Large-scale Manufacturing sector contracts by 1.87 per cent I Fall in power generation demand
In Focus
IMF mission to visit Pakistan to discuss climate financing under Resilience and Sustainability Trust
On 21 February, Dawn reported on International Monetary Fund (IMF) mission’s visit between 24 and 28 February to discuss an estimated USD one billion in climate financing. The fund disbursement is set to take place under the Resilience and Sustainability Trust constituted by the IMF in 2022. It functions to provide funding through concessions to meet climate-related expenditures. In this regard, Pakistan requested USD one billion in funding from the international lender to address its vulnerabilities to climate change-induced phenomena as it has been ranked among the most vulnerable countries to climate change under the Global Climate Risk. This IMF mission visit is coming ahead of another IMF visit in the first week of March, to carry out the first review under the Extended Fund Facility (EFF) of USD 7 billion.
Separately, while chairing the Senate Standing Committee on Climate Change, Senator Sherry Rehman highlighted the pressing need for climate financing in order. She compared how the fiscal constraints in Pakistan are higher than the ones in Bangladesh. She said: “Our current financial frameworks are inadequate, and without a robust strategy, Pakistan will struggle with climate adaptation and mitigation.” Meanwhile, Finance Minister Aurangzeb noted the prioritization of climate financing under the World Bank’s Country Partnership Framework as well as the ongoing deliberations with the Fund to secure the the USD one billion tranche under the EEF. However, a major impediment to accessing these funds lies in bureaucratic hurdles, he remarked.
On the same day, News International highlighted a statement made by IMF Resident Chief in Pakistan Mahir Binici while addressing the conference on “Retail Reimagined: Innovate, Collaborate & Thrive,” which was organized Pakistan Retail Business Council. He observed that the macroeconomic challenges of Pakistan were due to a debt burden which is preventing the country from generating a potential level of revenue. He said: “There is a higher burden of taxation on the formal sector.” He further stated that the fiscal burden has cropped up as certain economic sectors don’t contribute to the national kitty which have resulted in macroeconomic challenges. (Jamal Shahid, “IMF, Pakistan to open $1bn climate finance talks,” Dawn, 21 February 2025; Mehtab Haider, “Pakistan's inability to generate revenues key issue: IMF,” The News International, 21 February 2025)
Large-scale manufacturing sector contracts by 1.87 per cent
On 20 February, statistics from the Pakistan Bureau of Statistics revealed a 1.87 per cent contraction in the Large-scale manufacturing sector, on an annual basis, within the first six months of fiscal 2024-2025. The LSM sector is an important domain in the Pakistani economy as accounts for 69.3 per cent of the total manufacturing in the country and 8.2 per cent to the gross domestic product. The decline in production is influenced by global and domestic forces and has been continuing since August 2024 with October being an exception. Growth in August contracted by 2.65 per cent on a year-on-year basis while October was recorded at 0.02 per cent. However, in the next consecutive months, the production contracted as a contraction of 3.81 per cent was seen in November followed by 3.73 per cent in December. Nevertheless, a monthly growth of 19.07 per cent was recorded from November. Performance in the first six months of 2025, the food group witnessed an expansion of 0.85 per cent, alongside the automobile sector and pharmaceutical products and fertilizers. (Mubarak Zeb Khan, “Large-Scale Manufacturing production shrinks 1.8pc,” Dawn, 21 February 2025; Israr Khan, “Pakistan’s industry slows: LSM shrinks 1.87% in first half of FY25,” The News International, 21 February 2025)
Power generation demand falls in the first seven months
On 20 February, according to data released by the Power generation sector, the power generation levels rose by 4.5 per cent compared to the level of power generation in the previous month of the current fiscal. However, the level of power generation fell by 3.2 per cent in the first seven months of the current fiscal by 74,794 GWh, while it was at 77,296 GWh in the same period of the previous year. Analysts link this low power generation to a fall in demand as temperatures have dropped and consumers have moved towards solar energy alternatives. Interestingly, the nuclear power generation accounting for 26 per cent has been the most sought after in the power generation mix during the month of January. Analysts attribute this increase in generation from nuclear sources due to a decline in its cost of production. This has been followed by Regasified Liquefied Natural Gas-based power generation which accounts for 19 per cent. Among the renewable energy power generation mix, bagasse, solar and wind power generation amounted to one per cent, one per cent and three per cent each. (“Power generation falls on lower demand,” The News International, 21 February 2025)
In Brief
POLITICS
Islamabad High Court grants bail to PTI workers detained after 26 November demonstrations
