China-Pakistan: Beijing to "Further Deepen and Expand" Ties, Support Pak "Financial Stability"

Top Chinese officials have committed to “further deepen and expand” ties with Pakistan at meetings at the highest levels between the military and civilian leaderships of the two nations.  Chinese Prime Minister Li Qiang assured  Prime Minister Shehbaz Sharif of his country's support for Pakistan's "financial stability".  Also in the news this week is a Chinese government commission report recommending the construction of a 3,000 kilometer long railway link between China and Pakistan at an estimated cost of $57.7 billion, making it the most expensive infrastructure project in the Chinese-sponsored Belt and Road Initiative (BRI) to date.  The railroad will connect Pakistan's Gwadar Port on the Arabian Sea with the western Chinese city of Kashgar in Xinjiang province. This appears to be a part of the Chinese response to the US-led Indo-Pacific strategy which Beijing sees threatening its interests in the region. Will India allow itself be used as a US proxy against China? Will the US-China rivalry force India and Pakistan to choose sides as it plays out in South Asia? Will China's assistance now push Pakistan further into the Chinese camp? 

US-India Ties:

US President Joseph R. Biden is pursuing close strategic ties with Indian Prime Minister Modi. The false rhetoric of "democracy" and "shared values" is often used to disguise Washington's true intent to use India to counter China's rise as a global superpower. Meanwhile, China with its long land border with India has warned New Delhi that it "will be the biggest victim" of the US proxy war against China.  In a recent Op Ed in Global Times, considered a mouthpiece of the Beijing government, Professor Guo Bingyun  has wrote as follows: 

"Inducing some countries to become US' proxies has been Washington's tactic to maintain its world hegemony since the end of WWII. It does not care about the gains and losses of these proxies. The Russia-Ukraine conflict is a proxy war instigated by the US. The US ignores Ukraine's ultimate fate, but by doing so, the US can realize the expansion of NATO, further control the EU, erode the strategic advantages of Western European countries in climate politics and safeguard the interests of US energy groups. It is killing four birds with one stone......If another armed conflict between China and India over the border issue breaks out, the US and its allies will be the biggest beneficiaries, while India will be the biggest victim. Since the Cold War, proxies have always been the biggest victims in the end". 

US-Pakistan Ties: 

After assuming office as President of the United States, Joe Biden called many world leaders. But he did not bother to call then Pakistani Prime Minister Imran Khan, nor has he made a call to the current Prime Minister Shehbaz Sharif. This has sent a clear signal to Islamabad that Washington doesn't see it as important.  This prompted Brookings' Bruce Reidel and Madiha Afzal to write: "Biden did not call Khan while he was prime minister. Last fall, we argued he should. Khan in turn declined to attend Biden’s Summit for Democracy. The White House should call Shahbaz Sharif". 

Madiha Afzal of Brookings Institution again reminded Biden this year that "Pakistan, the fifth-largest country in the world and a nuclear-armed nation, ought to be seen by the United States on its own terms and not through the prism of its neighbors. A cold shoulder risks pushing Pakistan further toward China — which is neither an inevitable nor desirable outcome for the United States".  


CPEC Transforming Pakistan: 

Back in 2018, former US Ambassador to Pakistan Richard G. Olson wrote in  a New York Times Op Ed titled "How Not to Engage With Pakistan" that "(CPEC's) magnitude and its transformation of parts of Pakistan dwarf anything the United States has ever undertaken".  Olson went on to warn the Trump Administration that "Without Pakistani cooperation, our (US) army in Afghanistan risks becoming a beached whale". Among the parts of Pakistan transformed by China Pakistan Economic Corridor (CPEC) are some of the least developed regions in Balochistan and Sindh, specifically Gwadar and Thar Desert. 

Source: China Daily

Pakistan's Economic Crisis:

Some blame Pakistan's current balance of payments crisis on Chinese debt taken on to fund CPEC projects. The evidence does not support this. The fact is that Pakistan failed to grow its exports while its imports boomed for over 5 years on Prime Minister Nawaz Sharif's watch from 2013-2018. It forced Pakistan to seek an IMF bailout which came with its own tough conditions to compel economic reforms and greater fiscal discipline. Geopolitics has also played a role in it. The Ukraine War pushed the energy and other commodity prices higher, exacerbating Pakistan's trade deficits. At the same time, the Biden administration has shown little support for Pakistan's bailout by the IMF.  China's latest commitment to support "Pakistan's financial stability" will help, pushing Pakistan further into the Chinese camp. 

Here's a Wall Street Journal video on US-China Rivalry and Pakistan:

Related Links:

Haq's Musings

South Asia Investor Review

India Emerges the Biggest Winner of Ukraine War, US-China Rivalry

Can Washington Trust Modi as a Key Ally Against China?

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

US-China Battle For Influence in Pakistan

Russia Sanction: India Profiting From Selling Russian Oil

Indian Diplomat on Pakistan's "Resilience", "Strategic CPEC"

Vast Majority of Indians Believe Nuclear War Against Pakistan is "Winnable"


Riaz Haq said…
Key nations sit out U.S. standoff with Russia, China, leaks show - The Washington Post

THE DISCORD LEAKS | Documents illustrate how emerging nations’ bid to duck the great power showdown have put Biden’s global agenda at risk

The documents, among a trove of U.S. secrets leaked online through the Discord messaging platform, provide a rare glimpse into the private calculations by key emerging powers, including India, Brazil, Pakistan and Egypt, as they attempt to straddle allegiances in an era when America is no longer the world’s unchallenged superpower.

This is apparent in Pakistan, which received billions of dollars in U.S. economic and security aid following 9/11 but now is heavily reliant on Chinese investment and loans. According to one of the leaked documents, Hina Rabbani Khar, Pakistan’s minister of state for foreign affairs, argued in March that her country can “no longer try to maintain a middle ground between China and the United States.”

In an internal memo she titled “Pakistan’s Difficult Choices,” Khar, who previously served as Pakistan’s foreign minister, cautioned that Islamabad should avoid giving the appearance of appeasing the West, and said the instinct to preserve Pakistan’s partnership with the United States would ultimately sacrifice the full benefits of what she deemed the country’s “real strategic” partnership with China. The undated intelligence document does not detail how the United States gained access to Khar’s memo.

Another document, dated Feb. 17, describes Pakistani Prime Minister Shehbaz Sharif’s deliberations with a subordinate about an upcoming U.N. vote on the Ukraine conflict, and what the government anticipated would be renewed Western pressure to back a resolution condemning Russia’s invasion.

The aide advised Sharif that support for the measure would signal a shift in Pakistan’s position following its earlier abstention on a similar resolution, the intelligence document says. Pakistan had the ability to negotiate trade and energy deals with Russia, and backing the Western-backed resolution could jeopardize those ties, the aide noted.

When the U.N. General Assembly voted Feb. 23, Pakistan was among 32 countries that abstained.

Pakistani officials and those from other countries named in the leaked documents declined to comment.

While core U.S. allies in Europe and East Asia have come together to back Biden’s Ukraine campaign, providing an ever-increasing array of weapons and weaning themselves off Russian energy, Washington has encountered resistance elsewhere.

The Biden administration has told those countries that it is not asking them to pick sides between the United States on one hand and China and Russia on the other, a message that Secretary of State Antony Blinken has stressed in his travels. But nations including South Africa and Colombia bridle at what they see as an implicit choice.
Riaz Haq said…
India is sliding into Putin’s hands
Story by Angela Barnes

India is now the largest country in the world by population, having surpassed China in the latest UN figures. It’s also now the biggest buyer of Russian crude oil in the world, and its armed forces are largely equipped with Russian weapons.

The West has traditionally seen India as a friend, but when it comes to actions rather than words the world’s fifth biggest economy pays more attention to what Vladimir Putin wants than it does to the desires of Washington or London.

Karan Mehrishi, Indian economics commentator, tells the Telegraph that Russian imports have saved India around $3bn in the past year, compared to its total annual oil import bill of nearly $120bn. Russia has even knocked the Organization of the Petroleum Exporting Countries (OPEC) off the top spot for supplying India, since Western nations rejected Kremlin-supplied black gold following Putin’s invasion of Ukraine.

India will probably find, like Germany and other European nations before it, that becoming dependent on Putin for critical energy supplies is to place oneself far too much under his control. Indian Prime Minister Narendra Modi, however, seems to believe that India is simply seizing the opportunity to snap up cheap crude to meet its rising demand.

In March, for example, Indian fuel requirements jumped by 5 per cent year-on-year to 4.83 million barrels per day (bpd).

“The Indian economy is the fastest growing on Earth and is expected to become the world’s third largest by 2025. It will attain the $10tn GDP threshold by 2031,” says Mehrishi.

An economy that big needs huge amounts of energy, and India is heavily dependent on imports.

“Inflation worries rather than geopolitical concerns have taken centre stage, leading New Delhi to brush away Western reprobation about increasing economic ties with Moscow,” comments Susannah Streeter, head of money and markets at Hargreaves Lansdown. “The approach appears to be working, with India’s headline inflation rate going in the right direction, helped also by lower food prices. But the price spiral is still not unwinding fast enough to meet the central bank’s target.”

Osama Rizvi, energy analyst at Primary Vision, describes the relationship between Russia and India as a marriage of convenience.

“They are interdependent: India, which imports more than 85 per cent of its oil, and Russia, which depends on the proceeds from oil and gas for almost 50 per cent of its revenue,” he told the Telegraph.

India’s appetite for Russian crude has resulted in Moscow overtaking Iraq for the first time to emerge as its top oil supplier, pushing Saudi Arabia down to third place in the last fiscal year.

“Refinitiv Oil Research analysis forecasts that India will import 1.94 million barrels per day from Russia, more than doubling since last July and exceeding total imports from the Middle East region,” Streeter says.

As a result, Russia has been able to escape the worst effect of the penalties imposed by the West to isolate it. Non-sanctioning countries like India have propped up the crude oil export sales which are one of the main factors preventing Russia from going bankrupt.

India’s close ties to Russia might seem more obvious since the war in Ukraine started in February last year, but good relations between the two countries go back a long way. A positive relationship between the two countries has existed since the 18th century reign of Tsar Paul – albeit interrupted by the period of British rule, when Russia was seen as a threat by the colonial government. Following independence from Britain, India once again established firm diplomatic ties, beginning with Nehru’s 1955 visit to the Soviet Union.

“Apart from getting oil at below market rates, India could have also been obligated to buy Russian oil to help a friend,” Mehrishi says.

Riaz Haq said…
India is sliding into Putin’s hands
Story by Angela Barnes

Since the 1960s, the Soviet Union has supplied the Indian military with advanced weaponry that it would have had difficulty obtaining elsewhere: and India has in fact often looked to the Soviets and then Russia as a potential ally against the West. Perhaps the strongest example of Soviet Union military support came during the 1971 Bangladesh Liberation War, when the Kremlin deployed nuclear submarines to the Indian Ocean to ward off any Western meddling with Indian interests.

That long-standing supply of weapons to India continues. Russian state news agencies in February set arms exports to India at around $13bn over the past five years. New Delhi has placed further orders with Moscow for military equipment and weapons exceeding $10bn.

Tellingly, prime minister Narendra Modi has never condemned Russia's invasion of Ukraine. Meanwhile, relations between India and Russia are only set to strengthen with the two countries in advanced negotiations on establishing a free trade agreement – a move that will further stoke tensions with the West.

“Pushing down energy prices will be the priority of the Modi administration, so maintaining good trade relations with Moscow will continue to be seen as in the national interest, despite sharp disapproval behind diplomatic doors,” Streeter adds.

