“Downside risks remain exceptionally high,” says IMF

Daily Briefs

Photo : Dawn

11 May 2024, Saturday| Vol 5, No.95

“Downside risks remain exceptionally high,” says IMF

Icube-Qamar captures the first picture of the moon | Iran releases and repatriates 28 Pakistani prisoners

PR Daily Brief |

In Brief
POLITICS
Punjab speaker suspends MPA seats of SIC allocated to other parties
On 10 May, the Speaker of the Punjab provincial assembly suspended 24 women and three minority MPAs who were elected on reserved seats and barred from joining the house proceeding. Of the suspended MPA’s 23 belonged to the PML-N, two from PPP, and one each to PML-G and IPP. The Speaker Malik Mohammad Ahmed Khan took the decision on a point of order raised by the opposition lawmaker Rana Aftab of PTI-backed Sunni Ittehad Council (SIC) saying, the supreme court suspended the decision of the Election Commission of Pakistan (ECP) of allocating reserved seats of SIC to other parties. The suspension led the national assembly’s ruling coalition to lose two dozen members. The SIC members also filed a similar case in the 13 May National Assembly summoned by President Asif Ali Zardari. The SC decision is expected to have no effect on the composition of the Balochistan Assembly, as the PTI had not won any seat in the province in the 8Feb provincial elections. In the KP Assembly, the PTI-backed independents had won 91 seats compared to 19 seats secured by all other political parties combined. (Amjad Mahmood and Iftikhar A. Khan, “Ruling coalition loses 27 reserved seats in Punjab,” Dawn, 11 May 2024)

JUDICIARY
Supreme Court directs government to to establish an authority and fund to address climate change
On 11 May, Dawn reported that the three-bench Supreme Court has ordered the federal government to establish an authority and a fund under the Pakistan Climate Change Act, 2017 within two weeks to address the risks associated with climate change. It stated: “Considering that failure to establish the authority has serious implications on the fundamental rights of the people of Pakistan, we direct the federal government to establish the authority within a fortnight and thereafter complete the establishment of the fund.” The Public Interest Law Association of Pakistan, represented by Attorney Syed Faisal Hussain Naqvi had filed a petition with the court highlighting the existential threat that climate change poses to Pakistan. The federal government was given assurances by the court that a council meeting under the act will take place in less than a month to discuss issues related to the authority and fund's formation. The authority hasn't been established yet. The hearing was put back on 3 June by the court. After the devastating floods of 2022, Justice Shah had requested that the federal government prepare a report outlining the steps that Pakistan has undertaken to address the difficulties posed by climate change. The court emphasized the need to address climate change and mitigate its effect on people and their livelihoods, emphasizing the importance of acknowledging and confronting its fallout for combating the high risks posed it.(Nasir Iqbal, “Govt asked to set up climate authority within a fortnight,” Dawn, 11 May 2024)

ECONOMY
“Downside risks remain exceptionally high,” says IMF
On 10 May, the International Monetary Fund (IMF), following the second and final review under the Stand by Arrangements (SBA), stated that Pakistan’s economy faces high downside risks. The IMF said political uncertainities and political complexities alongwith high inflation, lower external financing could adversely impacy debt servicing, putting pressure on the exchange rate. Further, disruptions in global supply chains and tighter global financial conditions could impact the country’s “external stability.” The country's economy has stabilized after completing a short-term USD 3 billion programme, but Prime Minister Shehbaz Sharif has called for a fresh, longer-term programme. The IMF stressed the need for timely post-program external financing disbursements as the country still faces a high fiscal shortfall and stagnating growth. The country is expected to seek at least USD 6 billion and request additional financing from the IMF under the Resilience and Sustainability Trust. (“Downside risks for Pakistan remain exceptionally high: IMF,” Dawn, 11 May 2024)

