Financial experts warn depreciation of Pakistan’s national currency may ultimately lead to social unrest

A currency broker stands near his booth, which is decorated with pictures of currency notes, while dealing with customers, along a road in Karachi, Pakistan on January 27, 2023. (REUTERS/File)
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Updated 05 February 2023

Financial experts warn depreciation of Pakistan’s national currency may ultimately lead to social unrest

  • Economists say the declining value of rupee will further fuel inflation, leading to unemployment and increased poverty
  • The national currency is trading at its lowest level against the US dollar and official forex reserves are down to $3 billion

KARACHI: With Pakistan’s national currency hitting a series of historic lows against the US dollar since the removal of an artificial upper cap on the exchange rate, financial experts fear that ensuing unemployment and poverty could lead to mass social unrest across the country.

The Pakistani rupee has plunged by 16.5 percent to Rs276.58 since January 25 as pressure continues to build for import payments amid the country’s fast depleting foreign currency reserves.

The official reserves have declined to $3 billion, hitting the lowest level since 2000-01 when the forex with the central bank only stood at $1.6 billion. On average, Pakistan needs at least $5 billion to cover one month of import payments.

Speaking to Arab News, local currency dealers blamed the upper limit on the exchange rate in the interbank and open markets to keep the value of US dollar artificially low for causing major devaluation of the national currency.

“When we capped [the exchange rate] to keep [the value of the greenback] low, our inward remittances moved to the grey market and exporters also stopped their payments because the [dollar] rate was low in the bank and it was too high in the grey market,” Zafar Sultan Paracha, general secretary of Exchange Companies Association of Pakistan (ECAP), told Arab News in an interview on Friday.

“When we suddenly removed the cap after a long time, the dollar, I would say, came out with fury,” he added. “It seems that it has still not calmed down.”

The extreme shortage of dollar liquidity compelled the government to restrict import of goods, including industrial raw material and essential items, while commercial banks stopped issuing letters of credit (LCs) which left importers struggling to arrange the greenback for already placed orders.

Many Pakistani industries were either forced to shut down their production facilities or scale down operations, paving the way for mass layoffs.

“Because of the slowdown in the overall economic activity, decades high inflation and overall low production by the economy, it is expected that unemployment will increase and we are witnessing that at the moment as well,” Tahir Abbas, head of research at Arif Habib Limited, told Arab News.

The South Asian nation is currently experiencing one of the highest inflation rates that was gauged at 27.6 percent in January 2023. Previously, such levels were recorded in 1975.

Abbas said he feared the situation could lead to social unrest in the country.

“It is advisable for the government to resume the IMF [International Monetary Fund] program as soon as possible,” he continued.

The government began talks with the IMF last week in a bid to win approval for the disbursement of $1.1 billion under a bailout program the country signed with it in 2019 to stave off economic meltdown.

While the talks are scheduled to last until February 9, Prime Minister Shahbaz Sharif has already said the visiting mission of the international lender was giving tough time to the country.

However, finance minister Ishaq Dar has repeatedly said the situation is under control and the government hopes to maintain a substantially high dollar reserve by the end of the current fiscal year.

Economists said the country needed to complete the IMF program by June and should not go back to the fund for future bailouts since its programs reduce the pace of economic growth.

“The IMF program by design leads to reduced economic growth which leads to unemployment and increased poverty,” Dr. Ashfaque Hasan Khan, senior economist and former member of the government’s Economic Advisory Council, told Arab News.

“Such situation leads to deterioration of law and order and such signs are already visible in Karachi where muggings and snatchings at gunpoint have significantly increased,” he added.

Ex-PM Khan to file defamation suit against Pakistan’s anti-corruption watchdog

Updated 15 sec ago

Ex-PM Khan to file defamation suit against Pakistan’s anti-corruption watchdog

  • The ex-PM is accused of receiving land in return for granting £190 million settlement to a real estate tycoon
  • His arrest in the case on May 9 sparked violent protests in Pakistan, prompting a clampdown by authorities

ISLAMABAD: Former prime minister Imran Khan said on Friday he had decided to file a Rs15 billion ($52.93 million) defamation suit against the chief of the country’s anti-corruption watchdog, weeks after his arrest in a graft case.

