The UAE intends to invest $1 billion in Pakistani companies in various sectors, the state news agency (WAM) has reported citing an official source in Abu Dhabi.
The UAE wants to continue its cooperation with Pakistan “in various fields, including gas, energy infrastructure, renewable energy, healthcare”, the agency added.
The move will likely help revive investor sentiment in the country, which has been beset by dwindling foreign exchange reserves as well as the depreciation of the rupee. However, as an IMF bailout program becomes clearer, sentiment has improved and the stock market rebounded some 670 points on Friday.
The IMF’s summer vacation ends August 12. “So technically the IMF board meeting could take place before August 20, if recommendations are sent to the board by August 6,” one of the sources said.
Pakistan and the IMF signed the $6 billion rescue agreement – Extended Financing Facility (EFF) – in 2019. But the release of $1.17 billion tranche (seventh and eighth) is on hold since the beginning of this year, when the IMF expressed concern about the situation in Pakistan. compliance with the agreement.
The last consultation of the executive board took place on February 2 of this year. On July 13, the IMF reached a staff-level agreement on the combined seventh and eighth EFF reviews, which must be approved by the board of directors before being disbursed.
The sources said Pakistan tried to get board approval ahead of the summer recess (August 1-12) and sent several officials to Washington to persuade the fund to do so. Earlier this week, Army Chief Qamar Bajwa phoned US Under Secretary of State Wendy Sherman to seek Washington’s support for the package. “But the Pakistanis have been informed that it is not possible to hold a board meeting before the holidays as a number of members are already on leave,” one of the sources said.
Another source said the IMF was ‘eager to help Pakistan’ and ‘there was no delay on their behalf’ but it was ‘not possible to speed up the process’ .
The sources said the IMF has asked Pakistan to get assurances from Saudi Arabia and the United Arab Emirates that they will provide a planned loan of $4 billion to the country after the IMF releases its tranche.
“The Pakistanis have received and conveyed the assurance of the two friendly countries,” a senior diplomatic source said. “So we don’t see any problem with board approval.”
But other sources said Pakistan had been warned ‘not to let the political situation spiral out of control’. The government had further been informed that “violence in the streets and demonstrations by the opposition or government repression against the leaders of the PTI may have a negative impact on the agreement”.
US media, while commenting on General Bajwa’s appeals to US diplomatic and military officials three days ago, pointed out that “the Pakistani military, which has directly ruled the country for more than half of its 75 years of history, has worked closely with the United States and is an official ally in the War on Terror against Al-Qaeda”.
“And the calls helped, but even the Americans can’t persuade the IMF to circumvent its procedure,” a diplomatic source said.
“Pakistan desperately needs the IMF loan. In July, the fund said it would increase the value of the bailout by $6 billion to $7 billion, if approved by its board, which is generally considered a formality,” the statement said. one of the reports.
Another report noted that “the IMF’s bailout revival will help Pakistan and encourage other international financial institutions to engage with the country.”
The report pointed out that since Imran Khan’s ouster, “Pakistan’s currency has fallen to historic lows amid uncertainty over IMF assistance.”
The constant decline of the national currency “has caused panic in its business community” and “the rise in food prices has made the Sharif government very unpopular”.