Monday, January 23, 2023

Pakistan Is Not Collapsing!

Pakistan is currently facing major economic and political crises. These are partly of its own making but mostly the result of external shocks in terms of commodity prices that have exacerbated the nation's balance of payments.  The Pakistani military's unnecessary meddling in politics and resulting political instability have not helped either. The unprecedented floods in the country have further added to the severity of the challenges.  

US and China Compete For Influence in Pakistan. Source: Wall Street Journal

Pakistan's multidimensional crisis has spurred many in India and elsewhere to predict the Pakistani state's imminent collapse. Some disgruntled Pakistanis have also jumped on the doomsayers' bandwagon. What is often ignored in such oft-repeated dire predictions is Pakistan's size and its geopolitical importance in the world. Indian analyst Amit Bhandari has summarized it well in a recent Hindustan Times Op-ed: "Despite the severity of the challenges, Pakistan is unlikely to collapse — largely because of its geostrategic importance. A bailout by the IMF or friendly countries will happen".  Let me expand on Bhandari's comments:

1. The collapse of a large country like Pakistan will be very destabilizing for the South Asia region and the world. Pakistan is the world's 5th most populous country. It has a large military armed with nuclear weapons.

2. Pakistan's location is geopolitically very important. It borders Afghanistan, China, India, Iran and the Indian Ocean.  It has a coastline next to the sea lanes that transport the bulk of the world's oil. It is connected to multiple strategically important regions of the world:  Central Asia, Middle East, South Asia and West Asia.  

3. China, the United States and Gulf Arabs have expressed a strong interest in maintaining Pakistan's stability. All of them are offering assistance to Pakistan.  China will continue to support Pakistan as it tries to stabilize its financial situation, state media quoted President Xi Jinping as saying, according to Reuters. Prince Mohammad Bin Salman of Saudi Arabia has offered to increase loans and investments of over $10 billion to Pakistan, according to Bloomberg.  American officials have said they support the IMF assistance to Pakistan, according to Dawn newspaper

4. Pakistan has received pledges of $10 billion worth of loans and grants to rebuild after devastating floods last year, according to Bloomberg News. The amount pledged exceeds the $8 billion that Pakistan sought at the United Nations Donors Conference in Geneva, Switzerland. 

Debt to GDP Ratios. India 91%, Pakistan 87%. Source: Visual Capitalist

Pakistanis are no strangers to forecasts of their country's collapse. There have been many such forecasts over the last 75 years, starting with its birth.  Western and Indian forecasts of Pakistan's collapse are not new.  Lord Mountbatten, the British Viceroy of India who oversaw the partition agreed with the assessment of Pakistan made by India's leaders when he described Pakistan as a "Nissen hut" or a "temporary tent" in a conversation with Jawarhar Lal Nehru.

Here's the exact quote from Mountbatten: "administratively it [wa]s the difference between putting up a permanent building, a nissen hut or a tent. As far as Pakistan is concerned we are putting up a tent. We can do no more." The Brits and the Hindu leadership of India both fully expected Pakistan to fold soon after partition.

1999 DoD Forecast: Pakistan Disappears by 2015

A 1999 US Defense Department study titled "Asia 2025" forecast Pakistan's collapse by 2015.  It further said that Pakistan would become part of a "South Asian Superstate" controlled by India as a "regional hegemon". Two of the study's contributors were "South Asia experts" of Indian origin. Much of the South Asia section of this study appears to be wishful thinking rather than serious analysis.  Resilient Pakistan has defied this and many other similar forecasts of its demise since its birth. 

Goldman Sachs Forecast Over Next 50 Years

Goldman Sachs analysts Kevin Daly and  Tadas Gedminas project Pakistan's economy to grow to become the world's sixth largest by 2075.  In a research paper titled "The Path to 2075", the authors forecast Pakistan's GDP to rise to $12.7 trillion with per capita income of $27,100.  India’s GDP in 2075 is projected at $52.5 trillion and per capita GDP at $31,300.  Bangladesh is projected to be a $6.3 trillion economy with per capita income of $31,000.  By 2075, China will be the top global economy, followed by India 2nd, US 3rd, Indonesia 4th, Nigeria 5th and Pakistan 6th. The forecast is based primarily on changes in the size of working age populations over the next 50 years.  

OpenAI's ChatGPT on Pakistan's Possible Collapse

There's no question that Pakistan is in the midst of very serious political and economic crises. The nation is deeply divided politically. The country's economic performance is dismal. It is of paramount importance for Pakistanis to come together to deal honestly with their internal political and economic differences. Doing so will help Pakistan's large young population realize their full potential to join the ranks of the world's top ten economies. 

Here's a Wall Street Journal video on US-China Competition in Pakistan:



Imran said...

Riaz Sb plz it's pure assumptions there will be a cost of any bailout

Riaz Haq said...

Imran: "Riaz Sb plz it's pure assumptions there will be a cost of any bailout"

It’s in no one’s interest for a large nuclear armed state to collapse. Hence the bailout. It will help #Pakistan survive but not necessarily thrive. Pakistanis need to resolve their deep internal divisions to thrive.

Imran said...

Ukrain & former Soviet Republics got bailout packages at cost of theior nation security Pakistan has to surrender for a bailout

Riaz Haq said...

Imran: "Ukrain & former Soviet Republics got bailout packages at cost of theior nation security Pakistan has to surrender for a bailout"

US Ambassador Anne Patterson:"The Pakistani establishment, as we saw in 1998 with the nuclear test, does not view assistance -- even sizable assistance to their own entities -- as a trade-off for national security vis-a-vis India"

Indos said...

Many countries are also in difficult situation. Bangladesh and even Philippine face energy crisis. Egypt and BD have been another IMF patient, Sri Lanka has been defaulted. Many nations are in difficulty.

I believe one of the core problems is The Fed tightening policy.

Majumdar said...

While these days Brofessor sb reminds me of the band playing on the Titanic, I have to agree with him. There are far too many players who have a stake in Pak as a going concern.

1. The taller than mountain friend has invested over US$ 60 billion in Pak. Even a country as rich as it cant allow that much money to go down the drain. Pak is also useful as a cats paw in keeping local rival IND in check.
2. As the only state which is ideologically Islamic and is the only Islamic nuclear power, it has a certain brand equity among the brotherly Gulf states. Plus it is a source of manpower and if push comes to shove as a source of military manpower as well. While they may be indifferent to Pakistan being in a mess, there is no way the Keeper of the Two Holy Cities will allow Pak to vanish.
3. The Anglo American alliance too has large diplomatic and military investments in Pak.
4. Last but not the least, PAK or at least the cis Indus provinces are not a bunch of tribals or nomads; they are a settled society of producers who have lived in organised states for 5000 years. They have enough historical experience and ability to run a proper state.

Shirish Dave said...

There is no need to argue or to discuss.
Take a single example.

Who are more happy and where the more prosperity between India and the USA?
More percentage of citizens from India go to USA, than the citizens of USA come to India. Because life in the USA is better than in India.

Similarly more Pakistani and Bengladeshi come to India than the Indian citizens go to Pakistan and Bangladesh. Because life is far better in India. Not only this, but the persons and leaders voted for Pakistan, they themselves opted to reside in India. This is the hypocrisy of majority Muslims.

Radical Muslims are more active than the really secular Muslims.

It is upto the truly secular Muslims to save Islam.

Riaz Haq said...

Shirish: "more Pakistani and Bengladeshi come to India than the Indian citizens go to Pakistan and Bangladesh. Because life is far better in India"

Your comment is based entirely on ignorance and bigotry.

1. Do you know that Pakistanis are happier than Indians, according to the World Happiness Index?

World Happiness Report 2022: India ranks below Pakistan, Finland happiest for fifth year in a row
The index takes into consideration the GDP, social and economic conditions, personal freedom level, and data from social media behaviour of the countries

2. Do you know that more Indians have migrated to Pakistan than the other way around, according to the UN Migration Report?

Nearly half of India’s migrants are in just three countries: the United Arab Emirates, Pakistan and the United States. About 3.5 million Indians live in the UAE, the top destination country for Indian migrants. Over the past two decades, millions of Indians have migrated there to find employment as laborers. Pakistan has the second-largest number of migrants, with 2 million.

3. Do you know that Indians are hungrier than Pakistanis, according to the World Hunger Index 2022?

India slips to 107 from 101 in Global Hunger Index; behind Pakistan, Nepal

Riaz Haq said...

#Russia & #Pakistan might cut unprecedented #oil deal, making #Islamabad yet another #Asian customer of Russian crude, subject to G7/EU oil cap & sanctions. Pak to pay through a “friendly” country, presumably #China – a power play for Beijing. #energy

Cold War rivals Russia and Pakistan are negotiating an agreement for the Russians to start selling cheap oil to energy-starved Pakistan in March.

This will make Islamabad yet another Asian customer of Russian crude at a time when Moscow’s cash inflows are limited by a G7/EU oil cap and sanctions. Also, considering Pakistan is dead broke, payments might be made through a “friendly” country, presumably China – a power play for Beijing, whose yuan will be used for the transactions, giving the currency more sway as an alternative to the US dollar.

How is this deal going to affect American interests in the region? And why is Pakistan, which wants to balance its ties with Washington, giving business to the Russians perhaps through China?

First, some history. Although the agreement isn’t finalized, it’ll be geopolitically novel when it is because Pakistan is an unlikely destination for Russian business. Unlike India, Islamabad and Moscow have had no commercial ties for decades.

Considering Pakistan spent the Cold War spying on the USSR and/or attacking its troops in Afghanistan (the Soviet Union paid back in kind by arming India, Pakistan’s arch-rival), the two sides haven’t exactly behaved like partner-material.

Enter China. Pakistan and China have been “Iron Brothers” for decades. Even though Islamabad was a non-treaty US ally until not too long ago, the Pakistanis and the Chinese have always remained “all-weather friends.”

However, as India settled into the role of becoming America’s strategic partner in the region, displacing Pakistan as the preferred South Asian ally over the last two decades, the Chinese encouraged Pakistan to open up to the Russians, and vice versa. Now, a once hesitant Islamabad doesn’t just want Russian oil, but also natural gas, weapons and more. Still, Islamabad wants to stay aligned with the American camp.

Why is Pakistan doing this? Islamabad’s energy bills make the biggest chunk of its imports. Cheaper oil from Russia will obviously help its escalating balance of payments crisis and ballooning trade deficit.

But the biggest issue is with dwindling foreign exchange reserves. A year ago, Pakistan had $17 billion in the bank. Today, foreign reserves have dwindled to $4.3 billion, which will pay for less than a month of imports.

To manage the dollar crunch, Pakistan could use the Chinese yuan in a swap with China to pay Russia once the oil flows in (it expects to get 35% of its annual crude oil imports from 70 million barrels of Russian crude), putting its import-regime firmly in the China-Russia camp.

Pakistan thus finds itself between a rock and a hard place: It needs the cheap Russian oil but also wants to avoid antagonizing the US and its friends in the Gulf, Pakistan’s main energy suppliers — especially considering that Islamabad has been negotiating bailouts with the Washington-backed IMF and deferred oil payments from the Saudis and the Emiratis.

While the Pakistanis defend their position by citing neighboring India as an example of a country that buys Russian oil even as it tilts towards the US and deals with the Gulf states, Islamabad is in a very different position compared to New Delhi because Pakistan is crawling toward default.

Riaz Haq said...

A New U.S.-Pakistan Relationship Is Emerging | The National Interest

With the Afghanistan War in the rearview mirror and Khan no longer in power, the United States and Pakistan have been walking back from the brink and searching for a new meaning to their relationship. The reality is that in the nearly seven decades of U.S.-Pakistan relations, despite their lack of continuity and strategic consensus, the two countries have kept coming back to each other. Even their troubled post-9/11 engagement was not without major accomplishments, as Pakistan provided critical military and intelligence support for America’s efforts to weaken Al Qaeda and advance U.S. and global security. The security challenges remain, as does Washington’s need for Pakistan’s cooperation, for which there is no alternative following the American withdrawal from Afghanistan.

But gone are the days when the United States could just come back and reignite the relationship as if nothing had happened while it was away. Pakistan has long been in the grip of anti-Americanism, incited by America’s image as an unreliable ally that has manipulated Pakistan’s political system to its advantage, an image further inflamed by Khan’s allegations that Washington conspired to have his government removed, which are baseless but compelling to his base.

