Pakistan to join Trump's 'Board of Peace': Can it afford it while seeking $2.5B debt rollover from UAE?

Pak commits to Trump’s ‘Board of Peace’ $1B fee

• Pakistan pays $1 billion for permanent membership in Trump's Board of Peace
• Pakistan plans to aid Gaza peace and reconstruction efforts through the initiative.
• Pakistan faces rising debt and seeks financial aid from UAE and IMF

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Debt-laden Pakistan has confirmed it will join US President Donald Trump’s “Board of Peace,” which requires a $1 billion fee for permanent membership, making Pakistan one of eight Islamic nations participating in the initiative.

Pakistan’s foreign ministry said on Wednesday that the country aims to support efforts to achieve lasting peace in Gaza. The ministry added that it hoped “concrete steps will be taken towards the implementation of a permanent ceasefire” and to strengthen aid and reconstruction efforts in the territory.

The announcement followed a visit to Davos by Pakistani army chief Field Marshal Asim Munir. Three Pakistani officials told Reuters that Munir, along with Prime Minister Shehbaz Sharif, is expected to meet Trump during the forum. The officials spoke on condition of anonymity as they were not authorized to speak publicly. Pakistan army’s public relations wing did not respond to a request for comment.

The Board of Peace, established late last year under Trump’s Gaza plan, is designed to address global conflicts. While some countries have approached the initiative cautiously, the US has said more than 20 nations have agreed to join so far. Pakistan was formally invited by Trump to participate, the ministry confirmed.

Pakistan faces significant economic challenges, with total public debt reaching USD 286.832 billion (PKR 80.6 trillion) as of June 2025, an increase of almost 13 percent over the previous year. Domestic debt stands at PKR 54.5 trillion, while external debt is PKR 26.0 trillion.

Foreign Minister Ishaq Dar reiterated Pakistan’s decision to join the Board of Peace, stating it aligns with the country’s support for the Gaza Peace Plan. The announcement comes days after Pakistan approached the UAE seeking a rollover of $2.5 billion in maturing debt and a reduction in applicable interest rates to ease pressure on its struggling economy.

Pakistan is also seeking assistance from the International Monetary Fund, currently under a $7 billion IMF programme, its 24th, which followed a short-term $3 billion deal in 2023 that helped prevent a sovereign default. The IMF support was facilitated after Saudi Arabia and other Gulf allies provided financial assistance and deposit rollovers.