Pakistan says World Bank growth estimates based on ‘unrealistic assessment’

In this file photo, a person enters the building of the Washington-based global development lender, The World Bank Group, in Washington on Jan. 17, 2019. (AFP)
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Updated 09 October 2021

Pakistan says World Bank growth estimates based on ‘unrealistic assessment’

  • The country’s finance division says the bank’s GDP growth projection of 3.4 percent for FY2022 is underestimated
  • The World Bank published a report on South Asian economies, saying Pakistan’s growth remained 3.5 percent in FY21

KARACHI: Pakistan said on Friday the World Bank growth estimates for fiscal years 2021 and 2022 were based on “unrealistic assessment,” adding that the country’s economy grew by 3.94 percent and would soon be hovering around five percent.
The global lending agency on Thursday issued a report on South Asian economies that said Pakistan’s growth rate remained 3.5 percent in FY21.
It informed the country’s Gross Domestic Product was estimated to have increased by 3.5 percent in FY20-21, an upward revision of 2.2 percentage compared to the last forecast.
The report also added the country’s overall GDP growth was expected to ease to 3.4 percent in the current fiscal year since both expansionary fiscal and monetary measures were “expected to unwind.”
Reacting to the publication, however, Pakistan’s finance division said the World Bank estimates were inaccurate.
“With regard to the World Bank’s growth estimates of 3.5 percent in FY2021 against the National Accounts Committee’s estimates of 3.94 percent, released by the PBS [Pakistan Bureau of Statistics], it is mentioned that the WB estimates are based on unrealistic assessment,” said a comprehensive official statement.
The provisional estimate of GDP growth for FY2021 was 3.94 percent, it added, which was based on 2.8 percent growth in agriculture, 3.6 percent in Industry and 4.4 percent in services.
The statement said largescale manufacturing (LSM) was provisionally taken as 9.3 percent that yielded the estimated growth of 3.94 percent.
The LSM data was available with a lag of two months, the finance division explained, adding that the recent data released by the Pakistan Bureau of Statistics recorded a growth of 15.2 percent for FY 2021.
“After incorporating the latest available information, the GDP growth in FY2021 will improve further above 3.94 percent as compared to 3.5 percent estimates by the World Bank,” the statement continued.
It maintained the country’s economy was expected to grow by about five percent against the World Bank projection of 3.4 percent.
“For FY2022, the WB projection of 3.4 percent for GDP growth is again underestimated,” the statement said. “It is pertinent to mention that the economy of Pakistan has shown V-shaped recovery in FY2021 without creating any external and internal imbalances.”
“The government is committed to ensure that the growth momentum remains intact with macroeconomic stability,” it added. “Thus, it is expected that GDP growth for FY2022 will remain close to 5 percent.”
It did not say anything about the growth forecast for the next fiscal year (FY23) which the World Bank said would reach about four percent.
“For FY22/23, growth will pick up again to reach 4 percent as major structural reforms are implemented that are expected to strengthen the economy’s overall competitiveness,” said the World Bank report.
The WB report analyzed that fiscal and monetary tightening were expected to resume in FY22, as the government refocused on mitigating emerging external pressures and managing longstanding fiscal challenges.
“Regarding the monetary and fiscal tightening,” the finance division said, “it is to mention that, on one hand the government is tightening monetary and fiscal policies to contain the demand pressures, while on the other it is encouraging growth supporting policies as mentioned above.”
The statement also responded to the World Bank report on inflation and pressure on external accounts.
The bank had noted in its report that public debt would remain elevated in the medium term along with the country’s exposure to debt-related shocks.
It added that its economic outlook in the report had assumed that the Pakistan’s bailout package from the International Monetary Fund would continue to remain on track.
The finance division said, however, it expected that Pakistan would “achieve growth target with price stability.”


