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

In this handout photo, taken and released by the Government of Pakistan, members of Pakistan’s lower house of the parliament attend the National Assembly meeting in Islamabad on March 1, 2024. (Photo courtesy: Facebook/ NationalAssemblyOfPakistan)
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Updated 01 March 2024

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.

Pakistani, Saudi investors to set up $5 million edible oil refinery in Kingdom — Pakistan trade official

Updated 28 May 2024

Pakistani, Saudi investors to set up $5 million edible oil refinery in Kingdom — Pakistan trade official

  • Official says the joint venture is expected to be signed in next six months and it will allow export of 50 percent edible oil
  • Saudi authorities are offering land and other facilities to investors to encourage investment in the Kingdom, he adds

KARACHI: Pakistani and Saudi investors are establishing a $5 million edible oil refinery in Saudi Arabia through a joint venture (JV), a senior Pakistani trade official said on Tuesday, following recent business-to-business interactions between the two countries.

The development comes weeks after a 50-member, high-level delegation, led by the Kingdom’s Assistant Minister of Investment Ibrahim Al-Mubarak, arrived in Pakistan to explore investment opportunities in the South Asian country.

Pakistan and Saudi Arabia have been working closely in recent weeks to increase bilateral trade and investment deals, with Crown Prince Mohammed bin Salman last month reaffirming the Kingdom’s commitment to expedite an investment package of $5 billion.

“We are putting up an edible oil refinery in Saudi Arabia with the local partners. We have shared the feasibility with each other, and we will sign [an agreement] very soon,” Atif Ikram Sheikh, president of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), told Arab News on Tuesday. “There will be a joint venture.”

Ikram, who runs edible oil refineries and other businesses in Pakistan, informed that the project cost would be equally shared by investment partners, including himself.

“The project cost will be $5 million and we will share the cost together and this would be materialized within six months,” he said, adding the Saudi authorities were offering land and other facilities for the refinery. 

Saudi Arabia is currently consolidating its economy on modern lines under Vision 2030, a strategic development framework intended to cut the Kingdom’s reliance on oil. Under the framework, the Kingdom is also encouraging investment in diversified sectors to increase its export base.

“Their [Saudi authorities] condition is to maximize oil export up to 50 percent, while the rest you can sell in the local market,” Sheikh said.

The FPCCI chief said Saudi Arabia’s interest in Pakistan’s diversified sectors was “constantly increasing” and both sides had made tangible progress, including Saudi investment inflows in oil, agriculture and other sectors. 

In December last year, Aramco, one of the world’s leading integrated energy and chemicals companies, signed an agreement to acquire a 40 percent equity stake in Gas & Oil Pakistan that followed the signing of an agreement in November 2023 by Shell Pakistan (SPL) with Saudi Arabia’s Wafi Energy to sell its domestic operations after Shell Petroleum Company announced its exit from Pakistan with the sale of 77 percent shareholding in the local business.

Pakistani traders also expect further inflow of investment from the Gulf countries.

The FPCCI president said Pakistan’s Special Investment Facilitation Council (SIFC), a body consisting of Pakistani civilian and military leaders and specially tasked to promote foreign investment in Pakistan, is playing a crucial role in boosting investment in the South Asian country. 

The council, established in June last year, is focusing on investments in energy, agriculture, mining, information technology and aviation sectors, specifically targeting the Gulf nations.

Pakistan PM says ‘deeply concerned’ about Israeli strikes on Rafah, deplores violation of international law

Updated 28 May 2024

Pakistan PM says ‘deeply concerned’ about Israeli strikes on Rafah, deplores violation of international law

  • Israeli tanks reached the center of Rafah for the first time on Tuesday, three weeks into an operation that has sparked global condemnation
  • Shehbaz Sharif says Pakistan strongly condemns Israel’s bombardment of Rafah, urges international community, particularly UN, to play role

ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif said on Tuesday he was “deeply concerned” about Israeli strikes on the southern Gaza city of Rafah, deploring repeated violations of the international law by the Jewish state.

Israeli tanks reached the center of Rafah for the first time on Tuesday, witnesses said, three weeks into a ground operation in the southern Gaza city that has sparked global condemnation.

Overnight, Israeli forces pounded the city with airstrikes and tank fire, pressing their offensive despite an international outcry over an attack on Sunday that sparked a blaze in a tent camp, killing at least 45 Palestinians.

