PAKISTAN & CHINA: ARE WE BUSINESS PARTNERS?
SHAMSUL GHANI (email@example.com)
Nov 24 - 30, 2008
While Japan has announced $100 billion support for IMF resource base, China is yet to come up with a similar IMF resource bolstering contribution to play its role in the restoration of world economic equilibrium disturbed by the global financial meltdown.
China's $500 million assistance to Pakistan should not be seen in comparison with the Asia's two largest economies' support to IMF for meeting poor and needy nations' immediate cash requirements. Egged on by the UK to extend its generous support to IMF, China is taking its time to commit itself besides playing down expectations of any major infusion of funds.
Japan with its one trillion dollar reserves eyes a leading role in the infected economies' rehabilitation process. China, with reserves of almost two trillion dollars, intends to play safe as its economy has been indirectly hit by the global financial crisis. With the steep fall in American and European demand for its electronics, toys and clothes, Chinese industries fear a massive cut in jobs. Foreign production facilities that enjoyed the economies of cheap land and labor have also opted to wind up.
Nevertheless, the unexpected slowdown in China's economy has little to do with the peanut cash support of just $500 million. Despite oft-repeated claims of close friendship, we have done little to prove ourselves worthy of this relationship. It is time bout we did some realistic stock taking.
Table showing Pakistan's global external trade during 2007-08
COUNTRY EXPORTS 2007-08 COUNTRY IMPORTS 2007-08 . Million Rs. Million $ % . Million Rs. Million $ % Total 1,196,638 19,435 100 2,512,072 40,800 100 U.S.A 232,758 3,780 19.45 S. Arabia 336,590 5,467 13.40 UAE 130,548 2,120 10.91 China 294,684 4,786 11.73 Afghanistan 71,874 1,167 6.01 UAE 214,561 3,485 8.54 UK 64,597 1,049 5.40 Kuwait 188,502 3,062 7.50 Germany 51,255 832 4.28 U.S.A 153,278 2,489 6.10 Italy 45,391 737 3.79 Japan 114,510 1,860 4.56 China 43,164 701 3.61 India 106,872 1,736 4.25 Spain 33,992 552 2.84 Malaysia 96,935 1,574 3.86 Hong Kong 32,595 529 2.72 Germany 79,950 1,299 3.18 Netherlands 32,303 525 2.70 Indonesia 73,998 1,202 2.95 Turkey 27,244 442 2.28 Singapore 58,764 954 2.34 Belgium 25,743 418 2.15 UK 48,373 786 1.93 S. Arabia 23,981 389 2.00 Qatar 45,047 732 1.79 France 22,905 372 1.91 S. Korea 42,567 691 1.69 B'Desh 21,501 349 1.80 Thailand 37,259 605 1.48 S. Africa 19,967 324 1.67 Iran 34,654 563 1.38 India 15,905 258 1.33 Italy 34,639 563 1.38 Oman 14,411 234 1.20 Australia 32,589 529 1.30 Iran 13,727 223 1.15 Canada 31,927 519 1.27 Sri Lanka 13,413 218 1.12 France 30,776 500 1.23 Others 259,364 4,213 21.67 Others 455,596 7,400 18.14
The Pak-China trade figures show that we were a net importer of goods and services worth around $4 billion during 2007-08, while China recorded a current account surplus of $363 billion during the same year. The friendship is, therefore, certainly not based on mutual trade interests. Ideologically too, we are altogether two different nations. Gone are the days when this relationship drew its strength from the existence of a common enemy: India. While we still cherish this decades old rivalry, China despite being a far superior adversary has developed cordial trade relations with India.
For the sake of a better future, nations move ahead leaving behind the bitter past. We are yet to learn this lesson. Always wanting in stability, our fast changing governments too remain a source of concern to our friend whose interest in our development knows no bounds. Monetary and manpower support to our development projects in the face of hostile conditions are not appreciated by us the way it should have been. In a state of frenzy, we topple governments without ever bothering to realize the damage we are causing to ourselves and to our friend. We expect a generous dole-out from our most cherished friend after setting on fire our own house that was built with its overt and covert support. Did we ever think of taking our friend in confidence before embarking on any political or military misadventure? Did we ever try to take his feedback even after those misadventures?
PAKISTAN'S EXTERNAL DEBT POSITION AS OF MARCH 31 2008.
PARIS CLUB COUNTRIES AMT (MILLION $) Japan 6262 France 2554 Germany 2159 US 1550 Other 13 countries 2123 14648 NON-PARIS CLUB COUNTRIES China 908 Saudi Arabia 96 Other 4 Arab countries 172 1176 MULTILATERAL LENDING ORGS. ADB 9157 World Bank 11711 Others 653 21521 Eurobonds 2650 Commercial Banks 124 Total 40119
The external debt position shows that our two best friends China and Saudi Arabia don't believe in excessively burdening us with loans. Their recent reluctance to commit any worthwhile cash assistance essentially ensues from their doubts in our ability to first use this assistance with discretion and second to repay the amount on maturity. Having reservations on our past performance on economic and political fronts, they prudently took us to the doorstep of IMF which they believe has the capacity to put a regulatory noose around us. What is the lesson? Instead of basking in the heat of one-sided claims of friendship, we should learn to behave as a matured and self-dependent nation as we are fast becoming a liability in the books of our friends.
While we can impress Saudi Arabia with our position of the sole Islamic nuclear power, we have nothing to offer to China which by itself is a nuclear, industrial and economic power, revered and in some cases feared by its western adversaries. As a neighbor, we can impress our friends by showing discipline in our economic and political behavior ñ certainly not by subjecting them to unnecessary embarrassment every now and then.