ECONOMIC TIMES OF PAKISTAN
Italian firms encouraged to invest in energy sector
The government has an open door policy for investment, said Special Assistant to Prime Minister (SAPM) on Petroleum Nadeem Babar.
In a meeting with Italian Ambassador to Pakistan Stefano Pontecorvo, who called on him on Friday, Babar assured complete cooperation and facilitation to Italian companies operating in the energy sector of Pakistan. The special assistant further informed the envoy regarding investment opportunities in oil and gas exploration and production sector of the country. He added that the government had planned to hold open bidding for awarding new oil and gas exploration blocks by the end of this year.
“Pakistan expects that Italian companies will actively participate in the bidding process for new blocks,” he remarked.
During the meeting, the two sides discussed ways and means of joint ventures in the energy sector. Also speaking on the occasion, the envoy said that both the countries had the potential to enhance collaboration in diverse fields including trade, manufacturing, assembling and industries.
Pontecorvo also apprised Babar regarding the problems being faced by Italian companies operating in the energy sector of Pakistan.
Imran Khan chairs meeting for workers’ rights
The government is striving to achieve industrial growth and bring ease of doing business in the country without making any compromise on the workers’ rights, said Prime Minister Imran Khan.
The PM was chairing a high level meeting on Friday to discuss the facilitative measures for small and medium industries and the protection of the labourers’ rights, a PM Office statement said.
The prime minister was briefed in detail about the problems being faced by the industries sector in Punjab during the inspection by different departments. He was also apprised on the measures being taken for the protection of the rights of the workers and labourers and to improve the health and education facilities for their families.
The prime minister was told that according to the data from different electric supply companies, the power connections of around 55,435 industrial units of total 226,600 units in Punjab had been disconnected.
The prime minister emphasised that in order to achieve economic growth, it was essential to provide all out facilities to the industrial sector to accelerate economic activity as well as create the employment opportunities.
Talks between traders and FBR fail again
The talks between the Federal Board of Revenue (FBR) and traders have collapsed after the traders once again refused to become part of the formal economy, which may jeopardise the government’s plans to document the economy.
The latest round of talks was held on Thursday under the supervision of a senior official of the National Defense University, according to the sources in the FBR and traders union.
During the talks, a scuffle broke between the two groups of the traders, which further complicated the matter. All this happened in the presence of the representative, according to the sources.
The traders threatened to use their street power if the government did not show flexibility, which according to them had brought even the then military dictator General (R) Pervaiz Musharraf to his knees. General Musharraf had started a country-wide registration campaign in early 2000 but had to retreat after shutter down strike.
Through budget 2019-20, the government made it legally binding for the industrialists to seek the Computerized National Identity Card (CNIC) from the wholesalers and distributors on sales of over Rs50,000. The move pitched the traders and small shopkeepers against the government.
The traders neither want to get income tax registration nor the sales tax registration– the two measures that are very critical for documentation of the economy.
FBR Chairman Shabbar Zaidi last month constituted a joint committee of the FBR, tax experts and the traders representative to resolve the issue at the earliest and delayed enforcement of CNIC condition on purchase of over Rs50,000 till September 30.
More taxes will be detrimental to economy
Another mini-budget or imposition of additional taxes to overcome the yawning deficit would be greatly detrimental to the economy, said Karachi Chamber of Commerce and Industry Acting President Khurram Shahzad.
Industries and businesses are already underperforming due to the imposition of exorbitant taxes and they would be unable to sustain the impact of any additional taxes, he remarked in a statement issued Friday.
“The business and industrial community is not in a position to bear any more shocks as this would lead to the closure of many businesses and massive unemployment,” he said.
The government must strictly refrain from such anti-business and anti-industry moves, he advised.
In reference to a forthcoming visit of the International Monetary Fund (IMF) team to discuss fiscal issues with special focus to restrict target of primary deficit within the desired limits, he pointed out that under the IMF conditions, the primary deficit was to be brought down from 1.8percent of GDP to 0.6percent of GDP in the current fiscal year but instead of declining, the deficit has gone all the way up to 3.6percent.
“This means that the government will have to carry out massive adjustments of Rs1,300 billion to reduce primary deficit to 0.6percent of GDP, which many experts believe will be done through another mini-budget and would lead to additional taxes being imposed,” he added.
He warned that this decision would plunge the country into further economic crises and the economy may reach a point of no return.
|Gwadar Port From March 2018 To February 2019|
|Total Cargo||7,156 Metric Ton|
|Total Import||375.482 Metric Ton|
|Total Export||3401.105 Metric Ton|
Cabinet settles dispute over mandate of electric vehicle policy
The Cabinet Division has stepped in to end the row between ministries of climate change and industries and production over a mandate of formulating Electrical Vehicle Policy, saying that the business of climate change does not relate to formulating industry-related policy.
