Pakistani FM ‘hopeful’ flood aid promises will be fulfilled

Pakistan interim foreign minister Jalil Abbas Jilani speaks during the UNAOC Group of Friends meeting at UN Headquarters in New York on September 22, 2023. (Photo courtesy: X/UNAOC)
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Updated 23 September 2023
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Pakistani FM ‘hopeful’ flood aid promises will be fulfilled

  • Floods last year inflicted over $30bn in damage, economic losses on Pakistan
  • While donors have pledged around $10bn in aid, it has yet to be disbursed

NEW YORK: Pakistan is “hopeful” that pledged reconstruction funding to rebuild parts of the country damaged by floods last year will be disbursed soon, Foreign Minister Jalil Abbas Jilani said on Friday.

At a press conference during the UN General Assembly in New York, he told Arab News: “Pakistan is one of the worst affected as far as climate change is concerned because it has affected about 33 million people.

“One-third of the country was inundated with water, and about $30 billion worth of losses were suffered.”

Pakistan was devastated by the 2022 floods, which were the world’s deadliest since those in southern Asia in 2020.

About a month after last year’s disaster, Pakistan and other countries attending the UN Climate Change Conference in Egypt decided to establish the Loss and Damage Fund to assist countries in dealing with the effects of climate change.

Many donors have pledged funds to help Pakistan rebuild flood-affected areas. The Islamic Development Bank pledged more than $4 billion, the World Bank $2 billion and Saudi Arabia $1 billion.

“So far, there has been very little which has trickled down from the international community as far as the rehabilitation and reconstruction work that has to be carried out. Pakistan is doing that from its own resources,” Jilani told Arab News.

“Our banks are issuing loans on easy terms to all those people who were affected. But then obviously, there are limits to what the banking industry can do.

“This is the kind of situation we’re in. I think we’re hopeful that most of the promises which were made by the donors will be fulfilled shortly.”

Regarding foreign policy, Jilani described the formation of new blocs and rivalries in the Asia-Pacific region as “a very uncomfortable situation” for Pakistan.

“Asia-Pacific has been a very peaceful region, a prosperous region, and it has made great economic strides in the last 40-50 years. Any tension within the Asia-Pacific region, from our point of view, is certainly not good for peace and stability in the region,” he said, adding that Pakistan prioritizes good relations with all countries, specifically mentioning China and the US.

When asked about Islamabad’s potential to confront the Pakistani Taliban, which operates along the border with Afghanistan, Jilani said: “Afghanistan is a sovereign country. Pakistan follows a policy of non-interference … while respecting the sovereignty of other countries.

“At the same time, we have expectations that the Afghan side would take action against all groups who are violating Afghanistan’s soil to carry out terrorist activities against other countries.”

Jilani added that during a meeting between the foreign ministers of China, Pakistan and Afghanistan in May, “there was a reiteration of this commitment by the Afghan side that they won’t allow Afghan soil to be used against other countries.”

Jilani also praised Pakistan’s commitment to democracy and free elections. “We’re a democratic country. There’s absolutely no doubt about it. In Pakistan, when parliament has completed its full term, it’s a constitutional requirement that there’s a caretaker setup which is meant to ensure neutrality in the next elections,” he said.

“This is meant to ensure that the elections are free and fair, and is meant to ensure that people are able to participate in the voting process without any violence.”

Jilani said Pakistan is heavily involved in efforts to tackle Islamophobia in Europe, and had made a case for the criminalization of religious-based hate speech in the Organisation of Islamic Cooperation’s Contact Group on Muslims in Europe.

“We also appreciated the introduction of a bill by the government of Denmark which would criminalize such offenses, either the burning of holy books or insulting the prophets of any religion. I think this is a good step they’ve taken,” he added, saying he is hopeful that if such a bill passed in Demark, other European nations may follow suit.


