Pakistan struggles to pay salaries to overseas diplomatic staff due to dollar shortage

The Pakistani government is grappling with a severe cash shortage, leading to delayed salaries for staff members stationed at select diplomatic missions for the past three months, amidst a dollar liquidity crisis. Press attaches stationed in the US and Hong Kong, as well as press counsellors posted in Singapore, have been enduring salary delays since June, as reported by Pakistan-based daily The News International.

According to the report, Pakistan's finance ministry has cited the exhaustion of the country's foreign exchange reserves as the reason for being unable to release salaries, extending the financial strain into September. This situation poses a significant challenge to officials working in costly cities like Washington, DC, and Hong Kong, as well as Singapore, as they face the prospect of going without salaries for yet another month.

Top officials have confirmed, "The press attaches working in Washington, DC, and Hong Kong, as well as the press counsellor deputed in Singapore, continue to live without salary since June."


This is not the first time that Pakistan, facing financial constraints, has encountered difficulties in disbursing salaries. In the previous fiscal year (2022-23), a similar issue arose, but it was resolved with the approval of supplementary grants/technical supplementary grants for employees by the then finance minister, Ishaq Dar, through the Economic Coordination Committee (ECC) of the Cabinet.

Pakistan's struggling economy has been deteriorating over the years, causing significant hardship for the country's impoverished population due to soaring inflation. The crisis has been exacerbated by dwindling foreign exchange reserves and surging energy prices.

Although the International Monetary Fund (IMF) granted Pakistan a long-awaited $3 billion bailout to help prevent a default on its debt repayments, Islamabad is facing challenges in meeting all the conditions imposed by the lender.