Pakistan Independence Day 2020: National Resilience Amid Deadly COVID19 Pandemic

On Pakistan's 73rd Independence Anniversary, the people of the South Asian nation have demonstrated their resilience yet again. They have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Large Scale Manufacturing (LSM) is recovering. Monthly cement sales have rebounded to the pre-pandemic level, fertilizers sales are setting records, fuel sales have increased, tax collection is up,  exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Qamar Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties,  Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

Coronavirus Pandemic:

Foreign and domestic media, activists and think tanks lived up to their reputation when it comes to the coverage of coronavirus pandemic in Pakistan. They all made dire predictions of imminent collapse of the state and society. That has been the case in the past when Pakistan faced terrorist threats and natural disasters.  As in the past, they all turned out to be wrong. Pakistan successfully tacked the pandemic and brought it under control. This success has drawn praise from the likes of Bill Gates known for his global health activism and philanthropy. Speaking on CNN Global Public Square, Gates said:

"Pakistan had a pretty bad peak in Karachi but those numbers have come down and now they look like Europe. India is still sadly in growth phase as is South America...in Africa South Africa is top...in the rest of Africa we've been funding a lot of testing because it's a bit opaque..what goes on in the lungs..you are more exposed to indoor and outdoor particulates even at younger ages you can get disease compared to let's say a rich country"

CNN Screenshot of Pakistan's COVID19 Progress

Civil-Military Relations:

Attacking Pakistani military and describing Pakistani civilian leadership as "puppets" has been one of the favorite hobby horses of foreign and domestic media, activists and think tanks. It seems that they would like nothing better perpetual conflict between the two power centers. So far, these critics have miserably failed in igniting the civil-military conflict in Pakistan.

Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling health and economic crises faced by Pakistan. This has been one of the keys to country's success in dealing with the twin crises.

Pakistan Stock Market Best Performing in Asia. Source: Bloomberg

Large Scale Manufacturing:

In spite of COVID19 pandemic, Large Scale Manufacturing (LSM) went up 16.81% in June 2020 from May 2020, but still down 7.74% from June, 2019.  LSM  declined 10.17% in fiscal 2020 from fiscal 2019.

Pakistan Manufacturing Output. Source: Bloomberg


Cement Sales:

Cement is a basic building material. Its sales are seen as a very important economic indicator of development activity. The cement sales jumped 37.75% from 3.512 million tons in July 2019 to 4.838 million tons in July 2020, the first month the new fiscal year 2020-21.


Pakistan Cement Sales. Source: Bloomberg


According to the data released by Pakistan's cement industry group APCMA, the local uptake of cement in July 2020 increased by 32.67% to 3.953 million tons from 2.979 million tons in July 2019 while exports rose 66.14% to 0.885 million tons, up from 0.533 million tons in same month last year.

Fertilizer Sales:

Sales of urea, a barometer of agriculture activity, have surged 83% to 1.18 million tons in June 2020 from a year ago.  The surge came after a decline 7% YoY to 2.6 million tonnes in the first half of CY20, partly due to COVID19 related lockdown in the country.

Export Performance:

As the COVID19 pandemic eased in Pakistan, the country's exports bounced up to $1.998 billion in July 2020 against $1.889 billion in the same month of the last fiscal year 2019, up 5.8% in dollar terms year-over-year. The imports stood at $3.54 billion in July 2020 against $3.696 billion in the same month of 2019, recording a decline of 4.2 percent. The overall trade balance reduced by negative 14.7% as it stood at $1.542 billion in July 2020 compared with $1.8 billion in same month of 2019.

Pakistan is trying to address various impediments to growing exports. “More than half of Pakistani exporters struggle with domestic and foreign regulatory barriers,” said Invisible Barriers to Trade – Pakistan 2020: Business Perspectives. The report was prepared in collaboration with the World Bank Group’s country office in Pakistan. There's significant upside to exports if Pakistani government and exporters can join hands to address these "invisible barriers to trade".

Naya Pakistan Housing:

Inn spite of the pandemic, Pakistani Prime Minister Imran Khan announced a new housing construction incentives package that includes down payment assistance and expansion of home loans portfolios by commercial banks at discounted rates for affordable housing for the poor.

Shariah compliant financing is also included in it. Pakistan’s mortgage finance to GDP ratio is just 0.25%, among the lowest in the world, according to the World Bank. The average for South Asia 3.4%.  New housing drives a large number of sectors of the economy from banking and building materials to construction and manufacturing of furniture and home appliances. These incentives are designed to stimulate the economy, boost employment and deal with the growing shortage of affordable housing in the country.


CPEC Gains Momentum:

The work on China-Pakistan Economic Corridor (CPEC) has gained momentum in spite of the pandemic that has slowed many sectors of the country's economy.

Pakistan has begun construction on major dam projects worth $11 billion. Diamer Bhasha dam will store 6.4 million acre-feet (MAF) of water and generate 4,500 MW of electricity. Azad Pattan hydro-electric project will produce 700 MW of electricity.

Financing for the $6.8 billion ML-1 railway project has been agreed. It will be the first major upgrade of the train track since Pakistan's independence in 1947. This project will upgrade Pakistan’s existing 2,655km railway tracks to allow trains to move up to 165km/h – twice as fast as their current speed.

Nine special economic zones (SEZs), including Rashakai in Khyber-Pakhtunkhwa, Allama Iqbal in Punjab and Dhabeji in Sindh province, have been launched. Some 1,000 acres of land had been procured for Rashakai SEZ, the groundbreaking of Allama Iqbal SEZ in Faisalabad had been done and tenders opened for Dhabeji SEZ, which would be built on 3,000 acres of land.

Pakistan's Human Development: 

One of the biggest areas of concern is Pakistan's laggard performance in human development. This requires closer civil-military cooperation to deliver better education and health care to improve the country's competitiveness in the world.

There's reason for optimism, however. Key indicators show that education and health care in Pakistan are improving but such improvements are slower than in other countries in South Asia region. Pakistan's human development ranking plunged to 150 in 2018, down from 149 in 2017. It is worse than Bangladesh at 136, India at 130 and Nepal at 149. The decade of democracy under Pakistan People's Party and Pakistan Muslim League (Nawaz) has produced the slowest annual human development growth rate in the last 30 years. The fastest growth in Pakistan human development was seen in 2000-2010, a decade dominated by President Musharraf's rule, according to the latest Human Development Report 2018. One of the biggest challenges facing the PTI government led by Prime Minister Imran Khan is to significantly accelerate human development rates in Pakistan.

Summary:

Pakistanis have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Monthly cement sales have rebounded to pre-pandemic level, fuel sales have increased, tax collection is up,  exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties,  Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

Here's a brief video clip of Bill Gates' remarks on CNN:

https://youtu.be/NWTkfhiwsG4




Related Links:

Haq's Musings

South Asia Investor Review

COVID19 in Pakistan: Test Positivity Rate and Deaths Declining

Pakistan's Pharma Industry Among World's Fastest Growing

Is Pakistan's Response to COVID19 Flawed?

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Coronavirus Antibodies Testing in Pakistan

Can Pakistan Effectively Respond to Coronavirus Outbreak? 

How Grim is Pakistan's Social Sector Progress?

Pakistan Fares Marginally Better Than India On Disease Burdens

Trump Picks Muslim-American to Lead Vaccine Effort

Democracy vs Dictatorship in Pakistan

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

Panama Leaks in Pakistan

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

Comments

Riaz Haq said…
Bill Gates on CNN GPS talking about COVID19 Pandemic: "Pakistan had a pretty bad peak in Karachi but those numbers have come down and now they look like Europe. India is still sadly in growth phase as is South America...in Africa South Africa is top...in the rest of Africa we've been funding a lot of testing because it's a bit opaque..what goes on in the lungs..you are more exposed to indoor and outdoor particulates even at younger ages you can get disease compared to let's say a rich country"

Host Fareed Zakaria disses Pakistan's success against COVID19 but his guest Bill Gates does not agree. https://www.youtube.com/watch?v=KpAMVLwBJkM

Here's an excerpt from Fareed Zakaria GPS show aired on Aug 9, 2020.



ZAKARIA: So let's talk about the rest of the world. When you look at COVID from a global standpoint, what strikes you? Because it still, to me, seems odd that you have such variation. You know, if you look at a place like Sri Lanka or Pakistan, Pakistan which has done almost nothing as far as I can tell, you know, infections are not going crazy, death rates are not going crazy, there may be some underreporting, of course.

Then you have the fact of places like Vietnam or Taiwan, where they have really a stunningly low death rate. And then you have, of course, northern Italy, New York. What is all this telling you? Are you drawing any conclusions about the nature of the virus?

GATES: Well, there's a few patterns. Countries that had MERS or SARS episodes realized that in their checklist if a respiratory disease came along, they needed to reach out to the commercial testing groups and get capacity and get turnaround. And because they caught it early with competent testing, which the U.S. did not, they had such low level of cases, then contact tracing works. South Korea being a fantastic example of that.

