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

This file photo, taken on September 2, 2020, shows workers supervising embroidery machines working on fabrics for wedding dresses at a small factory on the outskirts of Islamabad. (AFP/File)
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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 interior minister orders ‘strict adherence’ to security plan for Muharram processions

Updated 16 July 2024
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Pakistan interior minister orders ‘strict adherence’ to security plan for Muharram processions

  • Militants have attacked Muharram processions in Pakistan in the past 
  • The South Asian nation has seen a surge in militancy in recent months 

ISLAMABAD: Interior Minister Mohsin Naqvi on Tuesday directed authorities to ensure security in all parts of the country and urged “strict adherence” to a special Muharram security plan put in place ahead of Ashura.

Ashura occurs annually on the tenth of Muharram and is marked worldwide by Shi’te Muslims as a day of mourning over the seventh-century battlefield death of Imam Hussein, the grandson of Prophet Muhammad (pbuh).

Militants have attacked Muharram processions in the past in Pakistan, which has seen a surge in militancy in recent months.

“The Minister directed the authorities concerned for ensuring security in all four provinces, Gilgit-Baltistan and Azad Kashmir and emphasized strict adherence to the special Muharram security plan,” state-run Radio Pakistan reported as Naqvi reviewed security arrangements at a main procession held in Islamabad on Tuesday, the 9th of Muharram.

“Naqvi said the federal government is extending every possible cooperation to provinces, Gilgit Baltistan and Azad Kashmir for maintenance of peace and law and order.”

While the Pakistani Taliban and separatist groups have been the major source of instability in Pakistan, sectarian militants who regard Shiites as non-Muslims also pose a significant security threat.

Large-scale sectarian attacks, which killed thousands in the 1980s and 1990s, are now less frequent in Pakistan but the rise of a local Daesh franchise has presented new challenges for the government. 


Pakistan-origin Shabana Mahmood is UK’s first Muslim woman Lord Chancellor

Updated 16 July 2024
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Pakistan-origin Shabana Mahmood is UK’s first Muslim woman Lord Chancellor

  • 43-year-old barrister has been a Member of Parliament for Birmingham Ladywood since 2010
  • Mahmood’s family roots are from Mirpur in Azad Kashmir, she graduated in 2002 from Oxford 

ISLAMABAD: Shabana Mahmood, a British-Pakistani MP from Birmingham, was sworn in this week as the United Kingdom’s new Lord Chancellor at a ceremony at the Royal Courts of Justice in London, becoming the first Muslim woman to head the Ministry of Justice as the Secretary of State for Justice. 

A member of the Labour Party, the 43-year-old barrister has been an MP for Birmingham Ladywood since 2010 and previously held various shadow junior ministerial and shadow cabinet positions under leaders Ed Miliband, Harriet Harman, and Keir Starmer between 2010 and 2024.

“I must say what an honor it is to take my own oath as Lord Chancellor today,” Mahmood, 43, said in a speech on Monday as she was sworn in. “There once was a little girl in Small Heath, one of the poorest areas of Birmingham who worked behind the till in her parents’ corner shop ...

“I hold this office in the very highest regard. I do so not just as a former barrister, but as the child of immigrants. My parents weren’t steeped in Magna Carta, Habeas Corpus and the Bill of Rights – as I would one day be. But they did have a strong sense, arriving here in the UK from rural Kashmir, that this country was different: That there are rules, some written and some not, that we abide by.”

Speaking about her inspirations, Mahmood mentioned Elwyn-Jones who served as Lord Chancellor for five years between 1974 and 1979.

“I certainly hope to emulate his longevity. It is said that he was the first Welsh speaking Lord Chancellor for centuries,” she said. “I wonder what he would’ve made of the first Lord Chancellor to speak Urdu.

“I’ve carried the weight of many identities in this career. It is a privilege, but also a burden … So, at the very least, I hope my appointment shows the next little girl in Small Heath, or wherever she may be that, in this country, even the oldest offices in the land are within reach of us all.”

Mahmood concluded by quoting Chapter 4 Verse 135 of the Qur’an: “O ye who believe! Stand out firmly for justice, as witnesses to Allah even as against yourselves, or your parents, or your kin and whether it be (against) rich or poor: For Allah can best protect both.”

