The Qatar Funding Authority (QIA) has introduced it goals to spend $3bn on varied business and funding sectors in Pakistan, which is presently dealing with a dire financial disaster, based on an announcement launched by Qatar’s Amiri Diwan.
Wednesday’s announcement was made throughout a go to to Doha by Pakistani Prime Minister Shehbaz Sharif, who held official talks with Qatari Emir Sheikh Tamim bin Hamad Al Thani after a gathering with the QIA on Tuesday.
“His Highness confused the significance of the brotherly and strategic relations between the 2 international locations and their aspiration to reinforce financial partnership by elevating commerce change and selling investments via the Qatar Funding Authority,” the Amiri Diwan mentioned in its assertion.
A senior Pakistani minister who was current in the course of the assembly confirmed to Al Jazeera that the Qatari authorities has proven its “intention of investing in Pakistan”.
“This is superb and greater than what we wanted,” he mentioned. The minister additional added that when the Qataris purchase Pakistani property, it would “enhance our reserves”.
“They’re fascinated with airports, seaport terminals, LNG-fired energy vegetation, photo voltaic vitality, [and] shares within the inventory markets,” he mentioned.
Pakistan is presently coping with critical financial turmoil and faces a stability of funds disaster, with overseas reserves having dropped as little as $7.8bn, barely sufficient for greater than a month of imports.
The nation can also be contending with a widening present account deficit, depreciation of the rupee towards the USA greenback and inflation that hit greater than 24 p.c in July.
Through the session, the 2 heads mentioned bilateral relations between Qatar and Pakistan, and methods to assist and develop them in “the fields of defence, economic system, funding, commerce change, vitality and sports activities, along with discussing the efforts made by the 2 international locations to fight terrorism”, the assertion mentioned.
IMF financing in pipeline
The Pakistan consultant for the Worldwide Financial Fund (IMF) mentioned on Wednesday that the IMF’s govt board would meet on August 29 to resolve on resuming a stalled $6bn mortgage facility for Islamabad.
Final month, the IMF mentioned it had reached a staff-level settlement with Pakistan that may pave the best way for disbursement of $1.17bn if accepted by the IMF board.
Earlier this week, Pakistan’s central financial institution additionally publicly said that the nation’s exterior financing wants had been “greater than absolutely met” for the present fiscal 12 months, “serving to cut back exterior vulnerability”.
Commenting on the announcement, Uzair Younus, director of the Pakistan Initiative on the Atlantic Council’s South Asia Middle, mentioned that whereas this funding could assist alleviate near-term financing considerations for Pakistan, it doesn’t deal with the central downside dealing with the nation’s economic system.
“Pakistan’s core concern is its lack of ability to sustainably finance its personal overseas change wants,” Younus mentioned. “The Qataris, via these investments, will count on income that may have to be repatriated in {dollars}. One should ask whether or not Qatar will actually have the ability to recuperate its investments with a worthwhile return.”
Macroeconomist Ammar H Khan mentioned that the Qatari funding will present Pakistan with “valuable foreign exchange liquidity” in a tricky setting.
Nevertheless, he too agreed with Younus, saying the funding won’t “alleviate structural issues that plague the nation”.
“If QIA is ready to enhance governance of state-owned enterprises via its funding and improve worth,” Khan mentioned, “then that may be a welcome profit.”
