Pakistan's army chief in Saudi Arabia, how to cut the economic crisis?

Qatar-based media Al Jazeera reported this information in a report on Sunday (January 8). During the visit, General Asim also discussed with the top officials of the country including the defense minister of Saudi Arabia.

According to the report, General Syed Asim Munir took charge as Pakistan's army chief in November last year. Saudi Arabia has always been a close defense and economic ally of Pakistan and the Pakistani General followed in the footsteps of his predecessors by visiting Saudi Arabia on his first foreign visit.

Chief of Army Staff General Asim Munir will also visit Connect Arab Emirates (UAE) on this one-week visit.

The Inter-Services Public Relations (ISPR), media wing of Pakistan's military, said in a statement last Wednesday, "COAS will hold notice with senior leadership of both brotherly countries to discuss matters of mutual interest, military cooperation and bilateral relations."

General Munir discussed military cooperation with Saudi Defense Minister Prince Khalid bin Salman bin Abdulaziz in the capital Riyadh on Thursday, the Saudi Press Agency reported.

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"We emphasized the strategic partnership between our two brotherly countries, reviewed bilateral military and defense ties and discussed ways to strengthen our cooperation," Crown Prince Khalid bin Salman tweeted.

'Perilous economic situation'
Al Jazeera says Army Chief General Asim Munir's Saudi visit comes at a time when Pakistan is facing a massive economic crisis. Pakistan's foreign reserves fell below US$6 billion, the lowest since April 2014.

This amount of foreign exchange can cover only one month's imports. Inflation has also skyrocketed in the country. On the other hand, the South Asian country has been dealing with catastrophic floods for the past year which have caused an estimated loss of more than 30 billion US dollars in Islamabad.

At the start of last week, Pakistan's Finance Minister Ishaq Dar prayed in a Khoj-Khabar conference that Saudi Arabia would put deposits in Pakistan's central bank to provide some relief to the country's economy.

Islamabad needed Saudi funds to boost foreign reserves and ensure protection against bankruptcy. During the tenure of former Prime Minister Imran Khan, Riyadh accumulated USD 3 billion in November 2021. Last month, Saudi extended the duration of that fund.

Besides, since taking office in April last year, Pakistan Prime Minister Shehbaz Sharif has visited several Gulf countries for economic support and investment. According to official data between April and November last year, Saudi Arabia provided more than $500 million in aid to Pakistan for oil imports, along with $900 million in aid.

At the same time, during Shehbaz Sharif's visit to Doha in August last year, Qatar pledged to invest US$3 billion.

Islamabad-based analyst Mohammad Faisal believes General Munir's visit must be seen as an economic focus, as the visit is taking place at a time of 'weak financial conditions'.

He told Al Jazeera, "Pakistan's leadership is looking to the Saudi royal family to avoid debt defaults and boost dwindling foreign reserves." For Islamabad, the key outcome of the visit will be Saudi Arabia's announcement of financial assistance.

Pakistan qualified to secure a US$1.17 billion loan from the International Monetary Fund (IMF) in August last year. However, the next tranche of USD 1.18 billion is being delayed. Islamabad is still negotiating with the IMF for the next tranche of loans.

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However, the then finance minister of Pakistan resigned last September. At that time, the Pakistani government was believed to be reluctant to accept the IMF's conditions, including increasing taxes on fuel.

Al Jazeera says Pakistan is on the brink of default. Simply put, if the current situation continues, the South Asian country will not be able to pay its debts and may not even have enough money in its treasury to meet its debt obligations.

Experts fear that Pakistan is headed for a Sri Lanka-like default situation and the country can prevent such a situation only by managing the economy efficiently.

Faisal says the Saudis want to maintain relations with Pakistan from their perspective because the nuclear-armed country is an important component of Saudi regional strategy.

Faisal told Al Jazeera, "Saudi Arabia knows that Pakistan, a large Muslim-majority country, supports the Saudi claim to Islam's two holiest sites in Mecca and Medina." close relationship

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Pakistan and Saudi Arabia have close relations internally. Looking at relations between the two countries over the last 50 years, it is noticeable that any Pakistani leader — civilian or military — has chosen Saudi Arabia as their number 1 destination after taking office.

Current Prime Minister Shehbaz Sharif and his predecessor Imran Khan both visited Saudi Arabia on their 1st visits in 2018 and 2022 respectively.

Besides, Pakistan's last two former army chiefs — General Munir's predecessor, General Qamar Javed Bajwa and General Raheel Sharif — also visited Saudi Arabia on their maiden visit.