Pakistan’s election regulator rules out delaying polls after Senate resolution calling for postponement

A security personnel stands guard at the headquarters of Election Commission of Pakistan in Islamabad on September 21, 2023. (AFP/File)
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Updated 15 January 2024
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Pakistan’s election regulator rules out delaying polls after Senate resolution calling for postponement

  • A non-binding resolution passed by Senate on Friday called for delaying polls due to poor weather, security challenges
  • In letter to Senate, election commission says has made necessary arrangements to hold polls on Feb. 8 across country

ISLAMABAD: Pakistan’s election regulator has categorically told the Senate that “it will not be advisable” for it to postpone polls beyond Feb. 8, days after a resolution in the upper house sought postponing polls in the South Asian country due to poor weather and security challenges. 

The non-binding resolution was passed on Friday in the Senate, calling for polls to be delayed out of fear that elections in the cold month of February would trigger a low voter turnout, especially in the northwestern Khyber Pakhtunkhwa (KP) and southwestern Balochistan provinces. 

The resolution was presented by Dilawar Khan, an independent senator from KP, who also cited recent attacks on politicians in the province as another reason to postpone polls. It was passed when only 14 senators out of 100 were present in the upper house of Pakistan’s parliament, according to media reports. 

In a letter addressed to the joint secretary of the Senate Secretariat on Jan. 13, ECP’s Additional Director General Elections Syed Nadeem Haider mentioned that the ECP had appointed Feb. 8 as the election date after consulting Pakistan’s president. It added that the ECP had also issued directions to the caretaker federal and provincial governments to beef up security arrangements and provide a “congenial environment” to the electorate for peaceful elections on Feb.8.

“ECP has made all necessary arrangements regarding the conduct of General Elections 2024,” the letter stated. It said that the election watchdog had also committed to Pakistan’s Supreme Court that it would hold polls on Feb. 8. 

Responding to Khan’s reservation on polls being held during the extremely cold in KP and Balochistan, the ECP said general elections had been held in the past during the winter season. 

“Sequel to the above narrated facts, it will not be advisable for the Commission to postpone General Elections 2024 at this stage,” the letter concluded. 

Caretaker Information Minister Murtaza Solangi shared a copy of the letter on social media platform X, saying that the ECP is “committed” to hold elections on Feb. 8.

Elections in the politically and economically troubled South Asian nation were originally due to be held in November, 90 days after the dissolution of the lower house of parliament in August, but were first delayed to February due to the fresh demarcation of constituencies under a new census.

Pakistan is currently being run by a caretaker government under interim Prime Minister Anwaar-ul-Haq Kakar that is meant to oversee a general election.

Caretakers are usually limited to overseeing elections, but Kakar’s set-up is the most empowered in Pakistan’s history thanks to legislation that allows it to make policy decisions on economic matters.

Political analysts fear that a prolonged period without an elected government would allow the military, which has ruled Pakistan for over three decades since independence in 1947 and wields considerable control even if not in power, to consolidate control.

Fears of violence spreading ahead of polls were ignited last week when an election candidate, contesting the upcoming polls independently, was shot dead with two others in Pakistan’s northwestern Waziristan district. The same day, a Pakistan Muslim League-Nawaz (PML-N) former minister was critically wounded when gunmen opened fire on his vehicle in the southwestern Turbat district. 

Pakistan’s western provinces bordering Afghanistan have seen a surge in militant violence since November 2022 when a fragile truce between the Pakistani Taliban and the state broke down. 

The Pakistani Taliban have carried out some of the deadliest attacks against security forces and civilians in the country for the last decade-and-a-half. In a bid to impose its brand of strict Islamic law, the Pakistani Taliban have targeted political parties and their candidates, such as the Awami National Party (ANP) and the Pakistan Peoples Party (PPP) who position themselves as secular, progressive forces. 


Pakistan’s tax-heavy budget likely to land IMF bailout, but stoke tensions

Updated 14 June 2024
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Pakistan’s tax-heavy budget likely to land IMF bailout, but stoke tensions

  • Coalition government of PM Sharif does not have the luxury of a parliamentary majority to help it pass the budget smoothly
  • Pakistan has set challenging tax revenue target of $47 billion for the year starting July 1, near-40% jump from current year

