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News18
17-07-2025
- Business
- News18
Pakistan's Pacts With Turkey Are A Sign Of Its Weakness & Desperation: Here's How
Last Updated: Turkey is building a robust defence ecosystem, using exports and co-development projects to enhance its own capabilities, while Pakistan remains trapped in a cycle of dependency Pakistan's ambitious naval modernisation through the MILGEM project—a high-profile partnership with Turkey —has increasingly exposed critical weaknesses linked to economic fragility, strategic gaps in technology transfer, and operational shortcomings. Beyond the optics, decoding what it really means. Financial Constraints and inability to make defence payments Pakistan's deteriorating economic position is front and centre in the unfolding challenges. With the rupee having lost over 60% of its value since 2018 and foreign exchange reserves routinely at crisis levels, defence contracts priced in foreign currency have become vastly more expensive in real terms. As a result, sustaining billion-euro navy modernisation programmes such as MILGEM (which stands for Milli Gemi Projesi in Turkish and translates to National Ship Project) has become increasingly difficult, with non-essential military imports being delayed or downscaled as debt servicing consumes over 40% of federal revenue. Even the country's traditionally protected defence budget has not been immune, now subject to IMF-imposed cutbacks. This fiscal tightening undermines Pakistan's ability to make timely payments for projects with Turkey, threatening both delivery schedules and ongoing technical support. The letter states: 'Pakistan is currently facing acute financial constraints and regrettably has not been able to meet financial obligations related to various foreign firms or contractors of MS ASFAT for MILGEM project. While remaining cognizant of our financial obligations, concerted efforts are underway to settle the outstanding payments. However, it may take a while before all outstanding liabilities can be settled." The letter also highlights challenges in the joint submarine project (MILDEN), noting that despite efforts, consensus on collaboration remains elusive and the memorandum of understanding (MoU) proposed in 2022 is still pending finalisation. It points out that Turkey is moving ahead independently on the project, causing the desired jointness to lose momentum. The Prime Minister further conveyed that these issues were raised during a high-level meeting between Pakistan's Chief of Naval Staff and President Recep Tayyip Erdoğan, who assured that the matters would be considered favorably at an appropriate level. Pakistan has formally requested Turkey to consider rolling over some outstanding payments for the MILGEM project by 2 to 3 years without imposing fines or affecting the delivery schedule of the ships. Asymmetry and loopholes in the Pakistan-Turkey partnership While official rhetoric touts brotherly cooperation and shared strategic ambitions, the reality has been far more asymmetrical. Under the MILGEM project, Turkey's ASFAT retained control over the most complex aspects of design, construction, and systems integration, while Pakistan's Karachi Shipyard & Engineering Works (KSEW) has played a secondary role—predominantly assembling components and relying heavily on Turkish technicians for hands-on problem-solving. Critical command-and-control, electronic warfare, and sensor suites remain largely Turkish- or Western-sourced, with only limited, mainly cosmetic technology transfer to Pakistan. The fact that key Turkish defence technologies, such as the MIDLAS vertical launch system revealed for Turkey's own submarine program, have not been shared or even briefed to Pakistan highlights the lack of joint innovation and strategic trust. There is no clear contractual mechanism guaranteeing Pakistan access to or co-development of future subsystems. Pakistan's attempts to localise production have faced serious bottlenecks. For instance, out-of-sequence shipbuilding—where the third hull began construction before the second due to schedule mismanagement—demonstrates persistent operational inexperience. Delays in commissioning (up to 72 months per ship) and continued reliance on Turkish expertise emphasize the gap between projected and actual indigenous capacity. Operational failures: The case of Operation