The United States and Pakistan now realize that if their ties are to be revived, they must be sustainable, mutually beneficial, and have public support. The stimulus for revival has come from both sides, though the initiative may have come from Washington, which is finally focusing on Pakistan, having been freed from the Afghanistan War and possibly provided a strategic pause by India’s ambivalence over the Russian invasion of Ukraine. It is evident that India’s interests in Russia are many and will endure. Indeed, India prefers “multi-alignment.”

Could this re-engagement with Pakistan be Washington’s own multi-alignment? For a start, last September, Washington announced a potential $450 million sale of F-16 aircraft sustainment to Pakistan over the objections of India. While India will remain a critical part of the American Indo-Pacific strategy, the centrality of India to U.S. policy in South Asia may not be in Washington’s interests.

Washington has important stakes in Pakistan, where it needs an independent policy that stands on its own. Pakistan is at the confluence of multiple U.S. concerns and interests that cannot be dictated by the Indo-Pacific strategy alone, such as China, Russia, the Taliban, counterterrorism, nonproliferation, nuclear security, and climate change. In any case, as Raja Mohan notes, “Pakistan occupies a vital piece of real estate that sits between the subcontinent, Iran, Arabia, Central Asia, Russia and China and is too important to be isolated.”

Rethinking in Pakistan

Pakistan has also been rethinking the relationship. There is a growing sentiment, especially among the ruling establishment, that the country’s mounting economic difficulties, rising challenges to internal stability, and continuing external security threats require good relations with Washington, particularly as China may not be the answer to all of Islamabad’s problems (nor should it be). However, the U.S.-Pakistan relationship can no longer be based on the rentier model that has largely defined it since the two sides’ initial engagement from 1954 to 1965, when the United States, to its credit, strengthened Pakistan’s defense capabilities and potential for economic development, offering critical help in stabilizing the emergent state.

Blaine said...

Let me just say this, we won't default iA. Secondly, countries have defaulted and carried on.

Pakistan was never invincible nor infallible, rather we manage to eke out our existence. So if the idea is to get by with "juggad", then Pakistan will manage. It will swallow the bitter IMF pill and then backtrack as soon as some relief comes its way (e.g. bumper crops, decline in energy bill etc.).

So this pain, as it is being felt by the elite as well (the poor were always suffering) may perhaps be the economic catharsis needed for the country to set its path straight and not allow this extreme economic situation to develop in the future. All easier said than done but not too many other options remain.

Anonymous said...

"Similarly more Pakistani and Bengladeshi come to India than the Indian citizens go to Pakistan and Bangladesh. Because life is far better in India."

Can you please provide the proof of this statement?

My family migrated from India and not single person, that I know of ever moved back. Even the relatives who married Indians lived in Pakistan. In some cases the guys moved to Pakistan.

As far as BD is concerned, it has changed in last 10-15 years. As a BD said "BDeshis would rather swim to Italy than to go to India".

Also this should be educational for you:

G. Ali

Riaz Haq said...

#US: #Pakistan can buy #Russian #oil despite restrictions. “So, we have encouraged countries to take advantage of that, even those countries that have not formally signed on to the price cap, so that they can acquire oil in some cases at a steep discount"

The United States has reiterated that Pakistan can purchase oil from Russia at a discounted price even though it has not signed a Washington-backed price-cap on Russian petroleum products.

US State Department’s spokesperson Ned Price told reporters at a Tuesday afternoon news briefing that Pakistan can also take advantage of the concessions Washington has given to other countries for buying oil from Russia.

“So, we have encouraged countries to take advantage of that, even those countries that have not formally signed on to the price cap, so that they can acquire oil in some cases at a steep discount from what they would otherwise acquire from, in this case, Russia,” Mr Price said.

On December 3, 2022, G7 and EU countries set a price-cap of $60 per barrel on Russian oil to prevent Moscow from using the revenues to finance its war against Ukraine.

Since, Europe and the United States no longer import crude oil from Russia, the controlled purchase would only affect third countries, like Pakistan. Islamabad has not yet signed the accord, mainly because Pakistan does not import oil from Russia.

Mr Price said the US approach to the purchase of oil from Russia has been laid out in the price-cap mechanism that it worked out with other countries around the world, including the G7.

“And the virtue of the price cap is that it allows energy markets to continue to be resourced while depriving Moscow of the revenue it would need to continue to propagate and fuel its brutal war against Ukraine,” the US official said.

“We have made the point that we have very intentionally not sanctioned Russian oil. Instead, it’s now subject to the price cap.” The US, he said, has been very clear that now was not the time to increase economic activity with Russia.

“But we understand the imperative of keeping global energy markets well resourced, well supplied, and the price-cap, we believe, provides a mechanism to do that,” he added.

On Friday, Minister for Economic Affairs Ayaz Sadiq, and Russia’s Energy Minister Nikolay Shulginov said at a joint news conference in Islamabad that they hope to sign an oil deal by late March, enabling Pakistan to buy Russian oil at discounted rates.

A joint statement issued after their talks said that the two sides reached an in-principle agreement on the supply of Russian crude oil and oil products to Pakistan, with technical details to be finalised in March at the latest.

“We have decided that it would be a good idea for Pakistan to approach Gazprom and Novatek, two largest LNG-producing companies, in late 2023 to discuss the conditions” for buying LNG, the Russian minister said.

Energy-starved Pakistan imports approximately 430,000mt of motor gasoline, 200,000mt diesel and 650,000mt crude oil at a cost of $1.3 billion per month.

Market observers earlier this month warned Pakistan may face fuel shortages in the near future as importers struggle to secure dollars to close deals. The country’s foreign exchange reserves have dwindled to their lowest levels in almost nine years.

Buying oil from Russia at a discounted price could ease the pressure.

Riaz Haq said...

The (US DoD's China Military Power Report CMPR) ranks Pakistan as its “only all-weather strategic partner” while Russia is the only “comprehensive strategic partnership with coordination relations.” Pakistan is also one of the places that China has likely “considered a location for military logistics facilities.”

Pakistan’s relations with China are of a different pattern. The US and its allies in the Western world have always considered Pakistan very important to their strategic interests in the Asian Continent.


China justifies its special relationship with Pakistan for more than one reason. China’s BRI is allied with Pakistan’s pipeline and port construction projects. China aims to reduce its dependence on transporting energy resources through vulnerable choke points like the Straits of Malacca.

The report recalls that suicide bombers attacked a workers’ bus on its way to a BRI infrastructure development project in Pakistan. Ten Chinese nationals were killed, and 26 others were injured.

The report does not mention anything about the bomber, but unofficial sources said they were active members of the Pakhtun National Movement.

Amusingly, the report says that China used the incident to “extend its ability to project military power to safeguard its overseas interests, including BRI, by developing closer regional and bilateral counterterrorism cooperation with Pakistan.”

China’s double standards in dealing with the issue of counterterrorism will be understood without difficulty. This is why Pakistan has given a clean chit to China in the context of blatant violation of the human rights of Uyghurs of Xinjiang province while viciously maligning India by bringing in baseless charges of human violations in Kashmir.

As we see, one of the main reasons for the Baloch insurgency in Pakistan is the sell-out of Baloch resources to China, whose benefits fill the coffers of the Punjabi elite and landlords in the province of Punjab, Pakistan.

A significant part of the report deals with strategic defense cooperation between China and Pakistan. Beijing has helped Islamabad complete the in-orbit delivery of the Pakistan Remote-Sensing Satellite.

The report includes observation of joint military exercises between the two countries.

Rising Military Relations
In 2020-21 China participated in a joint naval exercise with Pakistan and supplied strike-capable Caihong and Wing Loong Unmanned Aircraft Systems to Pakistan. These are spy vehicles, and Pakistan has been using these against India in the border region of Jammu.

Pakistani drones are deployed to drop arms, ammunition, drugs and Indian currency, and anti-India propaganda literature.

In October 2018, it was announced that Pakistan Aeronautical Complex and Chengdu Aircraft Corporation of China would jointly produce 48 Wing Loong II UAVs for use by the Pakistan Air Force.

The Chengdu GJ-2, also known as Wing Loong 2, is an unmanned aerial vehicle (UAV) capable of remotely controlled or autonomous flight developed by the Chengdu Aircraft Industry Group in the People’s Republic of China.

Intended for use as a surveillance, aerial reconnaissance, and precision strike platform, Chengdu unveiled the concept of Wing Loong II at the Aviation Expo China in Beijing in September 2015. Wing Loong II has long-range strike capability with a satellite link.

China supplied major naval vessels to its partners, particularly Pakistan, which purchased 8 Yuan class submarines for more than US $3 billion. Two years later, China sold four naval frigates to Pakistan.

Under the PLANMC — a supporter of PRC’s military diplomacy — Chinese forces have trained with Thai, Pakistani, Saudi Arabia, South African, and Djiboutian forces. Pakistan is also a member of the China-led Asia-Pacific Space Cooperation Organization.

Riaz Haq said...

US DoD's China Military Power Report CMPR

Under the PLANMC — a supporter of PRC’s military diplomacy — Chinese forces have trained with Thai, Pakistani, Saudi Arabia, South African, and Djiboutian forces. Pakistan is also a member of the China-led Asia-Pacific Space Cooperation Organization.

The report released in November follows the Pentagon’s release of the National Defense Strategy in October, which identified China as the “most consequential and systemic challenge” to US national security and a free and open international system.

Pakistan’s relations with China are of a different pattern. The US and its allies in the Western world have always considered Pakistan very important to their strategic interests in the Asian Continent.

China, too, has strategic interests in befriending Pakistan but for a different purpose: to challenge India’s growing economic and political power by creating a proxy to engage India.

While the western countries want to checkmate Russian designs southward, China intends to contain India because it finds a veritable political, economic and military threat in the rise of India in the Asian Continent.

Keeping the Kashmir pot boiling serves the interests of both power blocs.

It is also in their interests that Islamic religious sensitivity is sharpened among the people in the area lying at the underbelly of the Russian State. First, they experimented with the Basmachi (terrorist groups in Turkistan) in the second and third decades of the 20th century, which they met with reversals.

The failure of the Basmachi movement in Central Asia made the imperialists think seriously of an alternative region that could serve their objective of containment of Russia. This led to the theory of partition of India. This plan was subtly initiated and carried forward.

In this way, creating the State of Pakistan in the most sensitive geographical part of India became a reality in 1947.

Anti-Soviet and anti-Russia forces found a foothold strategically crucial for them. To maintain the foothold, they forged the political weapon of pan-Islamism.

Now we have the Basmachis in a new avatar of LeT, JeM, Lashkar-e-Jhangvi, Hizbul Mujahideen, Ansar Ghazavatul Hind, and a dozen of new versions of sub-continental terror groups directly or indirectly supported by the two contesting super-powers of the world.

Now Pakistan is under the patronage of China for all purposes. However, its elite still swears by the US.

Speaking at a recently held seminar in the US on Pak-America relations, Chinese foreign policy expert Yun Sun said that Pakistan’s relations with the US were a factor in China’s overall strategy for South Asia, but China has plenty of confidence that its relationship with Pakistan is going to continue regardless of the modality of US-Pakistan relations.”

Sun made a very interesting point by saying that China was also adjusting or recalibrating its policy and expectations toward reaching out to the US, especially regarding CEPC.

And from that recalibration, there’s almost a welcoming attitude in China that Pakistan should re-balance its external strategy. And there’s a welcoming attitude that Pakistan is reaching out to the United States again.”

KN Pandita (Padma Shri) is the former Director of the Centre of Central Asian Studies at Kashmir University. Views expressed here are of the author’s.

Riaz Haq said...

Beijing relies on Pakistan to project its might, Pentagon report notes

China relies on Pakistan for projecting its military and economic might as Islamabad remains a key Beijing ally, says the US Department of Defence.

The China Military Power 2022 report — released here on Tuesday — examines how China seeks to achieve its “national rejuvenation” objective by 2049 with the help of international partners, such as Pakistan.

According to the report, China ranks Pakistan as its only “all-weather strategic partner” while Russia as its only “comprehensive strategic partner with coordination relations”.

During the last five years, China has expanded ties with both of its historical partners, Pakistan and Russia. Pakistan is also one of the places that China has likely “considered as locations for military logistics facilities”.

The report notes that China’s Belt and Road Initiative (BRI) is associated with pipelines and port construction projects in Pakistan. But with the help of those projects, China “seeks to become less reliant on transporting energy resources through strategic choke points, such as the Strait of Malacca”.

Beijing also attempts to exploit the relationships it builds through BRI to pursue additional economic cooperation with participating countries, the report adds.

