KARACHI: Following an International Monetary Fund (IMF) report painting a bleak picture of Pakistan’s economy, the government finds itself torn between the IMF’s demands for a further increase in prices for gas and power, the domestic unrest that will likely arise as a result of meeting those demands, and the economic cost of not receiving the IMF’s bailout package, with Pakistan needing billions of dollars to service its external debt.
“Pakistan is facing an increasingly difficult economic situation, with high fiscal and current account deficits, and low international reserves. This mostly reflects the legacy of an overvalued exchange rate, loose fiscal policy and accommodative monetary policy,” said Harald Finger, head of the IMF staff mission that visited Islamabad from September 27 to October 4, in a statement issued on Friday.
The IMF mission head said that a rapid increase in international oil prices, normalization of US monetary policy, and tightening financial conditions for emerging markets are adding to this difficult picture, suggesting that, as a result, economic growth will likely slow significantly, and inflation will rise.
Finger said: “The team welcomes the policy measures implemented since last December. These include 18 percent cumulative depreciation of the rupee, interest rate increases of cumulatively 275 bps, fiscal consolidation through the budget supplement proposed by the minister of finance, a large increase in gas tariffs closer to cost-recovery levels, and the proposed increase in electricity tariffs.
“Policies should include more exchange-rate flexibility and monetary policy tightening, further fiscal adjustment anchored in a medium-term consolidation strategy, and strengthening the performance of key public enterprises together with further increases in gas and power tariffs,” he continued.
Following the IMF statement, the Pakistan Stock Exchange reacted negatively with the benchmark KSE 100 index nose-diving by 860 points due to slow decision-making on the part of government and a drastic drop in the country’s foreign exchange reserves, which decreased to $8.2 billion.
Senior analyst Ahsan Mehanti told Arab News, “Stock fell sharply on investor fears amid a weekly fall in foreign exchange reserves of $627 million and dismal earnings outlook after the IMF end-of-mission statement, which called for policy measures including a further hike in gas and power tariffs and significant external financing”.
“Slow decision-making (about whether to accept the IMF’s bailout package) is the biggest concern of the market, because delaying the inevitable has its own cost,” Muhammad Sohail, senior equity analyst and CEO of Topline Securities, explained.
“The government is still trying hard to avoid the IMF, due to its harsh terms and conditions, but if, as a last resort, the government goes to the fund, we will have to face political fallout,” Senator Mohsin Aziz, PTI member of the Senate Committee on Finance, Revenue and Economic Affairs, told Arab News.
Professor Hassan Askari, a senior political analyst, said: “If the government goes to the IMF it will be subjected to lot of harsh criticism at home because so far the PTI has been staunchly opposed to the IMF program.”
Former finance minister Dr. Salman Shah said: “If they do not go to the IMF they will be in trouble, and delaying it will come with a certain cost. But If they do go to the IMF, people will have to face inflationary pressure, in which case they may shift some of the blame on to the shoulders of the previous government (as is the norm in Pakistan’s politics).”
As experts forecast another wave of inflation, the IMF advocates protection of some of the more-vulnerable segments of society through the Benazir Income Support Program.
Junaid Esmail Makda, president of the Karachi Chamber of Commerce and Industry,said: “An increase in gas tariffs will ultimately result in (increasing) inflation, which will terribly affect the lives of the poor.”
Senator Mohsin Aziz said: “In the post-IMF program period, the government would try to increase its revenue income so that vulnerable people and sectors could be compensated through subsidies and other means.”
Though no official was available to comment on the decision to approach the IMF, local media reported that the team negotiating with the IMF mission has told Prime Minister Imran Khan that the IMF bailout package is “the only viable option” and the PM is expected to give his consent within days.
