Pakistan passes IMF-backed supplementary finance bill amid opposition protest

This photograph released by Pakistan National Assembly on January 7, 2022, shows a general view of a parliament session in Islamabad. (Photo courtesy: @NAofPakistan/Twitter)
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Updated 13 January 2022

Pakistan passes IMF-backed supplementary finance bill amid opposition protest

  • The passage of mid-year budget along with a bill on State Bank autonomy will help revive a $6 billion IMF loan program
  • Pakistan's finance chief says the government was forced to go to the international lender for loan since it had no alternative

ISLAMABAD: Pakistan's National Assembly on Thursday passed a supplementary finance bill and a legislation on the autonomy of the central bank with majority vote amid protest by opposition parties, meeting the International Monetary Fund's prerequisites for the revival of a $6 billion loan package.
The government tabled the bills in the lower house of parliament last month to impose a uniform 17 percent general sales tax, withdraw tax exemptions on a number of items, and grant autonomy to the State Bank of Pakistan.
The passage of the two bills was to ensure that Pakistan's sixth review for the IMF's Extended Fund Facility would get clearance from the international financial institution's executive board.
The IMF was originally scheduled to review Pakistan's progress on January 12 in its board meeting to release a $1 billion tranche. However, it postponed the process until the end of the month after a delay in the passage of the bills.
Pakistan's finance chief Shaukat Tarin said during his speech on the floor of the house on Thursday it was "painful" for the government to undertake economic reforms amid the COVID-19 pandemic, soaring international commodity prices and crisis in neighboring Afghanistan while urging the opposition to endorse the bills.
“We were forced to go to the IMF,” he said. “There was no escape from the IMF.”
Listing the government's economic achievements, he said the revenues were registering a 35 percent growth while foreign remittances and exports would each reach $31 billion by the end of the current fiscal year.
"We'll have to fix the structural problems of the taxation system," he continued, adding the IMF was pushing Pakistan to levy a uniform rate of general sales tax across the country.
Tarin noted the legislation would help document the economy and increase the government's revenue.
"Everyone wants to escape the documentation [of the economy] since their incomes will be taxed after that," he said, as he dismissed the opposition's claim that the legislation would bring an "inflationary storm" in the country.
The minister said Rs280 billion out of a total of Rs350 billion of new taxes were refundable and the government would only be collecting Rs70 billion by imposing additional taxes.
The finance chief informed the house that only Rs3.5 trillion out of Rs20 trillion of retail sales were documented, adding there was always an outcry when the government tried to document that money.
He said that taxes on milk, laptops, food and bakery items were withdrawn to facilitate the public.
About the central bank's autonomy, Tarin dismissed the opposition's concerns that the legislation would undermine the government's control over the bank.
The minister said the government would appoint the bank's board of directors and have "full power" over it.
Earlier, the opposition parties tried to introduce amendments in the bills, though they were all rejected by the government.
Members of the opposition parties chanted slogans against the proposed legislations and displayed anti-government placards.
"The friends of IMF are traitors," they said while chanting slogans.


Media watchdog demands Pakistan ensure safety as two reporters killed in two days

Updated 9 sec ago

Media watchdog demands Pakistan ensure safety as two reporters killed in two days

  • Gunmen killed Ishtiaq Sodharo of Sindhi weekly Chinag in Khairpur district in Sindh province on July 1
  • Iftikhar Ahmed from Daily Express shot dead in northwestern Pakistani district of Charsadda the next day

ISLAMABAD: The International Federation of Journalists (IFJ) on Tuesday demanded the Pakistani government ensure the safety of journalists, days after gunmen killed two reporters within two days in two separate incidents.

Unidentified assailants killed Ishtiaq Sodharo, associated with the Sindhi weekly Chinag, in Khairpur district of the southern Sindh province on July 1. A day later, Iftikhar Ahmed, a reporter for the Daily Express, was shot dead in the northwestern Pakistani district of Charsadda. Police are investigating the motive behind Ahmed’s death, including personal enmity, while Sodharo’s wife has alleged he was killed on the orders of a local policeman. 

The IFJ condemned the murders and called on the Pakistani authorities to fulfil their international obligations under Pakistan’s constitution to safeguard press freedom.

“Pakistan’s government must take appropriate measures to ensure journalists’ safety and security, as required by law, and act to reduce assaults on journalists so that they may carry out their work without fear,” the IFJ said in a statement on its website.

Pakistan is considered a dangerous country for journalists who often have to face violence, legal cases, abductions, detentions and threats from both state and non-state actors. 

