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ISLAMABAD: Pakistan and the European Union have signed a €20 million grant agreement to launch the “Better Governance and Business Environment” initiative in the South Asian country, Pakistani state media reported on Thursday.

The agreement, signed by EU Ambassador to Pakistan Dr. Riina Kionka and Secretary Economic Affairs Division Dr. Kazim Niaz, aims to enhance the competitiveness of Pakistan’s private sector, particularly small and medium enterprises (SMEs), including those led by or benefiting women.

Pakistan’s government has increasingly spoken about achieving sustainable economic growth and moving the country away from his usual “boom and bust” cycle through financial reforms, signing trade, business and grant deals with regional allies worth billions of dollars and enhancing its exports.

“The program will strengthen SME-related legislation, support the green transition of export-oriented firms, facilitate targeted green investments, and promote public-private dialogue,” the Radio Pakistan broadcaster reported.

The development comes as Pakistan takes policy measures to increase lending portfolio of SMEs to enhance their contributions to employment, exports and the national GDP.

These enterprises account for approximately 40 percent of the country’s GDP, 25 percent of exports and nearly 78 percent of non-agricultural employment, according to the Pakistani finance ministry.

But despite their contributions, their access to formal finance remains “disproportionately low,” with a small percentage of private-sector lending currently directed toward them

“This expansion is expected to enhance the contribution of SMEs to GDP, exports, employment, youth and women’s digital empowerment, and overall financial inclusion, laying the foundation for sustained and inclusive economic growth,” the finance ministry said this month.

“Deregulation efforts, such as reducing reliance on NOCs and increasing e-inspections, are also being introduced to reduce compliance burdens for SMEs.”

Pakistan will also use a $1.4 billion loan from the International Monetary Fund’s climate resilience fund to expand fiscal space, embed climate planning into public investment decisions and unlock private-sector capital for green projects, the IMF said last week.

QUETTA: Armed men killed nine bus passengers after kidnapping them in Pakistan’s southwestern Balochistan province, officials said on Friday, in the latest attack on commuters hailing from the eastern Punjab province.

The attackers took the passengers with them after intercepting two buses on the N-70 highway in Balochistan’s Zhob district, according to a senior official of the paramilitary Levies force. Their bodies were found in the nearby mountains in the intervening night of Thursday and Friday.

No group has claimed responsibility for the latest attack on the Punjab-bound buses, but suspicion is likely to fall on Baloch separatist groups who have been involved in multiple such attacks targeting ethnic Punjabi commuters in the past.

“Armed men intercepted two Lahore-bound passenger buses at the Balochistan-Punjab national highway near Sara Dhaka area and kidnapped nine ethnic Punjabi travelers after checking their national identity cards (NICs),” Yasin Mandokhail, the Levies station house officer (SHO) in Zhob district, told Arab News.

“The bodies are being shifted to Rakhni Hospital for medico-legal procedure.”

Shahid Rind, a spokesman for the Balochistan government, said security forces immediately responded to the attack but the attackers fled under the cover of darkness.

“Security forces are conducting a thorough search operation in the area,” he said in a statement.

Balochistan, Pakistan’s largest but most impoverished province, has been the site of a long-running insurgency that has intensified in recent months, with separatist militants attacking security forces, government officials and installations and people from other provinces, particularly Punjab, who they see as “outsiders.”

The Baloch Liberation Army (BLA) is the strongest of a number of insurgent groups long operating in the mineral-rich region bordering Afghanistan and Iran, who accuse the central government of stealing their resources to fund development in Punjab.

The federal government denies the allegations and says it is working for the uplift of local communities in Balochistan, where China has been building a deep-sea port as part of its Belt and Road Initiative.

Last August, nearly two dozen passengers were killed after BLA militants forcibly removed them from Punjab-bound buses in a string of coordinated attacks in Balochistan. Another seven Punjabi commuters were offboarded from buses and killed in Balochistan’s Barkhan district in February this year.

In March, the BLA separatist hijacked a train with hundreds of passengers aboard near Balochistan’s Bolan Pass, which resulted in the deaths of 23 soldiers, three railway employees and five passengers. At least 33 insurgents were also killed.

On Thursday, Pakistan Railways suspended train service from Balochistan provincial capital of Quetta to the rest of the country for a day after law enforcement agencies shared security concerns.