Economists criticize Pakistan’s budget for lack of tangible poverty alleviation measures

A salesman waits for customers next to a television screen showing Pakistan's Finance Minister Ishaq Dar presenting the budget for the 2023/24 fiscal year in the parliament in Islamabad, at a shop in Karachi, Pakistan, June 9, 2023. (Photo courtesy: REUTERS)
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Updated 10 June 2023

Economists criticize Pakistan’s budget for lack of tangible poverty alleviation measures

  • Some experts believe nearly 100 million people in Pakistan have slipped below the poverty line
  • Most economists call for increased Benazir Income Support Program allocation amid rising inflation

KARACHI: Pakistan’s top economists criticized the new federal budget on Saturday, saying it lacked tangible poverty alleviation measures at a crucial historical juncture when the current financial situation of the country had pushed about 100 million people below the poverty line.

The government proposed a Rs14.46 trillion ($50.4 billion) budget on Friday in which it allocated nearly 50 percent for interest payments. This implied that only meager resources would now be available for other expenditures like poverty alleviation.

A leading Pakistani economist, Dr. Abdul Hafeez Pasha, said poverty had increased in Pakistan due to unemployment resulting from last year’s devastating floods and a major spike in inflation amounting to 38 percent in May.

“At this time, it is estimated that around 100 million people have gone below the poverty line,” he told Arab News. “Many of them also belong to lower middle class. Two things have primarily contributed to increased poverty and unemployment. The people were affected by the recent floods and the prices of food items increased manifold.”

Pasha said the unemployment rate had surged to 11 percent, though it was less than seven percent before the COVID-19 pandemic four years ago.

“The government measures to restrict imports and price hike have rendered 3.5 million more workers jobless,” he continued.

Pakistan’s planning minister Ahsan Iqbal and state minister for finance Dr. Aisha Ghaus Pasha did not respond to queries on poverty and unemployment numbers.

The finance minister, Ishaq Dar, announced to enhance the Benazir Income Support Program (BISP) allocation by Rs50 billion to Rs450 billion on Friday.

However, Pasha said the gap between income and poverty was somewhere around Rs1.7 trillion, and the government should have covered at least one-third of it.

“The government should have increased the BISP allocation to at least Rs635 billion and taken steps to reduce flour prices,” he said. “It has not done these two things in the budget.”

Dr. Ikram ul Haq, senior economist and taxation expert, agreed with Pasha, saying the BISP allocation was too small under the circumstances.

“The scope of targeted cash benefits should have been extended both in terms of numbers and scope, including food stamps. The fiscal policy alignments needed under the challenging times for the people below the poverty lines are missing. Taxation remains largely dependent on indirect mechanism which is also anti-poor,” he told Arab News.

Meanwhile, Dr. Abdul Jabbar, a poverty alleviation expert, said BISP was a “political tool” for distribution of cash with the intention of getting votes.

“They have increased cash incentives in BISP but that is a delusion and it will not reduce the poverty since the program has created no impact since it was launched,” he said.

“BISP is a political tool for the distribution of unconditional cash transfers,” he continued. “But in Africa, all such cash transfers are conditional which means the receivers are bound to educate children or create social impact through cash utilization in a productive manner which we have been lacking.”

Haq said no steps have been taken to increase the income of poor and vulnerable segments of the society.

“There is nothing in the budget that can be for the poor and the vulnerable segments in terms of countering inflation and creating opportuneness for raising their incomes,” said adding “It is the budget by the rich and for the rich.”

The finance minister has increased ad hoc relief allowance of government employees by 35% for grade 1-16 grades and 30% for employees falling in 17-22 grades while increased pensions by 17.5% and proposed Rs32,000 minimum wage.

“The higher echelons of the powerful civil-military bureaucracy has got raises when even the government will borrow further even to pay part of interest payment,” Haq said adding “It is classic case of debt trap.”

As far as the income is concerned, the government has not changed the rates on lower sides, according to Ali A Rahim, a renowned tax consultant.

“There are no change in income tax rates but for lower class they announced price reduction at Utility stores but no especial relief for the salaried class,” he told Arab News.

Rahim called for implementation of minimum wages in the private sector but cautioned that the current economic situation was bigger hurdle.

Majyd Aziz, former president and board member of Employers’ Federation of Pakistan (EFP), conceded that the current minimum wage which is too low was not even being implemented by 60% in formal and 90% in informal sector.

“We morally and ethically believe that the current wage is very low but still it is not being implemented across the board,” Aziz told Arab News. “government has announced in the budget to increase minimum wage which would be decided after wage boards meetings.”

However, Aziz said the due to the current economic condition the workers prefer to secure their jobs rather than demanding increments.

Pakistani consumers said they have made drastic change in spending habits after price hike of essential commodities amid administrative failure.

