Reality bites after IMF tells Pakistan to leave rupee to market forces

In this June, 11 2018 file photo, passersby walk past an advertisement board with photos of Pakistani rupee at a money exchange along a sidewalk in Karachi. Less than 10 months after coming to power in Pakistan with visions of creating a welfare system to lift millions out of poverty, economic crisis has forced Prime Minister Imran Khan into the hard realities of an IMF bail-out. (Reuters)
Updated 24 May 2019
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Reality bites after IMF tells Pakistan to leave rupee to market forces

  • Pakistani currency has dropped 5 percent against the dollar since IMF accord signed
  • Newly appointed Finance Adviser Abdul Hafeez Shaikh due to unveil his plan for the economy on Saturday

ISLAMABAD: Less than 10 months after coming to power in Pakistan with visions of creating a welfare system to lift millions out of poverty, economic crisis has forced Prime Minister Imran Khan into the hard realities of an IMF bail-out.
In the days since last week’s agreement in principle with the International Monetary Fund for a $6 billion loan, the rupee currency dropped 5 percent against the dollar, and it has now lost a third of its value in the past year. Financial crises have shaken the world’s sixth-largest nation repeatedly over the years, threatening the stability of a nuclear-armed state plagued by Islamist militancy, and while the IMF program may help stabilize the economy, it will bring more hardship.
“It is coming with a lot of pain,” Ashfaque Hasan Khan, an academic and a member of Khan’s economic advisory council, commented on the likely impact.
Under the IMF’s terms, the government is expected to let the rupee fall to help correct an unsustainable current account deficit and cut its debt while trying to expand the tax base in a country where only 1% of people file returns.
Just how committed the government is to making changes could become clearer on Saturday, when newly appointed Finance Minister Abdul Hafeez Shaikh is due to unveil his plan for the economy.
Shaikh has to present a 2019/20 budget next month, having been told by the IMF that the primary budget deficit — excluding interest payments — should be cut to 0.6 percent of GDP, implying a $5 billion reduction from the current projection for a deficit of 2.2 percent.
The crisis has taken a toll on policymakers. Khan has also replaced the central bank governor, and this week the finance secretary and the head of Board of Investment left their posts.
Foreign currency reserves stand at around $8 billion, not enough to cover three months of imports, making Pakistan desperate for the IMF board to give its blessing for the release of the first tranche of the loan.
Warning of growing inflationary pressures that are already squeezing household budgets hard, the central bank has hiked its key interest rate by 150 basis points to 12.25 percent even though the economy is slowing and millions of people are struggling to find work.
Khan’s government had tried to avoid going to the IMF. Instead it sought billions of dollars in loans from countries including Saudi Arabia, the United Arab Emirates and Pakistan’s “all weather friend” China.
But that money has not been enough, and analysts say the government will suffer for not reaching agreement with the IMF more quickly.
“The cost of going into this program is far higher than if we had done it much earlier,” said Mohammed Sohail, head of Topline Securities in Karachi. “It shattered confidence.”

Foreign direct investment halved during the first 10 months of a fiscal year that began in July. The $60 billion China Pakistan Economic Corridor, launched in 2015, had promised a new beginning, with infrastructure projects that could become a new foundation for growth, but it also required heavy imports of capital equipment, widening the trade deficit.

