Dear Prime Minister,
Like millions of other Pakistanis overseas, I am pleased to see you are living up to your campaign promises on the issue of building dams to address our beloved country’s water woes. Not only we like your ideas but also your qualified team; however as a Pakistani, I feel a need to suggest something which could solve this looming water crisis.
What history tells us is that our Holy Prophet (PBUH) told the mankind that giving and taking a loan is 18 times better than getting or giving donations. Every good economist knows that business and projects run much better if you utilize the loans as investments instead of donations.
Your government pledged Pakistanis to donate hard earned cash for fundraising of mega dams. Instead of asking for donations, the government must ask for loans and make lenders the shareholders in Diamer-Basha Dam. This amount will be payable after the dam’s completion and will give every shareholder (anyone who invested more than a certain amount, let say $1000) profit for first five years because Diamer-Basha Dam will generate (expected) 4,500MW of electric power which will give plenty of cash to the government. This way the people’s money will be used as an investment instead of donations and they will pour a lot more funds than giving some charity.
The government of Pakistan will be the guarantor for the profits and for the return of original loaned amount. In this way, bigger players will invest in this national project and it will generate more amounts to make another project after completion of the first project. All the international investors do the same but now our people will give you money and will get the profits afterward.
The second issue is related to the problem of 12 to 14 billion U.S. dollars, which Pakistan is trying to get from International Monetary Fund (IMF) or any other institution on easy terms due to current account deficit.
This issue can be handled by doing future trading mixed with Option trading with China as Gulf Cooperation Countries sometimes did future trading regarding their export of oil.
China is now becoming an import oriented economy from export driven. China is holding its China International Import Expo (CIIE), in which Pakistan is invited as the guest of honor. It gives us huge opportunity to get large orders for our products especially in the field of agriculture.
Pakistan has its immense cultivation potential for soybean and it must capitalize on its opportunity to increase the crop’s exports to China. The trade war between U.S. and China is worsening day by day and China is trying to get a reliable partner to get imports from and to diversify its exports. Right now China is looking towards Brazil and India for purchasing Soybean as they tariffed $15 billion annual import of soybean, $3.5bn of cotton, $7bn of medical devices, $2.5bn of forest products, $960 million of fish products, $384mn of dairy products, $205mn of wheat, $172mn of tobacco, and $54 billion in services from U.S. Here I only mentioned the items which Pakistan produces or is capable of producing. Pakistan cannot only get these orders in future trading but can also negotiate option trade prices to get 25 percent of advance payment as Chinese companies don’t do business on their own. The Chinese government controls all the business and is capable of giving advance payments to Pakistan. This way we will get three main benefits.
- We will solve the problem of the current account deficit
- We will be able to triple fold our exports still standing on some $23 billion (+/-3) for last 12 years
- We will be able to give 30 million promised jobs and to generate tremendous growth of our agriculture sector
China will also benefit in three ways:
- China will get a reliable partner for imports
- Cost of transportation for imports to China will decrease as Pakistan is neighboring country
- Existing CPEC structure will be utilized, even without completion as this route will be used for delivery of all items, giving a positive sign to all OBOR partner countries
Hope my suggestions will get your attention.
You have my best wishes for next five years.
Malik Anwar Bilal Awan
