Pakistan receives $2.3 billion Chinese loan to stabilize falling reserves

A Pakistani dealer counts US dollars at a currency exchange shop in Karachi, Pakistan, on October 9, 2018. (AFP/File)
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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. 


Finance division says Pakistan’s economy made headway despite challenges since independence

Updated 45 min 26 sec ago

Finance division says Pakistan’s economy made headway despite challenges since independence

  • The country is currently facing the daunting challenge of dealing with a mounting current account deficit, dwindling forex reserves
  • The finance division says its aspiration is to put Pakistan’s economy on higher growth trajectory through investment, efficiency, productivity

KARACHI: Pakistan’s finance division on Saturday brought out a comprehensive report on 75 years of the country’s economic journey, showing the economy had improved its growth potential over a period of time despite tough challenges.

Pakistan is poised to celebrate its 75th independence anniversary on Sunday.

The South Asian nation of over 220 million people is currently facing a daunting challenge of managing a stuttering economy, as it faces a huge current account deficit projected at nearly four percent of the Gross Domestic Product (GDP).

The country’s foreign exchange reserves have also been consistently depleting in recent months, though officials say Pakistan will soon be in a position to stabilize its external sector with the assistance of friendly countries and the International Monetary Fund (IMF).

“Pakistan’s GDP rose from $3bn to $383bn from 1950-2022,” the report said. “In 1950, GDP was 1.8 percent and in 2022 it is 5.97 percent.”

The report noted the per capita income in Pakistan also rose from $86 to $1,798 within the same period.

“Exports rose from $355.5 million to $72.0 billion from 1950-2022,” it added, “while Tax Revenues rose from Rs. 0.31 billion to Rs. 6,126.1 billion from 1950-2022.”

The finance division said Pakistan only inherited 34 industrial units at the time of its independence out of the 921 currently operating in the country.

“FDI [Foreign Direct Investment] increased from $1.2 million in FY1950 to $1,867.8 million in FY2022,” it noted, “while the remittances increased from $0.14 billion in FY1973 to $31.2 billion in FY2022.”

“Pakistan has made significant headway in spite of the many challenges that it has faced,” the report maintained. “The nation was able to transform itself into a semi-industrial economy and hub for business activities.”

The finance division added its aspiration was to put the economy on a higher growth trajectory through greater investment, efficiency and productivity.
 


Pakistan’s ousted prime minister’s party hires public relations firm for media management in US

Updated 13 August 2022

Pakistan’s ousted prime minister’s party hires public relations firm for media management in US

  • The firm will try to improve the party image in the US through information distribution, media briefings
  • Imran Khan’s political rivals say he is ‘begging’ the US after accusing it of toppling his administration in April

ISLAMABAD: Months after Pakistan’s ousted prime minister Imran Khan said his government was brought down by the administration in Washington, the American chapter of his party has hired a public relations firm to improve its image in the United States through information distribution and media management.
Khan was driven out of power in a no-confidence vote in April after he lost his parliamentary majority. However, he told his workers and supporters he was “punished” for pursuing an independent foreign policy which was not liked by the US.
He also maintained the “international conspiracy” against him had succeeded since it was carried out with the help of “local abettors,” though his allegations were later denied by US and Pakistani officials repeatedly.
According to the agreement, a copy of which is available on the Internet, the Pakistan Tehreek-e-Insaf’s (PTI) US chapter has engaged Fenton/Arlook LLC for six months from August 1 on a monthly retainer fee of $25,000 to arrange media briefings and help the party with placement of articles and broadcasts.
“Fenton/Arlook shall provide public relations services, including but not limited to distributing information to and briefing journalists, placing articles and broadcasts, arranging interviews with representatives or supporters of PTI, advising on social media efforts and other such public relations services,” the agreement said.
The US firm noted its client did not include the PTI party registered in Pakistan.
“This is an agreement between a PR firm, not a lobbyist, and a group of US citizens,” Sajjad Burki, Khan’s focal person for the US, told Pakistan’s Dawn newspaper. “We are not lobbying for PTI Pakistan, and certainly not within the US administration.”
The former prime minister’s political rivals sharply reacted to the development, saying he had many faces.
Senior Pakistan Muslim League-Nawaz (PML-N) leader Ahsan Iqbal accused Khan of “begging [the] USA” after telling his followers that his government was toppled on Washington’s behest.

