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IMF expected to conclude final review today of Pakistan’s $3 billion loan program

In this handout photograph released by Pakistan’s Press Information Department (PID) and taken on March 14, 2024, Pakistan’s Finance Minister Muhammad Aurangzeb (2L) speaks with International Monetary Fund (IMF) Mission Chief for Pakistan Nathan Porter (2R) during a meeting in Islamabad. (PID/File)
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Updated 19 March 2024
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IMF expected to conclude final review today of Pakistan’s $3 billion loan program

  • IMF delegation arrived in Pakistan last week to carry out second and final review of its loan program
  • Pakistan, IMF to discuss letter of intent, staff-level agreement today, says finance ministry official 
Updated 19 March 2024
Aamir Saeed

ISLAMABAD: The International Monetary Fund (IMF) will conclude its review of Pakistan’s $3 billion short-term bailout program today, Tuesday, which was due to be completed on Monday, a Pakistani finance ministry official said amid Islamabad’s efforts to avoid a macroeconomic crisis and stabilize its fragile $350 billion economy.

The finance ministry official, who spoke on condition of anonymity as he was not authorized to speak to the media, said the visiting IMF delegation had decided to extend the deadline by a day on Monday as the review agenda couldn’t be completed in the scheduled period. 

The IMF team arrived in Pakistan last week to carry out the second and final review under the short-term loan program secured by Islamabad last summer. Pakistan has said it has met all the structural benchmarks and targets set by the lender, hoping that a successful completion of the evaluation will be followed by the release of a remaining tranche of around $1.1 billion.

“The review agenda couldn’t be completed in the scheduled period, therefore the mission has extended it for a day for now,” the official told Arab News on Monday. “The letter of intent and staff-level agreement will be discussed tomorrow [Tuesday] now.”

Islamabad has expressed its interest in securing a new loan under the Extended Fund Facility (EFF) program as it continues to carry out reforms to strengthen its debt-ridden economy.

On Monday, Pakistani financial authorities briefed the IMF mission on the country’s annual taxation targets, ways to abolish subsidies in different sectors, digitization of the tax system and expansion in the tax net, the official said.

“At the moment, Pakistan has been lagging on two fronts that are digitization of the taxation and bringing over 3 million retailers in the tax net,” he said. “The FBR has signed a memorandum this week for the digitization while the work on bringing the retailers into the tax net is underway.”

The global lender wants Pakistan to continue the economic stabilization and reforms agenda “till negotiation of the new loan program,” the official added.

Citing officials, Pakistani state media last week reported that Islamabad’s talks with the global lender for the second review of the ongoing program were “progressing positively.”

Pakistan secured the $3 billion IMF program in last June after it narrowly escaped a sovereign default. Its economy has been under extreme stress with low reserves, a balance of payment crisis, inflation at 23 percent, policy interest rates at 22 percent and record local currency depreciation.
 

Topics: Pakistan IMF Talks

Pakistan says will share concerns about terror groups threatening its security in ongoing US talks

Updated 09 May 2024
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Pakistan says will share concerns about terror groups threatening its security in ongoing US talks

  • Pakistan and United States are holding Pakistan-US Counterterrorism Dialogue in Washington
  • Pakistan has said suicide attack that killed five Chinese workers in March was planned in Afghanistan
Updated 09 May 2024
SAIMA SHABBIR

