Tehran looks to Islamabad for mediation as regional tensions rise

Iran's Foreign Minister Javad Zarif called on Prime Minister Imran Khan in Islamabad on May 24, 2019. (PID)
Updated 24 May 2019
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Tehran looks to Islamabad for mediation as regional tensions rise

  • Foreign Minister Zarif meets Pakistani counterpart, prime minister, army chief
  • Pakistan has own international obligations, cannot risk falling into the trap of US sanctions, analysts say

ISLAMABAD: Pakistani Foreign Minister Shah Mahmood Qureshi on Friday assured his visiting Iranian counterpart that Islamabad would continue its efforts to ensure peace in the region, the foreign office said, as Mohammad Javad Zarif arrived in Pakistan to seek mediation amid heightened tensions between the Islamic Republic and the United States.
Zarif started a two-day visit to Islamabad on Thursday night, ahead of next week’s emergency Arab League meeting summoned by Saudi Arabia over escalating tensions in the Arabian Gulf region. The Pakistani foreign office officials said the purpose of the visit — which has not been publicly revealed other than to say Zarif will hold bilateral talks with Pakistani leaders — was to seek Islamabad’s help in deescalating mounting tensions with the US.
“Pakistan supports diplomatic engagement to resolve all outstanding issues, and all stakeholders need to demonstrate restraint and patience,” Qureshi told Zarif during delegation level talks at the Foreign Office.

According to an official handout circulated by Pakistan’s foreign ministry later in the day, the two sides also discussed how to increase bilateral trade, facilitate people to people contacts, open new border markets and crossing points, and enhance security in their frontier regions.
Qureshi described Iran’s nuclear deal with six major world powers as “a good example of negotiated settlement of complex issues through diplomatic means,” adding that his country supported it and thought that all signatories to the deal must live up to their obligations.
The United States pulled out of the agreement a year ago that limited Iran’s nuclear program in return for lifting economic sanctions. This month tensions have risen sharply following US President Donald Trump’s decision to try to cut Iran’s oil exports to zero and beef up US military presence in the Gulf in response to what he says are Iranian threats.
“Tensions in the region are in no one’s interest,” Qureshi said, assuring his Iranian counterpart that Islamabad would continue its efforts for peace and stability in the region.
Pakistan walks a fine line with neighboring Iran, with which it shares a troubled 900-kilometer-long border, and staunch ally Saudi Arabia, which this week announced a $3.2 billion deferred oil and gas payment package for energy-strapped Islamabad. Pakistan has already received $3 billion in direct cash assistance from Riyadh in recent months to stave off a balance of payments crisis.
Zarif also met with Prime Minister Imran Khan on Friday and discussed issues of “bilateral interest,” according to a statement from the PM Office. In a statement released after Zarif called on army chief General Qamar Javed Bajwa, the military leader was quoted as saying, “war is not in anyone’s interest and all sides need to make efforts to keep conflict away from the region.”
Shamshad Ahmad, a former foreign secretary, said the Iranian foreign minister’s visit to Islamabad was part of a “consultative process” between the two neighboring countries to chalk out ways to tackle the unraveling situation in the Arabian Gulf.
“We are geo-politically linked with Iran, and if something bad happens to Iran, Pakistan will automatically feel its consequences,” Ahmad told Arab News. “Javad Zarif is here to explain Iran’s position and take the Pakistani leadership into confidence over the recent regional tensions.”
Ahmad said the timing of Zarif’s visit was “very important” just days before Prime Minister Imran Khan is due to visit Saudi Arabia on may 31 to participate in a summit of the Organization of Islamic Cooperation (OIC) body.
“The situation emerging in the Gulf is very serious not only for Iran, but also for the whole region,” he said, “But Pakistan can only extend moral support to Iran in the current scenario. We have our own limitations and international obligations to abide by … [we] cannot risk falling into the trap of US sanctions.”
This month, Pakistan said it had informed Iran in writing that it could not execute a $7 billion Iran-Pakistan gas pipeline project as long as Tehran was under a United States sanctions regime, driving the final nail in the coffin of a project that was conceived in the 1990s to connect Iran’s giant South Pars gas field to India via Pakistan.
Tehran formally issued a notice to Islamabad in February this year, saying it was moving an arbitration court against Pakistan for failing to lay down the pipeline in Pakistani territory in the timeframe stipulated in the bilateral agreement. Pakistan has until August this year to legally respond to Iran’s notice and settle the issue through negotiations.
Relations between Iran and Pakistan have been strained in recent months, with both sides accusing each other of not doing enough to stamp out militants allegedly sheltering across the border.