It recalls that in 2021, 10 Chinese nationals were killed, and 26 others injured when a suicide bomber targeted a workers’ bus on its way to a BRI infrastructure development project in Pakistan.

The report, however, claims that China used this incident to “extend its ability to project military power to safeguard its overseas interests, including BRI, by developing closer regional and bilateral counterterrorism” cooperation with Pakistan.

Reviewing China’s growing military and economic cooperation with Pakistan, the report notes how Beijing helped Islamabad complete the in-orbit delivery of the Pakistan Remote-Sensing Satellite.

China also vigorously pursues its policy of supporting a BRI host-nation’s security forces through military aid, including military equipment donations.

The examples of China-Pakistan cooperation cited in the report include joint military exercises. It notes that in 2020-21, China participated in a joint naval exercise with Pakistan and also supplied strike-capable Caihong and Wing Loong Unmanned Aircraft Systems to Pakistan.

China also supplied major naval vessels to its partners, highlighted by Pakistan’s 2015 purchase of eight Yuan class submarines for more than $3 billion. In 2017 and 2018, China sold four naval frigates to Pakistan.

Under the PLANMC, which supports the PRC’s military diplomacy, Chinese forces have trained with Thai, Pakistani, Saudi Arabia’s, South African, and Djiboutian forces.

Pakistan is also a member of the China-led Asia-Pacific Space Cooperation Organisation.

The “Military and Sec­urity Developments Invo­lving the People’s Republic of China,” commonly known as the China Military Power Report (CMPR), is a Congressionally mandated document. It serves as an authoritative assessment of China’s military and security strategy.

The report follows the Pentagon’s release of the National Defence Strategy in October, which identified China as the “most consequential and systemic challenge” to US national security and a free and open international system.

The military power report covers the contours of the People’s Liberation Army’s way of war, surveys the PLA’s current activities and capabilities, and assesses its future military modernisation goals.

The Pentagon argues that China’s foreign policy seeks to build a “community of common destiny” that supports its strategy to realise “the great rejuvenation of the Chinese nation”.

Beijing’s “revisionist ambition” for the international order derives from the objectives of its national strategy and the Communist Party’s political and governing systems, it said.

Riaz Haq said...

Military and Security Developments Involving the
People’s Republic of China
A Report to Congress
Pursuant to the National Defense Authorization Act for
Fiscal Year 2000

The PRC has likely considered Cambodia, Myanmar, Thailand, Singapore, Indonesia,
Pakistan, Sri Lanka, United Arab Emirates, Kenya, Equatorial Guinea, Seychelles,
Tanzania, Angola, and Tajikistan, among other places, as locations for PLA military
logistics facilities.


To improve its diplomatic support further, the PRC also
seeks to create what it calls a “comprehensive global partnership network” of its strategic
partners to form a global “circle of friends.” Despite its encompassing rhetoric, the PRC uses
nomenclature to implicitly rank its level of “partnership.” For example, the PRC ranks
Pakistan as its only “all-weather strategic partner,” Russia as its only “comprehensive
strategic partner with coordination relations,” and other countries such as Brazil and various
states in South and Southeast Asia holding “all-round strategic partnership relations.”


In support of its national strategy, Beijing leverages BRI to strengthen its territorial
integrity, energy security, and international influence. The PRC aims to improve stability
and diminish threats, for example, by investing in projects along its western and southern
periphery. Similarly, through BRI projects associated with pipelines and port construction in
Pakistan, it seeks to become less reliant on transporting energy resources through strategic
choke points, such as the Strait of Malacca. It also attempts to exploit the relationships it
builds through BRI to pursue additional economic cooperation with participating countries.


In 2021,
for example, 10 PRC nationals were killed and 26 others injured when a suicide bomber
targeted a workers’ bus on its way to a BRI infrastructure development project in Pakistan.
China has therefore sought to extend its ability to project military power to safeguard its
overseas interests, including BRI, by developing closer regional and bilateral counterterrorism
cooperation and supporting host-nation security forces through military aid, including military
equipment donations.


The PLANMC (PLAN Marine Corps) has increased the size of its force in Djibouti from approximately 250 marines
in 2017 to 400 marines in 2022, including a new special forces contingent. The PLANMC
also embarks a contingent of marines with the PLAN’s Gulf of Aden counterpiracy-focused
naval escort task force that supports China’s trade interests. Additionally, the PLANMC
supports the PRC’s military diplomacy. For example, they have trained with Thai, Pakistani,
Saudi, South African, and Djiboutian forces


Beijing also completed the in-orbit delivery of the Pakistan Remote-Sensing
Satellite (PRSS-1), Venezuelan Remote-Sensing Satellite (VRSS-2), Sudan Remote-Sensing
Satellite (SRSS-1), and the Algerian Communications Satellite (Alcomsat-1). China has
provided satellite carrying or launching services for countries including Saudi Arabia,
Pakistan, Argentina, Brazil, Canada, Laos, and Luxembourg. China has built satellite data
receiving stations with countries including Bolivia, Indonesia, Namibia, Thailand and South

Riaz Haq said...

Military and Security Developments Involving the
People’s Republic of China
A Report to Congress
Pursuant to the National Defense Authorization Act for
Fiscal Year 2000

The Southern Theater Command is responsible for training, force disposition, and operations
in the SCS. In 2020 and 2021, Southern Theater Command units conducted multiple live-fire
drills and amphibious training events near PRC-occupied features in the SCS. The Southern
Theater Command also plays a significant role in the PLA’s bilateral and multilateral
exercises with countries in Southeast Asia, participating in a joint naval exercise with
Pakistan, a counterterrorism exercise with Cambodia, and a U.S. co-led multilateral exercise
in Thailand, in 2021


The PLAN, PLAAF, PLAA, and SSF have deployed abroad for counterpiracy, humanitarian
assistance and disaster relief (HA/DR), peacekeeping, training exercises, and space support
operations. Within the PLA, the PLAN has the most experience operating abroad due to its
far seas deployments and counterpiracy missions, the PLAAF likely has the most experience
conducting rapid response HA/DR operations abroad, and the PLAA has the most experience
conducting peacekeeping operations. The SSF operates tracking, telemetry, and command
stations in Namibia, Pakistan, Argentina, and Kenya. The SSF also has a handful of Yuan
Wang space support ships to track satellite and intercontinental ballistic missile (ICBM)


Military Cooperation. As China’s regional and international interests grow increasingly
complex, the PLA’s international engagements likely will continue to expand. Beijing often
relies on senior military visits, bilateral and multilateral exercises and training, and
peacekeeping and military assistance to promote China’s foreign policy objectives. For
example, through 2021, Beijing continued to conduct global “vaccine diplomacy” with
Cambodia, Pakistan, Mongolia, Sudan, Zimbabwe, and Ethiopia, among other countries,
which has allowed China to deepen bilateral relations and set itself up as a global leader. As
part of this COVID assistance, China has also donated personal protective equipment to more
than 50 countries throughout 2021 and has deployed its naval hospital ship nine times over
the past ten years to provide medical services for more than 40 countries and regions.

The PRC continues to expand the PLA’s participation in bilateral and multilateral military
exercises, normalizing the PLA’s presence overseas and establishing ties to foreign militaries.
For example, in 2021, the PLA participated in seventeen bilateral or multilateral exercises,
including hosting Russian forces for Interaction-2021, as well as Peace Mission 2021 along
with forces from other Shanghai Cooperation Organization (SCO) militaries includingKazakhstan, Tajikistan, Kyrgyzstan, India, Pakistan, and Uzbekistan. China also hosted forces
from Pakistan, Mongolia, and Thailand in Queshan County, Henan Province for SharedDestiny-2021, a multinational peacekeeping exercise.Additionally, China partnered with Iran
and Russia for joint naval drills in February of 2022. For a list of selected PLA bilateral and
multilateral exercises in 2021, see Appendix III.


The PRC has likely considered Myanmar, Thailand, Singapore, Indonesia, Pakistan,
Sri Lanka, United Arab Emirates, Kenya, Equatorial Guinea, Seychelles, Tanzania,
Angola, and Tajikistan among other places as locations for PLA military logistics


Riaz Haq said...

Military and Security Developments Involving the
People’s Republic of China
A Report to Congress
Pursuant to the National Defense Authorization Act for
Fiscal Year 2000

The PRC has likely considered Cambodia, Myanmar, Thailand, Singapore, Indonesia,
Pakistan, Sri Lanka, United Arab Emirates, Kenya, Seychelles, Equatorial Guinea,
Tanzania, Angola, and Tajikistan among other places as locations for PLA military
logistics facilities. The PRC has probably already made overtures to Namibia,
Vanuatu, and the Solomon Islands. The PLA is most interested in military access along
the SLOCs from China to the Strait of Hormuz, Africa, and the Pacific Islands.


China’s Arms Exports. China is the fifth-largest arms supplier in the world, and sells nearly
every category of conventional military equipment including UASs, submarines, naval
surface vessels, surface to air missile systems and fighter aircraft to customers like Saudi
Arabia, Serbia, the UAE, Indonesia, Kazakhstan, Iraq, and Pakistan.


Armed UASs. China has supplied strike-capable Caihong and Wing Loong UASs to
at least Pakistan, Iraq, Saudi Arabia, Egypt, the UAE, Algeria, Serbia, Indonesia, and


Naval Combatants. China is a supplier of major naval vessels, highlighted by
Pakistan’s 2015 purchase of eight Yuan class submarines for more than $3 billion.
Thailand also purchased one Yuan class submarine in 2017 and originally planned to
purchase two more. As of late 2021, Thailand’s procurement of the first Yuan
submarine was not fulfilled by China due to contractual delays, though it delivered
two Ming class submarines to Bangladesh in 2016 and one to Burma in 2021. In 2017
and 2018, China sold two naval frigates to Bangladesh and four to Pakistan. In
September 2019, China made its first-ever sale of an LPD-class ship to Thailand.


the last five years, China has expanded ties with its historical partners like Russia and Pakistan
while increasing engagements with U.S. partners and allies, such as the Philippines, Djibouti, and
Thailand. These bilateral defense engagements provide the PLA opportunities to acquire advanced
weapon systems and technologies and give the PLA access to foreign military practices,
operational doctrine, and training methods.


Selected PLA Bilateral and Multilateral Exercises in 2021
Exercise Name Type of Exercise Participants
Peace 2021/ Aman
2021 Multinational joint naval exercise Russia, Pakistan, Turkey, United
States and 41 additional nations


Shared Destiny 2021 Multinational peacekeeping exercise Pakistan, Mongolia, Thailand


Peace Mission 2021 Multinational military training
Russia, Kazakhstan, Tajikistan,
Kyrgyzstan, India, Pakistan,


Pabbi Antiterror 2021 Joint anti-terrorism exercise
Russia, Kazakhstan, Kyrgyzstan,
Tajikistan, Uzbekistan, Pakistan,


Riaz Haq said...

69% Pakistanis feel that their children will have a better life than them in a global Gallup International survey in 64 countries

Figure in India is 43%

The most positive country among those surveyed is Nigeria (90% minus 6%) and the most negative is Slovenia a (14% minus 53%). Among the prominent countries where GIA could poll, expectations for their children’s future are highest in Nigeria is followed by Russia (52% minus 10%), Mexico (48% minus 30%), the USA (43% minus 31%) and India (43% minus 33%).

When combining the two questions, another perspective is added. For instance, Moldova shows a total of 86 (45% saying that their live is worse life than the one of their parents plus 41% expecting a worse life of today’s children), followed in this negative ranking by North Macedonia (82: 35% negative assessments plus 47% negative predictions), Afghanistan (81), Syria and Italy (78), etc.

Most of the countries are still positive on both questions, but if one looks for instance for countries with both above 50% positive answers, Nigeria stands out with 171 (81% positive for today plus 90% positive for tomorrow), followed by Kosovo (162), the United Arab Emirates (150), Ghana (141), Pakistan (134), etc.

Findings are proved, confirming that developing parts of the world share more hope. National and political peculiarities leave their footprint but in general is seems that the closer the war and troubles are, the worse are the answers on both issues – as expected.


Every second citizen (51%) of the world believes that their life is better than that of their parents. The other half of the people asked is equally divided between those who assess a worse life (23%) and those who find it the same (23%). 3% could not answer. Satisfaction with the living standard is a key factor for people to believe that they have a better life than their parents. But in some rich regions like Europe this is not so valid.