ISLAMABAD: The Pakistan Foreign Office said on Thursday Islamabad would share its concerns regarding terror groups that threatened its security with Washington as the two countries hold counterterrorism talks in the United States this week. 
The three-day talks, which commenced on Wednesday and will conclude on May 10, are part of the Pakistan-US Counterterrorism Dialogue. The Pakistani delegation is led by the Additional Secretary United Nations division at the foreign ministry, Syed Haider Shah. 
The initial round took place last year in Islamabad, where discussions centered on the counterterrorism landscape in Pakistan and the wider region.
“The counterterrorism talks between Pakistan and the United States are ongoing and the two sides will discuss issues related to security and countering violent extremism and combating terrorism financing,” foreign office spokesperson Mumtaz Zahra Baloch told reporters in a weekly briefing in Islamabad, saying terrorism posed a collective threat to the international community. 
“It is important for Islamabad to share its concerns about terrorist groups that threaten its security with its interlocutors during these dialogues and this is a priority for Pakistan when we engage in these talks,” she added.
The FO statement comes two days after Pakistan’s military said a suicide bomb attack that killed five Chinese engineers was planned in neighboring Afghanistan, and that the bomber was also an Afghan national. 
Relations between Pakistan and Afghanistan have soured in recent months as Islamabad says Kabul is not doing enough to tackle militant groups targeting Pakistan from across the border. Kabul says rising violence in Pakistan is a domestic issue for Islamabad and has denied allowing the use of its territory to militants.
Gaza 
At Thursday’s press briefing, the Pakistan foreign office also condemned Israel’s attack on a Jordanian aid corps for humanitarian assistance to occupied Gaza.
“It is not just a flagrant violation of the obligations of the occupying power but a dangerous provocation that may lead to further escalation of tensions in the region,” Baloch said, condemning the invasion and seizure of the Rafah border crossing in southern Gaza by Israeli forces in what Islamabad said was defiance of international warnings and acceptable international behavior. 
“With its latest actions, Israeli occupation authorities have once again demonstrated their contempt for international humanitarian law as they continue to pursue an abhorrent policy of genocide and extermination in Gaza,” Baloch added.
Pakistan-Saudi Arabia relations 
Amid a flurry of visits between Pakistan and Saudi Arabia, including by the Saudi foreign minister and a high-powered business delegation to Islamabad and two visits by the Pakistani prime minister to Riyadh, the foreign office spokesperson said Pakistan and Saudi Arabia were engaged in a “robust dialogue” on cooperation in diverse domains, including in the energy sector.
“The two sides are also engaged in discussions for increased Saudi investments in Pakistan,” she added.
Baloch highlighted Pakistan’s emphasis on increased engagement, particularly with the Middle East, to attract foreign investment, saying the Special Investment Facilitation Council (SIFC) set up last year to oversee foreign financing was implementing measures to offer incentives to foreign investors in support of this effort.
Pak-Iran Gas pipeline
Baloch said the Iran-Pakistan (IP) gas pipeline was a “priority” for the country and reiterated that the South Asian nation would decide on the issue based on its own interest.
“Pakistan will take decisions based on its own national interest, and the Iran-Pakistan gas pipeline is a priority for Pakistan,” she added.
The two countries signed an agreement to construct the pipeline from Iran’s South Fars gas field to Pakistan’s Balochistan and Sindh provinces in 2010, but work on Pakistan’s portion has been held up due to fears of US sanctions.
In March, Islamabad said it would seek a US sanctions waiver for the pipeline. Washington, however, has said it does not support the project and cautioned about the risk of sanctions in doing business with Tehran.

Topics: Pakistan foreign office Pakistan US Ties War on Gaza Pakistan Iran gas pipeline

Pakistan advance to Sultan Azlan Shah Cup final for first time since 2011 after beating Canada

Updated 09 May 2024
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Pakistan advance to Sultan Azlan Shah Cup final for first time since 2011 after beating Canada

  • Pakistan made a dramatic comeback in the last match when they faced a 2-0 deficit in the first 17 minutes
  • Green Shirts will face Japan again in the final on Saturday after drawing a match with them in the tournament
Updated 09 May 2024
Arab News Pakistan

ISLAMABAD: Pakistan have surged into the final of the Sultan Azlan Shah Cup 2024 after making a dramatic comeback in their last match against Canada, setting the stage for a thrilling showdown with Japan on Saturday.
The Green Shirts have had a notable history in the international men’s field hockey tournament held in Malaysia. Over the years, Pakistan have secured the championship three times, occurring in 1999, 2000, and 2003.
However, their performance remained on a decline in recent years, making it the first time Pakistan have advanced to the tournament final since 2011.
“Pakistan and Japan have qualified for final of the 30th Sultan Azlan Shah Cup Hockey tournament,” the state-owned Radio Pakistan reported on Thursday. “The final match of the tournament will be played on Saturday in Ipoh, Malaysia.”
In their last match against Canada on Wednesday, Pakistan faced a 2-0 deficit in the first 17 minutes, though the players showed resilience and prowess to help the squad make a comeback and clinch a narrow 5-4 victory.
Currently leading the table after four matches with three victories and a draw, Pakistan will face Japan in the final match. The two teams drew their previous game after putting in all their effort to defeat each other.
Malaysia and New Zealand trail behind, tied with six points each, occupying the third and fourth spots respectively in the tournament standings.

