Pakistan, IMF grapple for consensus to unlock critical funding

A general view of the International Monetary Fund (IMF) building in Washington DC, United States, on April 5, 2016. (AFP/File)
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Updated 06 February 2023

Pakistan, IMF grapple for consensus to unlock critical funding

  • Finance ministry officials say deal expected by Feb. 9
  • Funds are needed to avoid defaulting on external debts

ISLAMABAD: Pakistan and the visiting International Monetary Fund mission are struggling to arrive at a consensus on fiscal adjustment plans, sources said on Monday, in talks aimed at unlocking critical funds needed for the ailing South Asian economy.

The mission has been in Islamabad since Jan. 31 to sort out the differences over fiscal policy that has stalled the release of more than $1 billion from $6.5 billion bailout package signed in 2019.

The IMF funding is crucial for the $350-billion economy facing a balance-of-payments crisis with foreign exchange reserves dipping to less than three weeks of import cover.

The two sides disagree on their data on the fiscal gap, two finance ministry officials with knowledge of the talks told Reuters.

The IMF says the primary deficit is 0.9% of GDP, or around 840 billion Pakistani rupees ($3.06 billion), but according to Islamabad it stands at 0.45%, or around 450 billion rupees ($1.64 billion), said the officials, who declined to be named as the talks were confidential.

"There is a clear difference in data," said one of them. They said Islamabad is expecting a deal by Feb. 9.

Observers say the funds are needed to avoid defaulting on external payment obligations, while the lender's green signal is vital for any other external funding.

The finance ministry and the IMF country representative did not respond to Reuters request for comments.

STUMBLING BLOCK

Pakistan's 2022-23 budget in June estimated the primacy deficit to be 0.2% of GDP and fiscal deficit 4.9% of GDP.

The country has already shifted back to a market-based exchange rate and hiked fuel prices - measures demanded by IMF. But analysts say the steps will increase crippling inflation, which is already up 27.5% year-on-year in January.

The big pile of energy sector debt - over 4 trillion Pakistani rupees ($14.55 billion), including 1.6 trillion in the gas sector- is another stumbling block in the talks, officials said.

They said Pakistan has submitted a plan to cut the debt in phases though price hikes and dividends from gas companies, but the IMF is demanding a clearer path forward.

Over 900 billion rupees in gas sector subsidies for FY2022-23 are also on the chopping block, they said, adding that Pakistan has agreed to withdraw export sector subsidies.

If issues are resolved, Pakistan will introduce a finance bill in parliament to generate revenue, like a one-off flood levy on luxury imports, windfall levy on banks and duties on cigarettes and carbonated drinks, as well as to cut expenditures and development funds.


Khan says current rulers have no plan, calls for elections for political stability

Updated 14 sec ago

Khan says current rulers have no plan, calls for elections for political stability

  • The South Asian country of 220 million has for months been embroiled in political, economic crises
  • The former prime minister says there is no ‘easy way’ to take the country out of this difficult situation

ISLAMABAD: Former prime minister Imran Khan on Sunday said the current rulers had no plan to steer Pakistan out of an economic crisis, once again calling for elections to ensure political stability in the South Asian country.

Khan, who was ousted in a no-trust vote in April last year, recently decided to kick off his election campaign by holding a rally at the historic Minar-e-Pakistan monument in Lahore, but he had to postpone the plan when police tried to arrest him after a district court in Islamabad issued his non-bailable arrest warrants in a graft case earlier this month.

The former premier praised the people of Lahore for coming out in large numbers to attend Saturday’s rally, with members of his Pakistan Tehreek-e-Insaf (PTI) party accusing authorities of arresting hundreds of supporters ahead of the public gathering.

Khan criticized the government of PM Shehbaz Sharif and the country’s military establishment for trying to keep him from coming to power again, questioning if they had any alternate plan to take country out of the present crisis.

“I ask Pakistan’s establishment that this is clear you have decided... we won’t let Imran Khan win. All this drama, election delay, the attack on my house, there is only one aim that we won’t let Imran Khan come to power,” he said.

“Fine, do not let [me] come to power, but tell [me] do you have any program to steer the country out of this destruction? Is there a roadmap? I challenge that the people sitting at the helm neither have the capability nor the will.”

The former premier said there was no “easy way” to take the country out of this difficult situation.

“Only someone with public mandate can make difficult decisions, someone who came through the vote of people, whom the people trust in,” he said.

“A party that would form government through public mandate, through the vote of public, that would be the first step. When a government would come for five years, then the people, business community would have the confidence that there is political stability.”

Khan, who blames his ouster on a United States-backed foreign conspiracy, has since been campaigning for nationwide snap elections in the country that are otherwise scheduled to be held by October.

In his bid to force nationwide snap polls, the former premier dissolved two provincial legislatures earlier this year and continues to pressure the government through frequent rallies.

The last couple of weeks also witnessed clashes between Khan supporters and the police as the law enforcers attempted to arrest the former premier, who faces dozens of cases with charges ranging from terrorism to sedition.


