Pakistan PM Abbasi rules out devaluing rupee, says will not ask IMF for help despite rising deficit

Pakistan Prime Minister Shahid Khaqan Abbasi (back toward the camera) being interviewed by Arab News’s Baker Atyani (left) and Sib Kaifee.
Updated 06 February 2018
0

Pakistan PM Abbasi rules out devaluing rupee, says will not ask IMF for help despite rising deficit

ISLAMABAD: Pakistan will not devalue the rupee or seek help from the International Monetary Fund to address its fiscal challenges, Prime Minister Shahid Khaqan Abbasi told Arab News in an exclusive interview.

A rising trade deficit, a potential currency crisis and a sharp decline in exports have placed Pakistan’s foreign exchange reserves under pressure. Financial analysts believe the reserves are probably falling more quickly than government projections suggest.

“We have discussed devaluation but it’s not on the cards,” Abbasi said. “There has been a slight decline in the rupee but that’s market based. In fact, because we are linked to the dollar and the dollar is weaker today, there has been a certain devaluation … compared to the other currencies.

“Economies have also slowed down in the Gulf, where most of our remittances used to come from.

“There has been a decline in the reserves but hopefully the last two months show an improving trend and the numbers for September will come in… and we expect to resolve that issue within our resources and not have to resort to the IMF. I don’t think the IMF program is something that we intend to pursue.”

Abbasi conceded that exports were down, but he insisted this was a macroeconomic trend. “Globally there has been a decline in exports,” he said. “We are trying to revive them. The economy is expanding, so the current account challenge is there and we are managing it.

“Imports have gone up. We have a lot of machinery imports. There are some discretionary imports that have gone up, which actually signals growth in the economy because the people have more money to spend on luxury goods.”

Abbasi said Pakistan and its economy were in an “expansion phase,” and were placing their hopes for the future on Chinese investment — particularly CPEC, the China Pakistan Economic Corridor, part of China’s ambitious $1 trillion One Belt One Road initiative.

“If you look at any economy, the basic ingredient is more infrastructure to resolve infrastructural issues and this is a quantum leap in that direction,” he said.

“It’s a massive investment, over $60 billion today. It’s mostly in infrastructure that we badly needed. Our roads, ports, industrial zones … it will open up western channels access to the world. It will help us to move our commerce faster. It will help us develop more industries and help with exports.

“It’s really a game changer and it will have multiplier effect. It will attract more investment, it will attract more projects. So, it’s really something that we feel will pay very high dividends for Pakistan.”

Abbasi rejected suggestions that large investments would give China undue influence in Pakistan.

“It’s a two-way relationship,” he said. “They have equity investments here but mostly it is debt or loans of some kind and it is basically focused on certain areas. We do not view it as a threat of any kind.

“Pakistan’s economy has the capacity to repay those loans. They have been targeted very carefully and the economic dividends will pay for more than the loans are worth. So, it’s an economic relationship in that sense.”

To read the full coverage, click here


What We Are Reading Today: Yale Needs Women by Anne Gardiner Perkins

Updated 21 September 2019

What We Are Reading Today: Yale Needs Women by Anne Gardiner Perkins

  • The book is a historical novel based on the first females that were accepted and lived on campus at Yale

Yale Needs Women by Anne Gardiner Perkins is a historical novel based on the first females that were accepted and lived on campus at Yale starting the summer term of 1969.

“This is an academic work although written in a very accessible style for the average reader,” said a review in goodreads.com.

It said the book “started as a graduate paper and morphed into a dissertation over time.”

The review also said Perkins “really allows readers into the lives of several of the students and one administrator in particular.”

It said the author “straddles the line nicely between fitting in the comprehensive detailed research she managed and making it interesting enough that someone mighty think it was a novel.”

Perkins grew up in Baltimore and attended Yale University, where she earned her BA in history and was the first woman editor-in-chief of the Yale Daily News. 

She has spent her life in education, from urban high school teacher to elected school committee member. 

She has presented papers on higher education at leading conferences.

Although Yale Needs Women’s principal focus is on, well, women at Yale, Perkins also weaves in a lot of events that were also happening at the time and impacted Yale life, such at the Black Panther movement and the Vietnam War.