Pakistan Requests China To Roll Over $6.3 Billion Debt

Pakistan on Saturday requested its all-weather ally China to roll over its USD 6.3 billion debt amid a slump in its economy due to devastating floods.

The debt is maturing in the next eight months and the new proposal seeking a fresh Chinese loan to repay maturing bilateral debt during FY 2022-23 is also under consideration, ending on June 30, reported The Express Tribune.

Pakistan plans to arrange USD 34 billion in the current fiscal year to meet its debt and external trade-related obligations.

The issue of rollover and refinancing of nearly USD 6.3 billion commercial loans and the central bank debt was discussed in a meeting between Chinese Ambassador to Pakistan Nong Rong and Finance Minister Mohammad Ishaq Dar, reported The Express Tribune.

Sources said that both sides also discussed the issue of outstanding Chinese dues on account of payments to the Chinese Independent Power Producers for the cost of the electricity purchase.

Prime Minister Shehbaz Sharif is visiting Beijing on November 1 with a list of new projects and requests to roll over the existing debt, considering sanctioning new debt and preferential trade treatment for certain exportable goods.

Pakistan is under pressure from western institutions and the governments to seek rollover of Chinese debt, currently standing at USD 26.7 billion including public and publicly guaranteed debt, reported The Express Tribune.

Pakistan is expected to solve the lingering issue of opening a bank account to save Chinese companies from the vicious cycle of circular debt before the PM’s visit.

The proposed visit of PM Shehbaz to China was also discussed in the meeting and both sides hoped that it would enhance bilateral relations between both countries, the finance ministry said.

The USD 3.3 billion Chinese commercial loans and USD 3 billion worth SAFE deposits loans were maturing from now till June next year, according to the Ministry of Finance officials.

The SAFE deposit is on the balance sheet of the central bank. In addition to this, over USD 900 million in bilateral Chinese debt was becoming due during the current fiscal year, reported The Express Tribune.

Sources said that the government was seeking a rollover of the USD 3 billion SAFE deposit for more than one year, preferably for three to five years. China has extended a total of USD 4 billion in SAFE deposits and out of this USD 1 billion has already been rolled over in July this year.

For the current fiscal year, the International Monetary Fund and the Ministry of Finance have estimated Pakistan’s gross external financing requirements in the range of USD 32 billion to USD 34 billion, excluding the impact of the recent devastating floods, reported The Express Tribune.

Pakistan has already obtained USD 2.2 billion in loans during the July-September quarter while Saudi Arabia has also announced to roll over USD 3 billion debt maturing in December this year.

The country still needs to arrange USD 29 billion and it is looking for a minimum of USD 6.3 billion to USD 7.2 billion rollovers from China in addition to any fresh lending, reported The Express Tribune. (ANI)

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World Bank Lower India’s 2022-23 Growth Rate To 6.5%

World bank, in its latest report, has lowered India’s 2022-23 growth rate from its June forecast, by 1 percentage point to 6.5 percent. In the previous report, the international organization had projected India’s growth rate to be at 7.5 percent for the period.

In the latest South Asia Economic Focus, Coping with Shocks: Migration and the Road to Resilience, released today, the World Bank has revised India’s growth rate down from its June forecast. It further expects India to grow at 7 percent and 6.1 percent in 2023 and 2024 respectively.

The twice-a-year update has also revised the regional growth rate of South Asia by 1 percentage point from the June forecast to 5.8 percent, as it expects a “dampening” growth rate in the region.

The main reasons highlighted for the revision have been Sri Lanka’s economic crisis, Pakistan’s catastrophic floods, a global slowdown, and the impacts of the war in Ukraine on top of the lingering scars of the COVID-19 pandemic.

“Pandemics, sudden swings in global liquidity and commodity prices, and extreme weather disasters were once tail-end risks. But all three have arrived in rapid succession over the past two years and are testing South Asia’s economies,” said Martin Raiser, the World Bank Vice President for South Asia.

“In the face of these shocks, countries need to build stronger fiscal and monetary buffers, and reorient scarce resources towards strengthening resilience to protect their people,” Raiser added.

However, the release has also highlighted the fact that India, which happens to be the region’s largest economy, recovered more strongly than the world average riding on the exports and service sector. It considers India’s “ample” foreign reserves to be serving as a buffer to external shocks.