Pakistan condemns Israel’s ‘policy of mass starvation’ after killing of over 100 Palestinians in Gaza

Updated 01 March 2024
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Pakistan condemns Israel’s ‘policy of mass starvation’ after killing of over 100 Palestinians in Gaza

  • Eyewitnesses say Israeli troops opened fire on a group of Palestinians waiting for life-saving aid and food delivery
  • Pakistan’s foreign office says Israel must face justice for committing crimes against Palestinians with impunity

ISLAMABAD: Pakistan on Friday condemned the killing of over 100 Palestinians who were trying to get food from an aid convoy in Gaza City a day earlier, saying the incident had highlighted Israel’s “deliberate and inhumane policy of mass starvation.”
According to eyewitnesses, Israeli troops opened fire on a crowd of Palestinians waiting for aid and food amid the rubble of their city destroyed by relentless airstrikes ordered by the Netanyahu administration last year in October.
Israel besieged the Gaza Strip after a surprise attack was initiated by Hamas in response to the deteriorating condition of Palestinian people living under Israeli occupation. The ensuing war has led to the killing of over 30,000 Palestinians, most of them women and children, as much of the world has accused the Israeli authorities of carrying out a genocide in Gaza.
International aid groups have also complained of increasing difficulties while delivering food supplies to starving Palestinians due to the Israeli military.
“Pakistan strongly condemns yesterday’s massacre by Israel’s occupation forces of unarmed Palestinians, who were awaiting life-saving aid and food delivery in Gaza,” foreign office spokesperson Mumtaz Zahra Baloch said during her weekly media briefing. “This massacre demonstrates a blatant disregard for civility and international humanitarian law and Israel’s deliberate and inhumane policy of mass starvation.”
Baloch reiterated her country’s stance for an immediate and urgent ceasefire while calling for unimpeded access of humanitarian aid to the people of Gaza.
“Israel must also face justice for its crimes against humanity being perpetrated with impunity against the Palestinian people,” she added.
The incident in Gaza has come at a time when various stakeholders in and around the region are trying to negotiate a ceasefire to end the conflict which has lasted for nearly five months.


Brothers accused of sparking blasphemy riot against Christians in Pakistan last year released

Updated 01 March 2024
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Brothers accused of sparking blasphemy riot against Christians in Pakistan last year released

  • The brothers were detained on suspicion of defacing the Holy Qur’an in Jaranwala where a mob vandalized Churches
  • Christians make up around two percent of Pakistan’s population and occupy one of the lowest rungs in society

LAHORE: Two brothers accused of blasphemous acts that sparked a mob in Pakistan to ransack homes and churches in a Christian enclave last year have been freed from jail, their lawyer said Friday.
More than 80 Christian homes and 19 churches were vandalized by crowds in the eastern city of Jaranwala last August, after accusations spread that a Holy Qur’an had been desecrated.
Blasphemy is an incendiary charge in deeply conservative, Muslim-majority Pakistan, where even unproven allegations of insulting Islam have provoked deadly vigilantism.
While police rounded up more than 125 suspected rioters, they also detained two Christian brothers on suspicion of having defaced a Holy Qur’an – a violation of Pakistan’s harsh blasphemy laws which can carry the death penalty.
But the brothers’ lawyer Tahir Bashir told AFP they had been freed after an anti-terror court declined to bring their case to trial on Thursday.
“Without a trial, no suspect can be detained indefinitely in jail,” Bashir said, declining to publicly name his clients out of fear for their safety.
“They are free, they are with their family. They were very happy to be released,” he added.
Hundreds of Christians fled Jaranwala’s Christian quarter last summer when rioters surged in, setting churches ablaze and raiding homes.
At its peak the crowd numbered around 5,000 and was spurred by mosque loudspeakers announcing a Holy Qur’an had been torn, scrawled with offensive words and stuck to the walls of a local mosque.
Christians, who make up around two percent of Pakistan’s population, occupy one of the lowest rungs in society and are frequently targeted with spurious blasphemy allegations.
Politicians have also been assassinated, lawyers murdered and students lynched over such accusations.
Last week, police were forced to intervene in the eastern city of Lahore when a woman wearing a shirt adorned with Arabic calligraphy was surrounded by a mob accusing her of blasphemy.
The crowd of men said the clothing depicted the Holy Qur’an but it was in fact emblazoned with the Arabic word for “beautiful.”
The woman issued an apology for causing offense, but none of the men were arrested.
Pakistan’s top Supreme Court judge has also been targeted by veiled death threats recently after ordering the release of a man accused of disseminating a blasphemous text.


