Pakistan expects new IMF deal by June; President Zardari to forge economic ties with Iran
In Focus
Pakistan and Afghanistan to discuss on trade and transit
On 29 March, according to the officials, during trade negotiations in Kabul, Pakistan and Afghanistan came to a number of agreements. These included initiating discussions on a revised transit trade agreement and enacting a temporary entrance document (TAD) for drivers of trade vehicles. On 18 March, tensions arose after Pakistan launched airstrikes in the Afghan districts of Patika and Khost as part of “intelligence-based anti-terrorist operations,” which according to Afghan officials claimed eight lives. According to the Foreign Office, the Hafiz Gul Bahadur organization, which was behind several terrorist attacks within Pakistan, including one on security forces in North Waziristan that claimed the lives of seven soldiers. On 28 March, in a press briefing Foreign Office (FO) spokesperson Mumtaz Zahra Baloch said that Commerce Secretary Mohammad Khurrum Agha visited Afghanistan from 24-27 March to discuss the bilateral relations with Afghanistan’s representative Nooruddin Azizi. Dawn said: “The two sides discussed a bilateral Preferential Trade Agreement, implementing a TAD for trade vehicle drivers, multimodal air transit and issues related to transit trade.” FO said: “We are encouraged by the progress made on these issues and remain committed to promoting trade and people-to-people ties with Afghanistan.” Pakistan embassy asserted that both countries have addressed trade agreement, air transit, the operation of border crossings 24/7 for trade purposes. Furthermore, Spokesman for the Afghan commerce ministry, Abdul Salam Jawad, said: “We will take up the issue of a ban on several transit items. Pakistan has banned the import of certain items under the transit agreement.” (Tahir Khan, “Pakistan, Afghanistan make progress on trade, transit in Kabul talks,” Dawn, 29 March 2024)
Pakistan expects new IMF deal by June
On 30 March, Dawn reported that the International Monetary Fund (IMF) staff-level agreement (SLA) is anticipated to be reached by the end of the fiscal year (June 30), according to Finance Minister Muhammad Aurangzeb, who also noted that no final talks have yet taken place with the Fund. The finance minister stated that specifics of the agreement will be reviewed at the spring meetings and that he would be leading a group to Washington on 14 or 15 April. He made this announcement during an appearance at the Pakistan Stock Exchange (PSX) gong ceremony. Aurangzeb addressed the important topic of a new IMF program, stating that in his recent discussions with them, the Fund has been “very receptive” to a “larger and longer program.” He said: “There hasn’t been any final discussion or agreement with them, but it is our wish that by the time we wrap up this fiscal year, the SLA is reached.” “We need the Extended Fund Facility (EFF) to execute the structural reforms programme, with the key word being ‘execute’, and not being bogged down in debate,” he added. (Fatima S Attarwala, “Aurangzeb eyes new IMF deal by end of June,” Dawn, 30 March 2024)
In Brief
POLITICS
PTI leader Qaiser advised KP CM Gandapur to cut ties with federal government
On 29 March, PTI leader central leader Asad Qaiser had advised Khyber Pakhtunkhwa (KP) Chief Minister Ali Amin Gandapur to cut ties with the federal government as his demands won’t be met. This comes after Gandapur and Interior Minister Mohsin Naqvi met in Peshawar to discuss a “joint strategy to fight terrorism.” In a statement Qaiser said: “They have not appointed a single officer on the CM’s demand and neither there has been any progress on the issue of the payment of the arrears to the province.” He called the lawyers, civil society members, teacher, media, students to participate in the “movement for constitutional supremacy” further asserting that this is the “time for resistance and not conciliation.” He said: “This is a question of the rights of the nation. Whether people want to live in a banana republic or in a country where there is the supremacy of the law and Constitution?” he said while announcing about the big movement in order to achieve its objectives. Qaiser’s remarks came after some PTI leaders expressed discontent over Gandapur’s meeting with federal officials. Previously, Gandapur’s meeting with PM Shehbaz Sharif had sparked criticism among the party. However, Gandapur asserted that meeting came out “positive” as he discussed about the public, provincial issues, including law and order. His meeting with PM was not welcomed by PTI founder Imran Khan. (Amir Wasim, “Qaiser asks KP CM to cut all ties with Centre,” Dawn, 30 March 2024)
President Zardari to forge economic ties with Iran
