Pakistan Economy Updates

[Saiyan0321]

Taking stock of 2020​

The year that is to close on Dec 31 was one of sharp volatility for the Pakistan stock market.

Over the calendar year 2020, the benchmark index climbed to 43,417 points on Dec 24, from 40,735 points on Jan 1, recording nominal gains of 2,682 points or 6.58 per cent. The year started out on a positive tone, but Covid-19 came in February. Business, industries and markets were devastated and the index started to tumble, settling deep down the dungeon at 27,229 points on March 25.

As the country started to come to grips with the situation and the pandemic caused much less damage to the economy than was feared, the stock market started to recover. The index catapulted by a staggering 16,188 points in the nine-month period from March 25 to Dec 24, providing a mouth-watering return of 59pc. Without the massive pullback from the March lows, the year would have joined the two gloomy years of negative stock returns: minus 15pc in 2017 and minus 8pc in 2018. In 2019, the equity return was 10pc.

The Economic Survey for 2019-20 released on June 11 had also painted a bleak picture of the stock market. The survey blamed Covid-19, stating that between Feb 26 (when the first Covid-19 case surfaced in the country) and the end of March, Rs1.58 trillion was wiped off market capitalisation. The main equity index managed to bounce back post-March, the survey stated.

Four Initial Public Offerings (IPOs) were witnessed in 2020 which together raised Rs8.4 billion. These included IPOs of Organic Meat Company, Agha Steel Industries, TPL Trakker and Engro Polymer preference shares. A senior market participant commented that Pakistan needed “sustainable economic growth and political stability for big IPOs”. The IPOs during the year were nonetheless highest in five years. In 2019, the bourse had seen just one IPO of Rs5bn. Besides the primary market, companies also asked shareholders for cash in rights issues: 14 rights offerings were made that mobilised Rs27bn.

In 2020 (until Dec 24), foreign investors sold Pakistani stocks worth $525 million. Local investors mopped up liquidity with the highest buying by insurance companies amounting to $224m, followed by individuals who put their faith and money in equities in the sum of $212m. A veteran broker said that after an initial euphoria over Pakistan’s retention in the Emerging Market (EM) Index by New-York based MSCI Inc, which belied concerns of a downgrade to the Frontier Market (FM) Index, foreigners stepped back. Pakistan stood out as a small dot in terms of weight in the MSCI EM against 8pc in MSCI FM.

The later part of the year also provided comfort to investors as corporate profitability in the third quarter (July-September) stood at Rs210bn, signifying a jump of 39pc from a year ago. “It was the highest quarterly increase in corporate profits in any year. Quarter-on-quarter profitability also recorded stellar growth of 52pc,” said the head of equities at a local brokerage firm.

For the nine-month period, aggregate earnings of the companies that make up the KSE-100 index stood at Rs479bn, up 3.9pc from a year ago. A fortnight ago, Asad Umar tweeted: “Industrial growth accelerates as economic recovery gathers pace. Large-scale manufacturing grew by 5.46pc in July-Oct against same period last year.” He observed that growth was even higher at 6.66pc versus October last year. Market strategists said that strong recovery would continue, thanks to low interest rates.

Earlier former chairman of the stock exchange, Arif Habib, told this writer that five sectors held as much as 70pc weight in the KSE-100 index. They include oil and gas exploration and production, power, banks, fertilisers and textiles, which led the stock rally and were later followed by other sectors. Several equity strategists observed that the yield on the 10-year Pakistan Investment Bonds (PIBs) had receded. The yield on the long-term government paper sank below the benchmark interest rate for the first time in a decade, which led the government to cut the rate of return on National Savings Schemes (NSS). With no comparable investible asset, funds started to flow into stocks and the market was swamped with liquidity.

Zulqarnain Khan, executive director of Next Capital, provided a synopsis of the outgoing year. It started on a chirpy note with the end to JUI-F’s sit-in. The index thus shot up by 7pc to a high of 43,468 points in the month of January. Banking and oil sectors mainly led the surge. But the chirping proved short-lived as the advent of the first case of Covid-19 in February prompted a nationwide lockdown. The index tumbled 59pc by March. Brent Crude, which had touched $71.75 a barrel in January, dropped dead to $15.98 a barrel by April.

Mr Khan recalled that between March and June, the SBP slashed the interest rate by 625 basis points to 7pc to revive the economy. The government also announced massive incentive packages for the construction industry, which led to a V-shaped economic recovery post-lockdown.

“This was rejoiced by the market and the index surged 59pc from its low by September. Earnings growth in September resulted in sustained recovery and the index now sits at an intra-day high of 43,955 points. Major sectors that led to the index upsurge include cement, technology, steel, pharmaceutical and packaging.”

Published in Dawn, The Business and Finance Weekly, December 28th, 2020

Taking stock of 2020

The year that is to close on Dec 31 was one of sharp volatility for the Pakistan stock market.

www.dawn.com

 

[Nilgiri]

This was a good read @Saiyan0321 @VCheng

Is the economy recovering?

Prime Minister Imran Khan has been talking about a ‘recovery’ in the economy since at least November.

www.dawn.com

They (pak govt) are not busting the invoice+circular remit/loan cartel.

