Coalition government headed by Shehbaz Sharif in Pakistan faces daunting challenges

Newly installed government in Pakistan headed by Prime Minister, Shehbaz Sharif is facing the daunting task of managing a faltering economy with huge deficits. 

Shehbaz, 70, the younger brother of former premier Nawaz Sharif, was elected as prime minister on Monday followed by a week-long constitutional crisis after parliament ousted Imran Khan in a no-confidence vote.

“Imran Khan has left a critical mess,” Miftah Ismail, who is likely to be Sharif’s Finance Minister, told a news conference in Islamabad, adding the suspended talks with the International Monetary Fund (IMF) would be resumed on priority.

“We will restart talks with the IMF,” he said.

Ismail repeated Sharif’s concerns raised in his maiden speech in parliament at what he described as record deficits his government will inherit from Khan, who was accused by the opposition of mismanaging the economy.

Sharif set up a National Economic Advisory Council in his first meeting on Tuesday.

The IMF had suspended talks ahead of the seventh review of a US$6 billion rescue programme agreed in July 2019.

Pakistan’s current account deficit is projected at around 4% of GDP for the current fiscal year (FY22), the country’s central bank said last week. The foreign exchange reserves held by Pakistan dropped to US$11.3 billion as on April 01, 2022 as compared with $16.2 billion less than a month earlier.

The central bank last week hiked key interest rates by 250 basis points to 12.25% in an emergency decision, the biggest hike in decades, citing deterioration in the outlook for inflation and an increase in risks to external stability, heightened by the Russia-Ukraine conflict, as well as local political uncertainty.

The bank also revised average inflation forecasts upwards to slightly above 11% in FY22, ending June 30, 2022.

Dawn, leading English newspaper of Pakistan in its Editorial on April 12, 2022 has highlighted that Shehbaz Sharif has inherited some daunting challenges. These include, but are not limited to, a worsening economic crisis, growing political turmoil, deteriorating relations with the Western powers, and the resurgence of militancy in some parts of the country.

The Editorial says, “We have no idea whether the ruling coalition that consists of disparate parties and groups, with often conflicting political and economic aims, will stick together until the elections are called. They may have achieved their common goal of ousting Imran Khan from power, but facets of their long-term plan are still to be revealed.”

“With the PTI quitting the National Assembly and pledging to build up strong public pressure on its successors for early elections in the country, it will not be all smooth sailing for the new administration.”

It continued, “Fixing the broken economy is probably the most formidable challenge facing Sharif’s cabinet, and he should place it on top of his agenda. The PTI had inherited a bad economy that it has left in far worse condition; ordinary people are grappling with elevated double-digit inflation, as well as wage and job losses, as macroeconomic indicators decline.”

“The crisis of balance of payments is already back, after a short Covid-related respite, as much-needed multilateral assistance is on hold because of uncertain political conditions in the country. Elevated international commodity prices, particularly food and crude oil, are putting additional pressure on a frail external sector.”

Improving the economy requires tough decisions, such as the immediate removal of the cap on electricity and petroleum prices and renegotiating a new loan with the IMF, which will be hard, if not impossible, without repairing diplomatic relations with the United States and other Western powers.

The biggest question is, can the ruling coalition take these politically unpopular but vital decisions?

New elections are not very far off, and Imran Khan’s PTI will be scrutinising and criticising every move of the new set-up. The populist announcements, like the 10pc raise in pay and pension of government employees and the provision of subsidised wheat flour, made by Shehbaz Sharif in his speech in the House, soon after his election as prime minister, are indicative of the extreme pressure he must be feeling.

With forbidding political and economic realities on one side and high public expectations on the other, the coalition government and its leader do not have too many options on the table as they get ready to deal with multiple crises, at least not at the moment.

The enormity of the economic and foreign policy challenges demands a strong government, which is not encumbered by uncertainty over its future and has the public mandate to take tough and unpopular decisions. The wiser course would be to reform the electoral laws and move towards new elections at the earliest.

