Saudi economic package: Dar concerned over reduction of oil ‘deferred payment facility’ by $1.8 bn

ISLAMABAD: Former Federal Minister for Finance and Economic Affairs Senator Muhammad Ishaq Dar has claimed that Saudi Arabia reduced oil deferred payment facility from $3 billion to $1.2 billion.

Talking to The News on Saturday, the former finance minister expressed gratitude over revival of Saudi economic assistance package but expressed concerns over reduction of oil deferred payment facility as he said, “Good news that existing Saudi deposit with SBP of $1 billion will be topped up by $2 billion to revive it back to $3 billion; bad news that oil deferred payment facility has been reduced from $3 billion to $1.2 billion.”

He added that Saudi economic assistance package for Pakistan stood revived but reduced from $6 billion to $4.2 billion. Ishaq Dar asserted that Saudi Arabia had been a great friend and supporter of Pakistan, both at international forums as well as provider of economic assistance in the hour of need, adding that in August 2018, Imran Khan, after assuming office, had declared his preference to seek support from friendly countries instead of going to IMF.

The former federal minister reminded that UAE and Qatar too joined in to lend further support by placing deposits of $2 billion and $500 million respectively with the SBP, adding that PTI government subsequently also used $3 billion Chinese trade financing facility to shore up the foreign reserves with the SBP. Dar recalled that the PTI government later chose to engage IMF for obtaining the Fund program for $6 billion facility regarding which Imran Khan, before General Elections 2018, pledged publicly to the nation that he would prefer committing suicide over going to the IMF for financing facility. Narrating the reasons for partial withdrawal of Saudi economic assistance to the country, he said that on the sidelines of the UN General Assembly (UNGA) annual meeting, Imran Khan announced with Turkish President Tayyip Erdo an and Malaysian Prime Minister Dr Mahathir Mohammad to jointly hold an Islamic Summit which was later held in Kuala Lumpur in 2019, adding that the surprise move annoyed Saudi Arabia and UAE, who viewed it as a threat to the unity of the Muslim world.

Consequently, Saudi Arabia withdrew $2 billion of the $3 billion deposit with SBP in addition to terminating the oil deferred payment facility. Senator Muhammad Ishaq Dar said that Pak Rupee had been worst performing Asian currency in the last six months as tracked by the Bloomberg.