Pakistan News

ISLAMABAD: Pakistan Tehreek-i-Insaf (PTI) Chairman Imran Khan will lead a rally from Rawalpindi to the Parade Ground in the federal capital, the venue of his slated protest against the coalition government and record inflation, on Saturday (today).

Addressing a seminar titled ‘Regime change: Impact on Politics, Security and Economy’ and organised by Islamabad Policy Institute (IPI) on Friday, Mr Khan blamed the “imported government” for crushing the masses under the burden of “unbridled fuel price hikes and power outages”.

The former premier who was ousted from power through a no-confidence motion in April this year said that the incumbent government, in a short span of time, increased the price of petrol by Rs99 and diesel by Rs133 per litre instead of buying “cheaper oil from Russia”.

Repeating his allegations that he was removed from power through a US-backed conspiracy, the PTI chief alleged that Pakistan “suffered the most” because of the regime change and cited the current economic condition as proof.

Mr Khan claimed that the Pakistan Economic Survey, unveiled a day ahead of the federal budget, testified that the economy was flourishing during the PTI era with the agriculture and other sectors recording improvements.

He raised a question as to why his government was removed from power in spite of positive economic indicators. “We are told that our [PTI] government was not capable of reining in the price hike,” he said, adding that the incumbents unleashed a storm of inflation within three months. He further questioned, “Who should be blamed for this unprecedented price hike faced by the masses?”

According to the PTI chief, the current state of the national economy could lead Pakistan towards a national security crisis just like Sri Lanka. He added that economic security was also just as important as “military security”, insisting that the ‘neutrals’ – a euphemism he uses for the establishment – would also suffer if the economy collapsed.

Earlier, the former premier issued a statement asking his supporters to join PTI’s protest against inflation today. He expressed optimism that it would be a historic gathering at the Parade Ground.

Imran Khan said that people should come out in huge numbers against the “imported government” over political destabilisation, excessive load-shedding, and a massive hike in fuel prices.

LAHORE: The Punjab Anti-Corruption Establishment (ACE) on Friday booked Farhat Shahzadi alias Farah Gogi, a close friend of PTI chief Imran Khan’s wife Bushra Bibi, and her mother and arrested a former acting chief executive officer (CEO) of the Faisalabad Industrial Estate Development and Management Company (FIEDMC) and Special Economic Zone (SEZ) committee secretary in a case of illegal allotment of two industrial plots, measuring 10 acres, to a company owned by Gogi.

According to the first information report (FIR), a probe was initiated into the allegations of illegal allotment of plots to M/s AI-Muez Dairy & Foods (Pvt) Limited with the connivance of officer/officials of FIEDMC. The inquiry team comprised ACE director vigilance, deputy director (vigilance) and inspector/HQ.

It further stated that during the inquiry proceedings, the ACE team found illegalities committed by FIEDMC former CEO Rana Muhammad Yousaf, SEZ committee secretary Maqsood Ahmed and others.

The probe report said Farhat Shahzadi and her mother Bushra Khan established a company registered with the Security & Exchange Commission of Pakistan (SECP) with the name of ‘AI-Muez Dairy & Foods (Private) Limited’ on Nov 26, 2020. The company submitted its first manual application through its director Farhat Shahzadi to the FIEDMC acting CEO on Nov 30, 2020 for allotment of a plot measuring 10.5 acres in M3 Faisalabad Industrial Zone. The acknowledgment of the application was issued by the FIEDMC on Dec 9, 2020 to AI-Muez Dairy & Foods (Private) Limited after which the company was asked to provide documents to process the allotment, including construction schedule, utility services (electricity, gas, etc) and business plan/feasibility of the project.

Two plots worth Rs600m were allotted in Faisalabad for Rs83m
As per the version of Abdul Samie, DG of the SEZ and a member SEZ committee, the application could not be processed as the mode of submission of application was “changed from manual to online system after the notification of 11SEZ Zone Enterprise Admission and Sale, Lease and Sub-Lease of Plot Regulations 2021 dated Jan 15, 2021”.

