Pakistan Economy Watch (PEW)

CM should exploit his potential for the welfare of masses

Shahbaz Sharif who had proved his worth during his last term as Chief Minister Punjab should now use his potential and experience for the welfare of masses and not fall prey to political gimmicks, Dr. Murtaza Mughal, Chairman of Pakistan Economy Watch said.
Although Chief Minister Punjab Shahbaz Sharif is no as strong as in his previous term when there was no hindrance like coalition partners etc, he said in a statement issued here Saturday.
But, it is widely believed that his administrative and business skills, developed during his experience family business, can certainly help resolve many issues being faced by helpless masses in the province of Punjab.
Others would be compelled to follow the suit if he proved his significance by working in a way he is known for.
Shahbaz Sharif employed best business practices in his family business and repeated same with some alteration as Chief Minister. “That is why he is remembered with great respect in all circles,” said Mughal. Earlier, the industry and capital use to travel towards Punjab owing to turmoil in Karachi but now the capital is flying abroad, especially Dubai.  read more…

Budget deficit control measures seems unrealistic

Shortfall to increase on missed taxation targets, weighty grants

Tax collection of 1.25 trillion rupees, increase in basic sales tax and modified import duties on 300 luxury goods may not prove very effective due to high political, economic and international pressures.
Meeting the deficit target would require drastic efforts which don’t seem realistic in the current circumstances, said Dr. Murtaza Mughal, President of Pakistan Economy Watch in a statement issued here Friday.
Giving Rs 1000 a month to one million poor households and 20 percent increase in the salaries and pensions of government workers will have no significant affect on poor and it seems to be a politically motivated statement.
“Masses will pay dearly for the decisions of the Government to cut oil subsidies and allocations in some important heads,” added Mughal. read more…

Pakistan should avoid selling rice to Philippines

Pakistan should not sell rice to Philippines as it will boost prices at home hitting millions of households, said a statement issued here today.
The Government should impose taxes on exports of the commodity to discourage exports, said Dr. Murtaza Mughal, president of Pakistan Economy Watch.
The Philippines which is the world’s biggest rice importer is in talks with Pakistan and China, broadening a search for supplies beyond Thailand. Islamabad should stop these talks as prices have already surged beyond limits.
Rice futures surged to a record in April after some exporters curbed shipments to guarantee local supplies and the Philippines failed to fill state tenders. The jump, coupled with record energy costs, raised concerns that the world may face food shortages and increased civil unrest.  read more…

Internet must be properly policed by Government

High time for Pakistan to ratify Cybercrime Treaty

In the backdrop of increasing incidents of computer-generated intrusions and card frauds, it’s high time for the Government to establish ICT courts dealing with digital investigations and ratify Cybercrime Treaty, said a statement issued here today.
So far, out of 47 signatories, 22 countries have ratified the treaty, introduced seven years ago. FIA is actively perusing the treaty and made good progress in it but more needs to be done, said Dr. Murtaza Mughal, President of Pakistan Economy Watch.
The number of countries that will have ratified the only international treaty addressing cyber crimes is expected to nearly double this year, a sign that momentum is building in the right direction.
He said that Government had issued an Ordinance dealing with cyber crime back in Dec. 2007 and decided to establish ICT courts to deal with the offenders. He demanded proper training for prosecutors and judges by the concerned wing of FIA.
“Many judges have little or no experience handling cyber crime cases since the technology came along far after they were trained,” Mughal informed. read more…

SAARC solid food summit, activation of Food Bank demanded

Food shortages have hit the whole globe and it is high time for SAARC to hold a high profile food summit to address the problem.
The grouping should also bring its Food Bank into operation soon, said Dr. Murtaza Mughal, President of Pakistan Economy Watch.
Four SAARC members including Pakistan, Bangladesh, India and Sri Lanka have already ratified the declaration of the food bank. “Rest four countries that is Nepal, Bhutan, Maldives and Afghanistan, of the regional grouping should ratify the declaration soon,” he said in a statement issued here today.
The decision to develop a food bank for the region was taken in April 2007 at the last summit of the SAARC. In view of the experience of food crisis in the region and other countries of the world since 2007 the decision to develop a food bank for the region was a prudent and farsighted one. The recent experience also has taught that if the decision was taken some years ago and implemented the region would not have suffered such a food crisis.
“It has now become an urgent task for the SAARC to establish the proposed food bank to store the targeted two million tones of cereal rice and wheat,” said Mughal.
Food crisis has not remained confined only to the SAARC region. It has become a global problem for a host of reasons. In that backdrop, the Food and Agricultural Organization (FAO) has warned nations that food price globally will come down only a little and furthermore, very slowly. Hence, all nations of the world, especially the Third World ones have to be very careful.
Analysts and forecasters are one that even if money is available food may not be available in the international market at the time of dire need.
SAARC is a relatively underdeveloped but most populous region in the world. So, accumulation of food grain reserve should be a topmost concern for the member countries.
During the last summit held in India it was thousand times pledged to be more active to protect the interest of the member countries. Now time has come to translate the promise into action.

