Pakistan’s finance minister says no risk of default as government works on federal budget

Pakistani Finance Minister Ishaq Dar (C) gives a press conference in Islamabad on July 11, 2017. (AFP/File)
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Updated 25 May 2023

Pakistan’s finance minister says no risk of default as government works on federal budget

  • Senator Ishaq Dar calls it ‘unfortunate’ the 9th IMF review began with a substantial delay of three months
  • He says his team has completed all the technical work required for the resumption of the $7 billion loan facility

ISLAMABAD: Federal Minister for Finance and Revenue Senator Ishaq Dar on Wednesday ruled out the possibility of a default while discussing budget proposals with representatives of local business community during a ceremony held in the federal capital.

Pakistan is witnessing a serious economic turmoil amid declining forex reserves and rapidly depreciating national currency. The government has held several rounds of talks with the International Monetary Fund (IMF) to revive a stalled loan program amounting to $7 billion. However, it has not managed to secure external financing from the international lender despite making an effort to implement all its conditions.

The situation has led to fears of a default on the country’s international financing obligations as the IMF program nears its expiry on June 30.

Addressing the ceremony, the finance minister said Pakistan faced similar threat of default in 2013, adding that no international financial institution or multilateral donor was not willing to provide it external assistance back then.

“If we get together and face this challenge collectively, which is what is happening now, we will come out of [the challenging economic situation],” he told the gathering.

“We are not in a danger of default,” he continued. “Pakistan will not default.”

Dar said his team had completed all the technical work required by the IMF under the 9th review of the loan program.

“It is unfortunate that this review started with a delay of three months,” he said. “Its understanding, which existed before I [took over as finance minister], was that it would begin in November. But it actually started on January 31.”

He added the technical review was over on February 9.

“We have completed all prior actions,” he continued while referring to the IMF conditions required for the resumption of the loan facility.

The finance minister said Pakistan had only completed one IMF program in the past between 2013 and 2016 which was done while he was managing the finance ministry.

He added it was his “sincere effort” to complete this IMF program, though the time was too short for that.

Dar asked the business community for its proposals and put them down in writing, adding the government would facilitate local companies in every possible way.


Italy ends search after Feb 26 migrant shipwreck that killed Pakistanis among 94 people 

Updated 10 sec ago

Italy ends search after Feb 26 migrant shipwreck that killed Pakistanis among 94 people 

  • The wooden migrant boat had set off from Western Turkey with around 180 people aboard 
  • Italian authorities, however, say they would reactivate the search if any bodies were sighted 

ROME: Italian authorities on Tuesday said they were ending the search for bodies after a deadly shipwreck on Feb. 26 off the southern town of Cutro that claimed at least 94 lives. 

The wooden migrant boat had set off from Western Turkey with around 180 people aboard, but smashed apart in stormy weather off the shore of Calabria in Italy's southern toe. 

Eighty people survived the disaster, suggesting around six people might still be missing. 

The government provincial office in the nearby city of Crotone said it was shutting down a search coordination centre, but would reactivate the unit if any more bodies were sighted. 

It said 48 of the recovered bodies were flown to Afghanistan for burial. Other bodies were repatriated to Tunisia, Iran, Palestine and Pakistan, while some were buried in Finland, Germany and Italy. 


Top Punjab police official denies mistreatment of ex-PM Khan’s female party supporters in prison

Updated 37 min 2 sec ago

Top Punjab police official denies mistreatment of ex-PM Khan’s female party supporters in prison

  • Punjab Inspector General Police Usman Anwar criticizes individuals for ‘lying about their own state institutions’
  • Khan accused the government of mistreating female PTI supporters who were taken into custody after his arrest

ISLAMABAD: The top Punjab police official on Tuesday denied any mistreatment of female prisoners belonging to former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party, stating that only women police employees were allowed to interrogate them.

