NIAS Area Studies
PAKISTAN READER
Photo : Dawn
In Brief
ECONOMY
SBP reveals negative government borrowing for budgetary support in first half of FY2025
On 26 December, Dawn reported that the State Bank of Pakistan has revealed that the government did not make any borrowings for budgetary support in the first half of the current fiscal. This hints at higher liquidity in the state treasury. Additionally, the data also revealed that in the July-December period the government was able to achieve a net debt retirement worth PKR 2.03 trillion as opposed to the net borrowing of PKR 2.7 trillion in the same period during the previous fiscal. It is a matter of importance to Pakistan as previous governments have only been borrowing from the banking sector for budgetary support. In this regard, the debt retirement could be an outcome of the profit flows to the State Bank. (Shahid Iqbal, “Govt makes no budgetary borrowing in first half,” Dawn, 26 December 2024)
Trade deficit with neighboring countries widens
On 26 December, a Dawn report highlighted that Pakistan’s trade deficit volume has expanded by 47.55 per cent with its nine neighboring countries. The deficit has increased from USD 3.032 billion in the previous fiscal to USD 4.474 billion in the present fiscal. Trade analysts believe that this widening took place as imports from China and India had increased in the months under review. Interestingly, the reason why Pakistan had to worry about the deficit in the previous fiscal was because the exports to Sri Lanka, Bangladesh and Afghanistan increased. This helped it offset the reduction in exports to China. However, while the value of exports to the nine countries improved by 5.99 per cent, the imports also soared by 31.8 per cent in the previous fiscal.The trend of high exports and higher imports has continued in 2025 fiscal. Comparison of data between the current financial year and the previous financial year revealed that the value of imports from China stood at by 32.40 per cent while exports fell by 13.9 per cent. Additionally, this trend was maintained in its trade with India, Afghanistan and Bangladesh. Nevertheless exports to Sri Lanka and Maldives showed a positive trajectory while shipments to Nepal fell by 34 per cent, to USD 0.96 million in the current year from USD 0.054 million in the previous year. (Mubarak Zeb Khan, “Trade gap with nine regional states widens,” Dawn, 26 December 2024)
SECURITY
Intelligence based operation kills 13 TTP members
On 25 December, an intelligence based operation launched in South Waziristan led to the elimination of 13 terrorists and the killing of two Frontier Corps in an improvised explosive device blast. According to the Inter-Services Public Relations (ISPR), the military media wing, the operation was launched as many reports of militants presence and their crimes against innocent people had tolight . It was also launched in response to the murder of 16 security personnel in the night between 20-21 December, in Sotuh Waziristan. In this regard, authorities had urged the general public to evacuate the area. However, the Provincial Disaster Management Authority (PDMA) is yet to construct temporary camps for families. In the same week, two other Frontier corps personnel were killed and four others sustained injuries after an ambush was carried out in Kolowa area. The security forces were deployed in the province to ensure security for Qatari visitors who were on their way to Turbat. (Umer Farooq, AK Wazir & Saleem Shahid, “13 terrorists killed in S. Waziristan operation,” 26 December 2024)
EXTERNAL
Afghanistan issues protest note to Pakistan
On 25 December, the interim government of Afghanistan issued a protest note to Islamabad’s charge de affairs as Pakistan carried out air strikes in the Patika district of Afghanistan. The foreign ministry’s statement denounced the “aggression by Pakistani military.” The attack was retaliation against the Tehreek-e-Taliban Pakistan’s (TTP) killing of 16 security personnel in South Waziristan. Reports emerging after the attack claimed that the Pakistani side had sought to attack the camps of the terrorist groups as prominent commanders were present there. While the Taliban claimed that the attack not only killed some Waziristan refugees but also “innocent women and children,” the TTP also tried to debunk the Pakistani official’s claims. It said that none of the militant group’s commanders were harmed and that they were alive.
Additionally, the attack also coincided with the day the envoy to Afghanistan, Muhammad Sadiq, led a delegation to meet the Foreign Minister Muhammad Muttaqi and Interior Minister Sirajuddin Haqqani to discuss bilateral relations between both countries. This re-engagement comes as after a year of diplomatic deadlock. In this regard, the statement questioned if the attacks were being launched on innocent civilians by “certain quarters” of Islamabad to foil the talks and sow seeds of distrust between both governments? (“Kabul protests air strike against `terror camps` in Paktika,” Dawn, 26 December 2024)