Pakistan Economy Updates

[Saiyan0321]

This Sticky is for the recording and understanding of Pakistani Economy and its positives and negatives along with the highs and lows. Every single aspect of the Pakistani Economy, whether analyzed through single component or as a collective, will be posted here.

 

[Saiyan0321]

Exports in Pakistan increased to 344835 PKR Million in November from 342539 PKR Million in October of 2020. source: Pakistan Bureau of Statistics​

Pakistan recorded a current account surplus of USD 778 million in the third quarter of 2020, compared to a USD 1,492 million deficit in the corresponding period of the previous year. It was the first current account surplus since the first quarter of 2015. The goods and services gap narrowed to USD 5,797 million from USD 6,146 million a year earlier and the secondary income surplus widened to USD 8,101 million from USD 6,078 million. Meantime, the primary income shortfall rose to USD 1,526 million from USD 1,424 million. source: State Bank of Pakistan​

Pakistan recorded a trade deficit of 329873 PKR Million in November of 2020. source: Pakistan Bureau of Statistics​

Pakistan has been running consistent trade deficit since 2003 mainly due to high imports of energy. Since 2012, China has emerged as Pakistan’s largest trading partner replacing the United States. In recent years, the biggest trade deficits were recorded with China, India, United Arab Emirates, Saudi Arabia, Kuwait and Malaysia. Pakistan records trade surpluses with the United States, Afghanistan, Germany and United Kingdom however we cannot reduce imports by simply taxing the imports. To reduce imports, we must first create a strong industrial base through which we can produce some goods however that is only good enough to shave off some sections of the imbalanced trade. Energy is the main problem here.
The primary energy supply amounts to over 70 million Tonnes of Oil Equivalent (TOE). Oil and gas are by far the dominating sources with a share of 80%. Oil is imported from the Middle East mainly Saudi Arabia, gas from Iran. In addition, Pakistan is consuming Liquefied National Gas (LNG), Liquefied Petroleum Gas (LPG) and coal. Pakistan has currently, 4 power plants with a total capacity of 755 MW; additional 3 are under construction. Nuclear power accounts for around 1.9% of the total installed capacity in Pakistan.Hydropower has a share of 13% whereas other renewable energies only play a minor role.

The government is supporting the use of LPG for cooking resulting in rapid investment in production, storage and establishment of auto stations of LPG. During the FY 2016, an approximate investment of PKR 2.38 billion has been made in the LPG supply infrastructure whereas total investment in the sector until Feb 2016 is estimated at about PKR 22.33 billion. During the FY 2016, the regulatory body OGRA has issued 12 licenses for operational marketing of storage and filling plants, 37 licenses for construction of LPG storage and filling plants, 20 licenses for Construction of LPG auto-refuelling stations and one license for storage and refuelling of LPG was issued. Further, one license for construction of production and storage of LPG facility is also issued by OGRA which shall result in improving supply and distribution of LPG as well as create job opportunities in the sector. Infact i was just reading another news piece that the government is importing gas for winter consumption. We have to start decreasing our reliance on oil and gas for energy purposes. We cannot stop it 100% but we must focus on other energy sections like Nuclear energy or hydropower to produce large energy supplies and ease the burden on our economy. This wouldnt be the magic wand that fixes the economy but it would most certainly help the pressure

 

[Saiyan0321]

‘Growing debt market crucial to Pakistan’s economic progress​

KARACHI: Growing and dynamic debt market is crucial for the economic progress of Pakistan and it is imperative for all stakeholders of the financial ecosystem to take the country’s debt market to regional and international levels, PSX chief executive officer said on Friday.

Farrukh Khan, chief executive officer of Pakistan Stock Exchange (PSX) said this during a gong ceremony to welcome Bank of Punjab (BOP) onboard as a market maker for conventional and shariah-compliant debt instruments on PSX.

“BOP is one of the first banks to become a market maker on PSX. We welcome this development as this will lead to increased growth and dynamism in the debt market, which is crucial for the economic progress of Pakistan,” Khan said in a statement. “We believe this step will play a significant role towards achieving that end. We are also in discussions with BOP to bring some of their SME [small and medium enterprise] clients to list on the new GEM [growth enterprise market] board. This will also be an important development for Pakistan’s economy, the SME sector and PSX.”

Market makers perform the role of providing liquidity and depth to the market by facilitating investors to buy and sell securities through continuously quoting two way prices – bid and offer prices.

Zafar Masud, CEO of Bank of Punjab said the bank will be the first bank in the Pakistan market making for both conventional and shariah-compliant securities as well as corporate debt instruments at the PSX portal.

“This makes us the first public sector bank offering a bouquet of services in collaboration with PSX,” said Masud. “We see our role expanding beyond a market maker for debt securities. Through this agreement, we are committing to becoming a leading player in development of capital markets in Pakistan by enabling greater investor participation and enabling listing of more debt, equity and non-conventional instruments at PSX.”

“We can partner with PSX in promoting privatisation and listing of public sector projects for example Punjab thermal power and Quaid-e-Azam solar power through the stock exchange. Moreover, we plan to design instruments to bring projects like Kamyab Jawan Program, SME financing project and low cost housing scheme to PSX platform,” he said.

The BOP CEO emphasised the role of the Bank of Punjab in the capital market and economy of Pakistan.

The Bank of Punjab is one of the largest commercial banks in Pakistan serving through a network of 624 branches. Today, BOP stands as one of the biggest banks managing assets in excess of Rs1 trillion and capital adequacy ratio of 17.18 percent.

