KARACHI: Pakistan would take a $1.2 billion hit on every $5 per barrel increase in the global oil prices, experts told Arab News after two Saudi oil facilities were droned on Saturday, adding that such a scenario could lead to “unimaginable” economic consequences for the South Asian country.
The Houthi militia attacked the Kingdom’s major oil facilities in the Eastern Province on Saturday, causing a disruption of 5.7 million barrels a day and removed 5 percent of global oil supply that resulted in a 15 percent increase in the global oil price at the beginning of the Asian trade on Monday.
The Brent crude for November futures traded at $65.41 per barrel by midday after posting an 8.6 percent gain in the Asian trade.
The attack that the US State Secretary, Mike Pompeo, blamed on Iran resulted in the single biggest oil supply disruption since the Iranian Revolution of 1979 when 5.6 million barrels a day went out of the global supply.
With all eyes riveted on Saudi Arabia and how quickly it manages to restore its full oil production, Pakistani experts say it will have a devastating impact on the country’s economy as Pakistan’s enhanced oil import bill will undermine all the measures to bring down the current account deficit.
Oil imports constituted 26 percent of the country’s total import bill of $54.8 billion during the fiscal year FY19 and 24 percent during the fiscal year FY18, according to the Pakistan Bureau of Statistics.
“Every $5 per barrel surge in oil prices weakens Pakistan’s balance of payments by $1.2bn on an annual basis, assuming that the prices remain high throughout the year,” Samiullah Tariq, Director Research at the Arif Habib Limited, a brokerage firm, told Arab News on Monday.
“Higher oil prices will lead to higher inflation and negative balance of payments. If the global uncertainty persists it will also negatively affect us since such circumstances usually impede financial inflows. It would also make things difficult for Eurobond and Sukuk issuance,” he added.
Economists say that such attacks can thwart Pakistan’s efforts to reduce its import bill, adding to its current account deficit once again.
“The price spike that is expected to stay at around $70 per barrel will increase our import bill and trade deficit that recently declined. This will once again begin to erode our foreign reserves,” Dr. Ayub Mehar, a senior economist, told Arab News.
“The government must take remedial measures from now on,” he added.
“The increasing crude prices will exert pressure on an already indebted nation,” GA Sabri, former secretary petroleum, told Arab News. “We are facing a financial crisis and this attack can further deepen our losses. The losses can be unmanageable because we mainly import oil from Saudi Arabia. The recent developments are very serious and disturbing and can have a trickle down impact on the overall economy.”
Experts suggest exploration of domestic energy resources. They also implore the government to find new oil import destinations to mitigate risks to Pakistan’s energy security.
“This attack on the Aramco installations show that in future such facilities would be subjected to war targets in the regional flare up. This will impact your strategic facilities,” Dr. Maria Sultan, Director General of South Asian Strategic Stability Institute University, told Arab News.
“I am constantly calling for exploration of domestic oil and gas and other minerals because the country is full of these natural energy resources,” Sabri suggested. “We must also honor our commitments and start long term TAPI [Turkmenistan-Afghanistan-Pakistan-India] gas pipeline project,” he added.
Pakistan looking at 'unmanageable' economic catastrophe post Aramco attacks – experts
Pakistan looking at 'unmanageable' economic catastrophe post Aramco attacks – experts
- Every $5 per barrel price increase would jack up Pakistan’s import bill by $1.2 billion, analysts warn
- Houthis attack on oil facilities removes 5.7 mbd from global supply, trigger price spike
After primary schools, Pakistan’s Punjab closes high schools as smog crisis deepens
- Record air pollution has triggered hundreds of hospitalizations, school closures, lockdowns in Punjab this month
- On Tuesday, provincial capital Lahore, home to 13 million people, had worst air quality globally, according to IQAir
ISLAMABAD: The government of Punjab has closed all educational institutions in the province up to the higher secondary level from tomorrow, Wednesday, until the end of the week because of record-breaking smog that has already prompted the closure of primary schools and government offices and has sickened tens of thousands of people.
Record-high air pollution levels have triggered hundreds of hospitalizations, junior school closures and stay-at-home orders in several districts of Punjab, including the provincial capital of Lahore, which has been enveloped in a thick, toxic smog since last month.
On Tuesday, Lahore, home to 13 million people, had the worst air quality of any city in the world, according to live readings by IQAir, a Swiss air quality monitoring company.
“All the educational institutions […] up to higher secondary level shall remain closed and will shift to online mode with effect from Nov 13 within […] DG Khan, Bahawalpur, Sahiwal, Sargodha and Rawalpindi divisions […] till Nov 17,” the province’s Environmental Protection Agency (EPA) said in a notification issued on Tuesday, ordering schools to shift to “online mode.”
In Pakistan, the higher secondary level refers to upper secondary education, which includes grades 11 and 12. It is also known as intermediate education.
Speaking to reporters, Punjab Education Minister Rana Sikandar Hayat said the decision to close higher secondary institutes was taken “in light of the complaints received from the district.”
“This drastic decision had to be taken to protect children from the deadly effects,” he said. “There is a sense of educational loss, but the decision to close educational institutions is being taken out of compulsion.
