Pakistan Now: Darkest Before Dawn?

Pakistan is experiencing one of the darkest periods of its history. Political instability is eroding confidence in the nation's future. Declining economic growth and high inflation are hurting the people of all strata of society, particularly the poor whose numbers are rapidly rising. Is there any hope left for the country? Is it a case of the "darkest before dawn"? How do investors see it? 

Ex PM Imran Khan (R) with President Erdogan

Writing in the Time magazine immediately after the recent arrest of former Prime Minister Imran Khan, American investor, author and commentator Zachary Karabell who has invested in Pakistani startups sees rare hope for Pakistan. He sees Pakistan where Turkey was back in 2001-2003, "when a series of elections brought Recep Erdogan to power even as he was repeatedly disqualified by a military that was determined to retain control". Here's an excerpt of his article titled "The Contrarian Case for Pakistan" published in the current issue of Time Magazine: 

"To some degree, this is an argument of “well, it’s not as bad as they say.” But it’s also a way of highlighting that Pakistan today may be a case of darkest before the dawn. With elections schedule for the fall, and with Imran Khan the most likely victor of said elections unless is his arrest leads to his disqualification as a candidate, Pakistan is in a very similar position to where Turkey was in 2001-2003, when a series of elections brought Recep Erdogan to power even as he was repeatedly disqualified by a military that was determined to retain control. Imran Khan has many of the same strengths and weaknesses of Erdogan, who after championing Turkish democracy and economic reform, then turned into the very type of corrupt autocrat that he had once fought against. But he nonetheless unleashed massive economic potential in Turkey and has left its 80 million people materially better off over the past 20 years, even as hyperinflation and Erdogan’s recent economic ineptitude is now eroding that. Should Imran Khan return to the head the government, he may well usher in a similar period in Pakistan, even as he has his own authoritarian and demagogic tendencies". 

Here are some of the key points Karabell makes in his opinion piece:

1. Pakistan has a real and dynamic private sphere that is not only seeing a start-up and new business ecosystem that has attracted hundreds of millions of dollars a year for the past few years but operates freely in a way that would be inconceivable in many other countries. Compare it to Egypt, for example, which receives far less negative attention and more foreign money yet is almost entirely dominated by a military dictatorship. Or Algeria. And then there are countries which barely function at all, dominating a whole swath of Sub-Saharan Africa but also dot central Asia (Tajikistan anyone?).

2. Pakistan is the fifth most populous country in the world with 230 million souls, a median age of barely 22 and two-thirds of the population under the age of 30. That means unlike most of the world, it has a favorable demographic future.

2. Unlike, say, Nigeria, where the ethnic divisions and decades of corruption mean that it well-nigh impossible to treat the country as one unified market for goods and services, Pakistan is one common market even with its various tribal divisions.

Pakistan Population Youngest Among Major Asian Nations. Source: Nik...

Karabell concludes with the following: 

Pakistan is on a cusp. We should honor the fact that whichever way the consensus believes it will go, the country is also poised to breakout on the upside. Which path will only be clear in retrospect, but we should pay more attention to the potential of things going right along with the legitimate focus on all that is going wrong.

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Comment by Riaz Haq on May 31, 2023 at 7:19am

#Pakistan’s Powerful #Military Faces Defiance From #Judges. Analysts say courts’ recent decisions — which effectively bolstered #ImranKhan’s political prospects — were as much a reflection of #judiciary’s budding political muscle as military’s battered image
https://www.nytimes.com/2023/05/31/world/asia/pakistan-courts-chall...



“For the judiciary, there is this tinge of independence now that they are able to sustain some pressure from the establishment,” said Ali Qasmi, a lecturer at The Lahore University of Management Sciences. “At the same time there is a clear kind of pro-Imran Khan tendency within the courts as well.”

Senior judges in Pakistan play a substantial role in judicial appointments. The chief justice of the Supreme Court leads a commission that nominates judges for the top and high courts, who are then confirmed by a parliamentary committee. The mandatory retirement age is 65 for Supreme Court judges, and 62 for those in the high courts.