A lot of Westerners think of India as a benign, neutral democracy which should naturally align with liberal values against the bloody-handed tyranny of modern Russia. But the Indians don’t see it that way: and the blunt truth is, they are keeping Vladimir Putin in business for no better reason than slightly cheaper oil.
Riaz Haq said…
#UNSC says #Taliban Foreign Minister can meet #Pakistan, #China ministers. #Chinese & #Pakistani officials have said in the past that they would welcome Taliban-led #Afghanistan into the multibillion-dollar China-Pakistan Economic Corridor (#CPEC).

Afghanistan sits as a key geographical trade and transit route between South and Central Asia and has billions of dollars of untapped mineral resources. The Taliban seized power in August 2021 as U.S.-led forces withdrew after 20 years of war.


UNITED NATIONS, May 1 (Reuters) - A U.N. Security Council committee on Monday agreed to allow the Taliban administration's foreign minister Amir Khan Muttaqi to travel to Pakistan from Afghanistan next week to meet with the foreign ministers of Pakistan and China, diplomats said.

Muttaqi has long been subjected to a travel ban, asset freeze and arms embargo under Security Council sanctions.

According to a letter to the 15-member Security Council Taliban sanctions committee, Pakistan's U.N. mission requested an exemption for Muttaqi was to travel between May 6-9 "for a meeting with the foreign ministers of Pakistan and China."

It did not say what the ministers would discuss. It said Pakistan would cover all costs associated with Muttaqi's trip.

Chinese and Pakistani officials have both said in the past that they would welcome Taliban-led Afghanistan into the multibillion-dollar China-Pakistan Economic Corridor (CPEC) infrastructure project, part of the Belt and Road Initiative.

Afghanistan sits as a key geographical trade and transit route between South and Central Asia and has billions of dollars of untapped mineral resources. The Taliban seized power in August 2021 as U.S.-led forces withdrew after 20 years of war.

The Security Council committee allowed Muttaqi to travel to Uzbekistan last month for a meeting of the foreign ministers of neighboring countries of Afghanistan to discuss urgent peace, security, and stability matters.

U.N. Secretary-General Antonio Guterres began a two day meeting on Monday in Doha with special envoys on Afghanistan from various countries that aims "to achieve a common understanding within the international community on how to engage with the Taliban," U.N. spokesman Stephane Dujarric said.

Dujarric said the closed-door meeting would discuss key issues key issues, such as human rights - in particular women's and girls' rights - inclusive governance, countering terrorism and drug trafficking.

Taking part are China, France, Germany, India, Indonesia, Iran, Japan, Kazakhstan, Kyrgyzstan, Norway, Pakistan, Qatar, Russia, Saudi Arabia, Tajikistan, Turkey, Turkmenistan, United Arab Emirates, Britain, the United States, Uzbekistan, the European Union and the Organisation of Islamic Cooperation.

Riaz Haq said…
#America’s Bad Bet on #Modi.
#Delhi Won’t Side With #Washington Against #Beijing. #India’s significant weaknesses versus #China, & its inescapable proximity to it, guarantee that Delhi will never involve itself in any #US confrontation with Beijing. #BJP

by Ashley Tellis

For the past two decades, Washington has made an enormous bet in the Indo-Pacific—that treating India as a key partner will help the United States in its geopolitical rivalry with China. From George W. Bush onward, successive U.S. presidents have bolstered India’s capabilities on the assumption that doing so automatically strengthens the forces that favor freedom in Asia.

The administration of President Joe Biden has enthusiastically embraced this playbook. In fact, it has taken it one step further: the administration has launched an ambitious new initiative to expand India’s access to cutting-edge technologies, further deepened defense cooperation, and made the Quad (Quadrilateral Security Dialogue), which includes Australia, India, Japan, and the United States, a pillar of its regional strategy. It has also overlooked India’s democratic erosion and its unhelpful foreign policy choices, such as its refusal to condemn Moscow’s ongoing aggression in Ukraine. It has done all of this on the presumption that New Delhi will respond favorably when Washington calls in a favor during a regional crisis involving China.


India’s priority has been to receive American assistance in building up its own national capabilities so it can deal with threats independently. The two sides have come a long way on this by, for example, bolstering India’s intelligence capabilities about Chinese military activities along the Himalayan border and in the Indian Ocean region. The existing arrangements for intelligence sharing are formally structured for reciprocity, and New Delhi does share whatever it believes to be useful. But because U.S. collection capabilities are so superior, the flow of usable information often ends up being one way.


The fundamental problem is that the United States and India have divergent ambitions for their security partnership. As it has done with allies across the globe, Washington has sought to strengthen India’s standing within the liberal international order and, when necessary, solicit its contributions toward coalition defense. Yet New Delhi sees things differently. It does not harbor any innate allegiance toward preserving the liberal international order and retains an enduring aversion toward participating in mutual defense. It seeks to acquire advanced technologies from the United States to bolster its own economic and military capabilities and thus facilitate its rise as a great power capable of balancing China independently, but it does not presume that American assistance imposes any further obligations on itself.

As the Biden administration proceeds to expand its investment in India, it should base its policies on a realistic assessment of Indian strategy and not on any delusions of New Delhi becoming a comrade-in-arms during some future crisis with Beijing.

Riaz Haq said…
#India's ties with #Russia remain steady. But #Moscow's tighter embrace of #China makes it wary. It appears “this (#Delhi-Moscow) relationship is going down from being a very high-value strategic partnership to a transactional one" #Modi #US #Ukraine

India’s relationship with Russia remains steadfast as both sides seek to deepen their economic engagements.

But Moscow has also grown close to Beijing since invading Ukraine, and that raises critical national security concerns for New Delhi, say observers.

India’s leaders are “carefully watching” as Russia becomes more isolated and moves closer to “China’s corner,” said Harsh V. Pant, vice president for studies and foreign policy at Observer Research Foundation, a New Delhi-based think tank.

It appears “this relationship is going down from being a very high-value strategic partnership to a transactional one,” said Sreeram Chaulia, dean of the Jindal School of International Affairs, adding Moscow’s “tighter embrace of China” doesn’t bode well for India’s national security needs.

India’s relationship with Russia remains steadfast as both sides seek to deepen their economic ties. But Moscow has also grown close to Beijing since invading Ukraine, and that raises critical national security concerns for New Delhi.

Indian external affairs minister S. Jaishankar recently said the country was ready to restart free trade negotiations with Russia.

“Our partnership today is a subject of attention and comment, not because it has changed, but because it has not,” he said, describing the relationship as “among the steadiest” in the world.

Russia also wants to “intensify” free trade discussions with India, Deputy Prime Minister Denis Manturov said during a visit to Delhi. Manturov is also Moscow’s trade minister.

Despite the display of economic cooperation, India’s leaders are “carefully watching” as Russia becomes more isolated and moves closer to “China’s corner,” said Harsh V. Pant, vice president for studies and foreign policy at Observer Research Foundation, a New Delhi-based think tank.

Russia’s “weak and vulnerable position” and growing reliance on China for economic and strategic reasons, will definitely be worrying for India, he told CNBC.

It’s becoming “more difficult with every passing day because of the closeness that we are witnessing between Beijing and Moscow,” Pant noted. “The pressure on India is increasing, it certainly would not like to see that happen.”

New Delhi will try as much as possible to avoid a potential “Russia-China alliance or axis,” Pant added. “As that will have far reaching consequences and will fundamentally alter India’s foreign policy and strategic calculation.”

There are national interest reasons “why India continues to buy cheap Russian oil and trade with them, this FTA is part of that,” said Sreeram Chaulia, dean of the Jindal School of International Affairs in New Delhi.

But it appears “this relationship is going down from being a very high-value strategic partnership to a transactional one,” he noted, adding Moscow’s “tighter embrace of China” doesn’t bode well for India’s national security needs.

India, which holds the current G-20 presidency, still hasn’t condemned Russia over its invasion of Ukraine.
Riaz Haq said…
#China's Role Growing in #SouthAsia Region as Foreign Minister Qin Gang heads to #Pakistan with #Afghanistan talks high on agenda. China also hopes to use the visit to further strengthen ties with Pakistan, one of its most important strategic partners.

Chinese Foreign Minister Qin Gang will visit Pakistan on Friday with efforts to resolve the crisis in Afghanistan high on the agenda.
During his two-day stopover, Qin will meet Prime Minister Shehbaz Sharif and Foreign Minister Bilawal Bhutto Zardari, and will also join in three-way talks with the Taliban’s interim foreign minister, Amir Khan Mutaqi.
Mutaqi, who is the subject of a travel ban under United Nations Security Council sanctions, was granted an exemption to travel to Pakistan for the meeting.
“China hopes that this visit will follow through on the important common understandings between the leaders of the two countries,” the Chinese foreign ministry said on Thursday, referring to a phone call between Sharif and Premier Li Qiang last week, as well as the Pakistani leader’s meeting with President Xi Jinping in Beijing in November.
During the November visit, Xi pledged further collaboration in the development of the China-Pakistan Economic Corridor – a US$60 billion transport infrastructure project – and support for efforts to stabilise the Pakistani economy.

Qin’s trip also aims to “further deepen strategic communication and practical cooperation, promote the building of an ever closer China-Pakistan community with a shared future in the new era, and contribute positive energy to the region and the wider world”, according to the Chinese statement.
The statement also used Beijing’s preferred formulations to describe the relationship between the two countries, alluding to their “ironclad friendship” and “all-weather strategic partnership”.
Qin will travel to Pakistan after attending the Shanghai Cooperation Organisation’s (SCO) foreign ministers’ meeting in Panaji, the capital of the Indian state of Goa. His tour also included two days in Myanmar where he became the most senior Chinese official to meet junta leader Min Aung Hlaing since the 2021 coup that brought him to power.
Riaz Haq said…
#India-#Russia Ties ‘Nose Dive’; After S-400 Shipments, Russia Could Now Suspend #Oil #Exports To India. @vkthakur. In Goa at #SCO2023 , Lavrov bluntly implied that in its dealings with Russia, India wants to eat the cake and have it too. #China #US

India, which has been lapping up cheap Russian oil for domestic consumption as well as export as refined commodities, hasn’t been compensating Russia for its oil imports.

Lavrov pointed out that Russia has accumulated billions of rupees in Indian banks that Russia cannot use.

“This is a problem. We need to use this money. But for this, Rupees must be converted to another currency, and this is now being discussed.”

India and Russia have been exploring options for settling their trade in rupees or rubles since the start of the Russian Special Operation (SMO) in Ukraine in February 2022, but they have made little headway even after more than a year.

Trade Imbalance Between India & Russia
The problem is – India’s imports from Russia far exceed its exports. As a result, Indian rupee payments to Russian bank Vostro accounts in Indian banks are of no use to Russia.

The obvious solution is for India to step up its exports to Russia. Unfortunately, Indian exports are severely constrained by the lackluster quality of Indian goods. Also, Russia is a resource-rich country, so India doesn’t have the option to export commodities to Russia.

India could pay the accumulated billions of rupees to Russia by converting them to a currency like the Chinese Yuan, however, that would entail bearing the cost of conversion. China’s massive trade surplus with India makes the rupee particularly weak against the Yuan.

Suspension of Rupee-Rouble Trade
According to Reuters, rupee-rouble trade between India and Russia has now been suspended. The suspension will likely restrict, if not end, the import of cheap Russian oil since the start of the Ukraine war.

The Imperative To Increase Exports
Nations become economic powerhouses by increasing their exports. To do so, they need to manufacture quality goods in demand across the world.

For example, Russia has the ability to make for itself just about everything that it needs, but that doesn’t make Russia an economic powerhouse. Russian exports are also constrained by quality when compared to goods manufactured by China, Japan, and many European countries.

Russia’s pivot towards Asia is a historic opportunity for the Indian private sector to increase exports to Russia. Our response to the crisis in Ukraine so far has been akin to a trader’s response, not the response of an entrepreneur. India can easily carve a niche for itself with the export of consumer goods to Russia.

