Sri Lanka’s crisis rings alarm for other troubled economies, from Lebanon to Pakistan

An investor monitors indexes on the big screen at the Pakistan Stock Exchange (PSE), in Karachi, Pakistan, June 24, 2022. (AP)
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Updated 06 July 2022

Sri Lanka’s crisis rings alarm for other troubled economies, from Lebanon to Pakistan

  • Like Sri Lanka, Pakistan has been in urgent talks with the IMF, hoping to revive a $6 billion bailout package 
  • Soaring crude oil prices pushed up fuel prices which in turn raised other costs, pushing inflation to over 21 percent

BANGKOK: Sri Lanka is desperate for help with weathering its worst crisis in recent memory. Its schools are closed for lack of fuel to get kids and teachers to classrooms. Its effort to arrange a bailout from the International Monetary Fund has been hindered by the severity of its financial crisis, its prime minister says.

But it’s not the only economy that’s in serious trouble as prices of food, fuel and other staples have soared with the war in Ukraine. Alarm bells are ringing for many economies around the world, from Laos and Pakistan to Venezuela and Guinea.

Some 1.6 billion people in 94 countries face at least one dimension of the crisis in food, energy and financial systems, and about 1.2 billion of them live in “perfect-storm” countries, severely vulnerable to a cost-of-living crisis plus other longer-term strains, according to a report last month by the Global Crisis Response Group of the United Nations Secretary-General.

The exact causes for their woes vary, but all share rising risks from surging costs for food and fuel, driven higher by Russia’s war on Ukraine, which hit just as disruptions to tourism and other business activity from the coronavirus pandemic were fading. As a result, the World Bank estimates that per capita incomes in developing economies will be 5 percent below pre-pandemic levels this year.




A daily wage laborer waits for work at a wholesale market in Colombo, Sri Lanka, Sunday, June 26, 2022. (AP)

The economic strains are fueling protests in many countries, as meanwhile, short-term, higher interest borrowing to help finance pandemic relief packages has heaped more debt on countries already struggling to meet repayment obligations. More than half of the world’s poorest countries are in debt distress or at high risk of it, according to the UN.

Some of the worst crises are in countries already devastated by corruption, civil war, coups or other calamities. They muddle along, but with an undue burden of suffering.

Here’s a look at a few of the economies that are in dire straits or at greatest risk.

PAKISTAN

Like Sri Lanka, Pakistan has been in urgent talks with the IMF, hoping to revive a $6 billion bailout package that was put on hold after Prime Minister Imran Khan’s government was ousted in April. Soaring crude oil prices pushed up fuel prices which in turn raised other costs, pushing inflation to over 21 percent. A government minister’s appeal to cut back on tea drinking to reduce the $600 million bill for imported tea angered many Pakistanis. Pakistan’s currency, the rupee, has fallen about 30 percent against the US dollar in the past year. To gain the IMF’s support, Prime Minister Shahbaz Sharif has raised fuel prices, abolished fuel subsidies and imposed a new, 10 percent “super tax” on major industries to help repair the country’s tattered finances. As of late March, Pakistan’s foreign exchange reserves had fallen to $13.5 billion, equivalent to just two months of imports. “Macroeconomic risks are strongly tilted to the downside,” the World Bank warned in its latest assessment.


AFGHANISTAN

Afghanistan has been reeling from a dire economic crisis since the Taliban took control as the US and its NATO allies withdrew their forces last year. Foreign aid — long a mainstay — stopped practically overnight and governments piled on sanctions, halted bank transfers and paralyzed trade, refusing to recognize the Taliban government. The Biden administration froze $7 billion in Afghanistan’s foreign currency reserves held in the United States. About half the country’s 39 million people face life-threatening levels of food insecurity and most civil servants, including doctors, nurses and teachers, have been unpaid for months. A recent earthquake killed more than 1,000 people, adding to those miseries.




A man stands among piles of humanitarian food supplies in Kabul, Afghanistan, Wednesday, Feb. 16, 2022. (AP/FILE)

ARGENTINA

About four of every 10 Argentines are poor and its central bank is running perilously low on foreign reserves as its currency weakens. Inflation is forecast to exceed 70 percent this year. Millions of Argentines survive largely thanks to soup kitchens and state welfare programs, many of which are funneled through politically powerful social movements linked to the ruling party. A recent deal with the IMF to restructure $44 billion in debt faces questions over concessions that critics say will hinder a recovery.

