“The Saudis have asked for another billion dollars to be sent back,” said the president of a private Pakistani bank. People familiar with the matter in Islamabad said the government had resolved to send General Qamar Javed Bajwa, the army chief, to try to smooth over relations with Riyadh.
The Saudi resistance on Kashmir, with Riyadh blocking attempts to get the Mecca-based Organisation of Islamic Cooperation to comment on the issue, was motivated in part by fear of angering India, one of the kingdom’s main trading partners, analysts said.
The Saudi loan to Islamabad was originally due to be repaid in instalments later this year and in 2021, while the deferred oil payment facility was intended to support Pakistan’s external payments position.
“It seems the Saudis didn’t appreciate the persistence of the Pakistanis on Kashmir,” said Arif Rafiq, president of Vizier Consulting. “China is pretty much becoming not just Pakistan’s main option but to some extent only option.”
China immediately lent $1bn to Pakistan following the decision by Saudi Arabia to cut off aid and could potentially offer more, a senior government official said.
“Within hours and not days of Saudi Arabia conveying its demand to Pakistan, China offered to place $1bn with our state bank [central bank],” said a senior government official. “Beijing has proven beyond doubt that they have an ironclad commitment to Pakistan’s future, prosperity and welfare.”
https://www.ft.com/content/49d24c4b-345e-492b-8a8f-c1a550173ee1