Deputy PM Dar, Saudi FM discuss Crown Prince’s visit to Pakistan, bilateral cooperation

Deputy PM Dar, Saudi FM discuss Crown Prince’s visit to Pakistan, bilateral cooperation
Saudi Foreign Minister Prince Faisal bin Farhan (L) and his Pakistan's counterpart Ishaq Dar arrive to address a joint press conference at the foreign ministry in Islamabad on April 16, 2024. (AFP/File)
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Updated 19 May 2024
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Deputy PM Dar, Saudi FM discuss Crown Prince’s visit to Pakistan, bilateral cooperation

Deputy PM Dar, Saudi FM discuss Crown Prince’s visit to Pakistan, bilateral cooperation
  • Deputy PM Ishaq Dar this month said the much-awaited visit was ‘on the cards,’ but neither side has confirmed any dates
  • The statement came amid Pakistan and Saudi Arabia’s efforts to increase bilateral trade and reach investment agreements

ISLAMABAD: Pakistan’s Deputy Prime Minister Ishaq Dar on Sunday held a telephonic conversation with Saudi Foreign Minister Prince Faisal bin Farhan and discussed with him Crown Prince Mohammed bin Salman’s proposed visit to Pakistan as well as bilateral cooperation between the two countries, the Pakistani foreign ministry said.

Dar this month said the much-awaited visit of the Saudi Crown Prince to Islamabad was “on the cards” and could materialize “any time” during May. But neither of the two sides has confirmed any dates.

His statement followed a series of high-level engagements between the two countries, including the visits of Pakistan PM Shehbaz Sharif to the Kingdom and a visit of the Saudi foreign minister to Islamabad.

On Sunday, Dar and the Saudi foreign minister discussed bilateral relations between Pakistan and Saudi Arabia, exploring various avenues for further strengthening cooperation across multiple sectors.

“They reviewed preparations for the visit of the Crown Prince and Prime Minister of Saudi Arabia His Royal Highness Prince Mohammed Bin Salman Al-Saud to Pakistan,” the Pakistani foreign ministry said in a statement.

“Deputy Prime Minister Ishaq Dar underlined that people of Pakistan are eagerly looking forward to the visit of His Royal Highness at a mutually agreed date.”

Pakistan and Saudi Arabia have lately been working to increase bilateral trade and investment, with the Crown Prince last month reaffirming the Kingdom’s commitment to expedite an investment package of $5 billion.

A high-level Saudi business delegation, led by the Kingdom’s Assistant Minister of Investment Ibrahim Al-Mubarak, this month visited Pakistan to explore investment opportunities in various sectors, including mineral, energy, agriculture and petroleum.

The visit by the Saudi Crown Prince would mark his first trip to Pakistan in the last five years. His previous visit took place in February 2019 during the tenure of former prime minister Imran Khan.

On Saturday, Pakistan’s Interior Minister Mohsin Naqvi said the proposed visit would prove to be a “game changer” in bilateral ties between both countries.

“The historic brotherly friendship of Saudi Arabia and Pakistan is turning into a beneficial economic relationship,” Naqvi was quoted as saying by his ministry. “The people of Pakistan are looking forward to the visit of the Crown Prince of Saudi Arabia.”

Pakistan and Saudi Arabia enjoy strong trade, defense, and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as a top source of remittances to the cash-strapped South Asian country.

Saudi Arabia has also often come to cash-strapped Pakistan’s aid by regularly providing it oil on deferred payment and offering direct financial support to help stabilize its economy and shore up its forex reserves.


Unusually heavy monsoon rains in Pakistan will affect 200,000 people, top UN official warns

Unusually heavy monsoon rains in Pakistan will affect 200,000 people, top UN official warns
Updated 37 sec ago
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Unusually heavy monsoon rains in Pakistan will affect 200,000 people, top UN official warns

Unusually heavy monsoon rains in Pakistan will affect 200,000 people, top UN official warns
  • UN, with help from local authorities, has prepared contingency plan, with $40 million set aside to respond to any emergencies
  • Devastating floods in 2022 killed 1,739 people, destroyed 2 million homes, and covered as much as one-third of the country 

ISLAMABAD: An estimated 200,000 people in Pakistan could be affected by the upcoming monsoon season, which is expected to bring heavier rains than usual, a top UN official warned on Thursday.

