Strengthening Economic Ties in Multiple Sectors
Pakistan is preparing to sign agreements and memorandums of understanding (MoUs) worth $2 billion with Saudi Arabia. The anticipated deals span various sectors and aim to enhance the economic partnership between the two nations. This significant move is scheduled during the upcoming visit of a high-level Saudi delegation to Islamabad, marking a pivotal moment in Pakistan's economic diplomacy.
Prime Minister's Announcement
Prime Minister Shehbaz Sharif disclosed the upcoming agreements during a federal cabinet meeting held on Tuesday. The prime minister highlighted the strategic importance of this visit, which is expected to foster deeper economic cooperation between Pakistan and Saudi Arabia.
The Saudi delegation, led by Investment Minister Khalid Bin Abdulaziz Al-Falih, is set to visit Pakistan from October 9 to 11. The visit comes just a week before the Shanghai Cooperation Organization (SCO) summit in Islamabad, positioning it as a prelude to further international engagements. The delegation will include officials from both government agencies and the private sector, signaling a comprehensive approach to strengthening bilateral ties.
Acknowledging International Support
During the meeting, Prime Minister Shehbaz Sharif expressed gratitude to key international allies—China, Saudi Arabia, and the United Arab Emirates—for their support in helping Pakistan secure a loan facility from the International Monetary Fund (IMF). He also referred to the recent visit of Malaysian Prime Minister Anwar Ibrahim, where both nations reached agreements to expand exports, including halal meat and rice, from Pakistan to Malaysia.
Economic Achievements Highlighted
In his address, the prime minister emphasized the government's successful efforts in economic recovery. He stated that, thanks to effective teamwork, the IMF program had been approved, and Pakistan's economy had shown signs of stabilization. Inflation had fallen sharply, dropping from 32% to 6.9%, while both exports and remittances were on the rise. Additionally, the stock exchange had been performing well, reflecting increased investor confidence.
Prime Minister Shehbaz Sharif warned against any political moves that could undermine the country's economic progress, describing such actions as a “conspiracy against the nation.”
Reforms and Relief Efforts
Shehbaz Sharif also spoke about his government's reform agenda, which includes expanding the tax base and improving the efficiency of tax collection through the digitization of the Federal Board of Revenue (FBR). He pointed out that the number of tax return filers had doubled under his administration, a positive sign for the country's fiscal health.
In another significant move, the government has reduced oil prices five times, providing much-needed relief to consumers. Additionally, a relief package worth Rs50 billion has been introduced to help power consumers in the protected category. The Punjab government has also contributed a Rs55 billion relief package, further easing the financial burden on the public.
Appreciation for IMF Support
The prime minister expressed his gratitude to the IMF chief for her assistance in approving the loan facility for Pakistan. He noted that she had acknowledged the reform measures implemented by both the current and previous caretaker governments. This international support has been crucial in Pakistan's efforts to stabilize its economy.
Finance Minister's Outlook: Macroeconomic Stability in Sight
Currency Stability and Reserve Growth
In a separate statement, Finance Minister Muhammad Aurangzeb provided an optimistic update on the country's economic situation. He reported that macroeconomic stability was beginning to take root, with the currency showing signs of stability. Pakistan's foreign exchange reserves had grown to $10.7 billion following the disbursement of the first tranche from the IMF.
Inflation at Record Low
The finance minister noted that had inflation dropped to 6.9%, marking a 44-month low. This reduction is evident across all inflation indicators, including headline inflation, core inflation, and average inflation, which have all fallen into single-digit figures. This represents a significant improvement from the sky-high inflation rates seen earlier.
Interest Rates Expected to Decline
Aurangzeb also expressed optimism that the State Bank of Pakistan (SBP) would reduce interest rates in its upcoming monetary policy meeting, citing positive economic indicators. He pointed out that the Karachi Inter-Bank Offered Rate (KIBOR), a critical benchmark, was already lower than anticipated, suggesting that borrowing costs could fall further.
Lower Debt Servicing Costs
The government's prudent fiscal management has led to a reduction in its borrowing needs, which in turn has lowered debt servicing costs. This fiscal discipline has freed up resources for banks to extend more loans to the private sector, supporting economic growth.
Relief Fund for Palestine and Lebanon Approved
Humanitarian Efforts in Response to Middle Eastern Crises
During the cabinet meeting, approval was granted for the establishment of the Prime Minister's Relief Fund to assist victims of Israeli aggression in Palestine and Lebanon. The State Bank of Pakistan was instructed to open an account to facilitate donations to the fund.
Minister for Planning and Development Ahsan Iqbal has been tasked with overseeing the relief efforts, ensuring that Pakistan's humanitarian support reaches those in need in these war-torn regions.
E-Office Implementation in Federal Ministries
Modernizing Government Operations
The Ministry of Information Technology and Telecom briefed the cabinet on the progress of e-office implementation across federal ministries, departments, and institutions. The meeting was informed that e-office systems were being rolled out in all 40 divisions of the federal government, with 100% implementation already achieved in some ministries.
The prime minister directed the ministry to accelerate the process and to provide a progress report within two weeks, emphasizing the importance of adopting modern digital solutions to improve government efficiency.
Additional Cabinet Decisions
Subsidies for Fisheries Sector
In light of recent decisions by the World Trade Organization, the cabinet approved an agreement to provide subsidies to Pakistan's fisheries sector. This move aims to support the industry and enhance its competitiveness in global markets.
Sister-Port Agreement Between Gwadar and Shanghai
The cabinet also approved the signing of an agreement to establish sister-port status between Pakistan's Gwadar Port and China's Shanghai Port. This agreement is expected to deepen trade and logistics cooperation between the two key ports, strengthening economic links with China.
Bilateral Agreements with Rwanda and Ghana
The cabinet approved the signing of memorandums of understanding (MoUs) for bilateral political consultations between Pakistan's Ministry of Foreign Affairs and its counterparts in Rwanda and Ghana. These agreements reflect Pakistan's broader strategy of expanding its diplomatic and economic ties with African nations.
New Jurisdiction for Anti-Narcotics Cases
On the recommendation of the Ministry of Law and Justice, the cabinet approved granting jurisdiction to judicial magistrates in Gwadar and Hub to hear anti-narcotics cases. This decision is part of broader efforts to strengthen the legal framework in Balochistan and address drug-related issues more effectively.