Expectations for the life of today’s children are predominantly good as well but lower than the comparison of own life to the life of the previous generation – 44% are expecting a better life for today’s children in comparison to our lives, 28% expecting a worse life, 20% expecting about the same and 8% not responding. Aged people are less sure about the better future of the next generation. More money unsurprisingly seems to result in more confidence in the future on a personal level, but on a national level countries that experience or used to experience difficulties are the ones to believe stronger in better future for the next generation. Unsurprisingly again.

Riaz Haq said...

Despite the fact that the country is facing various economic challenges, including a looming default and spiraling inflation, surveys conducted by The Express Tribune in three major cities disclosed that even though the people were aware of the financial hardships, they just wanted to carry on living their lives normally.

“The prices have increased to a certain extent but that doesn’t mean that the people will stop eating,” Ali, who runs a burger stall in Islamabad, said.

“We are working as usual. The prices of fuel and electricity have witnessed an unusual hike and the government should do something about it,” he added.

Ali maintained that the rising prices had not significantly affected his business.

“My shop is packed with customers like before,” he claimed.

Shahnawaz Satti, a tandoor owner, said the increase in the prices of fuel and flour had no effect on his business as he jacked up the rates of his naans and rotis in accordance with that.

Adeel, a citizen, told The Express Tribune that the political instability in the country could lead the country towards defaulting on its external repayments.

He noted that all political stakeholders would have to sit together and chalk out a strategy to avert this situation.

“If the government concedes to all conditions imposed by the IMF (International Monetary Fund), the price of petroleum products would exceed Rs400 per litre. This might not affect the rich but will choke the life out of the common people,” he observed.

The survey found that the people were not bothered by the threat of default, but they wanted their lives to continue as per their normal routine.

In Lahore, a city renowned for its festivities and liveliness, normalcy is slowly changing its pace as the economic crisis has made its presence known in every aspect of life.

While various segments of the city's residents still braving the deteriorating economic conditions during the tenure of the PTI government, its successor, the Pakistan Democratic Movement (PDM), failed to bring about the relief it promised when it assumed charge in April last year.

Ever since, matters have been gradually heading towards decay, and with no respite expected soon, there is a sense of disappointment lingering in the air.

Read ‘IMF, privatisation not a solution’

Lahore, which bristled with life, is now slowly becoming accustomed to lonely streets and closed markets at 10pm -- an hour relatively earlier by the city’s standards.

Recently, the authorities extended the time restrictions imposed on commercial markets, with the exception of pharmacies and other essential services, to save energy.

Pakistan, which already suffers from a serious energy crisis, is trying to make lifestyle adjustments to cut the fuel import bill as the country has run out of its dollar reserves to back its valuable imports.

On the surface of it, the decision to close markets early may appear to be an unwise one, but it is an extension of the “difficult measures” that the government says it has been taking to steer the country out of the economic crisis.

However, despite the incumbent government's tall claims, the situation is still unstable – the effects of which can be felt in everyday life in the city.

The Express Tribune spoke to people from various segments of the society to develop a clearer picture of how things really were.

The lowest segments of society have been hit the hardest by the economic crisis as they struggle to make ends meet, with the prices of essential items increasing faster than their income.

They complain about hefty utility bills despite low usage, unaffordable prices of essential commodities, lack of social protection and their struggle to maintain their income.

Those from various strata of the middle class echoed similar concerns as the economic crisis has made it significantly difficult for them to maintain their

Anonymous said...

Yes it is!

You sound like die hard Communists who insisted the USSR cannot collapse in the beginning of 1991..

It was after all a superpower with 80,000 + nuclear weapons,the worlds largest airforce and navy and second largest army ,the worlds largest land area (more than thrice as large as the US) and the third largest population and by far the most natural resource rich country on earth

Think objectively and dispassionately it’s all over!!
We have to now manage the breakup..

Balochistan become independent
Sindh becomes independent
KP merges with Afghanistan
Shia Kashmir joins Indian Kashmir
Punjab+Sunni Kashmir become the new Chota Pakistan.

It’s corrupt elite Fauji +Non Fauji and families are resettled in UAE and London with generous payoffs and they surrender their nuclear weapons like South Africa gave up theirs..

This will happen very soon well before senility sets in so you will watch all this in 4K.

Ahmed said...

Dear Anonymous

You said :

It was after all a superpower with 80,000 + nuclear weapons,the worlds largest airforce and navy and second largest army ,the worlds largest land area (more than thrice as large as the US) and the third largest population and by far the most natural resource rich country on earth

Comment :

It is not the millitary power or millitary strength which protects the country from inside or provides economic security I believe . Millitary and Defence only protects a country from external threats , it doesn’t protect a country from internal threats .

The biggest mistake which the government of USSR made before the breakup was that they focused too much on their millitary and wanted to build one of the largest millitary in the world and they thought that this would make them the most powerful country in the world but they forgot that it is not just millitary which strengthens a country but it is also politics and economy which plays an important role in making a country strong and prosperous .

Russian government never focused on the economy , their government never focused on producing jobs for its people and neither they focused on allowing foreign companies to invest in their economy which strangled their economy and confined it .

And pls note that it was Pakistan and America cooperated with each other in making the disintegration of USSR possible .

Anonymous said...

In 1948 an American magazine predicted that Pakistan would collapse within 6 months. Since then many have predicted the collapse of Pakistan. In 2000s some American think tank had predicted that Pakistan would disappear in 2015. Every time some one makes these stupid predictions the citizens of the Fascist republic of India start jumping with joy.

Your views are as idiotic as believing in tooth fairy or Santa Claus.

G. Ali

Riaz Haq said...

Pakistan is at risk of default
A balance of payments crisis is tipping a fragile economy over the edge

Pakistanis are accustomed to unreliable utilities. Even in affluent neighbourhoods of Karachi and Lahore, residents install diesel generators for power cuts and spare water tanks for when the taps run dry. Yet the events of January 23rd were still shocking. A surge in voltage at a power station in southern Sindh province led to almost the entire country of 230m people losing power for most of the day. Factories, hospitals and mobile-phone networks shut down in many areas. In Lahore, the evening’s trading and promenading—when Pakistan’s second-largest city feels most exhilaratingly alive—was conducted in darkness and a pale glow of mobile phones. Only at midnight did some streetlights come on.

The blackout is indicative of an economic crisis severe even by the standards of a country well-known for them. Pakistan is still suffering the devastating effects of monsoon flooding last summer that displaced 8m people and cost the country an estimated $30bn in damage and lost output. Tens of thousands remain homeless. A follow-up wave of inflation, fuelled by global factors and economic mismanagement, is making their situation harder. Annual inflation reached 27.6% in January, the highest level since 1975. The rupee is crashing; it traded at an all-time low of 275 to the dollar this week, down from 230 in mid-January and 175 a year ago. With foreign exchange reserves dwindling, the country faces its worst balance of payments crisis in peacetime.

Many heavily-indebted emerging markets have faced similar problems over the past year, related to post-pandemic supply glitches and the war in Ukraine. Pakistan, which imports much of its food and fuel, looks a lot like Sri Lanka last spring, before it defaulted on its debt and its president was chased from the country by angry protesters. Yet Pakistan is uniquely troubling. It is the world’s fifth biggest country by population, perennially unstable, beset by extremists and nuclear-armed.

The return to power of the Taliban in neighbouring Afghanistan in 2021 has launched a third destructive wave—of terrorism and insurgency, mainly in the northwest of the country. A suicide-bomber killed 84 people, mostly members of the security forces, last week in a mosque in the north-western city of Peshawar. Political dysfunction, as ubiquitous as corruption in Pakistan, is inevitably stymying the government’s response to all these disasters.

Imran Khan, a charismatic narcissist who was ousted as prime minister last April, has spent the past year agitating to bring down the government of Prime Minister Shehbaz Sharif that replaced him. Even if he fails (and the army, which tends to stage-manage Pakistan’s political dramas, is not with him) Mr Khan remains popular and well-placed for an election due by October. Mr Sharif’s administration is meanwhile squabbling, including over negotiations for an imf bailout. With foreign currency reserves down to just over $3bn in early February, enough to cover three weeks of imports, Pakistan needs access to $1.1bn in a bailout programme agreed with the imf in 2019 and suspended due to a lack of promised reform. If the fund’s negotiators, who returned to Islamabad on January 31st, depart on February 9th without a deal, Pakistan could default on its sovereign debt.

The forex shortage, in part caused by efforts to prop up the rupee, is causing additional damage. Import restrictions imposed to save dollars for essential items like food and fuel have hit industries reliant on imported inputs. Output in large-scale manufacturing, including cars, chemicals and textiles, fell by 5.5% in November 2022 compared with the year before. The World Bank predicts gdp will grow by 2% this year, half what it forecast last June. “There used to be this conviction that we’ll always come out of it somehow,” says a businessman in Karachi. “Now there’s deep pessimism, almost hysteria.”

Riaz Haq said...

U.S. delegation to visit Pakistan as two sides seek to repair ties
By Kanishka Singh

WASHINGTON, Feb 13 (Reuters) - U.S. State Department Counselor Derek Chollet will lead a delegation to Pakistan this week as Washington and Islamabad seek to repair ties strained under former Prime Minister Imran Khan.

The U.S. delegation will visit Bangladesh and Pakistan from Feb. 14-18 to meet with senior government officials, civil society members and business leaders, the State Department said in a statement on Monday.

Khan, who was ousted in a no-confidence vote in parliament last April, had antagonized the United States throughout his tenure. He welcomed the Taliban takeover of Afghanistan in 2021 and accused Washington of being behind the attempt to oust him in 2022.

Washington and Pakistan's National Security Council, a body of top civil and military leaders, dismissed his accusations. Khan was succeeded as prime minister by Shehbaz Sharif.

The U.S. delegation's visit comes as the $350-billion economy of Pakistan is still reeling from devastating floods last year that left at least 1,700 people dead, and the government estimates rebuilding efforts will cost $16 billion.

The nuclear-armed nation is in the grip of a full-blown economic crisis. Talks between Pakistan and the International Monetary Fund were scheduled to resume online this week after 10 days of face-to-face discussions in Islamabad on how to keep the country afloat ended without a deal on Friday.

The Dawn newspaper reported late in January that Pakistan had sought U.S. support to unlock the stalled IMF program that would release $1.1 billion to its strained economy as the country rebuilds.

Pak Econ said...

What are the top 5 things Pakistan must do for long term improvement in its economy?

Riaz Haq said...

Pak Econ: What are the top 5 things Pakistan must do for long term improvement in its economy?

1. Incentivize domestic savings

2. Prioritize investing in export oriented sectors

3. Broaden tax base with agriculture, service sector income

4. Incentivize documentation of economy

5. Ensure political stability/security for investors

Riaz Haq said...

Why Pakistan Won’t Be A Failed State – OpEd
February 19, 2023 Eurasia Review 1 Comment
By Asad Ali

Pakistan’s economic performance over the past seven decades has been a mixed bag. The country, which started off virtually from scratch and was almost written off by many analysts at the time of its inception, has bounded ahead in the face of enormous challenges.

Today, Pakistan offers the most liberal trade and investment regime in the region. It is fully integrated into the multilateral economic and trading systems. In order to appreciate the impediments faced by Pakistan on the road to economic development and prosperity, it is imperative to take stock of the country’s economic predicament at the time of its birth.

Since independence in 1947, the economy of Pakistan has emerged as a semi-industrialized one, the on textiles, agriculture, and food production, though recent years have seen a push towards technological diversification. Successive governments in Islamabad have been working tirelessly to uplift the country be it economically or socially. The major focus of the previous governments had been socio-economic area. The economic situation of Pakistan is satisfactory because rapid growth rate has resulted in a quadrupling of per capita incomes and reduction in poverty levels by one half despite fairly high population growth. Structural changes have transformed a predominantly agrarian economy to a more diversified production structure. Manufactures account for 80 percent of the country’s exports.

The governance issue prevails in many parts of the planet. Several countries are faced with this conundrum. It is not denying the fact that governance plays a key role in the growth of any state. The absence of governance causes various issues that lead this state towards abysmal shambles. In this contemporary world, developing countries present the worst-case scenario in this regard in order to achieve long-term economic stability. They are the mercy of developed states and leading global financial institutions.

In the first decade after independence, Pakistan’s economy grew on average 3.1%. Despite the overall modest growth, manufacturing grew at a healthy rate of 7.4%. During the 1960s, the growth rate more than doubled to reach 6.8%, which was underpinned by 5.1% growth in agriculture, 9.9% growth in manufacturing and 6.7% growth in services. However, the healthy growth rate could not be sustained and the next decade saw it come down to 4.8%. The nationalization policy is stated to be one of the factors which put the brakes on the economic march. While the services sector nearly maintained its robust expansion, agriculture and manufacturing growth fell to 2.4% and 5.5% respectively.

