ISLAMABAD: Pakistan’s new government plans to tap Middle Eastern commercial banks for financing after securing a new and long-term bailout loan from the International Monetary Fund (IMF) in the coming months, the new finance chief said on Wednesday.
The first order of business for new finance minister Muhammad Aurangzeb will be to seek a fresh Extended Fund Facility (EFF) from the IMF after a current standby arrangement expires on April 11. Pakistan bagged the last-gasp rescue package last summer to avert a sovereign default. The final review this week, if successful, will release a last tranche of around $1.1 billion.
“Once we conclude the [new] Extended Fund Facility, we should be able to approach Middle Eastern banks, which have ended their whole business and appetite, for commercial borrowing and we will be able to get funding and support from them primarily to help us with our trade business, etc.,” Aurangzeb said during an interview with Pakistan’s Geo TV on Wednesday night.
Pakistan has been financially assisted by countries like Saudi Arabia and the United Arab Emirates in the past, with deposits of billions of dollars in its central bank, followed by rollovers.
Gulf states have also regularly provided Pakistan oil on deferred payment facilities and offered direct financial support to help stabilize its economy and shore up its foreign exchange reserves.
Pakistan’s newly appointed finance minister has said he wants to ensure macroeconomic stability and reduce spending and tax system leakages as an IMF team arrived in Islamabad to hold a second and last review of the nation’s $3 billion stand-by arrangement starting today, Thursday.
A set of critical challenges face Aurangzeb, including stabilizing the economy amid soaring inflation and dwindling foreign reserves, managing substantial external debts and navigating negotiations with global lenders. Pakistan also needs fiscal reforms to boost revenue and attract investments, vital for sustainable economic growth and job creation.
The debt-ridden economy, which shrank 0.2 percent last year and is expected to grow around 2 percent this year, has been under extreme stress with low reserves, a balance of payment crisis, inflation at 23 percent, policy interest rates at 22 percent and record local currency depreciation.
“The GDP is better, we have macroeconomic stability and the exchange rate is getting better,” Aurangzeb told Geo. “So we need to bring this macro stability to permanence. If this stability comes toward permeance, we can lead it toward growth.”
The minister said Pakistan had a narrow tax base and needed to reduce revenue leakages, for which it was important to digitize the tax system and make it more transparent.
“This is something we have already started working on,” said the minister, who made his first official visit to the Federal Bureau of Revenue, the national tax collection body, on Wednesday.
On foreign borrowing, the minister said Pakistan needed to improve its economic management to break out of the practice of asking friendly countries to deposit money in its central bank and then seeking rollovers.
“Now even these friendly countries have given us a clear hint that they want to help us but not through aid but through investments,” the finance minister added. “And I think it is the right thing to do for the country.”
Aurangzeb said the government would tap the China bond market in the next fiscal year.
“The one [bond] market that we haven’t tapped is in China,” he said.
“See, our G2G [government-to-government] relationships are good. Their banks are still rolling over and giving aid to us. Chinese government is also helping us.”
“So, the panda market there, the bond market, it’s the second or third most liquid market in the world,” he added. “So I think from the ministry of finance we should go toward inaugural panda bonds during the next fiscal year.”
In February, China rolled over a $2 billion loan to Pakistan due in March.
The lender has said it will formulate a medium-term program if Islamabad applies for one.
Ahead of the current stand-by arrangement, Pakistan had to meet IMF conditions including revising its budget, and raising interest rates and the price of electricity and gas. The IMF also got Pakistan to raise $1.34 billion in new taxes. The measures fueled all-time high inflation of 38 percent year-on-year in May.
The government has not officially stated the size of the additional funding it is seeking through a successor program, but Bloomberg reported in February that Pakistan planned to seek a new loan of at least $6 billion from the lender.
Pakistan says will seek financing from Middle Eastern banks after securing new IMF bailout
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Pakistan says will seek financing from Middle Eastern banks after securing new IMF bailout
- New finance chief hopes better credit ratings post-bailout will make tapping bond markets easier
- Pakistan aims to secure new IMF loan after successful completion of last review under $3 billion facility
PM Sharif constitutes Economic Advisory Council as Pakistan aims to put economy on track
- The EAC is non-constitutional, independent body that advises the government on important economic issues
- Pakistan is currently navigating a tricky path to economic recovery after it narrowly escaped default last year
ISLAMABAD: Prime Minister Shehbaz Sharif has constituted an eight-member Economic Advisory Council (EAC), the Finance Division said on Saturday, as the South Asian country aims to revive its struggling $350 billion economy.
The Economic Advisory Council (EAC) is a non-constitutional, independent body in Pakistan formed to advise the government, more specifically the prime minister, on economic issues of national significance.
Pakistan, which has been facing low foreign exchange reserves, currency devaluation and high inflation, last month completed a short-term $3 billion International Monetary Fund (IMF) program that helped stave off a sovereign default.
However, the South Asian country is still dealing with a high fiscal shortfall and while it has controlled its external account deficit through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2 percent this year, compared to negative growth last year.
