Pakistan says discussing new three-year, multi-billion-dollar loan program with IMF

Pakistan's Finance Minister Muhammad Aurangzeb speaks during an interview with AFP at the Embassy of Pakistan in Washington, DC on April 15, 2024. (AFP)
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Updated 16 April 2024
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Pakistan says discussing new three-year, multi-billion-dollar loan program with IMF

  • Finance minister Aurangzeb is in Washington for spring meetings organized by International Monetary Fund, World Bank
  • Meets Pakistan Business Council, Climate Vulnerable Forum chief, Pak-US businessmen and tech entrepreneurs

KARACHI: Pakistan has initiated discussions with the IMF over a new multi-billion dollar loan agreement to support its economic reform program, its new finance minister told AFP on Monday, during a visit to Washington for spring meetings organized by the International Monetary Fund and World Bank.

An ongoing nine-month, $3 billion loan program with the IMF designed to tackle a balance-of-payments crisis which brought Pakistan to the brink of default last summer will expire this month. 

With the final $1.1 billion tranche of that deal likely to be approved later this month, Pakistan has begun negotiations for a new multi-year IMF loan program worth “billions” of dollars, Finance Minister Muhammad Aurangzeb said during an interview in Washington.

“The market confidence, the market sentiment is in much, much better shape this fiscal year,” said Aurangzeb, a former banker who took up his post last month.

“It’s really for that purpose that, during the course of this week, we have initiated the discussion with the Fund to get into a larger and an extended program,” he added.

An IMF spokesperson told AFP that the Fund is “currently focused on the completion of the current Stand-by Agreement program,” referring to the ongoing nine-month program scheduled for completion shortly.

“The new government has expressed interest in a new program, and Fund staff stands ready to engage in initial discussions on a successor program,” the spokesperson added.

During his visit to Washington, Aurangzeb will also attend the spring meetings of the IMF and World Bank, which kick off in earnest Tuesday, with two clear objectives: to help countries combat climate change, and to assist the world’s most indebted nations.

The meetings, which bring central bankers together with finance and development ministers, academics, and representatives from the private sector and civil society to discuss the state of the global economy, will kick off with the IMF’s publication of its updated World Economic Outlook.

“US VS. CHINA”

Pakistan held elections in February this year which were marred by allegations of rigging, with opposition leader Imran Khan jailed and barred from running, and his Pakistan Tehreek-e-Insaf (PTI) party subject to a crackdown.

The shaky coalition that emerged, led by Shehbaz Sharif, is now tasked with engineering an economic turnaround by implementing a raft of unpopular belt-tightening measures.

“I do think that we will at least be requesting for a three year program,” Aurangzeb said. “Because that’s what we need, as I see it, to help execute the structural reform agenda.”

“By the time we get to the second or third week of May, I do think we’ll start getting into the contours of that discussion,” he added.

Pakistan has close economic ties to both the United States and China, which has put it in a tricky position as the two countries have embarked upon a costly trade war.

“From our perspective it has to be an and-and discussion,” Aurangzeb said when asked how the Sharif government plans to conduct its trading relationships with the world’s two largest economies.

“[The] US is our largest trading partner, and it has always supported us, always helped us in terms of the investments,” he said. “So that is always going to be a very, very critical relationship for Pakistan.”

“On the other side, a lot of investment, especially in infrastructure, came through CPEC,” he said, referring to the roughly 1,860-mile-long China-Pakistan Economic Corridor designed to give China access to the Arabian Sea.

Aurangzeb said there was a “very good opportunity” for Pakistan to play a similar role in the trade war as countries like Vietnam, which has been able to dramatically boost its exports to the US following the imposition of tariffs on some Chinese goods.

“We have already a few examples of that already working,” he said. “But what we need to do is to really scale it up.”

As part of the structural reform program agreed to by the previous government, Pakistan is in the middle of a privatization drive to sell off its poorly-performing state-owned enterprises (SOEs).

The first SOE on the list is Pakistan International Airlines, the country’s flag carrier.

“We will get to know in the next month or so with respect to interest from prospective bidders,” Aurangzeb said.

“Our desire is to go through with that privatization and take it through the finishing line by the end of June,” he added.

If the PIA privatization goes well for the government, other companies could soon follow.

“We’re creating an entire pipeline,” he said, adding: “Over the next couple of years we want to really accelerate that.”

