ISLAMABAD: 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 country’s finance minister told Reuters on Friday, as his government prepares to execute its new $7 billion International Monetary Fund agreement.
Pakistan and the IMF reached an agreement for the 37-month loan program this month. Tough measures such as raising tax on agricultural incomes and lifting electricity prices have prompted concerns about poor and middle class Pakistanis grappling with rising inflation and the prospect of higher taxes.
Pakistan has relied heavily on IMF programs for years, at times nearing the brink of sovereign default and having to turn to countries such as the United Arab Emirates and Saudi Arabia to provide it with financing to meet external financing targets set by the IMF.
Finance Minister Muhammad Aurangzeb said in an interview that external financing continued to be an important component, though the government was seeking to focus on more sustainable forms such as direct investment and climate financing.
“I think in the existing situation we can expect those (loan) rollovers to continue to take place ... we have requested extension of maturities,” Aurangzeb said.
Rollovers or disbursements on loans from Pakistan’s long-time allies Saudi Arabia, the United Arab Emirates and China, in addition to financing from the IMF, have helped Pakistan meet its external financing needs in the past.
The IMF said the new Extended Fund Facility program is subject to approval from its Executive Board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.”
Aurangzeb said that meeting the external financing gap was “very manageable and very doable.”
He said Pakistan plans to expand its strategy beyond relying heavily on rollovers and toward foreign direct investment, including in the huge copper and gold Reko Diq mine in southern Pakistan. He added his government was working on identifying “bankable and investable” projects for Saudi Arabia and the United Arab Emirates, which have announced interest in billions of dollars in investment in Pakistan.
“That is what’s going to lead to sustainability, ” he said. “If we can’t get this executed in the next three years, we will not be able to get out of the ‘last’ program.”
Pakistan has been plagued by boom-and-bust cycles for decades, leading to more than 20 IMF bailouts since 1958. It is currently the IMF’s fifth-largest debtor, owing $6.28 billion as of July 11 according to IMF data.
Aurangzeb said the Reko Diq copper and gold mine project had drawn interest from the World Bank’s private investment arm, the International Finance Corporation(IFC), which had signalled it would invest a “large amount.”
Aurangzeb said that during a trip to China that he plans by the end of July, Islamabad will discuss power sector structural reforms with Beijing that have been suggested by the IMF. Beijing has set up over $20 billion worth of planned energy projects in Pakistan.
CLIMATE FINANCE
Pakistan has also agreed with the IMF to launch talks this year on financing under the fund’s Resilience and Sustainability Trust (RST) to draw financing for projects related to climate change.
Pakistan is one of the countries worst affected by climate change. Huge floods in 2022 killed hundreds of people and caused billions of dollars of damage in infrastructure and agriculture.
“We will start the discussions around that during this calendar year, possibly at the time of the first review, which will be in October, around the annual meetings in Washington,” said Aurangzeb, though he did not specify how much his government would request.
Pakistan has only successfully completed one long term Extended Fund Facility, in 2017. Aurangzeb said he planned to ensure Pakistan completed the current program, despite mounting political pressure and the inflationary impact of IMF-suggested reforms.
The minister, former head of Pakistan’s largest bank, also stressed that the government planned to push through the privatization of loss-making enterprises including national carrier Pakistan International Airlines (PIA).
Pakistan is looking for external financing avenues, finance minister says
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Pakistan is looking for external financing avenues, finance minister says
- Pakistan to meet external financing needs by speaking with foreign governments and lenders to draw foreign investment as well as seeking loan rollovers
- Finance Minister Muhammad Aurangzeb says government was seeking to focus on more sustainable forms such as direct investment and climate financing
Pakistan, US discuss Afghan refugee crisis, economic and counterterrorism issues
- Ambassador Donald Blome calls on Deputy Prime Minister Ishaq Dar
- Pakistan has repatriated nearly 700,000 Afghan nationals since last November
KARACHI: US Ambassador Donald Blome called on Deputy Prime Minister Ishaq Dar on Tuesday to discuss the Afghan refugee crisis as well as economic and counterterrorism challenges facing the South Asian nation, the US embassy said in a statement.
Pakistan has repatriated nearly 700,000 Afghan nationals since November last year when it launched a deportation drive against illegal foreigners following a spike in suicide bombings that Islamabad, without providing evidence, blamed on Afghans. A cash-strapped Pakistan had also said last year undocumented migrants had drained its resources for decades.
International rights organizations including the United Nations have also called on Pakistan to review the repatriation policy, warning that Afghan nationals deported may suffer from poverty and could face retaliation at the hands of the Afghan Taliban in their homeland.
“US Ambassador Donald Blome met today with Deputy Prime Minister and Foreign Minister Dar,” the US Mission Spokesperson Jonathon Lalley said in a statement on Tuesday.