EGYPT

Egypt’s inflation rate surged to almost 15 percent in April, causing privation especially for the nearly one-third of its 103 million people living in poverty. They were already suffering from an ambitious reform program that includes painful austerity measures like floating the national currency and slashing subsidies for fuel, water and electricity. The central bank raised interest rates to curb inflation and devalued the currency, adding to difficulties in repaying Egypt’s sizable foreign debt. Egypt’s net foreign reserves have fallen. Its neighbors Saudi Arabia, Qatar and the United Arab Emirates have pledged $22 billion in deposits and direct investments as assistance.




People crowd a msjor street in Cairo, Egypt, April 14, 2020. (AP/FILE)

LAOS

Tiny, landlocked Laos was one of the fastest growing economies until the pandemic hit. Its debt levels have surged and like Sri Lanka, it is in talks with creditors on how to repay billions of dollars worth of loans. That’s an urgent issue given the country’s weak government finances. Its foreign reserves are equal to less than two months of imports, the World Bank says. A 30 percent depreciation in the Lao currency, the kip, has worsened those woes. Rising prices and job losses due to the pandemic threaten to worsen poverty.

LEBANON

Lebanon shares with Sri Lanka a toxic combination of currency collapse, shortages, punishing levels of inflation and growing hunger, snaking queues for gas and a decimated middle class. It, too, endured a long civil war, its recovery hampered by government dysfunction and terror attacks.




Residents raise their hands as they cross a street during a protest against rising prices of consumer goods and the crash of local currency in Beirut, Lebanon, Monday, Nov. 29, 2021.  (AP/FILE)

Proposed taxes in late 2019 ignited longstanding anger against the ruling class and months of protests. The currency began to sink and Lebanon defaulted on paying back worth about $90 billion at the time, or 170 percent of GDP — one of the highest in the world. In June 2021, with the currency having lost nearly 90 percent of its value, the World Bank said the crisis ranked as one of the worst the world has seen in more than 150 years.

MYANMAR

The pandemic and political instability have buffeted Myanmar’s economy, especially after the army seized power in February 2021 from the elected government of Aung San Suu Kyi. That brought Western sanctions targeting commercial holdings controlled by the army, which dominate the economy. The economy contracted by 18 percent last year and is forecast to barely grow in 2022. More than 700,000 people have fled or been forced from their homes by armed conflicts and political violence. The situation is so uncertain, a recent global economic update from the World Bank excluded forecasts for Myanmar for 2022-2024.

TURKEY

Worsening government finances and a growing trade and capital account deficit have compounded Turkey’s troubles with high and rising debt, inflation — at over 60 percent — and high unemployment. The Central Bank resorted to using foreign reserves to fend off a currency crisis, after the beleaguered lira fell to all-time lows against the US dollar euro in late 2021. Tax cuts and fuel subsidies to cushion the blow from inflation have weakened government finances. Families are struggling to buy food and other goods, while Turkey’s foreign debt is about 54 percent of its GDP, an unsustainable level given the high level of government debt.




A man buys bread in Ulus district of the capital Ankara, Turkey, Thursday, May 5, 2022. (AP/FILE)

ZIMBABWE

Inflation in Zimbabwe has surged to more than 130 percent, raising fears the country could return to the hyperinflation of 2008 that reached 500 billion percent and heaping problems on its already fragile economy. Zimbabwe struggles to generate an adequate inflow of greenbacks needed for its largely dollarized local economy, which has been battered by years of de-industrialization, corruption, low investment, low exports and high debt. Inflation has left Zimbabweans distrustful of the currency, adding to demand for US dollars. And many skip meals as they struggle to make ends meet.


