Iranian President Dr Ebrahim Raisi said a key decision to increase bilateral trade volume to $10 billion has been reached as he addressed a high-profile joint press conference with Pakistan Prime Minister Shehbaz Sharif in Islamabad on Monday.

“In our meeting today, we (have) decided to promote bilateral relations between the two countries including political, economical, trade, cultural and others as far as possible,” said Raisi who arrived in Pakistan earlier during the day amid stringent security measures.

“You will probably find some individuals who do not favour expansion and good bilateral relations between us but who cares – it is not important. We believe it is important to expand relations between our countries,” added the Iranian president.

“We have decided as a first step to increase trade volume between our two countries to $10 billion.”

The two sides – which currently have bilateral trade of over $2 billion – also held a meeting earlier, and agreed on joint efforts to eradicate terrorism.

“The entire Pakistani nation welcomes the visit of the Iranian President,” Radio Pakistan quoted the PM as saying.

In his address, PM Shehbaz said that the two sides discussed religious, security and historic matters during their meeting.

“Today is an opportunity to make this friendship a happy and prosperous one.”

Pakistan, Iran sign eight accords

Meanwhile, Pakistan and Iran signed eight accords on varying subjects to enhance cooperation in the different fields including trade, science technology, agriculture, health, culture, and judicial matters.

PM Shehbaz and President Raisi witnessed the ceremony as the representatives from both sides signed the documents, state-run APP reported earlier.

The Iranian president’s visit comes at a significant time especially in terms of rising tension in the region amid the Israeli aggression in Gaza, its attack on the Iranian consulate, and Iran’s subsequent retaliation followed by strikes on its territory.

With terrorism incidents also on the rise in Pakistan, Raisi arrived in Pakistan on a three-day official visit – amid stringent security measures – accompanied by his spouse and a high-level delegation, comprising the foreign minister and other members of the cabinet, senior officials and a business delegation.

He was received by Federal Minister Riaz Hussain Pirzada.

The Iranian president then arrived at the Prime Minister’s House where he was received by PM Shehbaz. He was also presented with a guard of honour.

This is the first visit by any head of state to Pakistan after the February 8 general elections.

The leader’s visit comes after Tehran launched an unprecedented retaliatory attack on Israel last week.

Iran’s supreme leader Ayatollah Ali Khamenei praised the country’s armed forces for their “success in recent events”.

“The armed forces showed a good image of their abilities and power and an admirable image of the Iranian nation,” Khamenei said.

“They also proved the emergence of the power of the Iranian nation’s determination at the international level.”

Meanwhile, a statement issued by the Foreign Office (FO) had said Raisi will meet President Asif Ali Zardari, Senate Chairman Yousaf Raza Gillani and National Assembly Speaker Ayaz Sadiq.

“He will also visit Lahore and Karachi and meet with the provincial leadership,” it added.

“The two sides will have a wide-ranging agenda to further strengthen Pakistan-Iran ties and enhance cooperation in diverse fields including trade, connectivity, energy, agriculture, and people-to-people contacts,” the FO said.

“They will also discuss regional and global developments and bilateral cooperation to combat the common threat of terrorism,” it added.

“Pakistan and Iran enjoy strong bilateral ties anchored in history, culture and religion. This visit provides an important opportunity to further strengthen Pakistan-Iran relations,” the FO concluded.

The visit also comes months after Iran launched attacks in Pakistan targeting what it described as bases for the militant group Jaish al-Adl in the border town of Panjgur in Balochistan, prompting strong condemnation from Islamabad and downgrading of diplomatic ties.

Iran missile strikes: Pakistan recalls envoy

Less than 48 hours later, Pakistan struck terrorist hideouts in Iran’s Sistan-Baluchestan province. Reacting to the strikes, Iran had stressed that it would not allow its enemies to strain its “amicable and brotherly relations” with Islamabad.

The situation and bilateral ties, however, soon normalised with both countries resuming diplomatic engagement.

However, a thorny issue between the two sides remains the incomplete portion on Pakistani side of the Iran-Pakistan gas pipeline, which Islamabad says is subject to Washington’s agreement due to sanctions on Iranian entities.

Public holiday announced

A public holiday was announced in Karachi Division on Tuesday (tomorrow) in view of the “visit of foreign dignitaries and to avoid inconvenience to the general public”.

As per a notification issued from the Commissioner Karachi office, all government and private offices, educational institutions (public/private), would remain closed on Tuesday except the essential services and officials involved in emergency duties.

KARACHI: Petroleum dealers in Pakistan have warned of shutting down business as the government is reportedly working to deregulate petroleum products’ prices.

In a statement, Pakistan Petroleum Dealers Association (PPDA) Chairman Abdul Sami Khan rejected the likely move, saying that it will result in hiked prices of petroleum products in far-flung areas.

According to the PPDA chief, the move to deregulate petroleum prices will bring skyrocketing inflation in the country.

Khan said that the petroleum dealers have been urging against the move for years and the government has also promised that it will not take such a measure.

However, the PPDA chairman said that despite the promise, the government has asked for recommendations from the ECC regarding the potential plan.

Khan claimed that the government, by such a move, was attempting to save itself from criticism of the people.

Days earlier, the Oil Tankers Owners Association announced that fuel supply would remain suspended from April 16 against what it called an ‘injustice’ measurement by the authorities concerned.

The association said that it would not be supplying petroleum products in Gilgit Baltistan, Rawalpindi, Islamabad and Azad Jammu and Kashmir, and even at all airports across the country.

ISLAMABAD: The International Monetary Fund (IMF) has not yet included Pakistan on the agenda of its executive board meetings scheduled till May 1.

According to the Fund website, the IMF issued the schedule of the executive board meeting set to be held on April 29 and May 1, but a review under the $ 3 billion stand-by arrangement (SBA) programme with Pakistan is not on the agenda.

Pakistan aims to agree outline of new IMF loan in May: Aurangzeb

Pakistan is hoping the approval from the executive board which would pave the way for the country to receive funds of around $1.1 billion as its final tranche of the $3-billion SBA signed last year in June 2023.

Copyright Business Recorder, 2024

DERA ISMAIL KHAN: Unknown gunmen killed two customs officers in western Pakistan, officials said on Sunday, following the killing of five other customs officials in the area in recent days.