“The ambassador and deputy prime minister discussed a broad range of bilateral and regional issues, including the protection of Afghan refugees and asylum seekers, economic cooperation, security and counterterrorism and regional cooperation.”
Pakistan is going through a prolonged economic crisis, which pushed the country to the brink of a sovereign default last summer before a last-minute $3 billion IMF bailout program. Pakistan has since reached a new staff-level agreement for a 37-month $7 billion IMF loan which now awaits approval from the lender’s executive board.
Pakistan’s poor and the middle classes are still feeling the effects of the $3 billion bailout, which included 12 months of power tariff hikes. Higher tariffs have led to a decline in household power consumption, with annual power use expected to fall for the first time in 16 years.
The conditions of the new program have become tougher such as higher taxes on farm incomes and electricity prices.
Also adding to Pakistan’s woes are rising militant attacks, including a series of assaults in the country’s southwestern Balochistan province last month in which over 50 people were killed, including security personnel. The US Embassy had condemned the attacks and offered Pakistan support in the fight against “terrorism.”
Until the government initiated the expulsion drive last year, Pakistan was home to over four million Afghan migrants and refugees, of which around 1.7 million were undocumented, as per government figures.
Afghans make up the largest portion of migrants, many of whom came after the Taliban took over Kabul in 2021, but a large number have been present since the 1979 Soviet invasion of Afghanistan. Islamabad insists the deportation drive is not aimed specifically at Afghans but at all those living illegally in Pakistan.
Pakistan’s move to deport Afghan nationals has irked the Taliban-led government in Kabul, which has called upon Islamabad to treat its nationals with dignity and says Pakistan’s security issues are a domestic concern.
‘Pushed to the wall’: Veteran lawmaker from Balochistan quits after deadly attacks
- Sardar Akhtar Mengal says people of the volatile, impoverished province “consistently marginalized”
- Says people of Balochistan protesting for their rights “either silenced, labeled traitors, or worse, killed”
ISLAMABAD: Veteran politician Sardar Akhtar Mengal, leader of the Balochistan National Party (BNP), announced his resignation from the National Assembly on Tuesday, saying the people of the volatile, impoverished Balochistan province had been “consistently marginalized” and “pushed to the wall.”
Mengal’s resignation comes after over 50 people were killed in Balochistan when separatist militants attacked police stations, railway lines and highways, and security forces launched retaliatory operations, late last month. The assaults were the most widespread in years by ethnic militants fighting a decades-long insurgency to win secession of the resource-rich southwestern province, home to major China-led projects such as a port and a gold and copper mine. The province is Pakistan’s largest by area but its most economically backward, lagging behind the rest of the country by nearly all social and economic indicators.
“The prevailing situation in Balochistan has compelled me to take this step,” Mengal wrote in his resignation letter.
“Our province has consistently been marginalized and ignored by this House. Each day, we are pushed further to the wall, leaving us with no choice but to reconsider our roles. The lack of genuine representation in this Assembly for the people of Balochistan has left voices like mine unable to bring meaningful change.”
Mengal said attempts by the people of Balochistan to speak up for their rights or protest were met with “hostility.”
“Our people are either silenced, labeled as traitors, or worse, killed,” he said. “Under such circumstances, I find it impossible to continue in this capacity, as my presence here no longer serves any purpose for the people I represent.”
The army has recently repeatedly referred to an ethnic rights movement in Balochistan being led by young people, many of them educated women, a “terrorist proxy.” The protesters have been calling for an end to what they describe as a pattern of enforced disappearances and human rights abuses by security forces, which deny the charge.
The province is home to key mining projects, including Reko Diq, run by mining giant Barrick Gold and believed to be one of the world’s largest gold and copper mines. Balochistan is an important part of China’s $65 billion investment in the China Pakistan Economic Corridor (CPEC), a wing of President Xi Jinping’s Belt and Road initiative.
The decades-old insurgency has continued to keep the mineral-rich province of some 15 million people poor and unstable and created security concerns around Pakistan’s plans to access untapped resources under Balochistan’s desert and mountainous terrain.
It is Pakistan’s smallest province by population and strategically located, bordering Iran to the west and Afghanistan to the north. Balochistan also has a long Arabian Sea coastline in the south, not far from the Gulf’s Strait of Hormuz oil shipping lane.
Bangladesh ease to series sweep of Pakistan
- Bangladesh beat Pakistan by six wickets in second test to complete 2-0 series sweep in Rawalpindi
- The visitors won the opening test by 10 wickets, their first ever test victory over Pakistan
Bangladesh beat Pakistan by six wickets in the second test to complete a 2-0 series sweep in Rawalpindi on Tuesday.
Zakir Hasan (40), Najmul Hossain Shanto (38) and Mominul Haq (34) chipped in with useful cameos as Bangladesh chased down the 185-run victory target with more than a session to spare.
