Pakistan’s upcoming IMF bailout will ‘not be our last’ if tax revenues don’t rise — finmin 

Pakistan Finance Minister Muhammad Aurangzeb gestures while speaking with media representatives at the finance ministry in Islamabad on March 22, 2024. (AFP/File)
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Updated 07 July 2024
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Pakistan’s upcoming IMF bailout will ‘not be our last’ if tax revenues don’t rise — finmin 

  • Finance Minister Aurangzeb last month passed tax-heavy budget, earning the ire of opposition and government’s allies
  • Pakistan is in talks with International Monetary Fund for fresh bailout program that it hopes will be between $6-8 billion

ISLAMABAD: Pakistan will keep seeking financial assistance packages from the International Monetary Fund (IMF) if it does not significantly boost its tax revenues, Finance Minister Muhammad Aurangzeb said on Sunday. 

Aurangzeb’s comments come days after Pakistan’s president signed the federal budget for the current fiscal year, which has been criticized by the opposition, trade bodies and even the government’s allies, for its ambitious tax targets. 

The tax-heavy budget aims to raise Rs13 trillion ($46.6bn) by July 2025, a roughly 40 percent increase from the current financial year. Financial experts say the budget is aimed at satisfying the IMF, which has repeatedly asked Islamabad to bring tax reforms to ensure growth in its fragile economy. 

Speaking to British newspaper Financial Times, Aurangzeb said he was “relatively confident” of reaching a staff-level agreement with the IMF this month for a loan his government has estimated to be between $6-$8bn. 

“But it will not be our last fund program if we don’t bring our tax revenues up,” the minister said. 

Pakistan hopes the IMF bailout package will stabilize its economy, one of the worst-performing ones in Asia, that has been troubled by double-digit inflation, slow growth and low foreign reserves.

Pakistan’s economic indicators have recorded an improvement over the past few months, with inflation dropping down to 12.6 percent in June from the record-breaking 38 percent in May 2023. Pakistan’s stock market has registered high growth in recent weeks while the central bank’s foreign reserves have risen to over $9 billion. 

“The direction of travel is positive, and investors are showing confidence in the stock market,” Aurangzeb said. 

However, he acknowledged Pakistan’s tax collection authority, the Federal Bureau of Revenue (FBR), was viewed negatively by the masses. 

“People don’t want to deal with the tax authority because of corruption, because of harassment, because of people asking for speed money, facilitation money,” Aurangzeb noted. “That’s not sustainable.”

The finance minister lamented how Pakistan’s economy was reliant on imports, stating that Islamabad had to borrow to pay off existing or accumulating debt. 

“We need to create the capacity to repay loans,” Aurangzeb said. “As long as this economy stays import-based, what happens is the moment it heats up . . . we run out of dollars [and] we have to go back to the lender of last resort on our knees.”

Since April, Prime Minister Shehbaz Sharif has visited Saudi Arabia, UAE and China to attract foreign investment in Pakistan’s key sectors. His government has repeatedly assured Pakistan’s allies it seeks not loans but “mutually beneficial” partnerships. 

“It’s about time we get real,” Aurangzeb said, pointing to Gulf investors’ demands for equity and board seats. “The ball is in our court to provide bankable, investable projects.” 


Pakistan equities trade at record highs as weak China data dents investor mood

Updated 15 July 2024
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Pakistan equities trade at record highs as weak China data dents investor mood

  • Pakistan’s benchmark index rose 1.7 percent to hit a record high after Islamabad reached an agreement for $7 billion loan with the IMF
  • The index has soared 30 percent this year and has almost doubled since Pakistan signed its last deal for $3 billion standby arrangement

Most emerging market stocks started the week lower after disappointing China economic data, while Pakistani equities traded at record highs and investors assessed the fallout of a revised budget in Kenya.
China stocks ended flat on Monday and Hong Kong equities logged their biggest one-day drop after the economy grew much slower than expected in the second quarter, prompting downward revisions for annual growth by brokerages J.P.Morgan and Goldman Sachs.
Attention was also on the once-in-five-years ‘Third Plenum’, due to end on Thursday, where markets hope for some efforts to manage China’s vast property crisis, boost domestic consumption and revitalize the private sector.
“It remains the case that China is taking pragmatic steps to address the problems it can fix, but at nothing like the pace foreign investors or net commodity exporters wish to see,” said Hasnain Malik, head of equity research at Tellimer Research.
MSCI’s index tracking bourses in developing economies slipped 0.2 percent, while an index tracking currencies was flat. Traders assessed political developments in the US and the implications of a second Donald Trump presidency.
In South Asia, Pakistan’s benchmark index rose 1.7 percent to hit a record high after the International Monetary Fund (IMF) and the country reached a staff level agreement (SLA) for a $7 billion, 37-month loan program.
The index has soared 30 percent this year and has almost doubled since Pakistan signed its last SLA for the $3 billion standby arrangement.
India’s main stock indexes also traded at record highs. Quarterly earnings were in focus along with the new government’s annual budget expected on July 23, where a private lender expects the country to cut its current year’s gross market borrowings after a better-than-estimated surplus transfer from the central bank.
Meanwhile, yield on Kenyan sovereign bonds slipped between 5 and 13 basis points (bps) after the government said it plans to cut annual spending by 1.9 percent and widen the fiscal deficit to 3.6 percent of GDP, weeks after it was forced to roll back tax hikes due to mass protests.
Most currencies in eastern and central Europe were tepid against the euro. The forint inched up 0.2 percent ahead of remarks on monetary policy from the Hungary’s deputy central bank governor.
Elsewhere, the shekel inched up 0.1 percent against the dollar ahead of June inflation data and against the backdrop of talks of a Gaza ceasefire, while Rwanda’s franc was flat against the euro as elections were underway.