Is imposition of sanctions on Russia fueling price hike?

The western media has started playing mantra that Russian invasion of Ukraine and the imposition of economic sanctions on Moscow are contributing to surging global prices, particularly at the grocery stores and the gas pumps.

Russia’s status as a major exporter of raw materials, especially oil and natural gas, along with Ukraine’s position as a key agricultural supplier to regions including Africa and the Middle East, make the conflict between the two countries a flashpoint for commodity prices, which were already on the rise due to the pandemic.

“These countries export a lot of raw materials,” William Reinsch, a former Undersecretary of Commerce who now serves as international business analyst at the Center for Strategic and International Studies, said in an interview. “They tend to have a world price. And so when supply is constricted, the consequence for Americans is that the price goes up because it goes up everywhere.”

New consumer price index (CPI) data to be released Tuesday by the Labor Department is likely to show another sharp jump in both monthly and annual inflation. Consumer prices rose by 7.9% in the year ending in February, and signs of high inflation in March are mounting.

On Friday, the Food and Agriculture Organization (FAO) of the United Nations recorded a 12.6% increase in its benchmark food price index from February to March, an uptick it described as a “giant leap.” The March numbers represent all-time highs for cereal grains, vegetable oils and meats, while the sugar and dairy sectors also saw major gains.

The FAO cereal price index in particular saw a 17.1% increase from February to March, marking its highest level since 1990. The increase was “largely driven by conflict-related export disruptions from Ukraine and, to a lesser extent, the Russian Federation,” according to an FAO assessment.

The global numbers are consistent with the situation in the United States, where food prices spiked 7.9% in February as compared to the previous year, the largest 12-month increase since July 1981, according to consumer data from the US Bureau of Labor Statistics. The February food-at-home index, which looks at prices relating to domestic food preparation, was up nearly 9% in the same period, while wholesale prices for goods jumped 2.4% in February, the largest advance since data was first calculated in 2009. 

The war in Ukraine also accelerated a steady rise in oil prices driven largely by the recovery from the pandemic. Fuel oil prices rose 6.7% and gas prices rose 6.6% in February alone, according to the CPI as crude oil prices rose toward US$100/barrel. 

The price of a barrel of West Texas Intermediate crude peaked near US$130 on March 8 before falling to roughly US$94 on Monday, but gasoline prices have not fallen nearly as fast. A gallon of regular unleaded gas costs roughly US$4.10, according to the AAA national average, down just 20 cents from a month ago.

While inflation-adjusted gas prices are still below the peaks seen in the wake of the Great Recession, higher energy costs can hit consumers harder than inflation in other sectors. Higher gas prices are not only difficult to avoid for drivers but can also increase transportation costs for store-bought goods.

Beyond the cumulative effects of rising commodity prices, which can ripple through the economy and become magnified as they work their way up global production pipelines, Russia does produce certain goods that US companies, and by extension the nation’s consumers, use directly. “Palladium, vanadium and titanium are three such goods,” said Reinsch.

Palladium is a component in catalytic converters, which convert toxic gasses produced by internal combustion engines into less toxic pollutants. Vanadium is added to steel to make it stronger, and titanium has numerous applications including aircraft shells.

“There are others who produce these products,” Reinsch said. “But again, it is supply chain interruptions, and we have to scramble around to find them from other places.”

As more Americans feel the sting of inflation, the upswing in prices has emerged as a major campaign issue ahead of the 2022 midterm elections, with Republicans and Democrats taking turns placing blame for the upward trend in costs.

Republicans have blamed rising inflation on Democratic-backed policies, including the US$1.9 trillion American Rescue Plan that President Biden signed into law in March 2021, about a year after former President Trump signed a bipartisan $2 trillion coronavirus relief package.

A number of Democrats have, in turn, placed blame on corporations and market concentration, accusing larger companies of taking advantage of economic conditions to increase costs.

By contrast, experts have pointed to a combination of factors that have contributed to the higher price stickers.

