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Economy

Moody’s Upgrades Pakistan’s Debt and Currency Ratings to ‘Caa2’; Government Outlook Positive

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Moody’s Ratings has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa2 from Caa3, reflecting improving macroeconomic conditions and a slight enhancement in government liquidity and external positions. The rating agency has also upgraded the rating for Pakistan’s senior unsecured Medium Term Note (MTN) program to (P)Caa2 from (P)Caa3 and changed the outlook for the Government of Pakistan to positive from stable.

The upgrade to Caa2 indicates a reduction in Pakistan’s default risk to a level consistent with this rating. Moody’s attributes the improvement to better macroeconomic conditions and a moderate increase in government liquidity and external positions. The agency highlights that the certainty regarding Pakistan’s external financing sources has increased following a staff-level agreement with the International Monetary Fund (IMF) for a 37-month Extended Fund Facility (EFF) of $7 billion, reached on July 12, 2024. Moody’s anticipates the IMF Executive Board will approve the loan in the coming weeks.

Despite these improvements, Pakistan’s foreign exchange reserves have about doubled since June 2023 but remain insufficient to fully meet its external financing needs. Moody’s points out that Pakistan continues to depend on timely financing from official partners to meet its external debt obligations. The agency warns that the Caa2 rating still reflects Pakistan’s very weak debt affordability and high debt sustainability risks, with interest payments expected to consume about half of government revenue over the next two to three years.

The report notes that the positive outlook reflects a balance of risks skewed to the upside. It captures the potential for further reductions in liquidity and external vulnerability risks and improvements in the fiscal position, supported by the IMF program. Moody’s stresses that sustained implementation of reforms, including measures to increase government revenue, could enhance debt affordability. Moreover, prompt completion of IMF reviews would facilitate continued access to financing from official partners, aiding in the rebuilding of foreign exchange reserves.

Moody’s also raised Pakistan’s local and foreign currency country ceilings to B3 and Caa2 from Caa1 and Caa3, respectively. The upgrade reflects a two-notch gap between the local currency ceiling and the sovereign rating, driven by the government’s significant economic footprint, weak institutions, and high political and external vulnerability risks. The gap between the foreign currency ceiling and the local currency ceiling accounts for incomplete capital account convertibility and relatively weak policy effectiveness.

The ratings upgrade also applies to The Pakistan Global Sukuk Programme Co Ltd, with the positive outlook reflecting direct obligations of the Government of Pakistan. Moody’s underscores that ongoing reform efforts and successful IMF program implementation could further stabilize Pakistan’s economic position and improve its creditworthiness.

Overall, the rating upgrade and positive outlook signal a cautious improvement in Pakistan’s economic stability and external financing conditions, though challenges remain, particularly regarding debt sustainability and political uncertainties

Business Economy

Enforced disappearances’ ultimate responsibility on PM, cabinet’s shoulders: IHC

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 Amid continuing scrutiny over the issue of missing persons and enforced disappearances, Islamabad High Court’s (IHC) Justice Miangul Hassan Aurangzeb has said that the prime minister and his cabinet are responsible for any person that goes “missing”.

“The ultimate responsibility is on the shoulders of the personages at the helm of affairs in the government, which under our Constitution are the prime minister and the [federal] cabinet,” Justice Aurangzeb said in an order issued on Friday in a case involving the disappearance of Pakistan Tehreek-e-Insaf (PTI) leader Dr Shahbaz Gill’s brother Ghulam Shabbir.

The issue of missing persons and enforced disappearances has come under the spotlight on various occasions with various sections of society and human rights organisations expressing their concerns.

A day earlier, the incumbent government announced a package worth Rs5 million for each family as part of its efforts to provide legal and financial assistance to the heirs of missing persons.

Briefing the media on the decisions taken in the federal cabinet meeting chaired by Prime Minister Shehbaz, Federal Law Minister Azam Nazeer Tarar revealed that the cabinet also approved the constitution of a special committee to examine genuine cases of families in need of support after reviewing the final report of the committees.

Last month, Tarar had claimed that “only 23% of missing persons’ cases are pending”, adding that 10,200 cases of missing persons were registered in the Commission of Inquiry on Enforced Disappearances (COIED) out of which around 8,000 were duly addressed.

In its report presented in January this year, the Missing Persons Inquiry Commission said that Khyber Pakhtunkhwa reported 3,485 cases of missing persons, making it the highest number in the country. Causalities in drone attacks and the spike in militancy were the key reasons behind the disappearances, as per the report.

In Balochistan, 2,752 cases related to enforced disappearance were lodged, the commission had said, adding that besides other reasons, fleeing abroad without informing their families, due to the prevailing situation in the province, was among the causes of these cases.

Even now, the protesters of the Baloch Yakjehti Committee (BYC) are staging demonstrations in various areas across the country’s largest province.

No knowledge of detainee’s whereabouts

The case at hand involves Shabbir, who as per the court order, went missing between the night of June 8 and 9 while he was on his way to Islamabad from Lahore.

A writ petition was filed in the Lahore High Court (LHC) seeking his recovery but was later withdrawn on information that he was in fact present in Islamabad instead. Later, another plea, seeking Shabbir’s recovery, was filed in the IHC last month.

“Now if we give a strict order, action starts against judges. Earlier, the SHO was asked to pick up someone, now it is done according to the policy of the Government of Pakistan,” Justice Aurangzeb had remarked while hearing the case on Friday as reported by The News.

In his order, the judge recalled that the assistant attorney-general along with representatives of the Ministry of Defence, Ministry of Interior, Federal Investigation Agency (FIA) and others, said that government officials have expressed their lack of knowledge of the detainee’s whereabouts in their submission.

“This court has consistently expressed its grave concern over the disappearance of citizens [in Pakistan].

Such occurrences are detrimental to the development of democracy and fundamentally contradict the injunctions of Islam They instil fear among the general public and create the impression of a Gestapo state, particularly when the victims are political opponents of the Government in power,” he said.

He also said that the state’s lack of knowledge of a person coupled with the absence of steps taken for his recovery means that “it is a case of enforced disappearance”.

The IHC judge also highlighted that the LHC order seeking a report on Shabbir’s disappearance from the Punjab AG and the Inspector General of Police (IGP) was not adhered to and fulfilled.

The order has directed the court’s registrar to send a copy of it to the principal secretary of the PM, whereas the secretary of the Interior Ministry has been told to take all necessary measures to ensure that the detainee is produced before the IHC on August 6.

Economy

PPP remains largest IMF borrower followed by PML-N, document reveals

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The Pakistan People’s Party (PPP) regime (2008-2013) remains the leading borrower from the International Monetary Fund (IMF) to date, while the Pakistan Tehreek-e-Insaf (PTI) government (2018-2022) paid the highest interest on its loans to the same lender, an official document showed.

As per the document presented by the Ministry of Economic Affairs to the National Assembly’s Standing Committee, the PPP government secured loans amounting to 5.23 billion in Special Drawing Rights (SDRs), equivalent to over $7.72 billion.

The document further reveals that over $3 billion in loans were repaid to the IMF between 2008 and 2013. Additionally, the PPP paid more than $484 million in interest to the IMF.

On the other hand, the PML-N is not far behind the PPP in adding to the country’s indebtedness as the Nawas Sharif-led government borrowed 4.39 billion in SDRs from 2013 to 2018. This amount translates to over $6.48 billion over the five years.

The PML-N-led regime repaid loans of more than 4 billion in SDRs, or $5.92 billion in currency terms, and paid over $317 million in interest during their tenure.

The PTI government secured a loan totalling over 4.5 billion in SDRs or $6 billion from the IMF, the document shows. The PTI government repaid over $4.02 billion or 2.72 billion in SDRs on top of $791 million in interest to the IMF during this period.

Interestingly, the PTI regime emerges as the borrower that paid the highest interest on the IMF loans, surpassing the interest payments made by both the PPP and Pakistan Muslim League-Nawaz (PML-N) in their respective tenures.

Last month, the ruling PML-N-led coalition and the IMF reached an agreement for a $7 billion, 37-month loan programme with tough measures such as raising tax on farm income.

The staff-level agreement caps negotiations that started in May after Islamabad completed a short-term, $3 billion programme that helped stabilise the economy, avert a sovereign debt default, and set challenging revenue targets in its budget to get IMF approval.

Pakistan has been struggling with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958. Currently, the IMF is the fifth-largest debtor, owing $6.28 billion as of July 11, according to the lender’s data.

The latest economic crisis has been the most prolonged and has seen the highest-ever levels of inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.

The conditions of the programme have become tougher. The latest bailout is aimed at cementing stability and inclusive growth in the crisis-plagued South Asian country, the IMF said.

Economy

Concerns over an equity tax hike cause the Indian rupee to close at a record low.

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The government’s decision to hike taxes on capital gains from stock investments and equity derivative exchanges caused market anxiety, which caused the Indian rupee to fall to all-time lows on Tuesday.


The rupee fell to a historic low of 83.7150 early in the session before closing little down versus the US dollar at 83.6875, its lowest close ever.

The Reserve Bank of India’s intervention most likely prevented the currency’s collapse. Traders speculated that the central bank probably sold dollars via state-run banks around 83.70–83.72 levels. The BSE Sensex and Nifty 50, which are India’s major equity indexes, finished the day little lower after falling more than 1% earlier.

A trader at a foreign bank stated that although the rupee experienced a “knee-jerk” response to the decline in equity markets, the RBI is unlikely to permit a significant increase in volatility.

For the remainder of the week, the rupee is predicted to gradually depreciate and trade in the 83.57-83.77 range, according to Dilip Parmar, an HDFC Securities foreign exchange research analyst.


India’s fiscal year 2024–25 budget reduced the objective for the fiscal deficit while striking a balance between increased investment on rural development and jobs. The administration reduced its goal for the fiscal deficit in February’s interim budget from 5.1% to 4.9% of GDP. Additionally, it slightly decreased its overall market borrowing to 14.01 trillion rupees. Tuesday saw a small increase in the majority of Asian currencies, while the dollar index was up at 104.3.

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Economy

To increase tourism, Thailand has extended visa-free travel to 93 more nations.

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In a bid to revitalise its tourism industry, Thailand has expanded the scheme of its visa-free entry to 93 countries and territories.

Under the new scheme that took effect on Monday, visitors can stay in the Southeast Asian nation for up to 60 days, reported BBC.

Earlier, passport holders from 57 countries were permitted to enter without a visa.

