Pakistani businesses fear recession as anti-government protest continues

Activists of Islamic political party Jamiat Ulema-e-Islam (JUI-F) sit on a street near a roadblock before the start of anti-government "Azadi (Freedom) March" in Islamabad on November 1, 2019. (AFP)
Updated 06 November 2019
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Pakistani businesses fear recession as anti-government protest continues

  • Say a decline in business activities will result in low revenue collection and fall in annual growth rate
  • Commuters, daily wage laborers suffer due to the anti-government demonstration in Islamabad that has entered its seventh day

ISLAMABAD: The weeklong anti-government protest in Islamabad has hit the local economy hard, besides causing a nuisance to commuters in the federal capital, making businessmen fear that the demonstration would result in millions of rupees of losses and lead to low revenue collection for the government.

Tens of thousands of demonstrators led by Islamist cleric and chief of the opposition party, Jamiat-e-Ulema-e-Islam (JUI-F), Maulana Fazlur Rehman have camped in Islamabad since Thursday, demanding the resignation of Prime Minister Imran Khan and fresh elections in the country.

The anti-government protesters have blocked the main thoroughfare – the Kashmir Highway – that connects the federal capital with the rest of the country.




Supporters of religious and political party Jamiat Ulema-i-Islam-Fazal (JUI-F) wave flags and chant slogans during what participants call Azadi March (Freedom March) to protest the government of Prime Minister Imran Khan in Islamabad, Pakistan November 1, 2019. (Reuters)

Likewise, the local administration has blocked some other main arteries of the city with shipping containers to confine the demonstrators in the designated space and prevent their movement toward key government installations in Islamabad.

“Every business is affected in Islamabad due to the protest,” Ahmad Mughal, President of the Islamabad Chamber of Commerce and Industries, told Arab News on Wednesday. “Shops and businesses are deserted as thousands of people who visit the city on a daily basis from other places are not coming.”

Mughal said anti-government protests “affect the whole business environment across Pakistan,” adding that the low turnover of businesses would impact the government’s efforts to meet the revenue collection target of Rs5.5 trillion in this fiscal year. “If the sales are low, then obviously the tax collection, including the General Sales Tax and withholding tax, will also drop,” he said.

Islamabad has several hotels, restaurants, designer boutiques, foreign embassies, and important government offices which attract thousands of people from other cities.




Activists and supporters of Islamic political party Jamiat Ulema-e-Islam (JUI-F) attend an anti-government "Azadi (Freedom) March" in Islamabad on November 5, 2019. (AFP)

“I was scheduled for a visa interview at the US Embassy in Islamabad last Friday, but it was canceled at the last moment due to the protest,” Shoaib Chattha, a resident of Multan, told Arab News on the telephone.

He said the political situation of the country had forced him to reschedule his plan to visit his relatives in Miami in the United States. “It is terrible,” he added. “The government should sort out this mess as quickly as possible.”

The local administration has also suspended the metro bus service between Rawalpindi and Islamabad for an indefinite period, causing trouble to thousands of commuters.




Activists of Islamic political party Jamiat Ulema-e-Islam (JUI-F) gather on containers during an anti-government "Azadi (Freedom) March" in Islamabad on November 1, 2019. (AFP)

“My traveling cost has increased about ten times [due to the closure of the metro bus service]. What is even worse is that it now takes me hours to reach the office since there are several detours,” Asad Jamal, who works with a software firm in Islamabad, told Arab News.

Economists and experts said the knock-on impact of the protests in the aviation, transportation and health care sectors would also push growth down in the coming months.

Pakistan’s economic growth already plummeted from 5.8 percent to 3.3 percent in the last year, and it is further expected to slow down to 2.5 percent this year due to the low industrial and agricultural production, double-digit inflation and increasing unemployment. The country signed off a $6 billion bailout package in July this year which entailed the International Monetary Fund’s tough economic conditions.

“The government should disperse the protesters as quickly as possible. Otherwise, it won’t be able to meet the IMF’s revenue collection target or succeed in economic reforms,” Mughal said.


IMF defends $1 billion disbursement to Pakistan amid India’s objections

Updated 8 sec ago
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IMF defends $1 billion disbursement to Pakistan amid India’s objections

  • IMF communications director says the board approved funding as Pakistan had ‘met all of the targets’
  • She clarifies EFF disbursements go to the central bank and are not used to fund the national budget

