KARACHI: Concerns are at peak over the health of Pakistan’s economy as foreign reserves run out, inflation stands at decades-high levels and industrial growth slows down, with experts and industry leaders raising alarm and calling on the government to take decisive action, particularly on a stalled IMF bailout plan.
The biggest worries center around Pakistan’s ability to pay for imports such as energy and food and to meet sovereign debt obligations abroad. Right now, foreign exchange reserves with the central bank stand at just $4.6 billion, barely enough to cover a month’s imports, compelling the government to restrict the import of goods, including industrial raw materials, to stop dollar outflows.
Before devastating floods last year, an estimated $33.5 billion was needed to fulfil external financing needs for the 2022-23 financial year, according to the central bank, to be arranged through the daunting target of almost halving the current account deficit and receiving debt rollovers from friendly countries.
But in the aftermath of the floods, exports have slumped and imports have grown to make up for essential commodities lost in the flooding of millions of hectares of farmland.
Meanwhile, the Pakistani rupee has weakened 20 percent since the start of the year and the decline in the currency is pushing up the cost of imports, borrowing and debt servicing, and in turn will further exacerbate inflation running already at a multi-decade high.
“The situation is alarming,” Tariq Yousuf, President of the Karachi Chamber of Commerce and Industry (KCCI), told Arab News. “More than 7,500 containers [of imports] are stuck at ports and our industries are facing an acute shortage of raw materials, bringing them almost to the verge of collapse.”
Last year, the cash-strapped country imposed a ban on the import of luxury goods to avoid a balance of payment crisis but lifted some of the restrictions after pressure from the industrial sector.
Experts warn that a dire dollar crunch in Pakistan may further hurt the import of essential items in the coming months and lead to a shortage of several food items. The fast-depleting forex stockpile has currently left banks refusing to issue new letters of credit (LCs) for importers, hitting an economy already squeezed by soaring inflation and lackluster growth. The central bank has also restricted overseas payments and halved the amount of foreign currency that a person can carry overseas to $5,000.
Qaiser Ahmed Sheikh, chairman of the standing committee of the National Assembly (NA) on Finance and Revenue, told Arab News Pakistan was in a “dire situation.”
“There are problems opening LCs, approved by the State Bank of Pakistan, affecting raw material imports.”
Without an LC as a financial guarantee to foreign exporters, import clearances rarely go through.
Sheikh said thousands of import containers were stuck at various ports, which was affecting the manufacturing industry and fueling a fear of industrial closure and further inflation hikes.
The inflation rate in Pakistan is already worryingly high, recorded at 24.5 percent in December 2022, double the figure from around 12 percent in December 2021.
“Both industrialists and the masses are concerned that commodity prices are rising on a daily basis,” Sheikh said. “The inflation will increase further if the State Bank of Pakistan does not allow new LCs opening and the clearance of older LC contracts.”
The situation is particularly precarious for the country’s pharmaceutical industry, currently left with only a few days of stock.
“Pharmaceutical industries keep inventory for three months, but since November 2022 raw material arrival has stopped due to the LCs issue,” Dr. Sheikh Kaiser Waheed, spokesman of the Pakistan Pharmaceutical Manufacturers’ Association (PPMA), told Arab News.
“Due to resource constraints, the drugs for diabetes, cardiac patients, cancer patients etc, are in short supply,” he said. “This shortage is also partly due to excessive buying by patients as precautionary measures after reports of the import situation came out.”
The economic strain has caused a number of textile units, car assemblers, and other industries to suspend or scale down their operations while fears of petroleum product shortage from next month loom, according to industrialists and government sources.
In a meeting with industrialists at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the central bank governor this week announced that a joint committee would be set up with the FPCCI to resolve the “huge backlog in LCs,” according to a statement from the Chamber.
Pakistani senior economists interviewed by Arab News said the current economic situation was a result of the government’s “indecisiveness” with regards to negotiations with the International Monetary Fund (IMF).
A 9th IMF review to clear the release of the next tranche of funds to Pakistan has been pending since September.
“The economic situation of Pakistan is alarming … but the indecisiveness of government officials further compounds the situation,” Dr. Ashfaque Hassan Khan, a senior economist, said.
Current Minister of Finance Ishaq Dar and Minister of State for Finance, Aisha Ghaus Pasha, did not respond to requests for comment for this story.
“The only options before the government now are to either accept the IMF program (with all its conditions) or leave it,” Khan added. “Pakistan is now in a catch-22 position. The government ahead of the general elections would be reluctant to burn its political capital (by imposing more taxes and raising the rate of inflation).”
