Islamabad/Doha: Cash-strapped Pakistan on Monday secured a bailout package of US$ 3 billion from oil-rich Qatar, a day after Emir Sheikh Tamim bin Hamad concluded his visit to Islamabad and agreed to cooperate in the fields of trade, anti-money laundering and curbing terror financing.
The Gulf state is the fourth nation that has come forward to rescue Pakistan from default during past 11 months as the government of Prime Minister Imran Khan tries to overcome a ballooning balance-of-payments crisis.
Earlier, China gave US$ 4.6 billion in shape of deposits and commercial loans and Saudi Arabia provided US$ 3 billion cash deposit and US$ 3.2 billion oil facility on deferred payments. The United Arab Emirates also provided US$ 2 billion cash deposit.
Qatar’s financial assistance was announced by its foreign minister Sheikh Mohammed bin Abdulrahman Al Thani.
“Upon the directives of HH the Amir, the Deputy Prime Minister and Minister of Foreign Affairs announces of new investments in the form of deposits and direct investments worth a total of QR3 billion in the Islamic Republic of Pakistan,” the official Qatar News Agency tweeted, quoted the minister as saying.
“The Qatari-Pakistani economic partnership will amount to $9 billion. Qatar affirms its aspiration for further development in the relations between the two countries at all political, economic, sports and cultural levels,” he said.
Advisor to Pakistan Prime Minister on Finance Dr Abdul Hafeez Shaikh confirmed the Qatari financial help through his Twitter handle. “I want to thank the Emir of Qatar HRH Sheikh Tamim Bin Hamad Al Thani for announcing $3 billion in deposits and direct investments for Pakistan and for Qatar’s affirmation to further develop relations between the two countries”, Shaikh tweeted.
On Sunday, Pakistan conferred the visiting Qatari Emir with the ‘Nishan-e-Pakistan’, the country’s highest civil honour.
Apart from stepping up cooperation in trade and economy, Pakistan and Qatar signed a memorandum of understanding on cooperation in the field of exchange of financial intelligence related to money laundering and curbing terrorism financing.
Pakistan’s finance ministry did not immediately provide the break-up of the US$ 3 billion Qatar aid. It was not clear how much of the amount was in shape of deposit that will land in the State Bank of Pakistan to provide temporary cushion to the dwindling reserves, The Express Tribune reported.
Pakistan last month reached a preliminary agreement with the International Monetary Fund for a US$ 6 billion bailout package aimed at shoring up its finances and strengthening a slowing economy.
Despite these massive inflows, the official foreign currency reserves held by State Bank of Pakistan, the apex bank, stood at only US$ 7.6 billion as of June 14, the report said.
The Pakistan Tehreek-e-Insaf (PTI) government led by Prime Minister Imran Khan is going to make a new record of foreign borrowings in one year, it said.
Pakistan is also required to convert its short term loans into long term borrowings aimed at improving the debt profile. It currently pays 41 per cent of its budget in debt servicing.
The successive governments’ inability to enhance exports has increased Pakistan’s reliance on bilateral and multilateral creditors. The exports further slipped over 1 per cent during first 11 months under prime minister Khan, the report said.