PMD warns of worsening drought conditions in most parts of the country I Finance Minister announces USD 1 billion loan deal with two Middle Eastern banks
In Focus
Pakistan’s middle class has shrunk over the past decade, reports The News
On 22 January, an article in t=The International News stated that Pakistan’s middle class has shrunk significantly over the past decade. The World Bank stated that poverty rose from 34.6 per cent in 2015 to over 39 per cent by 2023. The purchasing power of the middle class has been eroded due to economic instability, high inflation exceeding 38 per cent for essentials in 2023, and dwindling foreign reserves. This has forced many households into lower income brackets. The 2022 floods and COVID-19 pandemic increased poverty and pushed nearly 20 million below the poverty line. The middle class consumption which was once a growth driver has declined. Furthermore, the income inequality has also widened. The stabilization of the economy requires reforms to curb inflation, enforce fiscal discipline, and support SMEs to create stable jobs. The inclusive growth and targeted welfare programs are critical to protecting vulnerable groups and ensuring gradual recovery amid shared middle-class struggles across South Asia. (Mansoor Ahmad,“Economic turmoil pushes millions of Pakistanis out of middle class Economy has been plagued by high inflation and currency devaluat,” The International News, 22 January 2025)
PMD warns of worsening drought conditions in most parts of the country
On 21 January, the Pakistan Meteorological Department (PMD) warned of worsening drought conditions in most parts of Pakistan. This is due to a 40 per cent rainfall deficit from September 2024 to January 2025. Sindh experienced rainfall lower than 52 per cent, followed by Balochistan at 45 per cent lower and Punjab at 42 per cent lower. The areas like Potohar, Multan, Tharparkar, and Kech, experienced mild droughts. The second half of the season is expected to remain dry due to El Niño and a transitioning Indian Ocean Dipole (IOD). The normal rainfall in northern regions might replenish reservoirs. However, southern Balochistan faces potential water shortages affecting irrigation and domestic supply. The PMD further warned of earlier pollen and heat stress in vulnerable populations due to above-normal temperatures. (Aamir Yasin, “PMD warns of drought due to scarce rainfall,” Dawn, 22 January 2025)
Finance Minister announces USD 1 billion loan deal with two Middle Eastern banks
On 21 January, Finance Minister Muhammad Aurangzeb stated that Pakistan has finalized a USD 1 billion loan deal with two Middle Eastern banks at 6 to 7 per cent interest during the World Economic Forum in Davos. This short-term financing aligns with Pakistan’s goal to raise USD 4 billion from regional banks by the next fiscal year. Pakistan is aiming for a single B rating upgrade by June 2025. It is doing so by upgrading Moody’s and Fitch’s recent upgrades to Caa2 and CCC+, respectively. However, both Moody and Fitch are still in “junk” territory. The government is preparing for its first review in February following a USD 7 billion IMF bailout in September 2024. Furthermore, it is advancing talks for USD 1 billion under the Resilience and Sustainability Trust for climate-related projects. Additionally, the privatization of Pakistan International Airlines is expected within six months. (“Finance minister says $1bn loan agreed with two Middle Eastern banks,” Dawn, 21 January 2025)
In Brief
POLITICS
PPP holds Indus water canal plans against government
On 21 January, the government’s plan to divert the course of the Indus River came under fire at the Senate. A heated debate emerged as the lawmakers from either side called for the matter to be dealt with by the Council of Common Interests (CCI). At the session, the Pakistan People’s Party(PPP) leader, Sherry Rehman denounced the government for planning to construct six canals without taking stakeholder’s opinion into consideration. Senator Sherry stated that the PPP views this action of the government as a violation of the rights of the Sindh province and highlighted how the province is already grappling with the “incompetence” of the Indus River System Authority (IRSA). She argued that plans to irrigate the barren land of Cholistan could potentially lead to a desertification of Sindh and ultimately threaten the livelihoods and productivity of the local people. Furthermore, she questioned why the government was silent on the matter. She said: “If the caretakers cannot understand the meaning of a green Pakistan, we should at least acknowledge it.” Speaking on the same matter, the Opposition leader in the Senate, Syed Shibli Faraz threw his weight behind Senator Rehman. He said: “You are a major ally of the government. You even spearheaded the constitutional amendment package. It is your right to be heard.” In a contrasting opinion, Pakistan Muslim League’s (N) (PML-N) Senator Irfan Siddiqui highlighted the 1991 accord which allows provincial authorities to utilize their share of agreed water allocation. He believed that if Punjab wanted to build canals to make use of its allocated share then it is not necessarily a violation. (Ifthikar A Khan, “Govt told not to ‘play with fire’ on water issue,” Dawn, 22 January 2025; Mumtaz Alvi, “PPP, PTI join hands in Senate on new canals issue,” The News International, 22 January 2025)