Some, you know, people have very good health systems like Vietnam. We also believe now that the related coronavirus exposure, because there's so many bats in -- as you get into Southeast Asia there, that they probably, you know, within a few months will really understand this. They probably had this cross-protection that meant the spread of the disease was not as strong there.

Also having a young population, you know, was beneficial. Pakistan had a pretty bad peak in Karachi, but now they look like Europe. Those numbers come down. India is still, sadly, in a growth phase as is lots of South America. Africa, we know South Africa is tough. The rest of Africa we've been funding a lot of testing there because it's a bit opaque what goes on. And the lungs in Africa, you're more exposed to indoor and outdoor particulate, so it looks like even at younger ages you can get a serious disease compared to, say, a rich country.

http://transcripts.cnn.com/TRANSCRIPTS/2008/09/fzgps.01.html
Riaz Haq said…
#Indian #Hindu temple reports huge #coronavirus outbreak as cases surge with 700 cases of the novel coronavirus among its staff in the past 2 months, as cases in the country surged past 2.2 million with 45,000 deaths. 62,064 new cases in the past 24 hours. https://reut.rs/30JyoGc

A well-known Hindu temple in India has seen more than 700 cases of the novel coronavirus among its staff in the past two months, a temple official said on Monday, as cases in the country surged past 2.2 million.

India reported a near-record 62,064 new cases of the virus in the past 24 hours, according to federal health data released on Monday, taking its total number of cases to more than 2.2 million.

India has fewer cases than only the United States and Brazil, though it has reported a relatively low number of deaths, at fewer than 45,000, although epidemiologists say the peak of its outbreak could be months away.

Cases in India have been spreading from urban areas to smaller towns and the countryside, where health infrastructure is already over-burdened.

The Lord Venkateswara temple in the town of Tirumala in south India, one of the biggest and most wealthy Hindu shrines in the world, said two of its staff and one former employee had died of COVID-19 since June 11, when it reopened to the public after a government lockdown.

In all, 743 temple employees had been infected by the virus, it said.

“We are providing the best medication to those infected. We are taking utmost precaution, social distancing norms are followed, devotees and others are wearing masks,” said the chairman of the temple’s trust organisation, Y. V. Subba Reddy.

It was not clear how many of the temple’s thousands of daily visitors had contracted the virus.

The trust employs about 22,500 workers including 300 priests and controls 10 temples, including the main Venkateswara temple where it employs 36 priests.

India started a phased re-opening after a strict lockdown that was imposed on March 25. Temples and other places of worship were allowed to open in June.

Places of worship draw many thousands of people in India and premises are often cramped, making social distancing difficult.
Riaz Haq said…
Car sales rebound in #Pakistan as #COVID__19 #pandemic eases. #Toyota sales jump 60% month-to-month, followed by Pak #Suzuki 28% & #Honda 23%. Honda motorbike sales of 94,003 units in July, up by 17% year-over-year & 4% on a month-on-month. #manufacturing https://www.samaa.tv/money/2020/08/suzuki-limps-as-toyota-honda-sales-accelerate-in-pakistan/

Pak Suzuki sales declined 40% in July as compared to the same period last year, despite the Indus Motor Company (Toyota) and Honda Atlas reporting 68% and 46% growth, respectively.

The overall sales of the industry dropped 8% to 11,501 units during the month, according to the Pakistan Automotive Manufacturers Association.

Kia Lucky Motors, a new player in the industry, sold around 1,500 units, according to Hammad Akram of Topline Securities. Kia’s data is not available on the PAMA website as it is not a member of the association.

The auto industry struggled during the Covid-19 pandemic and the subsequent lockdowns. However, car sales showed an increasing trend with 36% growth on a month-on-month basis as the government eased lockdown restrictions. Car assemblers are now ramping up production levels to meet demand. It is evident from one to three months of delivery time from the date of booking.

All the three main car assemblers in Pakistan have reported an increase in sales on a month-on-month basis. IMC reported the highest increase of 60% followed by Pak Suzuki at 28%. Honda reported 23% increase.

Atlas Honda, the bike manufacturers, reported motorbike sales of 94,003 units in July, up by 17% on a year-on-year and 4% on a month-on-month basis.

“We expect demand for cars to grow stronger as lower interest rates for auto financing have revived demand for new cars,” Akram said.

Out of a total of 11 automobile companies, stocks of ten companies, including Suzuki, Toyota and Honda, listed on KSE-100 remained red on Wednesday.
Riaz Haq said…
#BRT #Peshawar buses to start operating tomorrow. It’s a 3rd gen rapid transit project with 27 km long main corridor from Chamkani to Karakhano crossing, & 5 off-corridor routes connecting different parts of the city to it, adding up to 59 km.- #Pakistan

https://www.dawn.com/news/amp/1573928

The chief minister said his two years at the helm were tough as there was so much criticism of the project.

CM says project deadline set by his predecessor was a mistake

“For me, it was a situation like caught between a rock and a hard place,” he said.

Mr Mahmood said the government would gradually meet all those things, which the project lacked.

He praised the BRT managers over efforts for the project’s launch.

“All of them worked very hard to make the project’s timely inauguration a reality,” he said.

Fayyaz Khan, the chief executive officer of the government-owned TransPeshawar company, which has been set up to operate the project, highlighted the features of the initiative.

He said BRT was a third generation project, which had a 27 kilometers long main corridor from Chamkani to Karakhano crossing, and five off-corridor routes connecting different parts of the city to the main corridor.

“The Kohat Adda-Shah Alam on Charsadda road off the corridor link will be 18 kilometers long, while the length of the Chamkani-Pishtakha Chowk section is 19 kilometers. The three other routes will connect different parts of Hayatabad and Karkhano crossing with each other,” he said.

Mr Fayyaz said 30 BRT stations had been set up along 27 kilometers long BRT corridor at a distance of 900 meters.

He said three depots and staging facility were under construction.

The TransPeshawar CEO said the company had a fleet of 200 diesel hybrid air-conditioned buses, which would cover 59 kilometers of the main and off-corridor routes.

He said the project also had a bicycle sharing system and 360 buses had been purchased for the purpose.

Mr Fayyaz said the BRT would also have an express service, which would make stops at only seven stations of the main corridor, while the regular bus service would be available at all stations.

He said the commuters would have to pay Rs10 per five kilometers, while the fare would go up by Rs5 for every five kilometers.

“A ride from Chamkani to Karakhano crossing will cost a commuter Rs35,” he said.

About the existing public transport, the TransPeshawar chief said the company had registered 618 vehicles and of them, 418 had been compensated.

He said the company had distributed 100,00 Zu BRT cards free of charge among the residents.Work on the bus project was launched in Oct 2017 with the then chief minister, Pervez Khattak, setting six months deadline for its completion at a cost of Rs49 billion.

However, the frequent design changes and retrofitting not only caused the project to miss the first deadline but it also increased the project cost by Rs17 billion to a staggering Rs66.43 billion.

Thereafter, the project managers changed the launch dates from May 20 to June 30 to Dec 31 in 2018 to March 23, 2019, to June 2020. However, the project wasn’t launched due to design and other issues.

In the meanwhile, a National Accountability Bureau probe ordered by the Peshawar High Court into the alleged corruption in BRT project was stopped in Sept 2018 by a Supreme Court bench headed by the then chief justice, Saqib Nisar.

In Dec 2019, the Peshawar High Court ordered the Federal Investigation Agency to investigate that alleged corruption.

A five-member FIA team formed in line with the court’s judgement had submitted its report to the court at the end of Jan. However, the apex court stopped the probe in Feb.
Riaz Haq said…
#China to Supply #Coronavirus #Vaccine to #Pakistan, one of its closest allies. State-owned Sinopharm is set to work with #Karachi University on vaccine trials, including enough doses to vaccinate about one-fifth of Pakistan’s population. #COVID19 #CPEC https://www.wsj.com/articles/chinato-supply-coronavirus-vaccine-to-pakistan-11597337780

The agreement, among the first China has reached as part of its efforts to test its coronavirus vaccine in populations beyond its borders, comes amid a global competition for access to vaccines that are now entering trials and expected to come to market in coming months.

Negotiations are under way with a second Chinese company to try out its vaccine in Pakistan, officials said.


Developing countries often lack both a pharmaceutical industry to develop, test and produce vaccines and the money to purchase them from elsewhere. That has forced governments to seek supplies from allies or from international groups attempting to obtain vaccines for poor countries.

China hasn’t been a major vaccine producer globally. It needs to test its Covid-19 vaccines outside its borders because coronavirus cases in China have dwindled and it is harder to find the population diversity required.