Political conflicts hitting economy hard

Food scarcity can lead country into real instability
KSE saw biggest decline among 89 global benchmarks
Real instability knocking on doors of Pakistan

Multi dimensional political struggle between President, Pakistan People’s Party and PML-Nawaz as well as movement of lawyers has not only pushed the issues of food scarcity, loadshedding and inflation in the background but also brought the main stock index to its knees.
The efforts of State Bank of Pakistan that include May 23 step of raising its benchmark interest rate to tame inflation are not proving sufficient as inflation remains at a twenty-five year high.
Investors’ confidence is in a nosedive and capital flight has started with an alarming ratio while uncertainty and risk of default has resulted in biggest stock plunge in eight years recently.
Now the rumors about a big change on the political chessboard have added to the worries of investors and business community.
The unending political disputes have not only hurt the economy of Pakistan but also undermined the efforts to improve the living standards of people who according to world bodies are threatened due to food scarcity. “Half of Pakistanis can no longer afford sufficient food,” United Nations recently said.
If the situation remains unaddressed and top politicians remained busy in other issues, it could lead to real instability soon,” said Dr. Murtaza Mughal, President Pakistan Economy Watch. read more…

What after chicken is beyond reach?

A top official has rightly advised poor to eat chicken as the price of other provisions have rocketed out of sight and now man of the street can only think about it.
A million dollar question has been haunting economists as well as analysts — what after chicken is beyond the reach of majority of the people of the pure who were never in history were economically challenged in this way.
This phrase deserves to be recorded in history like that of French Marie-Antoinette (1755-93), the Queen consort of Louis XVI. She is supposed to have said ‘let them eat cake’ when she was told that the French populace had no bread to eat.
The similarity between thinking of French and Pakistani nobility shocked many. The recent comment that came centuries after the French phrase is not only a remark but speaks volumes about the mental inclination of our leaders who are not only least bothered about their subjects but cannot care less about the ailing economy of the country. read more…

KSE, a car without breaks stopped by violence

CW membership and sale of banks vital to lure foreign capital

Karachi Stock Exchange, Asia’s only rising market that proved immune to global slump was flourishing on several factors but yesterday’s political violence has put brakes to it.
Deteriorating security situation has heightened the investors’ concerns that need to be tackled, as the foreign capital sitting on the sidelines will not be tempted enough to step into Pakistan.
There were several reasons for the bullish trend with political stability on the top but the riots are the only reason for its dive. Strong fundamentals and technical reasons that were supporting market seem to be evaporating.
KSE-100 had closed at records highs several times this year and forecasts said that it would easily touch the 16,000 mark by the end of April. read more…

Outdated mineral policies needs to be changed: Dr. Mughal

Excessive federal control is putting brakes to progress in remote areas 
Government needs to change old-fashioned federal mineral and metal policies to exploit potential in the resource rich province of Balochistan, NWFP and Northern Areas.
Dollar is loosing its worth and now people are investing in oil, gas, commodities, minerals and metals that has resulted in high prices and demand.
This development offers a hope for progress and prosperity in country if investors are lured and work force is trained, said Dr. Murtaza Mughal, President of Pakistan Economy Watch while talking to Post exclusively.
The government has allocated Rs 221.9 million for projects related to minerals under Public Sector Development Program 2008-009. Major projects include Feasibility Study Gasification of Thar Coal (104.0 million), National Coal Policy (Rs 22.7 million), exploration and evaluation of coalfields of Chamlang-Bala Dhaka, Bahlol and parts of Ghazi Basin in Balochistan (Rs 10.9 million) and establishment of project monitoring and evaluation cell (Rs 18.0 million), he informed.
He said that given the international scenario, these allocations seems insufficient and Government needs to tailor its policies regarding mines and minerals and give some autonomy to provinces and regions as controlling mines etc from Islamabad has proved counterproductive over a long period. read more…