Sindoor These structural limitations translated into harsh operational realities during the 2025 Operation Sindoor crisis. Turkish-made drones failed to provide effective real-time target acquisition: their sensors suffered from poor optical clarity, weak endurance, and insufficient resistance to electronic warfare—key shortcomings when facing an adversary employing advanced AI-driven decoys and sophisticated jamming. Pakistani units, relying on Turkish communications backbones, were exposed to spoofing and jamming, ruining coordination and exposing ships to unacceptable risk. This episode shattered confidence among military leaders in Rawalpindi and has reportedly led to quiet inquiries into alternative suppliers, particularly Western systems—although affordability remains a massive hurdle. Strategic and economic fallout Rather than delivering self-reliance or a technological leap forward, the MILGEM program has left Pakistan more dependent than ever on foreign suppliers, both to keep its fleet functional and to maintain any pretense of competitiveness. The ships, hailed in official ceremonies as symbols of modern naval power, represent an economic drain rather than a sustainable investment. As debt servicing and austerity bite deeper, Pakistan's naval ambitions risk becoming unsustainable on every front—undermining both operational effectiveness and broader strategic credibility. The prevailing reality is stark: Turkey is building a robust defence ecosystem, using exports and co-development projects to enhance its own capabilities, while Pakistan remains trapped in a cycle of dependency, renting progress it cannot yet command or afford. Get breaking news, in-depth analysis, and expert perspectives on everything from geopolitics to diplomacy and global trends. Stay informed with the latest world news only on News18. Download the News18 App to stay updated! tags : news18 specials pakistan india turkey view comments Location : New Delhi, India, India First Published: July 15, 2025, 14:43 IST News world Pakistan's Pacts With Turkey Are A Sign Of Its Weakness & Desperation: Here's How Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Business Recorder
10-07-2025
- Business
- Business Recorder
National food security demands farmers' security
Pakistan's agriculture is not just a food-producing sector — it is the economic backbone of rural Pakistan and the foundation of national food security. The collapse of wheat in FY25 is not a standalone event but a symptom of deep-rooted institutional decay, exacerbated by uncoordinated policymaking and a lack of accountability at both federal and provincial levels. If meaningful reforms are not undertaken now, no amount of relief will prevent the next agricultural collapse. What is needed is a long-term, climate-resilient and farmer-centric vision — one that views agriculture not as a fiscal burden, but as a strategic investment in Pakistan's future. Pakistan's agriculture sector, which employs more than a third of the country's population, stands at a perilous crossroads. Despite some concessions in the 2025–26 federal budget, the sector continues to suffer from deep-seated structural failures, most recently exposed by the wheat market collapse of the past fiscal year. The latest budget attempts to offer short-term relief through credit expansion and tax exemptions, but these measures fall short of addressing the systemic dysfunction that now threatens Pakistan's food security and rural economy. In the 2024–25 wheat season, Pakistan recorded an impressive harvest of 28.5 million tonnes from 8.9 million hectares. Yet this apparent success turned into one of the most financially ruinous crop cycles in recent history. The government, operating under IMF-imposed fiscal constraints, withdrew from wheat procurement and failed to announce a Minimum Support Price (MSP). Simultaneously, it either authorized or failed to prevent the import of 3.5 million tonnes of wheat worth US$1 billion — despite a domestic surplus. The result was a catastrophic price collapse, with rates falling from Rs 3,900–4,000 per maund to just Rs 2,200–2,400 — far below the estimated production cost of Rs 3,200. This ill-advised import policy, reportedly driven by officials within the Ministry of National Food Security & Research — including food security commission-(ers) — and supported by importers and flour millers, caused