There is also talk of a mini-budget being announced to meet IMF conditions after its 9th review of the $7 billion IMF Extended Fund Facility (EFF).
“The government is negotiating with the IMF on an energy tariff increase and setting a market based exchange rate of the US dollar, which will increase inflation and there are discussions on the interest rate hike also,” Sheikh, the chairman of the NA standing committee, said.
“A mini-budget will be announced, as without it the IMF’s conditionalities cannot be fulfilled”.
The chairman denied having knowledge of the exact measures and proposed date of the mini-budget, amid speculation about a new petroleum levy and more taxes on imported and local vehicles.
“Hopefully ‘terms of engagement’ with the IMF finalized by the government of Pakistan are solid enough to finalize the 9th review,” Dr. Khaqan Najeeb, former adviser to the finance ministry, said.
“To get out of the present economic crisis, Pakistan must work on getting the IMF back, have a market determined exchange rate, rollover, reprofiling or restructuring of debt and effective social protection,” Dr. Sajid Amin, a senior economist, said.
With Pakistan’s economy in a tailspin, experts call for end to ‘indecisiveness’ on IMF program
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With Pakistan’s economy in a tailspin, experts call for end to ‘indecisiveness’ on IMF program
- More than 7,500 containers stuck at Pakistani ports create acute deficit of industrial, pharmaceutical raw materials
- Government may announce mini-budget to meet demands of the International Monetary Fund and break import deadlock
In Pakistan’s Peshawar, famed ‘Taj Soda’ has been cooling summers for nearly 90 years
- Taj Soda in Peshawar’s historic Qissa Khwani bazaar offers raspberry, blueberry, mint and several other seasonal flavors
- For some, the establishment, set up in 1936, provides an alternative to the city’s famed ‘qahwa,’ or green tea, in summers
PESHAWAR: One is greeted by the sounds of glass bottles clinking and their brass lids pop-opening as they enter a nearly 90-year-old soft drink outlet, named ‘Taj Soda,’ in the historic Qissa Khwani bazaar in the northwestern Pakistani city of Peshawar.
The visitors are led through a three-feet-wide passage into a hall room, which boasts benches and tables for customers to sit and enjoy their favorite drinks, with its walls adorned with pictures that depict the city’s history through the ages.
Taj Soda, established by Taj Muhammad more than a decade before the partition of the Indian subcontinent, claims to be the “oldest” carbonated drink outlet in Pakistan, which few say provides an alternative to Peshawar’s famed ‘qahwa,’ or green tea, in summers.
“My grandfather’s name was Taj Muhammad, who established this business in 1936. After him, my father Mukhtar Hussain, may he rest in peace, he ran the business for his whole life for 76 years,” Waqas Hussain, Muhammad’s 33-year-old grandson who currently runs the establishment, told Arab News on Friday.
“Our work goes on in six months of summer.”
The outlet, which offers a range of flavors like raspberry, blueberry, pomegranate, apple, rose, banana, mango and mint, is mostly frequented by customers from April till September, though it offers the cherished soft drinks round the year, according to the owner.
A simple drink, made with carbonated water, sugar, sodium citrate and benzoate, is sold for Rs50, while those with the addition of milk cost Rs80.
“We start [selling] soup in winter and we do serve cold drinks, soda water, but it is not like this [as high in demand as in summers],” Hussain said.
Usman Khan, a 21-year-old resident of Peshawar who took a group of friends on a tour of the city, said he brought them to Taj Soda to introduce them to the historic establishment, which was said to be older than even 7 Up, an American brand of lemon lime-flavored, non-caffeinated soft drink.
“They all are my friends, they are from different places. One is from Balochistan and the other is from Kohistan [in Khyber Pakhtunkhwa]. I have brought all of them here,” Khan told Arab News.
“The reason is that it is an old building and was made in 1936. I heard that Taj Soda was established [even] before 7 Up, but this is our bad luck that ... Taj Soda is restricted only to this place. No one knows about it outside [the city].”
But for Hussain, Taj Soda means more than just profit. It is about keeping the legacy of his father and grandfather alive.
“We try not to spoil the name of [our] elders and make the best product, and people trust us,” he told Arab News, with a sense of pride.
“Wherever we go, people know us. We feel happy about it.”