Beijing is leveraging its coronavirus vaccines to build global influence, especially in the developing world. “Covid-19 could be a turning point for China, as we are seeing a vacuum in global leadership,” said Jennifer Bouey, senior policy researcher at the Rand Corporation. “China could build solidarity with developing countries and become a more influential player in global health.”

The U.S. has spent at least $9 billion to buy up vaccine supplies in advance from non-Chinese companies to cover its entire population.

Neither the U.S. nor China have joined the global initiative backed by the World Health Organization that aims to raise $18 billion to purchase and distribute the vaccine equitably.

State-owned China National Pharmaceutical Group, also known as Sinopharm, has tied up with Karachi University’s International Centre for Chemical and Biological Sciences for the Pakistani trials.

Financial terms haven’t yet been worked out, the officials said.

Given intense global demand for the vaccine, the best that many countries can hope for before 2022 is to source enough vaccine for its most vulnerable people.

Pakistan has been a showcase for Beijing’s global infrastructure-building program, the Belt and Road initiative, in recent years. The initiative has been another way China has sought to increase its overseas clout.

Pakistani officials say that in addition to any vaccine from China, they are open to sourcing immunizations from elsewhere if they are affordable.

China has three indigenous coronavirus vaccines being developed in Phase 3 trials. They all use the traditional inactive virus technology. Chinese companies are also conducting final trials elsewhere, including in the United Arab Emirates and Brazil.

Some Western vaccines are also in final trials, including vaccines being developed by Oxford University and U.S.-based Moderna Inc.

Some countries including Brazil have a local vaccine-manufacturing capability. They have worked out an agreement with a Chinese company to produce the vaccine locally after trials there. But countries without that capability, such as Pakistan, are particularly vulnerable.

While Pakistan’s coronavirus figures have declined, officials say there are hot spots where the vaccine could be tested. They fear a second wave could arrive in coming months, as economic activity increases and restrictions on movement are lifted.
Riaz Haq said…
#Pakistan #diaspora sent home a record $2.67 billion in #remittances in July 2020, an increase of $740 mn (or 36.5%) over July 2019 and an increase of $302 mn (or 12.2%) over June 2020. This is the highest ever recorded workers’ remittances in a single month..Via
@StateBank_Pak


http://www.sbp.org.pk/press/2020/Pr-17-Aug-20.pdf


Workers’ Remittances rise to record monthly high in July 2020
1. In July, workers' remittances rose to US $ 2,768.1 million. This is the highest ever level of
remittances in a single month in Pakistan.
2. In terms of growth, remittances increased by 36.5 percent over July 2019 (y/y) and 12.2 percent
over June 2020 (m/m). Given the impact of Covid-19 globally, this increase in worker’s remittances
is encouraging.
3. In July, sizeable amounts of workers' remittances were received from Saudi Arabia (US $ 821.6
million), UAE (US $ 538.2 million), UK (US $ 393.9 million) and USA (US $ 250.6 million).
4. The growth rate in remittances compared to the same month in the previous year is around twice
as high as the Eid-ul-Adha related seasonality typically experienced over the last decade.
5. Several factors have likely supported the growth in remittances to date, including orderly
exchange rate conditions and policy steps taken by the State Bank and the Federal Government
under the Pakistan Remittance Initiative. These steps include reducing the threshold for eligible
transactions from USD 200 to USD 100 under the Reimbursement of Telegraphic Transfer (TT)
Charges Scheme, an increased push towards adoption of digital channels, and targeted marketing
campaigns to promote formal channels for sending remittances.
To improve data quality and better capture the source country of the remitter, the compilation
methodology for ‘country wise’ workers’ remittances has been strengthened from this month.
Therefore, country-by-country trends will be available on a consistent basis from August 2020
onwards. Importantly, the new data collection method does not affect the reporting of the level
of remittances arriving into Pakistan. Further information on the improvement in the data
reporting is available at the following link: http://www.sbp.org.pk/ecodata/Homeremit.pdf
http://www.sbp.org.pk/ecodata/Homeremit.xls
6. Importantly, the revised country shares under the improved data do not necessarily imply that
remittances from one country have increased over another. Instead they demonstrate that the
source country of remittances is being recorded more accurately now.
Riaz Haq said…
After Moody's, Fitch Ratings also affirms #Pakistan’s long-term rating at ‘B-’ with a stable outlook, anticipating a surge in foreign exchange reserves to a 4-year high of $16 billion, even after #Saudis withdraw $2 billion. #economy #IMF #credit #eating https://tribune.com.pk/story/2259975/fitch-affirms-pakistans-rating


It expects Riyadh would withdraw the remaining deposit of $2 billion from the State Bank of Pakistan’s (SBP) foreign exchange reserves on the scheduled timeline of 2022. Besides, the country has plans in place to float Eurobond and Sukuk to borrow more from the international market by December 2020, the global credit rating agency noted.

The foreign currency reserves stood at $7.7 billion about a year ago, it said.

“Fitch Ratings has maintained Pakistan’s sovereign rating at ‘B-’ with a ‘stable outlook’, which further confirms Moody’s assessment published earlier this month. Once again, this is a clear affirmation of the government’s well-considered and effective economic and financial policies in some of the most challenging circumstances in living memory created by the Covid-19 pandemic,” the finance ministry tweeted on Monday.

Fitch Ratings, in its rating action commentary on Monday, stated, “The external finances appear resilient to shock due to the authorities’ policy actions and continuing multilateral and bilateral financial support.”

It expected economic revival in FY21, expecting gross domestic product (GDP) growth of 1.2% compared to a contraction of 0.38% in FY20.

It also found Pakistan’s policy actions on the economic front like a tight monetary policy and a flexible rupee-dollar exchange rate regime very much sound.

The Covid-19 outbreak, however, prompted authorities to significantly cut the benchmark interest rate by 625 basis points to 7% to help households and businesses to cope with the pandemic. With this, the real interest rate has fallen to negative.

Moreover, the net foreign exchange reserves dropped to negative and the rupee depreciated further mainly due to panic pullout of investment by foreigners from rupee-denominated treasury bills and Pakistan Investment Bonds (PIBs) to the tune of $3 billion since the Covid-19 emergence.

The current challenges to the economy like weak public finances, large fiscal deficits, high government debt-to-GDP ratio and large external debt repayments against low foreign exchange reserves led Fitch to rate Pakistan’s long-term foreign currency issuer default rating (IDR) at ‘B-’.

“The coronavirus pandemic has exacerbated these challenges by depressing economic growth and pressuring public finances,” it said.

Pakistan may face challenges in collection of revenue in taxes and workers’ remittance may drop due to Covid-19 challenges. It, however, finds it difficult for authorities to announce a second stimulus package for individual and businesses to cope with Covid-19 challenges.

The situation may increase debt-to-GDP ratio to 90% in FY21 and expected to reduce to 85% by FY25, Fitch estimated.

The agency, however, strongly expected the country’s economic indicators to improve growing forward, as Pakistan is committed to implement the economic reform agenda under IMF loan programme.

“Foreign holdings (in T-bills/PIBs) have stabilised since then (Cvoid-19), and reserves have been restored through multilateral and bilateral disbursements. The central bank’s net forward position has increased somewhat in the past months and net reserves remain negative, even though they have narrowed,” Fitch said.

Pakistan’s current account deficit narrowed to 1.1% of GDP in FY20, from a peak of 6.1% in FY18, due mainly to import compression and lower oil prices. Fitch forecasts a slight widening of the current account deficit to 1.7% in FY21 due to a modest recovery in imports and declining remittances.

“Remittances rose unexpectedly by 7.3% in 4QFY20, but we view this as temporary and expect a decline of about 10% in FY21 due to the impact of the global economic shock on Pakistan’s overseas workers.”
Riaz Haq said…
#ImranKhan says #Pakistan had "elite capture" with a small minority having all facilities & advantages. "They think think have a privileged position and are above the law". #Karachi "is Pakistan's economic engine". #NawazSharif #Zardari #corruption #sugar https://www.dawn.com/news/1575107

"My entire life has been a struggle," he said, talking about his decision to become a cricketer early on and to later set up the Shaukat Khanum Memorial Cancer Hospital. "Politics was the biggest struggle."

But when you keep at it continuously, you learn how to do it, he said. "You no longer fear ups and downs. What happens is that when people don't struggle for something, they become worried when there are ups and downs."

So many people made political parties, but I think they gave up during bad times, he said. "Because I had an idea, I was constantly learning and getting back up on my feet."

These two years were the biggest struggle yet, because there were several challenges, the premier said. "The country's economy had crashed, we were defaulting on payments, we didn't have money to pay our debts [...] departments had collapsed and government corporations were in debt.

"There was no one place to concentrate on," he said, adding that this was a learning experience.

So in the first two years, we understood the challenges the country was facing and then I tried to change its path towards what it was originally made for, a welfare state, he said.

"Today if you ask me what I have tried to do, I will say I have tried to put the country on the path to becoming a welfare state. If we want to progress, we have to go back to that model."

