In a first, Pakistan launches seven-year plan to deal with adverse effects of climate change 

People make their way through a waterlogged road after a heavy rainfall in Lahore on June 26, 2023. (AFP/File)
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Updated 29 July 2023
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In a first, Pakistan launches seven-year plan to deal with adverse effects of climate change 

  • The development comes as Pakistan once again witnesses torrential monsoon showers that have claimed nearly 170 lives so far 
  • Climate change ministry says the plan will set out the government’s efforts to better anticipate and manage climate-related events 

ISLAMABAD: Pakistan has launched a seven-year National Adaptation Plan (NAP) for the first time in its history to deal with adverse impacts of climate change in the country, its climate change ministry said late Friday, as the South Asian nation continues to grapple with extreme climate events, including droughts, heavy rains and floods. 

Pakistan’s climate change ministry has warned that water availability will be reduced by a gradual rise in temperature and periodic, but consistent, heatwaves, unpredictable and severe monsoons with more frequent extreme weather events will cause more floods and droughts, and the sea level rise is expected to continue encroaching on coastal settlements, infrastructure, and ecosystems. 

The NAP process will be addressing issues in various sectors such as water, agriculture, forestry, coastal areas, biodiversity, and other vulnerable ecosystems to ensure water, food, and energy security for the country as well as to minimize the impacts of natural disasters on the economy, human life, health and property. 

“The overall impacts of climate change, if not addressed, will exacerbate Pakistan’s economic susceptibility and could resultantly reduce annual GDP by up to 20 percent per year by 2050,” read the NAP document shared by the climate change ministry. 

“Adaptation for sustainable and resilient development is more a necessity than a choice for Pakistan. It is thus critical-and is an essential component of a sustainable and equitable growth strategy-to build resilience and adapt to climate risks.” 




Motorcyclists wade through a flooded street in Karachi on July 24, 2023. (AFP/File)

The NAP process is part of an international initiative established under the Cancun Adaptation Framework (CAF) that resulted from the realization of the fragmented nature of adaptation under the United Nations Framework Convention on Climate Change (UNFCCC) and the need to make it cohesive. It focuses on synergizing diverse forms of knowledge (scientific, indigenous, and traditional) as critical policy pathways for achieving required transformation in priority areas. 

For instance, the main targets for water conservation includes a 20 percent increase in water use efficiency through modern irrigation techniques, refurbishment of irrigation infrastructure, real-time monitoring of water distribution for transparent water accounting and development of a unified authentic database to have reliable water resources assessment. To achieve this, the government last year allocated Rs90.312 billion (10 percent of total PSDP) for 91 water sector development projects and studies, according to the document. 

Agriculture and livestock constitute the largest sector of the economy that has been greatly impacted by the recent climate-induced floods, with labor participation and livelihood of a majority of the population directly or indirectly depending on it. However, during the last few decades, its contribution to GDP has gradually decreased to 19.3 percent. The government intends to develop a proper risk management system, encourage farmers to plant a variety of heat and drought-resistant low-delta crops, provide enabling financial environment to farmers, and promote energy-efficient farm mechanization to increase yields and laborsaving among other measures to boost the sector. 




Farmers distribute bundle of rice seedlings for planting at paddy field on the outskirts of Lahore on June 7, 2023. (AFP/File)

Similar strategies have been devised for disaster preparedness, human health, forestry, biodiversity, gender and urban resilience in the South Asian country. 

There was an increase of 0.63°C during the past century in conformity with the average global temperature increase, however, during the period 1981-2005, the decadal mean temperature rise over Pakistan was 0.39°C as compared to 0.177°C for the globe as a whole, which implies that the warming over Pakistan was twice as fast as the global mean temperature rise, according to the climate change ministry. 

Due to the rising temperatures, extreme climatic phenomena, including floods, droughts, cyclones, torrential rainstorms and extremely high temperatures, are occurring more frequently and with greater intensity across the country. Since 2000, there has been a significant rise in the variability of the monsoon. As a result, Pakistan has witnessed floods of varied sizes every year since 2010, which have greatly damaged property and claimed a significant number of lives. 

“The National Adaptation Plan is aimed at setting out what the government will do to support efforts across all levels of government, business, and the community, to better anticipate, manage and adapt to the impacts of climate change,” the document stated further. 

“It involves a range of broad, cross-sectoral challenges. An effective national adaptation response requires coordinated action across the natural, built, social and economic domains to the strength of the economy, adhere to national security, the resilience of our society and operation of natural systems.” 

The development comes as Pakistan once again witnesses torrential monsoon showers that have claimed nearly 170 lives so far this year and triggered migration from low-lying areas due to a flood-like situation. 

The rains have returned to Pakistan a year after the climate-induced downpour swelled rivers and inundated at one point one-third of Pakistan, killing 1,739 people. The floods also caused $30 billion in damage in cash-strapped Pakistan in 2022. 