Pakistan wants ‘larger, longer’ IMF bailout, PIA privatization by early July — FinMin

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Pakistan wants ‘larger, longer’ IMF bailout, PIA privatization by early July — FinMin

  • Pakistan last month completed a short-term $3 billion program that helped stave off sovereign default
  • Finance minister says hopeful PIA and other privatization deals would get through “finishing line” by early July

ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Monday Islamabad was seeking a “larger and longer” bailout program from the International Monetary Fund, whose mission would arrive in Islamabad within the next ten days to start discussing a new loan deal.

Pakistan last month completed a short-term $3 billion program, which helped stave off sovereign default, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer term program.

Pakistan’s financial year runs from July to June and its budget for fiscal year 2025, the first by Sharif’s new government, has to be presented before June 30.

The IMF has not specified the dates of its Islamabad visit, nor the size or duration of any new program.

“We have requested the IMF … that we want to go into a larger and a longer program with the fund and they have acceded that request, and we are expecting the mission to arrive here within a week to 10 days, where we will start discussing the contours of the next program,” Aurangzeb said while addressing a conference in Islamabad. 

He said Pakistan needed a new IMF program to bring “permanence” to macroeconomic stability and continue to carry out “structural reforms.” 

The IMF has said accelerating reforms was more important than the size of a new program, which would be guided by a package of reforms and balance of payments needs.

Under the last $3 billion bailout, Pakistan implemented several IMF-mandated reforms, such as budget adjustments, increasing interest rates, and higher energy prices. 

Among expected reforms under a new program are strengthening public finances through gradual fiscal consolidation, broadening the existing tax base and improving tax administration, and debt sustainability, all while protecting the vulnerable.

Pakistan also needs to restore the viability of the energy sector and prevent further accumulation of circular debt arising from subsidies and unpaid bills. Other reforms will include cutting inflation, stimulating private sector growth and adopting a market-driven exchange rate to help balance external accounts and rebuild foreign reserves.

PIA PRIVATIZATION

“We have to broaden our tax base,” the finance minister said, outlining reforms under new IMF deal. “Our tax to GDP [ratio] is languishing at about 9 percent ... we have to start moving it toward 14- 15 percent.”

“We have to start resolving the complex energy equation … And the third one is the SOE [state-owned enterprises] reform,” Aurangzeb said. “Our prime minister has been very clear that the government has no business being in business … We need to and we will accelerate the privatization agenda.”

He said he hoped that PIA, the national carrier, and other privatization deals would get through the “finishing line” by early July. 

Last week, Pakistan pushed back the deadline for companies to express interest in buying PIA to May 18, a day before the expressions had originally been due. The privatization commission says 10 companies have already expressed an interest.

Pakistan’s government has previously said it was putting on the block a stake of between 51 percent and 100 percent in the loss-making airline.

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 key to helping cash-strapped Pakistan pursue further funding talks with the IMF.


