Indus Pakistan
BANNED
- Joined
- May 7, 2012
- Messages
- 20,487
- Reaction score
- 182
- Country
- Location
Gentleman [ladies] great news. UAE has finalised a package of $6.2 billion which matches the earlier offer by Saudia and with $1.5bn trade finance from the International Islamic Trade Finance Corporation (ITFC) which takes the total amount to nearly $14 billion. This means the huge deficit left by the outgoing Nawaz government has been plugged.
This now gives space for the PTI government to fix the structural problems in Pakistan's economy. Let's hope that FM Asad Umar now uses this opportunity to sort out the economy. He has 5 years. God help if he fails because they are is no way Pakistan will be able to get another gigantic bailout. This really is a historic opportunity for Pakistan. And if PTI fail on this then I am afraid they will have failed Pakistan. But I think FM Asad Umar is aware of that. That is why the focus now is shifting to investments in the economy as we saw the visit in Turkey.
This means now nearly half of oil imports will be subsidised and there is even talk of LNG being given by Qatar on deferred payments. The flurry of activity with Qatar was probably over this so we should expect this anytime soon.
honestly these figures are huge [in Pakistani context]. We might end up with $16 billion in less than 4 months of PTI government. We must also keep in mind that in diplomatic parlance used by the oil kingdoms "deferred" actually means "grant" because down the road Pakistan never pays back the amounts given. The 'deferred' amounts are simply waived. This is the great thing about kingdoms. The rulers have the power to just nod and you don't have to pay it back.
So significant are these amounts that my views on UAE and KSA have changed. I think Pakistan now needs to work with both countries to build up a strategic relationship including even military support.
For me the biggest take away from all this is not only that the huge amount garnered by PM IK and his team in the shuttle tours they did of KSA, UAE, China etc but that they did so in situation when the Pakistan economy was in dire straits. This establishes the confidence shown by those countries in PM IK and his government.
This is great news. This means as the drive now changes gear to attracting foreign investment the same team that pulled this miracle will also be able to attract huge investment into Pakistan. So expect this year big new of huge investments in the country. Good news at the start of new year for Pakistan. Congratulations to all Pakistani's and thanks to KSA, UAE, Qatar, China and Turkey. A grea year appears in the making for Pakistan. I hop the IMF deal is sorted out, not so much for the money but because it gives a international validation that is now needed by Pakistan.
ISLAMABAD: Pakistan and the United Arab Emirates (UAE) have finalised the terms and conditions of a support package of about $6.2 billion expected to be announced by Crown Prince Sheikh Mohammed bin Zayed Al Nahyan during his visit to the country starting on Sunday (Jan 6) to help Islamabad address its balance of payments challenge.
The package involves $3.2bn worth of oil supplies on deferred payment, besides a $3bn cash deposit, a cabinet member told Dawn.
He said the UAE’s package was exactly of the same size and terms and conditions as given by Saudi Arabia. The UAE package was finalised on Thursday evening, he said.
With this, Pakistan would get a total saving of about $7.9bn on oil and gas imports from the two friendly countries — accounting for more than 60 per cent of annual oil import bill of about $12-13bn, he said. This includes about $3.2bn each of oil supplies on deferred payments from the UAE and Saudi Arabia and about $1.5bn trade finance from the International Islamic Trade Finance Corporation (ITFC).
The total financing support from the UAE and Saudi Arabia, including the ITFC’s trade finance, would be around $13.9-14bn when cash deposits of $3bn each from the two countries were also included, he said.
This is in addition to a deep-conversion oil refinery to be set up by Parco — a joint venture of Pakistan and Abdu Dhabi — worth $5-6bn at Khalifa Point and an expected petro-chemical complex by Saudi Arabia at Gwadar Oil City.
On top of that, the government has also started backchannel discussions with Qatar for some relief in terms of reduction in LNG prices or a relaxed payment schedule, but that is now at an early stage.
In reply to a question, the cabinet member said Pakistan was deepening relationships with all three friendly Islamic nations without compromising bilateral ties for geo-political reasons.
He said the UAE crown prince would be paying a two-day visit, adding that all arrangements had been finalised in this regard.
He said Saudi Crown Prince Mohammad bin Salman was expected to arrive in the country in the first week of February and an MoU for establishing a petro-chemical complex was still being worked out on the request of Riyadh.
Pakistan has already received $2bn in cash deposit from Saudi Arabia at an interest rate of 3.18pc while the third tranche of $1bn is due in the first week of February. The Saudi oil facility would also start rolling out this month with an average $274 million per month.