Pakistan Stock Exchange (PSX) crosses 73000 points
On 10 May, the Pakistan Stock Exchange (PSX) reached a new milestone by reaching 73,000 points. The KSE-100 index gained 0.59 per cent, to reach 73,085.5 points. Topline Securities CEO Mohammed Sohail stated that the 73,000 boundary was crossed due to expectations of inflation falling faster than expected. Chase Securities' Yousuf M. Farooq said traders were expecting inflation to reach close to 15 per cent for May and interest rates to decline over the next financial year. EFG Hermes Pakistan's chief executive, Raza Jafri, said monetary easing expectations continue to build up, with real interest rates now about plus 5 per cent and the external account exhibiting comfort. The stock market has snapped a three-day losing streak. He mentioned: “Hitherto underperforming leveraged sectors such as cement are seeing buying interest, from both local and foreign investors.” A day before that the stock market ended a three-day losing run when the benchmark KSE 100-share index ended the day in a positive position thanks to careful value-hunting.( “PSX reaches new high, crosses 73,000 milestone,” Dawn, 11 May 2024)

FBR and Telegram shared the first batch of SIMs for blockage
On 10 May, the Federal Reserve Bank of Pakistan (FBR) and telecom operators agreed to block non-filer mobile phone SIMs in batches with the first batch of 5,000 SIMs shared with the FBR for blockage. The FBR had previously directed telecom operators to block all over 0.5 million SIMs in one go until 15 May, 2024. The FBR and telecom operators have engaged in meetings to ensure the effective implementation of Income Tax General Order No. 1, issued under Section 114 B of the Income Tax Ordinance 2001. More batches will be sent daily and operators have started sending messages to non-filers regarding blocking their SIMs.Separately, the Cabinet Committee on Privatization (CCoP) approved24 state-owned enterprises for the privatization program 2024-29, including enterprises from the airlines, insurance, banking, and power companies. The CCoP has directed the Law and Justice Division to conduct a comprehensive examination of the provisions highlighted in the Sovereign Wealth Fund Act 2023, with recommendations expected atthe next CCoP meeting. The Ministry of Privatization presented a phased privatization program for 2024-29, based on recommendations from the Privatization Commission Board. The committee recommended prioritizing the privatization of loss-making entities and limiting the federal footprint to strategic and essential State-Owned Enterprises (SOEs). (Israr Khan and Mariana Baabar & Mehtab Haider, “Telecom firms agree to block non-filers’ Sims in batches,” The News International, 11 May 2024)

SECURITY
Spyware attacks surged by 300 per cent in the First Quarter of 2024
On 10 May, The Express Tribune reported that spyware attacks in Pakistan have surged by 300 per cent in QuarterI of 2024. This indicatesa spiraling threat of espionage and data infiltration. This is based on a report by he Kaspersky Managed Detection and Response (MDR) team which found that high-severity incidents involving direct human involvement surpassed two per day in 2023, with financial, IT, government, and industrial sectors emerging as primary targets. A comparison of cyber attack statistics between Quarter I of 2023 and 2024 in Pakistan shows a moderate rise in backdoor attacks, highlighting persistent vulnerabilities in the country's digital infrastructure. However, banking malware attacks registered a decline of over 50 per cent from 2023. The government sector recorded 22.9 per cent of all detected high-severity incidents, followed by IT companies (15.4 per cent), financial, and industrial companies (14.9 per cent and 11per centrespectively). The report also highlighted the most common tactics, techniques, and tools used by attackers in the past year. The percentage of malware attacks resulting in serious consequences dipped slightly in 2023, accounting for just over 12 per cent of the total reported critical incidents. Kaspersky recommends the use of effective automated cyber security solutions managed with the help of experienced SOC analysts. Hafeez Rehman, Technical group manager at Kaspersky mentioned: “we recommend the use of effective automated cyber security solutions managed with the help of experienced SOC analysts.” (“Spyware attacks increased by 300% in Pakistan,” The Express Tribune, 10 May 2024)

