High-level IFC delegation in Pakistan after nearly 10 years as World Bank pledges $20 billion

High-level IFC delegation in Pakistan after nearly 10 years as World Bank pledges $20 billion
Federal Minister for Finance and Revenue, Muhammad Aurangzeb, shakes hands with Makhtar Diop, Managing Director & Executive Vice President of the International Finance Corporation (IFC), at the Finance Division in Islamabad, Pakistan on February 14, 2025. (Photo courtesy: @Financegovpk/ X)
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Updated 14 February 2025
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High-level IFC delegation in Pakistan after nearly 10 years as World Bank pledges $20 billion

High-level IFC delegation in Pakistan after nearly 10 years as World Bank pledges $20 billion
  • The IFC, a member of the World Bank group, is the largest global development institution focused on the private sector in emerging markets
  • Finance Minister Muhammad Aurangzeb underscores efforts for the private sector to lead economic growth, particularly in export-led expansion

KARACHI: A high-level International Finance Corporation (IFC) delegation has met Pakistan’s Finance Minister Muhammad Aurangzeb, the finance ministry said on Friday, weeks after the World Bank pledged $20 billion support to the South Asian country.
The World Bank last month announced supplying Pakistan with $20 billion of loans over the next decade, which are expected to be invested in nutrition, education and renewable energies in the hope of stimulating private-sector growth.
The IFC, a member of the World Bank group, is the largest global development institution focused on the private sector in emerging markets, and its managing-director, Makhtar Diop, is currently leading a delegation to Pakistan.
In his meeting with IFC delegates, Aurangzeb briefed the about Pakistan’s macroeconomic stability on both the debt and equity sides as well as key structural reforms undertaken by his government, according to the Pakistani finance ministry.
“The finance minister highlighted the government’s recent declaration of warehousing as an industry and reaffirmed its commitment to public-private partnerships (PPPs) in infrastructure, IT (information technology), data centers, and AgTech (agricultural technology),” the ministry said in a statement.
“He emphasized that agricultural income tax remains a key area of discussion, alongside the broader goal of capital mobilization, where the private sector must play a leading role. He also noted that several international partners have publicly acknowledged Pakistan’s growing investment potential.”
During the meeting, Diop acknowledged the government’s reform efforts and noted that Pakistani private sector stakeholders had expressed confidence in the current policies, according to the finance ministry.
He commended Pakistan’s Country Partnership Framework (CPF) with the World Bank, recognizing it as one of the best practices globally, and reiterated IFC’s commitment to working closely with Islamabad and providing support in key areas such as green energy, data centers, agricultural supply chain improvements, telecom sector, and digitization.
The World Bank’s lending for Pakistan will start in 2026 and focus on six outcomes: improving education quality, tackling child stunting, boosting climate resilience, enhancing energy efficiency, fostering inclusive development and increasing private investment.
Pakistan nearly defaulted in 2023 on the payment of foreign debts and the International Monetary Fund (IMF) rescued it by agreeing to a $3 billion bailout. Last year, Islamabad secured a new $7 billion loan deal from the IMF. Since then, the country’s economy has started improving with weekly inflation coming down from 27 percent in 2023 to 1.8 percent in January. Pakistan Prime Minister Shehbaz Sharif has vowed to reduce dependence on foreign loans in the coming years.
During the meeting, Finance Minister Aurangzeb also outlined key structural reforms, including the recent introduction of agricultural income tax along with pension reforms and rightsizing initiatives across 43 ministries and 400 attached departments.
“He reaffirmed his government’s commitment to fostering an environment where the private sector leads economic growth, particularly in driving export-led expansion,” the finance ministry added.


Two cops, four militants killed in attack on police check-post in Pakistan’s southwest

Two cops, four militants killed in attack on police check-post in Pakistan’s southwest
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Two cops, four militants killed in attack on police check-post in Pakistan’s southwest

Two cops, four militants killed in attack on police check-post in Pakistan’s southwest
  • The attack comes two days after gunmen offloaded seven passengers from a Punjab-bound bus and killed them in Balochistan’s Barkhan
  • Pakistan has been struggling to contain mounting attacks by separatists in Balochistan, which has been the site of an insurgency for decades