Pakistan forms cabinet committee on climate change as over 600 killed in monsoon rains this year

Updated 16 August 2022

Pakistan forms cabinet committee on climate change as over 600 killed in monsoon rains this year

  • Committee to give recommendations on short, medium, and long term projects to prevent effects of climate change
  • According to NDMA, 635 people killed across Pakistan in torrential rains, floods since June 14 this year 

ISLAMABAD: Pakistan’s federal cabinet on Tuesday approved the formation of a cabinet committee chaired by the minister for climate change to give recommendations on short, medium, and long term projects to mitigate the growing effects of climate change.

Pakistan is among the top eight countries most affected by climate change while it’s share in global warming gas emissions is only 1 percent of the world. 

The country has faced unprecedented monsoon downpours this year, with 635 killed in rains and floods since June 14, according to the National Disaster Management Authority’s (NDMA) latest figures. The dead include 136 women and 233 children. More than 196 deaths were reported from the impoverished southwest province of Balochistan, 141 from Punjab, 137 from Sindh, and 122 from Khyber Pakhtunkhwa.

According to a latest alert by the Flood Forecasting Division of the Pakistan Meteorological Department, India released 1,71,797 Cusecs from Ujh Barrage on August 15, with likely water flow increases in River Ravi at Jassar ranging between 70,000 Cusecs to 1,00,000 Cusecs, which could result in medium to high flood levels.

“The cabinet unanimously approved the formation of a cabinet committee under the chairmanship of Federal Minister for Climate Change Sherry Rehman, which will also include ministers from the relevant ministries,” a statement issued by the prime minister’s office said after a meeting of the cabinet.

The committee will give recommendations on short, medium, and long term projects to prevent the effects of climate change, the statement added.

“We are glad that the prime minister has announced the formation of an inter-ministerial committee on climate adaptation with the participation of agriculture, food security, water, and others to sit together and devise an action plan for adaptation for all these sectors,” climate change minister Sherry Rehman said during the briefing to cabinet.

The minister said Pakistan would be water scarce by 2025 and the country has faced 152 extreme events in the last two decades with constant shifts in rainfall patterns, intensity, and frequency. 

“We are also home to the hottest cities in the world for three years straight with temperatures rising up to 53.7C, which is an unlivable situation,” Rehman told the cabinet, adding that due to its impact on food security Pakistan had an up to 40 percent food insecure population. 

“We have lost 1.8 million acres of fertile land to sea intrusion due to rising sea levels and lose 27,000 acres of forest annually,” she added.

Speaking in the cabinet, prime minister Shehbaz Sharif said climate change, water security, and food security were three interrelated challenges and needed urgent measures to combat them and protect future generations. 

“The government is well aware of the expected problems arising from climate change,” the PM said, “and solving this problem is among the top priorities of the government.”


Father and son linked to murders of Muslims, including two Pakistanis, in New Mexico

Updated 16 August 2022

Father and son linked to murders of Muslims, including two Pakistanis, in New Mexico

  • Police charged Afghan Muhammad Syed with two  murders, linked four killings to personal grudges
  • Son Shaheen Syed was arrested last week on federal firearms charges for providing a false address

ALBUQUERQUE, New Mexico: Police believe the son of the prime suspect in the killings of four Muslim men may have played a role in the murders, which have shaken the Muslim community in New Mexico's largest city.

Cellphone data shows Shaheen Syed, 21, was in the same "general area" of Albuquerque as his father at the time of the Aug. 5 killing of 25-year-old trucking entrepreneur Naeem Hussain, according to a filing by federal prosecutors for a Monday detention hearing during which Syed was denied bail.

Syed's attorney John Anderson said the allegations were "exceedingly thin and speculative."

Police last week charged Shaheen Syed's father, Muhammad Syed, 51, with two of the murders and linked the four killings to personal grudges, possibly fueled by intra-Muslim sectarian hatred. Shaheen Syed was arrested last week on federal firearms charges for providing a false address.

"Law enforcement officers also have recently discovered evidence that appears to tie the defendant, Shaheen Syed, to these killings," the filing said.

Agents believe Shaheen Syed observed Naeem Hussain leaving an Aug. 5 funeral service for two of the murdered Muslim men, based on FBI analysis of cell tower data. He then followed Hussain to the area of a parking lot where he was shot dead.

"Telephone calls between Muhammad Atif Syed and the defendant (Shaheen Syed) would be consistent with quick surveillance calls, both before and after the shooting," the filing said.