“The bank is one of the most active and largest socially responsible banks, contributing to economic development and social uplifting through various programs. During the last one year alone, the Bank of Punjab has emerged as the most active participant in various social protection and economic uplift programs. The bank is leading the efforts to provide financing under SBP COVID-19 schemes, promotion of housing finance in Pakistan, SME sector development and promotion of entrepreneurship through Kamyab Jawan Program,” he said.

The bank aims to become one of the most active players in the Pakistani capital markets. State Bank of Pakistan recently awarded BOP the status of primary dealer of government debt securities. The bank is also an authorised dealer of government shariah-compliant securities.

‘Growing debt market crucial to Pakistan’s economic progress’

KARACHI: Growing and dynamic debt market is crucial for the economic progress of Pakistan and it is imperative for all stakeholders of the financial ecosystem to take the country’s debt market...

www.thenews.com.pk

 

[Saiyan0321]

The remarkable recovery!​

In August of 2018 Pakistan was in the midst of a full blown economic catastrophe

When I hear our media pundits discuss the state of Pakistan’s economy, I am stunned by their ignorance. During the past two years, Pakistan has made a remarkable recovery, but most people seem oblivious of this fact. It’s a simple and shocking story, based purely on numbers and maybe it remains obscured for this reason — numbers are boring.

In 2013, when Nawaz Sharif came to power, Pakistan’s imports of goods and services were around $48 billion and its exports of goods and services stood just over $31 billion. Remittances were approximately $13 billion and while the situation was precarious, as foreign exchange reserves were around $6 billion, the situation was manageable.

Over the next few years, under the PML-N) government, our imports skyrocketed to almost $68 billion — an increase of over 40%, while our exports stagnated and fell to $30 billion — a decline of 3%. Remittances increased to about $19 billion. For a country with extremely limited foreign exchange, this was suicide on steroids. The massive and growing imbalance between our exports and imports, should have forced the rupee to depreciate, but in a dangerous political move, the PML-N artificially maintained the rupee-dollar exchange rate between 100-110, bleeding the reserves of the State Bank of Pakistan (SBP). In the final two years of the PML-N government, the SBP reserves fell by more than half to around $9 billion, when Imran Khan became the Prime Minister.

In August of 2018, Pakistan was in the midst of a full blown economic catastrophe. A massive current account deficit, which when combined with our long-term financial debt obligations, created a hole of $25-30 billion, while the SBP had foreign exchange reserves of less than $10 billion. This impending financial disaster, resulted in Imran Khan’s infamous tours around the world to beg for financial help due to the criminal mismanagement of the economy by PML-N.

I am astonished that none of our anchors have ever bothered to question the financial geniuses belonging to PML-N about these numbers. How could they justify the increase in imports or the bleeding of the forex reserves by artificially maintaining an unsustainable exchange rate? What was their plan?

Anyway, when you need $20-30 billion and have less than $10 billion, what do you do? You beg, borrow and... And then you fix the mess, created by your predecessor. Reduce imports, increase exports, stop the bleeding of SBP reserves by artificially maintaining an overvalued exchange rate and pray for continued growth of remittances.

In two years, the government of Imran Khan achieved an unbelievable turnaround. Pakistan’s imports went down to $50 billion, a decline of $18 billion. Exports declined by $2 billion, to about $28 billion. Remittances crossed $23 billion, an increase of over $3 billion and SBP forex reserves have just crossed $12 billion. The PML-N left Pakistan with a current account deficit of almost $20 billion, while the PTI government is now expected to post a current account deficit of around $1-2 billion, in the current fiscal year. No one predicted such a quick turnaround, not even the IMF.

In essence, the PML-N government turned Pakistan into the Titanic, searched for the biggest iceberg and rammed into it, but somehow the PTI government has managed to turn the ship around and plugged the hole — a $20 billion hole. Unfortunately, this recovery, just like any recovery, came at a cost. In order to reduce imports and prevent the complete decimation of forex reserves at the SBP, the PTI had to end the delinquent exchange rate policy of PML-N. They allowed the depreciation of the currency, and the rupee-dollar exchange rate went from 110 to around 160, in a short period of time. This not only helped curb imports, by making them more expensive but helped the SBP boost its reserves.

Pakistan’s biggest import is oil and as the rupee depreciated, oil became expensive and this led to high inflation within the country. Inflation in Pakistan has always been closely linked to oil prices. For example, when the PPP came into power in 2008, oil prices increased from around $100/barrel to $150/barrel and Pakistan subsequently experienced double digit inflation. Similarly, when the PML-N came into power in 2013, average annual price of oil was around $100/barrel but by 2015 fell to about $50/barrel and PML-N was able to boast of low inflation below 5%. The double digit inflation being suffered by the PTI is again linked to the increase in oil prices, which was due to the depreciation of the rupee – a depreciation which was inevitable due to the inexcusable management of our imports and forex reserves by PML-N, especially in their final two years.

It is beyond belief that despite the availability of these harrowing figures, the PML-N continues to get a free ride in the media vis-à-vis their handling of the economy while the PTI is crucified for preventing a complete financial collapse.

I will conclude this article by stating that the economy is a large subject and the external sector, discussed above, is an important part of the picture but not the entire story. However, it was the criminal mismanagement of this sector that brought Pakistan to the brink of economic collapse, adversely affecting other variables such as inflation, growth and unemployment and the recovery in this sector is the most significant development for our economy, at the moment. It has laid the groundwork for achieving objectives related to growth, unemployment, and inflation over the coming years which would have been a pipe dream had the PTI failed to overcome this herculean challenge.

