Friday, February 26, 2021

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Why is Saudi Arabia the “Messiah” for Pakistan’s Economic Crisis?

Why are Saudi Arabia-Pakistan Relations the last hope of survival for an indebted Islamabad? Will Saudi Arabia be the Messiah to an economically dwindling Pakistan? Pakistan is facing an acute economic crisis in terms of the balance of payments, and the Islamic Development Bank (IDB) backed by Saudi Arabia will grant a $4 billion loan to Islamabad.  

When the new government takes oath under Imran Khan, this loan would become a narrative of Riyadh’s increasing influence on the Islamic Republic of Pakistan. After the Islamic Development Bank decided to help a reeling Pakistan, even Pakistan has reciprocated some support to Riyadh.

Pakistan supported Riyadh’s diplomatic tirade with Ottawa which erupted over the issue of women rights in Saudi Arabia. Pakistan well might be termed by some as a proxy of Saudi Arabia, and this loan with “strings attached” might further make Islamabad a pawn in the hands of Riyadh, especially against Iran.

This much-needed loan being given to a nuclear Pakistan will not only further bolster ties between Saudi Arabia and Pakistan, but it will also give Riyadh deep influence over the new government. This friendship, however, would not find much liking in New Delhi as India sees Saudi Arabia as a key ally and has been trying to subdue Saudi-Pakistan ties.

In addition to the loan amount received from Saudi Arabia, Pakistan also has high hopes from an IMF bailout package worth $12 billion. But the US has raised several objections to the idea of an IMF bailout to Pakistan fearing that this money would be used to pay the Chinese lenders. US senators have already written a letter to the Trump Administration to block the IMF bailout for Pakistan.

More News at EurAsian Times

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