“The EAC will be chaired by the prime minister, who will convene its meeting with any required frequency,” the Finance Division said in a notification.
The council members include Jahangir Tareen, Saquib Sherazi, Shahzad Saleem, Musadaq Zulqarnain, Ijaz Nabi, Asif Peer, Ziad Bashir and Salman Ahmed.
The development comes amid Pakistan’s talks with the IMF for a fresh bailout after its $350 billion economy slightly stabilized following the completion of the last IMF program, with inflation coming down to around 17 percent in April from a record high of 38 percent in May last year.
While Islamabad has said it expects a staff-level agreement by July, both Pakistani and IMF officials have refrained from commenting on the size of the program. The South Asian country is expected to seek around $7-8 billion bailout from the global lender.
Pakistan has to meet a primary budget deficit target of Rs401 billion ($1.44 billion), or 0.4 percent of its gross domestic product, for the current fiscal year before the government presents its budget in June.
Saudi Crown Prince’s visit to Pakistan will prove to be ‘game changer’ in bilateral ties — minister
- Pakistan’s deputy PM this month said the much-awaited visit was ‘on the cards,’ but neither side has confirmed any dates
- The statement came amid Pakistan and Saudi Arabia’s efforts to increase bilateral trade and reach investment agreements
ISLAMABAD: Interior Minister Mohsin Naqvi said on Saturday that a proposed visit of Saudi Crown Prince Mohammed bin Salman to Pakistan would prove to be a “game changer” in bilateral ties between both countries, adding the entire Pakistani nation was awaiting the high-profile visit.
Naqvi said this during his visit to the Saudi embassy in Islamabad, where he met the Kingdom’s ambassador, Nawaf bin Saeed Al-Malki, according to the Pakistani interior ministry. The two figures discussed matters of mutual interest, including the Crown Prince’s visit, Pakistan-Saudi Arabia relations and bilateral cooperation in various fields.
Pakistan’s Deputy Prime Minister Ishaq Dar this month said a much-awaited visit of Saudi Arabia’s Crown Prince Mohammed bin Salman to Islamabad was “on the cards” and could materialize any time during May. But neither of the two sides has confirmed any dates.
“The historic brotherly friendship of Saudi Arabia and Pakistan is turning into a beneficial economic relationship,” Naqvi was quoted as saying by his ministry.
“The people of Pakistan are looking forward to the visit of the Crown Prince of Saudi Arabia. The visit of the Saudi Crown Prince will prove to be a game changer in relations between the two countries.”
Pakistan and Saudi Arabia have lately been working closely to increase bilateral trade and investment deals, with the Crown Prince last month reaffirming the Kingdom’s commitment to expedite an investment package of $5 billion.
A high-level Saudi business delegation, led by the Kingdom’s Assistant Minister of Investment Ibrahim Al-Mubarak, this month visited Pakistan to explore investment opportunities in various sectors, including mineral, energy, agriculture and petroleum.
“Saudi Arabia has supported Pakistan in every test,” Naqvi said. “The recent visit of Saudi Arabian investors to Pakistan was very successful.”
On the occasion, the Saudi ambassador said the Kingdom attached “great importance” to its relations with Pakistan, according to the Pakistani interior ministry.
Pakistan and Saudi Arabia enjoy strong trade, defense, and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as a top source of remittances to the cash-strapped South Asian country.
Saudi Arabia has also often come to cash-strapped Pakistan’s aid by regularly providing it oil on deferred payment and offering direct financial support to help stabilize its economy and shore up its forex reserves.
Ambassador says five Pakistani students injured in Kyrgyzstan mob violence
- One Pakistani student admitted to Bishkek hospital with jaw injuries, four others discharged after first aid, Pakistan’s envoy says
- Around 6,000 Pakistanis are studying in Bishkek, where mob violence erupted after some Egyptians quarreled with locals
ISLAMABAD: Five Pakistani medical students were injured in a mob attack on foreign students in the Kyrgyz capital of Bishkek, Pakistan’s ambassador to Kyrgyzstan said on Saturday.
A number of incidents of mob violence against foreign students have been reported in Bishkek since Friday evening. The matter boiled over due to sharing online of videos of a brawl between Kyrgyz students and medical students from Egypt on May 13, the Pakistani embassy said on Facebook, citing the Kyrgyz press.
So far, a few hostels of medical universities in Bishkek and private residences of international students, including Pakistanis, have been attacked. The hostels are inhabited by students from India, Pakistan and Bangladesh, and there have been reports of minor injuries to some Pakistani students.
“Five Pakistani students were injured in the mob violence. One of them is admitted in a local hospital with some jaw injuries, while four others were discharged after first aid,” Hasan Zaigham, Pakistan’s ambassador to Kyrgyzstan, told Arab News over the phone.
“No Pakistani is killed or raped in the violence,” he said, rebutting rumors on social media. “The situation is under control now as Bishkek authorities have dispersed all the miscreants.”
