By Staff Reporter
ISLAMABAD: The government plans to raise much needed millions of dollar in debt via an Islamic sukuk bond later this calander year amid growing concerns about the country’s dwindling foreign currency reserves.
The coalition cabinet of Prime Minister Shehbaz Sharif on Tuesday approved issuance of the Ijara Sukuk bonds in the domestic and international markets to support precarious budgetary position.
Bankers said it seems that the government has also given the finance ministry a go head to issue sovereign sukyk in the international market.
The government however didnot disclose size and tenor of the planned sukuk.
A senior banker said the government would focus more on sukuk issuance instead of interest-based borrowing, which was good for the economy, would save cost, promote financial inclusion and also help the government comply with Federal Shariat court decision to eliminate interest from the economy.
The collateral against sukuk would be five federal assets, including the East and West Warf of Karachi Port, parts of GT Road with no legal hindrances, Islamabad Expressway, Sports Complex, and the Makran Highway.
The government has recently added Islamabad International Airport as a new asset to the transaction structure of the domestic sukuk. Now the assets include Allama Iqbal International Airport, Multan International Airport, and Islamabad International Airport.
Ahsan Iqbal Minister for Planning, Development and Special Initiatives said the cabinet also discussed the matter of shortage of edible oil in the country and acknowledged the efforts of minister for industries and his team for setting sail an edible oil ship from Indonesia for Pakistan.
“The cabinet also reviewed the GSP Plus agreement, that was singed in 2013 and under which Pakistan had got the facility for ten years in exports to the European Union countries,” the minister said at a news briefing.
The meeting was also briefed on the key elements of proposed new EU GSP (2024-2034).
The cabinet expressed its satisfaction that almost all political parties had their representation in the current coalition government, therefore, meeting all the conditions required for the GSP Plus agreement would be more easy.
The prime minister directed all the relevant ministries to ensure timely inking of the agreement for EUGSP (2024-34).
A EU monitoring mission has arrived in Pakistan to analyse the actions of the government on its 27 conventions, a perquisite to qualify for continuation of ‘GSP Plus’ status.
The mission is slated to judge the progress made on implementation of 27 International Conventions concerning GSP+ from 2020 onwards with the stakeholders on human rights, labour rights, environment, and good governance.
To make the case for an extension in the GSP plus status stronger, the Attorney General for Pakistan, the Convener of TIC (Treaty Implementation Cell), met with all the concerned officials. The European Commission had published the legislation for the GSP scheme (2024- 34) on September 22, 2021.
In 2021, the EU on extending the GSP plus status for Pakistan, added six new conventions, while voicing concerns about the situation of human rights, press freedom, death penalty and child labour related problems.
After 2022, the EU will reveal some new criteria to qualify for the GSP plus status.
After getting the status Pakistan will have to fulfill the requirements of 5 more conventions. The EU passed the resolution with a majority to review the GSP plus status for Pakistan.
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