UAE declines Pakistan’s request to defer $2 billion loan repayment

Islamabad: Pakistan is deeply embroiled in the ongoing tensions between Saudi Arabia and the United Arab Emirates. Pakistan has openly supported Saudi Arabia and signed a defense deal. Pakistan is going to provide military assistance to Saudi Arabia. This friendship between Pakistan and Saudi Arabia is not appeasing the UAE. The UAE has refused to extend Pakistan's $2 billion loan for two years. Despite repeated requests from Pakistani PM Shahbaz Sharif's government, the UAE has only given Pakistan until April 17th to repay the loan. The UAE granted this two-month temporary relief after Pakistan's Deputy Prime Minister and Foreign Minister Ishaq Dar contacted them.

Meanwhile, after failing to receive relief from the UAE, Pakistan has now approached the International Monetary Fund (IMF). Pakistan wants the International Monetary Fund to release a $1 billion loan installment. Pakistan is due to receive a total loan of $7 billion. According to a Geo News report, official sources stated that the UAE not only refused to extend the loan for one year, but will also charge Pakistan interest at a hefty 6.5% rate. They stated that formal approval will be granted soon.

Which countries owe Pakistan debt?

A spokesperson for Pakistan's Foreign Ministry stated that Ishaq Dar had spoken with UAE officials regarding the matter. He did not specify how long the loan would take to be repaid. Previously, the UAE had extended this $2 billion loan for only one month, leaving impoverished Pakistan gasping for breath. The Shahbaz Sharif government had previously requested a two-year loan extension from the UAE. The UAE has rejected this request.

Pakistan has to repay a total of $3 billion to the UAE. The Shahbaz Sharif government is continuously requesting a deferral. This year, Pakistan is requesting a deferral on approximately $12 billion in foreign loans. This includes $5 billion from Saudi Arabia, $4 billion from China, and $3 billion from the UAE. Pakistani leaders are frequently visiting the UAE, but the government is showing no signs of changing its stance. Many analysts say that the UAE is not happy with Pakistan's growing close friendship with Saudi Arabia. Recently the President of UAE visited India and signed many major agreements.