Pakistan is currently importing about eight cargoes of LNG every month, costing $4.2 to $4.5bn a year and more than one-third of this could be financed through ITCF support. With support from Qatar, Pakistan is expecting about $9bn cushion in total oil and gas import bill.
Published in Dawn, January 5th, 2019
This now gives space for the PTI government to fix the structural problems in Pakistan's economy. Let's hope that FM Asad Umar now uses this opportunity to sort out the economy. He has 5 years. God help if he fails because they are is no way Pakistan will be able to get another gigantic bailout. This really is a historic opportunity for Pakistan. And if PTI fail on this then I am afraid they will have failed Pakistan. But I think FM Asad Umar is aware of that. That is why the focus now is shifting to investments in the economy as we saw the visit in Turkey.
This means now nearly half of oil imports will be subsidised and there is even talk of LNG being given by Qatar on deferred payments. The flurry of activity with Qatar was probably over this so we should expect this anytime soon.
honestly these figures are huge [in Pakistani context]. We might end up with $16 billion in less than 4 months of PTI government. We must also keep in mind that in diplomatic parlance used by the oil kingdoms "deferred" actually means "grant" because down the road Pakistan never pays back the amounts given. The 'deferred' amounts are simply waived. This is the great thing about kingdoms. The rulers have the power to just nod and you don't have to pay it back.
So significant are these amounts that my views on UAE and KSA have changed. I think Pakistan now needs to work with both countries to build up a strategic relationship including even military support.
For me the biggest take away from all this is not only that the huge amount garnered by PM IK and his team in the shuttle tours they did of KSA, UAE, China etc but that they did so in situation when the Pakistan economy was in dire straits. This establishes the confidence shown by those countries in PM IK and his government.
This is great news. This means as the drive now changes gear to attracting foreign investment the same team that pulled this miracle will also be able to attract huge investment into Pakistan. So expect this year big new of huge investments in the country. Good news at the start of new year for Pakistan. Congratulations to all Pakistani's and thanks to KSA, UAE, Qatar, China and Turkey. A grea year appears in the making for Pakistan. I hop the IMF deal is sorted out, not so much for the money but because it gives a international validation that is now needed by Pakistan.
ISLAMABAD: Pakistan and the United Arab Emirates (UAE) have finalised the terms and conditions of a support package of about $6.2 billion expected to be announced by Crown Prince Sheikh Mohammed bin Zayed Al Nahyan during his visit to the country starting on Sunday (Jan 6) to help Islamabad address its balance of payments challenge.
The package involves $3.2bn worth of oil supplies on deferred payment, besides a $3bn cash deposit, a cabinet member told Dawn.
He said the UAE’s package was exactly of the same size and terms and conditions as given by Saudi Arabia. The UAE package was finalised on Thursday evening, he said.
With this, Pakistan would get a total saving of about $7.9bn on oil and gas imports from the two friendly countries — accounting for more than 60 per cent of annual oil import bill of about $12-13bn, he said. This includes about $3.2bn each of oil supplies on deferred payments from the UAE and Saudi Arabia and about $1.5bn trade finance from the International Islamic Trade Finance Corporation (ITFC).
The total financing support from the UAE and Saudi Arabia, including the ITFC’s trade finance, would be around $13.9-14bn when cash deposits of $3bn each from the two countries were also included, he said.
This is in addition to a deep-conversion oil refinery to be set up by Parco — a joint venture of Pakistan and Abdu Dhabi — worth $5-6bn at Khalifa Point and an expected petro-chemical complex by Saudi Arabia at Gwadar Oil City.
On top of that, the government has also started backchannel discussions with Qatar for some relief in terms of reduction in LNG prices or a relaxed payment schedule, but that is now at an early stage.
In reply to a question, the cabinet member said Pakistan was deepening relationships with all three friendly Islamic nations without compromising bilateral ties for geo-political reasons.
He said the UAE crown prince would be paying a two-day visit, adding that all arrangements had been finalised in this regard.
He said Saudi Crown Prince Mohammad bin Salman was expected to arrive in the country in the first week of February and an MoU for establishing a petro-chemical complex was still being worked out on the request of Riyadh.
Pakistan has already received $2bn in cash deposit from Saudi Arabia at an interest rate of 3.18pc while the third tranche of $1bn is due in the first week of February. The Saudi oil facility would also start rolling out this month with an average $274 million per month.
Pakistan is currently importing about eight cargoes of LNG every month, costing $4.2 to $4.5bn a year and more than one-third of this could be financed through ITCF support. With support from Qatar, Pakistan is expecting about $9bn cushion in total oil and gas import bill.
Published in Dawn, January 5th, 2019
Last edited:
