Pakistan expects negative GDP growth for first time in 68 years

In this file photo, daily wage laborers wait for work as they sit outside closed shops, during lockdown amid the outbreak of coronavirus disease (COVID-19), at a market in Karachi on April 14, 2020. (REUTERS)
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Updated 20 May 2020

Pakistan expects negative GDP growth for first time in 68 years

  • GDP estimated at $264 billion in the current fiscal year, compared with $279 billion in 2019-20
  • Negative growth may pose a threat to the national security on the back of increasing debt burden

KARACHI: Pakistan’s economy is going to record a negative 0.38 percent growth rate in the current fiscal year, as its usual drivers — the industrial and services sectors — have been stalled by the coronavirus outbreak.

On Monday, the Ministry of Planning and Development said that the country’s gross domestic product (GDP) had been estimated at $264 billion in the current fiscal year 2020-21, compared with $279 billion in 2019-20.

“The minus growth after decades, in fact, after 68 years, will mean among many other things more debts to fund all the expenses. Many of which are inevitable. For example, debt servicing, defense, civil administration and social services,” Dr Ikram Ul Haq, a Lahore-based senior economist, told Arab News.

He added that it may pose a threat to the national security on the back of increasing debt burden.

"Our tax system at federal and provincial levels is not yielding even to meet current expenses ... unless the fundamental structural reforms are not made, the country will be pushed toward a level where debt non-sustainability will pose a threat to national security," he said.

Another expert believes that the slower growth could harm social funding.

"The immediate impact would be that no more funds would be available to spend on social sectors ... It seems that there would be no major revenue collection and that would impact sectoral allocation next year," Dr Vaqar Ahmed of the Sustainable Development Policy Institute (SDPI) told Arab News.

He added that the authorities are planning to boost tax collection and target tax evaders.

"Extensive data mining by the FBR (Federal Board of Revenue) is going on for the identification of those who have submitted low tax against liabilities or remain out of the tax net, including those who availed amnesty. An audit of large taxpayers is also an option," Ahmed said.

The agricultural, industrial and services sectors posted 2.67 percent, -2.64 percent, and -0.59 percent growth, respectively, while the manufacturing sector recorded a -5.56 percent growth rate, mainly due to COVID-19 related lockdowns of industrial units.

The wholesale and retail trade sector posted negative 3.42 percent growth, while transport, storage and communications shrunk to negative 7.13, according to the National Accounts Committee.

Though the per capita income for 2019-20 has increased in rupees to Rs 214,539 for 2019-20 showing a growth of 8.3 percent over Rs198,028 in 2018-19, in dollar terms it has shrunk to $1,271 from $1,363 due to currency devaluation.

Economists say the developments could result in dire consequences for the country, which is already reeling from the impact of COVID-19-related unemployment.

“Massive unemployment, shrinking income and rising poverty are some outcomes which are expected. For the common man, it means miseries and disillusionment. Lower growth is going to force the government to seriously consider that reforms are the only option," Dr Haq said.

Monsoon rains expected in Pakistan from June 26, bringing relief amid heat wave 

Updated 6 sec ago

Monsoon rains expected in Pakistan from June 26, bringing relief amid heat wave 

  • Meteorological department warns of flash floods in some parts of the country 
  • Pakistan has been in the grips of severe heat wave since last month

