ISLAMABAD: To resolve the ongoing financial unrest, the government of Pakistan expects over $20 billion in investment from Saudi Arabia, the United Arab Emirates, and Qatar in various fields, as the South Asian country seeks to overcome an economic crisis and avoid defaulting on its obligations.
According to a senior official Pakistan this week set up a Special Investment Facilitation Council (SIFC), that would also comprise the country’s army chief and in which the military will play a key role. The main purpose of the council would be to attract foreign investment to the country. The prime minister would preside over the council’s proceedings on weekly and monthly bases.
Pakistan is facing its worst economic crisis to date, with months of delays in securing funds from the International Monetary Fund (IMF) causing a rapid decrease in its foreign exchange reserves that recently went down below $4 billion. Pakistan, suffering from months of political uncertainty, has been plunged into an acute balance of payments crisis while inflation remains at an all-time high, reportedly above 35 percent.
According to official sources the government the government expects investments from Saudi Arabia, the United Arab Emirates and Qatar to the tune of more than $20 billion as the country had already received investment commitments from these countries, however it’s still not known when the commitment would be fulfilled.
Saudi Arabia and UAE’s Support for Pakistan
In recent months, Saudi Arabia and the United Arab Emirates have deposited billions of dollars into Pakistan’s central bank to shore up the country’s foreign exchange reserves and keep its economy afloat. In April, Saudi Arabia and the United Arab Emirates pledged US$2 billion and US$1 billion, respectively, in external financing to Pakistan. This was one of the IMF’s main conditions imposed on Pakistan for reviving a $6.5 billion bailout program that had remained suspended since November last year.
The council also gives the military a seat at the economic table, with the Army Chief serving as a member of its apex committee and the army itself serving as the national coordinator for both the apex and executive committees. An Army functionary will also be the Director General of the Implementation Committee of this body.
Economic Experts have mixed responses over the recent move. Some term it an optimistic move to drag the country out of an economic quagmire while others believe it might be just the old wine in a new bottle.