The United Nations, with help from local authorities, has prepared a contingency plan, with $40 million set aside to respond to any emergencies, said Mohamed Yahya, the newly appointed Resident Coordinator and Humanitarian Coordinator in Pakistan.

Yahya told journalists in Islamabad that the weather forecasters in Pakistan are projecting above-normal rainfall in the coming weeks. However, the rains would not be as heavy as in 2022 when devastating floods killed 1,739 people, destroyed 2 million homes, and covered as much as one-third of the country at one point.

Pakistan is one of the countries in the world most vulnerable to climate change, in part because of its immense northern glaciers, which are now melting as air temperatures rise. Warmer air can also hold more moisture, intensifying the rains of the monsoon.

Until recently, public opinion and even some government officials took little account of the possible negative impact from climate change on daily life. Pakistan’s weather patterns have changed in recent years, forcing cities to strengthen their infrastructure and farmers to adapt their practices.

The 2022 floods caused more than $30 billion in damage to Pakistan’s already cash-strapped economy.

Analysts and government officials say Pakistan in recent years failed to achieve goals for economic growth because of man-made disasters, which have repeatedly hit the country in the form of droughts, heatwaves and heavy rains, which badly damaged the road network, bridges, power system and other infrastructure.

Pakistan says despite contributing less than 1 percent to carbon emissions worldwide, it is bearing the brunt of global climate disasters. This year, Pakistan recorded its wettest April since 1961, with more than double the usual monthly rainfall.

Yahya said he was in contact with officials at Pakistan’s ministry of climate change, who were preparing their contingency own plans for monsoon season, which in Pakistan runs from July to October.

Earlier this week, weather forecasters in Pakistan urged people to stay indoors as the third heatwave in a month began. A recent study by the United Nations children’s agency said that Pakistan could avert 175,000 deaths by 2030 by developing resilient energy systems to power its health facilities.

On Thursday, temperatures in various parts of Pakistan soared as high as 48 degrees Celsius (118 degrees Fahrenheit), forcing many people to stay indoors. Authorities are asking people to hydrate and avoid unnecessary travel.


Two missing Japanese climbers spotted in Pakistan’s north

Two missing Japanese climbers spotted in Pakistan’s north
Updated 4 min 6 sec ago
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Two missing Japanese climbers spotted in Pakistan’s north

Two missing Japanese climbers spotted in Pakistan’s north
  • Japanese climbers Ryuseki Hiraoka and Atsushi Taguchi were attempting to summit 7,027-meter Spantik mountain in Karakoram range 
  • Pakistan is home to five of the world’s 14 mountains higher than 8,000 meters, including K2, the world’s second highest

SKARDU, Pakistan: Two missing Japanese climbers were spotted by helicopter on Thursday in Pakistan’s mountainous north, home to some of the world’s tallest peaks, but their condition remains unknown, a tour operator said.

The Japanese climbers Ryuseki Hiraoka and Atsushi Taguchi were attempting to summit the 7,027-meter (23,054-foot) Spantik mountain in the Karakoram range before they went missing.

“The rescuers saw the climbers and recognized them by their clothes, but they could not determine their condition,” Naiknam Karim, the CEO of Adventure Tours Pakistan (ATP) which organized the tour, told AFP.

The two were spotted during a military helicopter search on Thursday that was called off due to poor weather conditions.

“There has been no communication between the two Japanese climbers and officials at basecamp since they started their expedition,” Karim earlier said.

“They were seen on June 10 (for the) last time at above 5,000 meters.”

Another team of Japanese climbers raised the alarm on Tuesday after arriving at Camp 2, at around 5,650 meters, where Hiraoka and Taguchi were scheduled to be.

The search is scheduled to resume on Friday.

“An 8-member rescue team including five Japanese climbers will ascent on foot and search for them,” Karim Added.

The pair had reached base camp on June 3 and were attempting the climb without the help of porters.

Spantik, also known as the Golden Peak, is described as a “relatively accessible and straightforward peak” on the website of a separate tourist company, Adventure Tours.

The country is home to five of the world’s 14 mountains higher than 8,000 meters — including K2, the world’s second highest.

More than 8,900 foreigners visited the remote Gilgit-Baltistan region in 2023, according to official figures from the government, where the summer climbing season runs from early June to late August.


