Economic transparency

Published January 15, 2019

AS things move along, the need for greater transparency and disclosure on what exactly the government is signing onto is growing.

The eighth Joint Cooperation Committee meeting on CPEC between Pakistani and Chinese government delegations was held in December, but to this day, there is very little known about the details of what the government of Pakistan has consented to do.

Read more: What do Pakistan and China want from CPEC going forward?

In addition, we have seen $2bn land in the State Bank as a ‘deposit’, following a visit to Saudi Arabia by the prime minister accompanied by a high-powered ministerial entourage, with promises of another billion to come soon, and a ‘deferred payment’ facility to underwrite a portion of the country’s oil imports.

Yet, not a word has been uttered about what has been promised in return. Likewise, we are now hearing of another $3bn worth of ‘deposits’ to be made by the UAE, but once again, there is not a word about what is expected in return. No details have even been released about the terms on which these ‘deposits’ have come, whether on their tenure or return.

Now we are hearing of a massive investment from Saudi Arabia to be made in an ‘oil city’ in Gwadar. What exactly is going on here, many wish to ask.

Foreign investment is welcome in Pakistan, but in most cases it comes under a policy framework that is transparently known, has been debated in cabinet at least, and with the terms available to all. Some sort of a bilateral framework between two countries exclusively is also fine, but it should be known to all what exactly is being built, what concessions are being granted, how Pakistan’s long-term economic interests are being served, and so on.

Foreign investment that creates jobs, transfers skills and imparts dynamism to Pakistan’s economy and spurs its markets is welcome. But investment that seeks to create a transshipment enclave, or provides exclusive access rights and privileges to one group of investors only is of debatable merit.

When government ministers are asked for details, they refuse to entertain the request on the grounds that the other party — whether China or Saudi Arabia — prefers discretion in this matter.

Discretion is fine and has its place in deal-making of the sort that is under way between the states, but since sprawling Pakistani interests are involved, transparency and disclosure requirements must not be jettisoned.

The feeling right now appears to be that the government, in its desperation to avoid the stringent terms of an IMF programme, is signing every dotted line that is placed before it by foreign powers such as China and Saudi Arabia, in return for a bailout that will last a few months at best.

This is not the kind of policymaking that the PTI promised the country in the run-up to the election.

Published in Dawn, January 15th, 2019

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