 

[VCheng]

This was a good read @Saiyan0321 @VCheng

Is the economy recovering?

Prime Minister Imran Khan has been talking about a ‘recovery’ in the economy since at least November.

www.dawn.com

They (pak govt) are not busting the invoice+circular remit/loan cartel.

Let us wait for the inevitable fallout for the current setup in failing to deliver what it promised by a country mile.

 

[Kaptaan]

Let us wait for the inevitable fallout for the current setup in failing to deliver what it promised by a country mile.

What could possibly happen with this "fallout"? A insurrection and mobs breaking into PMO office and PM Imran Khan humiliated, muzzled retiring to Bani Gala with two Pak Army infantry Divisions parked across centre of Islamabad with soldiers in full combat gear. And ISI vetting every one of them in case they are ISIL members.

No worries ....

 

[Nilgiri]

Let us wait for the inevitable fallout for the current setup in failing to deliver what it promised by a country mile.

Seems there could be even more asset seizures/holds abroad coming up too:

How Pakistan lost $6 billion on a gold mine - Asia Times

PESHAWAR - Pakistan’s US and France based real estate assets are at risk of confiscation as a United Kingdom court moves to enforce an arbitration

asiatimes.com

@Saiyan0321

 

[ekemenirtu]

Given the pandemic ravaging the world, Pakistan's performance has been beyond and above all expectations.

Much work is yet to be done and there is no room for complacency, hence it is best not to gloat or count chickens before they hatch. Let us wait till the current term of the current PM ends before we judge if there has been any marked improvement when compared to the previous government.

Pakistan, as a state founded on an ideological basis rather than narrow ethno-nationalist basis that defines most states, has as its raison d’être what I would call "Islamic solidarity", rather than "Islamic nationalism" or "Islam" itself.

As the only publicly declared nuclear power in the OIC, with ballistic and cruise missiles adequately developed to deliver those weapons to Indian targets, Pakistan deserves a special mention and a special position among OIC members.

The status of Muslim communities worldwide can be said to be directly linked to the fate, to the strength, to the wellbeing of the Pakistani nation, however loosely defined.

As such, not only should the brotherly country of Turkey but all Muslim majority communities worldwide work, hope and pray for the continued strengthening of Pakistan in all aspects of life.

Pakistan Records Current Account Surplus for the 5th Consecutive Month

Pakistan’s current account maintained a surplus with a handsome value of $1.6 billion in the five months of the current

propakistani.pk

Pakistan Records Current Account Surplus for the 5th Consecutive Month​

Posted 4 weeks ago by M Yasir

Pakistan’s current account maintained a surplus with a handsome value of $1.6 billion in the five months of the current financial year, mainly due to enhanced inflows from remittances and export receipts.

The current account also posted a surplus-value of $326 million for the straight five months of the financial year that added further to the overall surplus-value of the current account in FY21.

According to the State Bank of Pakistan (SBP), the current account surplus has reached $1.6 billion compared to a deficit of $1.7 billion.



A.A.H Soomro, Managing Director at Khadim Ali Shah Bukhari Securities told ProPakistani,

PTI is having a windfall stroke of luck during COVID times. Lesser imports, more formal channel remittances, and a marginal uptick in exports are keeping state coffers filled. Expect these months to continue for the next few months. Confidence is building as PKR stabilizes.

In contrast to the previous five years, the current account has been in surplus throughout FY21 due to an improved trade balance and a sustained increase in remittances. In November 2020, both exports and imports picked up, reflecting a recovery in external demand and domestic economic activity.


The trade deficit of the goods stood at $8.6 billion during the period of July to November 2020 as compared to $8 billion recorded in a similar period of the last year. The trade deficit of services reduced to $3.08 billion from July to November 2020 compared to $3.77 billion recorded in a similar period of the last financial year.

The overall trade deficit showed a slight declined to $9.53 billion in July to November 2020 from $9.55 recorded in a similar period of the last year.

Remittances, on the other hand, provided strong support to the current account, which surged to $11.7 billion during the five months of the FY21 as compared to $9.2 billion remittances inflows received last year, showing a growth of 27 percent or $2.4 billion.

This turnaround in the current account, together with improvement in financial inflows, raised SBP’s FX reserves by around $1 billion in November 2020, which stand at $13.1 billion, which is the highest level in three years, SBP added.

The improved level of foreign exchange reserves also provides support to the stability of the Rupee against the Dollar, which will further help to contain the import bill of the country in the coming days.


Prime Minister appreciated the latest development terming it a “remarkable turnaround”.

https://twitter.com/i/web/status/1341233934114406401

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[Saiyan0321]

Pakistan can take IT exports to $10b​

OICCI report highlights importance of stable regulatory practices to attract FDI

KARACHI:
Pakistan has the potential to enhance its IT exports to $10 billion from the current $2 billion, said a report released by the Overseas Investors Chamber of Commerce and Industry (OICCI).

The report titled “OICCI Recommendations for Digital Economy” highlighted the much-needed shift required to capture the opportunity of digital transformation happening within and outside Pakistan through a new mindset.

