EDITORIAL: Prime Minister Imran Khan followed Chief of Army Staff General Bajwa to Saudi Arabia with the objective of further strengthening long-standing traditional brotherly ties between the two countries. Pakistan as the economically weaker partner has, during times of stress, relied heavily on the Saudi assistance which was delivered as: (i) an outright grant (in 2014 the ‘friendly country’ that deposited 1.5 billion dollars into the State Bank of Pakistan was widely believed to be Saudi Arabia); (ii) a loan at concessional terms (Saudi Arabia lent 3 billion dollars within the first few months of the Khan administration); (iii) deferred oil payment facility (3.2 billion dollars was extended in 2019); and (iv) last but certainly not least Saudi Arabia is a major source of remittance inflows into Pakistan.
Pakistan has maintained extremely close military ties with Saudi Arabia and our soldiers have been stationed in the kingdom since almost the early 1970s though during the tail-end of Nawaz Sharif administration Pakistan parliament’s refusal to contribute troops in Yemen led to some cooling off of relations between the two countries. However, on 29 May 2017, the newly retired General Raheel Sharif got the government’s approval to serve as the head of the 39-nation Islamic Military Counter Terrorism Coalition stationed in Saudi Arabia which went a long way towards easing ruffled feathers.
Reports indicate that during the ongoing visit by Imran Khan to Saudi Arabia a 500 million dollar memorandum of understanding is to be signed for the following specific projects: Mohmand Dam, Jagran hydropower project-I, Shounter hydropower project, Jamshoro power generation project, Mansehra water supply and Abbottabad-Muzaffarabad road project. While this support is greatly appreciated yet at present the Pakistani government and the people are desperately in need of programme/budget support, as opposed to project specific support, with the objective of not only meeting all our international obligations for repayment of loans procured in the past but also to enable the government to meet its pledge to provide relief to the poor and vulnerable (partly attributable to the raging third wave of the pandemic) through further strengthening of the Ehsaas programme.
Pakistan is currently on an International Monetary Fund (IMF) programme and the recently removed Finance Minister, Dr Hafeez Sheikh, had noted in the first letter of intent submitted to the Fund Board as a perquisite for approval of the loan that Pakistan would require 38.5 billion dollars external assistance during the 39 months of the programme. He itemized the countries that had already extended assistance with Saudi Arabia a prominent player in this regard. However, the most recent IMF report indicates that reliance that was hitherto placed on Saudi Arabia has had to be shifted to China, another longtime friend and ally.
One would therefore hope that the ongoing visit of the Chief of Army Staff and the Prime Minister would bear dividends for the country and Saudi Arabia can be convinced of the dire economic situation today that necessitates reliance on our friends abroad. Shaukat Tarin, the newly-appointed finance minister, has commented on the country’s critical economic situation on the one hand and the unfair IMF conditions on the other – unfair in terms of the harsh upfront conditions that were agreed to by his predecessor which would not only burden the poor and the downtrodden through a raise in tariffs but also throttle productivity in the country. Thus in this milieu any assistance that maybe extended by Saudi Arabia would be long remembered by not only our government but also by the Pakistani people.
Copyright Business Recorder, 2021