No, the balance of payments crisis is not over – all because PTI did not do its homework on China

Published: November 7, 2018
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China's President Xi Jinping shakes hands with Prime Minister Imran Khan ahead of their meeting at the Great Hall of the People in Beijing on November 2, 2018 PHOTO:AFP

Imran Khan’s recent visit to China has now become the most discussed topic in drawing rooms, in the media and in the business world. This was touted as a monumental visit, given that this was the premier’s first visit to China, Pakistan’s most important friend and a significant player on the geopolitical front. With the current financial crisis in the background, the Pakistan Tehreek-e-Insaf (PTI) government was also looking to get an immediate loan from China for economic assistance. This visit would thus determine the relationship between Pakistan’s new government and China, and set the tone for the next five years.

However, perhaps an unrealistic hype was created regarding this visit, and the nation was made to expect the premier to return with money, the way he had after his visit to Saudi Arabia. We were told to expect – once again – that we may not need to go to the International Monetary Fund (IMF) at all.

Anyone who is familiar with China’s model of investing knows it is not easy to get loans from the state without strong paperwork and preparation beforehand; mere verbal talks would not suffice. It is easy to get loans from the IMF to a degree, even easier to get one from the Saudis, but in comparison China offers a steep climb. Historically, China has preferred to help Pakistan in the form of direct investment rather than handing us cash like the Saudis.

As our premier left the country to attend the Shanghai Expo as an honorary member and to meet Chinese leaders and dignitaries, Pakistan was slowly choked by fanatics belonging to the Tehreek-e-Labbaik Pakistan (TLP). Despite knowing the security situation and being aware of how the matter would escalate (this is not the first, or even the second time TLP stopped life in the country), the premier chose to leave for China with ministers such as Sheikh Rasheed in tow. At such a crucial time for the country, the nation needed its leadership to be present and take charge, as Imran promised to do in a fiery speech that bore no results. The government only offered a symbolic reaction, until it surrendered to the fanatics after three days of inaction.

Given how the visit was hyped as a saving grace, it would make sense to argue that Imran had to leave to bring in money. But the visit ultimately yielded no loans or relief packages that can count as a justification for the premier leaving the country in its darkest hour.

Instead, the government’s hopes regarding the visit were unrealistic to begin with, and no homework was seemingly done on how to convince China to agree to offer immediate assistance. Resultantly, the joint statement issued by China and Pakistan made no mention of aid, only stated that while China would help Pakistan, more talks would be required in this regard.

Other than that, the agreement was diplomatic and reiterated China’s stance of supporting and investing in Pakistan, also highlighting the China-Pakistan Economic Corridor (CPEC). The message was that CPEC projects will continue on as per the deal, and in fact would only expand in number. Not only is this a rollback on PTI’s statements regarding reviewing CPEC projects, it also revealed that China remained unimpressed by the irresponsible statements given by the PTI government regarding CPEC. Perhaps this is the reason why our premier was received by the Chinese Minister for Transport when he reached Beijing. In diplomatic language, this is a clear message that China may not be as happy with us as we think.

It is highly unlikely the government expected China to offer immediate assistance, and yet once again the people were offered false hope regarding seeking a bailout. The country has seemingly never been as worried about the economy as it is now, and the government’s failure to pacify concerns play a large role in this. Not only has this created a negative perception amongst foreign and domestic investors, it has also made a mockery of us in international media, particularly after PTV’s humiliating typo labelling Beijing as “Begging” during Imran’s address.

China has gained what it expected from the meeting by signing 15 MoUs of mutual cooperation with Pakistan and has let Pakistan save face by agreeing to more talks on economic aid. The question is, when will PTI realise that not everyone in the globe will be able to save it every time it messes up?

Now, Finance Minister Asad Umar has said the balance of payments crisis is over ‘for now’, as we have the $6 billion from Saudi Arabia and the rest will reportedly be provided by China, which can only be confirmed after further talks take place on November 9th. At the moment, not only has China not yet agreed to assist us, the sum has also not been agreed upon, and we cannot even be sure if the assistance will be like the package offered to us by the Saudis. The fact that further meetings are required between delegations of both states is a clear indication that our team was underprepared for the visit.

Until Saudi aid actually arrives, we cannot simply declare that the balance of payments crisis is over. Then there is the fact that if China is ready to offer immediate assistance and the crisis is over, then why are we hurrying to get a bailout from IMF as well? It appears as if Umar’s statement has more to do with saving face after returning from China empty-handed.

Leaving Pakistan to go on a visit while the country was burning, followed by surrendering to extremists, and then the trip seemingly not being a necessity of the hour, all raise serious questions regarding Imran’s vision and understanding when it comes to running the state. As the head of state, we expect more leadership from him, simply because our premier told us to expect better leadership. Instead, what we are seeing is an inability to prepare for economic and financial negotiations. The so-called economic wizards of PTI, whose only solution to avert the economic crisis is a witch hunt against political rivals to bring back the imaginary billions of dollars taken out of the country, clearly need to work harder when it comes to surviving in an actual political set-up.

Imad Zafar

Imad Zafar

The writer is a columnist and writes for various English and Urdu publications. He tweets at @rjimad (twitter.com/rjimad)

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • Shakir Lakhani

    IK should send Murad Saeed on a world tour to get back the imaginary 200 billion dollarsRecommend

  • Zohaib

    Who are you sir? You should write this in big letters that “This is my personal opinion”.Recommend

  • vinsin

    Saudi had not given any significant AID. Let say Pakistan need $6 Billion and interate rate are close to 10%. What Saudi has done is that Pakistan will have to pay after 1 yr for the oil purchase with the limit of $3 Billion and given on 0% rate $3 Billion for 1 yr.

