#bank loan in pakistan

[fatehbaz]

We must understand the journey [...]. [T]he kings and queens of Europe [...] said that those Black or Brown or Indigenous [...], they could be exploited. [...] In the case of the UK, [...] [i]t was the profits of slavery, slave products which built the universities, that financed the inventions, the canals, the banks like Barclays Bank, the Bank of England [...] to send wealth back to the North. [...]. So [...] what it does is it creates the world  as we know it, and then [...] the anti-colonial struggles of the forties, fifties and sixties begin to challenge it. [...] So no longer did you need guns and rifles and gunboats. You could control economies by the power of [...] trade rules [...]. And we see that today with unsustainable debt repayments, [...] corporations taking profits out of the Global South and bringing it back to the banks and corporations in the Global North. So in reality, this logic of racialized capitalism, colonialism, imperialism, is still apparent today. And it's the same logic. [...] [T]here has been an attempt, and it's been largely led by international institutions such as the World Bank and the IMF, to create a narrative that over the last 30, 40 years, that somehow because of development or globalization, we've seen a reduction in poverty and inequality in the Global South. This is the classic trickle-down.  [...]

It's the fact that this is all legal. This is legally done.

We've created both a global tax system, a global trade system, and then a punitive system managed by institutions like the IMF and the World Bank and the WTO, which punishes countries if they challenge that logic, and if they, for example, decide to prioritize their own people.   [...]

---

So in Pakistan, as we know, 33 million people have been displaced by a climate flood -- when they are responsible for less than 1% of global emissions. [...] But Pakistan, for every 100 that the Government raises in tax revenue, it pays 83 of those [...] back out in debt repayments.

And what you've seen increasingly is country after country being trapped in this cycle of needing to beg for more debt-creating loans to pay the last debt-creating loans, and each of those loans coming with conditions.

Recently, Sri Lanka was unable to pay its debt. There have been huge protests on the streets of Sri Lanka, by movements, as people were unable to afford food, even kerosene to cook with [...]. People were unable to get to the hospital. The government was telling people to eat less, not to eat three meals a day. [There was] a huge uprising of people and the government that was in power fled; the new government, which was imposed in Sri Lanka, went to the IMF and said, we want to negotiate restructuring our loan, because once you default on your loan, the way our economic system is set up, you will be punished. Because every bank, every corporation, wants their debt repayments. So people are forced to go back to the IMF.

And the IMF told Sri Lanka, we will give you another loan, if you do three things: you cut your public expenditure -- so the very money that you need on public services -- second, you weaken your labor laws -- [they] don't want unions being strong in [Sri Lanka] -- and thirdly, you have to privatize what's left of your utility. Which were operating for the interests of the Sri Lankan people. They want them now to be put onto the open market and, like many countries in the Global South, the main drivers of our economy, are actually not in the hands of either our governments or our peoples, they are still controlled by the same Western multinationals.

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Now, if we had a picture, if we could show two maps, we could show a map  of the colonial world and the influence of the different countries of Europe on the different parts of the world, and the commodities that were drawn from those countries, to feed back to supply chains, to feed consumption and the industrial processes in the Global North.

But if you did the same map right now, you'd see the exact same commodities flowing from the Global South to the Global North, because countries were forced to and [told,] you will provide and produce this commodity because we want it, not because it's needed by your people [...]. It’s because you will grow cotton, you will grow coffee, you’ll export oil [...].

---

All text above are words of Asad Rehman. As interviewed by Kamea Chayne. Transcript published as “Asad Rehman: The End of Imperialism in a Radical Green New Deal (Ep378).” An episode of the podcast Green Dreamer. 25 October 2022. [Bold emphasis and some paragraph breaks/contractions added by me.]

[beardedmrbean]

A dozen poor countries are facing economic instability and even collapse under the weight of hundreds of billions of dollars in foreign loans, much of them from the world’s biggest and most unforgiving government lender, China.

An Associated Press analysis of a dozen countries most indebted to China — including Pakistan, Kenya, Zambia, Laos and Mongolia — found paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel. And it’s draining foreign currency reserves these countries use to pay interest on those loans, leaving some with just months before that money is gone.

Behind the scenes is China’s reluctance to forgive debt and its extreme secrecy about how much money it has loaned and on what terms, which has kept other major lenders from stepping in to help. On top of that is the recent discovery that borrowers have been required to put cash in hidden escrow accounts that push China to the front of the line of creditors to be paid.

Countries in AP’s analysis had as much as 50% of their foreign loans from China and most were devoting more than a third of government revenue to paying off foreign debt. Two of them, Zambia and Sri Lanka, have already gone into default, unable to make even interest payments on loans financing the construction of ports, mines and power plants.

In Pakistan, millions of textile workers have been laid off because the country has too much foreign debt and can’t afford to keep the electricity on and machines running.

In Kenya, the government has held back paychecks to thousands of civil service workers to save cash to pay foreign loans. The president’s chief economic adviser tweeted last month, “Salaries or default? Take your pick.”

Since Sri Lanka defaulted a year ago, a half-million industrial jobs have vanished, inflation has pierced 50% and more than half the population in many parts of the country has fallen into poverty.

Experts predict that unless China begins to soften its stance on its loans to poor countries, there could be a wave of more defaults and political upheavals.

“In a lot of the world, the clock has hit midnight,” said Harvard economist Ken Rogoff. “ China has moved in and left this geopolitical instability that could have long-lasting effects.”

HOW IT'S PLAYING OUT

A case study of how it has played out is in Zambia, a landlocked country of 20 million people in southern Africa that over the past two decades has borrowed billions of dollars from Chinese state-owned banks to build dams, railways and roads.

The loans boosted Zambia’s economy but also raised foreign interest payments so high there was little left for the government, forcing it to cut spending on healthcare, social services and subsidies to farmers for seed and fertilizer.

In the past under such circumstances, big government lenders such as the U.S., Japan and France would work out deals to forgive some debt, with each lender disclosing clearly what they were owed and on what terms so no one would feel cheated.

But China didn't play by those rules. It refused at first to even join in multinational talks, negotiating separately with Zambia and insisting on confidentiality that barred the country from telling non-Chinese lenders the terms of the loans and whether China had devised a way of muscling to the front of the repayment line.

Amid this confusion in 2020, a group of non-Chinese lenders refused desperate pleas from Zambia to suspend interest payments, even for a few months. That refusal added to the drain on Zambia’s foreign cash reserves, the stash of mostly U.S. dollars that it used to pay interest on loans and to buy major commodities like oil. By November 2020, with little reserves left, Zambia stopped paying the interest and defaulted, locking it out of future borrowing and setting off a vicious cycle of spending cuts and deepening poverty.

Continued in the link

[mariacallous]

In the span of a decade, China has emerged as the developing world’s bank of choice, pouring hundreds of billions of dollars in loans into global infrastructure projects as part of its sprawling Belt and Road Initiative (BRI).

But as its borrowers fail to pay up, China is finding that its newfound authority is coming at a price. Eager to recoup its money, Beijing is transitioning from generous investor to tough enforcer—and jeopardizing the very goodwill that it tried to build with initiatives such as the BRI. China has broken a few bones in Sri Lanka, whose financial turmoil allowed Beijing to seize control of a strategic port, and is hassling Pakistan, Zambia, and Suriname for repayment.

For two decades, countries “were getting to know China as the kind of benevolent financier of big-ticket infrastructure,” said Bradley Parks, the executive director of the AidData research group at William & Mary. Now, he said, “the developing world is getting to know China in a very new role—and that new role is as the world’s largest official debt collector.”

The problem for China is that nobody likes being hounded for money. Chasing down unpaid debts won’t win many friends. It complicates Beijing’s broader aspirations of extending its influence and forging new relationships through economic deals. That tension, experts say, has left Beijing facing an impossible trade-off: Can it collect its money without hurting its image?