KARACHI: The International Monetary Fund (IMF) this week defended its decision to release a $1 billion tranche to Pakistan, despite India’s concern over its potential misuse, by pointing out the country had met all requisite targets under the Extended Fund Facility (EFF).
India had raised objections to the IMF’s disbursement amid a military confrontation with Pakistan, saying the funds could be diverted to support activities that it described as detrimental to regional stability. New Delhi abstained from the IMF Executive Board vote on May 9, highlighting apprehensions about the timing and potential implications of the financial assistance.
During a news briefing in Washington on Thursday, IMF Communications Director Julie Kozack addressed these concerns, saying the international lender provided financing to member states for the purpose of resolving balance of payments problems.
“In the case of Pakistan … the EFF disbursements … are allocated to the reserves of the central bank,” she said. “Under the program, those resources are not part of budget financing … [and] are not transferred to the government to support the budget.”
The IMF official further emphasized the Fund’s decision was based on Pakistan meeting all the targets set under the loan program.
“Our Board found that Pakistan had indeed met all of the targets,” she continued. “It had made progress on some of the reforms, and for that reason, the Board went ahead and approved the program.”
Kozack also outlined the safeguards to prevent any potential misuse of funds, including targets on the accumulation of international reserves and a zero target for central bank lending to the government.
She also noted the program includes substantial structural conditionality aimed at improving fiscal management.
The IMF’s disbursement this month was part of a broader $7 billion support program aimed at stabilizing Pakistan’s economy. The Fund has said future disbursements will depend on Pakistan’s continued adherence to the program’s conditions and reforms.
 


PM Sharif tells business leaders private sector key to economy ahead of June 10 budget

Updated 54 min 12 sec ago
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PM Sharif tells business leaders private sector key to economy ahead of June 10 budget

  • The prime minister assures chambers of commerce representatives of his administration’s full support
  • He promises to reduce cost of doing business in the country, highlights zero tolerance for tax evasion

ISLAMABAD: Prime Minister Shehbaz Sharif on Friday emphasized the pivotal role of the private sector in driving economic development, asserting that a robust public-private partnership was essential for the country’s emergence as a strong global economy.
Sharif made these remarks during a meeting with presidents of chambers of commerce from across the nation, coinciding with the government’s announcement to present the next federal budget on June 10.
The government has consistently stressed the need for the private sector to lead in strengthening the national economy, assuring it of state support.
Sharif reiterated this stance, highlighting the necessity of collaboration between the government and private enterprises in the country.
“There is a need to mobilize the private sector to achieve economic self-reliance,” the Prime Minister’s Office quoted him as saying during the meeting.
“Protecting the rights of the Pakistani business community and providing them with a conducive environment for profitable business are among the top priorities of the government,” he continued.
Sharif also pledged to reduce the cost of doing business in Pakistan, noting that measures were being implemented to facilitate access to loans and reduce electricity prices.
Addressing tax compliance, he emphasized a zero-tolerance policy toward tax evasion. Pakistan has historically one of the lowest tax-to-GDP ratios in the region.
The government has tried to addressed the situation by reforming its tax collection body through increased automation to improve collection and compliance.
The official statement said the delegation of business leaders commended the government’s economic policies, citing gradual improvements in the national economy and business environment.
They also presented budget proposals for the upcoming fiscal year.
Pakistan is scheduled to release a comprehensive economic survey for the outgoing fiscal year on June 9, only a day ahead of the budget preparation.


Pakistan says 25,698 pilgrims to perform Hajj under private quota in 2025

Updated 23 May 2025
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Pakistan says 25,698 pilgrims to perform Hajj under private quota in 2025

  • The annual pilgrimage is expected to take place between June 4 and June 9 this year
  • Around 55,642 Pakistani Hajj pilgrims have landed in Saudi Arabia so far via 244 flights

ISLAMABAD: Pakistan’s religious affairs minister, Sardar Muhammad Yousaf, said on Friday only 25,698 pilgrims would be able to perform Hajj this year under the private scheme, after thousands of allocated slots were revoked due to non-compliance by private operators with Saudi booking rules and deadlines.

The kingdom had granted Pakistan a total quota of 179,210 pilgrims for Hajj 2025. Typically, this national quota is evenly split between the government-run and private schemes. However, the private sector failed to meet procedural requirements set by Saudi authorities, leading to a significant cut in their share, down from 89,801 to just over 25,000, leaving more than 67,000 would-be pilgrims affected.

“25,698 people will be able to go for Hajj under the private quota,” Yousaf said while addressing a press conference.

“Up until February 14, only 3,600 pilgrims had submitted their payments, but after a one-week extension, 10,000 more applications were received, bringing the total number to 13,000.”

He highlighted that private Hajj operators had registered 904 companies with the Saudi authorities, based on a list provided by the religious affairs ministry. However, some people ignored this and made payments to unregistered Hajj operators.

Yousaf assured that a committee formed by Prime Minister Shehbaz Sharif would investigate the issue.

He said Pakistan International Airlines, Saudi Airlines, Air Sial, Airblue, and Serene Air would be transporting Pakistani pilgrims for Hajj.

Earlier in May, a ministry spokesperson issued guidelines for Hajj pilgrims, including verifying the authenticity and quota approval of private tour operators before making payments, visiting the ministry’s official website to confirm registration and avoiding reliance on unverified advertisements or information.

