IMF deal will improve Pakistan’s funding prospects — Moody’s

An exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. (AFP/File)
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Updated 17 July 2024
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IMF deal will improve Pakistan’s funding prospects — Moody’s

  • Rating agency says government’s ability to sustain reform implementation will be key to continually unlocking financing
  • Capping talks that started in May, Pakistan and IMF reached bailout deal for $7 billion, 37-month loan program last week

ISLAMABAD: Rating agency Moody’s has said this week a new $7 billion bailout deal with the International Monetary Fund would improve funding for Pakistan from bilateral and multilateral partners but the ability to sustain reforms would be key to easing liquidity risks.

Pakistan and the IMF reached an agreement for a $7 billion, 37-month loan program last week, capping negotiations that started in May after Islamabad completed a short-term, $3 billion program that helped stabilize the economy, avert a sovereign debt default, and set challenging revenue targets in its budget to get IMF approval.

In a comment regarding the new IMF deal, Moody’s said, “the new IMF program will improve Pakistan’s (Caa3 stable) funding prospects.

“The program will provide credible sources of financing from the IMF and catalyze funding from other bilateral and multilateral partners to meet Pakistan’s external financing needs.”

However, the agency cautioned that the government’s ability to sustain reform implementation would be key to allowing Pakistan to continually unlock financing over the duration of the IMF program, leading to a durable easing of government liquidity risks.

The new IMF bailout deal comes with conditions of far-reaching reforms, such as measures to broaden the tax base and remove exemptions and make timely adjustments of energy enterprises’ management and privatization, phasing out agricultural support prices and associated subsidies, advancing anti-corruption, governance and transparency reforms, and gradually liberalizing trade policy.

A resurgence of social tensions on the back of high cost of living – which may increase because of higher taxes and future adjustments to energy tariffs – could weigh on reform implementation, Moody’s said. Moreover, risks that the coalition government may not have a sufficiently strong electoral mandate to continually implement difficult reforms remain, the rating agency said in the comment.

According to an IMF report published in May, Pakistan’s external financing needs are about $21 billion for fiscal 2025 (ending June 2025) and about $23 billion for fiscal 2026-27. The Moody’s agency said Pakistan’s external position remained fragile, with high external financing requirements over the next three to five years.

The country is vulnerable to policy slippages, it said, adding that weak governance and high social tensions can compound the government’s ability to advance reforms, jeopardizing its ability to complete reviews under the IMF program and unlock external financing.


On Defense Day, Pakistan inducts two new warships in its naval fleet

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On Defense Day, Pakistan inducts two new warships in its naval fleet

  • Pakistan celebrates Defense Day on Sept. 6 to honor soldiers who fought against India in 1965 
  • The ships, Babur and Hunain, have been equipped with anti-ship and anti-air warfare weapons

KARACHI: Pakistan on Friday inducted two new warships, Babur and Hunain, into its naval fleet, the Pakistan Navy said, as the nation marked its Defense Day.
The South Asian country celebrates its Defense Day each year on September 6 to honor the soldiers who fought against India in the 1965 war.
A ceremony for the induction of MILGEM Class Corvette Babur and Offshore Patrol Vessel HUNAIN was held at the Pakistan Navy Dockyard in Karachi.
Pakistan President Asif Ali Zardari graced the occasion as the chief guest, according to the navy’s Directorate General of Public Relations (DGPR).
“The Chief Guest dilated upon the precarious geo-strategic environment in the Indian Ocean and the need to have a potent Naval force to counter growing traditional and non-traditional challenges,” the DGPR said in a statement.
“He reiterated that induction of these ships in PN Fleet will consolidate and enable the Fleet to meet its ever-growing operational responsibilities.”
President Zardari formally handed over the ships’ scrolls to the commander of Pakistan Fleet, which marked the induction of the two warships.
Hunain is a multipurpose medium-sized offshore patrol vessel, equipped with state-of-the-art electronic warfare, anti-ship and anti-air warfare weapons, sensors, and self-protection and terminal defense system, according to the DGPR.
The Babur-class corvette is a subclass of the Turkish MILGEM project. The corvette class is heavier and larger than the Turkish Ada-class corvette and also equipped with vertical launch systems.
In his welcome address, Chief of the Naval Staff Admiral Naveed Ashraf termed the induction of these ships a “major milestone in capacity building of PN [Pakistan Navy] Fleet.”
“He acknowledged the government’s full support for providing best possible resources for this purpose,” the DGPR said.
The induction ceremony was attended by Turkiye’s Deputy Minister of National Defense Bilal Burdali, chairman of Pakistan’s Joint Chiefs of Staff Committee, political leadership and high-ranking officials of the armed forces.
On Thursday, Pakistan’s Embassy in Abu Dhabi hosted a reception to mark Defense Day aboard Pakistan Navy Ship Shamsheer at the Cruise Terminal, Mina Zayed Port, the mission said in a statement.
Pakistan’s envoy to the UAE, Ambassador Faisal Niaz Tirmizi, along with Commodore Shahid Wasif SI (M), Mission Commander of the Pakistan Navy, welcomed chief guest General Salem Saeed Al Jabri, UAE’s Assistant Foreign Minister for Military and Security Affairs, and Brig. Abdullah Al Mohairbi, Deputy Commander of the UAE Navy, at the reception, which was attended by members of the diplomatic corps and officials of the UAE government.