Pakistani court rejects ‘malicious’ social media campaign against judge Babar Sattar
- Statement comes in response to allegations Justice Sattar is a dual national, minted assets after elevation as high court judge
- Justice Sattar is one of six high court judges who spoke of alleged interference by intelligence agencies in judicial matters
ISLAMABAD: The Islamabad High Court (IHC) on Sunday rubbished a “malicious” social media campaign against one of its judges, Justice Babar Sattar, clarifying that he was not a dual national and that all his assets in Pakistan and the United States were legally owned.
The press statement from the Pakistani court came in response to recent social media posts that targeted the judge and members of his family. Some social media users had shared pictures of Justice Sattar’s and his family’s travel documents, suggesting that he was a US national and that he had minted assets after his elevation to the post of high court judge.
Justice Sattar is one of the six IHC judges who accused Pakistan’s premier spy agency, the Inter-Services Intelligence (ISI) of intimidating and coercing them over “politically consequential” cases in a letter written to the Supreme Judicial Council last month.
The letter grabbed headlines following which Pakistan’s Supreme Court took notice of the matter and started hearing the case.
The IHC said in its press release on Sunday that “untruthful” and “malignant” allegations against Justice Sattar were posted on social media along with details of his properties that were mentioned in his tax returns.
“Justice Babar Sattar has never had any nationality other than that of Pakistan,” the high court said. “He studied law at Oxford University as a Rhodes Scholar and pursued graduate education at Harvard Law School.”
The IHC clarified that Justice Sattar worked as a lawyer with a New York law firm and was issued the Permanent Resident Card while he was there in the US.
“He left his job in the US in 2005 and returned to Pakistan and has lived and worked in Pakistan since then,” the press release said.
The court said Justice Sattar’s wife and children are citizens of Pakistan and the US, adding that they had been living in the US till 2021 but returned to Pakistan after he was appointed as a
high court judge. It said that they are now living in Islamabad.
The high court said Justice Sattar’s mother is an educationist who established a school in Rawalpindi in 1992 as its sole proprietor. It added that the judge does not have any ownership interest in the school and is not involved with its management.
“Before being appointed a Judge, his law firm acted as legal adviser to the school and received retainer fee for its legal services,” the press release said.
It said that the judge owns real estate assets in the US and Pakistan that are mentioned in his tax returns. The press release said these assets were scrutinized by the Judicial Commission of Pakistan prior to his elevation as a judge of the high court.
“All real estate assets that he owns are either inherited or were acquired while he was a lawyer,” it said. “He has acquired no real estate assets since his appointment as a Judge. He is not
involved with the management of any business entity.”
The press release concluded by saying the IHC was committed to enforcing and upholding the code of conduct for high court judges, adding that it was accountable to the people as it was an institution that exercised public authority.
Pakistan appoint Kirsten, Gillespie head coaches for white-ball, Test formats
- Former South African batter Gary Kirsten coached Inda to World Cup glory in 2011, number 1 spot in Test format
- Former all-rounder Azhar Mahmood confirmed as Pakistan’s assistant coach in all three formats of the game
ISLAMABAD: The Pakistan Cricket Board (PCB) on Sunday announced it had roped in Gary Kirsten as the national squad’s new head coach for limited-overs cricket and Jason Gillespie for the Test format, with less than two months to go before the ICC T20 World Cup 2024 kicks off in the West Indies and USA.
Pakistan were without head coaches for both formats of the game after former team director Mickey Arthur and coaches Grant Bradburn and Andrew Puttick were transferred to the National Cricket Academy (NCA) in Lahore after a change in their portfolios in November 2023.
The trio left their respective positions in January this year, months after Pakistan’s abysmal performance in last year’s 50-over World Cup in India.
“The three appointments have been made for a two-year period following a recruitment process,” the PCB said in a statement, adding that former cricketer Azhar Mahmood has been confirmed as assistant coach in all three formats of the game.
“I extend my congratulations to Jason Gillespie and Gary Kirsten on their appointments as the red and white-ball head coaches of the Pakistan men’s cricket team, respectively,” PCB Chairman Mohsin Naqvi said at a news conference on Sunday.
“Their stellar track records precede them, and I warmly welcome them to the Pakistan cricket family.”
Kirsten, 56, is a former South African top-order batter who played 101 Test matches and 185 ODIs from 1993-2004 in which he scored a total of 14,087 runs and 34 centuries.
The 56-year-old former South Africa top-order batter played 101 Tests and 185 ODIs from 1993-2004 in which he accumulated a total of 14,087 runs with 34 centuries.
Kirsten coached India from 2008-2011 and helped them win the ICC Men’s Cricket World Cup 2011 title and attain the number one position on the ICC Test Team Rankings.
