Pakistan opposition takes prime minister to task over IMF deal

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

Pakistan opposition takes prime minister to task over IMF deal

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.”


Militants open fire and burn police car in Philippine town

Updated 04 December 2020

Militants open fire and burn police car in Philippine town

Militants open fire and burn police car in Philippine town

COTABATO, Philippines: Dozens of militants aligned with the Daesh group opened fire on a Philippine army detachment and burned a police patrol car in a southern town but withdrew after troops returned fire, officials said Friday.
There were no immediate reports of injuries in Thursday night’s brief attack by the Bangsamoro Islamic Freedom Fighters in Datu Piang town. Nevertheless it sparked panic among residents and rekindled fears of a repeat of a 2017 militant siege of southern Marawi city that lasted for five months before being quelled by government forces.
“We are on top of the situation. This is just an isolated case,” regional military commander Lt. Gen. Corleto Vinluan Jr. said in a statement.
Security officials gave differing statements on the motive of the 30 to 50 gunmen. Some said the militants targeted Datu Piang’s police chief over a feud but others speculated that the militants wanted to project that they are still a force to reckon with by attacking the army detachment in the center of the predominantly Muslim town.
Officials denied earlier reports that the militants managed to seize a police station and burn a Roman Catholic church.
When reinforcement troops in armored carriers arrived and opened fire, the militants fled toward a marshland, military officials said.
The Bangsamoro Islamic Freedom Fighters is one of a few small armed groups waging a separatist rural insurrection in the south of the largely Roman Catholic nation. The groups opposed a 2014 autonomy deal forged by the largest Muslim rebel group in the south with the Philippine government and have continued on and off attacks despite being weakened by battle setbacks, surrenders and factionalism.
The armed groups include the Abu Sayyaf, which has been blacklisted by the United States and the Philippines as a terrorist organization for kidnappings for ransom, beheadings and bombings.