Awaiting final report on sugar scam before taking action — PM Khan 

A laborer unloads sacks of sugar from a supply truck at the main wholesale market in Karachi February 19, 2012. (REUTERS/File photo)
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Updated 05 April 2020

Awaiting final report on sugar scam before taking action — PM Khan 

  • Federal investigations have named close aides of PM Khan and others in a multi-billion rupee sugar and wheat scam
  • PM says no “powerful lobby” will be able to profit at public expense once detailed report out on April 25

ISLAMABAD: Prime Minister Imran Khan said on Sunday he would wait for the findings of a detailed forensic investigation, due to be released on April 25, before taking action against those named in a federal investigation regarding a multi-billion rupee sugar and wheat industry scam.
Two reports by the Federal Investigation Agency (FIA) were made public on Saturday, naming Khan’s close aide Jahangir Tareen, allied party leader Monis Elahi, the brother of a sitting federal minister and others for benefiting from government subsidies on sugar export and profiting from increasing prices in the local market. 
“I await the detailed forensic reports now by the high-powered commission, which will come on April 25, before taking action,” Khan said in a Twitter post on Sunday. “InshaAllah [God willing] after these reports, come out no powerful lobby will be able to profiteer at the expense of our public.”
Rising food prices, particularly for sugar and wheat flour, present one of the toughest challenges for Pakistan’s 19-month-old civilian government. Experts have increasingly blamed influential businessmen and politicians for the price hikes, which are fueling public anger.
The price of sugar per kg has increased exponentially in Pakistan in the last six months-- from Rs55 in December 2018 to Rs71.44 in June 2019, though additional taxes were not implemented until July. 
Sugar production in the country was reported in excess of estimated domestic consumption between 2016-2017 and 2017-2018, and was exported. 
Pakistan had an export subsidy in 2015-16, set at Rs13,000 per ton for exports of 650,000 tons of sugar. In 2018, the Khan government quadrupled the volume of sugar eligible for export subsidies to 2 million tons to reduce excessive domestic supplies.
Sugar cane is a popular crop in Pakistan as the government sets procurement prices, while the industry is protected by a 40 percent import tariff which has led to high domestic prices.
According to the report of the FIA investigation, two main groups benefited from the sugar price hike crisis. The first was JWD, which is owned by PM Khan’s top aide Tareen and which obtained 12.28 percent of the total export subsidy of Rs3.058 billion during 2015-18.
The other is RYK group which has a portfolio of four sugar mills owned by Makhdoom Omar Shehryar, the brother of the sitting food security minister, as well as Chaudhry Munir of the opposition Pakistan Muslim League-Nawaz party and Monis Elahi of the PML-Q, which is part of the ruling coalition. Among them, they received a total of 15.83 percent of the government’s export subsidy, amounting to Rs3.944 billion, during 2015-18.
Arab News could not reach Tareen or Bakhtiar for comment. 
“The ball is now in the prime minister’s court, and let’s see how he moves against the mafia,” Adnan Rehmat, a political analyst, told Arab News on Sunday. “This is the best opportunity for the prime minister to initiate action against his close aides and other members of the ruling alliance to ensure transparency and good governance.”
Outlining the government’s options, Barrister Omer Malik it could order the FIA or National Accountability Bureau to move against the accused after the detailed forensic report was out. 
“An individual can also file a complaint in the Supreme Court or NAB against the accused named in the inquiry report, but he will first have to establish that he is an aggrieved party,” Malik said.


Pakistan plans to raise $1.5bln in Eurobonds, officials say

Updated 29 May 2020

Pakistan plans to raise $1.5bln in Eurobonds, officials say

  • The country’s central bank recently cut its policy rate drastically to cope with the coronavirus
  • The Pakistani economy is likely to contract -1% to -1.5% in the current financial year, according to the IMF

ISLAMABAD: Pakistan plans to raise $1.5 billion through Eurobonds to bridge a balance of payments gap for the financial year beginning July 1, two government officials said on Friday.
With the country’s fiscal deficit likely to rise as high as 9.4% and a shortfall in revenues due to COVID-19 economic losses, Pakistan desperately needs funds to stave off balance of payment pressure caused by dwindling foreign reserves and a current account deficit.
“Pakistan plans to launch these bonds in next fiscal year. Exact dates and amount can’t be confirmed at the moment as it depends on market situation,” an official at the finance ministry told Reuters.
Another official at Pakistan’s ministry of economic affairs said Pakistan wants to raise an estimate $1.5 billion. Both officials requested anonymity.
The Pakistani economy is likely to contract -1% to -1.5% in the current financial year, which ends in just over a month, on June 30, according to the International Monetary Fund and the country’s finance ministry.
The plan is subject to approval from Pakistan’s cabinet. Its terms would be made public at launching.
In the current financial year, Pakistan attracted over $4.4 billion in carry-trade funds through government financial instruments, including treasury bills and bonds, offering rates as high as 13%.
Pakistan’s central bank recently cut its policy rate drastically to cope with the coronavirus. Over $4.1 billion has flowed out of government instruments to date as the effects of the global pandemic hit markets.
Pakistan is also expecting more multilateral and bilateral external inflows in next financial year, including the IMF, as well as debt relief from G20 countries.
Moody’s has placed Pakistan’s local and foreign currency long-term issuer B3 ratings under review for downgrade, citing a potential default on private sector debt.