Qatar to invest $3 bn in beleaguered Pakistan economy

Qatar said Wednesday it would invest $3 billion in Pakistan’s debt-ridden economy in the latest boost by a Gulf state for the ailing South Asian nation.

Pakistan has been scrambling for finance in recent months, and the International Monetary Fund is due to meet next Monday to discuss reviving a suspended $6 billion loan programme.

The United Arab Emirates this month said it would invest $1 billion in Pakistan and, according to reports, Saudi Arabia is considering extending an emergency $2 billion loan made last year.

The latest boost came in talks between Qatar’s emir Sheikh Tamim bin Hamad Al Thani and Pakistan’s Prime Minister Shahbaz Sharif.

The emir “stressed the importance of the brotherly and strategic relations between the two countries” and the need to bolster their economic partnership, an official Qatari statement said.

In this regard, the Qatar Investment Authority announced its intention to invest $3 billion in various commercial and investment sectors in the Islamic Republic of Pakistan,” it added.

The statement said the two leaders also discussed cooperation in “defence” and “sports”.

But it did not confirm reports that Pakistan would send troops to Qatar for security during the football World Cup that starts November 20.

Last week, the Pakistan government said it had approved a deal with Qatar on the “modalities for deployment of troops for security assistance” during the World Cup.

Assistance from Gulf nations and a $2.5 billion loan from China has helped Pakistan stave off the worst of an economic crisis that has seen annual inflation rise above 20 percent.

A $6 billion IMF bailout package signed by former prime minister Imran Khan in 2019 has never been fully implemented, because the government failed to carry out promised cuts to subsidies and to improve revenue collection.

But the economy has shown recent signs of life. The rupee has strengthened and the stock market has made gains in the past two weeks.

Analysts say that Pakistan’s problems stem from decades of poor economic management by successive governments and military rulers who have failed to tackle corruption and widespread tax avoidance.

The IMF executive board is however expected to renew the crucial loan deal next week, analysts said.