The ambassador said they had advised Pakistani students to stay indoors and get in touch with the embassy in case of any urgency. “We are in touch with the local law enforcement authorities to ensure safety of our students,” he said.
Around 10,000 Pakistani students are enrolled in different institutes in Kyrgyzstan and nearly 6,000 of them are residing and studying in Bishkek where the violence erupted Friday night, according to Zaigham.
He said some Egyptian students had a brawl with the local people earlier this week, after which videos of the fight were shared online, inciting violence and mob attacks by the local people in Bishkek against all foreign students living in different hostels in the city.
Earlier in the day, Pakistan Prime Minister Shehbaz Sharif expressed his concerns over the violence around student hostels in Bishkek and asked his country’s embassy to help Pakistani students in the city.
“Deeply concerned over the situation of Pakistani students in Bishkek, Kyrgyzstan. I have directed Pakistan’s Ambassador to provide all necessary help and assistance,” Sharif said on X. “My office is also in touch with the Embassy and constantly monitoring the situation.”
Mumtaz Zahra Baloch, a spokeswoman for the Pakistani foreign office, said the Pakistani embassy had responded to hundreds of queries by students and their families. She said Pakistan’s envoy and his team were available on the emergency contact numbers: +996555554476 and +996507567667.
“In case the numbers do not connect because of phone traffic, please text/WhatsApp,” Baloch said on X.
The Pakistani embassy earlier said it had been able to contact over 250 students and their family members in Pakistan, adding the violence appeared to be directed at all foreign students and was not specific to Pakistanis.
It said this was an evolving situation and they would inform the Pakistani community in Kyrgyzstan and their relatives in Pakistan about any further developments.
Religion minister inspects catering arrangements for Pakistani Hajj pilgrims in Madinah
- Pakistan’s Hajj Mission has hired seven catering companies in Madinah to oversee food arrangements for pilgrims
- Chaudhry Salik Hussain urges catering firms to pay special attention to quality of flour, vegetables, meat and spices
ISLAMABAD: Pakistan’s religious affairs minister, Chaudhry Salik Hussain, has visited various firms in Madinah and inspected catering arrangements for Pakistani Hajj pilgrims, the Pakistani religious affairs ministry said on Saturday.
Pakistan’s Hajj Mission has hired seven catering companies in Madinah to oversee food arrangements for pilgrims as they arrive in Saudi Arabia’s holy cities from for the upcoming Hajj pilgrimage in June.
Hajj is one of the five pillars of Islam and requires every adult Muslim to undertake the journey to the holy Islamic sites in Makkah at least once in their lifetime if they are financially and physically able.
Hussain, who is currently in the Kingdom, inspected various stages of food preparation and packaging for the pilgrims, and lauded all departments for the “excellent work.”
“Special attention should be paid to the quality of flour, rice, vegetables, meat, pulses and spices,” he was quoted as telling officials of catering firms. “Catering companies should try to use all ingredients, spices and meat from Pakistan.”
He said using Pakistani commodities and spices would not only benefit Pakistan, but it would also maintain the Pakistani taste, adding that an online survey through the Pak Hajj mobile app would be conducted for the feedback of the pilgrims.
Pakistan has a Hajj quota of 179,210 pilgrims this year, of which 63,805 people will perform the pilgrimage under the government scheme, while the rest will use private tour operators. This year’s pilgrimage is expected to run from June 14-19.
Pakistani pilgrims have been arriving in Madinah since May 9 when Pakistan launched its pre-Hajj flight operation. More than 20,000 Pakistani pilgrims have since arrived in Madinah under the government scheme.
Toronto-bound PIA flight diverted to Karachi due to ‘technical fault’ — spokesperson
- PIA spokesperson says the flight, PK-781, departed from Pakistan’s capital of Islamabad late Friday
- But the fault forced captain to return instead of continuing the long flight over the Atlantic, he adds
KARACHI: A Toronto-bound Pakistan International Airlines (PIA) flight was diverted to Karachi due to a “technical fault” it encountered after the take-off, a PIA spokesperson said on Friday.
The flight, PK-781, departed from the Pakistani capital of Islamabad late Friday, according to PIA spokesperson Abdullah Khan.
The technical fault with the aircraft was “minor,” but the captain preferred to return instead of continuing the long flight over the Atlantic Ocean.
“The decision to bring the plane to Karachi was made due to better arrangements at the engineering base and availability of spare parts,” Khan said in a statement.
The airlines made the arrangements for the return of the flight to Karachi as well as food, transportation and accommodation of passengers, according to the PIA spokesperson.
“The flight has been rescheduled to depart for Toronto at 1pm tomorrow (Saturday),” he added.
Pakistan is set to privatize the national airline, which has been facing a financial crisis for the last several years, by June and July as part of the requirements set by the International Monetary Fund (IMF).
On Friday, the Ministry of Privatization named eight business entities that have expressed interest in acquiring stakes in the PIA.
Pakistan agreed to overhaul its public sector entities under a $3 billion short-term loan package it signed with the International Monetary Fund (IMF) last year to avert a sovereign debt default.