Topics: Pakistan Hockey

Pakistan’s PSO proposes swapping debt for stake in public sector companies

Updated 09 May 2024
Reuters
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Pakistan’s PSO proposes swapping debt for stake in public sector companies

  • Stopping the pile-up of unresolved debt across Pakistan’s power sector and settling it is a top IMF concern
  • PSO’s aggregate receivables from government agencies and autonomous bodies stands at about $1.8 billion
Updated 09 May 2024
Reuters

KARACHI: Pakistan State Oil, the country’s largest oil marketer, says it is in talks with the government on a plan to acquire stakes in public sector energy companies and offset mounting debt it is owed by firms such as the national airline.
Stopping the pile-up of unresolved debt across Pakistan’s power sector, and ultimately settling it, is a top concern of the International Monetary Fund (IMF), with which Islamabad begin talks this month for a new long-term loan deal.
“Everything will be done through competitive bidding and we will participate and if we win, the stakes will be offset against (PSO’s receivables),” said Syed Muhammad Taha, the managing director and chief executive of state-backed PSO.
“That is our proposal and this is under consideration, so we are working with the government,” Taha said in an interview on Wednesday with Reuters, which is the first to report the plan.
Pakistan’s government, with a stake of about 25 percent, is the biggest shareholder of PSO, but private shareholders own the rest.
Government officials, including the petroleum minister and the information minister, did not reply to a Reuters request for comment.
Total circular debt in Pakistan’s power and gas sectors stood at 4.6 trillion rupees ($17 billion), or about 5 percent of GDP by June 2023, the IMF says.
Circular debt is a form of public debt that stems in part from failure to pay dues along the power sector chain, starting with consumers and moving to distribution companies, which owe power plants, which then have to pay fuel supplier PSO.
The government is either the biggest shareholder, or outright owner of most these companies, making it tough to resolve debt as fiscal tightening leaves it strapped for cash.
Among other steps sought by the IMF, Pakistan has raised energy prices to stop the build-up of debt. But the accumulated amount still has to be resolved.
Taha said the IMF reforms helped the sector by boosting creditors’ ability to pay, which will continue to improve.
PSO’s aggregate receivables from government agencies and autonomous bodies stood at 499 billion rupees ($1.8 billion), the largest share owed by gas provider Sui Northern Gas, whose largest shareholder is the government.
PSO’s annual report last year said the crisis of owed debt was a serious issue for it.
Taha said PSO had initially floated the idea of acquiring stakes or complete ownership of assets such as power plants in Nandipur in the northern Punjab province and Guddu in southern Sindh, as well as the government-owned holding entity for power generation companies.
It also discussed equity stakes in profitable public sector companies such as the Oil and Gas Development Co, he added.
PIA DEAL
Taha said PSO was also a part of the broader settlement framework for the privatization of Pakistan International Airlines, which would potentially include a “clean asset swap” and a stake in the airline’s non-core assets, such as property.
The government is putting on the block a stake ranging from 51 percent to 100 percent in debt-ridden PIA as part of the public-sector reforms sought by the IMF.
In March, media said the principal alone that PIA owed PSO for fuel supply amounted to roughly 15.8 billion rupees ($57 million).
Taha added that he expected modest growth in demand for petroleum products as the economy opens up, thanks to lower interest rates and higher disposable income.
As economic conditions improve, he added, PSO is working with big strategic investors from China and the Middle East to upgrade and expand its refinery arm, Pakistan Refinery Ltd.
PSO has a network of 3,528 retail outlets in addition to 19 depots, 14 airport refueling facilities, operations at two seaports, and Pakistan’s largest storage capacity of 1.14 million tons.

