Pakistan finance minister steps down amid IMF talks, budget preparations

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Speculation has been rife in recent days that Umar would be replaced, mostly over delays in reaching a bailout deal with the International Monetary Fund at a time of worsening economic outlook for the South Asian nation of 208 million people. (AFP/File)
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Asad Umar and with Imran Khan at PTI Workers Convention in 2017 – (Asad Umar Facebook)
Updated 18 April 2019

Pakistan finance minister steps down amid IMF talks, budget preparations

  • Asad Umar says was offered energy ministry by prime minister in cabinet reshuffle but declined
  • Warns no one should expect miracles from the new finance minister

ISLAMABAD: Pakistan’s Finance Minister Asad Umar resigned from the cabinet on Thursday after Prime Minister Imran Khan tried to move him to the energy portfolio, heightening uncertainty about ongoing bailout talks with the International Monetary Fund and the government’s plan to deal with an economy in crisis.
Speculation has been rife in recent days that Umar would be replaced, mostly over delays in reaching a deal with the IMF at a time of worsening economic outlook for the South Asian nation of 208 million people.
“As part of a cabinet reshuffle PM [prime minister] desired that I take the energy minister portfolio instead of finance,” Umar said in a Twitter post. “However, I have obtained his consent to not take any cabinet position.”
At a press conference later in the day, he said Khan needed to pick a new finance minister “as soon as possible” but declined to comment on who would replace him.
Umar’s successor will have the monumental task of not just finalizing the IMF deal but also the national budget, due to be announced in May.
“We are at an advanced stage [of talks] with the IMF and this will also reflect in the upcoming budget,” Umar said. “Whoever comes in, he will have to face a thorny situation … Nobody should expect any miracle from the new finance minister.”
As part of a cabinet reshuffle, Umar said other changes in the cabinet would “be announced either tonight or tomorrow morning.”
Khurram Hussain, the business editor of Dawn newspaper, said Umar’s resignation was “ill-timed” and would add to uncertainty about the country’s economic future.
“At a time when the finance minister was engaged with the IMF and preparing the budget, his resignation is beyond comprehension,” Hussain told Arab News, adding that any new official would now have to start from scratch.
Dr. Athar Ahmed, a senior economist based in Karachi, said Umar’s resignation would shake the confidence of the IMF in Pakistan and possibly prolong the finalization of a deal.
Talks with the IMF began soon after Khan was appointed prime minister but stalled over austerity conditions imposed by the Fund, which has pressed Pakistan to improve tax revenue collection, bolster foreign currency reserves and narrow a current account deficit expected to top 5 percent of gross domestic product this year.
Pakistani officials say they agree on the need for reforms but do not want to sign up to conditions that would derail the economy, with growth set to slow this year to around 4 percent from 5.2 percent last year.
“We have finalized the IMF agreement on much better terms than before as I refused to take decisions that would have crushed the nation,” Umar said at Thursday’s press talk.


Karachi braces for weekend rains as billions lost to drenches this week

Updated 26 August 2020

Karachi braces for weekend rains as billions lost to drenches this week

  • Losses from Tuesday's flooding estimated at Rs5 billion ($30 million), Karachi traders say
  • Met agency says floodwater in Karachi must be drained immediately to prevent further flooding on Saturday

KARACHI: Another spell of heavy rain is expected to lash the port city of Karachi on Saturday, Pakistan's meteorological department warned, as it called on the city's authorities to drain water from flooded neighborhoods to avoid further damage and casualties.

Rain-related incidents in the past few days killed dozens of people in the coastal metropolis of Sindh province, while streets, homes and factories were flooded with sewage water, causing losses of billions of rupees in the city where the drainage and sewage systems are outdated.

"There will be a gap of two days (in rains). If it is not utilized to drain out the water from the affected areas, a light to moderate spell on Saturday will drown them again," Sardar Sarfraz, chief metrological officer of the Pakistan Meteorological Department, told Arab News.

On Tuesday, he said, a record 345 millimeters of rainfall flooded most of the city.

As flooding brought operations at the city's industrial zones to a standstill, Karachi Chamber of Commerce and Industry (KCCI) president Agha Shahab Ahmed Khan said the government should declare the rains a national disaster to allow people to be compensated.

Shaikh Umar Rehan, president of the Korangi Association of Trade and Industry (KATI) told Arab News that work has been heavily disrupted at the city's factories which normally operate non-stop.

“The factories work round the clock, but on Tuesday, even one shift couldn’t be completed,” he said.

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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According to Atiq Mir, president of the Karachi Traders Association, losses from damages to the markets in the old city area alone are estimated to be Rs1 billion.

"As trade volume is Rs4 billion per day, both direct and indirect losses make it Rs5 billion ($30 million). On Wednesday, as the markets could not open completely, the (trade) community will have to bear another Rs2.5 billion losses."

The Sindh government and the military say teams are on the ground to drain the water and rescue the affected.

“It has broken an 89-year record and it was continuously raining for eight hours but as soon as the rain stopped teams were on ground to clear the areas. Most of the city’s thoroughfares were cleared by the Tuesday evening. The entire Sindh government was in the field to supervise the relief work,” Sindh Labor Minister Saeed Ghani told Arab News.

He added that the problem will not be resolved within days.

The military's media wing said in a statement that relief and rescue efforts were underway in the heavily flooded Malir Nadi, Kohi Goth and Dur Muhammad Goth areas of the city.