KARACHI: The International Monetary Fund’s (IMF) $3 billion bailout deal will provide much-needed fiscal space to Pakistan but not solve the country’s long-term problems, financial experts and economists said on Saturday.
Subject to the IMF’s board approval in July, the stand-by arrangement (SBA) provides breathing space to a Pakistani economy staring at default and in dire need of external financing. The staff-level pact was announced a day before Pakistan’s previous $6.5 billion loan program with the IMF expired.
Cash-strapped Pakistan will get $1.1 billion in funds under the new financing arrangement right after the IMF’s board meeting in mid-July. The new deal provides Pakistan more than the $2.5 billion disbursement it expected to receive under the Extended Fund Facility (EFF) program that concluded incompletely on June 30, 2023.
“The SBA provides some much-needed space to the Pakistani economy and will most certainly dampen near-term uncertainty,” Uzair Younus, director of the Pakistan Initiative at the Washington-based think tank, the Atlantic Council, told Arab News.
“However, the economy remains in a precarious situation and the government has to try and sort out some of the major issues in the energy sector, reduce distortion in the exchange rate market, and adopt a policy framework that doesn’t just burn the external financing the country has unlocked to achieve near-term political objectives.”
Economists say the deal will only offer Pakistan short-term respite.
“It will not solve long-term problems of paying on average around $25 billion per year for the next three years,” Dr. Ikram ul Haq, a Lahore-based senior economist, told Arab News.
The new deal came through after Finance Minister Ishaq Dar revised the federal budget the government passed on June 9, 2023. Dar increased Pakistan’s revenue collection target to Rs9.415 trillion ($33 billion) and put total spending at Rs14.480 trillion ($51 billion), increasing the petroleum levy from Rs50 to Rs60 per liter.
Authorities have taken Rs215 billion ($752 million) additional tax measures, cut Rs85 billion expenditures, hiked allocations under the social safety Benazir Income Support Program (BISP) by Rs16 billion, and withdrew amnesty on foreign exchange inflows, while the central bank jacked up policy rate by 1 percent to record high at 22 percent in an emergency meeting.
Economists said the high cost of the IMF bailout package would be borne by the masses rather than the elite.
“The key to success of SBA and next program will be structural reforms that is Waterloo of our elites,” Haq said, adding that “the real victims will be masses who will pay higher indirect taxes and bear high cost of utilities as has happened under previous program.”
For now, the SBA has had a positive impact on local and international investors’ confidence, with Pakistan’s sovereign dollar bond, maturing in 2024, gaining its value as fears of default subsided.
“Significant upward movement in bond prices demonstrates growing optimism among investors regarding Pakistan’s ability to address its economic challenges and implement necessary reforms under the IMF-supported program,” Tahir Abbas, head of research at Arif Habib Limited told Arab News.
Pakistani analysts and currency dealers expect that the country’s capital markets may rally from next week in response to positive the development, which would unlock further funding from bilateral and multilateral partners.
Malik Bostan, president of the Exchange Companies Association of Pakistan (ECAP) hoped the IMF deal would help Pakistan’s national currency regain its lost value.
“The rupee is expected to recover about Rs5 to Rs10 on the opening day of trading and will further strengthen by Rs10 to Rs20 with the inflow of funds,” Bostan told Arab News. “Those hoarding dollars for gains will not suffer losses if they don’t come out to sell.”
IMF’s $3 billion bailout deal will not solve Pakistan’s long-term problems, say experts
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IMF’s $3 billion bailout deal will not solve Pakistan’s long-term problems, say experts
- Economists say IMF agreement provides much-needed space to Pakistani economy, will dampen near-term uncertainty
- Pakistani rupee to recover by Rs10-20 against the US dollar when the IMF funds are received, says currency dealer
Pakistani authorities broker seven-day ceasefire between warring factions in Kurram
- Three-day clashes have killed 82 and injured more than 150, according to local officials
- KP administration sent delegation to the area, convincing people to settle disputes amicably
PESHAWAR: Following days of clashes that left at least 82 people dead and injured more than 150 in Pakistan’s northwestern Kurram district, provincial authorities in Khyber Pakhtunkhwa (KP) said on Sunday the warring tribes had agreed to temporarily halt attacks and enforce a seven-day ceasefire.