“This is a moment where China cannot have its cake and eat it too,” said Zongyuan Zoe Liu, an international political economy expert at the Council on Foreign Relations. “I think China literally has to choose which side it wants to let go. If you want to have your money back, you want to force debt repayment, that basically means you are going to forgo the goodwill.”

Once billed as Chinese President Xi Jinping’s “project of the century,” the BRI was unveiled in 2013 as an ambitious infrastructure development campaign that would crisscross some 140 countries. In practice, the initiative was less streamlined and more opaque. As Chinese lenders scrambled to administer projects under the BRI umbrella, it became a haphazardly executed mishmash of projects with shoddy lending contracts.

BRI was, in large part, a response to China’s own domestic economic challenges, where an excess of domestic production capacity could find no easy outlet, rather than a grand strategy to upend the global order. Following the 2008 financial crisis, Beijing “freaked out” and funneled vast sums of money into infrastructure development as a domestic stimulus package, said Yun Sun, the director of the China program at the Stimson Center.

“The goal was to keep the economy going and keep the economy growing,” she said. “The unintended consequence was that it put China’s domestic industries on steroids.”

Overpumped, the Chinese market became saturated with steel, cement, glass, and aluminum, prompting Beijing to look abroad for answers. Given the size of the overseas market for infrastructure, the logic went, the BRI would allow China to export this industrial overcapacity while also harnessing its foreign reserves and surplus dollars.

“This was about economics,” Parks said. “Now if you fast-forward to today, if the whole purpose of this program is to make money and now you have a lot of deadbeats that are not repaying their dollar-denominated loans, then it probably feels like your strategy is backfiring.”

In 2017, China overtook the World Bank and the International Monetary Fund (IMF) to cement its position as the world’s biggest creditor, although Beijing has since scaled back its lending. But many of its borrowers—still reeling from the COVID-19 pandemic and Russia’s war in Ukraine, alongside Beijing’s lending practices—are now battling to pull their economies back from the brink. Around 60 percent of China’s overseas loans went to financially distressed countries in 2022, compared with just 5 percent in 2010, according to Parks. Unable to pay China back, some cash-strapped governments are pushing for debt relief, forgiveness, or restructuring.

That has put Beijing in a bind. “You make friends when you provide loans. You don’t make friends when you insist on full payment, when conditions have changed and full payment is nearly impossible,” said Brad Setser, a former senior advisor to the U.S. trade representative during the Biden administration, now at the Council on Foreign Relations. “China has put itself in a difficult position because the financial interests of its key policy banks really do now trade off against its diplomatic interests.”

Take Zambia, which defaulted on some $17 billion of debt in 2020 and counts China as its largest bilateral creditor. Over the years, once rosy relations between the two countries have soured as Beijing and Lusaka struggled to hammer out a debt relief deal as part of the G-20 Common Framework. Roadblocks have emerged in the process: U.S. Treasury Secretary Janet Yellen, who has urged China to forgive Zambia’s debt, recently accused Beijing of being a “barrier” to progress. Beijing, in turn, has blamed Washington for “sabotaging other sovereign countries’ active efforts to solve their debt issues.”

“There seems to be a complete impasse between Zambia and China right now,” Setser said. “Any realistic solution to Zambia’s debt problems requires China’s participation. There’s no possibility of going around China.”

With Sri Lanka, another borrower that has been buckling under the weight of its ballooning debt, Beijing has granted Colombo a two-year debt moratorium. But it has not provided the required financing assurances for the IMF to step in, effectively blocking the institution from offering rescue loans to the country.

Part of the trouble, Parks said, is that Beijing does not have a playbook for navigating debt crises and sovereign debt restructuring. “China has never gone through this before,” he said. “They’re kind of extemporaneously trying to make things up as they go along and try to adapt and iterate on the fly.”

In an attempt to come to grips with distressed economies’ debt restructuring challenges, representatives from the IMF, the World Bank, India, China, the Paris Club, and other lenders and borrowers met last Friday. This week, leaders are again convening for a series of G-20 finance meetings in India, and New Delhi is reportedly preparing a proposal that would pressure major creditors including China to accept a haircut on their loans, Reuters first reported.

“China was hoping to get its money back, plus a nice coupon, a little bit of interest,” Setser said. But it “has discovered, in a significant set of cases, that it’s going to be very difficult to get its money back—and the countries want a break.”

[warningsine]

https://www.reuters.com/world/asia-pacific/bangladesh-awaits-installation-interim-government-after-weeks-strife-2024-08-08/

DHAKA, Aug 8 (Reuters) - Nobel Peace laureate Muhammad Yunus took charge of Bangladesh's caretaker government on Thursday, hoping to help heal the country that was convulsed by weeks of violence, forcing Prime Minister Sheikh Hasina to quit and flee to neighbouring India.

Known as the "banker to the poor", Yunus is the pioneer of the global microcredit movement. The Grameen Bank he founded won the 2006 Nobel Peace Prize for helping lift millions from poverty by providing tiny loans to the rural poor who are too impoverished to gain attention from traditional banks.

As chief adviser of the caretaker government, he is, however, tasked with bringing stability back to the country which witnessed some of its worst violence in decades and then hold fresh parliamentary elections.

"The brutal, autocratic regime is gone," Yunus said in a televised address to the nation after taking charge. "Tomorrow, with the rising sun, democracy, justice, human rights, and full freedom of fearless expression will be enjoyed by all, regardless of party affiliation. That is our goal."

Earlier on Thursday, on his arrival in Dhaka following medical treatment in Paris, Yunus said he would govern it with the guidance of students who backed him for the role in the caretaker government.

A harsh critic of Hasina, Yunus became emotional and seemed to hold his tears back at the airport as he referred to a student he said had been shot during the protests and that sacrifice could not be forgotten.

Hasina's flight from the country she ruled for 20 of the last 30 years after winning a fourth term in January triggered jubilation and violence as crowds stormed and ransacked her official residence.

Many Hindu homes, temples and businesses were vandalised after Hasina's departure, and hundreds in the minority community have tried unsuccessfully to flee to India this week. The Bangladesh Hindu Buddhist Christian Unity Council said a schoolteacher was killed and 45 other people hurt.

Many Hindus have traditionally supported Hasina's Awami League party, which identifies as secular.

POWER VACUUM

Yunus' swearing-in plugged the power vacuum in the South Asian country of 170 million people with the fourth-largest Muslim population in the world, created after Hasina resigned and flew to India on Monday.

President Mohammed Shahabuddin administered the oath of office to  Yunus and 13 advisers who will help him govern, at a brief ceremony in the official presidential residence.

Three more advisers will be sworn in at a later date, officials said. Nahid Islam and Asif Mahmud, two student leaders who are both in their mid-20s and led the protests, were among the 13 who joined the caretaker government.

The ceremony started with a minute's silence to honour the hundreds who were killed in the protests and clashes that erupted in July.

The army played a critical role towards the end of the crisis, conveying to Hasina that troops would not open fire on civilians to enforce a curfew declared on Sunday, sealing her fate, Reuters reported.

Hasina's Awami League party does not figure in the interim government. In a Facebook post, her son Sajeeb Wazed Joy said the party had not given up, and was ready to hold talks with opponents and the interim government.

The main opposition Bangladesh Nationalist Party (BNP) boycotted two national elections after the arrest of its leaders and has demanded fresh elections in three months.

PROTECT HINDUS, INDIA URGES

Hasina is sheltering in the New Delhi area, a development that Yunus said caused anger at India among some Bangladeshis. India's foreign ministry said it had no update on Hasina's travel plans and it was up to her to "take things forward".

The neighbours have longstanding cultural and business ties and New Delhi played a key role in the 1971 war with Pakistan which led to the creation of Bangladesh.

India's Prime Minister Narendra Modi congratulated Yunus and said New Delhi was committed to working with Dhaka to fulfil the "shared aspirations" of the people of both countries for "peace, security and development".

"We hope for an early return to normalcy, ensuring the safety and protection of Hindus and all other minority communities," he said.

