Pakistan hopes to clear final IMF review, considers additional financing of $6-8 billion

The seal of the International Monetary Fund is seen at the headquarters building in Washington, DC on July 5, 2015. (AFP/File)
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Updated 27 February 2024
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Pakistan hopes to clear final IMF review, considers additional financing of $6-8 billion

  • Pakistan has increased energy prices to meet the global lender’s conditions under the short-term $3 billion loan
  • Pakistani officials say the final decision to avail another IMF program will be made by the next elected government

KARACHI: Expressing confidence to clear the final review of $3 billion short-term financing program of International Monetary Fund (IMF) after meeting key conditions including energy price hike, Pakistani authorities are weighing options to avail another $6-8 billion program, an official privy to the situation confirmed on Tuesday.
The South Asian nation, with a population of over 241 million, increased gas prices by up to 76 percent for domestic consumers in recent months before raising petroleum prices by 1-3 percent in February. The National Electric Power Regulatory Authority (NEPRA) also notified Rs7.05 per unit hike in power prices under fuel charge adjustment (FCA) on Monday.
Pakistani authorities are confident that recent energy price adjustments to meet some of the key conditions of the global lender would help clear the second and last review of the $3 billion Stand By Arrangement (SBA) that ends in March 2024.
“With latest energy price hikes, Pakistan has met almost all the preconditions set by the IMF for end-December 2023 review including exchange rate stability, continuation of tight monetary policy and restricted circular debt flow,” an official of finance division on Tuesday told Arab News on condition of anonymity.
The official said the government was successful in restricting the circular debt flow below the fund’s stated target of Rs385 billion ($1.37 billion), though it went as high as Rs378 billion ($1.35 billion) by the end of last December.
Pakistan’s circular debt stock, outstanding payments and liabilities in the country’s energy sector, continues to swell despite taking painful measures by the government including tariff hikes that resulted in high inflation.
The circular debt within the energy sector escalated to a staggering Rs5.73 trillion (approximately $20.5 billion) by the end of last November, official data reveals. This figure encompassed a power sector debt of Rs2.7 trillion ($9.66 billion) alongside a gas sector indebtedness surpassing Rs3 trillion ($10.7 billion).
While the IMF has not yet announced dates to start negotiations with Pakistan for the second review since it was ostensibly waiting for the formation of the next government, a successful review of the program will enable the South Asian nation to receive another tranche of about $1.1 billion from the fund.
The Pakistani official said the country was exploring various options to put before the IMF to avail new long-term program in recent weeks.
“The options under consideration included the size and conditions for the new program,” he said adding: “Yes, the size could be anywhere between $6-8 billion including the climate financing factor, the RSF.”
The Resilience and Sustainability Facility (RSF) of the IMF offers affordable, long-term financing to countries committed to reforms aimed at mitigating risks to future balance of payments stability, including challenges posed by climate change and pandemic preparedness.
The official, however, clarified that nothing had been finalized yet, adding these options were still at a preliminary stage and would be suggested to the next government, if finalized.
“It will be the prerogative of the next elected government to negotiate the size, terms and condition of the next program with the fund or whether or not they want to go to the IMF,” he added.
Last year in November, Pakistan’s caretaker finance minister Dr. Shamshad Akhtar hinted the country would continue to seek financial facility from the IMF to keep its fragile economy afloat.
Pakistani economists underscored the need for a new IMF program while calling for immediate engagement with the fund.
“It is good to hear that the government is working to get another IMF program,” Dr. Sajid Amin, deputy executive director at Islamabad-based Sustainable Development Policy Institute (SDPI), said.
“The real test, however, will be how quickly the new government takes up the challenge and engages with the fund.”
The present state of economy, particularly the low foreign exchange reserves and high external debt repayments, made it imperative for the country, Amin continued, to seek the IMF support for at least three more years.
“Unnecessary delays, as we witnessed in the PTI [Pakistan Tehreek-e-Insaf] and PDM [Pakistan Democratic Movement] tenures, will hurt the economy,” he warned.
Arab News sought comments from both the IMF and the finance ministry for this story, but received no response.


Pakistan calls for removal of technology restrictions to aid developing nations at UN meeting

Updated 18 May 2024
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Pakistan calls for removal of technology restrictions to aid developing nations at UN meeting

  • Access to emerging technologies in the Global South is often influenced by geopolitical concerns
  • Pakistan says equitable access to technology can help developing nations meet future challenges

ISLAMABAD: A senior Pakistani diplomat at the United Nations urged technology-producing nations on Friday to remove restrictions on the equitable spread of scientific knowledge and equipment, saying it would help advance developing countries.

