Archive for July, 2018

Pakistan needs a real plan to prevent economic disaster: PEW

A bailout package and a new strategic trade policy is needed
Plan to boost exports aggressively can make country self-sustaining

The Pakistan Economy Watch (PEW) on Saturday said the country needs a real plan to avert the looming economic disaster.
At this critical juncture the country needs is a bailout package to remain afloat followed by a new strategic trade policy designed after consultation with all the stakeholders which can fix economic problems through exports, it said.
Islamabad needs to consider a more strategic trade policy resulting in aggressive exports in to make economy self-reliant on a sustainable basis, said Dr. Murtaza Mughal, President PEW.
All the political parties seem to be focused on petty issues and unconcerned about the economic mess as the current account deficit for the FY2018 has touched $18 billion which was $4.87 billion two years ago, he added.
Dr Murtaza Mughal said that during the last two years policymakers failed to check imports which jumped to 66.2 billion dollars in FY2018 to reverse the economic gains and erode forex reserves held by State Bank to below nine billion dollars.
Rapid devaluation and other measures increased exports by $2.7 billion which was not enough as exchange rate erosion took a toll on masses and added trillions of rupees to the debt burden, he observed.
The increase in exports failed to keep pace with the increased imports and the economy continued to consume $1.5 billion per month throughout the year.
Imposition of regulatory duty on many importable items and half-hearted measures of the State Bank has only resulted in high inflation and uncertainty.
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SBP’s monetary policy confirms serious economic troubles: PEW

Hike in interest rate to result in economic contraction
Policymakers favoring stabilisation over growth
Govt failed to boost exports, control imports

The Pakistan Economy Watch (PEW) on Sunday said the monetary policy of the State Bank has exposed the tall claims of rapid economic development by the former government and confirmed that economy is sailing in troubled waters.
Hike in the discount rate also indicates that now policymakers are preferring stabilisation over the economic growth which will initiate the process of contraction of the troubled economy, it said.
Economic contraction will result in unemployment and cuts in the developmental budget which will hit the social sector, said Dr. Murtaza Mughal, President PEW.
He said that the deficit has reached 6.8 percent surpassing the target of 5.5 percent while the current account deficit from July to May has reached to 16 billion dollars which was 11.1 billion dollars during last year.
The government is failing to control the situation despite repeated erosion in the exchange rate, it has failed to boost exports substantially or reduce unnecessary imports which have taken a toll on the forex reserves, he said.
Dr. Murtaza Mughal said that a little improvement in exports and remittances aren’t enough and the government will be compelled to revise petroleum and electricity prices but it will not save it from knocking the door of IMF as billions of dollars are needed to keep the country from bankruptcy.
He said that water scarcity has been damaging the agricultural sector on which majority of the population depends while manufacturing is to take a hit from increased interest rates.
The caretaker government has started the groundwork for the IMF loan but it is leaving the final decision to the elected government which is very encouraging, he said.
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Pakistan should reduce dependence on India for water: PEW

Dams to help balance the energy mix
The Pakistan Economy Watch (PEW) on Saturday said Pakistan should reduce its dependence on India and Afghanistan for water by constructing dams and water reservoirs.
Reducing dependence on enemy nations is essential for national security as water is being used as an effective weapon against Pakistan, it said.
Dams will not only ensure water security but also reduce dependence on fossil fuel balancing the energy mix which is heavily tilted towards oil, said Dr. Murtaza Mughal, President PEW.
Th cost of Diamer-Basha dam was estimated to be Rs1450 billion in 2008 while the allocation for the dam for the year 2018-19 stands at Rs23.50 billion which is a joke, he added.
Dr. Murtaza Mughal said that the cost of the construction of the dam has jumped by billions due to delays and exchange rate erosion, Rs101 billion is required for purchasing land and resettlement of people while reservoir will need an investment of Rs 650 billion.
In this scenario allocating a meager sum for the dam speaks of neglect of policymakers which is criminal, he said.
Dr. Mughal said that nation is contributing for construction of two dams which is laudable but the cost cannot be covered through charity. It requires the resources which can only be met through loans worth billions of dollars.
He said that dams will also reduce dependence on furnace oil saving billions of dollars in energy imports. It will reduce the cost of power generation triggering economic activity, creating jobs, boosting exports and revenue.

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Licences of twenty-six trade associations cancelled: PEW

Three women chambers also declared illegal
Business community uneasy over the decision

