Saudi Arabia to deposit $2 billion in Pakistani central bank before IMF bailout — defense minister 

Pakistani Defense Minister Khawaja Muhammad Asif speaks during an interview with Arab News at the Ministry Of Defense in Islamabad on May 25, 2023. (AN Photo)
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Updated 27 May 2023
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Saudi Arabia to deposit $2 billion in Pakistani central bank before IMF bailout — defense minister 

  • Khawaja Asif promises to place all resources of Pakistan at the Kingdom’s disposal for its safety and security 
  • Says his party is seeking ‘judicial remedy’ to get ex-PM Nawaz Sharif’s conviction overturned before his return 

ISLAMABAD: Pakistan’s Defense Minister Khawaja Asif said on Thursday that Saudi Arabia would be depositing funds worth $2 billion in the Pakistani central bank before the revival of a stalled $6.5 billion International Monetary Fund (IMF) bailout program, amid desperate attempts by the South Asian country to secure external financing to avoid a default. 

Pakistan, a nation of over 220 million, has been facing an economic crisis for the last several months, with soaring inflation, a depreciating currency and critically low foreign exchange reserves. To avert the possibility of a default on its international obligations, the government has been striving for the resumption of the IMF loan program, stalled since November last year. 

In March, the IMF asked Pakistan to secure financing assurances from friendly states and multilateral donors before it could release $1.1 billion tranche, after which China rolled over its $2 billion loan to the cash-strapped South Asian nation. This was followed by a $2 billion pledge by Saudi Arabia and the UAE promising $1 billion support to Islamabad. 

However, the global lender has yet to sanction the release of funds. To keep the frail economy afloat, the South Asian country is facing the daunting task of securing the crucial IMF funds ahead of its budget for the next fiscal year on June 9. 

“The IMF asked them (Saudi Arabia) to give that commitment to them. They (Saudi Arabia) have already given that, that means that they will pay [the funds to Pakistan],” Asif told Arab News in an exclusive interview on Thursday. 

“I think, if I am not wrong, they will be depositing that money ($2 billion) before the IMF program. The IMF is not giving us something, not a big amount. It is just a program which we have to complete till 30th of June.” 

Pakistan’s IMF bailout program is set to expire on June 30, which has prompted the government to look for other options to avert a sovereign default. 

“We are receiving help from UAE, Saudi Arabia, China and some other sources also,” Asif said. “We hope to, God willing, come out of this economic wilderness very soon.” 

Earlier this year, the defense minister said in one of his statements that Pakistan had already defaulted, stirring a debate and fueling commotion within the country’s business community. 

“My use of the word default perhaps was not very accurate or very appropriate, but the fact remains that we are in a dire financial situation, we were in dire financial situation and we are still not out of the woods,” he replied, when asked about his statement. 

Asif said he was “just trying to explain” by using the word default that Pakistan was borrowing money to service its loans. 

During the interview, the minister lauded Saudi Arabia for its assistance to Pakistan on several occasions and expressed profound regard for the Saudi royal family. 

“Saudi Arabia, the land obviously, is the ultimate sacredness for us, the two holy cities. And our relationship with Saudi Arabia has a long history of brotherhood and respect and love for each other,” he said. 

“I have no words to explain that the feelings we have for Saudi Arabia and the ruling family of Saudi Arabia. They have helped us at very crucial junctures of our history in last 75 years and we are indebted to them.” 

He vowed to place all resources of Pakistan at the Kingdom’s disposal for its protection and safety. 

“And our forces or our resources, whatever resources we have mostly defense related, they will always be at the disposal of the Kingdom of Saudi Arabia for their defense, their protection,” Asif said. 

“Whatever worth we are, we will always stand by the Kingdom of Saudi Arabia.” 

Arab News also questioned Asif about the return of his Pakistan Muslim League-Nawaz (PML-N) party’s supremo and three-time former prime minister, Nawaz Sharif, to Pakistan. To which, Asif said said they were following a legal way to get his conviction in corruption cases overturned before his return to the country from London. 

Sharif, who is the elder brother of sitting Pakistan PM Shehbaz Sharif, was restricted for life from holding any political office by Pakistan’s top court in April 2018, followed by his conviction in a corruption case the same year. The ex-premier, who left for London in 2019 after securing bail on medical grounds and has since not returned, says the cases against him were politically motivated. 

