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Print

China comes to our rescue in a big way

  • Agrees to roll over $2.3 billion loan and extend additional assistance of between $2.5 to $2.8 billion
Updated 15 Jun, 2022

ISLAMABAD: China has agreed to roll over $2.3 billion loan to Pakistan and, significantly from the perspective of strengthening the $9.2 billion foreign exchange reserves (as on 3 June), to extend additional assistance of between $2.5 to $2.8 billion.

Highly-placed sources told Business Recorder that the recent visit of Chief of Army Staff General Qamar Javed Bajwa was a resounding success in procuring a highly valuable package. Sources further revealed that the three services’ team is still in Beijing and negotiations on the economic package are ongoing at present with possibly two phases of assistance; in the first (initial) phase $2.3 billion would be rolled over, a key International Monetary Fund (IMF) loan condition, and in the second phase another $ 2.5 to $2.8 billion would be disbursed, scheduled for November or early December.

Besides these two packages, China has also agreed to extend military aid, and to revive the strategic partnership between the two countries with the objective of raising it to the next level of cooperation in various fields under the China-Pakistan Economic Corridor (CPEC).

Asked about the terms and conditions of the Chinese economic package, the source maintained that the loans will be at concessional rates but the Chinese side reportedly emphasised the criticality of avoidance of any political disruption, underscoring the need for ensuring that all contractual obligations with the Chinese companies are met. The Chinese side also highlighted the need for reinvigorating projects rejected by the previous government.

“The Chinese leadership has assured Pakistan of Beijing’s continued support at this difficult time, besides pledging a more proactive role to support the country’s economy through the CPEC,” the source added.

A high-powered military delegation comprising senior military officials from all three services led by Army Chief Qamar Javed Bajwa visited China from June 9 to 12 to attend the meeting of Pakistan China Joint Military Cooperation Committee (PCJMCC).

Pakistani, Chinese militaries reaffirm strategic partnership

According to a statement issued by the military’s media wing, Inter-Services Public Relations (ISPR), the senior level tri-service military delegation held wide-ranging discussions with senior officials of Chinese military and other government departments. The meeting was held on 12 June with the Pakistani side led by Chief of Army Staff General Qamar Javed Bajwa and the Chinese side led by General Zhang Youxia, Vice Chairman Central Military Commission of China.

It stated that both sides discussed their perspectives on international and regional security situation, and expressed satisfaction on defence cooperation between the two countries.

“Pakistan and China reaffirmed their strategic partnership in challenging times and agreed to continue regular exchange of perspectives on issues of mutual interest. Both sides also vowed to enhance their training, technology and counterterrorism cooperation at tri service level,” it added.

The sources further noted that Saudi Arabia has also pledged rollover of $3 billion assistance, contingent on success of the seventh review, during Shehbaz Sharif’s visit to Saudi Arabia on 28 April and reports indicate that the Saudi government further pledged additional assistance including the deferred oil payment facility.

CPEC under renewed Sino-Pak focus

Reports also indicate that the Saudis urged the UAE to support Pakistan’s beleaguered economy and fruitful discussions were held on this account on Eid day during the visit of a high-level UAE delegation to Pakistan.

Negotiations are also reportedly at an advanced stage with Qatar for procuring liquefied natural gas (LNG) on deferred payment.

Pakistan is also hopeful, after the good optics between foreign minister Bilawal Bhutto Zardari and Antony Blinken, US Secretary of State in New York, on the sidelines of the Climate Change conference, that Washington may at best lend support to get Pakistan out of the Financial Action Task Force (FATF) grey list or, at the least, withdraw all objections.

Pakistan’s case will be heard by the FATF in Berlin, Germany, from June 15 (today) to 17, 2022 and Minister of State for Foreign Affairs Hina Rabbani Khar is leading the Pakistani side at the FATF moot. “We’ve worked hard on the 27-point action plan given by the FATF and we are quite hopeful that Pakistan will be excluded from the grey list,” another official dealing with the FATF action plan told Business Recorder.

FATF grey-list: Pakistan’s delegation leaves for Berlin

“All these packages from friendly countries would help Pakistan boost its foreign reserves and create fiscal space which may give a breathing space to the country’s economy,” said Dr Ashfaque Hassan, former adviser to finance ministry.

