S&P Global downgrades Pakistan’s credit rating, predicts reserves to remain under pressure in 2023

The S&P Global logo is seen outside a building in Washington, DC, on July 25, 2019. (AFP/File)
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Updated 23 December 2022
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S&P Global downgrades Pakistan’s credit rating, predicts reserves to remain under pressure in 2023

  • Cash-strapped Pakistan faces balance of payments crisis, with foreign reserves dropping as low as $6.7 billion
  • The US-based agency says elevated political risks in the country may impact policy trajectory over the next year

ISLAMABAD: A US-based company S&P Global on Thursday lowered Pakistan’s credit rating following a series of shocks, including severe floods, surging food and energy prices, and rising global interest rates, while predicting that the country’s economy would remain under pressure in the coming year amid low foreign exchange reserves.

Pakistan is witnessing a major economic turmoil as it faces a balance of payments crisis, with foreign reserves available with the central bank dropping as low as $6.7 billion which barely cover a month’s imports.

The country is desperately trying to revive a $7 billion loan program with the International Monetary Fund (IMF) which would allow it to get a new tranche of about $1 billion.

“Pakistan’s already low foreign exchange reserves will remain under pressure throughout 2023, barring a material decline in oil prices or a step-up in foreign assistance,” S&P Global said in its statement.

It noted the country also faced elevated political risks, which could impact its policy trajectory over the next 12 months.

“As a consequence, we lowered the sovereign credit ratings on Pakistan to ‘CCC+/C’ from ‘B-/B,’” it added. “The outlook is stable.”

The US-based company said it lowered Pakistan’s ratings to reflect a continued weakening of its external, fiscal, and economic metrics.

“Given high gross external financing needs, and limited foreign exchange reserves, Pakistan’s balance of payments outlook remains vulnerable to energy price developments and the availability and timing of foreign support,” it added.

“We expect the ratio of debt to GDP and budgetary deficits to remain elevated, with more than 40% of government receipts used to finance interest payments, thereby reducing the government’s capacity to finance investment and social support.”

The statement acknowledged the severe flooding during the summer of 2022 had imposed additional hardships on households and businesses while further constraining growth.

Back in July, the agency downgraded Pakistan’s outlook on long-term ratings from stable to negative, saying it reflected growing risks to the country’s external liquidity position over the next 12 months.

In October, Fitch Ratings also downgraded Pakistan’s long-term foreign-currency issuer default rating (IDR) to CCC+ from B-, while Moody’s also lowered five Pakistani banks’ ratings to Caa1 from B3.


Pakistani Christian community attacked in Punjab province after blasphemy accusation

Updated 25 May 2024
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Pakistani Christian community attacked in Punjab province after blasphemy accusation

  • The violence broke out after allegations of the desecration of the Muslim scripture, the Holy Qur’an
  • Police says they pushed back a crowd to rescue five injured Christians before taking them to hospital

LAHORE: At least five members of a minority Christian community were rescued on Saturday after a Muslim crowd attacked their settlement in eastern Pakistan, police and a community leader said.
The crowd, which accused the Christian group of blasphemy, hurled stones and bricks at the police, said Shariq Kamal, the police chief of Sargodha district.
A large contingent of police cordoned off the settlement, he said, adding that the crowd had been pushed back and five injured Christians had been taken to hospital.
At least one house and a small shoe factory was set on fire by protesters who had gathered after neighbors alleged that the Muslim holy book, the Holy Qur’an, had been desecrated by a minority community member, according to a police spokesman and Akmal Bhatti, a Christian leader.
“They burned one house and lynched several Christians,” Bhatti aid.
Videos posted on social media showed protesters looting items from burning properties. Others were seen throwing the items in a heap on fire in a street.
Bhatti said the videos were images from the scene.
Reuters could not independently verify the pictures.
The independent Human Rights Commission of Pakistan said the Christian community was “at grave risk to their lives at the hands of the charged mobs.”
Blasphemy is a sensitive subject in conservative Muslim-majority Pakistan, where just an accusation can lead to a street lynching.
Human rights groups say Pakistan’s harsh blasphemy laws are often misused to settle personal scores.
While blasphemy is punishable by death in Pakistan, no one has been executed by the state for it, though numerous accused have been lynched by outraged mobs.
A Muslim crowd attacked a Christian community in eastern Pakistan last year, vandalizing several churches and setting scores of houses on fire after accusing two of its members of desecrating the Qur’an.


