A year after Russia’s invasion of Ukraine, Pakistan’s economy continues to bleed 

Ukrainian bystanders look on to residential buildings that were destroyed during an attack, in Borodyanka on February 23, 2023. (Photo courtesy: AFP/FILE)
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Updated 25 February 2023
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A year after Russia’s invasion of Ukraine, Pakistan’s economy continues to bleed 

  • Economists say the conflict cost Pakistan 1 percent of GDP, directly contributing 9 percent to inflation rate 
  • Pakistan will continue to suffer from impacts of Russia-Ukraine conflict until 2027, experts say 

KARACHI: When Pakistan’s former prime minister Imran Khan visited Moscow on February 24 last year, he did not realize that the man he was to meet in Kremlin was about to press the war button and his country would bear its brunt. A year on, the estimates indicate that the war has cost his country 1 percent of its economic growth. 

The Russian invasion, which entered its second year on Friday with no end in sight, coincided with Khan’s visit to Moscow and has hit Pakistan hardest in terms of diplomatic relations with the West and economically at home. 

The conflict disrupted the global supply-chain network and led to an international hike in oil price. It came at a time when the South Asian country was recovering from the impacts of the COVID-19 pandemic and, according to economists, has dented Pakistan’s economy in various ways. 

“The first major impact of the Russia-Ukraine war was that Pakistan’s energy import bill inflated substantially and increased the cost of production which triggered huge inflationary pressure in the country,” Dr. Sajid Amin, a deputy executive director at the Sustainable Development Policy Institute (SDPI), told Arab News. 

“We estimate that the war has directly contributed 8-9 percent to current inflation rate in Pakistan as oil and food commodities prices shoot up in the global market after a war.” 

The South Asian nation is currently experiencing multi-decade high inflation that was recorded at 27.6 percent in January and is projected to hit as high as 40 percent in coming days. 

“The war has had severe impact in terms of commodity price hikes, termed as the commodities super cycle, which coincided with the opening of the industrial world after COVID and the shortage caused by the Russian-Ukraine war,” Dr. Khaqan Najeeb, a former adviser to the Pakistani finance ministry, told Arab News. 

The increase in Pakistan’s overall energy bill pushed the country’s current account deficit (CAD) beyond $17.4 billion, impacting its reserves that were already dwindling since December 2021, according to Najeeb. 

“Coupled with fund delays, Pakistan’s balance of payment remained challenging and continues to do so even today,” he added. 

Pakistan’s petroleum import bill remained $23.3 billion in the last fiscal year (FY22), which was 105 percent higher than the previous year, while the country has imported energy products worth $10.6 billion during the first seven months of this current fiscal year (FY23), according to official data. 

Economists say 1 percent of Pakistan’s gross domestic product (GDP) has directly suffered because of the Russian invasion of Ukraine. 

“The GDP loss that has been globally estimated by many institutions is 1 percent due to the Russia-Ukraine conflict,” Amin said. 

“Our estimates show that it has increased unemployment in Pakistan and pushed roughly 3.5 million people below the poverty line.” 

The conflict, through oil and food price hikes, has severely impacted the life of a commoner in Pakistan. 

“Particularly, the poor segment that spends 60-70 percent of their income on food basket,” Amin said. 

“Those who were close to the poverty line have slipped below the poverty line and at the same time, employment opportunities have diminished amid monetary and fiscal policy tightening.” 

The most important fact, according to Pakistani economists, is that the impacts of the Russian invasion will continue to haunt Pakistan for the next five years. 

“Our estimates suggest that the war impacts will continue to persist until 2026-27, also because of the International Monetary Fund (IMF) program and contractionary monetary policy,” Amin said. 

As cash-strapped Pakistan continues to suffer at the economic front, experts say the country has faced setbacks on the diplomatic front as well. 

“Pakistan has suffered from the almost exclusive focus of the US and Western countries on the war in Ukraine. These countries have little time and energy left to pay attention to other problem spots around the world, including Pakistan,” Husain Haqqani, a former Pakistani ambassador to the US who is currently a scholar at the Anwar Gargash Diplomatic Academy in Abu Dhabi, told Arab News. 

