As IMF program nears its end, Pakistan’s finance minister reiterates country won’t default 

Pakistan’s Finance Minister Ishaq Dar speaks during a press conference in Islamabad on February 10, 2023. (AFP/File)
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Updated 03 June 2023
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As IMF program nears its end, Pakistan’s finance minister reiterates country won’t default 

  • Finance Minister Ishaq Dar says despite having external debts, Pakistan has assets worth billions of dollars 
  • People ‘fond’ of predicting the country would default within two, three months should be ashamed, he adds 

ISLAMABAD: Finance Minister Ishaq Dar reiterated on Saturday that Pakistan would not default despite the economic challenges it was facing, adding the government would come up with new ideas in the weeks to come to steer the country out of the economic crisis. 

The South Asian country has for months been struggling with an acute balance-of-payment crisis, with inflation hovering at a record high, currency depreciating fast and foreign exchange reserves at critically low levels. 

Pakistan is making desperate attempts for the revival of a $6.5 billion International Monetary Fund (IMF) program that would release a $1.1 billion bailout tranche. The installment has been pending since November and the program is due to expire on June 30, with the government expected to present the federal budget next week. 

The stalemate has raised concerns that the country may default on its international financial obligations without the IMF funding. But Dar, in a meeting with a business delegation in Islamabad, assured that Pakistan, as a sovereign country, had assets worth billions of dollars. 

“If we have $100 billion in external debts, we also have assets, and one of our assets, the gas infrastructure, alone costs $40 to $50 billion, which is 50 percent of the debt,” he said. 

“No one is saying internationally that Pakistan will default, only some pseudo-intellectuals are saying that. In fact, the MD [managing director] of the IMF issued a statement a few weeks back that Pakistan will not default. Their broad discussions center around how is Pakistan surviving.” 

Dar said his government would try to come up with new ideas to steer the country out of the present crisis. 

“Our main purpose today is just to reassure you, that we will be coming out of [this crisis] and come up with new ideas in the weeks to come,” he said. 

“There will be the budget and after that, we will also do things for Pakistan’s long-term betterment.” 

Referring to statements by ex-finance czar Miftah Ismail about the country moving toward bankruptcy, Dar said “some people were fond of” predicting dates when the country would default. 

“They say the country would default in two to three months. They should be ashamed of themselves,” he added. 


Pakistan, Egypt among countries who pay most in surcharges to IMF— report 

Updated 24 April 2024
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Pakistan, Egypt among countries who pay most in surcharges to IMF— report 

  • Indebted member countries paid about $6.4 billion in surcharges between 2020-2023, says report by US think tanks 
  • Surcharges do not hasten repayment, instead punish countries already struggling with liquidity constraints, critics say

Countries, mostly middle and lower-income, have been burdened by surcharges on top of interest payments on their borrowings from the International Monetary Fund (IMF), widening global inequities, according to a report by US think tanks. 

WHY IT’S IMPORTANT

Indebted member countries paid about $6.4 billion in surcharges between 2020-2023, the report from Boston University’s Global Development Policy Center and Columbia University’s Initiative for Policy Dialogue released on Tuesday showed.
And the number of countries paying these surcharges has more than doubled in the last four years.
The IMF is expected to charge an estimated $9.8 billion in surcharges in the next five years, according to an earlier report by the Center for Economic and Policy Research.
Critics of the policy argue that surcharges do not hasten repayment and instead punish countries already struggling with liquidity constraints, increase the risk of debt distress and divert scarce resources that could be used to boost the struggling economies.
BY THE NUMBERS
Countries such as Ukraine, Egypt, Argentina, Barbados and Pakistan pay the most in surcharges, the report showed, accounting for 90 percent of the IMF’s surcharge revenues.
These surcharges, levied on top of the fund’s increasingly steeper basic rate, are IMF’s single largest source of revenue, accounting for 50 percent of total revenue in 2023.
KEY QUOTES
“IMF surcharges are inherently pro-cyclical as they increase debt service payments when a borrowing country is most need of emergency financing,” Global Development Policy Center’s director Kevin Gallagher said.
“Increasing surcharges and global shocks are compounding the economic pressure on vulnerable countries.”
CONTEXT
Data published by the Institute of International Finance earlier this year showed global debt levels hit a record of $313 trillion in 2023, while the debt-to-GDP ratio — a reading indicating a country’s ability to pay back debts — across emerging economies also scaled fresh peaks.
IMF shareholders agreed last week on the importance of addressing challenges faced by low-income countries, Managing Director Kristalina Georgieva said on Friday.