“By digitising most, if not all, key segments of the economy could boost IT exports to $10 billion annually, provide a significant growth to gross domestic product (GDP), attract billions of dollars in foreign direct investment (FDI) and create new jobs within a short period,” the report added.

It highlighted the FDI potential by creating an enabling environment for investment in the platform and hi-tech ecosystem so that Pakistan could attract global IT platform players and venture capital funds to accelerate innovation.

The OICCI digital recommendations cover six key areas which include connectivity, digital financial system, export growth and digital skills, platforms and e-commerce ecosystem, innovation and regulatory environment, and digital governance and citizen services.

Highlighting the potential for IT exports, OICCI President Haroon Rashid said, “While IT exports from Pakistan are only worth $1-2 billion, the Philippines, with half the population of Pakistan, exports IT services worth about $30 billion, India over $190 billion and many other Asian countries are also well ahead of Pakistan,”

“This should be a cause for great concern to the authorities but at the same time could be a motivational factor as Pakistan has great potential to boost its IT exports with a focused short and medium-term strategy and its delivery by key stakeholders.”

The report underlined the importance of stable and inclusive regulatory practices to ensure effective participation of global players in platform economy to attract FDI, make a significant positive impact on GDP growth and connect Pakistan to global e-commerce and creative economy opportunity.

While acknowledging the recent inauguration of Special Technology Zones, the report pointed out, “However, for immediate gains, OICCI has recommended the need to establish a digital mechanism to provide ease of doing business coverage in public-private partnership to bring 5-10 million square feet of space quickly in utilisation through virtual authority.”

Other recommendations include the need to massively improve the quality and stability of connectivity by pushing a “fiberisation drive”, accelerated focus on digital financial services by removing existing friction, enabling the country to be integrated with global chains and improved citizen and business services, through digital governance, which can significantly help in terms of service efficiency and image of the country.

With a highly improved security environment, duly recognised by independent sources, and an attractive operating cost, in terms of hard currencies, following massive depreciation of the rupee, the OICCI emphasised the need for sustained and structured efforts for improving the global image of Pakistan as an attractive destination for FDI, especially for large international technology players.

Published in The Express Tribune, January 19th, 2021.

Pakistan can take IT exports to $10b | The Express Tribune

Pakistan has the potential to enhance its IT exports to $10 billion from the current $2 billion, said a report released by the Overseas Investors Chamber of Commerce and Industry (OICCI)

tribune.com.pk

 

[VCheng]

Seems there could be even more asset seizures/holds abroad coming up too:

How Pakistan lost $6 billion on a gold mine - Asia Times

PESHAWAR - Pakistan’s US and France based real estate assets are at risk of confiscation as a United Kingdom court moves to enforce an arbitration

asiatimes.com

@Saiyan0321

A B777 in Malaysia, the High Commission's accounts in UK .... maybe it has already begun.

 

[Saiyan0321]

ADB to provide $5.4bn assistance to Pakistan in three years​

ISLAMABAD: The Asian Development Bank (ADB) will provide about $5.4 billion assistance to Pakistan over the next three years.

This is part of the ADB’s five-year Country Partnership Strategy (CPS).

“The indicative resources available for commitment during the first three years of the CPS period (2021-2023) total $5.4bn,” said the ADB on Thursday. This include $3.6bn for regular OCR (ordinary capital resource) lending and $1.8bn for concessional OCR lending.

Pakistan is classified as a group B category developing member country with access to OCR lending and concessional OCR lending. The bank said additional grant resources had been allocated for a project in 2021 from the Asian Development Fund thematic pool worth $5 million to increase gender equity.


The final allocation for the complete 5-year CPS period will depend on available resources, project readiness, and the outcome of the country’s performance assessments. Sovereign operations will be supplemented with ADB’s non-sovereign operations, subject to headroom constraints, as well as official and commercial co-financing.

The existing cost-sharing and financing parametres will continue to be applied during 2021-2025, with ADB financing up to 85 per cent of the loan project costs and 90pc for the TA costs, on an overall portfolio-wide basis. Actual shares for specific ADB projects will be determined by project-specific considerations and available co-financing.

The bank said it would place special emphasis on improving the quality of project readiness and implementation by engaging with the government to have project management units early. Only procurement-ready projects will be taken to the ADB board of directors for consideration of approval.

Published in Dawn, January 29th, 2021

 

[Saiyan0321]

Power of crowd: lesson for Pakistan from Wall Street fight​

Crowds have had the power – to overthrow governments or put Wall Street to the brink of disaster
KARACHI:
For long, stock markets were largely seen as a club where those with means got together, found ways to become wealthier, and it all came at the expense of someone else. Usually, that someone else was not part of the club. Okay, sometimes they were. But because it was all a club, they looked after each other in the next round.

Stock markets, in the strictest sense, do create wealth but it is not the same as job creation or bringing value. That value, or job creation, comes from listed companies that opt for financing through these markets. In a nutshell, and perhaps this needed to be stated earlier, a stock-market trade will always make one party better off, and the other worse off. But because there is no compulsion in conducting a trade, advocates of the free market usually get away with a pass on this one. But what happens when you are forced to sell and buy or disallowed from buying or selling a stock. It creates havoc.