FRAGILE DEMOCRACY

Once the IMF loan is finalized it should open the way for other funding agreements with other lenders. While that will bring some relief, Yousuf Nazar, former head of emerging market equity investments at Citigroup and author of a book on Pakistan’s economy, saw dangers ahead.
“The fallout could be a widespread social and political backlash that could cut short Imran Khan’s tenure in the office,” he said. Opposition parties have threatened protests once the Muslim holy month of Ramadan ends in early June. At least, unlike some other civilian leaders in Pakistan’s fragile democracy, Khan appears to have good relations with the country’s powerful generals.
But he’s working with a budget where more than half of spending currently goes on the military and debt servicing costs.
Problems are deep-rooted. The tax system is weak, carried by customs and sales tax and a tiny minority of salaried employees and companies. In a population of 208 million, only 1.8 million file income tax returns.
Key industries with powerful lobbies including agriculture as well as an informal sector, estimated at anywhere between a third and 90% of the overall economy, are untouched and tax evasion is rampant. Having widened to its highest in 11 years, the fiscal deficit is forecast by the IMF at more than 7% of GDP, and while data released this week showed the current account narrowing, the IMF has forecast it at 5.2% of GDP.
“The imbalances are out of hand and to fix those you have to take difficult actions,” said former finance secretary Waqar Khan, who helped negotiate Pakistan’s last IMF bailout in 2013-16.


Over 11,410 Pakistani Hajj pilgrims return from Saudi Arabia

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Over 11,410 Pakistani Hajj pilgrims return from Saudi Arabia

  • Another 4,995 Pakistani Hajj pilgrims to return via 20 flights on Sunday, says religion ministry 
  • Pakistan sent over 115,000 pilgrims under both government, private schemes for Hajj this year

ISLAMABAD: A total of 11,418 Pakistani pilgrims have returned in the post-Hajj flight operation so far, the country’s religion ministry said on Sunday. 
Pakistan began its post-Hajj flight operation with the arrival of PIA flight PK-732 in Islamabad on June 11, carrying 307 pilgrims. The country is expected to conclude the operation on July 10, with the last flight carrying Hajj pilgrims to land in Islamabad.
This year’s Hajj took place from June 4 to June 9, drawing millions of pilgrims to the holy cities. Pakistan sent over 115,000 pilgrims under both the government and private schemes. 
“As of Saturday, June 14, a total of 11,418 pilgrims have returned home,” a spokesperson of Pakistan’s Ministry of Religious Affairs and Interfaith Harmony said in a statement. “On Sunday, June 15, another 4,995 pilgrims will arrive in the country through 20 flights.”
The spokesperson said six flights carrying Hajj pilgrims will each land in both Islamabad and Lahore, while four will arrive in Karachi, three in Multan and one in Quetta on Sunday.
Of the 20 flights, eight will be operated by the state-run Pakistan International Airlines, five by Saudia, four by Airblue, two by AirSial and one by Serene Air.
“Despite global air traffic disruptions, Pakistan’s post-Hajj flight operation is successfully going on,” the ministry said, referring to the recent diversion of flights due to the ongoing Iran-Israel conflict. 
The spokesperson advised Pakistani pilgrims to ensure their return journey remained a “smooth” one by maintaining discipline.
“Pilgrims should ensure their baggage weight complies with the limit stated on their air tickets,” he said, advising pilgrims to reach their respective airports in Saudi Arabia six to eight hours before departure. 


Pakistan says FATF ignored India’s attempts to place Islamabad on ‘grey list’

Updated 28 min 10 sec ago
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Pakistan says FATF ignored India’s attempts to place Islamabad on ‘grey list’

  • China, Turkiye and Japan supported move to not place Islamabad on FATF’s grey list, says Pakistani state media 
  • India and Pakistan engaged in worst fighting in decades last month before agreeing to a ceasefire on May 10

ISLAMABAD: The Financial Action Task Force (FATF) has ignored India’s attempts to have Islamabad placed on the anti-money laundering watchdog’s “grey list,” Pakistani state media reported this week as tensions simmer between the nuclear-armed neighbors.

Various media outlets had reported that India was likely to push the FATF, a global financial crime watchdog, to add Pakistan back to its grey list during the watchdog’s plenary meeting in June. These reports came following India and Pakistan’s days-long military confrontation in May before both agreed to a ceasefire brokered by Washington.

The FATF’s grey list places a country under increased monitoring until it has rectified identified flaws in its financial system. Pakistan was taken off the FATF grey list in 2022, boosting its reputation among lenders which was essential for the country’s fragile economy.

“The Financial Action Task Force has decided not to place Pakistan in the grey list at its meeting held on Saturday,” state broadcaster Radio Pakistan reported on Saturday. 

