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 raises alarm at Sudan’s worsening, calls for immediate ceasefire
- United Nations-backed committee’s report in December outlined famine in five areas of Sudan
- Twenty-month-long war between Sudanese army, paramilitary group has killed over 24,000 people
ISLAMABAD: Pakistan’s United Nations Ambassador Munir Akram this week raised alarm at the Security Council over the worsening food security situation in Sudan, urging both warring parties to agree to an immediate and unconditional ceasefire as civil war in the African country rages on.
The UN-backed Famine Review Committee of the Integrated Food Security Phase Classification (IPC) published a report last month outlining famine in five areas, including in Sudan’s largest displacement camp, Zamzam, in North Darfur province. The IPC’s report also warned that famine will likely spread to another five areas— Um Kadadah, Melit, el-Fasher, Tawisha and Al-Lait, by May 2025.
Sudanese people have suffered due to a 20-month war between the army and a paramilitary group that has killed over 24,000 and driven over 14 million people from their homes, according to the UN. An estimated 3.2 million Sudanese have crossed into neighboring countries, including Chad, Egypt and South Sudan, to escape the horrors of the conflict.
Akram said on Monday that Pakistan was “deeply grieved” by the current ordeal of the people in Sudan by the war.
“We call for an immediate and unconditional ceasefire,” Akram said. “The parties need to find a sustainable political resolution to the conflict through dialogue. It will not be resolved on the battlefield. War will only bring more death and destruction for the Sudanese people.”
He said that the worsening food security situation in the country is “alarming,” noting that over 24.6 million people in Sudan face high levels of acute food insecurity.
“We have reviewed the 24th December report of the Integrated Food Security Phase Classification (IPC),” he said. “We note that the Sudanese government has questioned the IPC’s malnutrition data and assessment and its ability to collect data from conflict zones and those controlled by the Rapid Security Forces. These views need to be taken into account.”
The Pakistani envoy urged the international community to work with the Sudanese government in addressing the humanitarian crisis in the country, calling on Sudanese authorities to facilitate the delivery of aid to the needy.
“We appreciate the recent steps taken by the Sudanese authorities in opening additional air, sea and land borders for humanitarian aid and extending the Adre border crossing, which has brought some improvement in the humanitarian situation,” Akram noted.
The Pakistani ambassador called on the international community to alleviate the humanitarian crisis in Sudan and bridge the 36 percent funding gap for humanitarian appeals relating to Sudan.
“The international community must unite to support a common vision for return to peace and normalcy in Sudan,” he said. “Foreign interference in the internal conflict of Sudan must stop. The UNSC arms embargo on Sudan must be respected.”
As the war reached its peak in April 2023, Pakistan joined other countries in evacuating its nationals from Sudan, rescuing about 1,000 people from the African nation.
German diplomat found dead at his residence in Pakistan’s capital
- Preliminary reports suggest diplomat previously experienced minor heart attack, says state media
- Thomas Jurgen Bielefeld was serving as second secretary at Germany’s embassy in Islamabad
KARACHI: A German diplomat was found dead in his residence located in Islamabad’s heavily guarded Diplomatic Enclave on Monday, state-run media reported, saying that preliminary reports suggest he had previously suffered a heart attack.
Thomas Jurgen Bielefeld, 58, was serving as the second secretary at the German Embassy in Islamabad. His body was discovered after embassy staff raised concerns about his two-day absence from work, state-run Associated Press of Pakistan (APP) said.
The state media reported that the German embassy staff broke into his apartment and found him unresponsive, following which the authorities were notified.
“He [police spokesperson] said the body was taken to the Polyclinic Hospital, where a post-mortem examination was conducted to ascertain the cause of death,” APP said. “Preliminary investigations suggested that the diplomat had previously experienced a minor heart attack, which could potentially be linked to his cause of death.”
APP said the German embassy was in touch with Pakistani authorities and its officials were cooperating with the investigation.
