US to give $21mn to Pakistan to support COVID-19 affected economy: Pak envoy Asad Majeed

The United States will give $21 million to Islamabad in terms of support and assistance for capacity building to the economy affected by the coronavirus pandemic, Pakistan’s envoy to US Dr Asad Khan.

The envoy, while talking to NASDAQ’s Trade Talks host Jill Malandrino, shared that Pakistan is one of the ten priority countries identified by the US for support and assistance. 

He added that amount received by Pakistan is “perhaps one of the highest amounts the US has given out to any of its partner countries”.

The envoy also explained the global debt initiative spearheaded by Pakistan and what it meant. He said that it was an effort to provide much needed fiscal space to developing countries so they can “spare financial resources” and assist the vulnerable populations.

“This is about requesting the rich countries to allow developing countries some relief in the repayment of their debt that would provide them that much needed fiscal space,” Khan said.

He also explained that the coronavirus crisis hit the Pakistani economy at a “worse time” as the government was taking “very tough economic reforms” for the last one year.

“We had started to see the fruits of those measures in terms of improved growth rate in terms of enhanced exports, in terms of greater industrial activity but because of coronavirus it has unfortunately thrown its spanner in the works for us,” said the ambassador.

However, the envoy highlighted that despite those challenges the government was able to come up with a stimulus package of about $8 billion.

Debt relief for Pakistan

The envoy told the host Pakistan has also received good support on the front of debt relief.

“Pakistan received RFF made available by the IMF so that brought in $1.4 billion at a time when we were crash trapped we also requested for the G20 debt deferment plan and we hope to get another about $1.8 billion of relief through that measure and World Bank also has come forward with their assistance,” shared Khan.

'Best investment-related incentives in the wider region'

Responding to a question about what Pakistan has to offer to businesses, the ambassador said the country had some of the best investment related incentives in the “wider region”.

“Pakistan is the fifth largest country in the world, we have a growing middle class and we are sandwiched between two of the fastest-growing economies with China to our north and India to our East,” Khan said.

He added that Pakistan also sits at the mouth of central Asia and the Middle East making it an ideal destination.

Khan further said the country’s “expanding middle class” with rising “purchasing power” also makes Pakistan as an ideal investment destination.

“As the global value chain is being reconfigured and the kind of cheap labour, the young labour, the IT tech-savvy labour we have I think makes Pakistan attractive,” he said, adding that good trends were being observed.

“We see a lot of potential for Pakistan being used as a manufacturing hub and create win-win opportunities for US businesses,” Khan added.