New Delhi, April 29 (SocialNews.XYZ) Pakistan repaid $3.5 billion to the United Arab Emirates last week, and immediately Riyadh stepped in with financial support, which sparked debate over Islamabad’s growing reliance on Gulf financing, a new report has said.
Turkey based media house Anadolu Agency said that Saudi Arabia averted an immediate reserves shock, but it increased Pakistan’s dependence on a single benefactor at a time of heightened regional realignment.
Saudi Arabia immediately made a $3 billion deposit to Pakistan’s foreign reserves after UAE demanded repayment due to "displeasure over Islamabad's policy on the Middle East," the report suggested.
"Some analysts view the developments with caution, warning of over-reliance on Riyadh's financial support, which is equivalent to almost 50% of the State Bank of Pakistan's total foreign reserves of $16 billion," the report warned.
Karachi‑based economist Shahid Hasan Siddiqui cautioned that the relief from Saudi Arabia was temporary and raised longer‑term economic risks and shrunk Islamabad's financing resources.
"We put all our eggs in one basket. What if Saudi Arabia becomes unhappy with our foreign policy or the US doesn't need us tomorrow?" he asked.
He said the country must pursue structural reforms to avoid a "foreign policy compromise" and urged taxation of large foreign remittances to discourage money laundering.
"A nuclear country cannot run like that, where its imports are double its exports, and foreign remittances are being used to cover the trade deficit instead of investing them," he added.
Meanwhile, Pakistan’s Foreign Ministry described the repayment to the UAE as a “routine financial transaction," and denied any links to the war in the Middle East. He insisted there is no “gap” between Islamabad and Abu Dhabi.
"If you have to choose, then you go for long-term stability rather than short-term stability. And Pakistan has wisely chosen," he described Pakistan's decision to stand alongside Riyadh.
—IANS
aar/pk
Source: IANS
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