Pakistan Economy: News & Discussion

sthf

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Link from the above mentioned article.

https://tribune.com.pk/story/1352995/pakistan-will-paying-china-90b-cpec-related-projects/

“Average annual repayment of CPEC will be $3 billion. {However, in medium term} between fiscal year 2020-25, it will range between $2.0-5.3 billion with average payment of $3.7 billion,” Saad Hashemy, an analyst at the brokerage house, said in a report titled, ‘Pakistan’s External Account Concerns and CPEC Repayment’.
Pakistan is really lucky to have a friend like China.:rofl:
 

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WB links loans to liberal foreign exchange policy

ISLAMABAD: The World Bank has turned down Pakistan’s request for policy loans to cushion its dwindling foreign currency reserves and asked Islamabad to first depreciate the rupee before knocking the door for a bailout.

The government has been facing a dilemma because the foreign exchange reserves have been falling despite continued borrowing from the international market. During the past 11 months alone the reserves have depleted by $4.2 billion.

“Due to deteriorating macroeconomic conditions of Pakistan, the lending agency cannot extend policy loans for budgetary and balance of payments support at this time,” said sources in the World Bank.

“The Washington-based lender has linked the future policy loans to a liberal foreign exchange policy,” said the sources.

They said the day the government decided to liberalise the foreign exchange policy, the bank would give the policy loan. The decision will not affect the lending for projects that has already been sanctioned.

The bank’s condition has put Finance Minister Ishaq Dar in a tight spot because he is a staunch believer in a strong rupee against the US dollar. Last month he changed the acting State Bank of Pakistan governor within 24 hours after the rupee was allowed to depreciate by 3.1% against the US dollar.

Under the current macroeconomic conditions, specially the foreign exchange policy and a rising circular debt in the power sector, the bank will not be able to provide a bailout in the shape of budgetary support, said the sources.

“It is still not too late to revise the foreign exchange regime in a manner that is conducive for boosting the exports and help cover current account deficit,” they added.

The sources said the bank has informed the Q Block – the seat of the Ministry of Finance – that the policy loans can only be provided if the government brings those corrective changes.

“The negotiations for a policy loan are underway and the World Bank does not officially communicate us about its any decision to link the loan with the depreciation of the rupee,” said an official of the finance ministry.

He said it was not the mandate of the World Bank to make such a demand. The Ministry of Finance did not officially give a version on the story.

The rupee is traded at 105.3 to a dollar in the interbank market which, according to the IMF, is overvalued by at least 10%.

Usually, the bank’s policy loans range between $300 million and $600 million that are immediately disbursed after its approval by the Board of Directors.
 

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Pakistan president seeks China's economic support

http://www.google.com/hostednews/ap/article/ALeqM5j6Opchs9182J-sBrx4dU3ONO1WHAD96HFROO0

Pakistan president seeks China's economic support

SHANGHAI (AP) — Pakistan's president sought China's economic help during a visit to the country's financial capital Monday, but there was no sign of fresh Chinese commitment for aid in its neighbor's financial crisis.

On his second visit to China in just a few months after taking office, Asif Ali Zardari was hoping to build on Islamabad and Beijing's strong relations. He promised help in securing supply routes for Middle Eastern oil to China.

Massive government overspending and trade imbalances threaten to undermine Pakistan as authorities struggle to turn back a wave of Islamic militancy. The country took a US$7.6 billion IMF bailout last year to ward off collapse, but says it needs billions more.

There has been no sign from Beijing that it might forgive some of Pakistan's debt or extend additional aid.

"China has been providing help, within its own capability, to Pakistan's economic and social development," Chinese Foreign Ministry spokeswoman Jiang Yu told reporters during a regular news briefing last week.

"We hope that Pakistan maintains stability, and achieves economic development and social harmony," she said.

In a commentary published Monday in the state-run China Daily newspaper, Zardari acknowledged China's assistance in building up his country's military, nuclear power plants and ports, and he promised Pakistan's help in securing supply routes for Middle Eastern oil to China.

"Pakistan is also a sizable country in its own right. Once we get our economic fundamentals right we can be a useful economic partner, a significant market and a profitable destination for investment," he wrote.

Zardari took office in September after his party won elections last year. He has led the party since his late wife, the moderate U.S. ally Benazir Bhutto, was assassinated by suspected al-Qaida militants in late 2007.

In China, Zardari also toured the huge Three Gorges hydroelectric project to "see some of the engines that lie behind China's economic growth," his commentary said.