Inflation in Pakistan hits 23.1%, reaching its lowest point since June 2022

Updated 01 March 2024
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Inflation in Pakistan hits 23.1%, reaching its lowest point since June 2022

  • Pakistan faces historically high inflation, though the situation has improved from 38 percent recorded last year in May
  • Given the February inflation rate, experts predict the central bank to begin monetary policy easing from this month

KARACHI: Pakistan’s inflation rate was recorded at 23.1 percent in February, marking its lowest level since June 2022, on an annual basis despite surging food and energy costs, according to official data released on Friday.
Pakistan continues to face historically high inflation, though the situation has improved from the all-time high level of 38 percent recorded last year in May.
Last month, the prices of tomatoes and cigarettes saw substantial increases of 114.6 percent and 71.2 percent, respectively, on an annual basis. Condiments and spices rose by 55.3 percent, sugar by 53.4 percent, fresh vegetables by 46.2 percent and wheat flour by 45 percent.
In the non-food category, gas charges skyrocketed by 318.7 percent, electricity charges by 74.9 percent, transport services by 35.1 percent, textbooks by 34.7 percent, newspapers by 34.2 percent and accommodation services by 29.5 percent.
February’s inflation, the lowest in 20 months, suggests a potential easing in the country’s monetary policy stance.
“The low inflation rate was expected and interestingly despite incorporating recent gas and petroleum price increase in February the number is low. We will see this trend continue in the future and inflation trajectory will be downward,” Tahir Abbas, head of research at Arif Habib Limited, told Arab News.
Given the February inflation rate, experts predict the central bank will begin monetary policy easing from March onwards, with the market anticipating an indicative interest rate cut of around 1 percent this month.
Since June last year, the State Bank of Pakistan has maintained the interest rate at an all-time high of 22 percent.
The central bank recently adjusted its average inflation forecast for the current fiscal year to 23-25 percent, up from 20-22 percent, due to hikes in energy prices.


Race for new Pakistan finance minister heats up ahead of crucial IMF negotiations

Updated 01 March 2024
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Race for new Pakistan finance minister heats up ahead of crucial IMF negotiations

  • Ishaq Dar remains the top contender, though he may be declared deputy PM if he does not get the portfolio
  • Pakistan’s interim finance minister and president of the country’s largest HBL bank are also said to be in the race

ISLAMABAD: Pakistan’s newly-formed ruling alliance is yet to finalize its finance minister, the person who has to lead an immediate effort to negotiate a new International Monetary Fund (IMF) bailout, sources familiar with the discussions said.
The struggling $350 billion economy has a narrow path to recovery and the current IMF agreement expires on April 11, with critical external financing avenues linked to securing another extended program.
Former four-time finance minister Ishaq Dar remains the top contender, according to two sources in his Pakistan Muslim League-Nawaz (PML-N) party, which is leading the coalition.
PML-N’s Shehbaz Sharif has been nominated by the alliance to be prime minister in an election scheduled for March 3. He will announce his cabinet, including the finance minister, shortly after being elected.
But Dar is not the only candidate being considered, the sources said. Despite being a relative of, and close aide to, PML-N chief Nawaz Sharif, many political allies have criticized Dar’s handling of the economy in the last coalition set up.
He, however, has defended his actions, saying he had to take tough measures to avert a sovereign default by securing the IMF program, which former Prime Minister Imran Khan had scuttled days before leaving his office, a charge Khan denies.
Pakistan struggled for over four months to lock in the stand-by arrangement last summer when Dar was finance minister, and it took the intervention of his prime minister, Shehbaz Sharif, to secure a last-ditch deal.
Dar also regularly criticized the IMF on public platforms in the middle of negotiations, and has long favored market interventions to prop up the Pakistani rupee – something the IMF has warned against.
If Dar doesn’t get the portfolio, his party might consider creating a position of deputy prime minister for him, one of the sources in the PML-N said.
Also being considered are caretaker Finance Minister Shamshad Akhtar, a former central bank governor, who is overseeing key policy measures under the current IMF program, both sources said.
Akhtar has been a key part of the caretaker set up that has been praised by the IMF for “decisive policy efforts” to maintain stability.
Another name being considered is Muhammad Aurangzeb, president and chief executive officer of the country’s largest bank, Habib Bank Limited, the sources said.
Aurangzeb had also served as the CEO of JP Morgan’s Global Corporate Bank based in Asia.
Akhtar did not respond to a Reuters request for a comment and Aurangzeb’s HBL said it would not comment on “rumors and speculations.”
A PML-N spokesperson did not respond to a request for comment.
Dar himself told reporters before the parliament’s inaugural session on Thursday that there was no decision yet when asked if he would be the choice for finance minister again.
PML-N senior leader Irfan Siddiqui told the local newspaper The News that Dar will “most probably” be picked for the post.
Aside from negotiating a new and extended IMF program, the new finance minister will have about three months to prepare a federal budget that will need to strike a difficult balance between tough reforms and rejuvenating a struggling economy.
The PML-N, leading a minority government, will be relying on the support of different parties to pass critical legislation, with alliance partner Pakistan Peoples Party saying it would support the government on an issue-to-issue basis.
Efforts to assuage growing public anger at record inflation hovering around 30 percent will also be challenging with limited fiscal space.
“Pakistan needs someone who has broad and in-depth international experience to introduce the kind of reforms that have helped many other countries to come out of economic crises,” said Yousuf Nazar, a London-based economist and former Citigroup banker.
He, however, declined to say who was best suited.


