Monday, February 6, 2023

Asking for more loans from friendly countries is embarrassing: Pak PM

Pakistan Prime Minister Shehbaz Sharif has said that it was embarrassing for him to seek more loans from friendly countries, saying it was not a permanent solution for the cash-strapped country’s economic challenges.
Addressing the passing out ceremony of probationary officers of the Pakistan Administrative Service (PAS) here in the capital of Punjab province on Saturday, Prime Minister Sharif regretted that during the past 75 years, different governments — whether headed by political leadership or military dictators — could not address the economic issues.
Sharif said it really embarrassed him to ask for further loans while lauding the Kingdom of Saudi Arabia for the financial support, Geo News quoted him as saying.
He said that seeking foreign loans was not the right solution to address Pakistan’s economic challenges as the loans would have to be eventually returned.
The prime minister said that sustainable development goals (SDGs) could be achieved and foreign loans avoided had their “bus could have moved at a fast pace” and on the right track.
Pakistan is battling to fix its economic and political fissures amidst a parochial political rivalry between former premier Imran Khan and the current government headed by Sharif.
During Sharif’s recent visit to the United Arab Emirates (UAE), President Sheikh Mohammed bin Zayed announced a grant of a further USD 1 billion loan to Pakistan.
Saudi Arabia and the UAE are the two key supporters of Pakistan who come to its rescue when the chips are down.
The country faces a serious crisis as its foreign reserves are down to USD 5.8 billion, the lowest since February 2014. The reserve includes deposits worth USD 5 billion from Saudi Arabia and China with specific conditions of use.
Pakistan’s economic situation is facing severe headwinds with inflation being forecast to stay high between 21-23 per cent and the country’s fiscal deficit widening by more than 115 per cent in the first four months (July-October) of the current fiscal year.
The country — with an economy of Rs 350 billion — is in dire need of foreign aid to reduce its current account deficit as well as ensure enough reserves to meet its debt obligations.
Pakistan’s economy has been on a downhill because of the political crisis, plummeting rupee, inflation which is at an unprecedented high, added to it last year’s devastating floods, and a global energy crisis which has further worsened the situation.
In its call for funds at the recent International Conference on Climate Resilient Pakistan in Geneva, the country was able to secure pledges worth over USD 10 billion — most of them loans.
UAE has agreed to roll over USD 2 billion and also approved providing USD 1 billion in loans.
Riyadh also is considering beefing up its deposit in the State Bank of Pakistan (SBP) from USD 3 billion to USD 5 billion as Crown Prince Mohammad Bin Salman directed his financial officials to study increasing the Pakistan deposit by USD 2 billion, Geo News reported.

SourcePTI
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