STATE BANK LAUDS IMPROVED SECURITY’S IMPACT ON ECONOMY
State Bank of Pakistan (SBP) Deputy Governor Jameel Ahmad, while appreciating the reviving economic activities in the country, has lauded the impact of improved security conditions attributed much to the operation Zarb-e-Azb and the ongoing operation Radd-ul-Fasaad.
“A marked turnaround in retail sales has been observed in metropolises, with positive readings in investor and consumer confidence surveys,” said the deputy governor.
DIGITAL PRINTING WILL SPARK REVOLUTION IN TEXTILE SECTOR: LCCI
The Digital Printing and Signage Technology Exhibition brings modern machinery and equipment, which will spark revolution in the textile and printing industry in coming years, leading to job creation and higher industrial growth.
These were the opening remarks of Lahore Chamber of Commerce and Industry (LCCI) President Malik Javed Tahir at the three-day 3rd International Digital Printing and Signage Technology Exhibition.
The event began on Friday at the Lahore Expo Centre and around 150 local and foreign companies participated in the fair.
Tahir said foreign companies were exhibiting their products for joint ventures with local companies, which was beneficial for Pakistan’s economy as local companies would be able to manufacture modern equipment to save capital.
He urged the Trade Development Authority of Pakistan (TDAP) to facilitate local manufacturers in importing latest printing technology.
Responding to a question, he said the government had imposed unjustified regulatory duties on the import of raw material, which would be resisted by the business community at all levels.
“Around 500 textile units have already been closed due to unfavourable government policies,” he remarked.
Speaking on the occasion, Inks Global EMEA APAC Commercial Director Rudy Grosso said their ink technology had a great potential in the Pakistani textile market. “We will start from textile and go to food and other innovative industries in Pakistan for digitalisation purposes.”
WORK ON DIAMER-BHASHA DAM TO BEGIN NEXT YEAR
Pakistan Water and Power Development Authority (Wapda) Chairman Muzammil Hussain said on Friday that water and energy security were key components of national security.
“For these, we need to make critical development plans in both water and energy sectors and there has to be a strategy that turns words into action,” Hussain said while speaking to participants of the National Security and War Course of National Security College, Islamabad.
The delegation, headed by National Security College Commandant Major General Khalid Zia, visited the Wapda House on Friday. Wapda members for finance, power and water, its secretary and other senior officers were present on the occasion.
Highlighting the condition of water and power sectors, the Wapda chairman said the country had lacked a proper national water policy for the last 70 years despite being confronted with serious water problems.
There had been a lack of focus on the development of water resources, he said, noting that the establishment of the Ministry of Water Resources had improved things due to greater focus.
He said Wapda had reset its priorities in order to increase water storage capacity and increase the share of hydroelectric power in the energy mix.
CPEC PROJECTS HAVE ENTERED EARLY HARVEST STAGE: CHINESE
Chinese Ambassador to Pakistan Sun Weidong on Thursday said the China-Pakistan Economic Corridor (CPEC) projects initiated in 2015 have now entered into the early harvest stage.
The ‘early harvest’ term has been coined for the projects that are likely to be completed in the next few years as opposed to longer-term ones.
“There is no country in the world other than China that wants to see a stronger, stable and developed Pakistan,” he said this while speaking at a seminar organised by the Institute of Policy Studies (IPS) on the ‘Pakistan-China Relation: CPEC and Beyond CPEC’.
The session was chaired by Leader of House in Senate, Senator Raja Muhammad Zafar-ul-Haq.
The ambassador termed CPEC a win-win scenario for both China and Pakistan. He wrapped up the discussion on the Pak-China cooperation in three words: “All-weather, all-round and iron brothers.
The ambassador said the historic visit of Chinese President Xi Jinping in 2013 paved the way for a new era of bilateral relationship which to date had seen comprehensive promotion of exchanges in the areas of trade, investment, culture, education, science and technology between the two countries.