On 30 March, Dawn reported that despite US’s opposition of Pakistan- Iran pipeline project, President Asif Ali Zardari while talking to Iran’s Ambassador to Pakistan, Reza Amiri Moghadam had highlighted the need to forge relations with Iran for the mutual benefit of both countries. He stressed the importance to promote barter trade and economic ties with Iran. He further said that Pakistan and Iran have good opportunity to expand its bilateral cooperation across various sectors. As per the Presidency, Zardari expressed his commitment to forge bilateral relations with Iran. From his side, the Iranian ambassador highlighted the need to improve “trade volume, banking cooperation, and air and business linkages.” He further said Chabahar-Zahedan, the rail road for trade with Central Asia and Europe could be beneficial for Pakistan. (Syed Irfan Raza, “Zardari urges strong economic ties with Iran amid US opposition,” Dawn, 30 March 2024)
JUDICIARY
Central to appoint a judge to oversee “inquiry commission”
On 30 March, The Express Tribune reported that the federal government is looking for retired judges to preside “one-man inquiry commission” precisely formed to investigate the claims raised by the six judges of the Islamabad High Court (IHC) with regards to the meddling of intelligence in the judicial affairs. According to a government official, the federal cabinet is set to confirm the formation of the commission and discussions were also held regarding the Terms of Reference (TORs) for the commission. He further asserted that the proposal for the commission came from the superior judiciary. According to The Express Tribune, the federal government has hastily taken the letter by the six IHC court judges. Many government officials view this letter as a “preemptive strike before the commencement of misconduct proceedings against one IHC judge.” Objecting the commission, a candidate for the next presidential election of the Supreme Court Bar Association Munir Kakar said: “We reject inquiry commission. We will demand a commission comprising five senior most judges. If this commission was not formed then a constitutional petition will be filed in this matter.” (Hasnaat Malik, “Govt weights ex-judges for judicial meddling probe,” The Express Tribune, 30 March 2024)
ECONOMY
“Inflation had hovered around 30 per cent for over a year and hit a monthly high of 38 per cent in 2023” says Finance Ministry’s report
On 29 March, the finance ministry, in its monthly economic update said that inflation in Pakistan is predicted to remain in the range of 22.5 per cent to 23.5 per cent in March and to decrease even further in April. With the help of a last-minute, short-term International Monetary Fund (IMF) rescue program, the country, which had been suffering from high inflation and slowed economy for more than a year, just avoided default in 2023. According to the ministry’s report, the forecast for March inflation remained mild despite a rise in fuel prices and the impact of Ramadan, when people typically buy in bulk and demand is higher. The high base impact for declining inflation figures was also mentioned. The monthly inflation rate in February was 23.1 per cent, which was the lowest since June 2022. The economy declined by 0.17 per cent in the previous fiscal year, but the report indicated that there were signs of growth hopes for the current year due to the agriculture sector’s robust expansion. The report also stated that in order to meet external financial demands, foreign investment and remittances must flow in, and fiscal consolidation must continue for there to be a durable economic recovery. The government reached a staff-level agreement earlier this month for the second and final assessment of its three-month, USD 3 billion program, and has since signaled that it will approach the IMF again soon for a longer-term program. (“Inflation to hover at 22.5-23.5pc in March: finance ministry,” Dawn, 29 March 2024)
SECURITY
Chinese investigators arrive in Pakistan to probe into suicide attack
On 29 March, according to the Interior Ministry, Chinese investigators arrived in Pakistan to probe into the suicide attack that killed five Chinese nationals. As per the statement issued by the government, Interior Minister Mohsin Naqvi met the Chinese team of investigators at Beijing's embassy where he briefed them about the incident and the investigation so far. According to The Express Tribune, the recent attack is the third major attack carried out by the preparators on the Chinese nationals. Previous attacks against the Chinese officials were claimed by Majeed Brigade affiliated with the Baloch Liberation Army (BLA), it added. (“Chinese investigators arrive to join probe into Besham suicide attack,” The Express Tribune, 29 March 2024)
EXTERNAL
“Together, we will continue to forge a strong partnership,” says US President in his letter to PM
