Asad Umar's Exit: Causes and Effects on Pakistan Economy

Who removed Pakistan Finance Minister Asad Umar and why? What was expected of him? Did he fail to deliver it? What are the qualifications of Dr. Hafeez Shaikh who has been picked to replace Asad Umar? Is he better suited to deliver a deal with IMF and other international financial institutions?

Pakistan's Current Account Deficit. Source: Trading Economics

What are Pakistan's biggest economic issues now? Budget deficits? Trade deficits? Current account imbalances? Lack of exports? Lack of domestic savings and investments? Low FDI? What must the new economic team do to address short term and long term problems with Pakistan's economy that are forcing the nation to seek 13th IMF bailout in last 40 years?

Pakistan's External Debt. Source: Wall Street Journal


ALKS host Faraz Darvesh discusses these questions with Misbah Azam and Riaz Haq (www.riazhaq.com)

https://youtu.be/Axo8V-HNuHA






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Riaz Haq's YouTube Channel

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Comments

Riaz Haq said…
#Pakistan #energy #imports up 3.8% in nine months (July 2018-March 2019) of current fiscal year , led by liquefied natural gas (#LNG) , higher by 49.3% and crude oil up 15.19%. Cost of #petroleum product dipped 15.33% during the nine-month period. https://www.hellenicshippingnews.com/pakistan-oil-import-up-3-8pc-in-nine-months/

The country’s oil import bill went up 3.8 per cent year-on-year to $10.6 billion during 9MFY19, from $10.22bn in same period last year, according to data from the Pakistan Bureau of Statistics (PBS).

The rise in imported value of the petroleum group was led by surge in liquefied natural gas, higher by 49.3pc and crude oil 15.19pc. On the other hand, cost of petroleum product dipped 15.33pc during the nine-month period, whereas a 33.9pc decline was recorded in terms of the quantity imported, bringing the total down to 7.57 million tonnes.

The overall import bill during July-March FY19 fell by 7.96pc year-on-year to $40.75bn, leading to a 13pc decline in trade deficit to reach $23.67bn.

Barring petroleum and agriculture groups, all other categories saw their value of imports shrink during the period under review.

Food imports contracted 9.92pc to $4.73bn during July-March 2018-19, from $4.26bn in corresponding months last year. This decline was largely due to a 10.22pc fall in the value of palm oil, which decreased to $1.39bn in 9MFY19, from $1.54bn.

Import bill of the machinery clocked in at $6.74bn during the nine months, lower by 20.54pc, from $8.48bn in same period last year. The biggest contributor to the decrease was power generating machinery, which plunged by 49.09pc, followed by 17.26pc contraction is electrical and 8.86pc in telecom.

Similarly, transport group — another major contributor to the trade deficit – also receded during July-March FY19 as it posted a 35.7pc decline, with decrease in imported value of almost all sub-categories.

On the other hand, agriculture imports inched up by 1.6pc to $6.58bn, from $6.47bn on the back of 16.49pc increase in fertiliser, 13.32pc insecticides and 7.31pc medicinal products.

Textile exports inch up

The textile and clothing export proceeds posted a paltry growth of 0.08pc year-on-year to $9.991bn during 9MFY19, as against $9.983bn in same period last year.

Product-wise details show that exports of ready-made garments went up by 2.02pc, knitwear 9.29pc, bedwear 2.69pc while those of towels declined 1.85pc and cotton cloth 2.09pc.

Among primary commodities, cotton yarn exports dipped by 15.44pc, yarn other than cotton by 3.23pc, raw cotton 71.84pc whereas made-up articles — excluding towels — increased by 1.26pc and tents, canvas and tarpaulin gained 3.49pc in value during the period under review.

The slow growth in textile and clothing exports comes despite government’s support in the form of cash subsidies, special export packages and multiple rupee depreciations during the last year.
Source: Dawn
Riaz Haq said…
#ImranKhanPrimeMinister of #Pakistan joins 37 World Leaders, inc. #Chinese President Xi Jinping, #Russian President Putin, #IMF Chief Christine Lagarde, #UK Chancellor Philip Hammond & #Italian PM Giuseppe Conte for #China’s #BeltandRoadForum. #CPEC https://en.businesstimes.cn/articles/111210/20190425/37-world-leaders-join-china-s-2019-belt-and-road-forum.htm#.XMI85OCA0ek.twitter

China's Belt and Road Forum has just kicked off in Beijing with 37 international government and state leaders. Analysts said Chinese President Xi Jinping is heading to the second annual forum with support from the International Monetary Fund (IMF).