The application was examined by Muhammad Yousaf and Maqsood Ahmad who recommended the case for the approval by the SEZ committee.
Maqsood Ahmad, SEZ committee secretary, issued notice for 25th meeting of the SEZ committee scheduled to be held on Oct 25, 2021 at FIEDMC office in Faisalabad in which the application for allotment of plot No 255 & 256 at phase-2 of M3-IC to M/s AI-Muez Dairy & Foods (Private) Limited and its admission as zone enterprise was a part of the agenda items”.

The SEZ committee meeting was held on Oct 25 and 27, 2021, in two sessions in which the allotment of both the plots and admission of Zone Enterprise was approved.

According to the probe report, the “meeting was attended and its minutes were signed by five members which is a violation of rules 39(4) of Rules 2013 and Regulation 3(14) of the SEZ Zone enterprises admission and sale, lease and sub-lease of plot regulations 2021 which requires the 75pc mandatory quorum of the SEZ committee in order to make any decision, which means that the meeting should have been attended by at least 6 members in order to make any decision regarding the allotment of plots and admission as Zone Enterprise. One of the members of SEZ Committee i.e. the representative of DC Office Faisalabad Rana Tahir Mehmood joined the enquiry proceedings and stated that he neither participated in the 25th meeting of SEZ committee nor did he sign the minutes of meeting”.
The Zone Enterprise admission letter for the allotment of both plots was issued to AI-Muez Dairy & Foods (Private) Limited on Oct 29, 2021 by Muhammad Yousaf, acting CEO/chairperson SEZ Committee. Consequently, the M/s AI-Muez Dairy & Foods (Private) Limited was issued a provisional allotment letter on Dec 6, 2021.

It surfaced during the enquiry proceedings that Mr Yousaf assumed the charge of CEO FIEDMC on Oct 20, 2021 on an acting basis and he got approval of the allotment of plot to M/s AI-Muez Dairy & Foods (Private) Limited in haste without fulfilling the requirements as mentioned in the Act and rules & regulations.

The probe alleged that Mr Yousaf and Maqsood Ahmad as chairperson and secretary of the SEZ committee, respectively while signing the checklist, gave undue benefit to the company replying upon the undertakings submitted by Mst Farhat Shahzadi (CEO), Bushra Khan (director) of the company and Ahsan Jameel, husband of Farhat Shahzadi, for provision of necessary funds, if required.

According to the probe, the “project cost stipulated by the company was Rs1.05bn whereas the net worth as per the wealth statement submitted by Ms Shahzadi is about Rs700m and total capital value (share) of the company worth Rs20m therefore neither the company nor the director and CEO of company had capital as required for investment in Special Economic Zone I FIDEMIC as per law”.
The plots were allotted on a subsidised rate offered by the government that was Rs83m but their market value was about Rs600m.
The report alleged the members of the SEZ committee of FIEDMC, in violation of rules, allotted precious land/plot to the company and committed criminal breach of trust and caused a loss to the national exchequer.

“The competent authority has approved the registration of case against Rana Muhammad Yousaf, Maqsood Ahmad, Farhat Shahzadi and her mother Bushra Khan.

“However, the role of Ahsan Jameel who gave the undertaking in favour of Farhat Shehzadi for provision of funds and others, including members of SEZ committee who were signatories of minutes of 25th meeting of SEZ committee, is ordered to be determined during the course of investigation,” the report said.

ISLAMABAD: Prime Minister Shehbaz Sharif on Friday expressed satisfaction over functioning of 720MW Karot Hydel Project and pledged to overcome the electricity generation crisis in the country by restoring all halted power projects.

In a tweet, the prime minister said the Karot project was the first hydel project established under the China-Pakistan Economic Corridor (CPEC).
He expressed gratitude to the Chinese government for cooperation in the execution of project.
Later, presiding over a meeting to review measures to end outages, he said ending loadshedding was the responsibility of the coalition government.
He said the government was focused on taking effective measures to ensure uninterrupted supply of electricity to people.

Mr Sharif said the government was cognisant of the problems being faced by the people during the high temperatures, adding that every effort would be made to address the power shortfall immediately.

The prime minister said that the lack of maintenance of power plants during the tenure of the previous government resulted in the power shortage. He said quashing the deal with Qatar for supply of LNG was a big mistake committed by the previous government.
PM Sharif said that despite commitment, the revolving account was not opened with China.