While talking about Sri Lanka, the Report expects the country’s real GDP to fall by 9.2 percent this year and further by 4.2 percent in 2023. It considers the impact of COVID-19 and rising commodity prices due to the war in Ukraine to have worsened the situation and exacerbated its woes in debt and depleting foreign reserves.

While talking about Pakistan, the Report considers the high-commodity prices to have worsened Pakistan’s external imbalances and brought down its reserves. It finds Pakistan’s outlook subject to significant uncertainty after the devastating climate-change-fuelled floods submerged one-third of the country this year.

The release also considers that tourism’s return is helping drive growth in the Maldives and Nepal to a lesser extent.

The report expects the inflation in the region to rise to 9.2 percent this year before gradually subsiding. It highlights the main causes behind this as the elevated global food and energy prices and trade restrictions that have worsened food insecurity in the region. It calls them to have severely impacted the poor by squeezing their real income.

The report also talks about the impact of COVID-19 restrictions on the migrant workers of South Asia, who were disproportionately affected.

However, the report also considers migration as a crucial factor in facilitating recovery. It expects the migration flow to move from the areas hit hard by the pandemic to those that were not. It will supposedly equilibrate the demand and supply of labor.

“Labor mobility across and within countries enables economic development by allowing people to move to locations where they are more productive. It also helps adjust to shocks such as climate events to which South Asia’s rural poor are particularly vulnerable,” said Hans Trimmer, the World Bank Chief Economist for South Asia.

“Removing restrictions to labor mobility is vital to the region’s resilience and its long-term development,” Timmer added.

The report also offers two recommendations in its report. Firstly, it recommends cutting costs faced by migrants. Secondly, it suggests that policymakers de-risk migration including more flexible visa policies and social protection programs. (ANI)

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WHO Warns Of Worsening Situation In Pakistan

As Pakistan struggles to deal with the unprecedented floods situation in the country, the World Health Organisation (WHO) has warned about the worsening situation in the country ravaged by the record rains.

“We are following closely and with deep concern the humanitarian crisis currently facing the people of Pakistan as a result of devastating monsoon floods,” said Dr Ahmed Al-Mandhari, WHO Regional Director for the Eastern Mediterranean, on the floods in Pakistan.
In a press statement issued on September 5, Dr Al-Mandhari said the current scale of damage and destruction due to the floods is like none seen before in Pakistan – a result of long-term global climate change leading to more severe weather conditions.

Tens of millions of people are now forced to use unsafe water, both to drink and for their daily needs; they are also exposed to the elements due to flood damage and destruction of their homes, and many are displaced.

This has resulted in increased exposure to diseases already circulating in the country, including acute watery diarrhoea, malaria, dengue fever, typhoid, measles and leishmaniasis, the WHO official said.

Early disease surveillance reports are already showing an increase in cases of diarrhoea, malaria and typhoid. Other diseases in the country, such as polio and COVID-19, are also at increased risk of spreading if the situation is not rapidly contained.

According to Dr Al-Mandhari, thousands of pregnant women have lost access to health facilities and services for safe delivery of their babies, increasing the risk of medical complications as their options are limited to delivery at home.

The WHO official said those needing medical attention for existing conditions will face diminished access, while tens of thousands of people, including children, need psychosocial support and mental health services to cope with the enormous losses they are experiencing and the destruction they are witnessing.

“With almost 10 per cent of the country’s health facilities damaged or destroyed, WHO has stepped in quickly to support the ongoing efforts of the Government of Pakistan and the Ministry of National Health Services Regulations and Coordination to ensure that the affected people have access to the essential health services that they need. Our goal is to prevent this natural disaster from evolving into a complex public health catastrophe that results in further unnecessary loss of life,” he added.

According to WHO, mobile health teams have been redirected to flood-affected areas to provide health and nutrition services for pregnant women, new mothers and their babies, and children.

