Caretaker Minister Claims China Refused a Bailout Package to the Previous Government

Caretaker Minister for Foreign Affairs and Ports & Shipping Hussain Abdullah Haroon disclosed that China refused to bailout Muslim League Nawaz (PMLN) Government.

Hussain Abdullah Haroon was addressing the business and industrial community at Federation of Pakistan Chambers of Commerce and Industry (FPCCI) at Federation House Karachi on Friday. FPCCI President Ghazanfar Bilour and Chairman Karachi Port Trust Rear Admiral Jamil Akther also addressed the gathering.

Hussain Abdullah Haroon said that due to depleting foreign reserves Pakistan was in trouble and country was desperately in needs of $3 billion. PMLN government contacted Chinese authorities for the bailout but they refused. On this refusal Pak Rupee value decline sharply.

“When Caretaker setup takes over the financial condition of government was worst. Caretaker government engaged with China and they provided the desired amount of Dollars. Because Pakistan needs Dollars to pay for Petroleum imports,” Hussain disclosed.

He criticized PMLN government’s financial policy and said that previous government in its last days damaged the economy very badly. The previous government drew Rs.200 billion just before its term ended.

Hussain also talked about the burning issue of water shortage. He said that India is saying that till 2050 water crisis will be at its worst. If Pakistan does not act on water issue now, everyone will suffer in the future.

We need to resolve the water issue on war footing basis. Water is important and necessary for industries as without water no industrialization will be done. Subsoil water will not last very long.

“Pakistan needs to built big, medium and small dams. With limited water, we cannot produce electricity. “Hussain stressed.

He also said that Pakistan improved its relationship with Iran recently. Due to the newly imposed economic sanctions on Iran, the gas pipeline project got frozen.

  • The IMF can impose conditions before giving us money. These are required to stabilize the economy but they are painful so the IMF gets demonized. China can’t impose such conditions without taking a PR hit so they’d rather not do it. Bailing us out without imposing conditions will only lead to us defaulting on the debt in the future so no one will do it.

    As for water shortage the investments that are needed to solve that can only be funded by massive increases in water prices. The impact for that will be inflationary for the common man. It’ll also kill our agricultural sector because right now we are only competitive in agriculture because of subsidized water and electricity. After all our farmers continue to operate operate their farms as if this was the 19th century. Our competitors in other countries all use modern technology which is much more efficient.

    Anyway I don’t expect a government with a 5 year outlook to undertake serious reforms. Simply managing the BoP crisis will take up 3 years and the rest will be wasted looking after the interests of their “electables” and spending on populist policies before the elections in order to get re-elected.

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