'Like we are at war': Nationwide power outage shuts industry, causing $300 million losses

A stock broker monitors the share prices on computers, powered by the generator, in the hall of Pakistan Stock Exchange (PSX) during country-wide power breakdown in Karachi, Pakistan on January 23, 2023. (REUTER)
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Updated 24 January 2023

'Like we are at war': Nationwide power outage shuts industry, causing $300 million losses

  • Second countrywide breakdown in three months halted industrial and logistic activities across Pakistan
  • Traders in Pakistan’s commercial capital of Karachi say they had alone suffered losses of over $4 million

KARACHI: A senior official at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has said a breakdown in the national electrical grid that left Pakistan without power all day on Monday had caused the economy losses of over $300 million.

For millions of Pakistanis, the power cut that lasted up to 24 hours in some parts of the country, was a frustrating continuation of hardships brought by an economy that has been in a tailspin for months, with foreign reserves running out, inflation at decades-high levels and industrial growth slowing down.

This was the second countrywide power breakdown in three months and halted industrial and logistic activities across the country.

“Pakistan generates $1 billion worth of economic activities on a daily basis, in which the share of industrial production is around $200 million,” Memon Abdul Jabbar, vice president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), told Arab News on Tuesday, estimating that including the cost of transportation and other logistics and services, the losses to Pakistan’s economy caused by Monday’s power failure ranged at over $300 million. 

Energy Minister Khurram Dastgir Khan, Commerce Minister Syed Naveed Qamar and Minister for Industries Syed Murtaza Mahmud did not respond to repeated calls and messages seeking comment for this story.

With production activities remaining largely suspended, traders in Pakistan’s largest city and commercial capital of Karachi said they had alone suffered losses of over $4 million.

“Prior to the power failure, trading activities were already down by 60-70 percent [in Karachi],” Atiq Mir, the chairman of the All Karachi Tajir Ittehad business association, said.

“We have estimated that the business activities suspension [due to the power breakdown] has caused over Rs3 billion ($4.3 million) losses as trading remained almost paralyzed.” 

Industrial and trading activities also came to a halt in Lahore, Pakistan’s second largest city, where businesspeople described the situation as resembling war conditions or the peak of the coronavirus pandemic.

“Most of the trading and industrial activities remained suspended and even those having standby power generation facilities succumbed to one of the longest power failures,” Rana Tariq Mehboob, chairman of the Chainstore Association of Pakistan (CAP) and a member of the Central Executive Committee of Lahore Chamber of Commerce and Industry (LCCI), told Arab News. 

“The situation was like we are at war, or one which we had observed during COVID-19 when everything was shut down including industries and retail sector,” Rana said, adding that the breakdown had caused around 30 percent losses to the national economy. 

The power breakdown came as traders, especially importers, were already struggling, with more than 7,500 containers of imports worth $1.8 billion, according to the FPCCI, stuck at ports and industries facing an acute shortage of raw materials due to a worsening foreign exchange crisis.

The low reserves have compelled the government to restrict the import of goods, including industrial raw materials, to stop dollar outflows, whereas commercial banks have stopped issuing letters of credit (LCs), leaving importers struggling to arrange the greenback for already placed orders. 

Inflation in Pakistan is also at a multi-decade high. Meanwhile, Pakistan awaits the completion of a delayed 9th review of an IMF bailout program which will clear the way for the disbursement of $1.1 billion in external financing that the country desperately needs. 

“Pakistani industries are facing shortage of raw material and higher inflationary pressure due to issues pertaining to the opening of LCs for imports and clearance of goods pilling up at ports,” Jabbar said. 


PM calls for 'global unity' to fight Islamophobia after desecration of Holy Quran in Denmark

Updated 21 sec ago

PM calls for 'global unity' to fight Islamophobia after desecration of Holy Quran in Denmark

  • Danish far-right politician torched a copy of the Holy Quran on Friday near a Copenhagen mosque
  • PM Shehbaz Sharif says desecration of Holy Quran 'highly offensive' act, calls on world to denounce it

ISLAMABAD: Prime Minister Shehbaz Sharif called for "global unity" to fight Islamophobia on Sunday amid increasing incidents of the desecration of the Holy Quran in Denmark and Sweden last week. 

