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Pakistan to tap overseas nationals for funds to revive economy

By Monitoring Desk
January 29, 2019

ISLAMABAD: Pakistan will raise $500 million in March through a fund aimed at its nationals living overseas, as South Asia’s second-biggest economy seeks investment after averting a balance-of-payment crisis, Bloomberg reported on Monday.

Pakistani citizens living abroad would be asked to invest in the fund managed by the Board of Investment and the central bank, Haroon Sharif, the chairman of the state-run agency, said in an interview in Islamabad. Prime Minister Imran Khan’s administration would also sell a so-called diaspora bond in January, finance ministry spokesman Khaqan Hassan Najeeb said in a separate interview on Friday.

Khan’s six-month-old government is tapping different sources to overcome a nearly $12 billion financing gap and boost its dwindling foreign reserves. He has already secured $6 billion in loans from friendly nations, including Saudi Arabia and the United Arab Emirates.

Finance Minister Asad Umar said last week that an investment package with China was almost complete, while talks with the International Monetary Fund for a bailout loan were ongoing.

An accord with Riyadh for $3 billion of oil supply on deferred payments would be signed during Saudi Crown Prince Mohammed Bin Salman’s likely visit to Pakistan in mid-February, Sharif said.

The Saudi and UAE packages were secured by premier Khan during his visit to the two countries last year.

Sharif said international financial institutions have pledged to contribute to the fund, which would be used to develop the nation’s rural areas. Separately, he said, Pakistan has received “concrete” investment proposals of up to $40 billion from China, Saudi Arabia, the UAE, Malaysia, and South Korea.

“We’re looking into that as they want to make these investments in 3 to 5 years,” he said.

The government is set to raise up to $3 billion from the diaspora bond, or Pakistan Banao Certificate, on January 31 to boost foreign reserves, Dawn newspaper reported January 26, citing Finance Minister Umar. The bonds of three- and five-year maturities would carry a coupon of 6.25 percent and 6.75 percent, respectively, he said.