‘Recipe for disaster’: Experts say political turmoil jolting economy as dollar hits historic low

Commuters try to make their along a road partially blocked with transport trucks placed by local authorities in Rawalpindi on May 25, 2022, as all roads leading into Pakistan's capital were blocked ahead of protest planned by ousted prime minister Imran Khan. (AFP)
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Updated 25 May 2022

‘Recipe for disaster’: Experts say political turmoil jolting economy as dollar hits historic low

  • Pakistan’s economic woes compounded by anti-government march to capital by ex-PM Imran Khan
  • Rupee closes at Rs201.92 against US dollar, stock market traded 300 points below previous closing

KARACHI: Political turmoil in Pakistan over an opposition long march and uncertainty about the revival of a $6 billion International Monetary Fund (IMF) program are continuing to jolt the country’s local currency, as the rupee hit another historic low against the United States dollar on Wednesday, closing at Rs201.92.

Pakistan’s economic woes have been compounded by an anti-government march to the capital announced by former prime minister Imran Khan. Clashes between Khan’s supporters and law enforcers on Wednesday have dampened investor confidence, economists and experts said.

On Wednesday, the country’s stock market also traded 300 points below the previous closing.

“The political noise and delay in the IMF [deal] has been affecting investor confidence. This is why the stock market and rupee are falling. Clarity on both will help restore confidence,” Muhammad Sohail, CEO of the brokerage company Topline Securities, told Arab News. 

The rupee was expected to show some recovery after the Saudi minister of finance said on Tuesday the kingdom was finalizing extending a $3 billion deposit to Pakistan. 

“The market was expected to depict some positive sentiments [after Saudi announcement] but the current political situation overshadowed it,” Samiullah Tariq, director of research at the Pakistan Kuwait Investment Company, said.

Pakistani economists and financial experts said the current political turmoil in the country was wreaking havoc on an already fragile economy. 

“The mayhem created by the call for the long march, coupled with [the government’s] unwise and violent means to stop PTI supporters, are going to completely wreck the already rustic and dysfunctional economic ship of Pakistan,” Dr. Ikram ul Haq, a Lahore-based financial expert, told Arab News. 

“With foreign reserves left for less than two months and the rupee plunging to the lowest in history by crossing the psychological barrier of 200, the call for the long march and the way it is being handled, is going to provide a sure recipe for disaster,” he added. 

Economic experts also say a nearly $1.5 billion fuel and electricity subsidy announced by the last government of Khan was proving to be an “economic land mine” for the current administration.

“The current economic crisis, whether it relates to the delay in the IMF program and fiscal stress, is to a large extent created by the outgoing government which laid economic land mines in the form of petroleum subsidies,” Dr. Sajid Amin, Deputy Executive Director of the Sustainable Development Policy Institute (SDPI), told Arab News.

“The current economic problems and political uncertainty have been inherited by the incumbent government but its indecisiveness has further compounded the situation,” he added. 

Pakistan is currently negotiating with the IMF to secure around $3 billion needed to stabilize its economy, marred by an ongoing political crisis, rising trade and fiscal deficit, and depleting foreign-exchange reserves, which at $10.2 billion, are not enough to cover even two months of imports. 

“The outgoing government, sensing that it was about to go, had announced the relief package to push the incoming government in troubling waters and [had also] frozen petroleum prices, which was not possible,” Amin said. “It has distorted the IMF program. Now the incumbent government is not removing the subsidies, fearing a political cost.”

Negotiations with the international money lender come at a time when Pakistan is battling the second-fastest inflation rate in Asia at 13.4 percent. To sail through the IMF deal, the country has to make the politically tough decision of raising fuel prices to ensure financial viability. 

“Already burdened with the unbearable fuel subsidy left by the PTI coalition government, those at the helm of affairs are making sure that the state loses its financial viability,” said Haq. 

Muzzamil Aslam, PTI’s spokesperson on finance, denied political rallies were destabilizing the economy. 

