ISLAMABAD, Nov 3: President Asif Ali Zardari embarks on Tuesday on another trip to seek an economic bailout package for the country, this time to traditional ally Saudi Arabia being billed as the last hope for avoiding the highly unpopular option of an IMF loan.
Pakistan entered into negotiations with the IMF primarily as a standby arrangement for funds to avert a balance of payment crisis. It was never a preferred option because of stringent conditions attached to IMF loans and efforts are afoot to secure help from friendly governments.
Pakistan needs a package of $10 billion to $15 billion. President Zardari’s visit to Saudi Arabia, therefore, comes at a crucial time before the government takes a final decision whether or not to seek IMF loan, particularly because the West has told Pakistan that it would assist only after IMF’s involvement.
The two basic objectives of the president’s two-day visit to the kingdom are to solicit Saudi support for the ‘Friends of Democratic Pakistan’ initiative and to seek crude imports of $5.9 billion on deferred payment during the current fiscal year.
However, diplomatic sources say the Saudis are not enthusiastic about either of the counts and may offer only some temporary relief that may not be of much help in easing the economic crisis confronting the country.
The Saudis have bailed Pakistan out of similar economic woes in the past, but their relationship with the PPP-led government has not been warm so far, although owing to their commitment to the people of Pakistan they came up with a generous $100 million assistance for victims of last week’s quake in Balochistan.
Diplomats have attributed the lack of warmth in ties to the Saudi unease over the ‘Friends of Democratic Pakistan’ initiative, whose next meeting is being hosted by United Arab Emirates; Pakistan’s quest for an oil facility from Iran; a realignment of Saudi goals in the region; and political changes in Pakistan. The non-implementation of agreements signed during King Abdullah’s last visit to Islamabad is said to be another reason.
Besides, there has always been an element of uncertainty about the outcome of visit by Pakistani leaders to Saudi Arabia because there is no bilateral forum where issues of interests to the two countries could be discussed. Almost all issues are, therefore, decided at the summit level.
Sources in the Foreign Office here say that Pakistan has requested an ‘influential friend’ to intercede with the Saudis to allay their concerns.
A positive response from Riyadh would reinforce what Saudi Ambassador Ali Awadh Asseri calls ‘eternal commitment of the Saudi leadership to the people of Pakistan’ and what Pakistan sees as a ‘very special relationship’.
Pakistan is pinning high hopes on the Abu Dhabi meeting of the ‘Friends of Pakistan’ — a forum set up to restore its troubled economy and wants Saudi Arabia to take the lead role in the forum.
Mr Zardari expressed the same desire in an interview with the Saudi Gazette and said: “I would solicit Saudi support for the ‘Friends of Pakistan’ initiative. I sincerely hope that with the steadfast support of the Saudi government, it will achieve the desired objectives.”
Pakistan needs from the forum, comprising Britain, France, Germany, the US, China, the UAE, Canada, Turkey, Australia and Italy plus the UN and the EU, to inject up to $5 billion in cash to help it avoid defaulting on sovereign debt due for repayment next year.
However, it does not appear that the Saudis, who did not attend the inaugural meeting of the forum in New York, will change their position much. This impression was somewhat reinforced by the Saudi Ambassador to Pakistan Ali Awadh Asseri who told Dawn from Riyadh: “To my knowledge and understanding bilateral relationship is always more fruitful than going to any forum.” Besides, he stressed, the Saudi-Pak relationship went beyond any forum of this sort.
President Zardari would also reiterate a request for oil on deferred payments. The request was originally made by Prime Minister Syed Yousaf Raza Gilani during his visit to Riyadh in June.
On a question about the oil facility, Mr Asseri cautioned against reaching any conclusion at this stage whether the request would be accepted.
“Such a request has a number of formalities that have to be met,” the ambassador said. Mr Zardari, some diplomats here say, would realise the advantage of having his former ally Mian Nawaz Sharif on his side. In that case, they believe, it could be easier for him to proceed with the Saudi leadership.
Increase in the volume of trade and investment, export of manpower to Saudi Arabia and further avenues of cooperation will be on the agenda of the talks Mr Zardari will hold in Riyadh. Views will also be exchanged on challenges faced by the Ummah, the inter-faith dialogue initiative taken by King Abdullah and efforts to effectively counter the menace of terrorism and extremism.
The Saudi ambassador linked progress on these issues to the implementation of the agreements signed during King Abdullah’s visit to Islamabad. “I can reassure you that our economic and trade links would be better, stronger and more fruitful if the agreements signed during Khadam-e-Harmain’s visit to Islamabad were to be implemented in letter and in spirit,” he told this correspondent.