No group has claimed responsibility for the two attacks since Thursday, which police said they were investigating. Security in regions of Pakistan bordering Afghanistan has deteriorated in recent years.

Pakistan has experienced an increase in attacks, mostly targeting police, and security officials.

“Customs officials were present for checks when unknown persons opened fire,” said the district deputy superintendent of police, Muhammad Adnan, adding that two people were injured and the area on a busy highway had been cordoned off.

“Three days ago, five officials, including an officer, of the customs department, were killed in a shooting in the same area and the attackers escaped,” he said.

Five Japanese escape unhurt in Karachi suicide blast attack

The rise in attacks has escalated tensions between Pakistan and Afghanistan’s ruling Taliban administration. Pakistan, saying militants have been using Afghan territory to launch attacks, has called on the Taliban to take action and carried out an airstrike last month on Afghan territory.

The Taliban have denied allowing the use of Afghan soil for militancy and said Pakistan’s security issues are a domestic issue for Islamabad.

Pakistan carries out anti-terrorist operations inside Afghanistan, confirms FO

Last month, Pakistan carried out intelligence-based anti-terrorist operations inside Afghanistan in response to multiple terrorist attacks in Pakistan which caused the deaths of hundreds of civilians and law enforcement officials.

This is apropos a letter to the Editor by this writer carried by the newspaper yesterday. Assuming this theory holds true, let’s consider the potential benefits for the United States, Saudi Arabia, and Pakistan, as well as the broader impact on the Middle East under these circumstances.

By leveraging Pakistan’s diplomatic influence, the US could advance dialogue with Iran to potentially de-escalate tensions in the region, achieve guarantees from Iran in lieu of restraining from imposing further economic and financial sanction on Iran to preserve the safety of the world supply chain, prevent Iran from using its proxies to escalate tension in the Middle East and protect Israeli interests in the region.

Saudi Arabia may view Pakistan’s diplomatic interlocution as an opportunity to mitigate regional tensions and foster stability in the Gulf, obtain guarantees of cessation of attacks by the Houthis in the Red Sea to ensure uninterrupted supply of its petroleum products, the mainstay of its economy, and prevent spread Israel-Hamas-Iran stand off to other parts of the Middle East which could have disastrous consequence for the entire Middle East and the world peace.

For Pakistan, acting as a mediator between the US, KSA and Iran carries significant diplomatic and economic advantages. It could enhance Pakistan’s regional influence and reinforce its position as a key player in Middle Eastern affairs. Moreover, attracting substantial investments from Saudi Arabia would bolster Pakistan’s economy and contribute to its long-term development goals. Reducing tensions between KSA and Iran and Iran and USA will pave the way for broader cooperation and confidence-building measures in the Middle East. It would enhance the diplomatic status of Pakistan which in the long run would help it to improve its financial and economic outlook.

If Pakistan effectively contributes to regional diplomacy and helps de-escalate tensions in the region and continue its policy of hand off from Israel-Hamas-Iran staff off, and succeeds in establishing a viable and sustainable communication channel between Saudi Arabia and Iran, the United States could be more inclined to support the release of the outstanding $1.1 billion tranche under Pakistan’s existing Stand-By Arrangement (SBA) with the IMF and could pave the way for the approval of a new three-year IMF programme for Pakistan.

Above all, this will open the door for Saudi investment in Pakistan. The US might turn a blind eye as Pakistan and Iran finally complete the long-awaited gas pipeline, allow affordable power and oil to flow from Iran, facilitate the next rollover of Saudi and UAE deposits, and allow the IMF to enter into a long-term agreement with Pakistan.

Should this theory prove to be accurate, Pakistan is pursuing innovative and unorthodox diplomatic strategies during a global period marked by a convoluted geopolitical terrain.

Pakistan’s success in this creative and inventive diplomacy will be beneficial in a variety of ways. Pakistan will be able to overcome its diplomatic isolation and regain relevance by managing the most delicate and sensitive diplomatic maneuvering in the globe. It would ensure better possibilities for peace in the Middle East and smooth, risk-free exports of Saudi Arabia’s oil products. If this diplomatic move is successful, there is a greater chance that Israel and Hamas would reach a peace agreement, which would provide the Palestinian people some relief.

Qamar Bashir

Copyright Business Recorder, 2024

The unveiling of SIFC (Special Investment Facilitation Council) marks the Government of Pakistan’s comprehensive ‘Economic Revival Plan’ in response to the economic challenges faced by the country.

The SIFC was established as a “Single Window interface” to expedite project development and implement a consistent strategy for potential investors.

A comprehensive and inclusive approach was implemented to promote collaboration between the federal and provincial governments for efficient development and execution. This approach prioritized investors and expedited approvals through a well-coordinated process.

The active involvement of both the Federal and Provincial Governments demonstrates the strong determination of the country to revive the economy. Syed Asim Munir, the Chief of the Army Staff, affirmed the Pakistan Army’s unwavering support to complement the Government’s Economic Revival Plan, which is seen as crucial for the socio-economic well-being of Pakistanis and the restoration of Pakistan’s rightful position among the international community.

By engaging in partnerships and cooperation with diverse sectors of the economy, particularly agriculture, minerals and mining, information technology (IT), energy, and defense production, SIFC has played a pivotal role in facilitating the identification of investment prospects, tackling obstacles, and fostering a favorable climate for investment and economic advancement in Pakistan. The primary objective of this council is to make a meaningful contribution towards the economic revitalization of the country. By functioning as a unified platform for both domestic and international investors, it effectively reduces the intricacies and time constraints associated with corporate procedures.

The primary objective of the SIFC is to attract investment from amicable nations, with the immediate aim of augmenting FDI to US $5 billion and reaching US $100 billion within three years. Additionally, the SIFC aims to attain a nominal GDP of US $1 trillion by the year 2035. As of now, SIFC has decided to allocate resources for a minimum of twenty initiatives. The platform is currently exploring Pakistan’s potential in many industries, resources, and portfolios. Extensive research is currently being conducted to ascertain the feasibility of mining rare earth minerals in the northwest and northern regions of the country.