The remarkable recovery! | The Express Tribune

In August of 2018 Pakistan was in the midst of a full blown economic catastrophe

tribune.com.pk

 

[Nilgiri]

In two years, the government of Imran Khan achieved an unbelievable turnaround. Pakistan’s imports went down to $50 billion, a decline of $18 billion. Exports declined by $2 billion, to about $28 billion. Remittances crossed $23 billion, an increase of over $3 billion and SBP forex reserves have just crossed $12 billion. The PML-N left Pakistan with a current account deficit of almost $20 billion, while the PTI government is now expected to post a current account deficit of around $1-2 billion, in the current fiscal year. No one predicted such a quick turnaround, not even the IMF.

2020 is an awful reference year to use because of covid pandemic in world economy.

We cannot simply filter out what is due to govt policy and what is imposed by larger forces and currents than that.

That said (using 2019 to compare to 2018, till we have 2021 and 2022 for later)....there has definitely been some transient reform by PTI admin to help balance of payments crisis PMLN admin sunk Pakistan into badly... stuff to address the cyclic loan buffet spiraling out of control etc.

But this would have been done by nearly any pak admin is the point (even another PMLN admin), given the recipe to address those problems is staring in the face given their obviousness (in fact some of them already were kicking into gear just before PMLN lost power).

The root issues like savings rate of Pakistan is still not being addressed by PTI admin. Their earlier goal to question and negotiate things better in CPEC (for example) would have led them this way if they were honest in that intent and followed it to the source cause....i.e what is the underlying problem that CPEC is trying to address (I stress the trying...because it isn't and it wont).

There is simply a very low effective trust in Pakistan's system at large by its people.

Figures and generalisations are approximate:

Lowest tier 89% pop): They are burdened with inflation to begin with, so can't save barely anything anyway

Middle Tier 10% pop): If they save, rather than consume, they get shafted...so better consume or hide/launder the saving away

Top tier 1%): Why save if you can bribe and launder money instead...generals dont save, why should I? Tax man is just going to become more interested in me etc if I fork out 2X instead of X like last year.

No one trusts the banking system basically, or the people running the whole thing....they don't see a better benefit (to remaining with status quo) or simply cannot wait for it.

It needs a revolution and refounding or it needs incremental genuine honest reform that wont look good on brochure (or politically given who controls political discourse and media etc).

So anything else is basically tinkering around the edges to be perfectly frank, its a slow boil situation if you dont remove the pan from the heat.

 

[Saiyan0321]

Lowest tier 89% pop): They are burdened with inflation to begin with, so can't save barely anything anyway

These guys have nothing to save and if they save something then it is largely kept within their houses. So in the recording, they have no savings even if they have savings and that is saying alot.

Middle Tier 10% pop): If they save, rather than consume, they get shafted...so better consume or hide/launder the saving away

They are the bread and butter of tax officers who harass them not just for the taxes but for bribes as well. I actually worked in a tax office for a while and the major issue was to delay the tax payment, till an agreement could be reached with the tax officer.

Top tier 1%): Why save if you can bribe and launder money instead...generals dont save, why should I? Tax man is just going to become more interested in me etc if I fork out 2X instead of X like last year.

This thought isnt just prevalent in the top but also in the middle and lower, who believe that paying taxes to the state is simply not their obligation since the state is corrupt and they hold selective targeting like not targeting generals or politicians. Many believe that they get away with it by showing less assets due to their power.

Let me tell you about Zakat and Usher Ordinance. The state had promulgated this to help with its finances but the people would literally and still do, remove their wealth above the nisab to not pay the zakat since they believe that the state is corrupt and incompetent and would utilize zakat on unislamic measures like building roads and stuff. Infact there is actualy judgments andfatwas that doing any development from zakat is unislamic.

The lack of cooperation of the people and the corruption of the elite are a major problem

 

[Saiyan0321]

The root issues like savings rate of Pakistan is still not being addressed by PTI admin. Their earlier goal to question and negotiate things better in CPEC (for example) would have led them this way if they were honest in that intent and followed it to the source cause....i.e what is the underlying problem that CPEC is trying to address (I stress the trying...because it isn't and it wont).

That was never going to happen since you cant do this after you have taken the huge chunk of the loan. I think it displayed how chained Pakistan is now. You see we could have done it in 2013-14 but not now. We have taken a huge chunk, they are now part of the investment and slowly the economy is being tied to theirs.

This is what happens when you kick out top financers based on their religious affiliation. Frankly i think, that even now, its better late than never and frankly this isnt the major problem. The problem is what happened after. The complete military takeover of the CPEC most notable being the CPEC Ordinance. The army's involvement in economy and CPEC increased exponentially post our attempt to "renegotiate" CPEC. We saw COAS sitting in the economic council and the ordinance itself and the military taking control of the affairs regarding CPEC. Why was this done? and why now? well the only factor, i see is to control the democratic government which wanted to renegotiate the deal. If army controls the projects, there wouldnt be any renegotiation no matter who is in power

 

[Nilgiri]

This thought isnt just prevalent in the top but also in the middle and lower, who believe that paying taxes to the state is simply not their obligation since the state is corrupt and they hold selective targeting like not targeting generals or politicians. Many believe that they get away with it by showing less assets due to their power.

This is crux of the issue. The tax they dont pay is then passed to them by inflation and general sales tax etc (and that is proportionately more on them in the end i.e regressive given their earning is lot lower than average too and consumption is staples-based).