Impact On Defence Relationship
India’s deep-rooted defense relationship with Russia, which has stood India in good stead for decades, has been threatened for some years now by US CAATSA sanctions. The suspension of Rupee trade with Russia will seriously impact India’s defense capability, possibly at a time when India can least afford enfeeblement.

It’s likely that Russia held back the supply of an additional two S-400 regiments to India earlier because of India’s inability to compensate Moscow. Russia could continue to supply oil to India because Russia has surplus oil, but it couldn’t continue supplying S-400 because it doesn’t have surplus S-400 regiments. Not now, at least, when it’s fighting a war.

Willing Make-In-India Partner
Russia has expressed its enthusiasm for participating in Make-in-India defense projects through industry-to-industry collaboration.

India’s defense minister Rajnath Singh held a bilateral meeting with the Minister of Defence of Russia, Army General Sergei K Shoigu, on the sidelines of the Shanghai Cooperation Organisation (SCO) Defence Ministers’ meeting in New Delhi on April 28, 2023.
Riaz Haq said…
#India-#Russia Ties ‘Nose Dive’; After S-400 Shipments, Russia Could Now Suspend #Oil #Exports To India. @vkthakur. In Goa at #SCO2023 , Lavrov bluntly implied that in its dealings with Russia, India wants to eat the cake and have it too. #China #US

The two Ministers discussed wide-ranging issues of bilateral defense cooperation, including military-to-military ties as well as industrial partnership. They expressed satisfaction over the continued trust and mutual respect between the two countries, particularly in defense, and reiterated their commitment to strengthening the partnership.

Wary of US CAATSA sanctions, India is seeking joint venture development and local manufacture of weapon systems from Russia, and Russia has been forthcoming.

India and Russia have discussed technical collaboration for local production of S-400 systems in India. In September 2019, Russia’s state corporation Rostec CEO, Sergey Chemezov, said that both India and Russia are currently in talks to launch a local S-400 production line in India.

“Yes, we are discussing the localization [of S-400 production] with India as well”, Chemezov reportedly told Russia’s RBK TV.

Russia is participating in the competitive bid for the local manufacture of P-75I submarines in India. Russia is ready to transfer its Amur 1650 submarine technology to India, and it’s ready to collaborate with the DRDO in fitting the submarine with an AIP system

Russia is ready to provide technology for India’s new tanks. The Russian Federal Service of Military-Technical Cooperation (FSVTS) said that Moscow can share its advanced Armata modular tracked platform with India. Vladimir Drozhzhov, the deputy director of FSVTS, told Russian media that Moscow is keen on jointly developing India’s main battle tank with modern Russian technology.

Other JV development offers from Russia include the Su-75 Checkmate stealth fighter.

Disconcerting Lack Of Urgency On The Part Of India
The lack of urgency on the part of our negotiators to work out a trade mechanism is disconcerting. As Lavrov said, Russia, which is fighting a war, needs to use the money that India owes to Russia. As a strategic partner with special privileges, you would expect India to be sensitive to Russia’s concerns.

It will indeed be deeply ironic if Indian tardiness (Or perhaps Western pressures?) derail a deep-rooted mutually beneficial relationship that has stood the test of time.

The indirect impact of the derailing – Russia would likely be forced to lean more heavily on China – could have a more ominous negative impact on India’s long-term security.

Cost Competitiveness of Russian Weapons
There is a good reason why India continues to seek Russian defense technology despite its access to Western arms manufacturers in Israel, France, the UK, and the US; Russian defense technology is more cost-effective than Western technology in certain areas, such as submarines, hypersonics, and armor.

India has been a good market for Russian defense OEMs. However, if Russian defense OEMs are unable to operate in India, the loss will be India’s more than Russia’s. Russian OEMs will easily find alternative markets – in the Middle East, South America, and Africa – as this world inexorably moves towards multipolarity.

India, on the other hand, would slip from being a regional power to being a regional US vassal.

Riaz Haq said…
#China backs #Pakistan on #Kashmir post #Jaishankar-#BilawalBhuttoZardari meet. 2 sides issued a joint statement saying they oppose “unilateral actions” that could “further complicate the already volatile situation” #SCO2023 #Article370 @deccanherald

Beijing has joined Islamabad in seeking the settlement of the row over Kashmir according to the United Nations Security Council (UNSC) resolutions – a day after a meeting of the Shanghai Cooperation Organisation (SCO) in Goa witnessed a war of words between the foreign ministers of India and Pakistan over bilateral disputes.

After a meeting between Chinese and Pakistani foreign ministers, Qin Gang and Bilawal Bhutto Zardari, in Islamabad on Saturday, the two sides issued a joint statement, taking a veiled swipe at New Delhi on the issue of Kashmir and opposing what they called “unilateral actions” that could “further complicate the already volatile situation”. China and Pakistan also underscored the importance of maintaining peace and stability in South Asia and the need for the resolution of all outstanding disputes the resolution of all outstanding disputes. “The Pakistani side briefed the Chinese side on the latest developments of the situation in Jammu & Kashmir. The Chinese side reiterated that the Kashmir dispute was left over from history between India and Pakistan and should be properly and peacefully resolved in accordance with the UN Charter, relevant Security Council resolutions and bilateral agreements,” noted the joint statement released in Beijing and Islamabad.

India has been maintaining that the 1972 Simla Agreement between India and Pakistan and the 1999 Lahore Declaration had left no scope for the UN or any other third party to play any role in resolving the “outstanding issues” between the two South Asian neighbours. Ever since Prime Minister Narendra Modi’s government in August 2019 moved to abrogate Article 370 of the Constitution of India to strip Jammu and Kashmir of its special status and to reorganise the state into two union territories, Beijing and Islamabad have been running an international campaign, opposing what they called a unilateral move by New Delhi on a disputed territory.

Both Qin and Bilawal were in Goa on Thursday and Friday for the SCO meeting, which was hosted by External Affairs Minister, S Jaishankar, at a beach resort in the coastal state. They were joined by the foreign ministers of the other member nations of of the bloc. The meeting of the SCO Council of Foreign Ministers was however overshadowed by the war of words between Jaishankar and Bilawal.

Bilawal accused New Delhi of causing a setback to the India-Pakistan peace process with its August 2019 move on Kashmir. “Wake up and smell the coffee. (Article) 370 is history. The sooner people realise it, the better it is,” responded Jaishankar, adding that the only issue New Delhi would like to discuss with Islamabad about J&K was when Pakistan would vacate India’s territory it had been illegally occupying. His remark was in response to Bilawal’s comment that the onus to create a conducive atmosphere for restarting the stalled India-Pakistan dialogue was on New Delhi.

Jaishankar also dismissed Pakistan’s claim over J&K stating that the territory had been, was and would always remain an integral part of India. Bilawal returned to Islamabad from Goa on Friday. Qin also arrived in the capital of Pakistan on Friday for a pre-scheduled visit

Qin also arrived in the capital of Pakistan on Friday for a pre-scheduled visit. They on Saturday chaired the fourth round of Pakistan-China Foreign Ministers’ Strategic Dialogue. Addressing media-persons jointly with Qin, Bilawal lauded China’s “steadfast support” on all of issues of core national interests of Pakistan “including its principled position on the Jammu and Kashmir dispute”.
Riaz Haq said…
The Contrarian Case for Pakistan's Upside

Opinion by Zachary Karabell

“Pakistan in on a cusp. We should honor the fact that whichever way the consensus believes it will go, the country is also poised to breakout on the upside. Which path will only be clear in retrospect, but we should pay more attention to the potential of things going right along with the legitimate focus on all that is going wrong.”


Yet, underneath the grim macro and political realities, there is another dynamic at play. Pakistan is the fifth most populous country in the world with 230 million souls, a median age of barely 22 and two-thirds of the population under the age of 30. That means unlike most of the world, it has a favorable demographic future. That is, if it manages to navigate through its macro and political morass. It has multiple urban centers but is not yet truly urbanized, ranging from the chaotic and decaying megalopolis of Karachi to the more sedate boulevards of the capital city Islamabad. And unlike, say, Nigeria, where the ethnic divisions and decades of corruption mean that it well-nigh impossible to treat the country as one unified market for goods and services, Pakistan is one common market even with its various tribal divisions.

Pakistan also has a real private sector, one that has not been fully crowded out by the military as in, say, Egypt, and an informal economy that doesn’t flow through either the government or the state banks. That is a negative for a government that can barely collect taxes and is starved for foreign reserves, but it means that the country is more functionally dysfunctional than at first glance it appears. That informal economy (which by many estimates accounts for 75% of the jobs in the country and would add more than 50% to official GDP) is creating a growing ecosystem of financing that does not involve state banks, and creating a burgeoning e-commerce system that will reach more than $6 billion this year, making it one of the top 50 e-commerce countries in the world. Much of that activity isn’t captured by official statistics.

One area that is especially intriguing is that most of e-commerce is Pakistan is now settled by cash on demand rather than digital payments. Even with that massive headwind, it is a multibillion dollar market. Now, with smartphone usage surging off a low base, there is the opportunity to replace cash on demand with digital payments that are managed not by banks but by nimble fintech applications. Other countries such as Kenya have already shown the power of smartphone digital payment systems that are not centered on banks, and that can unlock material benefits for millions without any of that showing up in official data. That is true as well for digital delivery of education and learning for young people without that showing in official education statistics.

In a world where capital seeks opportunity, it is entirely appropriate to compare and contrast various countries. And at least in terms of opportunities for growth and change, Pakistan has more potential than many, and significantly more than its negative global reputation would suggest. To be clear, I am not writing this as an entirely neutral party. I have a handful of investments in Pakistani start-up companies (mostly in consumer and financial technologies) and have clearly acted on the thesis that there is unmined potential. But I’ve done that because I honestly believe in that opportunity. Either that will prove accurate or not. Until now, to be fair, very few investors have made much money from Pakistan, and many have lost quite a bit.
Riaz Haq said…
The Contrarian Case for Pakistan's Upside

Opinion by Zachary Karabell

Karabell is an author, investor, and commentator. His latest book is Inside Money: Brown Brothers Harriman and the American Way of Power.

But the idea that Pakistan is uniquely messed up should be challenged. Yes, it has a multi-decade legacy of the military ruling both behind the scenes and directly. But it also has that real and dynamic private sphere that is not only seeing a start-up and new business ecosystem that has attracted hundreds of millions of dollars a year for the past few years but operates freely in a way that would be inconceivable in many other countries. Again, take Egypt, which receives far less negative attention and more foreign money yet is almost entirely dominated by a military dictatorship. Or Algeria. And then there are countries which barely function at all, dominating a whole swath of Sub-Saharan Africa but also dot central Asia (Tajikistan anyone?)

Yet, Pakistan is usually lumped in the word of global basket cases, sharing reputational space with Somalia and Mali and Venezuela. That is not the case on the ground. Even Lebanon, a country whose non-functional government cannot even supply power and water, has boosters for the liveliness of Beirut. Argentina, which has defaulted on its debts nine times in total and three times since 2000, is seen as a dynamic hub for everything from the nightlife of Buenos Aires to the tourism and natural wonders of Patagonia. South Africa, Bangladesh, Cambodia, Peru, all suffer from extraordinary macro and political problems, yet also attract more constructive foreign interest and investment.

To some degree, this is an argument of “well, it’s not as bad as they say.” But it’s also a way of highlighting that Pakistan today may be a case of darkest before the dawn. With elections schedule for the fall, and with Imran Khan the most likely victor of said elections unless is his arrest leads to his disqualification as a candidate, Pakistan is in a very similar position to where Turkey was in 2001-2003, when a series of elections brought Recep Erdogan to power even as he was repeatedly disqualified by a military that was determined to retain control. Imran Khan has many of the same strengths and weaknesses of Erdogan, who after championing Turkish democracy and economic reform, then turned into the very type of corrupt autocrat that he had once fought against. But he nonetheless unleashed massive economic potential in Turkey and has left its 80 million people materially better off over the past 20 years, even as hyperinflation and Erdogan’s recent economic ineptitude is now eroding that. Should Imran Khan return to the head the government, he may well usher in a similar period in Pakistan, even as he has his own authoritarian and demagogic tendencies.

