Pakistan opposition takes prime minister to task over IMF deal

Pakistan Finance Minister Asad Umar (R) meets with IMF Managing Director Christine Lagarde at the Bali Convention Centre during the 2018 IMF/World Bank annual meetings in Nusa Dua on the Indonesian resort island of Bali on Oct. 11, 2018. (AFP file photo)
Updated 16 October 2018
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Pakistan opposition takes prime minister to task over IMF deal

  • The daily dithering has paralyzed the economy and precipitously devalued the rupee, says Sen. Sherry Rehman
  • Govt has instilled a sense of 'comfort and confidence' in the markets, says official spokesman

KARACHI, Pakistan: Questioning the government’s lack of perspicacity to avoid “painful economic decisions,” Pakistan’s opposition said on Monday that it was shocked at Prime Minister Imran Khan’s inability to avert a crisis, if any.  

“We have serious questions about this kind of strategy, where just the daily dithering has not just paralyzed the economy and precipitously devalued the rupee, but hugely compounded the crisis in the country’s public finances,” Sen. Sherry Rehman, former leader of the opposition in the Senate, told Arab News.

The reaction follows Finance Minister Asad Umar’s comments on Saturday wherein he said that “the government will have to take tough decisions that would be painful for people,” signaling a possible hike in utility prices, following Pakistan’s decision to approach the International Monetary Fund (IMF) for a bailout program. 

Opposing the decision, Rehman said: “We are shocked at the lack of a plan for a crisis we all saw looming. Now the slash and burn of utility prices is going to cause severe economic hardship. It’s one thing to have promised a completely different Pakistan, but another to not present alternative plans at least to manage the inflationary impact…on the most socially vulnerable sectors of Pakistan.”

Defending the move, Dr. Farrukh Saleem, government’s spokesman on economy and energy issues, said that the government has instilled a sense of “comfort and confidence” in the markets, not only within Pakistan but outside the country too, which was not possible without approaching the IMF for financial help. “IMF gives one prescription to those who avail its program, which includes an emphasis on increasing exports and curtailing imports and an end of subsidies,” he said.  Adding that the country’s “circular debts have gone up to 1.3 trillion rupees” — inherited from previous governments in the past 10 years — Dr. Saleem said that it was up to Imran Khan’s administration to do away with the liabilities as otherwise “the burden would eventually be shifted to consumers.”

“The government did not raise the gas rates for the last four years despite repeated requests from the concerned departments. Someone will have to swallow bitter pills of last 10 years,” he said. 

The stock market was jubilant following Pakistan’s decision to approach the IMF. However, investors’ newly acquired confidence was quickly replaced with concern as details emerged about the terms and conditions attached with the bailout program, resulting in a 750-point plunge in the benchmark KSE 100 index on Monday.

“Panic selling continued in the quarter earnings season amid a major fall in global equities and investor concerns for likely surge in interest rates and rupee depreciation with the potential IMF loans bailout package,” said Ahsan Mehanti, chief executive of Arif Habib Group. 

Pakistan has devalued its currency for the fifth time by 27 percent since December 2017, with analysts and stakeholders expecting another markdown as the IMF deal gathers steam.

“Its first impact would be in the currency market and the currency would be further devalued. With the devaluation of the Pakistani rupee against the US dollar, the prices of almost everything would start increasing especially those of imported goods,” Zafar Paracha, general secretary of Exchange Companies Association of Pakistan, told Arab News.  Another community that is expected to bear the brunt of the decision is the country’s industrialists and traders who said they could foresee an impact on the price of inputs and raw materials.

Junaid Esmail Makda, president of the Karachi Chamber of Commerce and Industry, said: “The finance minister should take the country’s business community into confidence before taking the ‘painful decision’ because if the government comes up with harsh decision without taking us into the loop it would have a disastrous impact.” 

He further warned that such a decision would be unfavorable not just “for foreign investors but for local investors too” who might move their assets to other countries.  

However, Dr. Saleem continued to remain optimistic.

Reiterating the fact that the steps taken by the government to mitigate the impact of the IMF’s conditions would yield results, he said: “The government is working to increase exports to stabilize foreign exchange and starting a housing project that would spur economic activities in the backdrop of a growing demand of allied industries.”


Finns held in Muslim Malaysia over ‘Christian pamphlets’

Updated 32 min 22 sec ago
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Finns held in Muslim Malaysia over ‘Christian pamphlets’

  • hey are accused of breaking laws that forbid people from disturbing religious harmony, and could be jailed for up to five years
  • Issues related to race, religion and language are considered sensitive in Malaysia

KUALA LUMPUR: Four Finns have been arrested on a holiday island in Muslim-majority Malaysia for allegedly distributing pamphlets about Christianity, police said Wednesday, and may face up to five years in jail.
Religion is a deeply sensitive issue in Malaysia, where more than 60 percent of the populaton is Muslim, and critics say rising conservatism has chipped away at a traditionally tolerant brand of Islam in recent years.
Authorities detained the two men and two women on Tuesday after receiving complaints from members of the public that they were handing out Christian materials on the popular resort island of Langkawi, said local police chief Mohamad Iqbal Ibrahim.
“Police have arrested four Finnish nationals in Langkawi for allegedly distributing religious material in a public place,” he told AFP.
“They were distributing pamphlets related to Christianity.”
The Finns, aged between 27 and 60, were arrested at a hotel and police seized pens, notebooks and a bag.
They are accused of breaking laws that forbid people from disturbing religious harmony. If found guilty, they could be jailed for between two and five years.
The suspects have been remanded in custody while police investigate.
Langkawi, a jungle-clad island in northwest Malaysia, attracts millions of tourists to its palm-fringed beaches every year.
Malaysia, home to about 32 million people, has sizeable ethnic Chinese and Indian communities who have long complained about rising Islamization.
In 2010, three churches were attacked with firebombs, causing major damage to one, as Muslims sought to prevent Christians from using the word “Allah.”
Issues related to race, religion and language are considered sensitive in Malaysia, which witnessed deadly riots between members of the majority Malay community and ethnic Chinese in 1969.