PAKISTAN has successfully sold a fresh debt of $2.5bn to international investors in what analysts had been describing as a significant investor-sentiment test, days after the IMF announced the resumption of its lending to the country under its $6bn programme.
The 39-month loan signed in July 2019 was suspended almost a year ago. The Eurobond plan had been on the cards for the last one year but was postponed because of the Covid-19 crisis and the suspension of the IMF programme over differences between the government and the Fund on electricity prices, the central bank’s autonomy and other issues. It is for the first time that Pakistan has raised funds through global markets after issuing $2.5bn of securities in 2017.
The money will be used to shore up the country’s meagre forex reserves and repay the maturing loans of $2bn in October this year and December 2022. The government’s decision to issue the new Eurobond debt has had a positive impact on the exchange rate, with the rupee having appreciated by more than 4pc against the dollar during the last three months. According to a report, Pakistan’s total global capital market debt stock, including the fresh debt, stands at $7.8bn.
Read: When it comes to the economy, the govt has reacted to circumstances instead of pursuing clear objectives
That the three-tranche note was oversubscribed in spite of the country’s poor international credit rating underlines the appetite of investors and fund managers for a reasonably priced sovereign debt. While some may argue that there could have been a better deal had the government launched the dollar bonds earlier, the sale of the five-, 10- and 30-year notes at a yield either lower than or close to the upper end of the indicative prices shows it is not that bad after all. Besides, the benchmark US treasury yields have also been moving upwards and the third wave of the pandemic has accentuated risks all around. The sudden replacement of the veteran finance minister by a younger, inexperienced politician just a day before the issue did not affect investor sentiment or yields. The $500m 30-year bond yield at 8.875pc against an indicative price of 8.875-9pc may appear a bit ‘expensive’ but the uncertainties associated with longer-term debts always fetch higher yields. The $1bn five-year note yields 6pc and the $1bn 10-year note 7.375pc against the indicative yields of 6.25pc and 7.5pc.
Indeed, the longer-term, market-based debt is a much better option for Pakistan than shorter-term commercial borrowings for balance-of-payments stability and certainty. However, it has to be returned one day. For years, we have been borrowing left, right and centre to repay past loans and pay import bills. This is unsustainable. The semblance of external account stability achieved in recent months should now be used to boost investments in manufacturing in order to produce surpluses for exports for a resolution of our debt and external account troubles.
Gender gap
THE Global Gender Gap Report 2021 brings no glad tidings for Pakistan. Not only is the country still hovering at the bottom of the gender parity index, it has since last year actually slipped a further two notches to 153 out of a total of 156 countries. Only Iraq, Yemen and Afghanistan fare worse. That means in the South Asian region it ranks second from last. Looking more closely at the four indices that factor into the final tally, the scorecard places Pakistan at 152 in economic participation and opportunity, 144 in educational attainment, 153 in health and survival, and 98 in political empowerment. In fact, in two indices, economic participation and opportunity, and health and survival, Pakistan figures in the bottom 10 countries. The document’s overall assessment is that “progress has stagnated”, and that the time needed for Pakistan to close the gender gap is now 136.5 years. The most demoralising aspect is that if seen in terms of historical perspective, not only are we stagnating; we are sliding precipitously. In 2006, Pakistan came in at 112 in the report: that translates into a drop of 41 places in the latest ranking.
Judging by this bleak assessment, the country is doing poorly in one of the main criteria that power the engines of national prosperity. Certainly, there is extensive evidence supporting the view that women in Pakistan get a far smaller share of the pie than their male counterparts. The Covid-19 pandemic has further exacerbated these disadvantages. Most women in Pakistan work in the informal sector, where they toil long hours for low pay, no benefits and little job security; many have found themselves furloughed without pay or laid off as economic activity ground to a virtual standstill. Intimate partner violence rates in the confined home space, with reduced opportunities for ‘escape’ or outside assistance, have also escalated steeply and affected productivity. Then there is education. Considering the already existing challenges in retaining girls in school beyond primary level, the prolonged school shutdowns will have a hugely detrimental impact. That said, one may well question the quality and comprehensiveness of the data, and the way it is used to arrive at conclusions in the annual gender parity report. For example, the contribution of women in the informal sector goes undocumented; were Pakistan to maintain more accurate data, the country would not rank far below nations where women are perceptibly more disadvantaged.
Cases of dog bite
FOR the Sindh government, the stray dog population and the ensuing cases of dog bites and rabies has proved to be a difficult beast to tackle. Though the provincial administration has taken several steps including culling and sterilisation campaigns and the introduction of helplines, the usual ad hoc and inconsistent approach to the issue has made all these measures largely ineffective. The stray dog population in Karachi and other Sindh cities continues to thrive, and there has been no let-up in the number of dog-bite cases that sometimes lead to rabies. Meanwhile, the shortage of the rabies vaccine and the dilapidated state of public hospitals and dog-bite centres in smaller towns of the province have exacerbated the problem. In 2019 alone, almost 11,000 dog-bite patients were treated at the Jinnah Postgraduate Medical Centre. In January last year, the provincial government finalised a billion-rupee programme for vaccinating stray dogs to control their numbers. According to a report published earlier this week, the Sindh local government secretary said that the provincial rabies control programme had vaccinated more than 30,000 stray dogs in Karachi alone. He said similar measures would be expanded to the rest of the province as well.
However, this initiative followed a gruesome dog-culling campaign in the city in February. The authorities had resorted to shooting stray dogs in certain areas. The two campaigns, less than a month apart and completely opposite in nature, reveal the shortsighted approach of the authorities. Moreover, during a recent hearing, the additional advocate general had informed the Sindh High Court Sukkur bench that around 110,000 stray dogs had been killed in the province. The ongoing efforts may give some respite in the short term, but for lasting results the provincial government needs to come up with a multipronged approach that includes vaccination of stray dogs, ensuring the supply of rabies vaccine and adequate treatment of dog-bite patients in all public hospitals, combined with a robust advocacy campaign. Only consistent efforts will prove effective in controlling this menace.