On 20 February, Islamabad High Court (IHC) gave bail to around 120 PTI workers who were detained after the 26 November 2024 demonstrations. The bail was granted with an instruction to file an affidavit, pledging that they would not be indulging in activities like such. In addition to the affidavit, the bail grantees would also have to submit “surety bond worth PKR 20,000.” The 26 November 2024 PTI demonstrations had the objective of pressurizing the federal government so that it frees imprisoned Imran Khan. The Islamabad district administration had made arrests on charges of breaching law and order in the capital city. Separately, a plea has been lodged in IHC which demands the revealing of identities of PTI workers who lost their lives in the demonstrations. (Malik Asad, “PTI workers freed in Nov 26 protest case,” Dawn, 21 February 2025)
PPP Chairman questions the hypocrisy of western countries in their stance towards possession of nuclear arms
On 20 February, PPP Chairman Bilawal Bhutto delivered a speech at Oxford Union. During the speech, he voiced his distress regarding US imposing sanctions on the “ballistic missile programme” of Pakistan. He questioned whether any other country can decide what “defence capabilities” Pakistan should possess. Further, he questioned the objections raised by western countries over possession of nuclear arms when they themselves have it. He asked “it is that every Western or White country is allowed nuclear weapons and others aren’t.” Targeting US President Donald Trump, he stated that Pakistan does not have any aspirations for extending its territory unlike US which has expressed its desire to “take over Canada and Panama canal.” He also praised his mother Benazir Bhutto who was an alumnus of the Oxford University for her “sacrifices.” He stated that Benazir Bhutto taught him not to focus upon taking “revenge.” Commenting on the importance of democracy he said “democracy is the best revenge.” (“At Oxford, Bilawal defends Pakistan’s N-programme,” Dawn, 21 February 2025)
ECONOMY
On lossmaking SOEs: “It is only a matter of time before these would have to be liquidated, sold, or fixed,” argues an editorial in Dawn
On 21 February, an editorial in Dawn titled “High cost of SOEs,” discussed how the State-Owned Enterprises (SOEs) of Pakistan has become a huge burden to the economy. According to a report issued by the Finance Ministry, the total losses incurred by many SOEs, especially the power and infrastructure sectors rose by PKR 851 billion along with a total debt of PKR 9.2 trillion, nearly matching the revenue collections of the Revenue Board in 2024. The editorial provides examples of how the Pakistan Steel Mills, the Railways and the Pakistan International Airlines that bleed just to stay in business. In fact, the government loans, grants, equities and subsidies allocated to SOEs make up 13 per cent of the budget receipts and is a larger estimate than that of the federal development programme. While efforts have been made to reform SOEs, the editorial describes them as “half-hearted” and “botched.” It highlighted the lack of political will in selling or fixing them as they produce “easy” and “large rents” for politicians and bureaucrats. However, this may not last for long as the government’s resources are declining by day amidst growing pressures from multilateral lenders. Hence, they will be left with “no option but to reconsider” policy on SOEs.
On the same day, another editorial in The Express Tribune highlighted a similar stance as it urges the government to persuade potential buyers, offer incentives and even privatize the loss-making enterprises. It describes the losses and loans as a potential threat to the economy, ultimately “making the government's failure to reform them an increasingly costly oversight.” Furthermore, the gross Economic Value Added by SOEs is at a negative PKR 2.5 trillion. This indicates how they are not just loss-making but also “actively diminishing national wealth.” Highlighting the political aspect of the issue, the editorial made reference to the incumbent government’s commitment to bring about macroeconomic stability via structural reforms, including the privatization of SOEs. But “little has materialized” even though the government has been making efforts to fulfil the International Monetary Fund’s conditionalities. Hence, the editorial suggested that these entities should be divested from in order to halt the erosion of public finances. (“High cost of SOEs,” Dawn, 21 February 2025; “Bleeding dry,” The Express Tribune, 21 February 2025)
SECURITY
Security forces detain culprits of the recent aid convoy attack in Kurram; Militants kill two police officers in Quetta
On 21 February, Dawn reported on the operation initiated by security forces in Kurram to identify the militants involved in disrupting the peace in the region. Close to 30 culprits have been detained by the security forces as per the police on 20 February. As per the Kohat Regional Police officer (RPO), the operations were initiated in five regions of Kurram and their nearby areas namely Bagan, Charkhel, Dad Kamar, Manori and Ochat. He informed that there were 18 culprits and 12 others who had helped them in disrupting the peace in the region and were involved in the ongoing violence. Things which were stolen from the aid convoy trucks have been retrieved from five houses. RPO confirmed the detention of the five accused. On 17 February, more than 30 trucks which were fetching necessary items to Kurram were ransacked. 19 trucks were set ablaze. The assault had resulted in the killing of a number of security officers and drivers of the trucks. As per the FIR filed in a Counter-Terrorism Department police station in Kurram, the accused mostly belonged to Tehreek-i-Taliban Pakistan.