ICC names Pakistan’s Sana Mir as Women’s T20 World Cup Qualifier ambassador

Updated 24 April 2024
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ICC names Pakistan’s Sana Mir as Women’s T20 World Cup Qualifier ambassador

  • Sana Mir led Pakistan in 137 of 226 international matches she played during her career
  • Mir says will guide teams and players on how to deal with pressure in the tournament

ISLAMABAD: The International Cricket Council (ICC) on Wednesday named Pakistan’s former iconic cricketer Sana Mir as its ambassador for the upcoming Women’s T20 World Cup Qualifier tournament. 

Former skipper Mir, considered widely as Pakistan’s best woman cricketer to date, will keep a keen eye on the tournament which would see 10 women’s teams battle it out for two spots at the ICC Women’s T20 World Cup 2024. 

The first four matches of the tournament will take place tomorrow, Thursday, which is scheduled to go on till May 7. 

The 10 teams have been divided into two groups of five, with the top two from each group entering the semifinals. The winning semifinalists confirm a trip to Bangladesh for the T20 World Cup later this year.

“ICC named Sana Mir, who represented Pakistan in 226 international games, 137 of them as skipper, as the ambassador of the Women’s T20 World Cup Qualifier on Wednesday, 24 April,” the cricket regulatory body said in a post on its website. 

Mir told ICC the tournament would provide an excellent opportunity for fans to witness exciting cricket. 

“The women’s game has become more and more competitive in recent years,” Mir said. “And the 10 nations involved in the Qualifier possess a number of quality players.”

Mir featured in several ICC tournaments during her impressive career. Her most memorable one was in the 2008 ICC Women’s Qualifying Series for the Women’s Cricket World Cup where Pakistan went all the way to the finals. 

Sana won the joint Player of the Series award for the tournament. The Pakistani icon said she aims to share her expertise and experience with the international players as ambassador. 

“My aim is to talk to the various teams and players during the Qualifier and help guide them on how to deal with the pressure of these events and what it takes to succeed,” Mir explained. 

“Pakistan had a great record in these events, and I in particular have fond memories of the 2008 edition of the 50 over World Cup qualifier event that I played.”

Mir said that while Sri Lanka and Ireland were favorites to qualify for the World Cup, others had a chance to cause major upsets too. 

“Teams like Scotland, Netherlands, United Arab Emirates, Uganda, and Zimbabwe surely have the potential to cause major upsets,” she said. “And make their way through to the semis and eventually to the final as well.”


Pakistan’s disaster management authority urges citizens to be cautious as heavy rains loom

Updated 24 April 2024
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Pakistan’s disaster management authority urges citizens to be cautious as heavy rains loom

  • Pakistan’s NDMA says heavy rains expected in KP, Balochistan, Gilgit-Baltistan and Azad Kashmir from Apr. 25-30
  • Disaster management authority warns administrations to prepare for emergencies in vulnerable areas from Apr. 25-30

ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) on Wednesday cautioned citizens in Khyber Pakhtunkhwa, Balochistan, Azad Kashmir and Gilgit-Baltistan areas against rising water levels, as it braces for heavy rains in various parts of the country from Apr. 25-30. 

A westerly wave from Apr. 25-30 is expected to bring “significant” rainfall and thunderstorms in Balochistan, KP, the northern Gilgit-Baltistan region, and Azad Kashmir, the NDMA said. 