The inflation accrues because then the govt has to go through more hands and add more inefficiencies in financial flows (loans or whatever) and their transmission to their biggest lever: the currency....and you can only get around that by bartering in which case you lose out even more pricing references etc and add losses etc.

So they (bulk population) end up paying effectively the same (or even more arguably) for lot worse in the end.

But way I see it they dont have enough time to think about these things and push for change etc.

Whereas those at top have plenty of time to organise things better, know the priorities of each group better, how to harness and reform that better. But their intent must be one of change rather than stasis....but stasis is often most comfy when you have everything already....you don't even see past your bubble much....much less empathise or sympathise.

 

[Saiyan0321]

This is crux of the issue. The tax they dont pay is then passed to them by inflation and general sales tax etc (and that is proportionately more on them in the end i.e regressive given their earning is lot lower than average too and consumption is staples-based).

The inflation accrues because then the govt has to go through more hands and add more inefficiencies in financial flows (loans or whatever) and their transmission to their biggest lever: the currency....and you can only get around that by bartering in which case you lose out even more pricing references etc and add losses etc.

So they (bulk population) end up paying effectively the same (or even more arguably) for lot worse in the end.

But way I see it they dont have enough time to think about these things and push for change etc.

Whereas those at top have plenty of time to organise things better, know the priorities of each group better, how to harness and reform that better. But their intent must be one of change rather than stasis....but stasis is often most comfy when you have everything already....you don't even see past your bubble much....much less empathise or sympathise.

And then we come to two other problems.

One is religious and one is based on moral downfall of society.

It has been a prevalent thought amongst the religious class or people who are more religious that taxes are haram. That islam does not have a tax system and this tax system is the construct of the west. Where I live, we have two barealvi mosques on the main road one after the turn and we have shia and deobandi mosques across the tracks. All of them are seen telling the people that taxes are haram and only zakat is halal which should not be paid to state but to them and this does two things. It reinforces the concept that the tax is not islamic this not their obligation and islam plays a major role in our lives and secondly it makes sure that the zakat revenue constantly flows to the mosques.

Second is the moral downgrade and it stems from the fact that where everybody is in the wrong, nobody is in the wrong. You see we can't say rulers are to fault alone nor can we say the bureaucratic answer that the people are at the fault. Both are at fault and when both are at fault, it creates whataboutism. About a year ago, I was talking to chowki in charge rewaz garden police and he was complaining on how the anti-corruotion drive sees his 2000 and ignores the whopping 200,000 of the senior officers. He was excusing his corruption on the basis of selective accountability and was this justifying if not glorifying his corruption. The same is done with taxes.. people defense their tax evasion by giving the excuse that the mill guys or generals or judges or politicians are not paying so why should we pay? They glorify this rebellion against state and justify it. This is prevalent thinking.

People say system is a mess. No. @VCheng and one of my senior lawyers rehman afridi is right. System is not a mess but perfectly absolute beautifully constructed for it's intended purpose and we are all playing a crucial part in it's sustainability.

 

[VCheng]

People say system is a mess. No. @VCheng and one of my senior lawyers rehman afridi is right. System is not a mess but perfectly absolute beautifully constructed for it's intended purpose and we are all playing a crucial part in it's sustainability.

You said it!

 

[Saiyan0321]

