Pakistan has a new savior – or at least someone who’s presenting himself as one. General Asim Munir, the chief of army staff and country’s de facto ruler, his supporters claim, is on a campaign to save Pakistan’s economy by crushing corruption and bringing in tens of billions of dollars in foreign investment.
Pakistan certainly does need the help. Its economy is in a bad place. Inflation remains stubbornly high at nearly 30%. Bloomberg Economics ranks Pakistan with Ukraine and Egypt as the three countries most vulnerable to a debt crisis.
A standby arrangement with the International Monetary Fund is what’s saving the country from default. But it terminates in April and additional inflows, including from the IMF, are vital before and after the program ends.
Munir’s plan to tackle the crisis is to bring in upwards of US$100 billion in investment from Gulf Cooperation Council (GCC) countries through the newly created Special Investment Facilitation Council (SIFC).
The SIFC is an army-managed “one-window” vehicle to fast-track investment from the GCC into agriculture, mining, and other industries. While investment from the Arab Gulf region is much needed, and welcome, it is essential that Pakistan doesn’t make the same mistakes with the SIFC that it made with China’s Belt and Road Initiative.
BRI and CPEC
In 2013, Beijing and Islamabad launched a bilateral connectivity initiative as part of the BRI, known as the China-Pakistan Economic Corridor. CPEC, Pakistani leaders said,...
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