 

 

However, former information minister and Khan’s close aide, Chaudhry Fawad Hussain, said the American firm was hired by the PTI USA “to put its point across in the media.”


Pakistani minister threatens to boycott polio campaign amid rising militant activities in tribal districts

Updated 56 min 15 sec ago

Pakistani minister threatens to boycott polio campaign amid rising militant activities in tribal districts

  • The religious affairs minister’s warning was issued after a local leader of his political faction was recently gunned down
  • The country has recorded 13 polio cases this year despite routinely carrying out vaccination drives to immunize children

ISLAMABAD: Pakistan’s religious affairs minister Maulana Abdul Shakoor threatened to boycott polio vaccination campaign in the country’s tribal districts in a recent video clip if the provincial administration of Khyber Pakhtunkhwa and security institutions failed to protect people amid rising militant activity in the region.

The minister’s warning came just a few weeks after a local leader of his political faction, Jamiat-e-Ulema-e-Islam (JUI-F), was gunned down in North Waziristan tribal district.

His statement mentioned the anti-polio campaign in the country where 13 cases of the virus have so far been recorded since the beginning of the year.

Among these cases, 12 were reported from North Waziristan district.

“We want to make it clear that if the government and security institutions fail to provide us peace, the people of [former] Federally Administered Tribal Areas will not accept the government’s activities and boycott polio [vaccination],” the minister said in the video clip.

It is not clear when the statement was recorded.

The federal government has also not reacted to the development, though it threatens to undermine the anti-polio drives which are routinely carried out across the country to immunize millions of children.

Militants have targeted dozens of health workers administering polio drops in Pakistan where many parents routinely refuse to get their children inoculated against the crippling disease.

The recent polio cases have dealt a blow to the South Asian nation’s efforts to eradicate the disease which can cause severe paralysis in children.

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


Javelin athlete Arshad Nadeem wins gold for Pakistan at Islamic Solidarity Games

Updated 13 August 2022

Javelin athlete Arshad Nadeem wins gold for Pakistan at Islamic Solidarity Games

  • The Pakistani athlete made history at the Commonwealth Games last week with a throw on 90.18 meters
  • Nadeem also created a new record at Islamic Solidarity Games with a massive throw of 88.55 meters

ISLAMABAD: Pakistan’s top javelin athlete Arshad Nadeem clinched another gold for his country on Friday at the 2022 Islamic Solidarity Games in Konya, Turkey, where he created a new games record with an 88.55-meter throw, confirmed the country’s sports authority.
Last week, Nadeem won the top medal at the Commonwealth Games in a fifth-round throw of 90.18 meters, making a new record at the games where he now holds the title of the biggest throw recorded by a South Asian athlete.
His victory was widely celebrated in Pakistan where he was applauded by the top political and military leadership along with leading celebrities.
“Arshad Nadeem Won Gold Medal for Pakistan at Islamic solidarity Games 2022 with a massive throw of 88.55 meter, a new record and a Great Win,” the Pakistan Sports Board said in a Twitter post, adding that the whole nation was proud of the athlete and naming several officials, including the prime minister, who congratulated him for his new accomplishment.

Nadeem, a poor boy from smalltown Khanewal, is one of nine children of a daily wage laborer who showed great versatility as an athlete from a young age while dabbling in all kinds of sports at school.
Though the family lacked financial means to encourage Nadeem’s enthusiasm for sports, the boy’s spirit earned him the support he needed, with his elder brothers working to help him build a career in sports, the family told Arab News in an interview last year.
After participating in several international tournaments, Nadeem said Pakistani athletes found it difficult to compete with their rivals from other countries due to the lack of facilities.
He noted that the national sports authorities were putting in a lot of effort, though more needed to be done.


