KARACHI: As Pakistan is expected to use the International Monetary Fund’s loan facility to steer the country out of prevailing economic crisis, economists believe the country will have to bear the brunt of being on the Financial Action Task Force (FATF) gray list.
Imran Khan, the next prime minister of Pakistan in line, promises to work on human development in the country but his party faces tough economic challenges and is left only with the option to move to the IMF.
Pakistan was put on list of “Jurisdictions with strategic deficiencies,” known as the gray list, by the money laundering and terrorism-financing watchdog FATF. It was listed on June 29, 2018. The country has been on the list twice, in 2008 and 2012.
“Pakistan has been put on gray list of FATF, which means the IMF loan will be extended at higher interest rates and the burden will again be shifted on to the vulnerable and tax-paying class,” Dr. Ayub Mehar, research economist at Asian Development Bank Institute, told Arab News.
There is no question of the IMF denying loans to Pakistan by IMF because it is responsible for the fund to facilitate the member country, Mehar said. Pakistan can avail under special drawing rights up to $2.8 billion from the IMF.
The IMF program’s condition may include expenditure cuts as part of government austerity, which in turn will affect the economically vulnerable class in Pakistani society. “The IMF comes with its own assessment of the country but it largely depends on the extent to which the government can effectively negotiate terms with the fund,”, Dr. Asad Sayeed, research economist at the Institute of Development and Economic Alternatives, told Arab News.
As part of its expenditure cut, the government is likely to withdraw subsidies being given to the poor segment. “Whenever the expenditure cut is talked about, it is always viewed by which segment is going to bear the brunt. It will depend how the government is going to protect the interest of the poor, middle-class segments,” Dr. Sayeed noted.
The economists believe Khan’s government will have to confront a huge current account deficit, caused by trade and fiscal deficits, and the instability of the national currency which has been devalued for the fourth time since December 2017. “The IMF will call for further devaluation of the Pak rupee and expenditure cuts which means the country will have to compromise on the its development spending,” Muzzamil Aslam, senior economist and CEO of EFG-Hermes Pakistan, told Arab News.
The rising imports have increased the current account deficit of Pakistan to a historic high of $18 billion during the last fiscal year, which continues to exert pressure on the Pak rupee against other currencies following the huge demand/supply gap. Pakistan imported $60.9 billion worth of goods while its export stood at only $23.22 billion during the last fiscal year, FY18.
Mehar noted: “Other factors such as less inflow of foreign direct investment have also played a crucial role in the weakening of Pakistan’s foreign exchange reserves, which have gone down to $9 billion.”
As the external financing gap keeps rising — it is expected to be remain at $17 to $18 billion during the current fiscal year, FY19 — the country needs substantial external inflows to fulfil its international obligations. “Pakistan needs $10 to $15 billion for external debt servicing alone within the next 16 months,” Muzzamil Aslam said.
Economists say the PTI government will have to take tough economic decisions at home while negotiating for a new IMF bailout program. Tax net expansion, privatization or restructuring of loss-making public sector entities, ease of doing business, and supply of energy without interruption are areas that an incoming government will have to focus on.
Imran Khan’s development promises may face setback if economy keeps worsening, warn economists
Imran Khan’s development promises may face setback if economy keeps worsening, warn economists
- IMF may extend loans at higher rates, vulnerable segment to bear the brunt
- Pakistan needs $10-15 billion for debt servicing within next 16 months
Pakistani deputy PM to attend UAE’s Sir Bani Yas Forum from Nov. 15-17
- Three-day summit will host top decision-makers, experts for debates on regional issues
- Ongoing war in Gaza is expected to feature prominently in discussions at Sir Bani Yas Forum
ISLAMABAD: Pakistan’s Deputy Prime Minister Ishaq Dar will attend the 15th Sir Bani Yas Forum in the United Arab Emirates (UAE) from November 15-17, the foreign office in Islamabad said on Thursday, with the ongoing war in Gaza expected to be at the center of discussions.
The three-day annual retreat will bring together top decision-makers and experts to debate pressing Middle Eastern issues such as regional peace and security and economic transformation.
“At the invitation of His Highness Sheikh Abdullah bin Zayed Al Nahyan, Deputy Prime Minister and Foreign Minister of Pakistan, Senator Mohammad Ishaq Dar will participate in the 15th Sir Bani Yas Forum being held from Nov. 15-17 in the UAE,” foreign office Spokesperson Mumtaz Zahra Baloch said at a weekly news briefing in Islamabad.
“At the forum, Deputy Prime Minister and Foreign Minister will engage in high-level dialogue with global leaders and experts addressing critical issues of regional security, economic cooperation and sustainable development.”
Dar will highlight Pakistan’s “strategic perspective on fostering diplomatic solutions to complex regional challenges and advancing collective prosperity,” Baloch added.
The war in the Gaza Strip is expected to feature prominently in discussions at the Sir Bani Yas Forum.
