PM calls cabinet meeting amid economic crisis as Pakistani rupee continues to slide

Pakistan Prime Minister Shehbaz Sharif (left) chairs cabinet meeting in Islamabad, Pakistan, on June 21, 2022. (Government of Pakistan/File)
Short Url
Updated 21 July 2022
Follow

PM calls cabinet meeting amid economic crisis as Pakistani rupee continues to slide

  • Pakistan’s rupee plummeted to a historic low of Rs224.9 against US dollar on Wednesday 
  • Political turmoil worsened after ruling Pakistan Muslim League-Nawaz’s (PML-N) heavy defeat in Punjab by-polls 

ISLAMABAD: Prime Minister Shehbaz Sharif called a meeting of the federal cabinet on Thursday, the Prime Minister’s Office confirmed, a day after the Pakistani rupee depreciated further against the US dollar amid rising political uncertainty in the South Asian country.  

On Wednesday, the Pakistani rupee hit another historic low of Rs224.92 against the US dollar. Pakistan’s Finance Minister Miftah Ismail blamed the rupee’s depreciation on the current political situation prevalent in the country.  

Pakistan, with low foreign reserves, mounting debt and a widening current account deficit, is desperately looking to revive a $6 billion loan program with the International Monetary Fund (IMF). The delay in the disbursement of funds has exacerbated the South Asian country’s economic troubles. Experts have warned the country faces a balance-of-payments crisis.  

“Cabinet meeting starts with Prime Minister Shehbaz Sharif in the chair,” the Prime Minister’s Office said in a statement.  

Pakistan’s political turmoil worsened last week when former Prime Minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party swept by-elections in Pakistan’s most populous Punjab province, winning 15 seats out of 20. As per official results, the ruling Pakistan Muslim League-Nawaz (PML-N) won four seats while an independent candidate won a single seat.  

However, despite the setback in Punjab by-polls, the federal government announced it would complete its tenure till next year rather than call early elections. 


IMF expresses ‘satisfaction’ over Pakistan’s domestic debt volume— official 

Updated 6 sec ago
Follow

IMF expresses ‘satisfaction’ over Pakistan’s domestic debt volume— official 

  • IMF delegation is in Pakistan till Friday to discuss Pakistan’s performance of $7 billion loan program approved in September
  • Pakistan assures IMF Islamabad reducing domestic debt and increasing debt servicing period, says finance ministry official

ISLAMABAD: A visiting International Monetary Fund (IMF) delegation on Wednesday expressed satisfaction over the volume of Pakistan’s domestic debt, a finance ministry official confirmed, as the international lender’s representatives holds discussions with Islamabad on key benchmarks of a $7 billion loan program approved in September. 
The IMF delegation led by Pakistan mission chief Nathan Porter arrived in Islamabad on Monday on an unplanned visit. The team is expected to hold meetings until Friday with top officials from ministries such as finance and energy and the Federal Board of Revenue, the main tax collection agency, to discuss the performance of a $7 billion loan program approved in September. The IMF has said Porter’s visit is not part of the first review of the loan program, which is not scheduled to take place before the first quarter of 2025.
According to Pakistan’s central bank, the country’s domestic debt rose by Rs7.838 trillion [$28.2 billion] over the past year to reach a total of Rs47.536 trillion [$171.1 billion] in September 2024, up from Rs39.698 trillion [$142.9 billion] in September 2023.
“The IMF delegation and finance ministry officials have discussed the domestic debt portfolio as part of discussions regarding the loan performance,” a finance ministry official told Arab News while seeking anonymity. “The IMF delegation has expressed satisfaction over the [volume] of the country’s domestic debt.”
He said the finance ministry informed the IMF delegation that Islamabad was gradually reducing the volume of its domestic debt and increasing the period of its debt servicing.
“The IMF wants Pakistan to increase the average period of debt servicing as this will help stabilize the economy,” the official said.
He added that the Federal Board of Revenue (FBR) officials also briefed the IMF about the government’s measures to digitize tax collection.
“The briefing is also given on the improvement in the revenue collection after the use of artificial intelligence by the tax collection agency,” the official said. He said the FBR has included over 0.4 million small traders in the tax net during the current fiscal year. These small traders and retailers have deposited Rs12 billion [$43.2 million] in taxes in the first quarter of this fiscal year, he said. 
“Some changes in the Tajir Dost Scheme will also be discussed with the IMF to improve the tax collection,” the official said, referring to an FBR scheme that the government has introduced to bring retailers in the tax net via incentives. 
The IMF reached a staff-level agreement with Pakistan in July for a 37-month $7 billion bailout package, which the Fund’s Executive Board approved in September. This was the 25th loan program that Pakistan has obtained since 1958.
Islamabad secured the bailout loan, critical to keeping its $350 billion fragile economy afloat, after taking painful measures such as hiking fuel and food prices and implementing reforms to broaden the country’s tax base and privatize state-owned entities.
“INTERIM CHECKS”
Pakistan’s macroeconomic conditions and investor sentiment have improved in recent months, which analysts say has led to a bullish trend in the country’s stock market.

