Pakistan’s finance minister optimistic about $7 billion IMF bailout approval today

Pakistan's Finance Minister Muhammad Aurangzeb speaks during an interview with AFP at the Embassy of Pakistan in Washington, DC on April 15, 2024. (AFP/File)
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Updated 24 September 2024
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Pakistan’s finance minister optimistic about $7 billion IMF bailout approval today

  • Muhammad Aurangzeb emphasizes the South Asian nation’s commitment to structural reforms
  • Pakistan has struggled with boom-bust cycles for decades and secured 22 IMF bailouts since 1958

ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb on Tuesday expressed optimism about the approval of Pakistan’s $7 billion International Monetary Fund (IMF) program, when the board of the global lending agency meets on Wednesday.

The government reached a staff-level agreement with the IMF in July, though the approval for the 37-month program has been pending since.

Pakistan’s last $3 billion IMF program helped avert a sovereign default in 2023 amid a sharp decline in foreign exchange reserves, currency depreciation and record inflation.

“We have the IMF board meeting tomorrow in the US,” the minister said, while addressing a high-level private sector dialogue, ‘CPEC-II and the Region.’ “We are very hopeful that the board will approve the 37-month, $7 billion program under which we are very committed to do structural reforms.”

Assuring that the country would stay its current economic course, Aurangzeb pointed out that macroeconomic stability was the “basic foundation” of any economy.

“You have to grow and build from a stable base,” he added. “We have reached that level now. Now, we can say that we have a good foundation on which we can build from here.”

“Now we need to move forward and stay with the reform agenda whether it’s on the taxation or energy side [or] on the state-owned enterprises or privatization side.”

The finance minister said it was important that the KIBOR, or Karachi Interbank Offered Rate, used as a benchmark interest rate in Pakistan, was also coming down, which positively affects the industry. He added that the government was in “no desperation” to borrow money.

“If we want to borrow domestically, we will at our terms,” he said.

Aurangzeb said it was about time the banking sector started lending to the private sector.

Pakistan has struggled with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958.

The latest economic crisis has been the most prolonged one, with the highest levels of inflation, pushing the country to the brink of a sovereign default last summer before the IMF loan.

The conditions of the IMF programs have become tougher in recent years, requiring the government to impose higher tariffs and remove subsidies. The latest bailout is aimed at cementing stability and inclusive growth in the crisis-plagued South Asian country, according to the IMF.

The latest IMF staff-level deal is subject to approval by its executive board and the confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.


Pakistan dispatches 19th relief consignment to Syria amid conflicts in Middle East

Updated 9 sec ago
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Pakistan dispatches 19th relief consignment to Syria amid conflicts in Middle East

  • Pakistan says it will continue to support people affected by Israel’s military campaign in the region
  • Since the beginning of the war in Gaza, Pakistan has called for a ceasefire at the UN, other forums

ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) dispatched its 19th relief consignment on Sunday to help war-affected people in Syria and refugees from Lebanon, according to an official statement, reaffirming the country’s commitment to supporting those impacted by ongoing conflicts in the Middle East.
The aid shipment, sent in collaboration with the Pakistani charity Al-Khidmat Foundation, consisted of 17 tons of humanitarian supplies, including buckets, powdered milk, tinned food, family packs, sleeping bags and medical kits.
The consignment departed via a chartered flight from Jinnah International Airport in Karachi to Damascus in Syria.
“This 19th consignment has been dispatched for the people of Syria and refugees from Lebanon,” the NDMA said in its statement. “Prior to this, the Government of Pakistan has sent 12 aid consignments to Palestine and six shipments to Lebanon, with a total volume of 1,722 tons.”
The statement reaffirmed Pakistan’s commitment to supporting the people of Palestine and Lebanon who are in distress due to Israel’s military campaigns in the region.
It also emphasized the importance of collaboration by welfare organizations and the Pakistani public in strengthening the government’s efforts to assist those in need.
Pakistan has already established a special fund titled the “Prime Minister’s Relief Fund for Gaza and Lebanon,” inviting public donations.
Since the beginning of the war in October last year, Pakistan has called for a ceasefire in Gaza and has raised the issue at the United Nations, the Organization of Islamic Cooperation (OIC) and other international forums, urging an end to Israeli military actions and a resolution to the humanitarian crisis.


