China and Pakistan are in a hurry to tap the Afghan economy as both have announced certain attractive benefits to Afghanistan, which will greatly benefit both the former and the latter in the near future, according to a news report Thursday.
War-torn Afghanistan is facing immense financial difficulties. And the new rulers are not used to dealing with the complex economic issues facing the impoverished country.
The former head of the Afghan central bank had also fled the country leaving the financial decision in disarray. However, recently the Taliban appointed a new leader.
Most Afghan officials struggling with financial problems now have dual citizenship and have many reasons to be wary of the wrath of the new authorities which could spread to their families, the InsideOver news site reported on Thursday.
Any initiative, even in the form of floating ideas or discussion, without action, can be risky. This opens up the prospect that Pakistani officials, like the military that helped the Taliban achieve victory last month, could be called upon to lead or guide the management of the Afghan economy, at least for some time, according to the statement. InsideOver.
In an attempt to take advantage of the situation, Islamabad and Beijing have already drawn up plans. The first step was taken by Islamabad since it recently announced that it would trade with Afghanistan in Pakistani rupees.
Finance Minister Shaukat Tarin cited the reason why the dollar has become scarce in Kabul. He also offered to help the Taliban fill technical posts left vacant due to recent evacuations.
The Communist regime has also started to attract the Taliban. Recently, China – the country known for easily lending money – pledged $ 31 million to jumpstart the Afghan economy. In return, the Taliban have also expressed interest in a rapprochement with the Chinese BRI.
When other countries decide whether to recognize the Taliban caretaker government, Beijing and Islamabad have started to act on financial issues related to Afghanistan.
However, in all of these developments, China appears to be a bigger beneficiary as the Pakistani economy and currency are already dependent on China. And since 2018, Islamabad has largely started trading with Beijing in Chinese yuan, doing much of the Sino-Pakistani trade based on the yuan, increasing the prospects for a three-way articulation of economies, IndsideOver said.
In this, being the strongest currency, the Chinese Yuan will largely benefit while allowing some measure of advantage to the other two.
Pakistan appears to benefit, acting as a middleman and monopolizing resources through transit and facilitation fees. But, currently, the Pakistani economy is in perpetual crisis and has a huge deficit in terms of debt service, among other indicators.
On Wednesday, the Pakistani rupee hit an all-time low of Rs 169.94 against the US dollar on the interbank market.
Afghanistan is one of the most at-risk and fragile economies in the world, according to InsideOver, despite Western aid for two decades. The World Bank had said that in Afghanistan poverty is endemic, as is underdevelopment. He also added that nearly 90% of the Afghan population lived on less than $ 2 a day and that Kabul, which received $ 4.2 billion in aid in 2019, is unlikely to receive any this year.
Beijing and Islamabad are closely following developments in Afghanistan.
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Posted: Saturday, September 18, 2021, 1:10 a.m. IST