While the judiciary’s power does not come close to rivaling that of the military, in recent weeks military leaders have responded forcefully to tip the scales back in their favor and signal their ultimate dominance.

Last week, military officials announced that protesters who attacked military installations in response to Mr. Khan’s arrest would be tried in military — not civilian — courts. Several prominent leaders from Mr. Khan’s party have also been arrested by the police shortly after being granted bail. The moves, many observers say, were a military effort to intimidate Mr. Khan’s supporters and show that the courts alone cannot protect them.

For much of Pakistan’s turbulent history, the country’s judiciary was seen as a junior partner of the military, a tool used to legitimize its more direct forays into the political sphere. It offered legal justification when military generals seized power from civilian governments in 1958, then in 1977 and again in 1999. They also provided legal cover in the 1990s when the military dismissed two governments, both led by former Prime Minister Benazir Bhutto.

In the following decade, when a chief justice of the Supreme Court began to challenge the state’s use of power, the country’s military ruler, Gen. Pervez Musharraf, suspended the justice. The move caused uproar across the country and sparked a nationwide movement in support of the justice, who was eventually reinstated.

The interests of the courts and the military then seemed to coincide. Empowered by the notion of defending the public’s interests, the courts set out to root out the entrenched corruption among Pakistan’s political dynasties — just as those very dynasties were falling out with military leaders. In doing so, the courts also helped pave the way for Mr. Khan — the former cricket star who campaigned as an anti-corruption crusader and was embraced by the military — to win the election in 2018.

“Two things were happening in parallel: The first was the court was more empowered” after the nationwide movement to reinstate the ousted chief justice, said Saroop Ijaz, a senior counsel at Human Rights Watch, the international watchdog group. “And the second is the military realized an empowered court was a great partner to influence political outcomes, to send prime ministers home without a direct military intervention.”

Comment by Riaz Haq on May 31, 2023 at 7:19am

#Pakistan’s Powerful #Military Faces Defiance From #Judges. Analysts say courts’ recent decisions — which effectively bolstered #ImranKhan’s political prospects — were as much a reflection of #judiciary’s budding political muscle as military’s battered image
https://www.nytimes.com/2023/05/31/world/asia/pakistan-courts-chall...



But while military leaders appeared to withdraw their support for Mr. Khan early last year, many in the judiciary still viewed him as a partner in their anti-corruption purge, analysts say.

The growing rift between the military and courts surfaced in April, when the Supreme Court, led by Chief Justice Umar Ata Bandial, ruled that the current government’s attempt to delay local elections in two provinces, including the most populous, Punjab, was unconstitutional. At the time, the ruling was widely considered a boon for Mr. Khan’s political party, Pakistan Tehreek-e-Insaf or P.T.I.

A month later, the Supreme Court ordered Mr. Khan to be released from custody and soon afterward the Islamabad High Court granted him pre-emptive bail in several corruption cases he is facing.

Mr. Khan’s supporters say that his opponents are trying to have him arrested to prevent him from hitting the streets and whipping up support for his party ahead of the country’s general elections this fall.

Mr. Sharif’s government has already attempted to rein in the powers of Mr. Bandial, who has been accused of being politically aligned with Mr. Khan.


In March, Pakistan’s parliament passed a new law to curtail the powers of the chief justice, reassigning his unique powers — including the ability to convene a small panel of specific judges to hear cases — to a committee of three justices. But later that day, the Supreme Court issued an injunction, preventing the law from taking effect.

In doing so, the court showed that while its powers are limited and it has no ability to enforce its rulings, it is still a force to be reckoned with as the country barrels toward general elections this fall, analysts say.

That new dynamic, said Mr. Kureshi, the lecturer at Oxford University, “changes the game and changes the way in which political bargaining with these unelected institutions happens.”

Comment by Riaz Haq on June 1, 2023 at 4:20pm

Has #ImranKhan lost his battle with #Pakistan army? His #PTI party colleagues are throwing in the towel one by one, as the #generals go to war with him, the country’s most popular politician. #Military brass is aided by opportunists from #PMLN #PPP #PDM
https://www.economist.com/asia/2023/06/01/imran-khan-loses-his-batt...

