Pakistan, currently grappling with a severe financial predicament, finds itself in a deeply embarrassing situation as its national carrier’s aircraft has been impounded in Malaysia due to non-payment of dues. According to reports from Pakistan’s local media on Tuesday, Pakistan International Airlines (PIA) had its leased Boeing 777 seized at Malaysia’s Kuala Lumpur International Airport amid a contentious dispute.
This particular Boeing 777 had been procured by (PIA) on lease from Malaysia. However, this marked the second instance of the aircraft being detained at Kuala Lumpur airport due to outstanding dues amounting to a staggering $4 million. In compliance with a local court order and after receiving payment of the arrears, the company decided to take possession of the PIA plane.
This incident eerily mirrors a previous occurrence in 2021, when the same aircraft faced seizure in Malaysia over similar payment issues. Subsequently, diplomatic assurances were provided, leading to the release of the plane, along with 173 passengers and crew members, who safely returned to Pakistan on January 27.
Image Source :- ANI
The economic distress gripping Pakistan has resulted in a significant depletion of its foreign exchange reserves, consequently impacting various services abroad and severely impeding imports. To mitigate the crisis, Prime Minister Shehbaz Sharif instructed the foreign ministry in February to curtail the number of diplomatic missions and downsize their offices and staff. This cost-cutting measure aimed to reduce expenditures for the debt-laden nation by 15 percent.
Foreign Exchange Woes: Pakistan’s National Carrier in Troubled Waters
Recently, a prominent Pakistani newspaper, reported that a public sector hospital in the Upper Kohistan district had halted its operations due to insufficient funds. This dire financial situation has also afflicted 19 outsourced health centers, which have had to limit their services. Furthermore, the Dasu DHQ hospital has been compelled to suspend all services due to a crippling shortage of fundsIMF Engagement Amidst Seizure: Pakistan’s Economic Turmoil Deepens
Amidst these pressing challenges, the International Monetary Fund (IMF) has been actively engaged with Islamabad, aiming to convene a board meeting before the expiry of a financing program at the end of June. To proceed with the review of the program during the board meeting, a prior staff-level agreement is imperative.
For Pakistan, such an agreement would unlock $1.1 billion in financing, forming a crucial component of the $6.5 billion IMF package. Unfortunately, the staff-level agreement for the pending tranche of $1.1 billion has been continuously delayed since November, exacerbating the country’s financial predicament.
Addressing the matter, Nathan Porter, the IMF’s mission chief for Pakistan, asserted the need for engagement with Islamabad, specifically emphasizing the restoration of foreign exchange market functionality, the passage of a fiscally prudent budget for FY24 aligned with program objectives, and the availability of adequate financing.
Meanwhile, Pakistan’s Finance Minister, Ishaq Dar, sought to assuage concerns by proclaiming that the nation was not teetering on the brink of a financial crisis and categorically stating that default was out of the question. However, the prevailing circumstances, including the cash crunch and the repeated seizure of PIA aircraft, paint a bleak picture of Pakistan’s economic stability.
As Pakistan grapples with its current financial turmoil, it is essential for the government and relevant stakeholders to swiftly address the issues at hand. The nation’s credibility and economic well-being hinge upon effective measures to restore financial stability, reignite economic growth and ensure the timely fulfillment of its financial obligations. Failure to do so may exacerbate the ongoing crisis and jeopardize Pakistan’s standing in the international arena.