ISLAMABAD: Pakistan’s plan to raise taxes in its 2024-25 budget and boost state revenues will help it win approval from the International Monetary Fund for a loan to stave off another economic meltdown, but could fuel public anger, a former finance official, experts and industrialists said. 
The South Asian country has set a challenging tax revenue target of 13 trillion rupees ($47 billion) for the year starting July 1, a near-40 percent jump from the current year, and a sharp drop in its fiscal deficit to 5.9 percent of GDP from 7.4 percent for the current year.
Pakistan had to reduce its fiscal deficit as part of negotiations with the IMF, with which it is discussing a loan of $6-8 billion, as it seeks to avert a debt default for an economy growing at the slowest pace in the region.
“The budget is enough to get an IMF Programme, as long as ... the budget is passed in the way it is presented,” former finance minister Miftah Ismail said. But he said the revenue targets will be challenging, as will the growth target of 3.6 percent.
“The two cannot happen simultaneously,” said Ismail, who as then-finance minister successfully negotiated the revival of Pakistan’s last Extended Fund Facility (EFF) program in 2022.
Outside analysts largely concur. 
Emerging Market Watch’s Metodi Tzanov believes the budget in its current form should be acceptable to the IMF.
“The government ticked almost all the right boxes to comply with IMF conditions, including withdrawal of tax exemptions, raising corporate tax for exporters, increasing the personal income tax rate, tightening the noose around non-filers, and hiking fuel tax,” he said.
But some said the IMF might baulk if it saw the tax target as unrealistic.
Finance Minister Muhammad Aurangzeb, who presented the budget for the first time, said he expected to seal a Staff-Level Agreement with the IMF in July.
The IMF did not immediately publicly comment on the budget and did not respond to questions sent by Reuters.
The big rise in the tax target is made up of a 48 percent increase in direct taxes and 35 percent hike in indirect taxes. Non-tax revenue, including petroleum levies, is seen increasing by a whopping 64 percent.
Taxes have notably been slapped on previously protected export-oriented sectors such as textiles, which consistently make up over half of Pakistan’s exports, and whose receipts keep a persistently high external account deficit in check.
The representative body for the sector, All Pakistan Textile Mills Association, called for a review of the budget, terming it “extremely regressive” and one that “threatens the collapse of the textile sector and its exports.”
It warned of “dire consequences for employment and external sector stability, as well as for overall economic and political stability and security.”
The Pakistan Business Council also called for budgetary measures to be reconsidered.
“The budget prioritizes securing another IMF EFF but lacks innovation for domestic economic growth,” said Musadaq Zulqarnain, director at the Pakistan Textile Council and chairman of Interloop, one of Pakistan’s largest textile manufacturers.
The coalition government of Prime Minister Shehbaz Sharif does not have the luxury of a parliamentary majority to help it pass the budget smoothly.
Sticking to the reform measures will require it to resist pushback from key economic sectors as well as a broader public already angry at the prospect of further price rises.
Sharif’s party had to convince its largest ally, the Pakistan Peoples Party (PPP), without whom it does not have a majority, to attend the budget session in parliamentary. PPP said it was not happy with some of the measures.
But analyst Yousaf Nazar, formerly of Citibank, believes the protestations are just political posturing. “(PPP) won’t rock the boat,” he said.
With few options in the short term to support Pakistan’s recent stability, an IMF program appears crucial.
Increasing the tax base in an economy where proper documentation is often lacking will require considerable time and effort. Pakistan’s undocumented parallel economy is huge and 44 percent of its nominal GDP does not contribute significantly toward direct tax revenue, according to the Tola Associates, a tax firm.
Traders and agriculturalists in particular, both politically influential, have resisted the government’s push to register themselves and document their sales.
“If the tax base is not going to increase, moving forward, the country’s tax revenues growth can drop further and it might end up as a dead weight loss to the economy,” Tola Associates said in a note.
“The real challenge is that of implementation,” said former central bank chief and Managing Director at Alvarez & Marsal Reza Baqir.
“For example, the budget targets an ambitious increase in the tax-to-GDP ratio. Many previous budgets have similarly targeted ambitious improvements. I would hope that the lessons from why those ambitions were not realized have been reflected in this budget.”


‘This Hajj has united us’: Pakistani pilgrims help elderly parents perform rituals

Updated 14 June 2024
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‘This Hajj has united us’: Pakistani pilgrims help elderly parents perform rituals

  • Pilgrims can expect to walk between 5km-15km per day during three-day Hajj
  • Around160,000 Pakistanis expected to perform Hajj this year, officials say 

