Pakistan’s Search for Markets Beyond the Gulf and the West

A sign with the International Monetary Fund logo on the wall of the IMF building

The IMF has warned that Pakistan’s economy remains dangerously tied to the Gulf Cooperation Council, which supplies over four-fifths of its fuel and half of all remittances.The International Monetary Fund has issued a stark warning: A staggering 85% of Pakistani fuel imports and 50% of its remittances come from the six Gulf Cooperation Council (GCC) countries.But Islamabad is putting together a backup plan, Dr Shaista Tabassum, former Dean of the Faculty of Law and Professor of International Relations at the University of Karachi, told Sputnik.

Three Ways to Reduce Gulf Dependence

Find new markets – Russia and Central Asia are promising alternatives, with a gas pipeline among potential projectsFix domestic mismanagement – the Pakistani fuel sector remains poorly managed, but better planning, combined with local renewables such as wind, solar and hydropower, could reduce reliance on importsExplore new routes – The QTTA route, from China to Kyrgyzstan, Uzbekistan and Tajikistan, is shorter than older Central Asian corridors and opens up new markets for Pakistani goods — provided the security situation in Gilgit-Baltistan holdsAnalysisPanda Bonds Could Help Pakistan Bypass US Dollar and Access Chinese Capital Market — Economist14 May, 10:38 GMT

Are Panda Bonds a ‘Chinese Lifeboat’?

Pakistan recently issued its first ‘panda bonds’ in China — a small sum for now, but a start.»These panda bonds can definitely be seen as an alternative to western lenders,» Tabassum said. «It is aimed at diversifying Pakistan’s economic activity, to protect its economy in times of crisis.»She says they are a practical way to move away from «roll-over financing» — though much will depend on Pakistan’s complex relationship with China.

The Bottom Line

No single move will break the dependency on the Gulf states overnight, but between QTTA, panda bonds and talks with Russia and Central Asia, Pakistan is quietly making its Plan B.

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