Pakistan's ninth review in order, IMF 'can't dictate' country — finance minister

In this file photo, the International Monetary Fund (IMF) logo is seen outside its headquarters in Washington DC, US on April 5, 2016. (AFP)
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Updated 03 December 2022

Pakistan's ninth review in order, IMF 'can't dictate' country — finance minister

  • Pakistan awaits a tranche of $500mln from IMF as part of its $7 billion loan program
  • The country is facing a myriad of economic woes and desperately needs forex inflows

ISLAMABAD: Pakistan's Finance Minister Ishaq Dar said on Friday that the ninth review of the country's $7 billion loan program was in order and the International Monetary Fund (IMF) "can't dictate" it measures for the release a $500 million tranche. 

The IMF review for the release of its next tranche of funding has been pending since September, which has left Pakistan in dire need of external financing. 

Dar told a Pakistani TV station that all targets for the IMF review had been completed and that withholding a tranche despite that would not make sense. 

"Our ninth review is totally in order... I have reminded them they should come and review and give Pakistan $500 million," the finance minister said. 

"[You] can't dictate." 

Pakistan secured a $6 billion bailout in 2019 under an Extended Fund Facility (EFF), that was topped up with another $1 billion earlier this year. 

The minister said Pakistan's foreign reserves, currently at $7.5 billion, would be shored up with a $3 billion financing from a friendly country in the next two weeks. 

But the reserves at the moment are barely enough for a month of imports for the South Asian nation, facing a widening current account deficit and balance-of-payment crises as well as depreciation of national currency. 

Asked about a delay in the visit of an IMF delegation to Pakistan, Dar said he "didn't care" and he did not want to plead for the visit. 

"If it (money) doesn't come, we will manage, no problem," the minister added. 

Death toll from mosque blast surges to 93 as Pakistan Taliban deny responsibility

Updated 12 sec ago

Death toll from mosque blast surges to 93 as Pakistan Taliban deny responsibility

  • Explosion occurred Monday at Peshawar compound where headquarters of police are located
  • Pakistan Taliban say attacking mosques, madrasas, other sacred places ‘an impeachable crime’

PESHAWAR/KARACHI: The death toll from Monday’s bomb blast at a mosque in the northwestern city of Peshawar surged to 93 on Tuesday morning, said a senior government functionary, as conflicting accounts emerged from the Pakistani Taliban over a claim of responsibility.

Police said up to 350 worshipers were gathered for afternoon prayers when the explosion occurred at a mosque located inside a compound where the headquarters of the provincial police are located. Peshawar Commissioner Riaz Mehsud has said it was premature to call the attack a suicide bombing.

“Death toll into the mosque bombing has reached 93 now,” he told Arab News. “Rescue operation will be completed very soon, very soon, and it will be done today. We have to remove debris from the blast site very carefully because last night we pulled out an injured person from the wreckage.”

Akbar Khan, an official working for the social welfare organization Edhi Center in Peshawar said its volunteers and those from other charities such as Rescue-1122, Chippa and Al-Khidmat were still carrying out rescue work:

“Hopefully, the rescue operation will be completed today.”

Wounded policemen get treated at a military hospital a day after the mosque blast inside the police headquarters in Peshawar on January 31, 2023. (AFP)

Funeral prayers for the policemen who died in the blast were held on Monday night, police in the northwestern Khyber Pakhtunkhwa province said on Twitter.

On Monday night, the Pakistani Taliban group said the militant group was not behind the explosion while one commander of the group said on Twitter the outfit was responsible for the latest assault.

“Tehreek-e-Taliban Pakistan (TTP) has nothing to do with this incident,” the group said in a statement shared with journalists. “Any action in mosques, madrasas, funeral homes and other sacred places is an impeachable crime.”

However, TTP commander Sarbakaf Mohmand claimed responsibility for the attack in a post on Twitter. His account has since been suspended.