Pakistan, and man who pioneered commercial manufacturing of national flag, both turn 75 

Updated 13 August 2022

Pakistan, and man who pioneered commercial manufacturing of national flag, both turn 75 

  • Sheikh Nisar Ahmed Perchamwala has Guinness world record for making world’s largest flag in 2004
  • Perchamwala has also made world’s largest flag for Saudi Arabia, measuring 6,000 square feet, in 2006

KARACHI: It was in 1985 that Sheikh Nisar Ahmed Perchamwala decided to go into the business of commercially producing Pakistan’s national flag, feeling personally offended that the patriotic symbol was being “desecrated” by manufacturers who paid little attention to government specifications about the flag’s correct size and color.

Perchamwala thus launched VIP Flags Pakistan with the aim of using modern machines that would get the colors and proportions of the national flag just right. Today, the company has many accolades to its name, including a Guinness world record in 2004 for making the world’s largest flag, after which the company’s CEO formally added to his name the honorific Perchamwala, which translates as flag maker.

And this August is particularly special for Perchamwala: as Pakistan turns 75, so too will he.

“I will also turn 75 on August 30,” Perchamwala told Arab News at the company’s manufacturing unit in Karachi, smiling. “August is not just the month of our freedom but also the month of my birth. It is the month of my Pakistan’s birth.”

Perchamwala was born in New Delhi on August 30, 1947, two weeks after the end of British colonial rule and the creation of Pakistan. His family had been in the clothing business for generations when in the early 1980s, Perchamwala became increasingly perturbed by Pakistani flag manufacturers who did not care “about the proportion of the crescent and the star.”

“These flags also came in different shades [of green], it was almost like people didn’t know how to make the Pakistani flag,” he said.

The casualness made him wonder: “What kind of a nation are we?”

People buy national flags of Pakistan at a market ahead of Pakistan's 75th Independence Day in Karachi on August 12, 2022. (AFP)

“Then I did some research and started manufacturing the flag along modern lines for the first time,” the businessman said. “Now, handmade flag manufacturing has stopped and only printed and standard flags are produced with right proportions.”

Perchemwala said he started off by making small flags, following government specifications, but then went on to increase the sizes and finally made the world’s largest flag, at 173,400 square feet, in 2004, for which he was recognized in the Guinness Book of World Records.

“When my name appeared in the record book, I felt I had accomplished something significant and started writing ‘Perchamwala’ with my name,” he said.

Since then, Perchamwala has used the cloth from his record-breaking flag to make quilt covers for the victims of a devastating earthquake that hit Kashmir in October 2005. He has also been receiving orders for large flags from other countries, including Saudi Arabia and Afghanistan.

Flags of various countries made by Sheikh Nisar Ahmed Perchamwala are displayed at his manufacturing facility in Karachi on August 02, 2022. (AN photo).

In 2006, he made the biggest Saudi flag ever, measuring 6,000 square feet, which was also the tallest, installed on a 100-meter-tall pole in Diriyah, near Riyadh.

“They [Saudis] approached us after we made the [2004] record. We were honored to make the kingdom’s flag, though it was also quite difficult due to the inscription and the sword,” the flag maker said.

In 2008, Perchamwala made another large flag, which measured 250,000 square feet, for neighboring Afghanistan. He also gets regular orders for flags from embassies, consulates and hotels in Pakistan.

Workers at VIP Flags are making green and white caps representing Pakistan's national flag on August 02, 2022. (AN photo)

Now, at the diamond jubilee of Pakistan, Perchamwala’s business is managed by the family’s third generation, for whom he had an important message:

“The new generation should not forget the importance of freedom which was earned through struggle. They must take care of Pakistan’s pride and greatness.”