The statement was issued after Khan accused the government of mistreating female PTI supporters who were taken into custody by law enforcement agencies in the wake of violent protests that followed his arrest on corruption charges on May 9.

Several social media users also raised similar concerns, attempting to depict police high-handedness by sharing graphic images.

In response to the allegations, Punjab Inspector General Police Usman Anwar criticized individuals for “lying about their own state institutions.”

He presented images that had been circulated on various social media platforms, maintaining that they had been doctored.

“The state is responsible, and the country knows what to do,” he said during a news conference in Lahore. “We are going to protect our institutions and installations, but we are not going to compromise on human rights, and we will adhere to whatever is written in the UN Declaration of Human Rights.”

Addressing the condition of the Kot Lakhpat jail in Lahore, he added, “There are lady doctors, female gynecologists, and psychologists in the jail. There are 150 cameras installed [at the facility]. The portion for women is completely separate.”

The IG police stated that only female officials were allowed to interrogate women inmates.

The caretaker administration of the Punjab province recently formed a committee that included SSP Investigation Dr. Anoosh Masood and Lahore Deputy Commissioner Rafia Haider to visit the jail and assess the treatment of PTI prisoners.

The two officials interacted with PTI supporters at the prison and reported that they were being treated well.

They also affirmed that no male staff member at the jail was allowed to enter the section designated for female inmates.


Global Islamic finance company AAOIFI to work with Pakistan to develop Shariah-compliant capital market

Updated 30 May 2023

Global Islamic finance company AAOIFI to work with Pakistan to develop Shariah-compliant capital market

  • Development comes day after Pakistan organized an inaugural Islamic Capital Markets Conference
  • The country has second-largest Muslim population in the world with very low banking penetration

ISLAMABAD: A leading Bahrain-based international non-profit, aimed at developing the global Islamic finance industry, has showed interest in enhancing collaboration with Pakistan on promoting the Islamic capital market in the South Asian country, the Pakistani finance ministry said on Tuesday, a day after the inaugural Islamic Capital Markets (ICM) Conference in Islamabad.

The conference was jointly organized by the Securities and Exchange Commission of Pakistan (SECP) and the Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI), the Bahraini firm responsible for the development and issuance of standards in the areas of Shariah, accounting, auditing, ethics and governance for international Islamic finance globally.

On Tuesday, Sheikh Ebrahim Bin Khalifa Al-Khalifa, who is the chairman of the AAOIFI Board of Trustees, held a meeting with Pakistan's Finance Minister Ishaq Dar in the Pakistani capital and exchanged views with him on mutual collaboration in the field of Islamic finance.

The two figures discussed "enhancing mutual collaboration with Pakistan in social welfare, business & financial sectors," the Pakistani finance ministry said in a statement.

"And promoting Islamic finance industry and capital market in Pakistan."

Pakistan has the second-largest Muslim population in the world with very low banking penetration. The government seeks to increase financial inclusion through promoting Islamic finance, as part of the National Financial Inclusion Strategy. Only 21 percent of the adult population had a bank account in 2017, with 13 percent of adults citing religious reasons for not having them, according to the World Bank.

The SECP and AAOIFI also signed an agreement at the conference for joint cooperation in areas of “common interest” that would support the development of the Islamic banking and finance industry.

In 2021, the government set a target of increasing the share of Shariah-compliant instruments in government securities to at least 10 percent by the end of 2022-2023. There are 22 Islamic banking institutions currently operating across the country.

The assets of Pakistan’s Islamic banking industry had posted a year-on-year growth of 29 percent in fiscal year 2022, Dar said as he addressed the ICM Conference on Monday.


Ex-PM Khan sends defamation notice to health minister after being accused of substance use

Updated 30 May 2023

Ex-PM Khan sends defamation notice to health minister after being accused of substance use

  • The former prime minister demands unconditional apology in 15 days while serving a Rs10 billion legal notice
  • The health minister recently shared Khan’s medical report with journalists while questioning his mental stability

ISLAMABAD: Former prime minister Imran Khan on Tuesday sent a Rs10 billion ($35.05 million) legal notice to Pakistan’s health minister Abdul Qadir Patel for making “false, disparaging and malicious” allegations in a recent news conference wherein he accused the ex-premier of substance use.