Access to emerging technologies in the Global South is often influenced by geopolitical concerns, as international relations and trade policies can dictate the availability and distribution of these resources.

This geopolitical gatekeeping not only restricts technological advancement in less developed nations but also perpetuates global inequities in access to cutting-edge tools and innovations.

In case of Pakistan, US export controls limit access to high-end technologies, particularly those with dual-use capabilities that might be diverted for military purposes.

“Unless fair and equitable access to new and emerging technologies is provided to developing countries, and all undue restrictions removed, the Global South will lag even further behind in achieving the Sustainable Development Goals,” Ambassador Usman Jadoon, Pakistan’s Deputy Permanent Representative to the UN, told a Security Council meeting.

According to an official statement, he underscored the transformative power of science in improving lives and anticipating threats through climate modeling, disease surveillance, and early warning systems.

Additionally, he highlighted Pakistan’s significant strides in nuclear technology, space exploration and biotechnology, saying that his country wanted to leverage scientific advancements for progress and stability.

“New and emerging technologies play an undeniable role in the progress of any society and in maintaining international peace and security when used in accordance with the principles of the UN Charter,” he continued.

Ambassador Jadoon mentioned Pakistan’s concerns about the unregulated military applications of emerging technologies and supported calls for establishing legally-binding norms to regulate their use, ensuring regional and global stability.

He affirmed his country’s commitment to unlocking the potential of science for peace and progress, advocating for responsible scientific practices and international cooperation to build a safer and more prosperous future.

 


Students urge government for evacuation as five Pakistanis injured in Kyrgyzstan mob violence

Updated 18 May 2024
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Students urge government for evacuation as five Pakistanis injured in Kyrgyzstan mob violence

  • Around 6,000 Pakistanis are studying in Bishkek, where violence erupted after some Egyptians quarreled with locals
  • Pakistan embassy has asked students to stay indoors, though many of them suspect resumption of violence tonight

ISLAMABAD/KARACHI: Pakistani students in Kyrgyzstan on Saturday urged their country’s administration to make arrangements for their evacuation from the Kyrgyz capital of Bishkek after mob violence against foreign nationals enrolled in various universities broke out on Friday evening in which five Pakistani medical students got injured.

A Facebook post by Pakistan’s diplomatic mission in the Central Asian city said the violence began after the emergence of online videos showing a brawl between Kyrgyz and Egyptian medical students that took place on May 13.

The mobs mostly targeted hostels of medical universities and private residences of international students, including Pakistanis, in Bishkek. According to the Pakistan embassy, around 10,000 Pakistani students are enrolled in different institutes in Kyrgyzstan and nearly 6,000 of them live and study in Bishkek.

Speaking to Arab News over the phone, Rana Taha, a final year medical student in the Kyrgyz city, he was stuck at his flat with other Pakistani students without any food and water.

“We have been frantically calling our embassy and the local authorities for assistance, but they are only advising us to stay indoors,” he said. “The paramilitary troops are patrolling the streets since the situation is still not under control.”

“The locals attacked our flat twice in the early hours of the day, but luckily they failed to barge in,” he continued. “We appeal our embassy to evacuate us to safety or make arrangements for our safe flights to back home.”

Nisar Ali, a fourth-year medical student from Peshawar, said the local police appeared to be “assisting the rioters,” instead of stopping them.

“They [rioters] are not discriminating among international students,” he informed. “Although it started between Egyptian students and locals, they are now attacking every foreigner, whether they are Indian, Pakistani, Egyptian, Bangladeshi, or citizens of any other country. Every other student is injured. Several of my friends who lived in the hostel have been attacked and are severely injured.”

Ali said the violence started at about 10pm on Friday, but the Pakistan embassy did not answer the calls until morning.

“I live with Pakistani friends in an apartment,” he added. “We have locked ourselves in with all lights off. We have nothing to eat, and we cannot go out, as going out means you are going to be attacked.”

He noted some peace was restored when the army troops arrived in Bishkek, but the students were still not feeling safe.

“We appeal to the government of Pakistan to safely evacuate us,” he said.

Pakistan’s ambassador to Kyrgyzstan Hasan Zaigham confirmed while speaking to Arab News over the phone that five Pakistani students had been injured.

