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’s defense minister reports ‘death threat’ to British police during London subway ride
- People who heckled Khawaja Asif made his video while saying some could stab him with a knife
- Pakistani ministers have also complained of harassment by Imran Khan’s followers in the past
ISLAMABAD: Defense Minister Khawaja Asif has lodged a report with the British police over the alleged death threat and abuses hurled at him during a train ride in London, the Pakistan High Commission in the United Kingdom said on Thursday.
A viral video surfaced on social media a day earlier, showing an unidentified man hurling abuses at the Pakistani minister in the native Punjabi language, saying, “Take him away before someone stabs him with a knife.”
While Asif chose to ignore the incident and got off the next stop, he visited the Pakistan High Commission on Thursday to formally report the “death threat” to the UK police and demanding an investigation.
“Khawaja Muhammad Asif lodged a report of the train incident with the local police at the Pakistan High Commission,” said a statement released by the Pakistani diplomatic facility. “He informed the police about the details of the knife threat and harassment incident on the train.”
The incident that took place on the Elizabeth Line is now being investigated by the London Transport police, it added.
“I am on a private visit to London,” Asif was quoted as saying. “I was going to Reading via the Elizabeth Line with a loved one.”
He added that a family of three to four persons “harassed and threatened to kill with a knife and used abusive language” against him while making the video.
“I do not know anyone involved in the incident,” the Pakistan High Commission quoted him as saying. “London Transport Police should use CCTV footage to track down the suspects.”
Asif further said death threats and harassment were a “source of shame” for 1.7 million Pakistanis residing in the UK apart from British citizens.
This is not the first time Pakistani ministers belonging to Prime Minister Shehbaz Sharif’s coalition government, led by the Pakistan Muslim League Nawaz party, have been heckled or harassed in the UK.
In the past, Pakistan Information Minister Ataullah Tarar and Punjab Minister Marriyum Aurangzeb have endured the same treatment allegedly by the Pakistan Tehreek-e-Insaf party supporters of jailed former PM Imran Khan.
Seven killed in Pakistan’s northwest as militant’s car bomb explodes accidentally
- The explosion took place in Mir Ali where a militant was fitting a bomb in a car at his residence
- Blast damaged several nearby homes and wounded 14 people, with some in critical condition
PESHAWAR: A powerful car bomb accidentally detonated at the house of a Pakistani Taliban militant in northwestern Pakistan on Thursday, killing at least two children and five suspected militants, police said.
The explosion took place before dawn in the city of Mir Ali in Khyber Pakhtunkhwa province when a man identified a local commander of the militants, Rasool Jan, was fitting a bomb in a car at his house, police official Irfan Khan said.
He said other militants from the Pakistani Taliban group quickly arrived at the scene and removed the bodies of the insurgents who died. Authorities later found the bodies of two children in the rubble of the house, which collapsed in the explosion.
The blast also badly damaged several nearby homes and wounded 14 people, including women. Some of the injured were in critical condition in a hospital, Khan said, but he did not provide details.
The Pakistani Taliban and other insurgents in the region often target security forces with assault rifles, rockets, grenades and suicide car bombings, and Khan said it appeared the car bomb was being prepared for such an attack.
The Pakistani Taliban, known as Tehreek-e-Taliban Pakistan, are separate from the Afghan Taliban but have been emboldened by the group’s takeover of Afghanistan in 2021.
Also Thursday, security forces raided a hideout of insurgents in Harnai, a district in restive southwestern Balochistan province, triggering an intense shootout in which a soldier and three insurgents were killed. During the operation, an army major was killed when a roadside bomb exploded near his vehicle, the military said in a statement.
Pakistan’s President Asif Ali Zardari and Prime Minister Shehbaz Sharif paid tribute to whom they called the “martyred soldiers” in separate statements. They said the fight against terrorism will continue until the elimination of all insurgents.
Pakistan, Russia call for regional collaboration on Afghanistan amid shared security concerns
- The call comes as Moscow’s special representative for Afghanistan visits Pakistan for a day
- Despite security issues, Afghanistan’s neighboring states view its stability as vital for progress
ISLAMABAD: Pakistan and Russia on Thursday called for greater collaboration among regional states to address the situation in Afghanistan, amid shared concerns over militant violence emanating from the war-torn country.
The call came during a visit by Moscow’s special representative for Afghanistan, Ambassador Zamir Kabulov, who met with Pakistan’s foreign secretary, Amna Baloch, and held detailed discussions with the additional secretary, Ahmad Naseem Warraich, at the Ministry of Foreign Affairs in Islamabad.
“The two sides exchanged views on relations with Afghanistan and called for enhanced coordination among regional countries for a peaceful and prosperous Afghanistan,” the foreign office said. “The two sides agreed to remain engaged toward this end.”
The talks come as both nations grapple with security threats linked to Afghanistan. Russia has voiced alarm over Daesh and its attacks, including a concert bombing in Moscow earlier this year that was linked to militants with ties to Afghanistan.
While the Afghan Taliban and Daesh are sworn enemies, Pakistan accuses the Afghan administration of facilitating the Tehreek-e-Taliban Pakistan (TTP), a proscribed militant network blamed for cross-border attacks, an allegation Kabul denies.
