The United Arab Emirates (UAE) has formalised a financial assistance of US$ 3 billion (Dh 11 billion) to Pakistan, helping the latter to cope up with its ongoing economic crisis economy and provide impetus to its long-term monetary policy.
The commitment was made in December 2018, during the visit of Pakistan’s Prime Minister, Imran Khan’s to Qatar, under the directives of the President of UAE – Shaikh Khalifa Bin Zayed Al Nahyan and Crown Prince of Abu Dhabi & Deputy Supreme Commander of the UAE Armed Forces – Shaikh Mohammad Bin Zayed Al Nahyan.
Speaking on the occasion, Mohammad Saif Al Suwaidi – Director General, Abu Dhabi Fund for Development (ADFD) said, “The directive to deposit US $ 3 billion with the State Bank of Pakistan aligns with the UAE leadership’s keenness to bolster Pakistan’s economy, help its government achieve financial stability and overcome economic challenges, and drive comprehensive development in the country.”
Moazzam Ahmad Khan, Ambassador of Pakistan to the UAE, said, “We are grateful to the leadership and people of the UAE for their generous balance of payment support. “It will go a long way in addressing Pakistan’s current economic challenges. It shows UAE’s continued commitment and friendship that has always remained an abiding element of our special relations.”
The ADFD has so far funded 8 developmental projects in Pakistan totalling upto 1.5 billion Durhams across sectors including energy, health, education and transport in Pakistan.
Pakistan’s economy has been facing acute stress as import bills towards China outweigh any out its export earnings. While a lot of it has been blamed on China-Pakistan economic Corridor (CPEC). CPEC involves a whole bouquet of infrastructure projects ranging from Roads to Power plants. The funding is provided by China as a loan to Pakistan with preconditions of Chinese companies executing the project. Western analysts have called much of the funding has been called wasteful by western analysts. US even made a pre-condition for Pakistan, to come out with transparent details on CPEC, for its support on a IMF funding to bail out the economy. The Present Foreign exchange reserves after UAE funding may have give Pakistan some room on its balance of payment needs.
For the records, Saudi Arabia had deposited US $ 3 billion into State Bank of Pakistan in 2018 and had assured to provide another US $ 3.2 billion oil deferred payment over the next 3 years. Besides, Pakistan will also receive US $ 1 billion grant from China, thereby taking Pakistan’s foreign exchange reserves to US $ 11 billion. As of now, the foreign exchange reserves stand at just below US $ 7 billion.