Pakistan is in talks to release of $1.1bn (£890m) of cash from the International Monetary Fund (IMF) to help ease its financial crisis.
Pakistan’s economic woes are a culmination of years of political turmoil, a financial crisis and last year’s catastrophic floods, with its reserves only able to cover three weeks – rather than the required three months.
Inflation is also thought to stand at around 24% to 26%, according to the country’s finance ministry, and the currency has been devalued against the dollar.
The IMF delegation will be encouraging the Pakistani government to implement bold cost-cutting measures to help it bridge its financial gap, with mission chief Nathan Porter saying: “You don’t have any other option.”
In 2019, Pakistan secured a $6bn (£4.9bn) bailout from the IMF. It got another $1bn (£811m) last year to help overcome the devastating floods, but in November the IMF suspended payments, saying the government failed to make progress on its fiscal consolidation.
In response, Ishaq Dar, the country’s finance minister, told the IMF it had made some efforts to bring its crisis under control, including increasing taxes on petrol and natural gas, and increased prices for electricity.
If released, the cash from the IMF would go towards paying its external debt to the tune of $8bn, which has to be paid by the end of June.
Backlogs at ports, factories closed and electricity blackouts
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The government has stopped issuing lines of credit, causing a backlog of container ships at the port of Karachi, while industry has been battered by the currency devaluation and imports block.
Domestic investment has dried up, with textile factories partially closing due to demand, and construction projects have been delayed due to lack of investment.
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Communities flee flooding
There has also been severe energy shortages, which has hindered remaining economic activity, while companies that generate and supply energy struggle with the high costs of fuel and turn off the electricity grid to save money.
Last week the country of 243 million people was plunged into darkness after a major breakdown of the national grid, which lasted several hours – the impact was felt on schools, hospitals, businesses and industry further hindering economic activity.
The country’s economy has been faltering for many years, with the floods in 2022 pushing it over the edge.
Pakistan’s floods impacted a third of the country and wiped out millions of hectares of crops. Almost 2,000 people were killed, and around 33 million people were displaced, with damage thought to cost around $40bn (£32.4bn).
Successive governments have been accused of making little effort to widening the tax net and increasing sources of revenue, while loans from allies such as China, Saudi Arabia and the United Arab Emirates kept its economy afloat.
Image: Fuel taxes have been increased. File pic: Reuters
Some blame former PM Imran Khan
Former prime minister Imran Khan, and his government, have been accused of contributing to the immediate crisis. A year into his premiership, the fiscal deficit shot to a record high of $25.3bn (£20.5bn) and by the time he was ousted early last year, inflation was over 12%.
Mr Khan delayed approaching the IMF, despite economists recommending it, saying he wants to shun the practice of approaching foreign entities with a “begging bowl”.
However, his government was unable to bear the costs of a slew of welfare schemes it rolled out – though it helped his popularity.
His government’s reluctance to increase fuel costs, even in early 2022 when international crude rates had breached the $100 mark due to the war in Ukraine war, meant the state exchequer lost precious dollars.
Is Pakistan going the same way as Sri Lanka?
There is comparison of what is taking place in Pakistan with the collapse of the Sri Lankan economy last year.
But this is unlikely, as almost half of Sri Lanka’s external debt was owed to private creditors while for Pakistan, this is only about 8% of what it owes.
Pakistan’s large bilateral loan payments are to friendly countries like Saudi Arabia, the UAE, and China, which will be rolled over.
With the present government starting to implement changes that would satisfy the IMF and a release of the $1.1bn tranche, this will pave the way for the release of the loan and other bilateral assistances.
But more importantly, Pakistan is a nuclear nation and a geostrategic country, and its allies, and the world, would prevent its economy from collapsing.
Venezuela has accused the US of “piracy” after an oil tanker was seized off the country’s coast.
Donald Trump announced the operation had taken place during a meeting of business leaders at the White House, telling reporters: “We’ve just seized a tanker on the coast of Venezuela, a large tanker, very large, largest one ever seized, actually.”
Attorney General Pam Bondi shared a video of the operation, revealing the FBI, Homeland Security, US Coast Guard, and Department of Defence were involved.
She said the US forces “executed a seizure warrant for a crude oil tanker used to transport sanctioned oil from Venezuela and Iran”.
Venezuela’s government said the seizure “constitutes a blatant theft and an act of international piracy.”
Image: Pics: X/@AGPamBondi
Ms Bondi said the seized vessel – believed to be a tanker named Skipper – has been sanctioned by the US for many years “due to its involvement in an illicit oil shipping network supporting foreign terrorist organisations”.
She did not name the vessel, what flag it sailed under, or exactly where the incident took place.
UK maritime risk management group Vanguard said that the tanker Skipper – which the US sanctioned for alleged involvement in Iranian oil trading under the name Adisa – was believed to be the target.