While the TTP as a group denied responsibility for the bombing, it has recently carried out similar attacks, with assaults on the rise since last November when the outlawed outfit called off a cease-fire signed with the government in May.

Pakistan and IMF team review economic and fiscal policies to unlock much-needed funding

Updated 17 min 28 sec ago

Pakistan and IMF team review economic and fiscal policies to unlock much-needed funding

  • More than $1 billion funding has been delayed since November last year over fiscal consolidation issues
  • Unlocking the funding is key for Pakistan as its forex reserves have dropped to cover just three weeks of imports

KARACHI: Pakistan and a visiting International Monetary Fund (IMF) mission held discussions on Tuesday on the South Asian nation’s economic and fiscal policies and reforms agenda to complete a 9th review of a stalled loan program, the finance ministry said.

The IMF mission headed by Nathan Porter is in Islamabad till February 9, 2023, to continue discussions for the revival of a $7 billion loan program that was signed in 2019. The mission will focus on policies to restore domestic and external sustainability, including to strengthen Pakistan’s fiscal position with durable and high quality measures while supporting Pakistanis affected by last summer’s record-breaking floods.

Talks for the pending ninth review were originally scheduled for October but were delayed mainly due to government’s reluctance to take ‘unpopular decisions’ being pushed by the IMF.

On Tuesday, Federal Minister for Finance Ishaq Dar held a meeting with the IMF review mission led by Porter at the Finance Division.

“The meeting discussed and reviewed the economic and fiscal policies and reforms agenda to accomplish the 9th review under the Extended Fund Facility,” a statement issued by the finance ministry said.

Dar briefed the Mission on fiscal and economic reforms and measures being taken by the government in different sectors, including bridging the fiscal gap and bringing exchange rate stability and reforms in the energy sector:

“He apprised that reforms are being introduced in power sector and a high level committee has been formed for devising modalities to offset the menace of circular debt in gas sector.” 

The finance ministry statement said Porter “expressed his confidence that the government will meet the IMF requirements for the completion of the 9th review.”

Pakistan has already met two key demands of the IMF ahead of the Mission’s Islamabad visit, including adjusting the Pakistani rupee according to market-based demand and supply, and a Rs35 per litter hike in petroleum prices.

“It is good that the talks have started,” Tahir Abbas, head of Research at Arif Habib Limited, said. “It is now likely that the mini-budget would be presented after development consensus on the measures to be taken.” 

Pakistani analysts said the country now had to convince the IMF team to go easy on Rs300 billion tax revenue measures and expected electricity and gas tariffs. 

Pakistan’s highest economic decision making body, the Economic Coordination Committee (ECC) of cabinet, is scheduled to meet today, Tuesday, to discuss issues in the power sector, including a circular debt management plan, fuel charges adjustment, and a waiver of electricity bills in flood affected areas. 

“The ECC is going to take up the matter of tariff rationalization and clearance of accumulation of arrears under the circular debt management plan. This is another step to accommodate IMF demands,” Abbas said. 

As the IMF and authorities resumed talks in Islamabad, Pakistan’s national currency showed some resistance against the United State dollar and was trading at Rs267 during the afternoon trade in the interbank market, as compared to Rs269.63 of Monday’s close. 

Pakistan’s national currency is under pressure as the country faces fast depleting foreign exchange reserves that have dropped to just $3.7 billion, not even enough to cover import payments for a single month. Pakistan on average has imported goods valued at $5 billion per month during the last six months.

The successful conclusion of talks between authorities and IMF team will lead to the disbursement of $1.1 billion but analysts expect the implementation of key measures under the IMF program will push inflation to over 30 percent in upcoming months. 

Pakistan court to indict ex-PM Khan on Feb. 7 in case involving sale of state gifts

Updated 31 January 2023

Pakistan court to indict ex-PM Khan on Feb. 7 in case involving sale of state gifts

  • Khan faces the charge of making ‘incorrect declarations’ of earnings to the country’s top election body
  • ECP disqualified him last October while referring the case to the judiciary for further proceedings

ISLAMABAD: A Pakistani court on Tuesday announced to indict former prime minister Imran Khan on February 7 in a case that led to his disqualification by the country’s top election body last year which found him guilty of making “false statements and incorrect declarations” after receiving gifts from various international leaders.