Pakistan’s approach to Afghanistan has grown increasingly confrontational since last year as it pressures Kabul to rein in the TTP. By contrast, Russia announced last month it would remove the Taliban from its list of terrorist organizations, signaling a step toward normalizing ties with Afghanistan’s rulers.
Beyond security, Russia is keen to retain its influence in Central Asia and engage in Afghanistan’s economic reconstruction, particularly in energy and infrastructure projects.
Initiatives such as the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline and the Trans-Afghan Railway remain key priorities for Moscow, though persistent security challenges have delayed progress.
For Pakistan also, Afghanistan is critical for regional connectivity. Islamabad has offered landlocked Central Asian nations access to its ports, aiming to facilitate trade with global markets via sea routes.
Despite security concerns shared by Afghanistan’s neighboring countries, its stability is viewed as vital to unlocking the economic potential of regional projects.
PM Sharif urges nation to perform rain prayers as toxic smog chokes Pakistani cities
- Shehbaz Sharif urges Islamic scholars to play their role in organizing ‘Istisqa’ prayers across the country
- Toxic smog has enveloped Pakistan’s cultural capital, Lahore, and 17 other districts of Punjab province
ISLAMABAD: Prime Minister Shehbaz Sharif has urged the nation to perform prayers for rainfall, calling on Islamic scholars to take the lead in organizing “Istisqa” prayers, his office announced on Thursday, as worsening air quality continues to endanger the health of millions.
The Istisqa prayer is a special Islamic ritual performed to seek rain, primarily during times of drought or severe water shortages. It symbolizes the community’s humility, repentance and reliance on divine mercy for sustenance.
Toxic smog has enveloped Pakistan’s cultural capital, Lahore, and 17 other districts in Punjab since last month. Health officials report that more than 40,000 people have sought treatment for respiratory illnesses, prompting Punjab authorities to close schools until November 17 to safeguard children’s health.
“PM Sharif appeals to the nation to offer Istisqa prayers for rain,” his office announced in a statement. “Scholars should especially play their role in organizing Istisqa prayers.”
The prime minister noted the rainfall would improve the environment apart from aiding in getting rid of diseases.
“Istisqa prayers should be organized in all mosques under the auspices of the federal government and the provinces,” he was quoted as saying. “In the current situation, there is a dire need for rain.”
A day earlier, Pakistan’s Meteorological Department forecast light rains from Nov. 14-16 in most districts of the country’s populous Punjab province.
The UN children’s agency has warned that the health of 11 million children in Punjab is in danger due to air pollution.
South Asia, particularly India and Pakistan, gets shrouded in intense pollution every winter as cold air traps emissions, dust, and smoke from farm fires.
Pollution could cut more than five years from people’s life expectancy in the region, according to a University of Chicago’s Energy Policy Institute study last year.
Pakistan signs four-year pact with Global Green Growth Initiative to boost climate resilience
- The agreement will help Pakistan’s transition to a green economy, address water scarcity and deforestation
- Pakistan has ranked as the fifth most vulnerable country to climate change, with its cities engulfed in smog
ISLAMABAD: Pakistan has signed a four-year country program framework agreement with an international green economy organization to advance its sustainable development goals by enhancing climate resilience through green growth initiatives, according to an official statement released on Thursday.
The agreement was signed by Pakistan’s Climate Change Ministry Secretary, Aisha Humera Moriani, and the Global Green Growth Initiative’s (GGGI) Deputy Director-General, Helena McLeod, during a formal ceremony at the United Nations-led Global Climate Conference (COP29) in Baku, Azerbaijan.
Pakistan ranks as the fifth most vulnerable country to climate change, according to the Global Climate Risk Index. In 2022, catastrophic floods claimed over 1,700 lives, affected more than 33 million people, and caused economic losses exceeding $30 billion.
While international donors pledged over $9 billion last January to help Pakistan recover from the devastating floods, officials report that little of the pledged amount has been disbursed so far.
“The Ministry of Climate Change & Environmental Coordination and GGGI has signed a four-year Country Programme Framework agreement to advance Pakistan’s sustainable development goals through targeted climate action and green growth interventions,” said the official statement.
On the occasion, McLeod said her organization aimed to facilitate Pakistan’s transition to a green economy through collaboration with national stakeholders to address water scarcity, deforestation and energy challenges “compounded by climate change effects.”
Prime Minister Shehbaz Sharif’s Coordinator on Climate Change Romina Khurshid Alam thanked the GGGI for engaging with Pakistan to “mobilize green finance, support climate action frameworks and promote investment” to achieve climate resilience.
Pakistan also regularly faces other climate change-induced effects such as droughts, cyclones, torrential rainstorms and heatwaves.
Currently, record-high air pollution levels have triggered hundreds of hospitalizations, school closures and stay-at-home orders in the eastern city of Lahore and other cities in the populous Punjab province, which has been enveloped in thick, toxic smog since last month.
A mix of low-grade fuel emissions from factories and vehicles, exacerbated by agricultural stubble burning, blanket Lahore and its surroundings each winter, trapped by cooler temperatures and slow-moving winds.
The city of 14 million people stuffed with factories on the border with India regularly ranks among the world’s most polluted cities, but it has hit record levels this month, as has New Delhi.