“One of them is admitted in a local hospital with some jaw injuries, while four others were released after first aid,” he informed.

“No Pakistani is killed or raped in the violence,” he said, rebutting rumors on social media. “The situation is under control now as Bishkek authorities have dispersed all the miscreants.”

The ambassador said they had advised Pakistani students to stay indoors and get in touch with the embassy in case of any urgency.

“We are in touch with the local law enforcement authorities to ensure safety of our students,” he added.

However, Muhammad Waleed, a final year medical student, said they had not received any “support from the Pakistan embassy despite our repeated calls and messages,” though they were informed to stay indoors.

“I am taking shelter here in Bishkek at a human rights organization’s office along with dozens of other Pakistani students,” Waleed informed over the phone. “Most of the students are still stuck in their hostels and apartments.”

He acknowledged the situation got better when the paramilitary troops were deployed in the city, though he said the situation was still fluid.

“We want Pakistani government to immediately arrange for our safe travel to back home as the situation may escalate again once the troops are pulled out,” he added.

Raj Kumar, a resident of Tharparkar district in Pakistan, told Arab News his sister was a medical student in Bishkek, adding that students there were suspecting the resumption of violence tonight.

“Those girls including my sisters are terrified by the situation,” he said. “They need to be relocated to a safer place.”

“We want to know what is the course of action contemplated by the Pakistan embassy there and the ministry of foreign affairs in particular,” he added.

Tariq Aziz, a Karachi resident, also said his daughter was “trapped inside a flat along with three friends,” which was located opposite to the hostel that was attacked last night.

“When I talked a little while ago, my daughter told me that only one message came from the Pakistan embassy, saying not to leave the flat. But there is no guarantee that the rioters, just like they broke the doors of several other flats where students were residing, will not break door of their flat too,” he told Arab News.

“A long time has passed since the violence started. The Pakistan embassy should not send messages but arrange security for the girls and safely take them to the airport,” he added.

Pakistan’s foreign ministry summoned Kyrgyzstan’s top diplomat in the country in response to the mob violence and handed him a protest note.

“It was impressed on the Kyrgyz charge d’affaires that the Kyrgyz government should take all possible measures to ensure the safety and security of Pakistani students and citizens,” it said in a statement.

Mumtaz Zahra Baloch, the Pakistani foreign office spokeswoman, said the Pakistani embassy had responded to hundreds of queries by students and their families. She said the country’s envoy and his team were available on the emergency contact numbers: +996555554476 and +996507567667.

“In case the numbers do not connect because of phone traffic, please text/WhatsApp,” Baloch said on X.

The Pakistani embassy reported earlier it had been able to contact over 250 students and their family members in Pakistan, adding the violence appeared to be directed at all foreign students and was not specific to Pakistanis.

It said this was an evolving situation and they would inform the Pakistani community in Kyrgyzstan and their relatives in Pakistan about any further developments.

 


PM Sharif constitutes Economic Advisory Council as Pakistan aims to put economy on track

Updated 18 May 2024
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PM Sharif constitutes Economic Advisory Council as Pakistan aims to put economy on track

  • The EAC is non-constitutional, independent body that advises the government on important economic issues
  • Pakistan is currently navigating a tricky path to economic recovery after it narrowly escaped default last year

ISLAMABAD: Prime Minister Shehbaz Sharif has constituted an eight-member Economic Advisory Council (EAC), the Finance Division said on Saturday, as the South Asian country aims to revive its struggling $350 billion economy.
The Economic Advisory Council (EAC) is a non-constitutional, independent body in Pakistan formed to advise the government, more specifically the prime minister, on economic issues of national significance.
Pakistan, which has been facing low foreign exchange reserves, currency devaluation and high inflation, last month completed a short-term $3 billion International Monetary Fund (IMF) program that helped stave off a sovereign default.
However, the South Asian country 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 EAC will be chaired by the prime minister, who will convene its meeting with any required frequency,” the Finance Division said in a notification.
The council members include Jahangir Tareen, Saquib Sherazi, Shahzad Saleem, Musadaq Zulqarnain, Ijaz Nabi, Asif Peer, Ziad Bashir and Salman Ahmed.
The development comes amid Pakistan’s talks with the IMF for a fresh bailout after its $350 billion economy slightly stabilized following the completion of the last IMF program, with inflation coming down to around 17 percent in April from a record high of 38 percent in May last year.
While Islamabad has said it expects a staff-level agreement by July, both Pakistani and IMF officials have refrained from commenting on the size of the program. The South Asian country is expected to seek around $7-8 billion bailout from the global lender.
Pakistan has to meet a primary budget deficit target of Rs401 billion ($1.44 billion), or 0.4 percent of its gross domestic product, for the current fiscal year before the government presents its budget in June.