The violence in the restive tribal district bordering Afghanistan began on Thursday when gunmen attacked a convoy carrying members of the minority Shiite community, killing 41 people.
Clashes intensified over the next two days, with sporadic gunfire reported in multiple areas of the district, taking the death toll to 82, according to local officials.
“Both sides agreed on a seven-day ceasefire and to return each other’s prisoners and bodies,” provincial government spokesperson Barrister Muhammad Ali Saif said in a statement.
The development comes just a day after KP Chief Minister Ali Amin Gandapur said the provincial authorities were working toward a ceasefire, adding they would formulate a strategy to address such deadly incidents in consultation with local elders.
Gandapur chaired a meeting via video link to evaluate the situation with officials after his administration dispatched a delegation to Kurram to engage with tribal leaders.
“After meeting Shiite elders a day before, today the jirga [tribal council] members met with Sunni elders, convincing both sides to implement the seven-day ceasefire and settle their disputes amicably,” Saif added.
The clashes in Kurram mark one of the deadliest incidents in the region in recent years, following outbreaks of sectarian violence in July and September that killed dozens.
The KP chief minister noted on Saturday establishing peace in the area was his government’s top priority.
Around 300 families fled on Saturday as gunfights involving both light and heavy weapons continued into the night. However, no fresh casualties were reported on Sunday morning.
Police have regularly struggled to stem violence in Kurram, which was part of the semi-autonomous Federally Administered Tribal Areas until its merger with Khyber Pakhtunkhwa in 2018.
Earlier on Sunday, KP’s Law Minister Aftab Alam Afridi said the provincial administration’s priority was to broker a ceasefire.
“Once that is achieved, we can begin addressing the underlying issues,” he said.
Several hundred people demonstrated against the Kurram violence in Pakistan’s two largest cities, Lahore and Karachi, reflecting nationwide concern over the situation.
With inputs from AFP
Zimbabwe stuns new-look Pakistan in rain-affected first one-day international
- Pakistan limped to 60-6 in 21 overs before rain denied further play, giving Zimbabwe 80-run win
- The hosts now have a 1-0 lead against Pakistan in the ODI series ahead of three T20 matches
BULAWAYO, Zimbabwe: All-rounder Sikandar Raza inspired Zimbabwe to a stunning 80-run win on the Duckworth-Lewis-Stern (DLS) method in the rain-affected first one-day international against a new-look Pakistan white-ball team on Sunday.
Raza made a crucial 39 runs and lifted Zimbabwe from a precarious 125-7 to 205 all out by sharing a 62-run eighth wicket stand with number nine batter Richard Ngarava, who top-scored with 48.
Under overcast conditions, Raza picked up two wickets in one over as Pakistan limped to 60-6 in 21 overs before it rained and denied further play as Zimbabwe took a 1-0 lead in the three-match series.
Pakistan’s second-string new ball bowlers – debutant Aamer Jamal and Mohammad Hasnain – couldn’t make an impact on Zimbabwe’s openers after the visitors had rested frontline pacers Shaheen Shah Afridi and Naseem Shah for the white-ball series in Zimbabwe.
Pakistan also rested its ace batter Babar Azam for the first time in an ODI since 2019 as it experimented with its bench strength ahead of next year’s Champions Trophy.
Tadiwanashe Marumani (29) flicked Jamal to square leg for a six and Joylord Gumbie (15) hit three fours against the seamers as they combined in a better than run-a-ball opening stand of 40 runs against a wayward Pakistan pace attack.
Gumbie got run out in a mix-up with Marumani in the sixth over before Pakistan came back hard through its spinners and struck at regular intervals. One of the three Pakistan debutants – left-arm wristspinner Faisal Akram took 3-24 and vice-captain Salman Ali Agha claimed 3-42 as Zimbabwe slipped to 125-7 in the 26th over.
However, Ngarava and Raza thwarted Pakistan’s spinners and pacers alike in a 69-ball stand to give the total respectability. Raza perished when he tried an expansive hit against Akram and was caught on the edge of the boundary while Ngarava was the last man to get dismissed after hitting five fours and a six when he chopped Hasnain back onto his stumps.