Khan was arrested by paramilitary troops in Islamabad on May 9 on the orders of officials of Pakistan’s National Accountability Bureau (NAB) in the Al-Qadir Trust land bribe case. He is accused of getting undue benefit from a Pakistani property tycoon, Malik Riaz Hussain, after granting him a settlement of £190 million seized by the United Kingdom’s National Crime Agency as part of a deal.

The Al-Qadir Trust, owned by Khan and his third wife Bushra Bibi, runs a university outside Islamabad devoted to spirituality and Islamic teachings. The project is inspired by Khan’s wife, who is as a spiritual leader. 

The government of PM Shehbaz Sharif says the trust was a front for Khan to receive valuable lands as a bribe from the real estate developer. The Al-Qadir Trust has nearly 60 acres of land worth Rs7 billion ($24.7 million) and another tract in Islamabad close to Khan’s hilltop home. The 60-acre parcel is the official site of the university, but quit a little has been built there. 

“I have decided to file a Rs15 Billion Defamation Suit, against Chairman, NAB. I have served Legal Notice upon him,” Khan wrote on Twitter.

“My Arrest Warrant was issued on a public holiday and was kept in secrecy for eight days. I was not informed about conversion of Al-Qadir Trust Case Inquiry into Investigation.”

To execute the warrant, Khan said, the paramilitary troops subjected him to “brute force,” while the motive behind his arrest was to defame him.

“To execute Arrest Warrant, Pakistan Rangers was used which subjected me to brute force,” he said.

“Ulterior motive was to defame me by arresting me from premises of Islamabad High Court. And show the world that I was arrested on corruption charges.”

Khan’s arrest, later declared “illegal” by the country’s top court, led to violent protests by his supporters in parts of Pakistan. The violence that targeted military installations, government buildings and law enforcement has since prompted a crackdown by authorities on Khan’s party. The ex-premier claims that thousands of his Pakistan Tehreek-e-Insaf (PTI) party’s supporters have been detained since the May 9 protests. 

Khan, who has been agitating for snap elections ever since he was ousted in a no-trust vote last year, has accused the government of attempting to “crush” his party through the clampdown ahead of the upcoming general elections. The government denies it. 

‘Still in trauma’: a ‘Killer Highway’ in southwest Pakistan claims over 400 lives in around four years

Updated 10 min 12 sec ago

‘Still in trauma’: a ‘Killer Highway’ in southwest Pakistan claims over 400 lives in around four years

  • More than 18,000 accidents have injured 24,768 people on the single-lane Quetta-Karachi highway since Oct 2019
  • Provincial authorities say more than 70 percent of the accidents occurred due to ‘speedy overtaking’ on the highway

QUETTA: Hajji Sharifullah, 47, lost his wife, daughter and two sons in a road crash in the southwest Pakistani province of Balochistan in January this year. His 16-year-old son, Waheedullah, managed to come out of the vehicle alive before it caught fire, but was “still in trauma” after one of the deadliest accidents on a major highway that has come to be known as the ‘Killer Highway.’

The 750-kilometer, single-lane highway stretching from the provincial capital of Quetta till the Pakistani commercial hub of Karachi in the south has claimed 436 lives in more than 18,000 accidents from October 2019 till April this year, according to the Medical Emergency Response Center (MERC 1122) in Balochistan. At least 24,768 people have been injured in these crashes.

On January 29, more than 40 people were killed after a speeding bus fell into a ravine and caught fire near the Lasbela district on the same Quetta-Karachi highway, with some bodies burned beyond recognition.

“Since that dark day, my son Waheed is still in trauma, because he saw his family members die in front of his eyes,” Sharifullah told Arab News on Thursday.

“He has not returned to normal life hence I have taken him to my village.”

