Comment by Riaz Haq on July 31, 2018 at 9:32am

#Pakistan hits back at #US for what it says are attempts by the US to use the country’s impending economic crisis to drive a wedge between #Islamabad and #Beijing. #CPEC #China #IMF #economy https://www.ft.com/content/ff3a6130-94ba-11e8-b67b-b8205561c3fe

Pakistani officials have criticised what they say are attempts by the US to use the country’s impending economic crisis to drive a wedge between Islamabad and Beijing.

Officials in Islamabad have accused Washington of trying to strong-arm Pakistan into scaling back billions of dollars’ worth of Chinese investment in their country’s infrastructure as part of a potential bailout by the IMF.

One senior Pakistani government adviser told the Financial Times: “The US is trying to spoil China's biggest contribution to our future.”

Another added: “The Americans are trying very hard to put pressure on Pakistan because they have their own interests. But making it so hard for Pakistan to successfully negotiate a new program with the IMF makes no sense. Ultimately, Pakistan will search for other options if the road to the IMF is blocked.”

The Financial Times revealed this week that Pakistani officials had drawn up plans to ask the IMF for a $12bn bailout soon after Imran Khan comes to power as the country’s new prime minister. Pakistan is suffering an acute shortage of foreign reserves after years of high imports and low exports have taken their toll.

But even before Pakistan even makes a request, there are signs of resistance from the US, which is the IMF’s biggest shareholder.

Mike Pompeo, US secretary of state, on Monday warned the IMF not to grant a bailout to Pakistan that would compensate Chinese investors in Pakistani projects.

Mr Pompeo told CNBC: “We will be watching what the IMF does. There is no rationale for IMF tax dollars, and associated with that American dollars that are part of the IMF funding, for those to go to bail out Chinese bondholders or China itself.”

His remarks were echoed in a blog post published by Mark Sobel, a former US representative to the IMF. Mr Sobel said: “The fund needs to have at its fingertips comprehensive data on all China-Pakistan Economic Corridor lending [a showpiece Chinese infrastructure programme] — its terms, maturities, and parties involved. Chinese lending should be on realistic terms and consistent with Pakistan’s sustainability.”

He added: “Otherwise, China should reschedule or write down its loans, sharply reducing the value of its claims.”

Beijing is planning to invest about $60bn in its southern neighbour as part of a wider plan by President Xi Jinping to establish a new silk road of global trading routes. It has so far refused to publish any details of the terms of those loans however.

While Islamabad says the project will revolutionise Pakistan’s infrastructure, there are signs it is creating short-term economic problems, with loan repayments further depleting its foreign currency reserves.

Recommended
Belt and Road, or debt trap?
Earlier this month, the Wall Street Journal revealed Pakistan had fallen behind on some of its payments, including plans to build new power plants.

Beijing has not yet commented on the potential terms of an IMF bailout for Pakistan. Geng Shuang, a spokesman for the Chinese foreign ministry, said when asked about how the fund would deal with Pakistan: “I believe they will handle it appropriately.”

But any demands by the US for China to publish the terms of its CPEC loans, as well as to scale back its investments and even write some down, could set up a bruising clash between Beijing and Washington. China is the second-biggest shareholder in the IMF, but does not have a veto on its board-level decisions.

For now, China is continuing to keep Pakistan afloat with short-term lending. According to local reports, Beijing has agreed to lend Islamabad a further $2bn since last week’s election, adding to the $5bn Pakistan borrowed from Chinese commercial banks in the previous financial year.

Comment by Riaz Haq on August 1, 2018 at 3:05pm

Tillman highlights successes of BRI, CPEC projects
RECORDER REPORT JUL 21ST, 2018 ISLAMABAD
Henry Tillman, in a comprehensive presentation made on the Belt and Road Initiative (BRI) and the China-Pakistan Economic Corridor (CPEC) at the Ministry of Foreign Affairs on Friday, outlined the impressive successes and milestones achieved by CPEC.

