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COLUMN FOREIGN AFFAIRS
Debt-stricken Pakistan into financial chaos which may be Pakistan’s financial to blame for this ugly scenario or the
military dictators who have been run-
exploited by extremist elements to
approaches China promote their dangerous agenda. In condition is so ning Pakistan either as rulers or from
critical that even
behind the scene?
any case, it is generally believed that
the loan Pakistan seeks will be used for
Most financial experts are of the
meeting financial obligations to China, if the UAE obliges view that Pakistan’s financial crisis has
Pakistan PM Imran Khan reached out to Beijing for financial which has created a debt trap through it with an been caused by reckless spending by
ASIAN DRAMA assistance. It, in turn, promised Rs.6 billion aid, besides spending on the controversial CPEC project. assistance package, its civilian rulers and their failure to
effectively curb corruption. But there
According to the figures released by
SYED CPEC project, to help the country come out of the financial distress the State Bank of Pakistan, Islamabad’s it would be difficult have other major factors too like ter-
current account deficit increased by 43
rorism, poor performance on the ex-
NOORUZZAMAN per cent to $18 billion in the fiscal that for Islamabad to port front and dwindling remittances
hough it was a howler that his readiness to review his stand as a ended in June 2018. Its foreign curren- avoid going to the from Pakistanis settled abroad.
the Pakistan government- bargaining tactic. cy reserves came down to $8.4 million Extremism and terrorism have cre-
The columnist — former controlled TV channel Pakistan now has plans to ap- by the October-end from $627 million IMF for a fresh ated a situation in which foreign inves-
Deputy Editor of The (PTV), carried the word proach the United Arab Emirates (UAE) in late September. Pakistan is, there- tors are scared to set up their establish-
Tribune, Chandigarh — “Begging” instead of Beijing leadership for financial aid as it does fore, faced with a major balance of bailout loan ments there. According to a State Bank
specialises in foreign T while showing Prime Min- not want to borrow a big amount from payment crisis. It can fulfil with great of Pakistan report for 2016, the war on
affairs. With a career ister Imran Khan address a gathering the International Monetary Fund (IMF) difficulty its foreign debt obligations till terrorism has cost $118 billion to the
spanning 41 years, he in the Chinese capital during his recent owing to certain restraining conditions the year-end. The public sector debt of through, I don’t need to tell anyone country’s exchequer. The Global Ter-
keeps close watch on official visit, the mistake reflected the it imposes on borrowers which nobody Pakistan stands at $75.3 billion, which about it, everyone knows the crisis the rorism Index (2016) says that out of 163
issues related to South bitter reality in his country. Khan was likes. is 27 per cent of its gross domestic previous government left us with.” countries, Pakistan stands fourth worst
Asian countries. The there looking for financial assistance to However, Pakistan’s financial condi- product. But what happened to Pakistan dur- hit by the scourge of terrorism.
views expressed are tide over the debt repayment crisis Pa- tion is so critical that even if the UAE Earlier, the Pakistan Finance Min- ing the previous government which Pakistan’s exports declined by 20
personal kistan is faced with today. The Chinese obliges it with an aid package, it would ister had said, “The difficult financial resulted in this crippling financial per cent during a period of 10 years
promised him to help Pakistan with an be difficult for Islamabad to avoid going situation that the country is going crisis? Are Islamabad’s civilian rulers from 2011 to 2017, according to the
aid package of 6 billion, which would to the IMF for a fresh bailout loan. World Bank’s lead country economist
be released besides what China Obviously, with a view to sending Enrique Blanco Armas. The reasons are
has been spending through China- positive signals to the international a discouraging business environment,
Pakistan Economic Corridor (CPEC) community, Pakistan Finance Minister an overvalued exchange rate, relatively
projects. However, more negotiations Asad Umar has asserted that with the weak trade facilitation and poor infra-
need to be held for Beijing’s aid to reach Chinese assurance of the $6 billion structure facilities.
Islamabad, as Chinese officials indicated aid package, his country’s balance of These factors could not have led to
to media persons during Khan’s visit. payments crisis is over, as the situation Pakistan’s foreign exchange reserves
Earlier, Khan, a cricketer-turned- stands today. declining to an alarming level had
politician, had visited Saudi Arabian “We had told you about the $12 billion there been adequate support from the
apparently to participate in an interna- financing gap, of which $6 billion have remittances from its nationals work-
tional investment conference there, but come from Saudi Arabia, and the rest ing abroad. But this was unavoidable
his real purpose was to approach the has come from China. So, the immediate because of the disturbances in the
Saudis which he did for urgent funds balance of payments crisis of Pakistan Middle-East, resulting in lakhs of for-
required by cash-strapped Pakistan for has ended. I want to make that clear in eign workers losing their jobs. Over 3.5
clearing its import bills and loan repay- unequivocal terms that we do not have lakh Pakistanis lost their jobs in Saudi
ments. Khan was obliged by the Saudis, any balance of payments crisis now,” Arabia alone.
Pakistan’s traditional lenders, with a $6 Umar told the media the other day. The financial crisis faced by Paki-
billion package of assistance. However, Yet Pakistan cannot afford to ignore stan has lessons for India too. We must
it has strings attached: Pakistan must the IMF, which is likely to come to the limit our non-productive expenditure
maintain its silence over the journalist rescue of Islamabad in this hour of and strive to maintain an environ-
Jamal Khashoggi murder controversy crisis, as it has done earlier too. Though ment in which foreign direct investors
and support the Saudis against Iran in the IMF is under pressure from the US feel encouraged to come and invest
the ongoing war for dominance in the and other Western countries to impose their funds without fear of any kind.
Arab world. It would be a tricky job for tough conditions on its bailout package, Populism being indulged in by the
Pakistan as it has been indicating to so soon after the IMF completed the NDA government can lead to serious
maintain its friendly relations with both payment of an earlier loan in July this repercussions in the long run.
countries. But Imran Khan needed the year, it cannot refuse to help Islamabad
funds he got and, therefore, expressed with a view to saving it from slipping LETTERS@TEHELKA.COM
TEHELKA / 30 NOVEMBER 2018 56 WWW.TEHELKA.COM
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