Incessant heavy rains in northwestern Pakistan leave 4 dead, 17 injured

Updated 38 min 2 sec ago

Incessant heavy rains in northwestern Pakistan leave 4 dead, 17 injured

  • Khyber Pakhtunkhwa’s disaster management authority says people died due to roof collapse
  • Heavy rains were also reported in Balochistan province where a woman from Harnai lost her life

PESHAWAR: Four people lost their lives while over a dozen were injured in rain-related incidents across Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province in the last 24 hours, a senior official at the Provincial Disaster Management Authority (PDMA) said on Saturday.

Monsoon rains and floods killed more than 1,700 people and submerged about a third of Pakistan’s territory last year while affecting the lives of 33 million people. According to official statistics, 309 individuals were killed in KP and 600,000 were displaced in several districts of the province.

“We have witnessed intermittent downpour during the last five days in KP, but continuous rains with greater intensity have taken place in the last 24 hours that left four people dead and 17 others wounded,” PDMA spokesperson Taimur Ali told Arab News on Saturday.

He said that women and children were among those hospitalized after suffering injuries as the roofs of their houses collapsed due to heavy rain.
Ali added that six houses had been damaged across three districts of the province.

He informed that most reports of casualties and damages were arriving from Mardan, South Waziristan, Peshawar, and Khyber districts.

Bilal Faizi, the spokesperson for Rescue 1122, said continuous rain over the last two days had prompted officials of his department to stay on high alert and take precautionary measures across the province.

“As per unofficial reports,” he continued, “six persons have died and more than 20 injured due to persistent rain showers in different parts of the province.”
Faizi said that those who were injured would get free medical treatment at district hospitals.

“The local administration will also provide relief items to families whose houses were damaged in the rains,” he added.

Apart from KP, heavy rains were also reported in different districts of the southwestern Balochistan province. According to PDMA officials, a woman belonging to district Harnai lost her life after the roof of her house collapsed due to the heavy downpour.

(With additional reporting by Saadullah Akhtar from Quetta.)


Balochistan administration to launch green bus transport service in Quetta

Updated 22 min 19 sec ago

Balochistan administration to launch green bus transport service in Quetta

  • The project will initially be implemented with eight buses to facilitate commuters in different parts of the city
  • Local transporters have announced to boycott the service, asking officials to first discuss all the routes with them

QUETTA: The provincial administration of Balochistan has decided to launch the first-ever green bus project in Quetta to provide quality transport services to citizens, said a senior official on Saturday.

Other provinces in the country have already implemented similar plans by introducing metro bus services in places like Karachi, Lahore, Rawalpindi, and Multan.

Quetta has had an old public transport system for the last three decades, with an estimated 550 carriers to serve a population of about three million. 

However, there are only seven routes for the buses, making it difficult for people to commute to different locations in the city without hassle.

“The government purchased eight fleet buses in 2021 to start the green bus service in Quetta,” said the provincial transport secretary, Dr. Muhammad Aslam Baloch, while speaking to Arab News. “However, the project could not be implemented due to some reasons. Now, we have decided to resume it under a public-private partnership program.”

“Four buses will cover the transport routes from the Railway Station to Sariab Custom, and four will commute from the Railway Station to Baleli, an outskirt neighborhood in Quetta,” he continued. “We have decided to start the service within the next three months.”

This picture shows old local buses parked in one of the neighborhoods of Quetta city in Pakistan on March 25, 2023. (AN Photo)

Local transporters have announced to boycott the green bus service in Quetta, criticizing the government for not first discussing the routes with local bus owners who, they said, were already running their buses in many areas of the city.

“We will not allow the implementation of the green bus service project in Quetta since the government should first decide all the routes [with us],” Saeed Ahmed Takari, information secretary of All Muttahida Bus Association Quetta, told Arab News. “The government should take the local bus association into confidence.”

Syed Ali Shah, a senior Quetta-based journalist, said the provincial authorities had allocated funds for the green bus service in Quetta two years ago while planning to procure 100 buses. Due to the congested streets of the city, however, the transport department only purchased eight vehicles.

“The government decided to start the project with eight buses,” he said. “But due to a lack of proper policy, the plan was not implemented and the buses were parked inside a government warehouse where they were also damaged due to bad weather conditions.”

Fahad Bin Waseem, a 30-year-old Quetta resident, said the project should be “implemented immediately” and the old buses must also be discarded.

“While the government is planning to start the project with eight buses, it should expand the new transport network across Quetta,” he told Arab News. 

“The provincial transport department should establish new bus stations in the city and separate roads for the green buses.”


Ex-PM Khan promises ‘largest rally’ in Lahore as authorities block roads with shipping containers

Updated 25 March 2023

Ex-PM Khan promises ‘largest rally’ in Lahore as authorities block roads with shipping containers

  • A senior leader of Khan’s party asks local authorities to remove the barriers since a court had allowed the PTI rally
  • PTI’s former National Assembly speaker urges international community to take notice of rights violations in Pakistan

ISLAMABAD: Pakistan’s former prime minister Imran Khan has vowed to hold the “largest rally” in the eastern city of Lahore on Saturday, as local authorities have placed shipping containers on different roads leading to the venue of his public gathering.

