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Chinese bank to provide $3.2b in two days: Miftah

Written by The Frontier Post

F.P. Report
ISLAMABAD: Finance Minister Miftah Ismail has announced that Chinese banks have approved a $3.2 billion loan for Pakistan and that the money would be transferred to the State Bank of Pakistan within ‘a couple of days.’
The finance minister thanked the Beijing government for facilitating the transaction. In a tweet, Miftah Ismail said that a consortium of Chinese banks had signed the loan facility on Wednesday after Pakistan signed the document on Tuesday.
The “inflow is expected within a couple of days. We thank the Chinese government for facilitating this transaction,” the finance minister said. The announcement comes hours after a major breakthrough was reported in talks between the IMF and Pakistan government over the budgetary proposals.
The report created a positive sentiment in stock and money markets but it could not lost longer. The rupee closed lower in the intraday trading after making gains in the first session. The stock market too closed in the red.
China had deposited 15 billion Renminbi (RMB)(around US$102.2 billion) with the State Bank of Pakistan in March 2019 to bolster the country’s forex reserves. The Beijing government was expected to provide a rollover when the loan matured this year, but a rollover could not materialize and the Chinese banks withdrew the money from Pakistan. After holding negotiations with Pakistani officials at several levels, the Chinese agreed to refinance the loan earlier this month, Miftah Ismail announced on June 2. However, the finance minister later admitted that the Chinese and other friends of Pakistan were not ready to transfer funds until Islamabad reached a deal with the IMF.
EU mission in Pakistan: A European Union monitoring mission arrived in Pakistan on Wednesday to assess the implementation of 27 international conventions Pakistan is signatory to and compliance of which will ensure Pakistan’s GSP+ status is renewed beyond 2023.
GSP+ is a special trade arrangement offered to developing economies by European nations in return for their commitment to implement 27 international conventions on human rights, environmental protection and governance.
On 21 September 2021, in its review of the GSP+ scheme, the European Commission introduced six new conventions, pertaining in particular to children’s rights, environmental safety and persons with disabilities. Last April, the European Parliament moved a resolution against Pakistan, seeking an immediate review of its eligibility for GSP+ status over what it called violence and discrimination against religious minorities and other vulnerable groups, as well as a crackdown on media. The EU Ambassador to Islamabad said last October the South Asian nation would have to “redouble” its efforts to meet international rights conventions in order to continue to be a part of GSP+.
The current GSP framework will come to an end in December 2023. “The GSP scheme is all about the EU’s and Pakistan’s joint commitment to sustainable development,” High Representative/Vice President Josep Borrell Fontelles said in a statement. GSP+ has been very beneficial for Pakistani businesses, increasing their exports to the EU market by 65 percent since the country joined GSP+ in 2014,” the statement added. “The European Single Market, with over 440 million consumers, is Pakistan’s most important destination. Pakistan exports worth EUR 5.4 billion (approx. PKR 1.2 trillion), namely garments, bed linen, terry towels, hosiery, leather, sports and surgical goods.”
During the mission, the EU team will hold meetings with the government, the UN Country Team, the International Labour Organization (ILO) and business and civil society representatives as well as other stakeholders. The findings of the mission will be part of the next GSP report, due to be presented to the European Parliament and the Council toward the end of 2022.
The European Union continuously monitors the implementation of relevant 27 international conventions and regularly sends monitoring missions to assess the situation on the ground and to subsequently reflect its evaluation in a publicly available report to the European Parliament and to the EU Member States in the Council. So far, three biennial reviews have been concluded in 2016, 2018 and 2020, respectively. Apart from Pakistan, the EU currently unilaterally grants GSP+ tariff concessions to Bolivia, Cabo Verde, Kyrgyzstan, Mongolia, the Philippines, Sri Lanka and Uzbekistan.

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