Prosecutors did not provide evidence on the other shootings.

Imtiaz Hussain said he believed at least two people were involved in the Aug. 1 murder of his brother Muhammad Afzaal Hussain.

A pistol and rifle were used to shoot Afzaal Hussain, a city planning director, 15 times in around 15 to 20 seconds, according to police records and Imtiaz.

“For one suspect it is difficult to use two weapons in that short an interval,“ said Imtiaz Hussain.

The victims Naeem Hussain and Afzaal Hussain were not related.

Muhammad Syed, an Afghan refugee, has been charged with killing Afzaal Hussain, who was from Pakistan, and cafe manager Aftab Hussein, 41, who had ties to Afghanistan and Pakistan. A fourth man, supermarket owner Mohammad Ahmadi, 62, was shot dead on Nov. 7, 2021.

Police have said they are working with prosecutors on potential charges for the murders of Naeem Hussain and Ahmadi.


Young British-Pakistani racer lives in the fast lane to prove Pakistan ‘the best’

Updated 16 August 2022

Young British-Pakistani racer lives in the fast lane to prove Pakistan ‘the best’

  • 22-year-old Enaam Ahmed is two races away from entering prestigious Formula 2 league in the US
  • Ahmed became British Formula Champion at 12 and European and World Champion at age of 14

KARACHI: A British-Pakistani racer, only two contests away from getting into the prestigious Formula 1 league in the United States, says his inspiration is to change the way Pakistan is perceived by the world and put his country of origin on the map of world sports.

Enaam Ahmed, 22, was born to Pakistani parents in London where he started racing on Go-Kart tracks while he was eight. His passion grew with time, and he ultimately became the British Formula Champion at 12 and a European and World Champion at the age of 14. He is currently in the American Formula 3 league, before which he was car racing in the British Formula 3 and became a champion at 17.

“My inspiration really is to change the way the world perceives our country [Pakistan] and the Muslim world, in terms of sports,” Ahmed told Arab News in a Zoom interview from London earlier this month.

“Representing the country [Pakistan] is what gives me the power, what gives me the motivation to succeed ... What keeps me going is this burning ambition to prove that we can be the best.”

Enaam Ahmed sits in his car for a race in Indianapolis, United States, on May 9, 2022. (Enaam Ahmed)

Ahmed said he had had his family’s support from the beginning of his interest in racing.

“I couldn’t really be here without them. I didn’t expect to be racing in the high-level series like I’m doing as a professional, I just started off with my little Go Kart, then worked my way into little races.”

Ahmed’s father, Shami Ahmed, said his interest in racing had come about by accident.

“It all started by accident, I was invited by a friend to take Enaam to a Go Karting track,” said the proud parent, saying sustaining his son’s passion was “financially challenging until we started getting support from sponsors and backers.”

“I believe Enaam has much more potential and the best is still to come. It’s great that he has taken it on himself to be an unofficial ambassador of Pakistan.”

Enaam Ahmed's car is pictured during a race in United States on July 8, 2022. (Enaam Ahmed)

The journey has been exciting and challenging. While Ahmed has traveled and raced in some top teams and against some of the best drivers in the world, he also had to face racism initially as a rare person of color alongside the black British driver, Lewis Hamilton, who had inspired him to enter the profession in the first place. Ahmed has also found it difficult to find good sponsors, which he said was the reason he missed the chance of getting into Formula 2 in Europe.

“There were moments when I didn’t want to give up but it was looking like I would have to give up because there was no option,” he said. “There were some situations when I didn’t have a sponsor one week before a race, but I always found a way.”

Despite the odds, there has been no looking back for Ahmed, who has never lost a race and always finishes in the top three.

“I have always done things to be the best or nothing,” he said. “I don’t do things just to take part or come second or third. I am here to win.”

Speaking about his special connection with Pakistan, he said he was “put on this earth to race for Pakistan and become a champion.”

“I have two biggest motivations: One is to make my country proud and raise the flag of Pakistan the highest it has ever been; and to relieve my parents, my family of work,” he added.