An editorial in Dawn deems IMF’s proposed tax on pensions and withdrawal of tax exemptions as “unfair”
On 11 May, an editorial in Dawn titled “Taxing pensions” has deemed the IMF proposal demanding that the government tax “civil and military pensions exceeding PKR 1.2 million a year, as well as revoke income tax exemptions for various pension schemes and funds in the next budget” as unfair. The editorial recognizes the revenue generating potential of the proposal- the scheme is projected to generate additional tax revenues in the range of PKR 22 billion to PKR 25 billion per year. However, it points out two fallouts. First, this move would add to the financial burden of “a class of citizens with few other sources of income.” Second, withdrawing tax exemptions would discourage people to save for their future pension funds and thus their retirement. The current scheme is one of the recommendations of an IMF proposal that is aimed at recovering additional tax revenues of PKR 600 billion in total based on the “principle of a fair tax policy: all incomes must be taxed regardless of source.” The editorial laments that the taxation structure in the country is already “inequitable and unfair” and if the government must tax pensions then it should ensure that the taxation must be progressive and include all by removing ‘special exemptions’ enjoyed by judges, military personnel. (“Taxing pensions,” Dawn, 11 May 2024)

EXTERNAL
Iran releases and repatriates 28 Pakistani prisoners
On 10 May, the Iranian embassy in Islamabad revealed that twenty-eight Pakistani prisoners have been released from Iranian jails on “humanitarian grounds” and have been allowed to return back to their country. The embassy statement read “As agreed, following the recent visit of the honorable Iranian President to Pakistan, some 28 Pakistani prisoners were released and returned to the brotherly country of Pakistan with the suspension of their prison sentences cherishing Islamic benignity and due to the humanitarian goals.” The exchange of prisoners on humanitarian grounds was proposed by Iran during President Ebrahim Raisi’s visit to Pakistan last month. The number of 160 Pakistani prisoners in Iranian jails stood at 160 before the current batch was released. There are 60 prisoners of Iranian nationality in the custody of Pakistani authorities. (“Iran sends back 28 Pakistani prisoners,” Dawn, 11 May 2024)

SPACE
Icube-Qamar captures the first picture of the moon, unveiled in Beijing
On 10 May, China issued the data captured by the iCube-Qamar satellite to Pakistan, marking a significant milestone in Pakistan’s space program. Two days after entering the moon's orbit, it sent the first picture of the moon from that orbit. The picture was unveiled in aceremony conducted in Beijing. The event was attended by representatives from various organizations. The data carrier was handed over to Pakistan's Ambassador to China, Khalil Hashmi by Zhang Kejian, head of the China National Space Administration. The Lunar Exploration and Space Engineering Centre of China National Space Administration presented a complete report of China’s Chang’e-6 mission. The satellite Icube-Qamar, developed by Pakistan's Institute of Space Technology (IST), was launched on China's Chang'e-6 spacecraft on 3 May. It was detached from the spacecraft and deployed into the lunar orbit on 8 May. (“ICUBE-Q beams back first image from lunar orbit,” The Express Tribune, 10 May 2024)

Pakistan on Twitter

Innocent people were martyred in Gwadar, it is against our Pakhtun and Baloch traditions to kill any of our guests or neighbors with extreme cruelty.
Balochistan Chief Minister Mir Sarfraz Bugti.
-PPP

Martyrs of Pakistan were, are and will remain my first priority. Alhamdulillah, the fulfillment of another promise of our government has begun. "Shaheed Benazir Bhutto Fully Funded Scholarship Program" has been formally launched. Martyrs live in our hearts, their children are our collective responsibility.
-Sarfraz Bugti

In a concerted effort to combat drug addiction, Pakistan's government and military leadership launched a rigorous anti-narcotics operation targeting drug dealers. Nationwide, authorities seized a staggering 1,028,904 kg of drugs and apprehended 1,352 dealers. Notably, between April 28 and May 5, significant drug hauls included 2,799 kg from Balochistan, 20 kg from Khyber Pakhtunkhwa, 17 kg from Gilgit-Baltistan, 37 kg from Punjab, and 245 kg from Sindh. The relentless efforts of concerned agencies underscore a commitment to eradicating drugs from the country entirely.
-Balochistan Current Affairs

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“Downside risks remain exceptionally high,” says IMF

Icube-Qamar captures the first picture of the moon | Iran releases and repatriates 28 Pakistani prisoners

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