KARACHI: An international credit rating agency on Thursday termed the ongoing no-confidence motion against Prime Minister Imran Khan as “credit negative” for the country, saying it was casting doubt on policy continuity in Pakistan while creating an overall environment of uncertainty.
Pakistan’s opposition parties tabled a no-trust resolution against the prime minister on Monday, accusing his administration of mismanaging economy and failing to provide good governance.
As the opposition claimed the government had lost its parliamentary majority, Moody’s, a credit rating corporation, raised concern over the economic ramifications of the prevailing political situation.
“We view the no-confidence motion as credit negative because it raises significant uncertainty over policy continuity, as well as the government’s ability to continue to implement reforms to increase productivity growth and secure external financing, including from the International Monetary Fund (IMF),” it said in a statement.
The no-trust motion comes at a time when Pakistan is encumbered with surging inflation and widening current account deficit amid rising global commodity prices. A further deterioration in its external position, including an erosion of foreign exchange reserves, would threaten the government’s external repayment capacity and heighten liquidity risks, according to Moody’s.
Pakistan has faced significant pressure on its foreign exchange reserves in recent months, amid elevated global commodity prices and a recovery in domestic demand. The Russia-Ukraine military conflict, which has driven up global commodity prices, has also amplified pressure on the country’s external position. Pakistan is a net oil importer, with petroleum and related products accounting for about 20 percent of its total imports.
Its current account deficit amounted to more than $12 billion between July 2021 and February 2022, a stark contrast to a $1 billion surplus in the same period a year before.
“We now expect the deficit to widen to 5-6 percent of GDP in fiscal 2022 compared with our previous forecast of 4 percent,” Moody’s statement said.
The further widening of the current account deficit would put greater pressure on Pakistan’s foreign reserves, which declined to $12 billion as of March 25, 2022, from $18.9 billion in July 2021, according to Moody’s and the State Bank of Pakistan.
Officials of the country’s finance ministry also said the economic situation was moving in the right direction before the no-confidence move, adding the alarm bells of uncertainty were now beginning to ring.
“So far, there was no impact on the economy,” Muzammil Aslam, the ministry’s spokesperson, told Arab News on Thursday. “The foreign investors were confident which was reflected in the Reko Diq gold mine dispute settlement and credit off-take was up.”
“Now it seems the deadlock which is prevailing will make things worse because the IMF is silent and the Chinese rollover [of $2.3 billion] has been agreed, but the payment made to China has not been returned yet which will cause a major dip in the reserves,” he said.
Pakistan’s reserves decreased by $2.915 billion to $12 billion, the country’s central bank said on Thursday. It informed that this decline reflected repayment of external debt, adding the rollover facility provided by China was being processed and was expected shortly.
Pakistan is also undergoing its seventh review under the IMF Extended Fund Facility program, which has disbursed $3 billion out of the stipulated $6 billion. However, discussions between Pakistan and the IMF appear to have stalled since the beginning of March when the global lending agency expressed concerns over the government’s recent relief package in response to rising inflation, according to Moody’s.
Pakistani economists said the current political situation had made local and foreign investors nervous who were waiting for the political dust to settle down.
“The state of uncertainty has been prevailing for almost a month and the government’s focus is on its defense,” Dr. Ashfaque Hassan Khan, senior economist, told Arab News.
Some experts said people who had invested in Pakistani bonds and sukuk were also feeling jittery which was reflected in the huge depreciation of the national currency.
The rupee on Thursday plunged to a new historic low of Rs183.46 against the US dollar in the interbank market.
“The dollar is going up and the oil prices are high,” Khurram Schehzad, senior financial analysts, commented, adding none of this was good for the economy.
However, Miftah Ismail, the country’s former finance minister and member of the opposition Pakistan Muslim League-Nawaz party, said things would get better after the formation of the new government.
“We are fully aware of the situation,” he said. “The markets, currency and bond, will settle down once the new setup is formed.”
However, Moody’s said anyone managing Pakistan’s government would find it difficult to balance revenue-raising reforms to secure external financing and political pressure from people facing rising cost of living.
