ISLAMABAD: Prime Minister Shehbaz Sharif on Friday invited American banks to invest in Pakistan’s infrastructure, energy, technology and agriculture sectors as the South Asian country seeks sustainable forms of external financing like direct investment.
On Friday, the IMF said Pakistan had received “significant financing assurances” from China, Saudi Arabia and the United Arab Emirates linked to a new International Monetary Fund program that go beyond a deal to roll over $12 billion in bilateral loans owed to them by Islamabad.
The IMF’s Executive Board on Wednesday approved the new $7 billion, 37-month loan agreement for Pakistan that 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 approval releases an immediate $1 billion disbursement to Islamabad.
On Friday, Sharif met a delegation of officials from top American banks in New York, including JP Morgan, Natixis Corporate & Investment Bank, Sumitomo Mitsui Banking Corporation, Goldman Sachs, Citizens Bank, Lazard and Audax Private Equity Partnering.
“The Prime Minister assured the delegation of the government’s commitment to maintaining a stable macroeconomic environment to facilitate foreign investors,” state broadcaster Radio Pakistan said in a report after the meeting.
“The Prime Minister informed the delegation about the key initiatives taken by the Government to stabilize the economy and attract foreign investment to Pakistan, including broadening the tax base, enhancing the ease of doing business, and ongoing reforms in the state-owned enterprises.”
These steps had resulted in improved economic indicators and the up-gradation of Pakistan’s credit rating by international rating agencies, including, Fitch and Moodys.
“He also briefed the delegation on the establishment of a Sustainable Finance Framework, which will allow the government to carry out a green and sustainability bond issuance in the international capital markets,” Radio Pakistan reported.
Islamabad had been working on implementing the IMF’s conditions, which Sharif had previously called “strict” to secure the 37-month loan program agreed in July.
One condition was to secure additional external financing, which the country was struggling to do.
The IMF said in a statement on Wednesday 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 cut the policy rate by a total of 450 bps since June, the statement said.
Despite this progress, it said, Pakistan’s vulnerabilities and structural challenges remain formidable, adding that the tax base remains too narrow.
“Without a concerted adjustment and reform effort, Pakistan risks falling further behind its peers,” it warned.
With inputs from Reuters
Pakistan invites investment from American banks as it seeks sustainable external financing
https://arab.news/j9zuc
Pakistan invites investment from American banks as it seeks sustainable external financing
- On Friday, Sharif met officials of top American banks including JP Morgan, Natixis Corporate & Investment Bank, Goldman Sachs
- IMF bailout loan is contingent on “continued strong financial support from Pakistan’s development and bilateral partners”
Pakistan removes floor price for rice exports
- Minimum export price for rice last set in November to be removed “effective immediately,” commerce ministry says
- Earlier this month, India removed a floor price for basmati rice exports to help farmers struggling with debt
ISLAMABAD: Pakistan removed a floor price for rice exports on Friday, the country’s commerce ministry said, following a similar move by neighboring India.
The Ministry of Commerce said in a written notification that the minimum export price for rice which was last set in November would be removed “effective immediately.”
Earlier this month, India removed a floor price for basmati rice exports to help farmers struggling with debt and higher costs boost overseas sales of the premium grade just weeks ahead of the arrival of the new-season crop.
India and Pakistan, the only growers of basmati, both try to promote the premium grade of rice in a manner similar to French Champagne or Darjeeling tea.
Pakistan delays PIA auction for third time as bidders seek more time
- No new date given for auction with the bidding process initially scheduled to be completed on Oct. 1
- Privatization commission spokesman says PIA’s cumulative losses have surpassed $2.86 billion
ISLAMABAD: The Pakistan government has delayed the auction of national carrier Pakistan International Airlines for the third time with no new date announced as potential bidders seek more time and information to assess the airline, a spokesman for the privatization ministry said on Friday.
The disposal of the flag carrier is a step that past elected governments have steered away from as it is likely to be highly unpopular, but progress on privatization is a precondition for cash-strapped Pakistan for an IMF bailout agreement approved this week.
The government announced in June it had selected six companies qualified to bid for PIA out of a pool of eight after receiving expressions of interest. The initial plan was to finalize the deal to sell PIA on the country’s Independence Day, Aug. 14, but the plan was delayed following requests from bidders who were waiting for the airline’s latest audited accounts, aircraft lease agreements and clarity on flights to Europe, which are currently banned. This was followed by September and October dates for the auction, but those have also not materialized.
Pakistan plans to sell more than 51 percent of its stake in the loss-making airline as part of the economic reforms suggested by the IMF which approved a long-awaited 37-month $7 billion bailout deal on Wednesday that 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.”