“Part of it is supply chain disruptions because of the pandemic. We can’t get the goods that we got before, for instance, like computer chips, and so on,” Desmond Lachman, said a senior fellow for the American Enterprise Institute. 

“But it was also the case that budget policy was too loose, and monetary policy was too loose. So we had all three things pushing in the same direction,” he said.

Ben Page, senior fellow at the Urban-Brookings Tax Policy Center, also said that stimulative fiscal policy contributed to inflation but added he wouldn’t call it the “root cause for most of the inflation.” 

“I think the way that you can see that it’s not purely driven by US policy is that it’s not just a US phenomenon,” Page said. “The increased inflation is something that we’ve seen across the world, or certainly across the developed world.”

In recent weeks, countries such as China, Egypt and France have seen rising inflation rates, a trend expert say is exacerbating by the ongoing Russia-Ukraine war.

The US has joined allies in unleashing a spate of sanctions on Russia in response to its invasion of Ukraine. 

Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, said many of the sanctions have been aimed at raising costs for Russia and restricting how its government accesses the global financial system.

“So, limiting their bank’s ability to the government’s ability to use global banks,” Ziemba continued. “And the sanctions program was set up in a way that tried to use the areas of asymmetry that would hurt Russia more than it would hurt the US and Europe.”

On the flip side, Ziemba said some of the impacts the US has seen as a result of the sanctions have been “sort of indirect,” while Russia has faced more payment challenges.

“The other issue, of course, the Biden administration is trying to do what they can to alleviate some of these costs. The challenges are we’re in a tight market … and I do think one of the challenges is going to be that a number of the producers of particularly oil and gas don’t make decisions quickly to change their production,” Ziemba said.

“I think that’s where the debates with sort of countries like Saudi Arabia and the UAE [United Arab Emirates] have been reluctant to deviate from their go-slow additional supply policy have been disappointing to the administration,” she added.

 

Can Germany afford to cut off Russian energy supplies?

Speaking to journalists in London alongside UK Prime Minister Boris Johnson, the German Chancellor Olaf Scholz said, "Germany is actively working to get independent from the import of Russian oil and we will be able to make it during this year.”

The statement seems to be aimed at pleasing the Anglo-sphere which has taken much tougher and quicker measures on banning Russian energy imports over Moscow’s military operation in Ukraine. 

Germany is heavily reliant on Russian energy, in particular gas. Back at home, there has been alarm among industry chiefs and politicians saying it would lead to huge rises in energy prices as well as shortages of energy to serve the country as well as ordinary households. 

Any quick measures to completely shut the tap on Russian energy may cripple Europe’s strongest economy. A German government source told British media “what use to anybody is a weakened Germany?” 

Berlin has already established a crisis team to deal with the contingency plans, something that Germany's industrial sector has sounded the alarm over saying they would be forced to shut production. 

The country announced its withdrawal from nuclear power after the 2011 Fukushima disaster in Japan, and in 2019 said it would pull the plug on coal-fired plants. 

Businesses across the country are bracing themselves for supplies to be cut either from Russian retaliation over Western sanctions or Berlin joining the Western energy embargo on Russian oil and gas supplies. 

The owner of a hi-tech mechanical engineering company in the country’s west spoke to media on condition of anonymity and refused to name his company because of fears of appearing to support Russia’s military operation.”

He said, “If Russian gas is cut off, his business which has been operating for a century now “will likely not survive”. 

He also added that “It would be a disaster, one which would have seemed almost unthinkable just two months ago, but which right now feels like a very realistic prospect.”

Industry managers and political leaders have warned that the damage which will be imposed on Germany by abandoning Russian energy supplies would be far stronger than any benefit it would bring to Ukraine.

Millions of German households without heat this winter is one of the most concerning matter. The other major concern is the hundreds of thousands of small and medium-sized businesses which are interlinked with manufacturing giants, all dependent on gas to operate. 

Both small and giant business companies are likely to suffer with huge rises in energy prices as well as mass shortages.

The German Institute for Economic Research (DIW) has come up with a model for how Germany can free itself from Russian supplies by this year’s winter.  

