Pakistan, Bangladesh launch 'quiet' diplomacy to ease decades of acrimony

This still from a video recorded on June 1, 2019 shows Pakistani Prime Minister Imran Khan talking to Bangladeshi Prime Minister Sheikh Hasina during a summit of the Organization of Islamic Cooperation (OIC) held in Mecca. (AFP)
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Updated 02 August 2020
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Pakistan, Bangladesh launch 'quiet' diplomacy to ease decades of acrimony

  • Recent diplomatic developments, including rare call by Pakistani PM to his Bangladeshi counterpart, have hinted at thaw in Pakistan-Bangladesh ties
  • Islamabad and Dhaka’s embrace comes at a time when relations between India and many countries in the region are unraveling

ISLAMABAD/ DHAKA: As India’s relations with its neighbors in the South Asian region deteriorate, old foes Pakistan and Bangladesh are making a push to build diplomatic, economic and cultural ties that could upend decades of historic configurations in the region, officials and experts in Islamabad and Dhaka have said. 
Indeed, a number of recent diplomatic developments have hinted at a thaw in a long-troubled Pakistan-Bangladesh equation.
Prime Minister Imran Khan invited his Bangladeshi counterpart Sheikh Hasina to visit Islamabad in a rare call earlier this month that came just weeks after a ‘quiet’ meeting between Pakistan’s high commissioner to Dhaka, Imran Ahmed Siddiqui, and Bangladeshi Foreign Minister A. K. Abdul Momen. 

Relations between the two countries have never recovered from the 1971 war when Bengali nationalists, backed by India, broke away from what was then West Pakistan to form a new country.
Ties reached a new low in 2016 when Bangladesh executed several leaders of its Jamaat-e-Islami party on charges of committing war crimes in 1971. Pakistan called the executions and trials “politically motivated,” arguing that they were related to the pro-Pakistan stance of the convicts during the war.
But now, officials on both sides say it’s time for a reset. 
“We look forward to having a sustained dialogue with the government of Bangladesh on how best our bilateral relations can move forward on a positive trajectory,” Pakistan’s foreign office spokesperson Aisha Farooqui told Arab News on Thursday. “We hope to work and take forward our relations, whether its trade, culture and all other mutual areas.”
Ambassador Siddiqui declined to give details of his meeting with Momen but told Arab News the aim of the huddle was “to further promote bilateral relations with a forward-looking approach” given a desire from both sides to strengthen ties, particularly through private sector partnerships. 

“The younger generation is especially keen to forge meaningful ties. There is a huge potential in bilateral economic and commercial cooperation,” he said. “The two sides may work together to realize this potential with a focus on bringing our respective private sectors closer.”
Mohammad Ruhul Alam Siddique, Bangladesh’s high commissioner-designate to Pakistan, also said he aimed to improve trade and commercial ties between the two nations during his tenure. 
“My only mission will be to better the bilateral relations as much as possible while delivering services in Pakistan,” he said, saying his first task in the coming weeks would be to reduce the trade imbalance between the two countries. 




Pakistan's High Commissioner in Dhaka Imran Ahmed Siddiqui, left, meets Bangladeshi Foreign Minister AK Abdul Momen, right, in Dhaka, Bangladesh, on July 1, 2020. (Pakistan High Commission)

According to the State Bank of Pakistan, Pakistan’s exports to Bangladesh reached $736 million in 2019, while Bangladesh’s exports to Pakistan were only $44 million.
Pakistan and Bangladesh’s embrace comes at a time when relations between India and many countries in the region are unraveling.
Last month, the Indian army said at least 20 of its soldiers were killed after hand-to-hand fighting with Chinese troops at a disputed border site, the deadliest clash in decades. 
India also has increasingly tense ties with Nepal over disputed land, about 372 square km (144 square miles), strategically located at the tri-junction between Nepal, India and the Tibet region of China. India has kept a security presence in the area since a border war with China in 1962.
Pakistan and India have also warred for decades over the disputed Kashmir region, which both claim in full and rule in part.
“We see there are problems [of India] with China in the border region, problems with Nepal, some problems with Bangladesh as well, and of course, with Pakistan on Jammu and Kashmir,” Farooqui of the Pakistani foreign office said. “These policies do not make India effective for peace and stability in the region.”




Pakistan's High Commissioner in Dhaka Imran Ahmed Siddiqui, second left, meets Bangladeshi Foreign Minister AK Abdul Momen, second right, in Dhaka, Bangladesh, on July 1, 2020. (Pakistan High Commission)

Explaining the context of a reset in Pakistan-Bangladesh ties, Pakistani prime minister’s special adviser on security, Moeed Yusuf, said in a veiled reference to India: “The context is very clear: there is one country that is threatening, annoying and upsetting all its neighbors.”
In response to an email from Arab News, the spokesperson of the Indian high commission in Islamabad, Vipul Dev, referred to a statement by the spokesperson of the Indian External Affairs Ministry last week after the Pakistani PM’s call to Hasina, saying India’s relationship with Bangladesh was “time tested and historic.” 
“This year both countries are taking lot of steps to strengthen this partnership,” the ministry spokesperson said. 
Despite enduring ties between India and Bangladesh, experts say Islamabad must continue to push its rapprochement with Dhaka, still in its infancy, forward.
“Now it’s Pakistan’s responsibility to rebuild the relationship,” international relations expert Prof. Delwar Hossain said. 
For this, Pakistan’s former high commissioner to India Abdul Basit said, the Pakistani prime minister needed to “follow up” on his call to his Bangladeshi counterpart. 
“Prime Minister Imran Khan should write a formal invitation to his Bangladeshi counterpart which will help keep the momentum going,” Basit said, adding that a special envoy to Dhaka should be appointed, like Pakistan had recently done for Kabul.