“The fact that former prime minister Imran Khan chose to stand beside President Putin in Moscow on the day Russia invaded Ukraine further diminished Pakistan’s ties with the West.” 

Haqqani said though Pakistan has move on but the war has caused it economic and political damages. 

“Pakistan has moved on from that moment but the Ukraine war has hurt Pakistan economically as well as politically,” he said. 

“Politically, Pakistan’s loss has come from the lack of ability of major Western leaders to attend to Pakistan and its neighborhood because their attention is on the war in Ukraine.” 

As Russia-Ukraine conflict continues to fuel volatility in the global commodity market, Pakistani authorities are striving to import petroleum products and Russian oil at discounted rates. 

“Pakistan has now tried to take advantage of price tact, Russian crude and refined products. Let’s hope that it does materialize,” Najeeb said. 

“The price that has been quoted informally around $60 a barrel may help bring down Pakistan’s imported energy costs and ease the balance-of-payment pressure as we move forward.” 

Pakistani authorities expect to import Russian refined oil from March this year, expecting that Moscow will provide cheap energy alternates to energy-deficient Pakistan. 
 


Pakistan unveils first Carbon Market Policy to attract green investment, curb pollution

Updated 8 sec ago
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Pakistan unveils first Carbon Market Policy to attract green investment, curb pollution

  • Pakistan wants to transition toward a low-carbon economy, says PM’s coordinator on climate change
  • Carbon markets refer to systems that reduce greenhouse gas emissions by offering financial incentives

ISLAMABAD: Pakistan’s Coordinator to the Prime Minister on Climate Change Romina Khurshid Alam on Sunday unveiled the country’s first National Carbon Market Policy, saying that the government wanted to attract investments in green initiatives and transition toward a low-carbon economy.
Carbon markets refer to systems that aim to reduce greenhouse gas emissions by allowing companies or organizations to buy and sell “carbon credits.” This is achieved by offering financial incentives to these entities to cut emissions. 
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.
“Let me say this confidently that Pakistan is now ready to lead, innovate and collaborate with local private sector as well as international partners for the development of carbon markets to attract investments in green initiatives for achieving climate goals under the Paris climate pact,” Alam said in a statement. 
Alam was attending an event held at the Pakistan Pavilion in Baku, during the sidelines of the global COP29 climate conference, to launch the country’s first carbon market policy. The event was attended by members of international civil society organizations, delegation members of different countries, academia, researchers, policymakers and journalists. 
“By participating in such markets, Pakistan can incentivize businesses and industries to adopt cleaner technologies and practices,” she said. 
Alam said the success of Pakistan’s carbon markets will depend on its ability to collaborate with international partners. 
“We welcome partnerships with international investors, organizations, and governments to ensure that this market becomes a regional and global success story,” she said.
Pakistani Prime Minister Shehbaz Sharif, who spoke at a number of events at COP29 earlier this week, used the forum to highlight the need to restore confidence in the pledging process and increase climate finance for vulnerable, developing countries.
The main task for nearly 200 countries at the COP29 summit from Nov. 11-22 is to broker a deal that ensures up to trillions of dollars in financing for climate projects worldwide.


No indication from Pakistan on trying Imran Khan in military court — UK foreign secretary

Updated 17 November 2024
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No indication from Pakistan on trying Imran Khan in military court — UK foreign secretary

  • UK Foreign Secretary David Lammy says Khan, like other Pakistani prisoners, has right to fair trial and due process
  • Pakistan’s military has initiated trials of at least 103 Khan supporters accused of attacking military installations last year