The popular think tank has suggested alternative suppliers and lower consumption which means households will have to turn down thermostats and use less warm water during what are usually long and very chilly winter conditions in Europe. 

The DIW report itself acknowledges that added supply alone will not be enough to make up the current volume of Russian gas imports but said it is possible if there is a clampdown on consumer demand.

That has been echoed by the German Economics Minister, Robert Habeck, who has urged German households and industries to turn down the thermostat. But the question is who will carry that burden? 

German households are already suffering from high inflation rates and energy prices had already soared before the crisis in Ukraine even began. 

A spokesperson for the economics ministry noted, “The question of prioritization is a very difficult decision, requiring consideration of a wide range of consequences.”

The Federal Network Agency, which claims to ensure fair access to gas, electricity and other vital services, has sent a questionnaire to all German businesses, essentially asking them to state their individual arguments for the right to access gas.

Forced by the high energy costs some businesses, such as the porcelain manufacturer KPM, founded in 1763, are working overtime to produce as many goods as possible before the Russian taps are turned off. “Who knows for how long we will have gas?” its CEO, Martina Hacker, told German media. “We can’t produce porcelain without it.”

Some analysts are envisaging an unpleasant battle between different sectors over who deserves the energy most. There have been discussions of dark scenarios over supply chains, which are already under pressure amid the covid pandemic, collapsing altogether with businesses forced into bankruptcy along with mass unemployment.

The chemical giant, BASF, the largest in the world and one of Germany’s biggest purchasers and consumers of energy says around 40,000 employees would have to be put on short-time working hours or laid off.

BASF said, "The consequences would not only be reduced work hours and job losses, but also the rapid collapse of the industrial production chains in Europe, with worldwide consequences.”

The German Chemical Industry Association (VCI), has also warned that chemical plants are too complex, they "can't just be switched off and on again like a microwave oven. Once chemical plants are shut down, they remain silent for weeks and months. It said the disruption would have a huge domino effect through almost all industries."

Other businesses are considering moving abroad to save their business and workforce, something that will cause further harm to the German economy. 

The  foreign affairs commissioner of European Union, Josep Borrell has also warned ,“This isn't just a German problem because the German economy is very closely tied to the European economy." 

Fitch Ratings has warned that replacing Russian natural gas in Europe could be challenging in the short term and it will keep gas prices high.

According to the credit rating agency, Europe as a whole import around 60% of its total natural gas demand, as Russia is supplying about a third of the continent’s consumption, which amounts to 152 billion cubic meters (bcm) by pipeline and 17 bcm as liquefied natural gas (LNG). 

The Nord Stream 2 pipeline, which Berlin has now scrapped, was meant to deliver from Russia as much as 70% of Germany’s gas requirements. Russia accounted for 55% of Germany's gas imports in 2021 and 40% in the first quarter of 2022.

Analysts say America would love to fill the void but there are too many logistics problems down the road for Washington.

Alternatives supplies have been suggested but it looks very difficult for Germany to shield its economy until it completely ends its dependency on Russian energy.  

Habeck has previously said that it would take around two years. But he also admitted “we face turbulent days ahead” amid the expected rise in gas prices.

BASF says a realistic time frame, for Berlin to wean itself off Russian gas would be four to five years. Some experts have said it is more likely to take until the end of the decade. That is unless Moscow itself does not halt supplies very soon unless it receives payments in its own currency the Ruble. 

Germany finds itself between a rock and a hard place by trying to join the Western sanctions alliance against Russia at the expense of German households and businesses along with the country’s economy.  

Those advocating the advance of peace talks between Kyiv and Moscow amid the West’s pumping of weapons to Ukraine, which some experts argue is prolonging the conflict; may help shape the direction Germany takes and what is currently the largest economy in Europe.

Restructuring Debt of Poorer Nations

According to International Momentary Fund (IMF), low-income countries face fewer debt challenges today than they did 25 years ago, thanks in particular to the Heavily Indebted Poor Countries initiative, which slashed unmanageable debt burdens across sub-Saharan Africa and other regions.

