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
July 25,2020

Madrid, Jul 25: Spain is witnessing a new surge in virus" coronavirus infections with nearly a thousand cases daily, a month after lifting the pandemic lockdown.

The country is reinstating both voluntary guidelines and mandatory restrictions that it had lifted on June 21, The Washington Post reported.

Spain on Wednesday reported over 224 outbreaks and 2,622 virus" coronavirus cases. According to a report in Washington Post, the new surge is attributed primarily to seasonal farmworkers, people attending family get-togethers and nightclub partyers.

On Thursday, the health ministry reported an additional 971 cases.

"The majority are related to fruit collection and also to the spaces where measures to avoid contact are relaxed," Spain Health Minister Salvador Illa told parliament. "We have to call on citizens to not lose respect for the virus not to be afraid of it, but not to lose respect for it either."

The government of Spain lifted all restrictions put in place to combat virus" coronavirus on June 21 and declared 'a new normal'. 

The virus" coronavirus pandemic till then had killed 24,000 people and infected more than 2,70,166.

Countries around the world are witnessing the second surge of virus" coronavirus. The resurgence could threaten the economic bounce Spain was hoping to get from vacationers eager for summer fun.

The surge in cases has been greatest in the northeastern region of Catalonia with more than 7,953 new confirmed cases since July 10.

Spain's National Epidemiological Survey has predicted that the rate of increase more than doubled in the past three weeks.

Meanwhile, the Catalan government reverted to pre-June 21 confinement rules in Barcelona and a dozen other municipalities in the metropolitan area, as well as in Figueras, Vilafant, La Noguera and Lleida.

Authorities have ordered bars and restaurants to limit indoor occupancy to 50 per cent, reduced sports to fewer than 10 people, closed night clubs and gyms and blocked some cultural activities.

The epidemiologist in charge of the region's biggest hospital warned in an interview last week with the Spanish daily El Pais that the situation in the agricultural hub of Lleida, located about 100 miles west of Barcelona, "had clearly gotten out of hand."

"Nobody foresaw that there would be a number of people coming from abroad to pick fruit in unfavourable conditions and that they might be infected," said epidemiologist Magda Campins of Vall d'Hebron in Barcelona. "And when the infections began to be detected, it was hard to keep tabs on the cases and their contacts because some of them, although they should have been in isolation, got away because they needed to earn money."

Catalonia's Department of Labour, Social Affairs and Family is using a hotel in Lleida to quarantine fruit workers who test positive for COVID-19 but are unable to isolate at home.

In the capital of Madrid, which was the epicentre during the pandemic's first wave in the spring, authorities reported 710 new cases in the past week. The use of face masks is widespread, but the region has shied away from making them mandatory in public.

Madrid's regional health secretary, Enrique Ruiz Escudero, defended that position while citing an uptick in infections in the under-40 age group. He told young people not to let down their guard.

"We can't take even one step backwards. Young people have to be aware of the responsibility they have," Ruiz Escudero said in a news conference Thursday. "I ask them to use the face mask and to maintain a safe distance."

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Agencies
March 26,2020

Madrid, Mar 26: More than three billion people around the world were living under lockdown on Wednesday as governments stepped up their efforts against the coronavirus pandemic which has left more than 20,000 people dead.

As the number of confirmed cases worldwide soared past 450,000, UN Secretary General Antonio Guterres warned that only a concerted global effort could stop the spread of the virus.

In Spain, the number of fatalities surpassed those of China, where the novel coronavirus first emerged three months ago, making it the hardest-hit nation after Italy.

A total of more than 20,800 deaths have now been reported in 182 countries and territories, according to an AFP tally.

Stock markets rebounded after the US Congress moved closer to passing a $2.2 trillion relief package to prop up a teetering US economy.

In Washington, President Donald Trump said New York, the epicenter of the US outbreak with over 30,000 cases, likely has a few "tough weeks" ahead but he would decide soon whether unaffected parts of the country can get back to work.

"We want to get our country going again," Trump said. "I'm not going to do anything rash or hastily.

