ECONOMIC TIMES OF PAKISTAN
Pakistan‘s C/A deficit narrows to 41-month low
The current account deficit narrowed 80percent to a 41-month low at $259 million in September, but it came at the cost of country’s economic growth. The deficit stood at $1.27 billion in the same month of last year, the State Bank of Pakistan (SBP) reported on Friday.
The measures taken by the central bank to aggressively cut unwanted imports through a significant hike in the benchmark interest rate and attempts to revive exports and earn higher remittances through rupee depreciation helped bring down the current account deficit. The measures, however, have adverely impacted the growth of gross domestic product (GDP) at the same time.
In the first quarter (July-September) of the current fiscal year 2020, the current account deficit fell by 64percent to $1.54 billion compared to $4.28 billion in the same quarter last year.
Alpha Beta Core CEO Khurram Schehzad said that the current account deficit has been reduced with a massive cut in imports through the rate hike. The hike has also led to improvement in foreign currency reserves. However, this is one side of the achievement.
Traders, businessmen must remain apolitical for Pak-Afghan trade to flourish
“The measures (rate hike and rupee depreciation) are now hurting economic growth in the absence of import substitutes,” he said.
“The government needs to create an enabling environment to attract investment (both local and foreign) in import substitution and human resource capacity building to let the economic growth accelerate. Otherwise, the current account deficit would again widen to unsustainable level when the authorities concerned soften interest rate to let some economic growth happen in the future,” he said.
Challenges to execution of CPEC addressed
Pakistan has addressed the challenges being faced in the execution of China-Pakistan Economic Corridor (CPEC) projects and the multibillion-dollar strategic initiative is progressing smoothly, said a top Pakistan official on Friday.
Co-chairing a meeting of the CPEC Joint Working Group on Planning, which was held through video conference, Ministry of Planning Secretary Zafar Hasan said CPEC was progressing satisfactorily and a lot of challenges related to it had been addressed.
The meeting was held weeks before the scheduled meeting of the Joint Cooperation Committee (JCC) of CPEC, which would review overall progress on implementation of the Chinese strategic initiative.
Chinese investors planning to invest $5bn
Special Economic Zones (SEZs) will create new business opportunities for Chinese companies in many sectors of the economy as investors are planning to invest $5 billion in Pakistan over the next three to five years, said Chinese Ambassador Yao Jing.
Talking to Faisalabad Industrial Estate Development and Management Company (FIEDMC) Chairman Mian Kashif Ashfaq on Friday, the ambassador appreciated Pakistan government’s business-friendly policies and pledged Chinese investment in various small and medium-sized industrial sectors.
“Pakistan has been a longstanding trade and strategic partner of China and we have plans to increase investment under the China-Pakistan Economic Corridor (CPEC) and increase imports from Pakistan to make it an economically strong and independent country,” he said. “We look forward to speedy completion of the projects included in CPEC.”
E-Commerce policy connected with women empowerment
The government has decided to develop linkages with the one-woman, one-bank account initiative under the e-commerce policy.
Considering draft of the e-commerce policy, the cabinet members in a recent meeting suggested that the e-commerce policy may be linked with the one-woman, one-bank account initiative, which complements e-commerce initiatives apart from promoting women empowerment and financial inclusion.
During discussions, the cabinet members emphasised the importance of a payment gateway for effective roll-out of e-commerce in the country. It was pointed out that while some foreign online payment companies were interested, the State Bank of Pakistan should come up with a clear-cut policy.
Pakistan gets 4-month to avoid FATF blacklist
The Financial Action Task Force (FATF) announced on Friday that it was retaining Pakistan on its grey list for four more months after which Islamabad might face action including being blacklisted if it failed to make any significant progress on the inter-governmental body’s 27-point action plan.
“Pakistan needs to do more and it needs to do it faster. Pakistan’s failure to fulfil FATF’s global standards is an issue that we take very seriously,” FATF President Xiangmin Liu said while addressing a news conference in Paris.
“The FATF is giving a very clear warning [that] if by February 2020 the country has not made significant progress, we would consider further actions, which potentially include placing the country on the Public Statement, also referred to as the blacklist,” he added.
This is for the first time since February last year that the global money-laundering and terror-financing watchdog has warned that it could blacklist Pakistan and also ask its members and other nations to issue an advisory to their business community against investing in the country.
The FATF president said If Pakistan failed to make progress across the full range of its action plan by the next plenary meeting, the global body could urge its member states to advise their foreign investors to give “special attention” to business relations and transactions with the country.
Govt crafts strategy to stop smuggling
In a first step towards curbing nearly ‘$7 billion worth of annual smuggling,’ the government on Thursday approved the country’s first national anti-smuggling and border management strategies that are also expected to boost revenues and promote job creation in border areas.
The decisions were taken by Prime Minister Imran Khan in a meeting that was attended by officials from the Ministry of Interior, Ministry of Commerce and Federal Board of Revenue. The lead role to curb the smuggling was given to the Customs Department. It was also decided, in principle, that about 2,000 people will be recruited to strengthen the Customs human resources.
“The government has also approved the National Anti-Smuggling strategy,” said Dr Firdous Ashiq Awan, Special Assistant to the Prime Minister on Information, while addressing a news conference after the meeting. It was for the first time that a national strategy has been approved to curb smuggling.