EDITORIAL: Retired Lieutenant-General Asim Bajwa’s decision to voluntarily step down as chairman of CPEC (China Pakistan Economic Corridor) Authority, once Prime Minister Imran Khan appointed Khalid Mansoor as his special assistant on all affairs related to the Corridor, is appreciated as the honourable thing to do. Yet the show must go on and as the CPEC enters its second phase, which will focus on industrial cooperation between the two countries as well as their private sectors, the government’s preference for someone with an entrepreneurial and corporate background is understandable. It also helps that the new special assistant has vast experience of working and dealing with international financial institutions (IFIs) and also a long history of working with Chinese companies.
So Khalid Mansoor seems to fit the bill rather well and the fact that he’s also had a very long and healthy working relationship with Planning Minister Asad Umar, who oversees the CPEC, is something like the cherry on the cake. It also helps that he’s being pretty candid right at the outset. Rather than start his stint by brushing rumours that the Chinese might be a little uncomfortable with the pace of progress of late under the carpet, he very rightly, and responsibly, said that if that is indeed the case then we will do what we have to in order to bring them around. That makes a lot of sense since the CPEC is clearly more of a game changer for us than for them and nobody, including the government, opposition as well as the establishment, ought to have any second thoughts about it.
It is, however, very true that things are not moving as fast as the Chinese would like, or even as fast as they were moving under the previous administration in Pakistan. One big reason is the pandemic, of course, but another is also the limited fiscal space that we have at the moment. And the present year’s expansionary budget, which will need the government to sprinkle subsidies here and there and also live with the reemergence of an unpleasant current account deficit, would limit that fiscal space even further. Also, now that the nuts and bolts of the Corridor have been put in place and the right kind of infrastructure is being erected, the Chinese would no doubt want to push the pace even further as negotiations between companies takes centre stage.
That’s where Khalid Mansoor’s skills and experience should come in handy. He has enough experience of international business as well as dealing with the Chinese to know how and what to do and he’s close enough to Asad Umar to have the right steps taken at home in the right amount of time. Keeping the CPEC on track is not just important because it takes care of a lot of our problems and gives us much to celebrate, but also because it has made China the biggest foreign direct investor in Pakistan. And since the IMF programme is technically suspended again, which makes us all the more vulnerable to exogenous financial shocks, we need to make extra sure that no eggs fall out of our basket at this point in time. FDI inflow, which is the kind of foreign exchange we need because it does not create any debt, already shrank about 29 percent year-on-year in FY21.
PM Imran Khan seems to have been advised well enough by the finance and commerce ministries to know which pieces to move on the board and at what time to make sure that the country is not checkmated economically and financially. Pakistan has done well, all things considered, to meet all the threats from the pandemic. But the problem hasn’t yet gone away and we will continue to do well only if we have the reserves for it. The country should be able to preserve the CPEC, take it to new heights, and also broaden the base of our foreign investors to make the economy really take off.
Copyright Business Recorder, 2021