Recalling his son’s words, he said the bus had been moving very fast and his wife and other passengers had asked the driver to cut down the speed, but he did not listen to them.

“I have lost my family but now I request the prime minister to take immediate measures for the expansion and dualization of the Quetta-Karachi highway in order to prevent such accidents in future,” the 47-year-old said.

Balochistan, a mountainous desert region bordering Afghanistan and Iran, is Pakistan’s largest but most neglected province, with a 40,000-km network of mostly dilapidated roads. The province 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.

The provincial government has established 18 Medical Emergency Response Center (MERC 1122) facilities for eight important highways passing across the province, but seven of these centers have been operational on the Quetta-Karachi highway, keeping the vulnerability of the ‘Killer Highway’ in view.

While provincial authorities are determined to increase the number of these emergency response facilities, they point to unfit vehicles and speeding as major reasons behind fatal accidents on the Quetta-Karachi highway.

“Single-lane road and unfit passenger buses are the key reasons behind the burgeoning number of accidents on this highway, but according to our assessment, 72 percent accidents were reported due to speedy overtaking on this narrow highway,” MERC 1122 Director-General Muhammad Asghar told Arab News.

“We have been providing basic rescue training to all of our emergency teams from Emergency Services Academy, Lahore, who have been actively providing medical services during any accidents on highways.”

In April 2022, Prime Minister Shehbaz Sharif visited the province and directed the National Highway Authority (NHA) to expedite the dualization of the Quetta-Karachi highway and complete the vital road network in 18 months. But despite the prime minister’s directives, the dualization work continues at a snail’s pace.

Arab News repeatedly tried to reach NHA officials for a comment on the subject, but did not receive a response to the calls.

Imtiaz Shah, a former Pakistani hockey player and Olympian, was killed on the notorious highway while returning to Quetta from Khuzdar along with two other hockey players in October last year.

Shah’s brother remembers the last goodbye he said to his mother and two young daughters before stepping out of home.

“My elder brother, accompanied by senior hockey players Mujahid Butt and Hajji Mir Muhammad went to Khuzdar to undertake hockey trials under the Prime Minister National Talent Hunt Program but they never returned home,” Sadam Shah told Arab News.

“A speeding passenger bus crushed their vehicle from the opposite side when it attempted to overtake another passenger bus. Although hundreds of people die on this Killer Highway every year, the government is not taking any measures to expand the highway or prevent transport companies from violating traffic rules.”

Muhamad Fazal, 40, who has been driving giant passenger buses on the Quetta-Karachi highway for the last 20 years, says major transport companies have strict speed checks on their buses, but drivers working for local companies frequently violate the speed limit.

“Unfortunately, some of the passenger buses carry smuggled goods and Iranian fuel to Karachi, and they speed to reach there timely, which causes major accidents and sometimes fire after the accident on this narrow highway,” Fazal told Arab News.

“I have seen many drivers racing on the highways while carrying dozens of passengers which should be ended to control accidents and transport companies should expel [such] reckless drivers.”

Many single-lane highways in the Punjab and Sindh provinces have been expanded or dualized, but the Quetta-Karachi highway has yet to be expanded since the 1990s, he noted.

Dengue outbreak triggers alarm in southwestern Pakistan’s district Kech

Updated 55 min 42 sec ago

Dengue outbreak triggers alarm in southwestern Pakistan’s district Kech

  • District Kech reported 2,131 cases in April and May, while two people died from infection
  • While provincial government says it is taking anti-dengue measures, locals say otherwise

QUETTA: Health officials expressed alarm at the outbreak of dengue virus in southwestern Pakistan’s district Kech on Thursday, as official data showed the infection claimed two lives and infected over 2,000 people during the months of April and May.

Dengue is a mosquito-borne disease that is transmitted from humans to mosquitoes. In its most lethal form, the disease is known to be fatal. Patients who are infected with dengue suffer severe flu-like symptoms, including high fever, severe headache, muscle and joint pain, nausea, and vomiting that can last for a week.

