China rolling over Pakistan’s $2 billion loan at reduced rate

ISLAMABAD: While offering the rollover of two billion dollars at a much reduced rate, China, in a latest communication, has assured Pakistan of standing with it during these difficult times with greater resolve and more proactively.

In a diplomatic communication received by the Foreign Office last Friday through Pakistan’s ambassador in China, the Pakistani government is also told that the Chinese government plans to enhance and broaden their economic and strategic ties with Pakistan.

The Chinese leadership, it is said, has assured Prime Minister Shehbaz Sharif that they will not merely continue to stand with the people of Pakistan but will do so more proactively and with greater resolve as they (Chinese leadership) are excited about working with the incumbent premier.

A source told The News that the diplomatic communication also conveyed the confidence of the Chinese leadership that Shehbaz Sharif would be able to overcome the challenges currently confronting Pakistan, because of what they call his “governance philosophy”.

In order to help Pakistan meet its economic challenges, the China has confirmed to roll over the two billion dollars loan. It is doing so at a reduced interest rate, which is lower than even to the loan that China has given to its other close friends. According to the diplomatic communication, the Chinese leadership is more comfortable working with Shehbaz Sharif because of their past experience when Shehbaz was the chief minister Punjab.

Interestingly, it was Sharif missing the “Shehbaz Speed”.

During the last PMLN government, Shehbaz Sharif, as the chief minister of Punjab, had closely worked with the Chinese to undertake giant economic projects in the power and energy sectors and built major transport projects metros in minimum-possible time.

While the Pakistani government is busy meeting tough pre-conditions of the IMF to get the much-needed bailout, the source expects that once the IMF deal is done, Pakistan’s friends including China would do more than expectations. The source, who is privy to top-level interactions with the friendly countries, shows the confidence that Saudi Arabia and the UAE are also eager to help Pakistan. Much is, however, linked with the IMF deal.

The help and assurances from friendly countries have encouraged the Pakistani government, which is finding it really hard to meet the IMF conditions. The government is expected to raise the oil prices shortly to end the subsidy allowed by the Imran Khan government. The tough decision, it is expected, to make is to increase the petrol and diesel per litre price by Rs27 and Rs55 respectively to end the oil subsidy. It would be a major step forward for the IMF deal, which Pakistan is keen to make before June 30th.