Last week, the health minister publicized Khan’s confidential medical report, allegedly prepared while he was taken into custody earlier this month, saying traces of alcohol and illegal drugs were found in the former PM’s urine sample. He also rebutted that Khan had endured a fracture to his leg after an apparent assassination attempt on him last November when he received gunshot wounds while leading an anti-government rally.

The minister shared Khan’s medical report while calling it a “public document” and maintained it also raised questions about the ex-premier’s mental stability.

“We act for and on behalf of Mr. Imran Ahmed Khan Niazi … who has instructed us to serve upon you the following legal notice under Section 8 of the Defamation Ordinance, 2002 … on account of dissemination and circulation of wrongful, baseless, false, misleading, erroneous, malicious and defamatory information/facts made against Our Client by you vide your Press Conference, dated 26.05.2023,” said the notice Khan’s legal team sent Patel.

The presser, as per the notice, was watched in Pakistan as well as all over the world through electronic media channels, YouTube, and various other social media platforms, while its details were also published in national and international newspapers.

The notice asked the health minister to retract his statements, tender unconditional apology, accept that he had misstated information, and pay Rs10 billion for defaming the former prime minister. It asked the minister to take these actions within 15 days, warning him that Khan would otherwise initiate legal proceedings against Patel.

It may be recalled that Khan was arrested by paramilitary Rangers on the instructions of Pakistan’s anti-graft body on May 9 in a corruption reference amounting to £190 million. He remained in the custody of authorities until his arrest and detention were declared “illegal” by the country’s judiciary that ordered his release.


Pakistan’s Khan gets bail on new charge of abetting violence — lawyer

Updated 30 May 2023

Pakistan’s Khan gets bail on new charge of abetting violence — lawyer

  • Ex-PM Khan’s May 9 arrest sparked violent protests, which saw military facilities ransacked
  • Khan has appealed for talks to end Pakistan’s political crisis, a demand rejected by the government

LAHORE: Pakistani former prime minister Imran Khan was on Tuesday granted bail on a new charge of abetting violence against the military by his protesting supporters after he was arrested and detained on May 9 in a corruption case, his lawyer said.

The embattled Khan, who says the corruption charges have been concocted, is embroiled in a confrontation with the powerful military, which has ruled Pakistan directly or overseen civilian governments throughout its history.

His May 9 arrest sparked widespread protests by his supporters who ransacked various military facilities, raising new worries about the stability of the nuclear-armed country as it struggles with its worst economic crisis in decades.

Khan, 70, was later freed on the orders of a court.

His lawyer, Intezar Hussain Punjotha, said an anti-terrorism court confirmed the bail on the new charge after the former premier appeared before it and submitted surety bonds.

Khan has denied the charge saying he was in detention when the violence took place.

The bail until June 2 on the new charge means he will not be detained on that charge.

The former international cricket star became prime minister in 2018 with the tacit support of the military, though both sides denied it at the time.

He later fell out with generals and was ousted as prime minister after losing a confidence vote in 2022.

Khan has since then been campaigning for a snap election, with rallies with his supporters across the country, but the prime minister who replaced him, Shahbaz Sharif, has rejected the call for an election before it is due late this year.

The turmoil has exacerbated Pakistan’s economic crisis with inflation at record highs, growth is anaemic amid fears of a sovereign default on external debts unless the International Monetary Fund (IMF) unlocks delayed disbursements.

Dozens of Khan’s supporters have been handed over to army authorities for trial in military courts.

A team of investigators looking into the May 9 violence summoned Khan on Tuesday for questioning but Punjotha said a member of his legal team would go instead.

Khan has appealed for talks to end the crisis. The government has rejected his call.