DUBAI: In an encouraging development, the United Arab Emirates (UAE) has
allocated $10 billion for investment in Pakistan, the Prime Minister’s Office said
Thursday.
The development came after Prime Minister Shehbaz Sharif’s meeting with UAE
President Sheikh Sheikh Mohamed bin Zayed Al Nahyan in Abu Dhabi, the capital
of the Gulf state, where the premier is on a day-long visit.
The decision has been take “to strengthen the Pakistani economy, support it, and
enhance cooperation between the two countries”, UAE’s WAM news agency
reported.
Pakistan is seeking investment from brotherly nations to boost its economy as the
Pakistan Muslim League-Nawaz (PML-N) government explores avenues to boost
reserves and reduce high inflation.
Saudi Arabia, as per federal ministers, has also pledged to expedite $5 billion in
investment, while the kingdom’s foreign minister said last month that Riyadh will be
“moving ahead significantly” to invest in projects in Pakistan.
In his maiden visit as elected prime minister, Shehbaz Sharif also told an event that
Pakistan is seeking collaboration with friendly nations as “gone are the days” when
officials will visit brotherly countries with begging bowls.
“Gone are the days that I will go to our brotherly countries with begging bowl. I
have broken that bowl,” the premier said.
The country’s total foreign exchange reserves stand at a comfortable position of
$14.5 billion, as of May 17, while the State Bank of Pakistan-held reserves are at
9.15 billion after a meagre increase.
Pakistan also last month completed a short-term $3 billion programme, which
helped stave off sovereign default, but the government of Prime Minister Shehbaz
has stressed the need for a fresh, longer-term programme.
Pakistan narrowly averted default last summer, and its $350 billion economy has
stabilised after the completion of the last IMF programme, with inflation coming
down to around 17% in April from a record high 38% last May.
It is still dealing with a high fiscal shortfall and while it has controlled its external
account deficit through import control mechanisms, it has come at the expense of
stagnating growth, which is expected to be around 2% this year compared to
negative growth last year.
Pakistan is seeking at least $6 billion and request additional financing from the
Fund under the Resilience and Sustainability Trust.
However, the IMF has conveyed to the Pakistan authorities that the next bailout
package under the Extended Fund Facility (EFF) would only be considered after
presenting an aligned upcoming budget and securing its approval from parliament,
according to report published in this newspaper.