Pakistan says committed to improving investment climate as it seeks external financing avenues

A representative from Finn Fund, Antti Partanen (left), calls on Pakistan's Finance Minister Muhammad Aurangzeb in Islamabad, Pakistan on August 27, 2024. (@Financegovpk/X)
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Updated 27 August 2024
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Pakistan says committed to improving investment climate as it seeks external financing avenues

  • IMF loan approval depends on “confirmation of necessary financing assurances from development and bilateral partners”
  • Pakistan is also fighting a growing militancy problem which experts say threatens business and investment climate 

ISLAMABAD: Finance Minister Muhammad Aurangzeb on Tuesday reiterated the federal government’s commitment to make Pakistan’s investment climate “favorable and conducive” for foreign investors as the South Asian country struggles to meet external financial needs to get approval for a $7 billion IMF bailout loan and fights a growing militancy problem. 

Last month, Aurangzeb said Pakistan will focus on meeting its external financing needs by speaking with foreign governments and lenders to draw foreign investment as well as seeking loan rollovers. The government is also seeking to focus on more sustainable forms of external financing such as direct investment and climate financing.

Pakistan and the IMF reached an agreement for the 37-month loan program last month. The IMF has said the program is subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.”

On Tuesday, Aurangzeb met Antti Partanen, a representative from Finn Fund, a Finnish development financier, who called on the finance minister in Islamabad. 

“The meeting focused on exploring potential investment opportunities in Pakistan,” Radio Pakistan reported. “The Finance Minister highlighted the government’s focus on transforming Pakistan into an export-led economy and attracting Foreign Direct Investment to enhance the country’s export base.”

Radio Pakistan said Partanen presented an overview of FinnFund’s profile and investment initiatives in Pakistan, emphasizing the firm’s interest in digital infrastructure, renewable energy, agriculture, and forestry.

“He noted that Pakistan’s growing young population makes it an attractive destination for financing and expressed the Fund’s willingness to explore investments in various sectors of the country.”

Aurangzeb has held a flurry of meetings with heads of foreign banks and companies in recent weeks in a push to bring in more investment. Last week he held meetings with top officials of Dubai Islamic Bank and Mashreq Bank to “discuss the economic outlook and explore investment opportunities in Pakistan.”

Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to meet gross financing needs under the IMF program, Aurangzeb said in July following a trip to China to seek energy sector debt reprofiling.

Rollovers or disbursements on loans from Pakistan’s long-time allies, in addition to financing from the IMF, have helped Pakistan meet its external financing needs in the past.

Tough conditionalities placed by the IMF, such as raising tax on agricultural incomes and lifting electricity prices, have prompted concerns about poor and middle class Pakistanis grappling with rising inflation and the prospect of higher taxes.

Bringing in foreign investors might also become harder as Pakistan’s security situation deteriorates. On Sunday, separatist militants launched several coordinated attacks in the southwestern province of Balochistan, killing over 53 people, including at least 19 soldiers and police. Attacks across the country by religiously motivated groups like the Pakistan Taliban have also been on the rise in recent months. 


Pakistani textile industrialists expect Trump to cut export tariffs after India ceasefire

Updated 5 sec ago
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Pakistani textile industrialists expect Trump to cut export tariffs after India ceasefire

  • President Donald Trump said he will “substantially” increase trade with Pakistan and India after the US brokered a ceasefire between both nations
  • Pakistan industrialists say they support Washington’s efforts and remain committed to promoting peace through Pakistan-US trade-led engagement

