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  • Investors pin hopes on ‘Daronomics’ as Ishaq Dar returns to Pakistan as new finance minister


Investors pin hopes on ‘Daronomics’ as Ishaq Dar returns to Pakistan as new finance minister

Pakistan's finance minister-in-waiting Ishaq Dar (right) walks upon his arrival at the Nur Khan military airbase in Chaklala, Rawalpindi, Pakistan on September 26, 2022. (PM's Office via REUTERS)
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Updated 27 September 2022
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Investors pin hopes on ‘Daronomics’ as Ishaq Dar returns to Pakistan as new finance minister

  • Investors hope Dar will help stabilize rupee, tame inflation, Dar favoured strong currency in previous tenures
  • Dubbed Daronomics, Dar’s approach kept rupee stable between Rs98 and Rs105 against dollar during last stint
Updated 27 September 2022
KHURSHID AHMED   

KARACHI: Senior leader of the ruling Pakistan Muslim League-Nawaz (PML-N) returned to Pakistan on Monday night, set to become finance minister of crisis-hit Pakistan, with investors pinning hopes that a new era of “Daronomics” would help to stabilize the rupee and tame record-high inflation.

Dar is a member of Prime Minister Shehbaz Sharif's ruling PMLN party and has already been finance minister four times. Dubbed Daronomics, his approach kept the rupee stable between Rs98 and Rs105 against the greenback during his last stint in office from 2013-2017 but he was also widely criticized for deliberately undervaluing the rupee by pumping dollars in the market.  

The Pakistani rupee gained in value by 1.11% or Rs2.63 to close at Rs237.02 against the United States dollar in the interbank market on Monday, and gained Rs6.90 to trade at Rs237.50 in the open market following the reports of Dar’s return. Dar touched down in Islamabad on Monday night and is expected to take charge this week.

While media had reported ex-finance minister Miftah Ismail would remain part of the government’s economic team, the outgoing official told Arab News on Monday: “I will have no role in the government.”

“I will try my best that I can pull Pakistan out of the economic swamp it is trapped in,” Dar told media at the airport after returning to Pakistan from London where he has lived in exile since 2017 when he was disqualified from office by a court in a corruption case.

Dar takes over as the economy faces one of its worst balance of payments crises, and recent floods are estimated to have cost it nearly $30 billion.

Earlier this month, the government cut its GDP growth forecast below 3% from a 5% budgetary target for 2022-23.

“Ishaq Dar is known for keeping the exchange rate stable for stronger currency, that is why the currency market has strongly reacted to his return resultantly the rupee gain some strength,” Samiullah Tariq, Director Research at Pakistan Kuwait Investment Company, said.

Economists said Dar’s return would bring some "comfort" to the currency market and tame increasing inflation, which is at a 47-year high at 27.3%.

“Ishaq Dar is being brought back by the coalition government keeping in view his past track of keeping the exchange rate under control,” Dr Sajid Amin, Deputy Executive Director at the Sustainable Development Policy Institute (SDPI), told Arab News.

“The first priority of the coalition government is to bring stability in the value of rupee as the national currency has fast eroded its value against the US dollar despite International Monetary Fund (IMF) program revival,” he added.

Economists said the coalition government of PM Shehbaz Sharif had paid the political cost of much-needed measures taken by the outgoing finance minister, including the withdrawal of fuel subsidies and fast depreciation of the rupee.

“When the rupee depreciates, the public attributes it to the performance of the economic managers. As a political party this has been the discourse at some level and the decision to bring Dar has been taken in order to show economic performance and improve the image in the eyes of the public.”

The government’s decision to replace Ismail with the Dar reflected the coalition government’s need to immediately “showcase” performance “due to the short time available to the election next year,” Amin said.

“Government wants to go into the election with a new image, with a new market and public feelings that it has improved things … exchange rate and inflation, two key indicators,” he added.

But many economists said Dar’s return would have little effect.