The economy regained momentum during the decade of the 1980s with overall growth of 6.5%. But as in the past, the growth rate fell to 4.6% during the 1990s as the country remained in throes of political instability as well as struggled to undergo structural economic transition. The next two decades also witnessed modest growth rates of 4.7% and 4.4% respectively. During this period, Pakistan has waged an epic struggle to ward off an existential threat posed by terrorism. The war against terror has tolled upon the national economy (we will come back to the economic costs of terrorism later).

As per the data available with Pakistan Bureau of Statistics, like most other developing economies, fiscal deficit has been a norm in Pakistan. In the 1960s, the average fiscal deficit made up 2.1% of the GDP, which more than doubled to reach 5.3% in the 1970s and further to 7.1% during the 1980s. During the 1990s, fiscal deficit came down marginally to 6.9% before falling significantly to 4.6% during the 2000s. During the current decade on average 6.2% fiscal deficit has been recorded.3 In 2017, Pakistan’s fiscal deficit was 4.5% of the GDP compared with India’s 6.5%, Bangladesh’s 4.9% and Sri Lanka’s 4.8%.4.

Riaz Haq said...

Why Pakistan Won’t Be A Failed State – OpEd
February 19, 2023 Eurasia Review 1 Comment
By Asad Ali

In the US-led war against terror, no other nation has sacrificed as tremendously in terms of both men and materials as Pakistanis have done. The nation’s incessant and intrepid campaign against the militancy has tested the resilience of the economy. Between 2001-02 and 2017-18, the direct and indirect economic cost of the war on terror has teetered on the edge of $127 billion, which accounts for nearly 40% of Pakistan’s present GDP of $319 billion.

The road and highway network in Pakistan spans 260,000 kms – more than five times the length inherited in 1947. Modern motorways and superhighways and four-lane national highways link the entire country along with secondary and tertiary roads.

Despite these harsh challenges both at domestic and international fronts, Pakistani governments fought well to uplift the country. They worked on infrastructures, roads and industries in order to gain maximum economic benefits and enhance their exports. Even during the Covid-pandemic, Pakistan’s currency and economy were flourishing at high pace. Pak Rupee was the best currency during Covid era.

At strategic fronts, Pakistan is having very troubled neighborhood. In its Eastern side, India is located, which never missed a single chance to destabilize Pakistan economically, politically and strategically. With already having limited economic resources, Pakistan spends major chunk of GDP in defense sector due to the hegemonic and warmongering designs of Indian government. Likewise, on the Western front, Afghanistan is located, which has witnessed many civil wars. The Afghan soil has become cauldron of non-state actors. The security situation in Afghanistan is having spill-over affect over Pakistan’s security and economic situation. To curb the menace of terrorism and extremism on Western front, Pakistan is spending huge sum of money, which is hurting overall economic environment. The influx of Afghan refugees has further complicated the matter for Pakistan.

Iran is another neighbor of Pakistan. The country is under direct and most stringent sanctions of US and Western countries. Pakistan cannot continue its trade with Iran freely due to the economic embargos. Despite limited economic options, troubled neighborhood and changing regional geo-strategic environment, Pakistan is performing well by extending all possible facilities to its people. The is absolutely no truth in the reports of Pakistan is going to be default. The country cannot default.

The war on terror has been most tiring for Pakistan because not has it consumed the state’s strategic and conventional resources but the menace of terrorism has infiltrated into the fabric of society as the biggest challenge ever to grapple with. However, despite all the bloodshed and loss, Pakistan still manages to survive and stands tall in the face of all these challenges.

Most recently, the economic turmoil is putting heavy pressure on Pakistan’s new government, which is currently in long-running negotiations with IMF on a bailout deal to stave off a disastrous default on foreign debt. Likewise, with government and armed forces’ tireless efforts, Pakistan can mop up all its socio-economic and religious political evils from its soil.

In a nutshell, governance is a phenomenon that smoothly steers government and state. However, the game is not over yet. Pakistan can come back on the right path by taking some extraordinary steps in this sphere

Riaz Haq said...

The war in Ukraine: Impact on Pakistan’s energy security

by Waqar Rizvi

Pakistan has long dealt with energy-insecurity, a state of affairs exacerbated by the disastrous economic effects of the pandemic, floods and war in Ukraine. While some experts warned Pakistan that its energy dependence was untenable, there were others who believed such concerns were overblown thanks to the abundance and low cost of Liquefied Natural Gas. The war in Ukraine has proven the latter group wrong, the subsequent sanctions disrupting energy supplies from Russia and driving up global prices. Europe's entry into the market and ability to meet any cost in securing limited worldwide supplies place Pakistan in an even more difficult position.

Pakistani officials already warn of mass gas shortages, and load-shedding in households is rampant with areas of the country experiencing daily power cuts that are 16 hours long. The country’s vital textile industry also stands to suffer from an interrupted and limited supply. This situation exists despite Pakistan's possession of exploitable natural resources, owing to policy-makers' dogmatic view that the development of these resources for self-reliance was unachievable. In addition, insecurity and political instability in areas such as resource-rich Balochistan have thwarted any remedial measures.

Pakistan’s alliances and loyalties with traditional allies are being tested at this difficult time. To encourage vital foreign investment in Pakistan's energy sector, the government can take advantage of the desire of the Chinese, Russians, Americans and Europeans to gain influence in the country. Restricted by geopolitical considerations from taking sides in the war on Ukraine, Pakistan must secure its national interests, especially energy security.

Pakistan should eschew inactivity despite the risk of being outbid in the competitive global LNG market. Responsible energy policymaking must be embraced, including the implementation and incentivisation of energy conservation measures, whilst shielding the lower classes from additional energy costs. Needed is a multifaceted energy policy that considers all available resources such as gas, oil, coal, solar, hydro and wind power. Experts must be involved in the formulation of sound strategies to exploit these sources, and Pakistan must learn from its mistakes, such its signing of bad-faith contracts with LNG middlemen, which allowed them to abandon Pakistan's agreements for profits.

However, political turmoil remains the largest contributor to Pakistan's energy insecurity. The government and opposition parties will need to put aside their partisan bickering to prioritize the country’s interests. Sound policies grounded in reality, as opposed to theoretical ones, are called for, and leaders must step up during crises.

Pakistan is in dire need of an infrastructural upgrade and must play all its cards to achieve it. Diplomatically, Pakistan holds significant influence in international forums and has valuable voting power at the United Nations. Economically, Pakistan can promise significant benefits to nations that invest in its natural resources.

Riaz Haq said...

Severe dollar crisis hobbles Bangladesh businesses | Business and Economy News | Al Jazeera

Severe dollar crisis hobbles #Bangladesh businesses.The #import-dependent nation is facing #economic hardship in the wake of #Russia’s invasion of #Ukraine as prices shoot up. #Hasina #Modi | Business and Economy News | Al Jazeera


Dhaka, Bangladesh – Spice trader Mohammed Enayet Ullah has made at least four attempts since November to open a letter of credit to pay for imports of cumin, cardamom and cloves, some of the most essential spices used in Bangladeshi cooking, only to be refused by banks due to a shortage of dollars.

Importers in Bangladesh need to open letters of credit with one of the country’s 61 scheduled banks to buy foreign goods and services. It is essentially a financial contract issued by an importer’s bank that guarantees payment to the seller in dollars. In case a buyer doesn’t pay up, the bank has to take on the liabilities.

But there is a severe shortage of greenbacks in Bangladesh due to its dwindling foreign reserves and a sharp drop in the value of its taka currency against the dollar. In the past six months, Bangladesh’s foreign reserves have dropped below $32bn from $39bn while the value of the taka has fallen by 27 percent from 84 to the dollar to 107.

The South Asian nation has been facing severe economic hardship since Russia’s invasion of Ukraine a year ago. In its import-dependent economy, rising global fuel oil and other commodity prices have caused nearly double-digit inflation and depleted foreign reserves.

To protect the declining reserves, the government had stopped all non-essential imports and reduced the supply of dollars to commercial banks. This has not only forced banks to refuse new letters of credit applications but also has made their promised payments to foreign suppliers for previous imports uncertain.

Local media reported that at least 20 banks with negative balances in their foreign currency holdings could not make these payments.

According to Bangladesh Bank, the central bank, the number of new letters of credit slumped 14 percent year-on-year in the July-to-December period, and payments of those debts declined by 9 percent, indicating defaults.

These numbers, however, don’t fully convey the perils of medium-sized importers like Ullah.

Ullah owns the spice trading company Hedayet & Brothers, which usually imports half of its annual $2m of essential spices ahead of Ramadan, the Muslim holy month, in which local consumption at least triples in the South Asian nation. But now, with barely a month left until the start of Ramadan, he is worried that a failure to secure new supplies would put a big dent in his balance sheet.

“I will lose a huge business,” Ullah, who also acts as the president of the Bangladesh Spices Traders Association, told Al Jazeera, “Traders will be compelled to increase the prices of spices because of the increasing gap between demand and supply. Ultimately consumers will be the biggest losers.”

Fear of losing credit rating
Large businesses also have not been able to insulate themselves from the dollar crisis. In January, multiple ships carrying goods like sugar and cooking oil for the importer Meghna Group of Industries (MGI), a Bangladeshi conglomerate with $1.2bn in revenues, got stuck in Chattagram port for weeks as the guarantor Agrani Bank couldn’t make the payment to the foreign supplier due to a shortage of dollars. MGI, however, had paid the full amount to the bank for the products in local currency.


“In addition to direct IMF financing, such programmes have a ‘crowding in’ effect as other international lenders will become more amenable to finance the current account deficit of Bangladesh,” said Rahman, who is hopeful that will happen soon.

Riaz Haq said...

#China blames ‘certain developed country’ (reference to #US) for #Pakistan’s #economic crisis. US policy is "the main reason behind the financial difficulties of a large number of developing countries including Pakistan" #Ukraine️ #Russia #sanctions

In an apparent reference to the United States, a Chinese Foreign Ministry spokesperson on Thursday said that the financial policies of a ‘certain developed country’ were the main reason behind the financial difficulties of a large number of developing countries including Pakistan and called on concerted efforts of all parties to play a constructive role in the economic and social development of the country.

“It must be pointed out that the financial policy of a certain developed country is the main reason behind the financial difficulties of a large number of developing countries including Pakistan,” Mao Ning said while responding to a question during her regular briefing held at the International Press Centre (IPC) in Beijing.

She said that the West-led commercial creditors and the multilateral financial institutions were the basic creditors for developing countries and called on concerted efforts of all parties to play a constructive role in the economic and social development of Pakistan.

Riaz Haq said...

#India’s #Economy Looks Shaky Under the Hood.
The key driver of India’s economy—#domestic consumer #demand—is weakening after a brief post-#pandemic spurt . #Modi #G20Summit

India’s economy is losing steam in the one place that has been the South Asian nation’s strongest bulwark against a possible global recession: robust domestic demand.

India’s economy slowed further in the December quarter, figures released this week showed, as postpandemic pent up demand ebbed and the country’s manufacturing sector continued to weaken. Asia’s third largest economy recorded year-over-year growth of 4.4% last quarter, down from 6.3% in the September quarter.

Weakness in private consumption stood out the most. India’s private consumer spending, which comprises about 60% of India’s gross domestic product, rose just 2.1% year over year, compared with an 8.8% increase in the September quarter. It was mainly hurt by higher interest rates and elevated inflation. Slower growth in rural spending after some pandemic-era subsidies were cut could have also played a role.

Higher borrowing costs will probably continue to pinch pocketbooks, especially in urban areas, as the Reserve Bank of India remains laser-focused on reining in stubborn inflation. It has raised benchmark interest rates by 2.5 percentage points since May last year and will probably hike by another 0.25 point to 6.75% in April, squeezing household budgets further. Despite an aggressive rate-raising cycle, retail inflation jumped to a three-month high of 6.52% in January.

A closer look at other numbers in the GDP data also paints a worrisome picture. Import growth fell more sharply than export growth, again signaling weak domestic demand. And while fixed investment growth was a relative bright spot, it still slowed for the second quarter in a row.

Fizzling momentum at a time of high global economic uncertainty and tightening global financial conditions also spells trouble for the country’s monetary policy stance. A weak external environment wasn’t entirely unexpected, but the emerging evidence of rapidly slowing domestic demand makes the central bank’s job much harder. A heat wave or subpar monsoon could make things even more difficult by hitting agricultural output, and boosting food price inflation.

