ISLAMABAD: Pakistan’s new prime minister has appointed 57-year-old economist and businessman Miftah Ismail as the finance minister who will be tasked with quickly arresting a downward economic spiral and getting IMF talks back on track.
Ismail, who briefly held the post four years ago, brings with him a record of decisive policy action and a close relationship with Prime Minister Shehbaz Sharif but faces a daunting array of challenges, from falling foreign currency reserves to soaring inflation and potentially historic deficits.
He will have limited time to act, with a maximum of 15 months before general elections are due, while they may be called sooner.
The former IMF economist, with a PhD in Public Finance and Political Economy from the Wharton School of Business, held the job for a few months in 2018 when he joined a government near the end of its term.
In that short period, Ismail scrapped costly government exchange rate controls and gave the Pakistani rupee more flexibility, while cutting income taxes as part of a growth promotion policy.
As he returns to the post, central bank foreign reserves have fallen to $10.8 billion from $16.2 billion in just one month, according to the latest figures released on Thursday, providing import cover of only around 50 days, Ismail said.
To rebuild reserves, he is considering pushing for more deposits from friendly countries such as China, Saudi Arabia and the United Arab Emirates, sources in the ministry have said. All of those countries have parked funds in Pakistan’s central bank that will need to be rolled over.
He will also prioritize securing a successful International Monetary Fund review to release a tranche of more than $900 million and unlock finances from other international lenders that require a clean bill of health from the Fund.
Ismail has said he intends to restart talks soon to resume the 39-month, $6 billion bailout program, which Pakistan entered in 2019, but negotiations will be tough with many targets off track.
He has also said his foremost task will be to contain a burgeoning fiscal deficit that could hit 6.4 trillion Pakistani rupees ($35 billion), or about 10 percent of gross domestic product, versus a target of about 4 trillion rupees, by the end of June.
Energy subsidies announced by ousted premier Imran Khan, which are burning through Pakistan’s public finances, are also an immediate concern.
A rollback would be politically difficult, with Khan ratcheting up pressure for fresh elections and consumer inflation already clocking in at 12.7 percent in March.
The subsidies were rolled over on Friday for at least two weeks, with Sharif citing political pressure, but Ismail has made clear the support was not sustainable and would have to be revisited.
“We cannot let our fiscal and external financial position deteriorate further and have our development partners walk out. Tough choices need to be made,” he said in a tweet on Saturday.
Ismail, from a wealthy family that runs a confectionery business, Ismail Industrial Ltd, is expected to have a strong working relationship with the new premier. Sharif was a provincial chief minister when Ismail began his public service career as the head of a provincial investment board a decade ago.
Pakistan’s new finance minister faces tight time frame to tackle crises
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Pakistan’s new finance minister faces tight time frame to tackle crises
- Miftah Ismail briefly held the post four years ago, brings with him record of decisive policy action
- But the minister faces a daunting array of challenges, from falling foreign reserves to soaring inflation
China hosts SCO defense ministers from Russia, Iran, India, Pakistan amid global unrest
- Chinese defense minister calls for ‘robust actions to jointly safeguard the environment for peaceful development’
- Dong Jun warns ‘hegemonic, domineering and bullying acts’ have been severely undermining the global order
QINGDAO, China: China hosted defense ministers from Iran and Russia for a meeting in its eastern seaside city of Qingdao on Thursday against the backdrop of war in the Middle East and a summit of NATO countries in Europe that agreed to boost military spending.
Beijing has long sought to present the 10-member Shanghai Cooperation Organization (SCO) as a counterweight to Western-led power blocs and has pushed to strengthen collaboration between its member countries in politics, security, trade and science.
The Qingdao meeting of the organization’s top defense officials comes as a fledgling ceasefire between Israel and Iran holds after 12 days of fighting between the arch-foes.
It is also being held the day after a summit of North Atlantic Treaty Organization (NATO) leaders in The Hague, where members agreed to ramp up their defense spending to satisfy US President Donald Trump.
