This comes just after Pakistan has finally convinced China, Saudi Arabia, and the United Arab Emirates to agree to roll over their respective debts for another year, paving the way for the country to get the final nod from the International Monetary Fund on the $7 billion loan program. The commitments, according to Finance Minister Muhammad Aurangzeb, would see rollovers at similar levels to what was witnessed last year, enabling the stabilization of the precarious financial position of the nation.
These allied nations total a debt of about $12 billion, rolled over in the past couple of years. Taking confirmation from these countries regarding these debts is imperative so that Pakistan would move a step forward in fulfilling its requirements from the IMF and securing the much-needed financial support.
A staff-level agreement was reached by the Pakistani authorities with the IMF staff in July for a 37-month Extended Fund Facility Arrangement of about US$7 billion. The agreement is pending finally from the IMF Executive Board, of which Pakistan has assured itself by the end of the current month.
According to a ProPakistani report on July 31, Pakistan is zeroing in on a deal to secure these debt rollovers from China, Saudi Arabia, and the UAE—its supportive allies. This development turns out to be of immense help in executing all of the measures that would have Pakistan sail through its prevalent economic issues and restore financial stability.
These debt rollovers will give breathing space to Pakistan as it works on economic reforms and tries to strengthen its financial system. In fact, the final nod by the IMF would be the most important decision regarding Pakistan’s plan for economic recovery, showing a much stronger commitment to structural adjustment and fiscal discipline.
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