The prime minister's comments came after a far-right Danish politician torched a copy of the Holy Quran on Friday near a mosque and outside the premises of the Turkish embassy in Copenhagen. 

Rasmus Paludan, known for his extremist stance towards Muslims, pulled a similar stunt in Stockholm last week. Paludan said he would repeat the act every Friday until Sweden is included in the NATO alliance. Turkey, whose support is crucial for Denmark to join the military alliance, has spoken out against Copenhagen's bid to join NATO. 

Paludan's Islamophobic acts have triggered anger among the Muslim community worldwide and evoked strong condemnations from Pakistan, Turkey, Saudi Arabia, Kuwait, and other Muslim countries around the world. 

In a Twitter post, Pakistan's prime minister condemned the "highly offensive" incident, calling on the civilized world to denounce it as well. 

"The need for global unity to fight Islamophobia couldn't be more urgent than it is now. We are deeply hurt," he wrote on Twitter. 

Pakistan's foreign office on Saturday issued a strong statement against Paludan's act, describing it as "a senseless and deeply offensive" action. 

"This repetition of the vile act leaves little doubt in the minds of Muslims around the world that freedom of expression is being blatantly abused to spread religious hatred and incitement to violence," it had said. 


Pakistan has to abide by tough IMF conditions out of ‘compulsion’ — defense minister

Updated 29 January 2023

Pakistan has to abide by tough IMF conditions out of ‘compulsion’ — defense minister

  • IMF wants Pakistan to reestablish market-based mechanism to determine Pakistani rupee's value
  • Defense Minister Khawaja Asif says government would try not to burden citizens under IMF’s conditions

ISLAMABAD: As Pakistan increased petrol prices by Rs35 per liter, Defense Minister Khawaja Muhammad Asif said on Sunday that the country had to agree to “very tough” conditions imposed by the International Monetary Fund (IMF) out of “compulsion” to address its economic woes.

The IMF’s mission is scheduled to visit Pakistan on January 31 to discuss the resumption of its $7 billion loan program, as Islamabad desperately seeks another loan tranche to shore up its foreign exchange reserves. Pakistan's forex reserves have declined to a staggering $3.6 billion, not even enough to cover a month of imports.

Earlier today, Finance Minister Ishaq Dar announced jacking up prices of petroleum products in the country by as much as Rs35 per liter. The minister said the decision was taken due to the Pakistani rupee's recent devaluation and up to an 11 percent increase in global fuel prices.

The hike in prices of petroleum products is part of the IMF's conditionalities to revive the stalled loan program, which requires Pakistan to do away with expensive energy subsidies. The price hike is expected to further increase decades-high inflation in the South Asian country. 

The global lender also wants Pakistan to reestablish a market-based mechanism to determine the value of the Pakistani rupee, which fell to a record low of 269.60 against the dollar in the open market this week. Such a mechanism is a key prior action for the country to receive IMF support.

“The IMF program, which we had to re-enter because of the [current] circumstances and out of compulsion, has set very strict and tough conditions for Pakistan,” Asif said on Sunday, speaking to reporters.

He added the government would undertake efforts to ensure the common man would not have to bear the economic burden of IMF’s conditions.

“We will try that only those belonging to the [upper] socioeconomic class will have to bear the economic burden of this crisis,” he said.

Answering a question related to the acute dearth of forex reserves in the country and the ensuing depreciation of the rupee against the dollar, the defense minister said people who have a foreign currency account in the country would still be able to withdraw “some” of their money in dollars.

“If someone here has a dollar account and wants to withdraw money from their banks, they can do so but in small amounts. For instance, if someone wants to take out money to pay for their children’s school fees, they can do so,” he clarified.