Several projects have been identified for the acceleration of the process. These projects include a large number of national and international contracts with oil refinery companies, energy sectors, coal and mining companies, hydropower projects, cloud-based infrastructures, solar project installation, and advanced telecomfacilities. Significant progress has been achieved in various domains, including the delayed Reko Diq initiative, enhancing the efficacy of Distribution Companies (DISCOs), and leading to the privatization of national carrier PIA.

The SIFC has rapidly positioned itself as a proponent for Pakistan’s security, stability, and development on the global stage. This exemplifies the concerted efforts of the civil-military complex to collaborate. A few days ago, Prince Mohammed bin Salman announced plans to bring 25 billion dollars to Pakistan through SIFC, marking the council’s finest accomplishment. Furthermore, Saudi Arabia will make a substantial investment of up to one billion dollars in the Reko Diq Copper Gold project.

Pakistan has entered into a bilateral deal worth $200 million with a Chinese company to facilitate the transition of a thermal power plant to solar energy. The agreement, facilitated by SIFC, aims to enhance the capacity of an existing thermal power plant by converting it into a 300-megawatt solar power facility. Furthermore, Shanghai Electric is interested in the mining sector of Pakistan. The implementation of this strategic maneuver could have substantial benefits for energy generation and economic development. Pakistan possesses essential minerals that play a crucial role in the worldwide energy transition and have the potential to attract investors throughout the whole mining process.

BYD, a prominent electric car manufacturer in China, has expressed its intention to invest in Pakistan for the production of advanced electric vehicles, in collaboration with Mega Conglomerate Private Limited. This development is consistent with Pakistan’s endeavors to mitigate carbon emissions and encourage the adoption of energy efficient modes of transportation. The investment made by BYD is indicative of the endeavors undertaken by the SIFC to attract foreign investors. In addition, Pakistan and China have reached an agreement to form a Working Group (WG) dedicated to five new economic corridors as a component of the second phase of the CPEC. The WG will concentrate on key sectors such as job generation, innovation, sustainable energy, and regional progress. The SIFC is currently engaging in efforts to eliminate barriers in this context.

Significantly, the ‘Semiconductor Industry Development Plan’ is being implemented by SIFC to attract billions of dollars in investment to the country. The project’s primary objective is to concentrate on the design of semiconductors, which would create more opportunities for Pakistan. With a plentiful and highly skilled workforce, Pakistan has the potential to attract a trillion-dollar industry on a worldwide scale. Pakistan has the potential to become the leading location for the manufacturing and testing semiconductor sector, following the success of the design.

SIFC is actively engaged in harnessing Pakistan’s vast natural resources. The objective is to expedite the establishment of a federal Mines and Minerals Division to rejuvenate the mining sector through the implementation of standardized rules and regulations nationwide. The Pakistan Mineral Development firm has just entered into a formal arrangement with an American firm to facilitate the exportation of pink salt. This development represents a notable advancement in the utilization of Pakistan’s plentiful mineral resources for the sake of international trade and commerce.

More importantly, the SIFC is implementing proactive measures to tackle Pakistan’s educational obstacles and harmonize its system with global benchmarks. As of now, there are more than 26.2 million children who are not attending school, and 40% of those under the age of 10 do not have access to education. The need for immediate action is evident, as emphasized by the most recent Annual Status of Education Report (ASER-2023), which emphasizes the urgent requirement for high-quality education in Pakistan. SIFC is actively engaged in close collaboration with both federal and provincial governments to implement educational policy reforms and address the existing disparities.

One of the primary projects undertaken by SIFC entails the establishment of technical and vocational training institutes, in addition to the improvement of fundamental educational standards. The primary objective of these endeavors is to enhance the caliber of Pakistan’s labor force at a global level, while simultaneously making significant contributions to the worldwide labor market. Pakistan and China are engaged in a collaborative effort to augment technical vocational training.

It is crucial to acknowledge that SIFC has emerged as a potent catalyst, purposefully engineered to enhance investor confidence and accelerate the implementation of crucial projects. Moreover, SIFC assumes a pivotal function in attracting investors to Pakistan. A visa service has been implemented by the SIFC, which confers advantages to both investors and enterprises. Through financial investments, this service intends to aid international entrepreneurs who desire to establish operations in the country. Moreover, its objective is to generate prospects fordigital transformation.

The first IT and ITeS export strategy of Pakistan was developed through a collaborative effort between the Pakistan Software Export Board, which operates under the Ministry of IT and Telecommunication, PricewaterhouseCoopers (PwC), and many international partners, including faculty members from the University of Oxford. The objective of this strategy is to enhance Pakistan’s knowledge technology exports to a value of $10 billion over the next three years. This statement is the overarching objective of the SIFC, which seeks to attain economic stability and foster the attraction of foreign investment.

SIFC has accomplished thirteen out of the fifteen objectives established throughout the preceding eight-month period, thereby contributing to the advancement of the information technology sector and the augmentation of exports. SIFC has shown remarkable efficacy in efficiently achieving its objectives. The objective is to have faith in the procedure and consistently offer assistance to the corporation by establishing a business-friendly atmosphere devoid of corruption.

The Council has been in operation for over a year and has garnered interest from investors at both local and global levels. The execution of many agreements with both domestic and foreign investors, valued at hundreds of millions of dollars, signifies a revitalized confidence in Pakistan’s capacity to attract and enhance domestic and global investment opportunities.

Copyright Business Recorder, 2024

ISLAMABAD: The Foreign Office on Friday expressed the government of Pakistan’s resolve to bring the perpetrators of the Landhi suicide terror attack to justice in which two Pakistani nationals lost their lives while five Japanese nationals remained unhurt.

“Two Pakistani nationals were killed in a terrorist attack in Karachi’s Landhi area. Five Japanese nationals remained unhurt during the attack.

Timely action by law enforcement agencies resulted in the death of two terrorists,” the Foreign Office said in a statement.

It stated that the government of Pakistan strongly condemns this heinous act of terrorism. “All necessary measures will be taken to bring the perpetrators to justice. Such dastardly acts only strengthen the resolve of the government and the people of Pakistan to eliminate the scourge of terrorism,” the Foreign Office resolved.

It added that Pakistan remains committed to ensuring the safety of foreign nationals residing in the country. “We will continue to work with our international partners to fight terrorism in all its forms and manifestations,” it further stated.