He said the projects with total worth of $18.5 billion investment, pertaining to energy had been at the forefront with six projects in progress and five had already been built.
He said the speed of the completion of Sahiwal Coal Power Project had been a record in Pakistan and it was expected that the completion of all eleven energy projects will add about 11,000 megawatts of electricity to the national grid.
In addition the diplomat termed the construction of road network another vital area of investment, maintaining up-gradation of the Karakoram Highway and the highway from Peshawar to Karachi will unlock transportation arteries in Pakistan that will effectively stimulate economic vitality.
CABINET DIRECTS PTA TO BEGIN CONDUCTING 5G TESTS ON TIME
The government has directed the Pakistan Telecommunication Authority (PTA) to start testing the new 5G technology in the market before its expected commercial availability after 2020.
Talking to source, a senior official of the Information Technology and Telecommunication Division revealed that the cabinet, in a meeting held last month, approved the launch of 5G technology in Pakistan and allowed the PTA to conduct tests and trials for its marketing in the future.
He said the cabinet was informed that existing 3G/4G mobile broadband technologies were continuously gaining momentum since their launch in mid-2014, which was the outcome of consistent policy initiatives taken by the government over the past four years.
Since the launch, the demand for data services had been growing along with the subscriber base that crossed 41 million in just three years.
The cabinet was informed that the Telecom Policy 2015 provided measures not only for early commercial adoption of futuristic technologies, but it was also aimed at promoting an environment conducive for research, development, testing and trial of new technologies.
The next big evolution globally in the area of mobile broadband is 5G which will offer attractive data rates and considerably enhance the experience and application of the next generation technology.
It is expected that the International Telecommunication Union (ITU) will approve 5G standards in 2019. Based on the evolving standards, a number of trials and tests are being undertaken around the globe.
In line with the government’s policy of staying at the forefront of technology and to provide state-of-the-art services for Pakistani consumers, it is imperative that Pakistan ensures its readiness for the upcoming 5G technology and also starts conducting tests well in time before its commercial availability, which is expected after 2020.
CURRENT ACCOUNT DEFICIT WIDENS 102PC IN Q1
Pakistan’s current account deficit widened 102% in the first quarter (Jul-Sep) of current fiscal year 2017-18 (FY18) to stand at $3.56 billion compared to $1.64 billion in the same period of previous year, according to data released by the State Bank of Pakistan (SBP) on Friday.
In September 2017 alone, the current account gap swelled $956 million compared to $550 million in August 2017.
Topline Securities commented that the numbers were broadly in line with its estimates and investor concerns were allayed after seeing August and September numbers as the deficit had widened $2.1 billion in July 2017.
“We may not see a sharp drawdown in foreign exchange reserves and Pakistan may not enter another IMF programme in FY18,” the report said.
Investors are concerned about the growing deficit after the country recorded a much higher-than-expected deficit of $12.1 billion (4% of gross domestic product – GDP) in the previous fiscal year.
With the difference between exports and imports being the biggest determinant of the current account balance, a deficit or surplus reflects whether a country is a net borrower or net lender with respect to the rest of the world.
To control the gap, analysts were anticipating that the government could allow the rupee to weaken against the dollar or impose duties on imports.
This week, the government enhanced regulatory duties by up to 350% on 356 essential and luxury goods. However, the rupee has largely stood firm.
As a percentage of GDP, the deficit rose to 4.2% in the first three months of FY18 as opposed to 2.2% in the same period of previous year.
In Jul-Sep FY18, Pakistan exported goods worth $5.67 billion compared with exports valuing at $5.05 billion in the same period of last year, reflecting a year-on-year increase of 12.2%.
However, imports jumped much faster to $12.89 billion against $10.32 billion last year, up 25%. The balance of trade in both goods and services in the three months was negative at $8.44 billion compared with $6.42 billion in the same period of previous year.