China's highest-ranking legislator, Dai Bingguo, reassured Zardari that Beijing would do all it can to strengthen bilateral ties.

Cooperation agreements were signed over the weekend on farm technology, port engineering and hydroelectric power development, the official Xinhua News Agency said.
This is a step in right direction. Pakistan is on the way to become a colony of china. this will make it faster.
 

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Pakistan may soon be ineligible for World Bank loans

ISLAMABAD: In an emerging development, Pakistan may soon become ineligible for financial assistance from one of the two main arms of the World Bank Group – the International Bank for Reconstruction and Development (IBRD), as the country’s official foreign currency reserves are rapidly getting slimmer.


One of the key conditions for qualifying for IBRD loans is that the loan-seeking country should have official foreign currency reserves equivalent to three months of import bill.

Pakistan was touching that border line as its reserves stood at $14.3 billion on August 4, 2017.

These reserves include $3.9 billion in short-term borrowings by the central bank. By excluding the short-term forward contracts, the State Bank of Pakistan’s (SBP) net reserves will come down to $10.4 billion, according to the central bank data.

Sources in a multilateral lending agency and the Ministry of Finance told The Express Tribune that gross foreign currency reserves may slip below the threshold of three-month import cover either in the last week of August or the first week of September.


In order to rein in the declining reserves, the Ministry of Finance will have to immediately look for ways to ramp up the critical pool of foreign currency. Since the end of the International Monetary Fund’s (IMF) assistance programme 11 months ago, Pakistan’s official foreign currency reserves have dropped $4.2 billion.

Responding to the development, a spokesman for the Ministry of Finance said the SBP’s reserves totalled $14.398 billion on August 4, 2017, which were adequate for 3.2 months of imports.

He pointed out that an export package of Rs180 billion and improved global economic outlook had caused about 10.5% increase in exports in July 2017 compared to the same month of previous year. Apart from this, remittances from overseas Pakistanis have shown a healthy growth of 16% in July 2017.

As exports and remittances returned to the growth zone, the spokesman said, the government expected a significant increase in foreign direct investment and other inflows including official ones.

“With increased inflows together with expected reduction in non-essential imports due to the imposition of regulatory duty in the Finance Bill 2017, the SBP reserves are expected to strengthen in coming months,” he said.

Furthermore, the government was also working on more measures, which would be rolled out after finalisation, said the spokesman.

Ministry sources revealed that the government was reviewing different options to keep the reserves above the three-month import bill. These included incentives for expatriates to invest in Pakistani dollar-denominated bonds, more restrictions on imports and steps that will encourage exporters to bring back export proceeds.

IMF data bloats Pakistan forex reserves by $3bn

The last three-month (May-July) import bill of Pakistan stood at $14.5 billion, showed the data compiled by the Pakistan Bureau of Statistics.

In the previous fiscal year, Pakistan’s total imports swelled to a record $53 billion and keeping that in view, the three-month average imports came in at $13.3 billion.

The IBRD lending had been stopped for most of the tenure of the previous PPP government and the World Bank Group restored it less than two years ago. The IBRD suspension carries implications for both project and programme financing.

The IBRD financing is relatively expensive and is usually linked with changes in the recipient country’s economic and financial policies.

The World Bank Group comprises five institutions. Its two arms – the IBRD and International Development Association (IDA) – give loans to governments.

The IBRD offers loans for projects, programmes or policy purpose as well as hedging products to help manage the currency and interest rate risk exposures.

IDA is a concessionary lending window that extends funds to the poorest developing countries.

In case, Pakistan is disqualified, its borrowing from the World Bank Group will be limited to the IDA, from where it can borrow only according to the quota.

Pakistan is among the few countries that qualify for both the IDA and IBRD assistance due to its creditworthiness.

Sources said if the World Bank stopped Pakistan from IBRD borrowing, it would also have implications for the country’s creditworthiness. Lenders define creditworthiness as “the ability to service new external debt at market interest rates over the long term”.

The World Bank has already declined to give policy loans to Pakistan until it depreciates the rupee against the US dollar. The bank’s decision reflected deterioration in the country’s external sector that was posing challenges to macroeconomic stability.

However, the Ministry of Finance insisted that dialogue with the bank for policy lending was under way and the exchange rate policy did not fall within the bank’s domain.
 

aditya10r

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Pakistan may soon be ineligible for World Bank loans

ISLAMABAD: In an emerging development, Pakistan may soon become ineligible for financial assistance from one of the two main arms of the World Bank Group – the International Bank for Reconstruction and Development (IBRD), as the country’s official foreign currency reserves are rapidly getting slimmer.


