KARACHI: Pakistan has all the ingredients and the right intent to recover from the current economic problems by investing in long-term policies, says Citi’s Managing Director of Europe, Middle East and Africa Grant Carson in an interview to Dawn.
He said that Citi is committed to “assist Pakistan in helping fix its macroeconomic woes.” Citibank was one of the lead managers in helping Pakistan raise $2.5 billion last year from the global capital markets.
“We are optimistic on Pakistan, it has ample opportunities to seize on right now,” he said while adding that the investments under the Belt and Road Initiative (BRI) are also immensely beneficial to the country and help domestic business environment.
China has vowed to invest more than $50bn in Pakistan under the China-Pakistan Economic Corridor (CPEC) mainly concentrated in infrastructure, power, and communication projects. Pakistan’s domestic production will benefit from overcoming infrastructure and power shortages, he said while commenting on the CPEC.
However, despite investments from China, Pakistan is facing a balance of payments crisis derived from a large current account deficit. Finance Minister Asad Umar recently said that Pakistan requires an additional amount of $9bn to fill the current account in the coming few months. Analysts expect Pakistan to approach International Monetary Fund (IMF) for an agreement to solve the crisis.
Mr Carson said that “Pakistan will have to eventually decide whether it wants to approach IMF — which is definitely an option — or find other lenders but it must take a long-term approach while making key policy decisions.”
However, Mr Umar recently said that IMF is the last option and the current government is exploring other options which are being interpreted as seeking help from China and Saudi Arabia. Prime Minister Imran Khan along with Finance Minister Asad Umar arrived on Tuesday in Saudi Arabia on his first official foreign visit.
Ever since assuming office, Imran Khan has pushed for austerity shunning the grand lifestyle usually attached with country’s political elite. Mr Carson, who was Citi’s Country Officer for Greece and Cyprus during 2011-14, said Pakistan has the political will and leadership to successfully implement austerity measures in the country unlike Greece where similar measures were met with sharp rebuttal.
However, stakeholders are worried that delays in key decisions may cost the economy in long run.
Answering a question on the implications for Pakistan in worsening US-China trade war, he said that the country must position itself to find common ground with both countries. Pakistan has strengthened ties with China as relations with the US have frayed. He said the the country’s relations with both global leaders should not be treated as mutually exclusive and the country’s leadership can pursue better ties with both powers simultaneously.
Published in Dawn, September 21st, 2018