Primary schools and government offices had already been closed until Nov. 17 in many districts of Punjab earlier this month, with school closures likely to affect the education of more than 20 million students, according to associations representing private and government schools.
Authorities in 18 districts of Punjab also closed all public parks, zoos and museums, historical places, and playgrounds for ten days last week.
On Friday, a court in Lahore ordered the government to shut all markets after 8pm. Authorities have already banned barbecuing food without filters and ordered wedding halls to close by 10pm.
On Monday, the UN children’s agency said the health of 11 million children in Punjab province was in danger because of air pollution
“Prior to these record-breaking levels of air pollution, about 12 percent of deaths in children under 5 in Pakistan were due to air pollution,” UNICEF’s representative in Pakistan, Abdullah Fadil, said.
“The impact of this year’s extraordinary smog will take time to assess, but we know that doubling and tripling the amount of pollution in the air will have devastating effects, particularly on children and pregnant women.”
Bus carrying wedding guests falls into river in northern Pakistan, killing 18
- Accident took place on Gilgit Baltistan region as bus was heading to Chakwal in Punjab
- So far only one woman had been found alive and was being treated at hospital, officials say
MANSEHRA, Pakistan: A bus carrying about two dozen wedding guests fell into the Indus River in northern Pakistan on Tuesday, killing at least 18 people, officials said.
It happened in the Gilgit Baltistan region as the bus was heading to Chakwal, a city in Punjab province, government spokesman Faizullah Farqan said.
He said a search for bodies continued, and so far only one woman had been found alive and was being treated at a hospital.
Police said it was unclear what caused the crash, and officers were yet to record the lone survivor’s statement.
Pakistani President Asif Ali Zardari offered condolences and asked rescuers to expedite efforts to find missing passengers.
Road accidents are common in Pakistan due to poor infrastructure and disregard for traffic laws and safety standards. In August, 36 people were killed and dozens of others were injured in two separate bus crashes.
Pakistan says developing nations need $6.8 trillion by 2030 to meet climate pledges
- PM Sharif calls on donor countries to give 0.7 percent of gross national income as development assistance, use existing climate funds
- Premier says debt cannot become “acceptable new normal” in climate financing, calls for focus on non-debt financing solutions
ISLAMABAD: Prime Minister Shehbaz Sharif said on Tuesday developing countries would need an estimated $6.8 trillion by 2030 to implement less than half of their current nationally determined contributions (NDCs), or national action plans for reducing emissions and adapting to climate impacts defined by the Paris Agreement.
Nearly 200 nations have gathered in Baku, Azerbaijan, for COP29 climate talks this week to thrash out the details of a deal known as the New Collective Quantified Goal, designed to deliver billions of dollars of climate finance to the regions that need it the most. But the United States, Europe and others say they will only commit to the fund if the list of countries contributing to it is widened to include the likes of China, South Korea and Singapore, and the resulting deadlock could block progress during the talks.
Meanwhile, COP29 follows a year of weather disasters that have emboldened developing countries in their demands for climate cash.
Pakistan is ranked the 5th most vulnerable country to climate change, according to the Global Climate Risk Index. In 2022, devastating floods killed over 1,700 people and affected over 33 million, with economic losses exceeding $30 billion. International donors pledged over $9 billion last January to aid Pakistan’s flood recovery but officials say little of the promised funds have been received so far.
“Developing countries will need an estimated $6.8 trillion by 2030 to implement less than half their current NDCs,” Sharif said in an address on the sidelines of the World Leaders’ Climate Action Summit.
“Donor countries should fulfill their commitment to provide 0.7 percent of their gross national income [as development assistance] and capitalize existing climate funds.”
One such commitment, the $100 billion Annual Climate Finance pledge established over a decade ago at COP15, is now reported by the Organization for Economic Co-operation and Development to have reached only $160 billion, Sharif said.
“Despite this number remaining a tiny proportion of the defined need, a significant part of this financing is dispersed in the form of loans, further enhancing the debt burden on developing nations and potentially pushing them toward mounting debt traps, I call them death traps,” Sharif added.
“Pakistan alongside many other developing countries calls for stronger, more equitable climate finance mechanisms. Debt cannot become the acceptable new normal in climate financing which is why we must resume focus on non-debt financing solutions, enabling countries to fund climate initiatives.”
Sharif also called on the United Nations Framework Convention on Climate Change to set up a committee to review NDCs “periodically.”
“We need to double adaptation financing from present level and loss and damage funds must be enhanced and directed toward resilient infrastructure and other pressing needs,” Sharif added.
Governments last year pledged $800 million toward a new ‘loss and damage’ fund to help poorer nations being hit by climate-fueled disasters. The fund, which has a director and a host nation, will now be deciding how the funds should be dispersed and calling for more contributions at COP29.
On Tuesday, the world’s top multilateral banks, including the World Bank, European Investment Bank and Asian Development Bank, pledged to ramp up climate finance to low and middle income countries to $120 billion a year by 2030 as part of efforts at COP29 to agree to an ambitious annual target.