The student-led movement that ousted Hasina grew out of protests against quotas in government jobs that spiralled in July, provoking a violent crackdown that drew global criticism, though the government denied using excessive force.

The protests were fuelled also by harsh economic conditions and political repression. The COVID-19 pandemic damaged the $450 billion economy after years of strong growth, leading to high inflation, unemployment and shrinking reserves.

It pushed the Hasina government to seek a $4.7 billion loan from the International Monetary Fund.

[drmaqazi]

WARNING

You have been warned

اٹھومیرے  سوئےہوئےامیروںکوجگاؤ 

جاگواورجگاؤ 

Wake up and shake up your people in deep slumber       before it is too late.

The so-called Islamic Republic of Pakistan, which by definition is neither Islamic nor Republic, has declared a war on Allah (Subhanahu wa Ta’ala) and His Last Prophet Muhammad (SalAllah ‘alaihi wa Sallam)

The poor people of Pakistan are suffering from the wrath of       Allah (Subhanahu wa Ta’ala) for disobeying His Laws (Shari’ah)

Allah (Subhanahu wa Ta’ala) does not declare war 

on any sinner in Holy Qur’an except the one who partakes in Riba’

(Surah al-Baqarah 2, Ayah 279), 

Riba (Arabic: ربا ,الربا، الربٰوة, Ribā’ or al-Ribā’, IPA: [ˈrɪbæː]) is an Arabic word used in Islamic law and roughly translated as "usury": unjust, exploitative gains made in trade or business. Riba’ is mentioned and condemned in several different verses in the Holy Quran (3:130, 4:161, 30:39, commonly 2:275-2:280). It is also mentioned in many hadith [reports of the life of Muhammad (SallAllahu ‘alahi wa Sallam)], most commonly in Surah al-Baqarah, Ayaat 275-280. 

While Muslims agree that Riba’ is prohibited, not all agree on what precisely it is. It is often used to refer to interest charged on loans, and the widespread belief among Muslims that all loan or bank interest in Riba forms the basis of the $2 trillion Islamic banking industry.[7] 

However, not all Islamic scholars have equated riba; with all forms of interest, nor do they agree on whether Riba’ is a major sin or simply discouraged (makruh), or whether it is in violation of Shari’ah law to be punished by humans rather than by God Almighty.

The primary form of Riba’ is the interest or other increase on a loan of cash, known as Riba’ an-nasiya. Most Islamic jurists acknowledge another type of Riba’, the simultaneous exchange of unequal quantities or qualities of some commodity, known Riba’ al-fadl.

YOU HAVE BEEN WARNED! 

Enjoining good and forbidding wrong,  ٱلْأَمْرُ بِٱلْمَعْرُوفِ وَٱلنَّهْيُ عَنِ ٱلْمُنْكَرِ , which are two (2) important duties imposed by Allah (Subhanahu wa Ta’ala) in Islam, as revealed in the Holy Quran and Hadith:

 Holy Qur’an Surah 3, Ayaat 104,110 

Holy Qu’ran Surah 5, Ayah 105

Holy Qur’an Surah 9, Ayaat 71, 112

Holy Qur’an Surah31, Ayah 17

Let it be known that I have fulfilled my duty as a Muslim as Allah (Subhanahu wa Ta’ala) says in the Holy Qur’an وَذَكِّرْ فَإِنَّ الذِّكْرَىٰ تَنفَعُ الْمُؤْمِنِينَ: Surah Adh-Dhariyat, Ayah 55, to remind you to please refrain from giving or taking Riba’ for your own good in both the worlds. If you do otherwise, please be ready to face the consequences both in this world and in the Hereafter.

Allah (Subhanahu wa Ta’ala) is my Witness on this day and will also be my Witness on the Day of Judgement that I have passed His Message to the Ummah of Prophet Muhammad (SallAllahu ‘alahi wa Sallam). honestly and sincerely, to the best of my information, knowledge and understanding.

May (Allahu (Subhanahu wa Ta’ala) guide us, Ameen, make us good Muslims and have Mercy on us and save us from the Hell fire, Thumma Ameen.

The Necessity of Taqwa and Avoiding Riba’ 

Most of the Muslim Rulers, their countries and their people are CORRUPT down to the core. Citizens complain loudly, but what they mean by corruption, and what forms of corruption they want to be fought, is a highly confused and confusing matter. 

People appear to believe that the responsibility for fighting corruption lies elsewhere, and that they are neither part of the problem nor part of the solution, even when they evade taxes or ask for bribes before they will discharge their duty. 

All of these countries need a revolution to get rid of all corrupt rulers, people, armies, establishment, judges, and lawyers In shaa Allah!.

Muslim Rulers, nations and people are being punished all over the Islamic world, without knowing and understanding that they cannort win this war against Allah (Subhanahu wa Ta’ala) and His Last Prophet Muhammad (SallAllahu ‘alaihi wa Sallam)’ We shouldrepent and ask forgiveness from Him. 

He says in the Holy Qur’an:

قُلْ يَا عِبَادِيَ الَّذِينَ أَسْرَفُوا عَلَىٰ أَنفُسِهِمْ لَا تَقْنَطُوا مِن رَّحْمَةِ اللَّهِ ۚ إِنَّ اللَّهَ يَغْفِرُ الذُّنُوبَ جَمِيعًا ۚ إِنَّهُهُوَ الْغَفُورُ الرَّحِيمُ

Say, ˹O Prophet, that Allah says,˺ “O My servants who have exceeded the limits against their souls! Do not lose hope in Allah’s mercy, for Allah certainly forgives all sins. He is indeed the All-Forgiving, Most Merciful. (Surah Az-Zumar, 33, Ayah 53),

Allah (Subhanahu wa Ta’ala) commands His believing servants to fear Him and warns them against what would bring them closer to His anger and drive them away from His pleasure. 

Allah (Subhanahu wa Ta’ala) said,

يأَيُّهَا الَّذِينَ ءَامَنُواْ اتَّقُواْ اللَّهَ

(O you who believe! Have Taqwa of Allah) meaning, fear Him and remember that He is watching all that you do.

وَذَرُواْ مَا بَقِىَ مِنَ الرِّبَواْ

(And give up what remains of Riba) meaning, abandon the Riba that people still owe you upon hearing this warning,

إِن كُنتُم مُّؤْمِنِينَ

(if you indeed have been believers) believing in the trade that He allowed you and the prohibition of Riba. 

Zayd bin Aslam, Ibn Jurayj, Muqatil bin Hayyan and As-Suddi (RadiyAllahu ‘anhum) said that this Ayah was revealed about Bani `Amr bin `Umayr, a sub-tribe of Thaqif, and Bani Al-Mughirah, from the tribe of Bani Makhzum, between whom were outstanding transactions of Riba leftover from time of Jahiliyyah. When Islam came and both tribes became Muslims, Thaqif required Bani Al-Mughirah to pay the Riba of that transaction, but Bani Al-Mughirah said, "We do not pay Riba in Islam." `Attab bin Usayd (RadiyAllahu ‘anhu), the Prophet's deputy on Makkah, wrote to the Messenger of Allah (SallAllahu ‘alahi wa Sallam) about this matter. This Ayah was then revealed and the Messenger of Allah (SallAllahu ‘alahi wa Sallam)  conveyed it to `Attab (RadiyAllahu ‘anhu),

يأَيُّهَا الَّذِينَ ءَامَنُواْ اتَّقُواْ اللَّهَ وَذَرُواْ مَا بَقِىَ مِنَ الرِّبَواْ إِن كُنتُمْ مُّؤْمِنِينَ

فَإِن لَّمْ تَفْعَلُواْ فَأْذَنُواْ بِحَرْبٍ مّنَ اللَّهِ وَرَسُولِهِ

(O you who believe! Be afraid of Allah (Subhanahu wa Ta’ala) and give up what remains (due to you) from Riba’ (from now onward), if you are (really) believers. And if you do not do it, then take a notice of war from Allah (Subhanahu wa Ta’ala)  and His Messenger (SallAllahu ‘alahi wa Sallam).

