Pakistan finance minister hints at ‘Plan B’ as revival of IMF bailout hangs in balance

In this handout photograph, taken and shared by the Ministry of Finance, Pakistan Finance Minister Ishaq Dar (center) addresses the post-budget press conference in Islamabad on June 10, 2023. (Photo courtesy: Government of Pakistan)
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Updated 10 June 2023
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Pakistan finance minister hints at ‘Plan B’ as revival of IMF bailout hangs in balance

  • Ishaq Dar says Pakistan is expecting transfer of $2 billion and $1 billion from Saudi Arabia and UAE respectively before June 30
  • Minister says the government has levied only $697 million additional taxes in the budget to promote documentation of economy

ISLAMABAD: Pakistan’s finance minister Senator Ishaq Dar said on Saturday his government was looking for a ‘Plan B’ in case the International Monetary Fund (IMF) did not release a $1.1 billion tranche of the stalled $6.5 billion bailout program Islamabad secured in 2019.

The statement came a day after the minister presented a Rs14.46 trillion ($50.4 billion) budget for the next fiscal year, setting a tax collection target of Rs9.2 trillion ($32 billion) that is 23 percent higher than the last year’s and envisioning a 3.5 percent GDP growth.

The government’s fiscal plan was unveiled amid record inflation, a depreciating currency, and fast-depleting foreign exchange reserves. While it stated its intention to provide relief to financially vulnerable segments, the budget numbers were aimed at securing the tough IMF loan amount to stave off a balance of payments crisis.

“A Plan B is always there and that is self-reliance,” the finance minister said, addressing a post-budget press conference in Islamabad. “Pakistan will not default.”

“If we don’t get it, we have a plan ready …. we hope to receive $1.1 billion [tranche], but there is no chance for the tenth review now,” the finance minister said. “We will only be fair to get the money after the ninth review.”

Pakistan’s IMF bailout program has been stalled since November and is set to expire on June 30, with its 9th and 10th reviews still pending the IMF board’s approval.

The finance minister said Saudi Arabia and the United Arab Emirates (UAE) had given a commitment of $2 billion and $1 billion respectively to the IMF as external financing support to Pakistan. 

“We expect if this amount was not transferred to Pakistan by June 30, it will come next year then,” he said, clarifying that debt rescheduling from the multilaterals was not on the cards.

“We can always negotiate with the bilateral for an ease-out.”

The finance minister clarified that there was no need to reschedule domestic loans because it would be a “serious issue” if a sovereign country could not fulfil “requirement of own currency.” 

He said the nation would have to “learn to live” as the country could not print dollars to repay external debts.

“We are trying to mobilize exports and remittances for the external debt [repayments],” Dar said.

About the 3.5 percent growth target, he termed it modest, realistic and in line with the IMF projection, admitting that servicing was one of the biggest items in the budget that the government was “trying to reverse.”

The government has paid special attention to agriculture and information technology (IT) sectors in the budget and given them tax exemptions on seeds and the import of machinery, according to Dar.

The economy is out of the woods now as hectic efforts by the government halted further decline of the economy.

He defended the government’s tax and non-tax revenues as “realistic and achievable” that were set after thorough consultations with stakeholders.

The budget levied new taxes of just Rs200 billion ($697 million) as the tax revenue had increased from Rs7,200 billion in the previous fiscal year to Rs9,200 billion.

“These 200 billion rupees taxes are mostly to promote documentation or fix an anomaly. This is not inflationary,” he said, adding that Rs900 billion out of Rs1,074 billion subsidies allocated in the budget were only meant for the power sector.

“This was a major stumbling block between us and the IMF, we have to focus on it,” he said. “No new major subsidy is being given.”


