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COAS REAFFIRMS RESOLVE AGAINST SMUGGLERS AND HOARDERS WITH IMF REVIEW AROUND CORNER Friday, 29 September, 2023 I 12 rabi ul awal, 1445
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Strongly-worded statement comes in wake of a crackdown on currency exchanges PROFIT
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n a week marked by the continued recovery of the Pakistani rupee, Chief of Army Staff (COAS) General Asim Munir vowed that the crackdown against smuggling and a litany of other illegal activities would continue with full force. General Munir made the statement during a meeting of the Provincial Apex Committee of Punjab. Flanked by caretaker Chief Minister Mohsin Naqvi, the COAS said that illegal activities such as smuggling, hoarding, and panic on the forex market had resulted in detrimental consequences for the economy. The strongly worded statement comes in the wake of a crackdown against currency exchanges all over the country and the establishment of currency exchanges by the country’s major banks. As a result of these strict measures, the Pakistani rupee has risen sharply against the value of the dollar to Rs 287 on Thursday. Market speculations expect that the greenback will continue to fall and that the rupee will settle somewhere around the Rs 250 to Rs 260 mark. At the same time the country’s caretaker setup has been actively making statements and planning to continue to wrestle down the dollar.
mark. The idea behind this condition is simple. IMF suspects that SBP in the past has been coercing the banks into keeping the dollar rate artificially low in the interbank market. The IMF does not like this, as this encourages imports and discourages exports, making the dollar reserve situation even worse . IMF, it seems, also believes that the open market is much more difficult to coerce and by requiring the rates in the two markets to be close to each other, it was hoping to keep the interbank rate nearer to
The statement comes at a crucial time when the caretaker setup is ready to begin talks with the International Monetary Fund on the quarterly review of the $3bn Standby Arrangement next month. It is important to remember that the IMF had set a condition as part of the agreement that the gap between the interbank and open market rate of the dollar would not exceed more than 1.25%. One of the biggest reasons for the recent crackdown that has resulted in respite for the rupee has been to meet this bench-
Govt expects $700m from IMF under SBA g
Rs 15.00 | Vol XIV No 90 I 8 Pages I Islamabad Edition
Additional $450m and $250m expected from WB and IDB respectively
the market reality. But not only was this condition not being met, the delta was so high that even if the IMF was not making us do it, such a wide gap was abnormal. In July, the IMF executive board had approved the much-needed nine-month SBA with Pakistan “to support its economic stabilisation programme”. The approval had allowed for an immediate disbursement of $1.2bn, with the rest to be phased over the programme’s duration — subject to two quarterly reviews. The second quarterly re-
Imran nominated prime accused as police submit challan of May 9 cases LAHORE
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The caretaker finance minister Dr Shamshad Akhtar has said that the government will deliver on the International Monetary Fund (IMF) programme to secure $700 million, under the Standby Arrangement (SBA) of the IMF. Briefing the Senate Standing Committee on Finance and Revenue, caretaker finance minister said that the government will deliver on the IMF programme to secure US$700 million under SBA. In addition, the government is also expecting $450 million from World Bank and $250 million from IDB. She further said that the government targets an increase in SBP FX Reserves to US$ 12 billion (3 months of import cover) by June 2024, based on higher official inflows and pick up in FDI under the SIFC. She said that the key risk to external stability comes from the rise in international commodity prices. She said that Brent crude prices have jumped to $ 95/bbl in Sept, an increase of 27% from $ 74 /bbl in June 2023. Finance minister said that the caretaker government has taken proactive measures to stabilize the economy and build market confidence. The government’s stabilization efforts are anchored around the IMF stabilization package, she added.