They said, "We repent to Allah (Subhanahu wa Ta’ala) and abandon whatever is left of our Riba", and they all abandoned it This Ayah serves as a stern threat to those who continue to deal in Riba’ after Allah (Subhanahu wa Ta’ala) revealed this warning.

Riba’ Constitutes War Against Allah Subhanahu wa Ta’ala) and His Last Messenger (SallAllahu ‘alahi wa Sallam).

Ibn Jurayj (RadiyAllah ‘anhu) said that Ibn `Abbas (RadiyAllah ‘anhumaa) said that,

فَأْذَنُواْ بِحَرْبٍ

(then take a notice of war) means, "Be sure of a war from Allah (Subhanahu wa Ta’ala)  and His Messenger (SallAllahu ‘alahi wa Sallam)." He also said, "On the Day of Resurrection, those who eat Riba’ will be told, `take up arms for war."' He then recited,

فَإِن لَّمْ تَفْعَلُواْ فَأْذَنُواْ بِحَرْبٍ مِّنَ اللَّهِ وَرَسُولِهِ

And if you do not do it, then take a notice of war from Allah (Subhanahu wa Ta’ala) and His Messenger (SallAllahu ‘alahi wa Sallam.

`Ali bin Abi Talhah (RadiyAllah ‘anhu) said that Ibn `Abbas (RadiyAllah ‘anhumaa) said about it,

فَإِن لَّمْ تَفْعَلُواْ فَأْذَنُواْ بِحَرْبٍ مِّنَ اللَّهِ وَرَسُولِهِ

[And if you do not do it, then take a notice of war from Allah (Subhanahu wa Ta’ala) and His Messenger (SallAllahu ‘alahi wa Sallam)] "Whoever kept dealing with Riba’ and did not refrain from it, then the Muslim Leader should require him to repent. If he still did not refrain from Riba’, the Muslim Leader should cut off his head.”

Allah (Subhanahu wa Ta’ala) then said,

وَإِن تُبتُمْ فَلَكُمْ رُءُوسُ أَمْوَلِكُمْ لاَ تَظْلِمُونَ

(But if you repent, you shall have your capital sums. Deal not unjustly) by taking the Riba’,

وَلاَ تُظْلَمُونَ

(And you shall not be dealt with unjustly) meaning, your original capital will not diminish. Rather, you will receive only what you lent without increase or decrease. Ibn Abi Hatim (RadiyAllahu ‘anhu) recorded that `Amr bin Al-Ahwas (RadiyAllahu ‘anhu) said, "The Messenger of Allah (SallAllahu ‘alahi wa Sallam) gave a speech during the Farewell Hajj saying;

«أَلَا إِنَّ كُلَّ رِبًا كَانَ فِي الْجَاهِلِيَّةِ، مَوْضُوعٌ عَنْكُمْ كُلُّهُ، لَكُمْ رُؤُوسُ أَمْوَالِكُم لَا تَظْلِمُونَ وَلَاتُظْلَمُونَ، وَأَوَّلُ رِبًا مَوْضُوعٍ، رِبَا الْعَبَّاسِ بْنِ عَبْدِالْمُطَّلِبِ مَوْضُوعٌ كُلُّه»

(Verily, every case of Riba from the Jahiliyyah is completely annulled. You will only take back your capital, without increase or decrease. The first Riba that I annul is the Riba of Al-`Abbas bin `Abdul-Muttalib (RadiyAllahu ‘anhu), all of it is annulled.)

REFERENCES:

https://www.al-islam.org/inner-voice-sayyid-saeed-akhtar-rizvi/amr-bil-maaroof

_________

SHORT

WARNING!

Allah (Subhanahu wa Ta’ala) does not declare war 

on any sinner in Holy Qur’an except the one who partakes in Riba’

(Surah al-Baqarah 2, Ayah 279), 

Riba (Arabic: ربا ,الربا، الربٰوة, Ribā’ or al-Ribā’, IPA: [ˈrɪbæː]) is an Arabic word used in Islamic law and roughly translated as "usury": unjust, exploitative gains made in trade or business. Riba’ is mentioned and condemned in several different verses in the Holy Quran (3:130, 4:161, 30:39, commonly 2:275-2:280). It is also mentioned in many hadith [reports of the life of Muhammad (SallAllahu ‘alahi wa Sallam)], most commonly in Surah al-Baqarah, Ayaat 275-280. 

While Muslims agree that Riba’ is prohibited, not all agree on what precisely it is. It is often used to refer to interest charged on loans, and the widespread belief among Muslims that all loan or bank interest in Riba forms the basis of the $2 trillion Islamic banking industry.[7] 

However, not all Islamic scholars have equated riba; with all forms of interest, nor do they agree on whether Riba’ is a major sin or simply discouraged (makruh), or whether it is in violation of Shari’ah law to be punished by humans rather than by God Almighty.

The primary form of Riba’ is the interest or other increase on a loan of cash, known as Riba’ an-nasiya. Most Islamic jurists acknowledge another type of Riba’, the simultaneous exchange of unequal quantities or qualities of some commodity, known Riba’ al-fadl.

YOU HAVE BEEN WARNED! 

Enjoining good and forbidding wrong,  ٱلْأَمْرُ بِٱلْمَعْرُوفِ وَٱلنَّهْيُ عَنِ ٱلْمُنْكَرِ , which are two (2) important duties imposed by Allah (Subhanahu wa Ta’ala) in Islam, as revealed in the Holy Quran and Hadith:

 Holy Qur’an Surah 3, Ayaat 104,110 

 Holy Qu’ran Surah 5, Ayah 105

 Holy Qur’an Surah 9, Ayaat 71, 112

 Holy Qur’an Surah 31, Ayah 17

Let it be known that I have fulfilled my duty as a Muslim as Allah (Subhanahu wa Ta’ala) says in the Holy Qur’an وَذَكِّرْ فَإِنَّ الذِّكْرَىٰ تَنفَعُ الْمُؤْمِنِينَ: Surah Adh-Dhariyat, Ayah 55, to remind you to please refrain from giving or taking Riba’ for your own good in both the worlds. If you do otherwise, please be ready to face the consequences both in this world and in the Hereafter.

Allah (Subhanahu wa Ta’ala) is my Witness on this day and will also be my Witness on the Day of Judgement that I have passed His Message to the Ummah of Prophet Muhammad (SallAllahu ‘alahi wa Sallam). honestly and sincerely, to the best of my information, knowledge and understanding.

May (Allahu (Subhanahu wa Ta’ala) guide us, Ameen, make us good Muslims and have Mercy on us and save us from the Hell fire, Thumma Ameen.

The Necessity of Taqwa and Avoiding Riba’ 

REFERENCES:

https://www.al-islam.org/inner-voice-sayyid-saeed-akhtar-rizvi/amr-bil-maaroof

________

Revised

WARNING!

Allah (Subhanahu wa Ta’ala) does not declare war on any sinner in Holy Qur’an except the one who partakes in Riba’(Surah al-Baqarah 2, Ayah 279), 

Riba (Arabic: ربا ,الربا، الربٰوة, Ribā’ or al-Ribā’, IPA: [ˈrɪbæː]) is an Arabic word used in Islamic law and roughly translated as "usury": unjust, exploitative gains made in trade or business. Riba’ is mentioned and condemned in several different verses in the Holy Quran (3:130, 4:161, 30:39, commonly 2:275-2:280). It is also mentioned in many hadith [reports of the life of Muhammad (SallAllahu ‘alahi wa Sallam)], most commonly in Surah al-Baqarah, Ayaat 275-280. 

While Muslims agree that Riba’ is prohibited, not all agree on what precisely it is. It is often used to refer to interest charged on loans, and the widespread belief among Muslims that all loan or bank interest in Riba forms the basis of the $2 trillion Islamic banking industry.[7] 

However, not all Islamic scholars have equated riba; with all forms of interest, nor do they agree on whether Riba’ is a major sin or simply discouraged (makruh), or whether it is in violation of Shari’ah law to be punished by humans rather than by God Almighty.

