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Pakistan needs IMF support to breathe again

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Pakistan has been suffering from its worst economic age, where the International Monetary Fund (IMF) has already slashed the growth outlook for the cash-strapped country, forecasting its economic growth 0.5pc this year, down from 6 percent in 2022.

Pakistan has been facing around 27pc inflation this year as per IMF prediction that could harm the country of an over 230 million people.

The global lender also warned that the country will struggle with unemployment this year and also last year’s deadly flood that resulted in the death of 1,739 people, has caused a damage of $30 billion.

To cover the current economic crisis, the coalition government of Pakistan’s Prime Minister Shahbaz Sharif is in talks with the IMF to receive a key tranche of a $6 billion package.

Sharif’s predecessor, Imran Khan, who is now a key opposition, has signed the package in 2019.

On Tuesday morning, Sharif held a telephonic conversation with IMF Managing Director Kristalina Georgieva, and the talks were centered around matters related to the IMF program.

Pakistan hopes to get bailout funds in a day or two

During the conversation, Sharif had expressed hope that the lender would announce a decision pertaining to the release of bailout funds within a day or two, according to local media.

Pakistan’s ninth review by the IMF under the 2019 Extended Fund Facility (EFF) for the release of a $1.2bn tranche is still pending with fewer than 10 days remaining until the program’s expiry on June 30, Dawn reported.

Pakistan was expected to get around $1.2 billion from the lender in October last year, but it has not been preceded and the IMF says Pakistan is not able to meet important prerequisites required for the budget.

The IMF Managing Director Kristalina Georgieva (L) met Pakistani Prime Minister Shehbaz Sharif (R) in Paris (Pakistan Prime Minister’s Office)

Now, when the deadline is about to expire, Pakistan’s primer held back-to-back meetings with Georgieva in Paris last week, to make sure it gets the money to deal with current economic difficulties.

“In connection with the meetings held in Paris, the IMF director general acknowledged efforts by the finance minister and his team for completion of the program,” said a handout released by the Prime Minister’s Office (PMO).

Sharif also reiterated his determination to achieve the goals of improving the economic situation through joint efforts, according to the handout.

Several observations on parts of budget

The IMF had earlier this month brought several eye-brows over Pakistan’s budget for fiscal year 2024. It made it clear that Islamabad has proposed some measures which are against the EFF program’s condition.

Esther Perez Ruiz, IMF representative for Pakistan, had earlier said Pakistan needed to satisfy the IMF on three counts, including the budget for the upcoming fiscal year, before its board will review whether to release the pending tranche, according to Dawn.

Considering the expiry of the program which some days remain, it seems Pakistan has failed to convince the IMF creating fear that the budget would not be materialized this time again.

Meanwhile, the government of Sharif is doing what it can to address IMF’s concerns and said Islamabad is flexible on the budget and expressed readiness to engage with the lender to eventually reach an good-natured solution.

Reportedly, the government of Pakistan last week has brought some changes to the fiscal year’s budget, including fiscal tightening measures dictated by the IMF in a last-ditch effort to secure critical funding, according to Dawn.

Pakistan’s Finance Minister Ishaq Dar had recently said that Pakistan and IMF had detailed negotiations for the last three days as a last effort to complete the pending review.

The changes include Rs215bn additional tax measures, a Rs85bn spending cut, withdrawal of an amnesty on foreign exchange inflows, lifting of import restrictions, a Rs16bn hike in Benazir Income Support Program allocations, and the powers to increase the petroleum levy from Rs50 to Rs60 per litre, Dawn reported.

Almost all irritants between two sides addressed

“Almost all the irritants between the IMF staff and the Ministry of Finance were addressed hours before the finance minister’s wind-up speech,” Dawn quoted an official.

Speaking on condition of anonymity, the official also said that it was now up to the IMF’s mission to line up the precise dates for the lender’s executive board approval and disbursement of funds.

However, he acknowledged that it was not on the calendar until June 30, when the $6.5 billion Extended Fund Facility agreed in 2019 is set to expire.

Pakistan primer Sharif during his visit to France also met with this expatriate community there. During the meeting, Sharif explained to them the circumstances in which the coalition government assumed office as well as the “mammoth economic, diplomatic and political challenges” that the government had to deal with over the last one year.

“I also outlined the broad contours of the Economic Revival Plan to put the economy back on track through long-term policies. Achieving economic self-reliance remains the overriding goal for the government,” Sharif added.

ASIA

Syria will not follow Afghanistan’s Taliban model of governance

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In an astonishing statement, Ahmed Shará, also known as Abu Mohamad Jolani, the leader of the Hayat Tahrir al-Sham (HTS) said that he will allow the girls to go to schools and will not turn Syria like Afghanistan under the rule of the Taliban.

Jolani, the de facto ruler of Syria, said that he will distance himself from the Taliban’s strict policies on women’s rights, and said that Syria will not follow the Taliban’s mode of governance.  

Jolani, who brought down the government of Bashar al-Assad and also widely welcomed by the Taliban, said that he believes in the education of women and girls and will not make Syria like Afghanistan.

“Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal. The Afghan model cannot be applied here,” Jolani told a BBC reporter.

Jolani says that Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal.