The ministry strongly urged all prospective pilgrims to exercise utmost caution when booking Hajj packages through private tour operators.

Some registered private organizations also failed to pay dues within the timeline set by Saudi authorities, prompting Sharif to intervene and request an extension of the deadline, which was approved.

This year’s annual pilgrimage is expected between June 4 and June 9, with nearly 89,000 Pakistanis traveling to Saudi Arabia under the government scheme.

Pakistan launched its Hajj flight operation on April 29.

Around 55,642 Pakistani Hajj pilgrims have landed in Saudi Arabia so far via 244 flights.


Karachi hospital reports four COVID-19 deaths amid surprise summer surge

Updated 23 May 2025
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Karachi hospital reports four COVID-19 deaths amid surprise summer surge

  • A senior physician says all those who succumbed to the disease in the past fortnight were elderly individuals
  • Health experts say the recent surge in coronavirus cases during the summer months is an unusual trend

KARACHI: At least four people with underlying health conditions have died of COVID-19 at a major Karachi hospital in the past two weeks, as experts report an unusual spike in infections during the city’s peak summer season.

All four fatalities occurred at the Aga Khan University Hospital (AKUH), where doctors say they are seeing a steady increase in admissions linked to the coronavirus— a trend they describe as “unexpected” at this time of year.

“In the past two to three weeks, we have seen a significant increase in COVID cases,” Prof. Dr. Syed Faisal Mahmood, a professor of infectious diseases at AKUH, told Arab News, confirming the death of four people during the past two weeks.

The surge, he said, was happening in late spring with temperatures exceeding 40 degrees Celsius.

COVID-19, caused by the SARS-CoV-2 virus, is a highly contagious respiratory illness that was first detected in late 2019 and declared a global pandemic within months. While the virus typically spreads more easily in colder months due to increased indoor activity and lower humidity, experts say its spread during summer in Karachi is a rare deviation from past seasonal patterns.

Mahmood said most infected individuals have been coming to the hospital with mild symptoms, such as sore throat, cough, body aches, and fever, but the virus remains dangerous for older adults and those with weakened immune systems.

“Like in previous years, this year the severe cases of COVID are mostly being seen in people who are older, especially those above 65, or those with weak immune systems,” he said.

“Among these COVID cases, there are some patients who have been hospitalized, and there have also been some deaths,” he added.

Mahmood added that while routine testing is no longer required for everyone with symptoms, caution is essential.

“If you suspect that you have COVID or any other cold or cough-related infection, it is better that you wear a mask,” he advised. “We recommend wearing a mask for at least five to ten days so that others do not get infected.”

The infectious diseases expert also urged caution for those in close contact with the elderly.

“If you are caring for someone who is elderly, then please do not visit them if you are feeling unwell, or at least wear a mask,” he said. “Please take care of yourself, and we hope that there will not be a major further increase in COVID cases.”


Pakistan extends airspace ban on Indian aircraft until June 24 amid ongoing tensions

Updated 23 May 2025
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Pakistan extends airspace ban on Indian aircraft until June 24 amid ongoing tensions

  • The restriction was originally imposed on April 24 after an attack in Kashmir killed 26 tourists
  • The airspace closure impacted Indian airlines, particularly on long-haul international routes

ISLAMABAD: Pakistan has extended its ban on Indian aircraft using its airspace until June 24, the Pakistan Airports Authority (PAA) announced on Friday, amid continued bilateral tensions following recent military clashes this month.

The restriction was first imposed on April 24, only two days after an attack in Indian-administered Kashmir that killed 26 people. India blamed Pakistan for the attack despite Islamabad’s denials. The administration in New Delhi also downgraded bilateral diplomatic ties and took other steps like suspending visas for Pakistanis and shutting border crossings.

In response, Pakistan took its own measures, including the closure of its airspace to Indian aircraft, including commercial and military flights.

“The ban on Indian aircraft flying through Pakistani airspace has been extended until 4:59 AM on June 24, 2025,” the PAA said.

“All aircraft that are Indian-registered, operated, owned or leased will remain subject to the ban,” it added.

The airspace closure has significantly impacted Indian airlines, particularly on long-haul international routes.

Air India, which operates numerous flights to Europe and North America, has been forced to reroute flights, leading to increased fuel consumption, longer flight times, and additional operational costs.

The airline estimates that the ban could result in approximately $600 million in additional expenses over a year and has sought compensation from the Indian government.

Despite a ceasefire agreement announced on May 10, which has held according to Pakistani Deputy Prime Minister Ishaq Dar, the extension of the airspace ban indicates ongoing diplomatic strains.

The situation was further exacerbated by a recent school bus bombing in Pakistan that killed four children, an incident Islamabad has blamed on New Delhi. However, the Indian authorities have denied the charge.