On 29 March, in his first letter to Prime Minister Shehbaz Sharif, US President Joe Biden highlighted the “enduring partnership” between both countries. The letter, according to the US Embassy in Islamabad read: “The enduring partnership between our nations remains critical to ensuring the security of our people and people around the world and the United States will continue to stand with Pakistan to tackle the most pressing global and regional challenges of our time.” US President Biden asserted that this also encompasses the shared vision “for a future of greater health security, economic growth and access to education for all”. He emphasized that through the US- Pakistan Green Alliance Framework, the two countries will continue to strengthen their water management, climate resilience and sustainable agriculture. The letter concluded by stating: “The United States remains committed to working with Pakistan to protect human rights and promote progress. Together, we will continue to forge a strong partnership between our nations and close bond between our people.” Meanwhile, on 15 March, US Ambassador Donald Blome asserted that Pakistan was considered an “important partner” and expressed his hope to further strengthen ties with the newly elected government. (Abdullah Momand, “In first letter to PM Shehbaz, Biden says ‘enduring’ Pak-US partnership critical to ensuring world security,” Dawn, 29 March 2024)
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“The recent attacks on Chinese infrastructure in Pakistan have once shed light on the challenge of the Baloch insurgency that the country faces. But the insurgency began decades ago. What fuels BLA's attacks on Pakistani forces and Chinese-invested projects”
- Zirnoor Baloch
“We often hear ‘justice delayed is justice denied’ but in Pakistan ‘justice’ is cancelled. ”
-Imaan Zainab
“No matter how hard they try to remove him from the political arena, the fact is that he IS the entire political arena of Pakistan now!”
- PTI
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Mirza Moiz Baig, ‘Judicial discontent’
Dawn, 30 March 2024
“Contemporaneous with its crusade against corruption, the court dismissed a petition soliciting information regarding the number of references pending before the Supreme Judicial Council and seeking directions to expedite the disposal of such references. For the uninitiated, the Constitution secures judicial independence by ensuring security of tenure. Judges of the superior courts can, thus, only be removed if the SJC, a body comprising the five senior-most judges in the country, finds them guilty of misconduct. Given frequent attempts to emasculate the judiciary throughout our history, the judiciary has inevitably remained sceptical of any parliamentary oversight of judicial conduct. Unsurprisingly, such recalcitrance has often engendered critiques of judges’ unaccountability. In 2023, for instance, members of parliament’s Public Accounts Committee were particularly irked after the Supreme Court registrar failed to attend the committee’s meeting despite repeated notices.”
Arhama, ‘Building a Mideast-Pakistan tech bridge’
The Express Tribune, 30 March 2024
“The Middle East, a region traditionally synonymous with oil and gas, is experiencing a quiet revolution. For decades, the rentier state model – where oil revenues funded social programmes and fostered stability – defined the economic structure of many Middle Eastern countries. However, concerns about peak oil production, price volatility and the global push for diversification have prompted a strategic shift. Governments across the region are actively fostering the development of a robust tech sector, recognising its potential to drive economic growth and reduce dependence on hydrocarbons. One key driver of this growth is government investment into initiatives such as Dubai’s Silicon Oasis Authority and Saudi Arabia’s NEOM megacity project that offer startups tax breaks, subsidised office space, and access to state-of-the-art infrastructure. These projects create an environment conducive to innovation and attract promising entrepreneurs.”
Aneela Shahzad, ‘Pakistan — a victim of geopolitics’
The Express Tribune, 29 March 2024
"While IMF’s stated purpose is to provide members with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity, practice shows the contrary. Every time our government has entered the IMF deal, there is requirement of increasing energy tariffs, imposition of more taxes, further devaluation of the Pakistani rupee and hikes in interest rates. This February was the same, immediately after the bailout programme, tariffs and energy prices skyrocketed and by March there was record inflation in the country. According to data, transport prices shot up 54.94%, food inflation jumped 47.15%, clothing and footwear prices climbed 21.93%, while housing, water and electricity costs rose 17.49%. And the same is expected to double up after this new agreement."
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“Art is the soul of resistance, especially in the Global South.”
-An opinion in Dawn, ‘War, art and truth’
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