Pakistan is in a forced state of adaptation and is among the most severely threatened countries in terms of climate–induced challenges, especially in the context of its dependency on climate-sensitive sectors such as agriculture, water, natural resources and the environment, and socio-economic issues such as poverty, according to the climate change ministry. The country’s adaptation to the adverse impacts of climate change is inevitable and likely to become critical in the future. 

“The reduction of vulnerability will be achieved by building adaptive capacity and resilience and through the implementation of adaptation actions... including facilitating the integration of climate change adaptation into existing strategies, policies, legal frameworks, and programs,” the document read. 

“Climate change will impact each domain differently. It is important to recognize that within the four domains are individuals, businesses, communities, organizations and governments, all facing unique challenges and barriers. To respond to these challenges, we need to work together on tailored, co-designed solutions.” 

The ministry said the two main objectives of the process were to reduce vulnerability to the impacts of climate change by building adaptive capacity, and to facilitate the integration of climate change adaptation into relevant new and existing policies, programs, and activities, in particular development planning processes and strategies, within all relevant sectors. 

Initial guidelines for the formulation of NAP were divided into four main elements, including laying the groundwork and addressing gaps, preparatory elements, implementation strategies, and reporting, monitoring, and review of climate-related events, it added. 


For these Pakistani women, Independence Day offers a chance to earn and celebrate

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For these Pakistani women, Independence Day offers a chance to earn and celebrate

  • Housewives, maids, mothers turn to selling flags and festive goods for extra income during Aug. 14 rush
  • Seasonal stalls in Pakistan’s commercial center can bring women vendors savings of up to $54 in a few days

KARACHI: In the days before Pakistan’s Independence Day, the streets of Karachi fill with green and white flags, bunting and balloons, but for many women in the city, the national celebration is also a time to step into business — if only for a few days.

Housewives, maids and street vendors set up temporary stalls along busy roads and markets, selling flags, badges, hats and T-shirts to customers celebrating the August 14 holiday.

In an economy where inflation has eroded incomes and steady jobs are scarce, the seasonal rush offers a welcome boost to household finances.

“August 14 is Independence Day, a day of happiness, so we also celebrate our happiness and earn a livelihood for the children,” said Shama Sikandar, a housewife selling Independence Day T-shirts for the first time this year from a roadside stall on Shahra-e-Quaideen.

“Before this, I would just stay at home and do nothing all year.”

She said the sight of other women working outside the home inspired her to try.

“It feels good to be working. I have seen many women even driving rickshaws, some riding motorcycles, some pushing carts, and others doing various jobs to earn a livelihood for their children.”

In Karachi, seasonal vendors crowd key intersections and shopping strips ahead of the holiday, calling out to passing motorists and pedestrians. The sales supplement incomes for women who otherwise rely on low-paying, year-round work.

For 32-year-old maid and mother of three, Saima Babar, the August rush is a planned investment.

From her savings of 30,000 rupees ($105), she buys flags and other celebratory goods to sell on the streets.

“Thanks to Allah, the household runs, we manage one meal a day, and that’s fine, right? My children are doing okay,” she said. “[By selling flags] I manage to save about 10 to 12 thousand rupees ($36–$43).”

Husna, a mother of seven who usually sells pens and keychains at traffic lights in Karachi’s upscale Defense area, shifts her stall to the Sindhi Muslim neighborhood every August.

“On some flags, I earn 20 rupees ($0.07) profit; on others, 30 rupees ($0.11). In this way, I make around 1,200 rupees ($4.30) a day,” she said, before handing over a badge and a couple of flags to a customer.

“Our livelihood is made; there’s enough for bread, water, and lentils. It’s happiness for you, and it’s happiness for us too. Pakistan Zindabad.”

Even women who have been selling for years say the holiday provides a reliable boost.

Sajan Kumar and his wife, Suman, have been setting up a flag stall on Shahra-e-Faisal every August for the past eight years.

“As soon as August 14 arrives, we come here to sell flags,” Kumar said. “It’s a day of celebration. We sell every year. People buy them, celebrate, and also come with their children to stroll around. We manage to save around 10 to 15 thousand rupees ($36–$54).”

Pakistan marks its 79th Independence Day this year under the theme “Marka-e-Haq – the Battle of Truth,” with celebrations beginning on Aug. 1 and running through the month. Across Sindh and Punjab provinces, flag-raising ceremonies, cultural shows, boat parades, marathons, and even donkey cart races have drawn large crowds.

For Babar, the more the merrier.

“The more people celebrate, the more purchases there are, right?” she said with a smile.


