Anwaar-ul-Haq Kakar, Pakistan’s caretaker prime minister, is negotiating the nation’s economic difficulties by enlisting the aid of important friends. His recent request that China and the UAE extend the $2 billion loan’s payback date illustrates how urgently Pakistan needs to manage its financial responsibilities.

PM Kakar thanked China in a letter to the Chinese Premier for its continued financial assistance despite the country’s economic challenges. This proposal is in line with PM Kakar’s similar request to the UAE for a loan repayment extension, illustrating the multifaceted strategy Pakistan is using to handle its economic issues.

China is likely to agree to extend the loan repayment period by a year, indicating Beijing’s willingness to work with Beijing. Beijing has already shown its commitment by rolling over $2 billion in debt last year. Pakistan has needed this financial support in order to make vital payments to the International Monetary Fund (IMF).

Read More: UAE Rolls Over $2 Billion Loan to Pakistan for One Year

Reaffirming Beijing’s commitment to supporting Pakistan, remarks made by Chinese Foreign Minister Qin Gang during his visit in May 2023 demonstrate China’s unwavering support. China and Pakistan’s financial cooperation is consistent with the two countries’ wider diplomatic and economic relations.

In response to PM Kakar’s request, the UAE has also shown support and promised to roll over $2 billion in deposits. 

All of these steps are intended to lessen Pakistan’s economic burden and provide the country some breathing room while it navigates its financial difficulties without going into default right away.

Attempts to obtain rollovers and extensions highlight how crucial it is to keep Pakistan’s economy stable. The loans and financial assistance from the UAE and China are essential parts of a plan to avoid an early default, lessen the strain of external payments, and lay the groundwork for a long-term economic recovery. The continuous exchange of information between Chinese and Pakistani finance ministry representatives highlights the importance of working together to solve these economic imperatives.

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