CURRENCY: PKR STRENGTHENS AGAINST $
The rupee strengthened against the dollar at 105.25/105.45 in the inter-bank market on Friday compared to Thursday’s close of 105.3/105.5, 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. 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%. According to analyst, the artificial support for the rupee has adversely affected Pakistan’s exports.
FOREIGN LOANS IN FY2016-17 RECORDED AT HISTORIC HIGH
Pakistan obtained a record high $10.1 billion in foreign loans during 2016-17, as it looked to repay old debt and support foreign exchange reserves after the government’s failure to mobilise non-debt creating foreign inflows. About 37% or $3.9 billion of the total external borrowing came from China alone -Islamabad’s new lifeline. This includes $2.3 billion in commercial loans and another $1.6 billion under the bilateral economic assistance. The $10.1-billion loans that include a record breaking $4.4 billion short-term foreign commercial loans as well were obtained during fiscal year 2016-17 that ended on June 30, said sources in the Ministry of Finance. This is the first time in Pakistan’s history that any government has taken over $10 billion as fresh foreign loans in a single year. About $4.4 billion of these loans were used to repay previous loans. The $10.1 billion loans were 26.3% or $2 billion higher than the government’s own estimates it had placed before the parliament in June last year.
AMERICAN SMES LOOKING TO INVEST IN PAK
America’s small and medium enterprises (SMEs) are trying to invest in Pakistan, giving entrepreneurs here an opportunity to launch joint ventures with them, reveals Stephen P Knode, Commercial Counsellor of the United States. “It will not only provide Pakistan entrepreneurs new technology and capital, but will also open new avenues for export of their products,” he said. Trade between Pakistan and America was increasing at a steady pace and exports from the latter stood at $2.1 billion in 2016 while its shipments in the first five months of current calendar year were worth $1.3 billion, Knode said during a meeting with business community at the Faisalabad Chamber of Commerce and Industry (FCCI) on Thursday. He emphasised that the US was trying its best to promote bilateral trade under its commercial diplomacy. “It is in this respect that offices of the commercial counsellor have been shifted from Islamabad to Karachi, which is the main hub of business and industrial activities followed by Faisalabad that contributes 20% to the national gross domestic product,” he said. Knode pointed out that the US commercial service department had stepped up efforts to guide and facilitate new investors.
PAK SUFFERS ANNUAL CROP LOSSES OF UP TO RS55 BN
Extensive salinity in the soil has left a third of cultivable agricultural land unproductive in Pakistan, causing crop losses of up to Rs55 billion in a year, says a top official of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) that deals with horticulture exports. It is a big problem for Pakistan that has a large agrarian economy as 5.33 million hectares are plagued by salinity and 1.55 million hectares by water-logging. Crops in Pakistan hard hit due to unavailability of storage facilities: Argentine envoy. The annual cost of crop losses from salinity has been estimated in the range of Rs15 billion to Rs55 billion, said Ahmad Jawad, Regional Chairman of the FPCCI Standing Committee on Horticulture Exports, in a statement. He blamed continuous seepage along the irrigation network over the years and a lack of natural drainage that increased the level of groundwater. Though the government tried to eliminate the problem by installing tube wells and building surface and sub-surface drains throughout the country, its efforts did not bear fruit due to several reasons. These include costly and energy-intensive drainage and land reclamation approach, which also suffers from practical implications such as environmental degradation and disposal of brackish drainage water.
PIA SUFFERS A LOT FROM OPEN SKIES STRATEGY
Adviser to Prime Minister on Aviation Sardar Mehtab Ahmed Khan said on Thursday Pakistan International Airlines (PIA) had suffered a lot due to a friendly open skies policy. “No foreign country or foreign airline will be granted any additional rights without proper justification, Khan said while speaking to participants of PIA’s Marketing Conference 2017, according to a PIA statement. “PIA can only succeed with full support and joint efforts of all employees and they should take full ownership of their organisation,” he emphasised. However, there is a need to eradicate favouritism and promote merit in all spheres of the national flag carrier. PIA has to fill in the demand gap that exists in the market and must have the capacity and right product mix. The air carrier must expand its network to cater to the demand gap. “I know competition is very tough due to no equal playing field,” he said. Khan praised the PIA management, especially CEO Nayyar Hayat, for bringing “improvements in the airline”. He believed that the airline was moving in the right direction and would soon reach new heights. Earlier, Hayat emphasised the need for PIA to adopt a new business model and said technological advancements should be incorporated at a faster pace to make it convenient for the passengers. He voiced hope that the airline is on the path of a turnaround and very soon we will be out of the difficult phase.