Copyright Business Recorder, 2024

ISLAMABAD: Pakistan on Friday regretted the United States’ decision to veto a UN Security Council’s resolution, seeking full membership of the United Nations for the State of Palestine and also expressed its “deep” disappointment over the Council’s inability to evolve a consensus on the resolution.

Speaking at her weekly news briefing, Foreign Office spokesperson Mumtaz Zahra Baloch voiced Pakistan’s strong support to the full UN membership for the Palestinian State, besides sharing Pakistan’s deep disappointment over the failure of the UN Security Council to evolve consensus on the resolution which was vetoed by the United States on Thursday.

“Pakistan is deeply disappointed at the result of last night’s debate at the United Nations Security Council and its inability to reach consensus and recommend Palestine’s membership of the UN to the General Assembly. We regret the US decision to veto the draft resolution granting full membership of the UN to Palestine,” she said.

She said that Pakistan believes the time has come for the admission of Palestine to the United Nations, which will be a step towards correcting the historic injustice suffered by the Palestinian people for over 75 years.

She added that it would also affirm their right to self-determination, adding that the people of Palestine have an inherent right to live in a sovereign, independent, and contiguous Palestinian State within the 4 June 1967 borders and with Al-Quds Al-Shareef as its capital.

The US, on Thursday, vetoed a widely supported resolution at the UN Security Council that would have paved the way for the state of Palestine to gain full membership at the United Nations. The vote in the 15-member Security Council was 12 in favour, including France, Japan, and South Korea. The US opposed it, while the United Kingdom and Switzerland abstained.

Responding to a query about the forthcoming OIC Summit being held from May 4-5 in Zambia, she said that the summit would consider several proposals including those on Palestine, Jammu and Kashmir as well as Islamophobia.

When her response was sought on the reported Israeli attack allegedly inside Iran, she said that they are still assessing the situation based on the media reports. “We’ve seen media reports and are still assessing the situation. We would comment when there are more details,” she said.

She added that Pakistan is naturally concerned over any escalation in the region and for months, Pakistan has underlined the urgency of international efforts for preventing expansion of hostilities in the region and for a ceasefire in Gaza.

“Instead of showing restraint and upholding international law. Israel has brazenly continued with its blatant violation of international law. The irresponsible and reckless Israeli attack on Iranian consulate on the first of April has further vitiated security in an already volatile region,” she said.

She also reiterated Pakistan’s call on the UN Security Council to prevent Israel from its adventurism in the region and to hold it to account for its violations of international law. “The council should actively contribute to efforts for restoring and maintaining international peace and security,” she added.

Asked about an update on Iranian President Ebrahim Raisi’s forthcoming visit, she said that Pakistan is looking forward to receive its “honoured” guest, the President of the Islamic Republic of Iran. “We will be making official announcement regarding the dates of the visit soon,” she added.

Commenting on the high-level Saudi delegation’s visit earlier this week, she said that the purpose of the ministerial delegation led by Foreign Minister Faisal bin Farhan was to accelerate discussions on enhanced bilateral economic cooperation.

At the “Saudi Arabia-Pakistan Investment Conference” co-chaired by foreign ministers of the two countries, she added that the two sides discussed investment proposals in diverse sectors such as energy, mining, agriculture, information technology, construction, human resource development, and exports.

She stated that on the proposals put forward by Pakistan, both sides are positively reviewing. “We hope that the negotiations on these investment projects will be completed soon and we will have good news with respect to Pakistan-Saudi economic ties,” she said, adding that Pakistan will continue constructive engagement with the Kingdom to enhance its economic and strategic partnership.

On the suicide attack on Japanese nationals in Karachi earlier in the day, she said that the attack was effectively repulsed due to the timely action of the police. “Pakistan will not rest until terrorism is eliminated,” she added.

Describing the recent statement of the Indian Minister for External Affairs as unfortunate, the spokesperson said the Indian leaders are engaged in a belligerent rhetoric in complete disregard of international law and diplomatic norms. “These reckless statements should be avoided as these threaten regional peace and security,” she said, adding that the diplomat should not advocate unlawful actions.

She categorically stated that Pakistan is fully prepared to respond to Indian provocations and irresponsible behaviour, adding that Pakistan has always acted responsibly despite their repeated provocations.

To another query, she said that Pakistani authorities are considering all aspects of the Illegal Foreigners Repatriation Plan and there are no plans to repatriate the Afghan Citizen Card (ACC) holders.

Copyright Business Recorder, 2024

ISLAMABAD: Pakistan has to bring and strictly implement broad-based structural reforms in the energy sector to get rid of the vicious cycle of circular debt, unaccounted for gas (UFG), lines/distribution losses, and capacity payments-related issues.

This was the crux of a seminar titled, “The Pakistan Energy Conundrum” organised by the Pakistan Institute of Development Economics (PIDE), here on Friday.

Moreover, wrong policy choices have resulted in high dependency on imported energy making up subject to external price shocks, poor state of energy infrastructure such that we cannot deliver what we can produce and low utilisation of investment made when we are a capital-starved country.

The energy system operates in Pakistan with significant flaws, particularly in the power sector. Despite the introduction of private sector involvement, it often remains under the control of state monopolies.

Policy formation for energy addition is deeply flawed, with political pressures often overriding rational decision-making. Governments failed to enforce cost recovery for power and gas, burdening consumers with higher costs.

Addressing the seminar as the only speaker, former Special Assistant to Prime Minister (SPAM) on Petroleum Nadeem Babar said that Pakistan’s energy sector was facing a series of issues and the government needs to address these issues once and for all as these problems are hampering the economic development of the country.

He said that one of the key problems of the energy sector wasthe power sector capacity payments which according to the National Electric Power Regulatory Authroity (Nepra) as of July 14, 2023, stands at Rs 1,954 billion, of which, Rs 692 billion coal-based power plants, Rs 443 billion nuclear power plants, Rs 282 hydel power plants, Rs 185 billion RNLG-based power plants, Rs 175 billion wind power plants, Rs 65 billion furnace oil power plants and Rs 112 billion solar/gas power plants.

The circular debt issue has made the energy sector business model sector unsustainable and necessitated the introduction of much-delayed reforms, as the International Monetary Fund (IMF) has also been calling to solve the issue. According to the Nepra, the figures for the current fiscal year 2023-24 for power price and capacity payments are Rs 1,048 billion and Rs 2,112, which translate into 33 percent and 67 percent respectively.