KARACHI: Pakistani textile mill owners on Monday expressed their hopes that United States (US) President Donald Trump will reduce tariffs on Pakistan’s exports, in line with his announcement to “substantially” increase trade with Pakistan and India following a ceasefire between the two nations.
Trump’s announcement came a day after Washington brokered the ceasefire after four days of fighter jet, missile, drone and artillery strikes by India and Pakistan against the other, leaving nearly 70 people dead on both sides.
The US president has imposed a 10 percent baseline tariff on all imports to the US and higher duties on dozens of countries. Pakistan faces a 29 percent tariff due to a trade surplus with the US of about $3 billion, though the US last month announced a 90-day pause in reciprocal tariffs.
The All-Pakistan Textile Mills Association (APTMA) said Trump’s message was an “encouraging signal” for the future of US-Pakistan economic engagement, especially in the textile sector that serves as the backbone of Pakistan’s export economy.
“His statement is a timely recognition of the crucial role trade can play in this regard. The US remains Pakistan’s largest export destination, with textiles accounting for nearly 80 percent of total exports to the American market. Additionally, Pakistan is the second-largest importer of US cotton and has taken proactive steps to increase cotton imports in response to concerns over the trade imbalance,” APTMA said.
“In line with these increased imports, we expect the US to reduce existing and proposed tariffs on Pakistan’s exports, thereby enhancing market access and unlocking greater trade opportunities.”
Trump said on Sunday he would try to work with both India and Pakistan to see if they can resolve their dispute over Kashmir, which had been divided between India and Pakistan but claimed in full by both.
The two countries have fought two of their three wars over the region, while last week’s military conflict between them was also triggered by a militant attack in Indian-administered Kashmir that killed 26 tourists on April 22.
“While not even discussed, I am going to increase trade, substantially, with both of these great Nations,” Trump wrote on his social media platform, Truth Social, referring to India and Pakistan.
“Additionally, I will work with you both to see if, after a ‘thousand years,’ a solution can be arrived at concerning Kashmir,” he added.
APTMA said it supports international efforts, particularly those led by the US, aimed at fostering lasting peace in South Asia, including the resolution of long-standing disputes through dialogue and mutual understanding.
“We recognize that economic cooperation and regional stability are deeply interconnected and remain committed to promoting peace through trade-led engagement,” it said.
“Building on this momentum, we look forward to strengthening a resilient and mutually beneficial US-Pakistan trade partnership, grounded in respect, national sovereignty, and shared economic goals.”


Indian army says talks with Pakistan’s military operations chief delayed

Updated 59 min 25 sec ago
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Indian army says talks with Pakistan’s military operations chief delayed

  • There were no reports of explosions or projectiles overnight, with Indian army saying Sunday was first peaceful night in recent days
  • Before ceasefire on Saturday, Pakistan and India had fought with missiles and drones during four days of intense confrontation last week 

ISLAMABAD: India and Pakistan have delayed until Monday evening talks between their military operations chiefs to discuss the next steps after a ceasefire, the Indian army said, as New Delhi reopened airports and shares rose in the nuclear-armed rivals.

A fragile 48-hour-old truce appeared to be holding on Monday after both sides blamed the other for initial violations on Saturday night, hours after the US-brokered deal was first announced. There were no reports of explosions or projectiles overnight, after some initial ceasefire violations, with the Indian Army saying Sunday was the first peaceful night in recent days along their de facto Line of Control border.

Saturday’s ceasefire followed four days of intense fighting with drones and missiles and gun fire exchanges across the Line of Control that divides the disputed Kashmir valley into parts administered by India and Pakistan. Dozens were reported killed. 

The Indian army said on Monday both sides’ director generals of military operations would speak by telephone in the evening, a delay from an initial timing of noon (0630 GMT), but gave no reason.

“In spite of some minor damage, all our military bases and systems continue to remain fully operational,” India’s director general of air operations, Air Marshal A.K. Bharti, told a media briefing.

A day earlier, Lt. Gen. Rajiv Ghai, the director general of military operations, said India’s armed forces struck nine militant infrastructure and training facilities, including sites of the Lashkar-e-Taiba group that India blames for carrying out major militant strikes in India and the disputed region of Kashmir.

At a televised news conference on Sunday, Pakistan military spokesman Lt. Gen. Ahmad Sharif Chaudhry said Pakistan’s armed forces targeted a total of 26 Indian military installations in response to India’s missile strikes which were launched before dawn Wednesday.

He said the military had vowed it would respond to the Indian aggression, and it has fulfilled its commitment to the nation. Sharif warned that any threat to Pakistan’s sovereignty or territorial integrity would be met with a “comprehensive, retributive, and decisive” response.

