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Pakistan to get $3bn from UAE to ease economic crises

Pakistan's Prime Minister Imran Khan on 5 November 2018 [ALY SONG/AFP/Getty Images]
Pakistan's Prime Minister Imran Khan on 5 November 2018 [ALY SONG/AFP/Getty Images]

Pakistan's economic woe has forced its newly elected Prime Minister Imran Khan to seek the aid of Gulf States for a second time in three months. This time the UAE will deposit $3 billion to help Islamabad, which is struggling with a balance of payments crisis.

UAE state media agency WAM confirmed the aid package in a statement today. "Top Pakistani officials have welcomed today's announcement by the United Arab Emirates that the Abu Dhabi Fund for Development, ADFD, will deposit US$3 billion, equivalent to AED 11 billion, in the State Bank of Pakistan, to support the bank's liquidity and foreign currency reserves," the statement said.

Shortly after the announcement, Khan posted a comment on Twitter to thank the UAE government "for supporting Pakistan so generously in [our] testing times," adding "this reflects our commitment and friendship that has remained steadfast over the years".

READ: Imran Khan's mission to balance relations with Saudi Arabia and Iran

Pakistan is said to be facing a widening balance of payments crisis. A team from the International Monetary Fund in November visited Pakistan, which has been a regular borrower from the IMF since the 1980s. However talks with officials on a possible IMF bailout ended without any agreement.

Islamabad last received an IMF bailout in 2013 to the tune of $6.6 billion. It also secured $6 billion in funding from Saudi Arabia and struck a 12-month deal for a cash lifeline during Prime Minister Imran Khan's visit to the Kingdom in October during the Future Investment Initiative in Riyadh boycotted by a number of global firms and states following the killing of journalist Jamal Khashoggi.

Speaking to Middle East Eye ahead of the trip to Riyadh, Khan said because of its dire economic crisis Pakistan had no choice but to prioritise good relations with the Kingdom despite the killing of Khashoggi. Though he said he was shocked by the Saudi journalist's murder, he stressed that the Pakistani government needed urgent access to Saudi loans to avoid defaulting on record levels of debt within months.

Islamabad also received billions of dollars in Chinese loans to finance ambitious infrastructure projects.

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Asia & AmericasIMFInternational OrganisationsMiddle EastNewsPakistanUAE
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