Not long ago Imran Khan looked like a man who had defied Pakistan’s all-powerful generals and got away with it. After his arrest by paramilitary goons on May 9th, the former prime minister was freed by a Supreme Court order—even though his outraged supporters had had the temerity to smash up military installations around the country. As Pakistan’s most popular politician, with a legion of committed activists and apparently no fear of the army, Mr Khan looked odds-on to win a general election due later this year.

Barely three weeks later, the political walls have caved in on him. The generals have in effect dismantled the party Mr Khan founded in 1996, Pakistan Tehreek-e-Insaf (pti). Scores of its senior leaders have defected and thousands of its supporters have been arrested. The government of Shehbaz Sharif is openly mulling banning the party. Mr Khan, who faces dozens of charges including corruption and blasphemy, could be tried by a military court—and perhaps expect a long political exile at best. Pakistan’s beleaguered civilian institutions appear, for now, to be firmly back under the army’s sway.


Whether under orders from the military or out of sheer opportunism, the government of Shehbaz Sharif is backing the pti’s dismantlement. It cites the urgent need to restore economic and political stability. Pakistan’s economy barely grew over the past year. Due to a collapse in the rupee, annual income per person dropped by nearly $200 in dollar terms, to $1,568. Annual inflation is estimated to have hit 37% in May. With foreign exchange reserves barely sufficient to cover a month’s worth of imports, there remains a real risk of sovereign default. The imf this week urged the government to respect constitutional means in resolving the political crisis and reiterated that Pakistan must obtain “sufficient financing from partners’‘ before it releases a long-stalled $1.1bn in bail-out funds. China is expected to roll over $2.3bn in loans in June.

An irony of Mr Khan’s fall, not lost on Pakistanis, is that he was once promoted by the army as a means to suppress other civilian parties, including Mr Sharif’s. After he became prime minister in 2018 some observers described his government as a civil-military “hybrid”. But the generals eventually tired of his grandstanding and narcissism, leading to his ouster last year in a no-confidence vote.

The attacks unleashed on army buildings by his supporters on May 9th, including the ransacking of a house belonging to the commanding general in Lahore, were unprecedented and, it is now clear, intolerable to the generals. An army spokesman promised a crackdown on all “planners, instigators, abettors and perpetrators” of the violence. Penitent pti leaders have since been paraded before journalists, condemning the violence, dissociating themselves from Mr Khan and pledging fealty to the army. Many of them have renounced politics altogether. Rights organisations accuse the government of using the crackdown to detain peaceful opponents alongside alleged rioters.

Comment by Riaz Haq on June 1, 2023 at 4:21pm

Has #ImranKhan lost his battle with #Pakistan army? His #PTI party colleagues are throwing in the towel one by one, as the #generals go to war with him, the country’s most popular politician. #Military brass is aided by opportunists from #PMLN #PPP #PDM
https://www.economist.com/asia/2023/06/01/imran-khan-loses-his-batt...


The generals will now be weighing their options. On the basis of their past campaigns against civilian politicians who dared to disappoint them, these will include jailing Mr Khan, nudging him into exile, disqualifying him from politics and, though it seems unlikely, allowing him to contest the election at the head of whatever remains of his party. Or they may decide that the election will not be held—there are rumours that they mean to form a technocratic government instead. Mr Khan, for his part, remains defiant. Challenging the government to “break as many people as you want”, he has called for early elections.

In any event, political and economic stability is likely to remain elusive. Mr Khan’s sidelining will not make him less popular. Mr Sharif and, for that matter, whoever the generals pick to lead the country next will have to contend with vast numbers of disaffected pti supporters. And so will the generals, whose relentless political interference has, thanks to Mr Khan, now made them a principal target for Pakistanis’ justified rage. “The army can’t help itself,” says Zahid Hussain, a political commentator. “Its urge to intervene is irresistible.” And yet it has never seemed more self-defeating.

