ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb on Monday held a meeting with the Pak-Kuwait Investment Company (PKIC) leadership to discuss “strategic initiatives” and future directions of the joint venture in Pakistan, the Pakistani finance ministry said, amid Islamabad’s ongoing efforts to seek external financing avenues.
The South Asian country is currently struggling to meet external financing needs as part of a $7 billion bailout agreement reached with the International Monetary Fund (IMF) in July that is pending approval by the IMF executive board.
Established as a joint venture between Pakistan and Kuwait in 1979, the PKIC is Pakistan’s leading development financial institution engaged in investment and development banking activities in the country, with a total equity of Rs34.3 billion ($122 million).
The Pakistani finance minister, who was accompanied by other senior officials of his ministry, held a meeting with PKIC Managing Director Saad-ur-Rehman Khan, wherein they agreed to continue collaboration to enhance the effectiveness of various joint ventures.
“Khan provided an overview of PKIC’s current portfolio, highlighting the PKIC’s initiatives in the real estate sector leveraging Islamic finance structures to fund major infrastructure projects addressing Pakistan’s investment needs while ensuring that investment activities adhere to Islamic principles, thereby attracting a broader range of investors,” the Pakistani finance ministry said in a statement.
“The discussions also highlighted PKIC’s dedication to supporting small and medium enterprises (SMEs) across Pakistan.”
The finance minister commended the PKIC for its strategic contributions to Pakistan’s economy, especially in sectors vital to the nation’s long-term development.
“The minister specifically acknowledged PKIC’s proactive approach to integrating Islamic finance into its operations, noting that this approach not only aligns with Pakistan’s development priorities but also resonates with the broader goals of ethical and sustainable growth,” the statement read.
Aurangzeb has held a flurry of meetings with heads of foreign banks and companies in recent weeks in a push to bring in more investment. Last month, he held meetings with top officials of Dubai Islamic Bank and Mashreq Bank to “discuss the economic outlook and explore investment opportunities in Pakistan.”
He also met Antti Partanen, a representative from Finnish development financier Finn Fund, and reiterated the federal government’s commitment to make Pakistan’s investment climate “favorable and conducive” for foreign investors.
Pakistan is currently 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.
But tough conditionalities placed by the IMF, 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. Bringing in foreign investors might also be harder for Pakistan amid a deteriorating security situation.
Pakistan discusses ‘strategic initiatives’ with joint Kuwaiti venture in quest for external financing
https://arab.news/pf3dk
Pakistan discusses ‘strategic initiatives’ with joint Kuwaiti venture in quest for external financing
- Pakistan is currently struggling to meet external financing needs as part of a $7 billion bailout agreement reached with the IMF
- Aurangzeb has held flurry of meetings with heads of foreign banks, companies in recent weeks in a push to bring in more investment
65-year-old man leading gang of ‘rickshaw dacoits’ busted in Pakistan’s Karachi
- Police say Rahim Bux’s gang lured traders into rickshaws or followed them on three-wheelers and robbed them at gunpoint
- Bux was released from prison in 2018 after serving a 20-year sentence for a $25,000 bank heist in 1998
KARACHI: Police in the southern Pakistani province of Sindh said on Monday they had arrested a 65-year-old man accused of leading a gang of dacoits who were using rickshaws to rob traders in the provincial capital of Karachi.
Karachi is Pakistan’s largest and richest city, home to the central bank and stock exchange, a major port, and some of the most violent areas of the country. Many of its sprawling slums are split along ethnic lines, and overrun by armed groups that have carved the city into spheres of influence. Driveby shootings and muggings are a daily occurrence in the teeming metropolis of over 20 million people, despite a military-backed crackdown launched in 2013 that brought down crime rates for a few years.
Speaking to Arab News on Monday, police official Mumtaz Khan Marwat said Rahim Bux, released from prison in 2018 after serving a 20-year sentence for a Rs7 million ($25,000) bank heist in 1998, had formed the “Rickshaw Gang” after completing his jail term. The operation in which Bux was arrested in 1998 resulted in the deaths of two policemen and his accomplices and injured Bux, who then spent two decades in prison.
“Bux formed his gang of four after his release from jail and started looting citizens. We arrested all gang members last night [Sunday] after a tip-off,” Marwat, who heads the Shah Latif Town police station, said.
The gang would target traders leaving cattle markets with large sums of cash, luring victims into their rickshaws or following them on the three-wheelers and then robbing them at gunpoint.
“Bux, the team leader, would wait at a destination to supervise the robberies and then flee in the same rickshaw with his men,” Ihsanullah Khan, another police official who is interrogating the suspects, told Arab News.
“Bux is a hardened criminal with several cases against him in the Karachi and Larkana divisions.”
Nearly 100 people have been killed during armed muggings in Karachi this year, according to police figures.
