Archive for December, 2018

PM’s plan against money laundering backed: PEW

The Pakistan Economy Watch (PEW) on Sunday lauded the Prime Minister Imran Khan’s decision to initiate biggest ever crackdown against money laundering in the history of Pakistan.

The decision will be supported by the masses as it will discourage corrupt nobility responsible for an annual loss of around10 billion dollars which can reduce the country’s dependence on foreign loans, it said.

The action will dishearten corrupt, improve country’s image, boost economy and investment, and help Pakistan out of the Financial Action Task Force (FATF) grey list, said Dr Murtaza Mughal, President PEW.

He said that across the board action will stop the smuggling of dollar, halt the flight of capital, and bring an end to the culture of artificial crisis which benefits select few.

Dr. Murtaza Mughal said that action against corrupt politicians and other influential will reduce pollution in politics and help stop the flow of illegitimately earned money to foreign banks.

The biggest ever crackdown against money laundering in the history of Pakistan will also help boost the image of the country which is necessary to attract investors, he observed.

He said that following the efforts of PM, the friendly countries have help Pakistan a lot

As Pakistan got the breathing space that it needed which has compelled IMF to soften its stance.

The uncertainty on the economic front has ended due to the assistance provided by the UAE, Saudi Arabia and China and now Pakistan can get a loan from the IMF on favourable conditions.

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Resurfaced circular debt threatening the economy: PEW

Sukuk bonds to boost Islamic finance industry

The Pakistan Economy Watch (PEW) on Sunday said the circular debt has again resurfaced threatening the fragile national economy.

The infamous power sector debt has surpassed Rs1300 billion and there is no way in sight to tackle it which is adding to the problems of the government, it said.

The government has decided to issue Rs200 billion Sukuk bonds to handle the debt which will calm down the issue for a year or two but not resolve the problem, said Dr. Murtaza Mughal, President PEW.

He said that past governments have promised reforms in the power sector but did nothing concrete while a former finance minister announced to bury the debt forever in 2013 but left it unresolved before leaving the country to avoid accountability.

The incumbent government had promised to resolve the issue of circular debt during the election campaign and now it should come up to its promise, he added.

Dr. Murtaza Mughal said that the government has decided to issue Sukuk bonds against the 43 assets of power generation and distribution companies which will not only help it handle the problem and also help boost the Islamic finance industry.

Six Islamic banks have completed most of the spadework and only minor irritants have been left to be removed before the launch of bonds, he added.

The market share of Islamic banking industry stands at 13.6 percent of total banking assets. The industry has grown over twenty percent during the last five years but it is yet to make major advances.

The increasing role of Islamic banks in the overall banking sector and their potential for providing strength to the economy must be appreciated, he demanded.

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Govt lauded for the re-entry of British Airways in Pakistan: PEW

Zulfi Bukhari improving the image of the country

The Pakistan Economy Watch (PEW) Chairman Brig. Muhammad Aslam Khan (Retd)

on Thursday said re-entry of British Airways in Pakistan is a landmark achievement of Prime Minister Imran Khan government.

The development has proved that the image of the country is improving globally which will help attract multinational corporations which is necessary for much-needed investment, he said.

Brig. Muhammad Aslam Khan said that a big name like British Airways coming to Pakistan means that international community is recognizing Pakistan’s potential as a new and good investment destination.

The credit of return of British Airways to Pakistan goes to PM Khan and his team as their effort will help send a positive picture of the country to the world.

The decision of the British Airways means that the country’s environment is now conducive for the foreign companies, it is no longer isolated and it is safe as well as highly profitable for the foreign investors, he noted.

The return of the British Airways will open new horizons of connectivity for Pakistan while the efforts of the government the economic outlook of Pakistan will continue to improve, he observed.

He recalled that the British Airways suspended its operations in Pakistan in 2008 citing the safety of its passengers but now the situation has changed for good.

Mr. Khan also lauded the steps taken to boost remittances which are the lifeline for the national economy as every year, overseas Pakistanis were sending over US$20 billion through proper channel.

Overseas Pakistanis were sending up to US$15 billion via informal means while increased use of banking channels will help the government boost foreign exchange reserves.

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Concrete steps demanded to protect masses, economy: PEW

Pakistan’s debt rating downgrade necessitates urgent steps

The Pakistan Economy Watch (PEW) on Saturday asked the government to take concrete steps to protect the vulnerable masses from inflation and shield the limping economy facing extreme pressure.

Abrupt devaluations have filled the masses and the business community with bewilderment while the investment and expansion plans have been put on hold, it said.

Pakistan’s long-term debt rating has been downgraded by a global rating agency due to repayment obligations, low foreign exchange reserves, and fragile fiscal situation which should be considered a tip of the iceberg, said Dr. Murtaza Mughal, President of PEW.

He said that the government claims that the exchange rate has now reached near to equilibrium and is reflective of the market conditions while independent experts continue to question the assertion.

