Aid request tests Sino-Pakistani ‘all-weather friendship’

Pragmatism in international politics ensures that there are no permanent friends or permanent enemies, only permanent interests. However, one seeming exception to this is the Sino-Pakistani “all-weather friendship.” It was precisely this friendship Prime Minister Imran Khan was banking on when he recently visited Beijing to seek an aid package to avert an economic crisis in Pakistan, which is left with barely enough foreign exchange to last even two months of imports.

Khan, however, returned to Pakistan without any aid from China, even though in the joint statement, China reiterated how the Sino-Pakistani friendship had withstood the test of time.

The joint statement elaborated more on the bilateral relationship and its strengths rather than on the aid Pakistan needed per se. In fact, Beijing even stated that more talks were needed to understand the details of the aid that Pakistan needs. Beijing merely stated that it would support Pakistan “in principle.”

Balance of payments crisis

Nevertheless, the euphoria surrounding the friendship and the reference to helping out Pakistan in principle led to a statement on Tuesday from Pakistani Finance Minister Asad Umar, who claimed that Pakistan’s balance-of-payments crisis was over.

Umar, who was a part of the delegation that visited Beijing led by Khan, referred to the fact that China would help Pakistan “in principle.” but its modalities would be discussed on November 9. The Finance Ministry echoed Umar’s remarks, adding, “A senior-level delegation [consisting] of federal secretaries of finance, foreign affairs, planning and development and commerce along with the State Bank of Pakistan’s governor will undertake a visit to China during the current week to work out the modalities.”

The interesting point to note is that on Wednesday, a day after Umar’s statements, China declined to quantify the assistance it was willing to provide to Pakistan. Nevertheless, it resorted to its commonly used tool of diplomatic doublespeak and described the Pakistani delegation’s visit as “very successful.”

Beneath the seeming euphoria over China’s decision “in principle” to help Pakistan lies carefully thought-out Chinese diplomacy, which is tied to Pakistan’s possible reach out to the International Monetary Fund for a bailout package. The IMF in October warned Islamabad against the China-Pakistan Economic Corridor’s looming bill, besides asking for the CPEC’s contract details, which Pakistan has been reluctant to share.

A bailout from the IMF will definitely mean the CPEC projects will be scrutinized, which is not to China’s liking. In fact, in October, it was Umar himself who, keeping the dire situation of the Pakistani economy in mind, stated that Islamabad was ready to share details of the CPEC with the IMF as he formally sought a bailout package from the international lender.

Against this backdrop, China has cleverly taken two steps. The first was Foreign Ministry spokesman Lu Kang stating that the debt incurred by the CPEC constituted a very small proportion of Pakistan’s debt composition and was surely not to blame for the current financial problems in Pakistan.

Beneath the seeming euphoria over China’s decision ‘in principle’ to help Pakistan lies carefully thought-out Chinese diplomacy

The second was a veiled threat to Pakistan, that if it follows the IMF’s prescription in sharing details of loans or imposing curbs on investments, then bilateral relations could be affected. This  put the ball in Pakistan’s court on keeping the IMF out of the CPEC.

Pakistan’s prompt actions are seen first in Khan’s labeling of the CPEC as a “blessing for Pakistan.” Until recently, he was keen on reviewing the projects under the CPEC.

The second step to keep the IMF away from the CPEC is Umar’s statement. While China has not given any aid yet, in its joint statement, it has given hope to Pakistan, which will now do what China wants to get the aid. As far as the timing is concerned, it is pertinent to note that Umar made the statement just a day before the scheduled IMF visit to Pakistan, and China has scheduled the meeting between “the relevant authorities” for discussion of the specifics of the aid to be given this Friday, two days after the IMF visit.

Also, it was pertinent that Umar made the statement regarding Pakistan’s debt crisis being over after he had made the statement in October regarding Pakistan’s willingness to share required details with the IMF in return for a bailout package. In the current scenario, China will watch what Pakistan does to throw the IMF off the CPEC scent and then dole or not dole out the aid accordingly.

This is also seen in Foreign Minister Shah Mehmood Qureshi’s statement that the purpose of the visit was to “send a message to the international community” and also “move the two countries’ strategic relationship to an economic partnership.”

The message to the international community is primarily a message to the IMF regarding the importance of Sino-Pakistani relations, from which Pakistan would have to seek assistance if China ultimately does not come to Pakistan’s rescue.

Therefore, Pakistan’s “all-weather friend” has kept the carrot dangling in the form of hopes of a bailout package, while it waits and watches if Pakistan can efficiently provide what it wants. The form of friendship as seen in the Sino-Pakistani all-weather friendship actually reiterates the fact that there are no permanent friends or foes in international relations, only permanent interests.