Since the beginning of Imran Khan’s time as Prime Minister, Pakistan’s economic woes have taken up a significant portion of his time and efforts. The PM and his government have been attempting to build up our financial reserves and avoid an international payment crisis. Fortunately for the country, our allies have come to aid us at this time with the latest bailout package UAE announced that they will be giving Pakistan $3 billion, which will then be added to the foreign reserves of the country.
The Foreign Minister of the country thanked the UAE establishment for their generosity:
We thank Crown Prince H.H @MohamedBinZayed for his generous financial support of US$ 3 Billion. This is a manifestation of the close fraternal ties between Pakistan & UAE which have always stood the test of time.
— Shah Mahmood Qureshi (@SMQureshiPTI) December 21, 2018
Initially, to avert this crisis Pakistan was on the verge of taking a bailout package from the IMF, who have helped us before, with the biggest loans being taken in Nawaz Sharif’s government. Though the IMF loans are helpful initially, they lead to Pakistan being under debt from the international body.
Furthermore, if Pakistan does decide to go for a loan from the IMF, they will also have to fulfill certain terms and conditions, that the package will come with, putting the government in a difficult situation.
Taking the bailout package from the IMF has been severely criticized and the new government has tried to prevent this event from taking place.
The Prime Minister of the country attempted to ensure that the aid we needed would come from other avenues, other than the IMF by visiting Saudi Arabia and China in the first 100 days of his tenure. He also visited Sheikh Mohamed Bin Zayed, the Crown Prince of the UAE last month.
It seems as if his attempts proved to be fruitful as the UAE decided to give Pakistan $3 billion, though we don’t know yet if the money will come in installments or in one go.
Even the PM tweeted, to show his gratitude:
I want to thank the UAE govt for supporting Pakistan so generously in our testing times. This reflects our commitment and friendship that has remained steadfast over the years.
— Imran Khan (@ImranKhanPTI) December 21, 2018
Imran Khan’s visit to Saudi Arabia also proved to be fruitful as they decided to offer Pakistan $6 billion in all, which is divided into the half with one half being deposited in the State Bank in installments of $1 billion. The other half, i.e. $3 billion will be used as a credit line for deferred payments on oil projects. This has also proved to be a major godsend for the nation.
Additionally, our close allies, namely China who we also embarking on a major trade and development project called CPEC have also agreed to help us at this time.
Such developments have eased the strain on the government, at least temporarily as they now have something to work with and can try and stabilize the economy. Recently, owing to our financial crisis, the rupee had devalued significantly, but with the latest bailout package, hopefully, our currency will also benefit to some extent.
The bailout package from UAE is also much welcomed as many believe that now, Pakistan will not have to go to the IMF at all, as Asad Umar suggested initially.