Israel invaded the enclave last year after Hamas-led gunmen attacked communities in southern Israel, killing around 1,200 people, according to Israeli authorities, and abducting more than 250 as hostages. Since then, the Israeli campaign has killed more than 43,500 people, according to Gaza health authorities, and destroyed much of the enclave’s infrastructure, forcing most of the 2.3 million population to move several times.
The issue was also at the center of the agenda at the recently concluded Joint Arab-Islamic Summit hosted by Saudi Arabia, with Baloch welcoming the resolution adopted by the summit, which, among other issues, called on the UN Security Council to impose an arms embargo on Israel and asked it to set up an independent investigation committee to investigate Israeli crimes including genocide, forced disappearances, torture and ethnic cleansing.
Commenting on recently signed investment agreements and memorandums of understanding (MoUs) worth over $2.8 billion between Pakistani and Saudi companies, the spokesperson said the deals were crucial for “sustaining economic and investment collaboration” between the two close allies.
“They [MoUs] are a reflection of the enhanced cooperation between our two countries in the economic domain,” Baloch added.
In response to a question about reports that the UAE had implemented a visa ban for Pakistanis, the spokesperson said:
“First, I would like to reiterate that according visa to any individual is the sovereign right and decision of the country concerned and secondly, we do not subscribe to this impression that there is a ban on visa for Pakistani nationals.”
The spokesperson’s comments follow widespread media reports of a decline in visas for Pakistanis by the UAE and a decrease in overall overseas employment for nationals of Pakistan, allegedly due to their lack of respect for local laws and customs and for participating in political activities and sloganeering while abroad.
“If there are any issues that arise with respect to issuance of visas and stay of Pakistani nationals in the UAE,” Baloch said, “that are important agenda items between Pakistan and the UAE and we continue to discuss them.”
Lahore most polluted city on earth, Agra’s toxic smog hides Taj Mahal
- Smog obscured India’s famed monument to love, the Taj Mahal, and Sikhism’s holiest shrine, Golden Temple in Amritsar
- Delhi flights faced delays, with tracking website Flightradar24 showing 88 percent departures and 54% of arrivals were delayed
NEW DELHI: Toxic smog obscured India’s famed monument to love, the Taj Mahal, as well as Sikhism’s holiest shrine, the Golden Temple in Amritsar, and delayed flights on Thursday, becoming too thick to see through in several places.
The city of Lahore in neighboring Pakistan ranked as the world’s most polluted in winter’s annual scourge across the region, worsened by dust, emissions, and smoke from fires burnt illegally in India’s farming states of Punjab and Haryana.
In the city of Agra, the Taj Mahal was barely visible from the gardens in front of the 17th-century monument, while dense fog wreathed worshippers at the Golden Temple in Punjab, television images showed.
Delhi flights faced delays, with tracking website Flightradar24 showing 88 percent of departures and 54 percent of arrivals were delayed.
Officials blamed high pollution, combined with humidity, becalmed winds and a drop in temperature for the smog, which cut visibility to 300 m (980 ft) at the city’s international airport, which diverted flights in zero visibility on Wednesday.
More patients flocked to hospitals, particularly children.
“There has been a sudden increase in children with allergies, cough and cold ... and a rise in acute asthma attacks,” Sahab Ram, a paediatrician in Punjab’s Fazilka region, told news agency ANI.
Delhi’s minimum temperature fell to 16.1 degrees Celsius (61°F) on Thursday from 17 degrees C (63 degrees F) the previous day, weather officials said.
Its pollution ranked in the ‘severe’ category for the second consecutive day, with a score of 430 on an index of air quality maintained by the top pollution panel that rates a score of zero to 50 as ‘good’.
Pollution in New Delhi is likely to stay in the ‘severe’ category on Friday, the earth sciences ministry said, before improving to ‘very poor’, or an index score of 300 to 400.
The number of farm fires to clear fields in northern India has risen steadily this week to almost 2,300 on Wednesday from 1,200 on Monday, the ministry’s website showed.
Lahore, the capital of Pakistan’s eastern province of Punjab, was rated the world’s most polluted city on Thursday, in live rankings kept by Swiss group IQAir. Authorities there have also battled hazardous air this month.
Pakistan court rules out Imran Khan acquittal in new state gifts case, will frame charges
- Case involves jewelry worth over €380,000 gifted to ex-first lady by foreign dignitary when Khan was PM from 2018-2022
- Huband-wife duo is accused of undervaluing the gift and buying it at a lesser price from the state repository
ISLAMABAD: A trial court has dismissed an acquittal petition and will frame charges against jailed former Prime Minister Imran Khan and his wife in a case relating to gifts acquired from a state repository, the ex-premier’s Pakistan Tehreek-e-Insaf (PTI) party said on Thursday.
The reference, popularly called the new Toshakhana case, was filed in July and involves a jewelry set worth over €380,000 gifted to the former first lady by a foreign dignitary when Khan was prime minister from 2018-2022. The couple is accused of undervaluing the gift and buying it at a lesser price from the state repository.