IMF calls for Pakistan to make further power price hikes
IMF calls for Pakistan to make further power price hikes
- Pakistan is facing “increasingly difficult” economic situation, IMF says
- Government braced for harsh criticism and political fallout, Senator Mohsin Aziz
Islamabad rejects ‘unhealthy’ remarks by Indian politicians about Pakistan’s nuclear capability, Kashmir
- Pakistan has been key topic of Indian election speeches by PM Narendra Modi, top leaders of his ruling BJP party
- Foreign Office urges Indian politicians to stop dragging Pakistan into their domestic politics for ‘electoral gains’
ISLAMABAD: Pakistan’s foreign office on Tuesday rejected “baseless” and “unhealthy” remarks by Indian Prime Minister Narendra Modi and other members of his cabinet regarding Pakistan’s nuclear program, Kashmir dispute and other regional issues, which came during campaigning for ongoing elections in India.
Pakistan has been a key topic of speeches by Indian leaders during campaign rallies, with Modi and top leaders from his ruling Bharatiya Janata Party (BJP) making strong statements about their South Asian neighbor.
At an election rally in Bihar this week, Modi indirectly referred to National Conference leader Farooq Abdullah’s remarks about Pakistan’s nuclear capabilities and said he would make Pakistan “wear bangles.”
Noting the “alarming” surge in anti-Pakistan rhetoric, Pakistan’s Foreign Office said it rejected the “irresponsible statements” by Indian leaders about the Jammu and Kashmir dispute, counter-terrorism efforts, bilateral relations and Pakistan’s nuclear capabilities.
“Regrettably, these statements reflect an unhealthy and entrenched obsession with Pakistan and reveal a deliberate intent to exploit hyper-nationalism for electoral gains. These also signify a desperate attempt to deflect attention from mounting domestic and international criticism,” Mumtaz Zahra Baloch, a Pakistani foreign office spokesperson, said in a statement.
“The bravado and jingoism exhibited by Indian leaders expose a reckless and extremist mindset. This mindset calls into question India’s capacity to be a responsible steward of its strategic capability. On the other hand, the purpose of Pakistan’s strategic capability is to safeguard its sovereignty and defend its territorial integrity.”
Baloch noted that Pakistan had clearly demonstrated its resolve to defend itself in the past and would not “hesitate to do so in the future should the Indian side choose to embark on a misadventure.”
About Indian Union Home Minister Amit Shah’s claim that Azad Kashmir was part of India, she said Jammu and Kashmir was an internationally-recognized disputed territory and the relevant UN Security Council resolutions clearly mandated a plebiscite in the territory for its final determination.
“No amount of inflated Indian statements can change this reality,” Baloch said. “India should, therefore, focus on implementing these resolutions instead of indulging in fantasies of grandeur.”
The Himalayan territory of Kashmir has been divided between India and Pakistan since their independence from Britain in 1947, with both countries ruling part of the territory but claiming it in full.
The western portion of the larger Kashmir region is administered by Pakistan as a nominally self-governing entity, while India rules the southern portion as a union territory.
Baloch urged Indian politicians to stop dragging Pakistan into their domestic politics for “electoral gains” and to handle sensitive strategic matters with “utmost caution.”
“We call upon the international community to take note of Indian leadership’s belligerent rhetoric, which poses a grave threat to regional peace and stability,” she said.
“The vision of peace, progress, and prosperity in South Asia can only be realized through the peaceful resolution of all outstanding disputes, including Jammu and Kashmir, and a shift from confrontation to cooperation.”
UK universities at risk as number of students from Pakistan, other nations plunge — report
- Students from Pakistan, India, Nigeria and China account for 70 percent of graduate visas
- The Migration Advisory Committee found no evidence of widespread abuse for graduate route
LONDON: Britain should avoid further restricting international student numbers or some universities may collapse, a government commissioned report said on Tuesday, after foreign registrations plummeted for next year.
High levels of legal migration have long dominated Britain’s political discourse and were one of the major drivers for the Brexit referendum in 2016.
Along with care staff and low salaried workers, the government of Prime Minister Rishi Sunak has sought to reduce the number of students coming to Britain, including preventing some post-graduate students from bringing family members.