At OIC contact group meeting, Pakistan calls on India to restore Kashmir’s special status

Updated 3 min 16 sec ago
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At OIC contact group meeting, Pakistan calls on India to restore Kashmir’s special status

  • Delegations from Pakistan, Saudi Arabia and other member states attend OIC Contact Group on Jammu and Kashmir meeting in Banjul
  • Member states call for early and peaceful resolution to Kashmir dispute along the lines of OIC’s agenda UN resolutions, says foreign ministry 

ISLAMABAD: Pakistan’s Deputy Prime Minister and Foreign Minister Ishaq Dar stressed on India to release prisoners, lift curbs on political parties and restore the special status of the internationally disputed Jammu and Kashmir territory, the foreign ministry said on Monday, during the sidelines of the Organization of Islamic Cooperation’s (OIC) summit in The Gambia. 

These views were expressed by Dar as he led Pakistan’s delegation to a meeting of the OIC’s Contact Group on Jammu and Kashmir on Sunday in Banjul. The meeting reviewed the political and security environment in Jammu and Kashmir, and took stock of the “grim human rights situation” in the territory, Pakistan’s Ministry of Foreign Affairs (MoFA) said. The meeting was attended by member states of the contact group such as Saudi Arabia, Türkiye, Niger, Azerbaijan and officials of the OIC-Independent Permanent Human Rights Commission. 

Kashmir has long been a flashpoint between India and Pakistan, both of which claim all of the region but administer only parts of it. On Aug. 5 2019, Indian Prime Minister Narendra Modi withdrew Indian-administered Kashmir’s autonomy in a move that was seen by analysts as a strategy to tighten his grip over the territory. The decision provoked outrage in Pakistan and the downgrading of diplomatic ties and suspension of bilateral trade between the two countries. 

“He [Dar] also stressed that India must release all the political prisoners, lift curbs on the outlawed political parties, revoke the illegal and unilateral actions of 5 August 2019 and the subsequent steps aimed at demographic change and political engineering, and implement the relevant UN Security Council resolutions,” MoFA said. 

Dar informed the group that India was “systematically denying the Kashmiri people their fundamental rights and freedoms,” adding that Indian authorities had created “an environment of fear and intimidation” in the disputed territory. 

The delegations from member countries stressed the importance of the resolution of the Kashmir dispute along the lines of the OIC’s agenda, the foreign ministry said. They expressed support for the legitimate struggle of Kashmiris for the realization of their right to self-determination in accordance with the relevant UN Security Council resolutions, the ministry said. 

“They called for an early and peaceful resolution of the Jammu and Kashmir dispute,” MoFA said. 

The OIC has 57 member countries, making it the second largest intergovernmental organization after the United Nations. The OIC contact group on Jammu and Kashmir was established in 1994 to support the struggle of the people of Indian-administered Kashmir, including their right to self-determination, to voice the organization’s position, and coordinate joint actions on the dispute.

Dar is in Banjul to attend an OIC summit being held against a backdrop of widespread anger over Israel’s military actions in Gaza. The Jewish state has killed nearly 35,000 Palestinians and caused massive destruction of hospitals, schools and residential neighborhoods in the densely populated area since Oct. 7.

The Pakistani deputy prime minister arrived in Gambia on Wednesday to present his country’s perspective on a wide range of issues, including the war in Gaza and the rights situation in Indian-administered Kashmir.
 


Pakistan ‘high priority’ economic opportunity for us, Saudi top minister says in Islamabad

Updated 30 min 11 sec ago
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Pakistan ‘high priority’ economic opportunity for us, Saudi top minister says in Islamabad

  • 50-member Saudi delegation with representatives of 30 Saudi companies in Pakistan for investment conference
  • Pakistan and Saudi Arabia have been working closely in recent weeks to finalize trade and investment deals

ISLAMABAD: Pakistan is a “high-priority economic investment and business opportunity” for Saudi Arabia, the Kingdom’s Assistant Minister of Investment Ibrahim Al-Mubarak said on Monday, as a two-day Pak-Saudi investment conference kicked off in Islamabad.