Chinese Defense Minister Dong Jun framed Thursday’s meeting of officials in Qingdao, home to a major Chinese naval base, as a counterweight to a world in “chaos and instability.”
“As momentous changes of the century accelerate, unilateralism and protectionism are on the rise,” Dong said as he welcomed defense chiefs from Russia, Iran, Pakistan, Belarus and elsewhere on Wednesday, according to state news agency Xinhua.
“Hegemonic, domineering and bullying acts severely undermine the international order,” he warned.
He urged his counterparts to “take more robust actions to jointly safeguard the environment for peaceful development.”
India’s Defense Minister Rajnath Singh, also in attendance in Qingdao, said SCO members should “collectively aspire to fulfil the aspirations and expectations of our people as well as tackle today’s challenges.”
“The world we live in is undergoing a drastic transformation. Globalization, which once brought us closer together, has been losing momentum,” he said in comments posted by his office on X.
And meeting Dong on the sidelines of the summit, Russian Defense Minister Andrei Belousov hailed ties between the two countries as being “at an unprecedentedly high level.”
“Friendly relations between our countries maintain upward dynamics of development in all directions,” he said.
China has portrayed itself as a neutral party in Russia’s war with Ukraine, although Western governments say its close ties have given Moscow crucial economic and diplomatic support.
Pakistan warns global order under ‘immense strain’ at UN Charter anniversary
- A Pakistani diplomat at the UN warns of growing disregard for international law and resurgence of unilateralism
- She says multilateralism remains humanity’s best hope to deal with emerging and persistent inter-state conflicts
ISLAMABAD: Pakistan on Wednesday warned of a global order under “immense strain” as it raised concern over growing violations of international norms and rising unilateral military actions, while addressing the Forum of Small States in New York to mark the 80th anniversary of the United Nations Charter.
The UN Charter, signed in San Francisco on June 26, 1945, laid the foundation for international peace, sovereignty and justice following World War II. Pakistan’s remarks come as the world witnessed two major military crises in South Asia and the Middle East in the last two months.
In May, nuclear-armed neighbors India and Pakistan exchanged artillery fire, drones and missiles in a brief but intense conflict before reaching a ceasefire. Weeks later, Israel launched a large-scale military campaign against Iran, targeting uranium enrichment facilities and nuclear infrastructure in what Tehran called an unprovoked act of war.
“The UN Charter remains our moral compass and legal foundation,” Pakistan’s Counsellor at the UN, Saima Saleem, said. “Yet today, we confront a global order under immense strain— marked by a growing disregard for international law, persistent and emerging conflicts, and a disturbing resurgence of unilateralism.”
“The voices of the vulnerable— especially peoples under foreign occupation, like the people of Jammu and Kashmir and Palestine— remain marginalized and their right to self-determination denied, despite the solemn promises of the Charter,” she added.
Calling for “inclusive multilateralism that delivers,” Saleem urged reforms to strengthen the UN’s effectiveness, including revitalizing the General Assembly’s authority and ensuring impartial implementation of Security Council resolutions.
“Selective application of international law and the UN Charter erodes faith in global governance. Its equal enforcement restores it,” Saleem said.
She also called for concrete action to ensure sustainable development, digital cooperation, youth and gender inclusion, climate resilience and peaceful dispute resolution.
“Multilateralism remains humanity’s best hope,” she said. “It must be re-energized, not replaced.”
The Forum of Small States is an informal group founded by Singapore in 1992. It offers a platform for smaller UN member states to coordinate positions and amplify their voices in global diplomacy. With over 100 members, it is now one of the largest informal blocs at the UN.