The Toshakhana – or state repository for gifts – reference against Khan gained momentum after the downfall of his Pakistan Tehreek-e-Insaf (PTI) administration in a parliamentary no-confidence vote last April.

Members of the current government of Prime Minister Shehbaz Sharif urged the Election Commission of Pakistan (ECP) to expedite the proceedings before Khan was disqualified under Article 63 of the Constitution.

According to local media reports, an additional sessions court in Islamabad announced to frame charges against the former prime minister in the coming week after his lawyer and the ECP counsel appeared before it and presented their arguments.

“District and Sessions Judge Zafar Iqbal heard the case and fixed February 7 (Tuesday) as the indictment date,” The Express Tribune said. “The former premier was also ordered to pay a bond of Rs20,000.”

The case involves accusations against Khan for misusing his position as prime minister to purchase and sell gifts received during state visits abroad that were worth over Rs140 million – or $5.4 million.

A major charge was that he had also failed to declare some of the earnings in his annual statements of assets submitted before the election commission.

Khan’s disqualification was followed by protests in different parts of the country, though the situation did not deter some local media outlets to continue their investigation into the issue.

Pakistan’s private news channel Geo TV interviewed a Dubai-based businessman Umar Farooq Zahoor who said he had paid Khan $2 million to buy a watch the ex-premier had received after he went to Saudi Arabia on an official trip in 2018.

The account presented by the channel contradicted the ex-premier’s narrative who has consistently claimed innocence in the case while pointing out that all receipts and records regarding the gifts and their sales were already present in the Toshakhana.

Khan subsequently filed a defamation case against the media house and the UAE-based businessman. However, the reference against him has been taken up by the court after the ECP referred the matter to the judiciary in its ruling last October.

Pakistan’s currency to weaken further, exacerbate inflationary pressure – Fitch Ratings

Updated 31 January 2023

Pakistan’s currency to weaken further, exacerbate inflationary pressure – Fitch Ratings

  • Pakistan’s rupee plummeted to 24-year low last week after markets removed cap on exchange rate
  • Fitch says rupee devaluation ‘positive’ for long-term outlook, helping unlock future IMF disbursements

ISLAMABAD: An international credit rating agency on Tuesday forecast that Pakistan’s national currency would depreciate further, exacerbating the imported inflationary pressure across the country in the days to come.

In its bid to revive a stalled $7 billion International Monetary Fund (IMF) loan program, Pakistan agreed to remove artificial controls from its exchange market. The rupee plummeted to a record 24-year low last week after foreign exchange companies removed the cap on the exchange rate. 

The removal of the currency cap has been one of the principal demands of the IMF. Pakistan, with a staggering $3.6 billion in reserves barely enough to cover three weeks of imports, is actively seeking an IMF bailout program to avoid a balance-of-payments crisis. 

In its latest forecast for Pakistan, Fitch Ratings said its earlier forecast of the dollar rising to Rs248 is “now looking out of date.”

“We believe that the rupee’s weakness still has further to run, particularly with Pakistan’s balance of payments position likely to remain weak for several more months,” Fitch said. 

The rating agency said currently there is “a considerable amount of uncertainty” at this juncture, adding that it is difficult to gauge the extent to which the latest rupee devaluation has caused investor confidence to dip. 

It said a weakening rupee would also have broader economic implications in the near future. “In the near term, it could exacerbate imported inflationary pressure, and may eventually result in steeper policy rate hikes from the SOP,” Fitch added. 

While it said that Pakistan’s economy was expected to contract by 0.3 percent in FY2022/23, the rupee’s devaluation would help Pakistan secure further disbursements from the IMF. Fitch said it would be “a positive for the longer-term outlook,” helping Islamabad ease its balance of payments strains. 