Notably, tourism is a key pillar of the Thai economy, however, it has not fully recovered from the pandemic.

In the first six months of 2024, Thailand recorded 17.5 million foreign tourists arrivals, which is up 35% from the same period last year, as per the official data. However, the numbers pale in comparison to pre-pandemic levels.

Moreover, the majority of the visitors were from China, Malaysia and India.

During the same period, tourism revenue came in at 858 billion baht ($23.6bn; £18.3bn), which is less than a quarter of the government’s target.

For its golden temples, white sand beaches and picturesque mountains, millions of tourists flock to Thailand.

The country also introduced a new five-year visa for remote workers on Monday. This allows holders to stay for up to 180 days each year.

Additionally, visiting students, who earn a bachelor’s degree or higher in Thailand will also be allowed to stay for one year after graduation to find a job or travel.

Following is the list of 93 countries and territories exempt from visa entry into Thailand for a time period of 60 days, according to Business Standard:

  • Albania
  • Andorra
  • Australia
  • Austria
  • Bahrain
  • Belgium
  • Bhutan
  • Brazil
  • Brunei
  • Bulgaria
  • Cambodia
  • Canada
  • China
  • Colombia
  • Croatia
  • Cuba
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominica
  • Dominican Republic
  • Ecuador
  • Estonia
  • Fiji
  • Finland
  • France
  • Georgia
  • Germany
  • Greece
  • Guatemala
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Ireland
  • Israel
  • Italy
  • Jamaica
  • Japan
  • Jordan
  • Kazakhstan
  • Kosovo
  • Kuwait
  • Laos
  • Latvia
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Macau
  • Malaysia
  • Maldives
  • Malta
  • Mauritius
  • Mexico
  • Monaco
  • Mongolia
  • Morocco
  • Netherlands
  • New Zealand
  • Norway
  • Oman
  • Panama
  • Papua New Guinea
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Qatar
  • Romania
  • Russia
  • San Marino
  • Saudi Arabia
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • South Korea
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tonga
  • Trinidad and Tobago
  • Turkey
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • United States
  • Uruguay
  • Uzbekistan
  • Vietnam
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Economy

Pakistan’s financing prospects are improved by an IMF pact, but changes are still vital: Moody’s

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Moody’s Ratings has said that although the new International Monetary Fund (IMF) deal boosts funding prospects for financially-challenged Pakistan, the strict enforcement of dictated reforms will be key to mitigating future liquidity risks and averting another bailout.

The IMF and Pakistani authorities have reached a staff-level agreement on a 37-month Extended Fund Facility Arrangement (EFF) of about $7 billion. The agreement, inked on July 12, is subject to approval by the IMF Executive Board, although no date has been set for a vote.

“If approved, which we expect is likely, the new IMF programme will improve Pakistan’s (Caa3 stable) funding prospects,” the Moody’s said in its latest report.

It said the programme would provide credible sources of financing from the IMF and catalyse funding from other bilateral and multilateral partners to meet Pakistan’s external financing needs.

“However, the government’s ability to sustain reform implementation will be key to allowing Pakistan to continually unlock financing over the duration of the IMF programme, leading to a durable easing of government liquidity risks.”

However, the ratings company warned that a resurgence of social tensions on the back of high cost of living – which may increase because of higher taxes and future adjustments to energy tariffs – could weigh on reform implementation.

The new IMF EFF comes with conditions of far-reaching reforms, such as measures to broaden the tax base and removing exemptions and making timely adjustments of energy tariffs to restore the energy sector viability, the financial services company said.

“Other measures include improving state-owned enterprises’ management and privatisation, phasing out agricultural support prices and associated subsidies, advancing anti-corruption, governance and transparency reforms, and gradually liberalising trade policy.”

Moreover, risks that the coalition government may not have a sufficiently strong electoral mandate to continually implement difficult reforms remain, it added.

According to an IMF report published in May, Pakistan’s external financing need is about $21 billion for fiscal year 2024-25 (ending June 2025) and about $23 billion for fiscal 2026-27. Pakistan’s foreign exchange reserves of $9.4 billion as of July 5 are well below its needs.

The country’s external position remains fragile, with high external financing requirements over the next three to five years and its economy is vulnerable to policy slippages, as per Moody’s.

“Weak governance and high social tensions can compound the government’s ability to advance reforms, jeopardising its ability to complete reviews under the IMF programme and unlock external financing,” it added.

Business Economy

A Deep Dive into Pakistan’s Solar Industry Reforms 

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By Nawal Aslam

The Pakistani government has been proactive in implementing solar energy initiatives under the Framework Guidelines for Fast-Track Solar PV Initiatives 2022. Initially approved on October 18, 2022, and subsequently amended on May 24, 2023, and August 9, 2023, these guidelines aimed to promote the solarisation of public sector buildings. However, recent developments and challenges have highlighted the need for further adjustments to the solar policy framework.

In a recent cabinet meeting, the Ministry of Energy Power Division raised concerns regarding Section 2.3.2 of the Framework Guidelines. This section mandates the Alternative Energy Development Board (AEDB), now merged with the Private Power & Infrastructure Board (PPIB), to prepare standard bidding documents and contract agreements, conducting competitive bidding on behalf of public sector entities. This centralized approach aimed to streamline the solarisation process, yet it faced significant resistance from procuring agencies.

The Ministry of Power detailed the steps taken by PPIB, which included preparing standard Request for Proposal (RFP) documents and contract agreements for the solarisation of public sector buildings and undertaking technical designs for around 250 buildings. Despite these efforts, the centralized bidding process encountered hurdles, including reluctance from procuring agencies and regulatory complications from the Public Procurement Regulatory Authority (PPRA).

To address these challenges, the Ministry of Power proposed allowing public sector entities to independently conduct competitive bidding for net-metering-based solar PV systems, using model documents prepared by PPIB. The cabinet, emphasizing the need for PPRA recommendations, approved the proposal to amend Section 2.3.2, permitting PPIB to support entities as needed.

Amid these procedural adjustments, a significant policy shift looms on the horizon with the government’s announcement to transition from net metering to gross metering for rooftop solar panels. This change, driven by financial challenges in the energy sector, aims to alter how consumers are compensated for the electricity they generate, potentially discouraging the use of rooftop solar panels. 

Under the current net metering system, consumers can offset their electricity consumption with power generated by their solar panels, benefiting from reduced electricity bills and promoting energy independence. However, gross metering requires consumers to sell all generated electricity to the grid at a fixed Feed-in-Tariff (FiT) and then buy back electricity at retail rates, significantly reducing financial incentives for solar investments.

The proposed shift to gross metering could have severe economic repercussions for both residential consumers and industries. Residential consumers currently benefit from lower electricity bills, but under gross metering, they would face higher costs, making solar investments financially unviable. Industries relying on captive solar power generation would also see increased operational costs, potentially reducing their competitiveness.

Moreover, this policy change could undermine Pakistan’s renewable energy goals and increase reliance on fossil fuels. The current net metering system has facilitated a rapid increase in rooftop solar installations, contributing to a diversified energy mix. Discouraging solar adoption could stall progress toward renewable energy targets and climate commitments.

Addressing these challenges requires a balanced approach. Maintaining net metering for smaller residential consumers while implementing gross metering for larger commercial installations could ensure continued solar investment benefits while addressing power distribution companies’ financial concerns. Additionally, renegotiating capacity payments with Independent Power Producers (IPPs), particularly under the China-Pakistan Economic Corridor (CPEC), could reduce electricity costs.

Offering subsidies or tax incentives for solar installations could further encourage solar investments, easing the transition to gross metering while maintaining momentum toward renewable energy goals. By adopting a balanced, forward-thinking approach, Pakistan can navigate its solar panel reforms to promote sustainable energy and economic stability.

References:

Bhutta, Z. (2023, November 15). Reforms in solar initiatives approved. The Express Tribune. 

Saeed, A. (2024, April 26). Demand for solar power rises in Pakistan as import glut crashes panel prices. Arab News Pakistan.

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Economy

In 42 cities, FBR will implement the merchants tax plan.

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 The Federal Board of Revenue (FBR) has decided to expand the fixed tax scheme for retailers to 42 cities with a minimum tax amount ranging from Rs100 to 10,000 per month, depending on the valuation rates of shops.

Under the International Monetary Fund (IMF) programme, the FBR has envisaged an annual collection of Rs50 billion from the scheme during the current fiscal year. 

Prime Minister Shehbaz Sharif is scheduled to visit the FBR headquarters on Saturday (today) to get a detailed briefing on digitisation and the way forward for placing end-to-end connectivity for broadening the tax base.

Official sources said the FBR shared a detailed working of fair valuation rates of all 42 cities with the retailers’ representatives. A minimum tax of Rs1,200 to Rs120,000 was proposed for retailers depending on the valuation of shops across the country. 

“A detailed working has been done by the FBR and shared with retailers. Now the FBR chairman has taken the firm stand that all retailers will have to contribute to national kitty,” said the sources.

The FBR has not yet been notified to expand the Tajir Dost Scheme from six to 42 cities. All schemes for bringing retailers had failed in the past mainly because the political leadership bowed before the pressure exerted by shutter owners/retailers.

Based on the valuation of different markets in different cities, the FBR has proposed to introduce a fixed slab-based scheme for retailers in the tax net.

The FBR launched registration of the Tajir Dost Scheme voluntarily with the deadline of April 30, 2024, in selected six cities in which only 78 retailers registered themselves. Then the FBR involved trader leader Naeem Mir and continued its registration drive. To date, only 44,830 retailers have registered under the scheme, out of over three million retailers countrywide.

The Point of Sale (PoS) machines were installed in branded shops, but a lack of proper technology, operational framework and piecemeal approach within the ranks of FBR failed all IT-based solutions, including PoS, Track & Trace and Digital Invoicing.

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Economy

PM Shehbaz orders FBR to get busy paying off the nation’s debts.

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Prime Minister Shehbaz Sharif on Saturday directed the Federal Bureau of Revenue (FBR) authorities to roll up their sleeves and be ready to serve the nation and rid the country of debts. 

In doing so, the premier, directed them to formulating a strategy and mechanism coupled with usage of latest technology to broaden the tax net base without further burdening the honest tax payers.

During a visit to FBR Headquarters, PM Shehbaz said that the incumbent government had the sole agenda of putting Pakistan on path of progress with consistent improvement in the economic indicators.

“Though it may be a difficult journey which requires collective and individual efforts, sincerity and sacrifices and putting forth the national interests supreme over all other interests,” he emphasised.