“MEETINGS WITH BUSINESS COMMUNITY”

In a meeting with members of the Pakistan Business Council (USPBC) on the sidelines of the IMF and World Bank spring meetings, the finance minister appreciated the important role of the US corporate sector in strengthening Pak-US economic ties. 

“Despite the challenges, the government was committed to implementing difficult but necessary reforms to ensure long-term economic growth and macro-economic stability,” Aurangzeb said. 

He highlighted key initiatives, including the Investment Policy 2023, aimed at attracting more foreign investments to enhance investor confidence and streamline project implementation, particularly in priority sectors such as agriculture, IT, energy, minerals and mining. 

“The new policy would simplify business regulations, provide foreign investors freedom to repatriate their profits abroad in their own currency and receive special protection,” the finance minister informed USPBC.

“He also apprised them of the government’s efforts to digitalize the economy and expand the tax base to ensure sustainable economic growth.”

Separately, in a meeting with the secretary general of the Climate Vulnerable Forum (CVF) Mohamed Nasheed, who is a former president of the Maldives, Aurangzeb highlighted Pakistan’s vulnerability to climate-induced disasters, drawing attention to 2022 floods that affected 33 million people and caused losses of approximately $15.2 billion. 

“He emphasized the need for developed economies to scale up their efforts to provide additional financing, technology transfer, and capacity-building assistance to developing countries, including Pakistan,” a statement from the finance ministry said. 

Aurangzeb also highlighted Pakistan’s pro-active role in mobilizing global support for a Loss and Damage Fund at COP 28. 

Aurangzeb also met influential Pakistani American businessmen and tech entrepreneurs and lauded the important role of the Pakistani diaspora in the socio-economic development of Pakistan, calling them “bridge-builders in deepening trade and investment ties between Pakistan and the United States.”

The Minister highlighted various initiatives taken by the government to improve business-friendly environment and attract foreign investment in Pakistan and specifically highlighted the potential of Pakistan in the IT sector as a host to a community of over a million freelancers, ranked third globally in the freelance market and annually producing over 75,000 IT graduates from 250+ recognized universities. 

The finance minister also attended a seminar on “Opportunities and Challenges for the Pakistani Economy through 2024 and Beyond” hosted by the Atlantic Council. 

In his address, he highlighted the prevailing economic conditions in Pakistan and measures being taken by the government to put the economy on a higher growth trajectory by facilitating exports, increasing remittances, expanding the tax-base, improving ease of doing business, digitalizing economy and attracting FDI into the country. 

“Positive trends in the industrial activity, better agriculture outlook, and improvements in the Composite Leading Indicators (CLI) of Pakistan’s major export markets were all signs that the economy was on a recovery path,” Aurangzeb said, adding that the implementation of reforms under the 9th IMF Stand-By Agreement (SBA) had provided Pakistan with much-needed macro-economic stability. 

He said Pakistan was prioritizing investment in key areas of agriculture, IT, mining and energy to enhance productivity and ensure sustainable growth and invited international stakeholders to become partners in Pakistan’s journey toward economic prosperity and development.

– With inputs from AFP


Kashmiris fortify bunkers, bracing for clashes between Pakistan and India 

Updated 9 sec ago
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Kashmiris fortify bunkers, bracing for clashes between Pakistan and India 

  • 1.5 million residents live along de facto border, relying on bunkers and homemade shelters to weather perennial bouts of unrest
  • India says its army has been exchanging fire with Pakistani military for the past five days as both countries remain on edge

CHAKOTHI, Pakistan: Pulling logs and dusty building materials from a storage bunker outside his home in Kashmir, Riaz Awan readied the underground space to house his family as they braced for clashes between Pakistan and India to reach their border village.

Kashmiris living on both sides of the de facto border — the Line of Control — have been caught in the barrage of shells and bullets for decades as the nuclear-armed archrivals fight over the disputed region.

The long history of clashes has pushed many residents to build bunkers for shelter should their homes be caught in the crossfire.

“We’ve endured cross-border firing, which has been a tough experience, and we don’t want our children to go through the same,” Awan, a 51-year-old farmer, told AFP as he and his children cleared the bunker that had until recently stored straw.

