Pakistan’s last-gasp IMF bailout as it happened

Pakistan Prime Minister Shehbaz Sharif meets with managing director of the International Monetary Fund (IMF), Kristalina Georgieva, in Paris, France June 22, 2023. (REUTERS/File))
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Updated 30 June 2023
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Pakistan’s last-gasp IMF bailout as it happened

  • Agreement is under a Stand-By Arrangement, existing Extended Financing Facility signed in 2019 expires later on Friday
  • IMF approved $6 billion, 39-month bailout package for Pakistan under EFF struck with government of then PM Imran Khan

KARACHI: Pakistan reached a staff-level agreement with the International Monetary Fund (IMF) to release $3 billion in critical bailout funds following a long drawn-out review process for the cash-strapped economy since November last year.

The agreement is under a Stand-By Arrangement (SBA), as the existing Extended Financing Facility (EFF) program signed in 2019 expires later on Friday.

Here are some facts about the lead up to the last-gasp agreement:

-May 2019: IMF approves a $6 billion, 39-month bailout package for Pakistan under the EFF struck with the government of then Prime Minister Imran Khan.

-April 2022: Khan’s government is removed in a parliamentary vote of no confidence. Shehbaz Sharif takes over as Prime Minister as the country reels from economic and political turmoil.

-July 2022: IMF and Pakistan reach staff-level agreement for the release of about $1.2 billion in the last successful EFF review until the SBA.

-Aug 2022: The IMF board approves the seventh and eighth reviews of the bailout program, allowing for a release of over $1.1 billion and an extension by a year.

-Sept 2022: Miftah Ismail resigns as finance minister, the fifth such minister to be replaced in less than four years.

Ishaq Dar takes over as finance minister for his fourth stint in the job, with Pakistan’s next staff review, the ninth under the EFF, and funds tranche due in November.

-Nov 2023: Pakistan, IMF begin virtual engagement for the ninth review of the loan program. A staff delegation visit does not materialize due to differences on program targets, and Dar hits out at the IMF for the delay.

-Jan 2023: Pakistan reiterates commitment to completing the IMF program in a meeting on the sidelines of a climate conference in Geneva.

An IMF staff delegation visits Pakistan after weeks of delays, but the 10-day visit concludes without an agreement to send the matter to the board, increasing economic uncertainty.

-Feb 2023: Pakistan, IMF decide to resume talks virtually on steps needed to secure an agreement for the ninth review.

-May 2023: IMF mission chief says continuing to work with Pakistani authorities to bring the ninth review to conclusion once necessary financing is in place.

-June 22, 2023: Sharif meets IMF Managing Director Kristalina Georgieva in Paris, looking to secure a last minute release of the stalled funds before the program expires on June 30.

-June 24, 2023: Pakistan changes its budget for the financial year starting on July 1, including the latest fiscal tightening measures dictated by the IMF.

-June 26, 2023: Pakistan’s central bank raises its benchmark interest rate by 100 basis points to 22 percent at an emergency meeting days before IMF program expires.

-June 30, 2023: IMF reaches staff-level agreement with Pakistan on $3 billion funding, which is spread over nine months and is higher than expected. The country was awaiting the release of the remaining $2.5 billion from the $6.5 billion bailout package agreed in 2019, which was expiring on Friday.


Pakistan and Russia agree to establish new steel mill in Karachi — state media

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Pakistan and Russia agree to establish new steel mill in Karachi — state media

  • The two countries have worked on deepening their ties in recent years, focusing on energy cooperation
  • Both sides also collaborated in the 1970s when the Soviet Union helped set up Pakistan Steel Mills

ISLAMABAD: Pakistan and Russia have agreed to establish a steel mill in Karachi, state media reported on Tuesday, aiming to boost bilateral ties and expand industrial collaboration between the two countries.

Their understanding reflects a broader deepening of Pakistan-Russia relations in recent years, including energy cooperation on oil and gas supplies. In 2023, the two sides worked on a deal for the delivery of Russian crude to Pakistan, and talks have continued on broader energy partnerships.

The two countries are also collaborating on the Pakistan Stream Gas Pipeline, a major infrastructure project aimed at transporting imported gas from Karachi to Punjab to help meet Pakistan’s energy needs.

The idea of the new steel mills was discussed during a meeting between Russian representative Denis Nazaroof and Special Assistant to the Prime Minister (SAPM) Haroon Akhtar Khan.

“The primary focus of the discussion was the establishment of new steel mills in Pakistan,” the Associated Press of Pakistan (APP) news agency reported.

The new project echoes the historic collaboration between the two sides in the 1970s, when the Soviet Union helped set up Pakistan Steel Mills (PSM).

PSM was once the country’s largest industrial complex. However, the facility suffered decades of neglect, financial mismanagement, and political interference, ultimately shutting down production in 2015 after accumulating billions in losses.