“He will be returning soon. There are some legal hurdles, the sentence he received during 2017-18 when engineering to bring Imran Khan to power was taking place,” Asif said. “He [Sharif] had to be replaced and sentenced, that was a plan.” 

The defense minister said the “circumstances” forced Sharif to stay in exile in London. 

“He is still suffering, and he is in exile not because of his own choice,” he said, adding that Sharif was dismissed on the “most frivolous” charge of not receiving money from his son’s company. 

“We have to secure his position legally before he returns. I think that will happen soon. We are following the legal path to secure that, nothing, something which is beyond legal realm.” 

The minister said they were working on a legal strategy to get Sharif’s conviction overturned from the Supreme Court. 

“We are seeking a judicial remedy to that,” he said, adding that they would be filing a petition for it in the Supreme Court. “It’ll happen. You’ll come to know about it.” 


Pakistani families urge President Raisi to release cargo crew detained in Iran as he visits Karachi

Updated 6 sec ago
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Pakistani families urge President Raisi to release cargo crew detained in Iran as he visits Karachi

  • Jalal Ahmed, the cargo boat captain, was on his way from Dubai to Somalia when he was caught by Iran four years ago
  • The families of detained Pakistanis say they have not been informed of the charges against Ahmed, others on the boat

KARACHI: Families of Pakistani crew members aboard a cargo boat, which set sail from Dubai to Somalia but was detained by Iran four years ago, appealed to Iranian President Ebrahim Raisi on Tuesday for their release, citing a lack of cooperation from Iranian authorities.
Raisi, who arrived in Pakistan on Monday for a three-day visit, flew to Karachi today after a brief stopover in Lahore. During his stay in Karachi, the Iranian president is slated to meet with government officials and businessmen.
The family of Jalal Ahmed, the captain of the cargo boat, along with others, staged a demonstration in front of the Karachi Press Club to highlight the difficulties they have faced in securing the release of their loved ones, who have been incarcerated in Iran’s Minab city for the past four years.
“We have come here because my brother is imprisoned in the city of Minab in Iran,” Gul Saba, Ahmed’s sister, told Arab News while urging Pakistan’s President Asif Ali Zardari and Prime Minister Shahbaz Sharif to intervene in the matter to secure the release of the detained crew members.
“We also appeal to Iran’s President Ebrahim Raisi to release our brother and the other ten [people] who accompanied him,” she continued.
Saba added her 45-year-old brother, who has three children, was transporting cargo from Dubai to Somalia when his ship was stopped by the Iranian authorities.
She said her family members had traveled to Iran, but there had been no response from Iranian authorities.
“No statement has come [from Iranian officials] regarding why [the Pakistani crew members] have been imprisoned,” she added. “There may be no crime involved as their cargo ship was legal.”
Arab News could not independently verify the claims made by the affected family.
Jawad Jalal, Ahmed’s 10-year-old son, also participated in the protest along with his mother, Sadia Ahmed, and aunt Saba.
“When I was six, my father was imprisoned in Iran,” he said while reminiscing how Ahmed escorted him to school before being detained.
“He should be released so he can drop me off at school once again,” he continued, holding a placard emblazoned with the demand for his father’s release from Iranian prison.


Pakistan says will reconstitute panel on ‘enforced disappearances’ after US report points out rights abuses

Updated 22 min 42 sec ago
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Pakistan says will reconstitute panel on ‘enforced disappearances’ after US report points out rights abuses

  • Pakistan has long been plagued by disappearances of political workers, rights activists and professionals
  • Families say people picked up by security forces often disappear for years, security agencies deny involvement

ISLAMABAD: Pakistan will be reconstituting a committee to address the longstanding issue of “enforced disappearances,” Law Minister Azam Nazeer Tarar said on Tuesday, hours after the release of a US report highlighting rights abuses in the South Asian country.

Over the years, hundreds of political workers, rights activists and professionals have gone missing in Pakistan, particularly in the northwestern Khyber Pakhtunkhwa and the southwestern Balochistan provinces, where militants have waged a war against the state for decades.

Families say people picked up by security forces often disappear for years, and are sometimes found dead, with no official explanation. Pakistani security agencies deny involvement in such disappearances.

Speaking at a press conference in Islamabad, Tarar noted the former Pakistan Democratic Movement (PDM) government had formed a committee on the issue with the representation of all stakeholders.

