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Govt chose not to seek foreign aid after floods: Aurangzeb

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WASHINGTON: Fina­nce Minister Muhammad Aurangzeb said on Thurs­day that Pakistan deliberately chose not to seek international aid after the 2025 floods, stressing that an improved macroeconomic position allowed the government to rely on its own resources.

Addressing a select gathering of scholars and economists at the Atlantic Council in Washington, the minister discussed the government’s approach to economic reform, disaster response and private-sector-led growth.

“Because we are in a relatively comfortable mac­roeconomic situation, which was different in 2022 — we didn’t rush out to appeal to the international community for even the rescue and relief effort,” said the minister while responding to a question.

“It was a very deliberate choice by the government and our administration that we are going to use our own resources, the fiscal space which is available, and see how and what we can repurpose,” he added.

Mr Aurangzeb described this year’s floods as “far worse”, noting that in 2022, only one river and parts of Sindh and Balochistan were affected, whereas this year, three rivers were in high flood, and Punjab bore about 80 per cent of the damage.

Introducing the minister, Atlantic Council President and CEO Fred Kempe said the government’s approach “has generated cautious optimism and renewed international attention” towards Pakistan.

Dr Aasim M. Husain, a former deputy director of the IMF’s Middle East and Central Asia Department, observed that the Fund’s latest statement credited the government with “entrenching macroeconomic stability, rebuilding market confidence, and significantly narrowing sovereign spreads”.

The IMF also noted that Pakistan’s recovery remains on track, highlighting that the country achieved its first current account surplus in 14 years and surpassed its fiscal primary balance target.

“So, I guess they’re saying ‘well done’, and it sounds like a pretty good report card,” Dr Husain added.

The finance minister agreed that floods were a recurring problem, adding that Pakistan’s high population growth rate and changing climate “posed existential threats” to the country.

He said the post-damage needs assessment would take months. “For now, we’re using fiscal space and available World Bank and RSF funding without long-term planning,” he said, referring to the IMF’s Resilience and Sustainability Facility.

The prime minister has announced a 300-day plan anticipating earlier monsoons next year, the minister added, warning that agricultural damage would reduce GDP growth from a projected over 4pc to still above 3pc.

Mr Aurangzeb highlighted the government’s success in consolidating macroeconomic stability over the past year, noting external validations from the IMF and rating agencies.

“We have received two external validations… and after about two and a half to three years, we have seen the three rating agencies aligned,” he said, referring to upgrades from Fitch, S&P and Moody’s.

Highlighting progress in broadening and deepening the tax base, he said, “Last year, the FBR tax-to-revenue ratio rose from 8.8pc to 10.2pc; we aim for 11pc by year-end and 13pc during the programme.”

He also emphasised the role of technology in revenue collection, stressing that technology — data analytics, AI, digital invoicing and monitoring — is critical in reducing leakages, particularly in sugar, cement, tobacco and beverage sectors.

On private-sector-led and export-oriented growth, the minister stressed a shift from past public-sector-dri­ven cycles. “This time, the focus is deliberate: export-oriented, private-sector-driven gro­­­­wth,” he said.

He mentioned refo­r­­m­­s including tariff rat­­io­nalisation, energy sector improvements and trade corridor expansions. Highlighting the strategic significance of projects like Reko Diq, he said: “When projects like Reko Diq come through… the first year of commercial operations will bring about $2.8 billion in exports — roughly 10pc of our current export base.”

The minister also acknowledged ongoing efforts to manage the country’s debt burden. “Debt servicing is the government’s single largest expense. Liability management trades and domestic debt buybacks help reduce the debt service burden,” he said.

With stability improving and reforms underway, the minister said the aim was a resilient, private-sector-led growth trajectory while meeting immediate humanitarian needs.

Meetings on ratings, investment

Earlier on Thursday, Mr Aurangzeb met an S&P Global team, welcoming its recent ratings action and noting that the three major international agencies are now aligned. He briefed the team on recent fiscal, monetary and external-sector developments and progress under the government’s reform programme.

In a separate meeting with Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan, Mr Aurangzeb discussed the privatisation of Pakistan International Airlines (PIA) and key airports, reaffirming the government’s resolve to attract strategic investments through transparency and efficiency.

Addressing a regional roundtable on digital transformation, he shed light on FBR’s modernisa-tion plan, noting that Pakistan’s tax-to-GDP ratio had improved from 8.8pc in 2024 to 10.24pc in 2025.

Later, in a meeting with Pakistani entrepreneurs, the finance minister discussed efforts to streamline regulations, improve taxation and resolve energy and privatisation-related issues. He also invited proposals to further strengthen Pak-US economic ties.