ISLAMABAD: Monsoon rains are expected to hit parts of Pakistan from June 26 till the beginning of July, the meteorological department said on Tuesday, offering much-needed relief during an ongoing heat wave.
The National Disaster Management Authority (NDMA) has issued a comprehensive monsoon forecast for July, highlighting the potential impact of rainfall across various regions of the country, which has been facing a severe heat wave since last month, with temperatures in some regions rising to above 50 degrees Celsius. 
“Rains predicted in the country from June 26 to July 1,” the Pakistan Meteorological Department (PMD) said in a statement on Tuesday. “Monsoon currents from the Arabian Sea and Bay of Bengal likely to penetrate eastern parts of the country from June 26.”
The statement warned that heavy rains could cause flash floods in Islamabad, Rawalpindi, Lahore, Sialkot, Gujranwala and Narowal hilly areas of Kashmir from June 28-30. 
Dust storms, windstorms and lightning can also affect daily routines and potentially cause damage to lose structures like electric poles, vehicles and solar panels during the period, the PMD said, advising all the concerned authorities to remain on alert and take precautionary measures.
In Pakistan’s southeastern province of Sindh, the PMD said rain and thundershowers with isolated heavy rainfall were expected in Mithi, Umarkot, Mirpur Khas, Sanghar, Tando Allahyar, Badin, Thatta, Karachi, Hyderabad, Jamshoro, Shaheed Benazirabad, Nausheroferoze, Khairpur, Dadu, Sukkur, Jacobabad, Kashmore and Larkana districts.
For the country’s Punjab province, the statement said Islamabad, Rawalpindi, Murree, Galliyat, Attock, Chakwal, Jhelum, Mandi Bahauddin, Gujrat, Gujranwala, Hafizabad, Wazirabad, Lahore, Sheikhupura, Sialkot, Narowal, Sahiwal, Jhang, Toba Tek Singh, Nankana Sahib, Chiniot, Faisalabad, Okara, Kasur, Khushab, Sargodha, Bhakkar and Mianwali would receive rainfall from June 27 onwards.
“Rain and thundershowers are expected in Bahawalpur, Bahawalnagar, D.G. Khan, Multan, Khanewal, Lodhran, Muzaffargarh, Rajanpur, Rahimyar Khan and Layyah from June 26-30,” it added.
The statement said heavy rainfall was also expected in the Dir, Chitral, Swat, Kohistan, Malakand, Bajaur, Shangla, Battagram, Buner, Kohat, Bajaur, Mohmand, Khyber, Mansehra, Abbottabad, Haripur, Peshawar, Mardan, Hangu and Kurram districts of Pakistan’s northwestern Khyber Pakhtunkhwa province from June 28.
With regards to the country’s largest province Balochistan, the PMD said thundershowers were predicted in Lasbella, Khuzdar, Awaran, Jhal Magsi, Kalat, Naseerabad, Jaffarabad, Dera Bugti, Kohlu, Zhob and Barkhan districts from June 26-28.
In Gilgit-Baltistan, rain and thunderstorms were expected in Diamir, Astore, Ghizer, Skardu, Hunza, Gilgit, Ghanche and Shigar whereas Kashmir’s Neelum valley, Muzaffarabad, Rawalakot, Poonch, Hattian, Bagh, Haveli, Sudhanoti, Kotli, Bhimber, and Mirpur can also receive rainfall from June 28.
Pakistan is consistently ranked among the world’s worst-affected countries due to climate change. Unprecedented rainfall and the melting of glaciers triggered massive floods across the country in 2022, killing nearly 1,700 people and inflicting damages worth $3 billion. Scientists and experts attributed the floods to the adverse effects of climate change. Heat waves and droughts have also become common in Pakistan.

Three of 10 tourists abducted by separatists in southwestern Pakistan released 

Updated 8 min 11 sec ago

Three of 10 tourists abducted by separatists in southwestern Pakistan released 

  • Tourists were kidnapped last Wednesday night at tourist spot called Shaban near provincial capital of Balochistan
  • Province has seen decades-long insurgency against what separatists call unfair exploitation of resources 

QUETTA: Three of ten tourists who were abducted last week in southwestern Pakistan by separatist militants have been released, a local paramilitary official said on Tuesday.

The tourists were kidnapped last Wednesday night at a famous tourist spot called Shaban, 35 kilometers from the provincial capital of Quetta in Balochistan province. The separatist militant outfit, the Baloch Liberation Army (BLA), claimed responsibility for the kidnappings. 

Levies paramilitary official Ajmal Khan said on Tuesday three people, including a Pakistan customs official, had been released, without offering details on how the release happened. 

