World bank says economic stabilization ‘taking hold’ in Pakistan

A man walks past the World Bank building in Washington, DC on April 21, 2022. (AFP/File)
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Updated 28 February 2025
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World bank says economic stabilization ‘taking hold’ in Pakistan

  • Pakistan and World Bank last month signed an agreement for a ten-year plan for $20 billion in development loans
  • Pakistan currently under IMF bailout that requires it to boost government revenues, external sources of financing

ISLAMABAD: The World Bank said on Friday economic stabilization was “taking hold” in Pakistan, making this an opportune moment for the group to sign an agreement for a ten-year plan to focus $20 billion in development lending in the cash-strapped country.

The new plan, known as the Country Partnership Framework, was announced by the World Bank last month and will focus the global institution’s pledge of $20 billion in areas including clean energy and climate resilience in the ten years from 2026.

The country has teetered on the brink of economic crisis for several years and economists and international financial institutions have called for major economic reforms. Pakistan is currently under a $7 billion International Monetary Fund bailout program, which requires the country to boost government revenues and shore up external sources of financing, much of which comes from loans from China and Gulf nations.

“This is an important moment for the partnership between the World Bank Group and Pakistan as we engage on this journey at a particular moment for Pakistan where stabilization is taking hold and there are new ambitions and new plans for development on the long term that are very aligned with the prioritizes of the World Bank Group in the country,” WB Country Director for Pakistan, Najy Benhassine, said in a video message on X.

“This is a groundbreaking joint commitment with the government of Pakistan both at the federal and provincial level to commit to focus on six of the most acute development challenges that the country is facing.”

The World Bank’s lending for Pakistan will start in 2026 and focus on six outcomes: improving education quality, tackling child stunting, boosting climate resilience, enhancing energy efficiency, fostering inclusive development and increasing private investment.

The finance ministry’s monthly outlook report said this week Pakistan’s consumer inflation was expected to remain stable in February and maintain a downward trajectory compared to the previous year. Inflation has eased since last year with CPI coming in at 2.4 percent in January compared to 24 percent in the same period last year. Authorities have credited the downward trend to economic stabilization under the IMF program secured last summer.

An IMF mission is due to arrive in Islamabad next week for the first review of the global lender’s facility.

“The primary surplus is expected to improve further in the coming months,” the finance ministry said, pointing to one of the benchmarks identified by the IMF.

The report also said that foreign remittances, a crucial lifeline for Pakistan’s economy, were expected to rise.

“Workers’ remittances recorded robust inflows of $20.8 billion during July-Jan FY2025, marking a 31.7 percent increase over $15.8 billion last year,” the ministry said.


In parched Karachi, mosques give back to the earth by saving ablution water

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In parched Karachi, mosques give back to the earth by saving ablution water

  • Project started at Jamia Uloom Islamia Banuri seminary has now spread to 20 city mosques 
  • From India to Indonesia, communities have long explored ways to reuse water from places of worship 

KARACHI: On a sweltering afternoon in Karachi’s Gulberg neighborhood earlier this month, rows of men lined up under shaded arcades at a seminary to perform wudu, the ritual ablution Muslims perform before prayers. 

In a city battered by chronic water scarcity, each drop of this cleansing water is precious but until last year, gallons of it flowed straight into Karachi’s aging sewer lines, lost forever.

Now, at over 20 mosques scattered across this sprawling megacity of more than 20 million people, this water has found a second purpose. It is being stored underground to help replenish the city’s shrinking aquifers, drop by precious drop. 

The unconventional fix is the brainchild of Dr. Syed Imran Ahmed, who heads the Panjwani Hisaar Water Institute at Karachi’s NED University. He convinced the administrators of Jamia Uloom Islamia Banuri, one of Pakistan’s biggest seminaries, to store ablution water in underground wells instead of letting it drain away.

And what started as a pilot at the Banuri mosque has since spread to more than 20 mosques citywide.

“A lot of people go to the mosque and use water there without any thinking. Now this water directly goes to wastewater, so it becomes part of wastewater,” Dr. Ahmed told Arab News.

“But what if you divert it to a tank or to a well in the mosque?”

Karachi is Pakistan’s economic engine but also one of its thirstiest cities. Official estimates show it needs about 1,200 million gallons per day but gets barely half that on average.

As residents bore deeper and deeper wells to tap the ground beneath them, they have left behind hollow pockets in the earth, literal sinkholes that are swallowing parts of the city.

A landmark study by Singapore’s Nanyang Technological University found Karachi ranks second in the world for urban land subsidence, just behind China’s Tianjin. Between 2014 and 2020 alone, parts of the city sank by as much as 15 centimeters due to excessive groundwater pumping.

“And that rate of sinking is higher than the sea level rise due to climate change. Now they are calling them bowl cities ... the city is like a bowl because different areas of it are sinking.” said Yasir Husain, founder of the Climate Action Center in Karachi.

The mosque project, he explained, addressed this destructive cycle in which countless homes had bore ever deeper into the earth for water.