Published in Dawn, October 17th, 2025





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Cooling Karachi with green buildings

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Karachi’s urban context is characterised by dense and narrow streets, frequent and long power outages, limited ventilation, and a general inability to afford air-conditioning, which often results in energy theft. In such environments, making green building codes mandatory is a required shift from governing and development bodies. Temperatures are rising every year, as is inflation, making thermal comfort unaffordable for lower as well as middle-income groups.

Regulations can be tailored to development size, with support mechanisms for enforcement, legal implications, and economic benefits of each law. Right now, most green ratings, such as LEED [Leadership in Energy and Environmental Desigh] or EDGE [Excellence in Design for Greater Efficiencies], are only relevant for high-end projects, therefore irrelevant for low- and middle-income developments.

Karachi’s current bylaws require that rooms in a building or house have a minimum percentage of openings or windows; for example, in a living room the opening size should be 10 per cent of the area of the room; this changes to 7.5pc for other rooms and 15pc for the kitchen.

All this looks impressive on paper, but that does not guarantee human comfort. These regulations were written decades ago, focusing on hygiene, and are not practical for today’s extreme heat.

The city’s building codes must take into account the sweltering heat when most of its people can’t afford to keep cool

Building codes in neighbouring countries, like India, or international standards like ASHRAE [American Society of Heating, Refrigerating and Air Conditioning Engineers] are focusing on performance. Instead of specifying how big a window should be, we need to ask basic design questions like, ‘Does this room have adequate fresh air? Is it designed to allow cross ventilation?’

The building codes in India ensure cross-ventilation in at least two rooms of every house, while internationally the number of times air should be replaced each hour to keep people comfortable is also specified. Karachi’s bylaws should enforce wind direction consideration and encourage the use of high and low vents, cement lattices, roof turbines, etc to ensure habitability during power outages. Ventilation is considered a formality, but elsewhere it is considered a necessity for making buildings habitable and comfortable.

Furthermore, roof cooling treatments should be made mandatory, like reflective lime plaster, reflective paints, or clay tile surfacing. Integration of green roofs in projects above 500 sqm, depending on optimum load capacity, should be compulsory. The CoolRoof Programme in Ahmedabad started as a pilot and is now a municipal regulation, serving as a key example from our own context. In the same vein, the use of solid blocks without insulation should be banned for south-facing external walls. While builders argue against prices of such products, it has overall reduced the structural cost of the building due to reduced load, hence it is more a matter of convenience rather than cost.

Another way to improve comfort is to make all external plaster/paint meet minimum reflectance, hence reflecting the maximum amount of radiation from the sun instead of absorbing it.

Countries like Bangladesh, India, and Egypt have set U-values (how fast heat dissipates) and R-values (the wall’s resistance to heat) for any construction, which mandate the use of insulated materials. Karachi desperately needs such a green building code.

As for the surrounding area, shading devices such as chajjas, verandahs, or sun breakers should be mandatory on south- and west-facing facades. The devices should leave 50pc uncovered yard space that lets rainwater soak in and trees grow, with one shaded tree per 30ft of frontage compulsory.

Efficient water management can also play an important role in cooling our city. Rainwater harvesting pits, permeable paving and low-flow fixtures in homes can help cut wastage. For larger projects, a required portion of grey water (from sinks and showers) is to be recycled for landscaping or flushing. This will ensure that saving water becomes a standard like laying bricks.

For effective implementation, the builder community must foresee the financial value in adopting these rules. While this can bring prestige and recognition in upper-income residential projects, middle- and lower-middle-income group housing needs to be targeted. Bulk procurement, tax breaks and reduced approval fees can be offered as incentives.

Finally, instead of solely relying on government agencies, which are often mistrusted, incentives could be built into the system. For example, housing finance institutions and banks can offer lower interest rates and easier loan terms for greener projects. The creation of bulk-purchasing networks by material suppliers will ensure that eco-friendly products are available at lower prices so the builders naturally shift towards them. Housing cooperatives, neighbourhood associations and buyers’ groups can create a demand for cooler homes; builders will adapt for competition.

These are not luxury ideas but a necessity for survival in a city where most people cannot afford air-conditioning. Government agencies, private institutions and citizens must act with urgency to ensure comfortable living across all income groups.

