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
Pakistan court grants bail to journalist, critical of government, in terrorism and narcotics case
- Matiullah Jan was arrested from outside a hospital in Islamabad where he was investigating alleged fatalities during this week’s protests
- Jan has a history of criticizing Pakistan’s government and military, while he was also briefly detained in 2020 during ex-PM Khan’s tenure
ISLAMABAD: An anti-terrorism court (ATC) in Pakistan on Saturday granted bail to journalist Matiullah Jan, critical of the Pakistani government and military, in a terrorism and narcotics case.
Jan, a presenter for TV channel Neo News with a popular YouTube channel, was “picked up” from outside a hospital in Islamabad on Wednesday where he was investigating alleged fatalities during this week’s protests in Islamabad in support of jailed ex-prime minister Imran Khan, his son said.
The FIR registered against Jan included Code of Criminal Procedure’s sections 279 (rash driving or riding on a public way), 353 (assault or criminal force to deter public servant from discharge of duty), 382 (theft after preparation made for causing death, hurt or restraint in order to the committing of the theft), 427 (mischief causing damage), 506 (criminal intimidation) along with 7ATA (terrorism-related section) and a narcotics-related section.
On Saturday, ATC Judge Tahir Abbas Sipra, who presided over the hearing of Jan’s bail petition, approved the plea against surety bonds worth Rs10,000 ($36), according to Jan’s lawyer.
“He [judge] listened to the prosecutor and to us during arguments on bail and then he granted bail while ordering to deposit surety bonds of Rs10,000,” Jan’s counsel Hadi Ali told reporters outside the court.
Jan has a history of criticizing Pakistan’s government and the powerful military establishment. He was also briefly detained by uniformed men in the middle of Khan’s four-year tenure in 2020.
Successive Pakistan governments have often been criticized by rights monitors for using overbroad anti-terrorism legislation to quash dissent.
More than 1,000 marchers were arrested over the three days of unrest in Islamabad this week, according to police.
Amnesty International said security forces used “unlawful and excessive force” on crowds, but Information Minister Attaullah Tarar told reporters on Wednesday the PTI was “lying saying people have died.”
The protesters’ main demand was the release of Khan, who has been jailed since August 2023 and snarled in a succession of legal cases he insists were orchestrated to prevent his comeback in the February 8 election.
The PTI won more seats than any other party in the vote but were shut out of power by a coalition of parties many believed to be backed by the military. The party has since staged regular protests alleging the vote was rigged, an allegation denied by authorities.
Ex-PM Khan party dares Pakistan government to impose governor’s rule in province it administers
- Under the governor’s rule, a provincial chief minister loses all of their administrative powers for up to six months
- Khyber Pakhtunkhwa government says it will resort to street protests and move courts if governor’s rule is imposed
ISLAMABAD: Jailed former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party on Saturday dared the federal government, led by Prime Minister Shehbaz Sharif, to impose governor’s rule in the Khyber Pakhtunkhwa (KP) province, which the PTI has been ruling for the last more than 10 years.
In Pakistan, the federal government can impose the governor’s rule in a province and hand over all administrative powers to the governor, a representative of the federation, for up to six months in case the provincial government fails to tackle a “grave emergency.” Under the governor’s rule, the provincial chief minister and his cabinet lose all administrative powers and virtually stand suspended.
The development comes amid heightened tensions between the KP government, led by Khan’s party, and the federation following violent protests in Islamabad this week by PTI supporters, who sought to pressure the central government to release Khan from jail. The protests resulted in clashes that Pakistan’s government said killed three paramilitary soldiers and a police officer. The PTI says at least 20 of its supporters were killed after being shot by law enforcers, an allegation denied by authorities.
“We know the federal government is considering options to impose the governor’s rule in KP, but we warn them to refrain from this adventure,” Barrister Muhammad Ali Saif, the KP government spokesperson, told Arab News.
The statement came a day after local media widely reported that a majority of members in PM Sharif’s cabinet had supported the idea of imposing the governor’s rule in KP after the Islamabad protests.
Saif said the provincial government would “react strongly” to any such move as they had “multiple options” available to deal with it, including street protests.
“We will obviously move the courts against this illegal and unconstitutional move if imposed on us,” he added.
Under Article 232 of the Constitution of Pakistan, the president can issue a proclamation of emergency if he is satisfied that “a grave emergency exists in which the security of Pakistan, or any part thereof, is threatened by war or external aggression, or by internal disturbance beyond the power of a Provincial Government to control.”
The constitution says a resolution from the provincial assembly was required for the imposition of emergency, which the KP Assembly would not pass as Khan’s PTI has a two-third majority in the house.
“If the President acts on his own, the Proclamation of Emergency shall be placed before both Houses of Majlis-e-Shoora (Parliament) for approval by each House within ten days,” the article says.
Ahmed Bilal Mehboob, president of Pakistan Institution of Legislative Development (PILDAT) in Islamabad, said the coalition government of PM Sharif was in a position to impose the governor’s rule in KP as they had majority in both houses, the National Assembly and the Senate, of parliament to pass a resolution for the purpose.
“At the moment, sufficient justification is available for the federal government to declare emergency in the KP province following the violent protests in Islamabad,” he told Arab News.
As per the constitution, Mehboob said, the federal government could impose the governor’s rule only for a maximum of six months, initially for two months and then it could twice extend it for a period of two months following approval of a resolution from parliament.
He, however, urged political parties to find a political solution to the issue.
“Political forces should find out political solutions for the issues instead of invoking specific laws and articles of the constitution against each other,” he said. “This will only vitiate the ongoing political crisis in the country.”
Legal experts said the imposition of the governor’s rule in any province would ultimately be challenged in the respective high court or the Supreme Court for a final judgment.
