Experts say Washington’s move to suspend foreign aid won’t impact Pakistan significantly

President Donald Trump signs an executive order in the Oval Office of the White House in Washington on January 20, 2025. (AP/File)
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Updated 28 January 2025
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Experts say Washington’s move to suspend foreign aid won’t impact Pakistan significantly

  • US last week paused all foreign assistance to countries, saying will review if they are consistent with foreign policy
  • Washington has invested in Pakistan’s critical energy, economic development and agriculture sectors over the years

KARACHI: Pakistani economists and former diplomats on Tuesday brushed aside the new American administration’s decision to suspend foreign assistance for countries around the world including Pakistan, saying it will not have a significant impact on the South Asian country and could even force Islamabad to undertake much-needed economic reforms. 

US State Department confirmed on Sunday that Washington has paused all US foreign assistance funded by or through the State Department and US Agency for International Development (USAID), adding that America would review all foreign assistance programs to ensure if they are efficient and consistent with US foreign policy.

The program affects all recipient countries, including Pakistan, where numerous US-funded programs are currently in progress. For over 70 years, the US-Pakistan development partnership has been instrumental in supporting sectors such as energy, economy, agriculture, education and health. The South Asian country has been grappling with an economic crisis that in 2023 almost pushed it toward a sovereign default. 

Washington has invested over $205 million in Pakistan’s energy sector, as per USAID’s website and has also provided assistance to economic development programs such as the Investment Promotion Activity ($16.8 million) and the Pakistan Private Investment Initiative ($43.5 million), aimed at enhancing Pakistan’s business climate and supporting small and medium enterprises (SMEs).

“I’m not sure if the suspension of aid will be very harmful because the real harm to the economy is coming from our own policy governance,” Kaiser Bengali, a leading Pakistani economist, told Arab News. 

“On the whole at the macro level, we have seen that in the last 40 years, foreign assistance has not contributed to the economy.”

Bengali said Pakistan’s current economic issues were largely self-created.

“We have created this deficit, balance of trade, balance of payments [crisis],” he said. “We have created a huge debt burden, borrowing loan after loan for the past thirty years and not investing debt funds to increase the productivity of the economy.” 

Pakistan’s Information Minister Ataullah Tarar and Khurram Schehzad, adviser to the government on finance, did not respond to Arab News’ request for comment. Pakistan’s foreign officer spokesperson Shafqat Ali Khan said he would address the queries during the foreign office’s weekly press briefing.

Zamir Akram, a former Pakistani ambassador, agreed with Bengali. He said Washington’s assistance to Pakistan is “limited” and its overall impact on the country’s economy is “negligible.”

“Since the US assistance for Pakistan is less and its funding is very low, it doesn’t have great impact,” Akram told Arab News. “We don’t know the amount of project-based assistance but its overall national assistance for Pakistan is negligent. So that’s why it won’t make any impact.”

However, Ahmed Bilal Mehboob, founder and president of Islamabad-based think tank Pakistan Institute of Legislative Development and Transparency (PILDAT), emphasized that the suspension could have significant consequences for Pakistan’s civil society and development sectors. 

Mehboob said an estimated 10,000 to 15,000 people were working in organizations working to protect democracy and human rights in Pakistan.

“If funding is halted in the future, not only will thousands be left unemployed but governance and human rights work will also be severely affected,” Mehboob told Arab News. 

However, he cited India’s example where civil rights groups grew indigenously, saying that they began receiving minimal foreign funding much later. 

“Sincere people will continue their work using local resources,” he said. 

Bengali said there might be a silver lining to the suspension of foreign assistance, adding that it may prompt Pakistan to seek local solutions and implement necessary reforms.

“If the entire world stopped funding Pakistan, that would actually be a big favor to the country,” Bengali said. “It would force us to make the necessary reforms and find our own solutions.”