Sunday’s attack on the Rafah refugee camp came two days after the International Court of Justice (ICJ) ordered Israel to end its military offensive in Rafah, where more than half of Gaza’s population had sought shelter before Israel’s incursion earlier this month.

“Deeply concerned by the disturbing developments in Rafah. Pakistan strongly condemns Israel’s indiscriminate bombardment that has led to heavy casualties,” PM Sharif said on X.

“It is deplorable that international law is being repeatedly violated, despite ICJ’s recent clear verdict against Israel.”

The case against Israel was initiated by South Africa in December 2023, where it labeled Israel’s actions in the Gaza Strip as “genocidal,” asserting that they intended to destroy the Palestinian people in ways specified under the 1948 Genocide Convention.

Pakistan does not recognize the state of Israel and calls for an independent Palestinian state based on “internationally agreed parameters” and the pre-1967 borders with Al-Quds Al-Sharif as its capital.

In recent months, the South Asian country has repeatedly raised the issue of Israel’s war on Gaza, launched last October, at the United Nations through its permanent representative, Ambassador Munir Akram.

“The international community, particularly the UN, must play its part in protecting civilians from such brutal aggression,” PM Sharif said in his statement on X.

The war on Gaza broke out after Hamas attacks on Israel on October 7, which killed more than 1,100 people, in response to the deteriorating condition of Palestinian people living under Israeli occupation.

Israel launched a retaliatory offensive, widely viewed as disproportionate, in which more than 35,000 Palestinians, mostly women and children, have lost their lives, according to the Palestinian Health Ministry.

Pakistan PM calls for minimizing load shedding amid heatwave, urges steps against power theft

Updated 28 May 2024

Pakistan PM calls for minimizing load shedding amid heatwave, urges steps against power theft

  • Power outages are not uncommon in Pakistan during the summer months when the demand on the national grid spikes sharply
  • Pakistan’s power sector has also been plagued by high rates of power theft and distribution losses, leading to huge debts

ISLAMABAD: Prime Minister Shehbaz Sharif on Tuesday urged authorities to minimize load shedding in Pakistan amid an ongoing heatwave and to take steps against power theft in the country, his office said.

The directives were issued during a meeting Sharif presided over in Islamabad to review the supply of electricity, load management and measures against power theft in parts of the country.

Power outages are not uncommon in Pakistan during the summer months when the demand on the national grid spikes sharply due to the widespread use of air conditioners and desert coolers.

These seasonal surges often lead to prolonged power outages, which fuel public discontent, particularly during the intense heatwaves that have swept across Pakistan in recent years.

“The situation of [power] load management in extreme heat should be improved, keeping the convenience of the public in view,” Sharif was quoted as saying by his office.

“Provincial governments and law enforcement agencies should fully support the anti-electricity theft campaign.”

The South Asian nation’s power sector has been plagued by high rates of power theft and distribution losses, resulting in accumulating debts across the production chain — a concern also raised by the International Monetary Fund (IMF) during recent bailout talks.

The government of PM Sharif has recently launched a campaign to curb power theft in the country to avoid huge financial losses.

The prime minister said he would personally review progress on the drive against power theft, urging authorities to ensure that consumers were not charged excessive bills.

“The national interest and the development and prosperity of the country require that all the government institutions perform their responsibilities effectively against electricity theft,” he added.

Climate change caused 26 extra days of extreme heat in last year — report

Updated 28 May 2024

Climate change caused 26 extra days of extreme heat in last year — report

  • In total, 76 extreme heatwaves were registered in 90 countries on every continent except Antarctica
  • Already this year, extreme heatwaves have afflicted swathes of the globe from Mexico to Pakistan

PARIS: The world experienced an average of 26 more days of extreme heat over the last 12 months that would probably not have occurred without climate change, a report said on Tuesday.

Heat is the leading cause of climate-related death and the report further points to the role of global warming in increasing the frequency and intensity of extreme weather around the world.

For this study, scientists used the years 1991 to 2020 to determine what temperatures counted as within the top 10 percent for each country over that period.

Next, they looked at the 12 months to May 15, 2024, to establish how many days over that period experienced temperatures within — or beyond — the previous range.

Then, using peer-reviewed methods, they examined the influence of climate change on each of these excessively hot days.