However, the total price stood at Rs 1,251 billion against the capacity payments of Rs 1,321 billion in fiscal year 2023. In fiscal year 2022, the price and the capacity payments were Rs 1,430 billion and Rs 971 billion respectively, while the figures for 2021 remained at Rs678 billion and Rs 856 billion. When it comes to 2020, the price of power generation remained at Rs 621 billion against the capacity payments of Rs856 billion. As far as the solution is concerned, Nepra has recommended that measures should be taken to increase power use and shut down obsolete power plants.

The energy revenue collected falls short of covering the cost of delivery, leading to a cycle of circular debt. This debt is periodically retired through bank borrowing, further increasing the cost of delivering services. To compensate, consumer tariffs for power and gas are raised, exacerbating issues like demand reduction and increased leakages in the system.

In many cases, state entities monopolise the energy sector, lacking competitive pressures and allowing inefficiencies malpractices to drive up costs. When costs are not fully recovered, subsidies required, leading to circular debt as state-owned enterprises borrow against government guarantees.

Poor policy choices have resulted in heavy dependence on imports, vulnerability to external price shocks, inadequate infrastructure, and underutilization of investments in a capital-starved country. Government actions and regulations often treat symptoms rather than address root causes, and overregulation alienates potential capital providers.

With no enforcement of government writ, non-payment of bills has become an entitlement in many parts of the country. The modus operandi of government and regulators has been a treatment of symptoms rather than causes.

Interest groups, mafias, and elites extract subsidies from the government, further raising costs for consumers. Despite these challenges, the true reasons behind the high cost of providing energy are often obscured by populist rhetoric. When the cost is not fully recovered, the subsidy has to be funded in the budget. Rather than funding it, the issue a guarantee and SOEs borrow under it, thereby creating Circular Debt distributed across multiple balance sheets.

The State entities are monopolies in most cases (DISCOs), NTDC, Sui Companies, LNG; with no competitive pressure, the burden of inefficiencies, losses, and malpractices become part of the approved “Cost”. The country was spending $20 billion on the imports of petroleum products, liquefied natural gas (LNG), liquefied petroleum gas (LPG), and coal-like products.

He said in 2020 when global crude oil prices touched the lowest level of $ 20 per barrel, he repeatedly requested the authorities to allow the hedging of crude oil for three years, had the cabinet okayed the move, Pakistan would have saved billions of dollars in import bills.

He said that the LNG import deal Pakistan signed with Qatar is even today the cheapest in the world but those who signed it were punished in Pakistan for benefiting the country. He said that the power sector circular debt stands at around Rs 2.6 trillion and in the books of different entities, total receivables are Rs 1.8 trillion while in reality hardly Rs 300 billion are recoverable and the rest of the amount the government has to write off as it is impossible to recover.

During another seminar, the participants were informed that Pakistan faces unprecedented stresses on its water resources from inequitable distribution, population growth, urbanisation, and shifts in production and consumption patterns, and these water problems exacerbate local tensions.

Pakistan is facing a serious water crisis. The country is rapidly moving from being classified as water “stressed” to water “scarce”—and with its annual water availability falling below 1,000 cubic metres per person, it may in fact have already crossed this threshold. With water availability per person declining year by year, and demand for food production continuously increasing, Pakistan faces not only a water crisis but also serious concerns regarding its future food security.

This situation also has clear implications for the government's efforts to become an upper middle income country by 2025 and achieve long-term peace and security. When climate change and its implications for Pakistan’s water resources are discussed, the conversation normally revolves around the expected decline in water flow in the Indus River basin as the glaciers of the Hindu Kush-Karakorum-Himalaya mountains retreat and are lost.

This concern is understandable given that snow and ice melt runoff currently generates between 50 and 80 per cent of average water flows in the Indus River basin. And there is in fact some evidence that the amount of water flowing into the Indus River basin has declined in recent years.

Pakistan, a semi-arid region and primarily agricultural economy is facing declining water availability and quality, growing water pollution and overall environmental insecurity. This situation, coupled with institutional, operational, and governance failures, is fostering domestic discord.

Copyright Business Recorder, 2024

WASHINGTON: Pakistan hopes to agree the contours of a new International Monetary Fund loan in May, Finance Minister Muhammad Aurangzeb told Reuters, and has kicked off talks with ratings agencies to lay the groundwork for a return to international debt markets.

The country’s current $3 billion arrangement with the fund runs out in late April and the government is seeking a longer and bigger loan to help bring permanence to macroeconomic stability as well as an umbrella under which the country can execute much needed structural reforms, the minister said.

“We expect the IMF mission to be in Islamabad around the middle of May - and that is when some of these contours will start developing,” said Aurangzeb, who met with the Fund’s Managing Director Kristalina Georgieva on Wednesday during the International Monetary Fund and World Bank Spring Meetings.

Aurangzeb expects to avoid wild rupee devaluation as govt engages IMF: report

He declined to outline what size programme the government hoped to secure, though Pakistan is expected to seek at least $6 billion. Aurangzeb added that once the IMF loan was agreed, Pakistan would also request additional financing from the Fund under the Resilience and Sustainability Trust.

The struggling South Asian nation had managed to accumulate foreign exchange reserves in recent months and was on track for its war chest to hit $10 billion - or roughly two months import cover - by end-June.

The debt situation also looked more benign, Aurangzeb said.

“The bulk of our bilateral debt - including our China debt - is being rolled over, so in that sense I think we are in good shape and I don’t see a big issue during this fiscal year nor next fiscal year, cause we need to repay roughly $25 billion dollars every fiscal year.”

Pakistan also hopes to come back to international capital markets, possibly with green bond. However, there was some more work to be done before that happens, said Aurangzeb.

“We have to come back into a certain ratings environment,” he said, having kicked off talks with ratings agencies, adding the government was hoping to get an improvement in its sovereign rating in the next fiscal year.

“In all likelihood, any international capital markets issuance will likely be in the 2025/2026 fiscal year.”

WASHINGTON: Pakistan hopes to agree the contours of a new International Monetary Fund loan in May, Finance Minister Muhammad Aurangzeb told Reuters, and has kicked off talks with ratings agencies to lay the groundwork for a return to international debt markets.

