News Analysis |
Information Minister Fawad Chaudhry has stated that the Crown Prince of UAE Mohammed bin Zayed bin Sultan Al-Nahyan will visit Pakistan in January followed by the first-ever official tour of Crown Prince of Saudi Arabia, Prince Mohamed Bin Salman in February.
The visits are on the lines of Prime Minister Imran Khan’s rapport approach to attract the investors to Pakistan. After assuming the highest office in Pakistan, Imran Khan made his maiden foreign trips to Saudi Arabia and UAE and discussed the bilateral relations and avenues where both countries could benefit from the available business opportunities.
The history is full with such examples where the foreign money played a key role in bringing the problems along, which the nation had to suffer even today.
Information Minister also talked about the possibility of a Memorandum of Understanding (MoU) been signed within a week regarding the “biggest foreign investment in the history of Pakistan” which the Finance Minister Asad Umar had also announced recently.
The Imran Khan-led PTI government’s first challenge in the initial days of power was to find a way out of balance of payment problem which the previous governments had left the country in. The government approached International Monetary Fund for a bailout package of roughly $12 billion but given the failure of previous programs and the kind of state Pakistan is in, the attached terms were going to be severe. A country which has a headcount of nearly 220 million could never be efficiently run through the direct tax revenues of mere 0.8 million people; hence, the terms of IMF are understandable.
But these terms at the same time would have directly affected the working class of the country who are already under the burden of indirect taxes, also causing the political damage to the government in its very first term in the power arena. Therefore the financial strategy of the current government focused on seeking help from old friends of Pakistan.
The decision to reach out to Saudi Arabia, especially after the murder of Journalist Jammal Khashoggi, was a bitter pill to swallow but it was the need of the hour at the same time. Prime Minister of Pakistan attended the “Davos in the Dessert” international investment conference when the world was pulling out of it and asked the investors to take advantage of the vast investment opportunities which Pakistan had to offer.
The gesture was taken in the intended spirit and Saudi Arabia decided to help Pakistan out, not only in the matter of settling the balance of payment crisis but in the form of foreign direct investment as well. There was news of the establishment of an oil refinery in Pakistan which would create jobs for the local workers and engineers and the announcement of “biggest foreign investment in the history of Pakistan” also started to make positive waves for the incumbent government.
The government approached International Monetary Fund for a bailout package of roughly $12 billion but given the failure of previous programs and the kind of state Pakistan is in, the attached terms were going to be severe.
The government so far has been successful in bringing in the foreign investment and to take off the burden on its shoulder of an all-out, strictly termed IMF bailout. But it is yet to be made clear that what would be the cost of the billions of dollars pouring into Pakistan’s Foreign Exchange reserves from the pockets of old friends in the long run.
It is not the first instance that dollars in bulk have made their way into the country. The history is full with such examples where the foreign money played a key role in bringing the problems along, which the nation had to suffer even today.
While it is important to avoid the looming economic crisis, it is also crucial that the long-term national interest is also kept as the part of calculations. These deliberations were missing in the past, which is criminal negligence, but it must be made sure that the lines are drawn in the beginning giving the due respect to the friendly and brotherly nature of the countries involved.