This photograph taken on April 27, 2025 shows a family laying carpets inside an underground bunker in the Chakothi village of Pakistan-administered Kashmir, about 3kms from the Line of Control (LoC). (AFP)

In Chakothi village, around three kilometers (two miles) from the Line of Control, there are around 30 bunkers for a community of 60 families overlooked by Indian army check posts atop the surrounding green mountains.

Awan and his cousin Shabbir share the bunker they built in 2017, which cost them 300,000 Pakistani rupees ($1,000) — a substantial amount in their impoverished village.

But they pulled together the funds to pay for safety.

A militant attack last week killed 26 people in Indian-administrated Kashmir, the worst attack on civilians in a Muslim-majority region in a quarter of a century.

India blamed the attack on Pakistan and accused it of “cross-border terrorism,” a charge Islamabad vehemently denied.

In response, New Delhi and Islamabad downgraded diplomatic ties, withdrew visas and announced the closure of the main land border. India has also suspended the 1960 Indus Waters Treaty that governs the sharing of river water between the two nations. 

India says that its army has been exchanging fire with the Pakistani army for the past five days as both countries remain on edge, bracing for a potential military confrontation.

“Every day, India makes various threats, saying they will do this and that,” said 52-year-old retired soldier Shabbir Awan.

“That is why we are cleaning these bunkers today, so that if needed, we can use them and make our lives safer.”

“NO PROPER SHELTER”

Kashmir has been divided between India and Pakistan since their independence from British rule in 1947. Both claim the territory in full but govern separate portions of it.

Rebel groups have waged an insurgency in Indian-controlled Kashmir since 1989, demanding independence or a merger with Pakistan

Ridges and valleys intersected by the Line of Control host tens of thousands of heavily armed troops, with some rival outposts just a few dozen meters apart.

The Pakistan military says about 1.5 million residents live along the ceasefire line, long relying on a network of community bunkers and homemade shelters to weather the perennial bouts of unrest.

An average underground bunker is around 2.5 meters deep, 3.5 meters wide and 3.5 meters long. Those who can afford it reinforce all four sides with concrete, while others simply use mud walls.

“Our main concern is the safety of our children, protecting them is our biggest priority,” said Saleema Bibi, a 40-year-old mother of four.

In 2017, “they even hit directly on top of our houses,” she told AFP.

“We have no proper shelter or protection. We are living here — where else can we go?” she said.

Naseema Bibi, a 46-year-old mother of four, owns a cow and two buffalos, making it hard for her to leave.

“We have livestock. We can’t move anywhere,” she said. So she is also working to clear a bunker.

“We are around eight families and it is difficult to adjust in one bunker,” she told AFP.

“But children get panicked so we are concerned because of them.”


Pakistan tells UN it has evidence ‘external adversaries’ behind deadly train hijacking last month

Updated 7 min 42 sec ago
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Pakistan tells UN it has evidence ‘external adversaries’ behind deadly train hijacking last month

  • A Pakistani diplomat at the UN extends condolences to the families of the victims of the Pahalgam attack
  • He says the international community must support survivors of militant attacks without political selectivity

ISLAMABAD: Pakistan told the United Nations on Monday it had “credible evidence” that a deadly attack on a passenger train in its southwestern region last month was externally sponsored, as it called for stronger global efforts to hold perpetrators behind such incidents accountable.
The statement referred to the March hostage-taking on the Jaffer Express passenger train in Balochistan province, which lasted about 36 hours before security forces launched an operation that killed more than 30 militants from the separatist Baloch Liberation Army (BLA).
Pakistan’s decision to highlight the passenger train incident at the world body came at a time when tensions remain high in the region following the killing of 26 tourists in Indian-administered Kashmir last week, an attack India blamed on Pakistan, despite Islamabad’s categorical denial.
“Just last month, Pakistan suffered a heinous terrorist attack by the BLA on Jaffar Express passenger train, which included the taking of hostages in Pakistan’s Balochistan province, which resulted in the loss of at least 30 innocent Pakistani nationals,” Jawad Ajmal, Counsellor at Pakistan’s UN Mission, said at the launch of the Victims of Terrorism Association Network at the UN. “Pakistan has credible evidence that this attack had external sponsorship from our adversaries in the region.”
Ajmal stressed the international community must do more to support survivors of such militant attacks and the families of victims whose lives are permanently altered after such developments.
He urged a collective approach to prevent future attacks, emphasizing the need to hold militants and their backers accountable without political selectivity.
“If we are to chart a way forward for victims, we must look beyond narrow political interests and geopolitical agendas,” he said. “We must examine why, despite global strategies, terrorism threats continue to proliferate and give rise to an ever-increasing number of victims.”
Commenting on the recent attack in Pahalgam in Indian-administered Kashmir, Ajmal said Pakistan extended condolences to the families of the victims and wished a speedy recovery to the injured.
He noted that Pakistan joined other UN Security Council members in condemning the attack.
The Pakistani diplomat added that his country was one of the worst victims of militant violence over the past two decades and had lost more than 80,000 lives to it.
He paid tribute to the families of his country’s law enforcement and armed forces personnel who had made “countless sacrifices” to defend the nation.


