Mallika Dureja
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Islamabad: According to The News International, Pakistani Prime Minister Shehbaz Sharif said it is shameful that a nuclear-armed nation has resort to begging in the midst of a failing economy.
Speaking at the Pakistan Administrative Service (PAS) probationary officers’ passing-out ceremony on Saturday, Shehbaz Sharif said it really embarrassed him to ask for more loans and that looking to foreign lenders was not the best course of action to deal with Pakistan’s economic problems because the loans would have to be repaid.
He said that President Sheikh Mohammed bin Zayed of the United Arab Emirates (UAE) had disclosed an additional USD 1 billion loan to Pakistan during his most recent visit to the UAE.
'Shameful for nuclear power to beg': Pak PM amid worsening financial crisis
Read @ANI Story | https://t.co/AmNz61VM40#NuclearPower #FinancialCrisis #ShehbazSharif pic.twitter.com/9SlTmQRuKF
— ANI Digital (@ani_digital) January 15, 2023
Shehbaz Sharif, the prime minister of Pakistan, also thanked Saudi Arabia for its financial assistance during his speech, according to The News International.
In the meantime, sources told The News International that Pakistan is considering asking friendly nations, particularly Saudi Arabia, for extra deposits immediately in an effort to bridge financing until matters are resolved with the International Monetary Fund (IMF).
According to government sources, Saudi officials are “studying” the possibility of making more deposits to Pakistan amid the shortage of foreign exchange reserves. According to the report, a top source at the Finance Ministry claimed that the tumultuous political environment was preventing policymakers from making the difficult decisions required for the restart of the IMF programme.
The State Bank of Pakistan’s (SBP) foreign exchange reserves are being drained at a rapid rate, according to official sources who told the journal that the government does not have much time to take action. The SBP’s foreign exchange holdings were only USD 4.3 billion as of January 6th.
The total amount of foreign exchange held by commercial banks was USD 5.8 billion, bringing the total amount held by the nation to roughly USD 10.18 billion. From USD 16.6 billion on January 22, 2022, to USD 4.3 billion on January 6, 2023, the SBP’s reserves have decreased by USD 12.3 billion over the past 12 months.
Shehbaz has previously said that the IMF assessment mission may visit Pakistan, but that has not yet occurred, according to The News International.
According to experts, the situation has reached a stage where only action guided by a clear vision can avert the disaster. There is a dearth of clarity over how to proceed.
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In addition, the government’s plan to use dollar inflows from friendly nations as interim financing until the IMF programme is restarted has so far been unsuccessful.
The News International claimed that friendly nations like Saudi Arabia have been considering the idea of a second USD 2 billion deposit, but it is unclear how long it will take them to decide.
In a joint statement released at the end of the PM’s visit, the United Arab Emirates (UAE) also agreed to roll over USD 2 billion in existing deposits, but nothing specific about the additional USD 1 billion deposit request was revealed.
Notably, the government’s failure to make hard decisions, such as raising gas and electricity tariffs and enacting new taxing measures, has prevented the IMF review mission’s visit from being officially announced.
According to The News International, the government’s severe actions will only make it possible to finish the ongoing 9th Review under the Extended Fund Facility (EFF).