Pakistan eyes ‘multibillion-dollar benefits’ as it plans direct ferry link to Oman

Updated 5 sec ago
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Pakistan eyes ‘multibillion-dollar benefits’ as it plans direct ferry link to Oman

  • Pakistani minister says Oman can boost regional ties via maritime corridor to South and Central Asia
  • He proposes boosting bilateral trade through improved port infrastructure and closer cooperation

KARACHI: Pakistan and Oman have agreed to deepen maritime cooperation, including launching a direct ferry service between Gwadar and the Sultanate, in a move that Islamabad says could unlock billions of dollars in trade, investment and transit revenue.

The development follows a high-level meeting on Thursday between Pakistan’s Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry and Oman’s Ambassador Fahad bin Sulaiman bin Khalaf Al Kharusi.

Both officials emphasized the need to boost maritime connectivity and capitalize on their long-standing economic and cultural ties.

“Minister Junaid Chaudhry underscored the economic potential of launching a direct ferry service from Gwadar to Oman, projecting multi-billion-dollar benefits in trade expansion, investment inflows and transit revenue,” said an official statement issued after the meeting.

“He stated that Pakistan stands to earn an estimated $10–15 billion annually through Gwadar’s maritime operations, while Oman could establish a maritime corridor to South and Central Asia, significantly enhancing its regional connectivity,” it added.

Earlier this week, the government announced its plan to launch a ferry service connecting Gwadar Port, a centerpiece of the China-Pakistan Economic Corridor (CPEC), to the Gulf Cooperation Council countries, aiming to strengthen regional ties, improve passenger movement and access new markets across the Middle East.

Pakistan’s minister of maritime affairs said his country’s exports to Oman stood at $224 million in 2024, and stressed the need to scale this up through improved port infrastructure and bilateral collaboration.

As part of long-term cooperation, he also offered maritime training and education opportunities for Omani students at the Pakistan Marine Academy.

The Omani ambassador welcomed the proposals and emphasized the importance of expanding cultural and commercial ties.

He acknowledged the positive contributions of the Pakistani diaspora to Oman’s development and noted that Urdu was widely understood in his country, reflecting strong social bonds between the two nations.


Tensions rise for Imran Khan’s party as Punjab speaker signals opposition disqualifications

Updated 4 min 57 sec ago
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Tensions rise for Imran Khan’s party as Punjab speaker signals opposition disqualifications

  • Malik Ahmad Khan says lawmakers violating constitution have no place in the provincial assembly
  • KP Governor Faisal Kundi has also hinted at a no-trust move against PTI-backed CM Gandapur

ISLAMABAD: Political temperatures rose on Thursday as Speaker of the Punjab Assembly, Malik Ahmad Khan, suggested opposition lawmakers backed by Pakistan’s jailed former Prime Minister Imran Khan could be disqualified from the provincial legislature.

Earlier, the speaker had suspended the membership of 26 lawmakers supported by the former premier’s Pakistan Tehreek-e-Insaf (PTI) party for 15 sessions following chaotic scenes during Chief Minister Maryam Nawaz’s speech during budget proceedings last month.

However, the issue of their disqualification gained traction a day after PTI announced a nationwide protest movement against the government in response to a Supreme Court ruling that denied the party reserved seats for women and minorities in national and provincial legislatures.

“Lawmakers violating the Constitution have no right to remain part of the provincial assembly,” the speaker told reporters on Thursday.

He maintained creating disruption in an assembly was wrong for any political party.

“I will fight this case to uphold the Constitution,” he continued. “I have exercised restraint for over a year and a half as speaker … I now have to fulfill my responsibilities as speaker.”

Last month, Pakistan’s top court upheld a verdict by the Peshawar High Court, ruling that the PTI was not entitled to reserved seats for women and minorities in national or provincial assemblies. The Supreme Court’s constitutional bench ruled that since PTI candidates had contested the February 8 general elections as independents after losing their electoral symbol, they could not claim reserved seats under proportional representation.

The fallout from the Supreme Court verdict has also rattled the PTI’s traditional power base in Khyber Pakhtunkhwa (KP) province where the party managed to form its government.

KP Governor Faisal Karim Kundi, who represents the federal government, has warned that a no-confidence motion could be tabled against PTI-backed Chief Minister Ali Amin Gandapur, a close aide of the jailed former prime minister.