Two-member Canadian team begins aviation security assessment at Karachi airport

Updated 15 July 2024
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Two-member Canadian team begins aviation security assessment at Karachi airport

  • This is the fifth international evaluation of Pakistan’s aviation security system in recent months
  • Pakistan’s aviation protocols have faced significant scrutiny since a 2020 fake pilot license scandal

KARACHI: A two-member Canadian team on Monday began its aviation security assessment at Jinnah International Airport in the southern Pakistani city of Karachi, the Pakistan Civil Aviation Authority (PCAA) said.
The team comprises inspectors, Barbara Durette and Abdel Tahir, from Transport Canada — a Canadian government entity responsible for policies and services of road, rail, marine and air transportation.
It held a meeting with Pakistani officials at the PCAA headquarters. The four-day assessment will focus on aviation security documentation, airport arrangements, catering and cargo complexes.
“The team will be inspecting implementation of various aviation security protocols at the airport and implementation of special security measures being undertaken by PIA (Pakistan International Airlines) for direct flights to Canada,” the PCAA said in a statement.
It said the assessment is a continuation of collaborative efforts between Transport Canada and the PCAA to enhance aviation security standards in the South Asian country.
This is the 5th international evaluation of Pakistan’s aviation security system in recent months. The PCAA earlier said it had successfully passed all previous inspections, including an inaugural assessment by the United Arab Emirates General Civil Aviation Authority (UAE-GCAA) of Islamabad and Karachi airports that concluded on July 5.
Pakistan’s aviation protocols have faced significant scrutiny since 2020 following a scandal wherein approximately 262 out of 860 active pilots were said to have obtained fake licenses, leading to the grounding of around 150 pilots from the PIA and other carriers.
This revelation came in the wake of the tragic crash of PIA flight 8303 in Karachi, resulting in the suspension of PIA’s operations in the European Union (EU) and other regions and prompting calls for regulatory reforms to improve safety standards and transparency.


Pakistan seeks review of court ruling declaring Imran Khan party eligible for reserved seats

Updated 15 July 2024
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Pakistan seeks review of court ruling declaring Imran Khan party eligible for reserved seats

  • Khan’s PTI party was denied its share of reserved seats in national and provincial assemblies, benefitting the ruling coalition
  • Government says the issue of granting reserved seats to PTI was not even in pleadings before the election commission, courts

ISLMABAD: The government of Prime Minister Shehbaz Sharif on Monday filed a petition seeking review of last week’s ruling by the Supreme Court of Pakistan that declared former prime minister Imran Khan’s party eligible for reserved seats in parliament.
The July 12 verdict in favor of Khan’s Pakistan Tehreek-e-Insaf (PTI) party dealt a blow to the ruling coalition of PM Sharif, which may lose its two-thirds majority in Pakistan’s parliament. PTI candidates contested the Feb. 8 national election in Pakistan as independents after the party was barred from polls on the technical grounds that it did not hold genuine intra-party polls, which is a legal requirement.
Subsequently, they won the most seats in the election, 93, but the Election Commission of Pakistan (ECP) said independents were ineligible for their share of 70 reserved seats — 60 for women, 10 for non-Muslims. The reserved seats were then distributed among other parties, mostly those in the ruling coalition, a decision appealed by the Sunni Ittehad Council (SIC) that was joined by Khan-backed independents to claim their share of reserved seats.
In its review petition, the government noted the issue of granting reserved seats to the PTI was not even in the pleadings of the SIC before the election commission, the Peshawar High Court and the Supreme Court.
“SIC and PTI are two separate political parties and two separate entities. The Order under Review, it seems has treated them as one party with different names which cannot be permissible under the Law,” the government petition read.
“It is submitted and reiterated here that PTI neither filed any case before the ECP, nor before Peshawar High Court, nor before the Supreme Court, hence it is not entitled to any relief, let alone a relief which was not even pleaded.”
The petition stated that all returned candidates had already joined the SIC and hence there was no question of giving them an option of joining the PTI that too after many months of the election. It was also against Rule 92 (6) of the Election Rules, 2017 which states that once an independent candidate has joined a political party, there is no option to recall or cancel, it added.
“The Order under Review is against the settled principles of interpretation of the Constitution. By carving out a procedure which is not provided under the Constitution, Order under Review might have gone into the realm of creating and not just interpreting the Constitution which is against the long standing jurisprudence of this Honourable Court,” the petition read.
The government requested the top court to accept the review petition for hearing and stay implementation of its order declaring the PTI eligible for reserved parliamentary seats.
All candidates from Khan’s PTI party were forced to contest the February polls as independents after the party was stripped of its election symbol of the cricket bat by the ECP on the technical grounds that it did not hold intra-party elections, a prerequisite for any party to take part in polls.
The PTI is currently entitled to around 78 reserved seats in the national and provincial assemblies, which does not affect the parliamentary majority of the Sharif-led coalition government.
The July 12 verdict also bolstered political position of Khan’s supporters, whose rallying cry has been that the election commission and a pro-military caretaker government that oversaw the polls indulged in electoral fraud to deprive it of a victory. The ECP denies this.