“I used to smoke gold leaf but when its priced doubled to Rs500 I switched over to Capstan which is available for around Rs220 but it seems that the option will be Birri or Hookah in order meet increasing kitchen expenses,” Ahmed Khan Malik, a senior researcher said.

“The ironically there is not prices mechanism in the country, multiple prices are charged for a single commodity in single market that is also fueling inflation,” he said adding no measures have been taken to address financial issues of fixed income groups.

Pakistan’s ‘first priority’ is countering terrorism from Afghanistan, PM says in UNGA address

Updated 22 September 2023

Pakistan’s ‘first priority’ is countering terrorism from Afghanistan, PM says in UNGA address

  • Kakar welcomes the normalization of relations between Saudi Arabia and Iran while calling for a two-state solution for Palestine
  • The premier urges global powers to convince India to accept Pakistan’s offer of mutual restraint on strategic weapons

ISLAMABAD: Caretaker Prime Minister Anwaar-ul-Haq Kakar on Friday called for action against militant attacks from neighboring Afghanistan, endorsed Saudi Arabia and Iran’s diplomatic rapprochement, and advocated a two-state solution as the path to enduring peace in Palestine.

Kakar achieved a historic milestone as the first caretaker prime minister of his country to address the annual United Nations General Assembly session in New York, where he tackled various global issues, spanning from extremist violence and relations with India to the escalating challenges of climate change and Islamophobia.

“Pakistan’s first priority is to prevent and counter all terrorism from and within Afghanistan,” he told representatives of United Nations member states. “Pakistan condemns the cross-border attacks … by the TTP [Tehreek-e-Taliban Pakistan], Daesh and other groups operating from Afghanistan.”

The prime minister’s statement comes against the backdrop of a dramatic spike in militant attacks in Pakistan, mainly in border regions abutting Afghanistan since the return of Afghan Taliban to power in Kabul in August 2021.

The first half of this year saw about 80 percent increase in attacks compared to the last year, according to statistics compiled by the Pakistan Institute for Conflict and Security Studies.

“We have sought Kabul’s support and cooperation to prevent these attacks,” the prime minister continued. “We are also taking necessary measures to end this externally encouraged terrorism.”

Prime Minister Pakistan Anwaar-ul-Haq Kakar speaks during the United Nations General Assembly (UNGA) at the United Nations headquarters in New York City, US, on September 22, 2023. (Photo courtesy: REUTERS)

Kakar reiterated his country’s position that peace in Afghanistan was a “strategic imperative” for Pakistan while sharing concerns of the international community with respect to Afghanistan, particularly those related to the rights of women and girls.

“We advocate continued humanitarian assistance for destitute Afghan population in which Afghan girls and women are the most vulnerable as well as the revival of Afghan economy and implementation of the connectivity projects with Central Asia,” he said.

Speaking about Pakistan’s relations with its nuclear-armed neighbor, the prime minister said his country desired “peaceful and productive” relations with all neighbors including India.

“Global powers should convince New Delhi to accept Pakistan’s offer of mutual restraint on strategic and conventional weapons,” he said, adding that Kashmir provided the key to peace between the two neighboring states.

Pakistan and India both rule parts of the disputed Himalayan region while claiming it in full. They have fought two wars over the mountainous territory and their forces regularly trade fire across a 740-kilometer (466 mile) Line of Control, which is the de facto border separating the two parts of Kashmir.

“We must counter all terrorists without discrimination including the rising threat posed by far-right extremist and fascist groups such as Hindutva inspired extremists threatening genocide against Indian Muslims and Christians alike,” he maintained.

“We also need to oppose state terrorism, address the root cause of terrorism such as poverty, injustice and foreign occupation, and distinguish genuine freedom struggles from terrorism,” he added.

The prime minister also proposed the creation of a committee of the general assembly to oversee the balanced implementation of all “four pillars of the global counter terrorism strategy.”

He also applauded the normalization of relations between Saudi Arabia and Iran while commenting on the overall strategic situation in the Middle East.

“Pakistan welcomes the progress made toward ending the conflicts in Syria and Yemen, in particular we warmly welcome the normalization of relations between the Kingdom of Saudi Arabia and the Islamic Republic of Iran,” he said.

Focusing on the Palestine issue, he mentioned continued “Israeli military raids, air strikes, expansion of settlements and eviction of Palestinians.”

“Durable peace can be established only through a two-state solution and establishment of a viable and contiguous Palestinian state within the pre-June 1967 borders with Al-Quds as its capital,” he said.



Kakar also mentioned the “age-old phenomenon” of Islamophobia, saying it had acquired endemic proportion in the wake of the September 11 attacks in the United States and was manifested in the negative profiling of Muslims and public burnings of the Holy Qur’an.

“The narratives advocating a clash of civilizations have done considerable harm to humanity’s progress,” he noted. “Such ideas have bred extremism, hatred and religious intolerance, including Islamophobia.”