Over 50,000 power looms shut in Pakistan in two years, leaving thousands jobless
- Industrial stakeholder says the closure owes to soaring power tariffs, raising the cost of doing business
- Punjab administration’s economic adviser vows to look into the issue to find viable solution to problem
ISLAMABAD: Tens of thousands of workers have lost their jobs as over 50,000 power looms shut down in Pakistan’s Faisalabad district over two years due to soaring electricity prices, an industry stakeholder said over the weekend, with officials pledging to explore viable solutions.
Power looms are mechanized devices that automate the weaving process. Faisalabad, located in Pakistan’s populous Punjab province, is the hub of the country’s textile industry, housing 125,000 power looms in its industrial zone.
The sector produces nearly 91% of Pakistan’s grey cloth, which also sells well in international market.
“In the last two years, over 200,000 workers have been rendered jobless in Faisalabad after the closure of some 50,000 power looms,” Saeed Ahmad, deputy secretary of the All Pakistan Cotton Power Looms Association, told Arab News. “The remaining industry is also on the verge of closure due to inefficient government policies.”
Ahmad said the hike in electricity prices over the last two years was the major factor behind the closures, as the per-unit cost of power had risen from Rs19 to Rs55, along with additional taxes.
“This is a small industry, and people cannot afford to pay millions in electricity bills each month,” he said, adding that the additional cost of doing business, such as higher interest rates, had also reached double digits.
Ahmad noted that while some power loom owners had switched to solar energy to run their industrial units, the option was prohibitively expensive for most.
“If you have to run the power loom, you cannot disconnect from the national grid because the solar station won’t work on cloudy days,” he explained.
Ahmad urged the government to lower electricity prices and provide loans to the industry to keep it operational.
“The power loom industry has been contributing to the national economy through textile exports, but the government is not willing to provide incentives to keep it afloat,” he said.
Speaking to Arab News, Javed Iqbal Malik, senior economic adviser to Punjab’s Industries, Commerce, Investment and Skills Development Department, acknowledged that the cost of doing business has increased due to a spike in electricity tariffs.
“I am not aware of the exact scale of the closure of power looms in Faisalabad, but one thing is for sure that the cost of doing business has increased and many businesses, including manufacturing, have become uneconomical, he said.
“We will look into the issue and discuss it with the industry to find out some viable solutions as this industry is vital for textile exports and economy,” he added.
Khurram Shahzad, a senior economist, said Pakistan’s economy had faced significant hardships in the last two years as the country narrowly avoided sovereign debt default, which also impacted the manufacturing sector.
“The manufacturing sector, including the power looms industry, has been affected by three factors: the interest rate, energy costs and taxes, all of which hit record highs in the last two years,” he told Arab News.
Shahzad noted that while the interest rate had declined in recent months, it remained in double digits.
He added that the government was promising to lower electricity tariffs to ease the cost of doing business.
“Taxes on the formal sector are expected to be reduced in the coming months with the stabilization of the economy, and this will help the manufacturing sector grow,” he said.
Pakistan compares failed PIA privatization bid to Air India, saying it sold on fifth attempt
- It took PM Narendra Modi administration more than four years to find a buyer for Air India in 2021
- PIA privatization hit a snag last month when the final bidding round attracted just one bid of $36 million
ISLAMABAD: Pakistan’s privatization chief Abdul Aleem Khan on Monday defended a recent failed bid to sell loss-making national carrier, Pakistan International Airlines by comparing it to Air India, which was sold after multiple attempts.
Cash-strapped Pakistan was looking to offload a 51-100 percent stake in debt-ridden PIA to raise funds and reform state-owned enterprises as envisaged under a $7 billion International Monetary Fund program approved in September. The process, however, hit a snag last month when the final bidding round attracted just one bid of Rs10 billion ($36 million) for a 60 percent stake in the national flag carrier.
PIA’s existing liabilities stand at approximately Rs250 billion ($896 million).
“Khan compared PIA’s situation to Air India, which had undergone multiple failed privatization attempts before ultimately succeeding on its fifth attempt,” the privatization ministry said in a statement, quoting Khan’s remarks at a meeting of the Senate Standing Committee on Privatization on Monday.
“Khan expressed hope that Pakistan’s national airline could follow a similar path but underscored the need for thorough reforms.”
It took Prime Minister Narendra Modi’s administration more than four years to find a buyer for Air India in 2021. For a decade before that, the Indian government had spent about $15 billion of taxpayer money on the airline, famous for its Maharaja mascot.
The Pakistan government had pre-qualified six groups for PIA’s privatization process in June, but only real-estate development company Blue World City participated in the bidding process in October, placing a bid that was below the government-set minimum price of Rs85 billion ($304 million).
The disposal of PIA is a step former governments have steered away from, as it has been highly unpopular given the number of layoffs that would likely result from it.
Other concerns raised by potential bidders for the PIA stake included inconsistent government communication, unattractive terms and taxes on the sector, and the flag carrier’s legacy issues and reputation.
