Pakistan completes legislative process for revival of $6 billion IMF program

Pakistan's Finance Minister, Shaukat Tarin, presenting the State Bank (Amendment) Bill at Senate in Islamabad, Pakistan, on January 28, 2022. (Photo courtesy: @SenatePakistan/Twitter)
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Updated 29 January 2022

Pakistan completes legislative process for revival of $6 billion IMF program

  • The IMF executive board is scheduled to meet for Pakistan's sixth review on February 2
  • Opposition says government has mortgaged country's economic sovereignty to the IMF

ISLAMABAD: With the passage of the State Bank (Amendment) Bill from the Senate, the Pakistani government on Friday completed the legislative process for the revival of a stalled $6 billion International Monetary Fund (IMF) bailout program to support the fragile economy and avert a balance-of-payment crisis. 

The government had the Finance (Supplementary) and State Bank of Pakistan (Amendment) bills passed by the National Assembly on January 13 to secure the next tranche of the IMF's Extended Funds Facility. The Finance Act, commonly known as mini-budget, is already enforced while the central bank autonomy bill required approval of the Pakistani parliament's upper house to become a law. 

The passage of these bills from parliament was a pre-requisite for the disbursement of around $1 billion from the IMF. The global lender’s executive board is scheduled to meet on February 2 for Pakistan's sixth review under the $6 billion program. 

The State Bank (Amendment) bill has been a major source of contention between the government and the opposition as the latter believes the legislation would compromise Pakistan's economic sovereignty. The government has been of the view that an autonomous central bank would help boost economic growth and stability in the country. 

“By facilitating domestic economic stability, the amendments will help support sustainable growth and avoid repeated booms and busts that have characterized Pakistan's past and led to painful consequences in terms of higher inflation, higher poverty and lower growth,” the bill reads. 

On Friday, opposition parties protested when Pakistani Finance Minister Shaukat Tareen presented the bill in the Senate, saying the government was going to “mortgage” Pakistan's economic sovereignty to the IMF. The bill was passed with a majority of one vote, with all amendments proposed by the opposition rejected. 

Interestingly, the opposition has a majority of at least 14 votes in the Senate, but some of its members were absent in Friday's session.  

The government said the amendments in the central bank legislation were in line with international best practices and took ground realities in Pakistan into account. 

Shortly after the passage of the bill, opposition members held a press conference and vowed they would withdraw this legislation after coming into power. 

“The joint opposition is not in favour of this bill and it will be withdrawn after whichever party of us comes into power,” said Senator Sherry Rehman of the Pakistan Peoples Party (PPP). 

Senator Azam Nazir Tarar, a member of the Pakistan Muslim League-Nawaz (PML-N) opposition party, said some of the opposition members could not attend the session due to COVID-19. 

“The days of this government are numbered,” he said, adding the government had “mortgaged the country's economic sovereignty to the IMF.” 

The revival of the IMF program would make available $1,059 million that would bring total disbursements to Pakistan to about $3,027 million and help unlock significant funding from bilateral and multilateral partners. 

Pakistan secured the $6 billion Extended Funds Facility in 2019, which has been stalled since March 2021. 


Pakistan plane carrying aid joins Afghan quake relief effort

Updated 25 June 2022

Pakistan plane carrying aid joins Afghan quake relief effort

  • Thousands were left homeless or injured by this week’s powerful earthquake in eastern Afghanistan
  • UN representative says among the 1,150 dead from Wednesday’s magnitude-6 quake are 121 children

ISLAMABAD: A Pakistani military cargo plane carrying relief goods for Afghanistan’s earthquake-affected people landed at the Khost airport Saturday, officials said, as tents, food and medical supplies rolled into the mountainous region. 

Thousands were left homeless or injured by this week’s powerful earthquake in eastern Afghanistan, which state media said killed 1,150 people. An aftershock Friday took five more lives. 

Among the dead from Wednesday’s magnitude 6 quake are 121 children and that figure is expected to climb, said the U.N. children's agency representative in Afghanistan. He said close to 70 children were injured. 

Mansoor Ahmad Khan, Pakistan’s ambassador in the Afghan capital of Kabul, said relief goods dispatched by Pakistan on Saturday were handed over to Taliban officials. 

Earlier, Pakistan’s government and a Pakistani charity had sent 13 trucks carrying food, tents, life-saving medicines and other essential items to Afghanistan. 

