Prime Minister Shehbaz Sharif’s tour of the Middle East saw more potential economic breakthroughs, as a team of economic experts from the UAE arrived in Islamabad to follow up on discussions that took place during the PM’s trip to Abu Dhabi. Official statements relating to the visiting economists spoke of increasing “bilateral economic cooperation”, especially in energy and infrastructure. The Prime Minister’s Office emphasised the fact that the trip took place during Eid holidays in both countries, which illustrates “the keenness of the Government of UAE to invest in our country”.
However, unlike Shehbaz’s Saudi trip, where at least some concrete proposals were also publicised, the language in the statements relating to his UAE trip and the visiting delegation were far more vague, with no specifics on any economic proposals and mostly generic language relating to regional security, brotherly relations, and cooperation on various fronts.
For opponents and critics of the new government, this is an indictment of Shehbaz’s failure to reach any substantive agreements during his trip, while the government is likely to harp on the fact that negotiations over the kind of deals and assistance Pakistan wants take several weeks and months to negotiate. Meanwhile, legitimate questions also rise over the dollar value of the foreign investment being discussed and where exactly it would go.
The truth is probably somewhere in the middle. Reaching agreements on any major deals just a few weeks after coming to power would be a moonshot. At the same time, the vague nature of the information provided would suggest that Pakistan’s biggest wish-list items may have been scratched off at the onset of negotiations, but lesser proposals are still under discussion.
Given the dire straits the economy is in, this would still be a major problem — amid record inflation, the loss of rupee value, and crashing foreign currency reserves, the PM’s economic team has very little wiggle room to introduce reforms. Even short-term reforms generally take a few months to a year to take effect. The worst-case scenarios would suggest we only have weeks to find a way to cushion our reserves while also controlling price escalation, especially for food and energy.
Published in The Express Tribune, May 7th, 2022.
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