Imran Khan upholds regular bench’s grievances against court administration
On 21 January, Imran Khan’s lawyer, Faisal Chaudhry stated that the former is not in favor of the changes brought about by the the 26th Constitutional Amendment as it undermined the pre-existing judicialstructure as well as transparency. While speaking with the media after a meeting with Khan, he quoted Khan who opined that the episodes of 9 May and 26th November would have never happened if there was an independent judiciary in place. In this regard, Khan voiced support for the statements of Justice Mansoor Ali Shah and Justice Ayesha Malik pertaining to the transfer of ongoing cases from the regular bench to the constitutional bench. He further added that the recent law was in fact a plan to crush the Pakistan Tehreek-e-Insaaf (PTI). Chaudhry revealed that Khan has directed PTI members, Ali Amin Gandapur and Salman Akram Raja to draft letters to the Supreme Court highlighting the lower court’s refusal to address human rights petitions filed by the PTI or even respond to some of the objections raised by the apex court. (Shakeel Anjum, “Imran committed to a strong judiciary: counsel,” The News International, 22 Janaury 2025)
Federal Cabinet permits foreign pilots continue to operate
On 22 January, Dawn reported that the federal cabinet has given its assent for extending the licenses of 86 overseas pilots. It also gave a go ahead for “three-year license validation” for overseas pilots who were recruited in the present year. Airline companies are obligated to recruit foreign pilots owing to Covid-19 and checks put on Pakistani pilots. Separately, PM Sharif spoke about the New Gwadar International Airport. He stated that the new airport would be beneficial for the country’s economy. He also acknowledged the contribution from China towards building the airport. China has granted USD 230 million for the new airport at Gwadar. PM Sharif further stated that those who were creating obstructions in building the new airport were enemies of the country. PM Sharif also set up a new committee which would be led by Defence Minister Khwaja Asif to look into the Toshakhana Act 2024. The objective of the committee would be to bring more “transparency in the system.”(“Cabinet extends licenses for 86 foreign pilots,” Dawn, 22 January 2025)
National Assembly approves health university bill amid PTI’s opposition
On 21 January, opposition protests led by Pakistan Tehreek-i-Insaf (PTI) disrupted proceedings in the National Assembly during Prime Minister Shehbaz Sharif’s attendance. The PTI members chanted slogans demanding the release of Imran Khan and inquiries into the 9 May and 26 November events. During the session, Speaker Ayaz Sadiq conducted over 60 per cent of the 51-point agenda, including the approval to establish the Nexus International University of Health Emerging Sciences and Technologies Bill in Islamabad. Furthermore, a 10 per cent quota for underprivileged students at the university was approved, while a proposal for campuses in other provinces was rejected due to federal jurisdiction limits. Additionally, the Qanoon-i-Shahadat (Amendment) Bill 2025 was referred to a committee. The Law Minister Azam Nazeer Tarar highlighted progress in narrowing the gender gap in voter lists to 7.4 per cent from 11.8 per cent in 2018, with hopes for further reductions by 2029. The session concluded with several bills deferred for later discussion. (Amir Wasim, “PM Shehbaz’s presence fails to quell noisy protest in NA,” Dawn, 22 January 2025)
National Assembly Standing Committee refuses to builders non-payment of tax privilege
On 21 January, while speaking at the National Assembly Standing Committee on Finance meeting, Minister of State for Finance, Ali Pervaiz Malik highlighted that economic restrictions on all non-filers of tax was required even if some amount of disruption was created by it. With the objective of documenting black money, the meeting’s chair, Syed Naveed Qamar said that the Federal Board of Revenue’s order could not be ignored as the Chairman of a real estate company, Hassan Bakhshi argued that no such restrictions existed in countries like US, Canada and many more. He pleaded the lawmakers not to make such decisions as it would curb property-related transactions across Pakistan. Despite the presence of 30 trillion deposits in banks, of which non-filers own 60 per cent, the chairman asked the committee to adopt a gradual approach. However, none of the committee members were assured. Nevertheless, after a long debate, the committee constituted a sub-committee which would determine the extent of restrictions that have to be imposed over those they believe are unfit of making major transactions. (“NA panel refuses to let estate builders bypass tax net,” The News International, 22 January 2025)
On Electoral Commission: The ECP has “behaved as if it has no obligation to uphold the standards” of the constitution, argues an editorial in Dawn
