Pakistan is in urgent need of a helping hand from its Gulf friend. Again. As the deadline to return the UAE’s goodwill loan of USD 1 billion is upon us, the finance ministry has reached out to Crown Prince Muhammad bin Zayed Al Nayhan for a one-year rollover. Given the brotherly relations between the two states, Islamabad is pretty optimistic about retaining this cash deposit. And why wouldn’t it? Returning such a huge amount would, surely, incur economic damages–that know no bounds–on any economy, let alone one catastrophically shrunk by the pandemic. As per a World Bank estimate, Pakistan’s real GDP growth nosedived to negative 0.38 per cent in FY 2019-20. This was in line with the rest of the world where the coronavirus was said to have wiped out nearly four years of world output gains; unleashing an economic crisis unprecedented in scope and magnitude. Even our next-door neighbour suffered from the lowest economic expansion since its balance of payments crisis of 1991-92. But all said and done, our positive economic indicators do indicate a smart recovery in the coming days. The Pakistani rupee is well poised on its way to stability. So far, the currency has appreciated 1.7 per cent against the dollar this year. This, along with positive GDP growth (there are expectations of a 2.5 per cent rise), soaring foreign exchange reserves ($20.13 billion last month) and a constant inflow of remittances over $2 billion make the Pakistani case even stronger. Positive gains aside, Pakistan is still not in a position to have any pressure on the rupee. The UAE’s financial assistance had been roped in to buy the Khan administration some time to negotiate a deal with the IMF. But given the 13-months long delay in the third loan tranche of over $500 million (the deal was salvaged just recently), there still remains a shortage of cash influx. As Pakistan gears up for the fiscal, monetary and structural framework required by the IMF programme, fears of ruining the much-celebrated bullish market sentiment hang heavy. Any such negative development would upend the recent economic gains. While fruitful negotiations with the UAE would help quash monetary panic in the short-term, it is high time Pakistan realises why it keeps finding itself with a desperate begging bowl at other countries’ doorsteps. There has been an exponential growth in our foreign debt levels and resultantly, there is no space left to attract long-term inflows like the FDI. While the government is touting the projected decrease of public debt in the next three year, its ratio to GDP still stands at a staggering 87 per cent. Increasingly frustrating is our dependence on foreign savings for balance-of-payments support. Around 87 per cent of the loans taken in 2020’s last gasp were meant to settle the country’s tabs. When Saudi Arabia asked for a cash deposit on its soft loan, Pakistan had to seek as many as three financing pipelines. What an unsettling state of affairs! Even the well-intentioned policies of Imran Khan could not prevent him from knocking at the IMF for a bailout package. In recent times, the surprising Senate defeat of financial advisor, Hafeez Sheikh, has created widespread market uncertainty; leading to a plunging stock exchange. More losses are to follow suit as investors are on the horn of a dilemma as to where to hedge their bets. Borrowing more and more money cannot sustain any economy. Period. *