The country’s current $3-billion Stand-By Arrangement (SBA) with the fund runs out in late April and the government is seeking a longer and bigger loan to help bring permanence to macroeconomic stability as well as an umbrella under which the country can execute much needed structural reforms, the minister said.

“We expect the IMF mission to be in Islamabad around the middle of May - and that is when some of these contours will start developing,” said Aurangzeb, who met with the Fund’s Managing Director Kristalina Georgieva on Wednesday during the International Monetary Fund and World Bank Spring Meetings.

Pakistan hopes for Moody’s rating upgrade as economic indicators improve

He declined to outline what size programme the government hoped to secure, though Pakistan is expected to seek at least $6 billion.

Aurangzeb added that once the IMF loan was agreed, Pakistan would also request additional financing from the Fund under the Resilience and Sustainability Trust.

The struggling South Asian nation had managed to accumulate foreign exchange reserves in recent months and was on track for its war chest to hit $10 billion - or roughly two months import cover - by end-June.

Aurangzeb expects to avoid wild rupee devaluation as govt engages IMF: report

The debt situation also looked more benign, Aurangzeb said.

“The bulk of our bilateral debt - including our China debt - is being rolled over, so in that sense I think we are in good shape and I don’t see a big issue during this fiscal year nor next fiscal year, cause we need to repay roughly $25 billion dollars every fiscal year.”

Pakistan also hopes to come back to international capital markets, possibly with a green bond.

However, there was some more work to be done before that happens, said Aurangzeb.

“We have to come back into a certain ratings environment,” he said, having kicked off talks with ratings agencies, adding the government was hoping to get an improvement in its sovereign rating in the next fiscal year.

Pakistan repays $1bn international bond: central bank

“In all likelihood, any international capital markets issuance will likely be in the 2025/2026 fiscal year.”

KARACHI: Five Japanese nationals in Pakistan escaped unhurt on Friday from a suicide bomb attack on their vehicle as police shot down a gunman accompanying the bomber, a police spokesperson said, but two bystanders were among the three injured.

No immediately claimed responsibility for the rare attack on Japanese nationals, however, with Pakistani authorities identifying them as engineers working for the management of an export processing zone in the port city.

The Japanese have been moved to a safe place in police custody, the spokesperson, Abrar Hussain Baloch, said, although the bystanders and a guard with the visitors suffered injuries.

“The police mobile unit, which was nearby, responded to the attackers quickly and the security guards of the foreign guests responded immediately,” Baloch added.

In Tokyo, Japan’s chief cabinet secretary, Yoshimasa Hayashi, told a press conference that one Japanese national was confirmed to have been injured and the government was checking details, having flagged the risk to other citizens in Pakistan.

One of the two motorcycle-borne attackers set off explosives tied to his body as soon as the vehicle slowed, Pakistani counter-terrorism official Raja Umar Khatab told reporters, but failed to strike his target.

Seven terrorists killed as security forces foil infiltration bid from Afghanistan

That prompted his accomplice to start shooting at the vehicle.

“I think he fired some 15 or 16 shots,” Khatab said, adding that private security guards with the foreigners and a nearby police patrol returned fire and killed the second attacker.

The men had followed the Japanese group’s vehicle for some time before the attack, he said, with authorities suspecting they carried out reconnaissance to identify the target and location of the attack.

Prime Minister Shehbaz Sharif condemned the attack, praising the timely police action for saving lives.

ISLAMABAD: Prime Minister Shehbaz Sharif has stated that renowned businessmen from Saudi Arabia will be visiting Pakistan soon.

While presiding over a meeting regarding Saudi investment in Pakistan following the recent visit of the Saudi delegation on Thursday, the premier asked the relevant ministries and departments to pay special attention to government-to-government agreements as well as business-to-business projects and taking Pakistan’s business community into confidence in this regard.

He said he would personally review the progress regarding Saudi investment and would not accept any kind of carelessness in this regard.

Saudi Arabia agrees to build strong partnership

The meeting was informed about the Saudi delegation’s interest in investment in various sectors and the presentation of projects by Pakistan.

The meeting was told that in the discussions between the two countries, investment in the sectors of mining and minerals, agriculture, energy, information technology and infrastructure development was discussed. The meeting was further informed that discussions on measures to make Pakistan a part of the global supply chain and value chain were also part of the negotiations.

The participants of the meeting termed the arrival of the delegations of friendly countries for foreign investment in Pakistan a success of the present government at the diplomatic front and for the development and prosperity of Pakistan.

The meeting was attended by federal ministers, Ishaq Dar, Khawaja Asif, Jam Kamal Khan, Ahad Khan Cheema, Atta Tarar, Rana Tanveer, Ahsan Iqbal, Salik Hussain Chaudhry, Sardar Owais Khan Leghari, Abdul Aleem Khan, Dr Musadik Malik, Minister of State Shaza Fatima Khawaja, Special Assistant Tariq Fatemi, Deputy Chairman Planning Commission Muhammad Jehanzeb Khan, Members of National Assembly Bilal Azhar Kayani, Rumina Khurshid Alam, Prime Minister’s Coordinator Rana Ehsan Afzal, and relevant senior officials.

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LONDON: The International Monetary Fund is ready to support Pakistan and the package of reforms is now more important than the size of new programme, the fund’s Middle East and Central Asia director said on Thursday.

IMF says global debt levels face ‘Great Election Year’ risk

“I think what is important at this stage is to accelerate the reforms, double down on the structure of reforms in order to provide Pakistan with its full potential of growth,” Jihad Azour told a press conference on the sidelines of the IMF 2024 Spring Meetings.

ISLAMABAD: Social media platform X, formerly known as Twitter, said Thursday it would work with Pakistan’s government “to understand its concerns” after authorities insisted an ongoing two-month ban was based on security grounds.

The platform, formerly known as Twitter, has been rarely accessible since February 17, when jailed former prime minister Imran Khan’s party called for protests following a government official’s admission of vote manipulation in the February election.

“We continue to work with the Pakistani Government to understand their concerns,” X’s Global Government Affairs team posted, in their first comments since the site was disrupted.

The Interior Ministry on Wednesday said X was blocked on security grounds, according to a report submitted to the Islamabad High Court where one of several challenges to the ban is being heard.

On the same day, the Sindh High Court ordered the government to restore access to social media platform X within a week.