Syed Atif Zafar, the chief economist at Topline Securities, said the IMF delegation’s meetings with Pakistani officials were part of “interim checks” to ensure a successful review of the loan facility next year.

“The government failed to achieve the tax revenue target in the first quarter that has perhaps necessitated this IMF visit, but still the authorities have multiple options and time to overcome this gap,” he told Arab News.

“The good thing at this point is that all structural and quantitative benchmarks of the loan program are on track.”

Tahir Abbas, a senior economist and head of research at Arif Habib Limited, said Pakistan last month requested the IMF for a $1 billion climate financing facility to mitigate climate risk, which would be discussed during the ongoing IMF visit.

“Pakistan’s revenue shortfall of around Rs200 billion ($720 million) in the first quarter has mainly necessitated this IMF visit,” he told Arab News.

“The finance ministry will now inform the IMF delegation about the possible revenue measures to overcome the shortfall and cut the expenditures.”
 


Pakistan says light rains forecast from Nov. 14-16 likely to reduce Punjab smog 

Updated 47 min 6 sec ago
Follow

Pakistan says light rains forecast from Nov. 14-16 likely to reduce Punjab smog 

  • Toxic smog has shrouded Pakistan’s cultural capital Lahore and 17 other districts in Punjab since last month
  • Rain expected to occur in Rawalpindi, Murree, Attock, Chakwal, Rawalpindi and other districts on Nov. 14

ISLAMABAD: Light rains from Nov. 14-16 in most districts of Punjab are likely to reduce smog in the eastern province, the Pakistan Meteorological (Met) Department said on Wednesday, as the deteriorating air quality continues to put the health of millions of people at risk. 

Toxic smog has shrouded Lahore and 17 other districts in Punjab since last month. Health officials say more than 40,000 people have been treated for respiratory ailments forcing Punjab to close schools until Nov. 17 to protect children’s health. The UN children’s agency has warned that the health of 11 million children in Punjab is in danger due to air pollution. 

South Asia, particularly India and Pakistan, is shrouded in intense pollution every winter as cold air traps emissions, dust, and smoke from farm fires. Pollution could cut more than five years from people’s life expectancy in the region, a study found last year.

“According to the Meteorological Department, rains are likely in Punjab from November 14 to 16,” PDMA Punjab said. “Director General PDMA Irfan Ali Kathia said that the possible rains are likely to reduce smog.”

Rains are expected to lash Rawalpindi, Murree, Attock, Chakwal, Talagang, Jhelum, Faisalabad, Gujranwala, Lahore, Mianwali, Khushab and Sargodha districts of Punjab, with thunderstorms predicted for Bhakkar, Layyah, and Dera Ghazi Khan districts on Nov. 15.

The Met Department urged people to wear face masks as a precautionary measure against smog and not to venture out unnecessarily. 

Seasonal crop burn-off by farmers on the outskirts of Lahore also contributed to toxic air, which the World Health Organization says can cause strokes, heart disease, lung cancer and respiratory diseases.

Pakistan’s top disaster management body has urged people to avoid stepping outdoors during smog peak hours in the morning, wear masks during outdoor activities, stay hydrated and use dehumidifiers. 