Pakistan to reopen Hajj applications from Jan. 10 to fill 5,000 vacant seats

Updated 12 sec ago
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Pakistan to reopen Hajj applications from Jan. 10 to fill 5,000 vacant seats

  • Religious affairs ministry says new applicants will have to pay about $2,152 in two installments
  • Pakistan extended the application deadline twice in December due to insufficient submissions

ISLAMABAD: Pakistan has decided to reopen Hajj applications from January 10 to fill the remaining 5,000 seats under the government quota after falling short of the required number of applications for this year’s pilgrimage, the Ministry of Religious Affairs said on Thursday.

Saudi Arabia has allocated a quota of 179,210 Hajj pilgrims for Pakistan in 2025, divided equally between government and private schemes. The government extended the application deadline twice last month, from December 3 to December 10 and then to December 17, to fill the seats. However, it also hinted at reopening applications in early January due to insufficient submissions.

“The Ministry of Religious Affairs has called for Hajj applications for 5,000 vacant seats under the government quota,” Muhammad Umer Butt, the ministry’s spokesperson, said in a statement. “Hajj applications will be received on a first-come, first-served basis starting from January 10.”

Butt said that new applicants must pay Rs 600,000 ($2,152) in two installments, with additional charges for sacrifices and separate room accommodations.

“All designated banks are instructed to upload daily received applications to the portal immediately,” he added. “The receipt of applications will be halted as soon as the government quota is filled.”

For the first time, the country’s Hajj policy allowed pilgrims last year to make payments in installments. Under this scheme, the first installment of Rs 200,000 ($717) had to be submitted with the application, the second installment of Rs 400,000 ($1,435) within 10 days of balloting and the remaining amount by February 10 this year.

According to official statistics, the government scheme received 12,000 to 13,000 more applications last year compared to 2023. In 2024, Pakistan had to surrender 21,000 Hajj seats to Saudi Arabia due to a shortage of applicants. However, the government is determined to fill all slots for the 2025 pilgrimage.

The ministry has also launched the Pak Hajj 2025 mobile application, available for both Android and iPhone users, to guide pilgrims. Additionally, the government announced a reduction in airfare, lowering ticket prices for federal program pilgrims to Rs 220,000, down from last year’s Rs 234,000.

Pakistan International Airlines, Saudi Airlines, and private carriers have agreed to transport pilgrims this year.


Pakistan’s interior minister calls for global strategy against militancy in farewell meeting with US envoy

Updated 33 min 36 sec ago
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Pakistan’s interior minister calls for global strategy against militancy in farewell meeting with US envoy

  • The two countries have a history of security and counterterrorism collaboration, especially after 9/11
  • Donald Blome was first US envoy to Pakistan after the pull out of international forces from Afghanistan

ISLAMABAD: Pakistan’s Interior Minister Mohsin Naqvi on Thursday urged the international community to develop a comprehensive strategy to combat rising militant violence during a meeting with outgoing United States Ambassador Donald Blome.

The discussion highlighted the longstanding history of counterterrorism collaboration between the two countries. Following the events of September 11, 2001, Pakistan became an ally in the US-led war in Afghanistan. Despite fluctuations in their relationship, both sides shared intelligence and carried out coordinated operations, with the US providing military aid to Pakistan.

More recently, Washington has offered counterterrorism support to Islamabad, which is grappling with a surge in militant violence in its western provinces bordering Afghanistan. Pakistan accuses militant groups, such as Tehreek-e-Taliban Pakistan (TTP), of launching cross-border attacks with Kabul’s support, an allegation Afghan authorities deny.

“Terrorism is a global issue,” Naqvi said, according to a statement issued by his office after the meeting. “The international community must unite to devise a plan for its complete eradication.”

The US envoy condemned the recent wave of militant violence in Pakistan, as Naqvi reiterated that no illegal foreigner would be allowed to stay in the country.

His remark was made amid a crackdown on Afghan nationals since 2023. Pakistani authorities had accused many of them of involvement in suicide bombings without providing much evidence.

The Pakistani minister also commended Blome’s contributions to enhancing US-Pakistan relations during his tenure.

