China, Pakistan reveal plans to benefit from vulnerable Afghan economy under Taliban rule

China and Pakistan are in a hurry to exploit the already vulnerable economy of Afghanistan after the Taliban conquered the war-ravaged nation, reported ANI citing another outlet. Both the Xi Jinping government in China and Imran Khan’s government in Pakistan have already announced plans to lure the benefits of Kabul.

Afghanistan is facing massive financial challenges because the Taliban are not experienced in handling complicated economic issues.

In an attempt to take advantage of the situation in Afghanistan, Pakistan and China have already revealed their plans. Most recently, Islamabad announced to trade with Afghanistan in Pakistani rupee. For using its own currency in the trade, Pakistan’s Finance Minister Shaukat Tarin has cited the dollar crunch in Kabul as the reason. As per the report, he has even offered to help the Taliban to fill up the technical positions that are currently vacant due to evacuations by western nations.

Additionally, China’s Communist regime has also started ‘tempting’ the Taliban. Recently, the Xi Jinping-led government, which is known to lend money, has vowed $31 million to kickstart the Afghan economy. In return, the Taliban have reportedly shown interest in collaborating with Beijing over one of China’s biggest projects, the Belt and Road Initiative (BRI).

Beijing and Islamabad’s developments regarding the Taliban-led government in Afghanistan are remarkable, especially when other nations are still deciding if they should recognise the so-called ‘interim’ government. 

China appears to be a larger beneficiary: Report

The report cited by ANI has also stated that China appears to be the larger beneficiary considering all the developments, as the Pakistani economy, as well as its currency, already relies on China. Notably, since 2018, Islamabad has started a significant level of trade with Beijing in Chinese currency, the Yuan. This means most of the Sino-Pak trade is Yuan-based and has raised the prospects of a three-way dovetailing of Pakistan, China and Afghanistan. 

Therefore, as Yuan is the strongest currency among the three, China will benefit a lot. It will allow China a measure of advantage over the other two. However, even as a middleman (according to InsiderOver report), Pakistan would still bag some perks via transit and facilitation charges. However, Pakistan’s economy is also currently in crisis and runs on a massive deficit in terms of debt servicing and several other indicators. 

Additionally, on September 15, the Pakistani rupee hit an all-time low of Rs 169.94 against the US dollar in the inter-bank market. The report cited by ANI noted that Afghanistan is ranking as one of the most fragile economies across the globe even though it received aid from western nations for 20 years. 

The World Bank has also said that poverty and underdevelopment are peaking in Afghanistan. IT said that nearly 90% of Afghanistan’s population lived on less than $2 per day. Notably, the bank added that Kabul will probably not receive any aid this year after getting $4.2 billion in 2019. The media report has also said that both China and Pakistan have continued to monitor the developments in the war-torn nation with keen interest.

(With inputs from ANI)

IMAGE: AP