TO HELP PAKISTAN RISE EXPORTS, THESE CIVIL SERVANTS WILL MAKE UP TO RS120,000 MORE
The government has decided to hand out large amounts as monthly allowances to bureaucrats, a move which has landed both parties in hot water. Officials serving in the Ministry of Commerce will receive up to Rs120,000 for conducting studies for promotion of exports. According to sources, Commerce Minister Khurram Dastgir Khan, who chairs the Board of Export Development Fund (EDF), approved to pay between Rs50,000 and Rs120,000 in monthly allowances to all bureaucrats in service, except for the federal secretary. However, the commerce minister stated in the board meeting that he was doing this on the bureaucracy’s insistence. Under the proposal, the least amount will be received by a grade-17 officer, which is even higher than the pay scale. Moreover, the maximum allowance was reserved for a grade-21 officer. In order to keep the matter a secret, the ministry did not formally put the proposal on the agenda of the board meeting. At present, the size of the EDF stands at Rs32 billion.
RUPEE STABLE AGAINST DOLLAR: RESEARCH ANALYST
The rupee remained stable against the dollar at 104.4/104.6 in the inter-bank market on Friday compared to Thursday’s close of 104.4/104.6, Kamal Hayder, Research Analyst-PAGE said. The currency market has fluctuated regularly in recent months with hefty rises and falls on some occasions. In the long run, however, the rupee has stood firm after experiencing extensive volatility, when it weakened from around Rs98 to a dollar to above Rs103 in the wake of political impasse over alleged election rigging. Recently, the central bank has imposed 100% cash margin on the import of certain consumer goods to restrict the demand for US dollars. The rupee has been one of the best performing currencies in Asia for over three years despite the dollar’s sharp appreciation against other currencies. However, the International Monetary Fund has repeatedly said that Pakistan’s rupee is overvalued by 5-20%. He further said that the artificial support for the rupee has adversely affected Pakistan’s exports.
GOVT AIMS TO ENLARGE TAX NET IN NEW BUDGET
Federal Board of Revenue (FBR) Chairman Dr Muhammad Irshad said on Friday that the government would widen the tax net in the upcoming budget. During a visit to the Lahore Chamber of Commerce and Industry (LCCI), Irshad said the government was going to present a historic budget after extensive consultations with all stakeholders in the economy. The concept of placing extra burden on taxpayers is incorrect, he said. The government will not spare non-filers and is committed to receiving tax from the people who are unwilling to pay. Responding to complaints about raids on factories by the FBR’s field officers, the chairman said the government did not want to put any industry in trouble, but sometimes misunderstandings occurred due to communication gap. We will constitute an advisory committee to create friendly atmosphere between government departments and the business community, he said. Irshad asked businessmen to take initiative and help resolve issues pending with the FBR in order to receive concessionary treatment.
WB TO FINANCE SOLAR POWER PROJECTS IN PAKISTAN
The World Bank (WB) has agreed to finance solar power projects from its Green Fund in an effort to improve the energy mix in Pakistan. At present, because of the poor energy mix, the entire chain has been affected, which is pushing energy companies towards financial collapse. Sources said Finance Minister Ishaq Dar had visited the US where he held a meeting with the World Bank on the possibility of funding solar power plants in Pakistan. The bank expressed its willingness, saying it was ready to finance the development of solar projects with a tariff of 3 to 3.5 cents per unit, which was quite attractive. Sources said the government was now working on the possibility of availing itself of the financing from the World Bank’s Green Fund that would go to renewable energy projects to be set up in far-off areas of Pakistan. In order to secure the proposed funding, the Ministry of Water and Power will engage an international panel of experts, who would develop a road map for the induction of renewable energy and identify the sites keeping in view the grid stability as well as overall modernisation of the national grid. According to an official, the Ministry of Finance wants the power ministry to tap financing from the Green Fund immediately. However, the government would have to select land for the proposed projects.
WEEK-ON-WEEK: SPI RISES 0.21PC
The Sensitive Price Indicator (SPI) for the week ended May 11, 2017 registered an increase of 0.21% for the combined income group, going up from 220.01 points in the previous week to 220.47 in the week under review, Kamal Hayder, Research Analyst-PAGE said. Compared to the corresponding week of the previous year, the SPI for the combined income group rose 2.98%. The SPI for the lowest income group also decreased 0.18% compared to the previous week. The index for the group stood at 209.49 points against 209.11 in the previous week. During the week, average prices of 17 items rose in a selected basket of goods, prices of 10 items fell and rates of remaining 26 goods recorded no change.
LOCAL AUTO SALES STAY BUOYANT AS VOLUMES RISE 14PC
Local automobile sales, including light commercial vehicles (LCVs) and jeeps, in the first 10 months (Jul-Apr) of the current fiscal year totalled 176,937 units, up 14% compared to 154,949 units (excluding Punjab taxi scheme sales of 29,150 units) in the same period of previous year, according to data released by the Pakistan Automotive Manufacturers Association (Pama). Car sales remained robust and are expected to touch 270,000 units (including 60,000 imported cars) by the end of fiscal year in June 2017. Car sales for April 2017 (including LCVs and jeeps) came in line with expectations, the report added. On a month-on-month basis, sales volumes showed a contraction of 11% (five-year average contraction of 6% month-on-month) mainly due to the phasing out of old Cultus model and 28% month-on-month contraction in sales of Suzuki Bolan and Ravi. Pak Suzuki Motor Company’s (PSMC) sales stood strong (ex-taxi scheme) due to healthy demand for Wagon-R, while strong LCV sales further supported the volumes in the first 10 months of FY17.