Asif also said the country’s imports, which had to be halted due to the dwindling reserves, were “gradually being relaxed.”

“Our exports are gradually being relaxed, so we will hopefully recover from the economic [turmoil] soon,” he said. “Slowly and gradually, things are being streamlined.”

Pakistan secured a $6 billion IMF bailout in 2019, which was topped up with another $1 billion last year. However, the lender then stalled disbursements in November due to Pakistan’s failure to make more progress on fiscal consolidation and economic reforms.


Pakistani FM heads to Moscow today as efforts on to finalize oil deal

Updated 29 January 2023

Pakistani FM heads to Moscow today as efforts on to finalize oil deal

  • Russia last week conceptually agreed to provide cheap crude oil to cash-strapped Pakistan on easy payment terms
  • Bhutto-Zardari will meet his Russian counterpart and deliberate upon the 'entire spectrum' of bilateral relations

ISLAMABAD: Foreign Minister Bilawal Bhutto-Zardari will be leaving for Moscow today, according to the Pakistani foreign office, amid efforts to finalize an oil deal between cash-strapped Pakistan and Russia. 

This is Bhutto-Zardari maiden visit to Russia since becoming the foreign minister last year. It follows the visit of a Russian delegation to Islamabad to attend the 8th Pakistan-Russia Inter-Governmental Commission (IGC) meetings in Islamabad earlier this month.  

The Russian delegation signed multiple memoranda of understanding with Pakistan in different sectors and also conceptually agreed to provide cheap crude oil to the cash-strapped South Asian nation, which has been struggling for months to meet its energy needs amid a severe forex crunch. 

In view of Pakistan’s deteriorating economic conditions and its forex reserves declining to a staggering $3.6 billion, Russia has also said it will allow Islamabad to pay for the energy imports in currencies of friendly countries. 

“Foreign Minister Bilawal Bhutto Zardari will undertake an official visit to Moscow at the invitation of Foreign Minister of the Russian Federation Sergey Lavrov from 29-30 January 2023,” the Pakistani foreign office said in a statement on Saturday. 

“The foreign minister will hold official talks with his Russian counterpart where the two sides would deliberate upon the entire spectrum of bilateral relations and exchange views on regional and international issues of mutual interest.” 

Over the decades, Pakistan-Russia ties have seen many ups and downs, mainly due to the Islamabad’s alliance with Washington. But in recent years, relations between the two states have warmed up as a countermeasure to proximity between India and the United States (US) on world issues. 

On Friday, Reuters reported that Independent Russian oil refiner Forteinvest had clinched a deal that will see 1,000 tons of Russian gasoline sent to Pakistan by land for the first time. 

The development came days after US State Department Spokesperson Ned Price said “now is not the time” to bolster economic ties with Russia, as the West continues to find ways to curtail Moscow’s finances due to its invasion of Ukraine. 

The Pakistani government, however, reiterated that the South Asian country would go ahead with the oil deal with Russia, adding that all deals will be finalized by March and oil will arrive in Pakistan by the end of April.  


At least 50 killed in twin transport mishaps in Pakistan

Updated 29 January 2023

At least 50 killed in twin transport mishaps in Pakistan

  • A passenger bus fell into a ravine and caught fire in Balochistan's Bela area, killing at least 40 people
  • In second mishap, 10 children were killed after their ferry capsized in country's northwest on Sunday

KARACHI: At least 50 people were killed in two separate transport tragedies in Pakistan on Sunday, officials said, renewing a debate about poor transport safety protocols in the South Asian country. 

In the first incident, a passenger bus fell into a ravine and later caught fire in Bela area of Pakistan's southwestern Balochistan province, where road accidents claim thousands of lives annually.  

Balochistan, a mountainous, desert region bordering Afghanistan and Iran, is Pakistan’s largest but most impoverished province, with a staggering 40,000-kilometer network of road infrastructure.  

According to the Motorway police, 6,000 to 8,000 people die each year in accidents across the Balochistan province, mainly on single-lane roads that have infamously come to be known as "killer highways."  

