Pakistan’s economic crisis has pushed the cash-strapped country to explore unconventional debt repayment strategies that go beyond traditional financial measures. With foreign reserves weak, debt rising and external obligations mounting, Islamabad is reportedly negotiating with Saudi Arabia to convert roughly $2 billion in loans into a deal involving JF-17 Thunder fighter jets — a barter-style arrangement that would see military hardware offset sovereign debt. This approach reflects the government’s attempt to monetise its defence industry instead of relying solely on hard currency to satisfy creditors.

Alongside jet deals, Pakistan is preparing to hand over about $1 billion in equity in the army-run Fauji Foundation to the United Arab Emirates as part of a separate debt rollover, blending public liabilities with military business interests in a way that raises transparency and governance questions. The moves highlight a broader strategy in which defence exports and barter arrangements are being positioned as tools to ease balance-of-payments pressure and reduce reliance on expensive loans.

Defence officials have even suggested that rising JF-17 orders could eventually reduce reliance on institutions like the IMF, though critics warn this narrative may be overly optimistic given Pakistan’s fundamental fiscal challenges, growing debt burden and need for structural reform. Economists argue that offering jets and military equity does nothing to address systemic weaknesses such as revenue shortfalls, inflationary pressures and governance transparency, and could undermine long-term investor confidence if not paired with serious economic discipline.