Topics: Pakistan economy Pakistan State Oil

Gunmen kill seven laborers from Punjab province in Pakistan’s coastal Gwadar district

Updated 21 min 15 sec ago
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Gunmen kill seven laborers from Punjab province in Pakistan’s coastal Gwadar district

  • The assailants targeted the seven hair-salon workers while they were sleeping in a residential quarter
  • No group have claimed the attack, though Baloch separatists have targeted Punjabi workers in the past
Updated 21 min 15 sec ago
SAADULLAH AKHTER

QUETTA: A group of unidentified gunmen attacked a residential quarter in Gwadar, a coastal town in Pakistan, in the early hours of Thursday, killing seven laborers from Punjab province, confirmed a local administration official.
The attack, which occurred about 24 kilometers from central Gwadar city, targeted hair-salon workers from Khanewal district in Punjab while they were sleeping.
Speaking to Arab News, Deputy Commissioner of Gwadar Hamood-ur-Rehman said the assailants stormed the quarter around 4 AM and opened fire on the occupants.
“The attackers killed seven laborers belonging to Punjab province before escaping from the area,” he said. “One worker was injured in the attack and has been transferred to District Headquarter Hospital Gwadar for medical treatment.”
Rehman also mentioned the district administration and law enforcement agencies had started investigating the incident. So far, no group has claimed responsibility for the attack.
This is the third attack against laborers from Punjab within a month in Pakistan’s restive southwestern Balochistan province, which shares porous borders with Iran and Afghanistan and has experienced a low-scale insurgency by Baloch separatist groups against the Pakistani state.
In April, the proscribed Baloch Liberation Army (BLA) claimed responsibility for the killings of nine Punjab residents traveling to Iran from Quetta, the capital of Balochistan. In another incident last month, two Punjabi garage workers were targeted.
Baloch nationalists have long accused the Pakistani government and Punjab province of monopolizing profits from Balochistan’s abundant natural resources, saying it has led to political marginalization and economic exploitation.
However, Pakistani administrations have denied these allegations, citing several development initiatives launched in the province to improve local living conditions.
Gwadar, located on the Arabian Sea coast, plays a pivotal role in the multibillion-dollar China Pakistan Economic Corridor (CPEC) that is envisaged to enhance regional connectivity.
Despite being resource-rich, Balochistan remains Pakistan’s most sparsely populated and impoverished province.
“The slain laborers were shot multiple times,” Dr. Hafeez Baloch, the medical superintendent at DHQ Gwadar, told Arab News. “We found bullet injuries on their heads and bodies.”
“One injured individual, who was in stable condition, has been referred to Karachi for better treatment,” he added. “The bodies of the slain laborers have been returned to their native village in Punjab.”
Prime Minister Shahbaz Sharif condemned the killings, describing the incident as “a cowardly attack on the country by its enemies.”
“We will eradicate terrorism from the country and stand with the families who lost their loved ones in Gwadar,” he declared in a statement.
Meer Sarfaraz Bugti, the provincial chief minister, vowed to pursue the attackers, saying: “We will use all our might against these terrorists and establish the writ of the state.”

Topics: Gawadar Baloch Liberation Army (BLA)

Gunmen kill seven barbers in Pakistan’s volatile Balochistan province

Updated 09 May 2024
AP
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Gunmen kill seven barbers in Pakistan’s volatile Balochistan province

  • No group has claimed responsibility, though Baloch separatists have targeted people from Punjab in the past
  • The Pakistan government says it has quelled separatist insurgency, but violence in Balochistan has persisted
Updated 09 May 2024
AP

QUETTA: Attackers fatally shot seven barbers before dawn Thursday in a home in a volatile province in southwestern Pakistan, police and a government official said.
The killings occurred near the port city of Gwadar in Balochistan province, police official Mohsin Ali said. All of the barbers were from Punjab province and lived and worked together.
Provincial Interior Minister Ziaullah Langau condemned the killings and said police were investigating who was behind the attack.
There was no immediate claim of responsibility. Separatists in Balochistan have often killed workers and others from Punjab as part of a campaign to force them to leave the province, which for years has experienced a low-level insurgency by the Balochistan Liberation Army and other groups demanding independence from the central government in Islamabad. Islamist militants also have a presence in the province.
The government says it has quelled the separatist insurgency, but violence in the province has persisted.
Police said they believe the attack on the barbers was not related to their jobs. Last month, the Balochistan Liberation Army claimed responsibility for killing nine people from Punjab province who were abducted from a bus on a highway in Balochistan, saying it had information that spies were on the bus.
Separatists have also targeted people from Punjab working on coal-mine projects in Balochistan.
In January, gunmen killed six barbers in a former stronghold of the Pakistani Taliban in the country’s northwest near the Afghanistan border. Pakistani militants years ago banned the trimming of beards and haircuts in Western styles.

Topics: Militant attack Baloch Liberation Army (BLA) Gawadar

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