“The imposition of the governor’s rule by the center is not a piece of cake,” advocate Sharafat Ali told Arab News. “The government has to fulfil certain legal and constitutional requirements to justify the proclamation of emergency, otherwise it would be turned down by the courts.”
In 2009, the then federal government, led by the Pakistan Peoples Party, had imposed the governor’s rule in Pakistan’s most populous Punjab province to suspend the administrative powers of then chief minister Shehbaz Sharif. However, the Supreme Court had later voided the proclamation and reinstated the Sharif government in the province.
Khan’s PTI has staged several protests this year to demand the release of the ex-premier, who has been in jail since August last year on a slew of charges, as well as to challenge results of the Feb. 8 national election, which it says were manipulated to keep the party from coming to power in the country. The Pakistani government and election authorities deny this.
13 more killed in Pakistan sectarian fighting
- Pakistan is a Sunni-majority country, but Kurram district has a large Shiite population and the communities have clashed for decades
- Fresh fighting broke out last Thursday when two separate convoys of Shiite Muslims traveling under police escort were ambushed
PESHAWAR: Sectarian feuding in northwest Pakistan killed 13 more people, a local government official said Saturday, as warring Sunnis and Shiites defied repeated ceasefire orders in recent conflict claiming 124 lives.
Pakistan is a Sunni-majority country, but Kurram district — in Khyber Pakhtunkhwa province, near the border with Afghanistan — has a large Shiite population and the communities have clashed for decades.
Fresh fighting broke out last Thursday when two separate convoys of Shiite Muslims traveling under police escort were ambushed, killing more than 40.
Since then, 10 days of fighting with light and heavy weapons has brought the region to a standstill, with major roads closed and mobile phone services cut as the death toll surged.
A Kurram local government official put the death toll at 124 on Saturday after 13 more people were killed in the past two days.
Two were Sunni and 11 Shiite, he said, whilst more than 50 people have been wounded in fresh fighting which continued Saturday morning.
“There is a severe lack of trust between the two sides, and neither tribe is willing to comply with government orders to cease hostilities,” he told AFP, speaking on condition of anonymity.
“Police report that many people want to flee the area due to the violence, but the deteriorating security situation makes it impossible,” he added.
A seven-day ceasefire deal was announced by the provincial government last weekend but failed to hold. Another 10-day truce was brokered Wednesday but it also failed to stymie the fighting.
A senior security official in the provincial capital of Peshawar, also speaking anonymously, confirmed the total death toll of 124.
“There is a fear of more fatalities,” he said. “None of the provincial government’s initiated measures have been fully implemented to restore peace.”
Police have regularly struggled to control violence in Kurram, which was part of the semi-autonomous Federally Administered Tribal Areas until it was merged with Khyber Pakhtunkhwa in 2018.
The Human Rights Commission of Pakistan said 79 people had been killed in the region between July and October in sectarian clashes.
The feuding is generally rekindled by disputes over land in the rugged mountainous region, and fueled by underlying tensions between the communities adhering to different sects of Islam.
Pakistan to face Zimbabwe in first T20I on Sunday
- The first T20 between Pakistan and Zimbabwe will start at 4pm Pakistan standard time
- Pakistan this week defeated Zimbabwe 2-1 in their three-match one-day international series
ISLAMABAD: Pakistan will face Zimbabwe in the first of their three-match Twenty-20 International (T20I) series in Bulawayo, Zimbabwe on Sunday.
The first T20 between Pakistan and Zimbabwe will start at 4pm Pakistan standard time. Pakistan this week defeated Zimbabwe 2-1 in their three-match one-day international series.
“A 99-run win in the third ODI to wrap up a series victory,” the Pakistan Cricket Board remarked as Kamran Ghulam struck his maiden one-day international century to steer Pakistan to win.
“Onto the T20I action.”
Pakistan and Zimbabwe will play the second and third T20 matches on Dec. 3 and 5 at the same venue in Bulawayo.
The tourists then head to South Africa for an eight-match all-formats tour, including two Tests.
Lifting of EU safety agency ban on PIA flights will make air travel easier for Pakistanis — PM
- European Aviation Safety Agency suspended PIA’s authorization in June 2020 over aviation safety concerns
- The suspension came days after Pakistan launched an investigation into the validity of pilots’ licenses
ISLAMABAD: Pakistan has welcomed the decision of the European Aviation Safety Agency (EASA) to lift a ban on Pakistan International Airlines (PIA) flights to the bloc, with Prime Minister Shehbaz Sharif saying it would make air travel easier for Pakistanis living in Europe.
EASA suspended PIA’s authorization to operate in the EU in June 2020 over concerns about the ability of Pakistani authorities and its Civil Aviation Authority (PCAA) to ensure compliance with international aviation standards.
The suspension came days after Pakistan launched an investigation into the validity of pilots’ licenses issued in the country following a PIA plane crash that killed 97 people.
In his statement on Friday, PM Sharif said the lifting of EASA’s ban would strengthen the national flag carrier’s reputation and bring financial benefits to the airline, the state-run Radio Pakistani broadcaster reported.
“The lifting of the ban reflects the successful policies of Pakistan and air travel will become easier for Pakistanis living in Europe,” Sharif was quoted as saying by the broadcaster.
The ban was costing PIA nearly 40 billion Pakistani rupees ($144 million) in revenue annually, according to government records presented in parliament.
PIA and the government had been pressing EASA to lift the ban even provisionally. The government’s attempt to privatize the airline fell flat when it received only a single offer this year, that too well below its asking price.
In a statement, the PIA also vowed to abide by the EASA regulations as it welcomed the lifting of the ban.
“The PIA administration will remain fully compliant with EASA and its rules and regulations,” the airline said.