The visitors won the opening test by 10 wickets, their first ever test victory over Pakistan.
Resuming the final day on 42 for no wicket, Bangladesh lost Zakir and Shadman Islam in the morning session but their victory never looked in doubt.
Shanto fell after the lunch break and Mominul threw away his wicket but veterans Mushfiqur Rahim, who made 22 not out, and Shakib Al Hasan guided Bangladesh home without any drama.
Shakib, who finished 21 not out, sealed the victory by hitting spinner Abrar Ahmed for four through the covers.
Heavy monsoon rains and floods kill at least 33 in south India and 5 children in Pakistan this week
- In Pakistan, flash floods triggered by heavy rains have killed at least 300 people since July 1 when monsoons began
- Since June, at least 170 people have died across India’s six northeastern states due to floods and mudslides brought by rains
HYDERABAD, India: Heavy monsoon rains and floods have killed at least 33 people in southern India and five children in Pakistan over the past two days, authorities said Tuesday.
In India’s Andhra Pradesh and Telangana states, houses collapsed and were swept away by torrential downpours while floods disrupted road and rail traffic, officials said. The weather service issued a red alert for 11 districts, predicting more rains in the region, Telangana’s top bureaucrat, Shanta Kumari, said.
More than 4,000 people have been moved to 110 government-run relief camps in Telangana since Monday, according to the state’s top elected official, A. Revanth Reddy.
Overflowing lakes, tanks and streams have cut off some villages in Mahabubnagar and Nalgonda districts.
Vijayawada, the commercial capital of Andhra Pradesh, is experiencing the worst flooding in two decades with the Budameru River flooding 40 percent of the city and stranding nearly 275,000 people in more than a dozen residential area.
Disaster relief teams are struggling to transport stranded families to safer areas, said Andhra Pradesh’s top elected official, N. Chandrababu Naidu.
Since June, at least 170 people have died across India’s six northeastern states due to floods and mudslides brought on by the rains, according to official figures.
In neighboring Pakistan, flash floods triggered by heavy monsoon rains killed five children on Monday in southwestern Balochistan province, bringing the country’s overall death toll from rain-related incidents to at least 300 since July 1.
The five deaths were reported in the Zhob and Khuzdar districts, according to a statement by the disaster management authority. In Balochistan alone, floods have killed 32 people, including 18 children and 12 women over the past two months.
The deluges have also inundated dozens of villages and blocked highways in parts of Balochistan, and damaged nearly 20,000 homes across the country, mostly in Balochistan.
Disasters caused by landslides and floods are common in both India and Pakistan during the June-September monsoon season. Scientists and weather forecasters have blamed climate change for heavier rains in recent years.
In 2022, climate-induced downpours inundated one-third of Pakistan, killing 1,739 people and causing $30 billion in damage.
Pakistan PM hopes for IMF bailout approval, says this will be ‘last program’
- Staff-level agreement for $7 billion IMF loan was reached in July, now awaits executive board approval
- Pakistan, struggling with boom-and-bust cycles for decades, has entered 22 IMF bailouts since 1958
ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif expressed hope on Tuesday that an agreement for a $7 billion International Monetary Fund (IMF) bailout program reached in July would get approval from the lender’s executive board, hoping this would be the country’s “last” loan deal.
The staff-level agreement for the 37-month program capped 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.
After signing the new bailout deal, PM Sharif, who leads a weak ruling coalition at the center, has repeatedly said his government is committed to tough but unavoidable reforms.
“All the prerequisites and conditions for our program with the IMF are fully under supervision and actions are being implemented to fulfill them. God willing, we are hopeful that all the conditionalities and requirements of the IMF will be fulfilled on time,” Sharif told his cabinet on Tuesday.
“Our case will go to the [IMF executive] board for approval, and a new journey will begin, but we should keep one thing in mind that this should be the last IMF program of Pakistan’s history and the country should stand and run on its own feet.”
Pakistan has been struggling with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958. Currently the IMF is the fifth-largest debtor, owing $6.28 billion as of July 11, according to the lender’s data.
The latest economic crisis has been the most prolonged and has seen the highest ever levels of inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.
The conditions of the program have become tougher such as higher taxes on farm incomes and electricity prices. The latest bailout is aimed at cementing stability and inclusive growth in the crisis-plagued South Asian country, the IMF said.
The latest IMF deal is subject to approval by its executive board and the confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.
On Monday, the statistics bureau said Pakistan’s annual consumer price inflation rate slowed to 9.6 percent in August, the first single digit reading in almost three years.
Pakistan’s August annual CPI figures were down from 27.4 percent this time last year and 11.1 percent in July. The monthly inflation rate was 0.4 percent, the Pakistan Bureau of Statistics said in a statement.
