To prevent the nation from becoming bankrupt due to depleting foreign exchange reserves, Pakistan’s Prime Minister Shehbaz Sharif and Chief of Army Staff General Syed Asim Munir asked the UAE and Saudi Arabia for USD 4 billion in financial assistance. A key government source claimed that the UAE had made it clear to Pakistan that it needed to examine its policies and make plans for better neighbourly relations (India).
According to recent reports, Sharif has pressed for “honest negotiations” with Prime Minister Narendra Modi regarding the Kashmir issue since “three wars with India have created more suffering, poverty, and unemployment.” An English newspaper in Pakistan remarked that Sharif is pleading with the world for financial assistance. Let’s examine the likely causes for Pakistan’s request for India’s assistance:
Pakistan’s economy is stagnated and fighting to stay afloat. Pakistan’s central bank has practically no foreign reserves, with just two and a third weeks’ worth of import payments left. From USD 16.6 billion in January 2022, it now has foreign exchange reserves of only USD 5.6 billion. Also, from 2.8% of GDP to 2.2% for 2022–2023, Pakistan’s defence spending was reduced. Tehreek-e-Taliban Pakistan (TTP) and other terrorists have been at war with the nation since 2002.
Pakistan’s agricultural land washed away in the 2022 flash floods, which created scarcity of wheat, vegetables, and rice and caused damages of roughly USD 40 billion. With little dollar reserves, it cannot even purchase imports. Pakistan is also struggling with a severe trade imbalance of USD 48.66 billion, a 57% increase as a result of higher-than-expected imports, and is unable to reach its export objectives. Despite the Sharif government’s prohibition on more than 800 non-essential luxury products, the trade gap has reached dangerous levels.
The government of Pakistan has reportedly developed a plan to resume commerce with India as it appears to be the only “viable and straightforward alternative” to import necessities like vegetables, wheat, rice, and medications following the ferocity of the recent flash floods.
According to political and economic analysts, only India can save Pakistan because of its easy access to trade routes like Wagah-Attari and Khokhrapar-Munabao Borders. This entails a new chapter in the India vs Pakistan relationship while all eyes are on India because of its rich resources and strong international alliances.