Trump offers ominous commentary
Without giving additional information on the operation, Mr Trump added during the White House meeting that “other things are happening”.
Later, Mr Trump said the tanker was “seized for a very good reason”, and when asked what will happen to the oil on board, he added: “Well, we keep it, I suppose.”
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US seizing oil tanker a ‘significant escalation’
How did we get here?
It marks another escalation from the US after months of pressure on Venezuelan President Nicolas Maduro.
The White House accuses Mr Maduro of presiding over a narcotrafficking operation in Venezuela, which he denies.
The US has escalated military deployments against the Latin American country over the last few months, with the president suggesting American forces could launch a land attack.
Speaking to Politico on Tuesday, Mr Trump declined to comment on whether US troops would enter Venezuela, but warned Mr Maduro’s “days are numbered”.
US interception of oil tanker raises more questions about international law
The seizing of an oil tanker off the coast of Venezuela is a significant escalation in US tactics.
By targeting an oil shipment, rather than a suspected drug boat, Washington has signalled its willingness to disrupt exports.
President Trump seems determined to shut down one of the last major sources of funding for Nicholas Maduro’s embattled government.
Nine months ago, Trump imposed a 25% tariff on all goods imported into the US from any country buying oil or gas from Venezuela.
This is even more aggressive and will be viewed in Caracas as a direct threat to the country’s economy and sovereignty.
The interception of the tanker raises more questions about international maritime law and the reach of US enforcement powers.
In the space of four months, the US has bombed 23 boats, killing 87 people, accusing the occupants of being “narco-terrorists”.
It will also fuel speculation that airstrikes are imminent, President Trump having posted two weeks ago that he had closed the airspace.
Venezuela: ‘It has always been about our oil’
The Maduro government describes America’s actions as a grab for Venezuela’s oil reserves, which are among the biggest in the world.
At a rally before a ruling-party-organised demonstration in Caracas on Wednesday, Mr Maduro did not address the seizure but told supporters Venezuela is “prepared to break the teeth of the North American empire if necessary”.
Flanked by senior officials, he said that only the ruling party can “guarantee peace, stability, and the harmonious development of Venezuela, South America and the Caribbean”.
His government did issue a statement, accusing the US of “piracy” and “imperial abuses”.
Of the US campaign, it said: “It has always been about our natural resources, our oil, our energy, the resources that belong exclusively to the Venezuelan people.”
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Are US strikes on Venezuela about drugs or oil?
Is military confrontation possible?
Geoffrey Corn, director of the Centre for Military Law at Texas Tech University, told Sky’s Mark Austin on The World that Mr Trump’s remarks on land strikes “ostensibly” refer to drug cartel members.
Formerly a senior adviser to the US army on warfare law, Mr Corn added: “That could very easily provide the pretext for some confrontation between Venezuelan armed forces and US armed forces.
“And then that would open the door to a broader campaign to basically negate the power of the Venezuelan military.”
Tributes have been paid to a British soldier killed in Ukraine, as the country’s allies prepare for talks before a crucial potential meeting with Donald Trump.
Lance Corporal George Hooley, 28, has been named as the paratrooper who died in a “tragic accident” on Tuesday while observing Ukrainian forces testing a new defensive capability away from the frontline.
The Ministry of Defence (MoD) said he joined the army in November 2015 and was “an exceptional soldier”.
Defence Secretary John Healey said he “served our country with distinction and professionalism” and “will be very deeply missed”.
He added: “George’s tragic death reminds us of the courage and commitment with which our outstanding armed forces serve every day to protect our nation.”
Coalition of the willing to meet
Britain has been one of Ukraine’s biggest backers since Russia launched its full-scale invasion in February 2022, and that support will again come into play on Thursday.
Volodymyr Zelenskyy will hold a virtual meeting with members of the self-styled coalition of the willing, after reports Kyiv has handed its revised peace deal proposal to US negotiators.
Mr Zelenskyy said the revised proposal has 20 points, after some “obvious anti-Ukrainian points were removed”.
The original US draft proposal had 28 points, and was seen as favouring Russia.
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Trump could ‘pull plug’ on Ukraine
Zelenskyy hopeful of progress
Ukraine has sought to change some key clauses, such as territorial issues and security guarantees, following talks with US and European negotiators.
In his nightly address on Wednesday, Mr Zelenskyy said his country is also drafting two additional documents: the first regarding US security guarantees and the second on the economy and reconstruction.
He said Kyiv’s peace delegation held a “productive conversation” with the US earlier, and “discussed key issues for recovery, various mechanisms, and visions of reconstruction”.
He also revealed he discussed the possibility of holding elections with Ukraine’s parliament, but that holding elections under martial law was not easy.