Pakistan economy in doldrums​

PAKISTAN economy continues to be in doldrums and with Covid-19 creating havoc with the global economies, rich or poor, developed or under-developed. Pakistan is no exception. Mounting debt crisis, falling exports, un-checked and spiralling government expenditure, absence of effective price mechanism to control every-day food items are not only ringing alarm bells but have put the country on a rough and bumpy road. Common man is the hardest hit and getting disenchanted with the PTI slogans. The situation needs extra urgent measures and policies which should be visible and workable to correct the course. The present scenario is giving ample fodder to opposition to exploit the situation. Hence the urgency to act rather than talk only.
Dwindling foreign exchange reserves, low exports, high inflation, growing fiscal deficit and current account deficit – are nothing new, and once again, the country finds itself knocking on the doors of the IMF. While the exact amount of this package has not been determined, Pakistan already owes IMF billions from previous programs. Indeed, 30.7% of Pakistan’s govt expenditure is earmarked for debt servicing, which cannot be supported by its decreasing revenues. Already on the Financial Action Task Force’s (FATF) grey list, and with the current PTI government enjoying internal institutional consensus on the national agenda, Pakistan must focus its attention on resolving its economic woes before it finds itself on the shores of bankruptcy. Presently Pakistan finds itself facing a dire macroeconomic crisis. The previous governments focused more on import-led growth strategy to finance large scale projects under CPEC.
By the end of June 2018, the gross public debt of Pakistan reached USD $179.8 billion, showing an increase of $25.2 billion within a year. More than half of this increase in gross public debt was due to an increase in public external debt, which grew by 30.1%. In 2018, the depreciation of the Pakistani rupee against the U.S. dollar alone was responsible for an excessive USD $7.9 billion increase in public external debt. Despite the massive depreciation in the rupee, Pakistani exports have remained almost the same. Meanwhile, the government’s external debt has also increased from USD $64.1 billion in June 2018 to USD $65.8 billion in January 2019. The inflation rate is now touching 9.4%, which is a record high over the last five years mostly due to rupee depreciation and rising energy prices. In addition, increased defense spending and its ongoing fight against extremism only further burden the economy. Along with a depreciating rupee that has made imports costlier, low foreign investment due to Pakistan’s security and political challenges has also severely hit its foreign exchange reserves. Despite rising deficits, Pakistan’s tax revenue was only 13% of its GDP in 2018. During the current fiscal year, the country has seen a decline in its revenues while expenditure has increased, resulting in a half-year fiscal deficit of 2.7% of GDP, the highest since 2010-11. According to the State Bank of Pakistan, the sharp decline in revenue can be attributed to a fall in development spending, reductions in income and corporate taxes, and taxes on petroleum products, as announced by the previous PML-N government.
Similarly, the previous government failed to make any significant progress in enhancing exports: in fact, Pakistan’s total exports fell in real terms during the PML-N’s tenure. In its recent report “Pakistan @100: Shaping the Future,” the World Bank held weak governance responsible for the fiscal deficit. Pakistan’s poorly regulated financial system facilitates tax evasion which contributes significantly to the growth of the fiscal deficit. Having inherited this economic crisis from the previous government, the PTI government, has an enormous task of steering Pakistan’s struggling economy out of a macroeconomic crisis by fostering economic development. Little progress has been made on reducing inflation because of the massive increase in SBP financing of the mounting budget deficit as government has failed to get the tax reforms moving or contain spending. Domestic debt (including energy related financing overhang) has increased to dangerous levels. With little progress on a structural strengthening of external accounts, any recovery of growth or increase in global oil prices and interest rates are likely to widen the current account deficit and adversely affect external debt sustainability.
Assigning multiple and conflicting objectives to specific policy instruments is counterproductive. In particular, monetary policy must not be directed at more than one primary objective. Successful macroeconomic reforms call for an independent Central Bank with primary focus on containing inflation, preferably, through inflation targeting. The ensuing monetary policy anchoring inflation has a supportive effect on fiscal policy, discourages debt accumulation, ensures exchange rate stability and promotes market confidence. However, successful inflation targeting itself calls for fiscal restraint and restraint on government borrowing. Successful implementation of a reform program calls for explicit national consensus and full political support.
Unstinting and sustained support at the highest level of the government for politically difficult, but necessary, reforms is critical. The unquantifiable factors influencing implementation of reforms – are quite important. Ideally, these should involve a combination of external – creditors – and domestic actors – technocratic reformers – to provide incentives sufficient to spur and sustain the reform process. Where these factors do not appear to exist, there is a need to “create” them so as to inject incentives for reform.
The design of the current adjustment program has evolved over the past two years or so. Although still not fully integrated with a national medium term reform strategy which should stress increased export-oriented investment financed primarily by higher domestic savings, the program, if fully implemented, has the potential to break the vicious circle and allow reforms to take hold. It appropriately aims at tightening fiscal policy so that monetary policy can cope with inflation, put revenue growth on a sustainable path, stabilize the exchange rate and reduce structural rigidities, particularly in the energy sector, so that growth could pick up. However, the program has so far not had the intended effect because of poor implementation owing largely to weak governance.
— The writer is former DG (Emigration) and consultant ILO, IOM.

Pakistan economy in doldrums - Pakistan Observer

Rashid A Mughal PAKISTAN economy continues to be in doldrums and with Covid-19 creating havoc with the global economies, rich or poor, developed or under-developed. Pakistan is no exception. Mounting debt crisis, falling exports, un-checked and spiralling government expenditure, absence of...

pakobserver.net

 

[Saiyan0321]

Dirty money continues to flow from Pakistan to UK​

LONDON: A British government report reveals that dirty money continues to flow unhindered from Pakistan into the UK and vice versa.

The latest “National risk assessment of money laundering and terrorist financing 2020” report says “corrupt foreign elites continue to be attracted to the UK property market, especially in London, to disguise their corruption proceeds”.

The report, put together by the Treasury and Home Office, has named Pakistan, China, Hong Kong, Russia and United Arab Emirates (UAE) as the hotspot countries from where the most flow of money takes place.

The report findings suggest that the illicit flow of money both ways between the two countries has held on well without any obstacles. About Pakistan, the report said the UK continues to have close economic links to Pakistan, including significant remittance flows between both jurisdictions, which according to estimates equated to approximately $1.7 billion in 2017.

The report notes that these economic and cultural ties “also enable and disguise illicit funds to be transferred between the UK and Pakistan, including through illegal informal value transfers”.

The report said that elements from Pakistan are buying high value assets in the UK and elements from the UK are buying high value assets in Pakistan, using cash and dirty money.

The report said: “Criminals continue to purchase high value assets, such as real estate, precious gems and jewellery to launder illicit funds which are transferred from Pakistan to the UK and vice versa.

This includes proceeds from corruption and drug-trafficking. The risk from cash-based money laundering from the UK to Pakistan via smuggled cash and Money Service Business (MSBs) also persists.”

The report says in 2018 Pakistan was nominated to the Financial Action Task Force (FATF) list of jurisdictions with strategic anti-money laundering and counter-terrorist financing (AML/CTF) deficiencies, known as the ‘grey list’, due to widespread CTF deficiencies.

While the FATF acknowledged notable improvements in the months following, they also warned “should significant and sustainable progress not be made when next reviewed then the FATF could call on its members to advise their financial institutions to give special attention to business relations and transactions with Pakistan”.

