Pakistan’s Prime Minister Shehbaz Sharif. File
| Photo Credit: Reuters

“Pakistan Prime Minister Shehbaz Sharif will embark on a five-day visit to China on June 4 to further strengthen bilateral ties,” the Foreign Office announced on May 31, as the all-weather allies seek to upgrade cooperation under the multi-billion dollar China-Pakistan Economic Corridor (CPEC).

“Sharif will be in China from June 4 to 8 on the invitation of Chinese President Xi Jinping,” Foreign Office spokesperson Mumtaz Zahra Baloch said at her weekly briefing.

China refuses to further expand cooperation with Pak in energy, water, climate under CPEC

The visit aims to increase cooperation under the CPEC project, as the two sides look forward to launching the second phase of the project. The CPEC was launched a decade ago and several projects related to energy and infrastructure had been already completed.

The Prime Minister chaired a meeting in Islamabad on Friday on his upcoming China visit directed to prepare an action plan to encourage Chinese companies to set up industries in Pakistan, assuring that Pakistan will provide all possible facilities to Chinese industrialists and investors.

Radio Pakistan reported that a detailed briefing was given to the Prime Minister on the preparations for his visit to China, during which a delegation of industrialists, investors and entrepreneurs from Pakistan will also accompany him during his visit to Chinese city Shenzhen.

The delegation will meet the Chinese business community and discuss the promotion of business-to-business relations between the two countries.

The Prime Minister directed to formulate a comprehensive plan regarding productive business-to-business meetings between the two countries during his visit to China. He also directed the Pakistani Ambassador to China to provide all possible facilities to the Pakistani business delegation in China.

Meanwhile, The Express Tribune reported that the government approved the construction of another road project under the CPEC at a cost of $2 billion, paving the way for the signing of its framework agreement during Prime Minister Sharif’s visit to Beijing.

The Central Development Working Party (CDWP), the body mandated to recommend mega schemes for higher forum approval, sanctioned the construction of the Thakot-Raikot 241-kilometre section of the Karakoram Highway, according to an announcement by the Ministry of Planning after the meeting.

The CDWP approved the project at a cost of Rs.567.5 billion (Pakistani Rupee) ($2 billion), with the direction that the price tag should be further reduced by rationalising overhead expenses.

The Karakoram Highway was originally built with the help of China about 50 years ago, and due to the difficult terrain, scores of people died during the construction phase.

A fully functional all-weather Karakoram Highway is critical for China-Pakistan economic and commercial relations. This is the third major road infrastructure project both nations aim to build under CPEC, following the Multan-Sukkur motorway and the Havelian-Thakot section of the Karakoram Highway.

The Deputy Chairman of the Planning Commission, Jehanzeb Khan, chaired the CDWP meeting. Mr. Khan’s position in the government may further be strengthened after the budget due to certain administrative changes that Prime Minister Sharif’s government is considering implementing.

Pakistan and China have already agreed to complete the remaining missing link of more than 800 kilometres of the Karakoram Highway during the 10th Joint Cooperation Committee meeting. “The 241-kilometre missing link is planned to be constructed with a Chinese soft loan,” according to Ministry of Planning officials.

Out of the $28 billion investment under CPEC, so far, $6.7 billion has been made in infrastructure projects. Last week, Pakistan requested Beijing to fund nine more projects under CPEC worth $17 billion, including the road missing link.

If China agrees to finance the project, it will be completed on an engineering procurement and construction modality, and the approval of the federal Cabinet will also be required. There were also issues with financing the project from the Public Sector Development Programme (PSDP), as the National Highway Authority’s financing requirements for ongoing projects have already gone up to Rs.1.7 trillion.

The country also needs Rs.250 billion annually if it wishes to complete the Mainline-I project of CPEC in the next eight years.

Pakistan’s Prime Minister Shehbaz Sharif speaks at the World Economic Forum (WEF) in Riyadh, Saudi Arabia, April 28, 2024.
| Photo Credit: Reuters

Pakistan Prime Minister Shehbaz Sharif has met IMF chief Kristalina Georgieva and discussed a new loan programme for the cash-strapped country to put the economy back on track.

In a meeting on the sidelines of the World Economic Forum (WEF) Special Meeting in Riyadh, the premier thanked Ms. Georgieva, the International Monetary Fund (IMF) Managing Director, for her support to Pakistan in securing the USD 3 billion standby arrangement (SBA) from IMF last year that was now nearing its completion.

Pakistan secured the USD 3 billion IMF programme in June last year, which helped it avert a sovereign default.

Pakistan is seeking a new long-term Extended Fund Facility (EFF) after the current SBA expires this month.

“Both sides also discussed Pakistan entering into another IMF program to ensure that the gains made in the past year were consolidated and its economic growth trajectory remained positive,” according to a statement issued by the Pakistan PM’s office on Sunday.

Mr. Sharif reiterated his government’s commitment to put Pakistan’s economy back on track.

Finance Minister Muhammad Aurangzeb has said Islamabad could secure a staff-level agreement on the new programme by early July.

Islamabad says it is seeking a loan over at least three years to help achieve macroeconomic stability and execute long-overdue and painful structural reforms, though Aurangzeb has declined to detail what size of the programme the country seeks.

If secured, it would be Pakistan’s 24th IMF bailout.

The USD 350 billion economy faces a chronic balance of payments crisis, with nearly USD 24 billion to repay in debt and interest over the next fiscal year — three times more than its central bank’s foreign currency reserves, according to Geo News.

According to the state-run PTV News post on X, this was the first meeting between the prime minister and Georgieva since his re-election last month. They last met in Paris in June 2023 on the margins of the Summit for New Global Financial Pact.

The IMF Executive Board is expected to meet on April 29 to decide on the final tranche of USD 1.1 billion under SBA, the post said.

Ms. Georgieva appreciated the leadership of Mr. Sharif for timely securing SBA last year, according to the statement.

During the meeting, the prime minister said that he had directed his financial team to carry out structural reforms, ensure strict fiscal discipline and pursue prudent policies that would ensure macro-economic stability and sustained economic growth.

The IMF MD shared her institution’s perspective on the ongoing programme with the premier, including the review process.

Separately, Prime Minister Sharif highlighted the “global inequity” in healthcare while speaking at a panel discussion on ‘Redefining Global Health Agenda’ during the special meeting of WEF.

“Today, I think the first and foremost problem is global inequity,” he said, adding that the Covid-19 pandemic had “exposed” these imbalances and gaps. “Imagine the global North and the global South; distribution of vaccines and so on and so forth,” he said.

He further said that climate change had “completely changed the landscape. Pakistan does not contribute (to) even a fraction of emissions. Yet we are on the red list of climate change and in 2022, we experienced the worst floods in Pakistan (…)and we had to invest hundreds and billions of rupees to rehabilitate people.”

This is the prime minister’s second trip to Saudi Arabia in less than a month. He last went on a three-day visit to the kingdom, which was his first foreign visit since he was re-elected as premier.

Separately, Mr. Sharif held a meeting on Sunday with Islamic Development Bank (IDB) President Muhammad Sulaiman Al Jasser, where they both agreed upon the earliest completion of various ongoing projects of the IDB in Pakistan.

During the meeting, held on the sidelines of the WEF, the premier thanked the IDB for investing USD 1 billion in various projects during the previous PML-N-led tenure, a statement on PML-N’s X account said.