Pakistan puts its national assets on mortgage to raise loan

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A news report published on January 24 which stated that Prime Minister Imran Khan was considering mortgaging the F-9 Park, the biggest park in capital city Islamabad, to get a loan of Rs 50 crore has rattled the country. Khan was quick to deny such a plan but the people are not in any mood to believe in him considering Pakistan’s deteriorating economic condition and given its track record of selling national assets.

The F-9 Park, named after Fatima Ali Jinnah, younger sister of Mohammad Ali Jinnah, known as founder of Pakistan, is spread over 759 acres of land. It is one of the largest covered green areas in Pakistan. The news reported by Dawn, a leading daily incidentally founded by Jinnah himself, stated that the plan of mortgaging the park has come amid Pakistan’s deteriorating relations with two of its biggest sources of foreign remittances and foreign exchange – Saudi Arabia and the United Arab Emirates (UAE).

In August 2020, Saudi Arabia had asked Pakistan to repay early a USD 3 billion soft loan. Then Khan had tried to defuse the tensions by quickly dispatching army Chief General Qamar Javed Bajwa. However, Saudi Arabia did not budge from its demand. The UAE, which is Pakistan’s second-largest source of foreign remittances, has recently banned issuing work visas for Pakistani workers. Pakistan Foreign Minister Shah Mahmood Qureshi’s recent visit to the UAE failed to lift the ban leaving Khan frustrated and disappointed.

Mortgaging assets in lieu of getting loans is not new for Pakistan. The practice was started in 2006. The government had raised Rs 600 crore by mortgaging roads like M-1, M-4, IMDC and Okara Bypass, which yielded high toll tax. Subsequently, Hafizabad-Lahore highway, Faisalabad-Rawalpindi highway, Jinnah International Airport, Karachi was also mortgaged.

If that was not enough the state run Pakistan TV’s assets making section Radio Pakistan were also mortgaged in 2013. At present, Pakistan’s debt stands at Rs 45 trillion. Out of which, Rs 36 trillion is public debt. The country has added more than Rs 2 trillion to public debt every year since 2007.

Imran talks soft on Kashmir conveying message to US

On February 5, Prime Minister Imran Khan posted a series of tweets sounding reconciliation mood departing from the usual hate against India. “If India demonstrates sincerity in seeking a just solution to the Kashmir issue, in accordance with the UNSC resolutions, we are ready to take two steps forward for peace,” read one of his tweets.

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The day chosen for this tweet was significant. Every year, Pakistan observers Kashmir Solidarity Day on February 5 spewing venom against India. Khan’s soft stand was followed by Foreign Office spokesperson Zahid Hafeez Chaudhri who in a weekly press briefing said Pakistan had always believed in a peaceful settlement of all issues. “The onus is on India to create an enabling environment for a meaningful engagement,” he said. He insisted that India should agree to resolve the Kashmir dispute in accordance with the relevant UN Security Council (UNSC) resolutions.

Experts believe that Pakistan’s toned down rhetoric is a calculated move to convey a message to new US president Joe Biden that Pakistan wants peace with its neighbours. Former president Donald Trump had offered to mediate between India and Pakistan on the issue of Kashmir. However, Prime Minister Narendra Modi had outrightly refused Trump’s proposal.

Interestingly, India responded to Pakistan’s propaganda on Kashmir by restoring the 4G Internet service in Jammu and Kashmir on February 5 when Pakistan was crying hoarse that the human rights were being suppressed in the Indian union territory.

Sugar prices at unusual high

The sugar prices in Pakistan are likely to remain high due to a notable drop in fresh production and a substantial increase in cost of production during the current season. The average sugar price in the retail market was Rs 80 per kg in the second week of December following the start of the sugarcane crushing season on time for the November-March season. In the current week, the prices have shot up to Rs 100 per kg in some parts like Islamabad and Rawalpindi.

Pakistan produced 5.2 million tons of sugar from 69.80 million tons of sugarcane in the previous fiscal year ended in June 2020. The government had asked the state run as well as private companies to import 8 lakh tons of refined and raw sugar to stabilise prices. However, the companies argued that the import was financially unviable as prices were hovering at higher levels in the world market. They said the import would lead to further price escalation at Rs 110 per kg because of taxes.

With the average production of sugar from sugarcane has dropped this year in Pakistan the Indian sugar producers have an opportunity to sell their excess sugar in the neighbouring county.