Pakistan seeks Saudi Arabia's help to tackle financial crisis

Agencies
October 17, 2018

New Delhi, Oct 17: Pakistan is seeking foreign aid to tackle its sagging economy and Saudi Arabia is one of the most important investors that it needs to get its hands on, opines Arif Rafiq, who authored 'The China-Pakistan Economic Corridor: Barriers and Impact'.

In an article, titled "What Is Saudi Arabia's Grand Plan for Pakistan?", published in The National Interest, Rafiq notes that the first foreign visit of Imran Khan after taking over as Pakistan's Prime Minister was to Saudi Arabia in a bid to woo Riyadh to invest in energy and mining in Pakistan.

"It appears that Islamabad asked Riyadh to park funds close to $10 billion with the State Bank of Pakistan-well before these investments achieve financial close-to shore up Pakistan's forex reserves in the interim," Rafiq wrote in the article published on October 16.

Terming Pakistan's claims and subsequent denials of inviting Saudi Arabia to join the China-Pakistan Economic Border (CPEC) as a strategic partner, as "Islamabad's scramble for dollars", the article states that talks between the two countries on several projects, including CPEC will, however, continue.

Islamabad has put forth five projects including the Reko Diq copper and gold mine in Balochistan, which amounts to hundreds of billions of dollars. However, the author, who is also editor of the CPEC Wire newsletter, pointed out that last year Pakistan lost an arbitration case to the Tethyan Copper Company.

The World Bank's International Center for Settlement of Investment Disputes ruled against Islamabad in relation to the unlawful denial of a mining lease for the Reko Diqproject in 2011. The tribunal is expected to determine Pakistan's liability this year, which might exceed 11 billion US dollar.

With Reko Diq's not-so-strategic location, that is, less than one hundred miles from Pakistan's border with Iran, the mine could be an easy target for the insurgent attacks.

"Resource nationalism is a driver of the ethnic Baloch insurgency, but it also receives support from regional states," Rafiq wrote.

Mentioning the suicide bombing incident by Balochistan Liberation Army, which attacked a convoy transporting Chinese engineers to the Saindak copper and gold mine, Rafiq noted that the attacker used an Iranian vehicle.

"Militants with several Baloch separatist groups combatting the Pakistani state are believed to be in Afghanistan or Iran. Projects linked to the Saudis would become targets in the same way Chinese projects have been over the past fifteen years," the article states.

Islamabad wants to rope in Riyadh for the second set of projects, which includes two government-owned operational regasified liquefied natural gas-fueled power plants in the Punjab province.

"Riyadh reportedly expressed interested in purchasing equity in the plants on a government-to-government basis, but that may not be legally possible. Instead, a Saudi power company, ACWA Power, could take part in open bidding for the plants. Sale of the plants could earn Islamabad much-needed cash, but there are geopolitical complications tied to that sale too. These power plants are fueled by liquified natural gas (LNG) from Qatar. Sale of the plants to a Saudi public or private entity would likely require an alternate source of LNG and could even impact Pakistan's fifteen-year LNG supply contract with Qatar," writes Rafiq.

The third investment project for Saudi Arabia in Pakistan is a Saudi Aramco refinery in Gwadar, the site of a Chinese-operated port and industrial zone. Just like Reko Diq mine, Gwadar shares a close proximity to Iran border.

The article goes on to mention that "Gwadar is a competitor to Iran's Chabahar port, where India will operate a terminal that will be used to bypass Pakistan to access Afghanistan and Central Asia. It is an end node for the China-Pakistan Economic Corridor, which begins in Kashgar, located in China's Xinjiang region. Economic activity and investment in Gwadar have progressed tepidly when compared to other regional upstarts like Duqm in Oman and Khalifa Port in Abu Dhabi, which have received significant inflows from China, with the potential to exceed $10 billion. Investment from a global energy giant like Saudi Aramco would catalyze other investments and boost port activity."

Rafiq also notes that even though a refinery in Gwadar would give the Saudis "an economic foothold in a strategic location" as it is right outside the Strait of Hormuz but close to Persian Gulf shipping lanes, and could lock Pakistan into purchasing Saudi crude, there are several flip sides to this investment.

One of the limitations to Saudis' investment is the memorandum of understanding signed by Saudi Aramco with a consortium of Indian state-owned oil companies for a $44 billion oil refinery and petrochemicals complex in India.

Rafiq also points that the domestic demands of Pakistan will be met if a refinery were to open in Gwadar and it would help Pakistan to save on import bills.

"Whether it's infrastructure development, energy trade, or defence hardware sales, China is ubiquitous across the Middle East and has been an equal opportunity partner to both Iran and its Gulf Arab adversaries. Iran is crucial to China's Silk Road Economic Belt. And the Gulf Arab states, especially the United Arab Emirates, could be critical to its Maritime Silk Road," reiterates Rafiq.

