China and Saudi Arabia have given positive signals to Pakistan for critical financial assistance as the country nears staff-level agreement with the International Monetary Fund (IMF) for funds needed to help offset the impact of losses incurred due to last year’s floods.
Foreign Minister Bilawal Bhutto Zardari last week met with Saudi Foreign Minister Faisal Bin Farhan Al Saud and China’s Director of the Office of the Central Commission for Foreign Affairs Wang Yi. Both the Saudi and Chinese foreign ministers were very supportive and keen to help Pakistan, reported Express Tribune.
In order to restart the IMF program, Pakistan must obtain assurances from Saudi Arabia and China regarding additional loans. The government has already taken a number of steps to meet the stringent IMF requirements. Allowing the market-determined exchange rate, imposing new taxes, and raising electricity and gas tariffs are among them.
In this regard, Foreign Minister Bilawal Zardari’s meetings with Saudi and Chinese foreign ministers were crucial.
When Finance Minister Ishaq Dar took over as finance minister in September, his first priority was to seek financial assistance from friendly countries rather than the IMF. The finance minister claimed in November that he had secured a $13 billion bailout from China and Saudi Arabia with $5.7 billion in new loans.
Dar was confident that the funds would arrive before the IMF’s program was revived. However, it had also been confirmed at the time that Pakistan’s old allies would not provide additional funds unless the country first agreed to the IMF’s terms. Logically, Pakistan was forced to invite the IMF mission to negotiate the deal at that point.
Pakistan is now hoping that its friends will come to its aid, as it has worked hard to persuade the IMF. The meetings in Munich will undoubtedly benefit Pakistan’s cause.