“Changing faces may have limited impacts as we are facing both global and domestic recessions,” Khurram Schehzad, CEO at Alpha Beta Core, a startup investment advisory platform, told Arab News. “Options are limited and the economic situation is challenging. So expecting something extraordinarily different from another person would not be prudent.”

Pakistani industrialists said the incoming finance minister would have to deal with a plethora of issues, chief among them political instability.

“Pakistan is facing a very difficult time at the time when Ishaq Dar is coming back … current account deficit, trade deficit, debt repayments, high inflation, and rupee dollar parity are among them,” Zubair Motiwala, chairman of the Businessmen Group at the Karachi Chamber of Commerce and Industry (KCCI), told Arab News.

“The big problem is political stability ... instability is the mother of all economic evils in Pakistan so he will have to deal with it. Our best wishes are with him and we pray for the speedy improvement of the issues the country is facing right now.”

Pakistan stocks closed bullish with the benchmark KSE100 index settling at 41,151 level, up by 531 points or 1.31%.

“Bullish activity witnessed on strong rupee recovery amid decision over the appointment of a new finance minister, which is likely to stabilise economic uncertainty,” Ahsan Mehanti, CEO of Arif Habib Corporation, said.

Topics: Daronomics Pakistan Pakistan economy Ishaq Dar Finance minister Miftah Ismail Miftah Ismail Pakistan finance minisiter

On World Press Freedom Day, Pakistani PM says journalists in Gaza ‘heroes of humanity’

Updated 5 sec ago
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On World Press Freedom Day, Pakistani PM says journalists in Gaza ‘heroes of humanity’

  • Committee to Protect Journalists says at least 97 press members killed in Gaza war, 92 of them Palestinians
  • UNESCO on Thursday awarded its world press freedom prize to all Palestinian journalists covering the war in Gaza
Updated 5 sec ago
Arab News Pakistan

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif said on Friday the journalists who were covering the war in Gaza, especially those who had died in the line of duty, were “heroes of humanity.”
Sharif said this in his statement on World Press Freedom Day, observed on May 3 each year to raise awareness of the importance of freedom of the press and remind governments of their duty to respect and uphold the right to freedom of expression enshrined under Article 19 of the 1948 Universal Declaration of Human Rights. The day also marks the anniversary of the Windhoek Declaration, a statement of free press principles put together by African newspaper journalists in Windhoek in 1991.
According to the New York-based Committee to Protect Journalists (CPJ), at least 97 members of the press have been killed since the war in Gaza broke out in October, 92 of whom were Palestinians.
“The male and female journalists who sacrificed their lives during coverage in Gaza are heroes of humanity,” Sharif said. “I salute them.”
Separately, UNESCO on Thursday awarded its world press freedom prize to all Palestinian journalists covering the war in Gaza, launched by Israel over seven months.
“In these times of darkness and hopelessness, we wish to share a strong message of solidarity and recognition to those Palestinian journalists who are covering this crisis in such dramatic circumstances,” said Mauricio Weibel, chair of the international jury of media professionals.
“As humanity, we have a huge debt to their courage and commitment to freedom of expression.”
Audrey Azoulay, director general at the UN organization for education, science and culture, said the prize paid “tribute to the courage of journalists facing difficult and dangerous circumstances.”
The war started with Hamas’s unprecedented October 7 attack on Israel that resulted in the deaths of 1,170 people, mostly civilians, according to a media tally of Israeli official figures.
Israel’s retaliatory offensive against Hamas has killed at least 34,596 people in Gaza, mostly women and children, according to the territory’s health ministry.
With inputs from AFP

Over the moon: China launches high-stakes lunar mission with Pakistani satellite bound for orbit

Updated 4 min 33 sec ago
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Over the moon: China launches high-stakes lunar mission with Pakistani satellite bound for orbit

