Virus outbreak could hit China-Pakistan corridor
Not only will any financial trauma in China directly impact Pakistan's economic lifeline, CPEC, but we're also far more open to directly importing the virus simply because such a large number of people travel between the two countries on a daily basis.
I suppose we ought to be relieved that the Pakistani Senate sprang into action in the interest of the people, for once, as the threat of the deadly coronavirus spreading into the country is all but assured. Even though the Chinese government has effectively quarantined the Wuhan area, where it originated, and much of the world is checking all airports and ports, the virus has still made confirmed appearances in Germany, Sri Lanka, Cambodia, Canada, Malaysia, Australia, Nepal, Vietnam, France, Singapore, Hong Kong, Macau, Taiwan, US, Republic of Korea, Japan, Thailand, and now Pakistan.
With Beijing announcing more than 130 deaths and almost 6,000 confirmed cases perhaps the World Health Organisation (WHO) will finally declare the outbreak an international health emergency.
It seems there's no end to China's troubles. It had just begun to turn around the tariff war with the US after sanctions had squeezed the economy to the lowest levels of growth in almost three decades. And now this virus has spooked investors, shut down businesses, priced risk appetite right out of the market, and sent bourses tumbling from Tokyo to New York.
Since markets hate uncertainty even more than bad news, and this particular bad news has spread uncertainty quite like an out of control virus itself, it's no surprise to see blood all over trading floors. The only people still laughing all the way to the bank are safe haven traders who went long Japanese yen and Swiss franc when the whole thing got going.
For the most part, though, it's now a story of a typical market tragedy: gold up, oil down, equities bleeding, and nobody knowing just when things will turn around. Not really the best start to the new year in an environment when the global economy was looking for an excuse to slip back into a painful recession.
Yet while the whole world worries about China, and rightly so since most countries have import trade linkages with the Middle Kingdom, surely the Pakistani government understands well enough just how vulnerable we have suddenly become.
Not only will any financial trauma in China directly impact Pakistan's economic lifeline - CPEC (China Pakistan Economic Corridor) - but we're also far more open to directly importing the virus simply because such a large number of people travel between the two countries on a daily basis.
Full marks to the government for having some state-of-the-art virus checking machinery brought to the country, once they realised we didn't have necessary equipment of course, but who's to say how many infected people made their way here before the alarm was raised? Even the Chinese, and indeed everybody else, woke up to the problem when people had already started dying.
That is precisely why the debate in the Upper House on Tuesday, however limited, was important. Almost every other person already has the flu or some lingering breathing problem because of the smog that infested most parts of the country for the past few months. And since there is some overlap between symptoms of severe flu and coronavirus - cough, bad throat, heavy breathing, etc - the last thing anybody needs is panic spreading through the country.
The way forward is working with the Chinese to find a solution that works. CPEC is crucial to Pakistan's survival not just because it will funnel $60 billion through its dry, starved economy, but also because the Chinese will help erect 21st century infrastructure right through our most backward and deprived regions. It is, quite literally, Pakistan's make or break moment.
That's why perhaps only the Chinese would have been happier than Pakistanis as Beijing's trade war with Washington appeared to be winding down. When China feels the pinch, you can bet on anxiety in Pakistan; it's just as simple as that. And Islamabad is already under pressure from Washington to distance itself from CPEC; or at least make the provisions of the loans and grants more transparent.
That, as always, is a veiled threat. When Alice Wells, America's top diplomat for South Asia, cautioned Pakistan against relying too much on CPEC in Islamabad recently, she really meant to say that we should move away from China because it's in Uncle Sam's interest to frustrate China. And not doing so will frustrate Uncle Sam; which might become a bit of a problem because he was just coming around to restoring aid that we just can't do without for too long.
Things were hard enough, then, even without the virus. Now the problem is far more magnified. You can bet that the Pakistanis would bend over backwards, if they have to, to help China get a handle on this problem as quickly as possible.
Shahab Jafry is a senior journalist based in Lahore, Pakistan
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