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Is Pakistan up for sale as ‘friendly’ countries seek prized assets?

Pakistani Prime Minister Shehbaz Sharif in Qatar on August 24 for financial talks (Photo: @_AhmedQuraishi/Twitter)

Pakistani Finance Minister Miftah Ismail has said that Qatar is keen to buy out two Pakistani LNG-fired power plants based in Punjab province. The two Punjab-based plants are the Haveli Bahadur Shah and the Balloki power plant, both of which get their gas from Balochistan.

With this statement, Ismail has clarified the initial confusion during Prime Minister Shehbaz Sharif’s visit to Qatar earlier this week that the Gulf country was providing $2 billion in assistance to Pakistan to bail it out from a default. Murtaza Syed, deputy governor at the State Bank of Pakistan (SBP) had said in a briefing on August 23 that Pakistan will receive $2 billion from Qatar in bilateral support.

The news had been widely reported in many media organisations.

In a press conference on August 26, Finance Minister Ismail also said that Qatar is interested in leasing Pakistan’s airports.

However, now that Sharif’s visit has concluded, it is clear that Qatar has expressed its desire to make investments worth $3 billion in a crumbling Pakistan rather than provide it a $2 billion in assistance.

Geopolitical analyst, Mark Kinra say that the the Gulf countries have once again come to the aid of “brother nation ” Pakistan but there is a catch this time—now they want something in return.

Kinra adds: “On July 24, the Pakistan cabinet approved the Inter-Governmental Commercial Transactions Ordinance 2022 to sell assets and shares of government companies to foreign countries. Earlier in 2019, Saudi Arabia had promised to invest $20 billion which did materialise. This time the kingdom has pledged to invest $1 billion but this is under the umbrella of a deferred oil facility”.

Just like Qatar and Saudi Arabia, the UAE too has decided to change tack regarding investments in Pakistan.

Kinra says that the UAE  is also planning to invest $1 billion in gas, energy infrastructure, renewable energy, health care, biotechnology, agricultural technology, logistics, digital communications, e-commerce and financial services. “These pledged investments only show that the Gulf nations want returns. With China unable to extract return on its vast investments due to deep-rooted corruption and structural problems, the friendly Gulf countries want to be doubly sure”.

With Pakistan’s economy in doldrums, the International Monetary Fund (IMF) had asked Pakistan to raise forex reserves from friendly countries before August 29 so that it could consider providing a package to the cash-strapped country wrecked with historic floods, rising radicalism and the Baloch insurgency.

Pakistani newspaper, The Express Tribune has said that the Qataris have indicated to Pakistan that the oil-rich country, which is part of the six-member Gulf Cooperation Council (GCC), will invest $3 billion through its $425 billion sovereign wealth fund in Pakistani “airports, power plants, port terminals, solar energy and the stock market”. The investments will be done through the Qatar Investment Authority (QIA).

The Qataris have apparently shown interest in acquiring stakes in two power plants—Haveli Bahadur Shah which was made by Chinese company SEPCOIII Electric Power Construction under the massive China Pakistan Economic Corridor (CPEC); and Balloki power plant which is a JV between China-based Harbin Electric International Company and Habib Rafiq. So far, Islamabad appears reluctant to part with some of its  “crown jewels”.

But Pakistan currently has foreign exchange reserves at $7.8 billion that will last it just one month, giving it little leverage on the negotiating table.

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