  • The launch is part of China’s Chang’e-6 mission that aims to obtain the first-ever soil and rock samples from the lunar far side
  • The samples will contain material ejected from lunar mantle, be used to provide insight into history of moon, earth and solar system
Updated 4 min 33 sec ago
SAIMA SHABBIR

ISLAMABAD: China on Friday launched a Pakistani satellite, ‘ICUBE-Qamar’ or ICUBE-Q, that is set to enter the lunar orbit on a high-stakes moon mission to reach the lunar side, Pakistani state media reported.
The launch was part of China’s Chang’e-6 mission, a planned robotic lunar exploration mission, that aims to obtain the first-ever soil and rock samples from the lunar far side and return them to earth.
The samples will contain material ejected from the lunar mantle and will be used to provide insight into the history of the moon, earth, and the solar system.
“The satellite has been designed and developed by IST (Pakistan’s Institute of Space Technology) in collaboration with China’s Shanghai University and Pakistan’s national space agency SUPARCO,” the state-run Radio Pakistan broadcaster reported.
“The primary purpose of CubeSats is to facilitate scientific research, technology development, and educational initiatives in space exploration.”
The satellite launch was broadcast live on the IST website from the Wenchang space launch site in Hainan, China.
The primary phase of the mission is expected to last about 53 days. Like its predecessors, the spacecraft is named after the Chinese moon goddess Chang’e.
ICUBE-Q has two cameras as payload for taking images of the lunar surface that will be transmitted back to earth for analysis, according to its developers.
They described the launch as a “historic moment” that would open new avenues for future deep space missions from the South Asian nation.
“This is Pakistan’s first deep space mission which is indeed a historic moment and following that maybe in the future other deep space missions can be planned,” Khurram Khurshid, the head of the electrical engineering and computer science department at IST and a co-lead on the satellite project, told Arab News.
Pakistan’s proposal to build the satellite was accepted by the China National Space Agency (CNSA) from plans submitted by eight member states of the Asia-Pacific Space Cooperation Organization (APSCO).

Topics: Pakistan China Ties pakistan china space program

Amid investment push, Pakistan prepares for upcoming visit by Saudi business delegation

Updated 26 min 29 sec ago
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Amid investment push, Pakistan prepares for upcoming visit by Saudi business delegation

  • Pakistan and Saudi Arabia have been working closely in recent weeks to increase bilateral trade and investment 
  • Pakistani PM has visited Saudi Arabia twice in a month, met crown prince and top ministers and banking heads
Updated 26 min 29 sec ago
Arab News Pakistan

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif said on Friday he hoped for “fruitful” meetings when a high-level delegation of Saudi businessmen that will visit Islamabad in the “next few days” amid a push by the South Asian nation to attract foreign investment. 
Pakistan and Saudi Arabia have been closely working in recent weeks to increase bilateral trade and investment deals, with Crown Prince Mohammed bin Salman also reaffirming the Kingdom’s commitment to expedite an investment package of $5 billion.
On Thursday, Pakistani Information Minister Attaullah Tarar said a “high-powered” delegation of Saudi businesspeople and heads of major Saudi companies would be in Islamabad in the “next few days” to discuss private sector investments. 
“The best hospitality should be given to the Saudi delegation,” Sharif said as per a statement from the Prime Minister’s Office after a review meeting on Saudi investments in Pakistan. 
“It is hoped that the meetings of Pakistani businessmen with the Saudi delegation will be fruitful.”
The business delegation’s visit comes on the heels of one by Sharif to Riyadh from Apr. 27-30 to attend a special two-day meeting of the World Economic Forum. On the sidelines of the WEF conference, the Pakistani PM met and discussed bilateral investment and economic partnerships with the crown prince and the Saudi ministers of finance, industries, investment, energy, climate, and economy and planning, the adviser of the Saudi-Pakistan Supreme Coordination Council and the presidents of the Saudi central bank and Islamic Development Bank.
This was Sharif’s second meeting with the crown prince in a month. Before that he also met him when he traveled to the Kingdom on April 6-8. The Saudi foreign minister was also in Pakistan last month, during which Pakistan pitched projects worth at least $20 billion to Riyadh.
Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as a top source of remittances to the cash-strapped South Asian country. 
Saudi Arabia has often come to Pakistan’s aid in the past, regularly providing it oil on deferred payments and offering direct financial support to help stabilize its economy and shore up forex reserves.
As things stand, Pakistan desperately needs to shore up its foreign reserves and is in talks with the International Monetary Fund (IMF) for a new bailout deal, for which it needs to signal that it can continue to meet requirements for foreign financing which has been a key demand in previous loan packages. 
Last year Pakistan set up the Special Investment Facilitation Council, a body consisting of Pakistani civilian and military leaders and specially tasked to promote investment in Pakistan. The council is so far focusing on investments in the energy, agriculture, mining, information technology and aviation sectors and specifically targeting Gulf nations.

