China Evaluating Economic Intervention in Pakistan Beyond Debt Issues, says Interim Prime Minister
Pakistan’s Interim Prime Minister, Anwaar-ul-Haq Kakar, stated in an interview with Bloomberg Television in New York on Thursday that China is evaluating economic intervention in Pakistan that goes beyond addressing debt issues. Kakar, whose caretaker government is responsible for running the country until early next year’s elections, expressed that China is exploring how it can aid Pakistan’s economic health.
This evaluation comes after Pakistan secured a $3 billion loan program with the International Monetary Fund (IMF) in July, following months of delays that brought the country close to default. China has played a significant role in financing power plants in Pakistan as part of its Belt and Road Initiative and has extended loans to Pakistan during the IMF negotiations.
Prime Minister Kakar, who assumed office last month after former premier Shehbaz Sharif’s term ended, has implemented an economic overhaul to strengthen Pakistan’s finances. This includes proposals to privatize state assets and crack down on illegal currency trade. The aim is to address inflation and the artificial value of the currency resulting from illegal currency trading.
Kakar acknowledged that his government has faced protests over recent increases in power and fuel prices, contributing to rapid inflation. However, he does not anticipate significant social unrest as consumption is expected to decline during the winter months. In addressing the power sector, the interim government plans to privatize transmission companies and expand the tax network to reduce reliance on indirect taxes in electricity bills.
Regarding the potential sale of state-run companies in the power sector, Prime Minister Kakar expressed optimism, stating that some of these entities could be privatized within a couple of months. Pakistan has also been actively seeking investments from Gulf nations in sectors such as mining, agriculture, and technology. Kakar mentioned that Saudi Arabia and the United Arab Emirates alone could potentially bring in $50 billion in investments, emphasizing that this figure could be even higher if the business opportunities expand.
In conclusion, China is evaluating economic intervention in Pakistan to support its economic health beyond just addressing debt issues. Pakistan’s interim government, under Prime Minister Kakar, is working on an economic overhaul to strengthen the country’s finances, focusing on the power sector and privatizing state assets. Furthermore, Pakistan is actively seeking investments from Gulf nations, with the potential to attract billions of dollars in investment.
