ISLAMABAD: The World Bank has said that Pakistan’s ability to withstand external shocks has diminished and risks will remain predominantly on the downside with declining reserves and elevated debt ratios.
In its South Asia Economic Focus titled ‘Budget Crunch’ released on Sunday, the World Bank says appropriate policy responses to correct these imbalances and increased buffers to absorb future shocks will reduce these risks and support a positive growth outlook.
Such responses would entail increased flexibility of the exchange rate, strengthening the fiscal position through renewed efforts to improve revenue collection and better coordination between federal and provincial governments to reduce public spending, the report says.
World Bank suggests immediate macroeconomic adjustments to correct large deficits
The country’s macroeconomic situation remains fragile. Consumption-led growth is expected to slow down due to fiscal and possibly monetary tightening. However, short-term measures for fiscal consolidation and export growth need to be complemented with implementation of medium-term structural reforms to uplift the economy out of frequent boom-and-bust cycles.
The report suggests that immediate macroeconomic adjustments are required to correct the large deficits. Rising global interest rates and tighter liquidity situation will pose challenges to Pakistan given the high gross external financing requirements.
The World Bank projected GDP growth to decelerate to 4.8 per cent in fiscal year 2019 as authorities are expected to tighten fiscal policy to correct imbalances. However, growth is expected to recover in fiscal year 2020 and reach 5.2pc as macroeconomic conditions improve. This recovery is conditional upon the restoration of macroeconomic stability, a supportive external environment, including relatively stable international oil prices, and a strong recovery in exports.
Inflation is expected to rise to 8pc (average) in 2019 and remain high in 2020, driven by exchange rate pass through to domestic prices and a moderate increase in international oil prices. The pressure on the current account is expected to persist and the trade deficit is projected to remain elevated over the next two years.
Remittances will continue to partly finance the current account deficit, although slower growth in member countries of the Gulf Cooperation Council will affect remittances. Foreign direct investment, multilateral, bilateral, and private debt-creating flows are expected to be the main financing sources in the near to medium term. The fiscal deficit is projected to narrow in 2019 due to post-election adjustments and some fiscal measures.
It is expected that there will be some scaling down of public investment spending at the federal and provincial levels, and increase in revenue collection through tax base expansion and other administrative measures.
Fiscal consolidation would improve debt dynamics, but the public debt-to-GDP ratio is expected to stay around 70pc of GDP during 2019 and 2020.
Growth deceleration and higher inflation are expected to slowdown poverty reduction in fiscal year 2019, though overall poverty decline is projected to continue reflecting GDP growth. The presence of safety net programmes will mitigate the negative impact of inflation on poverty.
The current account deficit increased to 5.8pc of GDP in fiscal year 2018, up from 4.1pc in fiscal year 2017. The widening current account deficit reflects the growing trade deficit as exports are not growing as fast as imports. Imports are growing fast due to high domestic demand and import-intensive investments related to the China-Pakistan Economic Corridor.
The State Bank intervened heavily in the foreign exchange market in the first half of 2018 to maintain the value of the rupee, resulting in a large decline in international reserves from $16.1 billion (2.9 months of imports) at end-June 2017 to $10.2bn (or 1.7 months of imports) by Aug 24, 2018.
Under intense market pressure, the currency depreciated by almost 18pc between Dec 1, 2017, and July 25, 2018. Post-election, with emerging political certainty, the rupee recovered three percentage points against the US dollar and was trading at Rs124.3 per dollar on Sept 7.
The fiscal deficit has widened over the past two years — reversing fiscal consolidation efforts in previous years and raising public debt levels. The 2018 fiscal deficit (including grants) reached 6.5pc of GDP — a slippage of 2.5 percentage points compared to the budget target. This was due to limited revenue growth and large increases in recurrent spending at both the federal and provincial levels.
Consequently, Pakistan’s public debt reached 73.5pc of GDP by end-June 2018, significantly raising debt-related risks. The newly elected government recognises the need for macroeconomic adjustments to overcome these challenges and has already announced its plans to cut expenditures, improve the management of state-owned enterprises, and undertake revenue mobilisation reforms, the report says.
Published in Dawn, October 8th, 2018
Law Minister Dr Farogh Naseem and British Home Secretary Sajid Javid on Monday jointly announced a justice and accountability 'initiative' between the UK and Pakistan aimed at repatriating "the looted wealth of the country".
The initiative — which the duo insisted will not target individuals but is a broader arrangement between the two governments to collaborate for the elimination of a variety of crimes — was launched during the British home secretary's official visit to Islamabad.