He said Pakistan exercised “maximum restraint” during the counterstrike, employing medium-range missiles and other munitions, and that no civilian areas were targeted inside India.

MARKETS INCH UP

Pakistan halted trading on Monday for an hour after its benchmark share index rose nearly 9 percent, having recovered most of its losses in the past three sessions after India’s first strikes last Wednesday. 

Late on Friday, the International Monetary Fund approved a fresh $1.4-billion loan to Pakistan under its climate resilience fund and approved the first review of its $7 billion program.

Pakistan’s benchmark share index closed up 9.4 percent on Monday, while India’s blue-chip Nifty 50 index closed 3.8 percent higher in its best session since February 2021.

Before the ceasefire took hold on Saturday, the arch rivals had targeted each other’s military installations with missiles and drones, as relations turned sour after India blamed Pakistan for a militant attack that killed 26 tourists on Apr. 22. Pakistan denies the accusations and has called for a neutral investigation.

Saturday’s truce was first announced by US President Donald Trump. US officials also said the two nations had agreed to hold talks on a broad set of issues at a neutral site though no date has been announced yet. 

Kashmir has been a bone of contention between the two countries since independence from British colonial rule in 1947. Both countries claim the Muslim-majority region in full but govern only parts of it. They have fought two of their three wars since 1947 over the disputed territory. 

Islamabad has thanked Washington for facilitating Saturday’s ceasefire and welcomed Trump’s offer to mediate on the Kashmir dispute with India but New Delhi has not commented on US involvement in the truce or talks at a neutral site.

- With inputs from Reuters


Normalcy slowly returns to Azad Kashmir as ceasefire holds

Updated 12 May 2025
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Normalcy slowly returns to Azad Kashmir as ceasefire holds

  • India and Pakistan agreed to a ceasefire on Saturday after exchanging drone, artillery and missile attacks
  • Residents return to homes near contested border in Azad Kashmir but remain skeptical of lasting peace

CHAKOTHI, AZAD KASHMIR: Shops began reopening in Azad Kashmir on Sunday (May 11) after India and Pakistan agreed to a ceasefire along their contested border, but residents expressed doubts about how long the peace would last without a political solution to the decades-old Kashmir dispute.

The border town of Chakothi, which had borne the brunt of recent cross-border shelling, showed tentative signs of normalcy as shopkeepers returned to assess damage and restart businesses. Many residents who had fled the violence remained hesitant to return.

“We’ll restart business but it will take time,” said Shabbir Abbasi, a shopkeeper and head of the local traders’ union. “People won’t come back until there’s a proper ceasefire agreement.”

The nuclear-armed neighbors agreed to stop cross-border firing in Kashmir, but locals said temporary truces were not enough.

“The Kashmir issue must be resolved now if they want real peace,” Abbasi told Reuters.

Some residents welcomed the pause in violence but remained skeptical. 

“A ceasefire is good, but talks to resolve Kashmir would be better,” said Mohammad Aslam, a Chakothi resident.

Muhammad Munir noted that people don’t rely much on ceasefire agreements. 

“Today there is a ceasefire but by evening there may be firing here,” he said. “That’s why people don’t rely on this too much, they don’t think this is a final thing.”

Hafiz Muhammad Shah Bukhari, a resident of district Poonch in India, was also happy at the cessation of hostilities. 

“There is a lot of joy in the village [after ceasefire],” he said. “Personally, I am very thankful to Allah. It is a very good decision that the shelling has stopped.”

Saturday’s ceasefire marks the temporary end to fighting that started on Wednesday (May 7), two weeks after 26 men were killed in an attack targeting Hindus in Pahalgam in Indian-administered Kashmir.


Pakistan welcomes Kurdish PKK’s disbandment, ending 40-year Turkiye insurgency

Updated 12 May 2025
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Pakistan welcomes Kurdish PKK’s disbandment, ending 40-year Turkiye insurgency

  • Since the PKK launched its insurgency in 1984, the conflict has killed more than 40,000 people, exacted huge economic losses 
  • PKK’s decision will give President Tayyip Erdogan the opportunity to boost development in Turkiye’s mainly Kurdish southeast

ISLAMABAD: Pakistan on Monday welcomed the decision by the Kurdistan Workers Party (PKK) group, which has been locked in bloody conflict with the Turkish state for more than four decades, to disband and end its armed struggle.