Moody’s calls no-confidence motion ‘credit negative’ for Pakistan as finance ministry says ‘no impact’
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Moody’s calls no-confidence motion ‘credit negative’ for Pakistan as finance ministry says ‘no impact’
- Moody's says no-confidence motion raises uncertainty over policy continuity, government’s ability to continue to implement reforms
- Economists say current political situation has made local and foreign investors nervous, awaiting the political dust to settle
Barrick Gold in talks with IFC, other agencies to raise $2 billion for Pakistan’s Reko Diq
- Reko Diq in southwestern Pakistan is one of world’s biggest under-developed copper mines
- Barrick Gold CEO says mining company needs $2 billion for first phase of Reko Diq project
TORONTO: Barrick Gold is not interested in bidding for Anglo American, which last week received a $39 billion takeover offer from BHP, and is building its own copper portfolio, the Canadian miner’s CEO Mark Bristow said on Wednesday.
If BHP’s proposed acquisition of Anglo is successful, it would create one of the world’s biggest copper miners.
Analysts and investors expect rival bids to emerge after BHP’s offer was rejected last week by Anglo, which said it was opportunistic, significantly undervaluing the company and its future prospects.
“We are not interested in bidding for Anglo American, as we are building (copper assets) of our own,” Bristow told Reuters.
Bristow is betting on developing the Reko Diq copper project in Pakistan in which it holds a 50 percent stake, the first phase of which is expected to cost $5.5 billion.
Barrick is in talks with the International Finance Corporation and other agencies to raise at least $2 billion for the first phase of the project, Bristow added.
Reko Diq, one of the biggest yet-to-be-developed copper mines in the world, is also 50 percent owned by the government of Pakistan. Saudi Arabia is in talks to buy part of the stake from the Pakistan government.
In Mali, where Barrick has a gold mine, the military-led government was last year in talks with miners over a change to its mining law that could see it boost state and private Malian interests in new projects to 35 percent from up to 20 percent previously.
However, Bristow said that the company has received written assurances from the junta that there was no threat of its assets being nationalized.
Pakistan strongly condemns ‘heinous’ Afghanistan mosque attack that killed six
- Gunman stormed mosque in Afghanistan’s Herat province on Monday, killing six and injuring one
- Pakistan says it condemns “terrorism” in all its forms, including attacks on places of worship
Islamabad: Pakistan’s foreign office on Wednesday strongly condemned a “heinous terrorist attack” that left six people dead in Afghanistan’s Herat province this week, reiterating Islamabad’s stance that it condemns violence in all its forms.
A gunman stormed a mosque in Herat province’s Guzara district on Monday, killing six worshippers and injuring one. Locals said the attackers had targeted the minority Shia community in the country.
Militant group Daesh claimed responsibility for the attack in a post on social media platform Telegram. Its regional chapter is the largest security threat in Afghanistan and has frequently targeted Shia Muslims.
“Pakistan condemns in the strongest terms yesterday’s heinous terrorist attack at a mosque in Herat, Afghanistan, resulting in loss of life and injuries,” the Ministry of Foreign Affairs (MoFA) said in a press release.
The foreign office said the people and government of Pakistan stand with the people of Afghanistan and express their heartfelt condolences over the loss of lives in the incident.
“Pakistan condemns terrorism in all its forms and manifestations, including despicable attacks on places of worship,” it added.
Relations between Afghanistan and Pakistan have deteriorated after militant attacks in Pakistan’s Khyber Pakhtunkhwa and Balochistan provinces bordering Afghanistan surged. The attacks increased after a fragile truce between Islamabad and the Tehreek-e-Taliban Pakistan (TTP), a banned outfit that pledges allegiance to the Afghan Taliban but is a separate group from it, broke down in Nov. 2022.
Islamabad says the attacks are launched mostly by TTP members who operate from safe havens in Afghanistan. Kabul denies this and blames Islamabad for not being able to handle its security challenges.
Tensions escalated in March when Pakistan conducted two airstrikes in Afghanistan against what it said were militant targets. Afghan officials said the airstrikes killed eight civilians, including five women and three children.