Saudi Crown Prince’s visit to Pakistan will prove to be ‘game changer’ in bilateral ties — minister

Updated 18 May 2024
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Saudi Crown Prince’s visit to Pakistan will prove to be ‘game changer’ in bilateral ties — minister

  • Pakistan’s deputy PM this month said the much-awaited visit was ‘on the cards,’ but neither side has confirmed any dates
  • The statement came amid Pakistan and Saudi Arabia’s efforts to increase bilateral trade and reach investment agreements

ISLAMABAD: Interior Minister Mohsin Naqvi said on Saturday that a proposed visit of Saudi Crown Prince Mohammed bin Salman to Pakistan would prove to be a “game changer” in bilateral ties between both countries, adding the entire Pakistani nation was awaiting the high-profile visit.
Naqvi said this during his visit to the Saudi embassy in Islamabad, where he met the Kingdom’s ambassador, Nawaf bin Saeed Al-Malki, according to the Pakistani interior ministry. The two figures discussed matters of mutual interest, including the Crown Prince’s visit, Pakistan-Saudi Arabia relations and bilateral cooperation in various fields.
Pakistan’s Deputy Prime Minister Ishaq Dar this month said a much-awaited visit of Saudi Arabia’s Crown Prince Mohammed bin Salman to Islamabad was “on the cards” and could materialize any time during May. But neither of the two sides has confirmed any dates.
“The historic brotherly friendship of Saudi Arabia and Pakistan is turning into a beneficial economic relationship,” Naqvi was quoted as saying by his ministry.
“The people of Pakistan are looking forward to the visit of the Crown Prince of Saudi Arabia. The visit of the Saudi Crown Prince will prove to be a game changer in relations between the two countries.”
Pakistan and Saudi Arabia have lately been working closely to increase bilateral trade and investment deals, with the Crown Prince last month reaffirming the Kingdom’s commitment to expedite an investment package of $5 billion.
A high-level Saudi business delegation, led by the Kingdom’s Assistant Minister of Investment Ibrahim Al-Mubarak, this month visited Pakistan to explore investment opportunities in various sectors, including mineral, energy, agriculture and petroleum.
“Saudi Arabia has supported Pakistan in every test,” Naqvi said. “The recent visit of Saudi Arabian investors to Pakistan was very successful.”
On the occasion, the Saudi ambassador said the Kingdom attached “great importance” to its relations with Pakistan, according to the Pakistani interior ministry.
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 a top source of remittances to the cash-strapped South Asian country.
Saudi Arabia has also often come to cash-strapped Pakistan’s aid by regularly providing it oil on deferred payment and offering direct financial support to help stabilize its economy and shore up its forex reserves.


Ambassador says five Pakistani students injured in Kyrgyzstan mob violence

Updated 18 May 2024
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Ambassador says five Pakistani students injured in Kyrgyzstan mob violence

  • Around 6,000 Pakistanis are studying in Bishkek, where mob violence erupted after some Egyptians quarreled with locals
  • Pakistani students say they have been stuck inside their residences, urge Islamabad to immediately evacuate them to safety

ISLAMABAD/KARACHI: Five Pakistani medical students were injured in a mob attack on foreign students in the Kyrgyz capital of Bishkek, Pakistan’s ambassador to Kyrgyzstan said on Saturday.
A number of incidents of mob violence against foreign students have been reported in Bishkek since Friday evening. The matter boiled over due to sharing online of videos of a brawl between Kyrgyz students and medical students from Egypt on May 13, the Pakistani embassy said on Facebook, citing the Kyrgyz press.
So far, a few hostels of medical universities in Bishkek and private residences of international students, including Pakistanis, have been attacked. The hostels are inhabited by students from India, Pakistan and Bangladesh, and there have been reports of minor injuries to some Pakistani students.
“Five Pakistani students were injured in the mob violence. One of them is admitted in a local hospital with some jaw injuries, while four others were released after first aid,” Hasan Zaigham, Pakistan’s ambassador to Kyrgyzstan, told Arab News over the phone.
“No Pakistani is killed or raped in the violence,” he said, rebutting rumors on social media. “The situation is under control now as Bishkek authorities have dispersed all the miscreants.”
The ambassador said they had advised Pakistani students to stay indoors and get in touch with the embassy in case of any urgency. “We are in touch with the local law enforcement authorities to ensure safety of our students,” he said.
Around 10,000 Pakistani students are enrolled in different institutes in Kyrgyzstan and nearly 6,000 of them are residing and studying in Bishkek where the violence erupted Friday night, according to Zaigham.
Pakistani students call for evacuation