“Levies has condoned off the area and a search operation is underway,” Khan told Arab News. 

Six of the ten tourists abducted belong to the same family. 

“Soon we will recover the rest of the seven abductees,” home minister Zia Langove said. 

The BLA is the most prominent of a number of separatist groups operating against the Pakistani state in Balochistan. BLA’s stated aim is complete independence for Balochistan, Pakistan’s largest province by territory but the smallest in terms of population given its arid mountainous terrain.

The province has seen a decades-long insurgency against what separatists call the unfair exploitation of resources in the mineral-rich region.

A spokesperson for the BLA told Arab News in an emailed statement the three tourists had been released because they were found to be “innocent,” without specifying what they were found to be innocent with regards to. 

“BLA had detained 10 individuals after an intelligence tip-off,” the BLA said. “The remaining suspects are undergoing judicial investigation and proceedings.”

Balochistan borders Afghanistan to the north, Iran to the west and has a long coastline on the Arabian Sea. It has Pakistan’s largest natural gas field and is believed to have many more undiscovered reserves.

It is also rich in precious metals including gold, the production of which has grown over recent years.

Most of the separatist groups operate independently, but some recent reports in local media have pointed to increasing cooperation between them.

Pakistani security forces have been their main focus, but in recent years they have also targeted Chinese interests, given Beijing’s increasing economic footprint in the region.

In ‘major breakthrough,’ joint venture signed to establish Chromebook assembly line in Pakistan

Updated 25 June 2024

In ‘major breakthrough,’ joint venture signed to establish Chromebook assembly line in Pakistan

  • Production capacity to be scaled up from 500,000 to million Chromebooks per year
  • Partnership expected to boost technology sector, generate employment, PID says

ISLAMABAD: The Pakistan government has signed a letter of understanding (LoU) with a local Google partner and a foreign company to establish a state-of-the-art Chromebook assembly line through a joint venture, the Press Information Department (PID) said on Tuesday.
Pakistan’s IT sector has been performing well in recent years, marking another all-time high record of $310 million in inflows in April. 
Central bank data shows the country achieved 62 percent year-on-year growth in the sector. During the 10 months of the current fiscal year (10MFY24), IT exports clocked in at $2.59 billion, up by 21 percent annual basis as compared to $2.14 billion recorded in 10MFY23.
Pakistani IT exports are expected to rise to above $3.5 billion after the government allowed a retention limit from 35 percent to 50 percent in the Exporters’ Specialized Foreign Currency Accounts.
“In a major breakthrough, National Radio Telecom Corporation (NRTC) Pakistan, Allied Australian, and Tech Valley Pakistan signed a letter of understanding (LoU) at the Ministry of Federal Education, paving the way for a groundbreaking joint venture to establish a state-of-the-art Chromebook assembly line in Pakistan,” PID said in a statement on Tuesday. 
Tech Valley Pakistan is a social enterprise and the official country partner of Google for Education, Google Workspace and Google Cloud in Pakistan.
The statement said the joint venture was aimed at harnessing the expertise, technology and market insights of each party to establish a world-class assembly line at NRTC and Haripur City in the country’s northwestern Khyber Pakhtunkhwa province after receiving regulatory approvals and infrastructure availability.
PID said the partnership would help boost the country’s technology sector, create new opportunities for economic growth, and generate employment.
“The assembly line will have an initial production capacity of 500,000 Chromebooks per year, which will be scaled up to one million per year,” the statement said, adding that the collaboration had the potential to transform Pakistan into a hub for technology manufacturing and innovation in the region.