US official leads delegation to Pakistan, reiterates support for economic stability
- Jon Bass, US under secretary for political affairs, discusses regional and bilateral issues with Pakistani officials
- Bass reiterates Washington’s commitment to a stable, secure and prosperous future for Pakistan and US
KARACHI: State Department official Jon Bass led a delegation to Pakistan this week to discuss bilateral and regional matters, including Washington’s support for Pakistan’s economic stability, the US embassy said on Wednesday.
The US State Department had confirmed this week that Bass, who is the US acting under secretary for political affairs, would meet senior Pakistani government officials to discuss a range of regional and bilateral issues on Apr. 30.
“He met with senior Pakistani government officials to discuss a range of regional and bilateral issues, including US support for Pakistan’s economic stability and bilateral priorities for regional prosperity and security,” US Mission Spokesperson Thomas Montgomery said in a statement.
Montgomery said Bass underscored Washington’s commitment to a stable, secure, and prosperous future for both nations.
Pakistan’s relationship with Washington has experienced fluctuations over the decades, characterized by periods of close partnership and notable estrangement.
Despite Islamabad’s recent initiatives to enhance and deepen its ties with Washington, until recently, President Joe Biden’s administration had remained reluctant to engage with Pakistan’s top leadership.
Ties between the two countries have improved since former prime minister Imran Khan’s government was ousted via a parliamentary vote on Apr. 2022. Khan had accused Washington of colluding with his political rivals to oust him from power via a “foreign conspiracy.” Washington has consistently denied the allegations.
Cash-strapped Pakistan has been grappling with an economic crisis that reached its peak last year when inflation climbed to a staggering 38 percent and the country’s foreign exchange reserves plummeted to alarmingly low levels.
Pakistan views the US as a key ally that can help alleviate its economic crisis considering its huge influence within the International Monetary Fund (IMF).
The IMF’s executive board this week completed the second review of a Stand-by Arrangement (SBA) it reached with Islamabad last year. The last-gasp deal helped Pakistan avoid a sovereign default.
Pakistani writers say Abu Dhabi book fair opportunity to promote country’s talent, rich culture
- Abu Dhabi International Book Fair kicked off on Apr. 29 and is scheduled to continue till May 5
- In a first, Pakistani writers will take part in the fair to discuss country’s literature and fiction works
ISLAMABAD: Pakistani writers taking part in the Abu Dhabi International Book Fair on Wednesday hailed the platform as a crucial opportunity for the South Asian country to promote its culture and dispel negative stereotypes associated with the nation.
The international fair kicked off on Apr. 9 and is scheduled to continue till May 5 in Abu Dhabi. It is an annual event that brings different writers together to promote reading, diverse cultures and knowledge locally, regionally, and globally. Organizers of the fair say their aim is also to promote cultural exchange and dialogue between several nations.
It also brings together leaders from the publishing and creative industries every year, providing promising opportunities for those involved in this sector to form new partnerships, learn about the latest trends and developments, and discuss its fundamental priorities.
For the first time ever, Pakistani writers are taking part in the international festival in two different sessions slated to be held on May 1 and May 3.
“Pakistan’s maiden participation in this event is crucial not only for the diaspora but also for familiarizing the Gulf and the world with Pakistan’s cultural richness, countering stereotypes, and dispelling reductionist descriptions,” Dr. Osama Siddique, a Pakistani novelist, told Arab News from Abu Dhabi.
Siddique is part of a panel that will discuss the state of Pakistan’s literary on May 3. He said Pakistani literature has struggled on the global stage due to a lack of support from the state, ineffective institutions, expensive printing materials and a lack of publishing industry development.
“Writers need to be proactive, and publishers must elevate their standards, and events like this provide a perfect platform for this,” he added.
He said Pakistan often falls short of showcasing its rich civilization, culture, and literature, despite the country’s profound historical and linguistic heritage spanning over 9,000 years.
He said Pakistani writers, local entrepreneurs and the Pakistani embassy in UAE collaborated to ensure Pakistan’s participation in the annual fair for the first time this year.
“It’s a start, albeit insufficient,” he said.
“It is vital to capitalize on such opportunities, considering the significant cultural investments made by the Gulf states in education, literature, and the arts,” he noted.