He stated that Pakistan had an "elite capture", where a small minority had access to facilities and were taking advantage of the system.

"They think think have a privileged position and are above the law. If you think about it, in the past two years, steps were taken for the very first time to bring them under the law."

'I was attacked on Covid-19 response'
Commenting on the country's success in controlling the coronavirus pandemic, the premier stated that he had always thought about the poor and the vulnerable segment of society when told to impose a lockdown to curb the spread of the illness.

"I was attacked, saying that I don't understand and am ruining the country but the lowest segment of society should be your priority," he said, adding that he was being told to impose a total lockdown by the opposition and by certain members of his own party.

"But our conditions were not like that of Italy and Spain. What would we have done about the common man, the labourers, the six to seven people living in one room if we imposed a lockdown? That is why I resisted," he said.
Riaz Haq said…
S&P Says Pakistan’s long-term outlook ‘stable’. #Pakistan had made solid progress toward important fiscal & #economic reforms prior to the start of the global #coronavirus outbreak, and reform momentum should return once the #pandemic was better contained https://www.dawn.com/news/1575582

ISLAMABAD: The Standard & Poor’s (S&P) rating agency on Thursday affirmed Pakistan’s ‘B-’ long-term and ‘B’ short-term sovereign rating while maintaining ‘stable’ long-term outlook.

The New York-based rating agency also affirmed ‘B-’ long-term issue rating on Pakistan’s senior unsecured debt and sukuk trust certificates. It said the country’s rating remains constrained by a narrow tax base and domestic and external security risks, which continue to be high.

Although the country’s security situation has gradually improved over the recent years, ongoing vulnerabilities weaken the government’s effectiveness and weigh on the business climate.

It said the Covid-19 pandemic exacerbated Pakistan’s economic downturn but forecast the real GDP to recover to 1.3 per cent during the current fiscal year. “We expect the sovereign’s credit metrics to remain under pressure for the next two to three years”, said the S&P.


The agency, nevertheless, noted that the government had made solid progress toward important fiscal and economic reforms prior to the start of the global coronavirus outbreak, and reform momentum should return once the pandemic was better contained. Multilateral and official funding will remain critical to Pakistan’s external debt sustainability.

It said the stable outlook reflected rating agency’s expectations that funding from the International Monetary Fund (IMF) and other partners, along with a recent improvement in Pakistan’s balance of payments position will be sufficient for the country to meet its considerable external obligations over the next 12 months.

The rating agency said it may lower its “ratings if Pakistan’s fiscal, economic, or external indicators deteriorate further, such that the government’s external debt repayments come under pressure”. Indications of this would include external or fiscal imbalances higher than expected.

Conversely, it may raise ratings on Pakistan if the economy materially outperforms expectations, strengthening the country’s fiscal and external positions more quickly than forecast. It said the progress on reforms was likely to be delayed amid the pandemic.

The ratings reflect the fallout of the Covid-19 pandemic on the country’s already-weak economy, considerable external indebtedness and liquidity needs and an elevated general government fiscal deficit and debt stock.

“While Pakistan had made progress toward consolidating its fiscal accounts during the first nine months of its Extended Funding Facility programme with the IMF, related imbalances have been worsened by much slower economic growth since March 2020”, it noted.

The agency noted in particular that domestic demand in the economy remained very weak, as evident from contractions in both real consumption and imports in the fiscal year ended June 2020. Prospects for a near-term recovery have dimmed following strict domestic virus containment measures implemented between March and June, and in the face of a much weaker global economic outlook.

Despite having stabilised in the first three quarters of the fiscal year, a deep downturn in the April-June period led the Pakistani economy to a full-year contraction of nearly 0.4pc in fiscal year 2020. Renewed weakness in the economy will undermine revenue generation while complicating the government’s efforts to curtail expenditure.

The government is likely to focus on implementing last year’s new revenue measures in the current fiscal period, rather than to introduce additional policies against a backdrop of poor business and consumer sentiment.
Riaz Haq said…
In Pakistan – the world’s fifth-largest country by population – 24 million breadwinners rely on daily wages or are self-employed in the informal economy. For them, life came to a standstill with the implementation of a lockdown in March, causing a widespread loss of income that began fueling civil unrest and rioting.


by Sania Nishtar


https://www.thenews.com.pk/print/703439-the-ehsaas-experience



To mitigate the pandemic’s socioeconomic damage, Pakistan’s government created the Ehsaas Emergency Cash program, the largest social-protection program in the country’s history. Rolled out ten days after lockdown began, it is delivering one-time cash grants totaling more than $1.2 billion to more than 16.9 million households, covering around 109 million people – approximately 50 percent of the country’s population. Recipient families are given Rs12,000 ($75) to cover their immediate subsistence needs.

---------------

Prior to the delivery of Ehsaas cash, I saw unspeakable suffering among people from many walks of life. There were day laborers and hawkers, hotel and restaurant staff, and domestic servants, security guards, and drivers. There were also laid-off public-transport employees, fishermen and miners, beauticians and barbers, and millions of shopkeepers – all on the verge of hunger, with their savings used up. They, along with private-school teachers, electricians, welders, painters, carpenters, plumbers, car mechanics, taxi drivers, and construction workers, did not know where their next meal would come from.

These stories were repeated across industries and regions, with even those used to earning a decent living suddenly wondering if their finances would ever add up again. But the handouts brought stability and comfort to millions of families, and the whole country watched as countless tragedies were averted.

Beyond the immediate crisis, the success of Ehsaas Emergency Cash offers Pakistan and other middle- and low-income countries invaluable experience in speedily delivering a massive national program in a complex and uncertain context. In order to share this knowledge, the government recently released a report describing the knowhow we gained through the program’s design and implementation, as well as the operational challenges we encountered and how they were addressed. The report can be accessed at: https://www.pass.gov.pk/Document/Downloads/EECreportAugust10.pdf
Riaz Haq said…
With #Coronavirus controlled, #Shanghai Electric Accelerates #Pakistan's Thar Block-1 Integrated #Coal Mine Project to achieve annual output of 7.8 million tons & 2 660-MW coal-fired power plants capable of providing electricity for 4 million households. https://prn.to/2CO9gES

The first charter plane arranged by Shanghai Electric and Air China took off from Shanghai's Pudong International Airport on August 4, taking the first batch of construction team consisting of hundreds of Shanghai Electric's workers, engineers and managers to Pakistan as part of the support to speed up the progress of Thar Block-1 Integrated Coal Mine Power project, a major energy project of the China-Pakistan Economic Corridor (CPEC).

The construction progress of the project has been interrupted by the pandemic-induced travel restrictions which have made it difficult for the workers to enter the country, causing a substantial shortage of the on-site workforce and slowing down the overall progress. The construction projects in Dubai and PanĨevo are also facing the same challenge.

With the assistance and guidance of the Shanghai municipal government, Shanghai Electric coordinated with Air China to arrange multiple charter planes for thousands of technical and managerial staff to accelerate the progress of the three major projects. All flights are operated with the highest health and safety measures throughout the journey to guarantee the safety of all construction personnel. The first batch of over 4 tons supplies including personal protective equipment, daily necessities, office essentials and emergency drugs were also shipped to the destinations.

The team was received by the company's officials at Jinnah International Airport on August 4 and will replace the local Chinese engineers and managers whose return were delayed due to the outbreak of the COVID-19 pandemic. All construction personnel will follow the quarantine measures in accordance with the local regulations upon arrival. The construction procedures are required to operate in line with the anti-pandemic guidelines, and the infection prevention measures have been put in place by Shanghai Electric to create a bio-secure working environment, protecting the safety and health of all on-site workers.

Located in Thar Desert in the southeastern part of Pakistan's Sindh Province, Thar Block-1 Integrated Coal Mine Power Project covers an area of over 9,000 square kilometers with the coal mine expected to achieve an annual production capacity of 7.8 million tons and two 660-megawatt coal-fired power plants capable of providing affordable and reliable electricity for 4 million Pakistani households.

"As a priority project of both the 'Belt and Road' initiative and CPEC, the completion of Thar Block-1 Integrated Coal Mine Power Project will go a long way in advancing Pakistan's energy development. However, the COVID-19 has posed an unprecedented difficulty to the construction operations," said Mr. Song Zaile, Executive Director of Thar Coal Block-1 Power Generation Company (PVT) Ltd (SPV of Shanghai Electric in Pakistan).

