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In Brief
ECONOMY
Pakistan, EIB sign EUR 60 million declaration for Karachi sewage project
On 17 December, Pakistan and the European Investment Bank (EIB) signed a €60 million declaration to support a major sewage and wastewater management initiative in Karachi, aimed at rehabilitating and expanding key water treatment infrastructure in the city. Signed on the sidelines of the 15th Pakistan–EU Joint Commission in Brussels, the agreement formalises EIB financing for the Karachi Water Infrastructure Framework project, which is expected to improve water security and expand access to safe water for the metropolis’s growing population. The project reflects Islamabad’s push to modernise urban services and invest in climate-resilient infrastructure, while also deepening development cooperation with European partners. (“Pakistan, EIB sign €60 million declaration for Karachi sewage project,” Dawn, 17 December 2025)
Current account turns positive in November with USD 100 million surplus
On 17 December, Dawn reported that the November 2025 current account surplus of Pakistan of USD 100 million was an improvement from October's current account deficit of USD 291 million. This change was caused mostly by an import contraction as opposed to improving export performance. As such, State Bank of Pakistan data shows that import values decreased 12 per cent MoM, and export values decreased 10 per cent MoM. This decline helped to narrow the external deficit, although the trade deficit increased it to USD 37.17 billion for the first five months against FY26. The steady general level of remittances of approximately three billion dollars every month has helped to be stable in terms of economic indicators on the balance of payments, and would also support foreign exchange reserves. However, there are concerns among the economic community that a significant portion of the current account surplus will be impossible to maintain due to the anti-growth effect of the continued contraction in importation activity, combined with the government's apparent continued use of imports as the main form of economic management. (“Current account turns positive in November with $100m surplus,” Dawn, 17 December 2025)
SECURITY
National leaders vow to crush terrorism on APS anniversary
On 17 December, on the 11th anniversary of the 2014 Army Public School (APS) attack in Peshawar, national leaders reaffirmed their commitment to a zero tolerance strategy for terrorism by committing to pursue terrorists and their affiliates with the utmost severity, President Asif Ali Zardari paid tribute to the APS martyrs, stating that no negotiations would be held with those who take up arms against the state or attack children, commended security and intelligence agencies for their efforts to prevent additional attacks and noted that Indian sponsored terrorism continues as a threat to Pakistan. In addition, Prime Minister Shehbaz Sharif expressed similar sentiments, indicated that the sacrifice of APS victims would not be forgotten, and said that justice will only be served through the destruction of terrorism and the continued support of the nation despite ongoing security challenges. (“National leaders vow to crush terrorism on APS anniversary,” The Express Tribune, 17 December 2025)
POLITICS & GOVERNANCE
PTI to contest Islamabad local government polls despite rigging concerns
On 17 December, as reported by Dawn, the Islamabad Capital Territory (ICT) local government elections are planned for February 15, 2026, and even though they are concerned about the potential for rigging and changes to the Local Government Act infringing on their ability to receive a direct public mandate, Pakistan Tehreek-e-Insaf (PTI) will run in these elections. At their meeting this week, the Islamabad leadership of PTI identified key priorities leading up to the local government elections.
Those priorities include ensuring that their loyal workers are nominated, creating committees dedicated to campaigning and legal assistance, and developing a manifesto for the elections. PTI has been vocal in its criticism of the recent legal changes that allow for horse-trading and manipulation within the electoral process. However, PTI leaders are optimistic about PTI's ability to be successful in the local elections because they believe that participating in the election process is necessary to challenge the current local government structure, which they see as flawed and hindered by delays of the Election Commission of Pakistan. (“PTI decides to contest Islamabad local govt elections despite ‘rigging’ fears,” Dawn, 17 December 2025)
President assents to bill establishing national commission for minorities’ rights
On 17 December, President Zardari gave his approval to the National Commission on Minority Rights Bill 2025, which creates a statutory body that will promote and protect the rights of non-Muslims in Pakistan, as well as authorising two additional pieces of legislation (concerning evidence and medical education). Earlier this month, the National Commission on Minority Rights Act was passed by a joint session of Parliament after some heated discussions. Amendments to the Act removed language regarding “overriding effect” and “Suo moto authority” in response to concerns about potential conflicts with the Anti-Ahmadi Ordinance. The government has made it clear that the Commission will operate as an advisory body and will not override current constitutional provisions or court rulings. This decision has been anticipated for some time and has its roots in a directive issued by the Supreme Court of Pakistan in 2014 that stated that minority groups need access to the institutional processes to address issues related to forced conversions, quotas for employment, and respect and dignity at the place of employment. (“President assents to bill for setting up minorities’ commission,” Dawn, 17 December 2025)