Nomura economists Sonal Varma and Aurodeep Nandi think markets are still significantly underappreciating the risks to India’s growth. They say the country’s growth cycle has peaked, and a combination of weaker global growth and tight domestic and global financial conditions could spell further trouble for exports, investment and discretionary consumption.

The International Monetary Fund still projects India will be the fastest-growing major economy in 2023—largely on the back of resilient domestic demand. The Indian government forecasts that India will grow 7% in the year ending in March 2023, and another 6.5% the following year.

Those numbers may turn out to be optimistic if private consumption doesn’t pick up the pace again soon.

Riaz Haq said...

Why Pakistan Cannot Be A Failed State – Analysis

By Ahsan Qazi

Merton suggests, “The second element of cultural structure regulates, and controls the acceptable modes of reaching out for the goals. Every social group invariably couples its cultural objectives with regulations, rooted in the mores or institutions, of allowable procedures for moving towards the objectives.” According to Merton’s anomie premise, most people try to legitimately fulfill culturally acceptable objectives; however, people have limitations. Merton claims, “In all instances, the choice of expedients for striving toward cultural goals is limited by institutionalized norms.” Institutionalized norms obstruct people from achieving their cultural goals, which may result in deviation. When access and the means to achieving cultural objectives are denied to entire populations or specific individuals, anomie results. Deviant behavior emerges as a result, characterized by one of the following behaviors: resistance, withdrawal, ritualism, innovation, and/or conformance.

Crime, which Merton terms “aberrant behavior,” develops when social goals are acknowledged as legitimate, but the resources available to accomplish these goals are not available to everyone. Goals and means differ in various ways based on the class. It happens at all levels of society. This difference disorients an individual, leading to social challenges and psychological stress. Merton makes his assertion extremely clear by stating, “It is, indeed, my central hypothesis that aberrant behavior may be regarded sociologically as a symptom of disassociation between culturally prescribed aspirations and socially structured avenues for realizing these aspirations.” An effective equilibrium is achievable between two elements of social structures if “satisfaction accrue to individuals conforming to both cultural constraints, viz., satisfaction from the achievement of goals and satisfaction emerging directly from the institutionally canalized modes of striving to attain them.” When a balance exists between cultural goals and institutionalized means, everyone has the chance to compete and progress in all strata of society; hence, Socio-structural inequality between the classes is lessened to a great extent and in such a way that “positive incentives for adherence to status obligations are provided for every position [sic] within the distributive order.”

Merton proposed that if an imbalance between individuals’ goals and their status exists, strain results because of exerted pressure. He writes, “Examination of how the social structure operates to exert pressure upon individuals for one or another of these alternative modes of behavior must be prefaced by the observation that people may shift from one alternative to another as they engage in different spheres of social activities.” When people face strain or pressure, people adapt according to one of the five ways:

1. Conformity: The individual pursues cultural goals through socially approved means. According to Merton, “The mesh of expectations constituting every social order is sustained by the model behavior of its members representing conformity to the established, though perhaps secularly changing, cultural patterns.”

2. Innovation: If the individual does not find the legitimate means to pursue goals, the individual “innovates,” which means the individual looks to socially unconventional or unapproved means to obtain culturally approved goals. He mentions, “This response occurs when the individual has assimilated the cultural emphasis upon the goal without equally internalizing the institutional norms governing ways and means for its attainment.”

Riaz Haq said...

Why Pakistan Cannot Be A Failed State – Analysis

By Ahsan Qazi

3. Ritualism: The individual uses the same socially approved means to achieve obscure goals modestly. The individual, in this stage, is “abandoning or scaling down” the “lofty cultural goals’’ and pursuing them in a way where his or her goals can be satisfied. Merton declares, “It is, in short, the mode of adaptation of individually seeking a private [sic] escape from the dangers and frustrations which seem to them inherent in the competition for major cultural goals by abandoning these goals and clinging all the more closely to the safe routines and the institutional norms.”

4. Retreatism: The individual rejects cultural goals and the means to obtain it. He then finds a way to escape it. Merton proposes that in this category, “They have relinquished culturally prescribed goals, and their behavior does not accord with the institutional norms.” Furthermore, “Defeatism, quietism, and resignation are manifested in an escape mechanism which ultimately led him to ‘” escape’” from the requirements of the society.”

5. Rebellion: The individual rejects the cultural goals and means. He then works to replace them. Writing on Rebellion, Merton highlights, “This adaptation leads men outside the environment to envisage and seek to bring into being new, that is to say, a greatly modified social structure. It presupposes alienation from reigning goals and standards.”

Merton’s analysis led him to conclude that the lower class commits more crimes. He based this conclusion by looking at crime statistics by class. Deviance or crime occurred because people in the lower strata could not achieve economic success via legitimate goals. To achieve their goals, people turned to illegitimate means. Merton provides the readers with an example of American culture. He points out, “…Contemporary American culture continues to be characterized by a heavy emphasis on wealth as a basic symbol of success, without a corresponding emphasis upon the legitimate avenues to march toward this goal.” In essence, the cultural value of success in American culture is placed so much on wealth that people are willing to achieve wealth through any means necessary.

Pakistan’s Political and Economic Turmoil
Given Merton’s sociological perspective on social structures and why anomie occurs, his sociological framework could be used to analyze Pakistan’s political and economic turmoil that seems to have no end. Since Merton proposed that culture and social structure are two core elements of a society, people develop their values, beliefs, goals, and identities in relation to culture, which is formed as a response to the institutionalized norms. The institutionalized norms provide a legitimate means for the public to achieve their objectives. If people can achieve their goals legitimately, people can achieve satisfaction in all strata of society. In Pakistan, the root causes of political and economic issues are various; however, the major issue in Pakistan remains that Pakistanis lack cultural objectives that can give the natives across the land a set of goals and the legitimate means to pursue those goals, which the people of Pakistan can pursue in unity.

Riaz Haq said...

Bilal I Gilani
Who wants to partner with whom

Gallup International survey in 64 countries on who wants to partner with whom

•Among different religious groups, US is ahead of China in preference for economic partnership. However, the gap is narrowest among Muslim respondents.


Bilal I Gilani
A representative sample of men and women in Pakistan was asked the following question: “Which of the following would you prefer your country to partner with economically – ” 56% responded China, 13% preferred US, 8% said Russia while another 8% said Others

Gallup International


Bilal I Gilani
•Interesting to note that just like economic preference, low-income economies prefer China for security partnership.

Gallup International survey in 64 countries on who wants to partner with whom


Bilal I Gilani
Pakistan tops the world in terms of wanting to have security partnership with China

Gallup International survey in 64 countries on who wants to partner with whom


Bilal I Gilani
Out of the 64 countries that were surveyed, South Korea tops security preference for US, Pakistan tops preference for China, while Serbia tops the preference for Russia and EU for security partnership

Gallup International survey in 64 countries on who wants to partner with whom


Bilal I Gilani
•Popularity of economic partnership with China was found to be highest in Sub Saharan Africa followed by MENA region. The least support was found in EU (lower than even US)

Gallup International survey in 64 countries on who wants to partner with whom


Bilal I Gilani
•Younger populations are more amiable towards China when it comes to striking Economic partnership. 23% of respondents under the age of 34 preferred China. Only 11 % in 55+ age bracket across the globe.


Bilal I Gilani
Pakistan, UAE and Nigeria are at the bottom for economic partnership with EU.

Gallup International survey in 64 countries on who wants economic partnership with whom


Bilal I Gilani
Yemen, Pakistan and Russia top in willingness to pursue economic partnership with China.

Gallup international survey on who wants to partner with whom in the global rivals US , China , Russia

Riaz Haq said...

Pakistan’s Dystopian Warning to the World

Pakistan has touted itself as one of the world’s cradles of civilization, flourishing for thousands of years along ancient trade routes passing through the fertile Indus Valley.

Now it presents a dystopian vision of the future, bankrupt, unstable and threatened by climate catastrophe. Its fate offers a warning to other heavily indebted nations on the precipice, from Sri Lanka to Zambia.

Pakistan is due to hold elections no later than October, and political jostling is narrowing the nuclear-armed nation’s options.

Opposition leader Imran Khan, who was ousted from the premiership last year, is in a bitter standoff with Prime Minister Shehbaz Sharif over control of the country of 230 million. He’s held mass rallies in recent months to pressure the government into an early vote, while the authorities have filed numerous cases against him and issued a warrant for his arrest.

As Islamabad fiddles, the country is burning up its foreign reserves, and investors see a growing risk of default. The government is living hand to mouth, reliant on outside loans from China while negotiating with the International Monetary Fund for the remaining funds in a $6.5 billion bailout — its 13th since the late 1980s.

Pakistan already got a taste of economic disaster last year when deadly floods displaced millions. Such calamities are unlikely to be a one-off, with climate scientists forecasting massive increases in river flows as a result of melting Himalayan glaciers, inundating farmland and obliterating infrastructure — interspersed with drought.

Pakistan could hardly have a more strategic location, lodged between Iran and India and with China and Afghanistan to the north. That, plus its sheer size as the world’s fifth-most populous nation, make it too big to be allowed to fail.

The question is who, both in and outside the country, is going to come to its rescue.

Riaz Haq said...

Key Reflections: Bruce Reidel interviewed by Sajjan Gohel

* The Taliban victory in Afghanistan has given an enormous boost to the morale of terrorists throughout the region.

* The role of ISKP in Afghanistan is very murky as it is not a monolithic organisation and has ties to Taliban factions. These include the Haqqani Network who also have a long association with al-Qaeda.

* The Pakistani military’s strategic support for the Taliban in Afghanistan strengthens the forces of terrorism that threaten the very nature of the Pakistani state.

* Iran has aspirations to be the dominant player in both the Persian Gulf and the Middle East.

* Backed by Iran, the Houthis in Yemen are a very well organised, disciplined organisation and have advanced their strategic interests in Yemen against Saudi Arabia.

* The combination of location, leadership, and success in counter-terrorism has made Jordan a key and stable ally against al-Qaeda and ISIS.


SG – Dr. Sajjan Gohel

BR – Bruce Riedel

SG: So that’s just another additional challenge that we’re going to have to face on top of everything else that is occurring. You have mentioned several times in our discussions about Pakistan. So, let’s look at that a little further in depth. What can we say about the role of Pakistan in the region? Are they still potentially going to be an ally in name, but will question marks still remain about their role? The fact that President Biden has still not spoken to Prime Minister Imran Khan as yet—does that matter? The fact that it seems Pakistan’s military worked with the Taliban to enable their takeover of Afghanistan in 2021—what can we say about the role of Pakistan and where that’s heading in 2022?

BR: I think the single issue that worries me the most in the current global environment is whether or not the Pakistani army, particularly the officer corps, and particularly those officers associated with the intelligence department, ISI, come away from Afghanistan with a sense of victory in jubilation. After all, a very convincing case can be made that the Pakistani army has now defeated two superpowers in the course of the last several decades—first the Soviets, and now the Americans. Will that sense of enthusiasm that they’ve done it again—will they now start turning their attention to enemy number one, which is India. And will they look to increase tensions in Kashmir and elsewhere to try to put pressure on the Indians to compel the withdrawal of Indian forces from the Kashmir Valley. It’s too soon to say whether that’s going to be the case, but I’m very concerned about that.

In that environment, is Imran Khan going to be a hedge, is he going to be a constraint on them? Imran Khan is all over the map on these issues in the course of his career, but most recently, since he became prime minister, he’s been very closely associated with the Pakistani army. That’s not a reason for ignoring him. If we can talk to Vladimir Putin, we can certainly talk to Imran Khan. That doesn’t mean we’re going to agree. There are going to be many things we disagree on. But it’s very, very important to engage the Pakistanis on these issues. Pakistan is the fourth largest country in the world in terms of population. It has the fastest growing nuclear arsenal in the world. It is China’s number one ally. This is a very, very important country in its own right. Leave aside Afghanistan. Pakistan should be considered one of the most important countries in the world for the United States to engage with. Iran, in many ways, is a Pakistan wanna-be—it doesn’t have nuclear weapons yet, it doesn’t have delivery systems, it doesn’t have a working military-to-military relationship with China. This is a country that we need to pay much more attention to, and that starts with a phone call from the president to Imran Khan.

Riaz Haq said...

