Saudi loan

Published October 25, 2018
PM Imran Khan and Saudi Crown Prince Mohammed bin Salman. — Photo/File
PM Imran Khan and Saudi Crown Prince Mohammed bin Salman. — Photo/File

AS Prime Minister Imran Khan and his government assemble a financial rescue strategy for Pakistan, two things are becoming apparent: Mr Khan believes that the public should take him at his word at all times and that all wrong that has been done to this country has been committed by his political enemies.

In the latter opinion, Mr Khan and his allies can make a reasonable case based on the fact that yet again the country is facing a balance-of-payments crisis and running dangerously high fiscal deficits. This was not Mr Khan nor his PTI government’s doing.

What is the prime minister’s doing and responsibility, however, are the steps he and his government are taking. And when those steps start to mirror the measures taken by the previous governments he relentlessly attacks, a fair question arises: why should Mr Khan simply be taken at his word?

In an address to the nation last night, Prime Minister Khan argued that the loan arrangement and deferred oil payments he has secured from Saudi Arabia will reduce the quantum of money Pakistan needs from the IMF and, therefore, the country will be able to negotiate better terms with the Fund.

According to Mr Khan, the IMF will make onerous demands of Pakistan if more money is sought from it. But the prime minister did not explain what are the terms on which Saudi Arabia has agreed to lend money to Pakistan.

Almost certainly, the terms will be different to what the IMF is likely to demand; no reasonable person would argue that Saudi cheque-book diplomacy has any stakes in domestic economic reforms in Pakistan. But there will be at a minimum Saudi expectations, and perhaps even demands, when it comes to Pakistan’s support for issues that are of interest to the Saudi monarchy.

When he was an opposition figure, Mr Khan seemed to understand that and hence decried the secret deal that the previous PML-N rulers had struck with the Saudis in return for a loan.

The prime minister’s claim that Pakistan will try and facilitate dialogue between the Saudis and its regional rivals and enemies is similarly unconvincing. It has been claimed before, by the last government, and did not amount to much.

Mr Khan has the political space to seek a financial bailout package as his government deems necessary; no one has denied the need for a bailout and the accusations of the opposition ring hollow because they fared little better when in office.

Mr Khan is also right in insisting that accountability is necessary — the fight against corruption is vital to this country’s long-term well-being. But the prime minister’s impulse to relentlessly attack the opposition while taking steps similar to those taken by previous governments is likely to fuel political instability.

The PTI needs to be more transparent in its decision-making.

Published in Dawn, October 25th, 2018

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