ISLAMABAD: Pakistan’s new government plans to tap Middle Eastern commercial banks for financing after securing a new and long-term bailout loan from the International Monetary Fund (IMF) in the coming months, the new finance chief said on Wednesday.
The first order of business for new finance minister Muhammad Aurangzeb will be to seek a fresh Extended Fund Facility (EFF) from the IMF after a current standby arrangement expires on April 11. Pakistan bagged the last-gasp rescue package last summer to avert a sovereign default. The final review this week, if successful, will release a last tranche of around $1.1 billion.
“Once we conclude the [new] Extended Fund Facility, we should be able to approach Middle Eastern banks, which have ended their whole business and appetite, for commercial borrowing and we will be able to get funding and support from them primarily to help us with our trade business, etc.,” Aurangzeb said during an interview with Pakistan’s Geo TV on Wednesday night.
Pakistan has been financially assisted by countries like Saudi Arabia and the United Arab Emirates in the past, with deposits of billions of dollars in its central bank, followed by rollovers.
Gulf states have also regularly provided Pakistan oil on deferred payment facilities and offered direct financial support to help stabilize its economy and shore up its foreign exchange reserves.
Pakistan’s newly appointed finance minister has said he wants to ensure macroeconomic stability and reduce spending and tax system leakages as an IMF team arrived in Islamabad to hold a second and last review of the nation’s $3 billion stand-by arrangement starting today, Thursday.
A set of critical challenges face Aurangzeb, including stabilizing the economy amid soaring inflation and dwindling foreign reserves, managing substantial external debts and navigating negotiations with global lenders. Pakistan also needs fiscal reforms to boost revenue and attract investments, vital for sustainable economic growth and job creation.
The debt-ridden economy, which shrank 0.2 percent last year and is expected to grow around 2 percent this year, has been under extreme stress with low reserves, a balance of payment crisis, inflation at 23 percent, policy interest rates at 22 percent and record local currency depreciation.
“The GDP is better, we have macroeconomic stability and the exchange rate is getting better,” Aurangzeb told Geo. “So we need to bring this macro stability to permanence. If this stability comes toward permeance, we can lead it toward growth.”
The minister said Pakistan had a narrow tax base and needed to reduce revenue leakages, for which it was important to digitize the tax system and make it more transparent.
“This is something we have already started working on,” said the minister, who made his first official visit to the Federal Bureau of Revenue, the national tax collection body, on Wednesday.
On foreign borrowing, the minister said Pakistan needed to improve its economic management to break out of the practice of asking friendly countries to deposit money in its central bank and then seeking rollovers.
“Now even these friendly countries have given us a clear hint that they want to help us but not through aid but through investments,” the finance minister added. “And I think it is the right thing to do for the country.”
Aurangzeb said the government would tap the China bond market in the next fiscal year.
“The one [bond] market that we haven’t tapped is in China,” he said.
“See, our G2G [government-to-government] relationships are good. Their banks are still rolling over and giving aid to us. Chinese government is also helping us.”
“So, the panda market there, the bond market, it’s the second or third most liquid market in the world,” he added. “So I think from the ministry of finance we should go toward inaugural panda bonds during the next fiscal year.”
In February, China rolled over a $2 billion loan to Pakistan due in March.
The lender has said it will formulate a medium-term program if Islamabad applies for one.
Ahead of the current stand-by arrangement, Pakistan had to meet IMF conditions including revising its budget, and raising interest rates and the price of electricity and gas. The IMF also got Pakistan to raise $1.34 billion in new taxes. The measures fueled all-time high inflation of 38 percent year-on-year in May.
The government has not officially stated the size of the additional funding it is seeking through a successor program, but Bloomberg reported in February that Pakistan planned to seek a new loan of at least $6 billion from the lender.