Terming the staff-level arrangement with International Monetary Fund (IMF) as a positive omen for the country’s economy, he expressed the hope that the lender’s board would also give a go ahead in this regard.

The cash-strapped country has reached a 37-month, $7 billion aid package deal, with the Washington-based institution, which gave a much-needed respite to the struggling economy.

The prime minister said now it was their responsibility to act speedily and work tirelessly for making the IMF programme as the last one in the country’s history, adding after which a journey of progress and prosperity would commence in the country.

PM Shehbaz expressed the confidence that Pakistan could become a great and prosperous country with collective and individual efforts.

If we want to get rid of debts, the FBR should levy taxes on those who had not been paying any taxes, he opined.

The prime minister said that the country’s top taxmen should realise the issue of repeatedly burdening of honest tax payers including the government employees who filed their annual tax returns.

Faced with chronic mismanagement, Pakistan’s economy has found itself on the brink, challenged by the COVID-19 pandemic, the effects of the war in Ukraine and supply difficulties that fuelled inflation, as well as record flooding that affected a third of the country in 2022.

With its foreign currency reserves dwindling, the cash-strapped nation found itself in a debt crisis and was forced to turn to the IMF, obtaining its first emergency loan in the summer of 2023.

The latest bailout, coming to Pakistan in the form of loans, follows a commitment by the government to implement reforms, including a major effort to broaden the country’s tax base.

In this regard, the authorities plan to increase tax revenues through measures of 1.5% of GDP in FY25 and 3% of GDP over the program.

In particular, the recently approved FY25 budget targets an underlying general government primary surplus of 1% of GDP (2 percent in headline terms).

Revenue collections will be supported by simpler and fairer direct and indirect taxation, including by bringing net income from the retail, export, and agriculture sectors properly into the tax system.

At the same time, the FY25 budget provides additional resources to expand social protection by increasing both the generosity and coverage of BISP, education, and health spending.

In a nation of over 240 million people and where most jobs are in the informal sector, only 5.2 million filed income tax returns in 2022.

During the 2024-25 fiscal year which starts July 1, the government aims to raise nearly $46 billion in taxes, a 40% increase from the previous year.

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Economy Opinion

Taxation in Pakistan: A Necessary Step Towards Economic Stability Or a Barrie to Growth.

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The question remains whether these heavy taxes will stabilize the government or hinder Pakistan’s growth and prosperity. Over the past four months, the Government has levied heavy taxes on various essential items, including electricity, food, stationery, fuel, sugar, and gas. While promising to provide free electricity up to 300 units, install solar panels, and offer housing to the poor, the government has simultaneously imposed a hefty tax on electricity consumption exceeding 200 units, making it unaffordable for the average middle-class citizen to pay.
“CM Maryam Nawaz says, on one hand, ‘The prices of flour, bread, sugar, ghee, vegetables, and bakery products have decreased, and hospitals have resumed providing free medicine, which was stopped by the opposition.

The CM claims that Punjab is the only province where the price of roti (bread) has not only been reduced but also implemented uniformly across the province. A 10kg bag of flour cost Rs1,380 in March, but now it’s available for Rs800.’ She lamented that other provinces announced prices of Rs12-13 per roti but failed to ensure its availability. Maryam also mentioned the program ‘Maryam Ki Dastak’, which delivers facilities to people’s doorsteps. However, on the other hand, the Punjab Government has devised a plan to collect tax from every household in the name of ‘safaai’ (cleanliness).


The government has imposed heavy taxes not only on electricity but also on the salaries of government employees, despite announcing a salary increase for them. This means that while government servants may receive a higher salary, a significant portion of it will be deducted as tax, effectively reducing their take-home pay. The government’s sugar-coated words have left people bewildered, unsure whether to be happy or cry about their situation.


Now, the questions arises whether the government’s dual policies will prove beneficial for Pakistan or not? Will imposing heavy taxes on electricity bills and fuel prices, and taking loans from the IMF, make Pakistan’s economy stronger or worsen the situation further ? Or will the government’s strategies become an overload burden for the country and hinder its growth? Four months are not enough to judge whether the government can stabilize the economy through heavy taxes or not. But it can be said that this is the worst situation for both the poor people of Pakistan and the government, as both are struggling to survive.

The poor people are burdened by the government’s heavy loans, while the government is trying to implement new reforms and strategies to strengthen Pakistan’s economy. The government needs to reform its policies and budget so that it becomes easier for the common man to live in the country, borrow less, and utilize resources more efficiently not only to strengthen the economy but also to end policies that hinder the country’s growth.

                                                                                                                                           Writer 
                                                                                                                               Sana Tassaawar.
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Economy

Nepra approves a base electricity rate increase for domestic customers of up to Rs7.12.

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 The National Electric Power Regulatory Authority (Nepra) on Thursday approved the federal government’s request seeking up tp Rs7.12 per unit hike in electricity base tariff for domestic consumers already reeling under rising cost of living.

The power regulator issued its decision of approval on the federal government’s application proposing hikes in electricity tariffs for domestic, commercial, general services, bulk, and agricultural consumers.

Geo News obtained a copy of Nepra’s 52-page decision which was sent to the federal government to implement the power tariff hikes after the latter proposed uniform tariff for all power distributions companies (Discos) and K-Electric.

With the new move, the Centre has been given a go-ahead by the power regular to notify its individual decisions “issued in the matter of each XWDISCO along with the decision of Power Purchase Price (PPP) forecast for the FY 2024-25 dated 14.06.2024”.

The base tariff has been increased for domestic consumers by up to Rs48.84 per unit.

However, domestic consumers up to 200 units per month would be exempted from the recent hike for three months from July to September 2024.

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The renewed electricity tariff for the consumers using 201 to 300 units per month would be charged Rs34.26 per unit with an increase of Rs7.12.

Similarly, the base tariff for those consuming between 301 to 400 units, will be Rs39.15 per unit after an increase of Rs7.02, while those using 401-500 units would face a hike of Rs6.12 with per unit reaching Rs41.36.

On the consumption of 501 to 600 units, Rs42.78 per unit would be charged after an increase of Rs6.12 and for those who fall in the category of 601 to 700 units, Rs43.92 per unit would be charged with an increase of Rs6.12.

The per unit cost of electricity would be charged at the rate of Rs48.84 for those using more than 700 units after an increase of Rs6.12.

Furthermore, per unit cost of electricity would be increased in accordance with the tax slabs.

The tax slab would remain unchanged for lifeline consumers using up to 50 units per month at the price of Rs3.95 per unit and Rs7.74 per unit for other lifeline consumers using 51 to 100 units a month.

In the same decision, the power regulatory authority approved tariff hikes for commercial, agriculture, general services and bulk consumers.

The base tariff for commercial consumers was hiked by Rs8.04, which would reach up to Rs77.15 per unit from July.

Following the hike, the base tariff for agricultural consumers has hit Rs46.83 per unit with an increase of Rs6.62 per unit and Rs61.03 per unit for general services after a hike of Rs6.98 per unit from July.

Whereas, after an increase of Rs5.51 per unit, bulk consumers would pay Rs59.96 a unit from July. However, the cabinet maintained the base tariff of electricity for industrial consumers.

The latest hike in power rates came after the Ministry of Energy sought the elimination of government subsidies, except for lifeline, industry or agriculture consumers, to bring financial sustainability to the energy sector via recovery of full cost of service through introducing efficient tariff structure.

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Business Economy

Electricity tariff: PM announces ‘3-month concession’ for protected users.

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Prime Minister Shehbaz Sharif announced that the government would maintain stable electricity rates for protected customers who consume up to 200 units of power for three months, specifically July, August, and September. This move comes in response to public outcry over a significant tariff increase, which was part of the conditions to secure a loan from the International Monetary Fund (IMF).

Speaking at an event in Islamabad, Prime Minister Sharif stated that the subsidy would benefit 94% of household electricity consumers, costing the national exchequer Rs50 billion. This subsidy will be funded through the budget’s development fund. Sharif highlighted that the previous government, led by Pakistan Tehreek-e-Insaf (PTI), had reduced power prices without making corresponding budget allocations.

Under this new subsidy package, the per-unit cost of electricity for these consumers will range between Rs4 to Rs5. Consumers of K-Electric will also be eligible for this subsidy. The prime minister emphasized that this decision aims to provide relief to the common man during the peak summer months when electricity consumption is typically higher.

Sharif explained that the summer months of July, August, and September are particularly challenging due to increased electricity usage. However, as the weather becomes more pleasant in October, electricity consumption tends to decrease. This subsidy is designed to help households cope with the high costs during the summer.

According to Reuters, Pakistan’s annual power usage is expected to fall consecutively for the first time in 16 years due to higher tariffs curbing household consumption. The prime minister assured the public of further relief measures, attributing them to ongoing government efforts to tax the elite class, expand the tax net, close non-performing entities, and reduce financial leakages.

Sharif also mentioned that the government is in the process of negotiating a three-year program with the IMF. This program is essential for Pakistan to manage its fiscal challenges, and the IMF has been informed about the relief measures for domestic power consumers. He emphasized that entering a new IMF program is necessary for Pakistan’s financial stability.

For the fiscal year that began on July 1, Pakistan has set a tax revenue target of 13 trillion rupees ($47 billion), representing a nearly 40% increase from the previous year. The government aims to reduce its fiscal deficit to 5.9% of GDP from 7.4% last year.

Earlier this month, to unlock the IMF program of over $6 billion, the federal government announced significant increases in the end-power tariff for both protected and unprotected consumers, which was to take effect from July 1, 2024. For protected consumers, those consuming 1-100 units saw their tariff increase by Rs3.95 per unit, while those consuming 101-200 units experienced a Rs4.10 per unit increase. Unprotected consumers faced even steeper hikes, with those in the 1-100 units slab seeing a 43% increase in their tariff.

These tariff increases have caused considerable concern among consumers. For instance, unprotected consumers using 101-200 units per month now pay 31% more, with their tariff rising by Rs7.15 per unit to Rs30.10 from Rs22.95 per unit. Those consuming 201-300 units per month faced a 26% increase, while those in the 301-400 units slab saw a 22% hike.

Consumers in the higher usage categories also experienced significant increases. For example, those using 401-500 units per month faced a 17% increase, while those consuming 501-600 units per month also saw a 17% hike. Consumers using 601-700 units per month faced a 16% increase, and those consuming above 700 units per month saw a 14% hike in their tariffs.