Last Friday, Pakistani authorities ordered the closure of all parks and museums for 10 days, urging people to avoid unnecessary travel.

In October, Punjab identified four hotspots in the city where it imposed restrictions. These included banning auto rickshaws with polluting two-stroke engines, along with restaurants that operate barbecues without filters.
 


UK announces program to improve education access for over 250,000 Pakistani children

Updated 13 November 2024
Follow

UK announces program to improve education access for over 250,000 Pakistani children

  • With $25.2 million contribution over three years, program aims to support children in English, Math and Urdu
  • Program to primarily focus on children from South Punjab and Khyber Pakhtunkhwa provinces, says British Council

ISLAMABAD: With a contribution of $25.2 million (Rs 7.2 billion) over three years, the United Kingdom hopes to provide over 250,000 Pakistani children better access to education, focusing primarily on the country’s eastern Punjab and northwestern Khyber Pakhtunkhwa provinces, the British Council said on Wednesday.

Pakistan has an estimated 22.8 million out-of-school children, the second highest in the world, according to UNICEF. A majority of them, about 12.2 million, are girls who face cultural and social barriers preventing them from seeking formal education especially in rural areas.

Funded by the British High Commission in Pakistan and delivered by the British Council, the service delivery component of Girls and Out of School Children’s Action for Learning (GOAL) program, “Khilo aur Barho” will see children receive support with their Urdu, Math and English subjects. The five-year program, from January 2023 to December 2027, aims to build more inclusive provincial education systems delivering quality education in KP and Punjab. 

“The UK is set to help over 250,000 children in Pakistan access better education,” the British High Commission said in a statement. “Through the service delivery component of Girls and Out of School Children’s Action for Learning (GOAL) program, Khilo aur Barho, the UK’s £20 million contribution will help break down barriers to education, enhance literacy and numeracy skills, and strengthen a resilient and effective education system in Pakistan over the next three years.”

It added that 10 percent of the participants would be children with disabilities while 20 percent will comprise from marginalized groups. 

“This support will focus on their ability, rather than their age, helping them to catch up on these subjects quicker,” the statement said. 

British High Commissioner Jane Marriott said Pakistan was facing an “education emergency” with $26.2 million children out of school.

“This targeted support will make sure some of the most vulnerable children in the country don’t fall behind,” she said. “The UK is already a significant supporter of education in Pakistan, supporting over 4.5 million children across Pakistan to access a decent education over the past 10 years.”

Pakistan’s Education Secretary Mohyuddin Ahmad Wani said his ministry is focused on facilitating each of the provinces to connect with international and local partners to fight learning poverty in every district, with a special focus on lagging districts. 

 “I am hoping that GOAL will show how you deliver that successfully in 14 most challenging districts. We will stand ready to help in every way to make it a success,” he said. 

In 2022, the UK had donated $160 million (Rs45.76 billion) to support women’s education in Pakistan. 

According to WorldMetrics, Pakistan’s literacy rate stood at 59 percent, while the country grapples with the challenge of 23 million out-of-school children.

The government’s spending on education remains low, at just 2.8 percent of GDP, contributing to poor infrastructure, limited access to quality education and a shortage of trained teachers, particularly in rural areas.
 


Pakistan’s Shaheen Afridi reclaims number 1 spot in ODI bowler rankings

Updated 13 November 2024
Follow

Pakistan’s Shaheen Afridi reclaims number 1 spot in ODI bowler rankings

  • Shaheen Afridi took eight wickets in three matches against Australia at 12.62 average this month
  • Pacer Haris Rauf rises to career-best number 13 as ex-captain Babar Azam remains top ODI-ranked batter

ISLAMABAD: Pakistan’s left arm fast bowler Shaheen Shah Afridi reclaimed his number one spot in the ICC ODI Bowler Rankings, the cricket governing body announced on Wednesday, after a successful tour against world champions Australia this year. 

Afridi regained his place as the top bowler in the 50-over cricket format after he took eight wickets across three matches against Australia in the ODI series that concluded last week. Afridi, who recorded an impressive average of 12.62 during the three matches, helped Pakistan secure a 2-1 series win against the 2023 world champions. This was Pakistan’s first series win against Australia since 2002. 