A 50-member delegation led by Al-Mubarak arrived in Pakistan on Sunday, comprising some 30 Saudi companies from the fields of IT, telecoms, energy, aviation, construction, mining exploration, agriculture and human resource development.

“To the Saudi government and Saudi companies, Pakistan is considered a high-priority economic investment and business opportunity,” Al-Mubarak said as he addressed the investment summit. 

“We believe in the great potential of Pakistan’s economy, demographics and talent as well as location and natural resources.”

Al-Mubarak said this was his second visit to Pakistan in two weeks and many influential leaders from globally renowned Saudi companies were part of his delegation.

“Today, we want to connect you [Pakistan] all to Saudi companies who desire to continue building their international presence, for Saudi Arabia’s ambitions do not stop at our borders and we would like to see Pakistan as one of our leading international partners,” the Saudi official added. 

“So, this gathering provides a wonderful opportunity for them [Saudi companies] to develop a deeper understanding of the great opportunities available for investment in Pakistan and to learn about related regulations, requirements, and incentives.”

INVESTMENT PUSH

Pakistan and Saudi Arabia have been closely working in recent weeks to increase bilateral trade and investment deals, with Crown Prince Mohammed bin Salman last month reaffirming the Kingdom’s commitment to expedite an investment package of $5 billion.

The Saudi business delegation’s visit comes on the heels of one by Sharif to Riyadh from Apr. 27-30 to attend a special two-day meeting of the World Economic Forum. 

On the sidelines of the WEF conference, the Pakistani PM met and discussed bilateral investment and economic partnerships with the crown prince and the Saudi ministers of finance, industries, investment, energy, climate, and economy and planning, the adviser of the Saudi-Pakistan Supreme Coordination Council and the presidents of the Saudi central bank and Islamic Development Bank.

This was Sharif’s second meeting with the crown prince in a month. Before that he also met him when he traveled to the Kingdom on April 6-8. The Saudi foreign minister was also in Pakistan last month, a trip during which Pakistan pitched projects worth at least $20 billion to Riyadh.

Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as a top source of remittances to the cash-strapped South Asian country. During the first half of the current financial year, bilateral trade between Pakistan and Saudi Arabia was recorded at $2.482 billion, with Pakistan’s exports of $262.58 million and Saudi exports of $2.219 billion.

Saudi Arabia has often come to Pakistan’s aid in the past, regularly providing it oil on deferred payments and offering direct financial support to help stabilize its economy and shore up forex reserves.

As things stand, Pakistan desperately needs to shore up its foreign reserves and is in talks with the International Monetary Fund (IMF) for a new bailout deal, for which it needs to signal that it can continue to meet requirements for foreign financing which has been a key demand in previous loan packages. 

Last year Pakistan set up the Special Investment Facilitation Council, a body consisting of Pakistani civilian and military leaders and specially tasked to promote investment in Pakistan. The council is so far focusing on investments in the energy, agriculture, mining, information technology and aviation sectors and specifically targeting Gulf nations.


Pakistan Securities And Exchange Commission approves PIA restructuring

Updated 06 May 2024
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Pakistan Securities And Exchange Commission approves PIA restructuring

  • Pakistan’s national airline has accumulated hundreds of billions of rupees in arrears and losses over the years
  • Pakistan last year agreed to overhaul loss-making public entities in exchange for a financial bailout from IMF

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has approved the restructuring scheme of the country’s national airline, the privatization ministry confirmed on Sunday, marking a significant milestone in the government’s endeavors to privatize the loss-making entity.

Pakistan has identified 25 public sector enterprises for privatization that have accumulated billions in losses, including the Pakistan International Airlines (PIA), banks, hotels and power generation and distribution companies. Pakistan agreed in June 2023 to overhaul its loss-making state-owned enterprises (SOEs) as part of a deal with the International Monetary Fund (IMF) for a $3 billion bailout package. The government resolved to privatize PIA shortly after finalizing the IMF agreement. 