On 20 February, two police officers were killed during an exchange of fire between them and the militants in Quetta. Security forces also managed to kill four militants. It all started when militants attacked “a joint post of police and forest guards in Shaban.” Shaban is situated roughly 12 miles away towards north east of Quetta. Separately, on 20 February, a blast took place in Sikanderabad. Sikanderabad is located on the periphery of Quetta. The attacker who was planning to detonate the bomb fell victim to it as it blasted untimely. (Javid Hussain, “Miscreants, facilitators held in Kurram action,” Dawn, 21 February 2025; Saleem Shahid, “Two cops martyred in Quetta attack,” Dawn, 21 February 2025)
ENERGY
PM Sharif constitute committee to address protests against Basha Dam
On 20 February, an official notification revealed that Prime Minister Shehbaz Sharif constituted a seven-member committee to address the Diamer-Bhasha Dam project. People of Chila have been demonstrating a sit-in for five consecutive days. The protests intensified on 19 February as the protestors, who are a part of the “Give Rights and Build Dam” brought a halt to construction linked to the Diamer Bhasha Dam. Additionally, they had set a two-day deadline for their 31-point demands to be implemented. The Gilgit Baltistan government also expressed solidarity with the demonstrators and informed them of the ministerial committee forced by the prime minister. (Jamil Nagri, “PM forms body to address grievances over Bhasha Dam,” Dawn, 21 February 2025)
INDIA VIEW
On US-India relations after Donald Trump assumed US Presidency: “We are likely to see the US tighten its strategic embrace of India under Trump” predicts an opinion in The Express Tribune
On 21 February, an opinion in The Express Tribune titled “Rekindling the Indo-US bromance” discussed the relationship of US with India and Pakistan after the new Donald Trump administration took charge. The author claims that the US is interested to have a greater “access” into the growing market of India. As per the author, Donald Trump was able to swing the Indian-American voters in his favor, given his close ties with PM Modi. PM Modi also received appreciation from the Indian population for sharing a close bond with the President of the US. The author claims that both PM Modi and President Trump appeal to the “majoritarian sentiments” of their respective populations. Both the leaders believe in trickle down theory of development. The author highlights two contentious issues between the US and India which developed after Trump assumed the Presidency. First, the illegal migrants from India living in the US. Second, the imposition of duties on imports from India to the US. The author points out Trump’s intention to escalate the volume of “energy exports” to India and also enhance defence ties. With Pakistan, the author opines that the US is not looking towards any noteworthy “investments.” The author claims that the US is skeptical about Pakistan’s growing ties with China. The author predicts that the US would want to develop closer ties with India under the new Donald Trump administration which might drive Pakistan closer to China. (Syed Mohammad Ali, “Rekindling the Indo-US bromance,” The Express Tribune, 21 February 2025)
EXTERNAL
On Pakistan’s obsession to increase trade with Central Asian countries: “It is time to look dispassionately at the whole gamut of, and fascination with, Central Asian Republics trade potential” argues an opinion in The Express Tribune
On 20 February, an opinion in The Express Tribune titled “The myth of Central Asia’s trade potential” presented a comparison between Chabahar port and Gwadar port and discussed how trade prospectives with Central Asian countries is overhyped. The author mentions that Gwadar port will have the capacity to manage “400 million metric ton(mmt) cargo” yearly by the year 2045. Chabahar port on the other hand will have the capacity to manage “82 mmt cargo” when it is completed. Gwadar port would have the capacity to manage vessels which have close to “50,000 deadweight tonnage.” Chabahar on the other handle could handle “20,000 tons.” The author points out the current state of trade of Central Asian countries with Pakistan which hovers around USD 400-500 million yearly. As per the author, Pakistan’s trade with the Central Asian countries can surpass USD 5 billion in the “next two years.” The author highlights the challenges such as poor infrastructure, insufficient “transportation network and connectivity,” complicated “trade regulations,” and time required for issuance of visa to entrepreneurs and drivers have caused roadblocks in Pakistan’s trade with Central Asian countries. The author mentions that the “intra-regional trade” in Central Asian countries amounted to USD 10 billion in 2022. The author then highlights Pakistan’s trade with China which amounted to USD 17.8 billion. Though the trade prospectives with Central Asian countries is not that significant, the author urges that Pakistan must keep on putting efforts to develop relations with “brotherly Muslim countries.” (Inam Ul Haque, “The myth of Central Asia’s trade potential,” The Express Tribune, 20 February 2025)
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Yesterday, the elder brother of former PTI President UK @MalikImranKhal an organizer who was trying to stop the London protest, was kidnapped and held by agents in Faisalabad for the entire day, which we strongly condemn.
Azhar Mashwani
- PTI
Hopefully the letter will have been received by now.
- PTI UK
Imran Khan first plotted to destroy Pakistan's economy, then got involved in the May 9 terror attacks, and now went to stage a protest against the army – but only 51 people out of 1.5 million turned out! The narrative of the riot movement has been completely rejected!
- Rana Tanveer Hussain
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"No one felt the need to run the proposed amendments by the people. After all, what do the people know?."
- An opinion in Dawn, ''The façade"
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