The report says the UK, as a member of FATF, continues to closely monitor for sustained and timely efforts. It said: “The UK also continues to support Pakistan, including with capacity building assistance, to help Pakistani authorities meet their commitments. Joint operations between the National Crime Agency (NCA) and Pakistani authorities to tackle illicit finance threats have benefitted from good levels of cooperation. For example, in December 2019, the NCA negotiated a settlement with a Pakistani national to return funds and property valued at approximately £190 million to Pakistan. This success would not have been possible without the close cooperation between UK and Pakistan law enforcement agencies.”

The report says serious and organised crime undermines the legitimacy and authority of the state and poses a fundamental threat to the country’s future security. Organized crimes, said the report, cost the UK economy an estimated £37 billion per year.

The report says money launderers from Russia exploited the UK’s company setup system and professional services to buy expensive properties.

The UAE is an attractive location for those who also wish to launder the proceeds of crime from abroad and these deficiencies expose the UAE, and other countries, to abuse by international controller networks which continue to launder the proceeds of crime to and from countries including the UK.

Dirty money continues to flow from Pakistan to UK

LONDON: A British government report reveals that dirty money continues to flow unhindered from Pakistan into the UK and vice versa.The latest “National risk assessment of money laundering and...

www.thenews.com.pk

 

[Saithan]

Dirty money continues to flow from Pakistan to UK​

LONDON: A British government report reveals that dirty money continues to flow unhindered from Pakistan into the UK and vice versa.

The latest “National risk assessment of money laundering and terrorist financing 2020” report says “corrupt foreign elites continue to be attracted to the UK property market, especially in London, to disguise their corruption proceeds”.

The report, put together by the Treasury and Home Office, has named Pakistan, China, Hong Kong, Russia and United Arab Emirates (UAE) as the hotspot countries from where the most flow of money takes place.

The report findings suggest that the illicit flow of money both ways between the two countries has held on well without any obstacles. About Pakistan, the report said the UK continues to have close economic links to Pakistan, including significant remittance flows between both jurisdictions, which according to estimates equated to approximately $1.7 billion in 2017.

The report notes that these economic and cultural ties “also enable and disguise illicit funds to be transferred between the UK and Pakistan, including through illegal informal value transfers”.

The report said that elements from Pakistan are buying high value assets in the UK and elements from the UK are buying high value assets in Pakistan, using cash and dirty money.

The report said: “Criminals continue to purchase high value assets, such as real estate, precious gems and jewellery to launder illicit funds which are transferred from Pakistan to the UK and vice versa.

This includes proceeds from corruption and drug-trafficking. The risk from cash-based money laundering from the UK to Pakistan via smuggled cash and Money Service Business (MSBs) also persists.”

The report says in 2018 Pakistan was nominated to the Financial Action Task Force (FATF) list of jurisdictions with strategic anti-money laundering and counter-terrorist financing (AML/CTF) deficiencies, known as the ‘grey list’, due to widespread CTF deficiencies.

While the FATF acknowledged notable improvements in the months following, they also warned “should significant and sustainable progress not be made when next reviewed then the FATF could call on its members to advise their financial institutions to give special attention to business relations and transactions with Pakistan”.

The report says the UK, as a member of FATF, continues to closely monitor for sustained and timely efforts. It said: “The UK also continues to support Pakistan, including with capacity building assistance, to help Pakistani authorities meet their commitments. Joint operations between the National Crime Agency (NCA) and Pakistani authorities to tackle illicit finance threats have benefitted from good levels of cooperation. For example, in December 2019, the NCA negotiated a settlement with a Pakistani national to return funds and property valued at approximately £190 million to Pakistan. This success would not have been possible without the close cooperation between UK and Pakistan law enforcement agencies.”

The report says serious and organised crime undermines the legitimacy and authority of the state and poses a fundamental threat to the country’s future security. Organized crimes, said the report, cost the UK economy an estimated £37 billion per year.

The report says money launderers from Russia exploited the UK’s company setup system and professional services to buy expensive properties.

The UAE is an attractive location for those who also wish to launder the proceeds of crime from abroad and these deficiencies expose the UAE, and other countries, to abuse by international controller networks which continue to launder the proceeds of crime to and from countries including the UK.

Dirty money continues to flow from Pakistan to UK

LONDON: A British government report reveals that dirty money continues to flow unhindered from Pakistan into the UK and vice versa.The latest “National risk assessment of money laundering and...

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Is it possible for Pakistanis to have foreign currency accounts in Pakistan ?

I am asking because it's possible to have foreign currency accounts in Turkey, but not in Denmark. Where common citizens can only have Danish Crown accounts.

Wiring money from Western Union and such offices are biggest means of "laundring", Banks can be imposed restrictions to verify or document who sends money at around 1000 usd, or any other amount.

_____________________________

Also your post about the Imam saying tax is against islam/Sharia irked me, especially since tax is perfectly well explained in Sharia.

I think Pakistan needs to establish a state governed Imam madrassas/school/university and don't allow anyone else to be imam, but those who've graduated from the state sponsored educational facility.

And monitor them, and dispose of them (reassign them to e.g. Mosque at the foot of K2)

 

[VCheng]

PAKISTAN economy continues to be in doldrums and with Covid-19 creating havoc with the global economies, rich or poor, developed or under-developed. Pakistan is no exception. Mounting debt crisis, falling exports, un-checked and spiralling government expenditure, absence of effective price mechanism to control every-day food items are not only ringing alarm bells but have put the country on a rough and bumpy road. Common man is the hardest hit and getting disenchanted with the PTI slogans. The situation needs extra urgent measures and policies which should be visible and workable to correct the course. The present scenario is giving ample fodder to opposition to exploit the situation. Hence the urgency to act rather than talk only.