"To address the challenges, we have been working on many fronts to keep the disruption caused by this global health crisis at a minimum while adopting the upgraded anti-pandemic measures to prevent on-site virus transmission," he added.
Riaz Haq said…
#China, #Pakistan agree to push on with #rail and #power projects after a meeting of foreign ministers in the south China island of Hainan. Both are part of the US$62 billion #CPEC which is enjoying a “mini-revival” ahead Pakistan visit by President Xi. https://www.scmp.com/news/china/diplomacy/article/3098419/china-pakistan-agree-push-rail-and-power-projects

China said it has agreed with Pakistan to push ahead with rail and power projects under the China Pakistan Economic Corridor (CPEC), as the two nations remain locked in border stand-offs with their mutual neighbour India.
Beijing made the announcement on Friday following a meeting between Chinese Foreign Minister Wang Yi and his Pakistani counterpart, Shah Mahmood Qureshi, in the south China island province of Hainan.

“The foreign ministers of China and Pakistan agreed that the joint construction of the belt and road should be accelerated to bring more benefits to the two peoples,” Wang was quoted as saying in a statement by the Chinese foreign ministry.
“The construction of the China-Pakistan Economic Corridor has entered a new stage of high-quality development and will continue to play an important role in the revitalisation of Pakistan,” he said.


The CPEC is a US$62 billion project that forms part of the Belt and Road Initiative, Beijing’s multibillion-dollar infrastructure development plan to boost connectivity across Asia and beyond.

China is the largest foreign investor in Pakistan, accounting for US$27 million of the US$114.2 million logged last month, according to figures from the State Bank of Pakistan.
Andrew Small, a senior fellow with the Asia programme of the German Marshall Fund, a non-profit organisation in Washington, said the CPEC was enjoying a “mini-revival” ahead of a possible visit to Pakistan by Chinese President Xi Jinping.

Xi was expected to visit earlier in the year but the trip was cancelled because of the coronavirus pandemic. A revised date has not been set.

“Given its status as the belt and road’s flagship, the Chinese government wants to ensure a narrative of momentum and success around the CPEC, especially with the additional spotlight a visit [by Xi] would shine on it,” he said.
“There is no chance that they would have been able to sustain that narrative without a new investment package, given the slowdown that CPEC has experienced in recent years.”

Earlier this month, Pakistan approved a US$6.8 billion scheme – known as the Main Line 1 upgrade project – to improve the South Asian country’s main railway line, which runs for almost 1,900km (1,180 miles) from Karachi to Peshawar.
The much-delayed project is the most expensive to date under the CPEC. Until 2018 it had a budget of US$8.8 billion but that was slashed by Islamabad over debt concerns.
Other CPEC projects have also suffered delays and funding problems. A key section of highway missed a construction deadline in December, as government ministries slashed payments for it.
Riaz Haq said…
Asia’s best-performing stock market is just getting started.
Pakistan’s key index is up 36% since March after rate cuts

https://www.bloomberg.com/news/articles/2020-08-24/asia-s-best-performing-stock-market-is-just-getting-started

https://twitter.com/FaseehMangi/status/1298000534385950720?s=20

The rebound that’s helped make Pakistan equities Asia’s best performers since the end of March isn’t done yet, according to some money managers.

The nation’s central bank has been among the most aggressive globally in cutting interest rates this year to cushion the economy amid the coronavirus pandemic. That has reduced the double-digit returns from fixed income and bolstered the bullish case for equities.

“Given the abrupt fall in interest rates, locals are still early in their re-allocation from bonds to equities,” said Ayub Khuhro, chief investment officer at Faysal Asset Management Ltd., whose assets have tripled to 35 billion rupees ($210 million) in the past year. “If rates remain at these levels for some time, they will continue to drive the market.”

Pakistan’s KSE-100 Index is up 36% from the end of March, the best rebound among major Asian equity indexes for the period. A slowdown in the rate of new infections coupled with measures to boost an economy that shrank for the first time in seven decades prompted the Dubai-based FIM Partners in July to make Pakistan its biggest exposure after the Philippines.

“I see Pakistan becoming our largest exposure in the next six months,” said Mohammed Ali Hussain, research head at FIM Partners, which manages $1.6 billion. “Even after the rebound, there’s room for re-rating assuming the macro picture remains on track,” he said. In dollar terms, the KSE-100 Index is still down more than 50% from its life-time high reached in May 2017, he said.

Tundra Fonder AB, the Stockholm-based money manager known for its early bet on Pakistan, said the nation has the largest allocation in its frontier fund.

“Covid-19 interrupted everything but our argument from July last year that the next four-five years should be very good for Pakistani equities is valid,” said Chief Investment Officer Mattias Martinsson. “Given the low foreign appetite for emerging and frontier markets, it remains to be seen if foreigners participate.”

So far, overseas funds aren’t joining their local peers in buying the nation’s shares. They’ve pulled a net $346 million this year, mirroring withdrawals seen in big Asian markets excluding China.

A year after winning a $6 billion International Monetary Fund loan to fend off a balance-of-payments crisis, Pakistan sought another loan to fight the fallout of the pandemic. The nation faces the risk for a resurgence in infections, which can stall economic recovery.

“There is a hanging sword of a second wave,” Haroon Ahmad Khan, Chief Executive Officer at Waves Singer Pakistan Ltd., a producer of fridges, washing machines and deep freezers, said at a briefing. “We are cautiously optimistic about the future.”

Stock bulls say the high volumes accompanying the rebound -- the KSE-100 Index saw its highest turnover in 13 years on Aug. 13 -- is a sign the rally is backed by the wider public after the 625-basis point cut in borrowing costs.

“Make hay while the sun is shining and that sun is the historically low interest rate,” Faysal Asset’s Khuhro said. “We expect this liquidity-fueled rally to continue.”
Riaz Haq said…
The State Bank of Pakistan (SBP) elaborated on its Twitter handle that the strong turnaround in the remittances and exports is achieved "with support from several policy and administrative initiatives taken by the SBP and the federal government.

https://tribune.com.pk/story/2261170/pakistans-economy-rebounds-despite-pandemic

"This is the fourth monthly surplus since last October," the central bank said in its second tweet.

The export of goods increased to $1.89billion in July compared to $1.58billion in June. It was, however, 14% lower than $2.22billion export in July 2019, according to the bank.

The remittances hit a record high of $2.77billion in the single month of July compared to $2.47 billion in June and $2.03 billion in July 2019.

The import of goods enhanced by 2% to $3.63 billion in the month compared to $3.56 billion in the previous month. It was, however, 13% lower than $4.18 billion import of July 2019.

"The balance of the current account in surplus is in line with the market expectations," Next Capital Managing Director Muzammil Aslam said. "The growth in workers' remittances was, however, surprising [in the month of July 2020]."

"Now the question is whether the balance in the current account would be maintained in surplus, going forward," Aslam questioned.

He said the encouraging number –the balance in surplus – would at least help the economy to absorb shocks if it encounters any due to unexpected higher import payments in the remaining 11 months of the fiscal year. "The account in surplus has created a buffer to absorb the shocks."

The government has targeted to record the current account balance in deficit in the range of 1-1.25% ($3-3.5 billion) in the year 2020-21 compared to 1.1% (around $3 billion) in the previous fiscal year 2019-2020. "The surplus in July has made it easier to achieve the set target of the current account deficit," he said.

Earlier, International financial institutions and global credit rating agencies have anticipated widening of the current account deficit to 1.6-2% of the gross domestic product (GDP) in the fiscal year 2021.

They foresaw a drop in inflow of remittances and export earnings during the year due to COVID impact, going forward. Besides, imports may increase with the reopening of the domestic economy from the four-month-long lockdown.

S&P Global Ratings said last week: "We expect the current account deficit to remain below 2% of the GDP over the next few years as the economy continues to rebalance, although higher capital imports associated with the restart of the China-Pakistan Economic Corridor (CPEC) projects could widen the deficit again."

"Gross external financing needs remain elevated, at approximately 140% of current account receipts and usable foreign exchange reserves at the end of fiscal 2020.

“We expect this figure to gradually decline to nearly 119% by the end of fiscal 2023, but a rekindling of import demand or higher commodity prices would challenge that trend," it added.
Riaz Haq said…
#China-#Pakistan Economic Corridor (#CPEC) is growing again...now openly championed by #PakistanArmy, In short term it will inject much needed aid and #investment into the #Pakistani #economy and bolster Pakistan’s security against arch-rival #India. https://foreignpolicy.com/2020/08/26/the-pakistan-armys-belt-and-road-putsch/

When Pakistan entered its 22nd International Monetary Fund program last year, plenty of observers assumed that the China-Pakistan Economic Corridor (CPEC)—described by Beijing as a “flagship project” in its broader Belt and Road Initiative—would be one of the casualties.

After all, with the IMF mandating cuts in public sector spending, a reduction of Pakistan’s deficit, and tightening of monetary policy, it made sense that the vast loans and spending associated with CPEC would have to stop. And further, China had already started to have misgivings about lending and investment in poorly governed frontier markets like Pakistan. It was said that CPEC—billed as a $62 billion connectivity initiative linking China’s landlocked Xinjiang region with Pakistan’s Arabian Sea ports—would likely continue only symbolically so as to enable the two stalwart allies to save face.