https://fp.brecorder.com/2018/07/20180721392633/


Tillman, Chairman and Chief Executive Officer, Grisons Peak Investment Bank, UK, is an authority on BRI & CPEC and other Chinese economic initiatives the world over, said a press release issued here. The event which was hosted by Foreign Minister Abdullah Hussain Haroon, was attended inter alia by Minister for Finance, Dr Shamshad Akhtar; Minister for Law and Justice Syed Ali Zafar, Ambassador of People's Republic of China to Pakistan, HE Yao Jing, CEOs of Chinese Companies and senior government officials. A large number of members of Islamabad's think tank community and academia also participated

In his remarks at the occasion, Foreign Minister Abdullah Hussain Haroon said that Pakistan-China relations were a shining example of win-win cooperation. He commended President Xi Jinping's visionary Belt and Road Initiative and CPEC as the flagship project of BRI. He stressed that CPEC had added a practical dimension to the strategic partnership between the two countries. Through its energy and infrastructure projects, CPEC has already started yielding dividends for Pakistan.

Agreeing with the Foreign Minister, Tillman highlighted the successes of BRI and CPEC projects and their economic impact. He said that CPEC was benefiting Pakistan in practical terms especially in the energy and infrastructure sectors. Several power projects had been completed and a number of roads had been built. Many projects in energy and infrastructure were in completion phases. CPEC would generate 800,000 jobs.

Tillman also highlighted the expected positive spillover impact of BRI and CPEC on FDI from other countries, as well as development of Pakistan's construction, manufacturing, tourism and e-commerce sectors. He focused on the tremendous opportunities to be made available through the Special Economic Zones, which were already attracting international interest and could act as catalysts for accelerated economic and industrial growth.

Appreciating the success of CPEC, Tillman opined that in comparison to other BRI corridors Pakistan had done well in fast tracking CPEC, due to which negativity about Pakistan was dissipating, many major companies were coming to Pakistan, revenue was being generated and new opportunities for investment were opening up.

President Xi Jinping had shown his full confidence in Pakistan by committing to invest more than US $ 60 billion through CPEC. He stressed that Pakistan had the gift of being ahead of everyone else involved in BRI. The event is part of Ministry of Foreign Affairs' ongoing efforts to highlight the positive impact of CPEC on Pakistan's economy and its importance for regional connectivity.-PR

Comment by Riaz Haq on August 6, 2019 at 7:06am

#IMF Official: #CPEC #energy #infrastructure projects have helped #Pakistan deal with acute shortages of power. She said the #debt sustainability analysis showed that CPEC loans were manageable, but the country’s overall debt situation was not sustainable. https://www.dawn.com/news/1498260

The International Monetary Fund (IMF) said on Monday that it had full access to borrowing and maturity terms of the China-Pakistan Economic Corridor (CPEC) projects and its loans were manageable.

Addressing Senior Journalists’ Forum at the National Press Club, IMF resident representative in Islamabad Teresa Daban Sanchez counted issues relating to the Financial Action Task Force (FATF), provincial spending behaviours and insufficient parliamentary strength of the government as key risks to its $6 billion 39-month bailout programme.

She said Pakistan had shared full details of CPEC loans with the IMF, adding that CPEC was mostly private sector investment in energy and infrastructure. In reply to a question, the IMF official said energy projects had no doubt helped the country deal with acute shortages of power and this was a very positive aspect. She said the debt sustainability analysis showed that CPEC loans were manageable, but the country’s overall debt situation was not sustainable.

Responding to a question, Ms Sanchez said fiscal consolidation and revenue mobilisation, market-based exchange rate and social sector protection were three basic pillars of the new IMF programme, adding that fiscal consolidation should be revenue-oriented to deal with the problems of fiscal deficit because the country had a very low tax-to-GDP ratio and needed to increase revenue which was being done through removing tax exemptions and privileges.

The IMF official said there was a strong need for greater coordination with the provinces to ensure that they spent less and provided budget surplus to the federal government. She said the IMF did not place any condition to bring changes in the National Finance Commission’s resource distribution formula, but it did get a commitment of fiscal federalism under a memorandum of understanding signed by the federal and provincial governments on revenue surplus and harmonisation of taxes for improved revenue collection.

Ms Sanchez said one of the most important pillars of the IMF programme was the market-based exchange rate, with the central bank in the background, to achieve price stability through forward looking actions to deal with inflation.