Khan, who was ousted from power in a parliamentary no-confidence vote last year in April, recently decided to kick off his election campaign by holding a rally at the historic Minar-e-Pakistan monument in Lahore.

However, he had to postpone the plan when a police contingent tried to arrest him after a district court in Islamabad issued his non-bailable arrest warrants in a graft case.

Subsequently, there were clashes outside his Lahore residence between the police and supporters of his Pakistan Tehreek-e-Insaf (PTI) party that lasted for about two days before a Pakistani court asked the law enforcement officials to stand down.

As the former prime minister prepared to hold the public rally on Saturday, his party officials complained that the police had arrested hundreds of activists in overnight raids to sabotage the power show.

“We will not back off under any circumstances,” Dawn newspaper quoted Khan as saying after he went to an anti-terrorism court in Lahore to get interim bail in three terrorism cases. “I am saying today that they [the government] will see the largest rally at Minar-e-Pakistan in the country’s history.”

Meanwhile, local news channels widely reported that authorities in Lahore had set up shipping containers at the entry and exit points of the city to prevent PTI activists from nearby areas from attending the rally.

Shah Mahmood Qureshi, a top leader of Khan’s political faction, said there was no justification for the authorities to block the roads since a court had allowed his party to hold the gathering.

“The police and the administration are requested to remove these containers,” he said while speaking to the media.

Qureshi maintained such measures were not only undemocratic but also indicated that the government was afraid of Khan.

Pakistan’s Geo News also reported that the former speaker of the National Assembly and a leader of Khan’s party, Asad Qaiser, sent a letter to various global forums, in which he asked the international community to take notice of the present political situation in his country.

Qaiser said grave human rights violations were carried out in Pakistan against the supporters of the PTI party, adding that many of these people had been “abducted.”

He also maintained that “fake criminal complaints” had been filed against Khan to get him disqualified from politics.

However, according to the caretaker Punjab information minister, Amir Mir, the authorities are not preventing anyone from going to the venue of the PTI rally.

He told Geo News that the shipping containers on the road were only meant to ensure the protection of people.


Man arrested in Pakistan’s northwest for helping Afghan nationals illegally obtain citizenship documents

Updated 25 March 2023

Man arrested in Pakistan’s northwest for helping Afghan nationals illegally obtain citizenship documents

  • Pakistan has more than 1.4 million registered Afghans who were forced to flee their homes due to decades of conflict
  • Federal Investigation Agency also arrested Afghan nationals and a Pakistani official in Bannu earlier this week

PESHAWAR: The Federal Investigation Agency (FIA) arrested an individual on Friday who is suspected of helping Afghan nationals illegally obtain Pakistan’s citizenship documents in the district of Bannu in the northwestern part of the country.

According to the United Nations Refugee Agency, Pakistan has more than 1.4 million registered Afghans who were forced to flee their homes due to decades of war and factional fighting in their country. A significant number of Afghan nationals also entered Pakistan in recent months after the Taliban seized control of the neighboring state in August 2021.

While the government initially offered amnesty to those Afghans who came to Pakistan on valid visas but prolonged their stay after their travel permits expired, the official relaxation ended last December before the authorities started cracking down on all illegal migrants and launched the deportation process.

“The accused was involved in providing computerized national identity cards [CNICs], domiciles, passports and other documents to Afghan nationals,” Abdul Ghafoor, a public relations official with the FIA, told Arab News. “The culprit took thousands of rupees from Afghan citizens before facilitating them to get these documents.”

The agency also issued a press release on March 22, stating that its Bannu circle had arrested an Afghan national, Muhammad Rauf, from a local hotel where he was staying to obtain Pakistan’s CNIC and passport.

The official statement said the accused had paid Rs650,000 ($2,296) to an agent to obtain these documents, adding that the token numbers of the passport and CNIC were also recovered from him.

After further investigation, the FIA arrested the assistant director of the passport office in Bannu, Siddique Akbar, who was accused of illegally providing Pakistan’s citizenship documents to Afghans.

Ghafoor confirmed that the authorities were probing the matter, adding they would soon share more information with the media.

Meanwhile, Saif Ullah Muhib Kakakhel, an advocate at the Peshawar High Court, told Arab News that cases related to Afghan nationals trying to obtain illegal documents in Pakistan were on the rise.

“Sometimes, officials are involved in such cases who take huge amounts of bribes to provide Pakistani documents to Afghans,” he said.

Kakakhel maintained most Afghan nationals even faced issues while opening a bank account or securing a legal property, though several legal ways were available to them.

“It is easy to stop the illegal ways of obtaining documents by immigrants,” he added, “though it will require making legal ways easier and more accessible by the government.”