In Brief
ECONOMY
Finance minister promises a reduction in government expenditures amid rising inflation
On 18 June, Finance Minister Muhammad Aurangzeb vowed that there would be a reduction in government expenditure, amid surging inflation rates in the country. He stated: “We are focusing on government expenditures. People would know about the austerity measures within one and a half months.” Aurangzeb advised the government to dissolve distributed subject’s ministries, and also reduce the tax amnesty. Noting that the government was including other sectors to increase the tax net, noting that “about 31-32,000 retailers were registered with the government.” Aurangzeb also criticized the Federal Board of Revenue (FBR) for not collecting the tax properly despite laws regarding tax collection presented already. Stressing the need to privatize unsuccessful state institutions by observing the outsourcing of Karachi airport, he argued: “If the country has to progress and the burden on the government has to be lessened, all of these entities will have to be privatized. Further, he projected that the agricultural and IT sector would help boost the economy as there is no IMF condition on it. (“Govt will reduce its expenditures, assures finance minister,” The News International, 18 June 2024)
Fitch rating shows significant debt reduction in the FY25 budget
On 19 June, The Express Tribune reported that as per predictions of the rating agency Fitch, Pakistan’s FY25 budget will significantly reduce government debt, which is set to decline to 68 per cent of GDP by the end of FY24. This reduction is due to high inflation and deflator effects. It is also estimated that there will be a strong decline in inflation and interest costs because of economic growth and primary surpluses. The budget for FY25 saw a target of a headline deficit of 5.9 per cent of GDP and a two per cent primary surplus when compared to FY24’s figures of 7.4 per cent and 0.4 per cent respectively. Pakistan’s external liquidity and funding remain critical challenges. Though the budget aims for a growth rate of 3.6 per cent in FY25, it could potentially face resistance within the parliament due to a weaker-than-anticipated mandate of the coalition government. As per Fitch’s revised fiscal forecasts, there will be a primary surplus of 0.8 per cent considering potential revenue shortfalls and higher current spending, while the growth forecast for FY25 has been adjusted to three per cent from 3.5 per cent. (“Pakistan budget to significantly reduce government debt, rating agency Fitch predicts,” The Express Tribune, 19 June 2024)
FM Aurangzeb assures the inclusion of other sectors into the tax net
On 18 June, Finance Minister Muhammad Aurangzeb assured that the other sectors would be brought into the tax net and tax exemptions would be reduced. The FY25 budget proposes 3.6 per cent GDP growth and places a PKR 13 trillion tax collection target by raising taxes on salaried classes and removing tax exemptions for the other sectors. He stated that the present tax-to-GDP ratio of 9.5 per cent was “not sustainable.” Aurangzeb observed that the schools and universities can run with “charity and philanthropy” but “the countries can function with taxes.” To achieve this, imposing direct taxation and the need to reduce tax exemptions are necessary. He highlighted that the government is bringing other sectors into the tax net as already 32,000 retailers had been registered and they would be taxed from July. However, the minister noted that the people were hesitant to enrol into the tax net due to “harassment and frivolous notices” (“Other sectors being brought into tax net, assures Finance Minister Aurangzeb,” Dawn, 18 June 2024)
EXTERNAL
12 dead after migrant boats drown off the coast of Italy, including two Pakistanis
On 19 June, The Express Tribune reported that two boats carrying immigrants sunk near the Italian water territory, killing at least 12 people including two Pakistani immigrants. The boats were carrying numerous immigrants to Europe via the Italian coast. The Nadir rescue boat, operated by a German aid group RESQSHIP, rescued 51 people from a sinking wooden boat in which two people were unconscious. They also found ten bodies stuck in the vessel’s lower deck. The UN refugee agency UNHCR, the International Organization for Migration, and UNICEF in a joint statement mentioned that the boat set off from Libya carrying migrants from Syria, Egypt, Pakistan, and Bangladesh. The second boat which set off from Turkey sank about 200 kilometres east of the Italian region of Calabria after it caught fire. The statement added that 64 people were missing at sea, 11 were rescued and one died. (“Pakistanis among 12 dead as migrant-carrying boats drown off Italy,” The Express Tribune, 19 June 2024)
ENERGY/ENVIRONMENT
PM coordinator on climate change highlights the threat of extending desertification
On 16 June, the Coordinator to the Prime Minister on Climate Change, Romina Khurshid Alam, stated on the eve of World Desertification Day that Pakistan is experiencing desertification and intense, recurring droughts. She said: “Through targeted policies, investments in research and technology, and fostering international cooperation, Pakistan remains steadfast in its commitment to combating desertification and achieving land degradation neutrality.” She underlined the government commitments and on-ground measures to challenge desertification and pointed out the factors behind this issue like warming temperatures, shifting or declining rainfall patterns, recurring droughts, loss of vegetation and tree covers. Alam highlighted that Pakistan is closely working with international partners, and is also a signatory of the UN Convention to Combat Desertification (UNCCD). Further, she detailed some initiatives taken by the government to challenge desertification like the Green Pakistan Programme, climate-smart agriculture, and the National Adaptation Initiative. Alam emphasized: “As the country observes World Desertification Day, let us reaffirm our collective responsibility to preserve our natural heritage, protect our land resources, and secure a sustainable future for generations to come.” (Jamal Shahid, “PM’s aide highlights threats from desertification,” Dawn, 17 June 2024)
PROVINCES
Khyber Pakhtunkhwa: CM accuses federal government of “using lies and falsehood” on electricity load shedding
On 18 June, Khyber Pakhtunkhwa’s Chief Minister Ali Amin Gandapur in a video statement accused the federal government of punishing the people in KP as revenge for sustaining the electricity load-shedding in the province, by alleging that the Centre has reduced the KP’s share of electricity supply. He stated that the “PDM government is using lies and falsehood,” while the “Centre is not fulfilling the commitment made” with the KP government. Lamenting that there were multiple complaints in the province regarding violations of the load-shedding schedule, Gandapur said that the provincial authorities had been “fully cooperating” with the Wapda authorities on the matter of line losses. In addition, PTI leader Asad Qaiser further criticized the federal government, acknowledging that KP has been undergoing its “worst” electricity load-shedding over the last three days. He warned that his party, which does not “accept load-shedding and high-priced electricity,” would stage a protest in the National Assembly on this matter. (“Gandapur alleges Centre punishing KP through electricty loadshedding,” The News International, 18 June 2024)
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Chairman Bilawal Bhutto Zardari expressed grief and sorrow over the death of Attaullah Abro, a senior activist of Bada city of Larkanou district. Late Attaullah Abro was an asset to the party and party, Bilawal Bhutto Zardari.