“After the FATF decision, India has completely failed to achieve its objectives as the Indian diplomatic delegation made a strong effort to get Pakistan included in the grey list once again in the FATF meeting.”

Neither the FATF nor the Indian government have so far commented on the development. The FATF’s plenary year begins in July and ends in June. The watchdog holds its plenary meetings usually in October, February and June of each year.

Radio Pakistan reported that China took “a clear stance” in Islamabad’s favor at the FATF meeting while Turkiye and Japan also “fully supported” Pakistan in not having it placed on the grey list. 

“India was trying hard to use FATF against Pakistan with the help of Israel,” the state broadcaster said, describing it as a victory for Pakistan’s diplomatic mission. 

Tensions spiked between the two countries after India blamed Pakistan for an April 22 attack in Indian-administered Kashmir that killed 26 tourists. Pakistan denied involvement and called for an independent probe. 

The two countries pounded each other with artillery fire, fighter jets, drones and missiles before the ceasefire on May 10. 

While the ceasefire between the two countries continues to persist, tensions between the neighbors remain high as India says it is holding in abeyance a decades-old water-sharing treaty with Pakistan.

Islamabad had said after India suspended the Indus Waters Treaty that it considered any attempt to stop or divert the flow of water belonging to Pakistan to be an “act of war.”
 


In ancient Taxila, artisan preserves dying craft: molding beauty from plaster of Paris

Updated 15 June 2025
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In ancient Taxila, artisan preserves dying craft: molding beauty from plaster of Paris

  • 65-year-old Ishfaq Ahmed Siddiqui paints intricate floral designs on pots and vases made of plaster of Paris
  • Orders have dwindled, younger artisans are reluctant to enter a craft that promises more passion than profit

TAXILA, Pakistan: The scent of turpentine and chalky plaster filled the modest workshop in Dheri Shah, a neighborhood tucked away in the ancient city of Taxila, where millennia-old ruins still murmur stories of Gandharan emperors and Buddhist monks.

Amid shelves lined with delicate vases and ornate pots, 65-year-old Ishfaq Ahmed Siddiqui dipped a fine brush into dark blue paint and carefully trailed it along a pristine white surface. The floral motif bloomed under his hand, petal by petal, on an object molded not from clay or stone, but from plaster of Paris.

Siddiqui is a solitary figure in a fading tradition. For over three decades, he has shaped everyday materials into works of art, channeling the ancient spirit of Taxila, a city once renowned across Asia for its intellectual brilliance, artistic mastery, and Buddhist heritage.

“I am the first person to design on plaster of Paris with paint, who painted on plaster of Paris in Taxila,” Siddiqui told Arab News, his voice weathered with time and hard work.

Once known as Takshashila, the “City of Cut Stone” in Sanskrit, Taxila flourished from the 5th century BCE to the 6th century CE as a Buddhist cultural and educational hub. Its stone-carved stupas and statues still attract archaeologists and pilgrims from around the world.

But where generations of craftsmen once chipped away at granite and schist, Siddiqui reached for plaster.

It wasn’t always this way.

Traditional clay was the medium of choice for local potters in Taxila, but as climate change altered soil availability and water levels, craftsmen were forced to import clay from distant regions, driving up costs.

“I used to face a lot of difficulties in buying and working with clay,” Siddiqui explained. “Now it’s not available easily because of climate change and other factors, so plaster was easily available and cost-effective, and we could mold it into different forms and shapes easily.”

When he began experimenting with plaster of Paris, a material more accessible and easier to mold, Siddiqui was met with skepticism.

“A shopkeeper wondered who would buy them. I told him, ‘Keep them, display them in the morning and put them back inside in the evening. When they get sold, give me the money’.”

The next day, the pieces were gone:

“With the grace of Allah, they sold the very next day.”