One of the key conditions for qualifying for IBRD loans is that the loan-seeking country should have official foreign currency reserves equivalent to three months of import bill.

Pakistan was touching that border line as its reserves stood at $14.3 billion on August 4, 2017.

These reserves include $3.9 billion in short-term borrowings by the central bank. By excluding the short-term forward contracts, the State Bank of Pakistan’s (SBP) net reserves will come down to $10.4 billion, according to the central bank data.

Sources in a multilateral lending agency and the Ministry of Finance told The Express Tribune that gross foreign currency reserves may slip below the threshold of three-month import cover either in the last week of August or the first week of September.


In order to rein in the declining reserves, the Ministry of Finance will have to immediately look for ways to ramp up the critical pool of foreign currency. Since the end of the International Monetary Fund’s (IMF) assistance programme 11 months ago, Pakistan’s official foreign currency reserves have dropped $4.2 billion.

Responding to the development, a spokesman for the Ministry of Finance said the SBP’s reserves totalled $14.398 billion on August 4, 2017, which were adequate for 3.2 months of imports.

He pointed out that an export package of Rs180 billion and improved global economic outlook had caused about 10.5% increase in exports in July 2017 compared to the same month of previous year. Apart from this, remittances from overseas Pakistanis have shown a healthy growth of 16% in July 2017.

As exports and remittances returned to the growth zone, the spokesman said, the government expected a significant increase in foreign direct investment and other inflows including official ones.

“With increased inflows together with expected reduction in non-essential imports due to the imposition of regulatory duty in the Finance Bill 2017, the SBP reserves are expected to strengthen in coming months,” he said.

Furthermore, the government was also working on more measures, which would be rolled out after finalisation, said the spokesman.

Ministry sources revealed that the government was reviewing different options to keep the reserves above the three-month import bill. These included incentives for expatriates to invest in Pakistani dollar-denominated bonds, more restrictions on imports and steps that will encourage exporters to bring back export proceeds.

IMF data bloats Pakistan forex reserves by $3bn

The last three-month (May-July) import bill of Pakistan stood at $14.5 billion, showed the data compiled by the Pakistan Bureau of Statistics.

In the previous fiscal year, Pakistan’s total imports swelled to a record $53 billion and keeping that in view, the three-month average imports came in at $13.3 billion.

The IBRD lending had been stopped for most of the tenure of the previous PPP government and the World Bank Group restored it less than two years ago. The IBRD suspension carries implications for both project and programme financing.

The IBRD financing is relatively expensive and is usually linked with changes in the recipient country’s economic and financial policies.

The World Bank Group comprises five institutions. Its two arms – the IBRD and International Development Association (IDA) – give loans to governments.

The IBRD offers loans for projects, programmes or policy purpose as well as hedging products to help manage the currency and interest rate risk exposures.

IDA is a concessionary lending window that extends funds to the poorest developing countries.

In case, Pakistan is disqualified, its borrowing from the World Bank Group will be limited to the IDA, from where it can borrow only according to the quota.

Pakistan is among the few countries that qualify for both the IDA and IBRD assistance due to its creditworthiness.

Sources said if the World Bank stopped Pakistan from IBRD borrowing, it would also have implications for the country’s creditworthiness. Lenders define creditworthiness as “the ability to service new external debt at market interest rates over the long term”.

The World Bank has already declined to give policy loans to Pakistan until it depreciates the rupee against the US dollar. The bank’s decision reflected deterioration in the country’s external sector that was posing challenges to macroeconomic stability.

However, the Ministry of Finance insisted that dialogue with the bank for policy lending was under way and the exchange rate policy did not fall within the bank’s domain.


================================================================
 

Cutting Edge 2

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Nawaz most likely stripped from premiership for seeking peace and friendship with India and Afghanistan rather than corruption with collaboration of Paki judiciary and military.
 

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On life support
Cyril Almeida

AND now we wait. Wait for them to break him. Wait and see how they’ll do it. Wait and see what it’ll mean for the rest of us. Because Nawaz is trapped.

Trapped by himself.

There’s no need to pussyfoot around. Nawaz has no plan. He knows what he wants, but he doesn’t know how to get it. And neither of those things is good for — or even about — the rest of us.

From here, they’ve got him. Because Nawaz wants to cling on in a system that he doesn’t want to improve.

What Nawaz wants is obvious.

