WORLD BANK REPORT HIGHLIGHTS DIFFICULTIES FOR PAKISTAN’S LABOUR FORCE
Pakistan will need to tackle the triple challenge of creating enough jobs for its growing labour force, improving access to jobs and economic opportunities especially for women, and improving the quality and productivity of jobs to meet challenges, the World Bank said on Friday.
Due to continuously high fertility rates, the country’s working-age population is expected to grow at 2.1% per annum for the next decade, the World Bank said in its report titled ‘Jobs and Entrepreneurship in Pakistan’.
However, the report highlighted entrepreneurship as an important avenue in meeting the challenges, through more productive self-employment, a more vibrant small and medium enterprises (SMEs) sector, and a greater opportunity for women and youth. The challenge is to help those self-employed or potential entrepreneurs who aspire to grow by helping them overcome the barriers to growth.
The report said that labour force participation in Pakistan remains low, primarily due to low levels of female labour force participation, which is 57% lower than that of males and especially low in urban areas.
“The share of growth-oriented entrepreneurship is still low in Pakistan,” it said, adding that “while there is no perfect metric for defining growth entrepreneurship vis-à-vis necessity entrepreneurs, only 1% of the employed are employers, i.e. those entrepreneurs who employ others.” The report said that this share is only slightly higher in urban areas.
“Women represent just 2% of all employers, a negligible share, and only 14% of own-account workers.”
It said that Pakistan’s formal private sector is quite small. “The low prevalence of employers among the self-employed is consistent with the low entry of firms, especially in the formal private sector, which is very small, accounting for only 6% of all employed”. More than a third of those participating in the labour force are self-employed, and the share of self-employed youth (aged 15-24 years) is 18% compared to 41% for adults.
PAKISTAN DIVERSIFIES LNG IMPORTS WITH 1ST CARGO FROM NIGERIA
Pakistan succeeded in diversifying its gas import sources as first liquefied natural gas (LNG) vessel, carrying 70,000 tons, arrived from Nigeria on Friday at the Floating Storage and Regasification Unit at Port Qasim.
Before the fresh supplies, Pakistan has been importing LNG from Qatar since March 2015. The government is also negotiating a state-to-state LNG deal with Nigeria without inviting any bids.
Global commodity trader Gunvor, headquartered in Switzerland, brought the LNG cargo from Nigeria through Golar Kevin vessel at the second LNG terminal, which was inaugurated by Prime Minister Shahid Khaqan Abbasi on November 20.
According to sources, with the arrival of the first cargo at the new terminal, acceptance tests will be undertaken immediately and after their completion, LNG supply to the national grid will rise by 600 million cubic feet per day (mmcfd) in the next few days.
Already, the first LNG terminal at Port Qasim has been handling and processing 600 mmcfd of gas.
Pakistan has achieved a milestone as higher LNG imports will ensure that gas load-shedding virtually comes to an end in the current winter.
Three LNG-based power plants with cumulative production capacity of 3,600 megawatts are being set up in Punjab, which will need uninterrupted supply of gas. They will receive the imported gas processed at the second LNG terminal.
SBP LEAVES KEY INTEREST RATE UNCHANGED AT 5.75PC
In line with market expectations, the State Bank of Pakistan (SBP) left the key interest rate unchanged at 5.75% for the next two months.
“The Monetary Policy Committee has decided to keep the policy rate at 5.75%,” SBP said on Friday.
The central bank has kept the discount rate unchanged at 5.75% since May 2016. This is the lowest level in four decades. It was in double digits at 10% in the first half of fiscal year 2012-13 before easing inflationary pressure led to a decline in the key interest rate.
Overall inflation in FY18 is expected to remain well below the target of 6%, the monetary policy statement said. Consumer price index (CPI) inflation averaged 3.5% during Jul-Oct FY18 – well below the annual inflation target.
Despite all the positive development, SBP’s foreign exchange reserves stand at $13.5 billion as on November 17, 2017 down from $16.1 billion at end June 2017. However, progress on the China-Pakistan Economic Corridor (CPEC) related projects and other official proceeds will be instrumental in managing the overall balance-of-payments deficit.
The introduction of regulatory duties is expected to help curb some growth in imports during the coming months.
Moreover, the financial account perspective shows that FDI inflows have risen, reaching $940 million by the end of October FY18 compared with $539 million during the same period last year, indicating improving sentiments regarding the economy.
RENEWABLE ENERGY: PAKISTAN, BELARUS TO INK MOU
Pakistan and Belarus will soon sign a memorandum of understanding (MoU) for establishing a centre of excellence in the field of renewable energy in Pakistan.
This was decided during a meeting between Belarus Ambassador Andre Ermolovich and National Vocational and Technical Training Commission (NAVTTC) Executive Director Zulfiqar Ahmad Cheema on Friday.
The meeting was aimed at enhancing linkages and cooperation in the technical and vocational sector between Pakistan and Belarus.