The sad part is that the nature of the problems in Pakistan's economy is such that nobody has the ability (or the will) to solve them, no matter how strident the claims. Changing faces periodically does nothing to change the basic exploitative monopolies underlying the present system.

 

[Saiyan0321]

The sad part is that the nature of the problems in Pakistan's economy is such that nobody has the ability (or the will) to solve them, no matter how strident the claims. Changing faces periodically does nothing to change the basic exploitative monopolies underlying the present system.

Well the system of exploitation has to remain and its not just one system but a multitude of several systems that come together to make up a larger system. The problem is that if the system is broken then you can fix it and fight against it or try to repair it. Its doable because its broken however how do you beat a system that is not just well placed but is extremely stable. How do you repair something that is broken at all and is stronger than ever. We have PDM and PTI fighting it out but what are they fighting for and whether that fight is impacting the system. absolutely not. None of them are bringing forth any radical idea that we can say can threaten the current system. Infact we can fairly argue that it is a battle for who gets to exploit rather than a battle against exploitation.

Think of it this way, since 1947, the timeframe when we can say Pakistan became an independent country which could take its own decisions, has the level of exploitation increased or decreased. Infact, post 1977, Pakistan has been hurling forward an exploitative feudal state where everything is used from military patriotism to Islam, simply to keep the system going and the people of Pakistan, the exploited are a major part of it. A friend of mine told me that even the most harshest and exploitative systems like Pakistan will produce brilliant individuals and he is right. All systems, no matter how oppressive, do produce those select brilliant people that come out however they have to constantly fight against the system until they either conform or simply leave and those that dont do either are shunned in best case scenarios or removed altogether.

Now the above does not mean that one wants Pakistan to be wiped out or is anti-national. infact highlighting the oppressiveness of a system is serving the country and saving it since Pakistan is synonymous with only its people and nothing else.

Let me give you an example of this mad exploitation. In a group where a bunch of us from the subcontinent talk and treat each other like human beings, one asked me about the pay scales of judiciary. Let me quote what i wrote there


""" Mentioning of your contention would get you lynched by lawyers. the amount of pride for the lawyer's movement that lawyers have cannot be placed to words.

Never the less. As a preface let me tell you about the perks. My thinking of the job

Pre-2008
"Somebody became a Civil Judge. Tch tch poor soul. There is only khawari here and no money. Better to do something else"

2020
"God I would walk on my knees to the grave of niazmuddin auliya if you make me a Civil Judge or hey I might as well sell the soul to the devil and become a high court judge"


The pays by 2008 were

Civil judge basic pay 8000

Senior civil 12000

Additional session 19000

District and session judge the most powerful judge in the district was getting 28000


So that is extremely low but I'm 2008 the punjab government and later on the federal as well, starting to increase the pay of judges. Zardari era was absolute turmoil and to keep people happy, zardari would offer bribes like perks, pay increase, ministries. He did the same to judges and they witnessed a steady increase in their pay. I think the only department that didn't see pay increase during his era was bureaucracy.

Anyhow now the pay of a simple civil judge is somewhere between 80,000 to 120,000.

The high court judges are loaded. The cheif justice has a pay of 12 lakh and 50 thousand rupees. The amount is ridiculously high and it doesn't even cover the perks like guards and housing and stuff. The simple high court judge gets 10 lakh 50 thousand something rupees and again the perks.

The staff of the high court has pays above 300,000. They are raking in monthly that I haven't seen in a lifetime.

The perks for above include a generator state of class Diesel, all working staff whose pay is paid by state or allowance of 25000 for each working staff and 500 liters of petrol for the car provided and housing rent of 68000, free medical care and unlimited utility bill allowance.

Supreme court judges in 2017 were recorded of receiving a basic pay of 7,50,000 and a superior judicial allowance of 3,50,000 along with those titan perks I mentioned above.

Now here is the ahahaha funny part. The fifth schedule determines the pay of supreme court and high court judges and it says that their pay should be like 10k at best but it is far easier to increase their pay through state policy then follow the law and amend the constitution to do it properly."""""""

the amendment for the president to increase was added in 1991 in the fifth schedule. If you have lived in Pakistan then i dont need to tell you that the above is ALOT of money.

 

[VCheng]

None of them are bringing forth any radical idea that we can say can threaten the current system. Infact we can fairly argue that it is a battle for who gets to exploit rather than a battle against exploitation.

This.

 

[Nilgiri]

Is it possible for Pakistanis to have foreign currency accounts in Pakistan ?

It is possible I think, because I have seen whenever Pakistan forex gets quoted, its always X amount held by State Bank (the central bank) and Y amount held by "other banks".

If foreign currency accounts were banned, you would not see the other banks holding any....they would simply exchange for rupee (anything they get forex wise) with central bank.

 

[Saiyan0321]

Pakistan’s economic performance remains encouraging despite challenges​

Finance division report says remittances, current account balance improved

Despite challenges due to the coronavirus pandemic, Pakistan’s economic performance remained encouraging in December, according to the Economic and Outlook report, which the government’s Finance Division publishes every month.

​

The report said remittances, the current account balance, foreign exchange reserves and stock exchange (index) have improved significantly.

Inflation is projected to stay in the range of 7.8% to 8.3% this month.

The economy is recovering from a balance of payments crisis due to the ongoing pandemic.

The report added that an increase in industrial production, tax revenue and foreign direct investment has been observed.