ISLAMABAD: High-ranking Chinese politician Yang Jiechi on Wednesday pledged to help in reinvigorating ties with longstanding ally Pakistan as he opened his two-day trip to Islamabad with a meeting with Army Chief Gen Qamar Bajwa.

“He assured to play his role for further improvement in diplomatic cooperation with Pakistan at all levels,” the ISPR said after Mr Yang met Gen Bajwa at the General Headquarters.

Mr Yang, who is considered a personal representative of President Xi Jinping because of his position in Chinese hierarchy, is leading a high-level delegation comprising vice ministers for foreign affairs and commerce, vice chairman of China International Development Cooperation Agency (CIDCA), and deputy secretary general of the National Development and Reform Commission (NDRC) on the visit that is taking place at a crucial juncture in bilateral ties.
It was probably in this context that Prime Minister Shehbaz Sharif sent his special assistant and point man on foreign policy Tariq Fatemi to receive him at the airport.

Yang holds talks with Bilawal, army chief
While emphasising the significance of his trip, China experts say Mr Yang is ranked even higher than Foreign Minister Wang Yi. He has in the past represented China in National Security Advisers’ talks with the United States. Therefore, it is said that whatever demands and concerns he conveys and any commitments that he makes during his meetings here will be seen as coming directly from President Xi.

The bilateral relationship currently appears under deep stress because of growing terrorist attacks on Chinese citizens. Beijing is particularly concerned about the lack of progress in the prosecution of the April 26 attack in which three Chinese language teachers were killed in Karachi. It is said that neither the mastermind nor other major actors involved in the attack have been apprehended.

The Chinese had demanded permission for deployment of private Chinese security guards for the protection of Chinese personnel and installations. Though Pakistani authorities did not allow that, the issue remains very much on the table.

The Chinese, moreover, are pushing for Majeed Brigade, the banned Balochistan Liberation Army’s Fidayeen (suicide) unit, to be listed on the UNSC 1267 Terror Sanctions list. The group has been behind most of the attacks on Chinese.

Gen Bajwa, during his visit to China earlier this month, sought to assuage the Chinese concerns by reiterating the army’s commitment to ensuring ‘foolproof security’. His effort helped in showing Pakistani top brass’ seriousness on CPEC security, but Chinese are waiting for words to be matched by deeds.

The ISPR, in its statement on Bajwa-Yang meeting, however, suggested that the Chinese side was satisfied with the renewed commitments. “The visiting dignitary thanked COAS for special measures taken for provision of safe and secure environment for Chinese personnel employed on various projects in Pakistan,” it said.
Secondly, Beijing is upset over the issue of more than Rs300 billion receivables of the Chinese companies operating in Pakistan.
Mr Yang also met Foreign Minister Bilawal Bhutto-Zardari.
“The two sides discussed entire spectrum of bilateral relations and exchanged views on regional and global issues of mutual interest,” the FO said in a statement.
During the visit, Mr Yang will also call on Prime Minister Shehbaz Sharif.

Minister of State for Foreign Affairs Hina Rabbani Khar has called for an easing of Western sanctions against Afghanistan under the Taliban government, saying the basic functioning of the Afghan economy must not be endangered.

The Taliban takeover last year prompted foreign governments, led by the United States, to cut development and security aid, and the strict enforcement of sanctions has debilitated the country's banking sector.

In an interview with Germany's Welt newspaper published on Thursday, Khar said isolating Afghanistan economically was pushing the country into economic collapse.

"If the country remains locked out of international banking and its foreign assets remain frozen, then that is what will happen. We must not promote famine," she added.

Khar said the Western troop withdrawal from Afghanistan, in which Germany was also involved, had serious repercussions because it was not preceded by a negotiated solution, as she called on Germany to play an active political role in easing sanctions.

"In the current situation, it is not a good idea to continue to starve Afghanistan and risk an economic implosion in the country," she said, adding that economic support was necessary to help the Afghan people.

"How is it that we spent $3 trillion on the war, but today don't even have $10 billion on Afghan survival? I don't understand this behavior," she added.

Taliban takeover
The Taliban took back power in Afghanistan in August last year after the United States pulled out its troops, almost 20 years after the group was ousted by US-led forces following the September 11, 2001, attacks on the United States.