“Pakistan is a secure and thriving hub for investment, and the international community has recognized its potential,” Khan said during the meeting.

“I invite all Russian businesspeople to explore investment opportunities in Pakistan,” he added.

Khan also emphasized the Prime Minister’s vision to attract foreign investment and underscored the potential for meaningful Pakistan-Russia cooperation in the steel sector.


China reaffirms support for lasting ceasefire between India and Pakistan after military standoff

Updated 38 min 59 sec ago
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China reaffirms support for lasting ceasefire between India and Pakistan after military standoff

  • China’s deputy foreign minister meets Pakistan’s envoy in Beijing to discuss regional tensions
  • He calls for a comprehensive ceasefire and offers his country’s support in achieving it

ISLAMABAD: China’s Vice Foreign Minister Sun Weidong met with Pakistan’s envoy in Beijing to discuss tensions between Islamabad and New Delhi and expressed support for a lasting ceasefire, Reuters reported on Wednesday.

The meeting followed a recent flare-up in hostilities between India and Pakistan, marked by cross-border missile, drone and artillery exchanges. The situation prompted international concern and calls for de-escalation.

According to a statement from China’s Ministry of Foreign Affairs, Sun emphasized Beijing’s support for a sustainable ceasefire between the two South Asian neighbors during his meeting with Ambassador Khalil Hashmi.

“China welcomes and supports Pakistan and India achieving a comprehensive and lasting ceasefire,” Sun said. “China is ready to continue to play a constructive role in this regard.”

China, a longstanding ally of Pakistan, has maintained a strategic diplomatic and defense relations with Islamabad.

During the recent hostilities in the region, reports indicated that Pakistan deployed Chinese-made J-10C fighter jets and PL-15 missiles in its military operations.

This marked the first known combat use of the J-10Cs, reflecting the potency of Chinese military hardware and highlighting Beijing’s significant role as Islamabad’s primary defense partner.

While China has expressed support for Pakistan, it has also called for restraint and dialogue.

In a statement issued earlier, the Chinese foreign ministry urged both India and Pakistan to prioritize peace and stability, remain calm and restrained and resolve their differences through dialogue and consultation.

The recent ceasefire agreement between India and Pakistan, brokered with international mediation, has also been welcomed by China.


Pakistan envoy at UN urges end to Gaza blockade, calls it collective punishment by starvation

Updated 14 May 2025
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Pakistan envoy at UN urges end to Gaza blockade, calls it collective punishment by starvation

  • Israel imposed the blockade in March, restricting entry of food, fuel and medical supplies
  • UN agencies warn nearly 470,000 people are facing significant levels of hunger in Gaza

ISLAMABAD: Pakistan’s top diplomat at the United Nations on Tuesday called for an immediate end to Israel’s blockade of Gaza, labeling the restriction of humanitarian aid as a violation of international law and a form of collective punishment through mass starvation.

Speaking at a UN Security Council briefing on the humanitarian situation in the war-torn Palestinian territory, Ambassador Asim Iftikhar Ahmed emphasized the dire consequences of the blockade, which has been in place since March this year.

The blockade has severely restricted the entry of food, fuel and medical supplies, exacerbating the humanitarian crisis in the region.
According to the World Health Organization, the blockade has led to severe shortages of essential supplies, with reports indicating that approximately 470,000 people are facing significant levels of hunger.

“The blockade imposed since 2nd March must be lifted,” Ahmed said. “Humanitarian access is not a favor – it is a legal obligation. Aid convoys and medical teams must be protected and allowed to operate freely and safely.”

“The normalization of starvation as a weapon of war is a crime,” he continued. “Collective punishment must end, and accountability must be ensured. The Gaza Reconstruction Plan must be fully and actively supported, and no forced displacement of Gazans must be tolerated.”

The ambassador’s remarks come amid escalating concerns over the humanitarian crisis in Gaza. The situation has been described as a deliberate starvation of a civilian population as a method of warfare by various humanitarian organizations.

UN agencies have reported that the blockade has resulted in the closure of bakeries and the depletion of food stocks, leaving the population with limited access to basic necessities.

The United Nations Relief and Works Agency (UNRWA) has also highlighted the challenges faced in delivering aid, noting that humanitarian supplies have not entered Gaza for several weeks.

Ambassador Ahmed called upon the international community to take decisive action to alleviate the suffering of the Gazan people and to uphold the principles of international humanitarian law.


Trump calls for deeper India-Pakistan engagement, hails US role in ceasefire at Riyadh forum

Updated 14 May 2025
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Trump calls for deeper India-Pakistan engagement, hails US role in ceasefire at Riyadh forum

  • The US president says he used trade as leverage to secure the ceasefire, a claim India denies
  • He asks Marco Rubio to help leaders of both countries ‘go out and have a nice dinner together’

ISLAMABAD: United States President Donald Trump on Tuesday reiterated he had brokered a “historic ceasefire” between India and Pakistan using trade as leverage, while urging his administration to help build diplomatic ties strong enough for the nuclear-armed rivals to someday “go out and have a nice dinner together.”