Enaam Ahmed signs a cap for a fan on May 1, 2022. (Enaam Ahmed)

Currently, Ahmed is on the Road to Indy series, a racecar driver development program that provided a scholarship-funded path to reach the IndyCar Series and Indianapolis 500.

Speaking to Arab News, a top official at the Pakistan Sports Board (PSB) applauded Ahmed for his passion to represent his country.

“It’s encouraging to see Enaam Ahmed representing Pakistan in the global racing scene but there is no federation for motorsports in Pakistan,” PSB director general, Col (r) Muhammad Asif Zaman, said.

“Formula car racing requires heavy investment and facilities, and we don’t have that. However, it would be worth considering adding racing to adventure games such as mountaineering and watersports.”


Post-Hajj flight operations conclude in Pakistani cities of Lahore, Peshawar, Multan

Updated 16 August 2022

Post-Hajj flight operations conclude in Pakistani cities of Lahore, Peshawar, Multan

  • Pakistan’s national airline operated over 154 return flights till August 13
  • Over 83,000 Pakistani pilgrims performed the Hajj pilgrimage this year

ISLAMABAD: A spokesperson for the Pakistan Civil Aviation Authority (PCAA) said on Tuesday post-Hajj flight operations had been successfully concluded at airports in the Pakistani cities of Peshawar, Multan and Lahore.

Up to one million pilgrims from around the world performed the annual Islamic pilgrimage, Hajj, after Saudi Arabia lifted coronavirus restrictions for the first time in two years. Pilgrims were required to be vaccinated and under 65 years of age. 

The kingdom allotted Pakistan a quota of 83,132 pilgrims this year, out of which 34,453 people availed the government’s Hajj scheme while over 48,000 performed Hajj through private operators.

Pakistan started its post-Hajj flight operations last month, with the first flight of the national carrier, PIA, arriving in Lahore from Jeddah with 213 passengers on July 14.

“After Lahore, post Hajj operations were also completed at Peshawar and Multan airports,” the PCAA spokesman said. “The post Hajj operation at Peshawar Airport started on July 14 and ended on August 13.”

From Peshawar airport, a total of 3,276 pilgrims had gone for Hajj through 40 flights.

“Peshawar’s Bacha Khan International Airport welcomed 3830 pilgrims who returned home in 62 flights,” the spokesperson said.

The post-Hajj operation at Multan International Airport ran from July 15 to August 13.

“A total of 39 flights were operated from Multan Airport through which 4,586 pilgrims traveled,” the spokesman said. “2,345 pilgrims returned home through 31 scheduled flights.”


Gunmen kill two policemen guarding Pakistan polio team

Updated 16 August 2022

Gunmen kill two policemen guarding Pakistan polio team

  • Pakistan has reported 15 polio cases since April this year
  • Polio only remains endemic in Pakistan and Afghanistan

PESHAWAR: Two officers guarding a polio vaccination team in northwest Pakistan were shot dead by unidentified assailants, police said Tuesday, the latest deaths in an ongoing campaign to eradicate the disease.
Pakistan and neighboring Afghanistan are the only countries where polio remains endemic, but vaccination teams have been targeted for years by Islamic militants in both nations.
“Two gunmen hiding near a small water channel opened fire on the policemen from a very close range,” senior officer Waqar Ahmad Khan told AFP.
“The gunmen spared the two-member polio vaccination team ... and fled on a motorbike.”
The incident happened in Kot Azam, Tank district, close to tribal districts where the military has clashed with militants since 2003.
Scores of polio workers and security officials guarding them have been killed since 2012 by militants who claim vaccination programs are part of a Western plot to sterilize Muslims.
Another conspiracy theory holds that the vaccines contain pig fat and are therefore banned by Muslims.
Islamist opposition to inoculation campaigns grew after the CIA organized a fake vaccination drive to help track down Al Qaeda’s former leader Osama Bin Laden in the Pakistani city of Abbottabad.
In April, Pakistan reported the first case of polio in 15 months.
Since then, 14 more polio cases have been reported — all from the same ultra-conservative district where many villagers are against vaccines.
The United States reported its first case of polio in almost a decade in July, while Britain said last week that around one million children in London will be offered a booster vaccine after the virus was detected in sewage samples.