Worker remittances amounted to $4.79 billion in Jul-Sep FY18, up 1.05% from the corresponding period of previous year, when they totalled $4.74 billion.
Remittances saw a steep decline of 34% standing at $1.3 billion in September 2017 due to a high base effect (higher remittances in August 2017 owing to Eidul Azha and lower number of working days in September 2017).
Remittances make up almost half of the import bill of Pakistan and cover the deficit in the trade of goods account.
Pakistan is also facing low levels of foreign direct investment (FDI) in recent years. In fiscal year ended June 30, 2017, the FDI increased just 5% to $2.41 billion compared to $2.30 billion in the previous year.
According to the Board of Investment, the country received a record high FDI of $5.4 billion in FY08 but since then it has been struggling to touch even half of that milestone.
PRA PLANS TO TAX MEDICAL PRACTITIONERS
The Punjab Revenue Authority (PRA) is trying to bring individuals like physicians into the tax net and aims to cover all services in a bid to ease the tax burden on sectors that are already contributing.
Punjab Finance Minister Ayesha Ghaus Pasha was of the view that no nation could prosper without taxing the untaxed.
“We want to change the practice of over-burdening some sectors and introduce a wider tax net for development of the country and province,” she said, while talking to reporters after inaugurating the Sales Tax Real Time Invoice Verification System (STRIVE) on Friday.
The minister said the provincial government as part of broadening the tax net had decided to collect tax from some service providers like medical practitioners.
Responding to a question whether the government was reducing the funds allocated for local governments, Pasha claimed that the government was transferring three types of grants – General Purpose Grant, Transition Grant and Development Grant – to the local governments under the Provincial Finance Commission in a transparent manner.
She said the government was not diverting grants to other mega development projects, but it was keeping cash for the solid waste control project in rural areas under the supervision of union councils. The project was being finalised without any final allocation, she said.
The minister pointed out that the provincial government had exempted oil tankers from the Infrastructure Development Cess till December 31, 2017, which was why they called off their strike.
FEE DISPUTE DELAYS START OF 2ND LNG TERMINAL
A dispute between Sui Southern Gas Company (SSGC) and Fatima Fertilizer over fee payment for handling liquefied natural gas (LNG) imports has prompted Pakistan LNG Terminal Limited to weigh the option of diverting gas imports from Qatar to the second LNG terminal, an official says.
Pakistan State Oil (PSO) and Qatargas have an agreement on LNG supply, which is being handled by the first LNG terminal set up by Engro’s subsidiary Elengy Terminal Pakistan Limited at Port Qasim.
The second LNG terminal has also been built but Pakistan LNG Terminal has been unable to put in place a mechanism to start handling gas imports at the new facility.
According to the official, Fatima Fertilizer is ready to receive first LNG cargo at the new terminal, but a row over payment of tolling fee is a hurdle in its way.
Fatima Fertilizer has paid a levellised tariff of $0.66 per million British thermal units (mmbtu) but SSGC, which transmits LNG through its pipelines to the fertiliser company, asks it to pay $1.45 per mmbtu as agreed by the regulator. Owing to the disagreement, SSGC is not ready to allow Fatima Fertilizer to bring cargo at the second LNG terminal.
Now, Pakistan LNG Terminal is putting pressure on PSO to divert one LNG cargo to the second terminal in order to start the facility.
“It is the responsibility of Pakistan LNG Terminal to arrange cargo, which must be brought 10 days before the commercial operation date of the terminal,” the official said.
In a meeting held in the first week of current month, Pakistan LNG Terminal managing director said PSO had responded to the request, pointing out that the arrangement was offered in July 2017 but time shortage and other contractual obligations under the sale-purchase agreement forced them to refer the request to Qatargas for its consent.
PSO general manager added that Qatargas needed to undertake due diligence to assess compatibility and make risk analysis. He also spoke about new challenges like additional cost which should be addressed.
An SSGC representative argued that diversion of cargo would impact its obligations under the LNG supply agreement.