Tahira Iqbal, a Pakistani novelist who writes in Urdu, said participating in such events is crucial as it allows one to connect with writers from diverse backgrounds, languages, and regions.
Iqbal will also attend the May 3 session with Siddique as a panelist.
“Although Pakistani fiction is of high quality, it has not garnered significant recognition on the global stage, so participating in such events can address this issue,” Iqbal told Arab News.
Shazia Ali Khan, a UAE-based Urdu film screenplay writer, said such events provided an opportunity for writers to challenge preconceived notions about their country, its culture, and the role of women within it.
“So it is almost like an ambassadorial or diplomatic mission, where just us being there and speaking our minds may or may not remove any notions in people’s minds about where we come from, what our culture is, and how empowered the women are,” Khan told Arab News.
Khan stressed that Pakistani writers should ensure their literary works are translated so that they reach a wider audience, noting how most literary works originating from Pakistan were in Urdu language.
“In the absence of good translations and the proper sort of publishing houses backing all of this up to get to the end user is a bit difficult,” Khan pointed out.
Faisal Niaz Tirmizi, Pakistan’s ambassador to the UAE, said the country’s participation in the event is a testament to the rich literary heritage and vibrant intellectual discourse that it possesses.
“This representation not only showcases the diversity and creativity of Pakistani literature but also fosters meaningful cultural exchanges on a global platform,” he told Arab News.
By engaging in such events, Tirmizi said Pakistan played a crucial role in promoting cross-cultural understanding, fostering dialogue, and building bridges of friendship and cooperation between nations.
Students in Lahore protest America’s ‘hypocritical’ support for Israel’s war in Gaza
- Students say United States raises rights concerns everywhere without criticizing Israel for its occupation
- They block the road leading to the American consulate, make fiery speeches and chant slogans for hours
LAHORE: A student organization blocked the road leading to the United States Consulate in Lahore on Tuesday, protesting the American support for Israel’s war in Gaza by making fiery speeches for several hours and chanting pro-Palestine slogans.
The Progressive Students’ Collective (PSC) is a student-led movement in Pakistan which has staged protests in solidarity with the Palestinian cause, including disrupting a speech by the German ambassador to the country last week.
Both students and civil society activists highlighted the “glaring hypocrisy” of western nations like the United States and Germany, saying they raised human rights concerns in the developing states while staying silent about the plight of Palestinians under Israeli occupation.
A media statement issued by the PSC advocated for Boycott, Divestment and Sanctions (BDS) against Israel and its powerful state and corporate funders while highlighting the Palestinian rights to resist, right and self-determination.
There were hundreds of Palestinian flags and people wearing keffiyeh, chanting slogans in favor of intifada and revolution.
“When looking at atrocities being committed across the globe, [we have to ask] who is enabling them,” 23-year-old Ali Raza, who delivered the opening address at the protest, told Arab News. “It is on American shoulders that Israelis put their weapons before firing them at Palestinians.”
He went on to describe Israel as a “proxy state,” policing the Middle East for “western imperial powers.”
Raza, the former PSC vice president, said the students chose the US consulate as the venue for protest because since it was the largest state funder of Israeli occupation.
Earlier, the told the gathering the US monitored freedom of expression across the world, but police officers retrain American university professors by force who speak up for Palestinian rights, adding that was what hypocrisy looked like.
At the Asma Jahangir Conference in Lahore last Saturday, the current PSC spokesperson, Ali Abdullah Khan, protested against the German ambassador’s speech and disrupted him while he was discussing civil rights in South Asia.
“We protested against him, protested against his invitation [to the conference],” he told Arab News.
Khan said the students’ collective wanted to make Pakistan an important part of the global student-led BDS movement against Israel.
He pointed out the PSC wanted to show solidarity with the students who were being expelled from Columbia University in New York for protesting against the Israeli occupation.
“We support the Palestinian right to resist, we support the Palestinian right to return, we support the Palestinian right to self-determination,” Khan said in his speech to the demonstration. “We want to talk about putting an end to settler colonialism, putting an end to imperialism and we want to talk about a free and independent Palestinian state.”
