KARACHI: Expressing confidence to clear the final review of $3 billion short-term financing program of International Monetary Fund (IMF) after meeting key conditions including energy price hike, Pakistani authorities are weighing options to avail another $6-8 billion program, an official privy to the situation confirmed on Tuesday.
The South Asian nation, with a population of over 241 million, increased gas prices by up to 76 percent for domestic consumers in recent months before raising petroleum prices by 1-3 percent in February. The National Electric Power Regulatory Authority (NEPRA) also notified Rs7.05 per unit hike in power prices under fuel charge adjustment (FCA) on Monday.
Pakistani authorities are confident that recent energy price adjustments to meet some of the key conditions of the global lender would help clear the second and last review of the $3 billion Stand By Arrangement (SBA) that ends in March 2024.
“With latest energy price hikes, Pakistan has met almost all the preconditions set by the IMF for end-December 2023 review including exchange rate stability, continuation of tight monetary policy and restricted circular debt flow,” an official of finance division on Tuesday told Arab News on condition of anonymity.
The official said the government was successful in restricting the circular debt flow below the fund’s stated target of Rs385 billion ($1.37 billion), though it went as high as Rs378 billion ($1.35 billion) by the end of last December.
Pakistan’s circular debt stock, outstanding payments and liabilities in the country’s energy sector, continues to swell despite taking painful measures by the government including tariff hikes that resulted in high inflation.
The circular debt within the energy sector escalated to a staggering Rs5.73 trillion (approximately $20.5 billion) by the end of last November, official data reveals. This figure encompassed a power sector debt of Rs2.7 trillion ($9.66 billion) alongside a gas sector indebtedness surpassing Rs3 trillion ($10.7 billion).
While the IMF has not yet announced dates to start negotiations with Pakistan for the second review since it was ostensibly waiting for the formation of the next government, a successful review of the program will enable the South Asian nation to receive another tranche of about $1.1 billion from the fund.
The Pakistani official said the country was exploring various options to put before the IMF to avail new long-term program in recent weeks.
“The options under consideration included the size and conditions for the new program,” he said adding: “Yes, the size could be anywhere between $6-8 billion including the climate financing factor, the RSF.”
The Resilience and Sustainability Facility (RSF) of the IMF offers affordable, long-term financing to countries committed to reforms aimed at mitigating risks to future balance of payments stability, including challenges posed by climate change and pandemic preparedness.
The official, however, clarified that nothing had been finalized yet, adding these options were still at a preliminary stage and would be suggested to the next government, if finalized.
“It will be the prerogative of the next elected government to negotiate the size, terms and condition of the next program with the fund or whether or not they want to go to the IMF,” he added.
Last year in November, Pakistan’s caretaker finance minister Dr. Shamshad Akhtar hinted the country would continue to seek financial facility from the IMF to keep its fragile economy afloat.
Pakistani economists underscored the need for a new IMF program while calling for immediate engagement with the fund.
“It is good to hear that the government is working to get another IMF program,” Dr. Sajid Amin, deputy executive director at Islamabad-based Sustainable Development Policy Institute (SDPI), said.
“The real test, however, will be how quickly the new government takes up the challenge and engages with the fund.”
The present state of economy, particularly the low foreign exchange reserves and high external debt repayments, made it imperative for the country, Amin continued, to seek the IMF support for at least three more years.
“Unnecessary delays, as we witnessed in the PTI [Pakistan Tehreek-e-Insaf] and PDM [Pakistan Democratic Movement] tenures, will hurt the economy,” he warned.
Arab News sought comments from both the IMF and the finance ministry for this story, but received no response.
Pakistan hopes to clear final IMF review, considers additional financing of $6-8 billion
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Pakistan hopes to clear final IMF review, considers additional financing of $6-8 billion
- Pakistan has increased energy prices to meet the global lender’s conditions under the short-term $3 billion loan
- Pakistani officials say the final decision to avail another IMF program will be made by the next elected government
Sixteen soldiers, eight militants killed in northwest Pakistan gunfight — military
- The killings occurred in the South Waziristan district after a group of militants ambushed a security outpost
- Pakistan blames the surge in militancy on militants operating out of Afghanistan, Kabul denies the allegation
ISLAMABAD: Sixteen Pakistani soldiers and eight militants were killed in a gunfight in Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province, the Pakistani military said on Saturday, amid a surge in militant attacks in the region.
Pakistan’s Khyber Pakhtunkhwa, which borders Afghanistan, has witnessed a number of attacks by the Tehreek-e-Taliban Pakistan (TTP) and other militant groups that targeted security forces convoys and check posts, besides targeted killings and kidnappings of law enforcers and government officials in recent months.
The latest killings occurred in the South Waziristan district during an exchange of fire after a group of militants ambushed a check post of Pakistani security forces in the Makeen area, according to the Inter-Services Public Relations (ISPR), the Pakistani military’s media wing.
“Sanitization operation is being conducted in the area and the perpetrators of the heinous act will be brought to justice,” the ISPR said in a statement. “Security forces of Pakistan are determined to eliminate the menace of terrorism and such sacrifices of our brave men further strengthen our resolve.”