THE CRAFT OF STILLNESS

Inside Siddiqui’s workshop earlier this month, time appeared to slow. He began with a simple white powder, plaster of Paris, mixed with water to form a creamy paste. From there, the material was poured into molds and left to set. Once hardened, each piece was smoothed, painted, and often gilded, transforming from a lifeless lump into a vessel of elegance.

“It started simply,” Siddiqui says, his fingers still chalky from his morning’s work. “I was fascinated by the way plaster could be molded, how it could capture the essence of something as fleeting as a flower.”

Siddiqui’s floral motifs — delicate jasmine vines, rose buds, tulip swirls — draw inspiration from nature and history alike. With customized tools, many of which he has crafted himself, he engraves and embellishes each piece, hand-painting them in vibrant hues or subtly gilding them for emphasis. These pieces, whether wall décor or architectural embellishments, radiate a timeless elegance that harks back to Taxila’s artistic golden age.

“There’s a tranquility in it,” Siddiqui said, gesturing to a half-finished panel adorned with curling vines. “You lose yourself in the detail, in bringing something beautiful into existence.”

His items, which sell for anywhere between Rs700 and Rs2,000 ($2.45–$7), might not fetch gallery prices, but they carry the weight of heritage.

Renowned cultural expert and folklorist Uxi Mufti, based in Islamabad, said Siddiqui’s work carried particular historical weight.

“The use of floral motifs in plasterwork has deep roots in South Asian and Islamic art,” Mufti said.

“From the ancient Gandharan stupas in Taxila itself, which often featured intricate stucco decorations, to the Mughal architecture adorned with exquisite floral carvings, this tradition speaks to a long history of appreciating natural beauty in artistic expression.”

In the context of plasterwork, Mufti said, the flower motifs “beautify a space but also connect it to a rich tapestry of artistic and philosophical traditions. Siddiqui is not just creating decorative items, he is preserving and continuing a living cultural legacy.”

Many artisans historically used stucco, a fine plaster made of lime, to create decorative reliefs on stone structures.

“It’s very difficult to carve granite, so artisans turned to stucco. But now, from stucco it has degenerated or rather it has come down to an easier, much easier medium which is plaster of Paris,” Mufti said.

But the tradition is teetering on the edge of extinction.

“Over the past 70 years, many of our master artisans have grown old. Some have passed on, and those who are still practicing don’t want their children to learn the art because they can’t make enough money. So many of our great art traditions are vanishing.”

Indeed, in a world that prizes speed and scale, handcrafted work like Siddiqui’s is struggling to survive. Machines produce faster, cheaper, and more uniformly. What is lost, however, is the soul of the work, the intimate connection between creator and creation.

“In an age of rapid industrialization and mass production, the skilled hands of craftsmen like Siddiqui are invaluable,” Mufti said.

“They maintain a direct link to historical techniques and aesthetic sensibilities that might otherwise be lost. Their work serves as a tangible connection to our heritage and keeps traditional arts vibrant.”

Siddiqui too admitted his was a drying craft. Orders had dwindled, and younger artisans were reluctant to enter a craft that promised more passion than profit.

But for him, the work was still its own reward.

“I only used to paint. There are no hand painters anymore,” Siddiqui said. “I feel sad that the real culture of Taxila is no more. Everything has changed.”


Pakistan urges citizens to avoid travel to Iran amid ongoing Israeli attacks

Updated 55 min 15 sec ago
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Pakistan urges citizens to avoid travel to Iran amid ongoing Israeli attacks

  • Israel and Iran launched fresh attacks on each other overnight into Sunday, stoking fears of a wider conflict
  • Pakistan taking steps to ensure the safe return of Pakistani citizens currently in Iran, reports state media 

ISLAMABAD: Pakistan’s government this week warned its nationals against traveling to Iran “for a limited period,” state-run media reported, amid Tehran’s worsening conflict with Israel. 

Israel and Iran launched fresh attacks on each other overnight into Sunday, stoking fears of a wider conflict after Israel expanded its surprise campaign against its main rival with a strike on the world’s biggest gas field.