Trump has ‘strong words’ with European leaders
It comes after Donald Trump used an interview with Politico to accuse Mr Zelenskyy of “using war” to avoid holding elections. The US president also claimed his Ukrainian counterpart had not read the original 28-point peace plan.
Mr Trump held a call with coalition of the willing members Sir Keir Starmer, Emmanuel Macron, ad Friedrich Merz on Wednesday, and said some “pretty strong words” were exchanged.
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Why is Trump attacking European allies?
Speaking at the White House on Wednesday, Mr Trump said Mr Zelenskyy was keen on a meeting involving him and European leaders this weekend, but warned his attendance will be “based on what they come back with”.
Today’s virtual meeting comes days after Sir Keir hosted Mr Zelenskyy, Mr Macron and Mr Merz in Downing Street.
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Zelenskyy meets leaders in Downing Street
The period of intense diplomacy comes as the fighting continues on the ground in Ukraine.
Its military says it’s still fending off a Russian assault launched on the key city of Pokrovsk, while energy infrastructure has been targeted by drones in southern Odesa.
The Venezuelan opposition leader Maria Corina Machado didn’t make it to Oslo in time to receive the Nobel Peace Prize in person, in an extraordinary day shrouded in uncertainty over her whereabouts.
Machado isn’t the first Nobel Laureate unable to attend, but her journey to Oslo was unprecedented in the history of the prestigious prize.
Her departure from Venezuela, carried out amid heavy secrecy and probably with covert US help, was fraught with risk, but on Wednesday she was en route to Norway, where she is expected to land late in the evening.
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Sister’s ‘mixed emotions’ over Nobel prize
Image: Venezuela’s President Nicolas Maduro joins supporters marching to commemorate the Battle of Santa Ines. Pic: Reuters
Reports suggested she first travelled by boat to the Caribbean island of Curaçao before getting a private flight via the US. Two US F-16 jets were tracked in the skies close to Curaçao late Tuesday night.
In a phone call with members of the Nobel Institute, released just after she took off, Machado said she was “very sad” not to make it in person but “as soon as I arrive, I will be able to embrace all my family and children.”
In her absence, her daughter Ana Corina Sosa Machado, whom she hasn’t seen for almost two years, collected the award in Oslo City Hall and delivered the speech her mother wrote.
She spoke about 2,500 people who had been “kidnapped, disappeared or tortured” under Venezuelan president Nicolas Maduro’sgovernment and slammed the corruption that has brought Venezuela, once one of the world’s richest nations, to its knees.
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“This prize carries profound meaning; it reminds the world that democracy is essential to peace.
“More than anything, what we Venezuelans can offer the world is the lesson forged through this long and difficult journey – that to have democracy, we must be willing to fight for freedom.”
Image: Maria Corina Machado addresses supporters at an anti-Maduro protest in January. File pic: AP
Image: Corina Perez de Machado, mother of Maria Corina Machado, at the Nobel Peace Prize ceremony in Oslo. Pic: Reuters
To a standing ovation from an audience that included several South American leaders, Machado thanked the people of Norway and sent a message to her fellow countrymen and women, many of whom had travelled to Oslo from their homes outside Venezuela.
“Venezuela will breathe again,” her daughter read.
“We will open prison doors and watch thousands who were unjustly detained step into the warm sun, embraced at last by those who never stopped fighting for them.
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Are US strikes on Venezuela about drugs or oil?
“We will see our grandmothers settle children on their laps to tell them stories not of distant forefathers but of their own parents’ courage.
“We will hug again. Fall in love again. Hear our streets fill with laughter and music. All the simple joys the world takes for granted will be ours.”
Ms Machado is the leader of a grassroots political movement fighting for democracy in Venezuela.
She was banned by Nicolas Maduro from running for election, so she rallied a campaign behind a little-known veteran diplomat Edmundo Gonzalez.
She organised and trained more than a million volunteers to monitor elections in 2024 and collect data.
Those results, smuggled out of the country, were verified by independent experts and confirmed a landslide win for Gonzalez and Machado’s party.
Maduro refused to recognise the result and detained thousands of opponents.
Protests have failed to dislodge him, although US president Donald Trump has stationed a massive naval force off the coast and has warned the Venezuelan leader his “days are numbered”.
Mr Trump had lobbied publicly to win this year’s Nobel Prize himself, but rang Machado to congratulate her. Some members of Trump’s administration had threatened the Nobel committee if he didn’t win.
Edmundo Gonzalez, who was at the ceremony in Oslo, has since gone into exile in Spain, but Machado has remained in Venezuela, spending most of her time in hiding.
Her mother, sister and children have also travelled to Oslo to be reunited with her.
The decision to travel to Norway is fraught with risk.
Having successfully left the country, she faces a dangerous journey home again.