It has been a bad week for Pakistan. First and foremost, the Pakistan cricket team has been knocked out of the Champion’s Trophy and second the US has cancelled $200 million asylum support deal involving the Pakistan- owned Roosevelt Hotel.
Both these developments will deal a heavy blow to the already cash-strapped nation. As the country reels under an economic crisis, Pakistan Prime Minister Shahbaz Sharif is visiting Baku to strengthen diplomatic and economic ties.
One blow after another
Pakistan would have thought that it’s all-weather friend China would bail it out of the economic mess. However, China as everyone knows it has set a debt trap for Pakistan. Funding from the Saudi Arabia too has come down drastically. In fact, on February 3, 2025 Pakistan signed an agreement with Saudi Arabia for Development to defer by a year a $1.2 billion payment on the country’s oil imports. Pakistan is however optimistic about this and says that the Saudi facility to defer the payment could help it boost its foreign reserves ahead of the first review of a $7 billion IMF bailout in March.
The cancelling of the asylum support of $200 million by the United States is a massive blow for Pakistan. The country took a significant hit after New York City terminated the $220 million lease agreement with Pakistan’s Roosevelt Hotel. This hotel had been operating as a shelter for migrants and the decision was taken following a major backlash from MAGA supporters who opposed taxpayers’ money being used to house migrants.
Mayor Eric Adams facing both federal scrutiny and pressure from the Trump aligned factions, made the announced regarding the closure of the hotel located at Manhattan. This hotel had provided emergency accommodation to thousands of asylum seekers. There are 1,025 rooms in the hotel and the migrants would be charged around $200 a night.
The move is also an important one since the number of migrants entering the US has dropped drastically since the Trump administration took over. In 2023 4,000 asylum seekers would come in weekly. This number has now dropped to 350 a week.
The decision to cancel this agreement puts further stress on the Pakistan economy. Pakistan had benefited largely from this deal and with this ending, Islamabad is set to lose several more millions of dollars.
Cricketing trauma
It is not just the loss to India that has taken a toll on Pakistan hosting the Champions Trophy. The loss to India and New Zealand’s win over Bangladesh knocked Pakistan out of the championship.
The organisers worry that since the home team has been knocked out, the stadium is unlikely to get good crowds. Further there is a question mark on the funding since many advertisers will now back off since the home team is out of the tournament. While Pakistan says that it will not lose much as the hosting fees and ICC revenue shares remain intact. However, the lack of crowds in the stadium will impact broadcasting deals. This would also lower sponsorship appeals towards the tournament.
While the loss came as a mighty blow, what has impacted the tournament further is the high alert that the Pakistani Intelligence agencies have put out. Based on phone conversations from Bangladesh, the Intelligence agencies picked up intercepts that there is a likelihood of international cricketers getting kidnapped by terror outfits.
This would act as another damper as many would want to stay away for their own safety. The international crowds which may have come in to witness their teams play are also likely to show less enthusiasm while visiting stadiums.
The USAID headache
After the Donald Trump administration took over, it stopped USAID to several countries. Pakistan too which was a beneficiary of USAID has been hit now that it has been stalled.
While Trump says that he is reviewing all the money that has been spent, in the case of Pakistan it is clear that USAID has been diverted to fund terror. The Fatah-e-Insaniat Foundation (FIF) which is the financial wing of the Lashkar-e-Tayiba was a beneficiary of these US funds. The FIF was formed when the Lashkar-e-Tayiba’s financial wing Jamaat-ud-Dawa was banned.
“The FIF is a Pakistan-based organisation that is closely connected to banned terrorist group LeT and its humanitarian front Jamaat-ud-Dawa (JUD),” the US document which banned the outfit says.
Aid to FIF was routed through Helping Hand for Relief and Development, a Michigan based Muslim charity which has ties with terror groups in South Asia. It has come to light that USAID to the tune of $110,000 was used to fund jihadi groups such as the FIF which targets India.
USAID has also been stalled for Power Sector Improvement Activity, Pakistan Private Sector Energy Activity, Energy Sector Advisory Services Project, Clean Energy Loan Portfolio Guarantee Program and Pakistan Climate Financing Activity. In addition to these four more projects have been hit.
In a nutshell, it has come to light that Pakistan has been using most of the aid to fund terror groups. Today it faces a huge cash crunch and in a situation such as this, the recent developments will only push the Islamic nation further back.
Comments