Foreign investment in Pakistan’s stock market surges to $19.9 million since Feb. 8 polls

Updated 01 March 2024
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Foreign investment in Pakistan’s stock market surges to $19.9 million since Feb. 8 polls

  • Financial experts describe the development as a result of growing investor confidence in the country
  • The stock market benchmark closes at 65,325 points after National Assembly held its first two sessions

KARACHI: Pakistan witnessed a substantial increase in foreign investment through the stock market in the last three weeks after international corporations and overseas Pakistanis brought $19.9 million into the country, reflecting improved investor confidence in the wake of the Feb. 8 polls, as confirmed by financial experts on Friday.
After months of uncertainty surrounding the general elections, Pakistan held the polls last month, though their conduct and outcome led to widespread speculations of vote fraud. The split mandate in the electoral contest was followed by political negotiations that led to a power-sharing agreement between Bilawal Bhutto Zardari’s Pakistan Peoples Party and the Pakistan Muslim League (PML-N) of three-time prime minister Nawaz Sharif.
Despite the allegations of rigging and ensuing political protests, the elections brought clarity to Pakistan’s capital market, which was reflected in the bullish sentiments including the rise in foreign equity investment.
Foreign corporations invested around $18.5 million in the equity market, while overseas Pakistanis bought shares worth $1.4 million after Feb. 8. In the last three weeks, the net investment amounted to $19.9 million, according to the National Clearing Company of Pakistan Limited (NCCPL), an institution that provides clearing and settlement services to the Pakistan Stock Exchange (PSX).
“The surge in the foreign portfolio investment reflects the clarity in the market after holding of general elections,” Khurram Schehzad, CEO of Alpha Beta Core, a financial advisory firm, told Arab News.
In February 2024 alone, the foreign investment amounted to $25.7 million as compared to the $8.5 million recorded in the corresponding month last year.
During July to February 2024, net foreign investment stood at about $59.6 million in equity market as compared to $16.3 million recorded during the same period in 2023.
Schehzad said the market would further consolidate after the formation of the next government.
Discussing the development, Ali Nawaz, CEO of Chase Securities, described the rise in foreign investment in the country’s equity market as “promising.”
“This can be attributed to factors like improved economic stability, successful International Monetary Fund loan agreement, and potentially positive policy changes anticipated under the new government,” he told Arab News.
“Once a stable government is formed, clearer economic direction and potential reforms will further incentivize foreign investors, making Pakistan’s stock market even more attractive,” he added.
The country’s equity market has witnessed a strong rebound during the latter half of the previous month, after the vote fraud allegations.
The stock market closed weekend trading session at 65,325 points after easing of political uncertainty. The formation of a coalition government at the center is expected to keep the investor sentiment positive.
“Stocks closed higher amid reports of inflation falling to 23 percent for February 2024 and the National Assembly session held to form the new government,” Ahsan Mehanti, CEO of Arif Habib Corporation, commented.
Mehanti said the American assurance to support Pakistan in its effort to break free from the vicious cycle of debt and international financing also played a key role in keeping the bullish sentiments alive at PSX.
Matthew Miller, spokesperson of the US State Department, noted on Thursday Pakistan’s economic stability was crucial to the long-term strength of its government.
“Pakistan’s new government must immediately prioritize the economic situation because the policies over the next several months will be crucial to maintaining economic stability for Pakistanis,” he said while responding to a question about the political situation of the country.