He also coached South Africa men’s cricket team from 2011-2013 and inspired them to the number one position on the ICC Test Team Rankings.
Kirsten has coached Indian Premier League (IPL) teams Delhi Capitals and Royal Challengers Bengaluru, and is presently the batting coach and mentor of Gujarat Titans, who won the 2022 IPL tournament.
“It’s a tremendous honor to be entrusted with the responsibility of coaching the Pakistan men’s national team in white-ball cricket and to rejoin the international cricket arena after some time,” Kirsten told PCB Digital.
“I eagerly anticipate this opportunity and aim to contribute positively to the Pakistan men’s national team in limited-overs cricket.”
Kirsten will take charge of the side immediately after completing his assignment in the IPL. During his tenure, besides the upcoming ICC Men’s T20 World Cup 2024 and other bilateral white-ball series, Kirsten will also be in charge of the side for next year’s ICC Champions Trophy 2025 in Pakistan, ACC T20 Asia Cup 2025 and the ICC Men’s T20 World Cup 2026 in India and Sri Lanka.
Meanwhile, former Australia fast bowler Gillespie will assume responsibilities for Pakistan’s ICC World Test Championship fixtures against Bangladesh (at home in August), which will be followed by Tests against England (at home in October) and South Africa (away in December) in the 2024-25 season.
“I am grateful to the PCB for their faith in my abilities and giving me the honor of coaching one of the most highly-regarded and talented cricket teams in the traditional format of the sport,” Gillespie told PCB Digital.
“Leading the Pakistan cricket team is a big achievement for any coach, given its rich legacy and passionate fan base.”
Gillespie said he wanted to win Tests for Pakistan, which is why he had taken up the coaching assignment.
“Within Pakistan we have a number of high-quality fast bowlers and being able to utilize them will be a key part of any success we enjoy,” Gillespie said.
“But we have quality in all departments – pace, spin, batting and keeping. We have all bases covered. It is exciting to know we have that talent and I am looking forward to working with such talented players.”
Gillespie, 49, has played 71 Tests, 97 ODIs and 1 T20I from 1996-2006. He has taken a total of 402 wickets and accumulated 1,531 runs. The former pacer was part of the Australia squad that won the ICC Men’s Cricket World Cup 2003 in South Africa.
Gillespie has coached Yorkshire County Cricket Club to back-to-back County Championship titles in 2014 and 2015 and is credited with developing England stars Jonny Bairstow, Gary Ballance and Joe Root during his time with Yorkshire.
KP CM directs authorities to remain alert as rains kill 5, injure 8 in two days
- Heavy rains in northwestern Pakistan since Apr. 12 have killed at least 65, injured over 80
- KP chief minister asks authorities to submit detailed report on losses suffered due to heavy rains
PESHAWAR: The chief minister of Pakistan’s Khyber Pakhtunkhwa (KP) on Sunday directed authorities to remain alert after heavy rains in the northwestern province killed five and injured eight in the last two days.
At least 65 people have been killed and over 80 injured in KP from rain-related incidents since Apr. 12. Three men and two women were killed in the last two days from rain-related incidents while five children, two men and one woman were reported to be injured, the latest report from the Provincial Disaster Management Authority (PDMA) said.
“Fourteen houses in total were damaged due to lightning strikes and from the walls or roofs of the house collapsing,” the report said. “One house was completely destroyed while 13 were damaged.”
The deaths were reported in KP’s Bajaur, Battagram, Mansehra, Buner, Dir Upper and Lower districts, the PDMA said.
“KP CM Ali Amin Gandapur has directed district administrations and other concerned departments to remain alert in view of the upcoming rain spell in the province,” the state-run Radio Pakistan said.
Gandapur asked authorities to submit a detailed report on the losses suffered due to heavy rains in the province.
“The provincial government is with the affected people during this hour of grief,” Gandapur said, according to a statement from his office. “Those affected will not be left alone and they will be offered every help.”
Separately, the PDMA has issued an alert about rains and snowfall in different parts of the province, adding that the current spell of rain will continue in the city till Tuesday.
“The PDMA has advised all the relevant departments to stay alert for restoring road links for traffic in case of closure due to landslides,” Radio Pakistan reported.
“The control room of PDMA is operational round the clock and people can contact by dialing 1700 in case of any emergency.”