Former military ruler Pervez Musharraf’s body to be repatriated to Pakistan today

Updated 12 sec ago

Former military ruler Pervez Musharraf’s body to be repatriated to Pakistan today

  • Musharraf seized power in a bloodless coup in 1999 and ruled Pakistan until 2008 
  • The former army chief died in Dubai on Sunday after nearly seven years in self-exile

ISLAMABAD: The body of former Pakistani president and army chief General (retired) Pervez Musharraf, who passed away in Dubai on Sunday, will be repatriated to Pakistan today, one of his close aides said on Monday, adding Musharraf would be laid to rest in the southern city of Karachi. 

Musharraf, 79, left Pakistan in 2016 for medical treatment after a travel ban was lifted. The former military ruler had since been living in a self-exile in the United Arab Emirates and was under treatment at a Dubai hospital for amyloidosis, a rare disease. 

Musharraf seized power in a 1999 bloodless coup and was acting simultaneously as Pakistan’s army chief, chief executive, and president when the 9/11 attacks on the United States took place. He later became a key ally of the US during its invasion of Afghanistan. 

The general twice suspended the constitution and was accused of rigging a referendum shoring up his power, as well as rampant rights abuses including rounding up opponents during his nearly nine-year rule. 

“General Musharraf’s body will be repatriated to Pakistan today evening and he will be buried in Karachi tomorrow,” Dr. Muhammad Amjad, a former chairman of Musharraf’s All Pakistan Muslim League (APML) party, told Arab News. 

Amjad said Musharraf’s family had obtained a no-objection certificate from the Pakistani consulate in Dubai to repatriate his body. 

“I am traveling to Karachi now to attend his last rites,” he told Arab News in Islamabad. “His last rites will be performed in a simple but dignified manner.” 

Pakistan’s foreign office spokesperson Mumtaz Zahra Baloch expressed ignorance about the timing of the arrival of Musharraf’s body, but said that “our missions in the UAE are in contact with the family and are facilitating the transportation of the mortal remains.” 

Mahreen Malik Adam, a former secretary-general of Musharraf’s party, also confirmed that his body would be brought to Pakistan today, on Monday, but she was not aware of the burial place. 

“We hope General Musharraf’s family will formally be issuing a statement regarding burial and last rites of the deceased,” she told Arab News. 

Arab News made repeated attempts to reach Bilal Musharraf, the deceased’s son, for details about Musharraf’s last rites, but could not succeed. 

Musharraf, the son of a career diplomat, was born in New Delhi in 1943 and migrated to the newly independent Pakistan with his family in 1947. He joined the army in 1964 and graduated from the Army Command and Staff College in Quetta. He later attended the Royal College of Defense Studies in London and fought in Pakistan’s 1965 and 1971 war against neighboring India. 

After holding a number of appointments in the army’s artillery, infantry, and commando units, Musharraf was appointed army chief by then prime minister Nawaz Sharif in 1998 — a move he would later come to regret when the military ruler ousted Sharif in a bloodless military coup in 1999. Musharraf then served as Pakistan’s president from 2001 to 2008. 

Following the US invasion of Afghanistan after the September 11 attacks in 2001, Washington sought Pakistan’s support in the ‘War on Terror,’ and Musharraf became a close ally of the then US administration of George Bush. He also won mass appeal in the West through his calls for Muslims to adopt a lifestyle of “enlightened moderation.” He also embraced liberal economic policies during his rule that impressed business leaders, brought in foreign investment and led to annual economic growth of as much as 7.5 percent. 

Musharraf ruled as army chief until 2007 when he quit, trading the military post for a second five-year term as president. 

He stepped down as president also in 2008 over fears of being impeached by Pakistan’s then ruling coalition. He subsequently left the country but returned in 2013 with the hope of regaining power as a civilian at the ballot box. However, he encountered a slew of criminal charges, and within a year, was barred for life from running for public office. 

In 2016, after a travel ban was lifted, Musharraf left for Dubai to seek medical treatment and remained there until his death. 