‘Elite must pay,’ PM says as Pakistan sets big tax target amid IMF talks

‘Elite must pay,’ PM says as Pakistan sets big tax target amid IMF talks
Updated 13 June 2024
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‘Elite must pay,’ PM says as Pakistan sets big tax target amid IMF talks

‘Elite must pay,’ PM says as Pakistan sets big tax target amid IMF talks
  • Pakistan has to find ways to increase revenues to reduce fiscal deficit as part of reforms being discussed with IMF
  • IMF is demanding fiscal consolidation, broadening tax base, improving tax administration and debt sustainability

Prime Minister Shehbaz Sharif said on Thursday the elite classes of Pakistan needed to pay their share of taxes, a day after the government announced its national budget and set a challenging tax revenue target of 13 trillion rupees ($46.66 billion) for the year starting July 1, a near 40 percent jump from the current year. 

Pakistan has to find ways to increase its revenues to reduce its fiscal deficit as part of reforms being discussed with the IMF, with whom Islamabad is in talks for a bailout of up to $8 billion. The IMF wants Islamabad to carry out gradual fiscal consolidation, broaden its existing tax base and improve tax administration and debt sustainability while protecting the vulnerable.

“During the budget preparation, I made it clear that the elite must pay taxes,” Sharif was quoted as saying in a statement by the PM Office after a meeting on tax reforms, digitization of the economy and measures to increase revenue. 

“We will eliminate tax evaders and those who assist them.”

Calling the national tax watchdog, the Federal Board of Revenue (FBR), the “most pivotal wheel” of the national economy, Sharif said the incumbent government would provide all resources for the uplift and digitalization of FBR’s human resources.

The top priority was to lower the tax rate while increasing the number of taxpayers, Sharif added, reiterating his government’s resolve to impose minimal taxes on the poor and middle class.

“We are prioritizing the complete digitization of the tax system and enhancing the capacity of the workforce,” Sharif said. “We are taking steps to bring eligible taxpayers into the tax net as soon as possible.”

The rise in the tax target in the national budget is made up of a 48 percent increase in direct taxes and 35 percent hike in indirect taxes over revised estimates of the current year. Non-tax revenue, including petroleum levies, is seen increasing by a whopping 64 percent while sales tax would increase to 18 percent on textile and leather products as well as mobile phones. A hike in the tax on capital gains from real estate has also been announced. 

Key objectives for the upcoming fiscal year include bringing the public debt-to-GDP ratio to sustainable levels and prioritizing improvements in Pakistan’s balance of payments position, the government’s budget document shows.

Pakistan has projected a sharp drop in its fiscal deficit for the new financial year to 5.9 percent of GDP, from an upwardly revised estimate of 7.4 percent for the current year. 

On Monday, the central bank warned of possible inflationary effects from the budget, saying limited progress in structural reforms to broaden the tax base meant increased revenue must come from hiking taxes.

The bank, in a bid to boost growth, cut interest rates for the first time in four years on Monday, slashing them by 150 basis points, in the face of a sharp decline in inflation from a high of 38 percent last year to 11.8 percent in May.

GDP would expand 2.4 percent in the current year, missing the budgeted target of 3.5 percent, the government said, despite revenues rising 30 percent on the year, and the fiscal and current account deficits being under control.

The upcoming year’s growth target has been set at 3.6 percent and inflation projected at 12 percent, Aurangzeb said.

With inputs from Reuters


Pakistan seeks US support for ‘favorable’ international financing to fix power sector woes

Pakistan seeks US support for ‘favorable’ international financing to fix power sector woes
Updated 13 June 2024
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Pakistan seeks US support for ‘favorable’ international financing to fix power sector woes

Pakistan seeks US support for ‘favorable’ international financing to fix power sector woes
  • Energy Minister Sardar Leghari meets US delegation led by Assistant Treasury Secretary Brent Neiman
  • “Fan replacement program” being launched for first time in Pakistan to increase energy savings, Leghari says

ISLAMABAD: Pakistan’s Energy Minister Sardar Awaiz Leghari has sought US assistance in securing international financing at “more favorable rates” to fix deficiencies in the South Asian nation’s ailing power sector, a statement from his office said on Thursday.

Restoring the viability of the energy sector is a major demand of the IMF, with which Pakistan is in negotiations for a new bailout loan ranging from $6 billion to $8 billion to avert default in an economy growing at the region’s slowest pace.