HEALTH
KP issues advisory as seasonal flu cases rise
On 17 December, as influenza-like diseases are rising in the province of Khyber Pakhtunkhwa, the State Health Division has released a provincial advisory for all hospitals in the province regarding the current H3N2 flu season. Due to limitations in healthcare access, a lack of effective infection control guidelines within hospitals, and inadequate public knowledge, the H3N2 flu season may be particularly severe this year. Hospitals have been instructed to improve their surveillance processes, collect and send samples for suspected influenza-like disease cases from their emergency departments to Khyber Medical University Public Health Reference Laboratory as soon as possible, and prepare to receive a larger volume of patient visits through both the outpatient and inpatient departments. Currently, there have been 340,000+ suspected cases of influenza-like disease reported in the country; with 12 per cent of those tests confirming H3N2, the advisory encourages early diagnosis, vaccinations for at-risk populations, and preventative measures such as wearing masks, practising good hygiene habits, maintaining social distance, and receiving timely antiviral treatment for severe cases to decrease the morbidity and mortality associated with H3N2. (“Health dept issues advisory amid rising flu cases in KP,” Dawn, 17 December 2025)
EXTERNAL
Government explores Djibouti route for Africa trade
Pakistan has held discussions regarding its plan to become more active within Africa by using Djibouti as its main trade link due to concerns about its current account deficit. This initiative comes after an exploration of ways for Pakistani businesses, especially exporters of agricultural and Halal products, to tap Africa's rich source of agricultural products. As Faheemur Rehman Saigol (President of the Lahore Chamber of Commerce and Industry) pointed out, the African continent is a huge untapped market, and it is time Pakistan started diversifying its exports beyond Europe and America. Djibouti is seen as a stable country that offers a unique opportunity for exporters from Pakistan to reach Chicagoland and much of eastern Africa. Ambassador Aqsa Nawaz stated that Djibouti is an essential trading centre for the movement of products and services throughout central and east Africa. Ambassador Nawaz also highlighted that the opportunities for export and investment from Pakistan into Djibouti and central and eastern Africa are vast. (“Government explores Djibouti route for Africa trade,” The Express Tribune, 17 December 2025)
Azerbaijan open to investing USD 2 billion in Pakistan
Pakistan and Azerbaijan are turning their long-standing diplomatic relationship into real, tangible benefits for both countries economically. According to Finance Minister Aurangzeb, his country has received multiple proposals for investment by Uzbekistan totalling nearly USD two billion (approximately PKR 1565 crore). While both nations maintain close ties, their trade volume remains far below the estimated capacity of at least USD 50 million. Azerbaijan and Pakistan are currently engaged in discussions about the top priority sectors for investment: energy (including oil and gas), minerals and mining, etc., with the State Oil Company of the Azerbaijan Republic (SOCAR) looking at an investment in an early-stage oil pipeline. In addition to these sectors, Baku has expressed interest in extending financial assistance of nearly USD one billion, potentially either via direct placement with the State Bank of Pakistan or by creating a financial structure to support Azerbaijani businesses that establish a presence in Pakistan. (“Azerbaijan open to investing $2b in Pakistan,” The Express Tribune, 17 December 2025)
IND-PAK
Pakistan extends airspace ban on Indian aircraft till 23 January
On 17 December, Dawn reported, as a continuation of previous restrictions placed on Indian-registered aircraft, the Pakistan Airports Authority has announced that the airspace ban will also remain in effect until 23 January 2026. This ban applies to all Indian-owned, leased, or operated civilian aircraft, as well as military aircraft, and includes the flight information regions of Karachi and Lahore. The announcement follows the ongoing bilateral tensions between Pakistan and India resulting from the April attack in Pahalgam and the subsequent military escalations between the two nuclear powers. Despite Pakistan's denial of any involvement in the attack and its insistence that there should be an independent investigation, many Indian airlines have incurred substantial financial and operational burdens as a result of being unable to fly through or over Pakistani airspace. Air India, for example, is reportedly looking for permission to use alternative routing via Chinese airspace to recover some of the financial losses associated with operating flights over or through Pakistan. (“Pakistan extends airspace ban for Indian aircraft till Jan 23,” Dawn, 17 December 2025)
SOCIETY
Amnesty condemns use of water cannons against PTI protesters outside Adiala prison
On 17 December, Pakistan's government was condemned by Amnesty International for their abuse of the high-pressure water cannon on protesters outside of the Adiala Prison in Rawalpindi. Amnesty pointed out that this was a violation of the right to peaceful assembly. The demonstration took place after the court-ordered expiration of the family visitation order, which had allowed for visitation twice a week. Amnesty has called for an end to the use of excessive force and to respect people's rights to assemble peacefully, as many police exercises occurred during the wee hours of the morning, followed by baton charges and subsequent arrests of protest participants, raising additional concerns regarding the diminishing nature of political dissent and civil liberties in Pakistan.