The US envoy, in turn, acknowledged the cooperation he received during his time in Pakistan.

Blome, the first US ambassador to Pakistan appointed after the withdrawal of international forces from Afghanistan in August 2021, played a role in recalibrating US-Pakistan relations in the post-war context. His appointment in May 2022 marked the end of a three-year vacancy in the role, during which chargé d’affaires led the US mission.

In addition to his diplomatic responsibilities, the outgoing US ambassador engaged in public diplomacy efforts, including exploring Pakistani culture and cuisine.

Last year, he visited Karachi’s famed Burns Road food street, sampling local delicacies. A video shared by the embassy featuring Blome enjoying the dishes garnered widespread attention.


PIA to resume European operations tomorrow with Paris flight after four-year suspension

Updated 09 January 2025
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PIA to resume European operations tomorrow with Paris flight after four-year suspension

  • Flights to Europe were suspended following an air crash in Karachi that killed 97 in May 2020
  • Resumption of European operations will boost PIA’s revenue, improve privatization prospects

ISLAMABAD: Pakistan’s national air carrier will resume flights to Europe on Friday, with the first flight departing from Islamabad to Paris, marking the end of a nearly four-year suspension of its European operations, the airline announced on Thursday.

The ban was imposed in 2020 following a Pakistan International Airlines (PIA) plane crash in Karachi that killed 97 people and subsequent claims by a former aviation minister of the country that nearly 40 percent of local pilots held “dubious” licenses.

The statement raised global concerns about Pakistan’s aviation safety oversight, prompting European regulators to ground PIA flights.

“PIA’s flight will depart from Islamabad to Paris tomorrow,” the airline said in a statement, adding that two weekly flights will initially operate on Fridays and Sundays, with plans to gradually increase the frequency.

The airline noted the flight schedule had been designed for maximum convenience, adding that flights from Islamabad would depart at 11:30 a.m. and arrive in Paris at 4:00 p.m., while return flights would leave Paris at 6:00 p.m. and reach Islamabad at 5:00 a.m. the following day.

“The schedule is so convenient that passengers can have breakfast in Pakistan and lunch in Paris,” the airline said, emphasizing the appeal of the new service.

The suspension of European operations had exacerbated PIA’s financial woes, as the debt-ridden carrier struggled to recover from a tarnished reputation.

The government faced challenges privatizing the airline, a condition set by the International Monetary Fund (IMF) during last year’s $7 billion loan negotiations, due to its fragile financial state.

The resumption of European flights is expected to boost PIA’s revenue stream and improve its appeal to potential investors, strengthening the government’s privatization efforts.


Baloch separatists attack remote town in Pakistan’s southwest, security forces regain control

Updated 46 min 29 sec ago
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Baloch separatists attack remote town in Pakistan’s southwest, security forces regain control

  • Balochistan Liberation Army claimed responsibility for the latest attack in Zehri town of Khuzdar district
  • BLA torched Levies station and NADRA office, robbed a private bank before security forces moved in

QUETTA: Armed fighters from the Balochistan Liberation Army (BLA) attacked a small town in Pakistan’s restive Balochistan province on Wednesday, seizing government facilities before security forces regained control, an administration official in the area confirmed.
The attack in Zehri, located 150 kilometers from Khuzdar city, occurred when BLA fighters stormed the Levies force station and the National Database and Registration Authority (NADRA) office, setting the buildings ablaze and robbing a private bank.
The incident comes days after an explosion targeting a Frontier Corps (FC) convoy in Turbat killed five paramilitary soldiers and injured over 40 people.
“Dozens of armed men attacked Zehri town on Wednesday and burnt a Levies station, NADRA office and robbed a private bank,” Khuzdar’s deputy commissioner, Yasir Iqbal Dashti, told Arab News over the phone. “Security forces timely retaliated and regained control of the area. One soldier of the Frontier Corps got injured during the standoff.”

