Pakistan all praise for Kingdom after $6bn aid promise

ISLAMABAD: Pakistan’s ailing economy can breathe a sigh of relief once the $6 billion, pledged by Saudi Arabia on Tuesday, is injected into the country to resolve its issues of balance of payments and oil imports, experts said on Wednesday.
The monetary aid extended by the Kingdom at the Financial Investment Initiative conference in Riyadh, which ended on Wednesday, will also bolster Pakistan’s dwindling foreign exchange reserves and stabilize its falling currency against the dollar – a move pertinent for a consumer-focused nation which is heavily dependent on imports.
The stock market jumped more than 1,000 points following Prime Minister Imran Khan’s “successful visit” to the Kingdom, tweeted Faraz Chaudhry, an entrepreneur and philanthropist.
“Thank you Saudi Arabia” and “good work by Imran Khan” wrote notable political analyst and former foreign ministry advisor Mosharraf Zaidi on social media. “Pakistan has to delicately manage complex regional dynamics and an insatiable youth-based economy,” he added.  
Saudi Arabia’s aid package has been hailed by economy experts who were quick to add a caveat -- the amount of $3 billion towards repayment of debts and an additional $3 billion in deferred oil payments is not enough to avoid the bailout request which Pakistan approached the International Monetary Fund (IMF) for, especially since the looming deficit crisis amounts to $18 billion. The country, therefore, immediately requires an additional $12 billion, according to reports quoting PM Khan.    
“This strengthens Pakistan’s position with the IMF,” Dr Vaqar Ahmed, an economy expert and deputy executive director of the Sustainable Development Policy Institute said, praising the Kingdom’s repeated generosity. In 2014, Riyadh “unconditionally gifted” Islamabad $1.5 billion to avert a similar economic crisis at the time.
“We appreciate the gesture of Saudi Arabia. This facility will provide some space for meeting urgent requirements,” Ahsan Iqbal, Pakistan Muslim League-Nawaz (PML-N) opposition leader and former minister of planning and development, told Arab News.
Experts added that Improved foreign exchange reserves would empower Pakistan to negotiate with the IMF in a better manner and secure development funding from the World Bank.      
Weeks before Imran Khan assumed office as Pakistan’s prime minister, China had approved $2 billion for its all-weather friend, to ease pressure on the depleting State Bank of Pakistan’s foreign currency reserves. “It’s a fine start but this only buys oxygen for reforms,” Zaidi said.
Iqbal added that this is not a solution because “the entire amount is payable”. “The fundamental crisis is ensuring political stability and continuity of policy,” he said.
He blamed the economic crisis on the ruling Pakistan Tehreek-e-Insaaf’s movement to overthrow the former PML-N government. “That caused billions of dollars of foreign investment to shy away from Pakistan which widened the gap in the balance of payments and now he (Imran Khan) is facing the effects of that crisis,” he said.
Pakistan time and again has sought financial assistance from its allies, repeating the same mistakes in governance, specifically over-spending, dependence on imports and taking loans to repay loans. These are some key factors, but “we seriously need to plug the leaks”, Dr Ahmed said.