Speaking about key reforms in the programme, she enumerated implementation of financial management to instill fiscal discipline in the public sector, autonomy to the central bank, energy sector improvement, strengthening of anti-corruption agencies and compliance with the FATF.

Comment by Riaz Haq on December 10, 2019 at 9:59pm

Pakistan revives Belt-and-Road projects under Chinese pressure

https://www.ft.com/content/ab809f2c-1101-11ea-a7e6-62bf4f9e548a


China has long faced criticism that its BRI projects burden fiscally weak countries with unsustainable debt. Islamabad is expected to pay $40bn in debt repayments and dividends to China over the next two decades.

Sakib Sherani, former adviser to the Pakistani finance minister, told the Financial Times that CPEC-related debt is “not unmanageable” but cautioned that Pakistan’s ability to meet its debt obligations hinges on increasing exports.

“There is a disconnect. CPEC-related debt eventually must generate enough exports to be able to deal with the repayments,” he said.

Last month US ambassador Alice Wells warned that “China is going to take a growing toll on the Pakistan economy”. She added: “Even if loan payments are deferred, they’re going to hang over Pakistan’s economic development potential, hamstringing prime minister Khan’s reform agenda.”

Beijing dismissed these fears. “Debt incurred from CPEC stands at $4.9bn, less than one-tenth of Pakistan’s total debt. I’m afraid US is not bad at math, but rather misguided by evil calculations,” a Chinese spokesman said on Twitter. “Whatever the US says or does to sabotage our co-operation, China will work with Pakistan for steady progress in CPEC.”

Comment by Riaz Haq on March 11, 2020 at 9:06am

Senior Pak official Dr Safdar Sohail: #CPEC long-term plan stunting for #Pakistan. Political elites and few bureaucrats channelizing CPEC #investments into such ventures where the short- term #benefits are personalized and long-term #risks are socialized. https://www.thenews.com.pk/print/627175-cpec-long-term-plan-stuntin...

Dr Safdar Sohail, Special Secretary Cabinet Division, was the first convener of the Joint Working Group on Industrial Cooperation when the CPEC was conceived and materialized into billions of dollar projects.

He also disclosed that both sides decided to establish Industry CooperationFund but that was never materialized. Dr Safdar remained affiliated with the CPEC at different positions in the past. He was the lead negotiator on CPEC Long Term Plan and then served as the founding Executive Director of CPEC Center of Excellence.

He made these bold and blunt remarks during a one-day dialogue on industrial cooperation under the CPEC and SEZs framework arranged by the Board of Investment here. Dr Safdar said he was using the harsh word of “stunting” for the CPEC Long Term Plan because it failed to achieve the strategic institutional thickening.

He said corporations on both sides joined hands with the help of some political elites and a handful of bureaucrats, channelizing their investments into such ventures where the short- term benefits were personalized and long-term risks were socialized.

Dr Safdar further said the titled CPEC LTP agreed in November 2017 did not lend itself to any kind of 'mutually constitutive' development alliance. “This 'aspirational plan’ actually is an amalgamation of old China-Pakistan Cooperation Agreement, LTP Outline MoU and Draft Production Capacity MoU 2015, leaving Chinese and Pakistani LTP aside” he added.

“It was a bad luck for the LTP process that the mid-level officials of NDRC coordinating the Early Harvest Program (EHP) had also taken in their hands to conclude the LTP. They were somehow averse to accepting any long-term commitments with Pakistan, he added.

Now, he said both sides had the new terms of second phase, without clearly speaking what the first phase was and without evaluating the performance of the first phase under the CPEC.

For way forward, he suggested that there was a need to create conditions for a reset of CPEC starting with the vision and goals, setting new priorities and new framework of a Long Term Strategic Economic Partnership between Pakistan and China.

Without a major upgradation of governance capacity, he said the chances of optimally benefitting from the CPEC would continue to be slim. But, CPEC could not wait for an overhaul of the whole governance apparatus. Therefore, there is a need to go for a selective institutional thickening both at the federal and local level which has a demonstrated capacity of being effective, he added.

