China, United Arab Emirates, Kuwait and Qatar: Pakistan looks for fiscal support

After Saudi Arabia, Pakistan has approached four other friendly countries, China, United Arab Emirates (UAE), Kuwait and Qatar, for seeking financial support to reduce budgetary deficit and keep economy on the move.
Sources told Business Recorder on Friday that following a $300 million grant from Saudi Arabia early this week for helping Islamabad offsetting impact of the rising oil prices on the economy now Pakistan has taken the case with other four countries, which could extend it financial support when current account deficit (CAD) was widening to alarming level.
The list of the countries to which Pakistan approached for financial support shows that Islamabad is heavily relying on the friendly countries to come out of the worsening financial crisis.
Economic analysts are of the view that Pakistan needs minimum $5 billion to keep its house in order and to fulfil fiscal responsibilities. Such support is also needed to keep the rupee parity with US dollar at some reasonable level, besides keeping foreign exchange reserves at certain limit to support the rupee.
The government economic wizards seem helpless in plugging budgetary deficit through usual means. Pakistan''s move is indicative of serious threats as a result of unprecedented high oil prices in the international market and much poor performance of different key sectors of the economy.
Islamabad can not make things happen smoothly when all key indicators of its economy are not performing up to the mark. Its two major sources- revenue collection and exports-have not been showing any good signs. Revenue collection is likely to remain much less than the targeted figure and, similarly, exports have gone down making it clear to the policy makers that they will be left with Pakistan''s huge trade deficit at the end of the current fiscal year.
This disorder can subsequently add to Pakistan''s financial woes. For the last few years, the economic managers in Islamabad had been plugging the gap in income and expenditure by raising money from international market through global depository receipt (GDRs), privatisation of national assets and from borrowing.
They managed to create the impression for a common man that Pakistan''s economy was robust as a result of reforms and their professional approach to meet the future challenges without any problem.
Perhaps they expected some divine force to come and remove the weaknesses in the economy. The campaign of getting whatever any friendly country can give it for financial support is now telling the true story of the economic successes of the last almost one decade.