ISLAMABAD: UK Foreign Secretary David Lammy recently assured a fellow parliamentarian that there have been “no recent indications” from Pakistani authorities that they intend to try former prime minister Imran Khan in a military court, reiterating that he had the right to a fair trial and due process. 
Protesters linked to Khan’s Pakistan Tehreek-e-Insaf (PTI) party attacked and damaged government and military buildings on May 9, 2023, after his brief arrest that day in a land graft case. Hundreds of PTI followers and leaders were arrested following the riots. The military has also initiated trials of at least 103 people accused of involvement in the violence.
The development raised fears among Khan supporters of his possible trial by a military court, prompting the former prime minister to file a petition in the Islamabad High Court against it. The petition was dismissed by the court in September after the government said it had not decided whether or not it wanted to try the former premier. 
Pakistan’s military spokesperson in September hinted at Khan’s possible military trial, saying that though the matter was sub judice, using military personnel for personal or political gains invites legal action.
In response to an Oct. 16 letter penned by Labour legislator Kim Johnson, Lammy assured him that the UK government engages regularly “at a senior level” with Pakistan on the country’s political situation. 
“We have no recent indications from the Pakistani authorities that they intend to try Imran Khan in a military court, but my officials continue to monitor the situation closely,” Lammy wrote in a letter to Johnson dated Nov. 11. 
The UK official said he has raised concerns about the potential use of military courts to try civilians, including Khan. Lammy added that such courts can lack transparency and independent scrutiny, making it difficult to assess their compliance with international standards.
“While Pakistan’s judicial processes are a domestic matter, we have been very clear that the Pakistani authorities need to act in line with their international obligations and with respect for fundamental freedoms, including the right to a fair trial, due process and humane detention,” he wrote.
“This applies to Imran Khan as it does to all Pakistan’s citizens.”
Lammy said he remains concerned by restrictions on freedom of expression and assembly in Pakistan, including those in relation to political opposition. 
“In our engagements with the authorities, we continue to underline that the freedom to hold and express views without censorship, intimidation or unnecessary restriction is a cornerstone of democracy,” he said. 
Khan’s close aide, Sayed Zulfikar Bukhari shared Lammy’s letter on social media platform X. 
“Respect for free and fair elections, and the rule of law, underpinned by an independent judiciary, are the bedrock of a democracy,” Bukhari wrote. “Pakistanis continue to struggle for theirs.”
Khan, arguably Pakistan’s most popular politician, was ousted from office after a parliamentary no-trust vote in April 2022 and has since waged an unprecedented campaign of defiance against the country’s powerful military and Prime Minister Shehbaz Sharif-led government. 
Khan’s party says the military and his political rivals rigged the Feb. 8 general election to form the Sharif-led government. Both deny the charge.


Pakistan says over 20,000 companies and freelancers have registered for VPNs

Updated 17 November 2024
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Pakistan says over 20,000 companies and freelancers have registered for VPNs

  • Pakistan’s interior ministry this week ordered a ban on VPNs, citing their use by militant groups
  • Pakistan Telecommunication Authority says VPN registration can be completed on its website

ISLAMABAD: The Pakistan Telecommunication Authority (PTA) this week disclosed that over 20,000 companies and freelancers have so far registered for Virtual Private Networks (VPNs) through its official website, days after it announced banning illegal ones. 
Pakistan’s Ministry of Interior sent a letter to the PTA on Friday asking it to block illegal VPNs across the country, citing their use by militant groups for financial transactions and violent activities.
This directive follows international criticism of Pakistan’s Internet restrictions, notably after the February general elections, where allegations of electoral manipulation led to the blocking of social media platform X. Media reports also suggested the government was setting up a national firewall, which had led to the slowdown of Internet speed across Pakistan. 
“To date, more than 20,000 companies and freelancers have successfully registered their VPNs through this efficient process,” the PTA said in a statement on Saturday.
The PTA said it had streamlined the VPN registration process for organizations and freelancers, saying that entities such as software houses, call centers, banks, embassies, and freelancers can now easily register their VPNs online through the PTA’s official website: www.pta.gov.pk.
It said the registration process involves completing an online form and providing basic details, including the national identity card number, company registration details and taxpayer status. 
Meanwhile, it said freelancers must submit documentation, such as a letter or email, verifying their project or company association. Additionally, it said applicants must provide the IP address for VPN connectivity. If a fixed IP address is required, it can be acquired from an Internet Service Provider (ISP).
“The registration process is free, and approvals are typically granted within 8–10 hours of submission,” the PTA said.
After the interior ministry circulated its letter calling for a ban on VPNs on Friday, the Council of Islamic Ideology, a constitutional advisory body that reviews laws to ensure they align with Islamic principles, also declared VPNs usage “un-Islamic” in a statement the same day.  
“The government and the state have the authority, from an Islamic perspective, to prevent all actions that lead to wrongdoing or facilitate it,” the council’s chairman, Raghib Hussain Naeemi, was quoted as saying in the statement. 
“Therefore, measures to block or restrict access to immoral and offensive content, including the banning of VPNs, are in accordance with Shariah.”
VPN users in Pakistan have already reported significant disruptions to services since last weekend, with issues relating to connectivity and restricted access.
Pakistan’s decision to impose online restrictions have been questioned by free speech activists and businesses alike.
PREDA, Pakistan’s first membership-based organization dedicated to promoting and protecting the interests of professionals, also wrote a letter to the government earlier in the day, appealing for the adoption of stable digital policies to support growth and build an eco system for global competitiveness.