Pakistan’s trade deficit with Gulf states widens to $12.4 billion amid free trade agreement talks
- Pakistan’s exports to GCC rose 16 percent, but higher oil imports widened the trade gap
- Analysts warn FTA may deepen deficit, citing imbalance in Pakistan-China trade deal
KARACHI: Pakistan’s trade deficit with Gulf nations widened by 14 percent to $12.4 billion in the outgoing fiscal year through May, even as the country pushes for a free trade agreement (FTA) with the six-member Gulf Cooperation Council (GCC) to boost exports and market access, official statistics show.
The trade gap stood at $10.9 billion during the same period last year, according to data from the State Bank of Pakistan (SBP). Pakistan’s exports to the region grew to $5.08 billion — up 16 percent — while imports rose 14 percent to $17.5 billion.
The GCC includes Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Oman and Bahrain.
Shankar Talreja, director of research at Topline Securities, attributed the widening trade imbalance primarily to surging imports from the UAE, Pakistan’s largest oil supplier in the bloc.
“Pakistan’s imports from the UAE have increased by 32 percent in 11MFY25,” Talreja told Arab News from Karachi. “This is a whopping increase of $1.5 billion.”
Overall, imports from the UAE jumped 46 percent to $8.33 billion, while exports to the country totaled $3.96 billion. In contrast, imports from Saudi Arabia dropped 15 percent to $3.47 billion.
The increase in oil imports comes as Pakistan, which heavily depends on petroleum products from the GCC, monitors global crude trends.
Prices spiked by 13 percent to $77 per barrel after Israel attacked Iran on June 13, before easing by 6 percent on June 24 following a ceasefire announcement.
“Pakistan largely relies on petroleum products from the GCC region and overall petroleum import bill in FY26 is unlikely to increase as oil prices are currently 10 percent lower than the average oil price of July-May period,” Talreja noted.
“This lower oil price may offset volumetric increase, leaving overall petroleum import bill unchanged,” he added.
Last year, Pakistan spent $17 billion on oil imports, more than twice the size of its most recent International Monetary Fund (IMF) loan package. The IMF has urged the government to ramp up exports to stabilize its fragile external account.
To that end, Islamabad is pursuing bilateral and multilateral trade deals, including FTAs with the GCC, South Korea, Vietnam, East Africa and Central Asian states.
While Commerce Ministry spokesperson Muhammad Ashraf did not respond to queries, another official confirmed the FTA was under negotiation.
“The FTA talks with the GCC nations are ongoing but I am not sure if they have finalized anything,” the ministry official said, requesting anonymity as he was not authorized to speak to the media.
Pakistan’s Economic Survey for FY2024-25 mentions both the Pakistan-GCC FTA and the Pakistan-UAE Comprehensive Economic Partnership Agreement as “upcoming agreements.”
However, Talreja expressed skepticism about the potential gains.
“Pakistan has never benefitted from FTAs, like in case of China our deficit with China has further increased,” he said.
Islamabad’s FTA with Beijing, signed in 2006, has consistently produced unfavorable trade outcomes. The bilateral trade deficit with China stands at $2.5 billion this fiscal year, according to SBP figures.
“In the case of the Middle East, I doubt that Pakistan will benefit as it’s a very competitive market due to the global access the GCC has,” Talreja added. “Islamabad could only benefit if it negotiated something extraordinary.”
Prime Minister Shehbaz Sharif’s government is also pushing to expand trade with the United States, Pakistan’s top textile buyer, by negotiating reciprocal tariffs. Talks are expected to conclude next week.
As part of these discussions under the Trade and Investment Framework Agreement, Islamabad is seeking greater access for mangoes, dates and beef in the US market.
Pakistan’s trade prospects in the European Union remain strong after its GSP+ status, granting zero-duty access on 66 percent of tariff lines, was renewed.
A preferential trade agreement with the eight-member Organization for Economic Cooperation also came into force in January.
Still, officials warn that the country’s export profile remains vulnerable due to over-reliance on a handful of markets.
“The overall export trajectory signals Pakistan’s reliance on a few core markets, highlighting the need for diversification and expanded global outreach to minimize exposure to external shocks,” the finance ministry said in its economic survey.
