Islamabad: Pakistan’s finance minister said countries that have typically been generous in lending to the crisis-hit nation are proceeding more cautiously now.
“We went to Saudi Arabia, Dubai and spoken to other countries — they are ready to give money, but all of them say we need to go to the IMF first,” said the minister, Miftah Ismail, on May 28.
That’s a pivot from the past. When Pakistan went through a similar economic crisis in 2018, the nation was able to secure backing from China, Saudi Arabia and the UAE before going to the International Monetary Fund. Now, China has yet to follow through with a pledge to re-issue loans to Pakistan repaid in late March.
Pakistan’s economic risk score is currently at the lowest level since Bloomberg started compiling data in 2009. The nation’s foreign exchange reserves have halved in less than a year and the rupee has dropped by almost 8% in the past month. That makes it the worst performer in Asia, according to data from 13 nations compiled by Bloomberg.
China’s Asian Infrastructure Investment Bank, which was created to compete with other global funders, has also aligned itself with the lenders, telling Pakistan that if the World Bank gives money, then so will it, according to Ismail. –Bloomberg