Although debt ratios are lower than in the mid-1990s, debt has been creeping up for the past decade and the changing composition of creditors will make restructurings more complex.

Improvements to the Group of Twenty Common Framework for Debt Treatments—from which the 73 countries that were eligible for the G20 Debt Service Suspension Initiative (DSSI) in 2020-21 can now benefit—could clear a path through this increasing creditor complexity.

So far only a handful of countries have requested to use the common framework, which was launched in November 2020, underscoring the need for change to build confidence and encourage participation at a pivotal moment for heavily indebted low-income countries.

Rising risks of debt distress

Spurred by low interest rates, high investment needs, limited progress raising additional domestic revenue and stretched systems for managing public finances, the debt ratios of DSSI countries have increased, partly reversing a decline seen in the early 2000s.

Now, the economic shocks from COVID-19 and the war in Ukraine are adding to the debt challenges faced by low-income countries, even as central banks start to raise interest rates.

About 60 percent of DSSI countries are at high risk of debt distress or already in debt distress—when a country has started, or is about to start, a debt restructuring, or when a country is accumulating arrears.

Among the 41 DSSI countries at high risk of or in debt distress, Chad, Ethiopia, Somalia (under the HIPC framework) and Zambia have already requested a debt treatment. Around 20 others exhibit significant breaches of applicable high-risk thresholds, half of which also have low reserves, rising gross financing needs, or a combination of the two in 2022.

On the domestic side, difficult trade-offs will exist between the need to restructure sovereign debt owed to domestic banks, in some cases, and the impact of such restructurings on financial sector stability and the capacity of domestic banks to finance growth.

Local currency debt for the median DSSI country doubled from 7% of gross domestic product in 2010 to 15% in 2021. For those DSSI countries with market access, the share more than tripled from 8 percent to 28 percent in 2021. Many of these DSSI countries have also experienced a tightening of sovereign-bank links, with larger holdings of domestic sovereign debt at domestic banks.

Coordination challenge

On the external side, increased diversity of creditors raises important coordination challenges.

In past decades, DSSI countries borrowed mainly from Paris Club official creditor nations and private banks, alongside multilateral institutions. Today, China and private bondholders play a much larger lending role.

The share of DSSI countries’ external debt owed to Paris Club creditors fell to 11% in 2020, from 28% in 2006. Over the same period, the share owed to China rose to 18% from 2% and the share of Eurobonds sold to private creditors increased to 11 from 3%.

The situation differs significantly across countries. Averages conceal a diversity of debt composition, from the shares of bilateral, multilateral and private creditors, to the composition of official bilateral creditors themselves.

China is now the largest official bilateral creditor in more than half of DSSI countries, including when counting all 22 Paris Club creditors as a single pool. China would therefore play a key role in most DSSI countries’ debt restructurings that would involve official bilateral creditors.

While the diversity of creditor compositions calls for greater attention to country specificities, appropriate coordination mechanisms will be the key in all cases.

Common framework

Putting in place mechanisms that ensure coordination and confidence among creditors and debtors has become urgent. Improvements to the G20 Common Framework could play an important role by ensuring broad participation of creditors with fairer burden sharing.

Experience so far shows that greater clarity on restructuring steps, earlier engagement of official creditors with the debtor and with private creditors, a standstill in debt service payments during negotiations, and specifying the mechanics of comparability of treatment is still needed.

Strengthening debt management and debt transparency should also be priorities. This would help countries manage debt risks, reduce the need for debt restructurings, and facilitate more efficient and durable resolution if debt becomes unsustainable.
 
It is in the interest of debtor countries as well as their creditors that debt restructurings, where necessary, are accomplished speedily, smoothly, and efficiently. This would support global stability and prosperity, too.

 

Bangladesh needs millions of tons of rice

There is a chance of record production of rice in Bangladesh in this year. As compared to last year, the rice production may increase by 2% to 36.320 million tons this year. 