immense damage. Although an inquiry into the scandal began over a year ago, it has yet to yield results, even after two crop seasons and the retirement of the official leading the investigation. Worse still, under pressure from international lending agencies, the support price for wheat was not announced, and both federal and provincial procurement were halted. Farmers, lacking storage and holding capacity, were left with unsold stockpiles, mounting debt and no viable recourse. The cumulative financial damage to wheat growers has been conservatively estimated at Rs 2,200 billion. Allegedly, provincial governments worsened the crisis by imposing price ceilings and deploying law enforcement against farmers attempting to sell wheat above the prevailing so called official rates. In several districts of Punjab and Sindh, tensions rose as growers faced legal action simply for trying to recover their costs. Moreover, in some areas, including Kamalia, the home area of the finance minister, perishable vegetables such as okra and potato were fed to livestock because the cost of harvesting exceeded potential market returns. The combination of federal withdrawal and provincial heavy-handedness laid bare the lack of coordinated agricultural governance across the country. The 2025–26 federal budget provides a mix of palliative relief and contradictory policies. Agriculture, Food, Irrigation, Forestry and Fishing have a meager allocation of Rs. 33.47 billion. On the positive side, it retains GST exemptions on fertilizers and pesticides, raises the agricultural credit target to adequate level and introduces a Clean Financing Facility that will offer collateral-free loans of up to Rs 100,000 via digital wallets for smallholders. It also allocates Rs 155million under the Green Initiative, which focuses on climate-resilient agriculture, seed improvement, and desert/corporate farming. While these initiatives are welcome, they are insufficient, given the new burdens placed on farmers. Among the most harmful new measures are the imposition of a 10% GST on solar panels — a vital technology for irrigation through tubewells — and a Rs 2.5 per litre carbon levy on diesel with fortnightly increase in price, Rs 7.50 per litre first and then Rs 10.39 again, an increase a couple of days ago, which further increases input costs. Urea and DAP prices have risen by Rs 100/200 and Rs.250/300 per bag, respectively, and there has been no relief on import duties or local taxes for farm machinery. Tractor prices now range from Rs 2.6 million to over Rs 5 million — well beyond the reach of most growers. Meanwhile, budget allocations for the Small Farmers Package and Youth Agriculture Loans have been slashed, prompting strong condemnation from farmer organizations such as the Kisan Board Pakistan, which has termed the budget 'anti-farmer.' Agriculture is a devolved subject under Pakistan's constitution, giving provinces substantial responsibility for extension services, pricing policies and crop guidance. Yet across all four provinces, governance has been inconsistent and ineffective. Punjab responded too late to the wheat crisis, Sindh relied on enforcement-led price controls, KP offered limited support schemes, and Balochistan continued to struggle with chronic input shortages. Farmers lack access to timely crop selection advice, market intelligence and climate adaptation training. Extension departments are severely under-resourced and depend on decades old obsolete crops knowledge, while provincial research and education institutions remain outdated and disconnected from the realities on the ground. Despite the government's stated goal of achieving 4.5% agricultural growth in FY 25-26, the sector grew by only 0.56 percent — and that too mostly due to livestock. Major crops, including wheat, rice and cotton, recorded negative or stagnant growth. These trends are likely to continue unless bold interventions are introduced following out of box solutions. Yet only Rs 4.25 billion — a negligible amount — has been allocated for development in FY26. Now sugar is being imported to benefit the foreign farmers or stockholders. No move has been made to tax large landowners or introduce land reforms, further entrenching inequality. Continued neglect of mechanization, smart irrigation and domestic seed development has stunted any hope of meaningful productivity gains. What