We are globally in such an intensely negative period that we have, almost everywhere, succumbed to the tendency that to assume that the future will likely be grimmer than not. Pakistan is a prime example of that reputational spiral. It is, of course, entirely possible that the next months will see a government external debt default followed by a military coup and chaos on the streets. In fact, that scenario would surprise no one. But what if things suddenly went not predictably wrong but unexpectedly right? That has happened elsewhere, and not just in Turkey, yet in moments of global grimness, we tend to forget that possibility. Pakistan in on a cusp. We should honor the fact that whichever way the consensus believes it will go, the country is also poised to breakout on the upside. Which path will only be clear in retrospect, but we should pay more attention to the potential of things going right along with the legitimate focus on all that is going wrong.
Riaz Haq said…
India just passed China in population. That’s good news for America.

By Max Boot

Smith argues that, thanks to recent investments in infrastructure, “India has most of the raw ingredients necessary to industrialize.” India should receive a major boost from Western firms eager to move supply chains out of China amid U.S.-China tensions. “In 2021,” Smith notes, “only 1% of iPhones were made in India; two years later, it’s approaching 7%, with a planned increase to 40-45%.” Already more than 750 million Indians use the internet — more than twice the total U.S. population — and those numbers will only continue to grow. “When a country has 1.4 billion people, a booming economy, and an open society,” Smith concludes, “there’s really very little limit to its potential influence.”

Not so fast, counters Sadanand Dhume of the American Enterprise Institute. During an interview with me (and in an op-ed in the Wall Street Journal), he points out that India faces major obstacles to realize its potential.

India’s education system, Dhume notes, lags far behind China’s. Only about three-quarters of Indians are literate, compared with nearly all Chinese. India does even worse at utilizing women in the workforce: At just 19 percent, its female labor-force participation rate is one of the lowest in the world — and far behind China’s 61 percent. Manufacturing’s share of India’s economy actually declined between 2000 and 2021. Dhume writes: “Almost half of the Indian workforce makes subsistence livings on small family farms, compared with only about 25% of Chinese and 1% of Americans.”

To his credit, Narendra Modi is the most pro-business prime minister India has ever had. He has been building infrastructure at a breakneck pace and trying to simplify the mind-boggling regulations known as the “license raj” that impede the private sector — and fuel corruption. But, as a Hindu nationalist, Modi has favored domestic firms (“national champions”) and boosted tariffs as part of his “Make in India” campaign. That makes India less attractive as a destination for multinational companies that want to assemble high-tech goods with parts from all over the world.

Modi is also undermining Indian democracy — his party just expelled the opposition leader from Parliament — and turning India’s 200 million Muslims into second-class citizens. No country can afford to sideline so much potential talent, especially given the discrimination already suffered by 200 million low-caste Hindus (the Dalits or “untouchables”).


Tellis told me that “India’s population ‘achievement’ suggests that it still remains the only Asian power with the natural capacity to balance China, if — and it is a big if — it can get its act together.” But, he added, “Although the U.S. should continue to partner with India to balance China in the Indo-Pacific, it will inevitably have to bear a disproportionate responsibility for successfully maintaining an Asian balance of power.”

Riaz Haq said…
The Budding Arms Race Among China, India, and Pakistan
By Andrew F. Krepinevich, Jr.
May 26, 2023

Security experts are only beginning to sort through the implications of China’s nuclear breakout. They would do well to consider Ashley Tellis’s new book, Striking Asymmetries, which assesses the implications of Beijing’s actions from the vantage point of the rivalries between South Asia’s three nuclear powers: China, India, and Pakistan. In a work that should be required reading for senior political and military leaders, Tellis presents a compelling case why this tripolar nuclear system, which has for decades remained remarkably stable, may be on the verge of becoming far more dangerous.

Tellis draws upon decades of experience in South Asian security affairs, unique access to senior policymakers and military leaders in the three rivals’ defense establishments, and a remarkable ability to make seemingly abstract technical concepts readily understood by those with even a passing interest in the subject matter. The result is the most comprehensive, informed, and accessible assessment to date of this nuclear rivalry—and one that cannot be ignored.

China and Pakistan have a long and close relationship, in part built around their mutual view of India as a rival. India finds itself sandwiched between these two often hostile powers. Yet despite a history of wars and persistent low-grade conflict between India and its two rivals, a general war has been averted since India and Pakistan became nuclear powers a quarter century ago. Moreover, the three countries have not found themselves caught up in a nuclear arms race. Until recently, they viewed their nuclear weapons primarily as political instruments, not as tools for actual warfighting. All three adopted a “minimum deterrent” nuclear posture, maintaining the lowest number of nuclear weapons necessary to inflict unacceptable damage to their adversaries’ key cities even after suffering a nuclear attack.

In keeping with this strategy, the three Asian rivals avoided maintaining a significant portion of their arsenals on high alert. Instead, they stored their weapons in caves, in deep underground facilities, or in other concealed locations. Rejecting American and Russian notions that “retaliation delayed is retaliation denied,” the three countries, especially China and India, forswore the need for a swift response to a nuclear attack. To be sure, they would respond eventually—in days, weeks, or even months—but they did not accept the imperative of immediacy. As a result, these countries have avoided making heavy investments in early warning systems while retaining centralized control over their arsenals.

But the prospects for sustaining this era of minimum deterrence appear increasingly shaky. The tripolar rivalry has not been locked in amber: Tellis describes strongly held beliefs among top security officials in China, India, and Pakistan that their nuclear postures are inadequate. Led by China and Pakistan, with India following in their wake, the three rivals are now on a course that will result in a dramatic expansion of their nuclear arsenals, even if Russia and the United States pursue substantial cuts to theirs.

At the core of Tellis’s assessment are the differences—“asymmetries”— driving the tripolar rivalry. One fundamental difference is that China and Pakistan are revisionist powers seeking to alter the existing order, while India remains content with the status quo. China possesses the most formidable nuclear arsenal of the three, followed by Pakistan, with India trailing.

Riaz Haq said…
The Budding Arms Race Among China, India, and Pakistan
By Andrew F. Krepinevich, Jr.
May 26, 2023

There is also an asymmetry in the three powers’ strategic focus. Pakistani security officials are obsessed with India, while India’s focus is overwhelmingly on China. China’s sights, however, have shifted beyond regional to global rivalries, principally with the United States. It is this competition with Washington that is driving Beijing’s nuclear breakout. For China, India’s deterrent is rapidly assuming a peripheral role, similar to that played by China in American nuclear planning during the Cold War.

Beijing’s support for Pakistan’s nuclear weapons program, which includes providing Islamabad with blueprints for a bomb and fissile material, has further complicated India’s position. Pakistan’s leaders are looking to abandon minimum deterrence in favor of “full-spectrum deterrence,” where their nuclear forces cover multiple contingencies in the event of war with India. There are three central factors spurring Pakistani officials to adopt this more aggressive posture. First, Islamabad is aware that its conventional forces are weaker than India’s and believes it has no alternative but to employ, if need be, its nuclear forces to offset this asymmetry. Second, given that India is far larger than Pakistan, Islamabad believes it must be able to inflict greater destruction on India in a retaliatory strike than India will inflict on it. This requires Pakistan to maintain a larger nuclear arsenal to target India’s population and economic hubs in the event of war. Third, Pakistan also hopes that its nuclear forces prevent India from undertaking large-scale military action against it in response to Islamabad’s ongoing support for militant groups in the disputed region of Kashmir.

Tellis shows that accomplishing full-spectrum deterrence will require Pakistan to expand its arsenal substantially. For instance, he notes that stopping a major advance of Indian conventional forces into Pakistani territory would require scores of so-called tactical nuclear weapons, weapons that Islamabad currently lacks.

Although Tellis argues that Beijing’s and Islamabad’s nuclear provocations do not automatically portend growing instability in the region, the evidence he presents suggests otherwise. He finds that Beijing’s growing arsenal will not necessarily place India’s security at greater risk—but describes a set of highly plausible Chinese actions that, in combination with a superpower-sized arsenal, risk undermining India’s confidence in its own nuclear deterrent.

To begin with, Beijing is seeking the capability to launch nuclear reprisals far more quickly than ever before. This requires China to maintain a portion of its force on heightened alert, which may not have posed a threat to India when China possessed a few hundred weapons. But if Beijing placed a significant percentage of its expanded arsenal of 1,000 or more warheads on high alert, the strategic ground would shift considerably. India would now face a neighbor capable of launching a large-scale attack with little or no warning.

India’s ability to withstand a nuclear strike and retain the capacity to inflict catastrophic destruction in response is closely tied to the security of its underground nuclear storage sites. China currently lacks the ability to destroy them—even assuming it knows their locations. That could change, however, once China’s arsenal has more than 1,000 warheads, especially if China improves the accuracy of its weapons. Such a development, combined with Beijing’s adoption of increased alert levels for its nuclear forces, would set alarm bells ringing in New Delhi; Indian officials could conclude that China has the capacity to disarm India’s nuclear weapons arsenal.

Riaz Haq said…
The Budding Arms Race Among China, India, and Pakistan
By Andrew F. Krepinevich, Jr.
May 26, 2023

India’s ability to withstand a nuclear strike and retain the capacity to inflict catastrophic destruction in response is closely tied to the security of its underground nuclear storage sites. China currently lacks the ability to destroy them—even assuming it knows their locations. That could change, however, once China’s arsenal has more than 1,000 warheads, especially if China improves the accuracy of its weapons. Such a development, combined with Beijing’s adoption of increased alert levels for its nuclear forces, would set alarm bells ringing in New Delhi; Indian officials could conclude that China has the capacity to disarm India’s nuclear weapons arsenal.

China may also enhance its air and missile defenses, making matters even more precarious for India. These defenses would minimize the threat posed by any “broken-back” Indian nuclear retaliation—in other words, an attack that uses whatever weapons survive a disarming Chinese strike. But New Delhi would surely know that employing the remnants of its arsenal to retaliate against China would leave it vulnerable to Pakistani nuclear blackmail. Put simply, India would risk being left with no credible nuclear deterrent to resist coercion by Islamabad.

Tellis is correct to note that China’s development of these capabilities is not assured. Yet during Beijing’s decades-old conventional military buildup, it has sought to match every significant U.S. capability, including stealth fighters, military satellite constellations, aircraft carriers, and cyberweaponry. Tellis recognizes that even if China creates such a set of capabilities, it must still know the location of India’s storage sites in order to target them—and have high confidence that its intelligence is accurate and comprehensive. This uncertainty could restrain Beijing. But at the same time, New Delhi may not feel comfortable simply trusting that its nuclear sites have not yet been unearthed by Chinese intelligence or presuming that Chinese leaders are wary of taking big risks.

How might India respond to China’s and Pakistan’s nuclear provocations? Tellis points out that India is not without options—but that each path has its pitfalls.

First, he shows that if India wanted to, it could easily match China weapon for weapon. Yet he believes New Delhi would prefer to maintain its minimum deterrent strategy, emphasizing its ability to inflict severe damage on its adversaries’ cities. This stems in no small part from the expense India would incur by following Beijing in its quest to match America’s nuclear arsenal. Still, Tellis acknowledges that India’s arsenal will have to expand its nuclear holdings to possess the warheads needed to inflict unacceptable damage on both China and Pakistan. And as India increases its arsenal, Pakistan is sure to do the same—completing the regional chain reaction triggered by China’s nuclear expansion.