The exchange rates generally move on demand and supply in the market and the key reason behind the recent devaluation was the last fiscal year’s $19 billion current account deficit which is natural but the central bank should protect the rupee-dollar parity, he added.

Dr. Murtaza Mughal said that the forex reserves are not enough, therefore, the government should finalize talks with IMF without any delay otherwise rupee will come under more pressure.

He noted that remittances were able to support a trade gap of $36 billion by almost 18 billion dollars which were insufficient therefore a major foreign exchange support has become imperative.

He said that imports have dropped while exports have risen by 4 percent but it has failed to ensure stabilization and growth resulting in the freefall of rupee.

The government should take steps to contain rising prices, stop the flight of capital and discourage the flow of undervalued imports which are damaging the fragile economy, he demanded.

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Agriculture sector should get due attention: PEW

The Pakistan Economy Watch (PEW) on Sunday said agriculture is the backbone of the economy, therefore, it should get the attention it deserves.

The agriculture sector contributes around 18 percent to the GDP, employs 42 percent of the total labour force, and constitutes 75 percent of the total exports revenue.

The cost of doing business for the farmers should not be increased to improve share of this critical sector in the national GDP, it said.

It is impossible to ensure national development while keeping agricultural development on the backburner, said Dr Murtaza Mughal, President PEW.

He said that agriculture is no more the largest sector of the economy but it continues to provide jobs to the majority of the labour.

Murtaza Mughal said that growth in this sector has remained unimpressive during the last ten years which proves apathy of the policymakers.

He noted that the high cost of inputs continues to reduce production which has been contributing to poverty in the rural areas.

Circumstances and some policies continue to push farmers to prefer low-cost crops over high-value crops while different packages announced in the past have not helped achieve results.

Pakistan is a notable country in milk production where the number of cattle head is increasing but the productivity of milk, beef and mutton are stagnant which must be noticed.

He said that the livestock sector is very important for poverty reduction, human health, and food security but the majority of four million people engaged in this business are away from the formal economy which has barred their development.

China, Israel, and Brazil have experienced exponential growth in the agriculture sector and Pakistan can learn from their experience to strengthen its own agriculture sector.

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Govt LNG move to stabilise energy market: PEW

Gas price inequality should be resolved through reforms

The Pakistan Economy Watch (PEW) Chairman Brig. Muhammad Aslam Khan (Retd) on Wednesday lauded the government for announcing that it is not terminating any liquefied natural gas (LNG) contract initiated by its predecessors.

The decision has put rumors of renegotiation of the LNG deal to the rest which will bring certainty in the energy sector, he said.

The government has assured the supply of gas to export industry during winter which is laudable but it should not delay exploitation of Turkmen gas through Tapi pipeline which is cheap as compare to all other deals, he demanded.

Muhammad Aslam Khan said gas tariff should be rationalized across the country while losses of distribution companies should be brought down from the current Rs48 billion annually.

Our reliance on imported gas is growing while the LNG is double the cost of domestic gas which is becoming an increasingly severe problem, he said, adding that the price difference between the imported and locally produced product cannot be ignored anymore.

The price of gas should be equalized for the industry of Sindh and Punjab as a huge disparity exists which is resulting in problems for exporters, he observed.

Dr. Murtaza Mughal, President on PEW said that gas price disparity should not be equalized with the help of subsidies which will add to the losses of the government.

As the economy comes to rely increasingly on imported LNG the gap in prices should be bridged through reforms which would be difficult.

Pakistani masses and industry has long been accustomed to taking natural gas for granted but those days are now over, he warned.

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Govt damaging economy, disappointing masses: PEW

The Pakistan Economy Watch (PEW) on Sunday said the decisions of the government are damaging the economy and disappointing masses.

The government seems to have no economic policy, vision or direction which is triggering uncertainty, it said.

The performance of the economic managers is very disappointing as dollar jumped by 18 rupees in short span adding to the unexplainable agony suffered by the masses, said Dr. Murtaza Mughal, President PEW.

He said that the government has shaken the foundations of the economy, claims regarding improvement have failed and everything is getting costly by the passage of the day which will make the life of masses very difficult.

Murtaza Mughal said that devaluation and interest rate hike will result in the closure of thousands of businesses leaving over half a million people unemployed.

The government continued to take u-turns on several issues including borrowing from IMF which added to the uncertainty which damaged the economy.

He said that the trade deficit has jumped to 7.5 percent in the last four months while foreign direct investment has been halved which indicate the incompetence of the economic managers who were once considered saviors by the masses.

He said that devaluation will increase the cost of all developmental projects including CPEC, stoke inflation, increase debt burden by Rs750 billion, trigger flight of capital and speed up dollarization of the economy.

The government has jumbled serious economic issued in a manner that business has become very difficult while new investment has become impossible, he said.

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