It happened in Pakistan in 2008, when trading was suspended by the regulator in September after the KSE-100 Index – considered a benchmark for market performance – plummeted from its high of 15,676 in April to near 9,000, wiping off the investments of many. The fall coincided with the global financial crisis.

Just the previous year, the KSE-100 Index had climbed almost 40%, luring new investors into its club. When trading did begin at the then Karachi Stock Exchange in December – not knowing when another suspension could be triggered – investors dumped their stocks as the KSE-100 went crashing to below 5,000.

Imagine the investors who entered at 15,000. On average, their investment would have been reduced to one-third in a matter of months.

However, this is not about what Pakistan’s reaction was to the global financial crisis. It is about how Wall Street reacted when its privileges were challenged by a crowd. A crowd powered by social media and fuelled by sentiment. It was about the ability of a crowd to challenge the club that bet against a particular stock or a group of stocks. The crowd said no.

In simple terms, big funds bet that the stock price of a particular company would go down. Game Stop Corp had already seen its price come down from $50 in 2013 to below $5 before Covid-19 began. The pandemic did not make things better. So these funds continued to make money.

Read: KSE-100 snaps three-day winning streak

However, in 2021, a group of powerful devotees – calling them devotees is fair – decided to challenge the Wall Street people. For whatever reason, motivated by something or the other, this crowd said, ‘let’s do this’. Presenting a united front, they managed to buy enough that the price went rose. Although gradual at first, from close to $5 to $20 in a few months, 2021 was the time the short-selling funds saw their bets become massive losses. The price skyrocketed to almost $350 within a few days.

Now, the problem with short selling is that this move has a higher downside risk. If you buy a stock worth $10, the minimum it can go is $0. You lose a maximum of $10. But if you short-sell – that is when you ask a broker who has the stock to sell it for you at the current price – the risk is higher.

Suppose you short sell at $10. The broker sells it for you, and gives you $10 for it. Now you ‘owe’ the broker 1 share of that company. And you have $10. When the price starts to come down, you buy it and give it to the broker. If you buy it at $3, the transaction is complete. You give the broker back their 1 share, and you have $7 from this transaction because $3 were used to buy the share. Now imagine that the price starts to climb. At some point, your broker will ask for their share. When do you buy it? The risk is even greater as the price can continue to climb to $300, and you will lose much, much more than $10.

And this is hurting the big funds. The problem isn’t their pain. The issue is that mechanisms were put in place that made it difficult for clients to conduct the trades. But that is another dimension.

This entire saga conveys a simple point that many literary works have conveyed so many times before. The power of the crowd.

Crowds have always had the power – to overthrow governments, pick a clown as prime minister, rally behind a movement to oust colonisers, or put Wall Street to the brink of disaster.

James Michael Surowiecki, an American journalist, very eloquently put in his book, ‘The Wisdom of Crowds’ that the large groups are smarter than the elite few, no matter how brilliant. Their wisdom and motivation aside, their power certainly came to the fore in January. With social media, the power of crowds has never been greater.

If a crowd can take on literally the giants of the game – a club that sits, wines and dines together and has practised their craft for decades, then there is a lesson in it all.

How unfortunate that in Pakistan, there is there is so much that divides us and next-to-nothing that unites us.

The writer is former business editor of The Express Tribune, and winner of the Citi Journalistic Excellence Award 2018. He holds a MBA from Cass Business School, and is currently associated with the CEJ-IBA. His Twitter handle is @bilala_memon





Published in The Express Tribune, February 1st, 2021.

Lesson for Pakistan from Wall Street fight | The Express Tribune

For long, stock markets were largely seen as a club where those with means got together, found ways to become wealthier, and it all came at the expense of someone else. Usually, that someone else was not part of the club. Okay, sometimes they were. But because it was all a club, they looked...

tribune.com.pk

 

[Saiyan0321]

What's behind Pakistan's pandemic-defying remittance boom?​

The Covid-19 pandemic has ravaged economies globally, but Pakistan has been on the receiving end of a boom that could continue until the end of this year.​

Remittances, the money sent home by migrant workers, are an important and under-acknowledged aspect of the global economy, giving poor families a lifeline and helping to prop up cash-strapped developing economies.

These transfers account for more than 5 percent of GDP in at least 60 low and middle income countries. Pakistan is one of them. Remittances to the South Asian nation rose from over 5 percent of GDP in 2009 to almost 8 percent in 2019, according to the World Bank.

This money has helped bolster the country’s depleted foreign currency reserves and mitigate recurrent balance of payments problems caused, in part, by chronically weak exports and a reliance on imported fuel.

In 2019 the situation spiralled out of control when twin fiscal and current account deficits forced prime minister Imran Khan to seek a $6 billion bailout from the International Monetary Fund (IMF).

When the coronavirus spread last year and countries across the world went into lockdown, remittances were widely expected to drop precipitously as economies crashed and migrants lost their jobs.

At the same time, energy prices nosedived to unprecedented lows, hammering oil-producing states like Saudi Arabia and the United Arab Emirates (UAE) which are believed to host around 2.5 million and 1.5 million Pakistanis, respectively.