“People have on every street two or three houses which have bores, and they suck water from the ground,” he said. “And they’ve gone deeper and deeper.”

Recharging wells, however small, could help restore the balance, Hussain added.

OTHER FAITHS, OTHER CITIES

The idea isn’t unique to Karachi. From India to Indonesia, communities have long explored ways to reuse water from places of worship.

In India’s Hyderabad, the centuries-old Charminar mosque installed a water recycling system in 2019 that filters ablution water for reuse in gardens. 

In Kuala Lumpur, Malaysia, a green mosque project uses treated wudu water for toilet flushing and irrigation.

In the Middle East, where water stress is even more acute, countries like the UAE have pioneered mosque greywater reuse for landscaping, transforming prayer halls into unexpected allies for urban water security.

At the Jamia Masjid Falah in the city’s Gulberg neighborhood, Abdullah Malik, a mosque committee member, said he could see the water recycling results firsthand.

“It’s essential that any sweet water used should be saved instead of being wasted into the gutter lines,” he said, estimating that 700–800 people performed ablution at his mosque daily.

Even saving three liters per person could mean thousands of liters recharging the earth every day, Malik added, a small, steady buffer against Karachi’s mounting water emergency.

Indeed, encouraged by the community response, Dr. Ahmed has mapped 27 flood-prone areas in the city where monsoon rain can also be stored in recharge wells.

He hopes local authorities will greenlight the proposal soon.

“I think that these 27 wells would be soon active, god willing,” he said.

Meanwhile, supporters like Husain believe mosques and local leaders could play a crucial role in changing habits.

“The water which is used for wudu [ablution] will not end up in your gutter,” he said. “That water is precious.”

No doubt, for Karachi, every drop saved, and returned to the earth, is a promise that the city’s lifeline might yet endure.


International Day of Family Remittances: Pakistani PM hails expats for record payments this year

Updated 16 June 2025
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International Day of Family Remittances: Pakistani PM hails expats for record payments this year

  • In current fiscal, overseas Pakistanis remitted record $34.9 billion, a 28.8 percent increase over the previous year
  • Pakistan received $3.7 billion in workers’ remittances in May 2025 alone, a strong 13.7 percent year-on-year

ISLAMABAD: Prime Minister Shehbaz Sharif on Monday hailed the record $34.9 billion in remittances sent by overseas Pakistanis this fiscal year, describing it as a sign of their “growing confidence in the government’s economic policies.”

In a statement marking the International Day of Family Remittances, the premier said the 28.8 percent year-on-year rise in remittances had significantly bolstered the country’s foreign exchange reserves. Pakistan received $3.7 billion in workers’ remittances in May 2025 alone, a strong 16 percent increase month-on-month and 13.7 percent year-on-year.

“These historic figures are a testament not only to the hard work and loyalty of our diaspora but also to their growing confidence in the government’s economic policies,” Sharif said, calling remittances a “powerful pillar supporting Pakistan’s economic resilience.” 

“This trust reinforces our resolve to redouble efforts for the revival and growth of our economy.”

With over 9 million Pakistanis living abroad, mainly in the Gulf, Europe, and North America, the prime minister praised the expatriate community for their enduring commitment to families back home and their role in sustaining the national economy.

Sharif reiterated the government’s commitment to attracting foreign investment and expanding exports to ensure long-term economic stability, stressing that remittances remained crucial to this goal.

“Let us renew our collective pledge to work hand in hand with our diaspora, development partners, and all stakeholders to overcome our economic challenges and usher in a new era of investment, prosperity, and national progress,” the premier said.


Pakistan closes pedestrian traffic at all Iran border crossings as Israel strikes escalate

Updated 16 June 2025
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Pakistan closes pedestrian traffic at all Iran border crossings as Israel strikes escalate

  • Closures affect crossings in Balochistan’s border districts of Chaghi, Gwadar, Kech, Panjgur 
  • All are key routes for cross-border movement, local trade between Iran and Balochistan province

 QUETTA: Pakistani authorities have closed all major border crossings with Iran for pedestrian traffic amid escalating cross-border strikes between Iran and Israel, officials in the southwestern Balochistan province said on Sunday.

The closures affect the Taftan crossing in Chaghi district, the Gabd-Rimdan crossing in Gwadar district, the Chedgi and Jirrak crossings in Panjgur district and the Rideeg Mand crossing in Kech district. All are key routes for cross-border movement and local trade between Balochistan and Iran. 

“All kinds of pedestrian movement at the Gabd-Rimdan border has been suspended due to the Iran-Israel conflict,” Jawad Ahmed Zehri, assistant commissioner for Gwadar, told Arab News.

Trade activity at the crossing would remain open and Pakistani citizens stranded in Iran would be allowed to return, he said, but no new entries into Iran would be permitted through this point until further notice.

In a separate order, authorities also said the Taftan border crossing in Chaghi district had been closed for pedestrian traffic.