QUETTA: Two policemen and four militants were killed in an attack on a police check-post in Pakistan’s southwestern Balochistan province, police officials said Friday.
Balochistan, Pakistan’s largest province in terms of landmass, has been the site of an insurgency for the last two decades, with separatists frequently attacking police, security forces and civilians they see as “outsiders” in the resource-rich region.
In the latest incident, armed men attacked a police check-post in Shaban area, some 35 kilometers away from the provincial capital of Quetta, local police station in-charge Munir Khan told Arab News.
“Terrorists attacked a police post in Shaban, killing two policemen and injuring two others. The police force timely retaliated and killed four terrorists,” he said.
“Search and clearance operation continued till early hours of Friday as some terrorists fled to the nearby mountains.”
No group immediately claimed responsibility for the attack, but suspicion was likely to fall on armed separatist groups who have carried out a number of attacks in a similar fashion in the past.
It comes two days after the outlawed Baloch Liberation Army (BLA) group killed seven passengers, who hailed from the Punjab province, after off-loading them from a bus in Balochistan’s Barkhan district, according to authorities.
Pakistan has been struggling to contain mounting attacks by separatists in Balochistan, which shares a porous border with Iran and Afghanistan.
At least, 25 policemen were killed and 61 others injured in Balochistan in nearly 40 attacks against police in 2024, according to provincial government figures. This is apart from losses incurred by security forces and civilians killed in targeted killings.
The separatists accuse the Pakistani government of exploiting the province’s natural resources for development elsewhere in the country, while neglecting the local population. The government denies the allegations and says it has prioritized Balochistan’s development through investments in health, education and infrastructure projects.
Separately, a man, who was allegedly carrying explosives, was killed in an explosion on Quetta’s Qambrani Road on Thursday night, according to police.
“It has been unclear whether he was a suicide bomber or delivering the explosives,” Qasim Rodeni, a police officer in Quetta, told Arab News.
“The man was carrying around 4-5 kilograms of explosive material which exploded on the road. We are investigating the incident.”
More than 50 people, including security forces, were killed in August last year in a string of assaults in Balochistan that were claimed by the BLA. Last month, dozens of fighters of the separatist outfit wrested control of a small town in Khuzdar from the Levies paramilitary forces. Pakistani authorities had regained the town after hours of efforts. 


Pakistan approves tax exemptions for ICC in Champions Trophy tournament

Pakistan approves tax exemptions for ICC in Champions Trophy tournament
Updated 21 February 2025
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Pakistan approves tax exemptions for ICC in Champions Trophy tournament

Pakistan approves tax exemptions for ICC in Champions Trophy tournament
  • Government says the exemption for the ICC is not expected to result in revenue loss
  • Pakistan’s cricket board, residents will be taxed on earnings during the tournament

ISLAMABAD: Pakistan’s Economic Coordination Committee (ECC) has approved tax exemptions for the International Cricket Council (ICC) in connection with the ongoing 2025 Champions Trophy tournament, the government announced on Thursday.
The South Asian nation is hosting the tournament, a major ICC event in Pakistan in nearly three decades, from Feb. 18 to March 9, with India’s matches scheduled to be played in the United Arab Emirates (UAE).
Cricket teams had abandoned Pakistan after an attack on the Sri Lankan cricket team outside Lahore’s Gaddafi Stadium on Mar. 3, 2009, forcing the cricket-mad South Asian nation into wilderness for several years.
On Thursday, Finance Minister Muhammad Aurangzeb presided over the ECC meeting to discuss key economic matters, including tax exemptions for the ICC, in line with international best practices.
“Under the standardized hosting rights agreement between ICC and Pakistan, no taxes or deductions will be applied to ICC revenues, its subsidiaries, associates, officials and non-resident delegates,” the Press Information Department (PID) of the Pakistani information ministry said.
“The tax exemption is not expected to result in a revenue loss as it was a prerequisite for securing the tournament’s hosting rights.”
The PID clarified that Pakistani nationals as well as the Pakistan Cricket Board (PCB) would be taxed on tournament earnings.
Pakistan entered the eight-team ICC tournament as the defending champions, having beaten India in the final of the 2017 edition. The participating teams have been divided into two groups with hosts Pakistan, Bangladesh, India and New Zealand pooled in Group A, while Group B comprises Afghanistan, Australia, England and South Africa.
Pakistan suffered a 60-run defeat to New Zealand in their opening match of the tournament in Karachi. The team will be looking to make a comeback in their next match against arch-rivals India in Dubai on Feb. 23.