Moody’s upgrades Pakistan’s credit rating to ‘Caa1’, finance minister hopes for rate cut

Updated 38 min 46 sec ago
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Moody’s upgrades Pakistan’s credit rating to ‘Caa1’, finance minister hopes for rate cut

  • Pakistan’s international bonds rose as much as 1 cent to between 90-100 cents on the dollar following ratings upgrade
  • Aurangzeb says more room for central bank to cut key policy rate from 11 percent on back of positive economic indicators

Moody’s said on Wednesday it had raised Pakistan’s credit rating by one notch to ‘Caa1’ from ‘Caa2’ due to an improving external financial position and it assigned the country a “stable” outlook.

The announcement came within hours of Pakistan’s Finance Minister Mohammed Aurangzeb saying there was more room for the central bank to cut the country’s key policy rate from 11 percent on the back of positive economic indicators.

“The credit rating’s improvement is a sign that economic policies are heading toward the right direction,” Prime Minister Shehbaz Sharif said in a statement.

Pakistan’s international bonds rose as much as 1 cent to between 90 and 100 cents on the dollar following the ratings upgrade. It lifted most of them to their highest since early 2022 when fears of a full-blown debt crisis sent them plunging to as little as 30 cents.

Moody’s decision to raise the rating by one notch after Fitch and S&P did the same will help Pakistan’s capability to raise external debt. Pakistan says its economy is on a recovery path after a $7 billion IMF bailout helped to stabilize it.

“We changed the outlook for the Government of Pakistan to stable from positive,” Moody’s said in a statement.

“The upgrade to Caa1 reflects Pakistan’s improving external position, supported by its progress in reform implementation under the IMF Extended Fund Facility (EFF) program,” it said.

Pakistan’s debt affordability has improved, but remains one of the weakest among rated sovereigns, Moody’s said, adding that the Caa1 rating also reflected the country’s weak governance and high degree of political uncertainty.

Aurangzeb told a gathering of businessmen in Islamabad ahead of the Moody’s announcement that he was expecting an improvement in Pakistan’s credit rating by other agencies after Fitch and S&P.

“We are hopeful of progress in terms of the policy rate going south,” he added.

Aurangzeb said it was his personal view that there was more room for a rate cut toward the end of the year, adding that it was for the central bank to make the final call on the issue. The next policy rate announcement is due on September 15. The central bank left its key interest rate unchanged at 11 percent on July 30, going against analyst expectations. In a Reuters poll they had forecast a reduction of 50 to 100 basis points. The bank said the inflation outlook had deteriorated due to rising energy prices.

Inflation accelerated to 4.1 percent year-on-year in July. 


Pakistan’s central bank sees FY26 growth up to 4.25%, trade gap to widen

Updated 18 min 24 sec ago
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Pakistan’s central bank sees FY26 growth up to 4.25%, trade gap to widen

  • Current account deficit forecast at 0–1% of GDP despite remittance growth
  • Forex reserves projected to reach $15.5 billion by end-December 2025

KARACHI: Pakistan’s central bank on Wednesday projected economic growth of up to 4.25 percent in the current fiscal year but warned the trade deficit would widen, even as reserves are set to climb on the back of steady remittances and foreign inflows.

The forecast comes as Pakistan implements reforms under a $7 billion International Monetary Fund (IMF) program approved in September 2024, which has helped stabilize the currency, ease inflation and restore investor confidence. The IMF deal is tied to fiscal consolidation, energy sector reforms, and measures to boost exports, part of a broader effort to strengthen macroeconomic stability after years of chronic external imbalances.

The economy returned to moderate growth last year, aided by improved agricultural output, lower global commodity prices, and a series of policy rate cuts totaling 1,100 basis points since late 2024. Inflation has eased from record highs, while the rupee has stabilized against the dollar after a crackdown on the illegal currency market.

“With the policy rate kept unchanged at 11 percent in the MPC meetings in June and July, the MPC expects the real policy rate to be adequately positive to stabilize inflation within the medium-term target range,” the State Bank of Pakistan (SBP) said in its Monetary Policy Report (MPR) released on Wednesday. 

“In the external account, the MPR expects the trade deficit to widen further and, notwithstanding continued expected growth in workers’ remittances, result in a current account deficit of 0–1 percent of GDP in FY26,” it added.

The central bank said “projected financial inflows, coupled with continued SBP interbank FX purchases, would support further buildup in SBP’s FX reserves, which are projected to rise to $15.5 billion by end-December 2025.”

Economic activity, it said, was “projected to gain further traction, with the impact of the earlier reductions in the policy rate still unfolding,” and real GDP growth was expected to range between 3.25 percent and 4.25 percent in FY26.

The MPR also flagged “potential external and domestic risks to the baseline macroeconomic outlook” and included analysis of the lag in monetary policy transmission, comparisons with global central bank decisions, and the SBP’s use of alternative data and machine learning to fill gaps in labor market and agriculture statistics.
 