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Former prime minister Imran Khan was nominated as the prime accused in a challan submitted before an antiterrorism court on Thursday pertaining to 11 cases registered following the May 9 riots. The challan, pertaining to incidents of vandalism at the Lahore Corps Commander’s House (Jinnah House), Askari Tower, Shadman Police Station and Sherpao Bridge during nationwide protests that broke out following Imran’s arrest on May 9 by the paramilitary Rangers, nominates the Pakistan Tehreek-e-Insaf chief and other party leaders as prime accused. PTI chief Imran, founding party member and former Punjab governor Omar Sarfaraz Cheema, former provincial ministers Mian Mehmoodur Rashid and Dr Yasmeen Rashid, fashion designer Khadija Shah and Sanam Javed, are among the accused named in the challan. Imran was arrested on May 9 from the premises of the Islamabad High Court (IHC), where he had appeared for proceedings related to the Al-Qadir Trust case. Nationwide protests broke out shortly after his arrest with rioters attacking key government and military installations, among other acts of vandalism. The state responded by shutting down internet and mobile services for four days, severely hindering the flow of information as well as adversely impacting economic functions in the country. The state has since rounded up thousands of PTI leaders and workers with a majority of them hailing
NOTIcE The offices of Pakistan Today will remain closed on September 29, 2023 (Friday) on account of Eid Miladun Nabi (SaWW). hence, the paper will not be published on September 30, 2023 (Saturday). The Pakistan Today offices will reopen on 30th September 2023 (Saturday).
from Punjab. Scores of them, including the prime accused in the challan submitted today (Thursday), remain incarcerated while at least 102 suspects are currently detained in military custody pending trials under the Pakistan Army Act read with the Official Secrets Act – both of which were amended earlier this year. The PTI chief was released on May 11 after the Supreme Court declared his arrest by the paramilitary force illegal. He was arrested for the second time on August 5, after a local court in Islamabad convicted him in the Toshakhana case effectively ending his prospects for taking part in the upcoming general elections. He remains behind bars with over 150 cases pending against him. Meanwhile, the police also submitted on Thursday a challan pertaining to an arson attack on Justice Mazahar Ali Akbar Naqvi’s squad car.
Defence Ministry, PTI and Ijazul Haq also join IB, Pemra to withdraw their pleas ISLAMABAD
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Chief Justice of Pakistan Qazi Faez Isa on Thursday asserted that future “serious happenings” could have been averted had the apex court’s verdict on 2017 sit-in at Islamabad’s Faizabad been implemented. “Had this verdict been implemented at that time, serious incidents, afterwards, would not have taken place,” the CJP observed while hearing a set of review petitions challenging the apex court’s verdict. A three-member bench — including Chief Justice of Pakistan Qazi Faez Isa, Justice Aminuddin Khan and Justice Athar Minallah — took up the pleas. During the hearing, the Defence Ministry through the federal government, the PTI and Ijazul Haq joined the Intelligence Bureau and the Pakistan Electronic Media Regulatory Authority (Pemra) to withdraw their pleas, prompting the CJP to ask “why is everyone so afraid to speak the truth”. Attorney-General for Pakistan (AGP) Mansoor Usman Awan, who was representing the federal government, assured the court that the decisions of the Faizabad judgement would be implemented. Hafiz Ahsaan was present as Pemra’s counsel while the MQM’s lawyer did not appear before the court.
Accepting the plea of Awami Muslim League (AML) chief Sheikh Rashid’s counsel to adjourn the hearing, the Supreme Court adjourned it till November 1 and directed the respondents’ counsels to submit a written response by October 27. Authored by Justice Qazi Faez Isa years before he took oath as the chief justice of Pakistan (CJP), the searing judgement had instructed the defence ministry and the tri-services chiefs to penalise personnel under their command who were found to have violated their oath. It had also directed the federal government to monitor those advocating hate, extremism and terrorism and prose-
cute them in accordance with the law. Adverse observations were also made against several government departments for causing inconvenience to the public as the 20-day sit-in paralysed life in both Islamabad and Rawalpindi. Pleas were subsequently moved against the verdict by the Ministry of Defence, the IB, the PTI, Pemra, the Election Commission of Pakistan (ECP), the Muttahida Qaumi Movement (MQM), Rashid and Ijazul Haq. However, earlier this week, the IB and Pemra approached the apex court, seeking the withdrawal of their review petitions in the case, stating that they did
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Tax exemptions to be limited to essential sectors ISLAMABAD
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not wish to pursue the matter further. Meanwhile, Rashid, via Advocate Mehr Khan Malik, had also requested the Supreme Court to adjourn the hearing. His plea had stated that since the AML chief’s counsel, Amanullah Kanrani, had taken over the charge of the law minister for Balochistan, he was not in a position to appear before the apex court. Prior to the hearing, when asked by a reporter if the PTI intended to withdraw its plea as well, Barrister Ali Zafar replied in the affirmative: “We do not wish to pursue the review petition.” THE HEARING At the outset of the hearing, CJP Isa observed that Rashid’s counsel had been appointed as a minister, therefore he should have arranged another lawyer in his place. He then noted, “I want to make a few things clear. This is a regular bench, not a special bench. Review petitions are immediately fixed [for hearing] but these were not fixed for four years. “One of the judges who pronounced the verdict has retired, therefore, this case was not fixed before that bench,” he clarified. At this point during the hearing, AGP Awan informed the court that the federal government wished to withdraw its review petition.