The prime minister welcomed the legislation initiated by Denmark and contemplated by Sweden to ban the desecration of the Islamic scripture.

“Pakistan and the OIC [Organization of Islamic Cooperation] countries will propose further steps to combat Islamophobia, including the appointment of a special envoy, creation of an Islamophobia data center, legal assistance to victims and an accountability process to punish Islamophobic crimes,” he continued.

Discussing the climate change issue, Kakar said Pakistan looked forward to fulfilling the climate commitments made at COP28 by developed countries to provide over $100 billion in annual climate finance, allocate at least half of it for adaptation in developing countries, operationalize the loss and damage fund, and reduce global carbon emission.

“Pakistan’s triple food finance fuel challenge is a prime illustration of the impact of COVID conflict and climate on developing countries,” he said, adding Pakistan was one of the worst affected countries from the adverse impacts of climate change.

Kakar said the last year’s flood in Pakistan submerged one-third of the country, killed 1,700 people, displaced over eight million people, destroyed vital infrastructure and caused over $30 billion damage to the economy.

“We are gratified by the commitment of over $10.5 billion for Pakistan’s comprehensive plan for recovery, rehabilitation, reconstruction with resilience,” he said.

“Specific projects are being submitted to ensure timely funding … I hope our development partners will accord priority to the allocation of funds for our recovery plan which costs $13 billion,” he added.

Pakistani authorities arrest journalist for allegedly spreading false news about state institutions

Updated 22 September 2023

Pakistani authorities arrest journalist for allegedly spreading false news about state institutions

  • Khalid Jamil was arrested by the FIA and an Islamabad court allowed it to hold him for questioning for two days
  • The arrest has drawn condemnation from the journalist community in a country that is viewed as unsafe for reporters

ISLAMABAD: Pakistani security agents have arrested a senior Islamabad-based TV anchor known for his criticism of the authorities on charges of spreading false content about state institutions on social media, his news channel and family said Friday.

Khalid Jamil was taken into custody by the Federal Investigation Agency late on Thursday, his ABN television posted on X, formerly known as Twitter.

Jamil’s family confirmed the arrest, saying he was detained in a late-night raid at his home in the capital, Islamabad. A photograph of Jamil circulating on social media shows him holding up a sign with his case number, apparently in police custody.

Later Friday, an Islamabad court gave the green light for the agency to hold Jamil for questioning for two days.

The arrest has drawn condemnation from the country’s journalist community. Pakistan has long been an unsafe country for reporters. In 2020, it ranked ninth on the Committee to Protect Journalists’ annual Global Impunity Index, which assesses countries where journalists are regularly harassed and killed and the assailants usually go free.

In recent years, activists and journalists have increasingly come under attack by the government and the security establishment, restricting the space for criticism and dissent. The criticism of the military can result in threats, intimidation, sedition charges and in some cases, being arrested with no warning.

Pakistan’s finance minister unveils centralized gateway portal to boost country’s debt market

Updated 22 September 2023

Pakistan’s finance minister unveils centralized gateway portal to boost country’s debt market

  • The platform will streamline investor onboarding process and enhance convenience of market intermediaries
  • The portal will be a major part of Pakistan’s financial infrastructure and will list government debt securities

ISLAMABAD: Pakistan’s interim finance minister Dr. Shamshad Akhtar inaugurated a centralized gateway portal (CGP) on Friday, saying it would help develop debt market in the country by listing government securities to promote retail participation, transparency, savings channelization, and overall market growth.

Debt or bond markets constitute financial arenas in which people buy and sell various types of debt securities representing loans made by investors to entities such as governments, corporations, or other organizations.

These securities are typically issued with the promise of periodic interest payments to bondholders and the repayment of the principal amount at maturity.

According to a statement released by the Securities and Exchange Commission of Pakistan (SECP), the CGP is a novel financial initiative to facilitate simultaneous onboarding of investors and customers across the securities market, the nonbank financial companies’ sector, and the insurance industry.

The platform features standardized, one-time know-your-customer requirements across diverse asset classes.

“Dr. Shamshad Akhtar, the Federal Minister for Finance & Revenue, said that the securities market can play a vital role in the development of debt market through the listing of government debt securities on PSX [Pakistan Stock Exchange],” said the SECP statement.

Addressing the inauguration ceremony, Akhtar said the issuance of securities through public auctions at PSX would facilitate greater transparency.

“One of the key issues undermining the growth of capital markets is the lack of liquidity which is directly attributable to the small number of investors,” she was quoted as saying.

The minister said the CGP would provide immense opportunities to investors and great convenience to market intermediaries by removing duplications and streamlining the customer onboarding process.

However, she noted the successful CGP launch should not be deemed the end of the project.