“This is the fundamental articulation of how we, as Muslims, view justice in how we deal with the world,” Mahmood said. “It places justice above all else,” the justice secretary said. 

With roots in Mirpur, Azad Kashmir in Pakistan, Mahmood was born in 1980 in Birmingham and lived from 1981 to 1986 in Taif, Saudi Arabia, where her father was working as a civil engineer on desalination. After that, she was brought up in Birmingham where her mother worked in a corner grocery shop that the family had bought after returning to England. Her father became chair of the local Labour party and as a teenager, Mahmood helped him with campaigning in local elections.

Mahmood graduated in 2002 from Lincoln College, University of Oxford and went on to complete the Bar Vocational Course at the Inns of Court School of Law in 2003 after receiving a scholarship. As a barrister, her specialism is in professional indemnity.


Pakistan Navy conducts sea training of Saudi officers and cadets

Updated 16 July 2024
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Pakistan Navy conducts sea training of Saudi officers and cadets

  • 96 Royal Saudi Naval Forces trainees from King Fahad Naval Academy completed comprehensive sea training
  • Pakistan has close military ties with Saudi Arabia, providing extensive support, arms, training for Saudi army

KARACHI: The Pakistan Navy said on Tuesday it had conducted a sea training exercise for officers and cadets of the Royal Saudi Navy Forces, describing the collaboration as a testament to the two nations’ mutual commitment to enhancing military capabilities and strategic cooperation.

Pakistan maintains close military ties with Saudi Arabia, providing extensive support, arms, and training for the Saudi armed forces. Since the 1970s, Pakistani soldiers have been stationed in Saudi Arabia and Pakistan has also been providing training to Saudi soldiers, sailors and pilots.

“Pakistan and Saudi Arabia have long enjoyed robust collaboration in military training. Saudi Navy Officers and Cadets frequently undergo training at various PN training units, Ships & Naval Squadrons,” the Pakistan Navy said in a statement shared with media. 

The picture shared by the Pakistan Navy on July 16, 2024, shows officers and cadets of the Royal Saudi Naval Forces (RSNF) attending a sea training exercise. (Pakistan Navy)

“In a recent episode, 96 x Royal Saudi Naval Forces (RSNF) trainees from the King Fahad Naval Academy completed comprehensive sea training. They went through modules of tactics, weapon handling, combat training, navigation, naval operations and seamanship. A familiarization tour to Naval Aviation was also arranged.”

The statement added that the collaboration underscored the “multifaceted defense relations between Pakistan and Saudi Arabia.”

The picture shared by the Pakistan Navy on July 16, 2024, shows officers and cadets of the Royal Saudi Naval Forces (RSNF) attending a sea training exercise. (Pakistan Navy)

“It serves as a testament to the mutual commitment to enhance military capabilities and strategic cooperation, reflecting a shared vision for sustained military excellence and cooperation,” Pakistan Navy said. 


Four Pakistanis killed, 30 injured in ‘terrorist attack’ near mosque in Oman

Updated 16 July 2024
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Four Pakistanis killed, 30 injured in ‘terrorist attack’ near mosque in Oman

  • Attack took place at Shiite mosque in Wadi Al-Kabir, a district east of Omani capital city of Muscat
  • Omani police have not confirmed motive for rare attack in one of most stable countries in Middle East

ISLAMABAD: Pakistan’s foreign ministry said on Tuesday four Pakistanis had been killed in what it described as a “terrorist attack” near a mosque in Wadi Al-Kabir, a district east of the Omani capital of Muscat. 

The Royal Oman Police have confirmed the attack but given no motive nor said who was suspected of being behind the assault, a rare breach of security in one of the most stable countries in the Middle East.

“According to the latest information received from the Omani authorities, four Pakistanis were martyred as a result of gunshots in the dastardly terrorist attack on the Ali bin Abi Talib mosque in Wadi Kabeer area in Muscat,” the foreign ministry said. “Another thirty Pakistanis are under treatment in hospitals.”

Videos shared by the embassy in Oman showed Pakistan’s ambassador to Oman Imran Ali visiting the injured in hospital. 