Pakistan urgently needs is not just financial relief but a comprehensive national strategy for agriculture — one that harmonizes federal and provincial policies, stabilizes crop pricing, and invests in infrastructure, technology (including AI), and robust market linkages. A coordinated policy framework could help build storage capacity, reintroduce a fair MSP system, and incentivize diversified cropping based on seasonal demand and export potential. Tax incentives for climate-smart farming, subsidies for efficient machinery, and digital crop advisories could transform the rural economy — if implemented with commitment and coherence. Agriculture is not a peripheral concern — it is Pakistan's frontline defense against food insecurity, rural poverty and climate stress. Treating it as a secondary budget item or a short-term political concession will only exacerbate the crises already underway. A long-term, farmer-centric, and climate-resilient agricultural policy is no longer optional — it is a national imperative. (The writer is former Adviser/Director General, Department of Plant Protection ([email protected])) Copyright Business Recorder, 2025
Express Tribune
03-07-2025
- Business
- Express Tribune
Digital banking pilot project delayed
The National Assembly Standing Committee on Poverty Alleviation and Social Safety has called for urgent reforms to ensure Pakistan's social protection system transitions to a fully transparent, technology-driven model with minimal human intervention. Chairing the 10th session of the Committee at Parliament House, Mir Ghulam Ali Talpur emphasised the original intent behind income support mechanismsreducing human interference to uphold dignity and ensure efficient, transparent disbursement of financial aid. He raised alarm over the country's rising poverty rate, now approaching 50 percent, and expressed dissatisfaction with persistent hardships faced by Benazir Income Support Programme (BISP) beneficiaries at point-of-sale camps. The committee voiced concern over delays in launching the much-anticipated digital banking pilot project, initially slated for June. In response, the State Bank of Pakistan (SBP) assured that most backend systems are ready and procedural approvals are nearing completion. The pilot is now expected to launch by the end of July, with beneficiary accounts opening by August 15. Initially covering seven districts and Muzzafargarh, the pilot will integrate geotagged banking services, simplified account opening, and biometric verification. Debit cards will be issued only in cases where fingerprint authentication fails. The rollout will be followed by a six-month evaluation before a nationwide scale-up. To reduce congestion and enhance accessibility, SBP plans to expand ATM networks, introduce staggered payment distribution, and roll out digital wallets. API integration testing and two-factor authentication mechanisms are also in final stages. The committee members expressed concern over treatment of beneficiaries at banks and campsite branches. The Acting Governor SBP reiterated the banking sector's commitment to maintaining dignity, security, and full service access for all beneficiaries. The Committee also urged PTA integration of mobile data repositories to improve biometric reliability in remote areas. On the institutional front, BISP revealed that of the 3,486 sanctioned posts, only 2,347 are filled, with 1,858 regular staff. The Committee noted that heavy reliance on deputation staff undermines institutional sustainability and raises costs. The Finance Division clarified that recruitment falls under the Cabinet and Establishment Division, and must comply with IMF-imposed fiscal restrictions. The committee urged BISP to work closely with the relevant ministries to address the staffing shortfall and approved relocation of BISP offices to underserved tehsils like Munda and Balambat to improve outreach. The meeting concluded with a consensus to fast-track the digital pilot rollout while ensuring robust oversight, transparency, and protection of beneficiary rights. Those attended the meeting were MNAs Mir Ghulam Ali Talpur, Ahmad Ateeq Anwer, Aasia Ishaque Siddiqui, Mahtab Akbar Rashdi, Muhammad Bashir Khan, Jamshaid Ahmad, Misbah Uddin, Shahid Usman, Nawabzada Iftikhar Ahmed Khan Babar, Shafqat Abbas, Mohammad Ilyas Choudhary, Mir Khan Muhammad Jamali, and Aniqa Mehdi (virtually).