"By Easter we'll have a recommendation and maybe before Easter," said Trump, who had been touting a strong US economy as he faces an election in November.

UN chief Guterres said the world needs to ban together to stem the pandemic.

"COVID-19 is threatening the whole of humanity -- and the whole of humanity must fight back," Guterres said, launching an appeal for $2 billion to help the world's poor.

"Global action and solidarity are crucial," he said. "Individual country responses are not going to be enough."

India's stay-at-home order for its 1.3 billion people is now the biggest, taking the total number of individuals facing restrictions on their daily lives to more than three billion.

Anxious Indians raced for supplies after the world's second-biggest population was ordered not to leave their houses for three weeks.

Russia, which announced the death of two patients who tested positive for coronavirus on Wednesday, is expected to follow suit.

President Vladimir Putin declared next week a public holiday and postponed a public vote on controversial constitutional reforms, urging people to follow instructions given by authorities.

In Britain, heir to the throne Prince Charles became the latest high-profile figure to be infected, though he has suffered only mild symptoms.

The G20 major economies will hold an emergency videoconference on Thursday to discuss a global response to the crisis, as will the 27 leaders of the European Union, the outbreak's new epicenter.

China has begun to relax its own draconian restrictions on free movement in the province of Hubei -- where the outbreak began in December -- after the country reported no new cases.

Crowds jammed trains and buses in the province as people took their first opportunity to travel.

But Spain saw the number of deaths surge to more than 3,400 after 738 people died in the past 24 hours and the government announced a 432-million-euro ($467 million) deal to buy medical supplies from Beijing.

The death toll in Italy jumped in 24 hours by 683 to 7,503 -- by far the highest of any country.

The number of French deaths was up by 231 on Wednesday to more than 1,330, and metro and rail services in Paris were cut to a minimum.

Spain and Italy were joined by France and six more EU countries in urging Germany and the Netherlands to allow the issue of joint European bonds to cut borrowing costs and stabilise the eurozone economy.

The call is likely to fall on deaf ears when EU leaders talk on Thursday -- with northern members wary of pooling debt with big spenders -- but they will sign off on an "unprecedented" recovery plan.

At La Paz University Hospital in Madrid, nurse Guillen del Barrio sounded bereft as he related what happened overnight.

"It is really hard, we had feverish people for many hours in the waiting room," the 30-year-old told AFP.

"Many of my colleagues were crying because there were people who are dying alone, without seeing their family for the last time."

Coronavirus cases are also spreading in the Middle East, where Iran's death toll topped 2,000, and in Africa, where Mali declared its first case and several nations announced states of emergency.

In Japan, which has postponed this year's Olympic Games, Tokyo's governor urged residents to stay home this weekend, warning of a possible "explosion" of the coronavirus.

Jerusalem's Church of the Holy Sepulchre, believed by Christians to house Christ's tomb, was shut as Israel tightened movement restrictions.

The impact of the pandemic is also hitting European football, with leagues and tournaments cancelled, while the fate of the Wimbledon tennis tournament could be decided next week.

The economic damage of the virus -- and the lockdowns -- could also be devastating, with fears of a worldwide recession worse than the financial meltdown more than a decade ago.

But financial markets rose after US leaders reached agreement on a stimulus package worth roughly 10 percent of the US economy, an injection Senate Majority Leader Mitch McConnell said represented a "wartime level of investment."

Meanwhile, more than half of all Americans have been told to stay at home, including residents of the largest state, California.

The United States has at least 65,700 cases and 942 people have died.

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News Network
April 26,2020

Apr 26: The Chinese city of Wuhan, where the global coronavirus pandemic began, now has no remaining cases in its hospitals, a health official told reporters on Sunday.

"The latest news is that by April 26, the number of new coronavirus patients in Wuhan was at zero, thanks to the joint efforts of Wuhan and medical staff from around the country," National Health Commission spokesman Mi Feng said at a briefing.

The city had reported 46,452 cases, 56% of the national total. It saw 3,869 fatalities, or 84% of China's total.

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