Pakistan’s first Islamic digital bank offers 14% Independence Day cashback

Updated 17 min 17 sec ago
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Pakistan’s first Islamic digital bank offers 14% Independence Day cashback

  • Campaign runs Aug. 13–22 with Rs3,000 cap per customer
  • Cashback credited to accounts within one business day

KARACHI: Pakistan’s first Islamic digital bank is offering a 14 percent cashback on eligible debit card and QR code transactions to mark the country’s 78th Independence Day, in a campaign aimed at promoting cashless and Shariah-compliant payments.

The “Azadi Cashback” promotion, launched by aik, will run from Aug. 13 to Aug. 22 and allow customers to earn up to Rs3,000 ($10.75) in cashback during the period, credited to their accounts within one business day. The offer excludes utility bills, cash withdrawals, peer-to-peer transfers and government payments.

“The cashback is structured as a discretionary gift on the momentous occasion of Pakistan’s 78th Independence Day,” aik said in a statement.

aik, which operates as a digital-only platform, said the promotion supports its mission to provide Riba-free financial services and encourage secure, cashless transactions. It aims to create a banking experience rooted in transparency, ethics and user empowerment.

aik said the Independence Day campaign was part of efforts to “accelerate the adoption of secure digital payments across Pakistan,” combining “convenience with compliance” for users seeking Islamic finance options.

Digital banking is expanding rapidly in Pakistan, driven by high smartphone penetration and government incentives for electronic payments. According to the State Bank of Pakistan, digital retail transactions surged over 50 percent year-on-year in fiscal 2024, with mobile banking emerging as a key growth segment.


India conflict fires up Pakistan’s Independence Day fervor, boosts flag sales

Updated 13 August 2025
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India conflict fires up Pakistan’s Independence Day fervor, boosts flag sales

  • Flag maker reports sales up by up to 50 percent as households and businesses spend heavily on August 14 decorations
  • Traders say brisk Independence Day buying is lifting markets despite inflation squeezing consumer budgets

KARACHI: Pakistan’s largest flag manufacturer, VIP Flags, is expecting around 50 percent growth in sales this year as the public marks the country’s 78th Independence Day with unusual zeal, fueled by celebrations of victory in the May 2025 conflict with India.

The two nuclear-armed neighbors, which have fought three major wars since 1947, engaged in their deadliest fighting in decades this May. The fighting ended on May 10 after US mediation, with Prime Minister Shehbaz Sharif’s government declaring victory and saying it had downed at least six Indian fighter jets.

Officials have since linked the conflict’s outcome to the heightened national fervor surrounding August 14 this year, reflected in booming flag markets and sales of other Independence Day paraphernalia.

“Our business, all the businesses have grown 50 percent,” said VIP Flags CEO Nisar Ahmed Sheikh, adding that much of his stock had been sold to marchers rallying in support of Pakistan’s armed forces during the war with India.

VIP Flags manufactures flags for domestic customers, the armed forces, and international buyers in Saudi Arabia and the UAE, and holds Guinness World Records for the largest flags made in 2004 and 2008.

Sheikh said sales this year would likely run into millions of units.

“Obviously when people were filled with passion [after the war with India] and started hoisting flags, the flags business saw an uptick and increased compared to last year,” he told Arab News. 

“It is still growing and people are putting flags on their cars, bicycles and motorcycles.”

Sheikh said the surge in sales extended well beyond flags, with market vendors incorporating Independence Day themes into a wide range of products — from shirts, mufflers and headbands to shawls, dresses and children’s clothing — creating a vibrant festive atmosphere.

“People must be spending billions of rupees on this (celebrations) and this spending boosts the economy,” the CEO said. 

In Pakistan’s commercial hub of Karachi ahead of Aug. 14, large and small flags adorned vehicles, houses and office buildings, alongside buntings and night-time illuminations. Meanwhile, federal and provincial governments are holding daily events, with top officials like the prime minister and army chief expected to attend ceremonies in Islamabad on Aug. 13 and 14.

“The last time we saw such a show of national zeal on Independence Day was in Zia’s time,” Sheikh said, referring to former military ruler Zia-ul-Haq. “We see people decorating their houses, vehicles and vicinities with flags and buntings and badges.”

Abdul Wahab, a finisher at one of Sheikh’s factories, said he expected at least a 25 percent income increase this season. 

“We are seeing a rush in the market because of this war we recently fought with India,” said the 26-year-old, who plans to work overtime to meet demand.

For lawyer Bad-e-Saba, the occasion was a chance to pass on a message to the next generation.

“The war we recently won against Hindustan is a matter of great pride for us. We want to convey it to our children so they could know where we are standing against our enemy,” she said.

“We want to tell our enemies that we can take good care of our country and our next generation will do it better.”