“Now the work is being initiated on this again on the directives of the prime minister. A committee is going to be reconstituted, there will be parliamentary presence in that committee,” he said. “There is no lack of seriousness on the government’s part to resolve this issue.”

The minister said they visited the Quetta, the capital of Balochistan province, met with stakeholders there as well as reviewed reports on the matter from the tenure of the caretaker government.

Tarar said 10,200 cases of “missing persons” had been registered in the Commission of Inquiry on Enforced Disappearances (CIoED), out of which around 8,000 cases had been addressed.

He, however, said the issued could not be resolved “overnight,” adding that there had been no “concrete evidence” of the involvement of state agencies in these cases.

The law minister’s comments came hours after a report released by the US State Department said Pakistan’s government “rarely” took steps to identify and punish officials who may have been involved in rights abuses in 2023, pointing out incidents of extrajudicial killings, torture, enforced disappearances, violence against journalists and restrictions on media freedom.

“The government rarely took credible steps to identify and punish officials who may have committed human rights abuses,” the State Department said, pointing out Pakistan last year had seen incidents of restrictions on freedom of expression and media, violence against journalists, unjustified arrests, disappearances of journalists, censorship and criminal defamation laws.

Pakistan’s actions in recent months to restrict Internet and mobile services throughout the country, especially on days when elections are held, have invited criticism from rights organizations and Washington.

The interior ministry last week confirmed it had banned social media platform X in February to protect national security, maintain public order, and preserve the country’s “integrity.”

The South Asian country has seen an uptick in violence, mainly suicide attacks, since November 2022 when a fragile truce between militants and the state broke down.

Pakistan has since then carried out military operations against the Pakistani Taliban or the Tehreek-e-Taliban Pakistan (TTP) and a Baloch separatist militant organization, the Balochistan Liberation Army (BLA) in the country’s two western provinces that border Afghanistan.


Saudi Arabia to invest $5 billion to boost Pakistan’s economy – planning minister

Updated 23 April 2024
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Saudi Arabia to invest $5 billion to boost Pakistan’s economy – planning minister

  • Ahsan Iqbal says the national economy can reach a $3 trillion mark by 2047 with 9% growth rate
  • He informs a summit the government plans to maximize investment from UAE, Kuwait and Qatar

KARACHI: Federal Minister for Planning and Development Ahsan Iqbal announced on Tuesday Saudi Arabia was expected to invest $5 billion in Pakistan, adding the administration in Islamabad was also trying to secure investment from other Gulf states to strengthen the national economy.

Amid economic challenges, Pakistan has been actively trying to attract foreign investment and established the Special Investment Facilitation Council (SIFC), a civil-military hybrid body, last year for the purpose.

The SIFC was created to serve as a single window for all foreign investment activities, offering a simplified and more direct route for international investors interested in various sectors such as mining, agriculture, energy, information technology and defense manufacturing.

The body was tasked to address procedural bottlenecks, accelerate policy reforms and create a more favorable investment climate, with a special focus on Gulf economies.

“Saudi Arabia will soon invest $5 billion in Pakistan and in this regard, Prime Minister Shehbaz Sharif will soon visit Saudi Arabia, followed by an expected visit of the Saudi Crown Prince Mohammed bin Salman to Pakistan,” the Planning Commission of Pakistan quoted the minister as saying in an official statement.

Iqbal issued the statement while speaking at a business summit in Islamabad.

He mentioned that discussions were ongoing with the United Arab Emirates, Kuwait and Qatar to maximize investment in Pakistan.

The planning minister said if Pakistan managed to increase its exports to $100 billion in the next seven to eight years, it would achieve a significant economic takeoff.

He maintained that Pakistan could become a $2 trillion economy by 2047 with 7 percent growth, adding it could also reach a $3 trillion mark by maintaining 9 percent growth.
 


Pakistan, Saudi Arabia and Uzbekistan ink ‘landmark’ agreement to promote trade, investment

Updated 23 April 2024
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Pakistan, Saudi Arabia and Uzbekistan ink ‘landmark’ agreement to promote trade, investment

  • As per agreement, Uzbekistan’s largest bank and a Pakistani firm will support investors in all three countries
  • Partnership to attract foreign investment particularly in key sectors of energy, infrastructure and agriculture

ISLAMABAD: Pakistan, Saudi Arabia and Uzbekistan have signed a “landmark” partnership agreement to boost economic cooperation and create new opportunities for investors in the region, Pakistan’s state-run television reported on Tuesday.

