China loans to Pakistan at commercial rates, not grants

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New Delhi, Sep 30 | A substantial chunk of Chinese development financing under the China-Pakistan Economic Corridor (CPEC) consists of loans that are at or near commercial rates, as opposed to grants, according to AidData, a US-based international development research lab, Dawn reported.

China committed $34.4 billion in development finance to Pakistan between 2000 and 2017. Islamabad is the seventh largest recipient of Chinese overseas development financing with 71 projects worth $27.3bn currently under way. The interest rate is 3.76 per cent for an average loan with 13.2 years’ maturity (when full repayment with interest is due) and 4.3 years grace period, it said.

In addition, the report claimed Pakistan received about half of all Chinese development finance in the form of “export buyer’s credit” i.e. money lent by Chinese institutions to Pakistan in order to facilitate the purchase of equipment and goods to be bought by Chinese implementation partners, the report said.

As much as 40 per cent of China’s lending to Pakistan is now directed to state-owned companies, state-owned banks, special purpose vehicles, joint ventures and private sector institutions. These Chinese loans do not appear on the government’s books “for the most part”, the report claimed.

“However, they often benefit from an explicit or implicit form of government liability protection, which blurs the distinction between private and public debt,” it said, noting that the government has issued sovereign guarantees in some cases. This means the national exchequer will repay the loans if non-government borrowers fail to generate sufficient revenue to meet their financial obligations.

“In other cases… the government has provided a so-called guaranteed return on equity to borrowers. This type of guarantee is effectively a form of hidden debt to China… These financial arrangements are attractive to the government because they need not be disclosed as public debts,” the report said, adding that the economy is already in the “danger zone” based on the public debt-to-GDP ratio of 92.8 per cent.

Source: IANS

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Does MBA really help in getting a better job offer ?

Does MBA really help in getting a better job offer ?

Most students pursuing an MBA come with the sole objective of having a decent job offer or a promotion in the existing job soon after completion of the MBA. And most of them take loans to pursue this career dream. According to a recent survey by education portal Campusutra.com  74% MBA 2022-24 aspirants said they would opt for education loans.

There are exceptional cases like those seeking master’s degree or may have a family business to take care of or an entrepreneurial venture in mind. But the exception cases are barely 1%. For the rest 99%, a management degree is a ticket to a dream job through campus placements or leap towards career enhancements. Stakes are high as many of them quit their jobs which essentially means loss of 2 years of income, apprehension and uncertainty of the job market. On top of that, the pressure to pay back the education loans. Hence the returns have to be high. There is more than just the management degree. Colleges need to ensure that they offer quality management education which enables them to be prepared for not just the demands of recruiters and for a decent job but also to sustain and achieve, all along their career path.

  • So, what exactly are the B Schools doing to prepare their students for the job market and make them industry ready ?
  •  Are B schools ready to deliver and prepare the future business leaders to cope up with the disrupted market ?  

These are the two key questions every MBA aspirant needs to ask, check and validate before filling the MBA application forms of management institutes. And worth mentioning that these application forms do not come cheap. An MBA aspirant who may have shortlisted 5 B Schools to apply for, may end up spending Rs 10,000.00 to Rs 15,000.00 just buying MBA / PGDM application forms.

While internship and placements data of some management institutes clearly indicates that recruiters today have specific demands. The skill sets looked for are job centric and industry oriented. MBA schools which have adopted new models of delivery and technology, redesigned their courses, built an effective evaluation process and prepared the students to cope with the dynamic business scenario, have done great with campus placements despite the economic slow down.

However, the skill set being looked for by a consulting company like Deloitte or KPMG may be quite different from FMCG or a manufacturing sector. Institutes need to acknowledge this fact and act accordingly.

  • Management institutes should ensure that students are intellectually engaged, self motivated and adapt to changes fast. In one word ‘VUCA ready’.
  • B Schools should encourage students to participate in national and international competitive events, simulations of business scenarios.
  • Institutes should have the right mix of faculty members with industry exposure and pure academics.

The placement records of 2021 across top management institutes indicated the fact that recruitment is happening, skilled talent is in demand and certain management institutions continued to attract recruiters even in the middle of an ongoing crisis.

It is time, all management institutes rise to the occasion, understand market realities and identify areas of improvement at both ends – students and faculty.

After all, the stakes are high at both ends. B Schools taking corrective measures will stay while those which are lagging will end up shutting down.

Author Name : Nirmalya Pal

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