Saudi official rejects ‘baseless’ reports Pakistan government sent Hajj funds to wrong account

Updated 6 min 8 sec ago
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Saudi official rejects ‘baseless’ reports Pakistan government sent Hajj funds to wrong account

  • News reports claimed Pakistan mistakenly sent Hajj funds for thousands of pilgrims to an account linked to OPEC
  • Saudi official says Kingdom’s electronic Hajj platform ensures “highest standards of transparency and accuracy”

ISLAMABAD: An official at Saudi Arabia’s Ministry of Hajj and Umrah on Tuesday rejected reports the Pakistan government had transferred Hajj funds for thousands of pilgrims to the wrong bank account, reiterating that the Kingdom’s electronic Hajj system operated with the “highest standards of transparency.”

Local news outlets this month published reports that Pakistani pilgrims could face delays in the Hajj journey as millions of Saudi Riyals meant for their expenses were mistakenly sent to an account linked to the Organization of the Petroleum Exporting Countries (OPEC) instead of Saudi Arabia’s Ministry of Hajj. 

This year’s annual pilgrimage will take place in June, with nearly 89,000 Pakistanis expected to travel to Saudi Arabia under the government scheme and 23,620 Pakistanis through private tour operators. The total quota granted to Pakistan was 179,210, which could not be met. 

“Recent claims in some Pakistani media outlets about ‘Hajj funds being sent to the wrong Saudi account’ are baseless and stem from a misunderstanding of the Hajj account management system and the ministry’s official electronic Hajj platform, which ensures the highest standards of transparency and accuracy,” the Saudi official said in a statement. 

Pakistani Prime Minister Shehbaz Sharif has formed a committee to investigate why the total Hajj quota granted by Saudi authorities to Pakistan could not be utilized, particularly by private tour operators.

The Saudi official said the Hajj ministry had announced arrangements for this year’s pilgrimage at the end of last year’s Hajj season, emphasizing the importance of adhering to timelines for finalizing contracts and services. In meetings with Pakistan’s religious affairs ministry and private Hajj companies, it was agreed that all contracts would be completed according to the approved schedule.

“While Pakistan’s Ministry of Religious Affairs successfully completed all its pilgrims’ contracts without any notable challenges, a number of Pakistani [private] companies failed to finalize their pilgrims’ contracts within the designated time frame,” the Saudi official said.

“This has been observed in past seasons as well and resulted in the inability to complete entry procedures for these pilgrims to perform Hajj in the Kingdom.”

The Saudi official said it is working in “high-level coordination” with Pakistani authorities to complete Hajj arrangements.

Pakistan kicked off its Hajj flight operations on Tuesday morning with the first batch of 442 pilgrims departing from Islamabad for Madinah.


Pakistan says shot down Indian ‘surveillance’ quadcopter near Kashmir border

Updated 29 April 2025
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Pakistan says shot down Indian ‘surveillance’ quadcopter near Kashmir border

  • The incident comes a week after 26 tourists were killed in the Pahalgam area of Indian-administered Kashmir
  • India blamed Pakistan, which denied involvement and warned of a ‘befitting response’ to any aggression

ISLAMABAD: Pakistan said on Tuesday it shot down an Indian quadcopter that violated its airspace along the Line of Control (LoC), the de facto border dividing the disputed region of Kashmir, amid growing tensions between the two nuclear-armed neighbors.

The incident comes a week after 26 tourists were killed in the Pahalgam area of Indian-administered Kashmir. India accused Pakistan of orchestrating the attack, though the charge was denied by Islamabad.