(“Amnesty condemns ‘repeated’ use of water cannons on PTI protesters outside Adiala Prison,” Dawn, 17 December 2025)
Editorials/Opinions
Water crisis
Editorial, “Water urgency,” The Express Tribune, 17 December 2025
“We are long past the point of calling Karachi's water crisis a 'threat'; it has rather become an everyday reality and a city-wide infrastructural disaster. Despite repeated assurances, K-IV - the mega water supply project that was meant to bridge the gap between demand and supply — has instead become a symbol of everything that is wrong with how the city is run. This demand and supply gap has ballooned massively over the years. The city now needs nearly 1,200 million gallons a day, but an inconsistent supply of 650 million gallons from the River Indus and Hub Dam leaves citizens scrambling for water tankers. The population of Karachi is not static. By the time K-IV trickles into the system, the population will have likely outgrown the project's capacity, rendering the so-called solution obsolete upon arrival. The city is effectively chasing a moving target, bound by administrative incompetence. Unless there is genuine accountability, the city will remain trapped in this cycle of promises that offer nothing but dried-up water pipes.”
https://tribune.com.pk/story/2582503/water-urgency
Economy
Editorial, “Token rate cut,” The Express Tribune, 17 December 2025
“The State Bank of Pakistan has defied market expectations and international lenders by cutting its key policy rate by 50 basis points to 10.5%. The decision follows four consecutive holds dating back to May and signals a major shift in priorities from inflation containment towards stimulating growth. While some analysts were bullish on the move and saw it as having the potential to bolster industrial output and exports, others are worried that it will further harm the poor, who are still struggling to come to terms with inflation. This is because, despite the overall rate of price increases declining this year, inflation was so high over the last couple of years that most people's pockets are still catching up. It is also worth noting that the joy in government circles over the rate cut lends credence to the concern that it was politically driven rather than economically prudent. With that in mind, if growth turns out to be an illusion and there is instead a spike in inflation or deterioration of external accounts, the rate cut will rightly be seen as a premature misstep that sacrificed hard-won stability.”
https://tribune.com.pk/story/2582501/token-rate-cut
Judiciary
Rida Hosain, “Judicial Injustice,” Dawn, 17 December 2025
“In his additional note in Noor Mukadam’s case, Justice Ali Baqar Najafi wrote that the case is “a direct result of a vice spreading in the upper society which we know as living [sic] relationship … The young generation must note its horrible consequences such as in the present case which is also a topic for the social reformist, to discuss in their circles”. The order implies that if a victim conformed to a certain moral or societal expectation, the crime could have been avoided. The reasoning shifts the focus away from the perpetrator’s culpability and onto the victim’s character and choices. It perpetuates a culture in which women are held responsible for the violence inflicted upon them. Victims are expected to predict, prevent, and bear responsibility for the violence committed against them. And with that, the once-certain prospect that Pakistan was on track to have its first female chief justice is no longer there. A previously guaranteed milestone has been made subject to the whims of political power.”
https://www.dawn.com/news/1961608/judicial-injustice
AF-PAK
Khurram Abbas, “Afghanistan & regional paradox,” Dawn, 17 December 2025
“Recently, Afghanistan’s neighbours held consultations in the Iranian capital on security and its impact on regional stability, under the Tehran Format. Special representatives on Afghanistan from Pakistan, China, Russia, Tajikistan, Uzbekistan, and Turkmenistan participated in the meeting. But the Afghan Taliban declined to attend. The Tehran Format is not the only regional process which has been initiated for regional consensus building on Afghanistan’s security situation. Since 2014, 10 multilateral platforms have been introduced on various occasions by several regional and extra-regional countries to facilitate coordination and avoid regional and international confrontation on Afghanistan’s security affairs. In order to establish a more coordinated regional strategy, Pakistan should simultaneously advocate for the revival of the SCO-Afghanistan Contact Group and connect its efforts with the Tehran Format. Islamabad must understand that building regional consensus may be a lengthy process, but it is far more effective and sustainable than relying on quick fixes.”
https://www.dawn.com/news/1961611/afghanistan-regional-paradox
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