Pakistan’s new government may undo damage to ties with US: CNBC

NEW YORK, Apr 13 (APP):A commentary posted on an American television network’s website Tuesday said that a key priority for Prime Minister Shahbaz Sharif’s government would be to fix relations with the United States and stabilize the country’s economy.
“Pakistan has a new prime minister and this could augur well for the South Asian country’s return to a healthier economy and its relations with its traditional supporter, the U.S., as well as its rival, India,” wrote CNBC correspondent Ravi Buddhavarapu, who is based in Singapore.
Referring to the recent political developments, he underlined that surprisingly the Pakistan Army stayed in the barracks during the political crisis.
“A decisive intervention by the judiciary was the next surprise,” correspondent Buddhavarapu wrote, referring to the Supreme Court’s ruling that led to Imran Khan’s ouster following the National Assembly’s vote of no-confidence, and the subsequent election of Shahbaz Sharif as prime minister.
But the CNBC correspondent quoted Iqbal Singh Sevea, the director of the Institute of South Asian Studies at the National University of Singapore, as saying that Shahbaz Sharif’s bid to make Pakistan a “paradise” for investments was not easy.
“He has inherited an economy rattled by a current account deficit and inflation. He will need to increase the state’s capacity to accrue revenue through taxation and increase in investment, especially in the export sector,” said the associate professor.
Pakistan is on its 23rd bailout from the IMF, he wrote. The country’s economy is under pressure from rising inflation, at over 10% this year, amid spiraling prices of crude oil and other commodities after the war in Ukraine.
Shahbaz Sharif is a known figure internationally, correspondent Buddhavarapu wrote, citing James Schwemlein, a senior director at the Washington-based Albright Stonebridge Group, who pointed to his reputation as a capable administrator.
“Shahbaz Sharif ran Pakistan’s largest province, Punjab. He did so largely developing a very positive effect with business. He was responsible for significant infrastructure investment. He’s well known to all of the international interlocutors — whether they be American or Chinese,” Schwemlein was quoted as saying.
India, in particular, will be paying attention to the new administration in Pakistan, he wrote.
Former Indian foreign secretary Shashank told CNBC that the way events unfolded in Pakistan is likely to provide an opening for New Delhi to improve relations with its neighbour, but that depended on the signals from the Sharif government.
In a piece on the assumption of prime ministership by Shahbaz Sharif, The Washington Post noted that his experience of running Pakistan’s largest and richest province, for three terms as its chief minister. During that time, he tackled ambitious infrastructure projects, earning a reputation for good governance and efficiency.
“He is seen as someone who gets things done,” Madiha Afzal, a fellow in the foreign policy programme at the Brookings Institution, was quoted as saying by the Post.
At the same time, Ms. Afzal said, “He’s never held national office before, other than being a leader of the opposition for the last three years, so this is going to be a test for him.”
A CNN report said that Shehbaz Sharif now inherits an ailing economy, with inflation in the double digits. The cost of basic necessities such as food and fuel are skyrocketing, and the government’s foreign exchange reserves are fast depleting.
A poll released in January by Gallup Pakistan found 64% of respondents felt inflation was the biggest problem for the country.
In a dispatch on the political developments in Pakistan published in The Diplomat, former Finance Minister Miftah Ismail was quoted as saying that if Imran Khan’s anti-U.S. rhetoric hasn’t harmed Pakistan-U.S. trade, it is not helping either.
Ismail believes relations with the United States are especially important, “not just because the U.S. is our second largest market for exports after the EU, but also because the U.S. has influence around the world in international organizations such as FATF [the Financial Action Task Force], the IMF, and the World Bank.”
Maleeha Lodhi, former Pakistan ambassador to the United States, Britain and the United Nations, was quoted as saying by CNN that reviving the economy will be Shehbaz Sharif’s “biggest challenge and top priority.”
“There is pressure on the rupee which has been rapidly falling against the dollar and business confidence has plunged,” she said.
The International Monetary Fund (IMF) agreed in 2019 to provide Pakistan with a $6 billion bailout, but since then the programme has experienced setbacks.
Ms. Lodhi said resuming the IMF program should be Sharif’s “main focus.”
“Pakistan urgently needs the funds,” she said.

April 13 , 2022

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