Before the new case was filed, the ex-premier, who has been in jail since last August, was convicted in four cases. Two of the cases have since been suspended, including an original one relating to state gifts, while he was acquitted in the remaining two.
“The trial court has dismissed the acquittal petition of Imran Khan & Bushra Bibi from Toshakhana Case 2. On Nov. 18, the court will frame charges,” the PTI said in a statement to reporters.
“This case doesn’t merit proceedings as the prosecution admitted that Imran Khan did not gain any personal benefit from the case, neither do the proceedings meet the law.”
Khan’s convictions had ruled the 71-year-old out of the Feb. 8 general elections as convicted felons cannot run for public office under Pakistani law.
Arguably Pakistan’s most popular politician, Khan says the cases against him are “politically motivated” and aimed at keeping him from returning to power. Pakistani authorities deny this.
The ex-premier is also facing multiple cases relating to May 9, 2023 protests, which saw his supporters attack government and military installations over his brief arrest in another graft case.
On Wednesday, the PTI announced that Khan had called a ‘long march’ protest movement to the capital, Islamabad, over alleged rigging in general elections and to call for the release of political prisoners and the independence of the judiciary.
The PTI is demanding that the government rollback recent constitutional amendments like the 26th amendment that it says are an attempt to curtail the independence of the senior judiciary.
The party is also calling for the release of all political prisoners, including Khan, and a return of “the public mandate” following what it believes was a rigged general election.
Pakistan’s government denies being unfair in Khan’s treatment and its election commission denies the elections were rigged. The government also says the recent amendments related to the judiciary are meant to smooth out its functioning and tackle a backlog of cases.
Pakistan says UAE eyeing investments in Sindh’s desalination, transport, construction sectors
- UAE is one of Pakistan’s largest trade partners and main source of foreign investment
- UAE-Pakistan trade volume rose to $7.9 billion in 2023, up by 12 percent from 2022
KARACHI: A spokesman for the chief minister of Pakistan’s southern Sindh province said on Thursday the UAE was interested in investing in a desalination plant in the port city of Karachi as well as in transport and construction projects.
The announcement came after a meeting between CM Murad Ali Shah and the UAE Consul General in Karachi, Bakhit Atiq Al Rimithiki, on the occasion of the National Day of the Emirates.
The UAE is one of Pakistan’s largest trading partners and a major source of foreign investment, valued at over $10 billion in the last 20 years, according to the UAE ministry of foreign affairs. The UAE-Pakistan trade volume rose to $7.9 billion in 2023, up 12 percent from 2022.
“Discussions were also held on the investment of UAE companies in various projects in Karachi,” the CM’s office said. “UAE companies are interested in investing in Karachi’s desalination plant, transport and road and bridge construction sectors.”
The spokesman said Shah was also arranging meetings between the provincial investment department and relevant officers of the UAE.
In May this year, Prime Minister Shehbaz said the UAE had committed $10 billion to invest in promising economic sectors in Pakistan.
Earlier this month, Pakistan signed four MoUs with the AD Ports Group, a major investor in Pakistan, to explore opportunities in the maritime, air and rail sectors as well as in logistics and digital services.
With UAE partner Kaheel Terminals, AD Ports Group is already developing, operating, and managing container, bulk, and general cargo operations at the Port of Karachi, Pakistan’s major port, where it has agreed to invest almost $400 million over 15 years.
The joint venture has agreed to invest $75 million over the next two years in superstructure and equipment, followed by $100 million within five years to increase efficiency and capacity by 75 percent, enabling the terminal to handle up to 14 million tones per annum.
Pakistan has been pushing for foreign investment in recent months in a bid to shore up its $350 billion economy as it navigates a tough reforms agenda mandated by the International Monetary Fund (IMF).
Premature blast kills suicide bomber in northwest Pakistan, harms no one else — police
- Suicide bomber riding a motorcycle set off an explosive device prematurely on a deserted road in Charsadda district
- Pakistani Taliban, known as Tehrik-e-Taliban Pakistan, often target security forces in KP province with suicide bombings
PESHAWAR, Pakistan: A suicide bomber riding a motorcycle set off an explosive device prematurely on a deserted road in northwest Pakistan on Thursday, killing himself but harming no one else, police said.
Local police official Masood Khan said the blast happened in Charsadda district in Khyber Pakhtunkhwa province bordering Afghanistan, where Pakistani Taliban and other insurgents often target security forces.
Khan said the intended target was unclear and bomb disposal experts and police were still investigating whether the man was wearing the explosives or they were attached to his motorcycle.
The Pakistani Taliban, known as Tehrik-e-Taliban Pakistan, often target security forces in the province with suicide bombings and other violence.
TTP are separate from the Afghan Taliban but have been emboldened by the group’s takeover of Afghanistan in 2021.
