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The World to save developing countries from recession caused by COVID-19 : Hafeez

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ISLAMABAD :Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh Tuesday expressed the hope that financial and other forums of the world would be able to come up with a plan, enabling developing countries like Pakistan to meet their international obligations and provide relief to the population adversely effected by COVID-19 pandemic.

Talking to Ambassador of China, Yao Jing, who called on him here, he said keeping in view the present circumstances, the World Bank (WB), International Monetary Fund (IMF) and G-20 countries were talking about debt relief, without which developing countries would be worst affected.

He said Pakistan looked forward to Chinese support in dealing with this unprecedented situation arising because of this pandemic.

The advisor welcomed the ambassador and thanked the Chinese government for all the assistance it had provided so far to Pakistan in dealing with the COVID-19 pandemic.

He also shared with the ambassador the details of the economic relief package given by the government to the people whose lives and businesses were affected by the pandemic.

He said during this difficult time, the government had three major priorities including provision of healthcare and safety to its people, cash assistance to the most vulnerable and keeping the wheel of the economy moving in slow but steady pace.

The government, he said, had come up with a comprehensive relief package of worth Rs1.2 trillion, which included, Rs200 billion assistance for workers and labourers, Rs100 billion for supporting SME and agriculture sector, Rs107 billion as sales tax refunds and Rs50 billion income tax refunds from 2014 onward.

Moreover, Ehsaas Programme, through its urgent cash disbursement, was taking care of the most vulnerable in the country.

He said the reduction in petrol and diesel prices and deferment of payment of bills were some other significant steps. Incentivizing the construction sector was also an opportunity for those who were in need of work.

The adviser also discussed with the ambassador about the effect of the coronavirus pandemic on the overall growth of the economy of the country as exports and remittances would both suffer as the global economies were in recessionary phase.

He said different economies had different levels of strength to deal with the economic losses and the developing countries would be the worst hit by the impact of this slow down.

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What will the post-COVID world look like?

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Although virologists have been warning of the risks of a global pandemic since the SARS outbreak in 2003, the world was still mostly unprepared when confronted with the COVID-19 crisis. However, it was also unlucky.

It was unfortunate that the pandemic came in the run-up to a US presidential election that has created an environment as politically polarized as any the country has experienced. As a result, much of the US media coverage of, and debate about, the virus and the global policies needed to deal with its effects have been more about the presidential race rather than the pandemic.

This has obviously had a clear effect on international politics because of the importance of the role of the US and its global leadership.

It was also bad luck that the health crisis came at a time of high tensions between the US and the second largest global power, China, where the virus originated. This further complicated any potential global unified response.

As a result of the global uncertainty, it is difficult to forecast how critical aspects of the crisis, which seems likely to continue for at least another 12 months, will play out in the Middle East, and also what a post-COVID world might look like.

One certainty is that most countries will be forced to shift their focus and resources to domestic matters rather than regional issues.

The virus and the resultant shutdowns imposed to “flatten the curve” of infections have had, and will continue to have, devastating consequences on economies and national budgets. It seems that despite the soft reopening of parts of economies around the world, the current health concerns will prevent a full restoration of business activities for some time, especially if the number of infections and deaths start to rise again after governments relax precautionary measures.

In our increasingly interconnected world, it is difficult to determine whether any country will come out on top economically, and consequently geopolitically, especially given mounting levels of debt.

Countries able to borrow in their own currency seem to be at an advantage; this applies mainly to the US and the EU (if the European countries can unify their policies), and indirectly also explains the current debate in the Gulf about the unpegging of currencies.

Another certainty is that with less money available, wars and proxy wars will become prohibitively expensive and all parties will be forced to scale down their ambitions. As a result, aggression will be reduced and consensus and agreement might be more readily reached. Countries and their allies or proxies who have refused to sit at the negotiation table might now change their minds and mellow, or perhaps even be forced to completely withdraw from conflict zones.

Take Iran, for instance, which has been targeted recently by a successful US policy of maximum pressure. The country is facing problems domestically and, with the added pressure of low oil prices, it will be less able to maintain its financial support to the Houthis in Yemen, the militias in Iraq, and Hezbollah.

Does that mean Tehran will cease its meddling? Nothing is certain but domestic turmoil might force it to do so.

As Iran’s problems have grown, the region has witnessed during the COVID-19 pandemic the emergence of a more assertive Turkey. This has happened despite the fact the country is also suffering economically.

