UAE to provide USD 3 bn to Pakistan to overcome financial crunches
Dubai, Dec 21 : The UAE will soon give USD 3 billion to cash-strapped Pakistan to support its financial and monetary policies, the state media reported on Friday.
The announcement comes as Pakistan is negotiating a USD 8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country’s economy. However, a recent meeting between the IMF and Pakistan ended in a stalemate.
The transfer of 11 billion dirhams (USD 3 billion) by the government-owned Abu Dhabi Fund for Development (ADFD) to State Bank of Pakistan is expected to be carried out in the “coming days”, the WAM news agency said.
The announcement of the financial support to Pakistan comes a week after its Finance Minister Asad Umar said that soon there will be an incoming investment package from the country’s close ally Saudi Arabia that would be “the biggest foreign investment” in Pakistan’s history.
The UAE’S support for Pakistan’s fiscal policy is based on the historical ties between the two people and the two friendly countries and the desire to further develop the bilateral cooperation in all fields, the WAM report said.
Pakistan’s all weather ally China has also pledged to provide a generous aid to Islamabad to overcome its financial woes.
Saudi Arabia has also announced that it will provide Pakistan USD 3 billion in balance of payment support and additionally give oil worth USD 3 billion on deferred payment after Prime Minister Khan met Saudi King Salman in Riyadh in October.
The Trump administration is making all efforts to ensure that any IMF loan to Pakistan is not used to repay its Chinese debt.
The US feels that the huge Chinese debt is responsible for Pakistan’s economic challenges.
“We are working and making clear within the IMF that if it were going to supply any funding to Pakistan that it would not be used to repay Chinese loans,” David Malpass, Under Secretary of Treasury for International Affairs, told lawmakers during a recent Congressional hearing.
There are concerns among American lawmakers that the Pakistan may use the IMF money to repay the Chinese debts.