Pakistan to benefit from infrastructural uplift under BRI

KARACHI: Pakistan’s economy would benefit from improvement in road and transportation infrastructure under the Belt and Road Initiative (BRI), the SBP’s former governor said on Thursday.

“Although the global economy is picking up, the world will never be the same again,” Yaseen Anwar, ex-governor of the State Bank of Pakistan said during a seminar organised by English Speaking Union of Pakistan.

“The global economy will revolve around the $2 trillion BRI, climate change and fintech space,” he said.

BRI would encompass 65 percent of the world population, 40 percent of global trade and linking over 100 countries through road infrastructure.

“Lack of quality infrastructure and transportation hampered the development that many BRI linked countries direly need,” Anwar said. “Pakistan too would benefit as the quantity of edibles that used to perish would find international markets.”

He said China has become more attractive because of its resilience, availability of resources and response to COVID.

He said policymakers were faced with very challenging and unprecedented circumstances. “Collective and coordinated measures are needed to push the fragile economies and ensure flow of credit to the real economic sectors.”

He said even before the birth of COVID-19, the world was heading towards an economic recession, and the pandemic only expedited the pace. The United States, China, UAE posted negative growth in the first five months of the pandemic, while supply chain disruptions and slower demand impacted international trade.

Anwar advocated promotion of intra-regional trade as this would provide impetus to regional economies.

He said climate change is at the heart of BRI. China's largest lender issued its first green bonds focusing on belt and road interbank regular cooperation last November in its latest bid to support the initiative's development.

“The issuance of the bond aims to support the development of green projects under the BRI and boost the inter-bank regular cooperation in the region,” he said. “Green investment principles for the BRI renewed focus on driving new green investments, and offered an opportunity to invest in green projects.”

“Countries including Pakistan would have to comply with the provisions of the Paris climate agreement,” he said.

Anwar informed 1.7 billion people in the world and 85 percent of the population in South East Asia don’t have access to digital payment networks, which offer massive growth opportunities for financial technology companies.

He said oil prices fell below $20/barrel, which benefited the countries observing the current account deficit including Pakistan.

“However, international forces pushed the oil prices through cutting supplies to $50/barrel. Protectionism is hurting international trade.”