Islamabad, Pakistan – Pakistan’s new army chief has held talks with top Saudi officials, including the defence minister, on his first official trip to the Gulf kingdom as the South Asian country faces an unprecedented economic crisis.
General Syed Asim Munir, who took charge in November, has followed in the footsteps of his predecessors in visiting Saudi Arabia – a close defence and economic ally – on his maiden overseas trip. He will also visit the United Arab Emirates during the nearly one-week trip.
“The COAS will be meeting the senior leadership of both brotherly countries to discuss matters of mutual interest, military-to-military cooperation and bilateral relations focusing on security-related subjects,” the Inter-Services Public Relations (ISPR), the military’s media wing, said in a statement on Wednesday.
General Munir discussed military cooperation with Saudi defence minister Prince Khalid bin Salman bin Abdulaziz in the capital Riyadh on Thursday, according to the Saudi Press Agency.
“We emphasised the strategic partnership between our brotherly countries, reviewed the bilateral military and defense relations, and discussed ways of strengthening our cooperation,” Prince Khalid bin Salman tweeted.
‘Vulnerable financial situation’
The current visit by General Munir came at a time when Pakistan faced a crippling economic crisis as the country’s foreign reserves have depleted to less than $6bn – its lowest since April 2014 – which can just cover a month of import. Inflation has been skyrocketing while the country is also dealing with the aftermath of last year’s catastrophic floods that resulted in an estimated loss of more than $30bn.
Earlier this week, Pakistani finance minister Ishaq Dar in a news conference expressed hope that Saudi Arabia will park its deposits in the central bank to provide some relief to the economy.
Islamabad needed Saudi money to shore foreign reserves and ensure a safety valve from default. Riyadh deposited $3bn in November 2021, under the tenure of former Prime Minister Imran Khan. Last month, the kingdom extended the terms of the fund.
Since taking office last April, Prime Minister Shehbaz Sharif has travelled to several Gulf countries to seek economic aid and investment. According to official data between April to November last year, Saudi Arabia has given more than $900m in aid and $500m for importing oil. Qatar promised to invest $3bn during Sharif’s trip to Doha in August.
Islamabad-based analyst Mohammed Faisal believed that General Munir’s visit must be seen from the lens of the economy as it comes at a time of “particularly vulnerable financial situation”.
“Pakistani leadership is looking towards Saudi royals to shore up the depleting foreign reserves to avert default. For Islamabad, a key outcome of the trip would be a Saudi announcement of financial assistance,” he told Al Jazeera.
Pakistan managed to secure a loan from the International Monetary Fund (IMF) worth $1.17bn in August. But the next tranche of the $1.18bn loan has been delayed. Islamabad is still negotiating with IMF for the next tranche.
In September, the Pakistan finance minister resigned while the government seems unwilling to accept IMF conditions, including increasing levies on fuel.
Pakistan has been teetering on the brink of default, which, in simple terms, means the country cannot pay back what it is owed and the treasury does not have sufficient money to meet its debt obligations. Experts have feared Pakistan is headed to a Sri Lanka-like default situation and that it can be only prevented by deft handling of the economy.
From the Saudi perspective, Faisal said, the Gulf nation wanted to maintain the relationship with Pakistan because the country was an important element of Saudi regional strategy.
“Saudi Arabia is aware that Pakistan, a large Muslim-majority country endorses Saudi claim to be the guardian of two of Islam’s holiest sites in Mecca and Medina,” Faisal told Al Jazeera.
Close ties
With the relationship between the two nations going back more than 50 years, this is not the first time a Pakistani leader, either civilian or military, has picked the kingdom as their first destination after taking charge.
Both the current Prime Minister Sharif and his predecessor Khan travelled to Saudi Arabia on their maiden visits in 2018 and 2022 respectively.
The last two former army chiefs, General Qamar Javed Bajwa – Munir’s predecessor, and General Raheel Sharif, went to Saudi Arabia for their first trip.
Sharif, after his retirement in November 2016, subsequently became the commander-in-chief of the Saudi-led Islamic Military Counter Terrorism Coalition, a 41-nation alliance of Muslim countries located in Riyadh.
Pakistan’s former envoy to Saudi Arabia Shahid M Amin said that the relationship between the two nations is historic in nature and, while Pakistan often needs economic support, it also has provided security assistance to Saudi Arabia.
“The two countries have engaged in various sectors such as economy, labour, trade, security and the fact that the current army chief went to Saudi Arabia, it is merely a continuation of a pattern.”
Amin told Al Jazeera that Pakistani manpower was the key driver for Saudi development for more than five decades. Pakistan, too, Amin said, has made commitments to protect the kingdom in case of any security concerns.
A retired senior military officer, Omar Mahmood Hayat, concurred with Amin’s views and said that the relationship is time-tested.
“One of our oldest and biggest bilateral military exercises has been with Saudi Arabia. We have a very strong training team deployed in Saudi for decades,” he said.
General Munir himself has served time in Saudi Arabia as part of the Pakistani army’s close defence cooperation with the kingdom.
Hayat further added that with Kingdom itself a very strong member of various international forums, it helps echo Pakistan’s point of view, as well.
“It makes a lot of sense that this should be the first visit as has always been,” he said.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
