Imran Khan's First Test: Pakistan's Troubled Economy
ISLAMABAD, Pakistan — The economic mess awaiting Pakistan’s new leader could take the thrill out of his election victory.
The country’s current account deficit, a broad measure of the imbalance between imports and exports, has soared to an alarming $18 billion. Foreign currency reserves would cover less than two months of imports.
The Pakistani rupee is shaky, tax collection is scandalously low (last year, in a country of 200 million, fewer than a million people paid any taxes) and Pakistan was recently returned to an international “gray list” for failing to curb terrorism financing, making foreign transactions more complicated and expensive.
So what’s a new prime minister to do?
Imran Khan, the former cricket player whose political party won Pakistan’s disputed election late last month, vowed to tackle the distressed economy the moment he ascends to the premiership, which is expected to happen in the coming days.
But the task will be made more difficult because Pakistan has sandwiched itself between two financial powers: China, from which it has borrowed heavily, and the Western-dominated International Monetary Fund, which might be its short-term savior.
Pakistan has taken out billions in Chinese loans and run up a huge import tab bringing in bulldozers, train carriages and building materials as part of a Chinese-funded master plan to revamp its ports, roads and railways.
That $62 billion plan, known as the China-Pakistan Economic Corridor, has been celebrated by both countries as a long-term investment that will increase trade. It is a cornerstone of a global infrastructure initiative that China calls Belt and Road.
Economists agree that for Pakistan’s economy to develop beyond rice and textiles, its main exports, it needs new infrastructure — a lot of it. . .
Pakistan’s economy, it seems, has become yet another battlefield between the United States and China.'>>>
https://www.nytimes.com/2018/08/04/world/asia/pakistan-economy-imran-khan.html?