Prime Minister Shehbaz Sharif’s announcement to maintain stable electricity rates for protected consumers aims to provide much-needed relief during the peak summer months. This subsidy, funded through the budget’s development fund, is designed to alleviate the financial burden on 94% of household consumers. As the government negotiates a new IMF program and implements measures to stabilize the economy, it remains committed to easing the cost of living for its citizens.

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Economy

PM says it would be unfortunate to return to the IMF after a three-year absence.

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Lamenting that the burden of debt has mortgaged the future of nation’s generations, Prime Minister Shehbaz Sharif has said it will be a matter of great shame if Pakistan has to once again return to the International Monetary Fund (IMF) for another loan after three years.

“To free ourselves from this cycle of debt, the federal and provincial governments, along with the relevant institutions, must work together,” the premier said while addressing a signing ceremony to launch a significant initiative aimed at the solarisation of agricultural tube wells in Balochistan on Monday.

“If we make this collective effort, future generations will be grateful. However, if we fail to make tough decisions, we will find ourselves seeking assistance from the IMF once again,” the PM, who was on a daylong visit to Quetta, said.

Pakistan is looking to strike a staff-level deal on an IMF bailout of more than $6 billion this month after addressing all of the Washington-based lender’s requirements in its annual budget.  

Moreover, the country’s debt has soared since the mid-2000s, as authorities failed to invest a gusher of loans from international bondholders and countries including China and Gulf nations into productive, export-oriented sectors.

Minister for Finance Muhammad Aurangzeb warned on Sunday that Pakistan would continue to seek the IMF bailouts “if it fails to boost tax revenue”. 

The finance czar said that he was “relatively confident” of reaching a staff-level agreement with the global lender this month for an estimated loan of $6 to $8 billion. 

“But it will not be our last Fund programme if we don’t bring our tax revenues up,” said the finance minister while speaking during an interview with the Financial Times. 

The federal government presented the tax-loaded Rs18.877 trillion budget for the fiscal year 2024-25 (FY25) last month, aimed at shoring up public revenue and satisfying the IMF, which has repeatedly demanded improved tax collection. 

The budget aims to raise Rs13 trillion by next July, a roughly 40% increase from the current financial year, to bring down a ruinous debt burden that has caused 57% of government revenue to be swallowed by interest payments.

Maintaining that turning to the IMF was a necessity, the PM Shehbaz said Pakistan had to finalise a deal with the IMF this month.

“Tomorrow in Islamabad, I will discuss measures to provide relief to the poor. The federal government stands with Balochistan in its development and prosperity. We will embrace anyone who genuinely cares for the well-being of Balochistan and Pakistan.”

PM Shehbaz further said that security and maintenance of law and order were imperative for investment to flow into Balochistan and Khyber Pakhtunkhwa.

Regarding Gwadar, he said: “I am not complaining, but the Safe City project there has been halted. Gwadar, by the grace of God, will prove to be more beneficial than the Reko Diq mines. We are committed to transforming Gwadar into a magnificent port. Together, we will eradicate the scourge of terrorism.”

Solarisation of tube wells in Balochistan

The solarisation of agricultural tube wells in Balochistan, the premier said, was part of the broader government efforts to address the economic challenges facing Pakistan and to promote sustainable development in the region.

“The government is commitment to economic reforms, security, and development, particularly in the underserved regions of Balochistan and Khyber Pakhtunkhwa,” the PM added.

During the ceremony, the prime minister oversaw the signing of the agreement between the federal and the Balochistan governments in Quetta. Federal ministers, the governor and the chief minister of Balochistan, and members of the provincial cabinet were also present on the occasion.

Speaking on the occasion, PM Shehbaz said the federal government in cooperation with the Balochistan government would shift around 28,000 agricultural tube wells of the province from electricity to solar energy.

He said the total cost of “this project is Rs55 billion and its 70% will be provided by the federal government”, while the rest by the Balochistan government.

Premier Shehbaz said that Balochistan Chief Minister Mir Sarfaraz Bugti had assured that the solarisation of tube wells would be completed in three months and it would help save around Rs90 billion annually.

“In the next phase, we are going for the solarisation of 1 million agricultural tube wells across the country, saving $3.5 billion, being spent on imported fuel every year,” the PM added.

He also said a 10% quota had been earmarked for the students of Balochistan, who would be sent to China at government expense for the latest professional training in the agriculture sector. 

Similarly, a 10% quota has been reserved for the students of Balochistan to get training in the field of Information Technology under the Chinese company Huawei, the premier said adding that funds had been allocated in the federal budget for the establishment of Danish Schools in Balochistan.

He expressed the hope that Balochistan Governor Sheikh Jaffar Khan Mandokhail, CM Bugti, and the entire provincial cabinet would continue playing their due role for the development and prosperity of the province. 

Meanwhile, Governor Mandokhail met with the Prime Minister, discussing the conversion of the province’s tube wells to solar power, party matters, and other mutual interests.

The governor expressed gratitude to the Prime Minister for his special interest in the province’s development and prosperity. Both leaders agreed to further strengthen and enhance the relationship between the federal and provincial governments.

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Economy

PSX breaks through the 80,000 threshold thanks to bailout bets.

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Stocks on Wednesday surged past the key resistance barrier of 80,000 points to hit an all-time high, fueled by bets that the country was closing in on a critical lifeline for its ailing economy, traders said.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index closed 0.9% higher, reaching a record high of 80,405 points during the day trade before ending at 80,233.67 points.

Minister of State for Finance, Revenue, and Power Ali Pervaiz Malik said on Wednesday that Pakistan was looking to clinch a staff-level agreement on an International Monetary Fund (IMF) bailout of more than $6 billion this month after addressing all of the lender’s requirements in its annual budget.

The index has rallied roughly 10% since the budget was presented on June 12, helped by continued optimism about getting an IMF bailout package to bolster the struggling economy.

“We hope to culminate this (IMF) process in the next three to four weeks,” Malik said while talking to Reuters. He added that Islamabad aims to finalize a staff-level agreement before the IMF board recess.

“I think it will be north of $6 billion,” he said of the size of the package, though he added that at this point the IMF’s validation was the primary focus. The IMF has, however, not responded to the junior finance minister’s statement yet.

Brokerage Arif Habib Limited (AHL) in a report said 65 shares rose, marking a positive trend, while 31 suffered losses.

“Leading the charge were HBL PA with a remarkable gain of 5.15%, POL PA climbing by 4.35%, and HUBC PA rising by 1.69%,  driving the index higher,” the report said.

On the other hand, FFC PA fell by 1.48%, EFERT PA dropped by 1.28%, and PAKT PA took a significant hit, plunging by 7.09%.

The AHL report said that the 80,000-point level would now serve as a strong support for further market expansion in the coming days. 

This milestone has set a new tone of confidence among investors, with the potential for continued growth and opportunity.

Speaking to Geo.tv, EFG Hermes Pakistan’s CEO Raza Jafri said that the gain was led by a burst of buying in SOEs such as the National Bank of Pakistan (NBP) and Oil and Gas Development Company (OGDC), with press reports indicating a push on privatization, strategic stake sales, and addressing legacy issues.

“This comes with increasing hopes of sizeable interest rate cuts in [the second half of 2024] and timely entry into an International Monetary Fund (IMF) programme,” he added.

The government’s privatization plan consists of two to three years and will be executed, Finance Minister Muhammad Aurangzeb said as the National Assembly passed the budget for FY25 last week.

Minister for Privatization Aleem Khan has said that the federal government intends to privatize around 24 SOEs in the coming years — with Pakistan International Airline expected to be the first enterprise to be privatized.

Meanwhile, Intermarket Securities Director of Research Saad Ali cited optimism regarding the IMF programme and continuation of macroeconomic recovery after the passing of the budget without significant bottlenecks or major amendments as the major reasons for the surge.

He added: “The market continues to re-rate from still low valuations and the prospect of lower interest rates in the future.”

A day earlier, stocks closed significantly higher at 79,552.89 points amid expectations of better earnings in the half-year results by SOEs in the oil sector.

Meanwhile, Alpha Beta Core CEO Khurram Schehzad said that the passing of the budget in line with most of the IMF’s conditions for the new larger and longer programme had given investor confidence in economic reforms and more stability in the economy.

Pakistan’s sovereign dollar bonds rallied, with the 2036 maturity gaining the most, rising by 1.19 cents to trade at 74.79 cents on the dollar by 1132 GMT.

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Economy

Government ‘fulfils all obligations’ for new bailout agreement with the IMF

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Pakistan is looking to clinch a staff-level agreement on an International Monetary Fund bailout of more than $6 billion this month after addressing all of the lender’s requirements in its annual budget, Minister of State for Finance, Revenue and Power Ali Pervaiz Malik said on Wednesday.

The Pakistan Muslim League-Nawaz (PML-N)-led coalition government has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures. 

In the budget, the government has increased the taxes on the already burdened salaried class, bought exporters into the normal tax regime, increased the petroleum levy to Rs70, and imposed new taxes on the real estate sectors, among others, to increase tax collection.

“We hope to culminate this (IMF) process in the next three to four weeks,” Malik told Reuters, with the aim of thrashing out a staff-level agreement before the IMF board recess.

“I think it will be north of $6 billion,” he said of the size of the package, though he added at this point the IMF’s validation was the primary focus.

The IMF did not respond immediately to a request for comment.

Earlier on Sunday, Finance Minister Muhammad Aurangzeb expressed optimism about the country’s chances of securing a new IMF bailout, following President Asif Ali Zardari’s approval of the tax-intensive budget for the upcoming fiscal year starting July 1.

“The IMF programme is our assurance in terms of macro stability. We are taking it forward; it is inevitable. I’m very optimistic that we’ll be able to take it through the finish line for an Extended Fund Programme which is going to be larger and longer in nature,” the minister said addressing a press conference in Islamabad.

In today’s interaction, Malik said the point of pushing out a tough and unpopular budget was to use it as a stepping stone for an IMF programme, adding the lender was satisfied with the revenue measures taken, based on their talks.

“There are no major issues left to address, now that all major prior actions have been met, the budget being one of them,” Malik said.

While the budget may win approval from the IMF, it could fuel public anger, according to analysts.

“Obviously they (budget reforms) are burdensome for the local economy but the IMF programme is all about stabilisation,” Malik said.