But today, over a year into its latest IMF program, Pakistan is actually doubling down on CPEC as a major vehicle for economic growth and investment. New or stalled hydroelectric and rail projects are moving forward. And as CPEC regains momentum, it has a new steward: the Pakistan Army, which has gone from a behind-the-scenes role in championing the project to publicly overseeing its overall implementation.

For Pakistan, the renewed emphasis on CPEC and the growing role for the Army are double-edged swords. In the short term, paired together, they will inject much-needed aid and investment into the Pakistani economy. And a tighter embrace with China will bolster Pakistan’s security against archrival India.

But, in the long term—absent civilian ownership, renegotiated terms, and structural reforms—CPEC may burden Pakistan with unaffordable electricity and unsustainable debt, cannibalize its federal budget, entangle Pakistan in broader U.S.-Chinese tensions, and further entrench the Army in the country’s politics and economy.

The announcement of CPEC in 2013 marked a departure in China-Pakistan relations, adding an emphasis on economic development to a relationship that had been largely confined to the diplomatic and military realms. The scheme paved the way for a surge in aid and investment from Beijing, and by giving Pakistan’s democratically elected civilian leadership the power to determine how tens of billions of dollars in Chinese aid and investment would be directed, it also gave the civilians a big say in the country’s most vital strategic relationship.

That never quite sat well with the Army—in part because the prime minister at the time was Nawaz Sharif, a man the military twice deposed from office. When Sharif came to power, he continued to call for the prosecution of Pervez Musharraf, the general who had sacked him in 1999, for high treason. In pushing for Musharraf’s treason trial, which could have resulted in the former general’s execution, Sharif crossed a red line for the Army, which would in turn keep his government on the defensive until he was permanently disqualified from holding public office by the Supreme Court in 2017.

The former prime minister and his brother were buoyed by easy access to Chinese financing for energy and infrastructure projects.

Such tensions would be enough to sink a different civilian government. But in this case, the former prime minister and his brother Shehbaz Sharif, who was serving as chief minister of Pakistan’s most populous province, Punjab, were buoyed by easy access to Chinese financing for energy and infrastructure projects. They directed these funds toward boosting road, digital, and economic connectivity with China; addressing Pakistan’s endemic power shortages; and strengthening their party’s fortunes ahead of elections slated for 2018.
Riaz Haq said…
Virgin Atlantic Airline to start flights to #Pakistan in December 2020. Airline will add 3 routes at once: #London-#Lahore, London-#Islamabad & #Manchester-Islamabad. Many other airlines adding or resuming flights to Pakistan. #aviation #tourism #COVID19 https://onemileatatime.com/virgin-atlantic-pakistan/

First of all, Pakistan has in general been doing well as an aviation market in recent years. We’ve seen many airlines add or resume flights to Pakistan. Specifically from the UK, we saw British Airways resume flights to Pakistan in mid-2019.

Next, keep in mind that Pakistan International Airlines (PIA) is in hot water right now. The airline has been in the news for its “fake” pilots, and both European Union and United States regulators have banned the airline.

Currently European Union aviation restrictions still apply to the UK, so PIA won’t be able to resume flights to the UK anytime soon, at least not with its own metal (rather it would have to lease a plane from another airline).

Lastly, Virgin Atlantic is following the industry trend whereby airlines aren’t necessarily adding back the routes that they previously operated, but rather are adding new ones altogether. Not only is Virgin Atlantic axing many of its existing routes, but the airline was supposed to launch flights to Sao Paulo in March 2020, but plans for that have been scrapped altogether.

Adding routes to Pakistan makes sense with the current environment. There’s a huge Pakistani population in the UK, and travel for the purposes of visiting friends and relatives will be the first to recover.

Virgin Atlantic will be launching flights to Pakistan as of December 2020. Not only that, but the airline will be adding three routes at once, which is pretty cool to see.

Ultimately this service makes sense — travel for the purposes of visiting friends and family will recover first, and this route is ideal for that. Furthermore, Virgin Atlantic could face limited competition, given PIA’s current struggles.
Riaz Haq said…
#Pakistan Army takes over Belt & Road (#BRI) project. New #CPEC Authority will still report directly to #ImranKhan but it will have wide-ranging autonomy to implement its #infrastructure program, part of leaning toward #China. #economy https://www.ft.com/content/f675981c-83b7-40e4-9b0b-1a4c52963e6f via @financialtimes


The proposed legislation comes shortly after Islamabad approved the most expensive CPEC project yet, a railway upgrade worth $6.8bn to be largely financed by China.

The government has also approved in the past two months two hydropower projects worth $3.9bn to be built in Pakistan-occupied Kashmir and again financed by Beijing.


------------------------
It would also give the CPEC Authority — whose strategic decision-making committee is co-chaired by China’s National Development and Reform Commission, Beijing’s top planning agency — greater financial autonomy from Islamabad.

“It’s basically building a new institution that is parallel to the government. We are in a phase of hybrid martial law,” said Ayesha Siddiqa, research associate at the School of Oriental and African Studies in London, who studies Pakistan’s military.

“The military is taking decisions without any accountability,” she said. “It has become very dangerous. It’s a matter of long-term commitment of national resources.”

The development highlights the growing influence of the Pakistan military after Mr Khan struggled to mount a swift response to the coronavirus pandemic and rescue the faltering economy.

Ahsan Iqbal, Pakistan’s former planning minister and opposition MP, said that the proposed CPEC Authority was “superfluous” and weakened the civilian government while ceding even more responsibility to the military.


“The incompetence of the [Khan] government is destroying our civil administration and putting an additional burden on the military,” said Mr Iqbal.

“We will certainly put forward our reservations. We are not in favour of having the CPEC Authority,” he said. “CPEC is the domain of the civil government, if it can’t do that then what good is it for?”

Proponents of the BRI programme argue that CPEC will give Pakistan the infrastructure boost needed to kickstart its economy at a time when Islamabad is struggling to attract international investors.

The US, however, has criticised CPEC as a debt trap that will leave Islamabad in thrall to Beijing.

While the new CPEC Authority would still report directly to Mr Khan, it would have wide-ranging autonomy to implement its infrastructure programme without civilian government oversight, critics said.

The CPEC Authority “shall be responsible for conceiving, implementing, expanding, enforcing, controlling, regulating, co-ordinating, monitoring, evaluating and carrying out all activities” related to the corridor, according to a draft document of the legislation seen by the Financial Times.

A senior government official in the planning ministry, who did not wish to be named, told the FT that a new draft of the legislation would be circulated for cabinet approval before being presented to parliament. The official said criticism that the military was encroaching on the civilian government was "absolute bs" and because the scope of CPEC had "significantly widened" there was a need for “an institution focused on just this and nothing else."

----------


Three army-run companies — the Frontier Works Organization, the National Logistics Cell and the Special Communications Organization — have won lucrative CPEC contracts.

“CPEC is the military’s baby,” said Adnan Naseemullah, an international relations lecturer at King’s College London. “It’s a strategic project.”


Riaz Haq said…
FAO: Effective measures diminish migration risk of desert #locusts in #Pakistan. Pak deployed 1,000 teams of about 6,000 staff which used 750 vehicles to carry out a ground operation to control the spread of the locusts by spraying pesticide. #agriculture http://www.xinhuanet.com/english/2020-08/30/c_139328767.htm


Quoting a report by the Food and Agriculture Organization (FAO) of the United Nations, Dawn News said Saturday that the country has made good progress against the first generation of hopper groups and bands formed in the desert areas of its south Sindh province.

The country formed more than 1,000 teams of about 6,000 staff which used 750 vehicles to carry out a ground operation to control the spread of the locusts by spraying pesticide to remove them, the organization said.

The country's Federal Minister for National Food Security and Research Syed Fakhar Imam chaired a meeting of the National Locust Control Center on Friday, saying that teams are working in a coordinated manner for the eradication of desert locust in Pakistan.

Earlier, the FAO said an increase in the number of locusts in Pakistan was feared during August with more hatching and band formation which may lead to a second generation of egg-laying from early September onwards.

Timely action against the pest has helped control its further migration to other areas. Currently, a Beaver aircraft is taking part in an aerial spray of pesticide against the locusts, together with ground teams in the desert area Tharparkar of Sindh, the Ministry of National Food Security and Research said.

An earlier report by the World Bank said that "Pakistan is located at a crossroads for migration of desert locusts in South Asia. Therefore, effectively controlling the locust crisis is not only crucial for Pakistan itself but also is critical for the entire Southwest Asia region." Enditem
Riaz Haq said…
Untold story of #Pakistan’s inspiring #green revolution. Not only did Pakistan meet and exceed the target of a billion #trees but it was a game changer for Pakistan as it changed our impression in the world. #ClimateChange #ImranKhan | The Express Tribune https://tribune.com.pk//story/2262681/untold-story-of-pakistans-inspiring-green-revolution


“The billion-tree tsunami has a very interesting back story,” shares Malik Amin Aslam, Pakistan’s Federal Minister for Climate Change and Global Vice President of Switzerland-based International Union for Conservation of Nature (IUCN). “After winning 2013 elections in KPK, Imran Khan said we need to plant trees, so I pushed our department in KPK to set a big target. It was a good department, but they were used to doing business as usual work like we plant a few trees this year and then some more next year. When I took the plan to Imran Khan, I still remember he said yeh kia hai, when you dream, you need to dream big. And that’s when we set the goal of a billion trees.”