Pakistan says ‘fully prepared’ to host Champions Trophy tournament amid India row

Updated 17 November 2024
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Pakistan says ‘fully prepared’ to host Champions Trophy tournament amid India row

  • PCB Chairman Mohsin Naqvi meets English counterpart in London to discuss Champions Trophy tournament
  • India has refused to travel to Pakistan for Feb. 9-Mar. 19 tournament next year due to political tensions

ISLAMABAD: Pakistan Cricket Board (PCB) Chairman Mohsin Naqvi this week reiterated that the country was “fully prepared” to host the Champions Trophy cricket tournament next year, despite India’s refusal to send its cricket team to the neighboring country. 
Pakistan is scheduled to host the Feb. 19-Mar. 9 Champions Trophy 2025 tournament. However, the International Cricket Council (ICC) last week informed Pakistan that India had declined to play any games in Pakistan. The PCB has sought clarification from the ICC on the refusal.
India has not sent its cricket team to Pakistan since 2008 due to political tensions between the two countries. Pakistan was forced to agree to a “hybrid” model for the 2023 Asia Cup through which all of India’s matches were shifted to Sri Lanka. Pakistan has said it will not agree to a similar model for the Champions Trophy. 
“Mohsin Naqvi said Pakistan is fully prepared for the ICC Champions Trophy tournament,” state-run Radio Pakistan reported on Friday. 
Naqvi said this in London after meeting England and Wales Cricket Board Chairman Richard Thompson on Saturday. 
Thompson expressed his best wishes to the PCB chairman for the upcoming tournament, the state broadcaster said. 
“He said England’s recent visit to Pakistan was a wonderful experience,” Radio Pakistan reported. 
Speaking about Pakistan renovating its stadiums ahead of the multi-nation tournament next year, Naqvi said the venues are being upgraded with modern facilities. 
While India’s presence is crucial to the commercial success of the ICC event, Pakistan might pull out of the tournament should it be shifted out of the country, the Dawn newspaper reported on Tuesday citing sources.
The ICC is in talks with the PCB and the participating boards before finalizing the schedule of the eight-team tournament.
The ICC Champions Trophy 2025 tour kicked off on Saturday after the trophy was displayed at Islamabad’s Pakistan Monument and Faisal Mosque landmarks.


Pakistani environmentalist turns barren wasteland into urban forest in Karachi

Updated 17 November 2024
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Pakistani environmentalist turns barren wasteland into urban forest in Karachi

  • In three years, Clifton Urban Forest has become home to over 700,000 trees, 140 bird species, over 100 plant varieties
  • Rapid urbanization in Karachi and breakneck expansion of roads and buildings means less and less space for trees and parkland