The disaster management authority said these areas are expected to face heavy to moderate rains, windstorms, and hailstorms while it was expected to snow over high mountains.

“Residents near riverbanks and nullahs should be aware of rising water levels and evacuate if necessary,” the NDMA said. “Citizens are urged to exercise caution, avoid weak structures and waterways, and stay updated on weather conditions.”

It also urged farmers, livestock owners, tourists, and travelers to take protective measures for their safety and properties. 

The NDMA urged authorities to prepare for potential floods and landslides, especially in upper KP, Murree, Galyat, Azad Kashmir, and GB. 

“Authorities should ensure readiness to respond to emergencies, with machinery and staff pre-positioned in vulnerable areas,” it added. 

A spell of heavy rains from April 12-21 in Pakistan’s Punjab, Balochistan and KP killed over 90 people, destroying property and farmlands. Experts say the country is experiencing heavier rains than normal in April because of climate change effects.

In 2022, downpours swelled rivers and at one point flooded a third of Pakistan, killing 1,739 people. The floods also caused $30 billion in damages, from which Pakistan is still trying to rebuild.

Pakistan consistently ranks among the world’s worst-affected countries due to climate change. 


PM Sharif stresses unity to overcome national challenges during Karachi visit

Updated 42 min 59 sec ago
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PM Sharif stresses unity to overcome national challenges during Karachi visit

  • Prime Minister Shehbaz Sharif arrived in Karachi on maiden visit to the city since assuming country’s top political office 
  • PM Sharif says business community “backbone” of Pakistan’s economy, vows to facilitate them in boosting economy 

KARACHI: Prime Minister Shehbaz Sharif on Wednesday called for unity to overcome Pakistan’s economic challenges, as he arrived in the southern port city of Karachi on his maiden trip to the metropolis since assuming the country’s top political office. 

Sharif held meetings with Sindh Chief Minister Syed Murad Ali Shah and the province’s governor, Kamran Tessori, after arriving in the city. The two sides discussed administrative and financial matters concerning the province. 

Flanked by the two officials, the prime minister later spoke to a delegation of Karachi’s prominent businesspersons, referring to them as “the backbone of Pakistan’s economy.”

“We should rise before our personal likes and dislikes and work together to serve the country,” he told the business delegation. Sharif added he wanted to carve out the best business policies for Pakistan to improve the country’s financial health.

Sharif noted Pakistan’s stock market was performing well with each passing day, highlighting that the country’s economic outlook was improving as was evident from its surging IT exports and positive current account. 

“I think we should avail this opportunity [for economic stability] completely,” he said. “And the only way to do that is to meet the business community’s legitimate demands. And our focus should be on export-led growth.”

Sharif assured the business community that privatization of state-owned entities (SOEs) would be done in the most transparent manner possible. 

“It would be done free of any obstacle or bureaucratic delay,” he said, adding that billions of rupees annually were being wasted due to loss-making SOEs. 

“It is not the job of the government to run the industry, the government’s job is to give only policy and act as a catalyst,” he said. “I believe in this and so does my team. You should move forward, sky is the limit.”

During the interaction, Pakistani business tycoon Arif Habib appreciated Sharif for securing Pakistan’s bailout package with the International Monetary Fund (IMF) last year, which helped the country avoid a sovereign default. 

Habib also urged the prime minister to mend Pakistan’s ties with India and extend an olive branch to former prime minister Imran Khan, his political nemesis. 

SINDH’S OUTSTANDING DUES

Earlier in his meeting with the Sindh chief minister, Sharif was informed about financial matters between the province and the center.

The chief minister’s spokesperson informed Sharif that the center owed Sindh a whopping Rs1,078.198 billion yet it had handed over Rs28 billion less than that.

“The prime minister instructed the federal finance minister to speak to the chief minister and resolve financial matters,” the chief minister said.

Sharif later announced the addition of 150 buses in Karachi to a fleet of 300, which the provincial government aims to deploy to alleviate the people’s transport woes.