And, indeed, remittances did decline for many recipient countries in April-May 2020. In India, for example, they fell by 10 percent. But, surprisingly, Pakistan experienced an increase in this period.

The rest of the year saw a further uptick. From July to December, 2020, the country received more than $14 billion in remittances, a rise of almost 25 percent on the same period in 2019, with Saudi Arabia and the UAE accounting for about half of the total.

These inflows have helped stabilise Pakistan’s economy, which registered a current account surplus for five months in a row from July to November and saw its foreign exchange reserves surge to the highest level in years.

Transfers might have spiked initially because workers lost jobs in the spring and off-loaded their savings before moving back to Pakistan. However, remittances have continued to increase throughout the year, pointing to other factors.

Moving parts

“The initial hypothesis was that workers were coming back and transferring their savings, which is why there was a spike,” according to Uzair Younus, a Visiting Senior Policy Analyst at the United States Institute of Peace and host of the podcast Pakistonomy.

“But the numbers continue to be strong, leading some to talk about the fact that this is due to informal channels being closed due to a decline in travel,” Younus told TRT World.

Travel restrictions have prevented workers from carrying remittances by hand, forcing them to send money via banks, money transfer operators or mobile platforms. The funds are therefore registered, leading to an increase in the official statistics.

Migrant labourers work in Dubai, United Arab Emirates. Saud Arabia and the UAE are believed to host around 2.5 million and 1.5 million Pakistanis, respectively. (Reuters)
“A lot of people are using digital means to send money to Pakistan,” said Samiullah Tariq, head of research and development at Pakistan Kuwait Investment Company. Expatriates are increasingly using digital apps like Xoom, which are “cheaper and much more convenient” than going to the bank or delivering money by hand, Tariq told TRT World.

According to the World Bank’s Global Knowledge Partnership on Migration and Development (KNOMAD), in its latest Migration and Development Brief, “The negative impact of the COVID-19–induced global economic slowdown has been somewhat countered by the diversion of remittances from informal to formal channels.”

Anti-money laundering efforts by Pakistan’s government may also explain the increase, according to Samiullah Tariq. Eager to comply with Financial Action Task Force (FATF) requirements, Islamabad has cracked down on the informal hawala system. “That has also contributed towards usage of official channels to transfer money,” Tariq told TRT World.

The increase in remittances is, in this sense, artificial, as the actual funds being transferred remain the same, regardless of whether they are carried by hand or sent electronically. But, according to Uzair Younus, “the economic stability metrics take into account official and formal flows. Which is why a redirection into formal channels is an important shift that does have an impact on overall stability.”

The World Bank also attributes the increase to the so-called ‘Hajj effect’ – “Pakistani migrants remitting home the money saved for pilgrimage to Mecca due to a sharp reduction in the number of Hajj visas to contain the pandemic.”

Migrants had funds at their disposal that would ordinarily have been spent on pilgrimage, enabling them to send more money back to Pakistan.

Exchange rate dynamics may be a factor, too, according to a new report by Oxford Economics. Pakistan’s rupee depreciated strongly against the US dollar in 2020. Remittances from the Gulf are often made in local currencies, which are pegged to the dollar. This money can therefore be exchanged for more rupees than would have been the case before the pandemic, attracting higher inflows.

There is another possible explanation. “The increase in remittances from Pakistani workers in the Gulf and elsewhere can be explained by the increase in demand for workers in e-commerce and other industries which benefited from the pandemic,” said Donghyun Park, a principal economist at the Asian Development Bank, speaking to TRT World in his personal capacity.

Businesses have been closed by lockdowns, leading to a boom in online shopping and home delivery. Locals have been reluctant to work in logistics and distribution, due to fear of infection, so migrant workers “stepped in to fill the void,” Park told TRT World.

The Pakistani government has also offered tax incentives to boost remittances, cutting withholding tax on bank transfers in July 2020. “The government’s efforts to attract remittances and migrants’ savings through tax incentives may be working, although these are yet to be evaluated,” according to the World Bank’s latest migration brief.

Furthermore, the bank notes that “cross-border payments for goods, services, and investments could be reclassified as remittances” so as to take advantage of tax incentives.

A correction ahead?

Last year Pakistan also introduced Roshan Digital online banking to facilitate remittances, part of a wider digitisation push by Prime Minister Imran Khan’s government. Approximately 70,000 Roshan Digital accounts have been opened so far, according to the State Bank of Pakistan.

“It’s the first time in Pakistan that an account-opener does not have to come physically to open an account,” said Samiullah Tariq. “You can open it digitally from any location.”

However, despite the increase in remittances to Pakistan in 2020, the World Bank expects a decline this year. “The underlying fundamentals supporting remittances remain weak,” KNOMAD told TRT World through a spokesperson.

“Lower level of economic activity, lower oil prices, and lower employment of migrant workers in the GCC region are likely to impact flows.”

Many Pakistani expatriates have left the Gulf since the coronavirus crisis began, and there has been a sharp drop in new migrations, according to data from Pakistan’s Bureau of Emigration and Overseas Employment.

