Qatari Emir Sheikh Tamin bin Hamad Al-Thani will visit Pakistan today.
During the visit, Qatar will pen an agreement to invest $22 billion into Pakistan’s economy. As the economy plummets and Pakistanis feel the pinch of higher taxes due to an IMF bailout, this investment is much needed. In the coming financial year, Pakistan’s GDP is forecast to grow by a mere 2.4% and its inflation is expected to hover between 11% and 13%.
On the other hand, Pakistani Prime Minister Imran Khan’s signing of this agreement will also likely raise tensions with its other Arab partners. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have severed all economic ties with Qatar. The United Arab Emirates previously promised Islamabad $3 billion in cash deposits and $3.2 billion in oil supply. However, following Mr Khan’s visit to Qatar in January, Dubai refused to provide the oil facility or handover the final $1 billion. A $21 billion investment Pakistan is receiving from Saudi Arabia may also come under threat.
Despite the risks, as Pakistan’s economic woes continue, expect Mr Khan to continue leveraging the Gulf rivalry to gain financial relief.
Saira is an analyst in the Current Developments team, where she focuses her research on the Middle East and North Africa region.