The achievement helped Afridi move up three places and take the premier position from South Africa spinner Keshav Maharaj, who was pushed down two spots to number three while Afghanistan spinner Rashid Khan remains in second place. 

“Pakistan have received a boost just months out from the start of next year’s ICC Champions Trophy with news that pace spearhead Shaheen Afridi has re-claimed the No.1 ranking on the latest ICC Men’s ODI Bowler Rankings,” the ICC said in a report. 

Afridi has previously first held the number one bowler ranking midway through last year’s ICC Men’s Cricket World Cup in India.

Meanwhile, fellow Pakistan pacer Haris Rauf improved 14 places to secure the number 13 spot, reaching a new career-high rating. Rauf was awarded Player of the Series against Australia after taking 10 wickets against the 2023 champions. 

“Afridi’s rise to the top means Pakistan now have the top-ranked player in both batting and bowling in ODI cricket, with former skipper Babar Azam increasing his lead at the top of the batter charts following 80 runs against Australia when dismissed just once,” the ICC said.

Pakistan will play their first of three T20I matches against Australia in Brisbane on Thursday. 
 


Pakistan’s northwestern province approaches center again to acquire national airline PIA

Updated 13 November 2024
Follow

Pakistan’s northwestern province approaches center again to acquire national airline PIA

  • Khyber Pakhtunkhwa this month formally expressed intent to buy PIA to keep it under government control 
  • Pakistan last month kickstarted flag carrier’s privatization process, attracting a sole bid of Rs10 billion [$36 million]

PESHAWAR: The northwestern Khyber Pakhtunkhwa (KP) government has recently sought an update from the federal government over its earlier intent to acquire the Pakistan International Airlines (PIA), reiterating its resolve to “revitalize” the national airline as Islamabad looks to privatize the state-owned asset. 

KP’s Board of Investment and Trade (KP-BOIT) wrote a letter to federal officials on Nov. 1, expressing its intent to top the sole bid of Rs10 billion ($36 million) it received last month to acquire the PIA. The provincial government said it wanted the national flag carrier to remain under government control to preserve its status as an asset that symbolizes Pakistan’s pride. 

Cash-strapped Pakistan is looking to offload a 51-100 percent stake in debt-ridden PIA to raise funds and reform state-owned enterprises as envisaged under a $7 billion International Monetary Fund program. The process, however, hit a snag last month when the final bidding round attracted just one bid of Rs10 billion ($36 million) for a 60 percent stake in the national flag carrier.

In a letter dated Nov. 11, the KP-BOIT demanded an update on its Nov. 1 expression of interest in acquiring the airline. 

“Given the strategic importance of this process and the strong support for this initiative from the Chief Minister of Khyber Pakhtunkhwa and the Khyber Pakhtunkhwa Board of Investment & Trade, we kindly seek an update on the status of KP-BOIT’s proposal,” the letter said. 

“KP-BOIT is fully committed to preserving and revitalizing PIA, ensuring its legacy as the National Flag Carrier.”

The board said that the KP chief minister and its team were fully committed to ensuring the national airline “return to prominence” and secure its future under the KP-BOIT, supported by its investors. 

“The leadership of Khyber Pakhtunkhwa is prepared to offer substantial backing and resources to accomplish these objectives,” the letter added. “KP-BOIT would appreciate any indication of when KP-BOIT might expect to discuss this matter further.”

KP-BOIT said its team is ready to share its strategic vision and present a “competitive and compelling bid” for the national airline. 

Former prime minister Nawaz Sharif, chief of the ruling party in Pakistan’s Punjab, said this month that the province was also considering acquiring the national flag carrier. A business group in Canada led by a Pakistani expat also threw its hat in the ring to acquire the airline this month, offering the Pakistan government around Rs100 billion ($358 million) to acquire the debt-ridden national carrier. 

The disposal of PIA is a step former governments have steered away from, as it has been highly unpopular given the number of layoffs that would likely result from it.

Other concerns raised by potential bidders for the PIA stake included inconsistent government communication, unattractive terms and taxes on the sector, and the flag carrier’s legacy issues and reputation.