Business Recorder
11-06-2025
- Business
- Business Recorder
KCCI says budget lacks steps for economic growth
KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has criticised the federal budget 2025-26, describing it as a 'more enforcement, less progressive' budget that lacks substantial measures for economic growth. Speaking to the media after the budget announcement by Federal Finance Minister Muhammad Aurangzeb, Chairman Businessmen Group (BMG) Zubair Motiwala, alongside KCCI President Muhammad Jawed Bilwani and other industry representatives, acknowledged the budget's technical soundness but expressed concerns over its limited focus on growth-oriented policies. Motiwala highlighted a significant imbalance in the budget's approach, noting that while import-related incentives have been proposed, there are no corresponding relief measures for exports. 'This is technically a sound budget but measures for economic growth are missing in it,' he stated. The business leader criticised the budget as a 'camouflage' document, suggesting that crucial details would emerge only after implementation. He expressed disappointment that despite the federal minister's emphasis on digitalisation, FBR's strict enforcement, and revenue collection, no attention was paid to exports growth and industrialisation. 'No measures were proposed in this budget for reduction in cost of doing business and cost of production.' Chairman BMG criticised the government for setting overly ambitious goals despite the country's poor economic performance in the previous fiscal year, during which all major targets, including GDP growth and fiscal consolidation, were missed. He questioned the rationale behind increasing the targets without providing any practical explanation of how these would be achieved, especially in a fragile economic environment dominated by uncertainty, high inflation, and IMF-imposed constraints. While acknowledging positive developments such as the reduction in interest rates, current account surplus, and a $2 billion increase in foreign reserves, he criticised the government's decision to increase gas tariffs. 'Prime fuel for export sector is gas and the government is increasing the tariff instead of reducing it.' The KCCI leader expressed disappointment over the agriculture sector's poor performance, which showed a depressing growth of just 0.6 percent against the ambitious target of 13 percent. He also criticized the allocation of only Rs1000 billion for the Public Sector Development Program (PSDP) calling it woefully inadequate, particularly in light of the deteriorating state of infrastructure. 'It is surprising to see a meagre allocation of Rs2.783 billion for climate change in a country which has witnessed increased frequency of climate-related disasters,' he added. While acknowledging that the budget was presented under strict IMF conditions, he said that despite being technically compliant, it fails to address the pressing needs of Pakistan's industrial sector or its citizens. He described the budget as one that may satisfy external lenders but does not offer any practical hope for businesses or the wider population. Vice Chairman BMG Anjum Nisar underscored the importance of establishing a fair and transparent taxation system that does not rely on intimidation or arbitrary enforcement. He warned that the environment being created through the proposed fiscal measures could foster fear among businesses instead of encouraging growth. He said that Karachi remains the economic lifeline of Pakistan and deserves special attention to unlock its full potential. Rather than continuously burdening it with revenue responsibilities, the government should empower it with infrastructure investment and policy support to enable it to contribute even more to the national economy. President KCCI Muhammad Jawed Bilwani rejected the budget, stating it completely failed to offer any meaningful relief to the industrial sector or the general public. He said the government's claim of reduced inflation does not align with the realities faced by households, where electricity bills remain unaffordable and basic necessities are out of reach. He criticised the lack of measures to reduce electricity tariffs and interest rates, which are key drivers of the high cost of doing business. He emphasised that without addressing these core issues, neither industrial expansion nor job creation is possible. The high cost of energy and borrowing has severely impacted the viability of businesses, and without urgent intervention, many enterprises may not survive. Bilwani expressed concern over the government's over-reliance on remittances and IMF programs to manage the economy, calling it an unsustainable and short-sighted approach. He stressed the need to develop a conducive environment for industrial growth, which is the only way to improve key economic indicators. He also criticised the minimal allocation for long-delayed infrastructure projects like K-IV, terming it a sign of the government's disregard for Karachi's needs and its vital contribution to the national economy. Despite repeated demands from the business community, no concrete steps have been taken to broaden the tax net or introduce structural economic reforms, which remain essential for long-term economic stability, he said, raising concerns about agricultural governance, noting that while the sector didn't perform when it was a federal subject, its transfer to provincial governments under the 18th Amendment has not yielded the expected improvements. Calling the entire budget an eye wash, Bilwani expressed frustration over the government's failure to implement serious measures for broadening the tax base, noting that the country continues to rely heavily on home remittances rather than expanding