Talking about North-South gas pipeline project for which Pakistan is seeking investment from Saudi Arabia, the author observes, "Pakistan signed a government-to-government agreement with Russia to build the pipeline and supply the LNG. The two countries, however, have not come to agreement on pricing, and Rostec has struggled to find financing for the project, though reports last year indicated that China's Silk Road Fund could finance it. Russia may have difficulty supplying the LNG."

He asserted that Saudi's role in the project remains unclear. But Pakistan has also invited the Arab kingdom's investment in an open bidding for exploration in ten oil and gas blocs.

Noting that fuel makes up one of the most imported commodity in Pakistan, Rafiq says, "Reducing its dependence on imported fuels by ramping up domestic oil and gas exploration is critical for Pakistan to escape its boom-bust cycles that bring it to the IMF's doorstep every few years. Pakistan may actually have enough recoverable natural gas to not only meet domestic demand but also export it."

The article also notes that even though under Crown Prince Mohammed bin Salman's influence, the strategic use of aid and investment has increased, there is an economic basis for Saudi investment in Pakistan.

The article further mentions that the FDI from China has been going up as against going down of net inflows from the Gulf countries. But Iran has not been able to make any investment in Pakistan.

Rafiq opines that, "For Pakistan, there is no escape from geopolitics, even when it comes to issues like connectivity and trade. And that is true in a global sense as well as the United States adopts a tougher posture toward the Belt and Road Initiative, digs deeper into a tariff war with China, and continues to use economic sanctions or lawfare to force Iran to capitulate."

In his article, the author asserted that Pakistan faces strong challenge to address its economic problems. "Calls for Pakistan to become a "normal" state that puts its economic interests above its strategic are outdated, reflecting a view of globalization that is now passe," concluded Arif Rafiq in the piece.

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News Network
February 18,2020

Washington, Feb 18: The upcoming visit of President Donald Trump to India later this month has the potential to usher in a new era of bilateral ties between the two countries, a top American business advocacy group has said.

President Trump will pay a state visit to India on February 24 and 25 at the invitation of Prime Minister Narendra Modi. He would be accompanied by First Lady Melania Trump.

This would be the president's first bilateral visit in the third decade of the 21st century and also the first after his acquittal by the Senate in the impeachment trial.

"I believe President Trump's upcoming visit to India has the potential to usher in a new era of our bilateral ties," Mukesh Aghi, President of the US India Strategic and Partnership Forum (USISPF) said in a statement on Monday.

On the sidelines of the visit, the USISPF, in collaboration with the Federation of Indian Chambers of Commerce and Industry (FICCI) and the ORF, has announced to organise a program entitled "US-India Forum: Partners for Growth".

The full-day discussion will focus on the key pillars defining India and the US' strategic, economic, and cultural partnership over the next decade.

"We have an opportunity before us to make real progress on multiple aspects of the relationship— whether it is upholding peace and security in the Indo-Pacific region; building upon an already strong energy partnership; developing co-production and co-development opportunities in the defense space; or strengthening bilateral trade," Aghi said.

"We look forward to an extremely successful visit and some concrete outcomes from the visit," he said.

The day-long programme on February 25 in New Delhi, will bring together over 500 senior business executives, members of the US-India think tank community and leading figures of the Indian diaspora to set the agenda for this strategic partnership.

Discussions during the day will touch upon areas, including the Indo-Pacific Strategy and Maritime Security; the US-India Defence Partnership, the US-India Energy Partnership, Elevating US-India Trade and Investment and Role of the Indian Diaspora in US-India Relations.

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News Network
February 19,2020

London, Feb 19: UK Home Secretary Priti Patel today announced the launch of the Britain's new points-based visa system, aimed at attracting the "brightest and the best" from the world, including from India, and cutting down numbers of cheap, low-skilled workers coming to the country.

The new system will come into force from January 1, 2021 at the end of the transition period after the UK's exit from the European Union (EU) last month, which will formally end free movement of people within the economic bloc for the UK as a non-member.

The new post-Brexit system, which will apply equally to the EU and non-EU countries like India, is based on assigning points for specific skills, qualifications, salaries and professions, with visas only awarded to those who gain enough points.

"Today is a historic moment for the whole country. We're ending free movement, taking back control of our borders and delivering on the people's priorities by introducing a new UK points-based immigration system, which will bring overall migration numbers down," said Ms Patel, the senior-most Indian-origin Cabinet minister.

"We will attract the brightest and the best from around the globe, boosting the economy and our communities, and unleash this country's full potential," Ms Patel, in charge of the UK's visa and immigration system, said.