Gandapur, however, has dismissed concerns about his government’s stability, saying there is no constitutional way to remove him from office.


European climbers complete rare alpine-style ascent of Nanga Parbat’s deadly Rupal face

Updated 03 July 2025
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European climbers complete rare alpine-style ascent of Nanga Parbat’s deadly Rupal face

  • German climber David Göttler paraglided from near the summit in a daring solo descent
  • Nanga Parbat is infamous for its high fatality rate, earning it the nickname ‘Killer Mountain’

ISLAMABAD: Three European climbers achieved a rare feat on one of the world’s most dangerous peaks, scaling the treacherous Rupal face of Nanga Parbat in alpine style, with one of them paragliding down from near the summit in a daring solo descent earlier this week.

German climber David Göttler was joined by French mountaineers Tiphaine Duperier and Boris Langenstein for the climb via the Schell route, a steep and rarely successful line up the mountain’s massive southern wall. The Rupal face, rising nearly 4,600 meters from base to summit, is considered the world’s highest mountain face and among the most technically demanding.

“Sometimes you need to be patient … It’s taken five attempts, but now that I’ve achieved it, I know it’s all been worthwhile,” Göttler wrote in a social media post on Tuesday, describing his 12-year pursuit of the route.

He said summiting with his teammates in alpine style was “incredible,” and added that being able to fly down from around 7,700 meters to base camp in the same day took his joy “to the next level.”

Unlike traditional expedition climbing, alpine style involves climbing in a single push without establishing fixed ropes or pre-stocked camps, requiring climbers to carry all their gear. The approach demands speed, efficiency and a high degree of skill, especially at high altitude.

“It’s been a long time since an expedition has successfully summited from the Rupal side,” Naiknam Karim, CEO of Adventure Tours Pakistan, which facilitated the expedition’s logistics, told Arab News over the phone. “Normally, people climb from the Diamir face.”

“What makes this climb special is that they did it in alpine style ,” he continued. “What’s even more remarkable is that Göttler paraglided down from the summit. So, that’s his special achievement.”

Nanga Parbat, the world’s ninth-highest peak at 8,126 meters, is infamous for its difficulty and high fatality rate, earning it the nickname “Killer Mountain.”

Over 100 climbers and porters have died on its slopes, with the Rupal face considered particularly unforgiving due to avalanche risk and exposure to extreme weather.


Pakistan pushes ahead with agri bank privatization under IMF-backed reform plan

Updated 03 July 2025
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Pakistan pushes ahead with agri bank privatization under IMF-backed reform plan

  • The Privatization Commission Board appoints financial advisers for the sale of Zarai Taraqiati Bank
  • An official statement mentions ZTBL among the priority transactions in the privatization pipeline

KARACHI: The government on Thursday appointed a consortium of financial advisers for the sale of Zarai Taraqiati Bank Limited (ZTBL), a state-owned agricultural lender, according to an official statement.

The decision, made during a meeting of the Privatization Commission (PC) Board chaired by Muhammad Ali, Adviser to the Prime Minister, signals the government’s intent to fast-track key transactions under its broader economic reform program.

The board approved the selection of a consortium led by Next Capital Limited, which ranked highest among six qualified bidders.

“ZTBL is among the priority transactions in the current privatization pipeline. The appointment of a top-tier consortium of FAs [financial advisers] reflects the government’s strong commitment to executing the process in a professional, transparent and timely manner,” the Privatization Commission said in a statement.

Pakistan’s privatization program, long encouraged by the International Monetary Fund (IMF) under various loan arrangements, is aimed at reducing fiscal losses from poorly performing state-owned enterprises (SOEs), improving governance and boosting private sector participation.

The IMF has repeatedly called for structural reforms, including divestment from commercial entities, to ease pressure on public finances and strengthen the country’s economic outlook.

Alongside the appointment, the PC Board also approved the formation of a Negotiation Committee to finalize the Financial Advisory Services Agreement (FASA) with the selected consortium.

