BRI is significant to deal with economic crisis amid COVID-19

KARACHI: The China-Pakistan Economic Corridor (CPEC) represents a very good opportunity for Pakistan to get out of its economic malaise, according to Yaseen Anwar, former governor of the State Bank of Pakistan (SBP).

The Salon themed “BRI and the World Economy amid Covid-19” was held last month by International Monetary Institution (IMI) aimed to probe into the impact of Covid-19 on the financial and economic landscape of the world, the China Economic Net reported.

According to the report, Mr Anwar in his keynote address at Salon, addressed perceived scepticism against CPEC. “If another country has an equal amount of resources to give to Pakistan to support these infrastructure projects, so be it. It’s a diversified opportunity for any country to come in and support the country in this effort,” he said.

“Due to the prevailing uncertainty from the coronavirus, severe disruption of the supply chain Belt and Road Initiative’s (BRI) importance has been elevated even more,” said Mr Anwar.

He said the lack of quality infrastructure had hampered the economic development that many countries needed, and BRI gave access to capital to certain emerging economies that never had the opportunity to attract offshore investors who required ratings dictated by their corporate policies.

As per data presented by the former SBP governor, the shortage of power in Pakistan impaired its GDP growth rates by up to 3pc, the report stated.

The absence of a developed transportation network for refrigerator trucks for the distribution of agricultural products resulted in a 50pc loss of perishable products in Pakistan, it added. “Without power plant, the engine for manufacturing and other industries, Pakistan would continuously be played with a depressed state,” said Mr Anwar.

Therefore, he said, BRI’s finance for infrastructure projects in poor countries that do not have access to other bond markets was significant. According to the report, Mr Anwar said the investment would help boost urbanisation and help poor countries come up with the curve for income equality which has got a wide gap right now, and improve their livelihoods.

“The second area of increased importance tied to climate change is BRI’s emphasis and priority on the development, issuance and usage of the Belt and Road Inter-Bank Regular Cooperation Bonds (“BRBR” bond),” Mr Anwar added.

He pointed out that the integration and intra-regional trade associated with BRI was going to pick up, and there were three main areas that would benefit from it, one being the Asean (Association of Southeast Asian Nations) region, another Africa, and the third central Asian republics with Pakistan and other countries in South Asia.

The intra-regional trade would gain momentum immensely by the infrastructure needs in the next couple of decades, said Mr Anwar. More than $60 billion of new business had been generated across a range of operations, including increased investment and tourism into Africa; new housing in Indonesia, power projects in Bangladesh; roads in Pakistan and Kazakhstan; and rising global and intra-regional trade across the Asean region, the report said.