Israel’s military said more missiles were launched from Iran toward Israel overnight, with direct strikes targeting its energy industry and Defense Ministry headquarters, while Tehran unleashed a fresh barrage of missiles blamed for the deaths of four people. The strikes late Saturday night represented the latest salvo since a surprise attack by Israel on Friday aimed at decimating Tehran’s rapidly advancing nuclear program.

“The Government of Pakistan has issued a travel advisory urging its citizens to avoid traveling to Iran for a limited period due to the recent Israeli attacks,” the state-run Associated Press of Pakistan (APP) reported on Saturday. 

APP reported that the government is closely monitoring the situation in the region. Citing officials, it said that the latest advisory has been issued to ensure the safety and security of Pakistani nationals. 

“In line with Prime Minister Shehbaz Sharif’s directives, necessary steps are already being taken to ensure the safe return of Pakistani citizens currently in Iran,” APP said. 

Pakistan on Friday advised its citizens planning religious travel to Iran and Iraq to reconsider their plans, citing security concerns after Israel launched strikes on Iranian military and nuclear facilities earlier in the day.

That advisory mentioned Pakistani “Zaireen,” or Shia pilgrims who travel to Iran and Iraq to visit religious sites, particularly in Mashhad, Qom, Najaf and Karbala.

Pakistan’s foreign ministry has established a 24/7 Crisis Management Unit to ensure the safety and security of Pakistani nationals and pilgrims in Iran.

Pakistan’s Defense Minister Khawaja Muhammad Asif on Saturday vowed Islamabad would extend diplomatic support to Israel at international forums. 

Pakistan has condemned Israel’s strikes against Iran and said Tehran has the right to defend itself. Islamabad has also called on world powers to intervene through dialogue and diplomacy to resolve surging Middle East tensions. 


Pakistan names women’s squad for AFC qualifiers amid bid to elevate football’s profile

Updated 15 June 2025
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Pakistan names women’s squad for AFC qualifiers amid bid to elevate football’s profile

  • The team will play Women’s Asian Cup 2026 Qualifiers in Jakarta from June 29 to July 5
  • The move aims to strengthen women’s football in a cricket-dominated South Asian state

ISLAMABAD: The Pakistan Football Federation (PFF) on Saturday unveiled its squad for the AFC Women’s Asian Cup 2026 Qualifiers, as the country seeks to uplift its women’s football program and strengthen its profile in a sport where its men’s team has also struggled to gain traction.
Pakistan’s men’s national team, briefly competitive in regional tournaments in the decades following independence, has long languished near the bottom of Asian rankings amid administrative issues and lack of sustained investment.
In contrast, women’s football in Pakistan began to take shape in the early 2000s, with the formation of the country’s first women’s football clubs in 2002 and the launch of the National Women’s Football Championship in 2005.
“The Pakistan Football Federation has named a squad for the upcoming AFC Women’s Asian Cup 2026 Qualifiers, set to take place in Jakarta, Indonesia from June 29 to July 5,” said the PFF in a statement.
Placed in Group E, the team will open its campaign on June 29 against Chinese Taipei, confront host Indonesia on July 2 and conclude the group stage against Kyrgyzstan on July 5.
A preparatory training camp, led by Coach Adeel Rizki, will be held at Islamabad’s Jinnah Stadium from June 19 to 26.
Football enjoys a considerable fan base in Pakistan despite the country’s cricket dominance.
Athletes have recently expanded into Olympic swimming and achieved international success in javelin, demonstrating a broader ambition to elevate sports beyond one stronghold.
PFF officials say the women’s squad aims to make a statement on the Asian stage and inspire broader development.
Pakistan will be seeking its first-ever Women’s Asian Cup appearance, while the men’s side continues to fight for relevance amid FIFA rankings that reached a historic low before recent suspensions were lifted.
Pakistan’s national women’s football team was officially formed in 2010 and has yet to qualify for a Women’s Asian Cup or World Cup, but played in multiple SAFF Championships and remained a bright spot in domestic football.