Issues of the national economy and foreign policy took centre stage this week, both at home and abroad. While the mini-budget was discussed on the floors of the National Assembly and the Senate, the ripple effects of the prime minister’s visit to Saudi Arabia, a follow-up visit by a Saudi “technical team” and Foreign Minister Shah Mehmood Qureshi’s appearance at the United Nations General Assembly made headlines.
When the prime minister arrived in Saudi Arabia on a special aircraft - instead of the commercial airline promised by Information Minister Fawad Chaudhry - he and his cabal of ministers got an audience with the Saudi royal family. Despite heavy economic pressures created by an external account deficit and the rising oil prices, the new government was trying to avoid going to IMF. This is the context of the prime minister’s trip to Saudi Arabia: Pakistan wanted a multibillion-dollar financial injection by Saudis, including oil import on deferred payments and parking of a few billion dollars in the Pakistani coffers to support the dwindling stock of the hard currency reserves. Saudis, under Mohammad Bin Salman, wanted to diversify their portfolio from just selling oil and wanted to use their financial reserves for further investments besides pursuing their one-point strategic blitz of isolating Iran.
The uncertainty over what course Pakistan will adopt has negatively affected the stock market and the economy, and has cast doubts about the preparedness of Finance Minister Asad Umar, whose name for the job was announced ages ago
While PM Imran Khan was in Saudi Arabia, some PTI leaders went on social media to announce that Saudis were about to dole out as much as $10 billion to Pakistan. This did not happen during the visit. No announcement of oil on deferred payments was made. It is not that such a thing cannot happen, it is just that people with knowledge of statecraft understand these decisions are neither made nor announced at the spur of the moment. They take time. All we have seen this week is the arrival of the Saudi “technical team” of experts in Islamabad. They had detailed meetings with their Pakistani interlocutors. Huffing and puffing bureaucrats prepared special presentations for these Saudi visitors as directed by Finance Minister Asad Umar. The team also visited Gwadar, where a Saudi oil refinery is being planned to meet Pakistani and Chinese needs. Sources say the team enquired about free land, security, water and electricity. These sources say that while there were no issues over land or security, power and water issues are yet to be addressed.
“Security will be provided but given the Saudi-Iran rivalry, setting up something by Saudis so close to Iran has the potential of inviting more threats,” a security expert requesting anonymity told The Friday Times.
Foreign Minister Shah Mahmood Qureshi addresses the 73rd session of the United Nations General Assembly UN
Sources say the team includes experts from the Saudi strategic camp, suggesting that there might be an element of a quid pro quo attached to future deals. “These are not decision makers. They are the people who can suggest to Saudi decision makers what all they can and should commit to. The commitment will be made at a higher level,” said one of official privy to the dialogue with the Saudi visitors.
Then, the information minister told media that Saudi Arabia was becoming the first country to become a partner in CPEC. The announcement shocked many in policymaking and political echelons. Former minister Ahsan Iqbal asked if the Chinese government knew about this, since the CPEC was a bilateral agreement between China and Pakistan. On Tuesday, the Planning Minister Khusro Bakhtiar, hit hard by the opposition Senators, announced that Saudi Arabia was not part of the bilateral CPEC agreement, but may be a part of some multilateral arrangements. Other countries had also been invited to be part of these agreements, he said.
Former minister Senator Hasil Bizenjo cautioned the government against inviting Saudis in certain areas of Balochistan to avoid Iran’s ire.
Islamabad is now waiting for the ‘big’ Saudi visit, as the technical team winds up their tour and heads home. The Saudi finance and foreign minister are expected in the capital next week. If there is a breakthrough, it is likely to happen on their arrival. If Saudis and Chinese open their hard currency chests, followed by a deal with IMF only then can Pakistan come out of the clouds.
The uncertainty over what course Pakistan will adopt has negatively affected the stock market and the economy, and has cast doubts about the preparedness of Finance Minister Asad Umar, whose name for the job was announced ages ago.
The IMF delegation also was in town since September 27 and had preparatory meetings with the government. The delegation, led by IMF Pakistan Mission Chief Harold Finger, was supposed to conclude their meetings by the end of the week. Although the probing teams of both the IMF and the Saudis tried to get details on CPEC, Islamabad is still tight-lipped about it.
IMF’s decision-making is heavily influenced by Washington. We have not forgotten Mike Pompeo’s threatening language on the IMF bailout, linking it to CPEC. Shah Mehmood Qureshi’s visit to UN and the United States was also seen in this context, besides the usual brouhaha with Indians at the UN General Assembly.
Besides the theatrics of travelling on an Acela Express train - a video of which was shared by the minister’s inexperienced social media team - the real gaffe was his announcement that he had an informal meeting with US President Trump. Shah Mehmood Qureshi shared with Pakistani media intricate details of his conversation with the US president. Nothing substantial took place except a handshake, was the news from the big apple.
The foreign minister went back to Washington DC to meet US Secretary of State Mike Pompeo and the US National Security Advisor John Bolton. “The fact that it was only a 20-minute meeting at the Foggy Bottom says it all,” said a veteran journalist in Washington DC about the foreign minister’s meeting with Mike Pomepo. Nothing newsworthy came out of meetings at the State Department and the White House.
While the opposition attacked the mini-budget, both in the National Assembly (where the government has a razor thin majority) and in the Senate (where the government is an absolute minority), the PTI government appeared undecided about IMF. The implications of this decision are huge in terms of the economy and the strategic context. And it will impact the very stability of the new dispensation put in place on August 18.
