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The Qatar Funding Authority (QIA) has introduced it goals to spend $3bn on numerous business and funding sectors in Pakistan, which is presently dealing with a dire financial disaster, based on a press release 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 nations and their aspiration to reinforce financial partnership by elevating commerce alternate and selling investments by way of 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 excellent and greater than what we wanted,” he mentioned. The minister additional added that when the Qataris purchase Pakistani property, it is going to “increase our reserves”.
“They’re fascinated by airports, seaport terminals, LNG-fired energy crops, photo voltaic vitality, [and] shares within the inventory markets,” he mentioned.
Pakistan is presently coping with severe financial turmoil and faces a stability of funds disaster, with international 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 in opposition to the US 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 alternate, vitality and sports activities, along with discussing the efforts made by the 2 nations to fight terrorism”, the assertion mentioned.
IMF financing in pipeline
The Pakistan consultant for the Worldwide Financial Fund (IMF) mentioned final week 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 might pave the way in which for disbursement of $1.17bn if permitted by the IMF board.
Earlier this week, Pakistan’s central financial institution additionally publicly acknowledged 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 might assist alleviate near-term financing considerations for Pakistan, it doesn’t tackle the central drawback dealing with the nation’s economic system.
“Pakistan’s core challenge is its incapability to sustainably finance its personal international alternate wants,” Younus mentioned. “The Qataris, by way of these investments, will count on income that may have to be repatriated in {dollars}. One should ask whether or not Qatar will really have the ability to recuperate its investments with a worthwhile return.”
Macroeconomist Ammar H Khan mentioned that the Qatari funding will present Pakistan with “treasured foreign exchange liquidity” in a troublesome setting.
Nonetheless, he too agreed with Younus, saying the funding is not going to “alleviate structural issues that plague the nation”.
“If QIA is ready to enhance governance of state-owned enterprises by way of its funding and improve worth,” Khan mentioned, “then that might be a welcome profit.”
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