Credible News from Pakistan!
Federal board of Revenue has rejected as fake, a letter being circulated on social media about resignation of Chief Commissioner Regional Tax Office, Rawalpindi.
In a tweet, the FBR condemned dissemination of such spurious news intending to undermine the morale of its workforce.
The FBR reiterated that its officers are committed to national cause and as always are working beyond their call of duty.
Source: Radio Pakistan
Prime Minister Muhammad Shehbaz Sharif says with the completion of project of importing 100 megawatts of cheap electricity from Iran, power supply has been ensured in South Balochistan, especially Gwadar.
Briefing Federal Cabinet in Islamabad of the details of his recent visit to the Pak-Iran border, he said this project will usher in a new era of development and prosperity in the backward areas of Balochistan.
Shehbaz Sharif said Mand-Pishin Border Market was also inaugurated, which will provide business and employment opportunities to the residents on both sides of Pak-Iran border.
He said the Iranian President also evinced keen interest in promotion of bilateral trade between Pakistan and Iran while fruitful discussion was also held on cooperation in the fields of agriculture, science and technology and solar energy.
The Prime Minister said a high level delegation headed by Foreign Minister will visit Iran to ensure progress on these issues.
He informed the Cabinet that both Pakistan and Iran agreed to further strengthen border security mechanism along the Pakistan-Iran frontier to make it a symbol of peace, brotherhood, development and prosperity.
Source: Radio Pakistan
Pakistan’s pursuit of the ninth review of its International Monetary Fund (IMF) program has proven to be elusive, casting doubt on the program’s completion as it nears its end (Jun’23).
According to an extensive report by Arif Habib Limited (AHL), Pakistan faces $5 billion in external debt servicing requirements and a sovereign default is likely, given how support from friendly countries is often tied to the IMF’s tacit approval.
The country’s foreign exchange reserves are at a dangerously low level (USD 4.3 billion), and Pakistan is confronted with significant debt repayments until June 2024.
Even in the most optimistic scenario where Pakistan might be able to receive support from bilateral friends (Saudi Arabia, UAE, and China) in the form of both rollovers and fresh funding and also run a balanced current account, the country still faces a shortfall of $5 billion to meet the external debt servicing requirement of $27 billion in FY24, said the report.
This clearly highlights the magnitude of challenges and risks ahead. Given support from friendly countries is often tied to IMF’s tacit approval, a lack of breakthrough with the fund would make sovereign default a very high probability.
While the report’s base case assumption is that Pakistan will avert default by remaining engaged with the IMF along with support from major bilateral creditors, sovereign default nonetheless remains a real possibility.
In the case of Pakistan, if it were to default on its debt, it would likely face difficulty in borrowing further funds, as lenders become reluctant to lend due to the high risks involved.
Moreover, even if Pakistan is able to secure a loan, the interest rates attached to it are likely to be very high only adding a burden to the mark-up servicing of the country.
A similar situation was witnessed back during 1998-99 when Pakistan was on the brink of default and resorted to a variety of measures to raise funds from external sources as well as restructure some debt.
If Pakistan defaults on its debt, it may become more difficult for the country to import even essential goods such as petroleum, machinery, and medicinal products.
Approximately 73.4 percent of total imports account for essentials, as of 10MFY23. Moreover, in case of default, exports may suffer from a combination of nonavailability of raw materials, energy shortages as well cancellation/shift of export orders to more stable competitors.
As of 10MFY23, 60.8 percent of Pakistani exports are from textiles which itself is reliant on the import of raw materials such as cotton.
More importantly, Pakistan is already facing severe inflationary pressure, with headline inflation hovering above 28 percent FYTD which could amplify manifold in case of a default event.
Pakistan could see a sharp contraction in GDP as well as devaluation of the currency. Already struggling with economic challenges like high commodity prices, political instability, and a weak currency, Pakistan’s GDP is expected to slow down in FY23 to ~1 percent. However, a default shall only make matters worse with GDP likely to contract.
Default Exposure on Local Banks
Given that Pakistani banks have very high exposure to government debt in the form of both investments in government treasuries (50 percent of assets) and lending to government-owned entities (6 percent), sovereign default can result in a major spillover onto the domestic banking sector.
Default could also result in economic sanctions being imposed on Pakistan by its creditors. International creditors could file lawsuits to recover the unpaid debts or to force Pakistan to fulfill its obligations. Even worse, a default could lead to a further downgrade of Pakistan’s already low credit rating which would make it extremely expensive for the country to borrow money in the future.