The 'initiative', earlier reported to be an 'agreement' but described by the government as only a 'declaration', is aimed at tackling corruption and "making it a priority for both governments," Radio Pakistanreported.
"The aim of this declaration is to bring back the looted wealth of the country," Shahzad Akbar, the Special Assistant to the Prime Minister on Accountability, said, adding: "The agreement on exchange of convicted personnel will also be renewed."
Javid expressed the British government's desire for mutual cooperation with Pakistan in defence, regional security and efforts against terrorism and extremism — the latter two of which, he said, are a common threat for the global community.
"The United Kingdom will continue to help Islamabad," Javid assured while acknowledging that Pakistan has made "a lot of sacrifices" in the global war against terrorism.
He described Pakistan as a "trustworthy friend of the UK" and said that eliminating corruption is a priority for both the countries.
Earlier in the day, Foreign Minister Shah Mahmood Qureshi, who also met Javid at the Foreign Office, had stressed the need for expansion in cooperation between Pakistan and the United Kingdom.
The two had discussed various aspects of regional and bilateral cooperation, particularly regional security, counter-terrorism, organised crime, migration, human trafficking, money laundering and asset recovery.
Qureshi also emphasised the need to translate existing ties into a tangible and multi-faceted strategic partnership.
He also formally acknowledged the UK Department for International Development's (DFID) contributions towards the development of various socio-economic sectors in Pakistan.
The British home secretary, in return, conveyed his government’s desire to support and work closely with the new government in all areas of mutual interest.
The two countries closely cooperate under the institutional framework of the [Enhanced Strategic Dialogue].
Begum Kulsoom Nawaz was laid to rest at Jati Umra, the Sharif family residence in Lahore, near the graves of her father-in-law Mian Sharif and brother-in-law Abbas Sharif, on Friday.
Her funeral prayers, led by Maulana Tariq Jameel, were offered at a ground at Sharif Medical City around 5:30pm, after which her body was transported to Jati Umra.
Begum Kulsoom, who was diagnosed with lymphoma in August last year, had passed away in London on September 11.
Thousands of PML-N supporters, well-wishers and politicians gathered to pay their respects to the three-time first lady and offer funeral prayers, which were held in the grounds of Sharif Medical City, adjacent to the Sharif family's Jati Umra residence.
Security at the ground was high, and barbed wire was used to separate the high-profile attendees from ordinary citizens. Despite these measures, television footage showed politicians being jostled by the crowd as they were led to their places.
A protective human chain was formed around Nawaz Sharif, Shahbaz Sharif and Maulana Tariq Jameel once they arrived so that the funeral prayers could be offered.
Former president Mamnoon Hussain, former law minister Rana Sanaullah, former prime minister Yousuf Raza Gilani, Javed Hashmi, JUI-F chief Maulana Fazlur Rehman, NA Speaker Asad Qaiser, Senate Chairman Sadiq Sanjrani, Punjab Governor Chaudhry Sarwar, Punjab Housing Minister Mehmoodur Rasheed, former Pakistan Cricket Board chairman Najam Sethi, MQM leaders Khalid Maqbool Siddiqui and Farooq Sattar, Chaudhry Pervez Elahi, Chaudhry Shujaat Hussain, and Saudi officials were among the attendees.
Congregational prayers (Rasm-i-Qul) for Begum Kulsoom will be offered on Sunday between Asr and Maghreb, a spokesperson had said earlier.
Begum Kulsoom's casket reached the provincial capital this morning on PIA flight PK-758 from London. Her body was received by members of the Sharif family, including Hamza Shahbaz, and was later transported to Jati Umra via ambulance.
Funeral prayers had previously been offered for Begum Kulsoom at London's Regent Park mosque on Thursday, where hundreds of people had showed up to pay their respects. The funeral had been arranged since Kulsoom's sons, Hasan and Hussain, decided against travelling to Pakistan.
Other members of the Sharif family, including Asma, Nawaz and Kulsoom's daughter, Shahbaz Sharif, and Zikriya Sharif, were in attendance at the funeral in London, alongside others such as former finance minister Ishaq Dar and former interior minister Chaudhry Nisar.
Sources said the family had received a death certificate issued by the private hospital where Begum Kulsoom Nawaz breathed her last on Tuesday, and the "out-of-England" letter from the coroner’s court, paving the way for the departure of her body to Lahore this evening.