The Pakistani Taliban claimed the brazen raid on the outpost near the border with Afghanistan, saying it was staged “in retaliation for the martyrdom of our senior commanders.”
The development came days after the Pakistani military said it had killed 11 militants in separate operations in KP’s Tank, North Waziristan and Mohmand districts.
Pakistan has struggled to contain surging militancy in KP since November 2022, when a fragile truce between the TTP, or the Pakistani Taliban, and the state broke down.
Islamabad has frequently accused neighboring Afghanistan of sheltering and supporting militant groups that launch cross-border attacks. Afghan officials deny involvement, insisting Pakistan’s security issues are an internal matter of Islamabad.
On Saturday, the Pakistani military urged the Taliban administration in Kabul to ensure robust border management after a group of militants tried to infiltrate from Afghanistan, leading to a skirmish that left four militants and a soldier dead a day earlier.
Authorities evacuate over 50 people from remote Pakistan district hit by sectarian clashes
- Clashes between Sunni, Shia tribes have killed over 100 people in Kurram since last month
- On Friday, authorities set a deadline of Feb. 1 for the warring tribes to surrender weapons
PESHAWAR: More than 50 injured and ailing persons were evacuated on Saturday from the northwestern Pakistani district of Kurram, which has been hit by sectarian clashes in recent weeks, to Peshawar, provincial capital of the Khyber Pakhtunkhwa province, disaster management authorities said.
Kurram, a tribal district of around 600,000 near Pakistan’s border with Afghanistan where federal and provincial authorities have traditionally exerted limited control, has been a flashpoint for sectarian tensions between Shia and Sunni tribes for decades.
Fresh clashes last month killed more than a hundred people, triggering a humanitarian crisis with reports of starvation, lack of medicine and oxygen shortages following the blocking of the main highway connecting Kurram’s main city of Parachinar to the provincial capital of Peshawar.
The injured and ailing persons were airlifted through helicopters from Kurram and safely transported to Peshawar on the instructions of KP Chief Minister Ali Amin Gandapur, according to the Provincial Disaster Management Authority (PDMA).
“Fifty-three affected people, including 14 patients, were brought to Peshawar by helicopter from Kurram district,” the PDMA said in a statement.
“The Khyber Pakhtunkhwa Relief, Rehabilitation & Settlement Department has declared an emergency for relief activities in Kurram district in view of the prevailing situation. An emergency cell has been set up to safely transfer the affected people to hospitals in Peshawar.”
The PDMA said it was in touch with the Kurram district administration and utilizing all resources in this regard, adding that people could contact its emergency operations center at helpline 1700 for any information or guidance.
The development came a day after KP authorities set a deadline of Feb. 1 for warring Sunni and Shia tribes in the district to surrender all weapons and dismantle their bunkers to stem sectarian clashes in the region.
The decision was made at a meeting of the KP apex committee, which comprises civilian and military officials, to discuss a sustainable solution to the issue. It allowed the launch of a special air service for temporary evacuation from some parts of Kurram to protect people’s lives, according to the apex committee declaration.
“The agreement outlines that both sides will submit a detailed action plan within 15 days for voluntary submission of weapons,” read a declaration issued after the apex committee meeting.
“All weapons are to be deposited with the local administration by February 1. Additionally, it was decided that all bunkers in the area will be dismantled by the same deadline.”
In the meantime, land routes to the area would be opened intermittently on humanitarian grounds and a mechanism was put in place for secure transportation, according to the statement.
“Personnel of police and Frontier Corps will jointly provide security to the convoys,” it read.
Last month’s clashes erupted after rival tribes attacked convoys of passengers on the Parachinar-Peshawar road, which were followed by attacks on each other’s villages.
The apex committee asked both sides to avoid any violent action in the future to keep the land route safe and open at all times, hoping that the parties would fully cooperate with the government for a lasting solution to the issue.
Pakistan PM directs measures to increase sugar industry revenues, end hoarding
- Sugar remains one of the largest consumed food commodities in the South Asian country
- PM Sharif says government making efforts to ensure supply of sugar at affordable prices
ISLAMABAD: Prime Minister Shehbaz Sharif has asked officials to take steps to increase revenue collection from the sugar industry and to end hoarding of the commodity, Sharif’s office said on Saturday.
The prime minister issued the directives at a meeting he presided over in Lahore to review the implementation of a strategy to improve revenue collection.
Sugar remains one of the largest consumed food commodities in the South Asian country and is used in large amounts in food processing, beverages, and bakery items.
Owing to its huge demand, the government sets its procurement prices while the sugar industry is protected by a 40 percent import tariff to ensure prices remain stable.
“Revenue collection will improve after the installation of video analytics in the sugar industry,” Sharif was quoted as saying by his office. “These reforms will end sugar hoarding and help balance prices.”
The prime minister said the government was making all efforts to ensure the supply of sugar at affordable prices.
“Regular monitoring of sugar stocks should be carried out so that the sugar supply chain is not affected,” he instructed officials, calling for strict and indiscriminate action against sugar mills that were evading taxes.
