Latest news with #diplomaticengagement
Arab News
21-05-2025
- Business
- Arab News
Pakistan says open to talks with India after IMF flags tensions as loan risk
KARACHI: Pakistan on Tuesday hinted that it was open to 'constructive diplomatic and economic engagement' with India as the International Monetary Fund (IMF) said prevailing tensions between the two archfoes had increased enterprise risks to Islamabad's ongoing loan program. The development comes days after Indian Defense Minister Rajnath Singh said the IMF should reconsider a $1 billion loan to Pakistan alleging it was 'funding terror,' a move denounced by Islamabad as proof of New Delhi's desperation. India and Pakistan this month clashed in the worst military violence in decades, killing around 70 people before agreeing a ceasefire on May 10. The conflict was sparked by an attack on tourists in Indian-administered Kashmir that New Delhi blamed on Islamabad, a charge it denies. Khurram Schehzad, adviser to Pakistan's finance minister, said the Washington-based lender had not imposed any new 'conditions' on Pakistan, which continues to pursue stability and responsible governance that supports long-term growth for itself and the region alike. 'Constructive diplomatic and economic engagement in the region, including with neighbors, remains essential,' Schehzad told Arab News, when asked about the recent developments on the fiscal front. The IMF last week approved a loan program review for Pakistan, unlocking a $1 billion payment which the State Bank of Pakistan said had been received. A fresh $1.4 billion loan was also approved under the IMF's climate resilience fund. But the lender last week said the rising India-Pakistan tensions, if sustained or deteriorated further, could heighten enterprise risks to the fiscal, external and reform goals of its $7 billion ongoing loan program for cash-strapped Pakistan. The IMF loan is vital for Pakistan which is trying to revive its debt-ridden economy that is expected to expand 2.68 percent by June, about one percent lower than the government's earlier projection. 'Yes, the IMF report identifies regional tensions as a potential risk, as is customary in such assessments,' Schehzad said, adding that at the same time, the Fund had noted that Pakistan's stocks market had reacted to the conflict modestly and retained most of its recent gains. 'We view this as a reflection of investor confidence in Pakistan's macroeconomic path.' Pakistan's stocks, which rose more than 80 percent last year, have largely resisted selling pressures in recent weeks, despite the country's conflict with India that saw the two sides strike each other with missiles, drones and artillery. Schehzad rejected the impression that Pakistan had increased its defense budget and said it remained constant at 1.9 percent of the gross domestic product this fiscal year starting in June 2024. 'The Rs2.414 trillion defense budget cited in the IMF's staff report is an absolute projection,' he said. After debt servicing, defense spending is the second biggest drain on Pakistan's revenues that the country is trying to improve by withdrawing energy subsidies and taxing incomes from agriculture, retail and real estate sectors as one of the conditions set by the IMF under its 37-month Extended Fund Facility (EFF) secured in September. BUDGET DISCUSSIONS An IMF team is currently discussing with Pakistan the upcoming federal budget that the country is expected to unveil early next month, said IMF officials privy to the discussions, requesting anonymity as they were not authorized to speak to media. The talks are expected to conclude 'this week' after which the IMF would issue a concluding statement, they told Arab News, without explaining what exactly the two sides were discussing. The IMF's latest country report, issued last week, mentioned certain structural benchmarks for Pakistan's economic reform program that Schehzad said represented the natural progression of the measures already agreed upon, when Pakistan signed the Memorandum for Economic and Financial Policies (MEFP) in September. 'There are not newly introduced conditions. Each step builds logically on the foundations laid in earlier phases of the program,' he said, adding that each structural benchmark the IMF's report mentioned was part of a sequenced approach to reforms that was designed in phases and built upon progress achieved in the country's earlier reviews. Pakistan on May 9 secured the IMF board's nod for its first review that saw the release of about $1 billion to the cash-strapped country and the approval of the country's request for a 28-month, $1.4 billion Resilience and Sustainability Facility (RSF) to cope with environmental vulnerabilities. 'These benchmarks are not surprises. They are deliberate follow-ons to earlier milestones,' Schehzad said, citing Pakistan's parliamentary approval of the next budget in line with the IMF staff agreement as a second step toward the country's goal of achieving a primary surplus of 2 percent of GDP by FY27. 'The first step was the FY25 budget [presented in June last year], which targeted a 1.0 percent surplus.' Terming several other IMF structural benchmarks as a continuation of what has been agreed upon with the lender, Schehzad said some new benchmarks were introduced in response to recent developments. 'The plan to publish a post-2027 financial sector strategy and the move to remove the cap on the debt service surcharge are based on new realities, including the recent constitutional amendment and the government's evolving energy sector reform strategy,' he said. Other reforms, according to the adviser, included phasing out incentives in Pakistan's special technology zones and industrial parks by 2035 to ensure a level-playing field, and lifting a ban on the import of used cars to reduce trade barriers was consistent with the trade liberalization goals outlined in the September 2024 MEFP. The finance adviser confirmed that the remaining 13 actions fall under the separate climate resilience-focused facility, RSF, that were approved by the IMF's executive board. 'These measures reflect Pakistan's steady and sovereign commitment to economic reform and transparency, not externally imposed demands,' he said.