Smoke billows from the National Database and Registration Authority (NADRA) office in Zehri, a small town in Pakistan's restive Balochistan province, on January 8, 2024. (Balochistan Police)

The BLA claimed responsibility for the attack, saying its fighters had seized government properties and set them on fire. Videos shared on social media showed armed men patrolling Zehri’s streets and taking vehicles and motorbikes belonging to security officials.
Asked about the amount stolen from the bank, Dashti said the authorities were investigating and did not yet have the figure.
“Armed men have managed to escape, and the situation is under control now,” he added.
Balochistan, Pakistan’s largest and resource-rich province, has long been plagued by a low-level insurgency led by ethnic Baloch separatist groups like the BLA. They accuse Islamabad of exploiting the province’s natural resources, such as gold and copper, while neglecting the local population.
Pakistan rejects these allegations, asserting that the federal government has prioritized Balochistan’s development by investing in health, education and infrastructure projects.
The BLA has become a significant security threat in recent years, carrying out major attacks in Balochistan and Sindh provinces targeting security forces, ethnic Punjabis and Chinese nationals working on development projects.
Violence by Baloch separatist factions, primarily the BLA, killed about 300 people over the past year, marking an escalation in the decades-long conflict.


UN experts urge President Biden to pardon Guantanamo prisoner arrested in Pakistan

Updated 09 January 2025
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UN experts urge President Biden to pardon Guantanamo prisoner arrested in Pakistan

  • Abu Zubaydah was never an Al Qaeda member, as per US report, though he was waterboarded 83 times
  • He was among the early Guantanamo detainees, held at the facility for nearly 20 years without a charge

GENEVA: United Nations experts called Wednesday on outgoing US President Joe Biden to issue a pardon for Abu Zubaydah, who has been held at Guantanamo for nearly 20 years without charge.

“We are exceptionally requesting a Presidential pardon for Mr. Abu Zubaydah, owing to his treatment while in detention and the lack of due process since he was first detained,” a dozen independent UN experts said in a statement.

“His immediate release and relocation to a third safe country are long overdue.”

Abu Zubaydah was the first of a number of prisoners to be subjected to CIA “enhanced interrogation” techniques following the September 11, 2001, attacks on the United States.

The Saudi-born Palestinian, whose full name is Zayn Al-Abidin Muhammad Husayn, was captured in Pakistan in 2002 and has been held without trial at the US Guantanamo camp in Cuba since 2006.

He was waterboarded 83 times and suffered other physical abuse, according to a US Senate report, which said that the CIA conceded he was never a member of Al-Qaeda and not involved in planning the 9/11 attacks.

The UN experts, including the special rapporteurs on torture and on promoting human rights while countering terrorism, warned in Wednesday’s statement that Zubaydah “suffers serious health conditions.”

Those included “injuries sustained during torture that are allegedly exacerbated by the denial of medical attention,” they said.

The experts, who were appointed by the UN Human Rights Council but who do not speak on behalf of the United Nations, also lamented that his “lawyer-client communication has been seriously impeded.”

They highlighted findings by a range of international and regional rights mechanisms that Zubaydah suffered multiple violations linked to the US rendition and secret detention program.

Zubaydah had endured “profound psychological and physical trauma of torture and other cruel, inhuman and degrading treatment and enforced disappearance,” they charged, demanding he be granted compensations and reparations.

He is among 15 people still being held at the controversial American base, after the US Defense Department on Monday said it had resettled 11 Yemeni detainees from Guantanamo to Oman.

Biden pledged before his election in 2020 to try to shut down Guantanamo, but it remains open with just weeks left in his term.

The facility was opened in the wake of 9/11 and has been used to indefinitely hold detainees seized during the wars and other operations that followed. Some 780 prisoners have spent time there.

The conditions there and the denial of basic legal principles have prompted consistent outcry from rights groups, and UN experts have condemned it as a site of “unparalleled notoriety.”