---

If Karachi rains stand at one end of the spectrum on how the PPP government prepared for climate change in Sindh, the PTI stands at the other end of the spectrum in Khyber-Pakhtunkhwa. And this is where the story takes a surprising twist few people know. The PTI government wanted to sign Khyber-Pakhtunkhwa up for the Bonn challenge, where countries voluntarily set climate change goals but the federal government (PML-N at the time) opposed the move, according to Aslam. When the province wrote to the Bonn challenge, they responded by saying they only take goals from countries at a national level, not provinces.

Not taking climate change lightly, the Khyber-Pakhtunkhwa government built a case at the Bonn challenge and got their targets accepted. The Bonn challenge has big countries like the US, the UK and Brazil, who have national targets but the little war-torn province in Pakistan, called Khyber-Pakhtunkhwa, was the first entity to actually deliver its goals on the Bonn Challenge, becoming the toast of town in global climate change circles.

Fast forward a few years later, things got even more interesting when Covid-19 hit. Unemployment was soaring, national morale was down, and the unemployed youth was migrating back from urban centres to their homes in rural areas. That’s when Aslam conceived the idea of a green stimulus, inspired by the American stimulus during the great depression, which provided mass employment to build infrastructure projects and lifted morale by giving people constructive work. The green stimulus in Pakistan created 84,000 jobs during Covid-19, while simultaneously helping Pakistan fight climate, including planting trees and building nurseries.

When Imran Khan called for debt relief for developing countries in response to Covid-19, the G-20 countries shared that they would prioritise relief to those countries who can deliver on quantifiable progress on climate change and biodiversity. Pakistan is now pitching to become the first pilot country on that. Aslam shares that because of the clarity and visible progress that Pakistan is making on climate change, the country is getting funding from international donors to pursue more such projects and money itself is less of an issue now.

Where did Imran Khan find the political will and vision to champion this cause when Pakistan has so many more pressing issues? To find the answer to that question you need to read Indus Journey, a book Imran Khan wrote in the 1980s, where he travelled across Pakistan, from Karachi to the northern most areas. Who did Imran Khan dedicate the book to? To the dwindling forests and vanishing wildlife of Pakistan.
Riaz Haq said…
#Pakistan's V-shaped #economic recovery after success against #COVID19 #pandemic: Kia Lucky #Motors in #Pakistan Starts Double-Shift #production to Meet High #auto Demand. #manufacturing #industry #economy #coronavirus #PTI #ImranKhan https://propakistani.pk/2020/09/08/kia-lucky-motors-starts-double-shift-schedule-to-meet-rising-demand/

Lucky Cement, a company owned by Yunus Brothers Group (YBG) released their annual report yesterday that spoke ambitiously of the progress that they have made in the 2019-20 financial year.

As per the report, the group has indeed had a phenomenal year, despite all the natural and man-made challenges that the company has had to endure through. One of their most promising offerings to the public has been Kia Lucky Motors (KLM).

The company was reintroduced to the Pakistani market in 2017 after 8 years of absence. Upon their arrival, Kia Lucky launched the Grand Carnival and the Frontier K-2700 light pickup truck in Pakistan. In mid to late 2019, Kia Lucky introduced the Picanto mini Hatch-back to rival the Suzuki Cultus, and the Sportage to rival the Toyota Fortuner.

Needless to say that both cars did very well against all odds, as the company is now gearing up for a double-shift production schedule to meet the rising demand of the Sportage as well as the Picanto among the buyers. In the annual report, the CEO of Kia Lucky Motors made the following statement:

Ever since the commencement of KIA Lucky Motors, the Company has received overwhelming response from the consumers for both of its models i.e. Sportage and Picanto. The order intake has increased multifold and currently the Company is planning to start the second shift to meet the customer demand from January 1, 2021.

Kia Lucky’s recent success in Pakistan can also be testified by the fact that the company has established over 20 dealerships all across Pakistan in just about a couple of years. Also, there’s been news of Kia planning to take-on the family sedan market of Pakistan by introducing the new Cerato in Pakistan. With their pace in terms of development, Kia Lucky is indeed set to become one of the biggest automakers in the Pakistani Market.

Riaz Haq said…
@javedhassan raises serious issue of fast growing pension liabilities in #Pakistan's public sector. Retirees living longer. Suggests reforms many other nations are implementing to address this issue: Increase retirement age, switch from defined benefits to defined contribution.

https://www.arabnews.pk/node/1732476


One of the more positive postwar global trends has been the fact that on average people are living longer. Pakistan is no different, where average life expectancy has increased from 45 years in 1960 to 67 years presently, and it continues to improve. While this is undeniably good news, it has also contributed to the exponential growth of public sector pension expenses.

The consolidated federal and provincial governments’ pension bills have grown over sixfold, from Rs164 billion in FY2011 to almost Rs1 trillion in FY2021, even before accounting for state-owned enterprises’ (SOEs) retirement liabilities. In the same period, consolidated revenues have increased less than three times. Consequently, retirement payments as a percentage of the consolidated revenues have grown from 7 percent in FY2011 to around 17 percent presently.

The pension system is designed as a defined benefit scheme, where payout is not directly linked to the contributions or taxes paid by individual beneficiaries as would be the case in a pay-as-you-go plan. At the same time there is virtually no provision by the state toward contributing into a pool of funds in order to finance future pension payments, and the unfunded liability is paid from annual budgetary allocations.

An actuarial evaluation by the Punjab government in FY2015 estimated that the present value of liabilities (i.e. current value of a future sum stream of payments) was over 30 times the annual pension expenditure by the provincial government. While it is important to caution that the projections are highly sensitive to actuarial assumptions, if a similar multiple is applied today to estimate the present value of consolidated provincial and federal liabilities, it would range between Rs30 trillion and Rs35 trillion. While an actuarial study needs to be undertaken to get an accurate appraisal, it is safe to assume that the future liabilities are many multiples of the annual budgetary resources currently available, and growing at a faster pace than tax revenues.

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Consequently, the number of retirees as a percentage of government employees in Punjab has increased from 32.5 percent in 2010 to 48.3 percent in 2019. In 1980 they were less than 4 percent. To varying degrees the same behavior is observed among other provincial and federal government employees. Early retirements not only accelerate the growth in the overall number of pensioners, but their replacement on the payroll effectively continues to grow the pension pool.

Adding to the ballooning liability is the fact that the pension schemes allow children and grandchildren to draw 75 percent of the entitlement after the demise of the pensioner and his spouse. The multigenerational nature of the scheme implies that annuities can continue over several decades.

A scheme that was designed for life expectancies that were on average lower than the retirement age and assumed that few would retire early is now not only unviable, but also crowding out fiscal space. After accounting for public servant salaries, debt servicing and pension payments, less than 45 percent of the consolidated federal and provincial budget is available for national security, provision of basic services, and investment in human development.

Reform is therefore required to move pension schemes toward a self-sustaining model that should look into instituting more fundamental changes than simply financial structuring of products such as pension funds and bonds. It will have to address the employee-retiree ratio by considering proposals that raise the retirement age in line with global trends, initially to, say, 65 years and then gradually to 67, as well as amend employment rules to preclude early retirement.
Riaz Haq said…
#Pakistan #economy gains strength as #coronavirus cases decline. It's seen from growing cement-to-fuel sales & demand for home appliances to cars. Economist Muzammil Aslam who expects economic expansion at 4%-5% in current FY with demand push https://www.bloomberg.com/news/articles/2020-09-13/pakistan-s-economy-shows-momentum-as-virus-cases-taper-off via @markets

https://twitter.com/haqsmusings/status/1305555250925826053?s=20

Evidence of momentum returning can be seen from growing cement-to-fuel sales and demand for home appliances to cars. That’s happening even as Pakistan added fewer than 2,900 cases last week compared with almost 35,000 cases in a week in June, and 96% of the total 300,000 infected have fully recovered.

“It has surprised everybody,” said Muzzammil Aslam, chief executive officer at Tangent Capital Advisors Pvt., who expects economic expansion at 4%-5% in the year started July, higher than the government’s 2.1% target. “The growth is led by an aggregate demand push.”

Cement sales rose 38% from a year ago to 4.8 million tons in July, and near a record level seen in October. A government program to give amnesty to tax evaders, provided they fund construction projects, is expected to fuel activity -- and demand for cement -- as work resumes after the lockdown.