Motorcyclists ride past billboards showing the portraits of Abu Dhabi's Crown Prince, Sheikh Mohammed bin Zayed Al Nahyan, and Pakistani Prime Minister Imran Khan, in Islamabad, Pakistan, Sunday, Jan. 6, 2019. (AP)
Moreover, GCC governments are stepping up efforts to employ more local workers and reduce their dependence on migrant labour. Saudi Arabia, for example, has intensified its ‘Saudization’ drive across various employment sectors.

Indeed, remittances from GCC countries to Pakistan were “either flat or declining” for years before the uptick in 2020, according to the World Bank, “perhaps reflecting the indigenization policy”.

The UAE last November stopped issuing new work visas for migrants from Pakistan and other countries. This was apparently a temporary measure to prevent the spread of the coronavirus.

However, Indians were not denied visas, even though their country has a much higher case tally than Pakistan, leading some to believe that the UAE’s decision was political.

Tensions have been running high between Abu Dhabi and Islamabad of late. Not only is Pakistan growing increasingly close to Turkey, an adversary of the Emirates, but it has refused to follow the UAE and other Muslim nations in recognising Israel.

Abu Dhabi has, for its part, forged closer ties to India and declined to criticise prime minister Modi for his crackdown in Kashmir.

TRT World asked the UAE’s foreign minister, H.H. Sheikh Abdullah Bin Zayed Al Nahyan, why Indians had not also been denied visas, but did not receive a reply. Pakistan’s foreign ministry did not respond to a query about the reason for the UAE’s visa decision.

The denial of new visas to Pakistanis will negatively impact remittances. “The UAE visa decision is a real concern and is not a good sign,” said Uzair Younus.

“The major impact of these restrictions will be in KPK [Khyber Pakhtunkhwa province], where about 10 percent of the average household income comes from foreign remittances,” Younus told TRT World.

However, despite these concerns, Gulf countries will still depend on Pakistani migrants, according to Qamar Huda, an analyst at Gulf State Analytics, a Washington DC-based risk consulting firm.

“Given the population size of GCC, the limited talent pool of locals and the immense need for international talent for growing markets, GCC countries will continue depending on labour from other countries, including Pakistan,” Huda told TRT World.

Reliance on migrant workers might even increase, according to Donghyun Park. “We expect economic growth in GCC and globally to rebound strongly in 2021,” Park told TRT World. “Therefore, the demand for workers will rebound strongly.”

“At the same time, the fear of infection will persist for some time, which means that the demand for foreign workers in industries, occupations, and activities will persist. Therefore, if anything, we can expect Covid-19 to boost demand for foreign workers,” Park said.

Samiullah Tariq expects remittances to continue their upward trajectory in 2021, reaching “$27-28 billion” for the full fiscal year. The central bank expects a slightly lower total of $24-26 billion, but that would still be an increase on 2019-20.

Much remains uncertain about these issues, and the World Bank is launching an International Working Group on Improving Data on Remittances to boost data collection and dissemination.

That might explain how Pakistan managed to defy gravity while the global economy was falling off a cliff.

What's behind Pakistan's pandemic-defying remittance boom?

The Covid-19 pandemic has ravaged economies globally, but Pakistan has been on the receiving end of a boom that could continue until the end of this year.

www.trtworld.com

 

[Saiyan0321]

Pakistan's inflation eases to 5.65pc in January​

The inflation rate eased to 5.65 per cent in January, the Pakistan Bureau of Statistics (PBS) said on Monday, from 8pc the previous month.

A decrease in the prices of vegetables, pulses, eggs, spices and chicken helped bring down the consumer price index (CPI), the bureau said.

It said the Urban CPI recorded a decrease of 0.16pc while Rural CPI recorded a drop of 0.29pc. The average inflation rate from July-January (2020-21) was 8.19pc and food inflation at 13.79pc over the year earlier period.

After touching as high as over 14pc early last year, the January reading was the first time that core inflation has come down to the level of what the PTI government had inherited when it came to power in August 2018.
“Our efforts to reduce inflation are now showing results,” Prime Minister Imran Khan tweeted on Sunday. “Consumer price index and core inflation are both now lower than when our government was formed,” he said.

Planning Minister Asad Umar also said on Twitter that inflation during January was down to 5.7pc, while core inflation was at 5.4pc, both lower than when the PTI government took over.




“In July 2018, prior to the PTI government’s formation, CPI was 5.8pc and core inflation was 7.6pc,” the minister wrote.

The opposition blames the government's mismanagement of the economy for having brought the GDP down to as low as 0.4pc from 5.8pc during the PML-N government and the inflation jumping to as high as 14pc from below 4pc.

IMF has forecasted the economy to grow 1.5pc this year against the government's target of 2.3pc in the fiscal year 2020-21.

Pakistan's inflation eases to 5.65pc in January

A decrease in the prices of vegetables, pulses, eggs, spices and chicken helped bring down the consumer price index: PBS.

www.dawn.com

 

[Nilgiri]

Pakistan can become $1.5-1.7tr economy | The Express Tribune

Real estate guru, Imarat Group of Companies Chairman and Graana.com CEO Shafiq Akbar has termed real estate sector the growth engine for the country’s economy and said that given the continuity of reforms, Pakistan can become a $1.5-1.7 trillion economy by 2040.

tribune.com.pk

ISLAMABAD:
Real estate guru, Imarat Group of Companies Chairman and Graana.com CEO Shafiq Akbar has termed real estate sector the growth engine for the country’s economy and said that given the continuity of reforms, Pakistan can become a $1.5-1.7 trillion economy by 2040.

