Saudi prince launches $100mn tech house in Pakistan
Prince Fahad bin Mansour Alsaud has formally launched the Saudi-Pakistan Tech House (SPTH) in Pakistan with the aim of creating more than 1,000 jobs at a total project value of $100 million in the IT sector over the next five years. A press release on Wednesday said the project aims to promote greater business in the IT sector in Pakistan and enhance its relationship between the two countries. The SPTH launch event was organised by the Saudi Embassy in Islamabad with Ambassador of the Kingdom of Saudi Arabia Nawaf bin Said Al-Malki as chief guest. “I believe with such a huge IT infrastructure, talent and start-ups in Pakistan, both (Saudi and Pakistani) private sectors can forge partnerships that can be a game changer in the IT sector,” said Prince Fahad bin Mansour in his address.
Dar assures IMF agreement in next few days
Finance Minister Ishaq Dar said on Thursday that Pakistan is close to reaching an agreement with the International Monetary Fund (IMF). “I and my team are absolutely committed to completing this [IMF] programme to the best of our ability…We seem to be very close to signing a staff-level agreement hopefully in the next few days,” said Dar. Addressing a seminar in Islamabad, the minister added that the country is facing several challenges currently, adding that the coalition government was handed over an economy that was “in shambles”. He added that the “government is trying to revive the economy and will overcome the economic problems soon”. “The previous government had agreed to a loan facility which was extended by the IMF. Unfortunately, instead of honouring the commitments, they didn’t implement but, before leaving the office, had reversed some conditionalities they had implemented earlier. This led to a serious trust deficit between development partners and Pakistan,” he furthered. However, Dar assured that whatever the situation may be, the agreements of the previous government will be honoured.
No date given for staff-level contract with IMF
Central bank Governor Jameel Ahmad said on Wednesday that staff-level agreement (SLA) with the International Monetary Fund (IMF) was “close to finalisation” but shied away from giving a date amid his forecast of a reduction in non-debt creating inflows. The head of the State Bank of Pakistan (SBP) made a policy statement about the external sector outlook, inflation and economic growth during a meeting of the Senate Standing Committee on Finance. His assessment painted a bleak external sector picture, indicating that the combined inflows, on account of exports and foreign remittances, will be $14 billion to $15 billion less than the budgetary estimates made by the federal government. “The SLA is close to finalisation and it is now a matter of time when it will be announced,” said the governor. The current account deficit (CAD) projection that he gave for this fiscal year, however, was still out of line with the IMF’s forecast.
Government raises Rs1.57tr through T-bill auction
Commercial banks have increased their cost of financing to the cash-strapped government by a fresh 1 percentage point (ppt) to a record high of 21 percent on Wednesday, signalling that the finance market anticipates a further hike in the central bank’s key policy rate next month. The government raised debt worth Rs1.57 trillion, through auctioning three 12-month T-bills to commercial banks against its pre-set target of Rs1.8 trillion. Had the government decided to borrow more through the auction, the cut-off yield (financing rate for the government) would have spiked beyond the current financing price of 21 percent. The government, however, required Rs1.8 trillion to retire the maturing old debt to the banks. It did, however, raise another Rs307 billion by selling 2-year and 3-year Pakistan Investment Bonds (PIBs), against the pre-set target of Rs70 billion.
Government plans to transfer Nandipur assets to PSO
The Government has planned to place assets of Nandipur power plant (NPP) in a separate entity in order to hand over its controlling interest to Pakistan State Oil (PSO) for paying some of its outstanding dues. This will help the cash-starved PSO, the country’s largest oil marketing company, to reduce its huge circular debt receivables. Finance Division, in an office memorandum, said that it had considered the proposal in a draft summary and the proposed transaction was meant to settle PSO’s claims of receivables against NPP and Guddu Power Plant (GPP). However, it stated that the summary proposed the transfer of Gujranwala Electric Power Company’s (Gepco) controlling interest, instead of GPP, in deviation from the federal cabinet’s decision. “The Ministry of Energy (Petroleum Division) may, therefore, provide justification for proposing Gepco, instead of GPP, for the purpose,” the Finance Division said, adding that the proposed NPP transaction structure suggested that “the government would carve out assets of the power plant in a separate entity”, after clearing all its active and contingent liabilities.
Malnutrition and food insecurity major problems in Pakistan
Malnutrition and food insecurity are major problems in Pakistan, particularly for women and children. Extreme flooding and other climatic changes have made the situation worse. According to economists, malnutrition costs Pakistan $7.6 billion annually in lost wages, medical costs, and decreased human capital productivity. The main factor that ensures food security is the production of enough staple crops. The nation’s food security is ensured by wheat, which is the staple crop. In Pakistan, 98 percent of people consume wheat every day. About 22 million acres are used for the cultivation of wheat, which contributes 1.8 percent of GDP and 7.8 percent of the value added in agriculture. Wheat self-sufficiency has been a goal of every government and a constant challenge for agricultural experts and decision-makers. Since wheat is a strategic crop, any production shortfall could result in awkward circumstances, political unrest, a significant loss of foreign reserves, an increase in the price of wheat flour, and money shortages in vulnerable areas.
Raising policy rate was not IMF’s demand
In a surprise, State Bank of Pakistan (SBP) Governor Jameel Ahmad told a parliamentary panel that the recent increase of 300 basis points in its policy rate was a decision of the Monetary Policy Committee (MPC) of the central bank and not done on the demand of the International Monetary Fund (IMF). Testifying before the Senate Standing Committee on Finance and Revenue, the SBP governor reported its latest foreign exchange reserves at $4.3 billion, following inflows of about $1.5bn over the past one and a half weeks. He said the remittances from overseas Pakistanis and exports had dropped in recent months and projected the average rate of inflation for the current fiscal year at about 26.5 percent.