Women in Pakistan’s Karachi protest against honor killings, rising extremism

Updated 19 min 11 sec ago
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Women in Pakistan’s Karachi protest against honor killings, rising extremism

  • Participants of the rally say Karo-Kari is ‘rampant’ in Sindh, oppose marriages to settle disputes
  • Protesters also raise concern about proposed amendments to Pakistan’s water distribution system

KARACHI: Hundreds of women marched in Karachi on Sunday to protest honor killings, rising extremism and social injustices, while voicing concerns over proposed changes to Pakistan’s water distribution mechanism earlier this year, which southern provinces argue are detrimental to their interests.
The rally, organized by Sindhiyani Tehreek, a women-led movement supported by civil society groups, drew demonstrators from across Sindh who marched from Regal Chowk to the Karachi Press Club.
Dr. Marvi Sindhu, the central general secretary of the movement, highlighted the threat of so-called honor killings, locally referred to as Karo-Kari. These killings target individuals accused of engaging in illicit relationships or marrying against their families’ wishes, often as a means to restore the perceived honor of the family.
“We are raising our voices against the rampant killing of women in the name of honor in Sindh,” she told Arab News. “We are also here to raise our voices against rising religious extremism.”
Sindhu said Karo-Kari was “alarmingly rampant” in northern Sindh, though she noted other socially conservative practices also undermined the interests and wellbeing of women.
“Women are married to settle disputes or murder cases [in the province], only to face harassment [from their in-laws] for the rest of their lives,” she continued, urging Pakistan’s senior judiciary to form a commission to address such issues.
Amar Sindhu, a professor and member of the Women’s Action Forum, echoed similar concerns, saying the rise in extremist ideologies was deepening social injustices and threatening women’s safety in Sindh.
“We stand united against these injustices and demand action to protect women from violence and oppression,” she said.
Sindhiyani Tehreek, founded in 1980, has been a prominent force in the province, advocating for women’s rights, social justice and the preservation of Sindhi culture. The movement also has a long history of resistance against authoritarian rule, gender-based violence and environmental degradation.
Apart from social and gender issues, the protest also highlighted proposed amendments to the Indus River System Authority (IRSA) Act, 1992, introduced in July to restructure Pakistan’s water regulatory authority.
Key changes include appointing a permanent federal chairman to the authority, replacing the current rotational system where provincial representatives take turns leading IRSA.
The movement’s general secretary condemned the amendments as “unlawful,” warning they could exacerbate interprovincial disputes and deprive Sindh of its rightful share of water.
“Sindh deserves its share of water to sustain its crops, mangroves and marine life,” she said.


One killed in northwestern Pakistan blast targeting religio-political party leader

Updated 17 November 2024
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One killed in northwestern Pakistan blast targeting religio-political party leader

  • Attack on Maulana Shehzad Wazir of Jamiat Ulema-e-Islam has left him critically injured
  • The JUI leader was on his way to a mosque in Azam Warsak when the explosion took place

PESHAWAR: One person was killed and six others injured in a blast triggered by an improvised explosive device (IED) targeting a senior leader of a prominent religio-political party in South Waziristan district on Sunday, leaving him in critical condition, police said.
The attack on Maulana Shehzad Wazir comes amid complaints from his Jamiat Ulema-e-Islam (JUI) party about being targeted by militants operating in Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province.
JUI chief Maulana Fazlur Rehman also voiced concerns over militant threats disrupting the party’s election campaign in the region ahead of the February 8 national polls, citing warnings from law enforcement about dangers to its candidates.
“The IED was planted in a street leading to Maulana Shehzad Wazir’s mosque, who is politically affiliated with the JUI-F,” Bilal Wazir, a police officer in Wana, the headquarters of South Waziristan tribal district, told Arab News over the phone. “Mufti Ijaz Wazir died on the spot while six others, including Maulana Shehzad Wazir, who was apparently the target of the attack, were left in critical condition.”
The officer said a police contingent was dispatched to the area soon after the explosion to gather evidence and shift the wounded to the hospital.
Asked about the intensity of the blast, he said it shook the entire neighborhood of Azam Warsak, a settlement on the outskirts of Wana.
Speaking to Arab News, Mufti Ijaz Shinwari, the JUI senior vice president in the tribal area, condemned the incident, saying the victims of the attack were religious leaders and key figures of his political party on the provincial level.
“This is inhumane,” he added. “This is clearly a terrorist attack and a cowardly act.”
No group has claimed responsibility for the attack, though Tehreek-e-Taliban Pakistan (TTP), a banned militant group, has a history of targeting civilians, security forces and politicians in the region, aiming to perpetuate instability in KP.
In recent months, the TTP has claimed responsibility for several attacks and is suspected by officials in others.
Earlier this week, however, Daesh, a separate militant outfit, shot dead Hameed Sufi, a senior leader of the Jamaat-e-Islami party, in the adjacent Bajaur tribal district.
In June, four people, including Maulana Mirza Jan, the president of JUI’s Wana chapter, were shot by unidentified attackers.
Pakistan claims Afghanistan’s Taliban rulers are providing shelter to TTP fighters across the porous border separating the two countries. However, the Afghan Taliban insists they do not allow anyone to use their soil to launch violent attacks in the neighborhood.
 