“Further investigations are underway to ascertain the circumstances surrounding the incident,” APP quoted the police spokesperson as saying.
Pakistan’s English language newspaper Dawn quoted the police as saying that the diplomat was found “dead with his eyes, nose and mouth bleeding at his residence located in Karakoram Heights.”
The report added that the diplomat last used the WhatsApp messaging platform at 7:44 p.m. on Saturday.
Pakistan’s finmin calls for timely policy measures to address country’s energy, economic needs
- Pakistan has attempted to undertake financial reforms in energy, tax and other sectors of its economy
- Islamabad has grappled with a prolonged economic crisis that has drained its resources, weakened its currency
ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb has called for timely policy measures to address the country’s key economic, energy and industrial needs, state-run media reported this week, as Islamabad attempts to steer the nation toward sustainable economic growth.
The finance minister was chairing a meeting of the Economic Coordination Committee (ECC), the cabinet’s top economic body, which was attended by senior ministers, officials and federal secretaries of various government departments, when he stressed on need for policy measures.
Pakistan has sought to ward off a prolonged economic crisis by attracting foreign investment in its vital sectors and undertaking long-term financial reforms concerning loss-making state-owned enterprises, energy and tax sectors.
“Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb on Monday emphasized the importance of timely policy measures to address critical economic, energy and industrial needs, with a focus on transparency and efficiency in implementation,” the Associated Press of Pakistan (APP) reported on Monday.
The ECC reviewed and approved a technical grant of Rs1.945 billion [$7.002 million] for the Ministry of Defense and Rs5.276 million [$18,993.60] for the National Commission on the Status of Women (NCSW), to support the commission’s efforts in advancing gender equality and women’s empowerment in Pakistan.
The ECC also considered and approved a proposal from the Ministry of Information and Broadcasting for a technical supplementary grant of Rs 2,462.302 million [$8,864,287.2] to facilitate the execution of 15 projects under the Public Sector Development Program (PSDP) for fiscal year 2024-25, the APP said.
Pakistan has registered some economic gains in the past few months, with inflation slowing to 4.1 percent in December 2024 and its stock market experiencing a bullish trend for the past couple of weeks. It has signed investment agreements from foreign countries such as Saudi Arabia, the United Arab Emirates and other Central Asian states to ensure sustainable economic growth.
In October 2024, Pakistan and Saudi Arabia signed several memorandums of understanding (MoUs) valued at $2.8 billion. In December, Sharif’s office confirmed that seven of the 34 MoUs had been converted into agreements worth $560 million.
Pakistan has also attempted to privatize its state-owned enterprises which have accumulated losses in the billions, including its national flag bearer, the Pakistan International Airlines (PIA). It failed in its attempt last year to sell the airline, attracting just one bid of Rs10 billion ($36 million) for a 60 percent stake.
Pakistan’s Punjab offers Saudi investors incentives in health, education and religious tourism sectors
- Punjab CM Maryam Nawaz meets Prince Mansour, former governor of Hafr Al-Batin province
- Pakistan and Saudi Arabia have sought closer business and economic ties in recent months
ISLAMABAD: The chief minister of Pakistan’s Punjab province has offered Saudi investors incentives as part of a “special package” to explore opportunities in religious tourism, health, education and infrastructure, state-run media reported this week.
Punjab Chief Minister Maryam Nawaz Sharif met Prince Mansour bin Mohammed Al Saud, the former governor of Saudi Arabia’s Hafr Al-Batin province, on Monday to discuss promoting bilateral relations and mutual cooperation between Saudi Arabia and Punjab, the state-run Associated Press of Pakistan (APP) said.
Pakistan and Saudi Arabia enjoy cordial ties, with Riyadh frequently assisting cash-strapped Pakistan by supplying oil on deferred payment terms and financial support to stabilize the South Asian country’s economy.
