Saudi Arabia became a trouble-shooter for Pakistan, put billions of dollars in its pocket, will the credibility of Shahbaz government be saved?

News India Live, Digital Desk: Saudi Arabia has once again emerged as a ‘Messiah’ for Pakistan, which is burdened with economic crisis and huge debt. Amidst the ongoing World Bank-IMF meetings in Washington, Saudi Arabia has made a big announcement to provide additional financial assistance of $3 billion to Pakistan. Along with this, the Saudi government has also extended its old deposit of 5 billion dollars for a longer period. After this big relief, the Shehbaz Sharif government has heaved a sigh of relief, which was under pressure to repay the huge loan to UAE this month.

Pakistan’s foreign exchange reserves will get ‘oxygen’

This new $3 billion package given by Saudi Arabia will have a direct impact on Pakistan’s falling foreign exchange reserves. Finance Minister Mohammad Aurangzeb confirmed this in Washington and said that this amount will come to Pakistan’s account by next week. At present, the situation of Pakistan is such that it has to repay a loan of about 3.5 billion dollars to the United Arab Emirates (UAE) this month. Without this help of Saudi, it was almost impossible for Pakistan to avoid bankruptcy.

The hassle of annual rollover is over, now long term support

This time Saudi Arabia has done another big favor to Pakistan. Till now the $5 billion deposited by Saudi had to be ‘rollovered’ (renewed) every year, but now it has been extended for a longer period. With this, Pakistan will not need to reach out again and again and its economic stability will be strengthened. Finance Minister Aurangzeb has expressed special gratitude to Saudi Crown Prince Mohammed bin Salman and its Finance Minister Mohammed Al-Zadan for this generosity.

Will Pakistan be able to get out of the debt trap?

Although this help from Saudi Arabia and Qatar is giving immediate relief to Pakistan, the crisis is not over yet. Pakistan has to meet the target of taking its foreign exchange reserves to $18 billion by June so that the path to the next bailout package from the IMF can be eased. Experts say that unless Pakistan makes drastic reforms in its internal policies, foreign aid will only act as a ‘Band-Aid’. At present, this Saudi booster dose has definitely given the Shahbaz government a respite of a few months.