“We have closed pedestrian movements at the Taftan border until further notice,” said Naveed Ahmed, assistant commissioner for Taftan, adding that trade and customs operations from the crossing were continuing as usual.

The Chedgi, Jirrak and Mand Radig border crossings have also been shut, officials in the Kech and Panjgur districts confirmed. 
 
The closures come amid heightened tensions following Israeli strikes on Iranian cities since Friday with scores killed, including senior Iranian military commanders.

The blockade is expected to affect daily wage laborers, small-scale traders and local residents who depend on frequent cross-border movement for commerce, supplies and family visits.

Small items such as fruit, vegetables and household goods are commonly traded by hand or in small vehicles along these routes.

Bilateral trade volume between Pakistan and Iran reached $2.8 billion in the last fiscal year, which ended in June. Both countries have signed a memorandum of understanding with the aim of increasing this volume to $10 billion.

Iran also supplies about 100 megawatts of electricity to border towns in Balochistan.


Israel’s unchecked nuclear capability will have ‘catastrophic consequences,’ Pakistan warns West

Updated 16 June 2025
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Israel’s unchecked nuclear capability will have ‘catastrophic consequences,’ Pakistan warns West

  • Analysts warn Israel’s unacknowledged nuclear weapons could encourage it to take more aggressive steps
  • Tensions have surged in the Middle East following Israel’s June 13 “Operation Rising Lion” aerial offensive on Iran

ISLAMABAD: Pakistan’s defense minister Khawaja M. Asif on Sunday warned Western governments that their support for Israel risked unleashing “catastrophic consequences,” citing concerns over Israel’s nuclear capabilities and regional aggression.

Tensions have surged in the Middle East following Israel’s June 13 “Operation Rising Lion” aerial offensive targeting Iranian nuclear and military facilities, reportedly killing more than 130 people, including senior military commanders and nuclear scientists. Iran has retaliated with missile and drone barrages on Israeli cities, sparking concerns of a wider conflict. 

Israel is widely believed to possess nuclear weapons but maintains a policy of ambiguity and is not a party to the Nuclear Non-Proliferation Treaty (NPT). The 1970 accord is aimed at preventing the spread of nuclear weapons, promoting disarmament, and ensuring peaceful use of nuclear technology. Pakistan is also not a signatory to the NPT but frequently underscores its commitment to nuclear safety and non-proliferation principles through other international frameworks.

Displaced Palestinians stand outside tents as they watch trails of Iranian missiles targeting Israel, from Rafah's Mawasi area in the southern Gaza Strip on June 15, 2025.(AFP)

Analysts warn that in the current volatile situation, Israel’s unacknowledged nuclear weapons could encourage it to take more aggressive steps, increasing the risk that the conflict could spread across the region or even spark a wider international crisis.

“World should be wary and apprehensive about Israel’s nuclear prowess, a country not bound by any international nuclear discipline,” Asif said in a post on social media platform X. “It is not signatory to NPT or any other binding arrangement.”

The minister contrasted Israel’s position with Pakistan’s, stating that Islamabad was a signatory to “all international nuclear disciplines” and maintained a nuclear program solely for “the benefit of our people and defense of our country against hostile designs.”

“We do not pursue hegemonic policies against our neighbors,” Asif added, accusing Israel of doing just that through its military actions. 

“Western world must worry about conflicts being generated by Israel. It will engulf the whole region and beyond. Their patronage of Israel, a rogue state, can have catastrophic consequences.”

The Pakistani minister’s comments come amid growing international concern over the humanitarian toll of Israel’s ongoing military operations in Gaza, as well as fears that the conflict could expand regionally following tensions with Iran and Hezbollah.

There was no immediate response from Israeli or Western officials to Asif’s remarks.


Pakistan hikes petrol, diesel prices in fortnightly review

Updated 16 June 2025
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Pakistan hikes petrol, diesel prices in fortnightly review

  • Government sets petrol at Rs258.43 per liter, up from Rs253.63
  • High-speed diesel will cost Rs262.59 per liter, up from Rs254.64

KARACHI: Pakistan’s government has increased fuel prices, raising the rate of high-speed diesel (HSD) by Rs7.95 per liter and petrol by Rs4.80 per liter effective from today, Monday, an official notification from the finance division said. 

The notification set the price of petrol at Rs258.43 per liter, up from Rs253.63, while high-speed diesel will cost Rs262.59 per liter, up from Rs254.64.

The revision is based on “recommendations from the Oil and Gas Regulatory Authority and relevant ministries,” the finance division saiad. 

The government did not provide a specific explanation for the hike.

Fuel prices in Pakistan are generally influenced by global oil market trends, currency fluctuations, and changes in domestic taxes.

Fuel costs are revised every two weeks and have a direct impact on inflation. Rising fuel prices increase production and transportation costs, leading to higher prices for goods and services across the board in Pakistan, including food and other essential items. This direct relationship is further amplified by the country’s dependence on imported fuel.