The Pakistan Economy Watch (PEW) on Monday said that Directorate General Trade Organisations (DGTO) has cancelled licences of twenty-six trade associations including nine chambers of commerce sparking widespread criticism.
Licences of three chambers of commerce representing women entrepreneurs have also been cancelled igniting criticism among concerned circles, it said.
A group of business leaders called on Dr. Murtaza Mughal, President of PEW and informed him that the office of DGTO is discouraging the business community. They are being insulted for small technical faults in the papers which is adding to the uncertainty.
The business community alleged that the DGTO office is full of remnants of a former government which are defaming the present government through such negative tactics.
The trade associations that have been declared illegal include Rawalpindi Women Chamber, Attock Women Chamber, Nowshera Women Chamber, Charcadda Chamber of Commerce and Industry, Benazirabad Chamber, Hunza Chamber, Qila Saifullah Chamber, Moosa Khail Chamber, and Nigar Chamber of Commerce and Industry, they informed.
They said that the other trade association that were declared illegal include Pakistan Computer Association, Chemists and Druggists Association, Travel Agents Association, All Pakistan Oil Mills Association, Small Hajj Organisers, Tractor Dealers, Almunium Manufacturers, Scrap Importers, Copper Importers, Plastic Scrap Importers, Association of Transporters, Glass Manufacturers, Ghee Exporters, Custom Agents, Heater Importers, Health Care and Importers of Gen Stones.
At the occasion, Dr Mughal said that the country is passing through difficult times and confidence of the business community is imperative to tackle challenges, therefore, they should be facilitated.
The timing of the move will not benefit the government of the business community in any way, he said.
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Former governments responsible for the water crisis: PEW

Water conservation can help tackle Indian conspiracies
Failure in the conservation of water will make Pakistan a failed state

The Pakistan Economy Watch (PEW) on Thursday said all the governments during the last 45 years are responsible for the water crisis in Pakistan.
However, the burden of responsibility is more on the shoulders of two former government that conveniently ignored the crisis in the making and continued to pursue agenda of personal welfare, it said.
Only India should not be blamed as we are also responsible for this dire situation, said Dr. Murtaza Mughal, President PEW.
He said that our farmers are on the top of the list of the cultivators known for wasting water as they use two to three times more water than India to grow anything.
Pakistani farmers continue to waste a lot of water which can be saved as it will not reduce but increase agricultural production to make Indian conspiracies less effective.
Developed nations use few hundred litres of water to get one kilogram of sugar, developing nations use approximately 1500 litres of water for the same while Pakistan waste 7000 litres for it, he informed.
Pakistan is also wasting a lot of water for other crops like wheat, rice, maize, fruits and vegetables etc. while the production of meat, cheese and butter need more water than any crop while chocolate top the list which need 17196 litres of water for one kilogram.
Half of the global production of food which is two billion tonnes is wasted in which Pakistan is not behind other nations.
The world is using 3.8 trillion cubic metres of water per annum of which 70 percent is used by the agricultural sector and the demand is set to grow by 300 percent by 2050.
Failure in the conservation of water will make Pakistan a failed state, he warned.
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Greylisting of Pakistan a political move: PEW

US wants to pressurise Pakistan into submission
The Pakistan Economy Watch (PEW) on Tuesday said the decision by the Financial Action Task Force (FATF) to put Pakistan in the ‘grey list’ is a move taken on the behest of US.
It has little to do with terror financing while everything to do with Pakistan’s Afghan policy which is seen as unfavorable in Washington, it said.
The US wants to force Pakistan into submission by shattering its fragile economy through such tactics, said Dr. Murtaza Mughal, President of PEW.
He said that we should counter US conspiracies as changing important regional policies to please Washington will be a suicide.
Murtaza Mughal said that the aims of FATF are political otherwise Afghanistan, India, Sudan and Nigeria would be been included in the list while the countries known for hiding dirty money including the UK would not have been spared.
The US is notorious for hiding dirty money, therefore, the politicians and bureaucrats of Pakistan and dozens of other countries but property worth billions there.
The FATF is a tool to hit Pakistan’s economy, CPEC, banking sector, exports, and investors confidence as it will increase the cost of doing business, he observed.
He said that the move can hurt the stock market and have an impact on the creditworthiness of the country making borrowing difficult.
Pakistan was included in the grey list in 2012 and it took us three years to come out of it but this time the US was so eager their all the friendly nations decided not to support Pakistan in the voting.
He said allowing terrorist outfits to operate by changing names and participate in the elections has added to the negative impression.
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Caretaker Govt lauded to extending amnesty scheme: PEW

Decision has improved Govt rating, confidence of businessmen
Move exhibits impartiality of the Govt, economic weakness

The Pakistan Economy Watch (PEW) on Monday lauded the decision of the caretaker government to extend the deadline of the tax amnesty scheme as it will attract much-needed funds.
The move has improved the confidence of the business community and polished the image of the present government, it said.
Extension in the scheme launched by the former government proves that the current administration is unbiased and impartial while it also exposes the feeble condition of the exchequer, said Dr. Murtaza Mughal, President PEW.
The former government continued to claim an economic turnaround but left exchequer empty, he added.
Dr. Murtaza Mughal said that former rulers borrowed over 45 billion dollars while a sizable amount was wasted due to mismanagement and nepotism.
The former government failed to manage economy otherwise the country would not have been on the verge of bankruptcy, he said, adding that SBP is short of forex reserves enough to manage two months of imports.
We are still spending one billion dollars a month while the gap between income and expenses has reached an alarming level of 25 billion dollars necessitating an IMF package.
He said that dollar was worth Rs60 during the dictatorship but the two democracies have pushed it to Rs125 while the fall continues.
Erosion in the exchange rate has pushed the necessities out of the reach of common man, he said.
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