ECONOMICS TIMES OF PAKISTAN
CPEC likely to contribute 3.5 percent to Pakistan’s GDP
China’s investment of over $60 billion in Pakistan’s infrastructure and power projects under the China-Pakistan Economic Corridor (CPEC) is expected to increase Pakistan’s economic growth by around 3.5 percentage points, said Standard Chartered Bank (Pakistan) CEO Shahzad Dada on Thursday.
Pak eyes far east markets via Malaysia
Malaysian Prime Minister Dr Mahathir Mohamad arrived in Islamabad on Thursday for a three-day official visit to Pakistan. Dr Mohamad is visiting Pakistan at the invitation of Prime Minister Imran Khan and will attend the Pakistan Day parade on Saturday (tomorrow) as the chief guest.
Dr Mohamad, who is accompanied by a high-level delegation, was received at the Nur Khan airbase by Prime Minister Khan, Foreign Minister Shah Mahmood Qureshi and Planning and Development Minister Khusro Bakhtiar. He was given a 21-gun salute upon his arrival.
In a statement, Foreign Office Spokesperson Dr Muhammad Faisal said focus of Dr Mohamad’s visit was on enhancing economic, trade, investment and defence. The visit, he added, would improve the brotherly and friendly relations between the two countries.
The visit largely aimed at enhancing business-to-business contacts and using them for Pakistan’s outreach to ASEAN (the Association of Southeast Asian Nations), Razak Dawood, Adviser to Prime Minister on Commerce, told a press conference in Islamabad.
During the visit, he said, businessmen from the two countries would sign $800 million worth of memorandums of understanding (MoUs) in the areas of “telecommunication, technology, automobiles and halal food”.
Dawood said Pakistan wanted to increase its outreach to the far-eastern countries through Malaysia, because the country looked to change its ‘China-centric’ economic policies. “We believe Malaysia will be an opening for us to the ASEAN countries,” he said.
Main court’s ruling in Bahria Town case lifts business sentiments
The business community on Thursday welcomed the Supreme Court’s decision, accepting Bahria Town, Karachi’s offer of Rs460 billion, saying that the decision would be beneficial for all the stakeholders.
The businessmen said that the decision would resume construction activities worth trillion of rupees and directly improve the economic activities at times when structural reforms had slowed them down.
“I think this is a very good decision. This was a commercial issue and resolved commercially. This is fair for both the parties; the seller of the land and the buyer of the land,” renowned businessman Arif Habib said.
More importantly, he said, the Supreme Court decision would resume construction activities in Bahria Town, Karachi, which would ultimately give a huge relief to the people, having invested millions and billions of rupees in the project.
“This is a huge project [worth trillions of rupees]. The decision would help boost economic activities as construction [sector] and dozens of allied industries [like cement, steel, labour, contacting companies, paint, electrical and electronic goods etc] play significant role in GDP growth,” he added.
People from different walk of life have invested in the project, Habib said. Investors were nervous, the construction work stopped and so as the sale and purchase of plots in the project, he added.
Pak’s agri-committee to set crop targets in mid-April
The Federal Committee on Agriculture (FCA) is set to meet on April 17 to review the production of Rabi crops and set targets for the Kharif 2020 season, revealed Deputy Food Security Commissioner Dr Wasimul Hassan.
Talking to APP on Thursday, he shared that the purpose of the meeting was to meet domestic food requirements and achieve export targets.
During the meeting, provincial ministers and other prominent stakeholders will apprise participants of the arrangements made to ensure smooth availability of all agricultural inputs including water, certified seeds and fertiliser.
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Mobile payment growth sparks decline in bank terminals
The rapid growth of mobile payments in China has brought about a decline in bank self-service terminals including automatic, video and smart teller machines, initiating industry transformation.
By the end of 2018, the number of ATMs at banks nationwide dropped 17,800 quarter-on-quarter to 1.11 million. The average number of ATMs per 10,000 people also fell 1.6percent from the previous quarter to 7.99, stated the latest report on the overall operation of payment systems issued by the People’s Bank of China, the central bank.
The decrease in ATM numbers triggered a decline in the performance of several companies principally engaged in the manufacturing, distribution and operation of such devices.
Beijing ATMVI Technology Co Ltd, a designer and manufacturer of kiosks, enclosures and housing for ATMs, disclosed preliminary earnings estimates on February 28, announcing that it posted a 32.52percent decrease in operating income year-on-year in 2018 and a 6.99 million yuan ($1.04 million) net loss attributable to shareholders of the company listed on the National Equities Exchange and Quotations.
“During the reporting period, the deployment of bank self-service terminals including ATMs kept slowing down due to the rapid development of mobile payments. It caused a slump in demand for related products and services of the company and a large decline in our business income,” the company said.