Days after the takeover, the US administration froze about $9.5 billion of the Afghan government’s reserves in US banks to compensate the victims of the 9/11 attacks. Banks have also placed severe restrictions on withdrawals by private customers, and many in the country have resorted to selling household possessions to buy food for their families.

Afghanistan has been in the grip of a major humanitarian crisis and the United Nations says more than half of Afghanistan's 38 million people face hunger. The country's economy, already battered by decades of war, went into freefall after the Taliban's return.
Western countries have tied the unfreezing of assets to the Taliban respecting human rights — especially with regard to women being allowed to work and girls to attend school.

ISLAMABAD: The telecom industry has warned the government of connectivity failures if prolonged power outages continue amid high fuel costs and stringent conditions on battery imports.

“Despite having backup power available in the form of generators and batteries, cellular operators are finding it almost impossible to cope with the quantum of these power outages that are beyond our dimensioned backup capacity,” leading cellular mobile operators (CMOS) Jazz, Telenor, PTCL and Ufone said in a letter to the Pakistan Telecommunication Authority (PTA).

The letter was written to draw the telecom regulator’s attention to “some critical economy-wide factors, which are directly impeding and are expected to further severely constrain the operators’ ability to meet the existing [quality of service] obligations … [key performance indicators] as well as our network rollout obligations under the new licence conditions”.
They also lamented that rapidly increasing fuel prices were placing extra constraints on the provision of generator backup for their base transceiver station (BTS) sites.

Telecom companies tell PTA they can’t run on backup options in face of costly fuel, strict conditions on battery imports
Besides, this extra fuel consumption for backup was going against the “government’s objective of rationalising fuel consumption in these testing times”, they said, adding that the situation had made it a “massive challenge” for the operators to maintain network availability.

The letter also stressed that the situation had worsened after the State Bank of Pakistan had imposed a 100 per cent cash margin restriction on the import of network/backup equipment, including batteries.

The situation had “severely dented” the CMOs’ ability to roll out more sites to meet the licensed quality of service requirements but also “drastically impedes addition of more backup capacity to counter these extended power outages”, the letter said.

The recent fiscal and political developments had further impacted the country’s “already deteriorating health of capital-intensive telecom sector”, the telecom companies noted and asked the PTA to help the industry keep providing essential telecom services to the masses.

The operators also informed the PTA that if the power outages and other issues were not addressed, they would be “constrained to notify force majeure situation under special circumstances”.

Dent on IT ambitions
Talking to Dawn, Jazz CEO Aamir Ibrahim said the backup systems used by telecom companies were not designed for prolonged power outages. “To ensure consistent improvement in service quality and expand broadband services, a policy and regulatory environment that enable mobile operators to remain financially healthy are critical,” he said.
A senior executive of a CMO told Dawn the high cost of diesel had put a financial burden on the industry as telecom towers and back-end equipment either used generators or backup batteries.
If the current situation persisted, there could be blackouts at certain towers, resulting in the disruption of telephony and data services in that area, the executive said: “And this can happen randomly for different companies at different places.”
Telenor Pakistan CEO Irfan Wahab Khan told Dawn that the greatest loss would be suffered by the people of Pakistan, who would be pushed into darkness at a time when the world was moving fast into the digital economy.
“Unless the government joins our collective efforts to ensure connectivity for every Pakistani, the industry and the people of Pakistan will remain at a disadvantage. Without connectivity, our IT ambitions will remain unachieved, slowing our progress to becoming a full-fledged digital economy,” he said.

ISLAMABAD: Pakistan will have to take at least two more “prior actions” to secure two combined tranches of about $1.85 billion from the International Monetary Fund (IMF) by the end of July or early August.

Top government sources said these prior actions — which will be in addition to a series of structural benchmarks for the performance review — would be necessary for the Fund’s executive board to approve the merger of the seventh and eighth quarterly reviews of the 39-month, $6bn loan programme that originally began in July 2019.

Finance Minister Miftah Ismail announced on Tuesday that Pakistan had received the Memorandum of Economic and Fiscal Policies (MEFP) from the IMF for the combined seventh and eighth reviews.

Under the MEFP, prior actions include the passage of the federal budget as agreed to with the IMF and presented in the National Assembly on June 24 and present a memorandum of understanding (MoU) duly signed by the provincial governments to jointly provide about Rs750bn cash surplus to the Centre.