He wants the N-League to win the next election. That’s possible. He wants to find a way back into the system. That’s unlikely. And he wants Maryam to eventually succeed him. That’s the X factor in all of this.

The thing about political capital — which Nawaz has topped up with the GT Road tamasha — is that you have to know what to do with it.

Last weekend was a fork in the road. The fanciful path — the one to strengthening the democratic project — was if Nawaz had installed himself as an éminence grise, the wise old man of politics steering things from outside.

Look, the system isn’t working and we all know why, Nawaz could have said. I’m now out but here’s what you guys — my party, the other parties — can do to help fix things.

It had to be big-ticket stuff. A new accountability regime. A justice revolution at the grass roots. Unshackling the economy. An admission that the existing PML-N strategy had failed.

It was always a low-probability event — Nawaz wasn’t suddenly about to become more than the sum of his politics.

But neither side of the fork was about meekness. The other option was violent collision. You want me, come and get me. I’ll burn everything to the ground.

A mystery about Nawaz has been his coyness this time round. While he still had his job, it may have made sense — if you don’t react to the attack, they may not go all the way.

But even then it didn’t always make sense. He allowed a seven-month spell of political torture, bookended by two irruptions by the boys, because he was unable to tell successive chiefs — enough.

What’s done is done, now cut the crap and let’s get back to business.

But he didn’t and he ended up losing his job anyway. And even now he’s being coy. Everyone knows what he’s trying to say, so why not just say it?

I, your rightful prime minister, believe that the military has colluded with the judiciary to remove me because I want friendship with India and peace in Afghanistan.

This isn’t about corruption, this is about power and control and conflict over what kind of country Pakistan should be.


Just say it.

What’s the worst they can do? Chuck him in jail?

Possibly. Probably. Yes. So what? Unless, of course, Nawaz doesn’t think this business of politics is worth going to jail for.

And so, when he arrived at the fork last weekend, Nawaz chose neither the good path nor the bad one and tried instead to find a middle way.

A stupid middle way that has failure written all over it.

You can see what he’s trying to do: gather enough political capital to prevent the other side from dismantling his party and eliminating his side of the family from the political frame.

It’s a strategy of self-survival based on the idea that by gaining fresh support in the political arena he’s increasing the cost of what the other side wants to do to him in the power arena.

But because it’s obvious, it’s stupid.

From here, they’ve got him. Because Nawaz wants to cling on in a system that he doesn’t want to improve and in which he has the fewer options.

Why won’t he just let go? That’s probably the wrong question. Why should he let go? He’s built a political machine that dominates the biggest province in the land.

Find a man who would just walk away from a prize like that and you’ll have found a man better than Nawaz — and everyone else.

But the bigger mistake has been to not groom Maryam earlier. She is wildly unprepared to bring to heel the beasts that are Punjab politics and the PML-N. Her ambition is the inverse of her experience.

So Nawaz is stuck — even if he wanted to let go, Maryam isn’t ready to take over yet.

You almost — almost — have to feel sorry for him. Because it will be a cruel process by which they’ll whittle him down politically from here.

They may do it methodically or they may do it extravagantly. They can do it through the courts or they can do it through his own party.

They may leave him to twist in the wind, politically bloodied but doltishly hopeful, or they may just brutally decapitate him.

It’ll depend on what they need and when. Maybe the electoral veneer will be deemed worth keeping, maybe there’s a deal to be had in Punjab.

And if you can’t bring yourself to feel sorry for Nawaz, feel sorry for yourself — and for all of us.

Because this democracy thing is done. Maybe not in form, but already in substance.

The other side is the anti-democrats. By definition they aren’t out to fix democracy or force substantive change; they want control and democracy is the opposite of control.

So all we had was the possibility of the democracy side doing helpful things for the democratic project when the moment arrived.

The moment arrived and Nawaz had nothing.
 

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I had good view of Imran Khan earlier but the way he has been focussed on one individual's removal all this time has made it clear that he is doing Army's bidding.
 

Cutting Edge 2

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It maybe because of the support we have been getting from Nawaz led PML-N government.
I would like to burst the myth (propagated by PA) that Nawaz is pro India. Nawaz is only pro Pakistan. He wanted to have good relations with India because it was beneficiary to Pakistan. During his youth Nawaz to was a typical jihadi type but as he aged he became more moderate but he was never pro India.

The most likely reason why we haven't taken MFN status back is because Pak have given us NDMA in return. These two agreement is the only reason why we have little border trade between two countries. This little trade is heavily tilted in our favour.