Police pursue leads in murder of local journalist in Sindh amid outcry over media safety

Updated 25 May 2024
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Police pursue leads in murder of local journalist in Sindh amid outcry over media safety

  • Nasrullah Gadani was killed in Ghotki and succumbed to his injuries at a Karachi hospital on Friday
  • Police chief in Ghotki says Gadani’s killers will be arrested after his family members register a complaint

KARACHI: Police in Pakistan’s southern Sindh province said on Saturday they have secured leads in the murder case of a local journalist, Nasrullah Gadani, who was killed for fearlessly carrying out his professional responsibilities, according to media community leaders.
The slain journalist, associated with the Sindhi newspaper Awami Awaz, was attacked by gunmen while traveling near Korai Goth, Mirpur Mathelo, on Tuesday.
Initially, he was shifted to Punjab province for medical treatment due to the lack of adequate health facilities in his home district. However, he was later airlifted to Karachi, where he succumbed to his injuries on Friday, leaving behind a widow and six children.
“We have already obtained leads but are waiting for the family to register an FIR [first information report],” Dr. Sumair Noor, senior superintendent of police in Ghotki, told Arab News, adding the police would apprehend the killers soon.
Earlier on Tuesday, Zia Ul Hassan Lanja, the provincial home minister, told the media that geofencing had been done to gather evidence in the case, and some people had already been detained.
Gadani’s death came three days after a young tribal journalist, Kamran Dawan, was killed in Pakistan’s North Waziristan tribal district, shedding light on the threats to journalists in the South Asian country.
Gadani mostly focused on stories related to corruption and injustices, making some powerful enemies. He confronted influential figures in his area and shed light on the struggles of the common citizen. His videos on social media often criticized feudalism, the military and the misgovernance of ruling classes while bringing attention to the plight of his community members.
In his last video, seen by Arab News, he criticized a feudal and local leader belonging to the province’s ruling Pakistan Peoples Party (PPP), Shehbaz Khan Lund, for receiving police protocol in Ghotki, where incidents of dacoities and other crimes have surged over the years.
“Nasrullah was a brilliant and fearless journalist for whom journalism was a mission,” said Jabbar Khattak, editor and owner of Awami Awaz. “He constantly highlighted the issues of the people.”
G.M. Jamali, President of Pakistan’s Federal Union of Journalists (PFUJ), strongly condemned the murder but expressed little hope that the killers would be brought to justice.
“The killers of Gadani are unknown, while we have been protesting for the arrest of known accused in the Jan Muhammad Mehar case for the last few months and have seen no progress,” he said, referencing another journalist who was shot dead in Sindh last August.
“He [Gadani] also reported on the mismanagement of funds for developmental projects, shed light on the condition of hospitals and bravely spoke about police complicity in releasing criminals while offering preferential treatment to landlords,” he added.
Shoaib Ahmed, Secretary of the Karachi Press Club and convener of its Joint Action Committee, which includes all unions and associations, informed media leaders were in contact with the family of the slain journalist.
“Police have assured us that an FIR will be registered with the family’s consent and the perpetrators will be arrested soon,” he said.
“We will not let the killers go free,” he pledged.


Pakistan to establish safe city project for security of Chinese workers in its northwest

Updated 25 May 2024
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Pakistan to establish safe city project for security of Chinese workers in its northwest

  • The development comes two months after five Chinese workers, Pakistani driver were killed in suicide attack on their vehicle
  • The assault near the Dasu hydropower project was the third major one in a little over a week on Chinese interests in Pakistan

ISLAMABAD: Interior Minister Mohsin Naqvi has formed a committee to prepare a plan for the establishment of Dasu-Chilas Safe City Project to ensure foolproof security of Chinese nationals working in the country’s northwest, the Pakistani interior ministry said on Saturday.
The decision was made at a meeting Naqvi presided over in Islamabad to review security of the Chinese and other foreigners. the newly formed committee will present its recommendations in 15 days.
The development came two months after five Chinese nationals and their Pakistani driver were killed in a suicide attack while they were on their way to the Dasu hydropower project in Pakistan’s northwestern Khyber Pakhtunkhwa province.
The hydropower project falls under the ambit of the China-Pakistan Economic Corridor (CPEC), a flagship project of China’s Belt and Road Initiative, for which it has pledged more than $65 billion for road, rail and other infrastructure developments in Pakistan.
“The prime minister has instructed that Daso-Chilas safe city be established. It will be established according to modern requirements like the project’s establishment in Islamabad and Lahore,” Naqvi was quoted as saying by his ministry.
“The aim of safe city is not just to install cameras, but it would be a system equipped with modern technology and artificial intelligence tools. Through this project, the surveillance and security of this area will be ensured.”
The committee, which includes Islamabad police chief, Hazara regional police officer and a Water & Power Development Authority (WAPDA) representative, will jointly prepare a comprehensive plan in this regard, according to the Pakistani interior ministry.
Chinese projects and interests have increasingly come under attack in recent years. The Dasu assault in March was the third major one in a little over a week on Chinese interests in Pakistan.
It followed a Mar. 20 attack on a strategic port used by China in the southwestern province of Balochistan, where Beijing has poured billions of dollars into infrastructure projects, and a Mar. 25 assault on a naval air base, also in the southwest. Both attacks were claimed by the Baloch Liberation Army (BLA), the most prominent of several separatist groups in Balochistan.
Dasu, the site of a major dam, has been attacked in the past, with a bus blast in 2021 killing 13 people, nine Chinese among them, although no group claimed responsibility, like the Mar. 26 bombing.
On Thursday, Pakistan’s top economic body approved $2.5 million in compensation for families of Chinese workers who were killed in the Mar. 26 Dasu attack.