However, the country’s progress in privatization has been stalled for decades due to political inertia and various challenges, including legal, licensing and ownership issues. In March, the government created PIA Holding Company (Holdco) to expedite the national carrier’s privatization by managing the airline’s liabilities and assisting in its transfer to potential investors.

On May 4, the Competition Commission of Pakistan (CCP) green-lighted PIA’s acquisition by Holdco, saying it would not have any material impact on the market. On Sunday, the privatization ministry said the SECP had agreed to the transfer of PIA’s non-core assets and liabilities to Holdco. 

“This order marks a significant milestone in the collaborative efforts of the Privatization Commission (PC), Finance Division, Aviation Ministry and Pakistan International Airlines to restructure the national carrier,” the ministry said. 

It said the SECP has directed the Pakistan Stock Exchange, the Central Depository Company and the National Clearing Company to ensure Holdco’s “smooth listing.” 

The PIA has accumulated hundreds of billions of rupees in arrears and losses over the years, forcing successive Pakistani governments to dole out billions of rupees from their budgets to keep the loss-making public entity afloat. 

The PIA’s woes were compounded after 2020 when the airline was already struggling financially while its flights were grounded due to the coronavirus pandemic. When the national airline resumed operations in May 2020, a domestic PIA flight crash in Karachi killed 97 out of 99 people on board, prompting an initial inquiry that pointed to a number of safety failures.

The inquiry sparked a disclosure from authorities that nearly a third of PIA’s pilots may have falsified their qualifications, prompting the European Union Aviation Safety Agency (EASA), the US Federal Aviation Administration (FAA) and other regulators to ban PIA flights.

Prime Minister Shehbaz Sharif has vowed to privatize the airline and warned Pakistan’s bureaucracy that he would not tolerate delays in the process. Sharif has assured Pakistan’s business community several times that the process to privatize the national airline would be a transparent one. 


Pakistan thrash South Korea 4-0 in Azlan Shah Cup hockey clash

Updated 06 May 2024
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Pakistan thrash South Korea 4-0 in Azlan Shah Cup hockey clash

  • Pakistani players Abdul Hanan Shahid, Arshad Liaqat, Ghazanfar Ali and Sufiyan Khan score goals 
  • This is Pakistan’s second victory in the tournament after their win over hosts Malaysia on Saturday

ISLAMABAD: Pakistan’s field hockey team beat South Korea 4-0 in their second match of the Sultan Azlan Shah Cup this week, state-media reported on Monday, as the South Asian side continued their impressive run in the tournament.

The 30th edition of the prestigious field hockey tournament is being played in Ipoh, Malaysia from 4-11 May. The cup will be contested between six teams, namely Canada, Japan, Malaysia, New Zealand, Pakistan and Korea. Pakistan’s national hockey team made a triumphant start to the tournament on Saturday, defeating hosts Malaysia by 5-4 in a thrilling match.

The green shirts continued their impressive form on Sunday, beating South Korea in what was a one-sided contest. 

“Pakistan in their second match beat South Korea by four goals to nil at Ipoh on Sunday,” the state-run Radio Pakistan reported on Monday. 

Pakistani players Abdul Hanan Shahid, Arshad Liaqat, Ghazanfar Ali and Sufiyan Khan scored goals to ensure the national team dominated the match. Pakistan’s defense did an impressive job to contain the Korean hockey team, thwarting their efforts to score a single goal. 

“Pakistan will play their third match against Japan in Ipoh, Malaysia tomorrow,” Radio Pakistan reported. “The match will start at 3:15 p.m.”

The Sultan Azlan Shah Cup 2024 will see a round-robin stage at first where all six participating teams will play against each other once, followed by positional playoffs.

The teams finishing in the bottom two places of the league stage will contest in a fifth-place classification match. Teams finishing in third and fourth place in the pool stage will compete for bronze, while the top two teams will play in the final for the title.