Pakistan calls for ‘understanding, not more harsh conditionalities’ amid talks to revive stalled IMF bailout

Updated 51 min 30 sec ago

Pakistan calls for ‘understanding, not more harsh conditionalities’ amid talks to revive stalled IMF bailout

  • In interview to Arab News, Ahsan Iqbal says Pakistan has strong fundamentals which will never let it go into bankruptcy
  • Pakistan currently seeing a severe dollar crunch and looking for external financing to fulfill its international obligations

ISLAMABAD: The International Monetary Fund (IMF) should realize that Pakistan needs “more understanding, not more harsh conditionalities” after having suffered $30 billion losses due to last year’s flood, its planning minister has said, adding Islamabad is paying an economic cost for a delay in finalization of an IMF review of the country’s $7 billion loan program. 

In addition to the economic losses, the devastating floods claimed more than 1,700 lives and affected 33 million people in the South Asian country, already witnessing decades-high inflation and fast depreciating national currency. 

Amid the economic crisis, Pakistan’s foreign exchange reserves have depleted to $3 billion — barely enough to cover 18 days of imports — leading to fears of a default. 

To mitigate the situation, Islamabad is currently holding talks with an IMF mission, which arrived in the country last month, to discuss the resumption of the $7 billion loan program, stalled since November. 

“The IMF program which should have been finalized earlier has taken a little longer and I hope that IMF also realizes that by delaying the finalization of the program or review of the program, markets get more uncertainty at an economic cost,” Planning Minister Ahsan Iqbal told Arab News in an exclusive interview on Saturday. 

“After Pakistan being subjected to $30 billion loss due to climate change, Pakistan needs more understanding, not more harsh conditionalities.” 

A successful review of the program will result in the release of more than $1 billion to Islamabad, while Iqbal said there was no chance of a default as the South Asian country had strong fundamentals that would never let it go bankrupt. 

“I am very hopeful that the IMF program will be finalized and as soon as the review is finalized, we will see that all the multilateral inflows will start coming in which have been held up due to uncertainty about program,” he said. 

“We should be able to turn around the situation in the next couple of months or maybe a year.” 

Just like climate disaster, the government was facing an economic disaster for no fault of it, but because of “someone else’s wrongdoings,” according to Iqbal. 

The Pakistani planning ministry has worked at the 5E framework which rallies around exports, e-commerce, energy, environment and education. 

“The government is looking at a more comprehensive reform package that will not only fix our immediate problems, but also provide us a solid foundation for sustainable and fast growth in the future,” the minister said. 

On the question of a surge in militant attacks in Pakistan, Iqbal said a small group of militants could not dictate Pakistan and the government had resolved to defeat militants through a comprehensive internal security policy. 

“The national action internal security policy envisages many non-kinetic measures so that we can also make and take more preventive measures in the future for such groups to find no support in the society,” he said. 

“We will continue our vigilance and we will continue our operations to eliminate any trace of these extremist elements which enter Pakistan from Afghanistan.” 

The South Asian country witnessed 254 militant attacks last year, according to the Islamabad-based Pak Institute for Peace Studies think tank, with most of them linked to the Pakistani Taliban, or the Tehreek-e-Taliban Pakistan (TTP), that unilaterally ended a cease-fire with the government in November. Pakistani officials have previously vowed to show no leniency to militants and fight them out. 

On the possibility of talks with former prime minister Imran Khan who has been agitating against the government, Iqbal said the coalition government always asked Khan to hold talks with it and take the path of consensus-building, but unfortunately, he did not do it. 

“He is a lonely voice standing on the one side, the rest of all democratic parties on the other side and they are realizing that,” the minister added. 


Pakistan extends condolences over deaths from Turkiye earthquake, offers assistance

Updated 06 February 2023

Pakistan extends condolences over deaths from Turkiye earthquake, offers assistance

  • A 7.8-magnitude earthquake hit Turkiye early Monday, toppling buildings
  • Several people died as a result of the quake, with death toll expected to rise

ISLAMABAD: The Pakistani government on Monday extended its condolences over the loss of precious lives and expressed sorrow over extensive infrastructure damage due to a massive earthquake in Turkiye, offering its support to Ankara for relief efforts. 

A 7.8-magnitude earthquake hit southeast Turkiye and Syria early Monday, toppling buildings and sending panicked residents pouring outside in a cold winter night. At least 100 were killed, and the toll was expected to rise. 