From #Karachi with love: exploring #Pakistan’s annual #flower show run by Pak #Horticulture Society at Karachi Boat Club: Big-headed yellow marigolds; purple & white stocks & annual carnations displayed with a distinctive style.

I have just been exploring links forged by flowers in dry south Pakistan. I was there on separate business, my life-long object of study, Alexander the Great. In 326-325BC he conquered his way down the Indus river valley, but he never planted a garden. He banned a curved fruit that was new to the Greeks and was thought to be upsetting his soldiers’ stomachs. It was probably a banana. Obedient to Alexander I never eat bananas.

Between lectures on his legend and localised study of his campaign, I have explored aspects of their setting, all new to me, and noticed how joined-up gardening links us to Pakistan. I was set on my path by a tree.

In the exclusive Karachi Boat Club, a fine old tree surveys the lawn, beautifully groomed for the members’ benefit. On its trunk a notice proclaims: “I have closely witnessed the evolutions of the upper middle classes of this metropolis for more than a century.”

If trees could talk, what would the plane trees in Berkeley Square be telling us about changes in London’s high society?

“Music and the playing of military bands,” the tree’s notice continues, “reminds me of the RAJ ERA when such parties were most prominent.” The tree is a bodhi tree, like the one under which the Buddha is said to have attained enlightenment.

Seeking sociological enlightenment, I looked at the gardening round the club’s lawn. Postcolonial petunias; big-headed yellow marigolds; purple and white stocks and annual carnations were displayed with a distinctive style: single plants of each had been planted in a painted clay pot, and then the pots were massed by the dozen to make lines and curves.

In the paved courtyard of the Gymkhana club in Hyderabad, plants in individual pots are banked up into a circular centrepiece which is a blaze of colour. I watched while the club’s gardeners took each pot to a tap in order to water it. At home I sometimes plant a spare petunia in a single pot, but it never reaches such a diameter. I need to give it some Pakistani care.

Admiring these bright variations on mere flowerbeds, I widened my social survey. I went to a popular gathering, the Pakistan Annual Flower Show, run by the Horticulture Society of Pakistan. As it began in the first spring of Pakistan’s existence, this year is its 75th anniversary. For three days, visitors flocked to Seaview and the AK Khan park, which commemorates Abdul Karim Khan, a founding genius of the show in 1948.

What a delight to see plants in profusion, packing individual nurseries’ tents and spilling out on to the grass while a military band played favourite Pakistani tunes. The show occupies a space that measures up to the Royal Hospital site of London’s Chelsea Show and the crowds are as dense as on any of Chelsea’s days. So much is on sale throughout, from excellent foliage plants to roses, including a superb flat-petalled crimson and a prizewinning red with white streaks called Double Delight.

Nurseries have joyful banners on their tents: “we do rockeries and manures” or “we are the Blossoming Nursery for rented plants”. Orange awnings brighten the scene, lit with those mainstays of Pakistani staging, lines of bare lightbulbs.


Much of the audience was middle class: how have flowers’ uses evolved elsewhere in society? Outside Karachi I was securely escorted to a great evening occasion, a Friday celebration at the famous shrine in the westerly town of Sehwan. It is the resting place of the 13th-century Sufi saint, Lal Shahbaz Qalandar, and is a place of pilgrimage from far and wide.

Inside, red-robed dancers twirled to the beat of hand drums before thousands of packed spectators, entranced by the music and the rhythms, boys and men in the front, girls and women in the side chapels.

Riaz Haq said...

The federal government has decided to go ahead with the China Pakistan Economic Corridor (CPEC) amid the watchful eyes of international entities. The federal cabinet has approved the commencement of the second, and most important, phase of the CPEC project for industrial development of Pakistan.

According to reports, the industrial cooperation agreement between the two neighboring countries will be effective till 2025, with the possibility of further expansion. They elaborated that under the agreement, there will be capacity building and skill development of Pakistan’s CPEC workforce. The Ministry of External Affairs and Ministry of Law jointly endorsed the draft agreement, sources claimed.

To clarify, BoI is the lead agency of the Joint Working Group (JWG) on industrial cooperation under CPEC from the Pakistani side. On the other hand, the Chinese counterpart of the BoI is the National Development & Reform Commission (NDRC), China.

A framework agreement was also signed between both parties in 2022, which besides other matters of significance, also aims to foster skill development and capacity building of the local workforce. This shows the potential skilling and economic advancement that Pakistan anticipates would result from the current endeavor.

Here is what happened in the pursuance of the consensus reached in the Framework Agreement and the 10th JCC meeting of CPEC, held on 23rd September 2021, the NDRC– China has proposed that an MoC between BoI and the All-China Federation of Trade Unions (ACFTU) is likely to be signed, in order to strengthen workers’ exchange under CPEC Industrial Cooperation.

Sources further hinted that the proposed MoC envisages to conduct exchange programmes of Government officers and workforce associated with CPEC projects, through capacity building and skill development, Chinese language courses, and any other mutually agreed mechanism to promote people to people ties.

According to sources, BoI and ACFTU have reached consensus on the text of the draft MoC, which has been duly vetted by the Law Division, as well as been concurred by the Ministry of Foreign Affairs.

Based on the draft copy, available with Profit, of the MoC between the ACFTU of China and the BoI of Pakistan, there will be an agreement between the two entities to promote industrial cooperation, within the framework of the China-Pakistan Economic Corridor Industrial Cooperation (CPEC IC).

In the foreseeable future (2023-2025), and keeping in mind the COVID-19 pandemic, both sides will, on the basis of mutual consent, hold online workers symposiums at regular intervals, as well as, carry out relevant exchanges and cooperation. The online symposium will be designated for the workforces of both countries that are actively engaged in and contributing to the construction of CPEC. This will provide a platform to augment people to people exchanges through experience sharing and suggestions for the future development of CPEC.

Moreover, online seminars based on the Chinese’s successful experience in development for Special Economic Zones (SEZs) shall also be organized for the concerned stakeholders in Pakistan. Following the same timeline, in the next three years, both sides shall initiate an exchange programme by arranging activities in their respective countries to foster practical people to people and cultural exchanges on ground.

To provide first hand experience of the successful industrial models in China, the Chinese stakeholders shall facilitate the field visits of the concerned teams from Pakistan, including the Chinese SEZs, sources told Profit. Likewise, in order to mitigate the language barrier between the two countries’ workforces associated with CPEC, while promoting brotherly relations and cultural ties, both sides shall arrange exchange programmes by holding language learning courses in their respective countries.

Riaz Haq said...

Pakistani PM inaugurates coal power plant under CPEC

Pakistani Prime Minister Shahbaz Sharif here on Wednesday formally inaugurated the Thar Coal Block-I Coal Electricity Integration project, an energy cooperation project under the framework of the China-Pakistan Economic Corridor (CPEC).

The plant, which was officially put into commercial operation in early February, has two 660-megawatt high-parameter coal-fired generating units, supported by an annual output of 7.8 million tons of lignite open-pit coal mine. It is capable of meeting the electricity demand of 4 million households in Pakistan.

Addressing the inauguration ceremony, Sharif said that it is a moment of great delight for the whole of Pakistan.

This was a desert region with the sand dunes only, the prime minister said, adding, "Now it has been transformed and industrialized."

It is producing electricity which is being transmitted all across Pakistan, bringing prosperity into the entire country, he said.

"This great project would provide a lot of boost to Pakistan's economy in the years to come," Sharif added.

On the occasion, Pang Chunxue, charge d'affaires of the Chinese embassy in Pakistan, said that Thar Coal Block-I would help Pakistan in reducing fuel imports, saving foreign exchange reserves, optimizing power supply structure and enhancing energy security.

"It has provided more than 18,000 direct employment opportunities for the locals, with a cumulative tax payment of 120 million U.S. dollars and corporate social responsibility expenditure of over 1.3 million dollars," said Pang.

Riaz Haq said...

Google BARD's answer to "Will Pakistan survive?"

Whether or not Pakistan will survive is a complex question with no easy answer. The country faces a number of challenges, including political instability, economic problems, and security threats. However, it also has a number of strengths, including a strong military, a young and growing population, and a rich culture.

Ultimately, the future of Pakistan will depend on the choices that its people make. If they can overcome their challenges and build a strong and prosperous country, then Pakistan will have a bright future. However, if they cannot, then the country could face a number of problems, including economic collapse, political instability, and even civil war.

Only time will tell what the future holds for Pakistan. However, it is clear that the country is at a crossroads. The choices that its people make in the next few years will have a profound impact on its future.

Riaz Haq said...

Obama Pointedly Questioned by Students in India

“Pakistan is an enormous country; it is a strategically important country,” Mr. Obama began, meandering around to a defense of his administration.


MUMBAI, India — When Michelle Obama, the first lady, introduced her husband to a group of college students here on Sunday, she urged them to ask him “tough questions.”

They did.

“What is your take or opinion about jihad?” came the first question for President Obama at a town-hall-style meeting at St. Xavier’s College. Next up were queries about spirituality, Gandhi, the American midterm elections and his government’s negotiations with the Taliban.

Finally, there was the question Mr. Obama confessed he had been waiting for: Why hasn’t the United States labeled Pakistan “a terrorist state”?

“Pakistan is an enormous country; it is a strategically important country,” Mr. Obama began, meandering around to a defense of his administration. He said its policy was to “work with the Pakistani government in order to eradicate this extremism that we consider a cancer within the country that can potentially engulf the country.”

The diplomatic response about the neighbor that India views with suspicion was indicative of the fine line Mr. Obama has walked on the topic of terrorism while here. On Saturday, his first day here, he faced criticism in the local press when he paid homage to victims and survivors of the 2008 terrorist siege in Mumbai without mentioning that the gunmen were Pakistani or suggesting, that some groups in Pakistan pose a terrorist threat.

While the students at St. Xavier’s, a 141-year-old Jesuit institution in this pretty seaside city, were exceedingly polite to Mr. Obama — in interviews many said they admired him — they seemed unafraid to get straight to the point, even if Mr. Obama did not always get straight to his.

“Well,” he said, tackling the question about jihad, “the phrase jihad has a lot of meanings within Islam and is subject to a lot of different interpretations.”

He carefully avoided saying that he was opposed to jihad — which has several meanings, including both holy war and a personal quest for self-improvement — and instead said: “I think all of us recognize that this great religion in the hands of a few extremists has been distorted to justify violence towards innocent people that is never justified. And so, I think, one of the challenges that we face is, how do we isolate those who have these distorted notions of religious war.”

Riaz Haq said...

Mohammed Sohail (Securities analyst)
New IMF Loan for Pakistan

Below our initial response on this

Pakistan has entered into a new US$3bn IMF short-term program, Standby Arrangement (SBA), which will be for 9 months.

Pakistan has entered into such IMF SBA in the past also in 2008 and 2000.

This new program is far better than our expectations.

There were a lot of uncertainties on what will happen after June 2023 as there will be a caretaker government and then a new government coming to power.

Now, this funding of US$3bn for 9 months will definitely help restore some investor confidence.

Saudi, UAE, and other bilateral and mulitareal funding will now come in after this new deal helping depleting FX reseves.

In fact, there will be some discipline until Dec 2023, which could not be there due to upcoming elections (where the gov takes popular measures) if Pakistan had successfully or unsuccessfully completed this EFF. It's a blessing in disguise.

Now, the caretaker government will have a road map on what to do for economic stabilization.

Interest rates may remain high as IMF says SBP to remain proactive in line with inflationary pressure.

PKR may gain in short run both in intebank and open market. But we dont expext a major and sustainable recovery.

No more interference in the currency market now, according to IMF, as it says SBP is committed to full market determination of exchange rate.

Power sector reforms may be introduced, including further increase in tariffs.

The newly elected government, likely by Nov/Dec, will have some time to evaluate the economic situation and decide on the way forward (bigger IMF loan with or without debt restructuring/Reprofiling).

IMF has not mentioned in the press release about the sustainability or non sustainability of Pakistan debt and risk of external debt repayment.

Pakistan Eurobonds rally will continue especially in short duration bond. Pakistan 2024 Bond is already up from a low of 38 cents to around 62 cents yesterday.

Local stocks that trade at unbelievevable low PE of less than 3x may rally on this new deal. Benchmark index that is hovering in band of 40k to 42k may break this level and go near 44k.

Riaz Haq said...