Though MFN status isn't really that important but since BJP has made a promise after Uri that they will put economic sanctions on Pak, their inaction on this issue seems like their promise was just another Jumla.

I had good view of Imran Khan earlier but the way he has been focussed on one individual's removal all this time has made it clear that he is doing Army's bidding.
Nawaz is a cunning man, a seasoned politician but Imran Khan is an idiot. His policies are lacklustre and opinions change according to public mood. Because of his limited intellectual capacity he is currently ISI's favourite. They want a rubber stamp PM and Im the Dim fits the bill.
 

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Despite calls after Uri attack, India yet to strip Pakistan of MFN status
Aug 19 2017

India has not yet decided on stripping Pakistan of the 'Most Favoured Nation' for trade status, although it has been under review since the September 2016 terror attack at Uri in Kashmir.

http://www.deccanherald.com/content/628899/despite-calls-uri-attack-india.html

:frusty::frusty::frusty::frusty:
More than the MFN status, India is hurting pakistan where it hurts the most.
MFN is not a big deal says some circles!
 

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More than the MFN status, India is hurting pakistan where it hurts the most.
MFN is not a big deal says some circles!
Yes, it really isn't.

What we need to do is move 100% into Chanakyan Realpolitik and give up our utterly naive and senseless Nehruvian symbolism.

We have been "symbolically" doing a lot of stuff against Pakistan - what has worked? It has just made us look petty and impotent.

Zia ul Haq was really good at this - he would say sweet things to Morarji Desai and send him gifts, in return Desai gave him details about our spy network. Best investment-return ratio I've ever seen.

Hell, I say give Pakistan MFN status, tell them we're their brothers, double up Aman ka TAmasha, call them to act in Bollywood films, send that retard Kulkarni there every week, call their journalists over, call Abdul Basit on DD every day - while at the same time working 10 times harder to liberate Baluchistan on the ground, covertly. That's what they do to us, we are far more capable of doing the same.
 
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Yes, it really isn't.

What we need to do is move 100% into Chanakyan Realpolitik and give up our utterly naive and senseless Nehruvian symbolism.

We have been "symbolically" doing a lot of stuff against Pakistan - what has worked? It has just made us look petty and impotent.

Zia ul Haq was really good at this - he would say sweet things to Morarji Desai and send him gifts, in return Desai gave him details about our spy network. Best investment-return ratio I've ever seen.

Hell, I say give Pakistan MFN status, tell them we're their brothers, double up Aman ka TAmasha, call them to act in Bollywood films, send that retard Kulkarni there every week, call their journalists over, call Abdul Basit on DD every day - while at the same time working 10 times harder to liberate Baluchistan on the ground, covertly. That's what they do to us, we are far more capable of doing the same.
Bro, I understand your frustration.

MFN is a single shot only to be used when your enemy is at its weakest point. With trade, we are whipping 4 billion surplus every year.

People also ask for scraping IWT, but then what is the benefit of doing so. We don't have infra to divert the Indus river. My friend decisions are not taken in anger.

I think this would the order.

1. Pak starts paying CPEC loan
2. India finishes road link to Afghanistan via Iran
3. Infra on Indus River (to support 20% of our share)
4. Racking up stuff in international forums thus gaining diplomatic imunity for changing the ratio from 80: 20 to say 50: 50.
5. Scraping MFN.

I hope to see all the 5 steps by end of 2018
 

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Pakistan on the verge of seeking IMF bailout, experts claim

PHOTO: REUTERS

KARACHI: Pakistan’s economy is once again fading due to endemic issues on the external front including a high current account deficit (CAD) that has ballooned three times to $2.05 billion in the single month of July 2017 year-on-year.

The widening deficit is fast eating up foreign exchange reserves and the time may not be far when economic managers of the country shall be negotiating a new bailout package with the International Monetary Fund (IMF) if the situation persists.

IMF, Pakistan fail to see eye to eye in assessment of economy

The fault-line in the economy, CAD, has badly shaken the Pakistan Stock Exchange (PSX) – a barometer which reflects economic performance on a day-to-day basis.

Many seasoned economists and analysts strongly believe devaluation of the overvalued rupee against the dollar and other major world currencies is one workable solution to containing the deficit.

On different occasions during 2016, the IMF said Pakistan’s currency is overvalued by as much as 20%.

Dollar trading closed at Rs105.36 per dollar in the interbank market on Tuesday, according to the State Bank of Pakistan (SBP).

