Pakistan Current Affairs - 2020

TPPA of USD 2.4 Billion Signed by Pakistan with China for Hydro Power Project in Pakistan Occupied Kashmir 

On 25th June 2020, a Tripartite Power Purchase Agreement (TPPA) was signed for the construction of the 1124 MW Kohala Hydro Power Project. The agreement was signed in between the Government of Pakistan, Chinese Company- China Three Gorges Corporation (State-owned company of Chinese Government), and Government of Azad Kashmir (Part of Pakistan occupied Kashmir).

Kohala Hydro Power Project

The Hydropower project is located near the villages of Siran and Barsala in Muzaffarabad district of Pakistan Occupied Kashmir. The Hydro Power Project is located on the river Jhelum.

The project is part of the China Pakistan Economic Corridor. The estimated cost of the project is USD 2,364 million and is expected to be completed by 2026.  The Hydro Power Plant will be constructed by Kohala Hydropower Company Limited (KHCL). KHCL is a subsidiary of China Three Gorges Corporation.

China-Pakistan Economic Corridor (CPEC)

CPEC was established on 22nd May 2013 with the intent to developed Pakistan’s infrastructure for strengthening its economy

CPEC has been a Chinese debt trap for Pakistan. This was proven when the Pakistan government was negotiating for a USD 6 billion bailout package for their economy with the International Monetary Fund (IMF) in 2018.

The documents submitted by Pakistan’s Ministry of Planning and Development to the IMF have revealed that in the shape of debt and dividends Pakistan will pay China USD 40 billion for USD 26.5 Billion investment under the CPEC.  The original value of the CPEC project was estimated at USD 46 billion at the initial stages, but the total value of CPEC projects as per the last update on 2017 has reached USD 62 Billion (more than double of the USD 26.5 billion).

Pakistan gets another extension on FATF Grey List despite failure to act against terror groups

During the 3rd & and the last Plenary and Working Groups Meeting of the Global anti-money laundering watchdog Financial Action Task Force (FATF) for the current FATF plenary year on 24th June 2020, Pakistan again managed to escape from entering the ‘Blacklist’ despite its continuing failure to act against terrorist organizations. The FATF plenary and Working Groups meeting was originally scheduled to be held in Beijing, China, but due to the COVID-19 global pandemic, it was conducted virtually through video conferencing.

Under the FATF Chairmanship of China, it was certain that Pakistan will be given another extension until the next FATF Plenary and Working Group meeting in October 2020.

Background

Pakistan’s performance in implementing the 27-point action given by FATF during its Plenary Meeting in June 2018 was under review during the June 2020 Plenary meet.  Pakistan has given more than a year for implementing the 27-point action plan, but Islamabad failed to implement 22 out of the 27 action-points, this was informed during the FATF’s plenary meet in October 2019.

In October 2019 meeting, Pakistan was given an extension to implement all the remaining 22 action points by February 2020. In February 2020, Pakistan failed to implement 13 out of the total 27 action-points of the FATF, as a result of which another extension for four months until June 2020 Plenary Meet was granted.

Financial Action Task Force (FATF)

FATF was founded in 1989 as per the initiative taken by the G& countries for developing global policies that can combat money laundering and financing for terrorism activities. It is headquartered in Paris, France.

FATF plenary year begins in the month of July every year and ends in the month of June next year. Every year a total of 3 Plenary and Working group meetings of the FATF are conducted in the months of October, February, and June.

For the FATF year from 1st July 2019 to 30th June 2020, China has the Presidency of FATF. From 1st July 2020, Germany will take over the Presidency of FATF until 30th June 2021.