The quake, felt as far away as Cairo, was centered north of the city of Gaziantep in an area about 90 kilometers (60 miles) from the Syrian border. 

Pakistan Prime Minister Shehbaz Sharif said his government he was “deeply saddened” and extended his sympathies to Turkish President Recep Tayyip Erdogan. 

“Deeply saddened by the news of a massive earthquake that struck southeastern region of Türkiye,” Sharif said on Twitter. 

“I send my profound condolences & most sincere sympathies to my brother President @RTErdogan & brotherly people of Türkiye on the loss of precious lives & damage to infrastructure.” 

The people of Pakistan stand in complete solidarity with their Turkish brethren in this hour of grief, the Pakistani foreign office said in a statement, offering Islamabad’s all possible support in the relief effort. 

“We extend our deepest condolences to the bereaved families and pray for early recovery of those injured,” the statement read. 

“We are confident that the resilient Turkish nation will overcome this natural calamity with characteristic grit and determination.” 


Pakistan says prioritizing medical imports as hospitals, labs ration devices, diagnostic equipment

Updated 06 February 2023

Pakistan says prioritizing medical imports as hospitals, labs ration devices, diagnostic equipment

  • Pakistan spends about $1.1 billion annually to procure devices and diagnostic equipment from abroad 
  • There is an unofficial import restriction in Pakistan as foreign reserves have plunged to dangerous levels 

ISLAMABAD: Millions are at risk in Pakistan as hospitals, laboratories and clinics face an acute shortage of medical devices and diagnostic products due to unofficial import restrictions, local suppliers and health care practitioners have said, while the government says it has ordered the central bank to prioritize medical imports. 

Pakistan imports over 90 percent of its medical devices and diagnostic equipment from the United States, the United Kingdom, Germany, and China to meet its domestic medical requirements. According to official statistics, the country spends about $1.1 billion annually to procure these products from abroad. 

The South Asian country is struggling to quell default fears in domestic and international markets, with its forex reserves diminishing to $3.09 billion and a $1.1 billion bailout tranche from the International Monetary Fund (IMF) stuck since November. Meanwhile, the government has also placed a ban on the import of goods, including industrial raw materials, to stop dollar outflows. 

“We have urged the government and the central bank several times to allow the import of medical devices as it is a matter of urgent public importance, but to no avail so far,” Masood Ahmed, chairman of the Healthcare Devices Association of Pakistan, told Arab News. 

The medical devices that Pakistan imports range from simple tongue depressors and bedpans to complex programmable pacemakers and closed-loop artificial pancreas systems. These devices also include in-vitro diagnostic (IVD) products, such as reagents, test kits and blood glucose meters as well as life-support equipment like ventilators, incubators and heart, lung and dialysis machines. 

The government slapped the ban on imports in December last year after the nation’s foreign exchange reserves started depleting because of external debt repayments. The country’s current forex reserves are barely enough to cover only about 18 days of imports. 

Islamabad is currently negotiating with the IMF for the resumption of its stalled $7 billion bailout program to avert the looming default. 

Ahmed said he was not expecting the government to lift the import ban anytime soon, even if it reached an agreement with the global lender to secure the next tranche of more than $1 billion. 

He said the depreciation of the Pakistani currency had also made it impossible for them to supply the products. The Pakistani currency has depreciated by around Rs100 against the greenback over the last one year amid a drop in export revenue, remittances and foreign direct investment. 

“We cannot meet the demand of public and private hospitals, clinics and medical labs in this situation,” he continued. 

“Ultimately, patients have been suffering since the prices of medical tests, surgeries and treatment have already increased exponentially.” 

The Pakistan Medical Association (PMA) said the shortage of devices was “severely impacting” the wellbeing of patients, who needed advanced respiratory support or intensive care due to cardiac arrest or for major surgeries. 

“Stents for heart patients and necessary equipment for ventilators are unavailable in the market,” PMA secretary-general Dr. Abdul Ghafoor Shoro told Arab News. 