According to Caixin Global, Xi met with IMF Managing Director Christine Lagarde ahead of the forum wherein the latter expressed willingness to cooperate with Beijing's Belt and Road Initiative (BRI). Xi said he appreciates Lagarde's eagerness to work with the project.

The positive atmosphere of Xi's meeting with Lagarde is expected to extend as the Chinese leader heads to this year's Belt and Road Forum wherein he will promote his government's goals and present benefits for partners under the BRI.

While some experts said Beijing may be hit with critical questions that could trace loopholes on the BRI, other economists said China could counter criticism through highlighting the massive infrastructure project's successful schemes over the past years.

Furthermore, it is expected that Chinese officials and partnering countries will rally behind Xi as he addresses potential questions regarding the BRI that critics may raise during the three-day forum.

Turkey and India have refused to attend the meeting but Beijing will receive a whole host of international leaders including Russian President Vladimir Putin. Pakistani Prime Minister Imran Khan will also be part of the forum. U.K. Chancellor Philip Hammond and Italian Prime Minister Giuseppe Conte confirmed they will attend.
Riaz Haq said…
#ImranKhanPrimeMinister of #Pakistan joins 37 World Leaders, inc. #Chinese President Xi Jinping, #Russian President Putin, #IMF Chief Christine Lagarde, #UK Chancellor Philip Hammond & #Italian PM Giuseppe Conte for #China’s #BeltandRoadForum. #CPEC https://en.businesstimes.cn/articles/111210/20190425/37-world-leade...

China's Belt and Road Forum has just kicked off in Beijing with 37 international government and state leaders. Analysts said Chinese President Xi Jinping is heading to the second annual forum with support from the International Monetary Fund (IMF).

According to Caixin Global, Xi met with IMF Managing Director Christine Lagarde ahead of the forum wherein the latter expressed willingness to cooperate with Beijing's Belt and Road Initiative (BRI). Xi said he appreciates Lagarde's eagerness to work with the project.

The positive atmosphere of Xi's meeting with Lagarde is expected to extend as the Chinese leader heads to this year's Belt and Road Forum wherein he will promote his government's goals and present benefits for partners under the BRI.

While some experts said Beijing may be hit with critical questions that could trace loopholes on the BRI, other economists said China could counter criticism through highlighting the massive infrastructure project's successful schemes over the past years.

Furthermore, it is expected that Chinese officials and partnering countries will rally behind Xi as he addresses potential questions regarding the BRI that critics may raise during the three-day forum.

Turkey and India have refused to attend the meeting but Beijing will receive a whole host of international leaders including Russian President Vladimir Putin. Pakistani Prime Minister Imran Khan will also be part of the forum. U.K. Chancellor Philip Hammond and Italian Prime Minister Giuseppe Conte confirmed they will attend.



From the ASEAN bloc, all 10 heads of state will be attending the meeting. Multiple local outlets confirmed that Philippine President Rodrigo Duterte touched down in China to show support for the summit.

Amid continued criticism from the United States and other countries who are not keen on supporting the Belt and Road Initiative, China secured over 170 deals with 150 countries. For the past five years, the agreements accounted for over $90 billion in investments.

Among the latest developments is the Malaysia deal that was seemingly terminated in 2017. With the stalled $10.7 billion railway project deal set to push through this time, analysts said it is a sign that Beijing is actually willing to make amends to its Belt and Road terms for the benefit of both sides.

It was also reported that Peru is set to sign a Memorandum of Understanding (MoU) as the country prepares to join the BRI movement. The Philippines is also expected to sign a total of five deals with the Chinese government during the forum.