Other shortlisted bidders included major consortiums led by Arif Habib Limited, A.F. Ferguson, AKD Securities, Bridge Factor and JS Bank.

ZTBL provides agricultural credit and rural banking services across Pakistan.

Its privatization is seen as part of a broader effort to reform the financial sector and reduce the state’s commercial footprint.


Utility Stores employees vow resistance as government plans shutdown from July 10

Updated 03 July 2025
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Utility Stores employees vow resistance as government plans shutdown from July 10

  • Workers’ union says closure will affect over 11,000 direct and 5,500 indirect employees
  • A committee will discuss Voluntary Separation Scheme with union members on Friday

ISLAMABAD: The Utility Stores Corporation (USC) employees’ union on Thursday vowed to resist the government’s decision to shut down retail operations by July 10, saying it would fight for the rights of over 11,000 workers by initiating protests, sit-ins and legal action.

Established by the government in 1971, the corporation has a nationwide chain of retail outlets that provide essential commodities to the general public at prices lower than those in the open market.

The corporation took over 20 retail outlets at the beginning but now operates 6,000 stores across the country. The government allocated Rs65 billion ($229.7 million) to subsidize the products sold by the retail chain in the last fiscal year.

One of its spokespersons confirmed to Arab News the corporation’s public retail stores will be closed by July 10, adding that all operations will shut down by the end of the month.

“We have received instructions from the Ministry of Industries and Production to close down all the stores by July 10, shift remaining goods to warehouses and completely shut down operations by July 31, 2025,” Sajid Marwat, USC Public Relations Officer, said.

Meanwhile, Arif Shah, Secretary General of the All Pakistan Workers Alliance of Utility Stores, said the union will use all available avenues to protect the corporation and its employees.

“We will pursue both options, challenging the decision in court and staging on-ground protests including a sit-in at the [USC] headquarters,” he told Arab News.

“In total, around 17,000 people — including 11,500 direct employees of Utility Stores, 2,000 to 2,500 vendor staff and 3,000 franchise store workers from 1,000 to 1,200 outlets — will be affected by the closure,” Shah said, adding the authorities had already terminated around 4,100 employees.

He maintained the institution has remained in existence for 55 years, and shutting it down was not the government’s sole prerogative.

“If it is truly necessary to close this institution, the decision should be approved by parliament,” he said.

Shah noted that during emergencies and disasters, the corporation stood at the forefront to provide relief items and ensure food security due to its big presence all over the country.

He pointed out if the government was determined to shut it down, then at the very least, the employees should be given a fair and respectable voluntary separation scheme (VSS) package to help absorb the financial shock.

Asked about the possibility of offering such a proposal, USC spokesperson Marwat said a human resource committee would convene on Friday to review the issue in consultation with union representatives and the management.

“The union is not accepting the current terms as they are demanding compensation packages for everyone, including daily wage laborers and contractual staff, as all categories of workers are being affected,” he informed, adding that the government was considering a financial deal for regular employees.

Under the package for regular staff, the government is planning to offer two or three month of basic salary.

“But based on mutual consultations, the committee will prepare a comprehensive package for the outgoing employees,” he added.

Raja Miskeen, a USC employee for over two decades, termed it completely wrong to shut down Utility Stores, saying it would put the livelihood of thousands of employees like him and their families at risk.

“We are waiting for the official written order, after which we will challenge this move in court,” he told Arab News.

“We are also in contact with our unions, urging them to develop a joint strategy that includes protests, sit-ins in the federal capital and legal action,” he added.

Miskeen said the employees have dedicated many years to the corporation, adding that it had been functioning well.

“We are not against restructuring or improving its operations, but a complete shutdown is simply unacceptable,” he added.

Ayesha Anwar, a regular customer at the USC in Islamabad’s G-6 sector, said she had been shopping at Utility Stores for years, as their quality goods and subsidized rates had always helped stretch her household budget.

“Sugar at the store costs Rs164 per kilogram [$0.58], while in the open market it is around Rs200 [$0.71]. Similarly, price differences exist for other essential items as well,” she said, adding that closure of these stores would deeply affect the public, especially low-income families.