To get $4.2 billion loan from Saudi Arabia, Imran Khan makes desperate compromises on Pakistan’s sovereign rights

By Mrityunjoy Kumar JhNew Delhi, November 30: Pakistani experts have called the $4.2 billion loan to Saudi Arabia a damp squib due to the harsh terms and conditions imposed by Saudi Arabia.

Pakistan has agreed to strict conditions regarding loan repayment.

It would not be able to rollover the loan and would have to repay the loan within one year of the deposit date.There was also a caveat that Pakistan would have to return the loan at any time with 72-hour notice.

According to Pakistani experts, the precondition for Saudi Arabias loan is that "in the event of a dispute, Saudi Law will apply." In relation to the $3 Billion cash deposit agreement, Pakistan has given up its sovereign claim to immunity from suit, execution, attachment, or any other legal process.

Experts also question the high interest rate Saudi Arabia is charging, compared to previous loans that were almost interest-free.According to reports, Pakistan will pay $24 billion more for the higher interest rate than what it paid in 2018, when Pakistan was lent $6.2 billion by Saudi Arabia "Pakistan calls Saudi Arabia their brother, but Saudi Arabias preconditions for Pakistan on the $4.2 billion loan, only signifies Pakistans lack of credibility and that Pakistan is isolated diplomatically, and economically, on a brink of collapse," Azim M Mian, a Pakistani expert in financial markets, said.The agreement stipulates that Pakistan will repay $3 billion to Saudi Arabia within one year of the date of the deposit.

Saudi Arabia can also demand immediate repayment of the money in the event of Pakistans sovereign default.Express Tribune reports that if Pakistan fails to comply with any provisions of the cash deposit agreement, it will be deemed a default.

A default will also be deemed if Pakistan fails to service its public external debt of more than $100 million.In a statement, the Pakistani Finance Ministry stated that all memorandums of understanding (MOUs) contain dispute resolution provisions.

"It doesnt mean that the country has lost its sovereignty." After Prime Minister Imran Khan visited Riyadh with his team and met with Saudi Crown Prince Mohammad Bin Salman, Saudi Arabia announced the $4.2 Billion package for Pakistan in October.Saudi Arabia had stopped oil supplies to Pakistan and its loan to it.This was due to Shah Mehmood Qureshi, Pakistani Foreign Minister, claiming that the Saudi-led Organisation of Islamic Cooperation(OIC) wasnt doing enough to press India on the Kashmir issue.To repay the loan to Saudi Arabia, Pakistan had to borrow money from China.(The content is being transmitted under an agreement with indianarrative.com --indianarrativ #loan #Saudi #Arabia #Imran #Khan #desperate #Delhi.