Jolani’s comment came when the Taliban congratulated the HTS-led victory by Jolani over Assad’s regime after years of fighting. The Afghan Foreign Ministry celebrated Jolani’s victory through a statement and hoped Jolani can bring peace and stability in the country.

“It is hoped that the power transition process is advanced in a manner that lays the foundation of a sovereign and serve-oriented Islamic government in the line with the aspiration of the Syrian people; that unifies the entire population without discrimination and retribution through adoption of a general assembly; and a positive foreign policy with world countries the safeguard Syria from a threat of negative rivalries of foreign actors and creates conditions for the return of millions of refugees,” the statement by Taliban Foreign Ministry.

However, Jolan’s position on the rights of women and girls is in great contrast with the current view of the Taliban leadership. Women and girls have been banned from education and work since the return of the Taliban in August 2021, following the collapse of the Republic System and withdrawal of the US troops from Afghanistan. Girls and women are even banned from medical institutions and visiting public spaces.

Jolani says he has a plan to create a government based institution and a council chosen by the people. 

The situation got worse when the Taliban’s Ministry for the Promotion of Virtue and Prevention of Vice called women’s voices “immodest” compounding their exclusion from public life. This year, it has been marked as three years since girls were banned from pursuing education over sixth grade. Besides that, on December 20, 2022, the Taliban’s Ministry of Higher Education announced that women would be barred from attending public and private universities.    

In an interview with CNN, Jolani said that he has a plan to create a government based on institutions and a “council chosen by the people.”

“When we talk about objectives, the goal of the revolution remains the overthrow of this regime. It is our right to use all available means to achieve that goal,” said Jolani.

“The seeds of the regime’s defeat have always been within it… the Iranians attempted to revive the regime, buying it time, and later the Russians also tried to prop it up. But the truth remains: this regime is dead.”

Moreover, he also said the Syrian people are the “rightful owners” of the country after the ouster of Assad, and declared a “new history” has been written for the entire Middle East.

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Yoon summoned again for questioning on treason charges

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A joint law enforcement team investigating South Korea’s martial law case announced on Friday that it has issued a second summons to ousted President Yoon Suk Yeol, requesting his presence for questioning next week. The inquiry concerns his alleged involvement in the failed implementation of martial law.

The team has scheduled the questioning for 10:00 a.m. next Wednesday at the Corruption Investigation Office for Senior Officials (CIO) headquarters in Gwacheon, located just south of Seoul. This marks the second summons after Yoon refused to cooperate with the initial notice earlier this week.

The decision to hold the questioning on a public holiday appears to be a strategic move by the CIO, likely aimed at addressing security concerns. The office confirmed that the summonses were delivered via express mail and electronically to both Yoon’s residence and the presidential office in Yongsan. Notably, after Yoon’s team refused to accept the first subpoena, the CIO opted against delivering the documents in person for this round.

The investigation focuses on Yoon’s role in the December 3 martial law declaration, which he revoked following a vote in the National Assembly. If Yoon continues to disregard the summons without valid justification, the CIO may seek a court order to detain him for up to 48 hours.

Yoon faces allegations of sedition and abuse of office, charges that have gained traction since his dismissal by parliament last Saturday. His suspension from office remains in effect pending a decision by the Constitutional Court, which will determine whether he is permanently removed or reinstated.

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Xi Jinping champions economic diversification during Macau visit

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During a three-day visit to Macau commemorating the 25th anniversary of its return to Chinese sovereignty from Portugal, President Xi Jinping emphasized the importance of economic diversification and maintaining the “one country, two systems” framework.

Speaking at the swearing-in ceremony for Macau’s new Chief Executive Officer, Sam Hou-fai, Xi urged the administration to make economic diversification the city’s primary focus. Sam, the fourth leader since the 1999 handover and the first mainland-born Chinese official to hold the position, is expected to align closely with Beijing’s objectives to reduce Macau’s reliance on gambling. The gambling industry, which accounts for approximately 80% of Macau’s tax revenue, has been the cornerstone of its rapid economic growth in recent years.

“Macau should prioritize proper economic diversification,” Xi stated, calling for enhanced policy support and investment in emerging sectors. He also reiterated the significance of the “one country, two systems” principle, stressing its role in ensuring the city’s “prosperity and stability” for the long term.

Xi’s visit included stops at the Macau University of Science and Technology, where he explored laboratories focusing on traditional Chinese medicine and planetary science. He also attended a cultural performance at the Macau Dome and met with local stakeholders, according to Chinese state media. His trip marked a shift in tone, with Anthony Lawrence, founder of Intelligence Macau, noting that it was the first time Xi publicly praised Macau for its progress rather than delivering critiques or instructions.

Since the liberalization of Macau’s gaming monopoly in 2002, the city has attracted significant foreign investment, including from prominent US casino operators such as Las Vegas Sands, MGM, and Wynn Resorts. However, the economy struggled during the COVID-19 pandemic due to travel restrictions, and recovery has only recently begun.

On Friday, Macau’s casinos were bustling with visitors, while non-gaming initiatives like a stamp exhibition co-organized by MGM China and Beijing’s Palace Museum showcased the city’s efforts to diversify its offerings.

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