KARACHI: Over three years ago, Masood Lohar, a passionate Pakistani environmentalist, embarked on a mission to breathe new life into a desolate 220-acre landfill on Karachi’s Clifton beach. 
Today, the barren wasteland is a thriving urban forest, home to over 700,000 trees and a vibrant community of more than 140 bird species that find sanctuary in its lush greenery and an adjacent lagoon.
“This particular place was a dump site,” Lohar, 57, said as he pointed to the trees around him, the first of which he planted exactly 46 months ago. 
“We cleaned the whole mess and then we started bringing soil from outside and started this plantation.” 
Lohar’s aim for the site, called the Clifton Urban Forest, is to nurture it as a marine ecosystem, and it is already seeing some success as a home to over 100 plant species, including native mangroves, fruit trees like pomegranates and guavas, and hardy, drought-resistant grass varieties that thrive in Karachi’s harsh climate.
The aim of Lohar’s project is not just beautifying the port city of over 20 million, which often ranks in the world’s top ten most polluted cities. The main goal is to restore Karachi’s dwindling marine ecosystem and counterbalance rapid urbanization in the sprawling city where the breakneck expansion of roads and buildings means there is less and less space for trees and parkland.
In 2021, the World Bank estimated that Pakistan’s forest cover was 4.7797%. That compares with 24% in neighboring India and 14.5% in Bangladesh. Lohar believes said afforestation projects like the one he has started could help make Karachi more resilient against natural disasters and encourage wildlife to settle.
The city, home to the Malir and Lyari rivers, once boasted a network of creeks, lagoons, and estuaries, many of them destroyed or severely degraded over the decades by industrial development and unchecked urban sprawl. The Obhayo Lagoon, once the largest in the area, has all but vanished, while other water bodies have been cut off from the sea, reducing biodiversity and making the city more vulnerable to environmental hazards.
Lohar’s initiative has helped restore a fragment of this ecosystem by reviving a small portion of the Obhayo Lagoon. 
“Now you can see that it is providing the services of a lagoon,” said the environmentalist, who has documented the sightings of 140 bird species, including lesser and greater flamingos and Siberian ducks, at the Lagoon since he launched the restoration project. 
The forest is now also teeming with insects, honey bees, and native beetles, with the small creatures playing an essential role in pollination and supporting the growth of various plants and trees in the area.
Lohar’s commitment to the environment is deeply personal. A former UN program professional who worked for UNDP from 2006-2020, he witnessed and studied firsthand worsening air quality and environmental degradation in Pakistan’s urban centers. 
“I knew at that time that the time will come,” he said, referring to now record-high air pollution levels in Pakistan, particularly in cities like Lahore and Karachi. 
 “You see, the Pakistani cities at this moment are fighting for their breath because the air quality is getting worse and worse.”
Lohar wants to provide shade for residents seeking escape from rising temperatures — a heatwave in 2015 killed more than 400 people in the city in three days, and temperatures in the surrounding Sindh region reached record highs this year. 
Experts say afforestation can also provide relief from heatwaves, with the sea breeze getting hotter as it passes through concrete structures while roadways and rooftops absorb heat.
“The other problem is [seasonal] heatwaves because concrete is the dominant outlook of our cities,” Lohar said.
Urban forests like the one Lohar has created are part of the solution, he said. 
Mangroves, in particular, have proven highly effective in sequestering carbon and Lohar estimates that his urban forest, a combination of mangroves and terrestrial trees, captures 6,000 metric tons of carbon dioxide annually, equivalent to the emissions of nearly 1,300 cars.
Yet despite its success, Lohar’s project faces significant challenges, particularly from real estate development. 
Karachi’s rapid urbanization has increased pressure on open spaces, with developers eyeing every available inch for construction. The urban forest itself is at risk from a development project being carried out by the Karachi Development Authority (KDA), which Lohar is worried could destroy over 300,000 of the forest’s mangroves.
“I’m not sure how that will unfold in the course of time and impact this marine ecosystem project, but I’m sure that it will definitely stress this project,” Lohar said, gesturing toward a marine wall under construction. 
“I have gone through a lot of difficulties and resources-wise and the indifference of the corporate sector and the government brings us on the verge of giving up.”
Director General KDA Altaf Gohar Memon did not respond to calls seeking comment for this story. Local government minister Saeed Ghani did not respond to Arab News’ requests for comment. 
Yasir Husain, an environmentalist and founder of the Climate Action Center, said that projects like the Clifton Urban Forest were vital, though such initiatives were insufficient to address the broader environmental challenges faced by Pakistan.
“These are just [pilot projects], and the city’s challenge is enormous,” he told Arab News, adding that finding a bird sanctuary in such a stressed environment was a gratifying experience.
“These are tiny projects, if you look at it from a macro perspective of the whole city, but they’re experiments,” he continued, appreciating that urban forests were maintained despite such challenging circumstances.