A 19-member team from the neighboring country comprised of physicians and paramedics has been helping Afghanistan’s Taliban-run government in Khost, providing medical treatment for those injured in Wednesday’s earthquake. 

The quake struck a remote, deeply impoverished region of small towns and villages tucked among rough mountains near the Pakistani border, collapsing stone and mud-brick homes and in some cases killing entire families. Nearly 3,000 homes were destroyed or badly damaged in Paktika and Khost provinces, state media reported. 

Officials said Pakistan has opened its border in the northwest to transport critically injured Afghans to hospitals in Pakistan. But it was unclear how many Afghans have arrived in Pakistan’s northwest from the quake-affected areas for medical treatment. 

Pakistan and Afghan Taliban officials pose for a photo in front of C-130, Pakistani aircraft carrying relief goods for Afghanistan's earthquake victims in Khost, Afghanistan on June 25, 2022. (@ambmansoorkhan/Twitter) 

Overstretched aid agencies said the disaster underscored the need for the international community to rethink its financial cut-off of Afghanistan since Taliban insurgents seized the country 10 months ago. That policy, halting billions in development aid and freezing vital reserves, has helped push the economy into collapse and plunge Afghanistan deeper into humanitarian crises and near famine. The effort to help the victims has been slowed both by geography and by Afghanistan’s decimated condition. 

Rutted roads through the mountains, already slow to drive on, were made worse by quake damage and rain. The International Red Cross has five hospitals in the region, but damage to the roads made it difficult for those in the worse-hit areas to reach them, said Lucien Christen, ICRC spokesman in Afghanistan. 

Also on Saturday, an Afghan military chopper transported food and other necessities to people in Gayan district in Paktika province. Dozens of men and children gathered in an open area under the hot sun to wait for food, water and tents from the Afghan Red Crescent. 

The aid organization said it would distribute relief items to around 1,000 families in the district, including food, tents and clothes. 


COVID-19 once again on rise in Pakistan as virus positivity soars to 3.19 percent 

Updated 25 June 2022

COVID-19 once again on rise in Pakistan as virus positivity soars to 3.19 percent 

  • Provincial authorities advised to administer booster doses to improve protection against infections 
  • Pakistan reconstituted pandemic response body after health officials detected new omicron sub-variant 

ISLAMABAD: The COVID-19 infections have once again been on the rise in Pakistan as the country reported 3.91 percent virus positivity rate on Saturday, the National Institute of Health (NIH) said. 

In late March, Pakistan disbanded the National Command and Operations Center (NCOC), which was overseeing the COVID-19 response in the country, as infection numbers were at the lowest since the start of the outbreak early in 2020. 

The South Asian country on May 23 reconstituted the NCOC at the NIH after health officials detected a new omicron sub-variant in a passenger arriving from Qatar. The new sub-variant of omicron is said to be highly infectious, though not as deadly as previous coronavirus strains. 

In the last 24 hours, health authorities conducted 13,644 tests for the virus, of which 435 came out to be positive, according to NIH figures. It constituted a 3.19 percent virus positivity ratio. 

 

 

Earlier this week, Pakistan’s Health Minister Abdul Qadir Patel presided over a meeting of the NCOC that advised all provinces and regions to administer booster doses on priority to improve protection against the virus transmission. 

“In view of the global pandemic situation, the Central Health Establishment (CHE) should strictly monitor the health status of incoming passengers at points of entry,” Patel was quoted as saying in a statement. “The CHE will be strengthened to enhance the functionality,” he added. 

The health minister stressed the need to adopt timely precautions, including social distancing and mask compliance, to avoid further spread of the virus, especially in the lead up to Eid Al-Adha. 


Pakistan reports 11th polio case of this year amid outbreak in northwest 

Updated 25 June 2022

Pakistan reports 11th polio case of this year amid outbreak in northwest 

  • All 11 cases have been reported in the northwestern North Waziristan district 
  • The outbreak is a blow to the South Asian nation’s efforts to eradicate the virus 

ISLAMABAD: Pakistani health authorities on Friday confirmed the 11th case of polio virus so far this year in the country’s former Taliban stronghold in the northwest, a region bordering Afghanistan. 

The outbreak, after the first polio case of 2022 was registered in the same region in April, is a blow to the South Asian nation’s efforts to eradicate the disease, which can cause severe paralysis in children. 