Pakistan says will seek financing from Middle Eastern banks after securing new IMF bailout
https://arab.news/bwqtq
Pakistan says will seek financing from Middle Eastern banks after securing new IMF bailout
- New finance chief hopes better credit ratings post-bailout will make tapping bond markets easier
- Pakistan aims to secure new IMF loan after successful completion of last review under $3 billion facility
Ex-PM Imran Khan party says wife, key aide not under arrest as Pakistan launches ‘operation’
- Local media widely reported vehicles carrying Bushra Khan and Gandapur left Islamabad and entered Khyber Pakhtunkhwa
- Interior minister says PM has ruled out talks with protesters demanding ex-PM Imran Khan’s release, six including four troops killed
ISLAMABAD: A spokesperson for jailed ex-premier Imran Khan said on Tuesday Bushra Khan, the former PM’s wife, and key party leader Ali Amin Gandapur, who were leading demonstrations in Islamabad to demand Khan’s release, had left a protest caravan but were safe amid widespread media reports they had been arrested.
At least six people, including four paramilitary soldiers and two protesters, were killed during clashes between security forces and protesters who made it on Monday night to the edge of Islamabad’s highly fortified red zone, home to key government and diplomatic buildings, before being pushed back by hundreds of security forces, according to Khan’s Pakistan Tehreek-e-Insaf (PTI) party.
“We are trying to secure Bushra Bibi and Ali Amin for the next few hours because we have credible sources that the law enforcement plans to arrest them with a heavy hand,” Sayed Zulfikar Abbas Bukhari, a spokesman for the PTI party told Arab News when asked if Bushra and Gandapur had left the protest caravan. He confirmed they had not been arrested.
Bukhari declined to disclose where the two protest leaders were but confirmed that their protest caravan, which was nearing the D-Chowk public square in the red zone, had been pushed further back to the capital’s Chongi 26 area by “hundreds” of security officials.
Two security officials, declining to be named, told Arab News an “operation” had been launched against the PTI protest, declining further details.
Pakistani local media widely reported that police chased cars carrying Bushra and Gandapur, but their vehicles entered Khyber Pakhtunkhwa, a northwestern province where PTI is in power and where the federal government does not have jurisdiction.
Supporters of Khan’s PTI on Tuesday reached D-Chowk for a “do or die” sit-in that they say will go on until Khan is freed from prison.
The former premier has been jailed since August last year and faces a slew of charges from corruption to terrorism that he says are politically motivated to keep him behind bars and away from politics.
Speaking to reporters, Interior Minister Mohsin Naqvi ruled out talks with protesters.
“In today’s meeting, the clear-cut decision of the prime minister and others is that there will be no talks with these protesters,” Naqvi said after Prime Minister Shehbaz Sharif met his cabinet and other top officials on Tuesday evening.
Information Minister Ataullah Tarar said the government had agreed to offer the protesters space on the outskirts of Islamabad to hold their protest and would have facilitated them in their activities.
“But why do they want to go to D-Chowk?” the information minister asked. “Because they want to cause damage to the life and property of Islamabad’s citizens. They have among them Afghan nationals, terrorists, dacoits.”
In a message shared with supporters from jail by his team, Khan, 72, urged his followers to stay peaceful but to stand firm till the end.
“My message for my team is to fight until the last ball is bowled. We will not back down until our demands are met!”
LOCKDOWN
As thousands of rally goers left for Islamabad on Sunday in protest caravans, authorities shut down major highways leading to the capital and used shipping containers to block major roads and streets inside the city. Mobile Internet links and apps like WhatsApp have been down since the weekend and schools have been closed for several days in the capital and the nearby garrison city of Rawalpindi.
Last week, the district administration also banned public gatherings in Islamabad for two months, and on Monday, the interior ministry invoked Article 245, calling in the army to maintain law and order.
On Tuesday afternoon, protest leader Ali Amin Gandapur urged protesters to camp at the D-Chowk square and not advance further into the red zone.
“D-Chowk means D-Chowk,” the chief minister told supporters from atop a truck en route to the public square. “Beyond that, as long as Imran Khan’s orders, Imran Khan’s instructions are not given, we will not go beyond that area and we will respect his instructions.”