Data by the Provincial Malaria Program showed district Kech reported 2,131 dengue cases in April and May. Two patients also died from the virus while undergoing treatment in Pakistan’s southern port city of Karachi.

“Due to the weather changes, we have been witnessing a dengue outbreak in Kech district because every year after the mid of May, the temperature increases up to 37 degrees in which dengue mosquitoes can’t survive,” Dr. Meer Yousaf, head of the Provincial Malaria Program, told Arab News.

“But for this season, the temperature has not increased.”

Balochistan health officials say only three districts in the province, namely Kech, Gwadar, and Lasbela, were declared high-risk places for the virus. However, he said only district Kech has reported a gradual surge in positive cases over the last six years.

Yousaf said despite intense insecticide fogging, the virus cannot be stopped from spreading until the masses don’t cooperate with the government to take preventive measures within their homes.

 Dr. Khalid Baloch, the medical superintendent at District Headquarter Hospital Kech, said authorities are conducting daily tests of over 200 people in the district out of which 30 plus people are testing positive.

“We have established a ten-bed isolation ward in the hospital but due to the burgeoning number of patients, many are now admitted in general wards,” Baloch told Arab News.

He said that out of over 5,000 dengue tests conducted in May 2023, a total of 1,016 patients tested positive for the infection. “We are now treating critical patients inside the dengue ward but still many patients are moving to Karachi for dengue treatment,” he added.

Kech government officials say they have been conducting anti-dengue measures such as spraying insecticides to kill mosquitoes. However, local residents deny these claims.

“The health authorities’ claims of anti-dengue spray in Turbat city and other areas of the district are totally false because the hospital is filled with dengue patients,” Yasir Aslam Baloch, a local journalist, told Arab News.

Yousaf said health authorities were running awareness campaigns against the disease. However, he said people were not taking preventive measures.

“Due to the shortage of clean water, the majority of people place their uncovered water buckets in their courtyards which is an active source for dengue mosquito breeding,” he said, expressing the fear that the coming monsoon season would cause a further spike in dengue cases in the district.

Prominent Pakistani rights activist Jibran Nasir ‘picked up’ at gunpoint, says wife

Updated 02 June 2023

Prominent Pakistani rights activist Jibran Nasir ‘picked up’ at gunpoint, says wife

  • Jibran Nasir has been increasingly critical of Pakistan’s powerful military on social media
  • Nasir was forcibly taken away at gunpoint by 15 men, says wife and actress Mansha Pasha

ISLAMABAD: Prominent Pakistani lawyer and rights activist Jibran Nasir was “picked up” by over a dozen unidentified persons in Karachi on Thursday night, his wife and actress Mansha Pasha said.

Nasir frequently criticizes Pakistan’s leading political parties, the religious right wing, and the country’s powerful military. He contested the 2013 and 2018 general elections as an independent candidate but managed to secure a few hundred votes each time.

Nasir has been increasingly critical of the Pakistani military on social media ever since it announced trying supporters of former prime minister Imran Khan under military laws for attacking its installations and torching government buildings on May 9.

“Approximately half an hour ago, my husband Jibran Nasir who is a very famous lawyer and who has done a lot for Pakistan— I don’t have to say it, you know it already— he has been picked up by some men,” Pasha said in a video message.

“We were on our way home after having dinner when a large white Vigo car intercepted our car, almost crashing into it, and around 15 men with pistols forcibly took my husband away,” she added.

“I would want you all to raise your voices and pray that my husband returns soon.”

Khan’s Pakistan Tehreek-e-Insaf (PTI) party demanded Nasir’s release, saying that his abduction is against the country’s constitution.

“Law of the jungle must not prevail in Pakistan,” the PTI wrote on Twitter.

Feminist rights movement Aurat March also demanded Nasir’s release, condemning his alleged abduction.

“We strongly condemn his abduction (which is a clear violation of citizen rights) & urge the govt & LEAs to ensure his immediate + unconditional safe release,” it wrote on Twitter.