“During the discussions, the chief minister invited Saudi investors to explore opportunities in infrastructure, health, education, and religious tourism in Punjab,” APP reported. “She assured Saudi investors of her government’s full cooperation and the provision of incentives under a special package.”
Sharif praised Saudi Arabia’s longstanding cooperation with Pakistan, saying that Riyadh was like “Pakistan’s elder brother and the hearts of the people of both countries beat together.”
“The Punjab government has ensured foolproof security and established a system based on merit to improve the business environment in the province,” the report quoted her as saying.
APP said Prince Mansour assured Pakistan of Saudi Arabia’s support.
“The relationship between Pakistan and Saudi Arabia is crucial for the stability and prosperity of the entire region,” he was quoted as saying. “Saudi Arabia will always stand by Pakistan.”
The Kingdom is also home to over 2 million Pakistani expatriates and serves as the source for most overseas workers remittances for Pakistan. Both countries have forged strong business and economic relations in recent months.
In October 2024, Pakistan and Saudi Arabia signed several memorandums of understanding (MoUs) valued at $2.8 billion. In December, Sharif’s office confirmed that seven of the 34 MoUs had been converted into agreements worth $560 million.
Pakistan, Bangladesh discuss enhancing media cooperation amid push to improve ties
- Pakistan’s information secretary, Bangladesh diplomat discuss collaboration between state media organizations of both countries
- Islamabad and Dhaka have moved closer in recent months to forge closer ties after the ouster of former premier Sheikh Hasina
ISLAMABAD: Pakistan’s information secretary and Bangladesh’s high commissioner discussed ways to boost media cooperation and people-to-people contacts with each other, state-run media reported this week, as both countries bolster efforts to improve their relations strained by a bitter past.
Established together as one independent nation in 1947, Bangladesh won liberation from then-West Pakistan in 1971. Relations between the two countries continued to deteriorate during former prime minister Sheikh Hasina’s previous administrations, which prosecuted several members of the Jamaat-e-Islami (JI) party for war crimes relating to the 1971 conflict.
However, Islamabad’s ties with Dhaka improved after Hasina was ousted last year after student-led violent protests in the country. Dhaka’s ties with New Delhi have been strained in recent months as the new administration in Bangladesh repeatedly demands India extradite the ousted prime minister.
“Secretary Information and Broadcasting Ambreen Jan and Bangladesh’s High Commissioner in Pakistan Iqbal Hussain Khan met here Monday and discussed ways to boost media cooperation and people-to-people contacts between their countries,” state-run Associated Press of Pakistan (APP) said on Monday.
The two sides focused on enhancing partnerships to highlight their shared historical narratives and cultural values that strengthen mutual understanding, the state media said.
Jan said Pakistan and Bangladesh had longstanding diplomatic and cultural ties with a shared history of cooperation in diverse sectors.
“She emphasized collaboration between state media organizations including Pakistan Television Corporation, Associated Press of Pakistan and Radio Pakistan with their Bangladeshi counterparts in fields of joint productions and exchange of news,” the APP said.
The Pakistani official highlighted that a journalist exchange program could provide media persons from Pakistan and Bangladesh an opportunity to learn about each other’s perspectives and narratives on various matters.
“High Commissioner Iqbal Hussain Khan lauded the government of Pakistan for taking steps to encourage multifarious cooperation between the two countries,” the APP reported. “He likened the people of two countries as brothers and added that their connectivity through joint cooperation programs would bring both nations further closer.”
The two sides also discussed expanding the availability of Pakistani news and entertainment channels on Bangladeshi cable networks and organizing film festivals and photographic exhibitions, the state media added.
Pakistan’s moves to forge stronger ties with Bangladesh include Islamabad’s initiative to launch a fully funded scholarship program for 300 Bangladeshi students in December 2024. The scholarship program is backed by Pakistan’s education ministry and supported by leading universities such as NUST, Comsats, and Lahore University of Management Sciences (LUMS).
