Much-needed Chinese support


CHINA has always extended support to Pakistan at critical times. At a time when the country’s foreign exchange reserves have dwindled to three billion dollars, barely enough to cover three weeks of controller exports, the Chinese side has once again extended the much-needed support to Pakistan. Finance Minister Ishaq Dar announced on Wednesday that the Board of China Development Bank (CDB) has approved a $700 million credit facility for Pakistan which, he said, expected to be received by the State Bank of Pakistan (SBP) this week.

Indeed this will send positive sentiments in the market as this will shore up the foreign exchange reserves as well as help stabilize the rupee value. As Pakistan has almost completed all the prior conditions set by the International Monetary Fund, we expect that the international lender will also soon release the next tranche under the Extended Fund Facility which, in fact, will also encourage other financial institutions such as the World Bank and Asian Development Bank to open their coffers. Inflows are also expected from China, Saudi Arabia and the UAE in the wake of signing of a staff level agreement with the IMF. This will definitely put the country in some sort of comfortable position, at least for the time being. But the question once again arises as for how long we will continue managing our affairs in such a manner – the brunt of which ultimately has to be borne by the poor people.

If the corrective measures are not taken, we will continue to see this quagmire every three or six months. In our neighbourhood, the Taliban government, despite facing bone-numbing sanctions, is pursuing the course of self-reliance as it is working on a plan to establish SEZs and the other day it also set up a consortium of companies to create an investment plan focusing on power, mining and infrastructure. Instead of entangling in petty politics, our political leadership should focus only on the country’s economy.

Obstacles in the way of operationalization of SEZs under the CPEC must be removed to attract investment from China and other sources. It is only through promoting industries in the SEZs as well as uplifting the agriculture sector, we can bring the country out of debt trap and take it on the path of sustainable development.