In an interview, he stressed the need for focusing on real estate and related industries along with achieving the target of constructing one million housing units per year over the next 10 years.

After the success of its pilot project, Graana.com is introducing a more advanced real estate transaction structure, Akbar said, adding that the Imarat Group of Companies is also going to set up three new four-star hotels of leading international brands in Pakistan. Construction of Marriott Court Yard and Marriott Residence projects has already started while construction work on the third project will be contracted soon.

In addition, a Special Economic Zone (SEZ) will be set up in Islamabad and Rawalpindi for industries connected with the construction sector. Akbar said that geo-tagging and geo-mapping of government land and housing societies has been conducted across the country and digital mapping of five million out of the eight million units has also been done.

He said that the goal of the Imarat Group is to channelise annual investment of $5 billion and take Pakistan among top 40 countries in terms of transparency.

Imarat Group is setting up an industry over an area of about 2,000 canals in Pakistan in which all kinds of construction material will be produced.

Akbar called for an effective Real Estate Regulatory Authority (RERA) for the development of real estate sector and emphasised that the government should expedite work on development of RERA rules. Graana.com has started certificate-level short courses in the real estate sector for the first time in the country with the help of National University of Sciences and Technology (NUST).

About 7,000 people have completed training courses so far under the certificate programme after which it has been proposed to start a master’s degree programme in the real estate sector at NUST.

In addition, two private universities in Karachi have introduced degree programmes in the real estate sector.

Akbar told The Express Tribune that following his graduation from Pakistan, he went abroad to obtain a master’s degree from the University of Cambridge. He worked in the real estate sector of the UK for 22 years after which he returned to Pakistan in 2016 to work in his homeland. Graana.com has set up 30 offices in Pakistan and provided employment to more than 1,000 people.

Presenting an outlook of the real estate sector, Akbar said that the value of Pakistan’s planned area is $900 billion. He said that thousands of housing societies have been set up in Pakistan, however, 5,000-8,000 of them, comprising two million canals of unapproved land, have been developed. The residential area in the planned area is 75% of any country while 5% is commercial and 20% is agricultural area.

“We are bringing a very advanced real estate transaction structure,” Akbar said, adding that the Imarat Group will also issue a white paper on the problems and potential of real estate in Pakistan.

By 2040, 60-70% of Pakistan’s housing demand will be met. The right investment in Pakistan is in the real estate sector. However, 70% of the complaints on the Prime Minister’s Citizen Portal were made by overseas Pakistanis and pertained to the real estate sector.

Pakistan is ranked 73rd in the world on the Transparency Index, Akbar said while expressing hope that the country could reach the 40th position if right measures are taken with regard to construction and real estate sector. He said that Graana.com will become a billion-dollar company in 2023.

Akbar cited lack of data and information as a major problem in Pakistan. RERA, set up by the government, should be present throughout the country and should be used effectively, he said, urging Pakistan needs to build one million houses every year.

He said Pakistan would need between $25-30 billion for constructing one million houses, out of which $12 billion can be obtained from overseas Pakistanis and the rest can come from other sources.

Akbar pointed out that more than half of the population of Pakistan resides in slums and is in need of proper houses.

Published in The Express Tribune, February 23rd, 2021.

 

[VCheng]

Pakistan can become $1.5-1.7tr economy | The Express Tribune

Real estate guru, Imarat Group of Companies Chairman and Graana.com CEO Shafiq Akbar has termed real estate sector the growth engine for the country’s economy and said that given the continuity of reforms, Pakistan can become a $1.5-1.7 trillion economy by 2040.

tribune.com.pk

ISLAMABAD:
Real estate guru, Imarat Group of Companies Chairman and Graana.com CEO Shafiq Akbar has termed real estate sector the growth engine for the country’s economy and said that given the continuity of reforms, Pakistan can become a $1.5-1.7 trillion economy by 2040.

In an interview, he stressed the need for focusing on real estate and related industries along with achieving the target of constructing one million housing units per year over the next 10 years.

After the success of its pilot project, Graana.com is introducing a more advanced real estate transaction structure, Akbar said, adding that the Imarat Group of Companies is also going to set up three new four-star hotels of leading international brands in Pakistan. Construction of Marriott Court Yard and Marriott Residence projects has already started while construction work on the third project will be contracted soon.

In addition, a Special Economic Zone (SEZ) will be set up in Islamabad and Rawalpindi for industries connected with the construction sector. Akbar said that geo-tagging and geo-mapping of government land and housing societies has been conducted across the country and digital mapping of five million out of the eight million units has also been done.

He said that the goal of the Imarat Group is to channelise annual investment of $5 billion and take Pakistan among top 40 countries in terms of transparency.

Imarat Group is setting up an industry over an area of about 2,000 canals in Pakistan in which all kinds of construction material will be produced.