The 2019 Belt and Road Forum will run from April 25-27.
Riaz Haq said…
#jeddah based #Islamic Development Bank will continue to support #Pakistan in #economic growth and #social uplift. #IDB has already provided total financing of $12.43 billion for various #development projects in Pakistan https://tribune.com.pk/story/1967852/2-islamic-development-bank-support-pakistan-economic-growth-social-uplift/

Islamic Development Bank (IDB) President Dr Bander MH Hajjar has said that the IDB Group’s relationship with Pakistan spanned over 40 years during which it supported sustainable and inclusive development in the country and it would continue to support Pakistan in economic growth and social uplift.

He was interacting with the business community at a dinner hosted by the Islamabad Chamber of Commerce and Industry (ICCI) on Monday evening. Hajjar revealed that the IDB wanted to support Pakistan in the areas of science, technology, innovation, value chains, economic empowerment and public-private partnership in order to contribute to implementation of a road map launched recently by the government of Pakistan.

He also shared with the business community a new development model set out in his new book “The Road to the SDGs: A New Business Model for a Fast-Changing World”, which was launched at the 2019 IsDBG Annual Meeting.
Speaking on the occasion, ICCI President Ahmed Hassan Moughal pointed out that the IDB Group had provided total financing of $12.43 billion for various development projects in Pakistan, which showed its crucial role in the country’s economy.

He said the IDB Group was financing some key projects in Pakistan like Neelum-Jhelum hydroelectric power project, Jamshoro power station and Casa-1,000 project, which would improve the energy situation and meet energy needs of the industry, leading to better industrialisation and promotion of investment in the country.

Meanwhile, a delegation of the IDB Group discussed financing needs of the local business community in various projects, which would expand their businesses and further strengthen the small and medium enterprise (SME) sector.

Representatives of the Islamic Corporation for the Development of Private Sector (ICD), International Islamic Trade Finance Corporation (ITFC), Islamic Corporation for Insurance and Export Credit (ICIEC) and Islamic Research and Training Institute (IRTI) were in the delegation. The delegation expressed interest in setting up a joint fund with the ICCI for supporting SMEs and innovators in business development and growth.
Riaz Haq said…
Unilever Chief Shazia Syed "#Pakistan is a land of opportunities..things will start improving after 2nd half of next fiscal year. The limbo won’t last longer than that, because the size of population offers a lot of growth opportunities". #FMCG #economy https://www.brecorder.com/2019/05/20/497921/pakistan-is-a-land-of-opportunities/

"The next twelve to eighteen months are going to be tough, but things will start improving after second half of the next fiscal year. The limbo won’t last longer than that, because the size of population offers a lot of growth opportunities"

"We are optimistic. Pakistan is a land of opportunities. Senior representatives from foreign principals of most of our members recently visited Pakistan, which is a clear sign of interest, and nearly all of our members are in expansion mode. As a country we have to showcase opportunities as well as the areas for improvement, as any mature investor knows that no country is without issues. What makes the difference is how these issues are managed."

It was better to take stock of the situation before going to the IMF, and it is also fine to explore low hanging fruit such as loans from friendly countries because we all know IMF’s conditions do have an impact on growth and welfare.

"As OICCI (Overseas Chamber of Commerce and Industry) , we understand the rationale behind government’s decision to delay the IMF programme, especially considering the rather aggressive statements made by the US officials as well as the whole China-IMF-Pakistan story. I think as a result of the delay, and support from friendly countries, the IMF has mellowed down a bit.
However, it would have been better if a sense of timeline was provided earlier on, such as that the IMF will be reached out to after the budget or in the coming fiscal year. That would have brought clarity to businesses. You may recall there was no clarity of statements about the timing, or whether we were going to the fund at all! That created a little bit of panic in the market during the last few months."

Shazia Syed is the Chairperson & CEO of Unilever Pakistan Ltd who has recently taken charge as the President of the Overseas Investors Chamber of Commerce and Industry (OICCI) for the 2019 term. In her 26 years with Unilever, she has worked across various categories at the company, including three years with Unilever Vietnam as Business Unit Leader for Personal Care, and later as its Vice President. Before Shazia took over as CEO of Pakistan operations in late 2015, she was the Chairperson of Unilever Sri Lanka. Until last year she had also served as a Director of the Pakistan Business Council (PBC).

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