Fast bowler Blessing Muzarabani used the home conditions to perfection and snared the early wickets of Saim Ayub (11) and Abdullah Shafique (1), who both got caught behind inside the first three overs from the tall pacer.
Kamran Ghulam (17) and skipper Mohammad Rizwan (19 not out) couldn’t pace the chase before Pakistan lost four wickets in the space of 18 runs against the spinners. Ghulam tried to break the shackles but Sean Williams (2-12) got a thick edge and earned Marumani his third catch behind the wickets before Raza had two in three balls.
Raza pinned Salman plumb leg before wicket of his second ball and one ball later Haseebullah Khan was out for zero in his ODI debut when he played the wrong line and was clean bowled.
The three-match ODI series will be followed by three T20s with Bulawayo hosting all the matches.
68-member Belarusian delegation arrives in Pakistan to strengthen economic ties
- Belarusian President Aleksandr Lukashenko will reach Islamabad for three-day visit on Monday
- Several agreements and memorandums of understanding are expected to be signed during the visit
ISLAMABAD: A high-level Belarusian delegation arrived in Pakistan on Sunday as the two countries prepare to deepen bilateral economic collaboration, with the president of the Eastern European state, Aleksandr Lukashenko, scheduled to reach Islamabad tomorrow.
The 68-member delegation, which includes key Belarusian ministers, was received at Islamabad airport by Interior Minister Mohsin Naqvi and officials from Pakistan’s foreign ministry.
Pakistan and Belarus established diplomatic ties in 1994 and have since worked to strengthen their relationship, with recent efforts focusing on industrial and technological collaboration, trade and investment.
Belarus exports machinery, fertilizers and synthetic yarn to Pakistan, while Pakistan provides textiles, leather goods and surgical instruments to Belarus.
“On behalf of the government and people of Pakistan, we warmly welcome the Belarusian delegation,” Naqvi said in a statement circulated by the interior ministry, as he interacted with the foreign dignitaries.
“This visit is of great importance for strengthening bilateral relations and fostering collaboration in various sectors, including industry and trade,” he added.
According to Pakistan’s foreign office, the delegation includes 43 business leaders and 25 ministerial officials. It is led by Foreign Minister Maxim Ryzhenkov, who is accompanied by colleagues holding portfolios in energy, industry, justice, communications, natural resources and emergency situations.
The chairman of Belarus’s Military Industry Committee is also part of the group.
The visit of the delegation marks another step in enhancing bilateral ties, with both countries aiming to explore new avenues of cooperation.
The foreign office said in a statement on Thursday “President Lukashenko will hold extensive talks with Prime Minister Muhammad Shehbaz Sharif and discuss areas of bilateral cooperation and engagement.”
“Several agreements and MoUs [memorandums of understanding] will also be signed during the visit,” it added.
Naqvi also emphasized the significance of the visit, hoping it would further solidify the relationship between our two countries.
Pakistan shuts down schools in Islamabad amid opposition party’s protest call
- Capital administration says closure applies to all public and private educational institutions
- Such closures have been a recurring practice during times of political unrest, high-profile visits
ISLAMABAD: Authorities in Islamabad announced on Sunday that all educational institutions in the federal capital will remain closed tomorrow, citing the ongoing situation linked to a protest call by former prime minister Imran Khan to his party supporters.
The decision comes as leaders and workers of Khan’s Pakistan Tehreek-e-Insaf (PTI) continue their march to the city, demanding the release of the ex-premier and protesting alleged election rigging and perceived threats to judicial independence.
“The decision to close schools has been taken in view of the current circumstances,” the Islamabad Capital Territory administration said in a statement.
It added that the closure applies to all public and private educational institutions in the city.
Such closures have become a recurring practice in Islamabad during times of political unrest or high-profile visits by foreign dignitaries. Pakistani authorities also shut down schools and colleges during the Shanghai Cooperation Organization (SCO) Summit in October.
Officials have intensified security measures in the capital, deploying police and paramilitary personnel equipped with riot gear across the city and sealing key roads with shipping containers to prevent protesters from entering the federal capital.