Guangzhou Kingteller Technology Co Ltd, another major ATM manufacturer and operator in China, also reported a 32.77percent drop in operating income year-on-year in 2018 and a 96.22 million yuan net loss attributable to equity holders of the company.
Kingteller tried to make breakthrough on various fronts, such as developing a new generation of smart teller machines and providing banks with comprehensive solutions for front-end systems.
ATM supplier GRGBanking also stepped up efforts for transformation and upgrading. In a disclosure of preliminary earnings estimates for 2018, the company said it deepened the exploration of the application of technologies such as biometrics, smart video, smart voice and big data.
Contrary to waning demand for ATMs, mobile payments have been on an upward trend. Last year, banking institutions handled 60.53 billion mobile payment transactions in China with a total volume of 277.39 trillion yuan, increasing by 61percent and 37percent year-on-year respectively, the report said.
A survey conducted by the Payment and Clearing Association of China showed that last year, 80percent of mobile payment users used this type of service every day. For 43percent of the users, the average amount for a single payment was below 100 yuan.
Prudent policies help Pak’s textile sector pick up pace
Pakistan’s textile sector is now picking up due to prudent policies of the government, declared Adviser to Prime Minister on Commerce, Textile, and Investment Abdul Razak Dawood.
While briefing the Senate Standing Committee on Commerce and Textile, he hoped that the sector would assist in surpassing the overall export target of $25 billion by the end of current fiscal year. “In a recent meeting with stakeholders from textile sector, I assured them of government’s full support if the industry upgrades in all aspects,” he remarked.
The adviser expressed optimism that after China’s assurance to import textile products from Pakistan, the sector would witness a further boom. He stressed that China’s promise of importing $1 billion worth of goods was excluded from the free trade agreement and hence it would be exempted from duties.
Under the agreement, he continued, China would import 350,000 tons of cotton yarn, 250,000 tons of rice, and 350,000 tons of sugar.
Govt clears Rs80b project for CPEC’s western route
The government on Thursday cleared a Rs80-billion project for western route of the China-Pakistan Economic Corridor (CPEC) amid difficulties in arranging funds for new schemes due to paucity of resources.
The Central Development Working Party (CDWP) recommended the doubling of track on the Kuchlak-Zhob section of N-50 highway for approval of the Executive Committee of National Economic Council (Ecnec), according to a statement issued by the planning ministry.
However, the project was cleared in haste as the Ministry of Planning had received PC-I of the scheme just 12 hours before its approval, denying it time to critically review the mega project. The Kuchlak-Zhob section was cleared amid uncertainty over the fate of another western route project, Dera Ismail Khan-Zhob section of N-50, due to lack of funding.
The CDWP approved Rs67.6 billion for the construction of road and another Rs11.4 billion for the procurement of land. The project involves doubling tracks and upgrading the existing two lanes, which have 305km length on the Kuchlak-Zhob section of N-50, to four lanes.
The proposed road is part of the western alignment of CPEC that will connect Kuchlak, Muslim Bagh and Qilla Saifullah cities.
The previous government of Pakistan Muslim League-Nawaz (PML-N) had preferred the eastern route of CPEC over western alignment. “The PTI government gives priority to construction of the western route and improving socio-economic conditions in neglected areas,” remarked Federal Minister for Planning Makhdum Khusro Bakhtyar. The minister said completion of the project would contribute to a smooth and efficient movement of goods and traffic in a relatively shorter time. The government wants to perform ground-breaking ceremony of the project by the end of March.
The CDWP constituted a committee comprising different stakeholders to confirm and rationalise the cost and scope of the 305km road project in two separate parts, said the planning ministry.
There is no allocation for both the projects in the current fiscal year’s Public Sector Development Programme (PSDP) but the government has indicated that it will allocate resources from next fiscal year.
In 2019-20, Rs19.2 billion will be required for the Kuchlak-Zhob section. In the second year of implementation, the financial requirement is estimated at Rs23.6 billion, which will increase to Rs24.8 billion.
The annual maintenance cost of the project has been estimated at Rs67.6 million. However, the authorities also want to purchase 28 vehicles for the project at a cost of Rs57 million. The transport section of the planning ministry has objected to the cost estimate by the National Highway Authority (NHA) which, according to it, is on the higher side.
The transport section also raised questions over the availability of funds. It argued that another western route project, Dera Ismail Khan-Yarik-Zhob section of N-50 was approved by Ecnec two years ago at a cost of Rs72.5 billion. After a lapse of two years, work on the project could not start due to unavailability of funds from the Chinese side under CPEC, it added.
The transport section stated that without dualisation of the Dera Ismail Khan-Zhob section first, there was no rationale for the dualisation of Kutchlak-Zhob section.