Tellis rejects the “more of the same” option of expanding India’s underground storage facilities, showing persuasively that it would prove costlier to accomplish than it would for China to simply expand the number of weapons needed to destroy them. Rather, he argues, India’s solution is to be found in stealth and mobility. This could be achieved by creating a nuclear ballistic missile submarine force and by shifting more of India’s arsenal to mobile road and rail missile launchers.

Riaz Haq said…
The Budding Arms Race Among China, India, and Pakistan
By Andrew F. Krepinevich, Jr.
May 26, 2023

As for China’s air and missile defenses, Tellis points out that India might address the problem by deploying penetration aid decoys on its missiles. These decoys are designed to present themselves as actual warheads to missile defense radars, thereby inducing the defender to expend precious interceptor missiles engaging false targets. This would offset, if only partially, New Delhi’s need to expand its nuclear arsenal.

The United States could provide India with a reliable thermonuclear weapon design.
Yet even if India were to pursue these actions, it would still face significant challenges. The threat of a Chinese preemptive strike may compel India to develop an effective early warning system to enable it to reduce its arsenal’s vulnerability by sending its weapons out to sea and flushing its land-based missiles from their silos. New Delhi would also have to establish a new command-and-control system to direct the actions of its nuclear submarines. Yet while India is in the process of constructing nuclear-powered ballistic submarines, it still has a long way to go in building a significant force and overcoming the technological hurdles necessary to create a credible seaborne nuclear deterrent. Tellis notes that among these challenges, New Delhi is experiencing problems with its naval nuclear reactor designs.

Then there are India’s nuclear weapons. New Delhi has only conducted a handful of nuclear tests—not enough to validate its thermonuclear designs to offer high confidence that these weapons will perform as designed. Its most reliable weapon has a yield of 12 kilotons, whereas China’s weapons have yields as much as 100 times greater. Addressing these shortfalls may require India to resume testing—and risk incurring sanctions from the United States and other nations.

Tellis hints at a tantalizing solution to India’s problems. The United States could provide India with a reliable thermonuclear weapon design. The trilateral security pact among Australia, the United Kingdom, and the United States that is known as AUKUS, which will assist Australia in acquiring nuclear-powered submarines, could be expanded to include India. Might the Americans also share their nuclear reactor designs with New Delhi? But for this to happen, India, which has kept the United States at arm’s length practically since its birth, would have to finally and firmly close ranks with the leading Indo-Pacific democracies and formally forsake the nonaligned strategic autonomy it has long enshrined at the heart of its foreign policy.
Riaz Haq said…
Blinken calls China ‘most serious long-term’ threat to world order - POLITICO

“China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to do it,” Blinken said. “Beijing’s vision would move us away from the universal values that have sustained so much of the world’s progress over the past 75 years.”
Riaz Haq said…
Pakistan: Don’t ask us to choose between the US and China

Pakistan’s Secretary of State for Foreign Affairs Hina Rabbani Khar tells POLITICO emergence of two rival global power blocs is a threat.

Pakistan has enough problems — including escalating attacks by Taliban insurgents and a spiraling economic crisis — without the added headache of a new Cold War between China and the U.S.

In an interview with POLITICO, Pakistan’s Secretary of State for Foreign Affairs Hina Rabbani Khar insisted Islamabad had no appetite to pick a side in the growing global rivalry between Washington and Beijing.

As a nuclear-armed heavyweight of 250 million people, Pakistan is one of the most closely watched front-line states in the contest for strategic influence in Asia. While Pakistan’s old Cold War partner Washington is increasingly turning its focus to cooperation with Islamabad’s arch-foe India, China has swooped in to extend its sway in Pakistan — particularly through giant infrastructure projects.

Khar insisted, however, that Islamabad was worried about the repercussions of an all-out rupture between the U.S. and China, which would present Pakistan with an unpalatably binary strategic choice. “We are highly threatened by this notion of splitting the world into two blocs,” Khar said on a visit to Brussels. “We are very concerned about this decoupling … Anything that splits the world further.”

She added: “We have a history of being in a close, collaborative mode with the U.S. We have no intention of leaving that. Pakistan also has the reality of being in a close, collaborative mode with China, and until China suddenly came to everyone’s threat perception, that was always the case.”

It’s clear why Pakistan still sees advantages to walking the strategic tightrope between the U.S. and China. Although U.S. officials have expressed frustration over Pakistan’s historic ties to the Taliban in Afghanistan — and have rowed back on military aid — Washington is still a significant military partner. Last year, the U.S. State Department approved the potential sale of $450 million worth of equipment to maintain Pakistan’s F-16 fighter jets.

Simultaneously, Beijing is pledging to deepen military cooperation with Pakistan — partly to outflank the common enemy in India — and is delivering frigates to the Pakistani navy. China is also building roads, railways, hospitals and energy networks in its western neighbor. While these Chinese investments have boosted the country’s economic development, there are also downsides to going all in with China, with Beijing’s critics arguing that Pakistan has become overly indebted and financially dependent on China.

Khar grabbed headlines in April when a leaked memo appeared in the Wall Street Journal in which she was cited as warning that Pakistan’s instinct to preserve its partnership with the U.S. would harm what she deemed the country’s “real strategic” partnership with China.

She declined to comment on that leak, but took a more bullish line on continued American power in her interview in Brussels, saying the U.S. was unnecessarily fearful and defensive about being toppled from its plinth of global leadership, which she argued remained vital in areas such as healthcare, technology, trade and combating climate change.
Riaz Haq said…
Pakistan: Don’t ask us to choose between the US and China

“I don’t think the leadership role is being contested, until they start making other people question it by being reactive,” she said. “I believe that the West underestimates the value of its ideals, soft power,” she added, stressing Washington’s role as the world’s standard setter. China biggest selling point for Pakistan, she explained, was an economic model for lifting a huge population out of poverty.

Leverage — and the lack of it — in Kabul
Khar’s sharpest criticism of U.S. policy centered on Afghanistan, where she said restrictions intended to hobble the Taliban were backfiring, causing a humanitarian and security crisis, pushing many Afghans to “criminal activities, narcotics strategy and smuggling.”

A weakened Afghanistan is causing increased security problems for Pakistan, and the Taliban in Kabul are widely seen as supporting an expanding terror campaign waged by the Pakistani Taliban. Ironically, given the long history of Pakistan’s engagement with the Afghan Taliban, Islamabad is finding it difficult to exercise its influence and secure Kabul’s help in reining in the latest insurgency wave.

When the Afghan Taliban seized power in Kabul in 2021, Pakistan’s then Prime Minister Imran Khan celebrated their victory against “[American] slavery” and spy chief Faiz Hameed made a visit to Kabul and cheerily predicted “everything will be O.K.” Khar, who took office last year, said Khan had reacted “rather immaturely” and argued her government always knew “the leverage was over-projected.”

While the violence has put Pakistan’s soldiers and police on the front line of the fight against the Taliban at home, Khar said Islamabad was taking a highly diplomatic approach in seeking to win round the Taliban in Afghanistan, pursuing political engagement and focusing on economic development — rather than strong-arm tactics.

“Threatening anyone normally gets you worse results than the ones you started with. Even when it is exceptionally difficult to engage at a point when you think your red lines have not been taken seriously, we will still try the route of engagement.”

She firmly rejected the idea that any other country — either the U.S. or China — could play a role in helping Pakistan defeat the Taliban with military deployments. “When it comes to boots on the ground, we would welcome no one,” she said.

Pakistan is seeking bailout cash from the International Monetary Fund as the economy is hammered by blazing inflation and collapsing reserves. When asked whether she reckoned Washington was holding back on supporting Pakistan, partly to test whether China would step up and play a bigger role in ensuring the country’s stability, Khar replied: “I would be very unhappy if that were the case.”

No to navies
When it came to Europe’s role in the Indo-Pacific region, she was wary of the naval dimensions of EU plans, an element favored by France. She was particularly hostile to any vision of an Indo-Pacific strategy that was dedicated to trying to contain Chinese power in tandem with working with India.

One of the leading fears of the U.S. has long been that China could use its investments in the port of Gwadar to build a naval foothold there, a move that would inflame tensions with India, and allow Beijing to project greater power in the Indian Ocean.

Khar said Europe should tread carefully in calibrating its plan for the region.

“I would be very concerned if it is exclusively or predominantly a military-based strategy, which will then confirm it is a containment strategy, it must not be a containment strategy,” she said of the EU’s Indo-Pacific agenda.

“[If it’s] a containment strategy of a certain country, which then courts a certain country that is a very belligerent neighbor to Pakistan, then instead of stabilizing the region, it is endangering the region.”

Riaz Haq said…
China Continues to Rescue Pakistan Amid Uncertain IMF Bailout

Pakistan is pinning hopes that China will continue to ease its payments pressure by extending loans as concerns rise about the nation becoming the next emerging market to default.

The nation plans to repay a $300 million loan to China on Friday and another $1 billion loan will be rolled over by June 30, according to central bank Governor Jameel Ahmad. Pakistan also returned a separate $1 billion loan to China recently, he said.

The South Asian nation will receive the rolled over amount of $1 billion today or on Monday, according to the governor.

This comes as odds are rising the nation will fail to restart its loan program with the International Monetary Fund that expires at the end of June. The country has pledged to repay its debt and faces about $23 billion of external debt payments for the fiscal year that starts in July.

Dollar bonds due in April 2024 fell for the fifth straight day, with the notes quoted at about 50.21 cents on the dollar. The rupee was little changed at 287.2 rupees a dollar.

China has extended loans annually to Pakistan for many years. The governor expects debt of $2.3 billion to be rolled over in June after Chinese banks extended another $2 billion in March.

(Adds return of rolled over amount in third paragraph)
Riaz Haq said…
#Pakistan's #ImranKhanPTI expresses support for bailout deal in #IMF meeting at his home in #Lahore.
IMF is seeking to build political support for the deal before coming general elections in the country scheduled for later this year.

KARACHI, Pakistan, July 7 (Reuters) - Pakistan's main opposition leader and former prime minister Imran Khan expressed support for a recently-reached bailout deal with the International Monetary Fund (IMF) after a meeting with officials of the lender on Friday, his party said.

The IMF said it was, in the lead up to national elections in the autumn, seeking the support of Pakistan's political parties, including Khan's, for the new nine-month $3 billion stand-by arrangement and policies associated with the programme.

Hammad Azhar, a former finance minister under Khan, who attended the meeting virtually, said in a post on Twitter that the former premier and his economic team had discussed last week's staff-level deal between the IMF and Pakistan's government.

"In this context we support the overall objectives and key policies," Azhar said, adding the meeting at Khan's residence in the eastern city of Lahore was attended in person by IMF officials while Mission Chief Nathan Porter joined virtually.

Earlier, the IMF's resident representative Esther Perez Ruiz said in a statement that the meetings with political parties were to "seek assurances of their support for the key objectives and policies under a new IMF-supported program ahead of the approaching national elections."

The new deal, which will be vital to help stabilise Pakistan's struggling $350 billion economy, will be taken up for approval by the IMF board on July 12.

The programme looks to replace a four-year Extended Financing Facility programme, originally signed by Khan's government in 2019, and which expired last month.

Khan's government deviated from agreements under an earlier IMF programme days before he was ousted in a parliamentary vote last year, leading to a delay in the implementation of the programme and increased economic uncertainty.

Pakistan's national elections are scheduled to be held by early November amid a charged political atmosphere that has seen Khan, the country's main opposition leader, in a bruising standoff with the government and the powerful military.

The new programme will span three governments - the incumbent set up under Prime Minister Shehbaz Sharif, whose term ends in August, a caretaker administration that will conduct the polls, and then a new government following the elections.

