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Thursday, November 30, 2023

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China-Pakistan Strengthen Ties As Latter Struggles With Economic Challenges

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China and Pakistan are in discussions to deepen their partnership as Islamabad tries to implement growth-oriented policies after avoiding a financial default earlier this year.

In an interview with Bloomberg Television in New York on Thursday, Pakistan’s Interim Prime Minister Anwaar-ul-Haq Kakar said, “We are having a very broad-based conversation” that goes “beyond debt issues.”

Kakar stated that China is determining what kind of “intervention would be helpful for our economic health.” The caretaker government has been given the authority to manage the nation until elections that are planned for early next year.

The nations are now in negotiations after Pakistan, which was on the verge of default due to delays for months, was granted a $3 billion credit programme by the International Monetary Fund in July. As part of the Belt and Road Initiative, China has invested billions of dollars in power projects in Pakistan and provided loans to the government even as discussions with the International Monetary Fund were going on.

After former prime minister Shehbaz Sharif handed over the reins at the end of the parliament’s five-year tenure, Kakar assumed office last month. Since then, Kakar has suggested an economic reform aimed at bolstering the nation’s finances. This reform includes the suggestion to privatise governmental assets and a crackdown on illicit dollar transactions.

Kakar stated that his temporary administration is committed to enhancing governance and putting a stop to cartels and mafias involved in everything from fuel and energy theft to illicit currency exchange.

“Undo the artificial bubble of inflation, the artificial value of the currency, which was primarily driven by the demand in the illegal trade of the currency,” he added, was the goal.

Protests against rising costs

Protests have been directed towards the interim administration due to rising electricity and fuel costs, which contributed to Asia’s highest inflation rate. Nevertheless, Kakar claimed that he did not foresee “huge social unrest” following an increase in energy prices because winter use was anticipated to fall.

Kakar stated that his administration was aiming to improve the nation’s electricity industry with more durable solutions.

“We are trying to privatize transmission companies, we are trying to increase our tax network so that we are not dependent on the indirect taxes which are being clubbed in all these bills of electricity,” Kakar said.

When asked if his administration will be able to sell certain state-run businesses in the electricity industry during his term, Kakar expressed optimism.

What “I’m specifically hinting about is the power sector, the transmission bodies throughout the country. We are expecting that a few of them would be privatized in couple of months,” he added.

Pakistan has also been attempting to get Gulf countries to invest in the mining, agricultural, and ICT industries. Kakar recently said that Saudi Arabia and the United Arab Emirates may spend $50 billion in his nation.

$50 billion is only one amount, which I did suggest, he said, but it may be higher. It may surpass that amount if they perceive additional commercial opportunities and if we have more to offer.

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