Nawaz Sharif, his daughter Maryam Nawaz and son-in-law retired Captain Safdar, who were all sentenced to jail by an accountability court weeks before the July 25 polls in the Avenfield property reference, were granted parole by the Punjab government on an application moved by Shahbaz in order to attend Begum Kulsoom's funeral.
The Punjab Home Department later announced an extension in the short 12-hour parole for an additional five days, from Sept 12 (4pm) to September 17 (4pm). The time does not include the time it takes to travel.
Also on Thursday, Nawaz Sharif paid a visit to Sharif Medical City to oversee arrangements for his deceased wife's last rites.
The former prime minister directed that all arrangements for the funeral be complete so that everyone is able to comfortably offer the funeral prayers. "There should not be any kind of issue in Sharif Medical City," he had said.
He was accompanied on the visit by his son-in-law retired captain Muhammad Safdar, grandson Junaid Safdar, and nephew Salman Shahbaz. During the course of this visit, Nawaz met some PML-N leaders at Sharif Medical City.
To condole her demise, PML-N and other political party workers have been visiting the Sharif family residence at Avenfield House in London and Jati Umra in Lahore since Wednesday.
Former Balochistan chief minister Sardar Sanaullah Zehri and Rasikh Elahi, son of Punjab Assembly speaker Chaudhry Pervaiz Elahi, were prominent among the visitors in London.
In Lahore, political leaders and workers including former prime minister Shahid Khaqan Abbasi, Khurram Dastagir, Maulana Fazlur Rehman, Azad Jammu and Kashmir Prime Minister Raja Farooq Haider, Malik Pervaiz, Saad Rafique, Ameer Muqam, Ali Pervaiz, Uzma Bokhari and Rana Mohammad Iqbal visited Jati Umra to offer their condolences.
Regarding reports that Nawaz Sharif did not see the visitors on Wednesday because he was unwell, Marriyum Aurangzeb said: "That was not the case. Mian sahib was shattered and tired but he met relatives. On Thursday, he will meet the political leaders and workers between 4pm and 6pm. Similarly, Maryam Bibi also met relatives."
Hamza Shahbaz met those arriving at Jati Umra to condole the death of the former first lady.
Former president Mamnoon Hussain also called on Nawaz on Thursday and offered his condolences to the PML-N quaid.
Former president Mamnoon Hussain also called on Nawaz and offered condolences on the demise of Begum Kulsoom.
Begum Kulsoom served as first lady of Pakistan in her husband's three non-consecutive terms as prime minister from 1990-1993, 1997-1999 and 2013-2017.
Born in 1950 in Lahore to a Kashmiri family, Begum Kulsoom attended Islamia College and graduated from the Forman Christian College in Lahore. She received a Master's degree in Urdu from Punjab University in 1970.
She married Nawaz Sharif in 1971, and served as the president of the PML-N from 1999 to 2002, after her husband's government was dismissed by former president Pervez Musharraf, and nearly all the Sharif family's men were jailed.
Both mother and daughter were also placed under house arrest following Nawaz's dismissal by Musharraf.
Begum Kulsoom led defiant, lonely protests against the Musharraf regime to get her husband freed from prison.
On July 9, 2000, she slipped through a police cordon that had been placed around her Model Town home the previous night to bar her from leading a protest rally against Gen Pervez Musharraf. Her ‘escape’ led to a car chase that ended when the police finally intercepted the car on Canal Road.
But the former first lady refused to leave the car. She locked it and made it known that she was going nowhere. Eventually, it was an overhead crane summoned to salvage the situation that bodily lifted the car and took it to a police compound nearby. The standoff lasted around 10 hours.
This moment when she sat suspended in midair was the high point in Begum Kulsoom’s short but eventful political career that started soon after Gen Musharraf, with the help of other generals close to him, ousted Nawaz Sharif.
That eventful day in 2000, she created an image of resistance, bringing the PML-N out of the shadow of the establishment.
"There are two chapters of resistance in the history of the PML-N. The second one is this period since Nawaz Sharif was disqualified by the Supreme Court in July 2017. But the original one was written under the stewardship of Begum Kulsoom. Until she started challenging the military dictator, this aspect of the party was hidden from public view," argued a political commentator who wishes to remain anonymous.
"I wonder if it would have been possible to write the second chapter of resistance if she hadn’t written the first," said the commentator.
But once she had done her job, Begum Kulsoom slowly withdrew from public view. She was nowhere to be seen during Nawaz Sharif’s third term in office even though her assessment of political matters and people was considered flawless in the Sharif household. "She was a typical eastern woman who would do anything to protect her family," says journalist Suhail Warraich.