Pakistan PM congratulates Sheikh Abdullah bin Zayed Al-Nahyan on becoming UAE deputy PM

Updated 15 July 2024
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Pakistan PM congratulates Sheikh Abdullah bin Zayed Al-Nahyan on becoming UAE deputy PM

  • Shehbaz Sharif also felicitated Dubai Crown Prince Sheikh Hamdan on appointment as UAE deputy PM, defense minister
  • The UAE is Pakistan’s third-largest trading partner after China and US as well as home to more than a million Pakistanis

ISLAMABAD: Prime Minister Shehbaz Sharif on Monday extended his felicitations to Sheikh Abdullah bin Zayed Al-Nahyan on his appointment as deputy prime minister of the United Arab Emirates (UAE).
Sheikh Mohammed bin Rashid, vice president and ruler of Dubai, announced the appointment of Foreign Minister Sheikh Abdullah as deputy PM as part of the UAE government amendments on Sunday.
He also announced the joining of Sheikh Hamdan bin Mohammed bin Rashid Al-Maktoum in the UAE government as deputy prime minister and minister of defense in the UAE cabinet.
In his message on X, Sharif also extended his congratulations to Dubai Crown Prince Sheikh Hamdan on his appointment.
“Wishing them both success in their new endeavors & looking forward to further strengthening of our bilateral ties & deepening cooperation between our two brotherly nations,” the Pakistan prime minister said.

The UAE is Pakistan’s third-largest trading partner after China and the United States as well as home to more than a million Pakistani expatriates and the second-largest source of remittances to Pakistan after Saudi Arabia. It is also one of Pakistan’s closest allies and has frequently bailed out the South Asian country.
Policymakers in Pakistan also consider the Gulf state an optimal export destination due to its geographical proximity, which minimizes transportation and freight costs while facilitating commercial transactions.


Top Imran Khan aide says party deliberating no-trust motion against Pakistani PM

Updated 16 July 2024
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Top Imran Khan aide says party deliberating no-trust motion against Pakistani PM

  • The announcement comes hours after PM Shehbaz Sharif’s government said it was seeking to ban Khan’s party
  • Pakistan has been witnessing renewed political wrangling after court rulings in favor of Khan and his PTI party

ISLAMABAD: Asad Qaiser, a close aide of jailed former prime minister Imran Khan, on Monday said their Pakistan Tehreek-e-Insaf (PTI) party was deliberating upon a no-confidence motion against Pakistan PM Shehbaz Sharif in parliament, in what appeared to be a tit-for-tat move in response to the government’s announcement of seeking a ban against the PTI.
Information Minister Attaullah Tarar announced the government had decided to file a high treason case against Khan and pursue a case to ban his party, unleashing a new challenge for the embattled PTI and its jailed leader.
The government’s decision followed a Supreme Court ruling that Khan’s PTI party was eligible for more than 20 extra reserved seats in parliament, which has mounted pressure on the weak coalition led by Sharif.
“We will see and contemplate if we want to bring a no-confidence motion against them or not,” Qaiser, a former National Assembly speaker, said in televised comments. “We will deliberate on that.”
Citing the increase in number of seats, Qaiser said the PTI would fight the government in parliament, clarifying that the PTI was a peaceful political party that believed in the rule of law and the constitution.
Separately, PTI leader Sayed Zulfikar Abbas Bukhari responded to Tarar’s announcement and said all cases against the PTI and ex-PM Khan were “politically motivated.”
“This is a sign of panic as they [federal government] have realized the courts can’t be threatened and put under pressure,” Bukhari said in a statement shared with reporters.
“I have been saying for a while now that we are under a soft martial law and this move only proves our point further.”

Khan’s PTI party says it has been facing a crackdown and mass arrest of members for standing by Khan, who has been in jail since August last year. Pakistani authorities deny the allegations.
Among four cases in which Khan was convicted, two have been suspended by courts and he has been acquitted in the others, though new cases have since been brought against him.
Arguably Pakistan’s most popular politician, Khan says all cases against him are motivated to keep him out of politics and behind bars. Authorities deny this.