Rights groups have raised alarm over the crackdown against PTI leaders and supporters, which has resulted in several of Khan’s aides leaving the party and distancing themselves from him since May 9.

Meanwhile, the government has denied reports it is illegally abducting dissenters and has repeatedly said only those who partook in violence and vandalism on May 9 would be dealt with according to law.

The continuing political turmoil has exacerbated Pakistan’s economic crisis with inflation at record highs, with fears of default looming large as the South Asian country so far fails to revive a stalled $6.5 billion loan program with the International Monetary Fund (IMF).

Indian fishermen released from Pakistani jail remember fellow inmates who died last month

Updated 01 June 2023

Indian fishermen released from Pakistani jail remember fellow inmates who died last month

  • Pakistan releases 200 Indian fishermen from Malir prison as goodwill gesture toward India 
  • Two Indian fishermen in Malir prison passed away last month due to health complications

KARACHI: Pakistani authorities released 200 Indian fishermen on Thursday, who expressed happiness at the thought of meeting their families again but were sad to leave behind fellow Indian prisoners who passed away in Malir prison. 

Indian and Pakistani fishermen are routinely detained by both maritime agencies on charges of illegally entering each other’s territorial waters. The nuclear-armed nations’ borders are not clearly defined in the Arabian Sea and many fishing boats lack the technology to steer clear of any intrusion.

Karachi’s Malir prison has been in the headlines since the past year after several detainees of Afghan and Indian origin passed away due to health complications. In May, two Indian fishermen Balo Jetha and Soma Deva passed away after their health deteriorated in prison. Jail authorities insist inmates are treated well and provided medical treatment whenever they fall ill. 

Parmar Sajjan, one of the Indian fishermen released on Thursday, expressed joy at being released but said he would miss his friend Deva, whose body is currently kept at a morgue in Karachi. 

“We used to live together [in jail], and if he were alive, he would have accompanied us [to India],” Sajjan told Arab News. “I am happy, and I believe he would have been happy too,” he added. Sajjan said his friend was provided health care in jail before he was taken to the hospital for treatment.

Indian fishermen depart from a railway station after Pakistan authorities released them, in Karachi on June 1, 2023, allegedly arrested for trespassing into its territorial waters. (AN photo)

Sajjan thanked Pakistani authorities for releasing him, adding that he was “extremely happy” that he would finally get to meet his family. 

Another Indian fisherman, Hussain Rahim, wished India would reciprocate the move and release Pakistani fishermen who were languishing in Indian prisons. “I want to express that just as we fishermen are being released here, I hope that the Pakistani fishermen imprisoned in India will also be freed as soon as possible,” Rahim told Arab News.

When asked about the facilities being provided to Indian fishermen in Malir jail, Rahim said they were “treated like brothers” there. 

Fatima Majeed, a Pakistani fisherwomen and activist, said she could feel the pain of the Indian inmates as her father was also imprisoned in India in 1988. 

“I can feel their pain from very close because I have experienced this time too, I have also passed through it,” Majeed told Arab News. “It’s a very painful time.” She said when fishermen are arrested, the women in their families have to seek work in the informal sector to feed their families. 

Indian fishermen show their identity card as they departs from a railway station in Karachi, Pakistan, on June 1, 2023, allegedly arrested for trespassing into its territorial waters. (AN photo)

Pakistan’s Foreign Office Spokesperson Mumtaz Zahra Baloch, in response to a question during a weekly briefing, said by releasing Indian prisoners, Pakistan had demonstrated its “consistent policy of not politicizing humanitarian matters.” She hoped India should also release Pakistani fishermen who were imprisoned in Indian jails. 

When asked whether a judicial commission existed to ensure the swift release of fishermen, Baloch responded in the affirmative. 

“The commission surely exists and the two sides have remained in contact on the mechanics of such visits which we hope will facilitate the civilians and fishermen who are held in prisons in Pakistan and India,” she said.