Topics: Pakistan Saudi Ties

Pakistan envoy highlights Kashmir, Palestine at UN debate on ‘Culture of Peace’

Updated 03 May 2024
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Pakistan envoy highlights Kashmir, Palestine at UN debate on ‘Culture of Peace’

  • Munir Akram says the realization of the culture is intrinsically linked with adherence to the principles of the UN Charter
  • ‘We must also confront and reverse the dark forces of fascism, aggression and occupation,’ Pakistan’s envoy tells the UN
Updated 03 May 2024
Arab News Pakistan

ISLAMABAD: Pakistan’s permanent representative to the United Nations (UN), Ambassador Munir Akram, on Thursday participated in a general debate of the United Nations General Assembly (UNGA) on the ‘Culture of Peace,’ where he highlighted the issues of Kashmir, Palestine and growing Islamophobia in the world.
The Muslim-majority Himalayan region of Kashmir has been a flashpoint between Pakistan and India since their independence from the British rule in 1947. Both countries rule part of the Himalayan territory, but claim it in full and have fought three wars over the disputed region.
Pakistan also does not recognize the state of Israel and calls for an independent Palestinian state based on “internationally agreed parameters” and the pre-1967 borders with Al-Quds Al-Sharif as its capital. Akram has repeatedly raised the issue of Israeli war on Gaza at the UN in recent months.
In his address on Thursday, Pakistan’s permanent envoy said the world was witnessing the “rise of hate, violence and war” despite a unanimously expressed desire to promote peace, noting that more than 300 conflicts were presently raging across the world.
“The right of peoples to self-determination is being brutally suppressed, especially in Palestine and in Jammu and Kashmir,” he said in his address. “We see the spread of discrimination, bigotry, xenophobia and Islamophobia even in mature democracies.”
Akram said his country welcomed the consideration of the agenda item, adding the realization of Culture of Peace, as delineated in Article 3 of the UN Declaration, was intrinsically linked with the adherence to the principles of the UN Charter.
“In our turbulent world, promotion of a Culture of Peace is not only desirable but imperative. Our strategy must energetically promote the values of peace and harmony under the dialogue among civilizations,” he said.
“But we must also confront and reverse the dark forces of fascism, aggression and occupation and the threat they pose to peace, prosperity and stability and a world order based on the principles and purposes of the UN Charter.”
Speaking with regard to growing Islamophobia in the world, the envoy noted Pakistan and member states of the Organization of Islamic Cooperation (OIC) had initiated the adoption of a resolution designating March 15 as the Day to Combat Islamophobia and on the same day this year, the General Assembly adopted a resolution on Measures to Combat Islamophobia.
“We look forward to the appointment of the Secretary-General’s Special Envoy on Islamophobia and the initiation of a Plan of Action to Combat Islamophobia,” he added.

