SBP Approves Rs 238.2 Bn for 2,958 Businesses Under Rozgar Scheme

ISLAMABAD, Nov 27, 2020(APP):: State Bank of Pakistan (SBP) under its Rozgar scheme for protecting businesses and employees, working with them, from the impact of COVID-19 has so far approved Rs 238.2 billion for 2,958 businesses. Similarly, under its refinancing scheme for protecting businesses from the impact of COVID-19, the central bank has so far deferred Rs 659.5 billion principal repayments of loans up to one year.

The bank also allowed restructuring or rescheduling of around Rs207.5 billion so far, according to the updated data of the central bank. The number of borrowers that would benefit from this rescheduling relief has risen to 1,572,428, with outstanding amount of Rs 2.514 billion, it said. Meanwhile, the bank under this refinancing scheme for hospitals to combat Covid-19, approved financing of Rs7.77 billion for 39 hospitals so far.

As many as 45 hospitals had requested for the financing amounting to Rs13.23 billion. With respect to progress on refinance scheme for setting up new projects or expansion, the central bank approved 243 projects with an amount of Rs 193.25 billion for which it received requests for 425 projects with amount of Rs 437.15 billion.

Furthermore, from March 20, 2020 to November 20, the Bank had issued fresh currency notes to the commercial banks worth of Rs 1.136 trillion. Similarly an amount of Rs 32.3 billion was quarantined during the period that was received from hospitals, clinics, and pharmacies. while overall the bank received cash worth of Rs 995 billion which was quarantined for 14 days.

It is pertinent to mention here that in order to combat the impact of COVID-19 and to help the businesses in payment of wages and salaries to their workers and employees and thereby support continued employment in this challenging environment, State Bank of Pakistan (SBP) has introduced a temporary refinance scheme for payment of wages and salaries to the workers and employees of the business concerns.

This Scheme was aimed to ease cash flow constraints of the employers and thereby avoid layoffs. In addition, the SBP had expanded the scope of existing refinancing facilities and introduced a scheme to support hospitals and medical centers to purchase equipment to detect, contain, and treat COVID-19 besides, stimulating investment in new manufacturing plants and machinery, as well as modernization and expansion of existing projects.

POL Import Bill Shrinks 24.56% to $3.153 Bln in 4 Months

ISLAMABAD, Nov 24, 2020 (APP):: The imports of overall petroleum group declined by 24.56 percent during the first four months of the current fiscal year (FY2020-21) as compared to the corresponding period of the last year. During the period under review, the total imports of the petroleum group stood at $3.153 billion, as against the imports of $4.180 billion last year, according to the latest data issued by the Pakistan Bureau of Statistics (PBS).

The commodities that contributed in negative growth of petroleum imports included petroleum products, imports of which declined by 12.5 percent, from $1.714 billion to $1.5 billion. The imports of petroleum cured decreased by 26.13 percent, from $1.186 billion last year to $0.876 billion whereas the imports of liquefied natural gas decreased by 46.14 percent from $1.191 billion to $0.641 billion.

The only petroleum product that witnessed increase in trade was liquefied petroleum gas, imports of which grew by 54.09 percent, from $87.435 million to $134.726 million. The imports of all other petroleum group commodities decreased by 1.85 percent, the data revealed. Meanwhile, on year-on-year basis, the petroleum group imports decreased by 18.33 percent during the month of October as compared to the same month of last year. The petroleum imports during October 2020 were recorded at $825.272 million against the imports of $1010.531 million.

On month-on-month basis, the petroleum imports into the country increased by 2.51 percent during October 2020 when compared to the imports of $805.086 in September 2020, the data revealed. It is pertinent to mention here that the country’s trade deficit witnessed reduction of 1.88 percent during the first four months of current fiscal year compared to the deficit of the corresponding period of last year. The deficit during the current year was recorded at $7.577 billion as compared to the deficit of $7.722 billion last year.

During the period under review, the country’s overall exports registered positive growth of 0.33 percent, by going up from $7.529 billion last year to $7.554 billion during the current year. On the other hand, the imports decreased by 0.79 percent, from $15.251 billion last year to $15.131billion during the current year

Probe Report Holds ‘PIA Engineers’ Responsible for Havelian Plane Crash

KARACHI, Nov 19, 2020:: The Aircraft Accident Investigation Board of Pakistan tasked to probe into the Pakistan International Airlines (PIA) plane crash near Havilian in 2016 has released its inquiry report and held PIA engineers responsible for the crash. A fractured turbine blade triggered a “complicated” sequence of failures that culminated in the fatal Havelian PIA crash in 2016, the Aircraft Accident Investigation Board of Pakistan has said in a report.

“The dislodging / fracture of PT-1 blade of No 1 Engine occurred after omission from the EMM (Non-Compliance of SB-21878) by PIA Engineering during an unscheduled maintenance performed on the engine in November 2016, in which the PT-1 blades had fulfilled the criteria for replacement, but were not replaced,” according to a report.

The report said that in February 2017, PIA Engineering reviewed the life of the old design PT-1 blades. “PIA Engineering decided to change the soft life as a hard life of 10,000 hrs irrespective of the conditions given in the maintenance manual (an action overboard towards safe side).”

