4 billion, sending fears of an imminent default. While both these developments have stemmed a downslide, what is needed is to breathe confidence in the economy and that can only be done by throwing open avenues for investment and multilateral cooperation. It is a foregone conclusion that the Middle East is awash with sovereign funds, and what is desired are lawful protective measures to tap them by creating a conducive environment.

Published in The Express Tribune, April 10^th, 2023.

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