Comment by Riaz Haq on June 15, 2023 at 4:06pm

#Pakistan sees 12.8% drop in #remittances to $28.48 billion during FY 2022-23. Last year (FY 2021-22), the remittances sent by overseas Pak workers rose 6.1% to a record high of over $31 billion in the fiscal year (FY) of 2021-2022. #ImranKhanPTI
https://www.arabnews.com/node/2321631/business-economy


Experts say declining remittances owe to people’s preference of using informal money channels instead of banks
KARACHI: Pakistani financial experts and currency traders said on Wednesday the 12.8 percent decline in the country’s remittance inflows in the outgoing fiscal year was due to the preference of expatriates to utilize informal channels to send money amid a significant exchange rate disparity between the interbank and open markets.

According to official statistics, Pakistan witnessed a decline of 4.4 percent in remittance inflow in the last month, which stood at $2.1 billion. The data shared by Pakistan’s central bank on Tuesday indicated that the reduction in remittances in May amounted to 10.4 percent on an annual basis. This is despite the fact that the country needs improved remittance inflows since it desperately needs dollars amid a decline in its official reserves to a dangerously low level of $3.9 billion.

Pakistan received 12.8 percent less remittances in the outgoing fiscal year beginning in July 2022. The cumulative inflows of $24.8 billion were recorded during the first 11 months of FY23, according to the State Bank of Pakistan (SBP). In absolute terms, remittances have declined by $3.68 billion during the fiscal year compared to the previous year’s $28.48 billion inflows.

The major contributors to Pakistan’s remittance are Saudi Arabia and the United Arab Emirates (UAE), although the inflows from the kingdom have also declined by 16.3 percent to $5.9 billion since July 2022, while the inflows from the UAE dropped by over 19 percent to $4.3 billion, according to the official data.

“The decline in inflows can be attributed primarily to Pakistani expatriates opting for informal channels instead of banks when sending money to their families in the country,” said Faizan Munshey, senior consultant at One Investments, Dubai, speaking to Arab News.

“This shift is driven by illegal hawala-hundi operators in the black market offering more favorable exchange rates or rupee-dollar parity, leading a portion of non-resident Pakistanis to choose informal channels for fund transfers.”

Currency dealers said the demand in the unofficial market was higher as some importers rushed to arrange for payment in order to get their containers cleared from the country’s ports.

“Some importers have procured goods from abroad without opening letters of credit, and the government has asked them to arrange for payment on their own,” said Malik Bostan, president of the Exchange Companies Association of Pakistan (ECAP), while speaking to Arab News. “So, they are resorting to the hawala market to fulfill their requirements.”

Bostan said the situation would not improve unless the government resolved the issue of LCs.

Currency dealers also mentioned that the exchange rate was still above Rs300 per US dollar in the unofficial or hawala market, while the gap between the open and interbank market was beginning to narrow down.

On Wednesday, the open market was trading at Rs295 compared to Rs298 on Tuesday, while the currency in the interbank closed at Rs287.97 against the greenback on Tuesday.

Bostan said that the dealers’ request for the release of currency for exchange companies was accepted by the central bank authorities, which resulted in the appreciation of the Pakistani rupee in the open market.

“We had requested the State Bank governor to release the stuck-up amount of exchange companies,” he added. “They released $5 million yesterday, and we are expecting another $5 million today.”

Comment by Riaz Haq on June 16, 2023 at 4:06pm

When Pakistan's politics get tough, Pakistanis respond with memes and humor

By

Betsy Joles

https://www.npr.org/2023/06/16/1179871275/pakistan-politics-imran-k...

Despite heavy censorship and periods of military dictatorship, humor in Pakistan has always found a way. Visual humor plays an important role in getting political messages across, says longtime artist and cartoonist Sabir Nazar, who is based in Lahore. "You cannot control the image. It has a kind of subversive quality," he says.

One of Nazar's recent cartoons shows Imran Khan holding onto a scale while a large boot — resembling one from an army uniform — weighs down the other side. Another cartoon shows a structure labeled "state" with broken pillars, engulfed in flames.

