All posts by : Zubia Azeem

New Trade Ties Washington has issued a joint statement this week, narrating the will to resolve the tension in Afghanistan. The Effort is to create economic and trade ties with the region as well as between markets of central Asia, South Asia, and Europe together. To realize its plans, Washington has formed a group namely C5+1, which includes the United States, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. A working group is formed inspecting the transit and financial opportunities in Afghanistan and the wider region along with keeping an eye over the border security and violent extremism. Needs to be Realized In late May, The United States, Afghanistan, and Uzbekistan agreed on the need to build a railway-based transportation network between central Asia and Pakistan. Also, the need for the construction of a gas pipeline from across Pakistan to India was highlighted during the meeting. Iran and China have also agreed on a joint venture featuring a security and economic partnership. It is reported that the investment would be worth $400 billion over 25 years. The prospects of which will be the creation of new economic opportunities for Iran in particular and China at large. Where does Pakistan turn? The prevailing sentiment among the diplomatic observers is that the China and United States are desperately seeking and trying to seize economic opportunities in South and Central Asia. There is a “tug of war” observed on the part of both China and the United States, where the two are trying to get a major stake to their benefit in the emerging economic prospects. In this display of power dynamics between the US and China, Pakistan will soon find itself in a decisive moment over taking-side with one of the parties. Whatever the decision may be, it will decide the future of Pakistan from both an economic and political standpoint.

To ensure prompt access to loans, Microfinance Institutions should disburse loans to small and medium enterprises (SMEs) under the Bangladeshi government stimulus package. This will help generate a quick medium of finance to combat the negative repercussions of the pandemic. The recommendation is made on the authority of South Asian Network on Economic Modeling (Sanem) at the Sanem Netizen Forum on Covid-19 Pandemic. According to Selim Raihan, Sanem Executive Director, the assistance of the entrepreneur’s community gets compromised due to the delay in opportune extension of loans, since the banking system follows a slow-moving process. To realize the true potential of previously announced Tk 20,000 crore stimulus package by the Bangladeshi government, the executive director proposed to take the microlenders into serious consideration for this is the ruling sector specialized to cater to the SMEs. In appreciation of the stimulus package, Raihan added that this action will help revive the sector parallel to the economy if transparency is maintained and the process is administered properly. Commenting on the social safety net program, he added that the COVID-19 outbreak has rendered people poor and unemployed. However, the government is yet to takes measures in the direction of extending financial cooperation to the eligible people. Furthermore, tapping into the foreign reserves to cushion the fallout was said to be a good initiative. Though the government must not go overboard with the practice as it will discourage Foreign direct investment (FDI), he added. Research director of SANEM and professor of economics at the University of Dhaka, Sayema Haque Bidhisha said that the remittance hike is observed since the outbreak. This poses a challenge to the economy since the expatriates are likely to make a return to home to little or no economic activity whatsoever. So, this sector has to be brought under social safety net as well, she added. Bidhisha also referred to the government to ease the interest rate from 4% to a lower rate, since SMEs won’t be in a position to comply with the criteria. Given the uncertain dynamics of the pandemic, the situation calls for a vigilant and quick response amongst various sectors. With special emphasis on balancing the various segments of the society under institutionalized reforms.