All 11 cases have been reported in North Waziristan, a district in the Khyber Pakhtunkhwa (KP) province, where parents often refuse to get their children inoculated. 

“Polio [virus] confirmed in an eight-month-old child. The child hails from Union Council 7 of Mir Ali in North Waziristan,” a spokesperson for the Pakistani health ministry said in a statement. 

“This year all cases have been reported in North Waziristan. The number of cases in Mir Ali has reached eight.” 

Pakistan’s Health Minister Abdul Qadir Patel said authorities were taking emergency measures to contain the virus, according to the statement. He urged parents to get their children administered the anti-polio vaccine. 

North Waziristan, a former tribal region, was a stronghold of the Pakistani Taliban until recently, when the military claimed to have cleared the region of militants following several wide-scale operations there. However, attacks still persist. 

Pakistan has for the past 25 years carried out regular inoculation campaigns in which health workers go door-to-door to give polio drops to children. Most of the workers are women, as they can get better access to mothers and children. The anti-polio teams are often escorted by security forces. 

So far this year, the government has carried out three nationwide anti-polio drives — in January, March and in May. During the March campaign, gunmen in northwestern Pakistan shot and killed a female polio worker as she was returning home after a day of vaccinations. And in January, gunmen shot and killed a police officer providing security for polio vaccination workers, also in the country’s northwest. 

Pakistan and Afghanistan are the only countries in the world where polio remains endemic. In 2021, Pakistan reported only one case, raising hopes it was close to eradicating polio.


Pakistan receives $2.3 billion Chinese loan to stabilize falling reserves

Updated 25 June 2022

Pakistan receives $2.3 billion Chinese loan to stabilize falling reserves

  • Islamabad still seeking to revive $6 billion International Monetary Fund loan program
  • Finance minister says the South Asian country is no longer on the path to debt default

ISLAMABAD: Pakistan on Friday received a $2.3 billion Chinese consortium loan that would help stabilize its dwindling foreign exchange reserves, Finance Minister Miftah Ismail confirmed, after saying the South Asian nation was no longer on the path to debt default. 

The development comes as foreign exchange reserves held by the Pakistani central bank deplete to as little as $8.2 billion — barely enough for 45 days of imports — with the Pakistani rupee at record lows against the US dollar. 

Grappling with a balance-of-payment crisis, the South Asian country is still seeking to revive a $6 billion loan program it secured from the International Monetary Fund (IMF) in 2019. The revival of the program, which is stalled since March, will release around $1 billion to Pakistan and help unlock funding from external sources. 

The latest deposit by a Chinese consortium provides a crucial boost to Pakistan’s fast-emptying coffers. 

“I am pleased to announce that Chinese consortium loan of RMB 15 billion (roughly $2.3 billion) has been credited into SBP (State Bank of Pakistan) account today, increasing our foreign exchange reserves,” Ismail said on Twitter. 

Pakistan entered the 39-month, $6 billion IMF program in 2019, but less than half its size has been disbursed as Islamabad struggled to achieve the targets. 

On Friday, the government of Prime Minister Shehbaz Sharif announced a one-year, 10 percent tax on large-scale industries to raise over 400 billion Pakistani rupees ($1.93 billion), in a bid to unlock $1 billion IMF tranche to avert the economic crisis. 

Pakistan is expected to receive an updated memorandum on macroeconomic and financial targets from the IMF soon, which would pave the way for the disbursement of the $1 billion installment. 

In a parliamentary session to wind up the budget debate on Friday, Ismail said the country was not going to default on international debt, but was instead on the “path to progress” due to the tough economic decisions taken by the government. 

On June 10, Pakistan set a revenue target of Rs7 trillion ($34.6 billion), a 17 percent rise on a year-on-year basis, in a Rs9.5 trillion ($47 billion) budget it unveiled for the next fiscal year. 

Ismail said the 10 percent super tax on large-scale companies would increase the revenue by Rs470 billion ($2.2 billion). 

“We have taken tough decisions,” the finance minister said. “The IMF program is essential to shield the country from default.” 

He said the current account deficit in the ongoing fiscal year could reach around $17 billion, adding the meagre foreign exchange reserves held by Pakistan could not sustain this deficit. 

To achieve revenue targets, Ismail said the government had also decided to bring at least 2.5 million out of 9 million retail shops in the tax net through a fixed tax. 