For industrial development, he suggested enhancing governance capacity of trade and investment officers, aligning Development Policies and internal policy reform agenda with CPEC by building industrial infrastructure and upgrading Regulatory and Policy Support System e.g. early establishment of already approved Exim Bank and Land Port Authority of Pakistan, adopting a strategic Industrial Policy; choosing champions but also defending legitimate interests of the local industry, upgrading the Business Environment, reducing litigations, frauds, managing land issues, security, enhance ease of doing business, preparing for bigger inflows of Chinese aid, re-socializing Pakistani firms and policy community towards China and overcoming synergy deficit among government ministries through greater collaborative efforts.

Comment by Riaz Haq on May 11, 2020 at 1:03pm

Pakistan request opens door for Belt and Road project debt relief
COVID-19 economic hit gives China little choice but to help cash-strapped allies

https://asia.nikkei.com/Spotlight/Belt-and-Road/Pakistan-request-op...


Pakistan's plea last month to China for Belt and Road Initiative debt relief has opened the floodgates for other participating countries to make similar appeals as the impact of the coronavirus slams friendly economies with traditionally close ties to Beijing.

Islamabad sought the extension of a debt repayment period on $30 billion in loans for the China-Pakistan Economic Corridor, or CPEC, the flagship project in the massive BRI infrastructure-building program. China agreeing could save Pakistan around $500 million in annual cash flow.

"Pakistan looks forward to Chinese support in dealing with this unprecedented situation arising out of this pandemic," Abdul Hafeez Shaikh, the finance and revenue adviser to Prime Minister Imran Khan, said in a statement, referring to the debt relief request.

Now, many countries in Asia and Africa participating in the BRI -- sometimes styled as a modern version of the ancient Silk Road and a key pillar of China's strategy of expanding its global influence -- have requested China provide similar help.

Mohan Malik, a professor of strategic studies at the National Defense College of the United Arab Emirates, said that from Beijing's perspective, Pakistan is not only an important ally, but the CPEC is also too significant to be allowed to fail. "Should Pakistan's economy go under without a financial rescue package, it would deal a major blow to President Xi Jinping's signature initiative," he told Nikkei Asian Review, referring to the BRI.

Malik added that the collapse of economies in friendly BRI countries amid the pandemic and the resultant sociopolitical instability would jeopardize China's foreign policy goals and damage Xi's political legitimacy. "For long-standing allies like Pakistan, Cambodia, Laos, Djibouti, and Sri Lanka, China is likely to provide some debt relief by either reducing loan interest rates or suspending interest payments in favor of principal-only payments," Malik added.

Experts believe that China has no choice but to provide the requested debt relief to protect its larger BRI projects.

Andrew Small, a senior transatlantic fellow at the German Marshall Fund of the U.S., thinks that Beijing will have to provide some form of debt assistance, the only question being what kind. "[Beijing] has already accepted the freeze on repayments from least-developed countries but [it is] facing pressure to take more comprehensive steps rather than conducting a vast series of bilateral negotiations," Small told Nikkei.

He argues that China being the origin of the coronavirus also compels it to help its allies. "[The current economic crisis] is a shock that stemmed from the Chinese government's own failings, so Beijing is even more politically on the back foot than it would be if the virus didn't have its origins in China," he said.

Nevertheless, providing general relief to all Belt and Road countries is not seen as feasible. Malik said that China will adopt a selective, case-by-case political approach to debt relief instead of offering blanket assistance for all BRI projects worldwide.

Pakistan's economy is taking a hit due to the COVID-19 crisis. According to the latest country report by the Economist Intelligence Unit, Pakistan's GDP is set to contract by 1.6 percent in the 2019-20 fiscal year. Concerned about worsening economic conditions, the government on Saturday eased coronavirus lockdown restrictions, even as the total number of infections crossed the 30,000 mark with 661 deaths.

Comment by Riaz Haq on May 11, 2020 at 1:03pm

Pakistan request opens door for Belt and Road project debt relief
COVID-19 economic hit gives China little choice but to help cash-strapped allies

https://asia.nikkei.com/Spotlight/Belt-and-Road/Pakistan-request-op...

Pakistan's economy is taking a hit due to the COVID-19 crisis. According to the latest country report by the Economist Intelligence Unit, Pakistan's GDP is set to contract by 1.6 percent in the 2019-20 fiscal year. Concerned about worsening economic conditions, the government on Saturday eased coronavirus lockdown restrictions, even as the total number of infections crossed the 30,000 mark with 661 deaths.