The world health body added that more than 4500 medical camps have been set up by the Pakistani government, WHO and health partners to ensure that people have access to basic and essential health services. (ANI)

Gandhis, INS Vikrant and Pakistan floods

Five Things That Happened Last Week (And what to make of them)

Step 1 for the Congress today is for the Gandhis to step aside

In 1969, when the Indian National Congress party split after the late Indira Gandhi was expelled from the party and she formed her own party, then known as Congress (R), the “R” standing for Requisitionists, her new party’s electoral symbol was a cow with a suckling calf. With that symbol, Ms. Gandhi won a landslide victory in 1971. Her long stints as Prime Minister of India (1966-77; and then again from 1980-84) were marked by historic events of both, of the favourable and adverse types. All that is part of history.

As is that symbol of her party, a suckling calf and a cow. The story about why that symbol was dropped and, instead, the open palm (which is still the Congress party’s electoral symbol) was adopted is probably apocryphal but like many such tales it is one that is amusing. The story goes that in the immediate aftermath of the Emergency, the calf and cow symbol became the butt of jokes with Ms. Gandhi being compared to the cow and her son Sanjay, whose notoriety during the Emergency period is well known, to the calf.

Nearly half a century later, the Indian National Congress party’s president is Indira’s daughter-in-law and the widow of former Prime Minister Rajiv Gandhi. And her son, Rahul, is the next most important leader in the party. And going by the current turmoil in the party and the perception that the mother and son duo are a sort of autocratic power centre family in the Congress, the calf and cow symbol could be an apt symbol for it.

The most recent notable departure of a leader from the Congress has been that of the former Union minister and former chief minister of Jammu & Kashmir, Ghulam Nabi Azad. Azad has unambiguously highlighted the autocracy in the party, particularly pointing to Rahul Gandhi and his manner of leadership. He has not been the only one to do so. Several leaders, including relatively younger ones (in the Congress that can mean anyone under 60; Rahul himself is 52 and still referred to as being a young leader), have left the party in recent years and months and while few have been as articulate about their disenchantment with the Gandhi family’s leadership style as Azad, the reasons for their departure are probably not dissimilar.

Much has been written about Rahul Gandhi’s inability to lead his party; organise and revamp it; or win elections. So much so that except for die-hard Gandhi family loyalists–a breed that is rapidly going extinct–to everyone it is quite evident that Rahul is not up for the job of leading, reviving, or running his party with any outcome of meaningful consequence. It may be a bit unfair to slam the “young” leader, though. After all, these sort of things happen. The son of Bollywood’s greatest superstar actor followed his father into acting and was a notable failure; another son of one of India’s best-known opening batsmen in cricket followed his father into playing cricket but flopped and no one really knows or cares about what he is doing.

Such examples abound in almost every field. So it is in politics. Rahul is the scion of an illustrious Indian political family–his father, grandmother, and great grandfather were all prime ministers of India. His great great grandfather was the president of the Congress party in pre-Independence India. But since he himself embarked on a career in Indian politics 18 years ago, his achievements have been unremarkable.

Some Congress leaders absurdly talk about how Gandhi, a middle-aged man, is still evolving and needs more time. The fact is that under him and his mother Sonia, who will turn 76 this year, the Congress has all but collapsed. The party has fared abysmally poorly in parliamentary elections; and has continued to lose its base and power in regions, including states that were once its bastion.

An addict, whether he is addicted to alcohol, drugs or even sex, can only rehabilitate himself if he acknowledges his problem. An addict in denial cannot be cured no matter how expensive or exclusive the rehab facility is to which you send him. Congress’s main problem is its leadership (read: the Gandhis). And the only way to revive it (or prevent its absolute and total collapse) is if the party recognises that and excises the Gandhis from it. Is that likely to happen? Because the party is all about the Gandhis, it can happen if, like the archetypal confessional alcoholic, the Gandhis decide that they are the problem and not anyone else. Step one for the Congress today is for the Gandhis to step aside.

Did India miss the chance to be a good neighbour?

The Biblical phrase “thou shalt love thy neighbour as thyself” is from the Book of Leviticus in the Old Testament about the ethic of reciprocity known as the Golden Rule or the Great Commandment. And while reference to a Biblical phrase can be a bit out of place in the atmosphere that prevails in public discourse–both in the social media as well as in mainstream discussions–it is is worth heeding that phrase, “love thy neighbour”, particularly in the aftermath of one of the most tragic and devastating floods to have hit India’s neighbour, Pakistan.