New Delhi also suspended key provisions of the 1960 Indus Waters Treaty, with Indian media outlets urging the government to consider military strikes.

Islamabad has warned it would deliver a “befitting response” to any aggression, saying its forces are on high alert to thwart any action from across the border.

“The Pakistan Army thwarted an Indian quadcopter’s violation of airspace along the Line of Control (LoC),” Pakistan’s government said on its official social media account.

“In the Manawar sector of Bhimber area, the enemy attempted to conduct surveillance using a quadcopter, which the Pakistan Army shot down through timely and effective action,” it added.

The image shared by Pakistani state media shows a quadcopter shot down by Pakistan along the Line of Control (LoC) on April 29, 2025. (PTV News)

Earlier, Pakistan’s state media, quoting security sources, reported the military had shot down an Indian quadcopter attempting reconnaissance along the LoC, calling the action a testament to Pakistan’s defensive preparedness.

Tensions have remained high since the April 22 attack in Pahalgam, with Pakistan’s Defense Minister Khawaja Asif warning on Monday the next few days were “crucial” in view of a possible Indian military incursion.

“The threat is there, there is absolutely no doubt about it,” Asif told Geo TV.

“If any attempt was made to cross our geographical borders or if a war was imposed on us, then we are definitely prepared for that and will give a full response,” he added.

Kashmir, a Himalayan region claimed in full by both India and Pakistan but ruled in parts by each, has been a flashpoint between the two countries since their independence in 1947.

The two sides have fought two of their three wars over the territory.


IMF Executive Board to meet on May 9 to review Pakistan’s loan programs

Updated 29 April 2025
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IMF Executive Board to meet on May 9 to review Pakistan’s loan programs

  • IMF board’s approval of staff-level agreement with Pakistan will pave the way for disbursement of $1 billion
  • Islamabad also secured a new loan program with IMF in March to help build resistance against natural disasters 

KARACHI: The International Monetary Fund’s (IMF) Executive Board will meet on May 9 to review its staff-level agreement with Pakistan for an ongoing $7bn bailout program and a new climate resilience loan scheme with Islamabad, the global lender said on its website recently. 

The IMF reached a staff-level agreement with Pakistan in March on the first review of the country’s Extended Fund Facility (EFF) and a new $1.3 billion loan arrangement under the Resilience and Sustainability Facility (RSF). Pakistan secured the EFF program last year and deems it crucial to escape a prolonged economic crisis. The staff-level agreement, once approved by the IMF Executive Board, will pave the way for an immediate disbursement of about $1 billion for Pakistan.

The RSF, on the other hand, will support Pakistan’s efforts in building resilience to natural disasters, enhancing budget and investment planning to promote climate adaptation, improve the efficient and productive use of water. It will also help in strengthening Pakistan’s climate information architecture to improve the disclosure of climate risks and align energy sector reforms with mitigation targets.

“May 9, 2025, Pakistan-first review under the extended arrangement under the Extended Fund Facility, request for Modification of Performance Criteria, and request for an arrangement under the Resilience and Sustainability Facility,” the IMF wrote on its website on Friday, disclosing its Executive Board’s schedule. 

Pakistan has been prone to natural disasters and consistently ranks among the most severely affected countries in the world due to climate change effects. Unusually heavy rains and melting of glaciers in 2022 triggered flash floods across the country, killing over 1,700 people and inflicting losses over $33 billion. 

The IMF program has played a key role in stabilizing Pakistan’s battered economy, which has made some gains in recent months, most notably a reduced inflation rate. The government has said the country is on course for a long-term recovery, while Finance Minister Muhammad Aurangzeb has vowed Islamabad will continue to implement financial reforms mandated by the international lender. 

Pakistan secured the $7 billion loan program in September 2024 as it attempted to consolidate its economy since averting a default in 2023. Islamabad has since undertaken several reforms to reduce public debt, maintain low inflation, improve energy sector viability, and accelerate growth.

Pakistan hopes to achieve further economic progress by increasing its exports and attracting foreign investment from regional allies, particularly the Gulf countries. Islamabad has signed memoranda of association (MoUs) regarding trade and investment worth billions of dollars with Saudi Arabia, the United Arab Emirates, Azerbaijan, China and other countries in recent months.