Pakistan In Focus

Indonesia looks to increase e-commerce with Pak

Adam Mulawarman Tugio, Indonesia’s ambassador to Pakistan, on Sunday said that Indonesia has set a $50 billion e-commerce trade target by 2025 to connect with the biggest sector of global trade.

“There are vast opportunities in e-commerce trade between Pakistan and Indonesia, which will increase bilateral trade and investment opportunities on both sides,” Adam Mulawarman Tugio told.

The envoy noted that both Pakistan and Indonesia have large youth populations that can make their mark in the global e-commerce trade and create vast employment opportunities in both countries.

He said that global retail e-commerce sales in 2020 stood at $4.28 trillion, which is expected to reach $5.4 trillion by 2022.

Rawalpindi ring road project gets another life

The federal government has conditionally cleared the construction of a controversial Rawalpindi Ring Road project with Rs23.6 billion public funding, which is now proposed to be completed along the original route to end controversy.

The Central Development Working Party (CDWP) – the first tier for scrutiny of mega projects – on Tuesday conditionally recommended the Ring Road project to the Executive Committee of the National Economic Council (ECNEC) for consideration.

A few months ago, the route of the project had brought a bad name to the government after two cabinet members were found connected with a change in it that escalated the land acquisition cost by Rs10 billion.

However, the CDWP cleared only the construction component of the project at a cost of Rs23.6 billion. The Punjab government has already separately revised downwards the land component scheme cost from over Rs16 billion to Rs6.7 billion.

IMF refuses borrowing request

The International Monetary Fund (IMF) has rejected Pakistan’s request to keep a door open for borrowing from the central bank and also did not agree on any meaningful accountability of the State Bank of Pakistan (SBP).

The central bank’s profit would also not be transferred 100percent to the federal government until the SBP gets cover to back its monetary liabilities. At least 20percent of the SBP profit will now remain in the central bank’s coffers until it gets the desired cover.

The IMF has rejected almost all major proposals of Pakistan for amendments to the SBP Act 1956, except for accepting the federal government’s right to appoint SBP board members and retaining finance secretary on the board.

However, the federal finance secretary, who would represent 96percent of shareholding, would not have the right to vote on any issue, sources told.

Foreign loans swell 18pc during Jul-Oct

The government took $3.8 billion worth of new foreign loans in the past four months, up 18percent, as it saw a further uptick in lending by the multilateral lenders once the International Monetary Fund (IMF) obstacle was crossed in a couple of months.

The government obtained $3.8 billion in gross foreign loans during the July-October period of fiscal year 2021-22, according to the Ministry of Economic Affairs.

The borrowing was higher by $580 million, or 18percent, compared with the loans taken in the same period of last fiscal year.

The $3.8 billion of foreign loans did not include the borrowing made through the highly expensive Naya Pakistan Certificates at up to 7percent interest in dollar terms for only one year.

Finance Adviser Shaukat Tarin said on Monday that the revival of IMF programme would help secure more loans from the bilateral and multilateral lenders.

Prime Minister aide unhappy with health tax delay

The adviser to prime minister on health has expressed his disappointment over the inordinate delay in approving the levy of health hazard tax on tobacco and beverages as the matter has been pending for a long time.

A proposal to slap health hazard tax was sent to the Economic Coordination Committee (ECC) of the cabinet at the time of presentation of budget. However, the ECC did not endorse it.

Later, the Ministry of National Health Services Regulations and Coordination again asked the economic decision-making body to approve the proposal, but the matter was put off.

Sources told that the special assistant to prime minister on health, in a recent cabinet meeting, raised the issue of health hazard tax on tobacco and sugar-sweetened beverages.

He lamented that an important initiative had been delayed inordinately and now once again the decision was deferred.

Ist phase of PSW to be completed in Mar-2022

The rollout of first phase of Pakistan Single Window (PSW) is underway and it will be completed in March 2022, said Adviser to Prime Minister on Finance and Revenue Shaukat Tarin.

Presiding over the second meeting of the governing council (GC) of Pakistan Single Window (PSW) at the Ministry of Finance on Tuesday, he expressed satisfaction on the overall progress made to implement the initiative.

Tarin lauded the efforts of Pakistan Customs and the Federal Board of Revenue (FBR) as the lead agency of the scheme.

While assuring full support for the deep-rooted reforms being introduced under the PSW program, he underlined the need to strengthen collaboration with both public and private sectors in order to create ownership and awareness.

“Successful implementation of Pakistan Single Window is a major objective of the current government, aimed at promotion of trade competitiveness through enhanced transparency and efficiency,” he said.

Agri sector vital for growth

Agricultural sector is vital for the country’s economic growth, food security, employment generation and poverty alleviation, particularly for the rural population, said Minister of National Food Security and Research Fakhar Imam.

Speaking during the signing ceremony of the protocol for onion export from Pakistan to China at the Ministry of National Food Security and Research (MNFSR) on Tuesday, he stated that the present government prioritised the growth of agriculture sector on sustainable basis.

The deal was signed by Imam and the Ambassador of China Nong Rong.

Imam added that appropriate policies were being implemented to achieve the desired outcomes.

Lending rate of commercial bank spikes

The aggressive tightening of monetary policy and the acceptance of stringent conditions for the resumption of International Monetary Fund (IMF) loan programme have badly jolted the Pakistan Stock Exchange (PSX) and a sharp drop in share prices indicates that the bourse may feel the aftershocks for some time.

The lending rate of commercial banks has spiked dramatically in the backdrop of the aggressive interest rate hike aimed at creating a balance between inflation and economic growth. The adjustment in markup rates, however, has increased the cost of borrowing for many businesses listed at the PSX and has adversely impacted their profit outlook.

Besides, Pakistan’s agreement with the IMF to cut its development budget significantly, withdraw tax exemptions worth Rs300 billion and increase petroleum product and power prices in phases is feared to hammer stock prices further from time to time.

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