There has been a lot of development the geopolitics recently. On one side groups like G7 are expanding whereas the Organization of Islamic Cooperation (OIC), a group of 57 Islamic countries is on the verge of segregation. Probably this year or the next many countries like Pakistan, Turkey, and some other countries might pull out from OIC.
As of now, there are two countries, UAE and Saudi Arabia that are ruling the OIC, and Pakistan’s relations with these two countries are going awry. Saudi Arabia has recently announced that the relaxation that they offered to Pakistan on crude oil which stated that, Pakistan could purchase crude oil worth $3.2 billion from Saudi Arabia in one fiscal year and the payment of this purchase will be in installments, has now come to a halt due to the disputes between the countries.
In 2018 when Pakistan’s 22nd Prime Minister Mr. Imran Khan came in power; he was facing one of the most formidable challenges of low Forex reserves due to which Pakistan was soaked in dept. During these tough times, Saudi Arabia lends a helping hand to Pakistan by announcing a Saudi Arab package of $6.2 billion in November 2018.
The $3.2 billion Saudi oil facility was a part of the $6.2 billion packages while the rest $3 billion dollars were given to Pakistan as a soft loan that will help the Forex reserve of Pakistan.
Recently Saudi Arabia has asked for $1 billion back from Pakistan 4 months ahead of its repayment period. Pakistan paid this amount by asking for help from China. Pakistan may also return the $2 billion dollars remaining Saudi loan cash, with similar facilities from China.
The United Arab Emirates has also announced a $6.2 billion package for Pakistan in December 2018, but later on, reduced the financial assistance to $2 billion and postponed the plan to give $3.2 billion of oil facility on deferred payments.
In May last year, Advisor to rime Minister on Finance Dr. Abdul Hafeez Shaikh tweeted that “From July 1, 2019, KSA is activating the deferred payment for petroleum products facility of $275 million per month amounting to$3.2 billion per year for three years”.
What went wrong?
Recently Pakistan has openly challenged the leadership of OIC and has threatened to pull out of OIC if the demands of a meeting on Kashmir matter are not met.
Pakistan has constantly been asking OIC for support on Kashmir matter stating allegedly that genocide is being practiced in the valley. On the other side, OIC has been avoiding making any direct statement in the matter without any proof.
Pakistan got frustrated on the matter and made an audacious statement that Pakistan will seek support from a separate bloc of Muslim countries.
After analyzing these threats of Pakistan to Saudi Arabia and the OIC, Saudi Arabia started pulling out its financial assistance and soon enough the UAE will do the same.