The primary form of Riba’ is the interest or other increase on a loan of cash, known as Riba’ an-nasiya. Most Islamic jurists acknowledge another type of Riba’, the simultaneous exchange of unequal quantities or qualities of some commodity, known Riba’ al-fadl.

YOU HAVE BEEN WARNED! 

Enjoining good and forbidding wrong,  ٱلْأَمْرُ بِٱلْمَعْرُوفِ وَٱلنَّهْيُ عَنِ ٱلْمُنْكَرِ , which are two (2) important duties imposed by Allah (Subhanahu wa Ta’ala) in Islam, as revealed in the Holy Quran and Hadith:

 Holy Qur’an Surah 3, Ayaat 104,110 

 Holy Qu’ran Surah 5, Ayah 105

 Holy Qur’an Surah 9, Ayaat 71, 112

 Holy Qur’an Surah 31, Ayah 17

Let it be known that I have fulfilled my duty as a Muslim as Allah (Subhanahu wa Ta’ala) says in the Holy Qur’an وَذَكِّرْ فَإِنَّ الذِّكْرَىٰ تَنفَعُ الْمُؤْمِنِينَ: Surah Adh-Dhariyat, Ayah 55, to remind you to please refrain from giving or taking Riba’ for your own good in both the worlds. If you do otherwise, please be ready to face the consequences both in this world and in the Hereafter.

Allah (Subhanahu wa Ta’ala) is my Witness on this day and will also be my Witness on the Day of Judgement that I have passed His Message to the Ummah of Prophet Muhammad (SallAllahu ‘alahi wa Sallam). honestly and sincerely, to the best of my information, knowledge and understanding.

May (Allahu (Subhanahu wa Ta’ala) guide us, Ameen, make us good Muslims and have Mercy on us and save us from the Hell fire, Thumma Ameen.

The Necessity of Taqwa and Avoiding Riba’ 

REFERENCES:

https://www.al-islam.org/inner-voice-sayyid-saeed-akhtar-rizvi/amr-bil-maaroof

[chawlashah420]

Which 4 Best loan apps in Pakistan

Now, we will learn about loan apps, which provide easy access to loans. Loans are given to you according to the amount. Whichever company or bank you take a loan from first checks your past credits and then goes and gives the loan approval, so you will know that we can easily get the loan. From which app can you take a loan?

Easypaisa

JazzCash

Barwaqt

NayaPay

[meta-bloggerz]

SBP Orders Banks to Report All Loans Given to Women

The State Bank of Pakistan (SBP) has directed all banks/DFIs to disclose the loans disbursed to women and women-owned/managed enterprises in their annual financial statements. According to the central bank’s circular issued on Monday, this rule would be effective from the accounting year ending December 31, 2024. A separate table titled “Advances to Women, Women-owned and Managed Enterprises”…

[abcexpresspk]

Asian Development Bank approves $250 million loan to Pakistan The Asian Development Bank state - https://abcexpress.pk/asian-development-bank-approves-250-million-loan-to-pakistan.php...

[zayncapital]

Navigating the Uncharted Waters of Lahore: A Guide

Lahore, the heart of Pakistan, is a city brimming with culture, history, and modernity. As the second-largest city in the country, Lahore offers a unique blend of ancient heritage and contemporary development. However, for those venturing into the economic and financial landscapes of Lahore, navigating these uncharted waters can be challenging. This guide aims to provide a comprehensive overview of Lahore's financial terrain, focusing on Venture Debt, Private Debt Venture Capital, and the role of Development Finance Institutions in Pakistan.

Understanding Venture Debt in Lahore

What is Venture Debt?

Venture debt is a type of financing provided to early-stage, high-growth companies that have already raised equity funding. Unlike traditional loans, venture debt is typically used to extend the runway for startups, allowing them to achieve specific milestones before raising additional equity. This form of financing is crucial for startups that are in the growth phase but need more capital to scale their operations.

The Landscape of Venture Debt in Lahore

In Lahore, the concept of venture debt is gaining traction. The city's startup ecosystem is vibrant, with numerous tech startups emerging from various incubators and accelerators. However, these startups often face challenges in securing traditional bank loans due to the lack of tangible assets and the high-risk nature of their businesses. This is where venture debt comes into play, providing an alternative financing option.

Several venture debt firms have started operating in Lahore, offering tailored financial solutions to meet the needs of startups. These firms understand the unique challenges faced by startups and provide flexible repayment terms that align with the company's growth trajectory. As a result, venture debt is becoming an increasingly popular choice for entrepreneurs in Lahore.

Benefits of Venture Debt for Startups

Venture debt offers several advantages for startups in Lahore. Firstly, it allows startups to preserve equity by avoiding dilution, which is a common concern with equity financing. Secondly, venture debt provides a cushion during periods of uncertainty, enabling startups to manage cash flow effectively. Lastly, it enhances the startup's credibility, making it easier to attract additional investment in the future.

Exploring Venture Debt in Karachi

Similarities and Differences with Lahore

Karachi, Pakistan's largest city and economic hub, also has a burgeoning startup ecosystem. While the overall dynamics of venture debt in Karachi are similar to Lahore, there are some notable differences. Karachi's larger market size and more diverse economic base offer a broader range of opportunities for startups. However, the competition is also fiercer, and the cost of doing business can be higher.

Key Players in Venture Debt in Karachi

Several venture debt providers are actively working in Karachi, catering to the financial needs of startups across various sectors. These firms not only provide capital but also offer strategic support to help startups navigate the complexities of the business environment. The presence of international venture debt firms has also enhanced the availability of capital in Karachi, providing startups with access to a wider pool of resources.

Case Studies: Successful Venture Debt Deals in Karachi

There have been several successful venture debt deals in Karachi, highlighting the effectiveness of this financing model. For instance, a prominent tech startup in Karachi recently secured venture debt to expand its operations across Pakistan. This funding allowed the startup to accelerate its growth, launch new products, and increase its market share. Such success stories are inspiring other startups to explore venture debt as a viable financing option.

Private Debt Venture Capital: Bridging the Gap

Defining Private Debt Venture Capital

Private debt venture capital is a hybrid financing model that combines elements of both private debt and venture capital. It involves providing debt financing to startups and high-growth companies, with the potential for equity conversion. This model bridges the gap between traditional debt and equity financing, offering startups the best of both worlds.

The Role of Private Debt Venture Capital in Lahore

In Lahore, private debt venture capital is emerging as a crucial tool for startup financing. The city's entrepreneurial landscape is dynamic, with many startups seeking flexible financing options to support their growth. Private debt venture capital provides these startups with the necessary capital while minimizing equity dilution. This financing model is particularly beneficial for startups that require substantial funding but are not yet ready for a full equity round.

Advantages of Private Debt Venture Capital

The primary advantage of private debt venture capital is its flexibility. Startups can access significant capital without giving up too much control or ownership. Additionally, this financing model often comes with value-added services such as mentorship, strategic guidance, and networking opportunities. This support can be invaluable for startups looking to scale their operations and achieve sustainable growth.

The Role of Development Finance Institutions in Pakistan

Understanding Development Finance Institutions (DFIs)

Development Finance Institutions (DFIs) are specialized financial institutions that provide financing for projects aimed at economic development. DFIs play a critical role in supporting infrastructure development, promoting sustainable growth, and fostering innovation. In Pakistan, DFIs are instrumental in bridging the financing gap for projects that have significant social and economic impact.

Key DFIs in Pakistan and Their Contributions

Several DFIs operate in Pakistan, each with a unique mandate and focus. These institutions provide a range of financial products, including loans, equity investments, guarantees, and technical assistance. Some of the prominent DFIs in Pakistan include:

Pakistan Industrial Credit and Investment Corporation (PICIC): PICIC focuses on financing industrial projects and promoting economic development through long-term investments.