Nisar Ali, 23, a fourth-year MBBS student in Bishkek hailing from Peshawar, said the local police appeared to be “assisting the rioters,” instead of stopping them.
“They [rioters] are not discriminating among international students. Although it started between Egyptian students and locals, they are now attacking every foreigner, whether they are Indian, Pakistani, Egyptian, Bangladeshi, or citizens of any other country. Every other student is injured. Several of my friends who lived in the hostel have been attacked and are severely injured,” he said.
“It started at around 10pm last night, but until morning, the Pakistan embassy didn’t answer our calls. I live with Pakistani friends in an apartment. We have locked ourselves in with all lights off. We have nothing to eat, and we cannot go out, as going out means you’re attacked.”
Ali said some peace was restored when the army troops arrived in Bishkek, but even then, they were not safe. “We appeal to the government of Pakistan to safely evacuate us,” he added.

Muhammad Waleed, a final year medical student, said they haven’t received any “support from the Pakistan embassy despite our repeated calls and messages,” but warnings to stay indoors, appealing the Pakistani government to immediately evacuate them.
“I am taking shelter here in Bishkek at a human rights organization’s office along with dozens of other Pakistani students,” Waleed told Arab News over the phone from the Kyrgyz capital.
“Most of the students are still stuck in their hostels and apartments, but the situation is better now as paramilitary troops have been deployed in the city to maintain law and order. We want Pakistani government to immediately arrange for our safe travel to back home as the situation may escalate again once the troops are pulled out.”

Pakistani student receives treatment at the National Hospital in Bishkek on May 18, 2024, following a brawl among foreign and local students in Kyrgyz capital early Saturday. (Photo courtesy: 24.KG News Agency)

Tariq Aziz, a resident of the Pakistani city of Karachi, said his daughter was “trapped inside a flat along with three friends,” which was located opposite to the hostel that was attacked last night.
“When I talked a little while ago, my daughter told me that only one message came from the Pakistan embassy, saying not to leave the flat. But there is no guarantee that the rioters, just like they broke the doors of several other flats where students were residing, will not break door of their flat too,” Aziz told Arab News.
“A long time has passed since the violence started. The Pakistan Embassy should not send messages but arrange security for the girls and safely take them to the airport.”
Pakistan summons Kyrgyz envoy
Pakistan’s foreign ministry said it had summoned and handed a protest note to Kyrgyzstan’s top diplomat in the country in response to violence against Pakistani students.
“It was impressed on the Kyrgyz charge d’affaires that the Kyrgyz government should take all possible measures to ensure the safety and security of Pakistani students and citizens,” Pakistan’s foreign ministry said in a statement.
Earlier in the day, Pakistan Prime Minister Shehbaz Sharif expressed his concerns over the violence around student hostels in Bishkek and asked his country’s embassy to help Pakistani students in the city.
“Deeply concerned over the situation of Pakistani students in Bishkek, Kyrgyzstan. I have directed Pakistan’s Ambassador to provide all necessary help and assistance,” Sharif said on X. “My office is also in touch with the Embassy and constantly monitoring the situation.”
Mumtaz Zahra Baloch, a spokeswoman for the Pakistani foreign office, said the Pakistani embassy had responded to hundreds of queries by students and their families. She said Pakistan’s envoy and his team were available on the emergency contact numbers: +996555554476 and +996507567667.
“In case the numbers do not connect because of phone traffic, please text/WhatsApp,” Baloch said on X.
The Pakistani embassy earlier said it had been able to contact over 250 students and their family members in Pakistan, adding the violence appeared to be directed at all foreign students and was not specific to Pakistanis.
It said this was an evolving situation and they would inform the Pakistani community in Kyrgyzstan and their relatives in Pakistan about any further developments.