Pakistan, EU officials discuss Middle East, Afghanistan situation among global security challenges

Pakistan, EU officials discuss Middle East, Afghanistan situation among global security challenges
Updated 21 February 2025
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Pakistan, EU officials discuss Middle East, Afghanistan situation among global security challenges

Pakistan, EU officials discuss Middle East, Afghanistan situation among global security challenges
  • The talks were part of 2019 Strategic Engagement Plan between the EU and Pakistan, which seeks to enhance mutual engagement on security matters
  • Both sides exchanged views on countering of ‘violent extremism, recruitment and movement of foreign fighters, offline and online radicalization’

ISLAMABAD: Pakistan and the European Union (EU) officials held their 9th Counter-Terrorism Dialogue in Brussels and discussed regional and global challenges, including the situation in the Middle East and Afghanistan, the Pakistani foreign office said on Thursday.
The dialogue is part of the broader 2019 Strategic Engagement Plan between the EU and Pakistan, which seeks to enhance mutual engagement on security matters and regional cooperation. It reflects a shared determination to address the evolving challenges posed by militancy.
The development comes amid a turmoil in the Middle East resulting from Israeli military actions against several regional countries, including the war on Gaza, as well as fears among some nations, including Pakistan, about the resurgence of militant groups in Afghanistan.
Pakistan has repeatedly called on Israel and world powers for a permanent ceasefire in Gaza and withdrawal of Israeli forces from Lebanon and Syria. Islamabad has also accused Afghanistan of supporting militant groups amid a recent surge in militancy in Pakistan’s western regions, an allegation denied by Kabul.
“The European Union and Pakistan condemned terrorism in all its forms and confirmed their steadfast commitment to fight it. The Dialogue allowed for an exchange on regional and global challenges, including the security implications of the situation in Afghanistan and in other areas, like the Middle East,” the Pakistani foreign office said in a statement.
“Both parties confirmed the importance of a strong cooperation with international partners in multilateral fora. This includes the work in the United Nations’ framework and in the Global Counter-Terrorism Forum, which the EU has been co-chairing since 2022.”
Abdul Hameed, director-general for counter-terrorism at the Pakistani foreign ministry, led the Pakistan side, while the EU delegation was headed by Maciej Stadejek, director for security and defense policy at the European External Action Service.
“The European Union and Pakistan also discussed areas for exchange of best practices and for concrete cooperation, with a focus on common actions on prevention and countering of violent extremism, recruitment and movement of foreign fighters, offline and online radicalization, combating terrorism financing and more topics that are relevant to address the growing challenges posed by terrorism,” the foreign office added.


IMF mission to visit Pakistan by mid-March to review $7 billion loan program, official says

IMF mission to visit Pakistan by mid-March to review $7 billion loan program, official says
Updated 21 February 2025
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IMF mission to visit Pakistan by mid-March to review $7 billion loan program, official says

IMF mission to visit Pakistan by mid-March to review $7 billion loan program, official says
  • A successful review would see the Washington-based lender release around $1 billion tranche to cash-strapped South Asian country
  • Islamabad has also requested IMF for additional $1.5 billion Resilience and Sustainability Facility to deal with climate-related issues

KARACHI: A team of experts from the International Monetary Fund (IMF) will be visiting Pakistan in mid-March for the first review of the South Asian country’s $7 billion loan program, an IMF official said on Friday.
A successful review would see the Washington-based lender release around $1 billion tranche to cash-strapped Pakistan, which seeks to boost its foreign exchange reserves to achieve the IMF’s threshold of three-month import cover.
IMF bailouts are critical for Pakistan which narrowly avoided a sovereign default in June 2023 by clinching a last-gasp, $3 billion IMF loan and is currently navigating a tricky path to economic recovery.
“An IMF staff team is scheduled to visit Pakistan in early to mid-March for discussions around the first review under Pakistan’s Extended Fund Facility-supported program,” Mahir Binici, the IMF resident representative in Pakistan, told Arab News in response to a query.
Pakistan, which averted a default in 2023, is currently navigating a path to economic recovery under the $7 billion bailout. The review is expected to revolve around the country’s compliance with its taxation targets and overall structural reforms.
The South Asian country has undertaken several reforms in taxation, energy and others sectors as well as with regard to better management of loss-making state-owned enterprises (SOEs), while provincial governments in Pakistan’s Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan have recently enacted laws to impose taxes on farm incomes in line with the lender’s requirements.
Pakistan’s finance adviser Khurram Schehzad told Arab News in a recent interview that the country was “fully prepared to go into the review process,” adding that the IMF was on board “on the targets and benchmarks that we have achieved as well as only a few we are chasing.”
The South Asian country also seeks to secure an additional $1.5 billion loan from the IMF to deal with climate-related issues under a Resilience and Sustainability Facility (RSF) arrangement.
“In this regard, a technical team will be in Pakistan starting in late February to discuss technical issues related to a possible RSF arrangement,” Binici said.
The Global Climate Risk Index places Pakistan among the countries most vulnerable to climate change.
Floods in 2022, which scientists said were aggravated by global warming, affected at least 33 million people and killed more than 1,700. The country’s economic struggles and high debt burden impinged its ability to respond to the disaster.