The statement came days after a major standoff between the two South Asian neighbors, which saw both sides exchange missile and drone attacks as well as artillery fire across the Line of Control in Kashmir.

Trump, who announced the ceasefire on Saturday, said it followed a night of intense diplomatic activity. Subsequently, US Secretary of State Marco Rubio informed the two countries had agreed to hold talks at a neutral venue to discuss a broad range of outstanding issues.

Trump made the remarks about the ceasefire during his address to the Saudi-US Investment Forum in Riyadh, shortly after arriving in the Kingdom where he met Crown Prince Mohammed bin Salman and senior Saudi officials. 

The visit also saw the signing of more than $300 billion in defense and economic deals.

“Just days ago, my administration successfully brokered a historic ceasefire to stop the escalating violence between India and Pakistan,” he said. “And I used trade to a large extent to do it and I said, ‘Fellas, come on, let’s make a deal. Let’s do some trading. Let’s not trade nuclear missiles. Let’s trade the things that you make so beautifully.’”

Trump praised the efforts of his top aides, including Vice President JD Vance and Rubio, and called the leadership in both India and Pakistan “strong and smart.”

“Maybe we can even get them together a little bit, Marco, where they go out and have a nice dinner together,” he added. “Wouldn’t that be nice?”

He warned that the recent crisis, which he said “started off small,” had the potential to spiral into a broader conflict with devastating consequences.

“Millions of people could have died,” he said.

India, however, negated shortly before Trump’s speech that trade was a factor in the US-mediated truce.

Randhir Jaiswal, spokesperson for India’s Ministry of External Affairs, confirmed that top leaders in New Delhi and Washington remained in close contact during the standoff, but denied that trade was discussed.

“The issue of trade didn’t come up in any of these discussions,” he said, referring to calls between Vance and Prime Minister Narendra Modi, as well as between Rubio and External Affairs Minister Subrahmanyam Jaishankar.

With input from AP


First batch of 633 Pakistani Hajj pilgrims to reach Jeddah today, ministry says

Updated 13 May 2025
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First batch of 633 Pakistani Hajj pilgrims to reach Jeddah today, ministry says

  • Pakistan launched its Hajj flight operation on Apr. 29 which will continue till May 31
  • Around 29,000 Pakistani pilgrims have already arrived in Saudi Arabia for pilgrimage

ISLAMABAD: The first batch of 633 Pakistani Hajj pilgrims is set to arrive in Saudi Arabia today, Wednesday, via two separate flights from Islamabad under the Road to Makkah Initiative, the Pakistani Ministry of Religious Affairs said.

This year’s annual pilgrimage is expected to take place between June 4 and June 9, with nearly 89,000 Pakistanis expected to travel to Saudi Arabia under the government scheme and 23,620 Pakistanis through private tour operators.

Pakistan launched its Hajj flight operation on Apr. 29 which will continue till May 31. Pilgrims continued to leave for Madinah during the first 15 days of the operation until May 13 and now, they will land in Jeddah and travel directly to Makkah.

“Under this phase, the first PIA flight, PK-741, carrying 305 guests of Allah Almighty (intending pilgrims), is scheduled to land at King Abdulaziz International Airport at 10:10am while the second flight, PK-759, carrying 328 pilgrims, will arrive at 6:55pm,” the ministry quoted Pakistan’s Director-General Hajj Abdul Wahab Soomro as saying.

The Makkah Route Initiative is designed to streamline immigration processes by enabling pilgrims to complete official travel formalities at their departure airports. Initially tested in Islamabad in 2019, the program was later expanded to Karachi, benefitting tens of thousands of Pakistani travelers. This saves pilgrims several hours upon arrival in the Kingdom, as they can simply enter the country without having to go through immigration again.

Around 29,000 Pakistani pilgrims have already arrived in Saudi Arabia. Of them, 14,000 are currently in the holy city of Makkah and 15,000 in Madinah. For the first time, Pakistani Hajj pilgrims will have access to fully air-conditioned camps in Mina and will be accommodated in top-of-the-line hotels and buildings in the Azizia and Batha Quraish neighborhoods, according to the religious affairs ministry.

They will receive a specially designed bag containing the Pakistani flag, a QR code for identification, and relevant information. A mobile app will provide access to Hajj group information, training schedules, flight details, accommodation details, and live maps and locations during the pilgrimage.

In recent years, Saudi Arabia has also launched mobile apps like Nusuk, Hajj Navigator, Tawakkalna and Asefny to streamline Hajj services, with the aim to make the pilgrimage experience smoother by offering real-time guidance and ensuring pilgrim safety.