Pakistan Poverty Alleviation Fund (PPAF): PPAF aims to reduce poverty by providing microfinance, grants, and capacity-building support to marginalized communities.

National Investment Trust (NIT): NIT is involved in investment management and offers various mutual fund products to support capital market development.

The Impact of DFIs on Lahore's Economic Landscape

In Lahore, DFIs have played a pivotal role in financing infrastructure projects, supporting small and medium-sized enterprises (SMEs), and promoting inclusive growth. These institutions have provided critical funding for projects such as affordable housing, renewable energy, and urban development. By facilitating access to finance, DFIs have contributed to Lahore's economic resilience and growth.

Challenges Faced by DFIs in Pakistan

Despite their significant contributions, DFIs in Pakistan face several challenges. These include limited access to long-term funding, regulatory constraints, and capacity issues. Additionally, the high-risk nature of developmental projects can pose difficulties in securing adequate financing. Addressing these challenges requires a coordinated effort from the government, private sector, and international development partners.

Navigating the Future: Opportunities and Challenges

Emerging Trends in Lahore's Financial Ecosystem

Lahore's financial ecosystem is evolving rapidly, with several emerging trends shaping the future. One notable trend is the increasing adoption of digital finance. Fintech startups are leveraging technology to provide innovative financial solutions, improving access to finance for individuals and businesses alike. Additionally, there is a growing focus on sustainable finance, with investors seeking opportunities that generate positive social and environmental impact.

The Role of Government and Policy Interventions

Government support and policy interventions play a crucial role in fostering a conducive environment for financial innovation and growth. In Lahore, the government has introduced several initiatives to support startups and SMEs. These include tax incentives, regulatory reforms, and capacity-building programs. However, there is still a need for more comprehensive policies that address the unique challenges faced by startups and promote a vibrant entrepreneurial ecosystem.

Addressing the Financing Gap

Despite the progress made, there remains a significant financing gap in Lahore. Many startups and SMEs struggle to access the capital needed to scale their operations. Addressing this gap requires a multi-faceted approach that includes promoting alternative financing options such as venture debt and private debt venture capital, enhancing the capacity of DFIs, and encouraging greater participation from private investors.

Building a Collaborative Ecosystem

Building a collaborative ecosystem is essential for the sustainable growth of Lahore's financial landscape. This involves fostering partnerships between financial institutions, government agencies, academia, and the private sector. By working together, stakeholders can create a supportive environment that nurtures innovation, drives economic growth, and improves access to finance for all segments of society.

Conclusion

Navigating the uncharted waters of Lahore's financial landscape requires a deep understanding of the various financing options available and the unique dynamics of the city's entrepreneurial ecosystem. Venture debt, private debt venture capital, and the role of DFIs are all critical components of this landscape, each offering unique benefits and opportunities for startups and high-growth companies.

As Lahore continues to evolve, it is essential for entrepreneurs, investors, and policymakers to stay informed about the latest trends and developments in the financial sector. By leveraging the diverse financing options available and fostering a collaborative ecosystem, Lahore can continue to thrive as a hub of innovation and economic growth in Pakistan.

[mariacallous]

In the lead up to the COP27 climate summit, the urgency of climate change had never been clearer. A third of Pakistan had submerged under water, half of China’s landmass was parched by drought, and repeated heatwaves set Europe ablaze with some regions losing up to 80% of their harvest.

Despite this, the global community in Sharm El-Sheikh, Egypt was unable to muster the financial commitments needed to adequately respond to the climate crisis. Achieving the Paris Agreement’s temperature and adaptation goals requires an estimated global investment of $3-6 trillion a year until 2050, but current investment levels are nearly a tenth of that, just around $630 billion. Further, according to the Intergovernmental Panel on Climate Change (IPCC), annual climate finance to developing countries needs to increase by four to eight times by 2030, yet COP27’s new finance pledges came nowhere near this target, and no headway was made on a new 2025 finance goal.

There were some victories, like the establishment of the Global Shield fund for climate risk, and a historical Loss and Damage Fund to help countries recover from climate impacts. But the details of these funds could take years to formalize before any country sees the proceeds. In the meantime, emerging market and developing economies will continue to face the brunt of the impacts of climate change with the fewest resources, while also being the least responsible for warming the planet.

Given this context, a new tool, debt-for-adaptations swaps, could be a game changing way to accelerate the lethargic pace at which climate finance is made accessible to countries desperately in need.

In a debt-for-adaptation swap, countries who borrowed money from other nations or multilateral development banks (e.g., the IMF and World Bank) could have that debt forgiven, if the money that was to be spent on repayment was instead diverted to climate adaptation and resilience projects. This has an opportunity to both alleviate debt distress and increase funding to adaptation which has proved far more difficult to finance than clean power. There has been a lot of interest in debt swaps from developing countries and multilateral development banks, especially at COP27, but not specifically focused on adaptation.

The U.S. should take on a leading role in this effort, not only because it is the right thing to do but also because it advances U.S. interests in its geo-strategic rivalry with China. As developing nations look to see who will help them out of the climate catastrophe, the U.S. has a chance to pioneer an alternate model to China’s Belt and Road Initiative, which is entrapping developing countries into loans and debt distress.

Moreso, the sovereign debt burden of developing countries is largely a historical product of colonialism. By championing debt-for-adaptation swaps, the Biden administration can advance its environmental justice objectives and quickly channel critical resources to vulnerable communities.

The State of Play: Loans and Mitigation Dominate, Grants and Adaptation Lag Behind

There is no common, universal definition for what “climate finance” means but it generally refers to two types of financial flows: (1) climate investments which seek to generate financial returns, and (2) climate aid which is given as a grant with no expectation of repayment.

Nearly 94% of existing climate finance is in the first category[1]—an investment through either debt or equity where the funder is expecting some financial return. These funders include commercial banks and investors, governments, and multilateral and national finance institutions (e.g., World Bank, International Monetary Fund, U.S. International Development Finance Corporation).

The expectation of revenue generation for climate investments structurally binds the success and likelihood of deals to broader macroeconomic and political trends. Therefore, climate investment has been slow in developing countries due to a real and perceived risk of doing business in countries which may be involved in or adjacent to armed conflicts, face political or economic instability, or experience humanitarian disasters. While private investors do want to invest in the developing world, most such projects are at very high-risk levels, well above what is considered “investment grade.”

Projects that do meet the “investment grade” criteria are almost all focused on renewable energy. Indeed, 90% of all climate finance last year went exclusively to activities which mitigate greenhouse gas emissions. This makes sense from an investor perspective because electricity can be bought and sold, generating predictable cash flows to yield returns.

The tradeoff is that climate adaptation has been almost entirely neglected in climate finance flows despite being more urgent for many developing countries. Roughly $50 billion in adaptation finance was tracked between 2019-2020, compared to $571 billion for mitigation. The U.N. estimates that developing countries already need $70 billion per year to cover adaptation costs now and will need $140–$300 billion in 2030, rising to $280-500 billion by 2050. The damage from this year’s monsoon flood in Pakistan alone will exceed $40 billion.

There are a range of reasons why adaptation projects like drought-resistant seeds, resilient buildings, environmental restoration, or sea walls have struggled to attract private sector financing. At its core, it is more difficult to capture the benefits of adapting to climate change in a way that generates revenue. Suffice it to say, as long as profit-motive drives the majority of climate finance flows, adaptation finance will lag behind.

What adaptation lacks in revenue generation opportunities, though, it makes up for in avoided damages. Adaptation finance can help avoid the costs of infrastructure collapse, climate refugees, and potential failed states. A conservative estimate finds that by 2050, the economic cost of climate change will be between $1 trillion and $1.8 trillion (not including non-economic losses like loss of cultural sites).