Smog drops from hazardous to unhealthy in Pakistan’s Lahore

Updated 17 November 2024
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Smog drops from hazardous to unhealthy in Pakistan’s Lahore

  • The city’s AQI index reached a daily average of 243, still considered ‘very unhealthy’
  • Current pollution level is 10 times higher than what is deemed acceptable by WHO

ISLAMABAD: The air quality in Pakistan’s smog-choked city of Lahore on Sunday fell below the threshold considered “hazardous” for humans for the first time in two weeks.
The AQI index reached a daily average of 243, still “very unhealthy” but below the highest level of 300 considered “hazardous.”
The level of PM2.5 particles was also more than 10 times higher than the level deemed acceptable by the World Health Organization.
The city of 14 million people close to the border with India peaked at a record AQI of 1,110 on November 14.
Punjab, home to more than half of Pakistan’s 240 million people, closed schools in its major cities on November 6, and on Friday extended the closure to November 24.
It has also banned all outdoor sports in schools until January, and cracked down on polluting tuk-tuks, barbecues and construction sites in pollution hot spots across Lahore.
Seasonal crop burn-off by farmers on the outskirts of the city also contributes to toxic air the WHO says can cause strokes, heart disease, lung cancer and respiratory diseases.


Pakistan’s finance chief says PM Sharif will soon unveil ‘home-grown’ economic agenda

Updated 17 November 2024
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Pakistan’s finance chief says PM Sharif will soon unveil ‘home-grown’ economic agenda

  • Muhammad Aurangzeb calls the recent IMF visit part of ongoing talks, enhancing mutual trust
  • The visit came weeks after the $7 billion loan approval, making observers think it was unusual

ISLAMABAD: Prime Minister Shehbaz Sharif will soon unveil a “home-grown agenda” for economic development, Finance Minister Muhammad Aurangzeb said on Sunday, as he informed that his interaction with a visiting International Monetary Fund (IMF) delegation last week went well, providing both sides an opportunity to enhance mutual trust.
The IMF delegation, led by Pakistan mission chief Nathan Porter, completed a five-day trip to the country during which it held wide-ranging conversations with the government.
The international lending organization approved a $7 billion loan for Pakistan in September, though it explicitly stated that the delegation’s visit was not part of the first review of the loan program, which is scheduled for the first quarter of 2025.
The IMF visit, which came just weeks after the loan’s approval, surprised observers who considered it unusual, though the finance minister described it as part of an ongoing dialogue between the two sides, noting that it resulted in a positive IMF statement.
Aurangzeb also said the government would specify its overall economic game plan in the next few days.
“The prime minister will soon share a home-grown agenda about how we are going to take forward our overall economic roadmap,” he said, without disclosing its details. “It has been very well syndicated with all the stakeholders.”
The minister emphasized that dealings between Pakistan and the IMF were completely transparent, with all agreed details available in the public domain. He noted the recent discussions with the IMF covered taxation and energy reforms, along with the privatization plan for state-owned enterprises and public finances.
“I welcomed this visit because this is an ongoing dialogue to ensure mutual credibility and trust,” he added. “We have shared our roadmap with them and explained how we are taking things forward.”
The finance minister said the two sides would continue to hold virtual talks, though he noted that he appreciated every opportunity to meet IMF officials face-to-face.
He also mentioned that discussions with the international lender included climate resilience and decarbonization, emphasizing that these issues had to be addressed alongside broader economic challenges rather than sequentially.
Pakistan has faced a prolonged economic crisis marked by rapid currency devaluation and dwindling foreign exchange reserves, which forced it to seek external financial assistance from friendly nations and global financial institutions.
The country has seen an improvement in its macroeconomic indicators in recent months, though it has yet to fully recover from its financial difficulties.
Reflecting on his visit to Washington for the World Bank and IMF meetings earlier this year, Aurangzeb described the discussions as productive.
“They gave us a platform to share with the comity of nations about how we turned the economy around in 14 months,” he said. “We also got an important message, which is that there is no room for complacency and we must stay the course [of stringent economic reforms].”