“The Sindh High Court has given the government one week to withdraw the letter, failing which, on the next date, they will pass appropriate orders,” Moiz Jaaferi, a lawyer challenging the ban, told AFP.

The court’s full decision is expected to be published this week.

Both the government and the Pakistan Telecommunication Authority (PTA) had for weeks refused to comment on the outages.

“It is the sole prerogative and domain of the federal government to decide what falls within the preview of terms of ‘defence’ or ‘security’ of Pakistan and what steps are necessary to be taken to safeguard National Security,” said the interior ministry’s report, submitted by senior official Khurram Agha.

The interior ministry suggested intelligence agencies were behind the order.

General Elections 2024: polling ends as Pakistan marred by ‘disconnect’

The closure of a social media service “when there is request from any security or intelligence agency” is “well within the scope of provisions of the PTA act”, the report said.

Digital rights activists, however, said it was designed to quash dissent after February 8 polls that were fraught with claims of rigging.

US calls on Pakistan to lift social media restrictions

Access to X has been sporadic, occasionally available for short cycles based on the internet service provider, forcing users to use virtual private networks.

Mobile services were cut across Pakistan on election day, with the interior ministry also citing security reasons.

It was followed by a long delay in issuing voting results, giving rise to allegations of tampering.

KARACHI: The Sindh High Court said on Wednesday the government must restore social media platform X within one week, a lawyer said, after more than two months of disruption ordered by the interior ministry.

The platform, formerly known as Twitter, has been rarely accessible since February 17, when jailed former prime minister Imran Khan’s party called for protests against a government official’s admission of vote manipulation in February’s election.

Pakistan’s communications authority later acknowledged in court papers that it had been ordered by the Interior Ministry to shut the site down.

“The Sindh High Court has given the government one week to withdraw the letter, failing which, on the next date, they will pass appropriate orders,” Moiz Jaaferi, a lawyer challenging the ban, told AFP.

The court’s decision is expected to be published in the coming hours.

The Interior Ministry said X was blocked on security grounds, according to a report submitted to Islamabad High Court in a separate challenge to the shutdown and shared with media.

“It is the sole prerogative and domain of the federal government to decide what falls within the preview of terms of ‘defence’ or ‘security’ of Pakistan and what steps are necessary to be taken to safeguard National Security,” said the report, submitted by Interior Secretary Khurram Agha.

US calls on Pakistan to lift social media restrictions

Both the government and the Pakistan Telecommunication Authority (PTA) had for weeks refused to comment on the outages.

The interior ministry suggested intelligence agencies were behind the order.

The closure of a social media service “when there is request from any security or intelligence agency” is “well within the scope of provisions of the PTA act”, the report said.

Activists challenging the shutdown said it was designed to quash dissent after February 8 polls that were fraught with claims of rigging.

Access to X has been sporadic, occasionally available for short cycles based on the internet service provider, forcing users to use virtual private networks, said Alp Toker of the NetBlocks internet monitor.

Mobile internet services were cut across Pakistan on election day, with the interior ministry citing security reasons.

It was followed by a long delay in issuing voting results, giving rise to allegations of rigging.

ISLAMABAD: Pakistan has assured Saudi Arabia of maximum support and facilitation in fast-tracking the Kingdom’s prospective multibillion dollars investments in Pakistan through the Special Investment Facilitation Council (SIFC).

The high-level Saudi delegation led by Faisal bin Farhan Al Saud, attended the “Saudi Arabia-Pakistan Investment Conference” held on Tuesday during the two-day visit of the delegation from the Kingdom.

“The two sides also finalised a bilateral implementation mechanism to closely coordinate and execute investment related matters at the functional level to turn the sovereign commitments into tangible economic outcomes,” said a statement issued by the Foreign Office.

Saudi Arabia likely to invest up to $1bn in Reko Diq Copper-Gold project

Foreign Minister Ishaq Dar warmly welcomed the Saudi Delegation at the SIFC, emphasising the deep-rooted ties and mutual strategic interests between Pakistan and Saudi Arabia, according to the statement. He highlighted the significance of enhanced bilateral strategic and economic partnership and the crucial role of Saudi investments in nurturing this relationship.

He explained how Pakistan through the SIFC platform aimed to streamline investment processes and ensure rapid decision-making, fostering a flourishing investment-friendly environment in Pakistan. He showcased Pakistan’s abundant opportunities in agriculture, IT, and mining sectors, inviting Saudi investors to engage in mutually beneficial partnerships.

The foreign minister expressed confidence in the strengthened bonds between the two countries, envisioning significant economic growth and lasting benefits. He concluded with a call for constructive engagement and collaboration towards mutual prosperity and development.

“The SIFC officials gave comprehensive briefings encompassing the potential and investment opportunities in key sectors of Pakistan’s economy. Both sides held exhaustive deliberative sessions at functional level to crystallize investment opportunities in Pakistan,” the statement added.

It stated that the Saudi side expressed great significance and interest in the improving investment ecosystem in Pakistan, appreciated SIFC’s role in amicable resolution of KSA’s legacy investment/business related issues, and showed keen interest to invest in key sectors of Pakistan.

“The Pakistan side assured the Saudi side of maximum support and facilitation in fast-tracking the Kingdom’s prospective multibillion dollars investments in Pakistan,” according to the statement.

In his address, Foreign Minister Dar said that Pakistan and Saudi Arabia share deep rooted brotherly ties anchored in our rich Islamic heritage and mutual strategic interest.

He said that the Saudi delegation’s presence here underscores deep and abiding connections between the two countries, a partnership founded on mutual respect, shared goals and a vision for a prosperous future.

Copyright Business Recorder, 2024

ISLAMABAD: Expressing confidence in the productive discussions with Pakistani authorities, Saudi Foreign Minister Faisal bin Farhan Al Saud on Tuesday said that there is a significant opportunity to increase the level of investment, which is already on the table by overcoming “hurdles”.

Speaking at a joint news conference along with Foreign Minister Ishaq Dar following a series of meetings with President Asif Ali Zardari, Prime Minister Shehbaz Sharif, Chief of Army Staff General Asim Munir and interaction with Apex Committee of the Special Investment Facilitation Council (SIFC), the Saudi foreign minister expressed the confidence the discussions will deliver significant benefits for both countries.