The hope is that climate aid, or money that’s given without expectation of financial return (e.g., grants), can fill this gap in climate adaptation finance. Unfortunately, developed countries have channeled a comparatively meager amount of overall climate finance through grant-based instruments. In total, grants currently account for only 6% of climate finance. Between 2016-2018, grant-based bilateral climate finance accounted for 34% of all U.S. contributions ($645M), 12% of Japan’s ($1.2B), and only 3% of France’s ($146M). There have been some bright spots, however, with 91% of the U.K.’s contributions coming through grants ($1.3B), 99% of Australia’s ($111M), and 100% of Sweden’s ($482M). At COP27, developed countries failed to make headway on the Glasgow Climate Pact to double adaptation finance, nor did they define the Global Goal on Adaptation (equivalent to the Paris Agreement’s 1.5°C mitigation target).

In the U.S., there has been political reluctance to legislatively disburse funds for climate aid grants. President Biden requested $11.4 billion in climate aid every year till 2024, but Congress has authorized just $1 billion total. The politics of grant-based aid remain controversial, as Republicans and Democrats are virtually in different worlds on how to address the climate crisis and the role of the U.S. in supporting other countries.

Therefore, in the absence of a significant inflow of grant money, innovative solutions are needed to overcome the barriers to scaling up climate finance for adaptation. By using debt-for-adaptation swaps, climate finance for adaptation can be mobilized while

[azharniaz]

Pakistan, IDB finalise $200m loan agreement | The Express Tribune

ISLAMABAD: Pakistan and the Islamic Development Bank (IDB) have finalised a $200 million loan agreement during a visit by an IDB delegation to Pakistan. The agreement documents were signed by the Economic Affairs Secretary and the IDB Director. According to the Economic Affairs Division, this amount will be allocated for the rehabilitation of flood-affected areas, construction of houses,…

[speedyposts]

In Pakistan, old hopefuls jostle to turn around struggling economy

Pakistani voters head to the polls on Thursday amid a deep-seated economic crisis. Inflation is hovering at 30 percent, close to 40 percent of people live below the poverty line, and the debt-to-gross domestic product (GDP) ratio has climbed to 72 percent. Pakistan’s new government will have to contend with these and an ageing public infrastructure.

“We have power outages every day for two hours,” says Muhammad Waqas, a janitor from Islamabad. “In the summer, when it’s hot, you sit idly and suffer.”

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▶ Satya Nadella & Sam Altman: Dawn of the AI Wars | The Circuit with Emily Chang

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As with other state-owned firms, the inability of successive governments to invest in Pakistan’s National Transmission and Despatch Company has left it prone to failure.

More recently, the COVID-19 pandemic and energy supply challenges dampened Pakistan’s growth prospects and constrained efforts to diversify its export base away from low-value-added products – such as cotton and rice – to higher-value goods.

In late 2022, meanwhile, monsoon floods displaced eight million people and cost the country $30bn in damage. The loss of cotton crops ravaged the country’s textile industry, a key source of exports. In all likelihood, Pakistan’s growth rate fell into negative territory in 2023.

Pakistan, which imports much of its food and fuel, consistently records large trade deficits. Owing in part to elevated commodity prices, foreign exchange reserves dwindled to less than one month of imports last May, leading to shortages of vital goods.

The following month, Islamabad narrowly avoided default after it secured a $3bn loan from the IMF – its 23rd fund programme since 1958. However, the lending package came with strict conditions and unpopular reforms.

As part of the deal, the government agreed to impose new taxes on its faltering power sector. It also agreed to lower utility subsidies, which led to sharp hikes in electricity prices, hitting poorer households particularly hard.

Inflation, which reached nearly 30 percent in December, has been climbing since the start of last year after Pakistan’s central bank agreed to liberalise its exchange rate as part of a pre-existing IMF programme. Once exchange controls were dropped, the value of the currency fell sharply.

The Pakistani rupee was Asia’s worst-performing currency in 2023, depreciating by roughly 20 percent against the US dollar. “We think the rupee will continue trending down slightly,” said Krisjanis Krustins, a director at Fitch Ratings. “This will lower Pakistan’s current account deficit as goods from abroad will become more expensive, compressing import levels.”

According to the State Bank of Pakistan, the country posted a balance of payments surplus of $397m last December.

Krustins told Al Jazeera, “Pakistan’s goods imports fell by 27 percent in the last calendar year. As for exports, they continue to be held back by limited human capital and poor infrastructure. So, corrections in the trade account have had a depressing impact on the economy.”

Recent job losses have lifted the official unemployment rate to a record high of 8.5 percent, pitching an additional 8.4 to 9.1 million people into poverty.

Separately, Pakistan has long suffered from “structural issues”, says Tariq Banuri, professor of economics at the University of Utah.

“For starters, Pakistan’s growth rate is not high enough to absorb its rapidly expanding population. It’s also one of the world’s worst performers on tax collection. Agricultural landowners are exempt from income tax, and there’s no capital gains tax on real estate.”

Successive governments have stopped short of imposing robust tax legislation for fear of upsetting powerful business interests, Banuri said. “But that may change this year because of the debt situation,” he added.

Islamabad’s failure to boost tax revenues and modernise state-owned enterprises has generated persistent fiscal deficits and a large debt burden. In absolute terms, external debt reached $125.7bn last year.

Looking ahead, Pakistan faces $24.6bn in external debt repayments by the end of June, the bulk of which is owed to China.

China is Pakistan’s largest bilateral creditor, and Beijing agreed to roll over $2.4bn in loans last year. Many economists expect the incoming government to try and secure longer-term financing from the IMF – its current deal expires in April.

Given the cutbacks to public spending last year, “further fiscal consolidation is unlikely”, says Yousuf Farooq, director of research at Chase Securities. “The Fund is going to try and eke out further conditions, but probably from wealthier sections of society.”

“Assuming the new government can get another IMF loan, it will struggle to repay unless it imposes new taxes on agriculture and real estate. If it can also roll over short-term contracts with longer repayment schedules, I’m hopeful that debt will fall in the near term,” he said.

In the meantime, foreign investment continues to be hamstrung by security concerns along the Pakistan-Afghanistan border. Since the Taliban returned to power in Kabul in 2021, Islamabad has accused its neighbour of harbouring fighters carrying out attacks on its soil.

An unfolding political crisis is also threatening Pakistan’s economic recovery. Today, Islamabad’s fragile democracy is overseen by a caretaker government following Imran Khan’s dismissal as prime minister in April 2022.

The legitimacy of the February 8 elections has been questioned as Khan is absent from the ballot sheet. He is in jail on corruption charges. And while he is disqualified from running, Khan’s approval rating stands at 57 percent, higher than any other politician.

As things stand, the head of the Pakistan Muslim League-Nawaz (PMLN) – is favourite to win. Sharif’s PMLN has assumed power four times in the past three decades, under either himself or his brother Shehbaz Sharif.

Earlier this month, the Supreme Court further weakened Khan’s Pakistan Tehreek-e-Insaf (PTI) campaign by banning the use of a cricket bat as its symbol – a serious setback in a country where millions of illiterate voters identify candidates by their party logos.

For Banuri, the economics professor, “People are right to criticise Pakistan’s political system, which is dynastic and extractive. But for all that, I remain an optimist. I think the worst of the economic crisis is behind us.”

“While I always hope tomorrow will be better than today, I do not think the main political parties will offer meaningful change. They seem to be far more concerned with getting into power,” he added.

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▶ Satya Nadella & Sam Altman: Dawn of the AI Wars | The Circuit with Emily Chang

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China lends Pakistan further $700 mln to shore up FX reserves

The credit facility, made through the state-owned China Development Bank will boost Pakistan's forex reserves by about 20%.

