By: Wasim Iqbal
The protracted sit-ins of Pakistan Tahreek-e-Insaaf (PTI) and Pakistan Awami Tehreek (PAT) in 2014 caused a six-month delay in the signing of Chinese-funded development projects (including China-Pakistan Economic Corridor), Chairman Board of Investment (BOI) Dr Miftah Ismail told Business Recorder.
He clarified that the $46 billion memoranda of understanding (MoUs) which were to be signed in September 2014 during the Chinese President’s scheduled visit were postponed due to security concerns emanating from the dharnas.
The Chinese President’s visit took place six months later in April. Sources in Planning Division said that in the current year Pakistan has received $576 million for development projects from China. Other losses included supplementary grants amounting to Rs 760.5 million to the ministry of interior to make security arrangements in the capital during the protests.
The political uncertainty that was triggered by the dharna led to the rupee erosion. The exchange rate which was Rs 98.82 on August 5, 2014 widened to Rs 103.19 on August 25, 2014, a depreciation of 4.4 per cent which adversely affected the import bill and increased foreign liabilities.
The foreign exchange reserve target of $15 billion by end September 2014 was not met due to delayed inflows of $2.4 billion; and external public debt, which was Rs 5,076 billion at the end of 2014, increased to Rs 5,304 billion due to the currency depreciation – a loss of almost Rs 228 billion.
The capital market was performing well at 29000 KSE index with a market capitalisation of Rs 7.2 trillion; however due to the sit-in, the capital market crashed down to 27,000 KSE Index with a market capitalisation of Rs 6.7 trillion. Foreign Direct Investment (FDI) also received a hit as inflows declined from $113.6 million in July 2014 to $92 million in August 2014. The fourth review under the IMF programme was also delayed.
Source: Business Recorder