TRACTOR FIRM GETS RS1.4 BILLION, BUT NOT ONE UNIT IS DELIVERED
Pakistan’s decline in the agriculture sector and deepening corruption woes were on naked display this week when Karachi’s Anti-Corruption Establishment (ACE) unearthed a mega scam involving officials of the Sindh agriculture department and a private company colluding to embezzle Rs1.4 billion. The ACE has now registered a case against officials of the Sindh agriculture department and Shehzad Trade Links CEO Shehzad Riaz on allegations of claiming a false tractor subsidy amount and embezzling Rs1.4 billion in the name of farmers. The ACE received a complaint on March 7, 2017, alleging the commission of massive corruption in tractor subsidy scheme, run by the agriculture department of the Sindh government. Subsequently, information was obtained from various offices and a thorough inquiry was conducted into the matter. The ACE carried out multiple raids to arrest the accused persons and court permission has also been sought to obtain bank statements of the accused. Additionally, the ACE is also tracing the bill of entry to prove absence of imported tractors from Belarus. According to PAGE-source, ACE’s investigation of the agriculture department led them to Riaz.
PAKISTAN LIKELY TO FLOAT $500 MILLION BONDS TO FUND DASU PROJECT
Pakistan Water and Power Development Authority (Wapda) is expected to raise $500 million by floating bonds in the international capital market backed by partial credit guarantees of the World Bank in a bid to finance the construction of 4,320-megawatt Dasu hydroelectric power project, source said to Research Analyst-PAGE. The foreign commercial cost component of around $500 million will be raised either through loan or bond in early 2018 by using partial credit guarantee of the World Bank. This is in addition to the planned borrowing of $350 million for 10 years from the global capital market approved recently by the Economic Coordination Committee (ECC) of the cabinet to fund the Dasu power project. A partial credit guarantee of $460 million was available for commercial financing. Of this, $250 million has been earmarked as guarantee for $350-million borrowing. The Dasu hydroelectric power project, one of the major schemes currently being executed by Wapda, is being partly funded by the World Bank through International Development Assistance (IDA) of $588 million along with credit guarantee of $460 million, source added to him.
PAKISTAN AMONG RISKIEST STATES FOR BUSINESSES
Terrorism, political instability and being prone to natural disasters has placed Pakistan in the list of the riskiest countries in the world to do business, according to a new study. The report has been published by property insurance group FM Global based on data from the World Economic Forum, World Bank and the International Monetary Fund. It lists Pakistan, Nepal, Ethiopia, Chad, Haiti and Venezuela as the riskiest countries, while Switzerland is the safest destination for business. That reflects the fact that the Alpine country is among the best in the world for its infrastructure and local suppliers, its political stability, control of corruption and economic productivity. Luxembourg took the second spot, having risen from eighth in 2013, partly as a result of its reduced reliance on oil for economic productivity and continued growth in the importance of its services sector. FM Global said that Luxembourg is well-placed to benefit from financial institutions that may be seeking a new home, following the UK’s departure from the European Union. Sweden, Austria, Germany and Belgium took third, fourth and fifth spot respectively, while the UK ranked 16th, lagging behind countries such as Australia, Belgium, Qatar, the Netherlands, Finland, Denmark and Norway. China and the US were both subdivided into three regions for the ranking because of their vast geographical area and varying levels of exposure to natural disasters. US East ranked 10th, Central ranked 9th and West ranked 18th, while China Zone 1 ranked 68th, Zone 2 ranked 72nd and Zone 3 was ranked 66th. Pakistan ranked 125th, while the Carribean Island of Haiti, which was ravaged by Hurricane Matthew last year, was ranked last at 130.
KARACHI RESTAURANTS MOVE TO DIGITALIZE DINING PRACTICE
New evidence has emerged which validates the claim that the restaurant business in Pakistan is certainly booming. Now, restaurants are set to utilise digital platforms for internal order placements – a move that will reduce time of orders while accommodating more customers. So, the next time a diner will visit Charcoal Tea at Tariq Road, he or she will not need to wait for a waiter. Instead, the customer will make use of the QR sticker pasted on the table to place an order. How it works is the customer would scan the aforementioned code on the Android-based application Khawo!, which would then pop up the main menu with food categories like starters and main course, among other things. The items available will be accompanied with actual price tags which will address complaints of overcharging. No involvement of waiters will be required during the placement of orders. It is said that the mobile application is aimed at removing the long wait in restaurants. The app will remove the unnecessary wait between food items and customers, he said. Sometimes, restaurants are short of order-taking and delivery staffers, especially during the peak lunch hours at restaurants near and around offices. On the other hand, Charcoal Tea Owner Muhammad Qasim said that the application has been doing wonders for the restaurant and he has asked developers for a feature for home orders as well. It is a brilliant app that we installed recently, though it might take a couple of weeks for our customers to get used to, he said.