Some good news

Published on: 28/07/2019 | Comments: No comments 

.. by Dr Farrukh Saleem

The best news is that the current account deficit (CAD) is down. Yes, the mother of all economic challenges has been the CAD which under the PML-N ballooned from $2.5 billion in 2013 to $19.9 billion. The really good news is that the CAD for June 2019 came in at $997 million against $1.9 billion in June 2018. What that means is that we were running a CAD of nearly $2 billion a month a year ago which has now come down to under $1 billion a month. For FY 2019, CAD has come down to $13.6 billion from $19.9 billion; a year-over-year improvement of 32 percent.

The other good news is that our non-oil CAD is near-zero. Technically, a lower CAD means lesser pressure on the rupee-dollar parity-but continued pressure nevertheless. The other good news is that imports have come down from $5 billion a month last year to $4 billion a month; a decline of 20 percent. Year-over-year, imports are down 23 percent which is the steepest decline in ten years. Yes, remittances from Pakistani workers have jumped from $19.9 billion last year to $21.8 billion-a 10 percent improvement.

The not-so-good news is that exports ? despite a 30 percent depreciation ? are not picking up steam. Year-over-year exports are actually down from $24.7 billion last year to $24.2 billion this year, a drop of 2 percent. The other bad news is that foreign direct investment (FDI) has come down from $3.4 billion last year to $1.7 billion this year, a drop of 50 percent. The other not-so-good news is that our accumulated imports are down primarily because of a decline in the import of machinery (and transport).

The other good news is that British Airways (BA), the flag carrier airline of the UK, resumed flights to Pakistan after a 10-year suspension. BA is now ?scheduled to fly three times a week to Islamabad from London Heathrow? (BA had stopped flying to Pakistan after the Marriott Hotel bombing in 2008). With effect from June 14, the International Civil Service Commission of the UN restored Pakistan?s status as ?family station?. This is the equivalent of an ?international vote of confidence? for Pakistan?s improved security scenario (the UN had downgraded Pakistan?s status after the Marriott Hotel bombing in 2008).

This week there was truckloads of good news from the tribal districts of Khyber Pakthunkhwa where polling for election on sixteen seats ended. The Free and Fair Election Network (Fafen) declared the ?historic elections as peaceful and free from any major controversy over the quality of the electoral process.? Imagine; peaceful elections in the tribal districts that the Voice of America labelled as the ?former epicentre of terror?. Yes, the US has been trying to do something similar in Afghanistan; eighteen years and a trillion dollars down the drain ? and two-thirds of Afghanistan is still controlled by the Taliban.

The good news on terror-related deaths is that Pakistan is now recording its lowest numbers in a decade. The US State Department has designated the Balochistan Liberation Army (BLA) as a ?global terrorist organization?.

Red alert: The economy is slowing down at a pace much faster than I had expected only a few weeks ago. This surely is stagflation ? persistent ?high inflation combined with high unemployment?. This could, if it continues, lead to urban strife. Urgent measures must be taken to reverse the trend ? and the expansion of social safety nets.

The writer is a columnist based in Islamabad.

.. Source

Economy drive of PTI government

Published on: 05/11/2018 | Comments: 1 comment 

The Federal government of Imran Khan is facing a grim financial situation, much greater than was expected at the time of general elections that was held in July. The Economic team was underestimating the seriousness of the issue but when they were in and received briefings from the departments concerned it dawned upon them that the reality was much more bitter than expected. Now that they are at the helm of affairs they have to deal with the situation at any cost. The solution to face it, has wisely been sought in the experience of the People?s Republic of China by eradicating corruption based on their methodology but our economic systems are quite different. What works there may not work here as they have got the will and we have not got such tools and determination as our people are divided into classes, sects, ethnic identities, political affiliations, vested interests, war lords, disgruntled neighbours etc. The fact stands there that punishment for corruption will take long time as investigation is required for it. There must be certain immediate steps to be taken which include the minimizing of government expenditure, luxury items and unnecessary visits of the ministers and officials that has been introduced but not with full force and the Aid from friendly countries will help to support but that cannot be counted upon for long but at the same time much more can be done such as:
Imposition of duty on NCP vehicles that run on the roads but pay nothing to the exchequer.
Minimize consumption of FUEL and declare one OFF day for all private vehicles.
Petrol rationing be introduced for private vehicles. There are millions of rich people who own many vehicles and all run on the roads, mostly uselessly. Each car owner should be given a limited amount of petrol for a week on card system. This will reduce consumption of petrol hence import of this item which increases every year and costs more dollars to be spent on it.
Luxury items of all types should be under heavier taxation.
The allowances given to government servants at high level should be revoked and all the government servants must be treated equally. Those in higher grades receive extra allowances with different denominations and extra ordinary rate of TA/DA but those in lower grades get nothing or something which is negligible.
Overuse of LPG/ CNG be controlled and extravagant use of these material be put on rationing system as we are facing economic emergency and in Emergencies rationing system is a common phenomenon. Expeditious measures have to be taken rather half hearted steps that will not work in the situations we face today.
High Tax per pilgrim on second and more Hajj and Umra visits for Sunnis and Shiites and tax on all Ismaili adults on the occasion of Dedaar of their Imam while in Pakistan.
High tax on ARMS Licences
Double or triple tax on shooting licences.
These TAXES will not affect the low income group but the well- to- do elements can afford them. Comments invited? .. Prof. Rahmat Karim Baig, Chitral 05 Oct 2018