Topics: Pakistan at UN

Pakistan takes stringent measures to broaden tax net ahead of IMF loan talks

Updated 03 May 2024
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Pakistan takes stringent measures to broaden tax net ahead of IMF loan talks

  • Islamabad expects an agreement with the IMF by July, though both sides have refrained from commenting on the program’s size
  • Law Minister Azam Tarar says IMF is insisting on increasing tax net, implementing energy reforms and ensuring good governance
Updated 03 May 2024
KHURSHID AHMED   

KARACHI: Pakistani authorities have taken some stringent measures to broaden the country’s tax net, including blocking mobile phone connections of individuals and registering retailers, ahead of Islamabad’s talks with the International Monetary Fund (IMF) this month for a new loan program.
Pakistan and the IMF are expected to begin formal talks after the arrival of an IMF team in Islamabad in the mid of May. Islamabad has said it expects a staff-level agreement by July. Though both Pakistani and IMF officials have refrained from commenting on the size of the program, the South Asian nation is expected to seek around $7 billion bailout from the global lender.
Last month, Jihad Azour, the IMF director for the Middle East and Central Asia, said that “reform is now more important than the size of the program.” The Fund is insisting on increasing the tax net, implement energy reforms and ensure good governance as part of the reforms, according to Pakistani officials.
Speaking at a press conference in Islamabad on Thursday, Law Minister Azam Nazeer Tarar said the IMF had recommended a number of measures and the government would utilize this revenue for the betterment of the masses.
“The IMF has recommended to expand tax net, control electricity theft and ensure good governance to save the resources,” Tarar said, adding that introducing reforms in the Federal Board of Revenue (FBR) was top priority of the government to address economic issues and broaden the tax net.
The Pakistani government has reshuffled officials within the tax collection agency to streamline operations and enhance its transparency, according to the official. It has decided to block more than half a million mobile phone connections of individuals, who had not filed their tax returns, and emphasized on the registration of retailers ahead of formal talks with the IMF.
“FBR has taken decisive action by issuing an order to disable mobile phone SIMs associated with 506,671 individuals who fall under the aforementioned category,” the tax collection agency said in a notification issued on April 30.
“These measures are aimed at encouraging individuals to fulfill their tax obligations and contribute to the country’s economic development.”
In an another move, the FBR has decided to expedite the registration of around 3 million retailers, under the Tajir Dost Scheme, which focuses on traders and shopkeepers operating through a fixed place of business, including a shop, store, warehouse, office or similar physical place.
However, representatives of trade bodies say the scheme, launched on April 1, had not produced the “desired results.”
“The scheme is failing because there is no awareness among traders about the pros and cons of the scheme, while business conditions are also not supporting such a move,” Atiq Mir, chairman of the All Karachi Tajir Ittehad (AKTI), told Arab News on Friday.
“Amid high inflation and slow business activities, traders are struggling to survive and they can’t afford another burden of taxes.”
To deal with the situation, the FBR has appointed Muhammad Naeem Mir, chairman of the All Pakistan Anjuman-e-Tajran’s Supreme Council, chief coordinator of the Tajir Dost Scheme.
Naeem, who has not yet taken the charge, said he would analyze and discuss the strategy with FBR officials next week.
“From Monday onwards, we will draw strategy and work on the scheme after discussing and getting know-how of it from FBR officials,” he told Arab News.
Naeem denied any resistance from traders, saying the FBR had not run a comprehensive campaign to introduce the scheme, but people were “voluntarily registering themselves.”
Under the scheme, the FBR has notified registration of retailers in six major cities, including Karachi, Islamabad, Lahore, Peshawar, Rawalpindi and Quetta. The tax agency expects around Rs100 billion revenue by imposing advance tax in these cities from the July this year, according to FBR officials.
If the FBR successfully implemented the scheme by bringing about 3 million more taxpayers in the net, the overall active taxpayers would increase to more than 7 million from the existing 4 million in Pakistan.

Topics: Pakistan IMF Talks

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