Business

IMF ‘not interested’ in releasing loan money to Pakistan: Miftah Ismail

Published

2 years ago

Farwa

Ishaq Dar has “sabotaged IMF agreement”, says ex-finance czar.
Miftah Ismail also claims IMF doesn’t trust Pakistan now.
“If Pakistan defaults it will be a grave situation.”

As Pakistan continues to woo the International Monetary Fund (IMF) to secure the much-needed bailout from the global lender, former finance minister Miftah Ismail claimed that the Washington-based lender is “not interested” in giving money to the cash-strapped nation.

Pakistan is now the only South Asian country that’s yet to secure a bailout from the multilateral lender as Sri Lanka clinched financing this week and Bangladesh pushes on with carrying out IMF-mandated reforms.

Pakistan has taken tough measures including increasing taxes and energy prices, and allowing its currency to weaken to restart a $6.5 billion IMF loan package. The funds will offer some relief to a nation still reeling from a dollar shortage that has raised the probability of the economy slipping into a recession ahead of elections this year.

Pakistan Muslim League-Nawaz (PML-N) leader Miftah, while speaking during a session titled ‘Pakistan in the midst of crisis’ organised by a private university in Karachi, said that when he was heading the Ministry of Finance, he spoke to the IMF officials and assured them that Pakistan would not make false statements or violate the agreement; however, when Ishar Dar was sworn in “he sabotaged the agreement”.

He recalled that Pakistan has three times made sovereign commitments and has then gone back on them.

“Now the IMF is not interested in giving money to Pakistan,” he said, emphasising that the Washington-based lender doesn’t trust the government in Islamabad.

‘Petrol subsidy formula not effective’

Regarding the petrol relief subsidy announced by the government on Sunday, Miftah said that he believes this formula would not be effective.

“We provide subsidies on petrol by taking loans,” he said. Since the government announced the petroleum subsidy — which initially amounted to Rs50 per litre amount and was later increased to Rs100 per litre — several red flags were raised as analysts and economic experts have been criticising the move as it may jeopardise the ongoing struggle to convince the IMF board.

IMF’s resident representative for Pakistan Esther Perez Ruiz had also clarified that said the Washington-based lender wasn’t consulted on the government’s plan to raise fuel prices for wealthier motorists to finance a subsidy for lower-income people.

“Fund staff are seeking greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities,” she said.

This is not the first time petrol price subsidies have been a sticking point for the IMF. The previous government led by former premier Imran Khan had given out petrol subsidies, which stalled the IMF programme last year.

Warning of the risks, Miftah mentioned that if Pakistan defaults it will be a grave situation for the country as people belonging to the rich segment will bear the brunt but the poor people won’t be able to make ends meet.

Business

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

Published

16 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

16 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

4 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.