Pertinently, Pakistan’s credit rating is currently Caa3 (Moody’s) / CCC+ (S&P), which is considered to be a speculative or “junk” grade.
Way Forward: Debt Restructuring Post-Default
In the event of a default, Pakistan would need to undergo an extensive debt restructuring exercise given the scale of debt servicing requirements over the next 2-3 years. The total public external debt outstanding as of Mar’23 is USD 96 billion (28 percent of GDP) out of which USD 37 billion relates to multilateral creditors likely to be excluded from any debt restructuring exercise.
Taking a clue from Sri Lanka, Pakistan would have to engage in separate negotiations with China, other bilateral creditors, and Paris Club to chalk out a restructuring plan which also needs to have the umbrella of the IMF.
To put things in perspective which was also highlighted in AHL’s earlier report “Debt reprofiling or restructuring?” Pakistan has a total external debt servicing requirement of $73 billion over FY24-27 out of which USD 39 billion are short-term bilateral borrowings mainly from friendly countries (Saudi Arabia, China, and UAE) and their commercial banks.
In essence, the total quantum of borrowing from friendly countries is USD 13 billion which is projected to be rolled over annually.
And then there’s the IMF. The report says a defaulter Pakistan would have to undertake a new long-term IMF program to achieve macroeconomic stability via strong policy measures and deep structural reforms ahead of any discussions on debt restructuring.
All things considered, China still remains the single most important bilateral partner for Pakistan given the deep strategic and economic links. It is also the single largest bilateral creditor contributing to an estimated 30 percent of Pakistan’s total external debt of USD 96 billion and shall play a very important role in any post-default scenario.
While China is likely to play a constructive role in helping Pakistan avoid a default event, its role in a post-default scenario will be even more critical, particularly on two key counts.
Firstly, any post-default restructuring will be impossible without China, and support from major creditors in particular China is likely to be a key precondition for any new post-default IMF program similar to what was witnessed in the case of Sri Lanka. China is likely to give similar assurances in a possible post-default scenario.
Source: Pro Pakistani
The Council for Advancement and Support of Education (CASE) has awarded the Asia-Pacific Leadership Award to Dr. Arshad Ahmad, Vice Chancellor of LUMS. Dr. Ahmad is the first recipient of a South Asian university to receive the award in recognition of his efforts to promote education and institutional advancement.
Mr. Shahid Hussain, Rector of LUMS, noted,
Over the years, LUMS has emerged as a model for how a small, young university located in a country without the historic advantages of prosperity, can make a substantial, positive impact on a wide range of complex, interconnected global challenges.
Dr. Ahmad added,
The gifts of LUMS include its exceptionally talented students across Pakistan and the extraordinary faculty and staff who teach and support them. The CASE Leadership Award will always belong to LUMS, and I’m privileged to be part of the community that is one of the best-kept secrets of the Global South.
Since joining LUMS in 2018, Dr. Ahmad has strengthened the University’s unique perspective of Learning without Borders to transcend academic, geographic, and socio-economic boundaries to advance quality higher education in the region.
Dr. Ahmad’s drive to bring people together and transcend traditional silos in LUMS’ governance and core academic work has formed the basis for many significant institutional advancements. He commented,
To truly make a difference to our students, our communities, and the region, we must look at the challenges before us as opportunities that lead to new ways of thinking, learning, and working together.
Over his tenure, this approach has had a significant impact. By combining LUMS Alumni Relations, Marketing, Development, and Communications under the Office of Advancement, donations and new grants to the University have tripled, and alumni contributions have doubled. Dr. Ahmad also championed the 50% scholarship for women enrolled in graduate programs at the Suleman Dawood School of Business, which resulted in a 35% increase in women’s enrolment within graduate programs. These efforts have also resulted in more financial support for students coming from disadvantaged areas through LUMS’ signature National Outreach Program (NOP).
Today, LUMS promotes a transdisciplinary approach to research and teaching that encourages cross-appointments across Schools and Centres at LUMS and strengthens faculty and student collaborations across different fields. New experiential learning programs such as the Baltistan Experience have expanded immersive learning opportunities at LUMS. Dr. Ahmad spearheaded this new program in 2022 by engaging hundreds of students for a month-long experiential learning partnership in Skardu. This summer, in the month of July, 50 students from the Computer Science department will lead 25 IT boot camps in high schools across Gilgit. Together, students and faculty from LUMS and communities in Gilgit-Baltistan will engage in several field-based courses that respond to major challenges with local and global impact.