#Pakistan #Stocks Surge Most in 15 Years After #IMF Loan Deal. Attractive valuations are helping Pakistan’s market as well. Benchmark KSE-100 saw one-hour halt in early trading. It rose 6.2% at close, the biggest gain since 2008. #economy #investors

“This IMF arrangement provides some comfort to investors over Pakistan’s ability to overcome short term external repayments,” said Ruchir Desai, fund manager at Asia Frontier Capital Ltd. based in Hong Kong. The “market should do pretty well” in the next few weeks, he said.

Financial support from multilateral lenders has boosted investor confidence — and returns — across troubled emerging and frontier markets in recent months, as funds were approved or disbursed for countries including Kenya, Tanzania, Senegal, Ukraine, Ghana and Ivory Coast. Other sovereigns in Africa, including Egypt and Mozambique, are expected to have their loans approved soon.

Inexpensive valuations are helping Pakistan’s market as well. Concerns related to the slew of negative headlines recently ranging from political turmoil to the risk of a debt default and sinking rupee had sent investors fleeing, with the KSE-100 Index becoming the world’s cheapest equity benchmark.

“Overall, the valuations are dirt-cheap with significant room for rebound,” said Ali Raza, head of international equities trading at BMA Capital, in Karachi.

Pakistan dollar bonds advanced, with the paper due in 2024 gaining 17 cents in the past week. The 8.25% 2024 bond was indicated 3.1 cents higher to trade at 73.6 cents on the dollar on Monday, a level last seen about a year ago in August. The gains come after dollar bonds notched their best-ever week. Pakistan’s currency market opens Tuesday.

Read More: Pakistan’s Politics Seen Key to Deliver on New IMF Aid Program

Economic indicators are helping as well. Pakistan’s inflation eased in June for the first time in seven months as record borrowing costs dampened demand and lower commodity prices slowed price gains. Consumer prices rose 29.40% in June from a year earlier, according to data released by the Pakistan Bureau of Statistics Monday. That compares with a median estimate for a 30.8% gain in a Bloomberg survey and a record 37.97% increase in May.

Still, the picture isn’t entirely rosy. Pakistan faces some $23 billion of external debt obligations coming due in the fiscal year starting July — more than six times the nation’s foreign-exchange reserves. Reserves dropped to $3.5 billion, to cover less than a month of imports — and below the global standard benchmark of three months. That restricted its ability to fund imports including raw materials, and forcing many factories to suspend operations.

The IMF bailout does change the game for Pakistan, to some market watchers. Barclays upgraded Pakistan debt to market weight on the development. Moody’s Investor Service expects the deal to open up support from bilateral and multilateral partners and help the nation with its high external debt repayments, analyst Grace Lim said in an emailed reply.

“This is the first-ever market halt on a positive rally,” BMA’s Raza said. “This is a huge day for Pakistan equities.”

Riaz Haq said...

Pakistan sovereign dollar bonds extend rally following IMF deal

Pakistan sovereign dollar bonds extended their recent rally on Monday with the shorter-dated maturities rising as much as 1 cent on the dollar, Tradeweb data showed.

The bonds notched sharp gains after the government said on Friday it had secured a $3 billion short-term financial package from the International Monetary Fund (IMF), giving the cash-strapped South Asian economy a long-awaited respite as it teeters on the brink of default.

The 2024 US695847AK91=TE and 2025 bonds US695847AR45=TE saw the biggest gains, both adding just over 1 cent to trade at 72 cents and 55 cents on the dollar respectively, Tradeweb data showed. The 2024 issue is at its highest since August 2022.

Riaz Haq said...

USD to PKR: Rupee gains massive recovery against dollar after IMF deal

KARACHI – Pakistani rupee gains momentum against the dollar on the first working day of the week, as trading resumed after Eid ul Adha holidays.

During the trading, Rupee moved up Rs5 against the greenback and was being quoted at Rs285 in the open market.

Rupee claws back as the stock market showed a bullish trend in light of the staff-level agreement finally being signed with the International Monetary Fund.

Signs of recovery in economic indicators started to appear as the country clinched much-needed funds from multilateral lender.

Riaz Haq said...

T C A Raghavan, India’s former High Commissioner to Pakistan, on the cult of Imran Khan, the role of the Pakistan Army and strategic implications for India.

T C A Raghavan, India’s former High Commissioner to Pakistan, on the cult of Imran Khan, the role of the Pakistan Army and strategic implications for India. The session was moderated by Strategic Affairs Editor Nirupama Subramanian

On political engineering by the Pakistan Army versus the Pakistan Tehreek-e-Insaf chief Imran Khan

There is a change from the past but former Prime Ministers Benazir Bhutto and Nawaz Sharif also had a very strong following at different points in time but were removed. While Imran Khan’s popularity appears to have a different quality of asserting greater civilian control over political affairs, it’s useful to recall that this is really an older script. What’s different is that unlike the past, when political figures chose to compromise themselves — they would go into exile or agree to a lower profile or simply follow what the military wanted to do — Khan has been defiant. Whether it is good or bad for Pakistan is a different question. He has certainly gotten under their (the military’s) skin and they have got under his.

But this is the surprising feature about Pakistan. Every major political figure who has been built up by the Pakistan military has, at some point in time, turned against it and wanted to act independently. This is as strong an evidence as we will get to show that the civil-military tension or the civil-military dynamic is the real dynamic. There is a political constituency which is constantly seeking to enlarge its space and comes up on this collision course almost once a decade.

On Khan’s future

Khan had a personal charisma, being an iconic cricketer and helming social work, that had been flowering from 2010-2011 onwards. But that flowering had to do with the military’s effort to boost him up. So they put together different components of the party which he led and surrounded him with people who were always close to the military. Many of those now leaving Khan are those who never saw themselves taking on the military as part of the menu when they joined his party. The military is having difficulty dealing with his personal popularity and the kind of iconic status which he has built up as someone who’s trying to create a new kind of politics.

Whether that is so in fact or not is a different matter but most of his followers see him as representing something new, a new political force and that element, while it will become subterranean because of the military pressure, will remain. That really will hold the key to Khan’s future.

But then he also changes his position quite radically. Perhaps when he took on the military establishment, there was an element of wishful thinking on his part, or he had started believing his own propaganda. But now, at least for the short and medium term, his future looks much more difficult.

On whether Khan will be disqualified

Some people in the military establishment feel that they weighed the scales too much in favour of Khan and the playing field has to be levelled again. That can be done in a number of ways, through his disqualification or some grand kind of reconciliation in the future where those who had been disqualified earlier, such as Nawaz Sharif and others, are also allowed to come back into politics. That’s the broad direction as many in the Army feel that they can’t empower one party or one politician so much that they then become a problem, so there must always be countervailing political forces. That’s the way they can manage the system much better – by playing off one against the other. There is shallowness in Imran’s democratic credentials but he has expanded the political space. Now it’s a scrap between different forces trying to maximise their position.

Riaz Haq said...

On weakening of Pakistan Army’s role

Former Army General Qamar Bajwa, during his tenure, was built up as the soldier’s soldier and a far-sighted military statesman but by the time he left, virtually everyone had turned against him, and he was seen as a figure who had been trying to basically further his own interests. Whether this denting of the Army’s image means that there is going to be a structural retreat, in terms of the role the military plays in Pakistan politics, is more difficult to answer. I don’t think we will see an early retreat from the role it has played in the short-term. But there will be a long-term impact.

On a scrap between the power elite and a divided judiciary

Just like the political class and the military, the judiciary has also dramatically shown all divisions within it. These reflect, to a great extent, the larger polarisation in Pakistan itself. There are two Supreme Courts in Pakistan — one headed by the Chief Justice, who is inclined towards Imran Khan, and the other headed by the Chief Justice-to-be, who is inclined towards Nawaz Sharif’s party.

Justice (Qazi Faez) Isa, who’s the second seniormost judge after the Chief Justice, will become the next Chief Justice. The Army realises that it has to choose from a menu of bad options and he is definitely preferable to some other judges. But while the current Chief Justice is in place, there is going to be a great deal of play and different kinds of conflicting judgments. The Supreme Court is split into two as are many of the High Courts. This means that the judiciary has emerged as a player in its own right in Pakistan’s politics over the past decade-and-a-half, since the first decade of this century when Justice Iftikhar Chaudhry was sacked. The bar associations have also emerged as a political force and they reflect, to some extent, the polarisation in Pakistan’s politics between different parties. They act as an independent force demanding their own space and are very sensitive to any infringement of their rights.

Audience Questions
On Pakistan’s ‘implosion’ and relations with India

There’s no evidence that Pakistan’s state structures are collapsing or have stopped working or people are deserting their posts at the government machinery. There’s a very intense political conflict which prevents any kind of purposeful policy attention on the economy and other problems that Pakistan faces.

This is something which the Pakistanis have to sort out themselves. I think external intervention will bring Pakistan together, so if you think that this is a time which presents a tactical opportunity for India, that would be wrong. The Pakistani military has a credible unified command structure, so it’s not as if we have suddenly got a better opportunity than in the past. So far, the domestic crisis has had no impact on India. It’s not had much of an impact on the ceasefire on the Line of Control (LoC) and it appears to be holding.

There is a minimal relationship, we have no trade, there are not even High Commissioners in place, and you have very little political or other contacts.

We have to be realistic about our own limitations. Even if India attempts to extend help to them, nobody begins from a clean slate. We cannot simply assume that it will be taken at face value. Dramatic gestures or dramatic changes will not lead to an improvement in relations. It will take a long time and there is no other instrument you have for embarking on that course, except patient, difficult diplomacy.

On resumption of trade ties

Given their economic crisis, Pakistan would be well advised to think of opening up trade with India and, in fact, General Bajwa did try this. But given the extent of political polarisation, it’s a very difficult thing to do just now. Nobody there wants to take a major decision like that on India and be accused by their political opponents of selling out.

Riaz Haq said...

#Pakistan's #ImranKhanPTI expresses support for bailout deal in #IMF meeting at his home in #Lahore.
IMF is seeking to build political support for the deal before coming general elections in the country scheduled for later this year.

KARACHI, Pakistan, July 7 (Reuters) - Pakistan's main opposition leader and former prime minister Imran Khan expressed support for a recently-reached bailout deal with the International Monetary Fund (IMF) after a meeting with officials of the lender on Friday, his party said.

The IMF said it was, in the lead up to national elections in the autumn, seeking the support of Pakistan's political parties, including Khan's, for the new nine-month $3 billion stand-by arrangement and policies associated with the programme.

Hammad Azhar, a former finance minister under Khan, who attended the meeting virtually, said in a post on Twitter that the former premier and his economic team had discussed last week's staff-level deal between the IMF and Pakistan's government.

"In this context we support the overall objectives and key policies," Azhar said, adding the meeting at Khan's residence in the eastern city of Lahore was attended in person by IMF officials while Mission Chief Nathan Porter joined virtually.

Earlier, the IMF's resident representative Esther Perez Ruiz said in a statement that the meetings with political parties were to "seek assurances of their support for the key objectives and policies under a new IMF-supported program ahead of the approaching national elections."

The new deal, which will be vital to help stabilise Pakistan's struggling $350 billion economy, will be taken up for approval by the IMF board on July 12.

The programme looks to replace a four-year Extended Financing Facility programme, originally signed by Khan's government in 2019, and which expired last month.

Khan's government deviated from agreements under an earlier IMF programme days before he was ousted in a parliamentary vote last year, leading to a delay in the implementation of the programme and increased economic uncertainty.

Pakistan's national elections are scheduled to be held by early November amid a charged political atmosphere that has seen Khan, the country's main opposition leader, in a bruising standoff with the government and the powerful military.

The new programme will span three governments - the incumbent set up under Prime Minister Shehbaz Sharif, whose term ends in August, a caretaker administration that will conduct the polls, and then a new government following the elections.

Azhar said the Pakistan Tehreek-e-Insaaf (PTI) party believed political stability was key for the economy and called for "free, fair and timely" elections after which a new government would initiate reforms and engage on a longer-term basis with multilateral institutions.

Despite being the country's most popular leader according to polls, Khan faces the prospect of being disqualified from the elections if found guilty in any of the cases against him since his removal from power.

The meeting is the highest profile engagement for Khan and his the PTI since he was ousted from power less than four years into his five-year term.

He said the cases are a bid to sideline him and dismantle his party before the polls. The government and military deny this, and say the cases are on merit.

The government launched a country-wide crackdown on the party in the aftermath of violent protests that followed Khan's brief arrest in May. The protests saw military installations ransacked. Khan was later released on bail.

Many of Khan's key aides remain under arrest and many others, like Azhar, are in hiding. Azhar said some of PTI's economic team members attended the meeting virtually.