The United Arab Emirates (UAE) have put the Imran Khan government in a tight spot after it has reportedly asked the cash strapped country to return its one billion dollars, which the former had deposited in the central bank of Pakistan.
Actually, the United Arab Emirates (UAE) had deposited the aforementioned amount with, State Bank of Pakistan (SBP), the central bank of the country. Now, since the amount has reached its maturity, the Gulf nation has asked the Imran Khan government to return the same and has set March 12 as its deadline, as per reports.
Coming as a major jolt to a country that is already stuck neck-deep in international debt, Pakistan has begged UAE to give it some extra time as that returning such a huge amount can impact its economic situation at present.
Pakistan officials have made innumerable attempts to reach out to UAE, especially to Crown Prince Mohammad bin Zayad Al Nahyan but haven’t succeeded so far.
Pakistan took a loan from China to repay Saudi loan
Last year, the islamic country had taken a loan of 1 billion dollars from China to repay a I billion dollars loan from the kingdom of Saudi Arabia. Reports at that time had revealed that Pakistan owes China double the amount it owes to the IMF.
Pakistan aircraft seized over non repayment of leasing fees
Pakistan’s precarious state of the economy is an open secret, and now, the coronavirus pandemic has only further worsened the economic woes of cash-strapped Pakistan. Last month, Malaysian authorities seized a Pakistan International Airlines Boeing 777 plane, with passengers still on board, at Kuala Lumpur airport for not paying leasing fees worth $15 million.
The embarrassing incident had left the Pakistan government red-faced. Awkward as the incident was, the unpaid leasing fees are just the tip of the iceberg. Pakistan’s debt problem has been escalating for some years now. According to a World Bank estimate, amid the Covid pandemic, Pakistan’s real GDP growth is estimated to have declined from 1.9% in the financial year 2019 to -1.5% in FY2020.
Pakistan’s public debt went past 87% of GDP at the end of 2019-20, up from about 72% of GDP at the end of 2017-18. Moreover, the country’s total external debt and liabilities rose to $113.8 billion in the fiscal year 2020 from $106.3 billion in the fiscal year 2019.