Wisdom behind Moody’s report questioned

Situation in Pakistan will improve soon: Dr. Mughal

Pakistan Economy Watch has questioned wisdom behind report of US based Moody’s Investors Service which has claimed that rupee will run down to 78 against US dollar in two years.
Rupee is stabilizing since the State Bank of Pakistan has taken some stringent measures and the recent report by the agency failed to dent the currency, said President of Pakistan Economy Watch Dr. Murtaza Mughal in a statement issued here Monday.
The rupee remained stable despite warning which proves that market forces have rejected the report, he added.
The rupee remained stable at on Saturday and Monday against the dollar despite the controversial report.
The author of the report — Aninda Mitra, a Moody’s VP can be a good storyteller rather than analyst, said Mughal adding that how come anyone guesses that current economic and political situation in Pakistan will remain tense over the next two years and rupee will continue to slide.
He said that the political and economic situation in Pakistan is not very weak and it will improve soon as Government is trying best to fix things. Moreover Pakistan will remain important on the international geo-political scenario. Peace agreements are working well and peaceful Long March has subsided worries of business community. Restoration of judges is also in sight and masses are hopeful about situation. read more…

Political dynasties, ambitious generals and imported PMs brings economy to the brink

Selfless middleclass leadership can bailout country from political and economic turmoil

National Traders Alliance has said that Pakistan is unstable politically and economically even after decades of experimentation and now we are being ruled by a coalition that is poles apart in their thinking pattern with questionable vision about market and economy.
Political families, aspiring military generals, imported Prime Ministers and some bureaucrats have ruled mostly in Pakistan and many of them are directly responsible for the political and economic chaos, said Malik Sohail Hussain, Vice President, Quami Tajir Ittehad Pakistan and former Senior Vice President Islamabad Chambers of Commerce and Industry in a statement issued here Saturday.
Major economic decision are taken on political considerations and the recent budget is a obvious example how our leaders prefer their agenda on national interests. “We need a new brand of middleclass leadership with a single-minded focus on national development who must be educated or at least well aware in the science of economics,” said Hussain.
He said that our politics in unfortunately revolving around few powerful families who would never allow middle or lower-middle-class politicians to emerge as a threat to their political domination. That is why education is one of the most disliked subjects in the areas lying in the control of feudal lords. read more…

Gas price hike amounts to mini budget

No justification for hefty domestic gas tariff hike
Govt failing itself by launching war against subjects
Masses should not pay for the slippages of elite

Government has raised gas prices sizably without any proper reason or explanation strengthening the notion that it lacks any economic agenda and believes in mini budgets.
The latest price increase, 6th energy hike in four months, will fuel inflation that rose at fastest pace in 30 years.
Government says annual gas subsidies amount to 35.2 billion rupees and it aims to cut it by 11.3 billion, a claim yet to be verified, said Dr. Murtaza Mughal, President Pakistan Economy Watch.
The 31 percent hike that is highest in the region is the most damaging one for country; it amounts to elimination of poor instead of poverty.
The increase will hike cost of production and unleash inflation hitting poor who have over 95 percent share in production and about 4 percent negligible share in resources. read more…

Black gold: blame game not to benefit anyone: Dr. Mughal

Whole world is witnessing an economic downturn due to surging prices of commodities including crude and important nations seem more interested in blame game than resolving the issue. OPEC seems less concerned with the whole issue as the crisis is adding to their huge reserves of petro dollars.
On the other hand Pakistan Government is only relying on their relations which will not work for long, said Dr. Murtaza Mughal, President Pakistan Economy Watch in an exclusive interview with The Post.
He said that the cost of crude oil is surging to record highs and a battle of blame is in full swing. The suspects include oil industry, developed nations, US energy policy, commodity speculators, environmentalists and developing countries in Asia (China and India). read more…

Tackling inflation, food dearth seen as uphill task for Pakistan’s economic managers

Amid warning by the world’s top lending institutions, the economic managers of ruling coalition have taken over an economy hit by stolen funds, waived off loans, record inflation and sluggish growth.
Wheat flour shortages and power deficiency that played a decisive role in recent election could prove an important factor if not tackled properly.
Number of people living under minimum food security level is increasing day by day which could hit growth and hike health costs. Presently 77 million people are facing food shortage and their low intake is hitting households in every direction.
Growing fiscal imbalances is another aspect to be considered seriously and dealt skillfully. read more…