Motorist who killed two pro-Palestine protesters in Islamabad identified as army officer — police

Updated 25 May 2024
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Motorist who killed two pro-Palestine protesters in Islamabad identified as army officer — police

  • Protesters encamped at Islamabad’s D-Chowk for several days to raise awareness about the Gaza war
  • Earlier this week, a speeding car lost control and ran over several demonstrators, killing two of them

ISLAMABAD: The driver of a car, which ran over and killed two pro-Palestine protesters in the Pakistani capital of Islamabad this week, has been identified as an army officer and handed over to the military police, the Islamabad police said on Saturday.
The protesters have set up their camps at D-Chowk in the Pakistani capital for the past several days. On Monday, a speeding car ran over a few demonstrators, killing two of them and injuring four others.
The driver of the car had sped away from the scene, but was arrested by the police shortly afterwards.
“The driver who crushed two people to death [on Jinnah Avenue] was arrested from the scene and identified as an army officer,” Taqi Jawad, an Islamabad police spokesman, told Arab News.
“He was nominated in the FIR [police report] and later handed over to the military police for further legal action.”
While the protesters condemned the incident, they said this week it would not dampen their spirits and they would continue to urge the government to do more about Israeli military actions in Palestine.
“We feel that the State of Pakistan and the Government of Pakistan should do far more than it has been doing till now,” Humaira Masihuddin, a lawyer, told Arab News on Tuesday.
Pakistan does not recognize Israel and supports an independent Palestinian state based on pre-1967 borders, with Jerusalem as its capital. In recent months, the South Asian country has repeatedly raised the issue of Israel’s war in Gaza at the United Nations through its permanent representative.
Rabail Shahid, a student, criticized the government for failing to provide security to the protesters in Islamabad.
“This incident happened here, I cannot even imagine, and [that too] in the Red Zone, in this Red Zone, which is a highly, strictly secured area,” she said.


Pakistan welcomes ICJ ruling on Gaza, reaffirms support to Palestinians

Updated 25 May 2024
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Pakistan welcomes ICJ ruling on Gaza, reaffirms support to Palestinians

  • The ICJ decision added to the pressure on an increasingly isolated Israel, coming just days after Norway, Ireland and Spain announced they will recognize Palestine as a state
  • The case against Israel was initiated by South Africa in December 2023, where it labeled Israel’s actions in Gaza Strip as ‘genocidal’ and said they intended to destroy Palestinians

ISLAMABAD: Pakistan on Saturday welcomed additional provisional measures by the International Court of Justice (ICJ) ordering Israel to immediately halt its military offensive in the southern Gaza city of Rafah, reaffirming its support for the Palestinians’ right to self-determination.
The ICJ decision on Friday added to the pressure on an increasingly isolated Israel, coming just days after Norway, Ireland and Spain said they would recognize a Palestinian state, and the chief prosecutor of a separate international court sought arrest warrants for Prime Minister Benjamin Netanyahu.
The case against Israel was initiated by South Africa in December 2023, where it labeled Israel’s actions in the Gaza Strip as “genocidal,” asserting that they intended to destroy the Palestinian people in ways specified under the 1948 Genocide Convention.
On Saturday, Pakistan’s foreign office said Islamabad supported the application filed by South Africa before the ICJ against Israel under the 1948 Genocide Convention, in follow up to which the ICJ announced additional provisional measures for Rafah.
“Pakistan demands immediate and unconditional implementation of the latest orders of the ICJ... We call on the UN Security Council to play its role in ending Israel’s ongoing brutal military campaign across Gaza; allowing unhindered flow of humanitarian assistance; taking effective measures to protect civilians in Gaza; and holding Israel accountable for its crimes,” the foreign office said in a statement.
“Pakistan reaffirms its unwavering support for the inalienable right to self-determination of the Palestinians for a viable, secure, contiguous and sovereign State of Palestine on the basis of the pre-1967 borders and with Al-Quds Al-Sharif as its capital.”
Israel besieged the Gaza Strip and launched airstrikes following a surprise attack by Hamas on October 7, prompted by the deteriorating conditions of the Palestinian people living under the Israeli occupation.
To date, the Palestinian death toll has reached about 36,000, predominantly women and children, as Netanyahu’s administration continues its military campaign that has demolished hundreds of residential neighborhoods along with hospitals and educational institutions.
Pakistan 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.
In recent months, the South Asian country has repeatedly raised the issue of Israel’s war on Gaza, launched last October, at the United Nations through its permanent representative, Ambassador Munir Akram.
“As required by the latest ruling of ICJ, Israeli occupation authorities should keep the Rafah crossing open for unhindered provision of humanitarian assistance, and ensure unimpeded access to the Gaza Strip of any commission of inquiry, fact-finding mission or other investigative body mandated by the United Nations to investigate allegations of genocide,” the foreign office added.