The writer is an architech and urban planner, currently leading her own practice, “Beyond Facades”

Published in Dawn, The Business and Finance Weekly, October 27th, 2025



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Govt to defer gas import plans as demand eases, LNG glut extends

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• UK-based firm projects 3pc fall in national gas demand during 2025-40
• Urges reforms as circular debt rises due to price distortions, market imbalances

ISLAMABAD: Despite population projections of 325 million over the next 15 years and rising overall energy needs, Pakistan may have to put off gas import options owing to declining demand until 2040 and the surplus of liquefied natural gas (LNG) going beyond 2031.

Sources told Dawn that an “all-of-government” approach is under consideration to slow-pedal both pipeline imports — from Turkmenistan and Iran — and readjust LNG supply schedules, while pushing through structural reforms to underpin sustainable growth.

The rethink follows a study by UK-based consultancy Wood Mackenzie, which projects a three per cent decline in national gas demand during 2025-40 under a business-as-usual scenario, even as total gas availability — including take-or-pay LNG — rises into the early 2030s.

The total gas supply, including that of LNG contracts, has been estimated to peak at five million cubic feet per day (mmcfd) by 2031 from around 3.8mmcfd today, up 31pc.

Demand, on the other hand, is projected to decline by 3.8pc by 2031 and 2.5pc in the subsequent nine years, with a cumulative average of 3pc between now and 2040. This takes into account more than a 12pc fall in the power sector’s gas needs and 2.8pc and 4pc growth in industrial and domestic needs, according to the study reviewed by Dawn.

“A clear pathway to address the structural market issues and towards greater market liberalisation is required as circular debt continues to escalate due to price distortions, inefficient resource allocation and market imbalances,” suggested the consulting firm, pointing out that addressing the root cause of the problem was to fix structural issues that have contributed to the issue of circular debt and to evolve the sector to Pakistan’s needs.

The reform areas would include constraints to investments for fresh exploration and production, weighted average costing of all gas sources, power sector gas offtake issues, forced curtailment of domestic fields, runaway gas losses, limited gas storage and increasing solarisation.

One of the key takeaways from the study is that Pakistan will not require as much LNG as originally anticipated, even in the near to mid-term, hence the need to develop an LNG import strategy to determine measures to deal with existing contractual arrangements, “assessing all options on the table”.

The low demand and higher import contracts are already taking a heavy toll on exploration and development activities in the country, with long-term adverse consequences — gas import costs in any shape are more than double the local production.

On the other hand, the report anticipated a new wave of LNG supply, indicating pricing cuts as the US and Qatar account for more than half of global LNG supply over the next decade, but Pakistan hardly benefits.

“The new wave of LNG supply will start putting pressure on prices from 2026, with the expectation of long-term prices being set by marginal US LNG cargoes,” it said. Simultaneously, LNG demand will be rising by 3pc over the 2025-40 period from over 400 million tonnes per annum to 675 mpta, mainly due to LNG demand growth in the Asia Pacific.

At present, fossil fuels account for about 88pc of total end-use consumption in Pakistan, of which gas and oil account for around 42pc and 29pc, respectively.

By 2040, while still dominant, consumption of fossil fuels is estimated to decline to about 84pc, with gas share coming down to 30pc and share of oil going up to 34pc, mainly owing to growing demand in the transportation sector.

Primary energy demand is expected to grow from about 88 million tonnes of oil equivalent now to over 99 million tonnes by 2030.

The power sector remains the key problem. Pakistan is going through a paradigm shift, both in terms of a reduction in demand (especially power and captive power plants) and the premise of greater availability of domestic supply.

“Full alignment and commitment of the plan for gas offtake from the power sector is crucial as it will shape how Pakistan’s overall gas demand will evolve,” the report said, but warned that challenges of the exploration and production sector will need to be addressed to realise forecasted supplies, as the LNG glut has forced closure of local gas fields.

It noted that while the country had made progress towards macroeconomic stabilisation, further reforms were required to sustain economic growth as the population was expected to reach 325 million by 2040, at a steady growth of 2pc and a young demographic, maintaining its position among the top five most populous countries.

Between 2025-40, economic activity is expected to grow with a long-term GDP compound annual growth rate of 3.7pc. Economic activity is expected to continue recovering, as the economy benefits from the availability of imported inputs, easing domestic supply chain disruptions and lower inflation,” it said.

The study forecast the industrial production achieving an annual growth rate of 4pc over the next 15 years. It also noted that while Pakistan’s growing population offered potential demographic dividend, the country faced significant challenges in harnessing this potential due to existing resource constraints, infrastructure deficits and employment issues. The population growth will nevertheless increase energy demand in residential sectors for heating and cooking and power generation to meet rising electricity needs and transportation.

Published in Dawn, October 27th, 2025



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Challenges to Pakistan’s cotton sector are far from over

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https://www.dawn.com/news/1951371



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