Pakistan’s economic performance remains encouraging despite challenges | SAMAA

Despite challenges due to the coronavirus pandemic, Pakistan’s economic performance remained encouraging in December, according to the Economic and Outlook report, which the government’s Finance Division publishes every month. The report said remittances, the current account balance, foreign...

www.samaa.tv

 

[Nilgiri]

Report produced by same SNAFU people ruining everything.

But thats a phenomenon found everywhere, its why I stick to multi-vetted data to analyse where possible.

 

[Saiyan0321]

Window of opportunity​

he Commonwealth is an apolitical association of 54 member states which was founded under the Balfour Declaration in 1926 and formally constituted by the London Declaration in 1949 with its headquarters in London. It includes all territories of the former British Empire, which have about 2.5 billion in population and approximately worth ten trillion dollars as an economy.


The Commonwealth's secretariat deals with intergovernmental issues while its foundation focuses on non-governmental relations between the member states. It is headed by Queen Elizabeth-II. The purpose behind creating the Commonwealth was two fold: to advance democracy and human rights, and to aid economic development. Pakistan became its member in 1947, departed in 1972 due to the UK's unfortunate partisan role in the 1971 Indo-Pak war, and re-joined this prestigious forum again in 1989.

A dynamic Pakistani businessman, Mobin Rafiq, who is the co-founder and chairman of the Global Trade Partnership (GTP) took a big initiative and established the Commonwealth Entrepreneurs Club (CEC) to promote trade and boost economic activities among the member states. Mobin Rafiq, who is the chairman of the CEC, is an illustrious technocrat, successful industrialist and renowned philanthropist with forty years of manufacturing experience and business relations with many industrial magnets and billionaire entrepreneurs in all economically prosperous Commonwealth member states including Canada, Australia and the UK, India and South Africa.

Mobin Rafiq published several reports on self-sustaining micro cities, industrial parks and low cast housing schemes as vehicles and growth enablers for trade and entrepreneurship. He has dedicated his life to help SMEs. It is also important to note that all members of the CEC, from different Commonwealth states, are prominent leaders from business, education and governments. Their expertise spans construction, industrial parks, manufacturing, mining, property, agriculture, food, health, services, affordable houses, tourism, vocational training and education.

Since Commonwealth trading potential is colossal, Pakistan can immensely benefit by promoting trade and collaborations with different Commonwealth states to alleviate poverty through creation of jobs via foreign investments. It is for this reason that I accepted the offer by him to join this prestigious club as president of its Pakistan chapter.

The CEC has leading organisations, experts and practitioners who can assist Pakistani entrepreneurs in their different ventures. It is implementing projects and industrial parks in Nigeria through public private partnerships (PPP). We encourage various entrepreneurs to not only seek membership of the CEC but also take active part in promoting multilateral trade and economic interaction which will give members global network access, network advice, free consultancy, PPP and market insight, access to new markets through annual events in London for greater interaction to promote trade and generate economic activities.

As patron of the Pakistan Youth Parliament (PYP), it was my desire to give global exposure to our young entrepreneurs. The chairman of the CEC graciously agreed to club the PYP with the CEC for the said purpose. It is also heartening to note that the visionary chairman of the CEC, who is also co-founder and chairman of the GTP, is also planning to link the CEC with global trade activities – thus opening new commercial, trade and business avenues for all Commonwealth member states including Pakistan.

Every patriotic Pakistani must have heaved a sigh of relief when a person no less than the prime minister of Pakistan himself tweeted that our state economy was picking up. We pray it does. However, when one sees that the size of our economy has shrunk in the last two and a half years from $315 billion to $264 billion, the GDP is heading towards negative growth, job opportunities have vanished, not a single SOE has shown any improvement – in fact these have further deteriorated with their swollen circular debts by more than hundred percent – employees of these SOEs are being laid off, inflation and energy costs have skyrocketed, one takes the honourable prime minister’s claims with a pinch of salt.

The PM, however, has recently candidly confessed that his party had not been prepared to rule a country like Pakistan which has immense internal and external challenges. That surely shows that the PTI manifesto had no relevance to ground realities. It was merely a paper exercise prepared by a few members of the party who did not have the foggiest idea about statecraft. As a result, the nation witnessed big claims of eliminating corruption in ninety days, building five million houses, creating ten million jobs, bringing two hundred billion dollars of looted money from abroad in no time and so on.

Another development which is worrisome is the cold shouldering by some of our extremely trusted allies like Saudi Arabia and the UAE. This is a real diplomatic disaster and points towards our failure of diplomacy. Greater trade and economic interaction with not only the Commonwealth states but also with the OIC, ECO, EU and SCO can not only take Pakistan out of the present economic mess but also break our diplomatic isolation because vital economic interests bind various states.

Pakistan, as we all know, is a land of opportunities for foreign investors. In tourism alone, billions of dollars of investments can be attracted if we do proper marketing in different states including Commonwealth countries. As a state, Pakistan undoubtedly has tremendous potential to join the world's top twenty economies – provided the leadership has the vision to set long, medium and short-term attainable goals and shows the desired political will to pursue these goals with determination. For this, the country needs competent and committed teams for effective governance, superior economic management and proactive targeted exterior manoeuvres. It is very possible – if we show determination to make full use of all important forums like the Commonwealth.



The writer is chairman Senate Standing Committee on Defence Production.

Window of opportunity

The Commonwealth is an apolitical association of 54 member states which was founded under the Balfour Declaration in 1926 and formally constituted by the London Declaration in 1949 with its...

www.thenews.com.pk