“There is a crisis-level shortage of health care devices and doctors are resorting to rationing and triage to save lives of critical patients.” 

When approached, the Pakistani health ministry said it had already written a letter to the central bank to include “imports of medicines and health care devices in the priority list.” 

“We are aware of the situation and tracking it on daily basis with all stakeholders,” Sajid Hussain Shah, a health ministry spokesperson, told Arab News. 

“Yes, the cost of everything has gone up with the rupee’s depreciation, but public hospitals are still trying their best to provide maximum services and treatment for free.” 


Pakistan divided on legacy of military ruler Musharraf

Updated 06 February 2023

Pakistan divided on legacy of military ruler Musharraf

  • Musharraf, 79, passed away in Dubai after losing battle to rare disease, amyloidosis
  • He ruled Pakistan for nearly a decade from 1999 to 2008 as chief executive, president

ISLAMABAD: Pervez Musharraf was a polarizing figure in Pakistani politics, returning the country to a period of economic stability while accused of rampant abuses and weakening democracy.
The nation’s most recent military leader governed for nearly a decade after seizing power in a bloodless coup in 1999.

His rule was marred by repeated allegations of abuses, including ruthlessly rounding up his opponents as well as being accused of involvement in former prime minister Benazir Bhutto’s assassination.

The effects of his decision to back the United States in its invasion of Afghanistan — albeit in the face of threats of bombing and in return for a massive aid injection — continue to reverberate.

“Musharraf boosted education standards and infrastructure in Pakistan. He brought development to the country,” 24-year-old student Mohammad Waqas told AFP in Islamabad.

“But on the other hand, the country suffered losses in the face of terrorism. Entering America’s war weakened our own country.”

Pakistan is currently undergoing yet another economic crisis, and widespread political uncertainty ahead of elections due later this year.

In the face of the turmoil, some remember Musharraf with a certain fondness.

“He was a good ruler. There has not been a leader like him before and there will never be one like him again,” said 70-year-old Islamabad shopkeeper Muhammad Khan.

Veteran Pakistani politician and Musharraf ally Parvez Elahi told AFP: “He was a ruler with a lot of depth, who loved hard work and he would appreciate new initiatives.”

In 2006 — at the height of their alliance — US President George W. Bush called Musharraf “a strong, forceful leader [who] has become a target of those who can’t stand the thought of moderation prevailing.”

US President George W. Bush (C) arrives with Afghan President Hamid Karzai (R) and Pakistan's Gen. Pervez Musharraf to make a statement in the Rose Garden at the White House in Washington on September 27, 2006. (AFP)

His moves to overthrow an elected government and to suspend the constitution for long periods, however, also frame his legacy.

“His one act, which will be remembered throughout history, was he violated the constitution,” retired civil servant Naeem Ul Haq Satti told AFP.

“The most important thing a country has is its constitution,” the 69-year-old added.

As he faced growing pressure for democratic elections, Musharraf’s oppression of critics worsened.

He suspended the constitution for a second time in 2007, rounded up thousands of opponents and sacked the chief justice, leading to widespread protests.

“General Musharraf was one of the military dictators who misruled the country by... bringing in a group of sycophants,” businessman Abdul Basit told AFP in the Balochistan provincial capital of Quetta.

Pakistani anti-Musharraf lawyers carry pictures of arrested lawyers and shout slogans in protest against the sacking of the top judge of the Supreme Court by President Pervez Musharraf during a demonstration in Islamabad on 13 December 2007. (AFP)

Under Musharraf, Pakistan stepped up its war against ethnic Baloch separatists, with a military operation killing key separatist leader Akbar Bugti in 2006, an assassination that further fanned the flames of that movement.

“People do give credit to General Musharraf for developing the country but on the other hand, like his predecessors, he played havoc,” said Basit.

Musharraf resigned in 2008 and faced years of legal wrangling, finally being found guilty in absentia and sentenced to death for treason. That ruling was later nullified.

The former ruler ended his days in Dubai, having failed to launch a political comeback and finding himself, and his All Pakistan Muslim League party, sidelined from political relevance.