Amnesty International called on the Pakistan government to protect and ensure the rights of protesters and “immediately rescind the ‘shoot-on-sight’ orders that provide undue and excessive powers to the military.”
“The severe restrictions on assembly, movement and mobile and Internet services as well as arbitrary detentions of thousands of protesters across Pakistan, particularly in Islamabad, are a grave violation of the rights to freedom of peaceful assembly, movement and expression,” the rights group said on X.
Pakistan urges World Bank support on economic reforms, development agenda
- IMF approved a $7 billion bailout loan for Pakistan in September that comes with a tough economic reforms agenda
- IMF is pushing Pakistan to continue prudent fiscal and monetary policies, mobilize revenue from untapped tax bases
ISLAMABAD: Minister for Finance Muhammad Aurangzeb met World Bank Country Director Najy Benhassine on Tuesday and urged the international lender to support Pakistan in its economic reforms and development agenda, Radio Pakistan reported.
The talks in Islamabad came less than two months after the IMF approved a $7 billion bailout loan for Pakistan that is attached to tough economic reforms. The IMF is pushing Pakistan to continue prudent fiscal and monetary policies, and to mobilize revenue from untapped tax bases.
Pakistan’s $350 billion economy has struggled for decades with boom-and-bust cycles, needing 23 IMF bailouts since 1958.
“During the meeting, the Finance Minister highlighted the importance of collaboration with the World Bank to support Pakistan’s economic reforms and development agenda,” Radio Pakistan reported. “The Finance Minister reiterated the government’s commitment to fiscal discipline, sustainable growth, and efficient resource utilization.”
The discussions focused on the establishment of a robust and transparent tax policy framework to enhance revenue mobilization and improve compliance while ensuring equitable taxation, the report said.
The World Bank team also offered technical assistance to streamline the budget-making process, adopt modern practices to improve transparency and accountability in public financial management, and put in place an effective debt management mechanism to ensure fiscal sustainability and reduce risks.
Issues related to the Agricultural Income Tax Regime and GST harmonization in coordination with provinces and an enhanced focus on the active role of the National Tax Council also came under discussion.
“The Finance Minister expressed gratitude for the World Bank’s support and reaffirmed the government’s resolve to implement reforms aimed at sustainable economic progress,” the reported said, adding that the World Bank officials reiterated the lender’s commitment to assisting Pakistan in addressing economic challenges and achieving its developmental objectives.
The IMF, which approved the new bailout in September, has said the program will require “sound policies and reforms” to strengthen macroeconomic stability and address structural challenges alongside “continued strong financial support from Pakistan’s development and bilateral partners.”
The IMF said in its statement on approving the loan that Pakistan had taken key steps to restore economic stability with consistent policy implementation under the 2023-24 standby arrangement.
It added that growth had rebounded to 2.4 percent and inflation has receded significantly, falling to single digits, amid appropriately tight fiscal and monetary policies.
A contained current account and calm foreign exchange market conditions have allowed the rebuilding of reserve buffers, and the central bank of Pakistan has been able to reduce interest rates by 700 bps since June in four consecutive cuts.
Despite this progress, Pakistan’s vulnerabilities and structural challenges remain formidable and the tax base remains too narrow.
The South Asian country is the IMF’s fifth-largest debtor, owing the Fund $6.28 billion as of July 11, according to the lender’s data.
Islamabad district commissioner denies reports of fuel shortages amid opposition protest
- Major roads and highways leading to the capital have been sealed off since last week when PTI party launched protest march on Sunday
- Oil Tanker Contractors Association says closed routes had stalled the delivery of petrol to several parts of Punjab province and Islamabad
KARACHI: The Deputy Commissioner of Islamabad on Tuesday rejected reports of fuel shortages after an oil tankers association said the supply of petrol to the federal capital and several cities in Pakistan’s eastern Punjab province had been “severely affected” due to a protest march being led by an opposition party.
