If oil prices surge, Pakistan won’t meet IMF targets: experts

A security guard sits in front of a wall with signs and slogans at the operation building at the Pakistan Steel Mills (PSM) on the outskirts of Karachi Feb 8, 2016.—Reuters
Updated 18 September 2019

If oil prices surge, Pakistan won’t meet IMF targets: experts

  • The country's oil imports from Saudi constituted 26 % of the total import bill last fiscal year
  • Pakistan is struggling to meet stringent IMF reforms after signing a $6 billion bailout package this year

ISLAMABAD: Following Prime Minister Imran Khan’s statement on Tuesday that attacks on Saudi Arabia’s oil supply were a threat to the “global economy,” experts believe the government’s efforts to meet its fiscal deficit targets in line with International Monetary Fund (IMF) conditions could be reversed if oil prices increased following Saturday’s attack on two Saudi oil facilities.
“If oil prices surge, Pakistan won’t be able to meet fiscal deficit targets set by the IMF,” Khurram Hussain, economic expert and business editor at daily Dawn, told Arab News.
The pre-dawn attack claimed by Yemen’s Houthi rebels led to an almost 20% increase in global oil prices on Monday, with fears of a surging fiscal deficit in Pakistan where a majority of oil is imported from Saudi Arabia.
“Pakistan’s oil imports constituted 26 percent of the country’s total import bill of $54.8 billion during the last fiscal year,” Hussain said, and added that any escalation in Middle East tensions, would “definitely impact our economy.”
“This government took at least one year to arrest the fiscal deficit and it has yet to bring it to the level as agreed upon with the IMF, but this would be reversed with an increase in oil prices” he said.
On Tuesday however, global oil prices dropped more than 6% with reports of oil production likely to resume fully within weeks, sooner than initially thought.
Still, there are concerns that a brewing conflict with similar attacks in the region could seriously impact Pakistan’s ailing economy, which signed off on a $6 billion loan from the IMF earlier this year and carries stringent reform conditions.
On Monday, an eight-member IMF delegation arrived in Islamabad to review Pakistan’s economic progress two months after singing the deal with focus on the country’s failure to achieve the set revenue collection target.
A senior leader of the Pakistan Peoples Party (PPP), Naveed Chaudhry, said that the attack on Saudi oil facilities threatened the world’s economy and global peace, and a sporadic violation of the Kingdom’s territorial integrity could result in a “full-fledged conflict” in the region.
“The world powers should take it [the attack on Saudi oil facilities] very seriously and take cogent measures to avoid its recurrence,” he said.
The rebel Houthi group in Yemen claimed responsibility for Saturday’s horrific attack, which damaged the world’s biggest crude oil processing plant. On Monday, the Saudi-led coalition said that the attack on Saudi oil facilities was carried out with Iranian weapons, an allegation that Tehran has denied.
“This attack has grave implications for peace in the region, it endangers, at once, both the east and the west. Pakistan particularly, because of an already volatile neighborhood,” Palwasha Khan, deputy information secretary of the PPP, told Arab News.
“Moreover, the increase in oil prices will impact economies that are already struggling. Pakistan will have to be more vigilant to play its role to avoid the spread of conflict,” she added.
On Tuesday, in a telephone conversation between Prime Minister Khan and Saudi Crown Prince Muhammad Bin Salman, Khan strongly condemned the acts of “sabotage,” and reaffirmed Pakistan’s support to the sovereignty and territorial integrity of Saudi Arabia.
Foreign Minister Shah Mahmood Qureshi also announced in a statement that PM Khan would be visiting Saudi Arabia on September 19 to discuss ways forward.


Pakistan Medical Association, doctors fear coronavirus surge as lockdowns lifted nationwide

Updated 09 August 2020

Pakistan Medical Association, doctors fear coronavirus surge as lockdowns lifted nationwide

  • Islamabad’s PIMS hospital had less than 10 coronavirus patients before Eid Al-Adha but new patients coming in since
  • Pakistan announced on Thursday it was opening virtually all sectors closed down in March to stem the spread of COVID-19

ISLAMABAD: The Pakistan Medical Association (PMA) and infectious disease experts on Thursday warned of a possible surge in coronavirus cases due to a premature lifting of restrictions, as the government announced a day earlier that it was opening virtually all sectors closed down in March to stem the spread of COVID-19.
Pakistan shut schools and land borders nearly five months ago, decided to limit domestic and international flights and discouraged large gatherings to try to halt the spread of the coronavirus. But with infections and deaths down nearly 80 percent since their peak as per government records, the government decided on Thursday to lift the lockdowns to help the country return to normalcy.
Pakistan celebrated the Eid Al-Adha religious holiday last week. After the last major Islamic festival, of Eid Al-Fitr, in May, infections rose to their peak in Pakistan.
Dr. Nasim Akhtar, head of infectious diseases at the Pakistan Institute of Medical Sciences (PIMS) in Islamabad, told Arab News the coronavirus ward at her hospital only had five to six patients before Eid, but new patients had once again started coming in.
“Cases registered a sharp increase after Eid Al-Fitr, and this can happen now again with the lifting of the lockdowns,” she said, adding that the government should have waited at least two more weeks to reopen restaurants and other public places.
“This is a bit early, and may worsen the situation again,” Akhtar said.
The World Health Organization has said “extreme vigilance” was needed as countries begin to exit from lockdowns, amid global concerns about a second wave of infections.
Germany earlier reported an acceleration in new coronavirus infections after it took early steps to ease its lockdown. South Korea, another country that had succeeded in limiting virus infections, saw a new outbreak.
“The next week is crucial to see if the infections soar as just one week has passed now since the Eid holidays,” Dr. Qaiser Sajjad, secretary-general of the Pakistan Medical Association, told Arab News.

 

 

Cases could also surge during the Islamic month of Muharram, which begins in late August, he said, and due to independence day celebrations on August 14. Huge crowds come out all over the world, including in Muslim-majority Pakistan, to commemorate the slaying of Imam Hussein, grandson of the Prophet Muhammed (pbuh).
“We think that the opening of all these things in a hurry ... probably this will create problems for us,” Sajjad said.
He said infections had risen sharply in the United States and Brazil after the nations lifted restrictions when cases initially declined. Spain reported 1,772 new coronavirus infections on Aug 6, marking the biggest jump since a national lockdown was lifted in June.
University of Health Sciences vice chancellor Javed Akram, however, called the reopening of public places a “wise decision.”
“The government cannot keep the cities and businesses under lockdown forever,” he said. “People should follow health guidelines to fight the virus.”