In response, Pakistan has also requested that G-20 countries provide debt relief, which could potentially result in the deferment of $1.8 billion in obligations for a year, Hafeez Shaik, a government adviser, was quoted as saying after a Ministry of Finance meeting. Pakistan has also secured a loan of $1.386 billion from the International Monetary Fund and another of $305 million from the Asian Development Bank.

In such a context, Krzysztof Iwanek, head of the Asia Research Centre at War Studies University in Warsaw, argues that Beijing agreeing to payment delays would give Pakistan short-term financial breathing room.

But Iwanek cautions against expecting significant debt relief from China. "[Beijing] may cancel some of [the] lesser value [loans] and allow Islamabad to defer some of the payments, at best, " he told Nikkei.

The German Marshall Fund's Small, meanwhile, said that China accepting Pakistan's request would underscore the reality that it can't aggressively push the CPEC projects. "[China] has largely figured out the terms of what a slimmed-down CPEC would look like and the current situation doesn't make it easier to deal with any of the continued obstacles," Small said.

Comment by Riaz Haq on March 3, 2021 at 6:53am

#Pakistan’s belt and road offer to #SriLanka stokes #India’s worries. Indian strategists say #Colombo using #Gwadar could be problematic for India’s security, as about 70% of the goods that Sri Lanka’s ports now handle are transhipped to and from India https://www.scmp.com/week-asia/politics/article/3123851/pakistans-b...


Pakistani leader Imran Khan has urged Colombo to participate in the China-Pakistan Economic Corridor
‘Most worrying’ aspect for New Delhi is proposal for Colombo to use Gwadar port, which analysts say could threaten India’s trade and security

Pakistan’s offer to Sri Lanka to join its multibillion-dollar trade and infrastructure scheme with China under Beijing’s Belt and Road Initiative has raised concerns in Indian policy circles, as New Delhi seeks to secure its influence in a region where China’s presence is growing.
On a two-day visit to Colombo last week, Pakistani Prime Minister Imran Khan urged Colombo to participate in the China-Pakistan Economic Corridor, which comprises railways, power plants and the deepwater Indian Ocean port of Gwadar. The CPEC is aimed at offering China a major overland route from its western frontiers to the world but critics have accused it of being a debt trap for Islamabad.
India has kept a close watch on the visit but has not commented on it.

“My visit is aimed at strengthening the bilateral relationship [with Sri Lanka], especially trade and economic ties through enhanced connectivity,” Khan said, adding that the CPEC could offer Sri Lanka better connectivity with the rest of Central Asia, through the Gwadar port.

Indian strategic affairs observers said a proposal for Colombo to use Gwadar could be problematic for India’s security, as about 70 per cent of the goods that Sri Lanka’s ports now handle are transhipped to and from India, according to data from the independent Indian think-tank Observer Research Foundation. In 2014 Sri Lanka had allowed a Chinese submarine and warship to dock at the Colombo harbour, raising serious objections from India.

Former Indian diplomat Rajiv Bhatia, who was ambassador to Myanmar and also looked after New Delhi’s ties with South Asian countries, described it as the “most worrying aspect” of the visit, which comes as Islamabad tries to expand its influence in a region traditionally dominated by India.
Bhatia, now a distinguished fellow at the Mumbai-based think-tank Gateway House, said: “The facet to explore is whether Pakistan and Sri Lanka are planning to enhance maritime or naval connectivity under Chinese inspiration. If so, this should worry New Delhi.”

Comment by Riaz Haq on September 19, 2021 at 8:12am

“Doubt is Our Product”: It’s vital that scientists engage with the public and the media to ensure that their research is accurately represented

https://blogs.lse.ac.uk/politicsandpolicy/doubt-is-our-product/

Recent research by Marcus Munafò and colleagues suggested that standardised cigarette packs increase the prominence of health warnings in non-smokers and light smokers. Interestingly, they didn’t see this in regular smokers. However, the research was misrepresented by British American Tobacco, who used it to argue that “plain packaging may actually reduce smokers’ attention to warnings”. He argues that scientists have the responsibility to make sure that their research is accurately represented, and that attempts to misrepresent their research are challenged.