Azhar said the Pakistan Tehreek-e-Insaaf (PTI) party believed political stability was key for the economy and called for "free, fair and timely" elections after which a new government would initiate reforms and engage on a longer-term basis with multilateral institutions.

Despite being the country's most popular leader according to polls, Khan faces the prospect of being disqualified from the elections if found guilty in any of the cases against him since his removal from power.

The meeting is the highest profile engagement for Khan and his the PTI since he was ousted from power less than four years into his five-year term.

He said the cases are a bid to sideline him and dismantle his party before the polls. The government and military deny this, and say the cases are on merit.

The government launched a country-wide crackdown on the party in the aftermath of violent protests that followed Khan's brief arrest in May. The protests saw military installations ransacked. Khan was later released on bail.

Many of Khan's key aides remain under arrest and many others, like Azhar, are in hiding. Azhar said some of PTI's economic team members attended the meeting virtually.

Riaz Haq said…
CPEC Results According to Wang Wenbin of China

Bilal I Gilani
CPEC projects are creating 192,000 jobs, generating 6,000MW of power, building 510 km (316 miles) of highways, and expanding the national transmission network by 886 km (550 miles),” Foreign Ministry spokesman Wang Wenbin told reporters in Beijing."

Associated Press of Pakistan: On July 5, Prime Minister Shahbaz Sharif while addressing a ceremony to mark a decade of signing of the China-Pakistan Economic Corridor (CPEC), said that CPEC has been playing a key role in transforming Pakistan’s economic landscape. He also said that the mega project helped Pakistan progress in the region and beyond. What is your response?

Wang Wenbin: The China-Pakistan Economic Corridor (CPEC) is a signature project of China-Pakistan cooperation in the new era, and an important project under the Belt and Road Initiative. This year marks the 10th anniversary of the launch of CPEC. After ten years of development, a “1+4” cooperation layout has been formed, with the CPEC at the center and Gwadar Port, transport infrastructure, energy and industrial cooperation being the four key areas. Projects under CPEC are flourishing all across Pakistan, attracting USD 25.4 billion of direct investment, creating 192,000 jobs, producing 6,000 megawatts of electric power, building 510 kilometers of highways and adding 886 kilometers to the core national transmission network. CPEC has made tangible contribution to the national development of Pakistan and connectivity in the region. China and Pakistan have also explored new areas for cooperation under the framework of CPEC, creating new highlights in cooperation on agriculture, science and technology, telecommunication and people’s wellbeing.

China stands ready to work with Pakistan to build on the past achievements and follow the guidance of the important common understandings between the leaders of the two countries on promoting high-quality development of CPEC to boost the development of China and Pakistan and the region and bring more benefits to the people of all countries.

Riaz Haq said…
US holds title for world's most powerful military, Pakistan ranks 7th, Where does India stand?

Pakistan has entered the top 10 of the most powerful militaries in the world, securing the seventh spot. Japan and France have dropped to eighth and ninth respectively. The United States, Russia, and China remain the top three.

According to Global Firepower, a prominent data website specializing in defence-related information, the United States possesses the most powerful military force worldwide.

Russia and China follow closely in second and third place, respectively, while India secures the fourth position. The recently released 2023 Military Strength list, which evaluates over 60 factors, also highlights nations with comparatively weaker military forces such as Bhutan and Iceland.

The assessment by Global Firepower takes into account various criteria, including the number of military units, financial resources, logistical capabilities, and geographical considerations, to determine each nation's overall score.

"Our unique, in-house formula allows for smaller (and) more technologically-advanced nations to compete with larger (and) lesser-developed powers… special modifiers, in the form of bonuses and penalties, are applied to further refine the list which is compiled annually. Trends do not necessarily indicate a declining power as changes to the GFP formula can also account for this."

The report lists 145 countries and also compares each nation's year-on-year ranking changes.

Here are the 10 nations with the most powerful militaries in the world:

United States




United Kingdom

South Korea





Here are the 10 nations with the least powerful militaries in the world:








Central African Republic


Sierra Leone

The top four nations remain as they were in the 2022 Global Firepower list.

In a shift from the previous year's rankings, the United Kingdom has advanced from eighth to fifth place in terms of military strength. South Korea retains its sixth position from last year.

Notably, Pakistan has entered the top 10, securing the seventh spot. Conversely, Japan and France, which held the fifth and seventh positions respectively last year, have dropped to eighth and ninth this year.

Despite ongoing conflicts and Russia's "special operation" invasion of Ukraine in February of the previous year, Russia maintains its second position. The rankings reflect the evolving dynamics and complexities of global military capabilities and highlight the continuous assessment of various factors influencing military strength.
Riaz Haq said…
The mega undertaking (China-Pakistan Economic Corridor or CPEC) has created nearly 200,000 direct local jobs, built more than 1,400 kilometers (870 miles) of highways and roads, and added 8,000 megawatts of electricity to the national grid, ending years of blackouts caused by power outages in the country of 230 million people.

Chinese Foreign Ministry spokesman Wang Wenbin told reporters in Beijing earlier this month that CPEC projects "are flourishing all across Pakistan," making a "tangible contribution" to the national development of the country and to regional connectivity.

But critics say many projects have suffered delays, including several much-touted industrial zones that were supposed to help Pakistan enhance its exports to earn much-needed foreign exchange.

The country's declining dollar reserves have prevented Islamabad from paying Chinese power producers, leading to strains in many ties.

Pakistan owes more than $1.26 billion (350 billion rupees) to Chinese power plants. The amount keeps growing, and China has been reluctant to defer or restructure the payment and CPEC debts. All the Chinese loans – both government and commercial banks – makeup nearly 30% of Islamabad's external debt.

Some critics blame CPEC investments for contributing to Pakistan's economic troubles. The government fended off the risk of an imminent default by securing a short-term $3 billion International Monetary Fund bailout agreement this month.

Security threats to its citizens and interests in Pakistan have also been a cause of concern for China. Militant attacks have killed several Chinese nationals in recent years, prompting Beijing to press Islamabad to ensure security measures for CPEC projects.

Diplomatic sources told VOA that China has lately directed its diplomats and citizens working on CPEC programs to strictly limit their movements and avoid visiting certain Pakistani cities for security reasons.

"They [Chinese] believe this security issue is becoming an impediment in taking CPEC forward," Senator Mushahid Hussain, the chairman of the defense committee of the upper house of the Pakistani parliament, told VOA in an interview earlier this month.

"Recurring expressions of concern about the safety and security of Chinese citizens and investors in Pakistan by top Chinese leaders indicate that Pakistan's promises of 'foolproof security' for Chinese working in Pakistan have yet to be fulfilled," said Hussain, who represents Prime Minister Shehbaz Sharif's ruling party in the Senate.

Riaz Haq said…
Pakistan, China sign six agreements to boost bilateral cooperation

China and Pakistan on Monday signed six agreements for the promotion of bilateral cooperation as Chinese vice premier Mr He Lifeng, Prime Minister Shehbaz Sharif, Foreign Minister Bilawal Bhutto-Zardari, Planning Minister Ahsan Iqbal and other foreign dignitaries looked on.

On the occasion, Prime Minister Shehbaz Sharif said that “Pakistan is absolutely ready to contribute towards Chinese President Xi Jinping’s vision of the shared destiny of progress and prosperity.”

The premier made these remarks during the signing ceremony of six agreements and MoUs for the promotion of bilateral cooperation between China and Pakistan.

PM Shehbaz said that the documents signed by the two countries were aimed at further enhancing economic relations between the two countries.

He added that under the China-Pakistan Economic Corridor (CPEC), more than $25 billion worth of investment has taken place in Pakistan’s power and hydel sector, road infrastructure and public transport.

Shehbaz maintained, “We are now entering the second phase of the CPEC which will envisage investments in sectors, such as, agriculture and information technology.”

He added that both ML-1 and Karachi circular railway projects are of immense importance, expressing the confidence that both sides “will successfully achieve these and many other projects”. He was also confident that this will help Pakistan stand on its own feet”.

The premier said both Pakistan and China enjoy a unique relationship, adding “We are all-weather friends, iron brothers and this friendship will continue and will not tolerate any obstacles in its way”.

The two countries have signed six agreements and MoUs for the promotion of bilateral cooperation. The first document was signed on the joint cooperation committee (JCC) of China Pakistan Economic Corridor (CPEC) and the second document was related to the establishment of an expert exchange mechanism within the framework of CPEC.

The third document was signed by the Secretary Ministry of National Food Security Zafar Hassan and the Chinese Charge D’affaires Ms Pang Chunxue for the export of dried Chillies from Pakistan to China.

Member Planning of National Highway Authority Asim Amin and Chinese Charge D’affaires Pang Chunxue signed the fourth document on the realignment of the Karakoram Highway Phase II project.

Addressing the occasion, PM Shehbaz said, “I thank the Chinese president for sending his senior official to Pakistan, expressing the solidarity of people-to-people friendship between the two countries. This gesture demonstrates the strength of our friendship.”

“I have no doubt that we are entering into the second phase of CPEC. Today, we have signed some important documents which will enhance our economic cooperation, and we will undertake the second phase under a new mode,” he told the gathering.

The PM highlighted that the agreements would lead to investments in agriculture and IT, enabling Pakistan, with China’s support, to export items according to the requirements and standards of the Chinese government.

He emphasised, “The CPEC was signed by then prime minister Nawaz Sharif and Chinese President Xi Jinping, and it was implemented promptly.”

“Today, we can claim that under the CPEC, more than $25bn investment took place in power, energy, public transport, and other sectors.”

He also expressed gratitude to the Chinese vice premier for visiting Pakistan as the two countries celebrate ten years of the CPEC. After the ceremony, delegation-level talks were held by PM Shehbaz and He Lifeng which encompassed multiple areas of bilateral cooperation.
Riaz Haq said…
China to work with Pak to build CPEC into ‘exemplary project’: Xi

Chinese President Xi Jinping said on Monday that China will work with Pakistan to aim for high-standard, sustainable and livelihood-enhancing outcomes and further build the China-Pakistan Economic Corridor (CPEC) into an exemplary project of high-quality Belt and Road cooperation.

Xi pointed out that CPEC is an important pioneering project of the Belt and Road cooperation. Since its launch in 2013, China and Pakistan have been advancing CPEC under the principle of extensive consultation, joint contribution and shared benefits, and have achieved a number of early harvests.

This has added new impetus to the economic and social development of Pakistan and laid a good foundation for regional connectivity and integration, he said, adding that it is a vivid testament to the all-weather friendship between China and Pakistan, and provides an important underpinning for building an even closer China-Pakistan community with a shared future in the new era.

Stressing that China and Pakistan will continue to improve overall planning and expand and deepen cooperation, Xi said that no matter how the international landscape may change, China will always stand firmly with Pakistan.

Xi added China and Pakistan will continue to work hand in hand and forge ahead in solidarity to carry forward the ironclad friendship, coordinate development and security, pursue cooperation of higher standards, broader scope and greater depth, and take the China-Pakistan all-weather strategic cooperative partnership to new heights, so as to make even greater contribution to peace and prosperity in the two countries and the broader region.
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Pakistan lines up Saudi-backed refinery as it eyes more Russian oil

$10bn project in Gwadar draws skepticism but some experts see long game

A $10 billion Saudi-backed oil refinery project planned in Pakistan's port city of Gwadar aims to capitalize on the troubled economy's potential, and, sources say, lay a foundation for taking in more Russian crude.

Four Pakistani state-owned energy companies late last week signed a memorandum of understanding (MOU) with Saudi Aramco, which will inject the initial 30% equity into the project. Once built, the refinery will be able to process 300,000 barrels per day, according to details released by the government.

That alone would surpass the combined total of 215,000 barrels per day of petroleum products refined in Pakistan in 2020-2021, according to a report by the Oil and Gas Regulatory Authority.