He said there were around 30,000 gold shops but only 22 of them were registered with the government, adding they would be charged a fixed income and sales tax of Rs40,000. 

“This tax is on their income and not expenses and that is why it will not increase inflation, rather help boost the revenue,” the finance minister added. 


Aid from Pakistan, Middle East reaches eastern Afghanistan after deadly quake

Updated 24 June 2022

Aid from Pakistan, Middle East reaches eastern Afghanistan after deadly quake

  • A 6.1-magnitude quake struck Afghanistan’s Paktika, Khost provinces on Tuesday
  • Pakistan dispatches over 16 trucks of relief items, sets up medical camp in Khost

KABUL/PESHAWAR: Relief goods from the Middle East, Pakistan and India have started reaching earthquake-hit parts of eastern Afghanistan, as Taliban authorities said on Friday they had ended rescue efforts after the deadliest quake in decades. 

The 6.1-magnitude quake hit several areas of Paktika and Khost provinces that border Pakistan on Tuesday night, flattening homes as people slept. Paktika was worst affected by the calamity. Afghanistan’s state-run Bakhtar news agency reported that the death toll had risen to 1,150 people, including at least five killed by an aftershock in Gayan on Friday. 

The emergency response has been complicated and rescuers have been working without proper equipment, as many international organizations pulled out of the aid-dependent country when the Taliban seized power in August 2021. Efforts were also hampered by heavy rain and poor connectivity in the affected areas. 

The Taliban government has requested foreign assistance, some of which has already arrived from the Middle East and neighboring India and Pakistan to help survivors. 

“Search operations are over, but helicopters are still on the ground if any injured people are found,” Ministry of Defense official Rohullah Omar told Arab News from Paktika. “There’s adequate emergency aid reaching the area.” 

Afghan authorities said on Thursday that aircraft with aid had also arrived from Qatar, Iran, and India, and trucks with food and medical supplies reached Paktika by road from Pakistan. Bakhtar news agency said that on Friday an aircraft with food assistance from the United Arab Emirates (UAE) landed in Khost, from where the aid will quickly reach Paktika by road and military helicopters. 

The provincial government in Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province continued to dispatch medical aid and relief items to Khost on Friday, Pakistani officials confirmed. 

“Today (Friday), we dispatched 16 trucks loaded with 500 tents, 500 kitchen kits, 500 hygiene sets, 500 mattresses and 200 tarpaulin sheets to North Waziristan for distribution onwards among the survivors in Khost and other quake-hit areas of the neighboring country,” Shareef Hussain, director-general of the KP Provincial Disaster Management Authority, told Arab News. 

Pakistan dispatches second tranche of humanitarian assisstance to Afghanistan on June 24, 2022. (NDMA)

Khateer Ahmad, director-general of Pakistan’s Rescue 1122 service, said his department had established a relief camp in Khost for the treatment of survivors. 

“For now, at least 40 persons with multiple injuries have been provided medical aid at the center,” Ahmad said. “Those seriously wounded will be transported to Pakistan via ambulances.” 

Pakistan’s Rescue 1122 service provide medical help to the wounded in Khost, Afghanistan, on June 24, 2022. (Rescue 1122)

Iqbal Wazir, the KP provincial minister for relief, rehabilitation and settlement, told Arab News from North Waziristan tribal district that a medical camp had already been established in Alwarra, a town on the Pakistan-Afghanistan border. “Civil and military officials in North Waziristan have stepped up efforts to facilitate the quake victims in every possible way. We plan to establish more medical camps, including the one at Ghulam Khan border [crossing],” he added. 

As food supplies have already arrived in the affected areas, the most urgent need now was shelter since the majority of the region’s inhabitants were left homeless. 

“People need shelter, and we would want aid organizations to help people with building their houses,” Omar said, as the extent of the destruction in the villages tucked away in the mountains was slowly coming to light. 

The quake was the deadliest in Afghanistan since 1998, when magnitude 6.5 tremors killed more than 4,000 people in Takhar province in the country’s north. 

UN teams deployed to deliver emergency supplies estimated more than 70 percent of homes in the worst-hit regions had been destroyed. 

Abdulfatah Jawad, the head of Ehsas Welfare and Social Services Organization, one of the local NGOs delivering assistance to Paktika, told Arab News that immediate food relief was sufficient and regularly distributed, but more tents and blankets were needed.