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One of many main developments from Prime Minister Shehbaz Sharif’s journey to Saudi Arabia seems to be discussions on “augmenting” the $3 billion deposit that the dominion offered for the State Financial institution of Pakistan to create a foreign exchange cushion. Stories recommend that the most definitely situation is a straight extension of the mortgage time period, though “different choices” are additionally on the desk. Whereas there was discuss of one thing of this nature being mentioned in the course of the journey, the truth that these stories have been printed in official Saudi media would recommend that talks are within the superior levels. The cash is of essential significance for Pakistan as a result of its overseas reserves have been crashing. Relying on whose numbers you consider, the reserves have fallen between 40% and 60% in latest months and at the moment are hovering at simply over $10 billion.
In the meantime, massive money injections from a lot of the normal sources appear unlikely — a minimum of within the close to future. Pakistan can be going to get a financing association for oil purchases, and though few particulars have been offered on what precisely this is able to entail, it’ll most likely be just like the sooner deferred cost services. Unofficially although, we do know that Pakistan was additionally pursuing additional deferral of cost for over $4 billion price of oil that was imported in recent times. The quantity accounts for greater than half of the $7.4 billion wish-list that Prime Minister Shehbaz and his entourage have been anticipated to current to the Saudis, in keeping with unnamed finance ministry officers quoted on this newspaper final week. Notably, the loans and deferrals that the PTI authorities negotiated with Riyadh have been way more restrictive than these negotiated by the earlier PML-N authorities, together with having laborious one-year deadlines.
Different obscure however intriguing bits of language within the joint assertion referred to increasing commerce and funding between the 2 international locations. Bear in mind, Saudi Arabia stays an enormous potential marketplace for Pakistani items and companies, whereas Saudi cash may very well be lucratively invested in a number of industries right here. Official media in each the international locations additionally stated that the Saudis would additional improve help for “financial structural reforms for the advantage of Pakistan and its folks”. The remainder of the official assertion was largely ‘inventory language’, with references to supporting one another at worldwide boards, discussions on problems with mutual concern, making certain inside and regional safety and stability, and tackling extremism and terrorism — issues that plague all of South Asia and the Center East.
One element buried within the assertion, nonetheless, was Riyadh welcoming Pakistan’s keenness to search out lasting options to all disputes with India, together with the Kashmir problem. This will likely recommend that there was some optimistic motion on backchannel or different unofficial talks with India, because the Saudis made a particular reference to Shehbaz’s efforts to achieve out to the Indian regime.
Printed in The Specific Tribune, Might 3rd, 2022.
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