Encapsulated in much of the humor is an understanding of issues of justice, human rights and democracy in Pakistan, which has not held elections since Khan was removed from power through a no-confidence vote last year.

"Memes in Pakistan frequently have a lot of biting political currency," says Ahmer Naqvi, a writer in Karachi focusing on pop culture in Pakistan. The meme format is well-suited for Pakistani humor, he says, because it captures the multilayered reality of social and political issues while bypassing censorship. "This form of expression is anonymous. It's very direct. And it allows you to do some social commentary."

An anonymous Instagram account called catboy_jinnah, run by a university student in Karachi who hides his identity to avoid abuse online, likes to poke fun at politics — alongside more innocuous posts that capture the humor and charm of everyday life in Pakistan. However, sometimes the underlying context of the posts is more serious.

One post from May incorporates a photo of men sitting on a sofa holding a portrait of Pakistan's founder, Muhammad Ali Jinnah, while a fire is seen raging behind them.

Catboy_jinnah mostly keeps his personal opinions about social and political matters veiled. "Irony is more dangerous," he says, referring to the potential for satirical humor to challenge political and social ideas.

Humor allows for social commentary while skirting censorship
Internet content related to Pakistan's current events proliferates despite a restrictive environment. Within hours of Khan's arrest, the Pakistani government shut off the country's mobile broadband, limiting access to social media sites, including Twitter, YouTube, and Facebook. (Content continued to be posted and shared on TikTok). Internet users took to VPNs to share protest memes.

According to U.S. watchdog organization Freedom House, Pakistani internet users face numerous barriers to access, including internet shutdowns and government regulations that dictate what content can be posted online. Pakistan's telecommunications authority can regulate or ban content that it considers anti-Islamic, a threat to public order and security or contrary to decency and morality. Internet regulations extend to media outlets, which were banned by Pakistan's media regulator in March from broadcasting Khan's speeches.

Nazar, the artist, started creating political cartoons as an art student in Lahore more than 40 years ago, during the rule of military dictator Gen. Muhammad Zia ul-Haq, who unleashed extreme levels of censorship after imposing martial law in the 1970s. "There was a kind of vacuum for humor and satire not [just] in journalism, but in the entire society," Nazar says.



During this time, comedy found a way to break through censorship, even via programs on state-run television. Fifty-Fifty, a sketch comedy show inspired by Saturday Night Live, relied on satire, slapstick and irony to highlight political and social issues such as police brutality and government repression.

Comment by Riaz Haq on June 18, 2023 at 7:17am

Over $7bn lost in exports, remittances

https://www.dawn.com/news/1760422


Exports plunged by $3.491bn, or 12 per cent, to $25.380bn during July-May of FY23 compared to $28.871bn in the same period of the last year, official data showed.

Similarly, remittances fell by 12.8pc to $24.831bn during the first 11 months of the current fiscal year, posting a net loss of $3.658bn.


-----------------


KARACHI: As the PDM government keeps struggling to secure $1.1 billion from the International Monetary Fund (IMF), the country lost $7.15bn on account of shrinking exports and remittances during the first 11 months of FY23.

Despite missing out on targets for the outgoing fiscal year, the government has fixed higher exports and remittances projections for FY24.

Exports plunged by $3.491bn, or 12 per cent, to $25.380bn during July-May of FY23 compared to $28.871bn in the same period of the last year, official data showed.

Similarly, remittances fell by 12.8pc to $24.831bn during the first 11 months of the current fiscal year, posting a net loss of $3.658bn.

The combined loss from these two sectors is much higher than the country is willing to receive from the IMF and borrow from commercial banks and other multilateral lending agencies.

“Instead of spending time to boost exports and remittances, the government remained busy with all its efforts to borrow from the IMF and other sources,” said a senior banker.

The government struggled hard to get assurances of $3bn from Saudi Arabia and $2bn from the United Arab Emirates to get IMF’s $1.1bn.

Financial experts believe that the policymakers lack a clear strategy to control the situation, as most of the time was spent on borrowing strategy.