Major roads and highways leading to the capital have been sealed off since last week when the Pakistan Tehreek-e-Insaf (PTI) party of jailed former premier Imran Khan launched a protest ‘long march’ to Islamabad on Sunday. The city has been in complete lockdown since, with shipping containers used to block major roads and streets inside Islamabad also.
“Reports of petroleum products crisis in the city are baseless and unfounded,” District Magistrate Irfan Nawaz Memon wrote on X. “There is a sufficient stock of petroleum products at petrol pumps.”
In a statement released on Tuesday, the Oil Tanker Contractors Association had said closed routes had stalled the delivery of petrol to several parts of Punjab, Pakistan’s most populous province, and Islamabad.
“Routes to Islamabad, Rawalpindi and North Punjab are closed due to which supply from petrol tankers is severely affected,” association spokesperson Noman But said in a statement. “Thousands of tankers are waiting for the route to open.”
Butt said petrol had not been supplied to Gujranwala, Jhelum, Sialkot and Kharian districts in Punjab for the last three days, while supply to Islamabad, Kohala and the northern city of Gilgit was also affected.
“Petrol has run out at pumps in many cities,” he added.
Khan’s party aims to pressure the government to release him from jail. He has been in prison since August 2023 on a slew of charges he says are politically motivated. The party is also protesting against what it says was rigging in the Feb. 8 general elections and calling on the government to roll back the recently passed 26th constitutional amendment, which the PTI says is an attack of judicial independence. The government denies this.
PTI supporters broke through barricades and clashed with police as they marched on the capital late on Monday evening, with Interior Minister Mohsin Naqvi saying three paramilitary troops and one policeman had been killed in clashes.
The PTI said in a statement two of its supporters were confirmed dead while over 30 were wounded.
Pakistan rules out talks with protesters demanding ex-PM Khan’s release, six killed
- Topping demands of Khan’s Pakistan Tehreek-e-Insaf party is release of all its leaders, including Khan
- Interior ministry says four troops killed in clashes with protesters, PTI says two supporters dead
ISLAMABAD: Interior Minister Mohsin Naqvi on Tuesday ruled out talks with protesters who are holding a sit-in in Islamabad to demand the release of jailed former Prime Minister Imran Khan after four security officials and two demonstrators were killed in clashes.
Hundreds of supporters of Khan’s Pakistan Tehreek-e-Insaf (PTI) on Tuesday reached the D-Chowk public square in Islamabad’s heavily fortified red zone, home to parliament, key government installations, luxury hotels, embassies and the offices of foreign organizations. Protest leaders, including Khan’s wife Bushra Khan and Ali Amin Gandapur, who is the chief minister of the Khyber Pakhtunkhwa province where the PTI is in power, have said this is a “do or die” sit-in that will go on until Khan is freed from prison. The former premier has been jailed since August last year and faces a slew of charges from corruption to terrorism that he says are politically motivated to keep him behind bars and away from politics.
PTI supporters broke through barricades and clashed with police as they marched on the capital late on Monday evening, with Interior Minister Naqvi saying three paramilitary troops and one policeman had been killed in clashes. The PTI said in a statement two of its supporters were confirmed dead while over 30 were wounded, the worst political violence seen in months in the South Asian nation of 241 million people.
“In today’s meeting, the clear cut decision of the prime minister and others is that there will be no talks with these protesters,” Naqvi said after Prime Minister Shehbaz Sharif met his cabinet and other top officials.
Information Minister Ataullah Tarar said the government had agreed to offer the protesters a place on the outskirts of Islamabad to hold their protest and would have facilitated them in their activities.
“But why do they want to go to D-Chowk?” the information minister asked. “Because they want to cause damage to the life and property of Islamabad’s citizens. They have among them Afghan nationals, terrorists, dacoits.”
In a message shared with supporters from jail by his team, Khan, 72, urged his followers to stay peaceful but to stand firm till the end.
“My message for my team is to fight until the last ball is bowled. We will not back down until our demands are met!”