Arab News
20-05-2025
- Health
- Arab News
Saudi-Iranian advisors and health ministers meet
Mohammed Al-Yahya, adviser to Saudi Arabia's Foreign Minister Prince Faisal bin Farhan, recently met with Ali Larijani, adviser to Iran's Supreme Leader Ayatollah Ali Khamenei, in Tehran. During the meeting, the officials discussed issues of mutual interest. This comes after Saudi Arabia's Defense Minister Prince Khalid bin Salman's visit to the Iranian capital recently and the renewed diplomatic engagement between the two countries. Meanwhile, Saudi Minister of Health Fahad AlJalajel met with his Iranian counterpart Mohammed Reza Zafarghandi at the 78th session of the World Health Assembly in Geneva on Tuesday, the Saudi Press Agency reported.
Zawya
20-05-2025
- Business
- Zawya
Oman & Spain: Partnership amidst global opportunities
The Sultanate of Oman and the Kingdom of Spain share a relationship marked by growing economic cooperation, building on a foundation of strong diplomatic ties. While the economic partnership is still developing, it holds significant potential for both nations, particularly as they navigate evolving global challenges and seek new avenues for growth. This analysis explores the multifaceted relationship between Oman and Spain, examining its historical context, current economic ties and future opportunities. The relationship between Oman and Spain is rooted in a history of diplomatic engagement, with formal relations established in 1972. This initial step has been crucial in fostering a climate of mutual respect and cooperation, setting the stage for increased collaboration across various sectors. The establishment of reciprocal embassies in the mid-2000s further solidified this foundation, enhancing communication and facilitating stronger economic links. High-level visits and agreements, such as the significant visit by King Juan Carlos I of Spain in 2014, have underscored the commitment from both sides to expand their cooperation. Examining the economic ties between Oman and Spain reveals a trade relationship with growth potential. While the overall trade volume has been described as 'relatively modest,' it has shown a general upward trend over the past decade. In 2023, Spain recorded a trade surplus with Oman, amounting to $27 million. Data indicates Oman's exports to Spain were valued at $246 million, while Spain's exports to Oman totalled $249 million. However, more recent monthly data suggests a contraction in trade volumes, highlighting the influence of factors such as commodity price volatility. Oman's exports to Spain are concentrated in mineral fuels, oils and aluminium, reflecting its resource-based economy. Spain's exports to Oman are more diversified, including machinery, transport equipment and manufactured goods. Specifically, Oman's exports to Spain include mineral fuels, oils ($33.57 million), aluminium ($32.48 million) and plastics ($19.10 million). Spain's exports to Oman feature ships ($31.83 million), aircraft ($24.93 million) and vehicles ($23.07 million). Investment is a vital component of the Oman-Spain economic relationship. The Spain Oman Private Equity Fund (SOPEF), a joint initiative between the Oman Investment Authority (OIA) and the Spanish development finance institution COFIDES, is a key example. SOPEF has allocated €300 million to support the internationalisation of Spanish companies and contribute to the economic development of both nations. Spanish investments in Oman include Union Fenosa Gas's stake in Qalhat LNG and Indra Sistemas' provision of air traffic management systems. These investments highlight Spain's involvement in Oman's energy and infrastructure sectors, while initiatives like SOPEF aim to foster broader economic diversification and collaboration. For Oman, this economic relationship presents opportunities to advance its Oman Vision 2040 diversification goals. Collaboration with Spanish firms offers avenues for technology transfer, access to new markets and enhanced competitiveness. Spain's membership in the European Union provides a strategic entry point for Omani products into the EU market. Omani companies, particularly SMEs, can explore niche markets in Spain, focusing on unique products and leveraging platforms like the Barcelona seafood expo to connect with Spanish partners. Spain also benefits significantly from this partnership. Oman represents a growing market for Spanish exports, including machinery, transport equipment and manufactured goods. Initiatives like SOPEF facilitate the internationalisation of Spanish companies and provide access to new investment opportunities in Oman and the broader Middle East. Furthermore, Oman is a reliable supplier of LNG to Spain, contributing to Spain's energy security. Several sectors have been identified as key areas for enhanced collaboration. These include renewable energy, where Oman's potential aligns with Spain's expertise; tourism, where Spain's experience can support Oman's growth plans; logistics and infrastructure, leveraging Spain's advanced capabilities; technology and digital transformation, fostering innovation and knowledge transfer; and manufacturing and agribusiness, promoting diversification and food security. 2022 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. (