On 22 January, an editorial titled “Errant ECP” in Dawn discussed the Electoral Commission’s tendency to act outside its authority. It referenced the recent criticism by the Supreme Court against the ECP’s decision to remove a Pakistan Muslim League (N) lawmaker for not voting in line with the PML-N’s stance on the 26th Constitutional Amendment. The apex court had ruled that the commission did not have the authority to determine whether an affidavit submitted by the lawmaker was genuine or not. In addition, the PML-N has failed to provide any concrete evidence pertaining to the lawmaker’s affiliation to the party. In this regard, the ECP has acted outside its “line of authority” as its main duty is to “ensure free, fair and transparent elections” and not remove lawmakers from the national assembly. (“Errant ECP,” Dawn, 22 January 2025)
JUDICIARY
Jurisdiction of cases becomes subject of dispute at the Supreme Court
On 21 January, Justice Syed Mansoor Ali Shah took up the contempt of court case. He inquired why a case which had originally been fixed for the regular bench had been transferred to the constitutional bench. This comes as the Additional Registrar Nazar Abbasi was slammed with contempt of court charges for not following the court’s orders to fix a case for the regular bench. Consequently, it has led to a debate over whether administrative decisions precede the judicial orders. At the hearing, the registrar pleaded that the case to the regular bench had been fixed by mistake. It did not entail any form of malicious intent but it was a bona fide act. In this regard, Justice Aqeel Ahmed Abbasi asked the registrar to provide the minutes of the meeting which led to the de-listing of the part heard case. However, the latter responded that the minutes were “confidential.” Justice Shah argued that no committee had the authority to withdraw a case via an administrative direction. Responding to this statement, the registrar stated that committee did have the power to withdraw previously scheduled cases. To this, Justice Shah said: “You just cannot do it.” “It is a gift from God, and we will not let it go.” Prior to the hearing, a three page letter was submitted by the Justice Shah, Justice Aqeel and Justice Ayesha A Malik highlighting that the court office’s failure to follow the judiciary’s instruction not just compromised the judiciary’s integrity but also circumvented existing constitutional provisions. These laws state that the administrative orders do not have the power to transfer a case before a bench which has taken cognizance of it. (Nasir Iqbal, “‘Jurisdiction’ becomes bone of contention at apex court,” Dawn, 22 January 2025)
On administrative transfer of cases: “It is incumbent upon the judiciary to undertake a review of recent legislations to clear the air of misgivings, paving the way for upholding the spirit of constitutional supremacy,” suggests an editorial in The Express Tribune
On 22 January, an editorial in “Of writ and litigation,” in The Express Tribune discussed the ongoing tiff surrounding the constitution of benches and the designation of cases. This comes as the recent 26th Constitutional Amendment has created a policy loophole as to which cases ought to be heard by the regular bench and which ones by the constitutional bench. It has created a debate between the judiciary and the administration as a judiciary committee had transferred an ongoing case from the one bench to another bench. In this regard, a senior judge said: “the [three-judge] committee is taking back ongoing cases, then the judiciary's independence has ended.” It has also elicited concern regarding the constitutionality of Article 19A, under which the constitutional bench was formed. The editorial cited experts who believe that the existing differences between the two benches may “graduate into a full court reference to determine the veracity, splitting the Brother Judges on the premise of their learned interpretation.” (“Of writ and litigation,” The Express Tribune, 22 January 2025)
ECONOMY
On highest current account surplus, “Increased remittances and exports have helped Pakistan record its highest current account surplus in 15 years,” says an editorial in The International News
On 22 January, an editorial titled “Stable or stagnant?,” in The International News stated that Pakistan has achieved a current account surplus of USD 1.2 billion in the first half of FY2024-25 which is the highest in 15 years. The central bank noted that this surplus was due to increased remittances and exports. In December 2024, it alone recorded a USD 582 million surplus with a 109 per cent year-on-year rise despite a 15 per cent monthly decline. The remittances increased to USD 8.8 billion in the first quarter of FY2025. However, export growth slowed with textile exports up only 5.55 per cent in December after four months of double-digit increases. Despite these improvements, GDP growth is at just 3 per cent which is inadequate for a rapidly growing population. Furthermore, Pakistan faces challenges with a 1.25 per cent contraction in large-scale manufacturing and heavy reliance on IMF aid and foreign loans. The editorial stated that sustainable growth in Pakistan required tough reforms including attracting foreign investment, reducing unproductive expenditures, and enhancing industrial competitiveness. (“Stable or stagnant?,” The International News, 22 January 2025)
ENERGY
On power sector reforms, “The aim is to deal with some of the inefficiencies in the power sector while rationalizing costs and pushing for more adoption of alternative energy sources,” says an editorial in The Express Tribune