The MEFP is based on budgetary measures announced by Mr Ismail in his winding-up speech on the revised budget in the National Assembly last week, envisaging over Rs1.716 trillion (2.2pc of GDP) of fiscal adjustment, mostly through taxation, including 10pc super tax on 13 industries and personal income tax covering monthly incomes above Rs50,000 per month.
This is on top of a fixed tax regime for sectors like retailers, traders, jewellers, builders, restaurants, automobile and property dealers and so on.
This is the biggest fiscal adjustment in a single year that would help turn about Rs1.6tr primary deficit — the difference between revenues and expenditures excluding interest payments — during the current fiscal year into a Rs152bn surplus next year.
The Ministry of Finance projected a Rs800bn (about 1pc of GDP) provincial surplus in the budget to help contain a consolidated budget deficit at 4.9pc of GDP, but three provinces — Sindh, Balochistan and Khyber Pakhtunkhwa — announced deficit budgets or no surplus. This nullified the impact of about Rs125bn surplus announced by Punjab that was too lower than its share.
Therefore, the federal government is now required to share with IMF an MoU with provinces along with the finance bill passed by parliament as prior actions to ensure that budget numbers presented in the fiscal framework would be adhered to.
The two sides would then jointly go through the MEFP over the next couple of days before formal signing by the finance minister and the State Bank governor to enable the fund staff to circulate Pakistan’s case among the executive board members for approval.
In all probability, two tranches of about $918 million each (or $687m Special Drawing Rights, or SDRs) would be made available to Pakistan at once in the last week of July of the first week of August, the officials said.

Fuel prices to go up
Under the structural benchmarks, the government will start imposing the petroleum development levy (PDL) from July 1 at the rate of Rs10 per litre on all products, except Rs5 per litre on high-speed diesel (HSD). The levy would then keep going up at the rate of Rs5 per month to a maximum of Rs50.

As such, the petrol rate is expected to touch about Rs250 per litre on July 1 with an increase of slightly over Rs13 per litre. Based on import parity price that also includes exchange rate loss, petrol price is estimated to be Rs3.3 higher for next fortnight than at present.
The import parity price of HSD has already gone up by almost Rs18 per litre. Therefore, the HSD retail rate would go up by about Rs23 per litre with Rs5 additional PDL — taking its end price to about Rs286.
The ex-depot rates of kerosene and light diesel oil are estimated to be increased by about Rs25 with the addition of Rs10 levy, to take their prices to about Rs237 and Rs233 per litre, respectively.
The electricity rates would be notified to go up by Rs3.50 per unit in July and August each and about Re1 per unit in the September-October billing cycle.
Under the MEFP shared with the government, the 39-month EFF will be extended by one year to September 2023. However, the IMF has not yet committed in the MEFP if it would also increase the size of the programme by $2bn to a total of $8bn, as verbally given an understanding during Dr Miftah’s visit to Washington in the last week of April.

‘Toughest part complete’
Officials said the toughest part of the stabilisation measures had been completed. Finance Minister Ismail said Pakistan was now out of the default threat but would have to tread a responsible taxation and expenditure path to ensure fiscal and monetary targets. Any misstep could reverse the hard-earned gains, he said.
While the government had already introduced Rs1.25tr worth of fiscal adjustment in its original budget presented in the National Assembly on June 10, this was not acceptable to the IMF staff. The government then took additional taxation measures of about Rs466bn on June 24 to reach an understanding with the Fund for a bailout necessary for the balance-of-payments support.
These included a surrender by the government to impose income tax on those earning Rs50,000 to Rs100,000 per month at the rate of 2.5pc and gradually go up for higher earners.
This was one of the moot points where the two sides had been stuck over the past few weeks as the finance minister had repeatedly been claiming to protect this category from income tax but finally gave in when the IMF staff did not budge.
In yet another retreat, the government also agreed to impose 1pc poverty tax on firms earning Rs150m, 2pc on those earning Rs200m, 3pc on over Rs250m and 4pc on Rs300m and above.
In the original budget, the government had set a 2pc poverty tax on Rs300m and above. This was in addition to up to 10pc super tax on 13 big industries.

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