They concluded that “human-caused climate change added — on average, across all places in the world — 26 more days of extreme heat than there would have been without it.”

The report was published by the Red Cross Red Crescent Climate Center, the World Weather Attribution scientific network and the nonprofit research organization Climate Central.

2023 was the hottest year on record, according to the European Union’s climate monitor, Copernicus.

Already this year, extreme heatwaves have afflicted swathes of the globe from Mexico to Pakistan.

The report said that in the last 12 months some 6.3 billion people — roughly 80 percent of the global population — experienced at least 31 days of what is classed as extreme heat.

In total, 76 extreme heatwaves were registered in 90 different countries on every continent except Antarctica.

Five of the most affected nations were in Latin America.

The report said that without the influence of climate change, Suriname would have recorded an estimated 24 extreme heat days instead of 182; Ecuador 10 not 180; Guyana 33 not 174, El Salvador 15 not 163; and Panama 12 not 149.

“(Extreme heat) is known to have killed tens of thousands of people over the last 12 months but the real number is likely in the hundreds of thousands or even millions,” the Red Cross said in a statement.

“Flooding and hurricanes may capture the headlines but the impacts of extreme heat are equally deadly,” said Jagan Chapagain, secretary general of the International Federation of the Red Cross.

‘Welcome development,’ says Pakistan as Spain, Norway, Ireland to recognize Palestinian state today

Updated 28 May 2024

‘Welcome development,’ says Pakistan as Spain, Norway, Ireland to recognize Palestinian state today

  • Three European states have said they will formally recognize Palestinian state from May 28
  • This followed recognitions by Barbados, Jamaica, Trinidad and Tobago and the Bahamas

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif on Tuesday congratulated Spanish PM Pedro Sanchez for pushing ahead with a decision to recognize a Palestinian state from today, Tuesday, as the European nation joins Ireland and Norway in implementing last week’s announcement.

The prime ministers of Spain, Ireland and Norway made the announcement on Wednesday, following recent recognitions by Barbados, Jamaica, Trinidad and Tobago and the Bahamas. The additions have brought the total number of countries recognizing the Palestinian state to nearly 150.

“The recognition of the reality of Palestine by a country like Spain is a positive and welcome development on the international scene,” Sharif said in a statement released by his office.

“Honorable [Spanish PM] Pedro Sanchez and the people of Spain have rejected the ongoing historical oppression and usurpation ambitions of Israel on innocent Palestinians with this decision.”

By joining more than 140 of the 193 member-states of the United Nations that recognize a Palestinian state, Madrid, Dublin and Oslo have said they sought to accelerate efforts to secure a ceasefire in Israel’s war with Hamas in Gaza.

“This is a historic decision that has a single objective: that Israelis and Palestinians achieve peace,” Sanchez said in a televised address before a cabinet meeting that will formally approve the measure.

Spain will recognize a unified Palestinian state, including the Gaza Strip and the West Bank, under the Palestinian National Authority with East Jerusalem as its capital, he said.

The Palestinian Authority, which exercises limited self-rule in the West Bank under Israeli military occupation, has welcomed the decision.

Sanchez said Madrid will not recognize any changes to pre-1967 borders unless agreed to by both parties.

“It’s the only way of advancing toward what everyone recognizes as the only possible solution to achieve a peaceful future, one of a Palestinian state that lives side by side with the Israeli state in peace and security,” he added.

Ireland’s Department of Foreign Affairs said last week it would upgrade its representative office in Ramallah in the West Bank to an embassy and appoint an ambassador and upgrade the status of the Palestinian mission in Ireland to an embassy.

The three countries say they hope their decision will spur other European Union countries to follow suit.

Israel has repeatedly condemned the move, insisting that it bolsters Hamas, which staged the Oct. 7 attack on Israel from its Gaza base.

“Sanchez, when you... recognize a Palestinian state, you are complicit in incitement to genocide against the Jewish people and in war crimes,” Israeli Foreign Minister Israel Katz wrote on X on Tuesday.

The Palestinian flag was flying outside the Irish parliament as the government was set to approve the recognition in a cabinet meeting on Tuesday morning.

“The people of Ireland know that a two-state solution is the only way to bring peace and stability to people in Israel, and to people in Palestine,” Prime Minister Simon Harris told journalists before the cabinet meeting.

-With inputs from Reuters