-PPP
Extended warm Eid-ul-Adha greetings to His Highness Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah, Prime Minister of the State of Kuwait in a cordial telephone conversation. Reaffirmed the significance of our deep-rooted fraternal ties that have withstood the test of time. We agreed to enhance bilateral cooperation in various fields, including trade, investment, energy, and export of skilled labour. Pakistani diaspora working in Kuwait serves as a bridge between our two countries.
- Shehbaz Sharif
Happy Eid to the countrymen! Eid-ul-Adha teaches us to adopt the spirit of self-sacrifice, which was set by the example of Mr. Ibrahim (peace be upon him), in the true sense. Unfortunately, the worship of egos and egoism of a few people in our country has contributed to the moral destruction of our society and has exposed every institution to decline and degradation.
-Imran Khan
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Afzal Ali Shigri, ‘Empowering Gilgit-Baltistan’
Dawn, 17 June 2024
“Previously perceived as a remote liability and officially referred to as the Northern Areas, it was a nameless region of Pakistan. Local Kashmiri leaders, deeming it a barren land and a financial burden, forsook its ownership. Thus, in the Karachi Agreement between Azad Jammu and Kashmir (AJK) and the government of Pakistan, the region was handed over to Pakistan unconditionally. This set in motion an ad hoc governance arrangement under the control of a joint secretary of government of Pakistan. For the simple folk of the region, the presence of Pakistani officials and the fluttering Pakistani flag symbolised their merger with Pakistan; they were, oblivious to the reality that they possessed no constitutional rights, as a disputed territory governed through decrees by the government of Pakistan.”
Zamir Akram, ‘Talking to the enemy’
The Express Tribune, 17 June 2024
“Even so, there is new optimism among some in Pakistan that a post-election weakened Modi government would be chastened to pursue more conciliatory polices, towards Indian Muslims and Pakistan. This is flawed thinking. A weaker Modi will be even more reliant on the Hindutva agenda and to manipulate the Pakistan bogey, especially in times of domestic political crises. The reasons are obvious. Since the age of eight, Modi has been a RSS ‘Kar Sevak’ or voluntary worker steeped in supremacist Hindu ideology which he has incessantly promoted. As Chief Minister of Gujarat, he was responsible for the massacre of Muslims following the Godhra incident in 2002. As Prime Minister since 2014, he has promoted a fascist Hindu ideology, giving free rein to Hindu fanatics to target Indian Muslims as “infiltrators”; passed laws to discriminate against them; build a Ram Mandir on the site of the destroyed Babri Masjid; and changed the status of the so-called only Muslim-majority state of (occupied) Kashmir. Externally, Modi and his minions have relentlessly demonised Pakistan as a sponsor of terrorism, a failed state and an arch-enemy that occupies Indian territory which must be snatched by force. Such Pakistan bashing is central to Modi’s Hindutva creed since Pakistan represents the break-up of ‘Akand Bharat’ that exists in RSS mythology. Dialogue with Pakistan is, therefore, anathema to Modi. Any change in this policy will come at a huge political cost, especially now.”
Editorial, ‘Profiting off denied visas’
Dawn, 17 June 2024
“This practice of charging exorbitant visa fees, in pounds or euros, for applications that are ultimately rejected is exploitative, and unfairly burdens applicants from poorer nations. The staggering rejection rates, too, underscore systemic biases in the largely non-transparent visa approval process. The policy effectively denies countless individuals the opportunity to travel for business, education, or personal reasons, while also extracting significant financial resources from them. The comparison made by Lago Collective’s Marta Foresti illustrates this disparity: while an Italian can secure a visa on arrival in Sierra Leone for a mere £30, a Sierra Leonean must endure a lengthy, costly, and often futile application process to enter Italy. Moreover, the recent hike in visa application fees, set to rise further, exacerbates matters. With Schengen visa fees increasing from €80 to €90 and UK fees from £100 to £120, the financial burden on applicants from countries with high rejection rates will only worsen.”
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“There is a call for a paradigm shift in carbon credit”
-An opinion in Dawn, ‘Blood carbon’
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