PAK, IRAN ASKED TO ADOPT SWIFT VISA STRATEGY
Multan Chamber of Commerce and Industry (MCCI) President Khawaja Jalaluddin Roomi urged strong cooperation between Pakistan and Iran to ensure a better future for the entire region. Being the largest Muslim countries in the region, the onus of ensuring regional prosperity lies with Iran and Pakistan, he said while talking to journalists on Thursday, adding that adopting a swift business visa policy should be the first step in achieving these ambitions. Linking peace and security in Pakistan to that of Iran and vice versa, Roomi said that Iran should not and does not desire instability in Pakistan. Emphasising strong cultural and historical ties between the two states, Roomi highlighted interaction between the respective business communities as the stepping stone towards stronger bilateral trade and economic cooperation. Roomi said the Iranian government should facilitate Pakistani exporters rather than restricting their movements and visits, adding that connecting banking sectors of the two countries would serve to expand bilateral trade as well. He further said that the volume of bilateral trade between Pakistan and Iran does not reflect its true potential, adding that chambers of commerce in the two countries would have to focus on expansion of trade by holding single country exhibitions and sending trade delegations to the respective countries.
MODERN AGRI PRACTICES CAN ASSIST AVOID LOSSES: LCCI
The Lahore Chamber of Commerce and Industry (LCCI) has underlined the need for adopting modern technologies in the agriculture sector in an effort to avoid post-harvest losses and enhance crop production. In a statement issued on Thursday, LCCI President Abdul Basit, Senior Vice President Amjad Ali Jawa and Vice President Muhammad Nasir Hameed Khan stressed that Pakistan had extensive fertile land, but its agriculture sector was suffering because of various factors. There is a dire need to add to the crop area as we cannot afford to stay where we are today in terms of crop area and per hectare yield because we are already running well short of per capita food availability, they said. Though almost 43% of Pakistan’s labour force depends on agriculture, the yield gap in four major crops is three times compared to best producers in the world such as China and Egypt. The low yield has contributed to poverty in rural areas besides forcing the country to import agriculture produce to feed its population. The LCCI office-bearers said this should be an eye-opener that China produced two times more cotton and wheat per hectare and Egypt produced around three times more rice and sugarcane per hectare compared to Pakistan. Factors that are recommended to improve the yield include large-scale introduction of hybrid seeds and mechanised farming, highly efficient irrigation systems such as drip irrigation and reduction in crop wastage through privately owned storage facilities and cold storage facilities. They emphasised that Pakistan had a tremendous potential to emerge as biotechnology leader, but to achieve the goal, private sector, scientists, researchers and the government would have to work hand in hand. They were of the view that Pakistan’s agriculture sector was losing heavily because of insufficient utilisation of biotechnology as magic progress of the sector could only be due to Genetically Modified (GM) crops. The agriculture sector has always faced two major problems – production per acre is lower than many countries and around 40% of production is wasted post-harvest. They suggested that federal and provincial governments should give special attention to promoting research and quality crops as green revolution was only possible through genetic engineering.
AMBASSADOR DISCUSSES TRADE PROMOTION
Ambassador-designate of Pakistan to Denmark Syed Zulfiqar Gardezi visited Islamabad Chamber of Commerce and Industry (ICCI) on Thursday and shared his views on strengthening commercial ties between Pakistan and Denmark with the local business community. He said the key priority should be to promote Pakistani products in Denmark and attracting Danish investments to Pakistan. He said bilateral trade between Pakistan and Denmark was over $200 million with the balance of trade in Pakistan’s favour. There is still potential for Pakistan to increase its exports to Denmark, he said, assuring that he would work hard to identify new areas of mutual cooperation to further improve bilateral trade between the two countries.
He also highlighted the importance of the business community’s input and efforts to explore avenues for trade promotion and enhancement with foreign countries. He identified renewable energy, dairy and livestock sectors as potential areas of cooperation between Pakistan and Denmark. He advised the ICCI to form a delegation for visiting Denmark and assured his full cooperation to make the visit successful. Speaking at the occasion, ICCI President Khalid Iqbal Malik said that Pakistan’s Embassy in Denmark should step up efforts to identify new avenues of promoting Pakistan’s exports in Danish markets. He said the Embassy should assist private sector companies by conducting market studies and researching on which products would be most needed and desired. He said Denmark has an advanced wind energy sector and can assist Pakistan in overcoming its energy problems by transferring wind power technology and sharing expertise.
SWITCHING TO EU’S REX: AUTHORITY ISSUES DIRECTIVES TO EXPORTERS
The Trade Development Authority of Pakistan (TDAP) has said that all current as well as potential exporters to European Union are informed that as per EU regulations for GSP plus beneficiary countries, Pakistan is required to completely switch to the EU’s REX (Registration of Exporters) System for origin certification by December 30, 2017. Accordingly, issuance of certificate of origin by TDAP for the EU-GSP+; which is being actively progressed by the Authority, will cease after this date (30th December, 2017) and only REX registered exporters would subsequently by able to issue Statements On Origin (SOO) in respect of their EU shipments. In the light of above, you are advised to get yourself registered in the REX system as soon as possible. TDAP is organizing seminars in major export cities to explain the details of the registration process.