“We should focus more on working behind the scenes to avoid unnecessary hype,” Basit said. “It should be a consistent process.”


Pakistan secures $1.2 billion as IMF clears reviews, flags gains on stability and reforms

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Pakistan secures $1.2 billion as IMF clears reviews, flags gains on stability and reforms

  • IMF praises Pakistan’s policy implementation despite challenging global environment and climate-driven shocks
  • The Executive Board urges faster energy, SOE and governance reforms for macroeconomic and fiscal sustainability

KARACHI: The International Monetary Fund (IMF) approved Pakistan’s second review under its Extended Fund Facility (EFF) and the first review of its Resilience and Sustainability Facility (RSF), said a statement on Tuesday, unlocking about $1.2 billion in new financing while praising the country’s progress in stabilizing the economy despite recent floods.

The decision taken by the IMF Executive Board allows Islamabad to draw $1 billion under the EFF and $200 million under the RSF, bringing total disbursements under both arrangements to about $3.3 billion. The Fund said Pakistan’s policy implementation had improved financing conditions, strengthened reserves and preserved stability even as the country faced a challenging global environment and climate-driven shocks.

Under the 37-month EFF, approved last year in September, the IMF noted strong fiscal performance, including a primary surplus of 1.3 percent of GDP, a rebound in gross reserves to $14.5 billion by end-FY25 from $9.4 billion a year earlier and progress on rebuilding confidence. It noted a surge in inflation due to flood-related food price spikes but said it was expected to ease.

“Pakistan’s reform implementation under the EFF arrangement has helped preserve macroeconomic stability in the face of several recent shocks,” IMF Deputy Managing Director Nigel Clarke said. “Real GDP growth has accelerated, inflation expectations have remained anchored, and fiscal and external imbalances have continued to moderate.”

Clarke said Islamabad’s commitment to meeting its FY26 primary balance target while also addressing urgent post-flood relief signaled strong fiscal intent. He urged continued tax policy simplification and base broadening to build space for climate resilience, social protection and public investment.

The IMF official maintained a tight monetary stance should be continued to keep inflation within the State Bank Pakistan’s target range, while allowing exchange-rate flexibility and deepening the interbank market.

Additionally, he said financial regulation enforcement and capital market development were essential for a resilient financial sector.

The IMF also flagged energy sector reforms as “critical to safeguarding viability,” noting that timely tariff adjustments had helped curb circular debt but that Pakistan must now focus on reducing electricity production and distribution costs and addressing operational inefficiencies in both the power and gas sectors.

The statement also welcomed the publication of Pakistan’s Governance and Corruption Diagnostic report, a detailed IMF-supported assessment that maps out where government systems are vulnerable to inefficiency or misuse and recommends reforms to improve transparency, accountability and service delivery.

Further priorities include the privatization of state-owned enterprises and strengthening economic data quality.
Clarke said reducing Pakistan’s climate vulnerability was vital for long-term stability, referring to the RSF, a financing tool that provides long-term, low-cost loans to help countries address climate risks.

“The RSF arrangement is supporting efforts to strengthen natural disaster response and financing coordination, improve the use of scarce water resources, raise climate considerations in project selection and budgeting, and improve the information on climate-related risks in financing decisions,” he said.

Pakistan faced a prolonged economic crisis in recent years before it began implementing stringent IMF-recommended reforms, which have driven a gradual improvement in macroeconomic indicators over the past two years.

The country also remains one of the world’s most climate-vulnerable nations despite contributing less than one percent of global greenhouse-gas emissions.

It has endured a series of extreme weather events in recent years, most notably the 2022 super-floods that submerged one-third of the country, displaced millions and caused an estimated $30 billion in losses.

This year’s floods killed over 1,000 people and caused at least $2.9 billion in damage to agriculture and infrastructure, underscoring the scale of climate pressures facing the economy.

Economic experts told Arab News a day earlier that the Fund’s disbursements under the two loan programs would support the cash-strapped nation, which has relied heavily on financing from bilateral partners such as Saudi Arabia, China and the United Arab Emirates, as well as multilateral lenders.

“It obviously will help strengthen the external sector, the balance of payments,” said Samiullah Tariq, group head of research at Pakistan Kuwait Investment Company.

Another analyst, Shankar Talreja, head of research at Karachi-based Topline Securities, said the move was likely to send a positive signal to domestic and international investors about the government’s commitment to its reform agenda.

“This will help strengthen reserves and will eventually help a rating upgrade going forward,” he said.