On 22 January, an editorial titled “Power sector reforms,” in The Express Tribune stated that the government is reforming electricity pricing to reduce consumer costs by up to PKR 12 per unit. It is also addressing inefficiencies in the power sector. The reforms would replace the Independent System Market Operator (ISMO) with the Central Power Purchasing Agency (CPPA) to streamline operations and build a stronger market structure. The plans include privatizing underperforming power distribution companies and renegotiating contracts with sixteen independent power producers to lower tariffs without violating IMF conditions. The future energy projects would focus on cost reduction and shift from the previous approach that led to surplus capacity and economic strain. However, several challenges like excess capacity from alternative energy adoption and widespread power theft require federal-provincial coordination. (“Power sector reforms,” The Express Tribune, 22 January 2025)
SECURITY
Militant neutralized in Balochistan on 11 January hailed from Afghanistan
On 22 January, The News International confirmed that a militant who was neutralized in Zhob, Balochistan was a citizen of Afghanistan. His body has been sent back to Afghanistan. The terrorist hailed from Paktika province in Afghanistan. Inter Services Public Relations (ISPR) which is the military’s media wing stated that this incident signifies how many Afghans are indulged in carrying out terror operations on Pakistan’s soil. ISPR further stated that it expects the Afghan government not to create safe havens for terrorists on its territory. In 2024, Pakistani army demanded that the current government of Afghanistan must take strict actions against proscribed terror organizations who have been given safe haven in Afghanistan. In 2024, the army carried out close to 60,000 intelligence-based operations and killed more than 900 terrorists. 73 of them were “high value targets.” (“Terrorist killed in Zhob identified as Afghan national,” The News International, 22 January 2025)
EXTERNAL
Saudi firm looking to buy 20 per cent shares in Reko Diq from Government of Pakistan
On 22 January, The News International reported that as per a newspaper of UK, Manara Minerals would be buying 10 to 20 per cent shares in the Reko Diq project. The total amount for buying the stakes would come around to USD 500 million to USD 1 Billion. Manara Minerals is a mining fund based in Saudi Arabia. This would give further push to Reko Diq copper and gold project. Manara Minerals would be buying the shares from the Government of Pakistan. Reko Diq project is jointly developed by Barrick Gold which is a Canadian firm. Minister of Petroleum Musadik Malik informed that the investment from the Saudi firm is anticipated to come before the last quarter of 2025. He further informed about the interest of other countries in the Gulf region in investing in the mining project. (“Saudi firm to invest up to $1bn in Reko Diq project: UK paper,” The News International, 22 January 2025)
FIA sends out advisory for stringent monitoring of suspected passengers flying to foreign destinations
On 22 January, The News International reported on the Federal Investigation Agency’s (FIA) advisory regarding putting an end to “human trafficking.” Directors of FIA immigration all over Pakistan have been instructed to stringently examine passengers who are travelling for the very first time outside the country and who fall in the age group of 15 to 40 years. The communique of FIA directed that stringent examination of “young passengers” should be carried out, who are flying by Dubai and Ethiopian Airlines. The FIA circular also instructed that enhanced monitoring of passengers who are flying to Azerbaijan, Ethiopia, Senegal, Kenya, Russia, Saudi Arabia, Egypt, Libya, Iran, Mauritania, Iraq, Turkey, Qatar, Kuwait and Kyrgyzstan should be carried out. Further, the circular directed that travel documents of passengers must be carefully inspected. Dubious passengers would have to go through “strict interviews” to make sure that they can sustain themselves economically in the destination country. As per the sources of The News International, because there was not a well-defined “advisory policy,” it was not easy for the concerned officials to inspect suspected passengers. (Afzal Nadeem Dogar, “FIA told to strictly check young passengers at airports,” The News International, 22 January 2025)
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"The decision in the Al-Qadir Trust case will be discussed later. First, we should see whether the judge who wrote this decision is worthy of this position or not,"
Matiullah Jan
- PTI
The debt of the sacrifices of the martyrs against the Khawarij rebellion cannot be repaid.
Prime Minister Muhammad Shehbaz Sharif
- PMLN Digital
The beautiful scene before me is what unites us in a strong unity that we call Pakistan, and our national flag is not complete without the color white.
Chief Minister Punjab Maryam Nawaz
- PMLN
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"Political leaders seek personal glory at taxpayers’ expense."
- An opinion in Dawn, 'Elaborate narcissism.'
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