As per the terms of the agreement, Uzbekistan’s largest bank Ansher Capital will work closely with KASB Securities Limited (KASB), a leading Pakistani stock and commodity brokerage firm, to provide financial advisory and corporate finance services to investors in all three countries, the state media said. 

Both firms will support investors and traders in Pakistan, Uzbekistan and Saudi Arabia by providing expert guidance on navigating financial markets, the Pakistan Television (PTV) said. 

“In a significant development, Uzbekistan, Pakistan, and Saudi Arabia have signed a landmark partnership agreement aimed at promoting investment and trade between the three countries,” PTV said. 

“The partnership is expected to expand the market and attract foreign investment, particularly in key sectors such as energy, infrastructure, and agriculture.”

The report said that the agreement is also expected to strengthen trade ties between the three countries, with a focus on increasing trade volumes and promoting economic integration. 

“The partnership will enable businesses to tap into new markets and access new investment opportunities, creating jobs and driving economic growth,” PTV said.

Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as the top destination for remittances to the cash-strapped South Asian country.

Saudi Foreign Minister Prince Faisal bin Farhan arrived in Pakistan last week for a two-day visit aimed at strengthening bilateral economic cooperation and pushing forward previously agreed investment deals. Pakistan has said it pitched investment projects worth $30 billion to Riyadh during Prince Faisal’s visit.

Islamabad has sought trade and economic partnerships with bilateral partners and allies as it seeks to navigate a macroeconomic crisis that has seen its reserves plummet to historic lows and its currency weaken significantly. 


Pakistan’s finance minister says new IMF loan agreement targeted for early July

Updated 23 April 2024
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Pakistan’s finance minister says new IMF loan agreement targeted for early July

  • The quantum and duration of new loan is still not clear, though the government wants at least a three-year program
  • Muhammad Aurangzeb says the modalities of the new loan will be thrashed out with an IMF delegation next month

ISLAMABAD: Pakistan’s finance minister Muhammad Aurangzeb said on Tuesday the country planned to discuss the contours of a new loan program with an International Monetary Fund (IMF) delegation next month while hoping to reach a staff-level agreement with the global lender by early July.

Pakistan secured a $3 billion IMF bailout last year to avert a sovereign default and hopes to receive the final tranche later this month. However, the government wants a fresh IMF loan since the country continues to face tough economic challenges and plans to implement structural reforms.

“We are still hoping that we can get into a staff-level agreement by the time June is done or early July so that we can move on,” the finance minister said while addressing a news conference.

He informed he had good discussions with IMF and World Bank officials during the spring meetings held by both international lending organizations in Washington.

Aurangzeb maintained it was not right to say that the IMF was imposing strict conditions on Pakistan since the country needed to carry out reforms on its own to strengthen its economy.

“This is Pakistan’s program which is helped, supported, assisted by the fund,” he said. “This is how we have to see it since this is the way ownership will come.”

He maintained the country’s foreign reserves were increasing and would reach about $10 billion by the end of June this year well before the new IMF program.

“Once the final tranche comes from the IMF, end of this week, we will be over $9 billion,” he told the media. “By the time we end June, we will be anywhere between $9-10 billion, which is going to be equivalent to two months of import cover.”

The finance minister noted the country had made progress since its foreign reserves dipped to nearly $3.4 billion last year.

He said the stock market was also hitting all-time highs and foreign buyers were entering the market.

“The gross domestic product growth is expected to be at 2.6 percent in the current fiscal year,” he said, adding the government was taking steps to attract foreign investment and keep the current account and fiscal deficits within reasonable limits.

“The current account deficit has been reduced to $1 billion after a 74 percent reduction in FY24,” the minister said, adding the inflation was expected to remain at 24 percent during the ongoing fiscal year, while the trade deficit had been reduced to $17 billion following a 24.9 percent decrease.

He said the quantum and duration of the new IMF program was yet not clear, though the government wanted to secure at least a three-year loan package.

Pakistan and IMF have said they are already in discussions for the new loan.

Aurangzeb said structural reforms carried out by the government include increasing the government’s tax revenue-to-GDP ratio to 13 percent to 14 percent in next two or three years from the current level of around 9 percent, reducing losses of state-owned enterprises through their privatization, and better management of the debt-laden energy sector.

With input from Reuters