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Justice Faez Isa asks ‘why is everyone so afraid to speak the truth’
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Govt plans to raise taxes on retail, agriculture, real estate
The Federal government has planned to raise taxes on retail, agriculture, and real estate sectors. Alongside a wealth tax on movable assets is also on the cards under the economic revival plan. The finance ministry has stated in its monthly economic update and outlook September, 2023 that the key measures under the Economic revival includes revenue enhancement strategies Including tax revisions in sectors like retail, agriculture, and real estate, alongside a wealth tax on movable assets, as deemed appropriate. In addition, tax exemptions worth billions will be limited to essential sectors only like food and medicine, whereas austerity measures to rationalize government expenditures, along with a review of subsidies and grants is likely to take place. The government will also review the Development Plan and emphasis toward Public-Private Partnership (PPP) projects, besides Compliance with Quarterly budget targets and IMF agreements. This includes both tax collection and debt liabilities. Furthermore, the government under the proposed plan will also focus on the 5Es framework (Exports, Equity, Empowerment. Environment, and Energy) in order to address socio-economic challenges, and to encourage export expansion and business facilitation. According to the Finance division, the use of Information Technology to digitize the economy and expand the tax net is also something that the interim government is keen on implementing. The proposed plan also includes State-Owned Enterprises (SOEs) reforms, including an SOE policy which is yet to be enacted. The Central Monitoring Unit (CMU) and SOE performance reports will also be prepared while focusing on the implementation of a Treasury single account (TSA), remittance incentives, energy conservation, and price controls. The Privatization Commission will also be looking to privatise selected Public Sector Enterprises using various modes. Initiatives include assessing privatization options for power sector DISCOs, restructuring options for PIA-CL, and unbundling studies for SNGPL will also be conducted. On the other hand, the government under the proposed plan will reduce corporate taxes in order to improve non-bank finance, and promote the capital market. For export enhancement, implementation of Weighted Average Cost of Gas (WACOG), operationalization of EXIM bank, and faster clearance of sales tax refund are priority short-term measures. The short-term initiatives for Business facilitation and promoting investment, are also to be taken by the Board of Investment, including the Asan Karobar plan (establishing central e-registry, development of Pakistan Business Portal).
Implementation of Faizabad sit-in ruling would’ve averted ‘serious incidents’ afterwards: CJP g
view under the SBA, due in October, would be based on end-September data that would secure the disbursement of about $710 million worth of the second tranche in December. Thanks to the current environment in which the dollar has been dampened, the data for September will help Pakistan go back to the IMF for the current review with heads held high. As has been the norm of late, the meeting involving the COAS also spoke regarding the Special Investment Facilitation Council and its role in the economy in the days to come. The ISPR said the forum was also apprised of progress on the Special Investment Facilitation Council and Green Punjab initiatives. “Law enforcement actions against a spectrum of illegal activities will continue with full force in collaboration with the LEAs and the concerned government departments to rid Pakistan of the substantial economic losses it continues to suffer due to pilferage done by different methods,” the military’s media wing quoted Gen Munir as saying. Earlier this month, the army chief had also met the business community in Lahore and assured them of fostering transparency in dollar exchange and interbank rates. During the four-hour meeting, Gen Munir had signalled towards the country’s bright future in view of the upcoming huge foreign investments in various sectors.