Court orders removal of serving general heading Pakistan’s National Database and Registration Authority

Updated 06 September 2024
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Court orders removal of serving general heading Pakistan’s National Database and Registration Authority

  • Lt Gen Munir Afsar was appointed NADRA chairman in Oct. 2023 and became the first serving army officer to be appointed on the key post
  • The Lahore High Court on Friday ruled the appointment was made without requisite ‘authority of law’ and ordered Lt Gen Afsar’s removal

ISLAMABAD: The Lahore High Court (LHC) on Friday declared as “unauthorized” the appointment of a serving lieutenant general as chairman of Pakistan’s National Database and Registration Authority (NADRA), ordering his removal from the post.
Lt. Gen. Munir Afsar was appointed NADRA chairman in Oct. 2023 and became the first serving army officer to be appointed on the key post. The appointment was made by the caretaker government of then-prime minister Anwaar-ul-Haq Kakar and confirmed by the elected government in March 2024 for a period of three years.
Petitioner Ashba Kamran had challenged the appointment in the LHC and stated in the petition that the appointment was “in violation of the provisions of NADRA Ordinance, 2000” and did not adhere “to the requirements of conducting a fair and competitive process for appointment by inviting potential aspirants.”
Presiding over a hearing of the case on Friday, LHC’s Justice Asim Hafeez ruled that the appointment was made without requisite “authority of law” and ordered removal of Lt Gen Afsar from the post.
“Illegality committed by way of an unauthorized appointment, by the appointing authority in absence of delegation, cannot be covered... Hence, discretion necessarily needs to be exercised, to end usurpation of the office,” the judge wrote in his verdict.
“In these circumstances, act of confirming the appointment of Respondent No 6 [Lt Gen Afsar] is unauthorized and otherwise inconsistent with the enactment, therefore, without requisite ‘authority of law’.”
The judge ruled that the “appointment, confirmation and continuing holding of the office of Chairman NADRA by respondent No. 6 is declared without the ‘authority of law’.”
Justice Hafeez ordered court officials to send a copy of the order to the federal cabinet, interior ministry and all concerned departments.
Afsar was promoted to the rank of lieutenant general in October 2022. He had taken over the position of NADRA chairman from Asad Rehman Gilani, who assumed the office in June 2023 following the resignation of Tariq Malik.


PM congratulates Pakistan’s Haider Ali for winning bronze at Paris Paralympics discus throw

Updated 06 September 2024
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PM congratulates Pakistan’s Haider Ali for winning bronze at Paris Paralympics discus throw

  • Ali won the bronze medal with a 52.54-meter throw, clinching his fourth Paralympic medal
  • PM Shehbaz Sharif says Ali’s courage, determination are source of inspiration for Pakistanis

ISLAMABAD: Prime Minister Shehbaz Sharif on Friday congratulated Haider Ali for winning bronze at the Men’s Discus Throw event at Paris Paralympics 2024, describing him as an “inspiration for the entire nation.”
Ali won the bronze medal with a 52.54-meter throw, clinching his fourth Paralympic medal. Uzbekistan’s Tolibboy Yuldashev won gold with a massive 57.28m throw, setting a personal best on his sixth attempt.
Ali led the field in the first attempt with a solid 52.28-meter throw, but was overtaken by Canada’s Jesse Zesseu, who won silver, with a 52.81m throw in the third round.
In his post on X, Pakistan PM Sharif said his country was celebrating Ali’s performance at the Paris Paralympics.
“Congratulations Haider Ali @HaiderAthlete on winning the Bronze medal at the Paris #Paralympics 2024,” the prime minister said. “Your courage and determination are a source of inspiration for the entire nation. Wishing you the very best!“

The development comes weeks after Pakistan’s Arshad Nadeem made history at the Paris Olympics by setting a new record for the longest javelin throw and winning a gold medal for his country.
His record-breaking 92.97m javelin throw in Paris earned Pakistan its first Olympic medal since the 1992 Barcelona Games and first gold medal since the 1984 Los Angeles Games.