The Migration Advisory Committee, an independent body which gives the government advice, said the number of international postgraduate students paying deposits to study at British universities this September had dropped by 63 percent, compared with the previous year, after the government put restrictions on education visas.
The report warned that further restrictions on the so-called graduate route, which allows foreign students to work in Britain for up to two years after graduation, would lead to job losses, course closures and a risk “that some institutions would fail.”
Britain boasts some of the most famous and sought after universities in the world, from Oxford and Cambridge to Imperial College London. Business leaders argue that they boost innovation, increase creativity and provide a form of soft power, as many world leaders have studied at British colleges.
The government commissioned the review after concerns that the graduate visa route was being abused. Some British politicians have complained that some students are applying for visas and then claim asylum or overstay.
Esther McVey, a minister in Sunak’s cabinet, said on Monday that some British universities were “selling immigration to international students rather than education.”
A spokesman for Sunak said the government would consider the report and respond. But the spokesman highlighted concerns about the scheme, pointing out that more than 40 percent of international students using the route were either not working or earning below 15,000 pounds ($18,834) a year after graduation.
The Migration Advisory Committee found there was no evidence of widespread abuse specifically for the graduate route. Students from four countries – India, Nigeria, China and Pakistan – account for 70 percent of graduate visas.
British business lobby group, the CBI, said British universities were one of the country’s biggest export successes, and with the Migration Advisory Committee saying the system was not being abused “it’s time to put its future beyond doubt and end this period of damaging speculation.”
Pakistan PM to visit Azad Kashmir ‘in few days’ to review situation after violent protests
- At least four people were killed in protests over subsidized wheat flour and electricity that began on May 11
- The protests were called off on Tuesday after Pakistan approved $83 million subsidies for the disputed region
ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif has announced visiting Azad Jammu and Kashmir (AJK) “in a few days” to personally review the situation after days-long violent protests over subsidies, Pakistani state media reported on Tuesday.
At least three protesters and a police officer were killed and several others wounded in days of clashes between demonstrators demanding subsidies on wheat flour and electricity and law enforcement.
The protests were called off on Tuesday, a day after Pakistan announced $83 million subsidies and prompted the regional government to notify a reduction in prices of wheat flour and electricity.
On Tuesday, Sharif presided over a meeting of his cabinet to discuss the situation in Azad Kashmir, the state-run Radio Pakistan broadcaster reported.
“Prime Minister Shehbaz Sharif has announced to visit Azad Jammu and Kashmir in a few days to personally review the ground situation and promote the tendency of resolving issues at the dialogue table,” the report read.
“He said Kashmir is the jugular vein of Pakistan as declared by the founder of Pakistan, and maintaining law and order there is the top priority.”
The Himalayan territory of Kashmir has been divided between India and Pakistan since their independence from Britain in 1947, with both countries ruling part of the territory but claiming it in full.
The western portion of the larger Kashmir region is administered by Pakistan as a nominally self-governing entity, while India rules the southern portion as a union territory.
While the Indian portion has faced an ongoing insurgency for decades and multiple armed attempts by the state to quell it, the Pakistani side has remained relatively calm over the decades, though it is also highly militarized.
The Jammu Kashmir Joint Awami Action Committee (JAAC) had organized the protests that began on May 11. “On the appeal of the Awami Action Committee, it has been decided to end the ongoing lockdown and wheel-jam strike across Azad Kashmir,” Amjad Ali Khan, a member of the JAAC core committee, told Arab News on Tuesday.
Presiding over the cabinet meeting, Sharif commended the AJK government for demonstrating restraint to foil “nefarious designs of the elements, who intend to sabotage the situation under the pretext of protests,” according to the Radio Pakistan report.
He thanked Pakistan President Asif Ali Zardari and AJK PM Anwar-ul-Haq for their cooperation in resolving the issue “amicably.”
