Saudi Arabia is no longer willing to bail out Islamabad and refused to provide ‘easy money’ to Pakistan, demanding economic reforms, reported Middle East Eye. Pakistan is in dire need of sustained US dollar inflows to avoid defaulting on nearly USD 80 billion of international loan repayments over the next three and a half years. The country is currently sitting on just USD 3 billion in foreign exchange reserves.
Saudi Arabia’s decision to refuse to provide any further bailouts or interest-free loans to Pakistan has left the government in Islamabad in shock and has prompted the finance minister to complain that even friendly countries aren’t keen on helping Pakistan out of its economic emergency, Middle East Eye reported. Umar Karim, an associate fellow at the King Faisal Center for Research and Islamic Studies, said Pakistani authorities are in a state of shock. “While previously Saudi Arabia and other Gulf countries would bail Pakistan out off the back of a phone call from the foreign minister or the prime minister, this time around they are really being put through the mill,” Karim told Middle East Eye. It is believed that on a recent trip, even the Pakistani military chief couldn’t convince Saudi Crown Prince Mohammed bin Salman to release emergency funding for the country. At the World Economic Forum in Davos in January, the Saudi finance minister made the Kingdom’s new policy very clear. Mohammed al-Jadaan said, “We used to give direct grants and deposits without strings attached and we are changing that.”
