Aurangzeb approaches Middle Eastern banks for $4bn

ISLAMABAD: Pak­istan is in talks with Middle Eastern banks to secure about $4 billion in loans required to meet external financial needs during the current fiscal year as part of the $7bn Extended Fund Facility (EFF) currently pending approval of the executive board of the International Monetary Fund (IMF).
Finance Minister Muhammad Aurangzeb and his team, including Minister of State for Finance, Revenue and Power Ali Pervaiz Malik, Finance Secretary Imdadullah Bosal and Additional Secretary Sara Najeeb, had a virtual meeting with Dr Adnan Chilwan, Group CEO of Dubai Islamic Bank.
On Wednesday, a similar interaction was held with Mashreq Bank President and GCEO Ahmed Abdelaal. Both meetings had been arranged to “discuss the economic outlook and explore investment opportunities in Pakistan”.
The finance minister has repeatedly said that commercial borrowing from the Middle East would soon resume, which had waned about two years ago amid adverse credit rating.
For the current fiscal year, Pakistan has pitched about $20bn in foreign borrowing in the budget, besides another $3bn rollover from the UAE that was reported separately for the balance of payments. With this much borrowing, Pakistan’s reserves were estimated to grow to about $19-20bn by the end of the current fiscal year.
Of the $20bn estimate, about $4bn is again targeted to be arranged through foreign commercial borrowing during the current fiscal year and another $1bn in international bonds.
During interaction with Dr Chilwan, Mr Aurangzeb provided an in-depth overview of Pakistan’s current economic scenario, emphasising the progress in stabilising the economy and fostering a conducive environment for business and investment. He also briefed the the DIB chairman about key initiatives taken such as broadening the tax base, enhancing the ease of doing business, the FBR’s digitalisation, and ongoing reforms and restructuring in state-owned enterprises (SOEs) and privatisation.
Dr Chilwan emphasised that Pakistan remained a strategically important market for Dubai Islamic Bank. He reiterated the bank’s interest in playing a more significant role in the country’s financial growth, particularly in Islamic banking, infrastructure, and SME development.
During the meeting, while exploring the potential areas for investment in Pakistan, the minister invited the Dubai Islamic Bank to enhance its investment in the country and reaffirmed the government’s dedication to maintaining a stable macroeconomic environment and ensuring that all necessary measures are in place to facilitate foreign investment.
The discussion underscored the importance of strengthening economic cooperation between Pakistan and DIB. The meeting reflected the shared commitment of both parties to fostering sustainable economic development and further deepening financial ties between Pakistan and the UAE.
Another statement said Mashreq Bank President Ahmed Abdelaal also appreciated the policies and initiatives of the government towards improving the investors’ confidence and creating a business-friendly environment in the country and expressed interest in deepening its engagement in Pakistan’s financial sector and contributing to the country’s economic development.
He also mentioned that Pakistan is amongst one of the most strategic markets for investment opportunities and discussed the potential areas for investment in Pakistan such as infrastructure, energy, technology, agriculture, and SMEs, to enhance collaboration between Pakistan and the UAE for remittances, trade, finance, and Islamic banking.
Published in Dawn, August 23rd, 2024