Akbar called for an effective Real Estate Regulatory Authority (RERA) for the development of real estate sector and emphasised that the government should expedite work on development of RERA rules. Graana.com has started certificate-level short courses in the real estate sector for the first time in the country with the help of National University of Sciences and Technology (NUST).

About 7,000 people have completed training courses so far under the certificate programme after which it has been proposed to start a master’s degree programme in the real estate sector at NUST.

In addition, two private universities in Karachi have introduced degree programmes in the real estate sector.

Akbar told The Express Tribune that following his graduation from Pakistan, he went abroad to obtain a master’s degree from the University of Cambridge. He worked in the real estate sector of the UK for 22 years after which he returned to Pakistan in 2016 to work in his homeland. Graana.com has set up 30 offices in Pakistan and provided employment to more than 1,000 people.

Presenting an outlook of the real estate sector, Akbar said that the value of Pakistan’s planned area is $900 billion. He said that thousands of housing societies have been set up in Pakistan, however, 5,000-8,000 of them, comprising two million canals of unapproved land, have been developed. The residential area in the planned area is 75% of any country while 5% is commercial and 20% is agricultural area.

“We are bringing a very advanced real estate transaction structure,” Akbar said, adding that the Imarat Group will also issue a white paper on the problems and potential of real estate in Pakistan.

By 2040, 60-70% of Pakistan’s housing demand will be met. The right investment in Pakistan is in the real estate sector. However, 70% of the complaints on the Prime Minister’s Citizen Portal were made by overseas Pakistanis and pertained to the real estate sector.

Pakistan is ranked 73rd in the world on the Transparency Index, Akbar said while expressing hope that the country could reach the 40th position if right measures are taken with regard to construction and real estate sector. He said that Graana.com will become a billion-dollar company in 2023.

Akbar cited lack of data and information as a major problem in Pakistan. RERA, set up by the government, should be present throughout the country and should be used effectively, he said, urging Pakistan needs to build one million houses every year.

He said Pakistan would need between $25-30 billion for constructing one million houses, out of which $12 billion can be obtained from overseas Pakistanis and the rest can come from other sources.

Akbar pointed out that more than half of the population of Pakistan resides in slums and is in need of proper houses.

Published in The Express Tribune, February 23rd, 2021.

How does further inflating the real estate bubble count as productive investment?

 

[Nilgiri]

How does further inflating the real estate bubble count as productive investment?

Well if its capex driven low-income housing, there is merit to the thing...as construction sector can bring lot of jobs and creates hard assets in valuable areas of a country. Theoretically if you attract lot of sound money in productive industries or investment funds directly, you can create a large job-providing sector that does not need immense training-investment...but provide a middle bulk sector for the economy. That is for example how China created even more job pull in the cities past just the initial factories.

Problem with Pakistan is the land-mafias joined at hip to each other and the DHA khakis et al., so entire effort turns into bubble and speculation quite prematurely (even for a developing country) like you describe.

I have been sensing this since a long time ago when musharaff first took power and he visited Singapore iirc (where I was at the time), and pakistan embassy produced a full multi-page feature (in a section of the Straits Times) of industry brochures complete with musharaf-isms like Pakistan will soon beat India in IT exports and will soon beat India at space launches and this and that.

Then certain folks confirmed it for me in PDF in much more grounded sectors a country really needs to get as correct as possible.

They are outnumbered heavily by the brochure-wallahs though...and droned out or banned when they mention underlying rot that is uncomfortable.

 

[VCheng]

Not entirely unexpectedly, FATF decided to keep Pakistan in the grey list for now.

 

[Kaptaan]

Not entirely unexpectedly, FATF decided to keep Pakistan in the grey list for now.

Well, you got your smile of the day.

 

[VCheng]

Well, you got your smile of the day.

Not really. It is in Pakistan's national interests to implement the FATF plan for its own benefits. What they are asking is the correct thing, and delaying it for as long as Pakistan has is increasingly counter-productive.

 

[suryakiran]

Not really. It is in Pakistan's national interests to implement the FATF plan for its own benefits. What they are asking is the correct thing, and delaying it for as long as Pakistan has is increasingly counter-productive.

Here is a reality check. Most militaries and regimes globally are involved in some kind of militant promotion in some part of the globe. But, this is done as part of State policy.

But, the case with Pakistan is that individual players have started believing their own inner voice (which actually is nothing more than indoctrination) that what they are doing is in benefit of the State. At an individual level.

De-linking becomes all the more difficult when major individual players are involved in supporting recognised terrorst organisations.

if it was only the State, you could always change groups/tacts and the like. But, when your own citizens are involved in the fund raising, well...best of luck.

 

[Kaptaan]

Here is a reality check. Most militaries and regimes globally are involved in some kind of militant promotion in some part of the globe. But, this is done as part of State policy.

But, the case with Pakistan is that individual players have started believing their own inner voice (which actually is nothing more than indoctrination) that what they are doing is in benefit of the State. At an individual level.

De-linking becomes all the more difficult when major individual players are involved in supporting recognised terrorst organisations.

if it was only the State, you could always change groups/tacts and the like. But, when your own citizens are involved in the fund raising, well...best of luck.

10/10