ISLAMABAD: Pushing his mother in a wheelchair through the large premises of Makkah’s Grand Mosque, Pakistani pilgrim Wilayat Mustafa said he was determined to help his mother fulfill her dream of performing the Hajj pilgrimage.
Wrapped in white robes, the father of four arrived in Makkah along with his mother, wife, and sister on a journey that cost them around $20,000 to perform the fifth pillar of Islam. The religious rite takes place in the 12th month of the Islamic calendar. Pilgrims can expect to walk between 5km-15km per day during the three-day Hajj.
Mustafa, a business professor, said he wanted to repay his mother for evertyhing she has done for their family.
“You know our mothers, our parents paid so much attention when we were child. They have brought us up,” Mustafa, 51, said. “We cannot return all these things to our parents but what we do is we should help them. And every Muslim helps their parents when they are old and loves them.”
Mustafa said his mother was around 75 and weak and unable to walk.
“In Hajj, we have to walk a lot. So, for helping her, I have brought her on her wheelchair to perform all the activities of the Hajj.”
Shaqat Yasmin, Mustafa’s mother, said she was “very happy” her son was taking care of her along with her daughter and my daughter-in-law.
“And we are here for three days for saying our prayers all the day long and also reciting Qur’an.”
Hajj is mandatory for every able-bodied Muslim who can afford it to partake at least once in their lifetime. Around 160,000 Pakistanis will perform Hajj this year, according to figures from the religious affairs ministry. 
For Mustafa, the pilgrimage has also given him a chance to spend quality time with this mother. 
“This Hajj has united us to meet and keep spare time with us, with each other,” he said. “Otherwise where we were living in our country we meet after 5 days or 6 days or 7 days but this is the time when we are here [together] 24 hours.”
With inputs from Reuters


Pakistan mill owners say new federal budget ‘threatens’ textile sector, exports

Updated 14 June 2024
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Pakistan mill owners say new federal budget ‘threatens’ textile sector, exports

  • Pakistan increased tax on textile exports to 29% of profits, while sales tax on retail increased to 18%
  • Industrialists say the ‘regressive’ measures will eliminates incentives and drains liquidity from the sector

ISLAMABAD: The All Pakistan Textile Mills Association (APTMA) on Friday voiced severe concerns regarding the new federal budget and called it an “extremely regressive” one that “threatens” the textile sector and its exports.
The ambitious revenue targets for the fiscal year through June 2025, presented by Finance Minister Muhammad Aurangzeb in parliament this week, were in line with analyst expectations. Total spending was 18.87 trillion rupees ($68 billion).
Key objectives for the upcoming fiscal year included bringing the public debt-to-GDP ratio to sustainable levels and prioritizing improvements in Pakistan’s balance of payments position, the government’s budget document showed.
Non-tax revenue, including petroleum levies, was seen increasing by a whopping 64 percent, while sales tax would increase to 18 percent on textile and leather products as well as mobile phones.
Pakistani textile mill owners said the new budget could have “dire consequences” for employment and external sector stability as well as for overall economic and political stability of the South Asian country.
“The budget is based on extremely regressive tax policies. The tax rate on exports has increased from a 1 percent final tax regime to a staggering 29 percent on profits, plus a 2 percent
advance tax on export proceeds. This excessive taxation eliminates incentives for export-oriented activities and drains liquidity from the sector as the 2 percent advance tax will soak up all liquidity from low-margin high-volume industries like textile,” the APTMA said in a statement.
“This 18 percent sales tax and turnover tax will further disadvantage local manufacturers. These measures will further erode their competitiveness, causing huge reduction in domestic value addition in exports and deterioration of trade balance.”
The textile sector body noted that after peaking at $19.3 billion in FY2021-22, textile exports had plummeted to approximately $16.5 billion in FY2022-23, while the trend continued throughout FY2023-24, with monthly exports consistently falling over $600 million below the installed capacity.
“This drastic decline highlights the urgent need for governmental intervention to support the sector. No measures have been put forward to resolve the industry-wide energy crisis,” it said.
“Grid power tariffs have soared to 16.4 cents/kWh and are expected to increase by another 2 cents/kWh following tariff rebasing in July. This is more than twice the regional average. The cross subsidy from industrial to other consumers is also expected to rise from Rs. 240 billion to Rs. 380 billion, exacerbating the financial strain on textile manufacturers and further eroding their competitiveness.”
The APTMA said rising energy costs, high interest rates, and the dysfunctional sales tax refund mechanism had pushed many firms to the brink of bankruptcy. It warned of a severe deterioration in both foreign and domestic investment prospects and destabilization of the external sector and overall economic growth for the years to come.
“APTMA urges the government to reconsider the FY25 budget and implement measures that address the prohibitive energy costs, rationalize taxation, and provide a conducive business environment to avert an imminent collapse of the textile sector,” the association said.
“Failure to do so will have catastrophic implications not only for the textile industry but for Pakistan’s entire economy and society.”
The South Asian country narrowly averted a default in June 2023 and its $350 billion economy has slightly stabilized after the completion of its last International Monetary Fund (IMF) program in April, with inflation coming down to around 17 percent in April from a record high of 38 percent in May last year.
Pakistan is still dealing with a high fiscal shortfall and while it has controlled its external account deficit through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2 percent this year, compared to negative growth last year.
The South Asian country is currently holding talks with the IMF to seek $6-8 billion under an new, longer-term program and request additional financing from the IMF under the Resilience and Sustainability Trust.