“Bidding is postponed but no new date is given officially,” Dr. Ahsan Ishaq, a spokesperson for privatization ministry, told Arab News on Friday.
He said the ministry had received “no official reason” from the bidders to delay the process but confirmed that they had been requesting more time and information to assess the carrier.
In August, the country’s central bank refused to grant a waiver or exemption to prospective buyers regarding PIA’s commercial bank loans of Rs268 billion ($971.1 million) and other financial guarantees in dollar terms, a development viewed as a setback to the privatization bid.
Dr. Ishaq said his ministry was in touch with the central bank to resolve the issue regarding all outstanding commercial loans of the national carrier before its final bid.
According to the ministry, the pre-qualified bidders for PIA include Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol (Pvt) Consortium and YB Holdings Consortium.
Official data available with Arab News shows there are 88 commercially operated state-owned enterprises in Pakistan, with collective losses of up to Rs730.258 billion ($2.61 billion) in the fiscal year 2022 (FY22).
In its five-year privatization plan ending in 2029, the government has approved 24 state-owned enterprises for sale, including PIA.
The top ten loss-making Pakistani entities, including PIA with Rs97.5 billion, the National Highways Authority at Rs168.5 billion and the Peshawar Electric Supply Company Limited with Rs102.2 billion, accounted for cumulative losses of Rs650.197 billion ($2.33 billion) in FY22, according to official data.
In contrast, the remaining enterprises reported combined losses of Rs80 billion ($286 million) during the same fiscal year.
Dr. Ishaq said PIA’s cumulative losses alone had surpassed Rs800 billion ($2.86 billion), with the total asset valuation of the airline standing at approximately Rs160 billion ($572 million).
Haroon Sharif, a former member of the Cabinet Committee on Privatization and a senior economist, said the government should have started the privatization process with “simpler transactions” to improve the confidence of investors instead of trying to sell complicated organizations like PIA.
“It is difficult to smoothly privatize PIA as its accounts, assets and financial records are not as transparent as required by the bidders,” he told Arab News, suggesting that the government bifurcate the PIA into four or five different sections and privatize them in parts.
“The potential bidders will definitely want to see clear and transparent audits, assets and liabilities of PIA before going ahead for the final auction, so that’s why this may take some time,” Sharif said. “The government should also refrain from privatizing the national carrier in haste, otherwise it will backfire.”
With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s and 5 ATRs, the airline loses traffic to Middle Eastern carriers, who have a market share of 60 percent, because of an absence of direct flights to destinations.
The carrier has air service pacts with 87 countries, and landing slots at key destinations such as London Heathrow.
The re-organization plan of the business will separate the aviation-related aspects from non-core components, so freeing the operating subsidiary of a large portion of legacy debt.
Pakistan receives $1.02 billion first tranche from new IMF bailout
- IMF board on Wednesday approved a long-awaited $7 billion bailout deal
- First tranche to be reflected in SBP liquid reserves to be released on Oct. 3
ISLAMABAD: Pakistan’s central bank said on Friday it had received $1.0269 billion from the International Monetary Fund as the first tranche of a $7 billion bailout to stabilize the economy, two days after the global lender’s board approved the package.
The IMF’s board on Wednesday approved a long-awaited 37-month $7 billion bailout deal that 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.”
“Following the approval of the IMF Executive Board of 37-month Extended Fund Facility amounting to $7 billion, SBP has received the first tranche of SDR 760 million (equivalent to USD 1026.9 million) from the IMF today [Friday],” the central bank said.
“These inflows will be reflected in SBP liquid reserves to be released on Thursday 03 Oct 2024.”
Pakistan has been struggling with boom-and-bust economic cycles for decades, leading to 22 IMF bailouts since 1958. Currently the country is the IMF’s fifth-largest debtor, owing the Fund $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 Pakistan facing its highest-ever inflation, pushing the country to the brink of a sovereign default last summer before a stop-gap last-minute IMF bailout.
Inflation has since eased and credit ratings agency Moody’s has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to ‘Caa2’ from ‘Caa3’, citing improving macroeconomic conditions and moderately better government liquidity and external positions.
With inputs from Reuters
Cricket umpire Aleem Dar to quit next year after Pakistan domestic season
- The 56-year-old Dar is among four Pakistani umpires on the ICC international panel
- Dar says its the right time to step down, give opportunities to other emerging Pakistani umpires
ISLAMABAD: Three-time world cricket umpire of the year Aleem Dar will step down in 2025 after the Pakistan domestic season.
The 56-year-old Dar served on the ICC elite panel of umpires from 2003-23. He is on the Pakistan elite panel and is among four Pakistani umpires on the ICC international panel, making him eligible to officiate in one-day internationals and Twenty20s.