Sakib Sherani, an economist who heads private firm Macro Economic Insights, said a quick deal with the IMF was needed to avoid pressure on Pakistan’s foreign exchange reserves and the currency given the country’s maturing debt repayments and the effects of unwinding of capital and import controls that were applied earlier.

“If it takes longer, then the central bank may be forced to temporarily re-instate import and capital controls,” he said. “There will be a period of uncertainty, and one casualty is likely to be the rally in equities.”

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Business Economy

The government (FBR) boosts import duties on luxury commodities by up to 55%.

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The Federal Board of Revenue (FBR) in Pakistan has implemented significant changes to customs duties and regulatory measures on imports, effective from July 1, 2024. These adjustments, outlined in SROs 928(I)/2024 and 929(I)/2024, aim to regulate and manage the importation of various goods, imposing new duties and regulatory measures on a wide array of items. Here’s a comprehensive overview of the recent developments:

The FBR has introduced a 2% Additional Customs Duty (ADC) on items that were previously subject to a 0% duty rate. This measure applies to a range of imported goods and is structured across various rates: 2%, 4%, 6%, and 7%. The imposition of ADC on items previously enjoying a 0% duty rate is aimed at generating revenue and potentially encouraging local manufacturing by making imported goods marginally more expensive.

In addition to ADC, the government has imposed Regulatory Duty (RD) on a list of 657 luxury items. RD rates vary significantly, ranging from 5% to 55%, depending on the nature of the goods. This measure targets items such as cars, watches, cosmetics, perfumes, sunglasses, imported cycles, dairy products, natural honey, dates, fruit, and various types of clothing. Notably, cosmetics face a high RD of 55%, indicating a strong governmental stance on boosting local production or reducing imports in certain sectors.

Under SRO 929(I)/2024, the FBR has detailed specific duties applicable to automotive and agricultural sectors. This includes:

  • Components for Automotive Vehicles: A 2% ADC on sub-components, components, sub-assemblies, and assemblies used in the manufacturing of automotive vehicles, including agricultural tractors, road tractors, and CNG-dedicated vehicles.
  • Tyres and Tubes: Components for the assembly/manufacture of agricultural tractors and road tractors for semi-trailers and trailers above 280 HP are also subject to a 2% ADC.

These measures aim to support local industries by making imports for manufacturing slightly more expensive, thereby incentivizing the use of locally produced components and enhancing economic activity within these sectors.

Despite the broad application of ADC and RD, there are exemptions and special cases specified under various notifications and schedules. Notable exemptions include:

  • Essential Goods: Items such as seeds and spores for sowing, motor spirit, high-speed diesel oil, liquefied natural gas, and fertilizers are exempt from additional customs duties, ensuring affordability and availability of essential commodities.
  • Sector-Specific Exemptions: Importations under specific schemes and notifications, such as those related to temporary importation, special steel products, and certain categories of vehicles, benefit from exemptions to foster growth in strategic sectors.

The imposition of additional customs duties and regulatory measures by the FBR is expected to have several implications:

  1. Revenue Generation: The introduction of ADC on previously duty-free items aims to enhance government revenue streams through increased customs collections.
  2. Local Industry Support: Higher RD on luxury items and specific sectors like automotive encourages local manufacturing and reduces dependency on imports, aligning with national economic priorities.
  3. Consumer Impact: Consumers may experience increased prices on imported goods subject to new duties, potentially influencing purchasing behaviors and promoting alternatives.
  4. Compliance and Administration: Businesses and importers will need to ensure compliance with new duty structures and administrative requirements, potentially impacting supply chains and cost structures.

The recent regulatory changes by the FBR underscore Pakistan’s efforts to regulate imports, boost local industries, and manage economic priorities effectively. While aimed at revenue enhancement and economic protectionism, these measures also seek to balance consumer affordability and industrial growth. Monitoring the impact on various sectors and consumer markets will be crucial in assessing the long-term implications of these customs and regulatory adjustments.

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Economy

According to PBS, headline inflation increased by 12.6% annually in June.

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Picking up the pace at the outset of the new fiscal year, headline inflation came in at 12.6% year-on-year (YoY) in June compared to 11.8% in May, according to data released by the country’s federal statistics agency on Monday. This increase aligns with market and government expectations.

According to the Pakistan Bureau of Statistics (PBS), the Consumer Prices Index (CPI) based inflation increased by 0.5% on a month-on-month basis in June.

The CPI-based inflation in May rose 11.8% from a year earlier, the lowest reading in 30 months and below the finance ministry’s projections.

The country has been beset by inflation above 20% since May 2022. Last year in May, inflation jumped as high as 38% as the country navigated reforms as part of an International Monetary Fund (IMF) bailout programme. However, inflation has since slowed down.

Brokerage firm Topline Securities noted that the reading matched their projections, so it did not surprise them.

This CPI reading brings the average inflation for fiscal year 2023-24 to 23.4%, compared to 29.2% in fiscal year 2022-23.

The Ministry of Finance, in its Monthly Economic Update and Outlook report, had forecast a marginally higher inflation rate for June 2024 compared to the previous month but noted it was still lower than the same period last year. 

The ministry attributed the hike to higher prices of perishable items driven by Eid ul Adha and added that the government is working to manage supply and demand to bring about price stability, reduce market volatility, and improve the inflation outlook.

JS Global Research, another brokerage firm, had projected CPI inflation to hover around 12.5% YoY, with the FY24 average at 23.8%, continuing the slowdown that started in May (11.8%). This compares to 17.3% in April and a significant drop from 29.4% in June 2023.

“June is expected to see a 37 basis points month-on-month decrease in food inflation, following an 8% month-on-month drop in April. This translates to a year-on-year food inflation rate of just 0.5% in June, a significant improvement from 39% in Jun-2023,” JS Global said in its report.

AKD Securities Limited, another brokerage house, estimated that inflation would register a 12.55% year-on-year increase, up from 11.76% in the previous month.

“On a monthly basis, it is likely to ascend by 0.45%, following a slight rebound in vegetable prices due to ongoing festivities during the current month,” the AKD report said.

As per the AKD report, with both food and fuel indices slowing down in May, “we anticipate near-term CPI readings to remain highly susceptible to the upcoming inflationary hikes announced in the federal budget”. 

“Additionally, any further rebounds in essential commodity prices driven by a pullback in crude oil in the wake of global monetary easing, alongside moderate weakness in the domestic currency, if any, may keep disinflationary prospects in check,” according to the AKD report.

The parliament on Friday, June 28, passed the government’s tax-heavy finance bill for the current fiscal year amid an annual inflation projection of up to 13.5% for June 2024.

The bill came ahead of more talks with the IMF for a loan of $6 billion to $8 billion to avert a debt default for Pakistan, the slowest-growing economy in South Asia.

A finance ministry report had projected annual consumer price inflation for June 2024 between 12.5% to 13.5%, up from 11.8% in May.

“The government was implementing various administrative, policy and relief measures to control inflationary pressures,” the report said.

The rise in the tax target is made up of a 48% increase in direct taxes and a 35% hike in indirect taxes over revised estimates of the current year. Non-tax revenue, including petroleum levies, is seen increasing by 64%.

Opposition parties, mainly parliamentarians backed by jailed former prime minister Imran Khan, have rejected the budget, saying it would be highly inflationary.

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

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Economy

The temperature during the Saudi Hajj was 2.5°C higher due to climate change.

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 The heatwave in Saudi Arabia blamed for the deaths of 1,300 people on the Hajj pilgrimage this month was made worse by climate change, a team of European scientists said on Friday.

Temperatures along the route from June 16 to 18 reached 47°C (117°F) at times and exceeded 51.8°C at Mecca’s Great Mosque.

The heat would have been around 2.5°C (4.5°F) cooler without the influence of human-caused climate change, according to a weather attribution analysis by ClimaMeter.

ClimaMeter conducts rapid assessments of the role of climate change in particular weather events.

The scientists used satellite observations from the last four decades to compare weather patterns from 1979 to 2001 and 2001 to 2023.

Although dangerous temperatures have long been recorded in the desert region, they said natural variability did not explain the extent of this month’s heatwave and that climate change had made it more intense.

The assessment also found that similar past events in Saudi Arabia occurred in May and July, but now June experiences more severe heatwaves.

“The deadly heat during this year’s Hajj is directly linked to fossil fuel burning and has affected the most vulnerable pilgrims,” said Davide Faranda, a scientist at France’s National Centre for Scientific Research who worked on the ClimaMeter analysis.

Climate change has made heatwaves hotter, more frequent and longer lasting. Previous findings by scientists with the World Weather Attribution group suggest that, on average globally, a heatwave is 1.2°C (2.2°F) hotter than in preindustrial times.

Medical authorities generally do not attribute deaths to heat, but rather to the heat-related coronary or cardiac illnesses exacerbated by high temperatures. Still, experts said it is likely that extreme heat played a role in many of the 1,300 Hajj deaths.

“Saudi Arabia is one of the biggest oil producing nations in the world and they often act to frustrate and delay climate action. They need to realise their actions have consequences,” said Mohamed Adow, director of nonprofit Power Shift Africa.

Saudi Arabia is the world’s second-largest oil producer, after the United States, and state oil firm Saudi Aramco is the world’s largest corporate greenhouse gas-emitter. 

It is responsible for more than 4% of the world’s historical carbon emissions, according to a database of emissions from carbon majors.

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Economy

Taliban government delegates meet in Doha with UN and Afghan envoys.

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Representatives of Afghanistan’s Taliban government began meetings on Sunday with UN officials as they attended talks in Doha with special envoys to the Central Asian country for the first time, a UN spokesperson said.

The two-day, UN-hosted meeting in Qatar is the third of its kind in the gas-rich emirate in just over a year but the first to include Taliban authorities who seized power in Afghanistan in 2021.

“Preparatory discussions have begun with the UN meeting separately with many of the special envoys in attendance and with the Taliban representatives,” the UN spokesperson, who asked not to be named, told AFP.

UN officials and over 20 envoys, including the US special representative to Afghanistan, were expected to meet with the Taliban government’s delegation led by spokesperson Zabihullah Mujahid.

The talks in Doha were due to discuss increasing engagement with Afghanistan and a more coordinated response to the country, including economic issues and counter-narcotics efforts.

In the aftermath of the Taliban’s return to power, the international community has grappled with its approach to Afghanistan’s new rulers.

The Taliban authorities had been excluded from the first round of UN talks in May 2023 and declined to attend the second round in February, demanding that their delegation be the only Afghan representatives.