The IMF wants Pakistan to prevent further accumulation of circular debt in its power sector arising from subsidies and unpaid bills, and implement reforms to reduce costs by improving electricity transmission and distribution, moving captive power into the grid, improving governance, and combating theft.

Additionally, Pakistan needs to maintain power and gas tariffs at levels that ensure cost recovery, with adjustments made to safeguard the financially vulnerable, through existing progressive tariff structures.

In a report released in January, the IMF said Pakistan had missed its target for power sector arrears, largely due to lower-than-expected recoveries and tariffs.

On Thursday, a delegation from the US treasury department called on the Pakistani power minister and discussed collaborations in the energy sector as well as Islamabad’s reform agenda. 

A statement from Leghari’s office said he told the delegation about “the importance of US support in securing international financing at more favorable rates for Pakistan’s power sector.”

“He expressed the need for US technical assistance to address the gap between seasonal production and demand,” the statement added. 

Leghari informed the US delegation about plans to address the power sector’s deficiencies, adding that the reforms were aimed at improving Pakistan’s energy mix and rectifying other issues. 

The energy minister also informed the US delegation about reforms to increase private sector participation in the distribution and transmission of electricity. T

Discussing debt management, the energy minister also apprised the US team of a “fan replacement program” being launched by Pakistan in a bid to increase energy saving.

“The US Assistant Secretary of Treasury [Brent Neiman] appreciated Pakistan’s power sector reform initiatives and assured all possible cooperation to resolve Pakistan’s power sector problems,” the statement said. 


Pakistan shares close at record high after budget dispels concern over capital gains tax hike

Pakistan shares close at record high after budget dispels concern over capital gains tax hike
Updated 13 June 2024
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Pakistan shares close at record high after budget dispels concern over capital gains tax hike

Pakistan shares close at record high after budget dispels concern over capital gains tax hike
  • Benchmark share index closed up 4.9 percent at 76,338 points after presentation of budget, which looks to raise tax revenue of $47 billion
  • Budget aims to strengthen case for new IMF bailout deal, as Pakistan seeks estimated loan ranging from $6 billion to $8 billion

ISLAMABAD: Pakistan’s benchmark share index made its biggest single-day gain in nearly a year to close at a record high, a day after the government unveiled a budget that cheered investors by avoiding an anticipated increase in capital gains tax, despite an ambitious tax revenue target.

The benchmark share index closed up 4.9 percent at 76,338 points after the presentation of the budget, which looks to raise tax revenue of 13 trillion rupees ($47 billion) for the year starting July 1, up nearly 40 percent from the current year.

“The market was expecting an increase in capital gains tax and so investors had reduced exposure significantly,” said Adnan Sheikh, assistant vice president of Pak Kuwait Investment Co.

A record day was expected following the budget and Monday’s cut of 150 bps in the central bank’s policy rate, as “equities are the best option for the medium term,” said Sheikh.

Pakistan’s international sovereign bonds also rallied with longer-dated maturities seeing the largest gains. The 2036 bond added 1.4 cents — its biggest gain in more than two months — to be bid at just over 77 cents in the dollar, Tradeweb data showed. .

Following a post budget press conference on Thursday, Finance Minister Muhammad Aurangzeb told Reuters that Islamabad plans to raise up to $1 billion through international bonds in the 2025/26 fiscal year, adding that up to $300 million will be raised through Chinese markets.

Apart from the capital gains tax, analysts say the budget and other revenue measures were in line with expectations.

The budget aims to strengthen the case for a new bailout deal from the International Monetary Fund (IMF), as Pakistan seeks an estimated loan ranging from $6 billion to $8 billion, to avert default in an economy growing at the region’s slowest pace.

“We believe this budget will serve as prior action for a new IMF program,” Topline Securities said in a note.

Topline said that if parliament passes the budget in compliance with IMF measures, it expected a forward price to earnings ratio of 6.93 in three years time, for a historic high, from 3.4 now.

Defending the decision to boost tax revenue, Aurangzeb said the present tax-to-GDP ratio of a little under 10 percent was not sustainable.

Key objectives for the upcoming fiscal year include efforts to increase the ratio gradually to 13 percent in the next three years, Aurangzeb told a press conference after presenting the budget in parliament.