Pakistan is currently facing severe economic pressure and is in need of international help to repay its old debts. The situation is such that the country is now seeking financial assistance from its close partners like Saudi Arabia and China. According to Bloomberg report, Pakistan is trying to raise new funding to repay the debt of about 3 to 3.5 billion dollars. This amount is mainly to be returned to the United Arab Emirates.
For the past many years, Pakistan used to rollover its debt, but this time no such agreement could be made with UAE. For this reason, the pressure on Pakistan to make timely payments has increased. The country has to repay a huge amount by the end of this month, which has increased the strain on its foreign exchange reserves. At present, Pakistan has foreign reserves of about 16 billion dollars, which is considered sufficient for barely a few months of imports. In such a situation, any big payment can further weaken his financial condition.
Increasing talks with Saudi Arabia
Meanwhile, economic and strategic talks between Pakistan and Saudi Arabia have intensified. Recently the Saudi Finance Minister had reached Pakistan, where discussions were held to increase trade, investment and economic cooperation between the two countries. The government of Pakistan says that it wants to further strengthen relations with Saudi Arabia so that financial stability can be achieved. During this time, there has also been talk of strengthening the security and strategic cooperation between the two countries, which indicates that help can be not only economic but can be on a wide scale.
Increasing dependence on China and huge debt
China’s role in Pakistan’s economy is already quite big. China is considered to be Pakistan’s biggest creditor country, to which Pakistan owes more than 25 billion dollars. Due to big projects like China-Pakistan Economic Corridor (CPEC), the economic relations between the two countries have deepened, but with this the debt burden on Pakistan has also increased.
Relief from IMF, but challenge remains
The International Monetary Fund (IMF) has given initial consent to a relief package of $7 billion for Pakistan, out of which some amount is also being released. However, this help is not the solution to the entire problem of Pakistan. The country has to repeatedly take help from international organizations and friendly countries, due to which its economic dependence is continuously increasing.
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