At the same time, the government included certain unrealistic expectations to bolster exports and remittances in the upcoming FY24 budget, without providing the rationale behind them. Analysts and experts said the new fiscal year would start under the stress of a current account deficit that has been projected at $6bn for FY23. The government has also allocated a budget of $6bn CAD, which analysts believe will likely increase due to the continuing decline in remittances.

“The government has also budgeted a $6bn CAD, which analysts believe will increase due to the continuing decline in remittances. But even taking the government figures, they imply a deficit of $300m to $700m every month,” said Faisal Mamsa, CEO of Tresmark, the company that tracks currency trends worldwide.

If the June 30 deadline for the IMF loan agreement (total worth $7bn) expires, the situation will become even more challenging for the new fiscal year.

Under the new FY24 budget, the government has projected a 7.2pc growth in exports. However, this projection is far from reality, as there is no improvement in Pakistan’s exports and the slowdown in world trade is not expected to improve in the next 12 months.

Remittances, which have been declining by an average of $332m per month, have been projected to grow by 8.5pc. However, remittances are declining due to a government policy that permits importers to purchase dollars from the illegal grey market for imports.

The grey market offers a rate of Rs20 to Rs25 per dollar higher than the official banking rate. Remitters are benefitting from these grey market transactions and this situation is expected to persist into the next fiscal year, resulting in a decline in remittances instead of the projected 8.5pc growth.

During the first 10 months of FY23, Pakistan received only $1.1bn as Foreign Direct Investment. However, the government anticipates receiving $2.8bn in FY24 without providing any justification for this projected growth.

Comment by Riaz Haq on July 7, 2023 at 1:37pm

#Pakistan's #ImranKhanPTI expresses support for bailout deal in #IMF meeting at his home in #Lahore.
IMF is seeking to build political support for the deal before coming general elections in the country scheduled for later this year.
https://www.reuters.com/world/asia-pacific/pakistans-imran-khan-exp...

KARACHI, Pakistan, July 7 (Reuters) - Pakistan's main opposition leader and former prime minister Imran Khan expressed support for a recently-reached bailout deal with the International Monetary Fund (IMF) after a meeting with officials of the lender on Friday, his party said.

The IMF said it was, in the lead up to national elections in the autumn, seeking the support of Pakistan's political parties, including Khan's, for the new nine-month $3 billion stand-by arrangement and policies associated with the programme.



Hammad Azhar, a former finance minister under Khan, who attended the meeting virtually, said in a post on Twitter that the former premier and his economic team had discussed last week's staff-level deal between the IMF and Pakistan's government.

"In this context we support the overall objectives and key policies," Azhar said, adding the meeting at Khan's residence in the eastern city of Lahore was attended in person by IMF officials while Mission Chief Nathan Porter joined virtually.

Earlier, the IMF's resident representative Esther Perez Ruiz said in a statement that the meetings with political parties were to "seek assurances of their support for the key objectives and policies under a new IMF-supported program ahead of the approaching national elections."

The new deal, which will be vital to help stabilise Pakistan's struggling $350 billion economy, will be taken up for approval by the IMF board on July 12.

The programme looks to replace a four-year Extended Financing Facility programme, originally signed by Khan's government in 2019, and which expired last month.

Khan's government deviated from agreements under an earlier IMF programme days before he was ousted in a parliamentary vote last year, leading to a delay in the implementation of the programme and increased economic uncertainty.

Pakistan's national elections are scheduled to be held by early November amid a charged political atmosphere that has seen Khan, the country's main opposition leader, in a bruising standoff with the government and the powerful military.

'POLITICAL STABILITY KEY'
The new programme will span three governments - the incumbent set up under Prime Minister Shehbaz Sharif, whose term ends in August, a caretaker administration that will conduct the polls, and then a new government following the elections.

Azhar said the Pakistan Tehreek-e-Insaaf (PTI) party believed political stability was key for the economy and called for "free, fair and timely" elections after which a new government would initiate reforms and engage on a longer-term basis with multilateral institutions.

Despite being the country's most popular leader according to polls, Khan faces the prospect of being disqualified from the elections if found guilty in any of the cases against him since his removal from power.