Reaffirming a goal of capping global warming at 1.5 degrees Celsius above the pre-industrial average by 2050, the new figure is a more than 60 percent increase on what the group of 10 multilateral development banks (MDBs) had funneled to poorer nations last year, according to a statement released during the UN climate summit.
The new figure includes $42 billion to help adapt to the impacts of extreme weather, a 70 percent increase over the 2023 number.
Emerging fintech operator in Middle East, Pakistan to acquire FINCA Microfinance Bank
- FINCA operates in 108 cities in Pakistan, providing state-of-the-art deposit and payment solutions
- ABHI established global headquarters in Abu Dhabi in Jan. 2024, has expended to Dubai and Saudi Arabia
KARACHI: Abhi Private Limited, an emerging fintech operator in the Middle East and Pakistan, and leading tech conglomerate TPL Corp. Limited, are all set to jointly acquire FINCA Microfinance Bank Limited, a statement from Abhi said on Tuesday.
FINCA Pakistan, part of a global FINCA network, operates in 108 cities across Pakistan, providing state-of-the-art deposit and payment solutions, including micro-credit facilities aimed at improving livelihoods.
ABHI established its global headquarters in Abu Dhabi in January 2024 and has also expanded its business through partnerships in Dubai and Saudi Arabia.
“The strategic alliance between Abhi and TPL Corp. aims to reshape financial inclusion efforts across Pakistan by combining FINCA’s extensive microfinance network and expertise with Abhi’s innovative digital solutions and TPL Corp’s presence in retail, insurance and technology sectors,” Abhi said in a statement.
“By bringing together these complementary strengths, the partnership is set to diversify and expand access to financial products and services that cater to underserved communities, including rural populations, small businesses, and lower-income individuals.”
The acquisition will combine TPL’s diverse business portfolio and FINCA Pakistan’s established presence and deep knowledge of the market, with the combined entity being “well-positioned to introduce customer-focused solutions that can make a tangible difference in underserved regions.”
“At Abhi, we’ve always believed in creating accessible financial solutions for everyone,” said Omair Ansari, CEO & Co-founder of Abhi.
“By joining forces with TPL, we’re making a stride toward expanding our reach and delivering impactful financial products to millions of Pakistanis who have previously lacked access to essential services.”
Looking ahead, Abhi, TPL and FINCA plan to focus on delivering a new range of financial products “tailored to underserved communities, driving financial inclusion and contributing to the nation’s economic growth.”
“FINCA Pakistan delivered on its promise to develop a nationwide microfinance network that is creating economic opportunity throughout Pakistan, especially for women,” said Jeff Smith, chair of the FINCA Pakistan Board of Directors.
“Abhi and TPL share FINCA’s commitment to expanding access to financial services for small entrepreneurs. The infusion of new capital and more comprehensive digital services have the potential to significantly accelerate financial inclusion in Pakistan.”
Top leaders of Imran Khan’s party briefly arrested, released in Pakistan’s Rawalpindi
- Leader of the opposition in the national assembly and other PTI leaders had arrived at Adiala jail to meet Khan
- Ex-PM has been in jail since August last year and faces a slew of legal challenges he says are politically motivated
ISLAMABAD: Top aides of jailed former Prime Minister Imran Khan were briefly detained before being released in the Pakistani city of Rawalpindi as they arrived to meet their leader at a local prison, his party said on Tuesday, with police saying they were arrested for breaking a law against public gatherings.
Leader of the opposition in the National Assembly, Omar Ayub Khan, and several other leaders of the Pakistan Tehreek-e-Insaf (PTI), had arrived at Rawalpindi’s Adiala jail to meet Khan when they were arrested for what Punjab Police has described as violating Section 144 of the Pakistan Penal Code, a legal provision that empowers district administrations to prohibit the assembly of four or more people in an area for a limited period.
“PTI workers were detained for violating Section 144 but were released after being issued a warning,” Punjab Police Spokesperson Sajjadul Hassan told media.
The PTI says the leaders were detained to block them from meeting Khan who has been imprisoned since August last year and faces a slew of legal cases, from corruption to terrorism, which he says are politically motivated.
“PTI leadership has been set free, after being kept in custody till the time for scheduled meeting with Imran Khan was over,” the party said in a text message to reporters.
In a post on X, the PTI said the arrests showed the “blatant misuse of power” of the ruling coalition led by Prime Minister Shehbaz Sharif’s PML-N party, which it said was “aimed at silencing PTI leaders and anyone standing with Imran Khan.”
“This assault on political freedoms is a grave warning for all citizens. The nation must stand up for itself, get organized, and peacefully protest,” the PTI said. “This is not an issue of any one person or party; it is a matter of Pakistan’s survival and integrity.”
Since his ouster from the PM’s office in 2022 in a parliamentary no-trust vote, Khan has been embroiled in over 150 cases and has been sentenced in several, including to three years, 10 years, 14 years and seven years to be served concurrently under Pakistani law. Khan’s convictions were later overturned in appeals but he cannot be freed due to other, pending cases against him.
He has maintained his innocence and has argued that the cases are an attempt to sideline him politically by keeping him out of the public area. The government denies it is persecuting Khan or his party.