The Taliban government in Kabul has not been officially recognised by any other government since it took power and the administration has subjected women to laws characterised by the UN as “gender apartheid”.

In a push to include Taliban government representatives, that condition has been met with the exclusion of civil society groups which will meet with representatives on Tuesday instead.

‘Caving’

Ahead of the UN event, Taliban foreign ministry official Zakir Jalaly on Sunday maintained that any meetings taking place after Monday were “unrelated” to the official agenda.

The sidelining of civil society organisations has provoked outcry among the groups, including women’s rights activists.

“Caving into the Taliban’s conditions to secure their participation in the talks would risk legitimising their gender-based institutionalised system of oppression,” head of Amnesty International Agnes Callamard said in a statement ahead of the talks.

Yesterday, Mujahid told a Kabul news conference that Taliban authorities “acknowledge the issues about women”, but asserted they were “Afghanistan’s issues” to solve.

Hameed Hakimi, an Afghanistan expert, told AFP the international community was “genuinely” concerned over women’s rights and the role of civil society in the country.

But he explained that international policy makers, “while accepting the Taliban are not perfect players in the game, also recognise that there is this gap that has not been filled by the Afghans themselves”.

In recent years, many governments, international organisations and aid agencies cut off or severely scaled back their funding to Afghanistan in response to the Taliban authorities’ return to power — dealing a serious blow to the already struggling economy.

“On the one hand, there’s a humanitarian situation that requires funding, on the other hand you can’t alleviate the humanitarian situation without the political engagement,” the Britain-based, Chatham House specialist explained.

Ahead of the UN-hosted discussions, the Taliban government delegation held meetings in Doha with special envoys from Russia, India, Saudi Arabia and Uzbekistan, Mujahid said on X, formerly Twitter.

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Economy

Pakistan has increased the price of gasoline by Rs7.45 per litre.

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The federal government has jacked up the petrol price in the country by Rs7.45 per litre from Rs258.16 to Rs265.61 for the next fortnight in line with an “increasing trend in the international market”.

The Finance Division officially notified the latest prices, which it said had been worked out by the Oil and Gas Regulatory Authority (Ogra), based on the price variations in the international market. 

As per the notification, the price of high-speed diesel (HSD) has also been increased by Rs9.56 to Rs277.45 per litre. The new fuel prices will come into effect from July 1.

ProductsExisting priceNew priceIncrease/Decrease
PetrolRs258.16Rs265.61+Rs7.45
High Speed Diesel (HSD)Rs267.89Rs277.45+9.56

“The prices of Petroleum products have seen an increasing trend in the international market during the last fortnight,” the official notification read. 

The changes in fuel prices come for the first time since the announcement of federal budget for fiscal year 2024-25 earlier this month on June 12.

The Finance Division stated that there will be no change in the applicable taxes and duties, which will remain at the existing level, as had been notified by the government in the Budget FY25.

The government had increased the petroleum development levy (PDL) by Rs10 per litre — from Rs60 to Rs70 — in the budget, further burdening the inflation-hit masses.

However, Finance Minister Muhammad Aurangzeb had clarified earlier today that the increased levy on petroleum products was not being imposed immediately, meaning that the PDL remains the same in the latest fuel price review.

Earlier, the government had provided a cumulative relief of Rs35 per litre by decreasing the petrol price in the last four fortnightly reviews.

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Business Economy

Pakistan will seek Qatar’s permission to resell excess LNG.

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The Pakistani government is set to approach Qatar for consent to resell liquefied natural gas (LNG) imported from Doha on the spot market if domestic demand falls short. This step is aimed at addressing the challenges posed by a long-term LNG supply contract signed between Islamabad and Doha in 2016, which obligates Pakistan State Oil (PSO) to take supplies regardless of domestic consumption needs. The price revision under this contract is slated for February 2026.

This contractual obligation has caused operational difficulties for Sui Northern Gas Pipeline Limited (SNGPL), especially when there is a mismatch between supply and demand, leading to pipeline issues. According to a senior official from the Ministry of Energy, Islamabad is preparing to use diplomatic channels to either cancel shipments or secure permission to sell surplus LNG on the spot market to alleviate these pressures.

The disclosure was made during a public hearing conducted by the National Electric Power Regulatory Authority (Nepra) on a petition from power distribution companies seeking approval to charge consumers an additional Rs3.41 per unit due to fuel adjustments for May 2024. The hearing highlighted that the actual fuel rate was Rs9.12 per unit, compared to a reference price of Rs5.7 per unit, resulting in a proposed increase.

During the hearing, power distribution companies reported a 5% drop in electricity consumption due to favorable weather conditions, with total demand in May 2024 being only 17,000 megawatts. More electricity was produced using LNG rather than coal, with the cost of LNG-based electricity pegged at Rs24.7 per unit. This unexpected drop in power-sector consumption has increased line pack pressure for gas utilities, highlighting the need for better forecasting of LNG demand.

In May, the country faced critical line pack pressure due to a reduction in the use of Re-Gasified Liquefied Natural Gas (RLNG) by the power sector, which exacerbated transmission risks. Officials at the hearing stressed the importance of forecasting LNG demand months in advance to avoid such issues.

The hearing also touched on the role of net metering in Pakistan’s energy mix, which was noted to be less than 1%. Some intervenors accused the Power Division of downplaying net metering’s significance and suggested that net metering users were actually consuming more electricity from the national grid at night, arguing that criticism against net metering was baseless. They questioned Nepra’s role in providing consumer relief over the past five years and criticized the lack of options for consumers to pay bills in installments.

Additional concerns raised during the hearing included a coal scam at the Sahiwal coal power plant, cases lost by the Central Power Purchasing Agency (CPPA) in international courts, and the rising circular debt in the power sector. However, the CPPA, representing power distribution companies, declined to address these queries during the hearing, stating that they were not pertinent to the current discussion and should be submitted in writing.

The CPPA’s reluctance to engage with these issues underscores broader challenges in Pakistan’s energy sector, which faces multiple pressures from financial constraints, operational inefficiencies, and regulatory complexities. The need for an IMF bailout and adherence to stringent fiscal measures, including increased taxes and levies, further complicates the situation.

The government’s move to renegotiate LNG contracts with Qatar reflects its broader strategy to manage energy supplies more flexibly and align them with domestic demand. By securing the ability to resell LNG on the spot market, Islamabad aims to mitigate the risks associated with fixed long-term contracts and avoid operational bottlenecks that can disrupt gas transmission.

As Pakistan continues to navigate its economic challenges, the energy sector remains a critical area requiring careful management and strategic planning. Ensuring a balance between supply and demand, improving forecasting accuracy, and addressing infrastructure constraints are essential steps towards achieving energy stability and sustainability. The ongoing discussions with Qatar and the outcomes of the Nepra hearings will likely play significant roles in shaping the future of Pakistan’s energy landscape.

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Business Economy

FinMin Aurangzeb’very hopeful’ about unlocking IMF deal after tax-laden budget adopted.

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Finance Minister Muhammad Aurangzeb expressed strong optimism on Sunday regarding Pakistan’s prospects of securing a new International Monetary Fund (IMF) bailout, following President Asif Ali Zardari’s approval of a tax-heavy budget for the upcoming fiscal year beginning July 1.

Speaking at a press conference in Islamabad, Aurangzeb emphasized the critical importance of the IMF programme for ensuring macroeconomic stability in Pakistan. “The IMF programme is our assurance in terms of macro stability. We are taking it forward; it is inevitable. I’m very optimistic that we’ll be able to take it through the finish line for an Extended Fund Programme which is going to be larger and longer in nature,” he stated.

The federal government, grappling with severe financial constraints, has introduced an Rs18.9 trillion budget replete with measures aimed at increasing tax revenue. These measures are essential for securing the much-needed IMF bailout after the country nearly defaulted last year.

Key components of the budget include heightened taxes on the salaried class, the inclusion of exporters in the regular tax regime, an increase in the petroleum development levy (PDL) to Rs70 per liter, and new taxes on the real estate sector. These measures are designed to boost tax collection and address the fiscal deficit. However, experts caution that while these steps may facilitate the unlocking of the IMF deal, they are likely to exacerbate inflation, potentially provoking public discontent.

Addressing concerns about the increased tax burden on an already struggling population, Aurangzeb expressed empathy and a commitment to easing the financial strain in the future. “I completely understand the stress that people from different sectors feel about additional taxes; I completely empathise and sympathise, but we need to work for it,” he said.

Aurangzeb underscored the government’s intent to mitigate the burden on the public and businesses by improving the management system and curbing financial leakages.

One significant aspect of the budget is the increase in the petroleum development levy (PDL) by Rs10 per liter, raising it from Rs60 to Rs70. This move has raised public concerns due to the already high petrol prices. However, Aurangzeb clarified that the increased levy would not be imposed immediately. “There are talks about the PDL. I want to be very clear: the Rs70 limit that we’ve set, we’re not going to impose it [right now],” he assured. “This is a ceiling. In my first budget speech, I had set it at Rs80, which was later revised to Rs70 and it will not be imposed; it’ll be kept as a headroom.”

In addition to the Rs70 levy on petrol, the same levy will be applied to diesel, while Rs50 per liter will be imposed on light diesel oil and kerosene oil. High-octane fuel will also be subject to the Rs70 per liter levy.

To boost tax collection in a country where the informal sector dominates employment, the government has implemented stringent measures. Only 5.2 million people filed income tax returns in 2022, despite a population exceeding 240 million. To address this, the government has blocked mobile phone SIM cards for non-filers and will restrict them from traveling abroad.

The finance minister defended the budget, emphasizing that new sectors would be brought into the tax net. “There should be no confusion that we aren’t roping in new sectors. The same goes for the real estate sector, previously, the demand side was taxed […] and now the supply side’s income will also be taxed,” he explained.

Aurangzeb also highlighted the importance of broadening the tax base and ensuring compliance. “I’m repeating myself. When Miftah [Ismail] sb proposed taxing retailers in 2022, it should have been implemented. We cannot have any segment that is not contributing to society and the exchequer,” he asserted.

He further noted the registration of 42,000 new retailers, who will be taxed starting in July. Emphasizing the need for compliance, he stated, “Non-filers should not exist. In this particular budget, we have taken it to the punitive level so as to make the non-filers realise that they [have to file their taxes].”

Aurangzeb reiterated the inevitability of the IMF programme for Pakistan’s economic stability and the government’s commitment to taking the necessary steps to secure it.