[shahananasrin-blog]

[ad_1] Women participate in an embroidery workshop at the University of Karachi. — PPI/FileCentral bank's decision to back those starting their own businesses.SBP official says women can support families via this opportunity.Bank will provide interest-free loans up to Rs0.5 million.DERA ISMAIL KHAN: In its bid to ensure economic stability and female participation in the workforce, the State Bank of Pakistan (SBP) is offering interest-free loans to unemployed women to start their large-scale businesses.The central bank's Dera Ismail Khan Deputy Chief Manager Fazal Muqeem made the announcement while addressing participants of a seminar ‘Women bankability and banking on equality’ at the Government Polytechnic Institute for Women in Dera Ismail Khan on Sunday.Women, Muqeem said, will be able to support their families by starting their own businesses. He said the current wave of inflation has impacted the entire society and social strata. The SBP official added that it gets difficult for the poor to manage their everyday expenses due to their income resources.The employment opportunities are also limited in the country, therefore starting of own business is the only way to handle such a situation, he added. He informed that the prime minister introduced different policies with the support of the central bank to make unemployed women productive citizens.Under these policies, the bank accounts of unemployed women were being opened along with men on an equal basis so that they could be provided with interest-free loans up to Rs0.5 million.Addressing the seminar, Assistant Director Muhammad Zubair said that today’s era is of digital mobile app and citizens must take benefit from this facility. He said the citizens should become income tax filers which would make them avoid many taxes.On this occasion, GPI for Women Principal Sara Khan thanked the guests from the SBP. She said their institution was working to make its students skillful so that they could become self-sufficient and useful citizens of society.She said many women would benefit from this SBP’s policy in the future. She expressed the hope that such type of useful seminars would be organised in the future so that poor and eligible women of DIK could benefit.On this occasion, GPI for women Principal Sarah Khan, SBP Dera Ismail Khan Assistant Chief Manager Muhammad Amir Ejaz, Assistant Director Muhammad Zubair, Rizwanullah Shah, GPI (women) Placement Officer Zafar Awan, a good number of teachers and female students were present on the occasion. [ad_2]

[currenthunt]

G20 Summit 2023 of Joint Declaration: New Delhi Declaration

India is presiding over the G20 summit this year. This conference has been organized on 9 and 10 September at Bharat Mandapam of Pragati Maidan. G20's first joint declaration - A joint declaration has been agreed upon on the very first day of the ongoing G20 Summit in New Delhi. At the beginning of the second session on Saturday, PM Modi, in his capacity as President, passed the New Delhi Declaration with the consent of all the member countries. The G20's joint declaration is a total of 37 pages. There are total 83 paragraphs in it. This has been called the New Delhi Declaration. The main proposals included in this are as follows - All countries will work on Sustainable Development Goals. One Future Alliance will be formed on India's initiative. - All countries should work according to the rules of the UN Charter. - Bio fuel alliance will be formed. Its founding members will be India, America and Brazil. - Emphasis will be laid on one earth, one family, one future. - Multilateral development banks will be strengthened. They will be made better, bigger and more effective. - Emphasis will be placed on the priorities of the Global South. - There will be talks to make a global policy regarding cryptocurrency. - India has emphasized on making a common framework to create a better system regarding loans. - The fastest growing cities in the world will be funded. - Work will be done on green and low carbon energy technology. - All countries have criticized all forms of terrorism. Terrorism was mentioned 9 times. Europe and Middle East will build economic corridor with India - The G20 summit held in the Indian capital will be remembered for a historic deal. This deal has been made between India, Europe and Middle East i.e. Gulf countries. - This has been called the India, Europe, Middle East Economic Corridor Deal. It is being considered as the answer to two Chinese projects. - These are the Belt and Road Initiative (BRI) and the China-Pakistan Economic Corridor or CPEC. In a sense, CPEC is considered a part of BRI. - 8 countries are part of this economic corridor. This deal has innumerable benefits and the target is to complete it in 10 years. These countries are included in the deal - India, United Arab of Emirates (UAE), Saudi Arabia, European Union (EU), Italy, Germany, France and America. White House spokesperson had recently hinted towards this deal and said – It is possible that soon some more countries will become a part of a special economic deal. Some of these names may surprise you. Key points of this deal - The poor and middle-income countries falling in the three regions will benefit the most. America's Deputy National Security Advisor John Finneran told the media that we will not have to wait 10 years for its results. Very soon you will see huge changes. - This summit is proving to be very special for President Biden. He was considered soft on China, but he gave a forceful reply and gave the world the option of BRI. In this, every powerful country including India is with America. - Now the Middle East region will be directly connected with India and Europe not only through rail but also through port. Everyone will benefit from this. Saudi Arabia's Crown Prince Mohammed bin Salman (MBS) wants to make the oil economy business based. They know this will fulfill their Vision 2030. - America's deputy NSA Finner himself said - it will soon be known how big a success this is. People will be able to understand more about this deal when its work starts. This will also reduce tension in every area. - In recent times, China has been trying to weaken America and India by increasing its influence in UAE and Saudi Arabia. Now the Saudi Crown Prince has once again hinted towards joining America's side. This is also important because after the Corona period, China's economy is weakening day by day. Its growth rate has been low every time in the last four quarters. - From the economic point of view, every country included in this deal is developing rapidly. Now since the European Union is also a part of it, you will also have to keep in mind that at least 27 countries will be in this deal only from this union. Global Biofuel Alliance was launched at the end of the first day - PM Modi launches Global Biofuel Alliance. During this, US President Biden, Bangladesh Prime Minister Sheikh Hasina and heads of state of Brazil, Argentina and Italy were also present. After this, PM Modi said in his address that increasing connectivity is a priority for India. What is biofuel - Biofuel means fuel made from plants, grains, algae, husk and food waste. Biofuels are extracted from many types of myomas. - It contains less amount of carbon. If its use increases, the world's dependence on traditional fuel petrol and diesel will reduce and environmental pollution will also reduce. - For the first time in the year 1890, Rudolf Diesel used vegetable oil to run an internal combustion engine for farming. How is biofuel made - Different types of refineries are used to make biofuel. It is categorized on the basis of crop stock. - First generation biofuel depends on reserves of food crops. Sugarcane crop and grain starch are processed in the first generation unit. Whereas second generation biofuel is known as advanced biofuel. In this, the process takes place in non-edible plants, woody biomass or husk. - Third generation biomass is made from algae and microbes. Fourth generation biofuels rely on biomass materials that absorb carbon dioxide. Where is most biofuel produced - The largest ethanol producing countries in the world in the year 2022 are America and Brazil. America produced 57.5 billion liters of ethanol and Brazil produced 35.6 billion liters of ethanol. Whereas Europe remained at the forefront in the matter of making biodiesel. 17.7 billion liters of biodiesel was produced there. After that America is at second place and Indonesia is at third place. What is the theme of G20 Summit 2023? - This time the theme of G20 Summit 2023 is Vasudhaiva Kutumbakam. It means one earth, one family, one future. What is the logo of G20 Summit 2023 - This time India has made the earth its logo along with the lotus flower. This logo is of 3 colors, which is taken from the Indian flag. And these colors are- saffron, white, green and blue. What is the motto of G20 Summit 2023? - India's presidency of the G20 will prove helpful in strengthening trade ties with member countries and provide an opportunity to attract investments from those countries in sectors such as infrastructure. Importance of G20 Summit 2023 - G-20 is called Group of Twenty, this group has 19 member countries and the 20th member of the group is the European Union. The G-20 Summit is organized once a year, however, starting from 2008, the G-20 Summit was organized twice each in the years 2009 and 2010. - In this conference, the heads of state of the member countries of the group are invited and some other countries are also invited. After this, the heads of state of all the countries sit and discuss many issues. - This year, under the chairmanship of India, the G-20 conference is going to be held at Pragati Maidan in Delhi. How many countries has participate in this G20 Summit? - This time 20 countries are participating in the G20 Summit 2023. Apart from India, the G-20 group includes France, China, Canada, Brazil, Australia, Argentina, America, UK, Turkey, South Korea, South Africa, Saudi Arabia, Russia, Mexico, Japan, Italy, Indonesia and as the 20th member. The European Union is involved. - Presiding over the G-20 representing more than 80 percent of the global economy is a big opportunity for India. Read the full article