The UK Home Office said the new system is a direct response to the 2016 referendum in favour of Brexit, which was seen as a vote to end the country's reliance on cheap migrant labour and reduce overall levels of migration with tighter security.

"The new single global system will treat the EU and non-EU citizens equally. It will give top priority to those with the highest skills and the greatest talents, including scientists, engineers and academics," the Home Office said.

The Global Talent Scheme, a fast-track visa to be in operation from Friday, will also apply to the EU citizens from next year to allow highly-skilled scientists and researchers to come to the UK without a job offer.

Professor Alice Gast, President of Imperial College London, said: "British science is global. The new post-study work and Global Talent visas will help us to attract the world's brightest students and researchers, wherever they come from."

"From the race to develop a coronavirus vaccine to clean energy, British science's international collaborations drive innovation and excellence."

The government said the points threshold for the new system will be carefully set to attract the talent the UK needs. Skilled workers will need to meet a number of relevant criteria, including specific skills and the ability to speak English, to be able to work in the UK. All applicants will be required to have a job offer and, in line with the Migration Advisory Committee''s (MAC) recommendations, the minimum salary threshold will be set at 25,600 pounds - lower than the previous 30,000 pounds level for Tier 2 work visas.

The new points-based system will also expand the skills threshold for skilled workers.

Those looking to live and work in the UK will need to be qualified up to A-level or equivalent, rather than degree-level under the current system. This will provide greater flexibility and ensure UK business has access to a wide pool of skilled workers, the Home Office said.

In line with the British Prime Minister Boris Johnson's manifesto commitment in the December 2019 General Election, there will be no specific route for low-skilled workers.

"It is estimated 70 per cent of the existing EU workforce would not meet the requirements of the skilled worker route, which will help to bring overall numbers down in future," the Home Office said.

Student visa routes will also be points-based and be opened up to EU citizens from next year.

Those wishing to study in the UK will need to demonstrate that they have an offer from an approved educational institution, that they can support themselves financially and that they speak English.

To address the specific labour concerns of the agricultural sector reliant on seasonal workers from the EU, the Seasonal Workers Pilot will be expanded in time for the 2020 harvest from 2,500 to 10,000 places.

EU citizens and other non-visa nationals will not require a visa to enter the UK when visiting the UK for up to six months.

However, the use of national identity cards will be phased out for travel to the UK and the Home Office highlighted that as part of its post-Brexit offer, those EU citizens resident in the UK by December 31 2020 can still apply to settle in the UK through the EU Settlement Scheme until June 2021.

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News Network
February 3,2020

Beijing, Feb 3: The first batch of patients arrived on Monday at a specialised hospital built in just 10 days as part of China's intensive efforts to fight a new virus.

Huoshenshan Hospital and a second facility with 1,500 beds that's due to open this week were built by construction crews who are working around the clock in Wuhan, the city in central China where the outbreak was first detected in December.

The Wuhan treatment centres mark the second time Chinese leaders have responded to a new disease by building specialised hospitals almost overnight. As severe acute respiratory syndrome, or SARS, spread in 2003, a facility in Beijing for patients with that viral disease was constructed in a week.

The first batch of patients arrived at the Huoshenshan Hospital at 10 am on Monday, according to state media. The reports gave no details of the patients' identities or conditions.

The ruling Communist Party's military wing, the People's Liberation Army, sent 1,400 doctors, nurses and other personnel to staff the Wuhan hospital, the official Xinhua News Agency said. The government said earlier some have experience fighting SARS and other outbreaks.

Authorities have cut most road, rail and air access to Wuhan and surrounding cities, isolating some 50 million people, in efforts to contain the viral outbreak that has sickened more than 17,000 and killed more than 360 people.

The Huoshenshan Hospital was built by a 7,000-member crew of carpenters, plumbers, electricians and other specialists, according to the Xinhua News Agency.               Photos in state media showed workers in winter clothing, safety helmets and the surgical-style masks worn by millions of Chinese in an attempt to avoid contracting the virus.

About half of the two-storey, 600,000-square-foot building is isolation wards, according to the government newspaper Yangtze Daily. It has 30 intensive care units.

Doctors can talk with outside experts over a video system that links them to Beijing's PLA General Hospital, according to the Yangtze Daily. It said the system was installed in less than 12 hours by a 20-member "commando team" from Wuhan Telecom Ltd.

The building has specialised ventilation systems and double-sided cabinets that connect patient rooms to hallways and allow hospital staff to deliver supplies without entering the rooms.

The hospital received a donation of "medical robots" from a Chinese company for use in delivering medicines and carrying test samples, according to the Shanghai newspaper The Paper.

In other cities, the government has designated hospitals to handle cases of the new virus.

In Beijing, the Xiaotangshan Hospital built in 2003 for SARS is being renovated by construction workers. The government has yet to say whether it might be used for patients with the new disease.

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