Following this development, the Ministry of Industries and Production on Thursday notified a committee to prepare Electrical Vehicle Policy comprising representatives of science and technology, Ministry of Commerce, climate change, Federal Board of Revenue, Board of Investment, Engineering Development Board and Ministry of Industries and Production.
The Cabinet Division had pointed out that under schedule– 11 to the Rules of Business, the federal government functions; ‘National Industrial Planning and Coordination’ and ‘Industrial Policy’ are allocated to Ministry of Industries and Production. The allocated business of the Ministry Of Climate Change Does not relate to formulation of an industry related policy.
Though the rules of business are silent regarding Electrical Vehicle Policy as a subject, however, it is more akin to the functions assigned to the industries and production under ‘Industrial Policy’. In this case, since the Climate Change Division has made marked advancement in terms of drafting the policy, hence it would be fitting that the Industries and Production Division while formulating policy, carries out necessary consultation with the Climate Change Division in order to ensure that the policy meets international environment standards.
Pak can raise IT exports by training youth
Pakistan can increase its IT exports by a wide margin if it focuses on providing training to its youth on how they can form groups or companies rather than operating as individuals to compete more efficiently in the bidding process.
This was stated by E-commerce Gateway Pakistan President Dr Khursheed Nizam in a press conference held in connection with upcoming 19th IT Exhibition Telecom Conferences (ITCN).
“Pakistan has factories in shape of educated minds which can bring foreign reserves,” he said. “Our target is to take IT exports from $1 billion to $5 billion in the next three years along with increasing the share of e-commerce to 80percent domestically and 20percent cross-border.”
He added that non-technological exports, which were around $23 billion, could be uplifted to $50 billion if the government played the role of an enabler.
Pakistan Software Export Board (PSEB) and Pakistan Software Houses Association for IT and ITES (P@SHA) have 4,068 member companies out of which 1,016 are IT companies and 3,052 are Business Process Outsourcing (BPOs) companies.
Pakistan produces 500,000 graduates of business and other subjects and 25,000 graduates of computer science.
“Up to 20percent of them get jobs and the rest keep struggling for employment. The 80percent is the potential which can be used to attract dollars in the country,” he stressed. “Without any help from the government, millions are working as freelancers in Pakistan.”
Proposal to organize CPEC authority opposed
The Parliamentary Committee on China-Pakistan Economic Corridor (CPEC) on Thursday opposed the government’s proposal to set up a CPEC authority, terming it an unnecessary move that will create more confusion in the execution of the multibillion-dollar project.
The joint parliamentary committee also criticised government’s decision to set up the authority through a presidential ordinance – which will further erode the moral authority of the government after the Gas Infrastructure Development Cess (GIDC) Ordinance fiasco.
The 22-member joint committee of both the houses of the parliament held its meeting in-camera.
This week, the federal cabinet approved a summary to promulgate yet another presidential ordinance to set up the CPEC authority to oversee the implementation of CPEC projects, the Ministry of Planning and Development informed the parliamentary committee.
Creating yet another bureaucratic body is also against the notion of small and efficient government and it will add more financial burden on the government.
’s (PTI) Member National Assembly Sher Ali Arbab chaired the meeting that had been convened to take briefing on the terms of reference (ToR) of the CPEC Authority, ToRs of the head of the authority and the proposed mode of legislation. Majority of the members of the joint parliamentary committee expressed serious concerns over the decision to set up the authority, a committee member told on condition of anonymity. The members rejected the CPEC authority proposal by showing off their hands.
SBP: Rupee likely to depreciate in next 6-month
The Pakistani rupee may encounter events of depreciation against the US dollar over the next six-month period. The country, however, remained confident that the actions taken on money laundering and terror-financing would help it in exiting from the Financial Action Task Force’s (FATF) grey-list next month.
“Over the next six months, foreign exchange rate risk, balance of payment pressures, widening fiscal deficit and increase in domestic inflation were reported as key risks,” State Bank of Pakistan (SBP) said in its annual Financial Stability Review (FSR) 2018 launched on Thursday.
“The likelihood of occurrence of a high risk event in Pakistan’s financial system over the short-term is slightly higher than the medium-term,” the central bank said in the perception survey.
The local currency has recovered 2.3percent to Rs156.38 to the US dollar compared to fiscal year 2019’s closing at Rs160.05 following slight improvement in the current account deficit and foreign currency reserves.