Dr. Ahmad has also initiated the LUMS Learning Institute to support faculty development, pedagogical partnerships with students, and the integration of educational technologies to enhance learning and teaching. Following the pandemic, LUMS became a recognized leader in Pakistan in providing support for effective hybrid and online learning. The recent creation of LUMSx, the University’s new online platform, opens new possibilities for the University to amplify access, relevance, and collaboration.
Dr. Ahmad’s unwavering commitment to LUMS and to the advancement of quality higher education in the region will be long-lasting. He has played a pivotal role in supporting and advancing LUMS across all aspects of its work, its outreach, and its impact in the region and beyond. This award celebrates his dedication to exceptional quality higher education and signals the extraordinary progress that the LUMS community has achieved to make a difference in the Global South. The award ceremony recently took place during the CASE Asia-Pacific Advancement Conference and was followed by Dr. Ahmad’s participation in the President’s Panel held in Melbourne.
Source: Pro Pakistani
The Pakistan Cricket Board (PCB) has terminated the services of its chief medical officer, Dr. Najeeb Soomro, following the dismissal of former Test spinner, Nadeem Khan.
Dr. Soomro was appointed to the position in 2021 by the then-PCB CEO, Wasim Khan after Dr. Sohail Saleem was dismissed during the Karachi leg of the sixth edition of PSL.
During his tenure, several players, including Shaheen Afridi, Mohammad Wasim Jr, Shahnawaz Dahani, Shadab Khan, Hassan Ali, and Mohammad Rizwan, experienced injuries.
Soomro, who established himself in the field of Australian sports medicine, found himself in hot water when Shaheen suffered an injury during an important T20I season last year.
In response to these recent developments, the PCB has already initiated the process of recruiting a new Director of Sports Medicine, as indicated by a board advertisement.
Earlier this month, the cricket board also sacked former cricketer, Nadeem Khan, from his positions as Domestic Director and Director of the National Cricket Academy.
It is important to mention that the Men in Green have recently concluded a five-match T20I series and five-match ODI series against New Zealand at home.
The Babar Azam-led side will play a two-match Test series against Sri Lanka before the Asia Cup 2023.
Source: Pro Pakistani
Prime Minister Shehbaz Sharif has reiterated Pakistan’s desire to expand brotherly ties with the United Arab Emirates in diverse fields especially trade and investment.
He was talking to a delegation of UAE led by Chairman Abu Dhabi Ports Sheikh Ahmed Dalmook al Maktoum which called on him in Islamabad on Friday.
The Prime Minister said Pakistan attaches great importance to its ties with the UAE and welcomes the keen interest of visiting UAE delegation to invest in the ports and shipping industry of Pakistan.
On the occasion, Sheikh Ahmed Dalmook al Maktoum who is also member of UAE ruling family, said he is visiting Pakistan in less than two months again with an objective to give further momentum to his country’s investment in Pakistan with a focus on infrastructure, energy and agriculture.
The Prime Minister assured that every possible support would be extended to UAE investors.
Source: Radio Pakistan
Eight Pakistanis have died and six others injured in a fire incident at a hotel in Makkah.
According to Foreign Office, Pakistan’s Mission in Jeddah is in contact with local authorities to provide relief to the victims and their families.
Prime Minister Shehbaz Sharif has expressed deep grief and sorrow over the death of eight Pakistanis pilgrims in an unfortunate fire incident in a hotel in Makkah.
In a statement today, he expressed his condolence and sympathy with the bereaved families.
The Prime Minister directed Ministry of Religious Affairs to provide the best possible medical facilities to the injured. He also directed the Ministry to facilitate the families of the deceased.
Source: Radio Pakistan
To cement people-to-people exchanges and enhance practical cooperation, the Pakistani city of Murree and the Chinese city of Dujiangyan signed a Letter of Intent, for the establishment of a sister-city relationship.
The singing ceremony was held in the famous Lidui Park of Dujiangyan. Murree was represented by Ambassador Moin ul Haque, while Mayor Zhang Yadan, signed on behalf of Dujiangyan.
The cooperation agreement has been envisaged keeping in view the picturesque setting of the two cities amidst green hills and their touristic strengths.
The experience sharing of Dujiangyan of hosting and managing more than 30 million tourists annually would help Murree in its own plans to manage large inflows of visitors and upgrade its tourism infrastructure as well.
The establishment of the latest sister city relationship will also augment the already strong people-to-people ties existing through more than 40 sister province and sister city relationships between various regions and cities of China and Pakistan.
Source: Pro Pakistani