Business

Govt unaware of full scope of current economic crisis: Miftah Ismail

Published

2 years ago

Farwa

Miftah says majority of the issues are self-inflicted.
Pakistan’s economic woes are not caused by IMF, former finmin says.
Urges govt to raise minimum wage to match pace of inflation.

Former finance minister Miftah Ismail said that the coalition government is unaware of the full scope of the current economic crises, emphasising that Pakistan has “been facing a crisis persistently,” The News reported Friday.

Miftah — while speaking during a pre-budget discussion at Salim Habib University titled ‘Pakistan’s financial crisis and a way forward’ — said Pakistan’s economic issues were not caused by the International Monetary Fund (IMF), but rather by “the successive leaderships of the country”.

“Pakistan should not be where it is right now; two million shopkeepers pay Rs30,000 in taxes,” he said, warning that more economic issues will arise in the nation, and “we must draw lessons from them”.

‘Majority issues are self-inflicted’

Commenting on the delay in the revival of the IMF programme, he reiterated that Pakistan needs the IMF for the 24th time to avoid default.

Miftah said: “Pakistan was going through a very difficult economic time and the nation does not have the resources to pay its debts.

“We have to go for an IMF programme, if we don’t go, we will default and no one in the world will give us loans,” the former finance minister said.

He said the majority of the issues are, in fact, self-inflicted; however, getting out of the economic spiral will take some time.

Pointing to the lack of revenue, the former finance minister said that the country needed to take new loans to pay the interest on the previous loans.

He added that when a country borrows to retire the previous loans, the debt of that country becomes unsustainable.

Minimum wages must be raised

Regarding the upcoming budget, the former finance minister suggested that minimum wage — which is currently at Rs25,000 — must be raised to keep pace with the exorbitant inflation rate.

“For the past 75 years, 90% of Pakistanis have experienced the effects of inflation; nevertheless, 10% of the middle class and elite today also experience price hikes,” he pointed out.

Pakistan’s inflation, based on the consumer price index, increased to a record high of 36.4% in April from 35.4% in the previous month. The increase in inflation was due to higher food inflation amid currency devaluation.

He noted that Pakistan has a higher inflation rate than India and Bangladesh. “Not all inflationary pressures can be attributed to the increase in prices worldwide,” he said, adding that Pakistan’s policy decisions were flawed.

Highlighting the need for increased provincial competition for better performance, the former finance minister demanded that more federal powers should be transferred to the provinces.

He claimed that because the US adopted this strategy, its states’ economies fared better.

Miftah suggested that a meeting should be held between all the political stakeholders in Pakistan to discuss the best course of action to rescue the nation from this current economic crisis.

Business

The amount of trade between Saudi Arabia and Pakistan hits $700 million.

Published

10 hours ago

Farwa

Through the Special Investment Facilitation Council (SIFC), Pakistan’s trade connections with Saudi Arabia have grown significantly, with bilateral trade volume rising from $546 million to $700 million and exports to the Kingdom growing by 22%.

As bilateral economic cooperation continues to grow, Saudi investors have shown a strong interest in Pakistan’s construction, energy, agricultural, and information technology sectors. The objective for exporting IT services between the two countries has been raised from $50 million to $100 million.

Saudi Arabia has set up a help desk dedicated to making it easier for Pakistani IT companies to register in the Kingdom in order to expedite commercial procedures. The goal of this program is to speed up economic collaborations between the two countries and lower administrative barriers.

The well-known Saudi restaurant chain AlBaik has revealed plans to open locations in Pakistan, which is a big step for the food service industry and should lead to the creation of new job possibilities in the area.

Officials have noted that stronger business links between the two countries lead to greater economic stability, and the SIFC has played a crucial role in promoting these trade advancements. For bilateral trade and investment projects, the Council remains a crucial facilitator.

According to a trade official with knowledge of the developments, “the establishment of dedicated support mechanisms, such as the help desk for IT companies, demonstrates a commitment to long-term economic partnership,” The goal of these programs is to improve the conditions for commercial collaboration between the two nations.

The increasing amount of trade and the diversity of investment sectors show that Saudi Arabia and Pakistan’s economic ties are changing as both countries seek to deepen their business alliances in a number of industries.

Business

After more than 50 years, Bangladesh and Pakistan resume direct trade.

Published

10 hours ago

Farwa

After more than 50 years, the two governments will resume direct bilateral trade, with Bangladesh’s food ministry announcing Sunday that it will receive a supply of 25,000 tonnes of rice from Pakistan next month.

After former Prime Minister Sheikh Hasina was overthrown last August, relations between Bangladesh and Pakistan have begun to improve after decades of tense relations.

Since then, there have been increased bilateral interactions between Bangladesh and Pakistan. Nobel laureate Muhammad Yunus, the interim government’s senior adviser, has met twice with Pakistani Prime Minister Shehbaz Sharif.

According to the food ministry, Dhaka completed an agreement earlier this month to import grains from Pakistan.

“On March 3, the first shipment of 25,000 tonnes will reach Bangladesh,” Zia Uddin Ahmed, a ministry assistant secretary, told Arab News.

“This is the first time that Bangladesh has started importing rice from Pakistan at the government-to-government level since 1971.”

Following direct maritime contact between the two South Asian countries in November—a Pakistani cargo ship stopped in Bangladesh for the first time since 1971 with imports and exports arranged by private companies—their trade relations grew.

Resuming trade with Pakistan is a significant step for Bangladesh, according to Amena Mohsin, a lecturer at North South University and a specialist in international relations.

“We want to see progress in our bilateral relationship with Pakistan. Most significantly, we are currently going through a low point dispute with India, even though we constantly diversify our partnerships.

This most recent move to purchase rice from Pakistan is really significant in this context,” she told Arab News.

Business

The total amount of Pakistan’s liquid foreign reserves is $15.95 billion.

Published

3 days ago

Farwa

As of February 14, Pakistan’s total liquid foreign reserves were $15,947.9 million, with the State Bank of Pakistan’s (SBP) holdings being $11,201.5 million.

Official figures for the week ending February 14, 2025, show that the central bank’s liquid foreign exchange reserves rose by $35 million to $11,201.5 million.

Commercial banks maintained net foreign reserves of $4,746.4 million during the period under review, according to the breakdown of foreign reserves.

The nation’s total liquid foreign reserves as of the week ending February 07, 2025, were $15,862.6 million.

Of these, the central bank held $11,166.6 million in foreign reserves, while commercial banks kept $4,696 million in net reserves.