The quartet of enterprises -- Pakistan State Oil (PSO), Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Private Limited (GHPL) -- also signed a memorandum with China National Offshore Oil Corp. for engineering, procurement and construction of the refinery. Gwadar has long been positioned as the heart of China's Belt and Road projects in the country.

Pakistan is mired in political and economic crises, which forced it to go to the International Monetary Fund for a $3 billion standby bailout arrangement to avoid a default. For this reason, some experts Nikkei Asia interviewed expressed skepticism about the refinery project, questioning the need for the additional capacity in light of the economic woes. Security is also an ever-present concern, highlighted by a deadly suicide bombing in northwestern Khyber Pakhtunkhwa province on Sunday.

But some argue that the parties involved are playing a longer game. James Dorsey, a senior fellow at the S. Rajaratnam School of International Studies in Singapore, reasoned that although the economic situation in Pakistan is not ideal, the country, with a population of over 200 million, still has huge economic upside. "This refinery will take a few years to build and by that time economic growth is anticipated in Pakistan," he said.

The refinery could handle Russian crude, which Pakistan has just begun importing. With Ukraine war sanctions limiting Russia's export options and forcing discounts, a cash-strapped Islamabad turned to Moscow to bolster its energy supplies. Pakistan recently imported one shipment of Russian crude and is negotiating a second with a long-term oil transportation deal.

The secretive dealings have raised several questions: over Pakistan's ability to process the Russian oil, as well as shipment costs, and how exactly the government can pay for the fuel in Chinese yuan. Nevertheless, a Pakistani government official privy to the developments told Nikkei on condition of anonymity that importing oil from Russia has been a success.

"Pakistan plans to increase its oil imports from Russia, which would result in a need for additional refinery capacity in Pakistan," the official said. "The proposed refinery in Gwadar will possibly help refine increasing volumes of Russian crude."

The Saudis, meanwhile, have been eyeing this project for some time. Crown Prince Mohammed bin Salman's visit to Pakistan in February 2019 brought the first announcement that a $10 billion oil refinery would be built in Gwadar. After a four-year interval, Dorsey believes Riyadh is likely serious about the project now.

"Initially the Pakistanis tried to integrate the [Gwadar refinery] project in BRI but the Chinese refused it," Dorsey said, saying the project can now move ahead outside the Belt and Road framework.
Riaz Haq said…
Pakistan's "Dust to Development"

Saudi delegation attends first ever mineral summit hosted by Pakistan with foreign investors, dignitaries in attendance
Saudi Arabia’s wealth fund, mining company Ma’aden created Manara Minerals last year to invest in mining assets worldwide
ISLAMABAD: An important delegation from the kingdom arrived in Pakistan on Tuesday to explore investment opportunities in the South Asian country’s mining sector, aiming to tap into Pakistan’s $6 trillion estimated worth of mineral deposits, Saudi Vice Minister for Mining Affairs, Engineer Khalid bin Saleh Al-Mudaifer said.

The Saudi delegation, led by Al-Mudaifer, attended Pakistan’s first dedicated summit on minerals in Islamabad, where Prime Minister Shehbaz Sharif and Pakistan’s army chief spoke in front of a gathering of foreign investors, diplomats, and international dignitaries. The summit was organized under the umbrella of the Special Investment Facilitation Council (SIFC) that Pakistan set up in June to attract foreign investment.

“We are here with a big delegation from Saudi Arabia to explore mineral investments,” Al-Mudaifer told Arab News on the sidelines of the summit. He hoped that with unwavering determination, the strategies proposed in the summit would lead to success, and in the future, ensure a thriving mining sector in Pakistan.

“The [Saudi] government is mandated to support, help, bring investment and facilitate that investment into Pakistan to build into the relationship between us,” Al-Mudaifer said. “And therefore, we brought our companies here, the Ma’aden, the Manara and other companies to attend and facilitate discussion with their counterparts.”

He said though Pakistan has $6 trillion estimated worth of mineral deposits, the country also has the potential of 240 million people. “The people of Pakistan is the wealth of Pakistan and in addition, the expertise, the locations, the minerals,” he said. “A new era is going to start in Pakistan. We congratulate Pakistan on the establishment of the SIFC that will help major investment,” he added.

Addressing the summit earlier, the minister said Pakistan and Saudi Arabia not only enjoy historical but deep religious and cultural ties as well. He said both countries had also expanded their reach in bilateral trade and investment domains.

Al-Mudaifer said mineral resources have played a crucial role worldwide in promoting trade, creating jobs and in the overall economic growth of several countries.

“Many macro factors are driving the need for new mining jurisdictions and the future will be mineral intensive,” he said, adding that overall, mineral production must increase at least six-fold to meet the demand for clean energy technologies.

“Pakistan is blessed with vast mineral resources and is home to various mineral deposits, including copper, gold, sulfur, lead, and zinc which will continue to be an essential source of economic development for Pakistan,” he added.

The minister said under the Saudi Vision 2030, the kingdom is implementing new programs and trillion-dollar giga-projects to achieve economic transformation in its bid to become a leading industrial powerhouse and global logistic hub, maximizing the value of its mining and energy sectors.

He said Saudi Arabia was currently the world’s fourth-largest net importer of minerals with giga-projects and its industrial transformation initiatives were expected to triple the local demand for minerals.
Riaz Haq said…
UAE, Saudi Arabia race for investment in Pakistan

Sabena Siddiqui

Both Riyadh and Abu Dhabi are prepared to develop closer business ties with less red tape, but experts caution that the Gulf nations stand to benefit most.

The UAE and Saudi Arabia have accelerated the pace of investments in Pakistan. If Abu Dhabi decides to invest further in Pakistan, it is quite likely that Riyadh will follow suit as part of their unspoken rivalry.

Since 2021, the kingdom has been giving incentives to multinational companies to headquarter at Riyadh. Therefore, even though Dubai is an established regional business hub, Riyadh is becoming its top competitor as a leading logistics center.

If a UAE-Saudi business race starts off in Pakistan, Islamabad will have to balance both of its close allies.

In search of a viable long-term solution to prop up its ailing economy, cash-strapped Islamabad has created a Special Investment Facilitation Council (SIFC), which has offered 28 high-value projects worth billions of dollars to friendly countries. The main focus is on Saudi Arabia, UAE, Qatar and Bahrain.

First to avail the opportunity, the UAE-based AD Ports group leased four berths at Karachi Port for 50 years and around $220 million in June. Just weeks later, Abu Dhabi inked a second major seaport terminal deal. As a result, around 85% of East Wharf would be controlled by the UAE company.

Zeeshan Shah, a financial analyst at FINRA in Washington, “The increasing rivalry between the Saudis and Emiratis should not be overlooked as both countries will probably try to one-up the other. ... Pakistan will have to be prudent in being even-handed between both countries if they happen to compete for various investment opportunities.”

Not lagging far behind, Saudi Arabia’s Aramco has signed a memorandum of understanding with four Pakistani state-owned oil companies to build a $12 billion greenfield oil refinery at Gwadar in the province of Baluchistan. The local companies would contribute 70% equity while Aramco would initialize the project with 30% equity.

Meanwhile, Pakistan has also offered its major airports for investment, and Saudi companies are interested in airports outsourcing.

Zubair Faisal Abbasi, a development policy and management specialist based in Islamabad, told Al Monitor, “Pakistan requires foreign investment to expand and further diversify its economy. It envisions scaled-up IT sector contribution in the exports-based economy, and also seeks modernizing investments in agriculture sector to increase productivity. In addition, the country has huge potential in the mining sector.”

Ranging from copper and gold mines in Chagai, the Thar Coal Rail Connectivity scheme to the Diamer-Bhasha dam and agricultural farms, the investment from these projects could go even higher than the $28 billion invested under the China-Pakistan Economic Corridor up till now, if all the projects get picked up by the Arab states.

In the past, the absence of a swift, one-window operation for foreign investors used to be an impediment. But now, the SIFC mechanism has made things easier, especially as adequate legal cover has been provided.

Abbasi noted, “One of the binding constraints on Pakistan’s economic growth has been bureaucratic inertia and problematic economic governance due to 'sludge' in the economic policy implementation.” The SIFC, he said, can “reduce red tape, bring in efficiency, and create synchronization in decision-making processes. Therefore, the investments may not only change sector growth, but also alter the institutional arrangements of economic governance.”
Riaz Haq said…
UAE, Saudi Arabia race for investment in Pakistan

Sabena Siddiqui

Providing equity for SIFC-approved projects for joint ventures, a Pakistan Sovereign Wealth Fund has also been created. In due course, seven profitable state-owned entities worth up to $8 billion are to be transferred to this fund.

However, Shah cautioned that the Saudis and Emiratis' interest stems from "the removal of red tape, the ability to purchase potentially lucrative assets, and security of their investments, rather than being attracted to invest in Pakistan by structural economic reforms which would strengthen the Pakistani economy in the long term as well as Pakistani bargaining power as well.”

For now, in reaction to the Gulf investments, the Pakistan stock market remains positive, reaching a two-year high.

From the GCC, Qatar is also considering the investment offer, and Doha is having talks with Pakistan to jointly run the terminals of its three main airports, Karachi, Lahore and Islamabad. If this comes through, Doha would invest around $3 billion in cargo handling as well as providing five-star accommodation and modern facilities at the airports.

In order to improve its food security, Doha is also considering a 10,000-acre corporate farming project in the Cholistan desert in Punjab province.
Riaz Haq said…

At a time when Pakistan faces severe economic challenges, the renewal of CPEC's second phase comes as a timely opportunity to address the country's immediate needs while paving the way for long-term development. As BRI's flagship project, CPEC has already demonstrated its transformative impact on Pakistan's infrastructure, energy, and regional connectivity. Now, with the initiation of Phase-II, the partnership between China and Pakistan is set to deepen further, solidifying their strategic relationship.

The expansion of cooperation into rural revitalisation and agricultural development holds immense potential to uplift Pakistan's rural communities and boost the agriculture sector—a crucial backbone of the country's economy. Additionally, the focus on industrialisation and green development aligns with Pakistan's aspirations for sustainable growth and environmental conservation. Through the transfer of technology and expertise, CPEC's second phase promises to enhance Pakistan's capabilities in these critical areas.

Vice Premier He Lifeng's visit to Pakistan and the signing of six MoUs demonstrate China's continued commitment to the success of CPEC. Despite global economic challenges and geopolitical complexities, China's unwavering support signals a firm belief in the project's potential to bring mutual benefits to both nations.

As CPEC enters its second phase, President Xi Jinping's statement takes on heightened significance. By emphasising high standards, sustainability, and livelihood enhancement, Xi underscores the importance of inclusive growth and the well-being of the people at the heart of CPEC's objectives. This reaffirms the project's commitment to fostering shared prosperity and a closer China-Pakistan community with a shared future.

Moreover, President Xi's statement of standing firmly with Pakistan, regardless of changing international landscapes, further solidifies the all-weather friendship between the two nations. In a time of global uncertainties, China's steadfast partnership provides much-needed reassurance for Pakistan's economic revival efforts.

Despite criticism from Western analysts, with accusations of 'debt-trap diplomacy', CPEC has not solely relied on bilateral governmental investments; it has attracted private Chinese investments across various sectors, stimulating employment and economic opportunities in Pakistan. Moreover, China's foreign policy, emphasising non-interference in the internal affairs of other sovereign states, has led to limited meddling in Pakistan's politics or economic policies, unlike some Western multilateral financial institutions.

To fully capitalise on the opportunities presented by CPEC's second phase, Pakistan must prioritise political stability, policy continuity, and broad-based economic reforms. The government's focus on fiscal discipline and economic growth aligns with the goals of CPEC, making it essential to overcome internal challenges and create an enabling environment for investment and development.