    Saudi interest rate is close 2%, so in reality Saudi has given aid of $120 million.

    After 1 yr Pakistan again has to arrange $6 Billion to give it to Saudi Arabia.Recommend

  • salman

    Keep it up bro. Maybe you think with every article chances of NRO for Nawaz are increasing!Recommend

  • Adnan Tariq

    Any expertise in ur opinion of what type of homework u r mentioning. .Seems a biased article from a someone who repeatedly writes against pti . Ur previous articles suggest soRecommend

  • Nadeem

    I am no fan of either PML or PPP, but the way this man used to rake them over the coals the past 7 years, and simultaneously sell dreams to the voters, I am now getting a perverted pleasure by watching him get humiliated, degraded, and his image slowly coming down to earth from the high orbits he used to fly in as a dream seller until July 25. He is just a snake oil salesman. Certainly not a tough, down-in-the-trenches reformer who will deliver Naya Pakistan.Recommend

  • http://about.me/utg001 utg001

    “The question is, when will PTI realise that not everyone in the globe will be able to save it every time it messes up?” are you implying that its PTI’s fault that we need to look at IMF etc?
    “Leaving Pakistan to go on a visit while the country was burning, followed by surrendering to extremists, and then the trip seemingly not being a necessity of the hour, all raise serious questions regarding Imran’s vision and understanding when it comes to running the state.” Well, not going to China for help when he could have, and forcing the courts to listen to the protester’s demand to hang a woman sends an entirely different image to the people and to the world. Is that what he should have done to resolve the burning of the country?

    Bravo, you made real sense in this article.Recommend

  • Patwari

    Say, you are still in mourning over Darbari Nawaz’s ouster.
    He ain’t coming back. Has reservation at Adiala Hilton, for
    long, long vacation.Recommend

  • Muhammad Hamza

    Economy is everything.
    It is absurd to suggest that IK should have cancelled the visit just because of TLP thugs’ garbage protests. That would be exactly what the extremists want.Recommend

  • Mahmood Anwar

    To begin with I’m not a PTI supporter. This is literally one of the most biased articles I’ve ever read with little supporting evidence. IK visited friendly countries for the nation and to clean up someone else’s mess. Yes, China is a hard bargainer but the PM had no choice but to approach it. The ‘begging’ uproar is a shameful incident and should be deplored by all Pakistanis. The inflow of dollars is in State Bank accounts and not IK’s personal one. Strategic interests are more important that waiting for protests to subside and its incredible that a compromise was reached in 3 days flat.Recommend

  • PatelPara

    a little too harsh and way too early. expecting a magic wand?Recommend

  • Greywolf

    much of that degradation being done by the media is happening at the behest of the aunty media cell run by maryam nawaz and her team. IK definitely deserves criticism as no one is above it, but much of this criticism is being done simply to criticize and make him look worse than the other two horrendous parties. IK and PTI are not perfect, but for the sake of pakistans socio economic prosperity, this government is going to be way better. i can assure everyone of that. 2.5 months is not a large enough sample size when the tenure is 5 years. lets all calm down.Recommend

  • Greywolf

    indians should stay out of these discussions. you and your countrymen are not mentally capable of diagnosing an issue without bias. goodbye.Recommend

  • numbersnumbers

    Hmm, much like hype last spring when ministers declared victory at FATF meeting, only to quietly slink back into country when they failed!Recommend

  • Iftikhar Khan

    Pakistan-China friendship is so long, consistent and strong that a surprise is only possible to the downside. First of all, with so many communication channels open between China and Pakistan, an extensively hyped and publicized trip from the chief executive of Pakistan was a useless exercise of publicity in ceremonial background and displaying public friendly federal cabinet in Afghan style white pajamas as Pakistani which is different from Indian style pajama (desis still trying to express anti-colonial optics despite 70 years of freedom).
    It is common practice for governments to create a psychological profile of any new leader coming for a visit. Without being privy to such profile of IK by Chinese, it is impossible to ignore the tendencies of armchair pundits or traditional spiritual healers such as Pirs, with no expertise in any field, no before the job or on the job training and no record of accomplishments.
    So how does the concept of a successful visit fit in this scenario?Recommend

  • gul

    Great Article, reality check. Wake up dreamers, its morning!Recommend

  • Hamood Rehman

    This article is short on facts and based on bias. The author seems to be a supporter of corrupt PPP and PML(N) parties who both have brought Pakistan to the brink. PTI has been in power less than 100 days. PML(N) was in power one way or the other since 1985, the PPP since 1970. Both these corrupt parties have decades of rule under their belt and have been in the govt. at the federal level for at least 10-15 years each. The author wants PTI to clean up their mess within 100 days. This mess is not created by PTI. Please stop writing nonsense articles such as this. PTI and IK are doing their best. And BTW your beloved Nawaz and Zardari will not be spared and the country will be a much better place after 5 years.Recommend

  • Sajjad Jaffery

    Can’t agree more. The hostile media cum mafia used to lafafa culture and implanted willing collaborators among a cunningly self-serving and corrupt bureaucracy would be hard to reform to say the least. Those who gave plunderers and looters masquerading as national leaders decades and never raised a finger at the loot and plunder are now becoming impatient with PTI government within a couple of months!! Stick with your newly minted concern for the country ‘s future and give PTI a chance to deliver .Recommend

  • Patwari

    He writes one biased article against PTI, every week.Recommend

  • https://newslink.pk Newslink

    IK definitely deserves criticism as no one is above it, but much of this criticism is being done simply to criticize and make him look worse than the other two horrendous parties.Recommend