Current Affairs – June, 2019

Pakistan secures $3 billion bailout from Qatar

Cash-strapped Pakistan has secured a financial assistance in form of a bailout package of $3 billion from oil-rich Qatar, a day after Qatar’s Emir Sheikh Tamim bin Hamad concluded his visit to Pakistan.

Qatar’s financial assistance to Pakistan was announced by Sheikh Mohammed bin Abdulrahman Al Thani, Foreign Minister of Qatar.

Key Highlights

Pakistan also conferred visiting Qatari Emir with the Nishan-e-Pakistan, country’s highest civil honour.

Pakistan and Qatar apart from stepping up cooperation in trade and economy also signed a memorandum of understanding (MoU) to cooperate in field of exchange of financial intelligence related to money laundering and curbing terrorism financing.

During past 11 months, the Gulf state is 4th nation that has come forward at Pakistan’s rescue from default as when Prime Minister Imran Khan’s government tries to overcome a ballooning balance-of-payments (BOP) crisis.

Other Financial Aid to Pakistan:

China gave $4.6 billion aid to Pakistan in shape of deposits and commercial loans.

Saudi Arabia provided $3 billion cash deposit and $3.2 billion oil facility on deferred payments.

United Arab Emirates (UAE) also provided $2 billion cash deposit.

In May 2019 Pakistan reached a preliminary agreement with International Monetary Fund (IMF) for $6 billion bailout package that was aimed at supporting Pakistan’s finances and for strengthening a slowing economy.

Russia extends ban on EU Food Imports until end of 2020

Russian President Vladimir Putin recently signed a decree for extending Moscow’s embargo on food products being imported from the European Union (EU) to the end of 2020. This decision was in continuation of Russia’s s retaliation against sanctions over Ukraine.

Key Highlights

A decree signed by President Vladimir Putin posted on Moscow’s official government website, reads that ban on produce, dairy, meat and most other foods imported from EU will now stretch to December 31, 2020.

Background: In 2014, following the international sanctions imposed by United States and other countries over Russia for its annexation of Crimea and support of east Ukraine’s separatists, Moscow in August 2014 imposed counter sanctions on most food imports from the European Union, US and several other countries. The international restrictions were primarily targeted at finance, energy and defense sectors of Russian economy.

Recently on 20 June 2019, EU further extended their punishing economic sanctions against Russia (over conflict in Ukraine) for a further 6 months period.

Sanction Result: The Western economic restrictions being faced by Russia as well as country’s own embargo have affected Russian economy by pushing up food prices. Western sanction have deprived Russian economy of $50 billion on the other hand EU has lost $240 billion.

Russia has now managed to benefit from Western economic pressure as it has started phasing out its imports and replacing them with domestically made products, even in sectors in which Moscow did not have any experience, thus giving boost to domestic producers.