As President Xi's upcoming visit to Pakistan approaches, anticipation builds for further high-level discussions and agreements that will reinforce the trajectory of CPEC's success. It is a momentous occasion that will not only deepen China-Pakistan ties but also set the stage for accelerated progress in the second phase of this transformative economic corridor.
Riaz Haq said…
The Special Investment Facilitation Council’s Role in Pakistan’s Economic Resurgence

The SFIC has to strike a balance between including military decision-makers to raise investor confidence and upholding democratic governance.

By Shabbir Ahmed

The inception of the Special Investment Facilitation Council (SIFC) represents a pivotal juncture in Pakistan’s economic evolution. Intended to attract foreign investments and invigorate economic growth, this pioneering initiative has captured national attention. Nevertheless, as the SIFC emerges as a distinctive amalgamation of civil and military entities, it ignites discussions surrounding the nuanced equilibrium between safeguarding policy coherence, upholding the principles of democratic governance, and managing the military’s active role in shaping economic decisions.

This convergence of interests and authority prompts an exploration of how this “hybrid” forum can effectively navigate its responsibilities, engender investor confidence, and ensure that the military’s involvement aligns harmoniously with the broader democratic fabric of the nation.

The SIFC’s creation is rooted in a dire need for economic rejuvenation, particularly in the face of bureaucratic hurdles and regulatory complexities that deter foreign direct investment (FDI). By providing a platform to streamline cooperation with Gulf Cooperation Council (GCC) nations, the SIFC aims to unlock investment opportunities across sectors ranging from agriculture to information technology. Nonetheless, the inclusion of military officials in key roles raises questions about the balance between civilian and military authority, reflecting both opportunities and challenges.

Prime Minister Shehbaz Sharif’s proclamation of the SIFC as a “unified approach” toward economic challenges underscores the value of collective insight. Undoubtedly, cooperative endeavors that engage both civilian and military leadership hold the promise of establishing policy steadiness and instilling confidence among foreign investors. Yet, the crux of the matter resides in harmonizing the military’s role with, rather than eclipsing, civilian authority. This equilibrium is essential to safeguarding the tenets of democracy, upholding accountability, and preventing the erosion of democratic values. The success of this collaborative venture hinges on the delicate choreography between these two distinct spheres, facilitating an environment wherein policy predictability is fortified without compromising the essence of democratic governance

The decision to entrust the SIFC with a substantial military presence emerges from a broader context of geopolitical considerations and the desire to instill investor confidence. The involvement of Saudi Arabia, Qatar, and the United Arab Emirates in pressing for military-backed guarantees highlights a lack of confidence in Pakistan’s political stability and its ability to honor business agreements across government transitions. The army’s engagement in the SIFC could offer a sense of continuity, but it also underscores the need for comprehensive, long-term policy reforms to address underlying structural challenges.
Riaz Haq said…
The Special Investment Facilitation Council’s Role in Pakistan’s Economic Resurgence

The SIFC’s mandate is far-reaching, extending from agriculture and energy to telecommunications and infrastructure. Its “single window” approach to cooperation with GCC countries signals a proactive stance toward attracting FDI. Notably, the SIFC holds the authority to summon regulatory bodies and government representatives when bureaucratic bottlenecks hinder investment operations. Moreover, the council can recommend regulatory relaxations or exemptions, ensuring they align with existing legal provisions. This flexibility could expedite investment procedures, enhancing Pakistan’s appeal to potential investors.

The inclusion of military officers in the SIFC’s apex and implementation committees sparks concerns about potential overreach and diminishing civilian oversight. While an “institutionalized” army role in economic decision-making can offer stability, it also poses challenges to democratic governance. The delicate interplay between civilian and military spheres demands meticulous management to prevent undue military influence over crucial economic policies.

While the military’s involvement in the SIFC might alleviate immediate investor concerns, it is not a panacea for Pakistan’s economic challenges. The council’s focus on Gulf investments and its goal of achieving high FDI targets could offer short-term relief, but sustained economic stability demands comprehensive policy reforms. A closer look at India’s 1990s reforms provides valuable lessons in addressing deep-rooted economic issues and driving long-term growth.

The Special Investment Facilitation Council’s establishment signifies Pakistan’s commitment to economic resurgence and foreign investment attraction. However, as the nation treads this uncharted territory, it must strike a delicate balance between ensuring policy predictability and safeguarding democratic governance. While the military’s involvement can potentially bolster investor confidence, the long-term stability of Pakistan’s economy hinges on holistic policy reforms that address structural challenges. The SIFC can serve as a stepping stone toward economic growth, but the ultimate key lies in Pakistan’s ability to cultivate a business-friendly environment, foster sustainable growth, and uphold democratic principles in its pursuit of prosperity.

Riaz Haq said…
Hyping 'CPEC opposition' linkage with terrorist attack targeting Chinese engineers distorts facts: experts - Global Times

However, despite the official reports of no casualties among Chinese personnel, the VOA deliberately only cited the terrorist BLA statement in its Chinese language coverage of the accident, saying that at least four Chinese nationals and nine Pakistan security troops were killed.

In the VOA English report of the same event, no exact number of casualties was mentioned, and it even slammed the outlawed group, saying that it often releases inflated claims.

Moreover, the VOA Chinese report stuffed in a paragraph saying that the construction of the China-Pakistan Economic Corridor project has faced opposition from the local population in Balochistan, where Gwadar Port is located, as they feel they do not benefit much from it.

"Radical groups like the BLA have continuously attacked Chinese personnel and facilities to express their opposition and protest against the China-Pakistan Economic Corridor project," the VOA stated, as it seeks to link the tragedy with so-called local opposition against the CPEC with the Sunday attack.

Spreading such false information that smears the BRI flagship project is a pure distortion of facts, Chinese analysts pointed out, saying that the extreme actions by terrorist militants by no way represent the will of local people.

It is a stubborn internal illness in Pakistan, said Wang Yiwei, director of the Institute of International Affairs at the Renmin University of China, commenting on the latest terror attack.

It shows differences between the local provincial government and the Pakistani central government stemming from the imbalance of development. Therefore, such attacks should not be interpreted as opposition against the BRI flagship CPEC, Wang told the Global Times on Monday.

The US hyping of the so-called opposition against the BRI just proves that projects have attained major progress, Wang said.

Launched in 2013, the CPEC is a corridor linking Gwadar Port in southwestern Pakistan with Kashi in Northwest China's Xinjiang Uygur Autonomous Region, which highlights energy, transport and industrial cooperation

The CPEC, which is marking its 10th anniversary this year, has played an important role in bilateral cooperation between China and Pakistan and created over 155,000 local jobs for Pakistani people, China's National Development and Reform Commission (NDRC) said in May.
Riaz Haq said…
China says bond with Pakistan strong

China reaffirmed its unwavering commitment to its strong friendship with Pakistan and the China-Pakistan Economic Corridor (CPEC), declaring that any attempt to disrupt these bonds would be unsuccessful.

The Chinese Foreign Ministry's spokesperson, Wang Wenbin, delivered this resolute message during a routine media briefing. “No attempt to sabotage the friendship between China and Pakistan and the China-Pakistan Economic Corridor will succeed.”

This statement comes a day after terrorists targeted a military convoy safeguarding Chinese workers on their way to a port project in Gwadar. Despite the attack, no civilian or military casualties were reported, and the swift response led to the elimination of two assailants.

“Due to the efficient and swift response, two terrorists were sent to hell with no harm to any military or civil persons,” the army’s media wing had said in a statement, without mentioning the presence of Chinese nationals.

The Chinese consulate in Karachi had said at the time that a Chinese convoy from the Gwadar port project “was hit by roadside bombs and gunfire on its way back to the port area from the Gwadar Airport”.

The consulate had confirmed that no Chinese citizens were killed or injured in the attack. It had also asked Pakistan to “severely punish the perpetrators and take concrete and effective measures to ensure the safety of Chinese citizens, institutions and projects”.

The Majid Brigade, a wing of the banned Baloch Liberation Army, had claimed responsibility for the attack.

In the statement today, the Chinese spokesperson reiterated that “no Chinese citizens were killed or injured”.

While strongly condemning the attack, Wenbin asked Pakistani authorities to “bring the perpetrators to justice and take actions to keep Chinese nationals safe”.

He added that the Chinese embassy and consulate in Pakistan “immediately activated the emergency response mechanism”, reminding Chinese nationals, companies and project construction teams in Pakistan to stay alert.

It also asked them to “upgrade security measures, closely follow the security situation on the ground, guard against security risks and keep themselves safe”, the spokesperson said.

Wenbin went on to assert: “China will continue to work with Pakistan to jointly guard against and counter the threats of terrorism and effectively protect the safety of Chinese personnel, institutions and projects in Pakistan.”

When asked about China’s response to recently sworn-in Anwaarul Haq Kakar assuming the role of Pakistan’s caretaker premier, Wenbin said China congratulated Kakar on the appointment.

He added, “No matter how the international landscape and the domestic situation in Pakistan may change, the ironclad friendship between China and Pakistan will always remain rock-firm and unbreakable.”

Wenbin asserted, “China stands ready to work with Pakistan to advance our all-weather strategic cooperative partnership, build an even closer China-Pakistan community with a shared future in the new era and bring more benefits to the two countries and two peoples.”
Riaz Haq said…
SIFC to continue working for fast-track foreign investment: PM

Lauds vision of Saudi leadership, saying KSA can always count on Pakistan as trusted partner
Says looking forward to working with UAE on advancing cooperation in various fields
ISLAMABAD: Caretaker Prime Minister Anwaarul Haq Kakar on Wednesday said that the recently-instituted Special Investment Facilitation Council (SIFC) would continue to work as before to lay the foundations to fast-track foreign investments, particularly from Saudi Arabia.

The prime minister, in a meeting with Saudi Ambassador Nawaf bin Saeed Ahmad Al-Malkiy, who called on him, highlighted energy, infrastructure, agriculture, IT and manpower as potential sectors of cooperation.

The Saudi ambassador congratulated the prime minister on assuming office and conveyed the best wishes and greetings on behalf of the Custodian of Two Holy Mosques, as well as Crown Prince Mohammed Bin Salman, and the people of Saudi Arabia.

The prime minister said that Pakistan and Saudi Arabia enjoyed historic and deep-rooted ties.

He thanked the Saudi government for its consistent support for Pakistan’s economic stability and development.

He particularly mentioned the large number of Pakistanis working in Saudi Arabia and requested the Saudi side to continue to extend all possible facilitation to them.

Prime Minister Kakar lauded the vision of the Saudi leadership and said that Saudi Arabia could always count on Pakistan as its trusted and reliable partner.

Ambassador Nawaf reiterated that Saudi Arabia and Pakistan were bound together in a fraternal relationship, which was characterized by mutual trust and understanding, and close cooperation on all bilateral and regional issues of common interest.

Looking forward to advancing trade, investment ties with UAE

Meanwhile, Caretaker Prime Minister Anwaar-ul-Haq Kakar on Wednesday said that he looked forward to working with the United Arab Emirates (UAE) on advancing bilateral cooperation in various fields, especially trade, investment and energy.

The prime minister, in a meeting with the UAE Ambassador Hamad Obaid Ibrahim Salem Al-Zaabi, who called on him here, expressed gratitude for the UAE’s support for Pakistan’s economic and financial stability.

The ambassador conveyed the greetings of the UAE leadership to the prime minister on his assumption of office.

Prime Minister Kakar thanked the UAE government for the warm congratulatory messages and said that Pakistan and UAE enjoyed historic and deep-rooted fraternal ties.

He also wished the UAE success in hosting the COP28 Summit later this year.

The prime minister also emphasized the important role played by the Pakistani diaspora in the UAE and sought the UAE government’s continued support to them.

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Pakistan's Saadia Zahidi Leads World Economic Forum's Gender Parity Effort