She never, however, refused to play a role whenever she was called upon. Over the last 30 years, she had stood by her husband and advised him on various government affairs. Party leaders have also said that she occasionally wrote many of Nawaz's speeches.
In a 2012 interview with Newsweek, Maryam had said her mother "dauntlessly challenged the usurper when a lot of men backed out... She’s contributed famously to my father’s life and to democracy in Pakistan."
She is credited with convincing her husband to allow Maryam to enter politics.
Turkish Foreign Minister Mevlut Cavusoglu on Friday assured Pakistani counterpart Shah Mehmood Qureshi of his country's support in the bid to find a peaceful solution to the Kashmir issue.
Cavusoglu, who arrived in Islamabad on Thursday for high-level discussions with Pakistani officials, held a meeting with FM Qureshi at the Foreign Office today, following which the two addressed a joint press conference.
FM Qureshi said that Turkey has agreed to support Pakistan's bid for a peaceful resolution of the Kashmir issue at the UN.
"At the United Nations conference there will be a separate conference on Kashmir on the side. It happens every year but it is different this time because a new UN report has come out which sheds light on the India-occupied Kashmir.
"There has certainly been a surge in the interest of people in the human rights abuses that are taking place there. I invited FM Cavusoglu to that conference, and I am thankful to him that he accepted the invitation."
Cavusoglu said that it's Turkey's wish that the Kashmir issue involving India and Pakistan gets resolved the UN in a peaceful manner.
"In the group that has been formed over Kashmir in the UN, we will stand with Pakistan and try to make [its efforts] successful."
FM Qureshi said that ways to enhance economic and commercial ties with Turkey were also discussed in his meeting with Cavusoglu.
"In our meeting today we focused on enhancing our economic relations," FM Qureshi said. "[We discussed] ways to facilitate each other.
"Our relationship has been very strong. There is a mutual interest. We understand each other's sensitivities. Turkey has played a role in improving regional consensus and stability.
"They also have a trilateral arrangement, which we can be used to further improve our regional stability and connectivity."
"I got the chance today to thank the Turkish FM for supporting Pakistan's membership in Nuclear Suppliers Group (NSG). On the Netherlands caricature issue as well, Turkey supported us."
Qureshi further said that the situation of Afghanistan, Iran and Kashmir were also discussed during the meeting.
Turkish FM Cavusoglu congratulated Qureshi and Prime Minister Imran Khan on forming the new government in Pakistan.
"Governments and people come and go, but real friendships cannot end," Cavusoglu said. "This friendship should remain forever.
"In today's meeting I discussed a lot of issues with FM Qureshi. The most important aspect of our discussion was on the strategic council, the sixth conference of which — God willing — will take place in Pakistan, and we will do all we can to make it happen.
"We have strengthened our commercial ties, and [decided to facilitate] our companies that want to work in Pakistan."
"We have a unique relation, therefore, we should work together to further enhance our relations. The security issue for both the countries is important and so is the economic and military cooperation."
FM Cavusoglu said that "there is a propaganda against Islam in Europe. We ran a campaign against the Netherlands caricatures, and thank God they shut it down."
The Turkish minister said that Pakistan and Turkey have suffered the most hardships in the war against terrorism.
Cavusoglu said that "Turkey will never forget Pakistan and its people's help" in the failed 2016 Turkish coup d'état attempt.
"The Gulen movement not only damaged Turkey but it caused destruction wherever it went," he said. "Pakistan helped us in that and we would for it to keep doing so."
The Turkey’s foreign minister, who is here to convey the greetings of President Recep Tayyip Erdogan to the PTI government, called on Prime Minister Imran Khan on Friday.
Cavusoglu reiterated Turkey’s full support to Pakistan government’s future plans to “take the country on a rapid course of economic progress, developments and creating greater opportunities for the people of Pakistan, especially its vibrant youth”, read a statement issued by the PM Office.
PM Khan stated that Pakistan and Turkey were bonded by common faith, mutual interest, and a shared future for the people of the two countries. “Both countries have always stood beside each other and would continue to do so,” he maintained.
Turkish FM Cavusoglu, following his meeting with FM Qureshi, called on Chief of Army Staff Gen Qamar Javed Bajwa at the General Headquarters in Rawalpindi.
"The focus of the discussion remained on Pak-Turkey relations and regional security, including the evolving situation in the Middle East, management of defence and security cooperation between both the countries," according to the Inter-Services Public Relations (ISPR).
The Turkish minister, the ISPR said, "acknowledged and appreciated Pakistan’s contributions for conflict prevention in the region, and also pledged to keep working for better relations between the two brotherly countries".