He said that he and his delegation had a productive series of meetings with Pakistani leadership and counterparts, adding that they stressed on importance and strategic depth of bilateral relations between the two countries, as well as the Kingdom’s commitment to further exploring avenues to deepen this relationship.

Saudi FM-led delegation arrives in Pakistan

“We are extremely impressed by the very proactive attitude that we saw in our meetings, especially with the Special Investment Facilitation Council and a very strong business-focused approach on addressing challenges and opportunities and highlighting the work we can do together,” the Saudi foreign minister said.

“I feel very confident that the results of this visit and the results of the work being done between the two respective teams with this attitude, with this approach of focus on results and overcoming hurdles will deliver significant benefits for both of our countries and it will significantly accelerate the process of achieving those investments that we’re looking at together.

I can say that there is (a) significant opportunity to increase the level of investment that is already on the table,“ he further stated. He said that this was a very positive visit from the Saudi’s perspective, adding that the engagement they had so far laid the groundwork for significant and important work to be done in the next few months in order to achieve all of the potential that exists.

He said that Saudi Arabia strongly believes in the potential that Pakistan holds, especially, in the economic development side there is a lot of untapped potential, which needs to be utilised. “Working together, we will do what we can with our colleagues in the government of Pakistan to make that happen,” he added. He also thanked the Pakistani authorities for their insights into the “excellent opportunities” regarding investment that could be potentially realised.

He stated that during the meeting with Foreign Minister Dar, they discussed all issues of mutual interest, regional and international affairs. “As usual, Pakistan and Saudi Arabia see eye to eye. We have an outlook that is unified by our fraternal relationship, brotherhood and also our shared outlook on geopolitics. So, we will continue to work together for our economic prosperity but also for (the) security of our region and the world,” the Saudi Foreign Minister further stated.

Responding to a question about the situation in the Middle East, the Saudi foreign minister strongly criticised the “double standards” of the world with regard to the situation in Gaza and called for an immediate ceasefire.

“What can I say about Gaza, except that the international efforts towards the ceasefire are not enough… 33,000 civilians have been killed and we are now actively discussing the potential for famine in Gaza. Again famine which means people starving to death because humanitarian assistance is not reaching them,” he said.

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ISLAMABAD: Pakistan and the Kingdom of Saudi Arabia (KSA) have reiterated their resolve to build a strong partnership and further promote economic cooperation for the mutual benefit of the two brotherly countries.

This was discussed during a meeting between President Asif Ali Zardari and Saudi Foreign Minister Prince Faisal bin Farhan Al Saud, who called on him, at Aiwan-e-Sadr, on Tuesday.

The Saudi foreign minister was accompanied by a high-powered delegation, comprising the Minister of Water and Agriculture, the Minister of Industry and Mineral Resources, the Assistant Minister of Investment, the Head of the Saudi Special Committee and senior officials from the Ministry of Energy and Saudi Public Investment Fund.

Saudi FM-led delegation arrives in Pakistan

Chairman Pakistan Peoples Party Bilawal Bhutto Zardari, Minister for Foreign Affairs Muhammad Ishaq Dar, Minister for Privatisation and Board of Investment Abdul Aleem Khan, Minister of Petroleum and Water Resources Musadik Masood Malik, Minister of Industries and Production Rana Tanveer Hussain, and Foreign Secretary Syrus Sajjad Qazi, and senior government officials also attended the meeting.

The two sides discussed the regional dynamics and recent developments in the Middle East and called for an immediate and unconditional ceasefire and end to Israeli atrocities in Gaza. Both sides also exchanged views on issues of bilateral importance and the challenges being faced by the Muslim Ummah.

Welcoming the delegation, the president said that Pakistan and KSA enjoyed a long-standing and decades-old relationship and Pakistan wanted to transform the existing ties into a long-term strategic and economic partnership. He highlighted that the government and the people of Pakistan had the highest regard for the Custodian of the Two Holy Mosques His Majesty King Salman bin Abdulaziz Al Saud and would continue to stand with KSA.

The president said that the prosperity of the Islamic world was linked to the progress of KSA.

He lauded the courageous and visionary leadership of the Crown Prince and Prime Minister of KSA, Muhammad Bin Salman, and the remarkable progress being made under the Vision 2030. He also thanked the leadership of KSA for its support to Pakistan in difficult times.

The Saudi foreign minister said that KSA considered its relations with Pakistan very critical and was committed to building a strong partnership with Pakistan. He highlighted that both countries enjoyed strong bonds and had helped each other for decades. He appreciated the contributions of the Pakistani Diaspora in the development of KSA. He also conveyed the greetings of Saudi leadership and underlined the importance of Pakistan for the Kingdom.

President Zardari also conveyed best wishes to the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud.

Copyright Business Recorder, 2024

LAHORE: At least 41 people have died in storm-related incidents across Pakistan since Friday, including 28 killed by lightning, officials said on Monday.

Pakistan’s National Disaster Management Authority (NDMA) has warned of landslides and flash floods because more rain is expected in coming days.

Punjab, Pakistan’s largest and most populous province, witnessed the highest death toll, with 21 people killed by lightning between Friday and Sunday.

Heavy rain forecasts: civic bodies asked to pull their socks up

“I have asked the NDMA to coordinate with the provinces … and for the NDMA to provide relief goods to areas where damages occurred,” Prime Minister Shehbaz Sharif said on Monday.

People living in open, rural areas are more at risk of being struck by lightning during thunderstorms.

At least eight people were killed in Balochistan province, including seven struck by lightning, where 25 districts were battered by rain and some areas were flooded.

Karachi could be hit by thunderstorm on Wednesday: PMD

Schools in the province were ordered shut on Monday and Tuesday, delaying the return of students after Eid ul-Fitr holidays at the end of the holy fasting month of Ramazan.

Four people were killed in road accidents linked to flooded roads in southern Sindh province.

Another eight people were killed in the northwestern province of Khyber Pakhtunkhwa, including four children, when houses collapsed in the heavy downpours.

Pakistan Peoples Party chairman Bilawal Bhutto Zardari, speaking to local media, blamed climate change for the surge in lightning incidents.

Pakistan is increasingly vulnerable to unpredictable weather patterns, as well as often destructive monsoon rains that usually arrive in July.