A chief operating officer (COO) of a leading asset management company said devaluation of the rupee should be decided at the earliest since procrastinating would allow the rupee to get more overvalued with the subsequent depreciation being equally severe.

There is a sense in the market that the government will sooner or later devalue the currency. This perception has caused imports to increase with traders stocking up on imported items to safeguard themselves in the event of rupee devaluation, which would make the former more expensive to buy.

Increased imports due to this perception are further widening the CAD.

“In my opinion, 7%-8% devaluation in real term would be enough and it should be done in one-go instead of doing it gradually,” the COO said.

Mirroring similar views, a former governor of SBP said the much-needed initiative would prove to be a short-term solution. He stressed on increasing value-added exports as well since the purpose of devaluing the currency is to make exports cheaper (hence attractive) and imports expensive (hence less desirable).

“4-5% devaluation is the immediate solution,”Arif Habib Limited Head of Research Shahbaz Ashraf opined, adding that this will address foreign investors’ concerns at the PSX and allow them to stop selling and start buying.

“This may attract a few hundred million dollars in Pakistan and partially finance CAD,” he claimed.

Topline Securities lists devaluation, regulatory duty on non-essential imports, export promotion, dollar bonds and bilateral borrowing as short-term measures for stabilising the economy.

Pakistan returning to IMF?

Economist Dr Ashfaque Hasan Khan foresees the widening CAD to be creating a serious balance of payments crisis for Pakistan by March-April 2018 forcing the government to re-negotiating a bailout package with the IMF by that time.

IMF data bloats Pakistan forex reserves by $3bn

He estimates CAD to be around $16-16.5 billion during fiscal year 2017-18 with another $7-7.5 billion needed for debt servicing, taking the total amount of foreign exchange required to $24 billion in FY18.

On the contrary, he estimates Pakistan’s receivables to amount to $12.5 billion from several sources including the World Bank, Islamic Development Bank, Asian Development Bank, AIIB, bilateral grants, Chinese financing and Foreign Direct Investments, he said. “The finance minister should be asked how and who will fill the financing gap while reserves are drying up,” he remarked.

He deplored that the current government’s preoccupation with politicking will leave Pakistan with no other option than to go to the IMF.

Published in The Express Tribune, August 23rd, 2017.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.


https://tribune.com.pk/story/1488579/pakistan-verge-seeking-imf-bailout-experts-claim/



 

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https://www.dawn.com/news/1354633/business-with-china


Slowly but surely a crucial realisation is setting in amongst the business community here that dealing with their Chinese counterparts is not going to be easy.

The rhetoric coming from the Pakistani government had made the relationship sound like it was some sort of family affair. But those sections of the business community who have tried to build commercial ties with their counterparts in China are finding out that, over there, profits come first and sentiment second.

One thing the business community has noticed is that their Chinese counterparts prefer dealing with the government rather than building private-sector partnerships, according to a report published on Monday in this paper that presented the opinions of a range of Pakistani businesses that have, or are seeking to build, ties with Chinese enterprises. They have noticed that the Chinese do not negotiate very much. They lay down their terms, and expect them to be fully met.

This realisation is only the beginning of what the rest of the country needs to learn about the growing economic relationship with China. The Chinese government has provided some diplomatic support to Pakistan at crucial junctures, even now as relations with post 9/11 US take yet another nosedive. But business is business, and when it comes to economic cooperation and partnering, all countries look out first and foremost for their own interests.

The question that needs to be asked with increasing urgency is this: is our government doing the same when it engages with the growing number of Chinese delegations landing in the country to build the framework under which Chinese investment will come pouring into Pakistan?

Ever since the CPEC enterprise got under way, calls have been growing for more transparency in its execution. By now, there ought to be no further doubts that the CPEC enterprise goes far beyond roads and power plants, and is, in fact, about creating the right environment for Chinese investment to acquire large stakes in Pakistan’s economy.

This is a positive development undoubtedly, but it is also important to ask how far the government is going to protect Pakistan’s economic interests.

There is a need to learn this important lesson from the Chinese government. Only greater transparency with more information being shared through the online portals created by the government for disseminating CPEC-related news can address this concern.

Answers to questions like what sort of dispute-resolution mechanism will govern the partnerships envisioned under CPEC, and what investments are being prepared for which areas, will help dispel the growing anxieties.

It would be a sad but necessary end to the euphoria that has greeted the arrival of CPEC if the government were to learn the same lesson that the business community is busy learning these days, that in matters of business, brotherly relations have no role to play.

Published in Dawn, August 29th, 2017
 

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