Over the decades, Pakistan has failed to generate tax revenues in higher amounts due to a narrow tax base, low compliance rate, an inefficient tax administration and massive tax evasion.
The South Asian country has set an ambitious target of collecting $46 billion through taxes this financial year (July 2024 till June 2025), amid efforts to revive its fragile $350 billion economy.
Pakistan slams US claims on missile program as ‘unfounded’ and ‘irrational’
- A senior US official this week said Pakistan was developing long-range missiles that could threaten the US
- The statement came after Washington said it was imposing new sanctions related to Pakistan’s missile program
ISLAMABAD: Pakistan’s Foreign Office on Saturday dismissed as “unfounded” and “devoid of rationality” the allegations by a senior United States (US) official that its missile program posed a threat to the United States.
The Foreign Office statement came in response to comments made by US Deputy National Security Adviser Jon Finer, who said nuclear-armed Pakistan’s development of long-range ballistic missiles could potentially target the US.
The statement came after the US said it was imposing new sanctions related to Pakistan’s missile program, including on the state-owned defense agency that oversees the program. The sanctions freeze any US property belonging to the targeted entities and bars Americans from doing business with them.
The Foreign Office said that Pakistan had made it abundantly clear that its strategic program and allied capabilities were meant to thwart a “clear and visible existential threat from our neighborhood” — a reference to arch-foe India — and should not be perceived as a threat to any other country.
“The alleged threat perception from Pakistan’s missile capabilities and delivery means, raised by the US official are unfortunate. These allegations are unfounded, devoid of rationality and sense of history,” the Foreign Office said in a statement.
“Since 1954, Pakistan and the US have enjoyed a positive and broad-ranging relationship. The recent spate of US allegations toward a major non-NATO ally would be unhelpful for the overall relationship, especially in the absence of any evidence in this regard. Pakistan has never had any ill-intention toward the US in any form or manner, and this fundamental reality has not changed.”
Finer’s statement underscored how far the once-close ties between Washington and Islamabad had deteriorated since the 2021 US troop withdrawal from Afghanistan. It also raised questions about whether Pakistan has shifted the objectives of nuclear weapons and ballistic missile programs long intended to counter those of India, with which it has fought three major wars since 1947.
But the Foreign Office said Pakistan’s strategic capabilities were solely meant to defend its sovereignty, highlighting Pakistan’s long history of cooperation with the US, particularly in the counter-terrorism domain.
“We wish to reiterate that Pakistan’s strategic capabilities are meant to defend its sovereignty and preserve peace and stability in South Asia,” it said.
“Pakistan cannot abdicate its right to develop capabilities that commensurate with the need to maintain credible minimum deterrence as well as evolving and dynamic threats.”
Relations between the US and Pakistan have seen significant ups and downs. The countries collaborated during the Cold War and in the fight against Al-Qaeda after 9/11.
However, ties have been strained due to coups in the South Asian country by Pakistan’s military, support for the Taliban’s 1996-2001 rule in Afghanistan, and over the nuclear weapons program.
Islamabad urges Afghanistan to boost border security as infiltration attempt kills five
- Military says four TTP fighters and a soldier were killed as militants tried to enter Pakistani territory
- Statement comes after media reported a deadly attack on a military outpost that killed 16 soldiers
ISLAMABAD: The Pakistan military on Saturday urged the Taliban administration in Kabul to ensure robust border management after a group of militants tried to infiltrate from Afghanistan, leading to a skirmish that left four infiltrators and a soldier dead.
Relations between Islamabad and Kabul have deteriorated in recent years as militant violence surged in Pakistan, fueled by attacks from Tehreek-e-Taliban Pakistan (TTP) militants in the northwestern Khyber Pakhtunkhwa province.
Pakistani officials blame the TTP for the escalating violence, accusing the Afghan authorities of turning a blind eye to militants using their territory to launch cross-border attacks.
However, Kabul denies these allegations, insisting that Pakistan’s internal security is its own responsibility.
“On night 19/20 December, movement of a group of khwarij [TTP militants], trying to infiltrate through Pakistan-Afghanistan border, was picked up by the security forces in general area Rajgal, Khyber District,” the military’s media wing, Inter-Services Public Relations, said in a statement. “Own troops effectively engaged and thwarted their attempt to infiltrate. Resultantly, four Khwarij were sent to hell.”
The statement noted that one of the soldiers, Sepoy Amir Sohail Afridi, also lost his life amid intense exchange of fire.
“Pakistan has consistently been asking Interim Afghan Government to ensure effective border management on their side of the border,” it continued. “Interim Afghan Government is expected to fulfil its obligations and deny the use of Afghan soil by Khwarij for perpetuating acts of terrorism against Pakistan.”
The ISPR statement comes after media reported a deadly attack on a military outpost in Khyber Pakhtunkhwa which was targeted by 30 militants from three sides. According to anonymous intelligence sources, the attack left 16 soldiers dead. The TTP claimed responsibility for targeting the outpost in a statement that described the attack as a retaliation to the recent killings of its top commanders.
The Pakistan military reiterated in its statement it remained committed to securing the borders. It added that its soldiers would also fight to eliminate the menace of militant violence.