“All great journeys must eventually come to an end, and the time has come for me to focus fully on my social and charity work,” Dar said on Friday. “My hospital project and other initiatives are very close to my heart and require my full devotion and attention.”
Dar played 17 first-class matches and 18 List A games from 1986-98 before he made his first-class umpiring debut in Pakistan’s premier domestic competition, the Quaid-e-Azam Trophy, in 1999.
“Umpiring has been my life for nearly 25 years and I have cherished the privilege of officiating some of the most iconic matches involving the greatest players of this generation,” Dar said. “Throughout my career, I’ve strived to uphold the highest standards of sportsmanship, and it has been an honor to work alongside some of the finest match officials in the world.”
Dar said it was the right time to step down and give opportunities to other emerging umpires from Pakistan.
“I will remain committed to mentoring and supporting the next generation of match officials and will always be available to offer guidance to those pursuing a career in this noble profession,” he said.
Dar officiated in 145 test matches, 231 ODIs, 72 T20s, and five T20 World Cups.
Pakistani PM says Israel threatening to drag entire Middle East into war
- Sharif was addressing UN General Assembly, where he spoke about Gaza, Kashmir, Pakistan’s fight against terror
- Sharif also lamented that UN Security Council Resolutions on Jammu and Kashmir had not been implemented
ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif said on Friday a failure to implement United Nations resolutions concerning Palestine had emboldened Israel and it was threatening to drag the entire Middle East into war.
Sharif was addressing the UN General Assembly, where he spoke about the war in Gaza, India’s ‘occupation’ of Kashmir, Pakistan’s fight against militancy and its struggle to shore up its economy, among other issues.
Gaza health authorities list more than 41,000 Palestinians confirmed killed in Israel’s air and ground assault, launched after Hamas fighters attacked Israeli towns on Oct. 7 last year, killing 1,200 people and capturing around 250 hostages. Israel’s airstrikes in recent days in Lebanon have killed hundreds of people and heightened fears of a regional war.
“In a span of a few days, Israel’s unrelenting bombing of Lebanon, has killed over 500 people, including women, and even small children,” Sharif told the UNGA.
“The failure to implement UN resolutions has emboldened Israel. It threatens to drag the entire Middle East into a war, whose consequences could be grave and beyond imagination.”
Sharif called for “durable peace” through a two-state solution.
“We must seek a viable, secure, contiguous and sovereign State of Palestine, based on the pre-1967 borders, with Al-Quds Al-Sharif as its eternal capital. And to advance these goals, Palestine must also be immediately admitted as a full member of the United Nations,” Sharif said.
Sharif also lamented that UN Security Council Resolutions on Jammu and Kashmir had not been implemented. The Council has adopted several resolutions in 1948 and in the 1950s on the dispute between India and Pakistan over the region, including one which says a plebiscite should be held to determine the future of the mostly Muslim Kashmir.
Another resolution also calls upon both sides to “refrain from making any statements and from doing or causing to be done or permitting any acts which might aggravate the situation.”
UN peacekeepers have been deployed since 1949 to observe a ceasefire between India and Pakistan in Jammu and Kashmir.
“Instead of moving toward peace, India has resiled from commitments to implement the Security Council resolutions on Jammu and Kashmir. These resolutions mandate a plebiscite to enable the people of Jammu and Kashmir to exercise their fundamental right to self- determination,” Sharif said.
The Himalayan region has long been a flashpoint in ties between the nuclear-armed neighbors India and Pakistan, who both claim it in full and rule it in part.
In August 2019, India stripped the part of Kashmir it administers of its special status, blocked the right of the state to frame its own laws and allowed non-residents to buy property there. Telephone lines, Internet and television networks were blocked and there were heavy restrictions on movement and assembly.
“Day in and day out, nine hundred thousand Indian troops terrorize the people of occupied Jammu and Kashmir, with draconian measures, including prolonged curfews, extra-judicial killings and the abduction of thousands of young Kashmiris,” Sharif said.
“At the same time, in a classic settler-colonial project, India is seizing Kashmiri lands and properties, and settling outsiders into occupied Jammu and Kashmir, to transform the Muslim- majority into a minority. This hackneyed tactic is employed by all occupying powers, but it has always failed. In Jammu and Kashmir too, it shall fail.”
Sharif said it was also “worrying” that India was engaged in a “massive expansion” of its military capabilities, which were essentially deployed against Pakistan:
“Its war doctrines, envisage a surprise attack and a ‘limited war under the nuclear overhang’. Thoughtlessly, India has spurned Pakistan’s proposals for a mutual “Strategic Restraint Regime”. Its leadership has often threatened to cross the Line of Control and “take-over” Azad Kashmir. Let me state in no uncertain terms that Pakistan will respond most decisively to any Indian aggression.”