It is a climate disaster of an unprecedented kind. “A monsoon on steroids” is how the United Nations secretary-general Antonio Guterres described the natural calamity that has affected millions of Pakistanis and taken the lives of thousands.

India is Pakistan’s big neighbour. The two countries share a 3,323-kilometre border. India has a population of 1.4 billion compared to Pakistan’s 220 million (for perspective, Uttar Pradesh has a population of 234 million). India’s GDP is expected to reach US$3000 billion this year, while Pakistan’s is expected to be only US$292 billion.

But India and Pakistan are also in conflict. The two have been fighting several wars since Independence and the partitioning of the Indian subcontinent in 1947. The main dispute is over Kashmir where India and Pakistan are conflicted over who has sovereignty over how much of the area. India also alleges that Pakistan offers safe passage to separatists and terrorists who operate in Kashmir.

When the floods wreaked havoc across the border, it took some time before India’s Prime Minister Narendra Modi came out with a statement about it. In a tweet last week, Modi said: “Saddened to see the devastation caused by the floods in Pakistan. We extend our heartfelt condolences to the families of the victims, the injured and all those affected by this natural calamity and hope for an early restoration of normalcy,” But did Modi or the Indian government offer any help to Pakistan? No. 

As a neighbour and more resourceful nation, the Indian government could have offered help in the form of medical assistance, food, help in evacuation of the thousands stranded and homeless because of the floods and so much more. Till now, there has been none of that.

It has been a missed opportunity for India. The disputes with Pakistan are long-standing and will probably continue for a long time to come. However, humanitarian assistance that is aimed at benefiting the common people who have been hit by a natural calamity such as the floods in Pakistan could have shown that India can rise above the disputes and conflicts with its neighbour and set an example of magnanimity in international relations.

An aircraft carrier is commissioned; politics ensues

Political bickering accompanies even notable achievements in India’s development. Recently, when the INS Vikrant, India’s first indigenously developed aircraft carrier, was commissioned by Prime Minister Modi to the Indian Navy, and marks the government’s efforts to attain self-reliant development for India, an effort popularised by the term Atmanirbhar Bharat.

Development of the aircraft carrier makes India one of the few countries in the world to attain the capability to build a warship of this proportion. As many as 26 MiG-29K fighter jets, 4 Kamov Ka-31 helicopters, 2 HAL Dhruv NUH utility helicopters and 4 MH-60R multi-role helicopters can operate from INS Vikrant. It is 262 metres long, with a top speed of 28 knots, and endurance of 7,500 nautical miles. INS Vikrant has 2,300 compartments and can accommodate a crew of 1700 seamen. 

The commissioning of the carrier was soured by comments from the opposition Congress party leaders who said the Prime Minister does not acknowledge continuity in development, a reference to the fact that the work on the aircraft carrier had begun at Cochin Shipyards in 2009, way before the present government had come to power. The protests seem to suggest that the Congress wanted the Prime Minister to give its earlier regime some credit for development of the warship. Petty politics. 

Whither respect for women in India?

Recently, a video surfaced showing the husband of a woman member of the legislative assembly (MLA) slapping her in public. The video shows Baljinder Kaur, MLA from the Aam Aadmi Party (AAP) being slapped by her husband, also an AAP leader in the state.

The video has gone viral and so have the reactions. Women activist organisations have said they will initiate suo motu action against Sukhraj Singh, the husband.

The bigger issue, however, is that in India, gender equality remains a pie-dream and women’s rights are in peril–no matter the status and social standing of individuals. It is a sad commentary on Indian society.

Elon Musk wants you to have more children

The billionaire investor and businessman Elon Musk whose statements and social media posts are often designed to shock and create sensation has said that people should have more children. “It’s important that people have enough babies to support civilization,” Musk, who himself has 10 children, has said. “If we don’t have enough kids, then we will die with a whimper in adult diapers. And that will be depressing.”

As the world’s population is set to touch 8 billion (it is estimated at 7.97 billion now) and other experts warn of a dramatic catastrophe, Musk’s latest exhortation comes across as being eccentrically contrarian. But then controversy and contrarianism are nothing new for Musk who is the founder, CEO, and Chief Engineer at SpaceX; CEO, and Product Architect of Tesla, Inc. and has an estimated net worth of around US$266 billion, which makes him the richest man in the world.