LOCKDOWN
As thousands of rally goers left for Islamabad on Sunday in protest caravans, authorities shut down major highways leading to the capital and used shipping containers to block major roads and streets inside the city. Mobile Internet links and apps like WhatsApp have been down since the weekend and schools have been closed for several days in the capital and the nearby garrison city of Rawalpindi.
Last week, the district administration also banned public gatherings in Islamabad for two months, and on Monday, the interior ministry invoked Article 245, calling in the army to maintain law and order.
A round of the federal capital by Arab News on Tuesday afternoon showed that all entry and exit points of the city had been sealed again with shipping containers shortly after protesters removed them to enter the city. The Srinagar Highway, the main artery connecting the Punjab and Khyber Pakhtunkhwa provinces, was littered with stones that protesters had reportedly hurled at security personnel on their way to D-Chowk.
Local residents of Rawalpindi and Islamabad could be seen distributing food and water among protesters on the Srinagar Highway while helicopters hovered above.
Protest leader Ali Amin Gandapur, whose caravan had still not reached D-Chowk by Tuesday evening, urged protesters to camp at the square and not advance further into the red zone.
“D-Chowk means D-Chowk,” the chief minister told supporters from atop a truck en route to the public square. “Beyond that, as long as Imran Khan’s orders, Imran Khan’s instructions are not given, we will not go beyond that area and we will respect his instructions.”
Amnesty International called on the Pakistan government to protect and ensure the rights of protesters and “immediately rescind the ‘shoot-on-sight’ orders that provide undue and excessive powers to the military.”
“The severe restrictions on assembly, movement and mobile and Internet services as well as arbitrary detentions of thousands of protesters across Pakistan, particularly in Islamabad, are a grave violation of the rights to freedom of peaceful assembly, movement and expression,” the rights group said on X.
Pakistani conglomerate Descon announces local incorporation in Saudi Arabia
- Pakistan’s Descon Engineering operates in the engineering, power and chemical sectors
- It has a long-standing strategic partnership with the Olayan Saudi Holding Company
KARACHI: Pakistan’s Descon Engineering, which operates in the engineering, power and chemical sectors, on Tuesday announced the incorporation of Descon Engineering Arabia, a registered entity in the Kingdom of Saudi Arabia, in partnership with its long-standing strategic partner, Olayan Saudi Holding Company (OSHCO.)
OSHCO is a Saudi-based diversified business enterprise with commercial and industrial operations spread across Saudi Arabia and the wider Middle East and North Africa regions. The company’s portfolio includes more than 25 companies operating in five sectors, namely, food and beverages, restaurants, health and personal care, information and communications technology (ICT), and energy.
Descon, a group of companies headquartered in the eastern Pakistani city of Lahore, is active in UAE, Qatar, Saudi Arabia, Kuwait, Oman, Iraq, and South Africa.
“This significant development reaffirms Descon’s continued commitment to the Kingdom and highlights its focus on localization within Saudi Arabia,” Descon said in a statement.
“Through Descon Engineering Arabia, the company is further expanding its regional footprint, reinforcing its position as a trusted and established service provider dedicated to meeting the needs of customers across the Kingdom.”
The company said the “new chapter” had strengthened its resolve to make a broader global impact, ensuring enhanced value delivery to clients in Saudi Arabia, while supporting the development of local talent and capacity building.
“As we establish Descon Engineering Arabia in partnership with OSHCO, we reaffirm our commitment to the Kingdom of Saudi Arabia and its vision for sustainable growth. This step represents a deepening of our long-standing relationship with the region, enabling us to deliver tailored solutions while contributing to local talent development and capacity building,” Taimur Saeed, CEO of Descon Engineering, said.
“We look forward to fostering stronger collaborations and continuing to serve the Kingdom with the reliability and expertise that have defined our journey for nearly five decades.”
Through Descon Engineering Arabia, Descon Engineering is positioned to deliver even greater value, continuing its “dedication to excellence and local growth” for customers in Saudi Arabia and the region, the company added.