Trump aid cut imperils water scheme in Pakistan’s hottest city

Trump aid cut imperils water scheme in Pakistan’s hottest city
Updated 21 February 2025
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Trump aid cut imperils water scheme in Pakistan’s hottest city

Trump aid cut imperils water scheme in Pakistan’s hottest city
  • Sun-parched Jacobabad city in Sindh province sometimes surpasses 50°C in increasing heatwaves causing health problems like dehydration, heat-stroke
  • In 2012, USAID committed a $66 million grant to uplift Sindh’s municipal services, including renovation of a plant pumping and purifying water from a canal

JACOBABAD: In Pakistan’s hottest city, fresh and filtered water can quench the searing onslaught of climate change — but US President Donald Trump’s foreign aid freeze threatens its vital supply, an NGO says.
Sun-parched Jacobabad city in southern Sindh province sometimes surpasses 50 degrees Celsius (122 degrees Fahrenheit) in increasing heatwaves causing critical health problems like dehydration and heat-stroke.
In 2012, USAID committed a $66 million grant to uplift Sindh’s municipal services, including the flagship renovation of a plant pumping and purifying water from a canal 22 kilometers (14 miles) away.
But Pakistani non-profit HANDS says Trump’s aid embargo has blocked $1.5 million earmarked to make the scheme viable in the long-term, putting the project at risk “within a few months.”
“This has transformed our lives,” 25-year-old Tufail Ahmed told AFP in Jacobabad, where wintertime temperatures are already forecast to pass 30C next week.
“If the water supply is cut off it will be very difficult for us,” he added. “Survival will be challenging, as water is the most essential thing for life.”
Between September and mid-January Sindh saw rainfall 52 percent below average according to the Pakistan Meteorological Department, with “moderate drought” predicted in the coming months.
Heatwaves are becoming hotter, longer and more frequent due to climate change, scientists say.
The project pipes in 1.5 million gallons (5.7 million liters) daily and serves about 350,000 people in Jacobabad, HANDS says — a city where grinding poverty is commonplace.
HANDS said it discovered Trump’s 90-day freeze on foreign assistance through media reports with no prior warning.
“Since everything is just suspended we have to withdraw our staff and we have to withdraw all services for this water project,” HANDS CEO Shaikh Tanveer Ahmed told AFP.
Forty-seven staff, including experts who manage the water purification and service the infrastructure, have been sent home.
The service will likely stop functioning “within the next few months,” Ahmed predicted, and the project will be “a total failure” unless another funder steps in.
The scheme is currently in the hands of the local government who lack the technical or revenue collection expertise HANDS was developing to fund the supply from bill payments, rather than donations.
The international aid community has been in a tailspin over Trump’s campaign to downsize or dismantle swathes of the US government — led by his top donor and the world’s richest man Elon Musk.
The most concentrated fire has been on Washington’s aid agency USAID, whose $42.8 billion budget represents 42 percent of humanitarian aid disbursed worldwide.
But it accounts for only between 0.7 and 1.4 percent of total US government spending in the last quarter century, according to the Pew Research Center.
Trump has claimed USAID is “run by radical lunatics” while Musk has described it as a “criminal organization” needing to be put “through the woodchipper.”
In Jacobabad, 47-year-old local social activist Abdul Ghani pleaded for its work to continue.
“If the supply is cut off it will severely affect the public,” he said. “Poverty is widespread here and we cannot afford alternatives.”
Residents complain the Jacobabad supply is patchy but still describe it as an invaluable service in a city where the alternative is buying water from private donkey-drawn tankers.
Eighteen-year-old student Noor Ahmed said before “our women had to walk for hours” to collect water.
HANDS says the private tankers have a monthly cost of up to 10 times more than their rate of 500 rupees ($1.80) and often contain contaminants like arsenic.
“The dirty water we used to buy was harmful to our health and falling ill would cost us even more,” said 55-year-old Sadruddin Lashari.
“This water is clean. The supply cannot be stopped,” he added.
Pakistan — home to more than 240 million people — ranks as the nation most affected by climate change, according to non-profit Germanwatch’s Climate Risk Index released this year and analizing data from 2022.
That year a third of the country was inundated by unprecedented monsoon floods killing more than 1,700 and causing an estimated $14.9 billion in damages after a punishing summer heatwave.
Jacobabad’s water system also suffered heavy damage in the 2010 floods which killed almost 1,800 and affected 21 million.
Pakistan produces less than one percent of global greenhouse gas emissions which scientists say are driving human-made climate change.
Islamabad has consistently called for countries which emit more to contribute to aid for its population suffering on the front line of climate change.
“It’s incredibly hot here year-round,” said Lashari. “We need water constantly.”