Pakistan to engage international consulting firms in effort to expand foreign investments 

Updated 14 June 2024
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Pakistan to engage international consulting firms in effort to expand foreign investments 

  • Sharif meets delegation led by Dr. Reza Baqir, former Pakistan central bank governor, currently with consulting firm Alvarez & Marsal
  • Last month Pakistan signed agreement with global consulting giant McKinsey and Company for digitalization of its tax system

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif said on Friday his government would consult internationally renowned consulting firms in order to expand foreign investments as the South Asian nation navigates numerous challenges to shore up an uneven economic recovery.
The Sharif-led government has been making a concerted push in recent months to seek foreign investments, with a flurry of visits, including to Saudi Arabia, UAE and China. Last week, Pakistan signed dozens of memorandum of understanding with China during a visit by Sharif. 
“Investment agreements with friendly countries of the country should be completed in consultation with internationally renowned firms,” Sharif said at a meeting with a delegation led by Dr. Reza Baqir, a former governor of the Pakistan central bank, who is currently managing director and practice leader of sovereign advisory services at Alvarez & Marsal.
Alvarez & Marsal is a global professional services firm notable for its work in turnaround management and performance improvement of a number of large, high-profile businesses both in the US and abroad such as Lehman Brothers, HealthSouth, Tribune Company, Warnaco, Interstate Bakeries, Target, Darden Restaurants and Arthur Andersen.
A statement released by Sharif’s office said the delegation led by Dr. Baqir presented suggestions regarding the expansion of international investment in Pakistan.
“In order to reduce the size of the government and make the government system effective, consult with world-renowned firms,” Sharif was quoted as saying in the statement. “Private sector has a key role in the development of national economy.”
Last month, Pakistan signed an agreement with global consulting giant McKinsey and Company for the digitalization of its tax system as the South Asian nation strives to deliver reforms amid talks with the International Monetary Fund for a new bailout loan.


Relatives of Pakistani, other victims of Greece boat disaster demand answers, one year on

Updated 14 June 2024
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Relatives of Pakistani, other victims of Greece boat disaster demand answers, one year on

  • Up to 700 migrants from Pakistan, Syria and Egypt were crammed in Libya into a fishing trawler bound for Italy
  • It capsized off southwestern Greece in June 2023, even though Greek coast guard had been monitoring it for hours

ATHENS: Demonstrators were due to rally in Athens on Friday to mark the anniversary of a shipwreck that killed hundreds of migrants off Greece and demand answers about the causes of the disaster and the fate of relatives.
Up to 700 migrants from Pakistan, Syria and Egypt were crammed in Libya into a fishing trawler bound for Italy. It capsized off southwestern Greece on June 14, 2023, even though the Greek coast guard had been monitoring it for hours.
Some 104 survivors were rescued but only 82 bodies were recovered. The catastrophe, one of the worst Mediterranean boat disasters on record, raised searching questions about how the European Union is trying to stem flows of migrants.
“I wake up to nightmares. Even now, I swear by God, my body still hurts,” said one Egyptian survivor called Mohamed. “We, thanks to God, are alive ... Where are the rest of the bodies?“
Survivors and activists were planning rallies in Athens, London, Paris and Berlin. In the Pakistani city of Lalamousa, victims’ relatives prepared a memorial ceremony.
Survivors say the coast guard caused the ship to capsize when it tried to tow the vessel in the early hours of the morning. Authorities say the movement of migrants on board tipped the overcrowded boat over.
A year on, a probe by a naval court into the coast guard’s role is still at a preliminary stage, frustrating survivors, relatives and rights groups. Greece’s shipping minister has called for patience.
Pantelis Themelis, commander of Greece’s Disaster Victim Identification unit, said 74 of the 82 dead had been identified. But many more families from Africa, the Middle East and Asia have sent DNA samples to Greece for checks to no avail.
Hasan Ali, an Athens resident from Pakistan, said his brother Fahad was among the missing, and their parents back in Pakistan would not accept that he could be dead.
“My mother and father are waiting for him,” Ali said. “They say he’s alive, that he’s in Greece.”