domestic revenue sources. However, not all business associations shared the KCCI's pessimistic assessment. The President of the Karachi Customs Agents Association (KCAA) termed it a 'public friendly budget,' welcoming its potential to provide relief to common citizens, particularly the salaried class. The KCAA president also praised the government's decision to reduce overall customs tariffs to rational levels over the next five years, describing the budget as 'so far so good.' Meanwhile, Mashood Khan, an expert of auto sector said that the FM's budget speech closely mirrors the IMF's recommendations. The downward trend in additional customs duty, regulatory duty and customs duty will likely hit local manufacturing instead of exports in the future, foreseeing severe consequences for our local manufacturing industry. He said that the auto parts and other manufacturing sectors would face significant challenges, urging FM to revisit the budget before seeking approval from the National Assembly. Copyright Business Recorder, 2025
Express Tribune
10-06-2025
- Business
- Express Tribune
Businessmen air concern over budget measures
Listen to article Reacting to the federal budget for fiscal year 2025-26, business leaders and industrialists raised concerns, citing increased burden on taxpayers and the lack of incentives for economic growth. Businessmen Group (BMG) Chairman Zubair Motiwala, while calling it a "camouflage budget," expressed serious reservations about its unrealistic targets and the absence of any meaningful relief for the business community or the common man. The budget includes various announcements related to digitalisation and promoting the cashless economy. These measures alone are insufficient for stimulating exports or driving industrialisation, which are critical for sustainable economic growth, he stated. Addressing a press conference at the Karachi Chamber of Commerce and Industry (KCCI) after the finance minister's budget speech on Tuesday, he criticised the government for setting overly ambitious goals despite the country's poor economic performance in the previous fiscal year, during which all major targets, including GDP growth and fiscal consolidation, were missed. Motiwala questioned the rationale behind increasing targets without providing any practical explanation regarding how these would be achieved, especially in a fragile economic environment dominated by uncertainty, high inflation and the IMF-imposed constraints. He remarked that for achieving the elevated tax collection target, the government seems to be relying largely on extracting more revenue from the existing pool of compliant taxpayers, rather than expanding the tax base. He feared that instead of introducing meaningful reforms to bring untaxed sectors into the fold, the budget would result in increased discretionary powers for tax officials, burdening documented businesses and discouraging the economic activity. "This strategy of squeezing the formal sector could result in contraction of economic output rather than expanding it." The Overseas Investors Chamber of Commerce and Industry (OICCI) has expressed disappointment over the government's limited progress in addressing inequitable corporate tax rates in the recent budget. While a marginal reduction in super tax was acknowledged, the OICCI reiterated the need for a comprehensive overhaul of tax structures to enhance Pakistan's competitiveness and attract foreign investment. The chamber noted the absence of a meaningful reduction in government expenditure, which could have helped narrow the budget deficit. Fiscal discipline remains critical to ensuring macroeconomic stability. The OICCI urged the government to prioritise expenditure rationalisation in its budgetary measures. It regretted the missed opportunity to broaden the tax base, particularly the absence of a concrete strategy to document Pakistan's Rs9 trillion cash-based informal economy – a critical measure for meaningful revenue enhancement and economic formalisation that the chamber had consistently advocated for. Federal B Area Association of Trade and Industry President Shaikh Muhammad Tehseen commented that the federal government's announcement of the initiative to promote SMEs is a welcome move for owners of small and medium-sized businesses. He urged the government to engage relevant stakeholders and incorporate their recommendations to ensure the success of the proposed business scheme, support the export-based sector and generate jobs for the youth. According to the budget speech, on the directives of the PM, the Small and Medium Enterprises Development Authority (Smeda) has prepared a three-year business plan for 2024-27, which includes increasing SME financing, enhancing exports, building inter-industry linkages and promoting female inclusion in business. The speech also mentioned the success of the SME Risk Coverage Scheme, which generated more than Rs311 billion in assistance for over 95,000 SMEs by May 2025. The government's target is to increase SME financing to Rs1,100 billion by 2028. "The government should focus on reducing the cost of production to ensure benefits for industries, particularly through lower interest rates, utility charges and petroleum product prices, which will support the struggling SME units and attract both local and foreign investors to establish SMEs," Tehseen said. SITE Association of Industry (SAI) President Ahmed Azeem Alvi stressed the need for clearer policies, faster tax refunds and digital reforms to support exporters and industries. He said the government has recognised the need for relief within the Customs sector and intends to implement reforms. However, he noted that the full impact of these measures will only be clear once detailed budget documents are released.