Cigarette smoking is addictive. Cigarette smoking causes lung cancer. Today these statements are uncontroversial, but it’s easy to forget that this was not the case until relatively recently. The first studies reporting a link between smoking and lung cancer appeared in the 1950’s (although scientists in Germany had reported a link earlier), while the addictiveness of tobacco, and the isolation of nicotine as the principal addictive constituent, was not established until some time later. Part of the reason for this is simply that scientific progress is generally slow, and scientists themselves are typically not the kind of people to get ahead of themselves.

However, another factor is that at every stage the tobacco industry has resisted scientific evidence which indicates harms associated with the use of its products. One way in which it has done this is by suggesting that there is uncertainty around the core evidence base used to support tobacco control policies. A 1969 document from the Brown and Williamson tobacco company (a subsidiary of British American Tobacco) outlines this strategy: “Doubt is our product, since it is the best means of competing with the ‘body of fact’ [linking smoking with disease] that exists in the mind of the general public”.

This approach seeks to “neutralize the influence of academic scientists”, and has since been adopted more widely by other lobby groups. The energy industry has used a similar approach in response to consensus among climate scientists on the role of human activity in climate change. But what’s the problem? There are always a number of ways to interpret data, scientists will hold different theoretical positions despite being in possession of the same basic facts, people are entitled to their opinion. That’s fine, but the tobacco industry goes beyond this and actively misrepresents the facts. Why do I care? Because recently our research was misrepresented in this way.


There is ongoing debate around whether to introduce standardised packaging for tobacco products. This is a prominent policy issue in the UK and elsewhere at the moment, particularly following recent claims that David Cameron’s electoral strategist, Lynton Crosby, may have influenced the decision to drop the introduction of standardised packaging from the coalition government’s planned legislation. The tobacco company Philip Morris International has a contract with Lynton Crosby’s firm, Crosby Textor Fullbrook, for lobbying work in the UK, including on standardised packaging of tobacco.

Public health campaigners mostly favour standardised packaging, while the tobacco industry is opposed to it. No particular surprises there, but given that only Australia has so far introduced standardised packaging there’s a need for more research to inform the debate.

Comment by Riaz Haq on September 30, 2021 at 7:20am

AidData’s new dataset of 13,427 Chinese development projects worth $843 billion reveals major increase in ‘hidden debt’ and Belt and Road Initiative implementation problems

https://www.aiddata.org/blog/aiddatas-new-dataset-of-13-427-chinese...

The AidData report, Banking on the Belt and Road, offers a bird’s-eye view of China’s geo-economic strategy before and after the introduction of the BRI in 2013. It details how spending patterns, debt levels, and project implementation problems have changed over time, leveraging insights from a uniquely granular dataset that captures 13,427 projects across 165 countries worth $843 billion. These projects were financed by more than 300 Chinese government institutions and state-owned entities. The new 2.0 Global Chinese Development Finance Dataset covers projects approved between 2000 and 2017 and implemented between 2000 and 2021. It is the most comprehensive dataset of its kind.

“China has quickly established itself as the financier of first resort for many low-income and middle-income countries, but its international lending and grant-giving activities remain shrouded in secrecy,” said Ammar A. Malik, a Senior Research Scientist at AidData and co-author of Banking on the Belt and Road. “Beijing’s reluctance to disclose detailed information about its overseas development finance portfolio has made it difficult for low-income and middle-income countries to objectively weigh the costs and benefits of participating in the BRI. It has also made it challenging for bilateral aid agencies and multilateral development banks to determine how they can compete—or coordinate and collaborate—with China to address issues of global concern.”
----------------

“China will soon face higher levels of competition in the global infrastructure finance market due to the Build Back Better World Initiative and the E.U.’s recently announced Global Gateway Initiative,” said Parks. “As we enter this new era of strategic rivalry, it will be more important than ever that G7, Chinese, and host country policymakers rely on hard evidence rather than opinions or conjecture.”

Comment

• ‹ Previous
• 1
• …
• 3
• 4
• 5
• 6
• Next ›
• Page