In May, the country fell 12 points on the World Press Freedom Index from 145 in 2021 to 157 in 2022.


Pakistan concludes Hajj flights, all 83,312 pilgrims arrive in Saudi Arabia

Updated 56 min 16 sec ago

Pakistan concludes Hajj flights, all 83,312 pilgrims arrive in Saudi Arabia

  • 34,453 pilgrims traveled under government scheme and over 48,000 through private operators
  • 52 flights have utilized the Route to Makkah immigration facility at Islamabad airport this year

ISLAMABAD: Pakistan’s director-general of Hajj in Jeddah said on Tuesday the country’s Hajj flight operation was complete and all 83,312 Pakistani pilgrims had arrived in Saudi Arabia. 

One of Islam’s five main pillars of faith, the Hajj was restricted over pandemic fears to only 1,000 people living in the Kingdom in 2020 and to 60,000 domestic participants last year, compared with the pre-pandemic 2.5 million pilgrims annually. 

This year, after Saudi Arabia lifted COVID-19 restrictions, the kingdom will welcome one million domestic and foreign pilgrims. A quota of 81,132 pilgrims was initially allocated for Pakistan this year, which was later increased by 2,000.

“Our Hajj flights have been completed and all 83,312 Pakistani pilgrims have arrived in Makkah,” DG Hajj, Abrar Ahmed Mirza, told Arab News over the phone from Makkah.

He said 34,453 pilgrims had traveled under the government scheme and over 48,000 through private operators.

“We are now giving them training on Hajj rituals which are starting from Wednesday especially preparing them for Mina, Arafat, and Muzdalifah where pilgrims from all over the world move at the same time,” Mirza said.

Haseeb Ahmed Siddiqui, the director of the Hajj Complex in Islamabad, said 52 flights had utilized the Route to Makkah facility at Islamabad airport this year. 

The Route to Makkah initiative allows pilgrims to fulfil all immigration requirements at the airport of origin. This saves them several hours upon reaching the kingdom since they can enter the country, having already gone through immigration at home. 

“17,077 pilgrims proceeded to the Kingdom under Route to Makkah project using 52 flights this year,” Siddiqui told Arab News.

Adeel Ahmed, a pilgrim from Rawalpindi, said he had no words to express his happiness at being selected for the pilgrimage.

“My name was not part of the first draft and I got a chance at the last moment,” Ahmed told Arab News. “I am unable to share my feelings and happiness as Allah has granted me this privilege to fulfill my dream.” 

Sumera Kiran, another pilgrim from Rawalpindi, expressed satisfaction with arrangements at the airport.

“The [Saudi] government and Pakistani authorities have done very good arrangements at the airport,” she said, adding that she had received her luggage at the hotel.


Pakistan central bank may raise rates by 125 bps to tame 13-year high inflation

Updated 05 July 2022

Pakistan central bank may raise rates by 125 bps to tame 13-year high inflation

  • The South Asian nation is wrestling with economic turmoil, a fall in reserves and a weakening currency
  • Another hike would increase government debt servicing costs as well as hurt industries, says an economist

ISLAMABAD: Pakistan’s central bank looks set to raise its key policy rate by 125 basis points at its review on Thursday, as it attempts to tackle 13-year high retail inflation, according to the median estimate in a snap poll of 10 economists and market watchers. 

The economists, analysts and senior professors surveyed were widely split on the quantum of increase by the State Bank of Pakistan (SBP), with views ranging from 50 to 200 basis points. 

Two respondents did not see a need for a rate increase. 

The central bank raised the benchmark interest rate by 150 bps in May, taking the total increase to 400 bps so far this year to counter rising inflation. 

The South Asian nation is wrestling with economic turmoil, a fall in reserves and a weakening currency. 

Data on Friday showed consumer prices in June leapt 21.3 percent from a year earlier, largely on account of a 90 percent spike in fuel prices since the end of May after the government scrapped costly fuel subsidies. 

With the current policy rate at 13.75 percent and inflation running well above, real interest rates in the economy have turned sharply negative. 

“The last monetary policy committee statement is proof that the State Bank of Pakistan is way behind the curve on anticipating inflation,” said Yousuf Nazar, an economist who writes for various publications and formerly with Citigroup. 

“Another hike would increase government debt servicing costs as well as hurt industries. 

It is not going to have much of an impact on exchange rate or overall demand,” he added. 