PM forms committee of allies to deliberate amendments to Pakistan’s social media law
- Law minister says federal cabinet will take final decision after coalition partners give feedback on draft law
- Critics say the amendments could be used to stifle dissent and free speech instead of protecting digital rights
ISLAMABAD: Prime Minister Shehbaz Sharif has formed a committee comprising representatives of allied parties to review amendments to Pakistan’s electronic crimes law, Law Minister Azam Nazeer Tarar said on Tuesday, highlighting that the federal government wanted to form political consensus before making changes to the law.
The government says amendments to the Prevention of Electronic Crimes Act (PECA) 2016 are aimed at protecting the digital rights of millions of Pakistani users, encouraging responsible Internet use and regulating online content to prevent hate speech and disinformation. Critics say the amendments, like PECA itself, could be used to stifle dissent and free speech. In the past, PECA has been used against critics of Pakistan’s all powerful army as well as governments and cases under the blasphemy law among others have also been filed using the legislation.
Earlier this month, the government notified a new National Cybercrimes Investigation Agency (NCCIA) to probe electronic crimes, which digital rights activists described as yet another attempt to stifle online criticism of the state. The NCCIA was approved by the caretaker government-led federal cabinet last year to take over cybercrime investigations from the Federal Investigation Agency (FIA).
Addressing the media on Tuesday, the law minister said the draft legislation has been sent to the federal cabinet for approval after being drafted by the IT ministry according to Article 19, which deals mainly with freedom of speech.
“Despite this, the PM was of the view that a political consensus was necessary for legislation, the cabinet also agreed to the premier’s view,” Tarar said.
“Now he has formed a committee in this regard which will include allied parties including the Pakistan Peoples Party (PPP), Muttahida Qaumi Movement-Pakistan (MQM-P), Pakistan Muslim League Quaid (PML-Q), Istehham-i-Pakistan Party (IPP).”
The law minister said allied party representatives would examine the draft legislation and report feedback to the federal cabinet which would then take a final decision.
PECA
PECA was passed in 2016 during the government of Sharif’s Pakistan Muslim League Nawaz (PML-N) party, which is once more in power and leading a fragile coalition at the center.
The law was originally enacted to combat various forms of cybercrime, including cyber terrorism, unauthorized access, electronic fraud and online harassment.
But the law has variously been used to crackdown on journalists, bloggers and other critics of the state.
The popular social media platform X has been blocked in the country since February when Pakistan held general elections marred by widespread allegations of manipulation and rigging.
New coach Gary Kirsten to join Pakistan cricket team in England
- The 56-year-old South African has served as the batting coach of Gujarat Titans in the Indian Premier League
- The PCB has also appointed Simon Helmot as the fielding coach and David Reid as mental performance coach
ISLAMABAD: Gary Kirsten will start his two-year assignment as the coach of Pakistan’s white-ball cricket team when he joins the squad in England on Sunday.
Pakistan will play four Twenty20s against England to prepare for the T20 World Cup next month in the Caribbean and the United States.
Pakistan has delayed naming its final 15-man squad for the T20 World Cup until the first T20 against England next Tuesday at Leeds.
Kirsten served as the mentor and batting coach of Gujarat Titans in the Indian Premier League. They were knocked out of playoff contention on Monday.
“I’ve missed the experience of coaching at the international level and nurturing talented players to reach their full potential,” Kirsten said in a statement issued by the Pakistan Cricket Board on Tuesday. “I’m committed to working closely with the (Pakistan) team to elevate their game and bring joy to fans around the world.”
Kirsten has coached India and South Africa.
Last month, the 56-year-old South African was confirmed as the white-ball coach along with Jason Gillespie as the red-ball coach.
Pakistan has done well in the last two T20 World Cups. It made the semifinals in 2021 and the final against England in 2022.
The PCB has also appointed Simon Helmot as the fielding coach and David Reid as mental performance coach of the national team for the T20 World Cup. Reid will join the team next Monday while Helmot will team up with the Pakistan side on May 31 after the T20 series against England.