 


Pakistan reports 17th polio case of this year in Islamabad

Updated 06 September 2024
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Pakistan reports 17th polio case of this year in Islamabad

  • This is the first human case reported in Pakistan’s federal capital of Islamabad in 16 years
  • Pakistan has reported 12 polio cases in Balochistan, three in Sindh and one in Punjab this year

ISLAMABAD: Pakistan has reported another case of polio virus in the federal capital of Islamabad, authorities said on Friday, taking the national tally to 17 this year.
The Regional Reference Laboratory for Polio at the National Institute of Health detected the wild poliovirus type 1 (WPV1) in a child from Union Council Rural 4 of Islamabad, according the country’s polio program.
This is the first human case reported in Islamabad in 16 years, while environmental samples from the capital and neighboring Rawalpindi district have been positive for WPV1 since June, underscoring the persistent threat of polio to children’s well-being.
“It is incredibly heartbreaking that another Pakistan child has been affected by a disease that has no cure, but is entirely preventable with the help of an easily accessible vaccine,” Ayesha Raza Farooq, Prime Minister’s focal person for polio eradication, said in a statement.
In view of the “intense outbreak” of poliovirus in the country, she said, the polio program had held in-depth consultative sessions with the provinces and districts to implement plans to improve all aspects of polio eradication activities, starting from a polio campaign beginning next week.
“From September 9 onwards, polio teams will go house-to-house in 115 districts to vaccinate more than 33 million children under five,” Farooq said. “This virus does not discriminate. Wherever it finds a child with weak immunity, it will attack. Parents must understand the urgency of ensuring that their children receive polio drops and are up to date on their routine immunization.” 
Muhammad Anwarul Haq, coordinator of the National Emergency Operations Center for polio eradication, said the polio program was launching this targeted vaccination campaign particularly in districts where the virus had been detected and where the risk of continued transmission and spread was really high.
“We’re ramping up efforts to reach every child with polio vaccines, including in Islamabad,” he said. “We have a collective responsibility to protect the health and wellbeing of our children.”
Haq reiterated that unfortunately, parents had not always welcomed and opened their doors to the vaccinators when they visited their homes.
“I encourage all parents and caregivers to make sure your children are not missed when the vaccinators visit your house next week,” he added.
Pakistan earlier reported 12 polio cases from Balochistan, three from Sindh and one from Punjab this year.


Pakistan invites investment from Oman as it looks for external financing avenues

Updated 06 September 2024
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Pakistan invites investment from Oman as it looks for external financing avenues

  • Pakistan in July reached a bailout loan deal with the IMF which is pending approval from the lender’s executive board
  • Approval dependent on “confirmation of necessary financing assurances from Pakistan’s development, bilateral partners”

ISLAMABAD: Finance minister Muhammad Aurangzeb has invited Oman to enhance investments in Pakistan, state media reported on Friday, as the South Asian country struggles to meet external financing needs as part of a $7 billion bailout loan that is pending approval by the International Monetary Fund (IMF) executive board.
Aurangzeb has said in recent weeks Pakistan will focus on meeting its external financing needs by speaking with foreign governments and lenders to draw foreign investment as well as seeking loan rollovers. The government is also seeking to focus on more sustainable forms of external financing such as direct investment and climate financing.
Pakistan and the IMF reached an agreement for the 37-month loan program in July. The IMF has said the program is subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.”
On Thursday, Aurangzeb held a virtual meeting with the chairman of the Pak Oman Investment Company Limited, Juland Jaifer Salim Al-Said, “to discuss ways for expanding business collaborations and enhancing investment and trade flows between the two brotherly countries.”
The minister provided an in-depth overview of Pakistan’s current economic situation, emphasizing progress made in stabilizing the economy and fostering a conducive environment for business and investment.
“Aurangzeb said the government is determined to push ahead with its reform agenda to facilitate the private sector, promote businesses and provide a secure and friendly investment climate,” Radio Pakistan reported.
“Finance Minister highlighted the significant strides achieved in recent months to stabilize the economy and put it on a sustainable path of growth. He also mentioned the improvements registered in several macro and micro economic indicators of the economy as well as a host of structural reforms undertaken in various sectors of the economy, including energy, taxation, privatization, and downsizing of government to let the private sector lead the growth with the government playing the role of a facilitator, in the process.”
Radio Pakistan said the Pak Oman Investment Company chairman said Oman viewed “Pakistan as a brotherly country and a potential place for business and investment.”
“He expressed hope that due to opening up of more investment opportunities in Pakistan in the wake of ongoing economic reforms, there would be more business collaborations,” Radio Pakistan said. 
The first Pakistani Business Expo will be held in Muscat on October 13-14. 
Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to meet gross financing needs under the IMF program, Aurangzeb said in July following a trip to China to seek energy sector debt reprofiling.
Rollovers or disbursements on loans from Pakistan’s long-time allies, in addition to financing from the IMF, have helped Pakistan meet its external financing needs in the past.
Tough conditionalities placed by the IMF, such as raising tax on agricultural incomes and lifting electricity prices, have unleashed street protests and prompted concerns about poor and middle class Pakistanis grappling with rising inflation and the prospect of higher taxes.