A Hindu festival in southwestern Pakistan brings a mountainous region to life
- Pakistan’s largest Hindu festival, Hinglaj Yatra, began on Friday and ends on Sunday
- Organizers says more than 100,000 are expected to participate in the festival
HINGLAJ, Pakistan: The ascent of steep mud volcanoes marks the start of Hindu pilgrims’ religious rituals in southwestern Pakistan.
They climb hundreds of stairs or clamber over rocks to reach the summit, tossing coconuts and rose petals into the shallow crater while seeking divine permission to visit Hinglaj Mata, an ancient cave temple that is the focus of their three-day worship.
The dramatic surroundings of Hingol National Park in Baluchistan province are the setting for Pakistan’s largest Hindu festival, Hinglaj Yatra, which started on Friday and ends on Sunday. Organizers say more than 100,000 Hindus are expected to participate.
Muslim-majority Pakistan is home to 4.4 million Hindus, just 2.14 percent of the population, and Hinglaj Mata is one of the few Hindu sites that continues to draw large numbers of pilgrims every year from across the country.
Muslims and Hindus generally live peacefully in Pakistan, from where most of the Hindus migrated to India when it was divided by British colonialists in 1947. But there have been attacks on Hindu temples in recent years as relations between the rivals remain tense.
Hindus believe Hinglaj Mata is one the places where the remains of Sati, the goddess of marital felicity and longevity, fell to earth after she ended her life.
Maharaj Gopal, the temple’s most senior cleric, explains why people flock to it.
“It is the most sacred pilgrimage in the Hindu religion,” said Gopal. “Whoever visits the temple and worships accordingly during these three days will have all of their sins forgiven.”
The journeys begin hundreds of kilometers (miles) away, mostly from neighboring Sindh province. Hundreds of packed buses set off from cities like Hyderabad and Karachi, traveling along the Makran Coastal Highway that hugs Pakistan’s south and southwest.
But there’s scant parking and vehicular access to the holy sites, so many pilgrims disembark and complete their travel by walking over parched and rocky terrain, sometimes barefoot and carrying children or luggage.
It’s a few kilometers (miles) from the main road to the mud volcano and then, from there, almost 45 kilometers (25 miles) to Hinglaj Mata.
Winds buffet the desert-like conditions, churning up dust that whips the eyes, nose and mouth. The pilgrims’ festive cheer and brightly colored apparel are a contrast to the arid landscape. Strong gusts distort people’s celebratory cries of “Jai mata di” and “Jai shiv shankar.”
Kanwal Kumar, 28, was visiting the temple for the first time with her husband. “We have yet to conceive a child after six years of marriage, so we are hopeful for help from the goddess,” she said. “We believe that no one returns empty-handed. All wishes are granted by Hinglaj Mata.”
The Hindu festival brings the Pakistani park to life. Hundreds of stalls spring up to sell snacks, drinks, jewelry, and clothing. Vats of hot food are prepared in the open air or thatched huts. Pilgrims purchase coconuts, sweetmeats, flowers, and incense for their ritualistic offerings.
Aloo Kumar, 55, wanted to express her gratitude to Lord Shiva, one of Hinduism’s three most important deities. “He blessed our family with a grandson,” Kumar said, gesturing toward the boy beside her cradling his baby sibling. “We prayed for a grandson during last year’s festival.”
Hinglaj Mata thrums with activity, even after dark. Fairy lights and other decorations adorn the shrine and pilgrims jostle for position in front of it, sometimes holding up babies so the deities can bless them. Stewards urge them to pay their respects and move along.
The park’s Hingol River provides Hindu pilgrims with the opportunity for ritual bathing, like the Ganges in India.
While there is no ban on Hindu worship in Pakistan, openly practicing the faith is not routine as ties between India and Pakistan are broken. Their interactions are riddled with animosity and suspicion after having fought three wars, built up their armies and armed them with nuclear weapons.
Travel restrictions and hostile bureaucracies largely keep people from crossing the border for leisure, study and work, although the countries sometimes make exceptions for religious pilgrimages, usually for India’s Sikhs.
The decades of political hostility present a challenge for the minority Hindu community, as many in Pakistan equate Hindus with India. The reverse exists in India, where Muslims complain of discrimination.
Versimal Divani, the general secretary of Hinglaj Mata, lamented that only Hindus in Pakistan can attend the festival.
“We can visit this temple in our beloved country whenever our heart desires,” said Divani. “But this is not the case for the rest of the world’s Hindus. I would like the Pakistani government to issue them visas so they can come here and take blessings with them. It’s good for people-to-people contact and it’s good for the economy too.”