Copyright Business Recorder, 2022

Comments

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Hussain Ahmed Jun 15, 2022 08:36am
Government is burning cash every day. How long will this loan last?
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imran mirza Jun 15, 2022 10:06am
Good for Pakistan but a huge discredit to the political set-up. Do we really need foreign minister, who is nothing more than a dummy, travelling around at the expense of taxpayer money.
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Syed Arif Hussain Zahidi Jun 15, 2022 10:21am
This is just great. But that doesn't mean that we can relax. From 2017 it is very clear that all funds were arranged by Gen. Bajwa only.
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FAISAL HUMAYUN Jun 15, 2022 10:51am
Wish this breather is the last time we go begging around. IS IT NOT A PITY THAT WE AS A NATION HAVE FAILED TO BUILD A STRONG SELF RELIANT ECONOMY. HOW LONG WILL THIS GO. SHAME ON US THAT THE ELIGIBILITY OUR LEADERSHIP IS BASED ON HOW MUCH LOANS THEY CAN FETCH FOR US. PLEASE WAKE UP. WE NEED STRONG ECONOMIC/INDUSTRIAL/EXPORT BASE. LEADERS PLEASE STRIP OFF YOUR EGOS. SIT DOWN AND LEAD THIS NATION ON A REVIVAL PLAN. OR ELSE YOU WILL ONLY B REMEMBERED AS A BUNCH OF DANCING CALL GIRLS OUR NATIONAL HISTORY
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Taimur Khan Jun 15, 2022 12:16pm
Fatf not in the mood to support us. Otherwise we r far better than many others who r not even on gray list. Imf also giving hard time to squeeze us. They r china specific and after us solely to contain china and cpec. Chinese want us to pursue expensive cpec agreements that r not in our economic interest like expensive energy options. Imf not happy with chinese contracts esp. In energy and wants us to renegotiate. We r squeezed from both sides.
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Taimur Khan Jun 15, 2022 12:19pm
@Syed Arif Hussain Zahidi, might as well be him. He is solely responsible for this mess having removed the first decent government we've had since jinnah. He played us into US hands amd the.last 2 months downslide is his doing. Russian cheap oil and wheat was our best chance and he blew it
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Danesh N Dubash Jun 15, 2022 01:48pm
@Syed Arif Hussain Zahidi, Very true. It is him who is using his own efforts for re aligning this nation. And all credit must go to him at the right time but in a big manner.
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Kashif Jun 15, 2022 09:21pm
That’s not complete news per my analysis. How can Chinese give away loan to a regime which is supported by US apparently. Chinese believe it too. Bajwa must have been asked for certain explanations. N must have asked to take certain steps and assurances to clear the dust. It’s not as simple as the article describes.
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Karim Jun 17, 2022 05:43am
@FAISAL HUMAYUN , agreed
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Salah ud din Jun 17, 2022 05:04pm
I have following suggestions for this government. this will help government in managing the current financial issues. A- Short Term Measures: 1. Rescheduling of its short term forex liabilities 2. Expenses at government level to be cut to half for non-development 3. Moderate level of spending for infrastructure. 4. Invite investors from brother countries for investment 5. Seek help from Pakistani at abroad and …. 6. Improve efficiency at all areas and ensure effective delivery to masses through government agencies and institutions. B- Long Term Measures. 1. Enhance productivity and yield of every person, land and manufacturing concerns. 2. Invest in forestery, live -stock, seeds, food items, cotton ie in all domestic yielding area to increase GDP. 3. Improvements in infrastructure, water resources 4. Develop volunteer teams throughout the country to identify areas where improvements can be made.
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Salah ud din Jun 17, 2022 05:05pm
I have following suggestions for this government. this will help government in managing the current financial issues. A- Short Term Measures: 1. Rescheduling of its short term forex liabilities 2. Expenses at government level to be cut to half for non-development 3. Moderate level of spending for infrastructure. 4. Invite investors from brother countries for investment 5. Seek help from Pakistani at abroad and …. 6. Improve efficiency at all areas and ensure effective delivery to masses through government agencies and institutions. B- Long Term Measures. 1. Enhance productivity and yield of every person, land and manufacturing concerns. 2. Invest in forestery, live -stock, seeds, food items, cotton ie in all domestic yielding area to increase GDP. 3. Improvements in infrastructure, water resources 4. Develop volunteer teams throughout the country to identify areas where improvements can be made.
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Salah ud din Jun 17, 2022 05:15pm
I have following suggestions for this government. this will help government in managing the current financial issues. A- Short Term Measures: 1. Rescheduling of its short term forex liabilities 2. Expenses at government level to be cut to half for non-development 3. Moderate level of spending for infrastructure. 4. Invite investors from brother countries for investment 5. Seek help from Pakistani at abroad and …. 6. Improve efficiency at all areas and ensure effective delivery to masses through government agencies and institutions. B- Long Term Measures. 1. Enhance productivity and yield of every person, land and manufacturing concerns. 2. Invest in forestery, live -stock, seeds, food items, cotton ie in all domestic yielding area to increase GDP. 3. Improvements in infrastructure, water resources 4. Develop volunteer teams throughout the country to identify areas where improvements can be made.
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Salah ud din Jun 17, 2022 05:17pm
Government must seek its supporters and we can come out of this crisis
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