Additionally, mobile Internet services have been suspended, and Wi-Fi connections remain slow in Islamabad.
Pakistan vows order as Imran Khan’s party launches protest amid Belarusian delegation visit
- Deputy PM questions PTI motives, calling protest march ‘conspiracy’ against Pakistan’s honor
- Interior Minister Mohsin Naqvi asks Ali Amin Gandapur to prioritize stability in his own province
ISLAMABAD/PESHAWAR: Tension continued to mount in Pakistan on Sunday as the government vowed to prevent any disruption in Islamabad during a high-level visit by the Belarus president, as supporters of jailed former prime minister Imran Khan began marching to the capital to demand his release.
Khan’s Pakistan Tehreek-e-Insaf (PTI) party is spearheading a “long march” to the capital after more than a year of his incarceration on charges he claims are politically motivated. The party is also protesting alleged rigging in February’s general elections and raising concerns about judicial independence, which it says has been undermined by recent constitutional amendments, a claim the government denies.
Security in Islamabad has been tightened, with paramilitary forces deployed and major roads sealed with shipping containers. The interior ministry has suspended mobile data services in sensitive areas, and highways have been blocked to thwart the arrival of protesters.
Addressing the media in Islamabad, Interior Minister Mohsin Naqvi criticizing PTI’s timing ahead of the three-day visit of Belarusian President Aleksandr Lukashenko to discuss for bilateral economic cooperation.
“Protecting the lives and property of citizens is a priority,” he said. “Disruption during the arrival of foreign guests will not be tolerated under any circumstances. Anyone spreading chaos will be arrested.”
Naqvi also urged Khyber Pakhtunkhwa Chief Minister Ali Amin Gandapur, a close aide of ex-PM Khan, to prioritize stability in his own province instead of staging protests, calling such demonstrations harmful to national interests.
He also informed the authorities had detained “extremists” in Islamabad.
Pakistan’s Deputy Prime Minister Ishaq Dar also questioned PTI’s motives, describing its protest as “a deliberate conspiracy against the country’s honor and dignity.”
Earlier, Planning Minister Ahsan Iqbal accused Khan’s party of attempting to disrupt Pakistan’s economic recovery by launching a demonstration right ahead of the Belarusian president’s visit.
“I am hopeful this drama will end tonight, and normalcy will return,” he said at a press conference in Lahore.
Iqbal defended the government’s strict measures, highlighting its responsibility to ensure law and order.
Meanwhile, residents of Islamabad said they were already grappling with disruptions. Mohammad Hayat, a 32-year-old fruit vendor, lamented the impact of the ongoing political friction between the government and the opposition party on his livelihood.
“Since morning, I haven’t had a single customer. Roads are blocked, people can’t come out, and my fruit is perishing,” he said.
Another resident, Sayyed Sarmad from E-16 sector, criticized the road closures, claiming, “A girl died in an ambulance yesterday. The government should allow protests but manage them better.”
PTI leaders also remained resolute as caravans from KP headed toward Islamabad.
Asif Khan, a party lawmaker, declared “we will go to our destination at any cost,” highlighting transportation challenges as booked vehicles were allegedly blocked. “We arranged vehicles from other districts and captured videos to show our strength,” he added.
Iman Tahir, a women’s leader from Attock, underscored the movement’s peaceful nature.
“We have always been peaceful and will go peacefully this time again,” she said. “Today, all of Pakistan will rise, and Khan’s final call will be a successful one.”
Khyber Pakhtunkhwa Chief Minister Ali Amin Gandapur, leading the rally, reiterated his commitment while traveling in official protocol.
“We are going to D-Chowk at any cost, and we will not return before reaching D-Chowk,” he said at the Peshawar Motorway toll plaza, referring to an iconic spot in Islamabad that has witnessed political protests for decades.
Another PTI lawmaker, Arbab Sher Ali, echoed the party’s determination to reach the federal capital, saying, “We are instructed to reach Islamabad and are following Khan’s directives. If we can’t reach today, we will reach tomorrow or the day after.”
PTI leaders have hinted at an indefinite sit-in in Islamabad, saying the will not return until their demands are met by the government.