The party cadre adores him for being among the individuals who founded the Pakistan Tehreek-i-Insaf (PTI) with the country’s popular cricketer as its head and who has never stopped dreaming that one day his leader would become prime minister.
Now when Dr Arif Alvi has been nominated by the PTI leadership to contest next month’s presidential election, many in the PTI believe the party has taken the right decision to nominate him for the post of head of state.
Dr Alvi tweeted on Saturday after his nomination for presidential election: “Both Prime Minister @ImranKhan and I got elected from Karachi, and we are grateful to the people of Karachi for the honour and trust they have bestowed upon us.”
Dr Alvi’s career in politics spans over five decades and began with his role in student politics as a president of the student union at de’Montmorency College of Dentistry in Lahore.
Dr Alvi was part of the student movement of 1969 during Gen Ayub Khan’s military regime and, as his party men say, was among those who fought for democracy in the country.
During one of the protests on The Mall in Lahore, according to PTI activists, he was shot and wounded and “still ‘proudly’ carries a bullet embedded in his right arm as a mark of his struggle for democracy in Pakistan”.
For the first time, Arif Alvi emerged as an election candidate in 1977 when he secured a Pakistan National Alliance ticket for a Sindh Assembly seat for Karachi. However, he did not take part in the elections as they were boycotted by the opposition parties.
Born in 1949 and a dentist by profession, Dr Alvi was among more than 100 candidates who were fielded by the PTI in the 1997 elections. All the aspirants, including Imran Khan, lost, most of them to the Pakistan Muslim League-Nawaz.
Dr Alvi ran in the 1997 elections from, now erstwhile, PS-114 (Clifton Karachi) but could secure only 2,000 plus votes. He contested from another constituency — PS-90 (Karachi West) — in the 2002 elections but received fewer votes (1,276) than his previous tally.
For a long time, Dr Alvi has remained the only known face of the party in Sindh as he dedicated his time, house and money for the party.
According to the PTI’s official website, he is one of its founding members and was the party’s secretary general from 2006 till 2013.
For the first time, he was elected a member of the National Assembly from the erstwhile Clifton constituency NA-250 (now NA-247) in the 2013 polls, which was the only NA seat won by the party in Sindh.
“This was despite a serious law and order situation (in Karachi), blatant rigging and threats to people not to cast their votes,” says the PTI website.
Though not as successful as his Captain, Dr Alvi has a history of playing sports. He played squash, cricket and hockey in his younger days and is still said to be a sports enthusiast.
Dr Alvi is regarded as one of the authors of the PTI’s constitution. He was part of the PTI’s central executive council for a year since 1996 and then he was appointed the party’s president in Sindh in 1997. In 2001, he was promoted to the post of vice president and then became the party’s secretary general in 2006, a post he held until 2013.
He has been re-elected to the National Assembly from the same Clifton constituency now called NA-247 (Karachi South-II) in the July 25 general election.
Published in Dawn, August 19th, 2018
WASHINGTON, Sept 2, (AFP): The US military plans to cancel $300 million in aid to Pakistan due to Islamabad’s lack of “decisive actions” in support of American strategy in the region, the Pentagon said Saturday. The US has been pushing Pakistan to crack down on militant safe havens in the country, and announced a freeze on aid at the beginning of the year that an official said could be worth almost $2 billion.
Source: Arab Times
Prime Minister Imran Khan has asked that the media give his government three months before criticising its performance, DawnNewsTV reported on Friday.
The statement was made during a meeting with journalists in Islamabad.
The PM promised that three months down the road, there will be a marked difference in the way the country is run. He also mentioned that none of his cabinet members was appointed permanently and could be shuffled around on the basis of performance.
According to Geo.tv, PM Khan, responding to a question, said that while Pakistan cannot fight the US and looks to improve ties with Washington, the government will not give in to any unjust demands made by the White House.
He mentioned that Pakistan seeks peaceful relations with India, Afghanistan and Iran as well.
According to DawnNewsTV, PM Khan also told journalists that he has directed the chairman of the National Accountability Bureau to continue an indiscriminate accountability process in the country.
He added that if any member of the government is suspected of any indiscretion, they should also be held accountable.
The prime minister also pointed out that Pakistan's circular debts stands at Rs1.2 trillion and that progress would not be possible without across-the-board accountability.
During the meeting, PM Khan was also asked about his usage of a helicopter for travel to and from Banigala, which he defended as a way of saving citizens from the trouble of traffic holdups.