“It is the indecisiveness of the current government,” he said, “which is responsible for the economic turmoil.” 


In ‘Saadhay 14 August,’ Pakistani playwright Anwar Maqsood brings heroes of independence to life 

Updated 6 sec ago

In ‘Saadhay 14 August,’ Pakistani playwright Anwar Maqsood brings heroes of independence to life 

  • ‘Saadhay 14 August,’ an ode to Jinnah and Gandhi, premiered in Karachi on Pakistani Independence Day
  • Play will also be performed in Islamabad and Lahore as well as several international destinations next year

KARACHI: A Pakistani stage production that spotlights the relationship between two leading figures of the Indian independence movement, Muhammad Ali Jinnah and Mahatama Gandhi, has received widespread applause from audiences in Karachi since it premiered there on the 75th anniversary of Pakistan’s birth. 
Written by renowned dramatist Anwar Maqsood, “Saadhay 14 August” is the last part of a trilogy that centers on events leading to the emergence of two independent nations, India and Pakistan, after the end of British rule in the Indian Subcontinent in 1947.
The play tries to imagine interactions between Pakistan’s founding father Jinnah and Indian independence icon Mohandas Karamchand Gandhi.
The previous two parts of the series were called “Pawnay 14 August” and “Sawa 14 August.”
“I didn’t write ‘14 August’ because Independence Day never came for me after August 14, 1947,” Maqsood told Arab News in an interview this week. “People do not really understand what independence truly means and I have tried to convey it in the play.”
Discussing the central theme of the new production, the platwright said it was an attempt to determine who was responsible for the division of the Subcontinent and “should be punished.” The drama then plays out as a court case that takes Jinnah and Gandhi to London, Lahore, Kashmir and New Delhi in search of the answer to the play’s central puzzle.
“We wanted to show a lighter side of the two leaders,” Dawar Mehmood, who directed the play, told Arab News.
“It was a huge responsibility to portray a big, national leader,” actor Omar Kazi, who plays Jinnah, told Arab News. “It was a new look, new style and a new aura … as opposed to the clichéd Jinnah in his Karakul cap. The play is also set in current times so he is supposed to behave in a manner that aligns with present times.”
Tanveer Gill, who has won audiences with his portrayal of Gandhi, said he worked really hard to get into his character.
“There is only so much you find about original Gandhi on YouTube,” he said. “To make this character [work], I observed and thought of positive, older people who used to be in my life. It was their positivity that helped me play the part.”
Veteran actor Sajid Hasan, who played a small role in the production, said Maqsood had “done us a very big favor” by turning the two characters into “real humans.”
“There is a little irreverence in Anwar [Maqsood] Bhai for which he has always been known,” he said. “But it is a brilliant take on the overall India-Pakistan situation.”
Musician Ali Hamza said such historical plays were needed in Pakistan and Maqsood was well placed to write on partition since he had witnessed it closely.
“He uses humor but what he feels in his heart is also reflected in [the play],” Hamza said. “This was so engaging and so on-point.”
Actor Fahad Mirza said “Saadhary 14 August” could be compared to any international stage production.
“I hope the world sees how much talent and skill we have,” he said. “It was so beautiful. There were times when people were horrified to see the scenes of partition and violence … Dawar [Mehmood] has nailed it and Anwar Sahib is at his best.”
“Saadhay 14 August” will be staged in Karachi until November 15, after which it will move to Lahore and Islamabad as well as to various international destinations next year.


In rare move, court orders ex-PM Khan aide’s police remand for another two days

Updated 17 August 2022

In rare move, court orders ex-PM Khan aide’s police remand for another two days

  • Dr. Shahbaz Gill was arrested last Tuesday over televised comments media regulator says were ‘seditious’
  • Senior PTI leader Fawad Chaudhry seeks judicial inquiry into alleged torture of Gill during police custody

ISLAMABAD: A local court in the federal capital on Wednesday remanded Dr. Shahbaz Gill, a senior Pakistan Tehreek-e-Insaf (PTI) leader and former prime minister Imran Khan’s chief of staff, in police custody for two days for investigation in a sedition case.