Pakistan issues glacial lake outburst warning for northern areas as temperatures soar
- Pakistan says intense monsoon currents, soaring temperatures may trigger sudden GLOF events
- Authorities say glacial lake outbursts may pose serious threat to humans, livestock and agriculture
ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) this week issued a Glacial Lake Outburst Flood (GLOF) alert for the country’s northern areas, citing “persistent high temperatures” and intense monsoon currents as the main reasons.
Pakistan is consistently ranked among the countries most adversely affected by climate change. Climate change has triggered irregular weather patterns in the country, which include unusually heavy rains, droughts and heat waves.
In a press release on Wednesday, the NDMA said sustained heat for the past several weeks has accelerated snow and glacier melt in Pakistan’s northern regions.
“The added influence of monsoon rains and thunderstorms have now significantly increased hydrometeorological pressure on glacial lakes, raising the risk of sudden GLOF events,” the NDMA said.
It said Reshun, Brep, Booni, Sardar Gol, Thalu 1 and 2, Badswat, Hinarchi, Darkut and Hundur valleys are at “heightened risk” in case of a GLOF events.
“Sudden outbursts from these glacial lakes may trigger flash floods, posing a serious threat to human lives, livestock, and agriculture,” the disaster management authority said.
“Damage to infrastructure such as roads, bridges, and communication networks is likely, and access to remote valleys may be temporarily disrupted.”
The NDMA urged residents, tourists and trekkers to avoid traveling near glaciers, glacial lakes and riverbanks in the identified areas.
It urged locals to stay informed through official alerts and cooperate with authorities on evacuation instructions where necessary.
Floods in 2022, brought by record monsoon rains and glacial melt in northern mountains, killed over 1,700 people and impacted 33 million people out of a population of 220 million. Raging currents swept away homes, vehicles, crops and livestock in damages estimated at $30 billion.
Authorities recover 20,000 soap bars for anti-polio campaigns being sold illegally in Peshawar
- Provincial authorities seize large stockpile of soap bars provided by UNICEF in Peshawar’s Sabzi Mandi area
- UNICEF says authorities have not ruled out possibility of collusion by insiders or lapses in oversight mechanism
PESHAWAR: Pakistani authorities on Wednesday recovered 20,000 soap bars provided by the United Nations International Children’s Emergency Fund (UNICEF) for exclusive use in anti-polio campaigns after they were found being illegally sold in the northwestern Peshawar city, the UN agency said.
Authorities seized the soap bars in a raid conducted at the city’s famous Sabzi Mandi area, with UNICEF raising serious concerns about the diversion of humanitarian supplies to the open market.
“The seized consignment included approximately 20,000 soap bars, reportedly marked for exclusive use in Polio Campaigns,” the UN agency said.
UNICEF said provincial officials believe it is highly unlikely that such a large-scale misappropriation could have occurred without either the “active involvement or gross negligence” of personnel within the provincial Health Department and UNICEF’s local and national operations.
“Further investigations are underway to determine how the supplies were diverted from official distribution channels to Open Market,” the statement said. “Authorities have not ruled out the possibility of collusion by insiders or lapses in oversight mechanisms.”
UNICEF said the incident underscored the critical need for greater accountability and monitoring in aid distribution processes, particularly in sensitive public health programs like the polio eradication campaign.
Polio is a paralyzing disease with no cure, making prevention through vaccination critical. Multiple doses of the oral polio vaccine, along with the completion of the routine immunization schedule for all children, are essential to build strong immunity against the virus.
According to Pakistan’s polio program, 10 cases have been confirmed so far this year, with 74 reported in 2024.
Pakistan, one of the last two countries where polio remains endemic, has made significant progress in curbing the virus, with annual cases dropping from around 20,000 in the early 1990s to just eight in 2018.
The country reported six cases in 2023 and only one in 2021.