“A bus going from Quetta to Karachi plunged into a ravine and caught fire at around 3am,” Hamza Anjum Nadeem, the Bela assistant commissioner, told Arab News. "At least 39 bodies have been recovered and search for others is underway."  

Anjum later confirmed the death of another passenger, taking the count to 40. 

Of these, 38 dead bodies were being moved to the southern port city of Karachi, 177 kilometers away from Bela, for medico-legal formalities, Karachi Police Surgeon Dr Summaiya Syed told Arab News. 

Balochistan is the epicenter of the $64 billion China-Pakistan Economic Corridor (CPEC), a road and infrastructure development plan, which aims to ultimately provide the shortest route for Chinese cargo headed for the Middle East, Africa and Central Asia.  

Major roads are slated for construction under the CPEC, including the road from Balochistan’s Khuzdar district to the Chinese-funded, deepwater port of Gwadar. But for now, the absence of dual carriageways, inadequate training of drivers, and a lack of highway patrols mean thousands continue to die on these roads each year.   

In another incident, 10 children died when their boat capsized in Tanda Dam lake near Kohat in the country's northwest, according to police. 

All of the dead recovered so far aged between seven and 14 years, local police official Mir Rauf told the AFP news agency. 

Rauf said 11 children had been rescued from the water, with six in critical condition. The boat was carrying between 25 and 30 students on a daytrip from a local madrassa when it overturned. 

“A rescue operation is underway,” Rauf said. 

Mass drownings are common in Pakistan, when aged and overloaded vessels lose their stability and pitch passengers into the water. 

In July, 18 women drowned when an overcrowded boat carrying a wedding party across the Indus river in Punjab province capsized. 

The South Asian country also has poor road safety controls and thousands of lives are lost to road crashes each year, particularly in the southwestern Balochistan province. 

According to the National Road Safety Strategy 2018-2030, a report administered by the Asian Development Bank that cited police data, 6,548 people died at the scene of accident on Pakistan’s roads in 2016. Of these, 355 fatalities happened on national highways and 6,003 on provincial roads.  

At least seven people were killed and 15 others were injured after a passenger bus collided with a truck in Balochistan's Killa Saifullah district this month.    

In June last year, 22 people were killed when a passenger bus veered off a narrow road and fell into a ravine in the same district.


Earthquake jolts Islamabad, adjacent Pakistani cities — USGS

Updated 29 January 2023

Earthquake jolts Islamabad, adjacent Pakistani cities — USGS

  • This is the 3rd time in a month Islamabad, parts of Khyber Pakhtunkhwa felt tremors
  • The residents of Islamabad share their experience on Twitter, calling it a ‘massive jolt’

ISLAMABAD: A magnitude 4.4 earthquake jolted the Pakistani capital of Islamabad and nearby cities on Sunday, the United States Geological Survey (USGS) said, with many residents of the capital describing it as a “massive jolt” on Twitter.

According to the USGS, the earthquake struck at around 12:45pm Pakistan time, with its epicenter located 25.5 kilometers away from the capital at a depth of 32.4 kilometers.

However, Sabir Khan, a senior meteorologist at the National Seismic Monitoring Center (NSMC) in Islamabad said the magnitude of the earthquake was recorded 6.3 on the Richter scale, the state-run APP news agency reported.

No casualties have so far been reported in its wake.

“Stay safe Pakistan! It was a massive jolt,” Zubair Faisal Abbasi, an Islamabad resident, wrote o Twitter.

“Quite strong shaking in Islamabad #earthquake,” said Sana Jamal, another Islamabad resident.

This was the third time in a month that the Pakistani capital experienced tremors.

On January 19, several parts of Punjab and Khyber Pakhtunkhwa provinces were shaken when a 5.6-magnitude quake hit Islamabad, Charsada, Peshawar, Nowshera, Mardan, and Shabqadar, the National Seismic Monitoring Center (NSMC) said.

Tremors were felt in Islamabad and parts of KP on January 5 as well.