It has been a long time in the making. Turkish involvement has spread to many regional issues beyond its normal national security zone. Its involvement in neighboring Syria is understandable, given that the conflict there directly threatens Turkey’s security. More interesting is the Turkish interest in Libya, where Ankara is pushing for a continued presence with no apparent direct threat or rationale to explain this. This is happening while it also increases political rhetoric that promises continued interference in the domestic affairs of Arab countries in the years to come.

A closer look at the issues reveals that Turkey is focusing its involvement on key points on Europe’s energy routes. This is not surprising, as Europe remains Ankara’s main and constant focus. So, Turkey is now directly competing with Russia — the biggest supplier of gas to Europe — in Syria, where Iran is also strongly entrenched as the country is a key Mediterranean access point for its gas and energy deliveries to Europe.

Turkey is challenging Russia for control of the tap that provides Europe with its energy stability, and this explains its involvement in Libya and other countries. The same logic explains Ankara’s negative reaction to the Israeli-Greek-Cypriot gas-pipeline project, EastMed. This motivates its strategy, as it hopes to leverage it to make more gains in the region.

Therefore, we can expect an increased Turkish focus on the Mediterranean and on supply-chain routes and access points for energy, as well as merchandise being shipped from the East to Europe.

On that point, the land routes of China’s Belt and Road Initiative include one that goes through Russia and another that passes through Turkey. This massive project is also something Turkey is well aware of, and Ankara is striving to ensure it has a presence on key points along the BRI’s Maritime Silk Road. Once again, it is being guided not by national security concerns but a desire to increase its regional clout.

It is difficult to forecast how critical aspects of the corona crisis will play out in the Middle East. 

Khaled Abou Zahr

While Russia and Turkey face off on the ground over an increasing number of issues, it is interesting to note the apparent lack of any direct involvement by the US or China, the two biggest global powers, and, surprisingly, the total absence of European nations, which should be the most concerned about what is happening.

In weighing how global and regional powers will direct their foreign policies and manage existing conflict zones, their own domestic political, economic and social stability will play an important role.

Yet, apparent weaknesses might invite bold moves and dangerous power-grab attempts. This delicate balance will be the key driver for international policies in the coming years. One might say that uncertainty and volatility have spread from the stock-markets to the geopolitical arena.

  • Khaled Abou Zahr is the CEO of Eurabia, a media and tech company. He is also the editor of Al-Watan Al-Arabi.

Courtesy : Arabnews.pk

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US warns of ‘consequences’ if China abandons trade deal

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US Treasury Secretary Steven Mnuchin said on Monday he expects China to uphold a trade deal reached with Washington this year, and warned of “consequences” if the country did not.

The comments come amid a sharp drop in global trade caused by the coronavirus pandemic as well as a dispute between the two powers over fault for the spread of the virus, which first broke out in Wuhan, China.

The US and China in January signed an agreement to end a nearly two year-long trade war, that included a commitment by Beijing to buy an additional $200 billion in American goods over the next two years.

“I’m expecting them to meet their obligations,” Mnuchin said on Fox Business Network.

“I have every reason to expect that they honour this agreement and if they don’t, there would be very significant consequences in the relationship and in the global economy as to how people would do business with them.”

Ties strained

However, relations between Washington and Beijing have soured in recent weeks, with US President Donald Trump blaming China for the pandemic, and threatening tariffs.

The US has been hit with tens of millions of layoffs as the virus has spread, significantly weakening the previously solid economy, which Trump was counting on to win re-election in November.

The trade agreement signed in January includes $77.7 billion in additional purchases from the manufacturing sector, $52.4 billion from the energy sector and $32 billion in agricultural products.

The US currently runs a trade deficit with China, and the objective is to realign the trade balance between the two countries.

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Pakistani doctors on forefronts against COVID-19 worldwide: PM

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Islamabad:Prime Minister Imran Khan Saturday said Pakistani health professionals were on the front line in the fight against COVID-19 pandemic worldwide.

On Twitter, the prime minister said Pakistani doctors working abroad also desired to help the government in Pakistan for what a dedicated portal www.yaranewatan.gov.pk has been launched.

The initiative would provide the willing overseas health professionals a platform to register for voluntary services.

According to official portal, Yaran-e-Watan is a joint initiative by the Government of Pakistan and the Pakistani diaspora health communities.

The objective is to facilitate voluntary two-way engagement that addresses the gaps in the health needs of Pakistani people by coupling them with the expertise of Pakistani and foreign health professionals practising abroad.

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