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Business Economy

PIA lowers fares for Umrah pilgrims

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Pakistan International Airlines (PIA) has announced significant price cuts for Umrah flight tickets, a move expected to benefit many Pakistani pilgrims. The new fares, applicable until July 15, 2024, offer a substantial reduction compared to previous rates, making the spiritual journey to Madina more accessible for many Pakistanis.

A PIA spokesperson revealed that the discounted fares are available immediately for those traveling to Madina from various Pakistani cities. Specifically, the two-way ticket from Lahore and Islamabad to Madina is now priced at Rs86,000, while the same ticket from Karachi to Madina costs Rs76,000. These rates are exclusive of taxes. Previously, the price for an Umrah ticket stood at Rs120,000, marking a significant reduction that underscores PIA’s commitment to facilitating religious travel for Pakistani citizens.

The initiative comes at a crucial time as the new Umrah season has just commenced. The season began following the annual Hajj pilgrimage, which saw 1.8 million Muslims from around the world gather in Saudi Arabia. With Umrah being a pilgrimage that can be undertaken at any time of the year, the new pricing strategy by PIA is likely to encourage more pilgrims to make the journey to the Grand Mosque in Makkah.

Saudi Arabia has been actively working to increase the number of Umrah pilgrims. Reports indicate that the kingdom aims to host 30 million Umrah pilgrims annually. Abdulrahman bin Fahd, an assistant undersecretary for Umrah Affairs, highlighted this ambition in a statement to Gulf News. He mentioned that the goal for the current year is to welcome over 10 million Umrah pilgrims, reflecting a continuous and strategic effort to expand the pilgrimage capacity and infrastructure.

The PIA fare reduction is expected to contribute to this goal by easing the financial burden on Pakistani pilgrims. By making travel more affordable, PIA is playing a part in Saudi Arabia’s broader vision for religious tourism, which is a key component of the kingdom’s economic diversification plans under Vision 2030.

The reduced fares are part of PIA’s broader strategy to enhance its services and make air travel more affordable and accessible. This initiative not only serves the religious aspirations of Pakistani citizens but also aligns with PIA’s efforts to increase its passenger load and operational efficiency. The airline, which has faced numerous financial and operational challenges in recent years, is looking to regain its competitive edge and improve its market share.

Moreover, the price cuts are timely, given the increasing demand for Umrah travel post-Hajj. Many Muslims prefer to perform Umrah after the Hajj season when the holy sites are less crowded. The discounted rates are likely to attract a large number of pilgrims who had postponed their travel plans due to high costs.

In addition to the price cuts, PIA is expected to maintain its focus on safety, reliability, and customer service to ensure a comfortable and hassle-free journey for all passengers. The airline has a longstanding reputation for serving the needs of Umrah and Hajj pilgrims, and this move reinforces its commitment to supporting Pakistanis in fulfilling their religious duties.

The response to the fare reduction has been overwhelmingly positive, with travel agents and prospective pilgrims welcoming the news. Many have expressed their gratitude to PIA for making the pilgrimage more affordable. This move is also anticipated to boost the overall travel and tourism sector in Pakistan, with more people likely to travel for religious purposes.

In conclusion, PIA’s announcement of discounted Umrah fares is a significant development that stands to benefit many Pakistani pilgrims. By reducing the financial barriers to performing Umrah, PIA is facilitating greater religious participation and supporting Saudi Arabia’s goal of increasing the number of pilgrims. This initiative reflects PIA’s strategic focus on customer satisfaction and its role in promoting religious tourism, which is integral to both Pakistan and Saudi Arabia’s cultural and economic landscapes.

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Economy

The government proposes pension modifications in an effort to lessen financial load.

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The government of Pakistan has proposed significant modifications to the pension system in an effort to alleviate the financial burden on the country’s economy ¹ ² ³. The proposed changes aim to reduce the financial load of pension payments, which are expected to exceed Rs 1 trillion in the coming years ³.

The key modifications include calculating pensions based on the average of the last three years’ drawn salary, reducing the commutation formula to 25%, and limiting pension entitlement for certain categories of retirees ² ³. Additionally, the proposal suggests indexing pension increases with the Consumer Price Index (CPI) and introducing penalties for early retirement ² ³.

The changes also aim to transition the pension system to a defined contributory model, where expenses will no longer be borne by the government ². Federal government employees will be entitled to a gross pension based on 70% of average pensionable emoluments drawn during the last 36 months of service before retirement ¹ ² ³.

The proposal also introduces the option for federal government employees to commute up to 25% of their gross pension at the time of retirement ². Family pension entitlements will be limited to a maximum of 10 years after the death or disqualification of a spouse, with exceptions for Shuhada families and disabled or special children ² ³.

The proposed modifications are expected to significantly impact the pension landscape for public sector employees in Pakistan ². The government’s efforts to reform the pension system aim to reduce the financial burden and ensure sustainability for future generations ³.

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Economy

Government approves joint ventures to move Chinese industry to Pakistan

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Prime Minister Shehbaz Sharif on Wednesday permitted joint ventures (JVs) between the two nations to relocate Chinese industries to Pakistan, as part of its efforts to fire up the China-Pakistan Economic Corridor (CPEC) activities following his recent engagements with top officials from Beijing, state media reported.

Presiding over a meeting centred on the matters of the Board of Investment (BoI), the premier underscored the government’s commitment to fostering both local and foreign investment, which he said were among the government’s priorities

During the meeting, he spotlit the Pakistan Muslim League-Nawaz (PML-N) )-led administration’s contributions towards creating a truly business-friendly environment for traders and investors.

The prime minister, according to state-run APP, tasked the authorities to submit a detailed report on the follow-up actions related to the memoranda of understanding (MoUs) inked between Pakistani and Chinese companies during his recent visit to Shenzhen, China. 

China’s President Xi Jinping in a meeting with Prime Minister Shehbaz in Beijing on June 7 had said that their two countries should focus on “promoting the joint construction of the CPEC,” and Chinese and Pakistani firms 31 MoUs covering technology, agriculture, trade, energy, coal and gasification, according to the Ministry of Commerce.

The premier also called for a review of the draft legislation for the Special Economic Zones (SEZs) One-Stop Shop, keeping in view the latest economic and business-related developments from his successful China trip.

Highlighting the potential for relocating industries, the PM identified significant potential for China’s textile, leather, footwear, and other sectors to move to Pakistan, as per the state media.

During the briefing, the BoI secretary outlined steps being taken to support this industrial relocation, including hiring Chinese experts to establish a Business Facilitation Centre in the federal capital. 

Moreover, the draft “Easy Business Act” is being forwarded to the Cabinet Committee for Legislative Cases.

The meeting was attended by Federal Minister for Privatisation and Investment Abdul Aleem Khan, Federal Minister for Commerce Jam Kamal, Federal Minister for Finance and Revenue Muhammad Aurangzeb, Federal Minister for Petroleum Dr Musadik Malik, Prime Minister’s Coordinator Rana Ehsan Afzal, and other senior government officials.

In the June 7 meeting, Xi also said that China would also help Pakistan with its economic and social development.

“China will, as always, firmly support Pakistan and safeguard its national sovereignty and territorial integrity,” Xi told Sharif, adding that the two countries’ “all-weather strategic partnership… had broad development prospects.” .

But the Chinese leader also called on his guest to step up efforts to ensure the security of Chinese projects in the country.

Pakistan owes China almost 13% of its total debt, which was taken on to pay for infrastructure projects over the years and other types of spending.

Beijing has lent Islamabad almost twice as much as its second- and third-ranked multilateral lenders, the World Bank and the Asian Development Bank, to which Pakistan owes $16.2 billion and $13.7 billion respectively.

Chinese firms have also invested a further $14 billion in Pakistan since CPEC was announced in the summer of 2013 as part of Chinese President Xi Jinping’s flagship Belt and Road Initiative, data from the American Enterprise Institute think tank shows.

Most of that investment was made by Chinese state-owned energy companies financing fossil-fuel and nuclear power plants, as well as logistics routes under construction connecting Gwadar Port in the Arabian Sea with the Xinjiang region in China’s northwest.

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Economy Politics

Another PTI MNA declares his own “loadshedding schedule” and forcibly restores the power.

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Pakistan Tehreek-e-Insaf lawmakers continue to make trouble for the electricity supply companies under the centre’s authority in Khyber Pakhtunkhwa as another PTI MNA on Saturday night barged into a South Waziristan grid station and forcibly restored electricity supply to different areas.

A rift is going on between the province and federal government as KP Chief Minister Ali Amin Gandapur has allowed lawmakers to use force to restore electricity supply to feeders suffering from more than 12 hours of loadshedding.

Except for K-Electric, which was privatised in 2005, all the power distribution companies are owned by the Government of Pakistan, as the federal government deals with the power supply matter.

Tribal Areas Electricity Supply Company (TESCO) is responsible for supplying electricity in tribal areas, including North and South Waziristan, whereas Peshawar Electric Supply Company (PESCO) supplies power to the rest of the province.

Gandapur Friday warned the Shehbaz Sharif-led federal government that things could get out of hand if it does not reduce loadshedding to a maximum of 12 hours in his province.

Following the footsteps of his party’s lawmakers, the KP CM himself restored the electricity supply on the third day of Eid ul Adha.

With temperatures rising across the country as climate change shows its effects, power cuts have become frequent and longer in some areas, leading to back-to-back protests.

After storming the Jandola grid station with his supporters a day earlier, MNA Zubair Khan Wazir announced his own loadshedding schedule as well.

“Electricity supply to FR Jandola and Upper Waziristan will continue for 12 hours and remain shut for 12 other hours,” the legislator said.

Wazir said his workers would stay at the grid station to switch on and off the power supply. 

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Economy National

NEPRA proposes fixed fees of up to Rs1000 for domestic consumers.

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The National Electric Power Regulatory Authority (NEPRA) of Pakistan has recently proposed the introduction of fixed charges for domestic electricity consumers, potentially amounting to up to Rs1,000 per month. This proposal has sparked significant debate among stakeholders, including consumers, energy experts, and policymakers, as it represents a substantial shift in the country’s electricity billing framework.

The fixed charges, as proposed by NEPRA, would be a mandatory monthly fee applied to domestic electricity consumers, regardless of their consumption levels. The rationale behind this move is to stabilize revenue streams for electricity distribution companies (DISCOs) and to address the financial challenges faced by the energy sector in Pakistan. According to NEPRA, these fixed charges are essential for ensuring the sustainability of the power supply and for supporting the infrastructure investments required to improve service delivery.

