Pakistan gets USD 6 billion help from Saudi Arabia; reports say 'not enough'

The Saudi package may provide breathing space to the government for dealing with economic challenges, but would not be enough to avoid the IMF facility, The Dawn reported.

A picture taken on October 23, 2018 shows Pakistani Prime Minister Imran Khan(C) as he arrives to attend the opening ceremony of the Future Investment Initiative FII conference taking place in Riyadh from 23-25 on October . - Saudi Arabia is hosting a key investment summit overshadowed by the killing of critic Jamal Khashoggi that has prompted a wave of policymakers and corporate giants to withdraw. (Photo by FAYEZ NURELDINE / AFP)

New Delhi: In a major relief to Pakistan’s ailing economy, Saudi Arabia on Tuesday agreed for a USD 6 billion assistance package of loans and deferred payments to Pakistan, after weeks of speculations. However, this alone won't help the flailing economy of the country as now it looks up to China for further bailout. In the deal that was announced on Tuesday after Prime Minister Imran Khan called on Saudi King Salman Bin Abdulaziz, Riyadh agreed to give Pakistan USD 3 billion in foreign currency support for a year and a further loan worth up to USD s billion in deferred payments for oil imports, news agency PTI reported. The agreements were signed on the sidelines of the annual Future Investment Initiative (FII) Conference in Riyadh, which has been skipped by many countries in the wake of the killing of journalist Jamal Khashoggi inside Saudi consulate in Istanbul. As many world leaders decided to give the event a skip, Pakistan which was ‘desperate’ for a loan attended the event and managed to get a 6 billion dollar worth aid. As per the speculations of the media reports, the assistance will immediately relieve pressure on the cash-strapped government and improve its negotiating position during the tough bailout negotiations with the IMF. During his first visit to Saudi Arabia in September Khan was unable to fetch a financial aid for the country. Pakistan which is facing the current account deficit of $18bn, had earlier this month sought assistance from the International Monetary Fund (IMF) to deal with the aggravating balance of payments problem. An IMF mission is scheduled to visit Islamabad on Nov 7 for talks on the size of the loan facility that Pakistan could be requiring, The Dawn reported. Prime minister Khan is keen to avoid the IMF bailout package and had requested Saudi Arabia, China and the United Arab Emirates for placement of deposits in the central bank to artificially inflate the foreign currency reserves, it said. The Saudi package may provide breathing space to the government for dealing with economic challenges, but would not be enough to avoid the IMF facility. It is believed that improved foreign exchange reserves would strengthen Pakistan’s negotiating position in talks with the Fund, it reported. Situation can improve for Pakistan if China takes some step to rescue its all-weather-ally. PM Imran Khan is scheduled to travel to China on November 3 for his first visit.