Most believed a hike was inevitable, given persistently high global energy prices, the abrupt ending of fuel subsidies as well as the need to control demand after SBP said in its last policy statement the economy had rebounded much more strongly than anticipated. 

“The overall policy mix is geared toward stabilization and demand management,” CEO of Macro Economic Insights Sakib Sherani said, adding that this will induce a sharp slowdown in the economy, possibly a recession, in the short run. 

But Fahad Rauf, head of research at Ismail Iqbal Securities, said he does not see the need to increase rates further. 

“The economy is already slowing down. The layoffs have started and are expected to increase further. 

Further cost pressures would only enhance the burden on industries and workers,” Rauf said. 

“The fiscal arm is working now, tough measures have been taken. SBP needs to wait for the results before further tightening,” he added. 

With Pakistan expecting a restart of the much-awaited bailout package from the International Monetary Fund after the country agreed on some tough economic policy adjustments to promote stability, the SBP’s decision is being closely watched. 


Dubai-bound Indian airline plane makes ‘emergency landing’ in Karachi

Updated 54 min 53 sec ago

Dubai-bound Indian airline plane makes ‘emergency landing’ in Karachi

  • India’s SpiceJet airline says plane diverted to Karachi due to indicator light malfunctioning
  • The B737 aircraft landed at Karachi airport at around 9am where it’s currently being repaired

ISLAMABAD: A Dubai-bound Indian airline plane on Tuesday made an “emergency landing” in the southern Pakistani city of Karachi, the Pakistan Civil Aviation Authority (PCAA) said. 

The B737 aircraft flew from New Delhi for Dubai this morning, according to the PCAA. The pilot requested Pakistani aviation authorities for an “emergency landing” because of a fuel leak. 

“An aircraft of SpiceJet going from Delhi to Dubai sought permission for emergency landing which was granted and the aircraft with 138 passengers on board landed at Karachi airport after 9am today,” PCAA spokesman Saifullah told Arab News. 

“The aircraft was diverted to Karachi airport for landing after fuel leakage.” 

SpiceJet, however, said the plane was diverted due to “indicator light malfunctioning.” 

“No emergency was declared and the aircraft made a normal landing. There was no earlier report of any malfunction with the aircraft,” the airline said in a series of tweets. 

“A replacement aircraft is being sent to Karachi that will take the passengers to Dubai.” 

 

 

The PCAA spokesman said all passengers had been moved to the transit longue of the airport, where they were provided food and refreshments. 

“The aircraft is currently being repaired,” Saifullah added. 


England to tour Pakistan for first time in 16 years from September 15

Updated 05 July 2022

England to tour Pakistan for first time in 16 years from September 15

  • England and Wales Cricket Board security team expected in Pakistan later this month to assess arrangements
  • Tour originally scheduled to be played in Rawalpindi last October but England had called off their visit

ISLAMABAD: Lahore and Karachi are likely to host seven T20Is between Pakistan and England from September 15 to October 2, ESPN cricinfo reported on Monday, quoting the Pakistan Cricket Board chairman. 

PCB is yet to announce the fixtures for the series, which will be the first instance of England touring Pakistan in 16 years. 

The England and Wales Cricket Board’s three-member security team is expected to arrive in Pakistan later this month to assess arrangements, the cricket website said. 

The matches were originally scheduled to be played in Rawalpindi last October but England had called off their visit, following New Zealand doing the same at the last minute over security issues. 

Though Pakistan have Multan and Rawalpindi as other venues to consider, PCB chairman Ramiz Raja said the schedule is “very tight and we can’t go elsewhere.” 

The upcoming series is significant as England have not toured Pakistan since 2005 and two of Pakistan’s home series in 2012 and 2016 were forced to be played in the UAE. 

After England decided to withdraw their men’s and women’s teams from tours to Pakistan last year, Raja had hit out at cricket’s “western bloc.” 

The ECB cited bubble fatigue and “increasing concerns about traveling to the region” to pull out of the series. 

Following the series with England, Pakistan will depart for New Zealand on October 4 to participate in a T20I tri-series (also involving Bangladesh) in Christchurch from October 7 to 14.  

England, meanwhile, will return to Pakistan following the 2022 T20 World Cup for a three-Test series in November as part of the World Test Championship. 

England’s new white-ball captain Jos Buttler last week said he did not expect to have his best team available for the series due to fixture congestion. England’s red-ball players are unlikely to be available at the start of the limited-overs series in Pakistan, with England’s third Test against South Africa due to finish on September 12.