Cheema briefed the ambassador on the milestones achieved by NAVTTC by bringing a paradigm shift in technical and vocational education in Pakistan.
Job markets all over the world were looking to hire qualified workers so there was an urgent need to explore the demographic dividend for the benefit of the nation, he said.
CURRENCY: PKR STABLE AGAINST $
The rupee remained stable against the dollar at 105.4/105.6 in the inter-bank market on Friday compared with Thursday’s close of 105.4/105.6. 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 analysts, the artificial support for the rupee has adversely affected Pakistan’s exports.
ALL CLEARANCES FOR K-ELECTRIC SALE RECEIVED: MINISTER
All concerned government departments have given their clearance for the sale of Abraaj Group’s 66.4% stake in K-Electric to Shanghai Electric Power, and the deal would conclude “very soon”, said Daniyal Aziz, Minister for Privatisation on Friday.
However, his statement was negated by Secretary Power Division Yousaf Naseem Khokhar who said that his department has not given any clearance for the acquisition of a majority stake by Shanghai Electric and the process was still going on.
Khokhar said that the “issue was still far from over and the matter will go before an inter-ministerial committee for approval. The Power Division still seeks resolution of outstanding dues.”
The National Electric Power Regulatory Authority (Nepra), Competition Commission of Pakistan (CCP), Securities and Exchange Commission of Pakistan (SECP), Ministry of Defense, Ministry of Interior and National Transmission and Dispatch Company (NTDC) have given the no-objection certificates, said Aziz.
He said that the Privatisation Commission was taking utmost care and it would very soon give the National Security Clearance Certificate after completing all remaining procedural formalities.
Aziz gave the statement after a delegation comprising Shanghai Electric Power Company, Abraaj Group and K-Electric met with the prime minister and privatisation minister separately. Aziz said that Shanghai Electric was best placed to address electricity woes in Karachi.
In August last year, Abraaj Group struck a deal to sell KES Power – the offshore entity that controls 66.4% of total K-Electric shares – to China-based Shanghai Power. At that time, the deal was estimated at $1.77 billion and was contingent upon settlement of issues between the government and the seller.
However, due to low determination of multi-year tariff by Nepra, the size of the deal is expected to be lower than $1.77 billion, said the sources. Nepra revised the base tariff upwards to Rs12.77 per unit from Rs12.07 effective July 2016, which would remain in place till 2023. K-Electric had sought an increase to Rs15.57 per unit for sustainability of its operation.
PROCESSING OF KINNOW STARTS IN SARGODHA
Processing of kinnow has started in Sargodha to ensure maximum export and growers receive best rates for their yields. Kinnow is being processed for export to international markets as its season will continue till the end of April, said Citrus Research Institute Sargodha (CRIS) Director Muhammad Nawaz Maiken. He informed that the bumper crop of quality kinnow was being expected in the season. Maiken expressed with satisfaction that last year almost 220,000 tons of kinnow was exported, and hoped that the current season would also contribute handsomely to the national exchequer through healthy exports. The rate of 40kg kinnow has been finalised at Rs800 by the factory owners and growers.
WEEK-ON-WEEK: SPI FALLS 0.31PC
The Sensitive Price Indicator (SPI) for the week ended November 23, 2017 registered a decrease of 0.31% for the combined income group, going down from 225.81 points in the previous week to 225.11 points in the week under review. Compared to the corresponding week of previous year, the SPI for the combined income group rose 2.06%. The SPI for the lowest income group decreased 0.44% compared to the previous week. The index for the group stood at 215.45 points against 216.40 in the previous week, according to provisional figures released by the Pakistan Bureau of Statistics. During the week, average prices of nine items rose in a selected basket of goods, prices of 11 items fell and rates of remaining 33 goods recorded no change.
AS LNG IMPORTS INCREASE, REFINERIES BRACE FOR IMMINENT CLOSURE
The government is stepping up imports of liquefied natural gas (LNG) at the expense of domestic oil refineries, which face the prospect of closure as they are finding it difficult to find consumers of expensive furnace oil because power plants based on relatively cheaper LNG are gradually coming on stream.
Industry sources said the refineries would stop producing petroleum products one after another very soon since supplies of furnace oil had plunged to zero following closure of 10 oil-fired power plants on the orders of Prime Minister Shahid Khaqan Abbasi due to the gradual start of LNG power plants in the winter season.
“The oil storage capacity is brimming with furnace oil; we cannot continue producing refined petroleum products, including jet fuel, petrol, diesel and kerosene oil in coming days,” an industry official said.
“We may not be able to operate if the current situation continues for over 8 to 10 days,” said a high official of Byco Petroleum, which runs the country’s largest refinery of 120,000 barrels per day.
An official of Attock Refinery painted an even grimmer picture, saying they would close the refinery if the situation persisted for three to four more days.
The sudden closure of oil-based power plants coincided with 100% increase in the country’s LNG import capacity to 1,200 million cubic feet per day after the second LNG terminal came on line at Port Qasim on Monday.