“This is my message to the Pakistani community that in this emergency situation, please don’t go toward Wadi Al-Kabir, that area is cordoned off,” Ali said in a video message recorded at a hospital. “If anyone has injured relatives, kindly please don’t give up on your patience.”

He said he had visited up to four hospitals and the injured people he had met were in “relatively” stable condition. 

“People in their homes, please stay safe, and don’t go there [toward Wadi Al-Kabir] because our information is that the emergency situation is still ongoing,” the ambassador concluded.

A handout from the embassy said the “terrorist” attack by “unknown assailants” took place around 11pm on Monday night on the Imam Bargah Ali bin Abu Talib in Wadi Al-Kabir. Authorities evacuated people from the area following the attack and started an operation around 230am.

“Assailants have taken worshippers hostages while reportedly [there are] several casualties; authorities have cordoned off the area,” it added. “Hostage evacuation has started now. Military units have reached.”

The Pakistani embassy’s Facebook page said emergency had been imposed at the Khulla Hospital, Nahida Hospital and Royal Hospital, which Ambassador Ali had visited. 

The attack comes during the Islamic month of Muharram when Shiite Muslims commemorate the seventh-century battlefield martyrdom of Imam Hussein, the grandson of Prophet Muhammad (pbuh).


10 soldiers killed in two separate militant attacks in northwest Pakistan — army 

Updated 16 July 2024
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10 soldiers killed in two separate militant attacks in northwest Pakistan — army 

  • Eight soldiers killed while blocking militants from entering military cantonment in Bannu on Monday
  • Two soldiers, five civilians killed in militant attack on Rural Health Center in Dera Ismail Khan on Tuesday

ISLAMABAD: Ten soldiers and five civilians were killed in two separate attacks in the country’s northwestern Khyber Pakhtunkhwa province on Monday and Tuesday, the army’s media wing said, blaming insurgents based in Afghanistan for one of the assaults.

Pakistan has witnessed a spike in militant attacks in recent years, with many of them taking place in the Khyber Pakhtunkhwa province which borders Afghanistan. Islamabad blames the surge mainly on militants from the Pakistani Taliban, or TTP, and other groups that it says operate out of Afghanistan.

Kabul denies that it allows its territory to be used by insurgents and says Pakistan’s security woes are a domestic issue.

In the first attack, the army said a group of ten militants had tried to enter a cantonment in Bannu in the early hours of July 15, Monday. 

“The attempt to enter the cantonment was effectively thwarted by the security forces personnel, which forced the terrorists to ram an explosive laden vehicle into perimeter wall of the cantonment,” the statement said.

Eight soldiers were killed in the ensuing blast which also led to the collapse of a portion of the outer wall and damaged nearby infrastructure.

“In the ensuing operation, own troops effectively engaged the terrorists as a result of which all ten terrorists were sent to hell,” the army said. “This timely and effective response by the security forces prevented major catastrophe, saving precious innocent lives.”

The military said the attack had been carried out by the Hafiz Gul Bahadur group, a TTP faction, saying it operated from Afghanistan and had used Afghan soil to ‘orchestrate’ attacks inside Pakistan in the past as well. 

“Pakistan has consistently raised its concerns with Interim Afghan Government, asking them to deny persistent use of Afghan soil by the terrorists and take effective action against such elements,” the statement said. 

“Pakistan Armed Forces will keep defending the motherland and its people against this menace of terrorism and will take all necessary measures as deemed appropriate against these threats emanating from Afghanistan.”

In a second attack early on Tuesday morning, militants opened fire at staff at a Rural Health Center in KP’s Dera Ismail Khan district, killing two women health workers, two children and a guard. 

“Security Forces in vicinity were immediately mobilized for clearance operation in RHC and in ensuing fire exchange, own troops effectively engaged the terrorists as a result of which three terrorists were sent to hell,” the army said. 

“However, during intense fire exchange, Naib Subedar Muhammad Farooq (age 44 years, resident of District Narowal) and Sepoy Muhammad Javed Iqbal (age 23 years, resident of District Khanewal) paid the ultimate sacrifice and embraced Shahadat [martyrdom].”