Financial Stability for DISCOs, One of the primary reasons NEPRA is considering fixed charges is to provide a stable and predictable income for DISCOs. This stability is crucial for maintaining and upgrading the aging infrastructure, ensuring consistent electricity supply, and reducing the sector’s reliance on government subsidies.

Infrastructure Improvement, With a steady revenue stream, DISCOs can invest more effectively in infrastructure improvements. This includes upgrading transmission lines, reducing line losses, and investing in modern technology to enhance the efficiency and reliability of the electricity network.

Encouraging Energy Efficiency, Fixed charges can also encourage consumers to be more mindful of their energy usage. By decoupling part of the bill from consumption, NEPRA aims to promote energy efficiency and conservation among households, which can help in managing demand and reducing overall energy costs.

    The proposal has elicited mixed reactions from various quarters. Consumer advocacy groups and the general public have expressed concerns about the additional financial burden that fixed charges would impose, especially on lower and middle-income households. Critics argue that such charges are regressive, disproportionately affecting those who consume less electricity and may struggle to afford higher utility bills.

    On the other hand, some energy experts and industry stakeholders have welcomed the proposal, emphasizing the need for financial reforms in the power sector. They argue that without such measures, the energy sector’s sustainability and ability to provide reliable services could be severely compromised.

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    Economy Politics

    Indian court prevents Kejriwal, a PM Modi opponent, from being released from jail

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    An Indian court on Friday stopped the release of one of Prime Minister Narendra Modi’s chief opponents from jail, a day after the latter was granted bail in a long-running corruption case, reports said.

    Arvind Kejriwal, the chief minister of Delhi and the leader of the opposition Aam Aadmi party, denies the charges as a “political conspiracy” by Modi and his Hindu-nationalist Bharatiya Janata Party (BJP).

    He was released from detention to campaign partway through India’s weeks-long general election but returned to jail after voting ended this month.

    A trial court ordered his release late Thursday, but before he could walk out of jail on Friday the country’s top economic crimes investigative agency, the Enforcement Directorate (ED), appealed to the Delhi High Court.

    It suspended his release until it could decide on the appeal, local media reported.

    The decision could come in “two-three days”, legal news portal Live Law posted on social media platform X.

    Kejriwal is one of several opposition leaders in India under criminal investigation over various corruption-related probes, which Modi’s opponents say are being used by the premier to weaken any potential challengers.

    The 55-year-old has been chief minister of Delhi, the region which includes the capital New Delhi, for nearly a decade.

    He first came to prominence as an anti-corruption crusader, but his government was itself accused of graft when it liberalised liquor sales in 2021.

    His party is a key member of the opposition INDIA bloc, led by the main opposition Congress party, which defied polls and expectations to deprive Modi’s BJP of its overall parliamentary majority in the election.

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    Business Economy

    Industries ministry attempts to reverse hike in taxes on hybrid and electric vehicles.

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    The Ministry of Industries and Production in Pakistan has formally requested the government to reconsider and reverse the recent hike in taxes on hybrid and electric vehicles (EVs). This move reflects growing concerns about the potential negative impact on the adoption of green technology and the automotive industry’s growth.

    Earlier this year, the government announced an increase in taxes on hybrid and electric vehicles as part of its broader fiscal policy adjustments. The rationale behind the tax hike was to increase revenue and address budgetary constraints. However, this decision has sparked significant backlash from industry stakeholders, environmental advocates, and consumers alike.

    The Ministry of Industries and Production has outlined several key reasons for seeking a reversal of the tax hike:

    Promotion of Green Technology: The ministry emphasizes the importance of promoting hybrid and electric vehicles to reduce carbon emissions and combat environmental pollution. High taxes on these vehicles could deter consumers from opting for greener alternatives, hindering progress towards environmental sustainability goals.

    Market Growth and Consumer Affordability: The increased taxes have made hybrid and electric vehicles more expensive, limiting their affordability for the average consumer. The ministry argues that maintaining lower taxes would help stimulate market growth, making these vehicles accessible to a broader segment of the population.

    Investment in the Automotive Sector: Pakistan’s automotive industry has seen significant investments in recent years, with several international and local companies showing interest in producing hybrid and electric vehicles domestically. The ministry believes that favorable tax policies are crucial for sustaining this investment momentum and encouraging further expansion.

    Global Trends and Competitiveness: Many countries are incentivizing the adoption of hybrid and electric vehicles through tax breaks and subsidies. The ministry contends that Pakistan needs to align with these global trends to remain competitive in the international market and attract foreign investment.

      Reversing the tax hike could have significant positive implications for both the economy and the environment. By making hybrid and electric vehicles more affordable, the government could encourage a shift away from traditional internal combustion engine vehicles, leading to a reduction in fuel consumption and greenhouse gas emissions.

      Moreover, stimulating demand for these vehicles could drive growth in the automotive sector, creating jobs and boosting economic activity. Local manufacturing and assembly of hybrid and electric vehicles would also benefit from such a policy, fostering technological advancement and expertise within the country.

      The ministry’s request has garnered support from various stakeholders, including automotive manufacturers, environmental organizations, and consumer rights groups. Automakers have welcomed the potential reversal, noting that high taxes undermine their efforts to introduce more environmentally friendly vehicles into the market.

      Environmental groups have also voiced their support, emphasizing the need for policies that encourage the adoption of green technologies to address air quality and climate change issues. Consumers, on the other hand, are hopeful that a reduction in taxes will make hybrid and electric vehicles more financially accessible.

      Despite the widespread support, the government faces challenges in balancing fiscal constraints with the need for sustainable growth. Reversing the tax hike would result in a reduction in revenue, which could impact the government’s budgetary plans. Therefore, careful consideration and possibly alternative revenue-generating measures will be necessary to offset the potential shortfall.

      The Ministry of Industries and Production’s request to reverse the hike in taxes on hybrid and electric vehicles highlights a crucial intersection of economic, environmental, and technological priorities. As Pakistan navigates its path towards sustainable development, aligning fiscal policies with these broader goals will be essential. The government’s decision on this matter will not only influence the automotive industry’s trajectory but also reflect its commitment to promoting green technology and environmental sustainability. As the debate continues, stakeholders remain optimistic that a favorable resolution will be reached, paving the way for a greener and more prosperous future for Pakistan.

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      Press Release: ISSI-MEMO Co-host Webinar on “The Future of Palestinian Refugees”

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      The Centre for Afghanistan Middle East and Africa (CAMEA) at the Institute of Strategic Studies Islamabad (ISSI), in collaboration with the Middle East Monitor (MEMO), hosted a webinar to mark World Refugee Day, titled, “The Future of Palestinian Refugees.” The webinar was moderated by Ms. Amina Khan, Director CAMEA. The speakers at the webinar included Ambassador Sohail Mahmood, Director General ISSI; Ambassador Khalid Mahmood, Chairman BoG, ISSI; Dr. Daud Abdullah, Director Middle East Monitor (MEMO); Dr. Salman Abu Sitta, Founder and President Palestine Land Society; Dr. Nader Al-Turk, Deputy Head of Mission, Embassy of the State of Palestine; and Prof. Nur Masalha, Palestinian historian.

      DG ISSI Ambassador Sohail Mahmood stressed the need to acknowledge the unwavering spirit of refugees the world over. He highlighted how Pakistan has been hosting Afghan refugees since 1979, and remains a major refugee-hosting country despite economic challenges. He noted that according to UNHCR global displacement, driven by conflicts in Gaza, Sudan, and Myanmar, reached 117.3 million people in 2023, including 1.7 million Palestinians displaced in Gaza due to Israel’s war. He described Palestinian refugee crisis, rooted in illegal occupation and dehumanizing treatment by Israel, as one of the longest-standing humanitarian issues. Despite formidable challenges, Palestinian refugees had shown remarkable resilience over the decades. On World Refugee Day, Ambassador Sohail Mahmood called for solidarity with Palestinian refugees and other refugees worldwide, urging the international community to address displacement’s root causes, ensure refugees’ fundamental rights, and help refugees rebuild their lives, emphasizing the need for Palestinians to reclaim what is rightfully theirs.

      Ms. Amina Khan highlighted the Palestinian refugee crisis due to Israel’s systematic occupation and oppression since 1948. She said that the ongoing reign of terror that has been unleashed on Palestine amounts to what can only be characterized as genocide has led to further displacement putting into question the right of return for refugees. She said despite Israel’s ongoing atrocities, Palestinians have demonstrated their steadfast determination and resilience. Ms. Khan added that systematic oppression leads to resistance and called for Palestinians’ rightful return to an independent homeland with Jerusalem as its capital.

      Dr. Salman Abu Sitta lamented that the issue of Palestinian refugees was being ignored by certain countries while focusing on Israeli hostages, asserting the refugees’ legal right to return despite Israeli usurpation. He added that the international law was on the side of the Palestinian refugees and supported their right to return. He highlighted the UNHCR’s failure to recognize all refugees and called for a future plan with refugees’ voices central. Dr. Sitta urged leveraging global university protests and civil society support for the Palestinian cause, increasing contributions to South Africa’s case against Israel, and more efforts by the Muslim and Arab countries.

      Prof. Nur Masalha emphasized understanding the history of the Palestinian issue, highlighting the 1948 Nakba and ongoing expulsions. Noting that Palestinians never voluntarily left their land and were forcibly evicted through systematic actions of the occupying power. He added that international law supports the right of return and stressed empowering refugees. He pointed out that Israel’s refusal nullifies the concept of voluntary repatriation and separates individual rights from collective self-determination. He emphasized the centrality of the refugee issue, stressing that it should be pressed alongside self-determination as both complement each other.

      Dr. Nader Al-Turk highlighted the rise in Palestinian refugees since 1948, Israel’s disregard for UN resolutions, and targeting of UNRWA. He noted the impact of the 2018 Trump funding freeze and the displacement of 500 villages. He called for international efforts to address the refugee crisis and hold Israel accountable.

      Dr. Daud Abdullah emphasized the right of return for refugees, focusing on repatriation, property restitution, and compensation. He noted that historical agreements have failed to resolve refugee issues justly and argued that political agreements must uphold refugee rights under international law. He also underscored that there was no conflict between right of return and self-determination as both complemented each other.

      During his concluding remarks, Ambassador Khalid Mahmood lamented UNRWA’s chronic underfunding and stressed addressing the root causes, ensuring refugee return, property restitution, and compensation. He urged unity among refugees to press their cause more fervently and energetically.