Pakistan "Desperate" After $3 Billion Saudi Bailout, Still Seeking IMF Package

As Turkey continues its slow drip of information surrounding the Saudi murder of journalist Jamal Khashoggi in Istanbul three weeks ago, resulting in a daily PR crisis for the kingdom as the world slowly turns against it, Riyadh seems to have suddenly gotten looser with its checkbook.

On Tuesday Pakistan's foreign ministry announced Saudi Arabia agreed to give Pakistan a $3bn bailout amidst its ongoing economic crisis fueled by a mounting balance of payments deficit and dwindling foreign currency reserves. 

"It was agreed Saudi Arabia will place a deposit of $3bn for a period of one year as balance of payment support," Pakistan's foreign ministry said. The agreement was reached during an official visit by Pakistan's Prime Minister Imran Khan to Ryadh where he met King Salman bin Abdulaziz and Crown Prince Mohammed bin Salman. 

Khan also attended the now controversial Future Investment Initiative conference held in the Saudi capital - dubbed the "Davos in the Desert" - but which a week before opening was forced to lower its profile as a flood of Western companies and media outlets pulled out, citing the murder of Khashoggi and the kingdom's horrible human rights record. 

Pakistan's foreign ministry further confirmed in a statement on Tuesday that the Saudis pledged an additional loan worth up to $3bn in deferred payments for oil imports. The deferred payment facility for oil imports is set to be in place for three years, to be reviewed by the close of that period, the ministry said. 

In a statement to reporters just before departing for Riyadh, Khan indicated his country is "desperate" to shore up its foreign currency reserves, which have reached a four-year low of $8.4m. The central Asian country's balance-of-payment includes an almost $18bn deficit with its public sector debt at $75.3bn, or a whopping 27% of its gross domestic product. 

During a session at the Riyadh Future Investment Initiative, Khan said, "The immediate concern for our government is to increase exports, bolster our foreign exchange reserves; getting Pakistanis to send remittances through the banking channels."

He continued: "At the same time, clamping down on money laundering, which is a problem in most of the developing world."

Meanwhile Pakistan will enter talks with the the International Monetary Fund (IMF) to try to stave off further economic crisis, with talks expected to begin on November 7, Finance Minister Asad Umar confirmed in a statement. After the Saudi loan was announced, there was some question over whether or not Pakistan would still pursue negotiations with the IMF, but the foreign ministry told Reuters on Wednesday, “Yes, we are going ahead into program negotiations with (IMF) in the first week of November.”

During his address in Riyadh, Khan confirmed that Pakistan was also in talks with the IMF: "Right now we need loans to go through this difficult period of servicing our debts," he said. "We are hoping to do a bit of both - to get some loans from the IMF and friendly governments," he added, "We have a tough period for the next three to six months."

Should an IMF assistance package be agreed upon it would be Pakistan's second such bailout in only five years, and perhaps more notably its 13th since the late 1980's.