The meeting is the highest profile engagement for Khan and his the PTI since he was ousted from power less than four years into his five-year term.

He said the cases are a bid to sideline him and dismantle his party before the polls. The government and military deny this, and say the cases are on merit.

The government launched a country-wide crackdown on the party in the aftermath of violent protests that followed Khan's brief arrest in May. The protests saw military installations ransacked. Khan was later released on bail.

Many of Khan's key aides remain under arrest and many others, like Azhar, are in hiding. Azhar said some of PTI's economic team members attended the meeting virtually.

Comment by Riaz Haq on July 10, 2023 at 8:01am

Remittances sent home by Pakistanis working abroad fell to $27bn for the fiscal year 2023, compared with $31.3bn a year earlier, the country’s central bank said on Monday.

https://www.aljazeera.com/news/2023/7/10/pakistans-flailing-economy...

Remittances for June slumped to $2.2bn from $2.8bn a year earlier, central bank data showed. The remittances were mainly sourced from Saudi Arabia ($515.1m), the United Kingdom ($343m), the United Arab Emirates ($324.7m) and the United States ($272.3m).

According to the World Bank last year, Pakistan was the world’s sixth top recipient of remittances in 2022, behind India, Mexico, China, the Philippines and Egypt, although Tonga, Lebanon and Samoa are most dependent on money sent home from abroad as a percentage of GDP.

Pakistan’s economic crisis
The drop signals another blow to Pakistan’s economy which is facing its worst crisis since gaining independence from Britain in 1947.

Years of financial mismanagement, a global energy crisis and severe flooding have battered the economy, resulting in a slew of strict economic measures imposed by the International Monetary Fund (IMF) as Pakistan’s central bank looks to secure a bailout.

The $3bn short-term financial package from the IMF is subject to approval by its board on July 12.

Comment by Riaz Haq on July 27, 2023 at 10:26am

Pakistan-GCC partnership has new momentum | Arab News

by Dr. Ali Awadh Asseri, Saudi Arabia’s ambassador to Pakistan from 2001 to 2009


The current civil-military consensus on the GCC’s pivotal economic role has emerged against the backdrop of tangible progress made by the present government on the economic, political, security and foreign policy fronts.
Sharif faced significant challenges upon taking office in April last year, inheriting a country on the verge of financial default. Dealing with the subsequent political turmoil, a renewed wave of terrorism and a serious deterioration in Pakistan’s relations with major powers and trusted allies was also a daunting task. But he has been able to successfully navigate this complex landscape by engaging coalition leaders, the security establishment and key foreign partners.
As a result, Pakistan is now stable enough to transition smoothly toward a caretaker setup, which will hold the next general election. Political turmoil has receded since the appointment of Gen. Asim Munir as the chief of the army staff in November. A new staff-level agreement with the International Monetary Fund, worth $3 billion for a period of nine months, was concluded in June. Although terrorism has seen a resurgence, enhanced security structures are now in place to combat this threat. And the China-Pakistan Economic Corridor stands revived, while relations with the US are also back on track.


-------------

Tangible progress in this investment drive will help Pakistan to increase investment inflows from the GCC, China and other countries. But its aspiration to become a $1 trillion economy by 2035 will depend on it taking solid steps that boost the dismal level of bilateral trade, which is currently worth $3 billion annually with the Gulf states. Islamabad must also increase the number of Pakistani workers and the diversity of the jobs they do in the GCC region. They number about 4 million at present.

Going forward, the Comprehensive Economic Partnership Agreement with the UAE needs to be emulated in Pakistan’s trade links with Saudi Arabia and the other GCC members. Pakistan’s skilled manpower in the IT and services sectors is a perfect match for the economic transformations taking place in the Gulf, particularly Saudi Arabia.

Let me conclude by saying that (PM Shehbaz) Sharif has done well to raise the prospects of economic recovery in Pakistan. One hopes that its future political leadership will sustain the current momentum in economic policies, especially with respect to the rapidly evolving partnership with the GCC economies.

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