Despite that, the country will have to import 1.500 million tons of rice, wheat and corn. However, it will be difficult for the country to import wheat amid the ongoing Russia-Ukraine war. The country might need to pay extra for that.

The US Department of Agriculture revealed this information in a report on the production of food grain in Bangladesh. The report, says that Bangladesh may face problems in importing phosphate fertilizer in the coming Aman season.

This is because Bangladesh usually imports 30% of its total demand for phosphate fertilizer from Russia. The country imports around 40% of the total wheat from Russia and Ukraine. However, it may not be possible to import these products from the two countries at the moment. If one looks for alternative sources in this regard, rising prices pose serious threats.

Lately, the Food and Agriculture Organization (FAO) published a report on the rise of food prices. It says after 1990, the price of food items worldwide was the highest in the month of March this year. The price of food may rise further in April. A huge number of people are going to be in trouble because of this. Another FAO report states that food prices are rising rapidly in Bangladesh as well.

The FAO director also feared a rise in food prices all over the world as an impact of the Russia-Ukraine war. He remarked that six countries, including Bangladesh and Egypt, are at the highest risk in this regard.

When asked about this, Agriculture Minister Abdur Razzaque said that the government is paying a huge subsidy for the collection of paddy and rice and the distribution of fertilizer. The amount of the subsidy is increasing with the rise of agricultural products. Essentials like fertilizer and wheat would be imported from alternative sources. The farmers of the country won’t face any problem.

According to the report of the FAO, the price of coarse rice in Bangladesh in March was Tk 47.5/kg which was one and a half per cent higher as compared to the previous year.

The price of medium quality rice was around Tk 66/kg on average which was around 5.6 per cent higher than the price in the previous year at the same time.

Citing local media, the report said that one of the main reasons for the high price of rice is that many big companies have embarked on rice business. the price has gone up as they hoarded huge amounts of rice.

Meanwhile, according to the daily food grain report of the Ministry of Food for April 07, 2022, the government warehouse has a stock of 1577,000 tons of food. In the last two months, it has decreased by about 500,000 tons. As a result of increasing the distribution of rice and wheat in the government’s social security program, stocks have decreased, which will decrease further in the coming days. However, these reserves are still considered to be sufficient.

Speaking regarding the issue, AMM Shawkat Ali, former Secretary of the Agriculture Ministry, said it was presumed that the Russia-Ukraine war would have an impact on the food market. Now the prices of wheat and fertilizer have gone up and it can increase further in the coming days. Therefore, Bangladesh will have to move towards alternative markets in the long run. For this we have to increase our diplomatic efforts.

According to the USDA report, Bangladesh might have to import 7.5 million tons of wheat, 2.3 million tons of corn and 700,000 tons of rice. Bangladesh will need a total of 37 million tons of rice this year which is one per cent higher than the last year.

The consumption of wheat and rice has also increased during the pandemic, the organization reported. It thinks that Bangladesh will import these products from India as an alternative to Russia and Ukraine.

 

State Department says no truth in claims of US involvement in regime change in Pakistan

The US State Department has said that there’s absolutely no truth in Imran Khan’s claim that Washington is behind an alleged conspiracy to overthrow his government.

Khan has been claiming that his independent foreign policy has annoyed foreign powers and they have financed the opposition’s no-trust move against him.

In an address to the nation on Friday, Khan had reiterated his allegations that a senior US diplomat threatened a regime change in Pakistan.

In another statement,Khan also named the official — Donald Lu, Assistant Secretary, Bureau of South and Central Asian Affairs in the Department of State — who allegedly threatened a regime-change in Pakistan during a meeting with the then Pakistani Ambassador Asad Majeed Khan.

Official says Washington supports Pakistan’s constitutional process

At a Friday evening news briefing in Washington, a journalist reminded Deputy State Department Spokesperson Jalina Porter that in his address to the nation, Khan renewed his allegation that the US had encouraged the no-confidence vote, saying that he had a diplomatic cable to prove it.

“Let me just say very bluntly there is absolutely no truth to these allegations,” said Ms Porter.