An IMF mission is currently in Islamabad till February 9, 2023, to discuss the loan revival. The mission will examine Pakistan’s policies to restore domestic and external sustainability, including strengthening the country’s fiscal position with durable measures while supporting those affected by devastating floods last year.

Envoy says three Afghans who died in Pakistan jail were denied cancer, heart treatment

Updated 31 January 2023

Envoy says three Afghans who died in Pakistan jail were denied cancer, heart treatment

  • Afghanistan’s acting consul general Karachi says jail authorities did not get Afghan prisoners the medical help they needed
  • Superintendent Malir Prison says all inmates get treatment, including three Afghan nationals who died of cancer and heart disease

KARACHI: Three Afghan citizens imprisoned in Pakistan’s southern port city of Karachi had died in jail from cancer and heart diseases since October last year, a Pakistani jailer and a senior Afghan diplomat said on Monday, with the latter alleging the patients were denied medical help during their incarceration.

Several Afghans flee to Pakistan without valid documents to seek medical treatment, evade persecution by the Kabul government, or to seek employment opportunities. In a report released last year, Pakistan’s National Commission on Human Rights said there was a “drastic rise” in the number of Afghans seeking to leave their country following the Taliban’s takeover of Kabul in August 2021.

Pakistan last year intensified its crackdown against Afghans who illegally cross the border and enter its territory without valid documents.

In a letter seen by Arab News, the superintendent of a correctional facility in Karachi’s District Malir informed the Sindh prisons police chief on Monday that three under-trial Afghan prisoners incarcerated there had died in judicial custody due to health complications.

Taj Muhammad, who was arrested on January 22, 2022, died on October 24, 2022, according to the letter, while Abdul Khalil, taken into custody on November 6, 2022, died on December 15, 2022. A third Afghan, Wali Khan, was arrested on November 5 last year, and died on January 22, 2023. His body is being kept at the Chhipa morgue in Karachi, the letter added, while the bodies of Muhammad and Khalil were handed over to family and the Afghan consulate respectively.

Syed Abdul Jabbar Takhari, Afghanistan’s acting consul general in Karachi, said Khan passed away last week from a heart attack while Muhammad and Khalil had succumbed to cancer. 

“These people died because they didn’t get treatment,” Takhari told Arab News, saying that his mission had informed Sindh authorities about the inmates’ health condition. “They knew about their health condition as these people had come here for treatment.”

Takhari said nearly 870 Afghan nationals were still languishing in Sindh prisons, many of them struggling with health issues, and as per the law, jail authorities were not allowed to detain cancer or heart patients.

“Instead, they should have been admitted to a hospital,” he said.

Superintendent Malir Prison Arshad Shah rejected Takhari’s allegations, saying all inmates were provided treatment, including the three Afghan nationals who died.

“We have medical facilities but the ones with serious conditions are sent to hospital, either to the Jinnah Hospital or the Civil Hospital,” Shah told Arab News.

Murtaza Wahab Siddiqui, a Sindh government spokesperson, said any person who violated Pakistani law would be prosecuted:

“Ailment can serve as grounds for bail to be granted but that doesn’t mean they can’t be arrested.”

Muniza Kakar, a lawyer who campaigns for the release of Afghan nationals in detention, said around 2,000 people had been arrested since authorities started a crackdown against Afghan nationals in July 2022.

“Of them, about 900 have been deported, some possessing refugees’ cards were released on bail while around 1,000 are still languishing in jails in Karachi, Hyderabad, and Sukkar cities of the province,” she told Arab News. “These include women, children, and aged people and most of them are patients with serious diseases.”

Kakar gave the example of an Afghan asylum seeker who she alleged was not provided treatment after suffering a cardiac arrest in jail on Sunday.

“She was seen by a jail doctor and on Monday, she was brought to court where she fell down,” Kakar said, “but she was taken to jail instead of being taken for treatment to a health facility.”