Always quick on the draw in writing-off Khan, the naysayers had already declared his recent visit to the UAE a failure. Once again, the doubters and detractors have been busy spreading despondency and a sense of impending doom in the stock and currency markets. But yet again, Khan has proven the mephitic band of virulent critics singularly wrong. It was reported on Friday by WAM, the official news agency of the Emirates, that the United Arab Emirates intends to deposit US$3 billion in the State Bank of Pakistan “to support the financial and monetary policy of the country”.
This commitment of monetary infusion into the country’s treasury has much greater significance than simply tiding over the balance of payments crises that the PTI government inherited as a result of the previous regime’s malign incompetence.
Khan’s economic team has taken difficult decisions to demonstrate its determination to do what is necessary to put the economy on an even keel. Many of these are in line with the IMF’s requirements.
While the official Emirate communiqué states that the country’s support for Pakistan’s is based on the historical ties between the two people, there’s more to it than meets the eye. It is the first time that the UAE has provided such substantial direct financial support to Pakistan. Despite their boasts of longstanding relationships with the ruling families of the gulf, the Sharifs failed to garner similar unequivocal backing during their tenure.
A lot may have to do with the fact that Pakistan is now seen as having leadership that puts national interest ahead of self-serving iqamas and a multitude of money laundering scams. Pakistan finally has a leader who is manifestly transparent and will not compromise on the well-being of his people for personal venal gain. The dynamics of confidence in the leadership cannot be underestimated, especially in the context of a middle-eastern culture where individual stature counts for much both in business and international relationships.
Unlike his predecessors, Khan is not seen as yet another pitiful supplicant from a poor country, but rather as a heroic figure who deserves help in his time of need to serve the greater good of his country and the region. Despite its current short-term financial crunch, Pakistan may once again be enjoying the kind of prestige and leverage in the Arab world that it once did in Zulfikar Ali Bhutto’s era.
Abu Dhabi’s Crown Prince Mohammed bin Zayed Bin Sultan Al-Nayan and Saudi Arabia’s de facto ruler Mohammed bin Salman plan to visit Pakistan in January and February respectively. How the two nations can help bolster the Pakistan economy will undoubtedly be high on the agenda, but just as important is likely to be the various considerations arising from regional realignments currently taking place.
Pakistan finally has a leader who is manifestly transparent and will not compromise on the well-being of his people for personal venal gain.
An economically stable Pakistan with a trusted leadership not only serves as an attractive investment destination for Gulf cooperation council (GCC) investors, but with the withdrawal of the US from Syria, and their departure from Afghanistan likely to follow, it is seen as playing a pivotal role in solving that imbroglio. Pakistan’s help is vital for the interests of the various players in Afghanistan, carefully calibrated towards ensuring peace and prosperity for the Afghani people and the region as a whole.
Khan’s economic team has taken difficult decisions to demonstrate its determination to do what is necessary to put the economy on an even keel. Many of these are in line with the IMF’s requirements. The inevitable weakening of the rupee, the increase in interest rate by the State Bank of Pakistan and the rise in gas and electricity tariffs, were all painful measures for any new government to take, and in the short-term detrimental to Pakistan’s growth, but they were essential to stabilizing Pakistan’s balance of payments.
Further infusion of funds brought about by Khan’s trips to friendly countries, and potentially an IMF stabilization package will greatly alleviate the country’s current economic woes. Perennial detractors of Khan and armchair critics of his trips to “beg” for money should eat humble pie if not their own words. They might want to consider the fact that here’s a proud man willing bend to alleviate the dire straits the country finds itself in, entirely created by those who would stoop to any level to benefit their own miserable skins.
Javed Hassan has worked as senior investment banker in London, Hong Kong and Karachi. He is a graduate of Imperial College London and an MBA from London Business School. He tweets as @javedhassan. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.