In a significant change of direction, Saudi Arabia has sent a stern message that it would no longer provide blank checks aid to regional allies, including Pakistan, The New York Times reported.
Saudi Crown Prince Mohammed bin Salman has insisted on economic overhauls like cutting subsidies and privatizing state-owned companies before releasing any further financial assistance.
The country changed its aid strategy which has been described as a shift towards economic accountability for struggling states like Pakistan, Egypt, and Lebanon.
Saudi officials say they are frustrated with watching their financial assistance evaporate in struggling economies.
This change in attitude could have far-reaching implications for Pakistan’s economy. The country is heavily reliant on foreign aid and loans to keep its economy afloat. With Saudi Arabia taking a more assertive stance in its leadership, it appears that the days of blank checks are over.
The kingdom is still sending money abroad — possibly more than ever. But much of it is now geared toward international investments for profit and influence and at kick-starting new industries at home, like electric vehicles.
The Saudi government has also taken on a role similar to the International Monetary Fund, which gives it even greater sway than before over regional politics, with larger nations like Pakistan effectively beholden to it.
