Archive for April, 2018

Tax amnesty scheme a move to avoid IMF: PEW

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Failure of the scheme will be a success for the US
The opposition should stop opposing the scheme

The Pakistan Economy Watch (PEW) on Sunday said the tax amnesty scheme has not been designed to benefit tax doggers but orchestrated to save the country from another loan by IMF on harsh conditions.
The failure of this scheme will be a success for the Trump’s administration which has already waged a war against Pakistan and eagerly awaiting a chance to further damage our country, it said.
A formal request by Pakistan for an IMF loan will be an opportunity for the US which has been humiliating and penalizing Pakistan for its failed policies, said Murtaza Mughal, President of PEW.
He said that country is passing through a critical phase; exchange rate and economy are not in very good shape, twin deficits have emerged as a big threat, forex reserves have been eroded raising concerns among stakeholders.
Murtaza Mughal said that the incumbent government has borrowed Rs6 billion per day from the domestic market which is a record and there is no way the loans can be serviced.
In this situation, the government had no option but to seek IMF’s loan or try to bring back funds hidden in foreign countries.
The amnesty scheme will not damage the economy while IMF’s loan will not be without acceptance of harsh economic and political conditions, he said, adding that it may also hurt CPEC.
He noted that the GDP growth rate continues to improve since 2012-13 while it will hit the mark of 5.8 percent in the current fiscal and over six percent in the next fiscal which is not acceptable to enemies of Pakistan.
Entering into IMF programme will be followed by policies which will result in the economic suicide, he warned.

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Economy improving despite record trade deficit: PEW

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ommerce officials harassing business community
Commerce ministry should be cleared of black sheep

The Pakistan Economy Watch (PEW) on Thursday said economic indicators are improving despite record surge in the trade deficit.
The government is also trying best to restore the confidence of the business community so that they transfer funds to Pakistan which are badly needed, it said.
Pakistan can become self-reliant only if the confidence of the business community is restored but some elements are trying to harass the businessmen, said Murtaza Mughal, President of PEW.
This he said while talking to a delegation of the business community representing various trade associations and chambers of commerce.
He said that bureaucracy should be controlled lest the business community is terrified wasting the efforts of the top government functionaries.
At the occasion, the leaders of the business community said that some officials of the commerce minister are harassing the business community. They are called from the far-flung areas of the country and humiliated.
“Our respected leaders are being dealt like criminals on one pretext or other while the commerce bureaucrats are acting like the officials of FIA,” they said.
The said that we don’t deserve to be harassed by officials under the grab of minor deviations from the rules and regulations at this critical juncture.
The asked the commerce minister to take note of the situation and cleanse the ministry from black sheep defaming the government so that business community can take a sigh of relief.

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PM lauded for suspending trade talks with China: PEW

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Govt kept national interest supreme over all other things
The Pakistan Economy Watch (PEW) on Wednesday lauded the decision of the Prime Minister Shahid Khaqan Abbasi to suspend the FTA negotiations with China.
The decision is praiseworthy as the national interests were kept supreme in it on any other consideration, it said.
The local business community has also informed the government well before the talks on the second round of FTA that further relaxations to the friendly country will damage the local industry beyond repair.
The Chinese side had refused to give any relaxation to Pakistan which was not expected by our officials, he said, adding that after suspension of talks the Chinese side has shown some flexibility which is good.
Murtaza Mughal said that Pakistan and China signed an FTA on Nov 24, 2006, which boosted Pakistani exports to China from 575 million dollars to 2.6 billion dollars while it increased Chinese exports to Pakistan $3.5 billion to $14 billion resulting in a large deficit.
The losses in trade with China continue to increase by the passage of every year which Pakistani exports continue to slide as China has given more relaxations to other countries.
India and Vietnam have replaced Pakistani products in the Chinese market because Pakistan’s interests were not preferred by the Chinese authorities.
He said under-invoicing by the Chinese exporters has also become a threat to the Pakistan economy which should be tackled.

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Ignoring agriculture keeping million poor: PEW

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Poor performance of agri sector to drag down the GDP
The Pakistan Economy Watch (PEW) on Saturday said ignoring agricultural sector is
Keeping millions poor and hitting growth rate.
The agriculture sector is considered the backbone of the economy but it is not getting due attention since decades despite the fact that majority of the population depends on this sector, it said.
The bad cotton crop and reduction in the area under cultivation of wheat will reduce the growth rate while the country will have to spend billions to bridge the shortfall of 2.5 million bales, said Murtaza Mughal, President of PEW.
The farmers are ignoring latest methods and continue to increase the volume of inputs like fertilizer to boost production which is increasing the cost of doing business, he added.
Murtaza Mughal said that it is next to impossible to ensure national development while keeping agricultural development on the backburner, adding that the poor performance of agriculture sector to drag down the GDP.
He said that agriculture is no more the largest sector of the economy but it continues to provide jobs to the majority of the laborers therefore it merits attention.
Agriculture growth in the last eight years has remained at the average of 2.1 percent while it has dipped to 1.6 percent which proves apathy of the policymakers, he added.
He said that reduced production is contributing to poverty in the rural areas and widening the gulf between rich and poor which can be bridged through the intervention of the authorities.
Pakistan is a notable country in milk production; the number of cattle head is increasing but the productivity of milk, beef and mutton is stagnant since long.

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Economy heading towards dollarization: PEW

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Imports and deficit putting pressure on the rupee
The Pakistan Economy Watch (PEW) on Wednesday said the continued decline in exchange rate has shattered the confidence of masses in the rupee which has triggered dollarization of the economy.
Dollarisation of the economy is against the national interests as it damages monetary sovereignty, hurt the economy and leave central bank almost useless, it said.
The government and the central bank should take concrete steps to de-dollarize the economy before it leaves rupee weightless, said Murtaza Mughal, President of PEW.
He said that dollar is sold at Rs117 in the open market, forex reserves with the central bank are below the level of twelve billion dollars while the trade deficit for the first eight months is 4.27 billion dollars over and above as compared to the last fiscal.
Frequent devaluation has pushed masses to convert their savings and profit into the dollar that cannot be countered through encouraging statements of secret meetings with the currency dealers.
The continued fall in the value of rupee and lack of reforms as well as inaction can result in widespread rejection of the rupee, in the long run, he warned.
Murtaza Mughal said that one of the reasons for dollarisation is the negative rate of return given to the depositors by the commercial banks which push them to prefer dollars to reduce the risk of inflation and devaluation.
The government can’t stop dollarisation by issuing orders, it can only be controlled by introducing long-awaited reforms and using positive economic measures like better regulations, enabling and transparent policies etc.

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