Gill was arrested last Tuesday afternoon, a day after he made a controversial comment in a talk show aired by a private news channel, asking army officers not to follow orders of their top command if they were “against the sentiments of the masses.”

The country’s national media regulator described the statement as “seditious” and said it was tantamount of inciting revolt within the military. The regulator also issued a show-cause notice to the channel, ARY News, for airing the “illegal” content. The channel has since been off air. 

Last Friday, after Gill had been in police custody for two days, the court sent him to jail on judicial remand, rejecting a request by the police to extend the suspect’s physical remand. Islamabad Advocate General Jahangir Khan Jadoon filed a plea in the Islamabad High Court on Saturday last week challenging the order and saying the physical remand of Gill was important to help complete the investigation.

Prosecutor Raja Rizwan Abbasi on Wednesday urged the court to allow physical remand of the suspect as investigators have yet to recover his mobile phone and conduct a polygraph test. In a rare move, the court accepted the demand for another round of police remand. 

“We are yet to investigate the person who approved the script [of what Gill said on TV show],” Abbasi told district and session judge Zeba Chaudhry during the hearing.

Gill’s counsel Barrister Salman Safdar opposed the prosecution’s plea for physical remand and said he had already faced torture by police last week.

“Shahbaz Gill has been tortured in police custody,” Safdar said, referring to a previous period of physical remand, adding that Gill was blindfolded when subjected to torture: “Even his private parts were tortured in custody.”

After hearing arguments from both the sides, the judge first reserved the verdict and later announced that Gill should be handed over to police on physical remand for 48 hours.

Meanwhile, senior PTI leader Fawad Chaudhry called for an independent inquiry.

“A judicial inquiry should be conducted and an independent board should be constituted on which both Shahbaz Gill and prosecution have the trust,” he told reporters.

PTI chairman Imran Khan wrote on Twitter he was “very concerned about Shahbaz Gill being sent into police remand again.”

“He is in a fragile state of mental & physical health because of the torture inflicted on him when he was abducted & taken to undisclosed location & then again at the police station,” Khan said.

 

 


Pakistan to host ten international cricket teams over next 4 years

Updated 17 August 2022

Pakistan to host ten international cricket teams over next 4 years

  • Cricket-obsessed Pakistan will also host Asia Cup and Champions Trophy during this period
  • Pakistan has struggled to convince international players to visit since attack on Sri Lanka team in 2009

ISLAMABAD: Pakistan will host ten test playing nations between 2023 and 2027, the Pakistan Cricket Board (PCB) said on Wednesday as it unveiled the country’s cricketing schedule under the next Future Tours Programme.

International cricket teams stopped visiting Pakistan after a 2009 attack on Sri Lankan players in Lahore and Pakistan hosted most bilateral international series in the UAE.

However, international matches partially resumed in May 2015, when Zimbabwe toured the South Asian country, followed by other international teams. 

Early this year, the Australian team visited Pakistan in February for their first cricket tour in nearly 24 years and later West Indies played three one day matches in Pakistan in June.

“The PCB has scheduled around 238 days of international cricket during the four-year period comprising 27 ICC World Test Championship fixtures (13 home and 14 away), 47 One-Day Internationals (26 home and 21 home) and 56 Twenty20 Internationals (27 home and 29 away),” PCB said in a statement.

“Pakistan’s FTP 2023-2027 reflects that it will play hosts to 10 out of 12 ICC Full Member nations for the first time in more than two decades.”

Pakistan will also host major cricket events like the Asia Cup and Champions Trophy. 

“Pakistan will host the Asia Cup 2023 and triangular series in February 2025 in the lead up to the ICC Men’s Cricket World Cup 2023 and the ICC Champions Trophy 2025, respectively, it will play 11 T20Is against the Netherlands, Ireland and England in the build up to the ICC Men’s T20 World Cup 2024, which will be jointly hosted by the United States and the West Indies,” PCB said.