“Having developed this promising digital platform, we are now faced with the critical part of realizing the potential it offers,” she continued. “This requires focused marketing efforts and promotion on the part of the PSX and other stakeholders like brokers, insurance companies, and AMCs [asset management companies].”

The minister pointed out that attracting new investors in the capital market should be one of the primary objectives, adding it would require coordinated efforts from all capital market infrastructure institutions, market intermediaries and brokerage houses under the SECP guidance.

Amid cutthroat politics, PPP suspends senior leader for joining ex-PM Khan’s legal team before elections

Updated 22 September 2023

Amid cutthroat politics, PPP suspends senior leader for joining ex-PM Khan’s legal team before elections

  • Sardar Latif Khosa was asked to explain his position after he started representing Khan without seeking party’s approval
  • Khosa criticized the state for charging the ex-premier for violating Official Secrets Act at a recent lawyers’ convention

ISLAMABAD: In yet another sign of cutthroat politics ahead of national elections slated for January, Pakistan Peoples Party (PPP) suspended the membership of one of its senior leaders on Friday for joining former prime minister Imran Khan’s legal team to defend him in multiple cases filed against him.

Sardar Latif Khosa, a lawyer and member of the PPP central executive committee, was issued a show-cause notice last week wherein he was asked to explain the reason behind his decision for “defending the leader of another party” without the approval of the leadership of his own political faction.

The former prime minister has been in a high-security prison after he was arrested in a graft case last month in which a local court sent him to jail for three years. While his initial sentence was suspended by the higher judiciary within weeks, his judicial remand was extended in a more serious matter involving the misuse of a confidential diplomatic cable which was deemed as a violation of the Official Secrets Act.

“The Secretary-General of the PPP, Syed Nair Hussain Bukhari, has suspended the membership of Sardar Latif Khosa,” the party said in a statement on Friday. “Khosa’s membership to the party’s central executive committee has also been revoked.”

It added the decision was taken after Khosa failed to respond to the show-cause notice served to him.

The notice highlighted Khosa’s speech at a lawyers’ convention in which he criticized the state policy regarding the case related to the secret diplomatic dispatch.

“You are hereby through this show cause notice asked to explain why disciplinary action not be taken against you for working against the party policy,” he was asked.

Pakistan’s election regulator has barred Khan from contesting elections for five years due to his conviction in the corruption case.

The prolonged restriction has provided an opportunity to other parties in the country to build momentum as national polls in January draw closer.

Pakistani minister seeks enhanced pilgrimage arrangements in meeting with top Saudi Hajj official

Updated 22 September 2023

Pakistani minister seeks enhanced pilgrimage arrangements in meeting with top Saudi Hajj official

  • Aneeq Ahmed urges Saudi minister to accommodate Pakistani pilgrims near areas where Hajj rituals are performed
  • The Saudi minister says the kingdom has limited the number of private tour operators to improve Hajj services

ISLAMABAD: Pakistan’s interim religious affairs minister Aneeq Ahmed discussed pilgrimage arrangements for next year with Saudi Hajj and Umrah minister Dr. Tawfiq Al-Rabiah on Friday, requesting him to accommodate people from his country in areas situated closely to the places where the annual religious ritual is performed.

Ahmed is currently on a week-long visit to the kingdom where he has held meetings with senior officials to explore the possibility of expanding the Makkah Route Initiative beyond Islamabad to make the journey of Pakistani pilgrims more convenient.

He said after his conversation with the Saudi minister that the kingdom had agreed to increase facilities for people of Pakistan who are interested in performing Hajj in the coming year.

“Accommodation, food and travel facilities for pilgrims will be finalized as soon as possible,” Ahmed was quoted as saying in a statement by his ministry.

“He asked Saudi Minister Dr. Tawfiq Al-Rabiah that flight schedule of Pakistani pilgrims should be finalized soon,” the statement continued. “Additionally, they should be accommodated near the pilgrimage places. The Makkah Route project should also be launched from other cities besides Islamabad.”

Pakistan’s interim religious affairs minister Aneeq Ahmed (second left) holds a discussion with Saudi Hajj and Umrah minister Dr. Tawfiq Al-Rabiah (second right) in Riyadh, Saudi Arabia, on September 22, 2023. (Photo courtesy: Pakistan's religious affairs ministry)

It added the Saudi minister pledged to offer more support to Pakistani pilgrims, saying the kingdom had already taken several measures to facilitate people performing Hajj.

He said that it had limited the number of private tour operators from 80 countries in the world and would only allow those companies that have 2,000 pilgrims.

“Karachi and Lahore are being considered for inclusion in the Makkah Route Initiative,” he added.

The initiative was introduced in Pakistan to provide customs and immigration services to pilgrims at their airport of origin to save them substantial time after arriving in Saudi Arabia.

According to official statistics, more than 26,000 Pakistani pilgrims benefited from the facility at the Islamabad airport this year.