“We expect dispatches to continue their rising run moving forward because of tax measures,” said Saad Khan, research head at IGI Securities Ltd. “Substantial decline in interest rates and mandatory targets given for banks to increase housing and construction financing to at least 5% of private sector credit” will also help, he said.

Cement sales eased to 3.5 million tons in August, mainly because of torrential rains across the country.

Fuel Sales
Gasoline sales in June rose to a record high as people return to work after lockdown measures eased in May, according to A. A. H. Soomro, managing director at KASB Securities Pvt. Sales have stayed elevated in July and August.

Fuel for power generation has increased as well. Fuel oil sales rose in June to the highest in a year while LNG spot cargo purchase resumed in June after a six-month hiatus.

Car Sales
Local car deliveries have recovered to about 10,000 units after four months as the end of lockdown ushered in new demand.

Kia Motors Corp.’s local unit is planning to add a second shift at its factory in Karachi from January.

Manufacturing

Manufacturing output improved for a second consecutive month in June. The overall recovery in large-scale manufacturing will likely be stronger in the October-to-December quarter with worldwide demand picking up, said Khaqan Najeeb, a former adviser to Pakistan’s finance ministry. Home appliances are also seeing “robust demand,” said Haroon Ahmad Khan, chief executive officer at Waves Singer Pakistan Ltd.
Riaz Haq said…
WHO Credits Pakistan's Community Health Program For Success Against COVID19

https://youtu.be/uZW9hADNo08

Pakistan Polio Eradication Initiative (PEI) has been on the frontline in the fight against the novel coronavirus pandemic ever since its assets — including surveillance, data, and communication capabilities — were rerouted by the government in March 2020. Their surveillance system has been adopted for COVID-19 contact tracing, tracking the disease’s spread, and creating awareness on prevention and containment. Active surveillance for influenza-like illness (ILI), severe acute respiratory infections (SARI), and suspected COVID-19 cases has been integrated into the ongoing acute flaccid paralysis (AFP) active and passive surveillance system used in the fight against polio. For contact tracing to work, the community needs to be involved. Since polio staff are already trained for door-to-door campaigns and carrying out risk perception in the community, it is now mobilizing defense against the fast-spreading virus. “We have found significant positives amongst those traced via contact tracing and thus it has impacted on reducing further spread via self isolation, education and sensitization of the contacts,” said Dr. Sultan. “Quantification is sometimes not easy, but is being analyzed to see if a numerical value could be assigned with confidence.”

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WHO Director-General's opening remarks at the media briefing on COVID-19 - 7 September 2020

https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---7-september-2020

Pakistan deployed the infrastructure built up over many years for polio to combat COVID-19. Community health workers who have been trained to go door-to-door vaccinating children for polio have been utilized for surveillance, contact tracing and care.

There are many other examples we could give, including Cambodia, Japan, New Zealand, the Republic of Korea, Rwanda, Senegal, Spain, Viet Nam and more.

Many of these countries have done well because they learned lessons from previous outbreaks of SARS, MERS, measles, polio, Ebola, flu and other diseases.

That’s why it’s vital that we all learn the lessons this pandemic is teaching us.

Although Germany’s response was strong, it is also learning lessons.

I welcome the announcement by Chancellor Angela Merkel over the weekend that her government will invest 4 billion euros by 2026 to strengthen Germany’s public health system.

I call on all countries to invest in public health, and especially in primary health care, and follow Germany’s example.

Riaz Haq said…
#Remittances from overseas #Pakistanis exceed $2 billion for third month in a row. 'Over the last three months, remittances reached an unprecedented level of $7.3 billion, which is 37.2% higher than the same period of last year' #COVID19 https://profit.pakistantoday.com.pk/2020/09/14/remittances-exceed-2bn-for-third-month-in-a-row/ via @Profitpk

Remittances rose to $2.095 billion in August, according to data released by the State Bank of Pakistan (SBP) on Monday, depicting a year-on-year growth of 24.4pc when compared with August 2019.

On a monthly basis, however, remittances were 24.3pc lower than the $2.768 billion remittances posted in July 2020. According to the SBP, this monthly decline reflected the usual seasonal decline in the post Eidul Adha period.

Most of the remittances in August were received from Saudi Arabia, at $593 million; followed by UAE at $410 million; and the UK at $302 million.

According to the SBP, workers’ remittances have now remained above $2 billion for the third month in a row.

In July, remittances were recorded at $2.77 billion, which was the highest ever level of remittances in a single month in Pakistan. And in June, remittances were recorded at $2.47 billion, which the SBP had dubbed as ‘historic’ at the time.

“Over the last three months, remittances reached an unprecedented level of $7.3 billion, 37.2pc higher than the same period last year,” the SBP noted.

According to the SBP, the rise in remittances is due to two reasons.

First, there has been increased efforts under the Pakistan Remittances Initiative (PRI). Under the PRI, the threshold for eligible transactions was changed from $200 to $100 under the Reimbursement of Telegraphic Transfer (TT) Charges Scheme, there has been an increase in adoption of digital channels, and a push for targeted marketing campaigns to promote formal channels for sending remittances.

Second, there has been a gradual re-opening of businesses in major host countries such as Middle East, Europe and United States.

It is a view echoed by analysts.

According to Tahir Abbas, head of research at Arif Habib Ltd., there has been an increase in remittances flows though formal channels.



Samiullah Tariq, head of research at Pakistan Kuwait Investment, also said that more overseas Pakistanis are using official banking channels to remit money to their homes, as there was a closure of flights and restriction of movement due to the Covid-19 pandemic.

Typically, money is sent to Pakistan by people physically carrying cash in their luggage, when they travel to visit Pakistan. However, due to the Covid-19 pandemic, and the subsequent cancellation in flights, people were forced to switch to formal channels, in an effort to make sure money reached their families.

In addition, the movement of cash transported on flights increases during Hajj and Umrah season. But this year, due to the Covid-19 pandemic there was a limited Hajj, and a bank on Umrah, which further curtailed people’s ability to send money through informal channels, and pushed them to use formal channels.

’31PC SURGE IN JULY-AUG’

Meanwhile, Prime Minister Imran Khan said on Monday remittances received by the country have increased by 31pc during the first two months of the fiscal year as compared to the same period last year.

Taking to Twitter, the premier said remittances of $2,095 million were received in August, which is an increase of 24.4pc.


Riaz Haq said…
The world's largest #schoolsreopening in #Pakistan as 50 million children return to over 300,000 #schools, #colleges and #universities after a six-month-long closure due to the #coronavirus #pandemic. #COVID19 #education https://www.voanews.com/covid-19-pandemic/millions-children-pakistan-return-school-post-virus-crisis

Millions of children in Pakistan returned to learning in schools and universities Tuesday after a six-month-long closure due to the coronavirus pandemic.

The largest return to school in the world comes as daily infections and deaths from the outbreak in the country of 220 million have steadily declined. Officials reported around 400 new cases and six deaths in the last 24 hours.

Prime Minister Imran Khan’s government had closed more than 300,000 educational institutions in mid-March as part of a nationwide lockdown to contain the spread of the virus that causes the COVID-19 disease.

Authorities have since gradually lifted all curbs on businesses across Pakistan and opened public places, including gyms, tourist destinations and restaurants, but schools remained closed.

The restriction confined more than 50 million school and university-going Pakistanis to their homes in the South Asian country where officials estimate nearly 23 million children already have no access to education.

“Let us welcome our children and students on the first day of opening of educational institutions,” tweeted Faisal Sultan, a special assistant to the prime minister on national health services.

“Please don't forget basic protective steps. Masks, reduced density in classes, hand hygiene. Parents, school administrators, teachers, students — all together,” Sultan cautioned.

Officials have recorded more than 302,000 cases, including close to 6,400 deaths, while 96% of the patients have recovered.

Pakistan’s countermeasures and supply of emergency assistance to millions of poverty-stricken families directly affected by ensuring economic lockdowns have been widely lauded.

An Asian Development Bank report released Tuesday praised Pakistan for achieving “notable success in containing the dual health and economic challenge" presented by the infection.

The government’s rapid mobilization of a $7 billion relief package comprising emergency financial support to daily wage earners, cash transfers to low-income families, accelerated procurement of wheat, support for health and food supplies and financial support for small and media enterprises helped shield the poor and most vulnerable during the pandemic, the report said.

"As the curve flattens and business activity resumes, the economy is showing signs of resilience and recovery, said ADB country director Xiaohong Yang.

The head of the World Health Organization (WHO) last week included Pakistan among seven countries that he said the world can learn from about how to fight future pandemics.

“Pakistan deployed the infrastructure built up over many years for polio to combat COVID-19. Community health workers who have been trained to go door-to-door vaccinating children for polio have been utilized for surveillance, contact tracing and care,” Tedros Adhanom Ghebreyesus said.

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