Pakistan cabinet approves draft MoU for student, teacher exchanges with Saudi Arabia

Updated 25 June 2024

Pakistan cabinet approves draft MoU for student, teacher exchanges with Saudi Arabia

  • Spokesperson religious affairs ministry confirms draft approved, agreement to be signed in coming days 
  • Pakistan has a close relationship with Saudi Arabia, which has been its friend and benefactor for decades

ISLAMABAD: Pakistan’s federal cabinet on Tuesday approved the draft of a memorandum of understanding to be signed with Saudi Arabia for the exchange of students, teachers and delegations, the ministry of religious affairs said. 
Pakistan has a close relationship with Saudi Arabia, which has been its friend and benefactor for decades. 
“On the recommendation of the Ministry of Religious Affairs and Interfaith Harmony Division, the Federal Cabinet approved the signing of a memorandum of understanding between the Ministry of Religious Affairs, the Government of Pakistan and the Ministry of Islamic Affairs, Da’wah and Guidance, Saudi Arabia,” the Prime Minister’s Office said in a statement.
Speaking to Arab News, the spokesperson of the ministry of religious affairs, Muhammad Umer Butt, confirmed the development. 
“The cabinet has approved the draft of the MOU which will now be signed later on,” he said. “It is about the exchange of teachers, students and delegations between Pakistan and Saudi Arabia under both countries’ relevant ministries.”
Pakistanis have made various contributions to Saudi Arabia over the decades. In the 1960s, Pakistani pilots operated RSAF fighter jets during Saudi Arabia’s Al-Wadiah conflict with Yemen as the PAF raised the RSAF (1969). The Pakistan Army was also crucial in helping the Saudi authorities put an end to the 1979 Grand Mosque Seizure. 
The immigration of Pakistanis is believed to have helped create contemporary Saudi Arabia, with doctors, engineers, professors and other professionals from Pakistan spending their lives in Saudi Arabia and making significant contributions to the country’s growth and social advancement.
Pakistanis living in Saudi Arabia are the largest source of remittances to the South Asian nation. According to a 2023 estimate, 2.64 million Pakistanis live and work in Saudi Arabia.

Pakistan court reserves verdict on pleas against ruling Imran Khan, wife violated marriage law

Updated 25 June 2024

Pakistan court reserves verdict on pleas against ruling Imran Khan, wife violated marriage law

  • Khan, wife Bushra sentenced to seven years in prison in February by court that ruled their 2018 marriage illegal 
  • Criminal complaint against marriage was brought by Bushra’s ex-husband to whom she was wedded for 30 years

ISLAMABAD: A district and sessions court on Tuesday reserved its verdict on pleas filed by Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan and his wife Bushra Bibi seeking the suspension of a ruling that they had violated the country’s marriage law.

Khan and his wife were sentenced to seven years in prison and fined in February by a court that ruled their 2018 marriage broke the law. Bushra was accused of not completing the waiting period mandated by Islam, called “Iddat,” after divorcing her previous husband and marrying Khan.

The Khans signed their marriage contract, or “Nikkah,” in January 2018 in a secret ceremony seven months before the former cricket superstar became prime minister for the first time. There was controversy over whether they had wed before the Iddat period was complete. After initial denials of the marriage, Khan’s Pakistan Tehreek-e-Insaf confirmed it weeks later.

The Khans both deny wrongdoing in the Iddat case.

“Court has reserved the decision till Thursday, June 27,” the PTI said in a text message to reporters. “Iddat case bail petition, with Barrister Slaman Safdar representing Former Prime Minister Imran Khan and former First lady Bushra Bibi, concluded arguments today.”

Khan is currently in jail and faces a string of legal cases. His convictions ruled the 71-year-old out of the February general elections as convicted felons cannot run for public office under Pakistani law. Arguably Pakistan’s most popular politician, Khan says all cases against him are motivated to keep him out of politics.

The criminal complaint against Khan and Bushra’s marriage was brought by her ex-husband, Khawar Maneka, to whom she was married for about 30 years.

Khan has often called Bushra his spiritual leader. She is known for her devotion to Sufism, a mystical form of Islam.

Born Bushra Riaz Watto, she changed her name to Khan after her marriage. Her husband and followers commonly refer to her as Bushra Bibi or Bushra Begum, titles that denote respect in the Urdu language.

Khan’s two previous marriages — to Jemima Goldsmith, daughter of tycoon James Goldsmith, and television journalist Reham Nayyar Khan — ended in divorce.