“Of course, we continue to follow these developments, and we respect and support Pakistan’s constitutional process and rule of law. But again, these allegations are absolutely not true,” she added.

A prestigious diplomatic news site, ‘Foreign Policy,’ noted in its latest report on Pakistan that the future of Islamabad’s fragile relationship with Washington remains foggy after Khan levelled serious allegations against the United States, making it a central part of their political crisis”.

The report, however, argued that Khan’s description of the alleged US involvement sounded more like “a US official complaining about the Pakistani prime minister, not plotting his ousting”.

The Washington-based news site noted that in Pakistan, public mistrust of the United States runs deep, in great part because there is a history of US meddling in Pakistan’s internal politics.

The report warned that Khan’s allegations have hurt US-Pakistan relations, especially after Khan publicly named the US official involved in the so-called plot.

The report pointed out that their ties were unsettled before this political crisis too as each country deepens relations with the other’s top rival — Washington with New Delhi and Islamabad with Beijing”.

The report warned that Khan’s allegation of the United States orchestrating regime change will make it more difficult to rein in the unmoored relationship.

Courtesy: Dawn

Imran Khan’s term comes to unceremonious end

In Pakistan, the opposition's no-trust motion against Prime Minister Imran Khan succeeded an hour past midnight on Sunday, with 174 members in the 342-strong house voting in favour of the resolution.

PML-N's Ayaz Sadiq, who was chairing the session after Asad Qaiser resigned as speaker, announced the result. As a result, Imran Khan ceased to hold the office of Prime Minister, according to Article 95 of the Constitution.

Imran Khan is the first prime minister in Pakistan's history to have been removed from office through a no-confidence vote. Before him, Shaukat Aziz in 2006, and Benazir Bhutto in 1989, survived the moves against them.

Before adjourning the session, Sadiq said the nomination papers for the new prime minister may be submitted by 2pm today (Sunday) and scrutiny would be done by 3pm. He summoned the session on Monday at 11am and said the new premier would be elected then.

Later, it was announced that the assembly would meet at 2:00pm instead.

Earlier, after announcing the result, Sadiq gave the floor to Shehbaz Sharif, who is the joint opposition's candidate for the post of prime minister. Shehbaz paid tribute to all leaders part of the joint opposition, and vowed that the "new regime would not indulge in politics of revenge".

"I don't want to go back to bitterness of the past. We want to forget them and move forward. We will not take revenge or do injustice; we will not send people to jail for no reason, law and justice will take its course," Shehbaz said.

After Shehbaz, Bilawal took the floor and congratulated the house for passing a no-trust resolution against a premier for the first time in history.

"On April 10, 1973, this house approved the Constitution. On April 10, 1986, Benazir Bhutto ended her exile and returned to Lahore for her struggle against Gen Ziaul Haq," Bilawal recalled.

"Today is April 10, 2022, and the one we had declared selected, the non-democratic burden this country was bearing for the past 3 years, today, April 10, 2022, welcome back to purana (old) Pakistan."

Minutes before voting began, National Assembly Speaker Asad Qaiser resigned from his post, saying he could not take part in a foreign conspiracy to oust the prime minister.

Qaiser's resignation came almost 15 minutes before midnight, which according to legal experts, was the deadline to implement the Supreme Court's orders to conduct voting on the no-trust motion.

Before announcing his resignation, Qaiser said that he had received "important documents" from the cabinet, which he invited the leader of the opposition and the chief justice of Pakistan to see.

"In line with our laws and the need to stand for our country, I have decided that I can't remain on the position of speaker and thereby resign," he said.

"Because this is a national duty and it is the Supreme Court's decision, I will ask the panel Chairman Ayaz Sadiq to run the session," Qaiser said.

After Sadiq took the chair, he paid tribute to Qaiser for remaining with his party and opting for an "honourable exit".

"He [Qaiser] had a very good relationship with all of us, a working relationship. He tried to conduct all these proceedings with dignity and together with the opposition."