“I am sure that our cricket fans will be delighted to know that top-ranked and attractive sides such as Bangladesh, England, New Zealand, South Africa, Sri Lanka and the West Indies will visit Pakistan to compete in matches for the ICC World Test Championship,” PCB Chief Executive Faisal Hasnain said.


Pakistan fulfills another FATF condition, makes currency declaration mandatory for air travelers

Updated 17 August 2022

Pakistan fulfills another FATF condition, makes currency declaration mandatory for air travelers

  • No passenger will be able to board a flight or leave the airport without submitting the declaration form
  • The global financial watchdog praised Pakistan for implementing its recommendations in its last meeting

ISLAMABAD: The Civil Aviation Authority (CAA) of Pakistan has made it mandatory for all incoming and outgoing passengers to fill out a currency declaration form, said an official statement on Tuesday, to meet yet another requirement of the Financial Action Task Force (FATF).
Pakistan has been on the international watchdog’s “grey list” of countries since 2018 due to inadequate controls over money laundering and terrorism financing.
However, the country moved closer to exiting the list in recent months after implementing FATF recommendations to strengthen its financial system.
The Paris-based international watchdog also praised Pakistani officials for making substantial progress while saying its team would soon carry out an onsite visit of the country.
The CAA notification on Tuesday said no passenger would be allowed to board a flight or leave the airport without submitting the declaration.
“For inbound flights, airlines are required to ensure in-flight announcement by the flight crew for every inbound flight for submission of subject declaration wherein the passengers will mention the currency under the regulatory requirement of FATF,” the notification informed.
“The said declaration will be deposited at the customs counter before the immigration desk at international arrival,” it added.
The CAA said airline staff and travel agents should provide a copy of the declaration form to all potential passengers who intend to be on an outbound flight while booking their tickets.
“At check-in counters, airlines are directed to issue boarding pass only once the passenger has deposited the declaration with the them,” the notification added.


Pakistan's finance minister criticizes manufacturers for importing parts instead of building them

Updated 17 August 2022

Pakistan's finance minister criticizes manufacturers for importing parts instead of building them

  • Miftah Ismail says cellphone manufacturers were only adding five percent value to their products
  • He points out that automobile manufacturers had not exported cars to lucrative destinations in 30 years

ISLAMABAD: Federal Minister for Finance and Revenue Miftah Ismail on Wednesday highlighted the structural problems of the country’s economy, saying that Pakistani companies preferred to import parts of their products instead of manufacturing them indigenously at home.

The government recently imposed a temporary ban on the import of luxury items since it was facing a massive current account deficit along with dwindling forex reserves and a rapidly depreciating currency.

The finance minister issued the statement against the same backdrop while addressing a conference of business leaders in the federal capital where he specifically mentioned the country’s cellphone and automobile manufacturers.

“We have given subsidies and 10 percent duty advantage to mobile industry to manufacture phones in Pakistan but their value addition is not more than five percent,” he said. “They get all of their parts from outside and only assemble them here. We have given double duty protection than its value addition and the same thing holds true for car manufacturing companies as well.”

Ismail noted that automobile manufacturers had been working in Pakistan for more than 30 years, but they had not exported vehicles worth a single dollar.

“Pakistani companies are selling inside the country only, though they should try to sell [their products] in rich markets of the United States, Europe and far eastern countries,” he added. “They sell locally to earn more profit because it is a protected market.”

The minister pointed out that out of Pakistan’s $30 billion exports, around $20 billion were generated by the textile sector.

“We import $80 billion worth of goods from abroad which is unsustainable,” he continued. “Our industries have to increase exports instead of only making local sales.”

Ismail also maintained that agriculture was the backbone of Pakistan’s economy, though he added it needed more innovation by adopting advanced Agri-Tech.

“My focus is to strengthen our agriculture as we have imported $450 million tons of wheat this year and more is still required,” he said.

The money spent on the import of wheat, the minister continued, could be used to support farmers and introduce latest technology in the sector.