The resumption of the IMF deal
The resumption of the IMF deal is crucial for Pakistan to sustain its external sector in the short to medium term since the growing trade gap is fuelling the current account deficit and bringing the already meagre foreign exchange reserves under massive stress.
But it is bad news for ordinary people.There’s no telling how the talks with the IMF are going but it is easy enough to see that they are not progressing smoothly.
The gap between what government says and what the people are going through cannot increase beyond a certain point. When that point comes can be different from one country to the next depending on various things.
It would be a terrible mistake for the government to underestimate the strength of the wave that is about to hit them in the coming months. In this financial situation people of Pakistan are very much worried about the future of CPEC.
There are some issues prevailing in various CPEC and non-CPEC projects. One of the major issues is the capacity payments liable to be paid by the government to the Chinese companies.
And the government wants companies to receive payments in instalments since it’s not possible to clear these payments fully.
The government is convincing Chinese companies engaged in power projects to receive capacity payments in instalments instead of full amount as it would be convenient for it to clear pending dues.
It is reality that there are some issues that also include the ones related to scrutiny of Chinese. At some projects the work is carried out slowly while some were underway fast.
The government is heading in a right direction to resolve all issues including the capacity payments amicably as it has succeeded in developing consensus with Chinese in this regard.
There is the project worth Us dollars 6.8 billion already approved by the government under CPEC.
Chinese point of view is that the cost estimation for the project is not according to its components. They say it should be nearly 8 billion dollars or so. Pakistan and Chinese are working on this.
As for as the Dasu Hyddro power project is concerned where the Chinese stopped work due to killing of nine Chinese engineers in a terrorist attack a couple of months ago, the Prime Minister and Army establishment are supervising this security issue very keenly.
—The writer is former Federal Secretary Election Commission of Pakistan and currently Chairman National Democratic Foundation.
