Two alleged close friends of Pakistan seem to be turning away from it in difficult times. Pakistan currently has foreign reserves of only $6.7 billion. Due to this, imports can be done only for three weeks. Even the installments of the old loan cannot be paid. Finance Minister Ishaq Dar had said in November that China and Saudi Arabia would give a new loan of $13 billion to Pakistan very soon. It has not been found till now and both countries are silent.
On the other hand, the International Monetary Fund ie IMF has also stopped the third installment of the loan. In such a situation, there has been a big question mark on where the funds will come from to repay the foreign debt and import in the first quarter of January to March.
China went a step further
According to a report in Pakistan's newspaper 'Express Tribune'- the Finance Minister may be claiming to get new loans worth $13 billion from Saudi Arabia and China, but the reality is something else. Talks were held with both countries at the beginning of November and so far no money has been promised, let alone getting any money from their side.
According to the report, China has gone a step further. He sought an installment of $1.3 billion from Pakistan. The Government of Pakistan has not yet said anything about this act of China. Dar is now claiming that talks are on with Saudi Arabia and is expected to get $3 billion from there soon. On the other hand, Saudi Arabia has kept silent on this matter.
where is the problem
Pakistan currently has foreign exchange reserves or forex reserves of only $6.7 billion. Of this, $2.5 billion is from Saudi Arabia, $1.5 billion from UAE, and $2 billion from China. These funds are security deposits, which means the Shahbaz Sharif government cannot spend them. Secondly, Saudi and UAE can withdraw this money on 36 hours' notice. In 2019 also, the foreign reserve of Pakistan was the same.
The IMF had last month refused to release the third tranche of the $1.7 billion loan. He is asking Pakistan to increase revenue and reduce expenditure as per the conditions.
On December 8, Pakistan wrote a letter to Saudi and requested to give a loan of $ 3 billion as soon as possible. Pakistan has to pay installments of $8.8 billion in January itself. Obviously, on the one hand, it cannot empty the reserve of $6.7 billion. On the other hand, it is not getting help from other countries or organizations.
Dar had said in November – We are going to get a financial package of $13 billion from China and Saudi Arabia. Of this, $5.7 billion are fresh loans. 8.8 billion will be received from China and 4.2 billion from Saudi.
Where is the matter stuck with IMF?
In August, the IMF agreed to provide $ 9 billion in installments to Pakistan. This was the 23rd time in Pakistan's 75-year history that it had to reach out to the International Financial Body to avoid bankruptcy.
Out of $9 billion, Pakistan has so far received only $2 billion. The reason for this is that IMF gives loans on very strict terms and it has a fixed program. It has to be accepted by the concerned country at all costs. Due to political compulsions, the Shahbaz Sharif government is not able to fulfill these conditions. This is the reason why the IMF has also stopped the installment.
Bigotry increased the trouble According to a report of 'The Express Tribune'- IMF had asked the Government of Pakistan for a detailed report about revenue and income. Pakistan also presented the report, but the IMF team was unhappy with it. According to him, the government was neither able to reduce imports nor was it successful in increasing revenue. In such a situation, the new installment which was to be released this month was stopped.
A statement by Ishaq Dar increased the problems in Pakistan. Dar had said in an interview – IMF cannot tell us what to do and what not. We cannot follow his dictation.
who will help now
The biggest question is who will be able to rescue Pakistan from the trouble that has befallen it. Dar said in this interview – A friendly country has assured us of help. We hope that we will get this help soon.
When Ishaq was asked which country was helping, he refused to name the country. Dar had also expressed the hope that crude oil and petroleum products in the country would now be imported from Russia.
This was also confirmed by Petroleum Minister Musaddiq Malik on Monday. He had said- Russia has agreed to give us crude oil, petrol, and diesel at a 30 to 40% discount.
Surprisingly, the Russian government did not make any statement in this regard. In February, then-Prime Minister Imran Khan also went to Russia and he also claimed that oil products would be bought from Russia at an affordable price on the lines of India. This has not been possible to date.
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