The minister’s highly unusual statement came amid Pakistan’s renewed efforts to mend ties with China, which has lately saved Islamabad from the default by refinancing two commercial loans. But Islamabad is still waiting for the rollover of a $2 billion Chinese deposit that is maturing on March 23 (Pakistan Day).
“Nobody has any right to tell Pakistan what range of missiles it can have and what nuclear weapons it can have. We have to have our own deterrence,” said Dar while speaking during a special Senate session in front of ambassadors of many nations.
It is for the first time that the finance minister has brought the issue of the range of nuclear missiles into the public sphere. In private conversations, some Pakistani authorities had said that there was a longstanding demand by a Western country to abandon the long-range nuclear missile programme.
Shaheen-III is Pakistan’s long-range nuclear missile having the capability to take nuclear warheads to 2,750 kilometer distance, covering the whole of India and parts of the Middle East.
Dar assured that “nobody is going to compromise anything on the nuclear or missile programme of Pakistan — no way”. His categorical statement may end the debate whether Pakistan will eventually compromise on its nuclear arsenals in return for the IMF programme.
Hours after Ishaq Dar’ statement, the Prime Minister’s Office also issued a statement to clear the air about the nuclear programme and its safety.
“Pakistan's nuclear and missile programme is a national asset, which is jealously guarded by the State,” said the PM’s Office. The entire programme is totally secure, foolproof, and under no stress or pressure whatsoever, it added.
The nuclear and missile programme continues to fully serve the purpose for which this capability was developed, said the PM’s Office.
The PM’s Office stated that, in the wake of all the recent statements, press releases, and queries, various assertions regarding Pakistan's nuclear and missile programme were being circulated on social and print media, wherein even a traditional routine visit of DG IAEA Rafael Mariano Grossi for peaceful nuclear programme was portrayed in a negative light.
Dar also spoke about the delay in reaching a staff-level deal with the IMF, saying the delay was “not on the part of the government”.
“It looks like each time the review is a new programme, which is very uncustomary with the IMF,” said Dar.
The still-incomplete talks for the ninth review began on January 31, which had to be finished on February 9 but are yet to conclude.
“It has been an extensive engagement, unusual, too lengthy, too long, and too demanding but we have completed everything,” said Dar while airing his frustration regarding the IMF.
He said the PTI government’s signed agreement of 2019 was different from the past under which the SBP law was amended by "this very parliament, after which the monetary policy has become too independent, in my opinion".
While speaking about the remaining hurdles, Dar said that, at the time of the previous review, certain friendly countries had made commitments to bilaterally support Pakistan. “The IMF is now asking that they should actually complete and materialise those commitments. That’s the only delay,” the finance minister told the Senate.
Pakistan needs $6 billion in new loans to bridge the financing gap, but Saudi Arabia, the United Arab Emirates, and Qatar have not yet given these loans despite repeated requests by Pakistan.
China bon ami
Sources told The Express Tribune that Pakistan is making renewed efforts to normalise its relations with China. The foreign secretary has gone on a visit to Beijing while the Chief of Army Staff is also expected to travel to China next week, they added.
Before departing to Beijing, the foreign secretary met with Finance Minister Ishaq Dar at the Q-block.
China has recently agreed to refinance the $2 billion in foreign commercial loans and has already transferred $1.2 billion in the central bank’s accounts.
Finance Minister Ishaq Dar tweeted on Thursday that the paperwork for another $500 million Chinese financing as part of the $2 billion was completed and the money will be transferred soon. The Chinese injection has helped keep the official foreign exchange reserves at $4.3 billion—although still critically low but sufficient to avoid default.
However, sources said that China has not yet rolled over the $2 billion SAFE deposit, which matured on March 23. The $2 billion loan by China’s State Administration of Foreign Exchange (SAFE) has been rolled over every year as the country lacked the capacity to return the loan.
Prime Minister Shehbaz Sharif has formally requested the Chinese government to roll over both the maturing loans, according to officials. These loans are taken for budget support, building foreign exchange reserves and project financing.
Beijing had given a commitment to the IMF in 2019 to rollover its debt until the Fund programme expires.
Diplomatic sources said that there were some procedural delays and China will soon rollover the $2 billion debt.
China takes pride in financially helping Pakistan without attaching strings like the IMF and the United States.
However, Pakistan has not been able to meet its commitments given to Beijing, particularly on payment of the $1.5 billion outstanding dues of the Chinese Independent Power Producers (IPPs). Special Assistant to the PM, Syed Tariq Fatmi, wrote to Ahsan Iqbal on Monday that non-payments of $1.5 billion Chinese dues were causing "huge concerns", which Pakistan urgently needs to address.
He further wrote that Chinese power plants at Hubco, Sahiwal, and Port Qasim were facing currency exchange restrictions and there were still gaps between the Revolving Fund raised by the Pakistani side and the Revolving Account Agreement signed between the two nations.
During the visit of former Prime Minister Imran Khan Pakistan and PM Shehbaz Sharif, Pakistan had sought rollover of the SAFE deposits. In February last year, Pakistan had requested a total $21 billion lifeline that included a $10.7 billion rollover of both commercial and SAFE deposits.
Pakistan had also requested to increase the size of the currency swap facility from $4.5 billion to $10 billion—an additional borrowing of $5.5 billion which the Chinese authorities did not approve at that time.
The Currency Swap Agreement is a Chinese trade finance facility that Pakistan has been using since 2011 to repay foreign debt and keep its gross foreign currency reserves at comfortable levels instead for trade-related purposes.
The benefit of this arrangement is that the additional Chinese loan will not reflect on the book of the federal government and will not be treated as part of Pakistan’s external public debt.