“On the insistence of transport minister, Sharjeel Inaam Memon, prime minister announced 150 buses in the pool of 300 buses,” Abdul Rasheed Channa, the Chief Minister’s House spokesperson said, adding that the prime minister praised the provincial transport department.

Karachi, one of the largest cities in the world with a population of 20.3 million people, has 25,000 buses operating on over 700 routes covering the city. The number of private buses has decreased to 300 which operate on only 50 routes.


Pakistan trains hundreds of volunteers ahead of annual Hajj pilgrimage

Updated 24 April 2024
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Pakistan trains hundreds of volunteers ahead of annual Hajj pilgrimage

  • Hajj is one of the five pillars of Islam and every adult Muslim is required to undertake it at least once in their lifetime
  • Islamabad is to begin its Hajj flight operation from May 9 that would conclude on June 9 and facilitate over 63,000 pilgrims

ISLAMABAD: The Pakistani government has started training hundreds of volunteers ahead of the annual Hajj pilgrimage to help thousands of pilgrims overcome language barrier and other challenges in Saudi Arabia, besides imparting training to intending pilgrims on how to perform Hajj rituals.

Pakistan has a Hajj quota of 179,210 pilgrims this year. Of them, 63,805 pilgrims will be performing the pilgrimage under the government scheme, while the rest would be accommodated by private tour operators, according to the Pakistani religious affairs ministry. The South Asian country is set to start its Hajj flight operation on May 9, which would conclude on June 9.

The ministry conducts training of Hajj assistants and pilgrims every year ahead of their departure to Saudi Arabia to make sure the whole process, including their food, transportation and accommodation, is managed efficiently. This year, Pakistan will be sending 550 Hajj assistants and 400 doctors and paramedical staff to Saudi Arabia to facilitate the pilgrims.

“The training programs are currently underway at district and tehsil level and Islamabad is one of them,” Noor Muhammad Soomro, a deputy director at the Hajj directorate in Islamabad, told Arab News.

“Ministry of Religious Affairs has made very good arrangements for the pilgrims, and this includes Pak Hajj app. If a pilgrim uses the Pak Hajj app, he gets all the details, including training, vaccination, maps.”

Volunteers participating in the Pakistani mission of this year's Hajj are seen attending a training session in Islamabad, Pakistan on April 23, 2024. (AN photo)

Soomro said each Pakistani pilgrim would be provided with a SIM card having 7GB data to connect with their families back home.

“This time, we will provide the train facility to all those pilgrims who travel to Saudi Arabia on the government scheme in Mina, Arafat and Muzdalifah,” he said.

Hajj is an annual Islamic pilgrimage that has been in practice for over 1,400 years. It is one of the five pillars of Islam and requires every adult Muslim to undertake the journey to the holy Islamic sites in Makkah at least once in their lifetime if they are financially and physically able. This year’s pilgrimage is expected to run from June 14 till June 19.

Instructors have been training Hajj assistants and intending pilgrims at a sprawling auditorium at the Islamabad Hajji Camp, where they can also visit different stalls to purchase Hajj items like Ihram, umbrella and towels.

“This training is basically the introduction of the duties of Hajj,” Sanober Khaliq Baloch, a Hajj assistant, told Arab News. “Hajj assistants would be performing those duties for example the induction [of the pilgrims], the transport, the food and obviously about Mina map, a little about the roads and traveling, all these things.”

Speaking about the potential challenges, she said the temperature difference and up to 14 hours of duty could be “daunting,” but she was determined to facilitate the pilgrims in all possible way.

Faisal Hafeez, another Hajj assistant, said he was committed to serve the pilgrims well by taking care of their food, accommodation and transportation.

“Different problems that confront the pilgrims have been discussed here [during the training] and how we are supposed to deal with them and solve the problems,” he told Arab News.

Syeda Munir, who is going to perform Hajj for the first time, praised the training sessions, saying this would help them smoothly perform all rituals.

“This is my third [training] session,” she told Arab News. “They guide us well about how to perform Umrah and Hajj.”