Since the PKK launched its insurgency in 1984, the conflict has killed more than 40,000 people, exerted a huge economic burden and fueled social tensions. The PKK is designated a terrorist group by Turkiye and its Western allies.

Taking to X, Pakistani Prime Minister Shehbaz Sharif called the PKK’s dissolution a “historic development.”

“Pakistan welcomes the announcement of PKK’s dissolution, a significant step toward lasting peace and a terror-free Turkiye,” he wrote.

The Firat news agency, which is close to the group, reported on Monday that the PKK 12th Congress decided to “dissolve the PKK’s organizational structure and end the armed struggle.”

The PKK held the congress in response to a February call to disband from its jailed leader Abdullah Ocalan, who has been imprisoned on an island south of Istanbul since 1999. It said on Monday that he would manage the process.

On Mar. 1, the PKK announced a unilateral ceasefire, but attached conditions, including the creation of a legal framework for peace negotiations.

“The PKK has completed its historic mission,” the PKK statement said. “The PKK struggle has broken the policy of denial and annihilation of our people and brought the Kurdish issue to a point of solving it through democratic politics.”

The PKK’s decision will give President Tayyip Erdogan the opportunity to boost development in Turkiye’s mainly Kurdish southeast, where the insurgency has impaired the regional economy for decades.

A deputy leader of the pro-Kurdish DEM Party, the third largest in Turkiye’s parliament and which played a key role in facilitating Ocalan’s peace call, told Reuters the PKK decision was significant not just for Kurdish people but for the Middle East as a whole.

“It will also necessitate a major shift in the official state mentality of Turkiye,” DEM’s Tayip Temel said.

- With inputs from Reuters


Pakistan, Saudi Arabia reaffirm commitment to strengthen bilateral ties 

Updated 12 May 2025
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Pakistan, Saudi Arabia reaffirm commitment to strengthen bilateral ties 

  • Pakistan’s deputy premier and foreign minister meets Saudi ambassador to Pakistan in Islamabad
  • Saudi Arabia was actively involved in de-escalating tensions between nuclear-armed India and Pakistan

ISLAMABAD: Pakistan and Saudi Arabia reaffirmed their commitment to further strengthen bilateral relations between the two countries, Pakistan’s foreign ministry said on Monday. 

The development took place as Saudi Ambassador Nawaf bin Said Al-Malki called on Pakistan’s Deputy Prime Minister and Foreign Minister Ishaq Dar in Islamabad. Their meeting took place days after Pakistan and India agreed to a ceasefire on Saturday after exchanging lethal missile, drone and artillery strikes. 

“They discussed the full gamut of bilateral ties and reaffirmed their commitment to further strengthen already existing fraternal relations across all sectors,” Pakistan’s foreign ministry said about Dar’s meeting with Malki. 

Saudi Arabia was one of the few countries that were actively engaged in de-escalating tensions between India and Pakistan last week after the former launched missile strikes against the latter on Wednesday. 

Saudi Arabia’s Foreign Minister Faisal bin Farhan spoke to Dar over the phone on May 10, expressing condolences over the loss of lives due to India’s strikes. The two had spoken after Saudi Minister of State for Foreign Affairs Adel Al-Jubeir visited Pakistan after his surprise stop in New Delhi for talks with Indian officials.

Saudi Arabia and Pakistan share close diplomatic and strategic relations. The Kingdom has extended significant support to Pakistan during prolonged economic challenges faced by Islamabad in recent years, including external financing and assistance with International Monetary Fund (IMF) loan programs.

The two regional and economic allies signed 34 agreements worth $2.8 billion in October last year. The Kingdom is home to over 2.7 million Pakistani expatriates, serving as the top destination for remittances for cash-strapped Pakistan.