Govt seeks economic re-engagement with US administration
In second phase of CPEC, there is high focus on social development and projects that are closer to the masses such as health and education. PHOTO: FILE
The government has formed an apex committee to find avenues for economic reengagement with the new US administration, including a possibility of seeking investment under the China Pakistan Economic Corridor (CPEC) project.
The 14-member ministerial apex committee will meet next week at the Foreign Office to discuss a range of economic and commercial proposals to warm ties with the US. The matters of national security and defence cooperation are not on the table, the official documents show. The maiden meeting agenda suggests that the ruling Pakistan Tehreeke-Insaf wants to revive economic ties with Washington after a phase of slow progress on the CPEC during the past twoand-a-half years.
Foreign Minister Shah Mahmood Qureshi has been made the chairman of the apex committee. The ministers for finance, national food security, economic affairs, information technology, national security adviser, and PM’s aides on commerce, climate change, human resource development, power and investment are the members of the committee.
The ruling PTI wants to re-engage the Joe Biden administration in areas of trade, investment, energy and economic cooperation, which had also remained the common grounds for discussion during former president Barack Obama’s term. A recent policy paper by Tabadlab – an independent think tank – had suggested that Pakistan must leverage the country’s economic potential rather than banking on geostrategic location while dealing with Biden’s America. Going forward, the Ministry of Finance has sought the US support to keep the financing lines with the International Monetary Fund and the World Bank open, the sources said.
The US had bailed out Pakistan by exerting its influence on the IMF to waive core conditions of the last programme. Pakistan’s decision to join the Belt and Road Initiative (BRI) of President Xi in June 2013 had put the US-Pakistan economic relations in cold storage. During former president Trump’s tenure, the US did not appoint a full-time ambassador to Islamabad, while reducing the official-level engagement to the level of assistant secretary of state.
However, the CPEC, which is the flagship project of the BRI, has been slowed down during the last almost three years. The government has not been able to secure a date from China for the 10th Joint Cooperation Committee of the CPEC meeting during the last six months due to its failure to show tangible progress on the CPEC projects, according to sources in the Ministry of Planning.
The Board of Investment (BoI) has proposed that through CPEC, Pakistan can offer certain areas of cooperation to the US but “but we need to be cognizant of the sensitivities of both the US and China”. In the past, China had not agreed to Pakistan’s proposal to include Saudi Arabia in the CPEC framework. The BoI has also proposed to attract more US foreign direct investment in Pakistan, especially through technology firms. The BoI also seeks US investment through special incentive regimes.
The Ministry of Commerce has suggested that an American-Pakistan Economic Zone could be set up near Karachi port to allow reprocessing at concessional rates. It has also proposed to enhance structured engagement through TIFA Ministerial Council and Business Opportunities Conference. Last time, the TIFA council meeting was held in May 2019. The US-Pakistan TIFA is the primary mechanism for both countries to discuss trade and investment issues and focus on ways to strengthen the bilateral relationship.
The United States continues to be Pakistan’s largest market for exports The Ministry of Commerce has also sought early finalisation of proposed legislation on Reconstruction Opportunity Zones, which had been promised by the Bush administration in return for Pakistan’s support to the US war in Afghanistan. The Ministry of Commerce has proposed to address some of the US concerns about data protection bill, business climate for digital trade and other trade-related issues. The Ministry of Information Technology has recommended to get access to the US markets for IT exports and investment of the US IT companies in the information technology sector.
It also wants USAID scholarships in the information technology sector and new technologies. The Ministry of Energy has proposed to import liquefied natural gas (LNG) from the US. Last month, the government signed a new longterm deal with Qatar for imports of additional LNG quantities. It also sought exploring possibility of US assistance in tapping Pakistan’s shale gas reserves. The energy ministry said that Pakistan could attract the US private sector investment in electricity transmission and distribution sectors and installation of automated metering infrastructure. Both the countries can collaborate in clean energy and converting waste to energy.
The joint statement of the US-Pak Strategic Dialogue held in March 2016 reaffirmed the US-Pakistan energy cooperation – beginning imports of LNG and clean energy. The apex committee will start discussions on these broad issues on Monday.