Khan also highlighted hurdles in the privatization process during Monday’s meeting, saying it would require a “fresh approach and big-hearted decisions.”
“The first consultant engaged for the task was deemed unsatisfactory, and a new consultant would be hired to help move the process forward,” Khan told the committee, adding that privatization could only take place if PIA’s financial and operational situation was “clean and attractive to potential buyers.”
“We need to ensure that PIA is clean and profitable before privatization can proceed. Without addressing these fundamental issues, investors will not show interest,” Khan said.
Losses running into billions of dollars in the power and gas sector, the main hole in the economy, were also discussed.
“The privatization process for the first three Discos [power distribution companies] is expected to be completed by January 31, 2025,” the statement said, with Khan acknowledging that privatizing Discos would be even more challenging than PIA.
Public gatherings banned in Islamabad for two months ahead of opposition protest
- District magistrates bans gathering of more than five people for next two months
- Ban comes as Pakistan Tehreek-e-Insaf is planning protest in Islamabad on Nov. 24
ISLAMABAD: A two-month ban on public gatherings has been imposed in Pakistan’s federal capital, Islamabad, a notification from the district magistrate said on Monday, days ahead of a planned protest march by the party of jailed former Prime Minister Imran Khan.
The Pakistan Tehreek-e-Insaf party (PTI) announced last week it would lead a ‘long march’ to the capital on Nov. 24 over alleged rigging in Feb. 8 general elections and to call for the release of political prisoners, including Khan, and in support of the independence of the judiciary.
The party’s recent rallies and marches have been thwarted by similar bans on public gatherings imposed under Section 144 of the Pakistan Penal Code which allows the government to prohibit various forms of political assembly, gatherings, sit-ins, rallies, demonstrations, and other activities for a specified period.
In a notification dated Nov. 18, the district magistrate, without naming the PTI, said processions being planned in the capital “can disrupt public place and tranquility and keeping in view the current law & order and security environment, it is necessary to control such types of illegal activities which present a threat to public peace, tranquility and maintenance of law & order.”
He added that the demonstrations would cause “public annoyance or injury, endanger human life and safety, pose a threat to public property, and may lead to a riot or an affray including sectarian riot within the revenue/territorial limits of district Islamabad.”
In light of this, all gatherings of more than five people are banned in the capital, the notification said:
“This order shall come into force with immediate effect and shall remain in force for a period of TWO MONTHS.”
Khan has been in jail since August 2023 and has faced dozens of cases since he was removed as prime minister in 2022 after which he launched a protest movement against a coalition of his rivals led by current Prime Minister Shehbaz Sharif and backed by the all-powerful military, which denies interfering in politics.
Khan says cases against him, which disqualified him from contesting the February elections, are politically motivated. His party has held several protest rallies in recent months to build public pressure for its leader’s release.
With regards to the latest protest, the PTI’s first demand is a rollback of recent constitutional amendments like the 26th amendment that the PTI says is an attempt to curtail the independence of the senior judiciary. It is also calling for the release of party leaders and supporters and a return of what it describes as a “stolen mandate” after Feb. 8 general elections.
Pakistan’s government denies being unfair in its treatment of Khan and his party and the election commission rejects allegations the elections were rigged. The government also says recent amendments related to the judiciary are meant to smooth out its functioning and tackle a backlog of cases.
Pakistan Stock Exchange may gain at least 27% by end of 2025 — Bloomberg
- Benchmark KSE-100 Index forecast to increase to 127,000 points by Dec. 2025, a 34% rise, from 94,704 points it closed on Friday
- Key index advanced as much as 0.6% on Monday, taking gains to more than 50% this year, the second best performer globally
ISLAMABAD: Pakistan’s stocks are expected to advance by more than a quarter by the end of next year as the nation’s economy shows improvement under a loan program with the International Monetary Fund and the currency stabilizes, Bloomberg reported on Monday, quoting two brokerage houses.
The benchmark KSE-100 Index is forecast to increase to 127,000 points by December 2025, or a 34% rise, from the 94,704 points it closed last Friday, according to Topline Securities Ltd. in a report announced on Nov. 16. Arif Habib Ltd. targets the index to reach 120,000 points, a gain of 27%.
“The stage is set for a potential market re-rating with declining interest rates, a stable rupee, and improving macroeconomic indicators,” Karachi-based brokerage Arif Habib commented in a report.
Pakistan’s economy has stabilized with inflation easing from record levels that has allowed the central bank to cut the interest rate for four straight meetings to 15 percent, the lowest in two years.
The key index advanced as much as 0.6% on Monday, taking its gains to more than 50% this year, the second best performer globally, according to data compiled by Bloomberg.
The equity market will be offering a 37% return including 10% dividend yield by the end of 2025 because of economic stability and falling bond yields, Karachi-based Topline said in a separate report.
Pakistan is also increasingly attracting the attention of foreign investors, particularly in its debt and equity markets, said Arif Habib.