PIA’s PK-661, crashed while travelling from Chitral to Islamabad on December 7, 2016. All 48 passengers and crew aboard, including religious scholar and former singer Junaid Jamshed, died in the crash. The report said that most probably, the PT-1 blade had fractured during the previous flight (Peshawar to Chitral). The summarized sequence of the technical failures was as follows:

Before the accident flight: Engine Power Turbine Stage 1 (PT-1) Blade fractured/dislodged causing imbalanced rotation of PT shaft,OSG pin fractured and Probable contamination (external from the engine) in PVM. It is pertinent to mention here that PM Imran in May 2020 had ordered to make public all reports on fatal plane crashes that happened in past. PM Khan had chaired the meeting regarding PIA Karachi plane crash and had ordered to public Junaid Jamshed plane crash report.

Forensic Audit Team Formed to Analyze Dry/Shut-In Oil, Gas Wells

ISLAMABAD, Nov 10 (APP): Amid fast depletion of existing hydrocarbon deposits and increased energy demand, the Petroleum Division has constituted a team to conduct a forensic audit of the dry/shut-in wells drilled in different parts of the country by oil and gas Exploration & Production (E&P) companies. “A four-member core committee has been constituted under the chairmanship of Dr Naseem Ahmed (ex-ED/MD OGDCL) to formulate a forensic team to analyze the dry/shut-in wells in detail and submit its report within a month,” according to an official document available with APP.

The country’s existing gas production is around 3.7 billion Cubic Feet per Day (BCFD) against the demand of 6 BCFD, while the available gas reserves are depleting at the ratio of 9.5 percent per year. The committee would be assisted by 15 co-opted members including three from Geological Survey of Pakistan (GSP), two from Hydrocarbon Development Institute of Pakistan (HDIP), two from Mari Petroleum Company Limited (MPCL), four each from Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL).

The chairman of the committee has also been asked to formulate forensic field monitoring teams, comprising representatives of E&P companies, GSP, HDIP and officers of the Policy Wing of Petroleum Division. As per the Terms of Reference (TORs), the field teams would visit shut-in wells throughout the country and evaluate their status on technical lines. The teams would conduct a forensic audit of the wells and check the feasibility of wells that could be reviewed and put on production.

It would review the timelines provided by the E&P companies and suggest schedule compression for production from the feasible wells. The team would also ensure execution of work plans for revivals of the already identified shut-in wells for which the E&P companies have committed schedules and work plans, besides recommending penalty as per law, if it found any failure of non-compliance or non-implementation of the committed work plays by the E&P companies.

The team would have the mandate to monitor the wells already in production for purposes such as quality control, assessment of the production facilities, technical losses/theft assessments and review of daily production data and drilling data.” “This team will report the status of shut-in wells and report directly to the Secretary Petroleum Division within a month period. It will also do any additional assignment given by the competent authority.”

FBR Gross Revenues Grew 5.8% to Rs1400 Bln In 4 Months

ISLAMABAD, November 2, 2020 (APP): The Federal Board of Revenue (FBR) collected gross revenues of Rs1400 billion during the first four months of the current fiscal year against the collection of Rs1323 billion during the same period of last year, showing growth of 77 billion or 5.8 percent. The net revenue collection also grew from Rs1288 during July-October (2019-20) to Rs1337 billion during July-October (2020-21), showing growth of 3.8 percent.
According to break figures released by the board here Monday, the Income Tax collection stood at Rs. 470 billion while collection of Sales Tax, Federal Excise Duty, Customs Duty remained at Rs 643 billion, Rs81 billion and Rs 206 billion respectively. During the month of October only, the total collected revenue stood at Rs333 billion against the collection of Rs325 billion in the same month last year, showing growth of 2.46 percent.

The Income Tax collection for July to October stood at Rs. 470 billion while the collection of Sales Tax, Federal Excise Duty, Customs Duty remained at Rs643 billion, Rs81 billion and Rs206 billion respectively. During the first four months of the current fiscal year, refunds to the tune of Rs128 billion were issued against Rs52 billion last. According to FBR statement, the refunds greatly helped boost the economic activity in the country. The refunds issued during the month of October this year stood Rs15 billion against Rs4.5 billion in the corresponding month last year.

Despite increase in refunds, FBR has still managed to cross the revenue collection of October last year, it said adding that the performance made despite the fact that the economy had been sluggish in the wake of on-going COVID-19 pandemic. Moreover, the government had extended significant tax relief measures to the public in the Finance Act, 2020 and there was drop in revenues at import stage at 2 %.
However, the domestic revenues grew at 13 % in these four months which reflected taxpayers’ growing confidence on the revenue measures being taken by the present government.

During the first four months of current fiscal year, smuggled goods worth Rs21.48 billion were seized as compared to seizures goods worth Rs13.40 billion during the corresponding months of 2019. The statement added that the board was fully geared towards automation, e-audit, and simplification of procedures, e-payment of duty draw back so as to add to Ease of Doing Business (EoDB). Furthermore, FBR had launched an effective crackdown against corruption, harassment, and misuse of authority and has also introduced a simplified one pager Income Tax Returns for the retailers in the current Tax Year.

Moreover, FBR also uploaded Income Tax Returns in Urdu and Regional languages for the retailers and salaried people. The board has appealed the taxpayers to avail these facilitative measures and ensure filing to Annual Income Tax Returns before the last date i.e. December 8, 2020.

Report of Giving Immunity to CPEC Authority Chairman from NAB Investigation Is Misleading: Planning Ministry

ISLAMABAD, Oct 22 (APP):The government Thursday termed the news report of giving immunity to Chairman CPEC Authority from investigation of National Accountability Bureau (NAB) as misleading. “It has been reported in certain sections of press that the new CPEC Authority Bill, 2020 will give immunity to Chairman, CPEC Authority and other officers from investigations of NAB and Federal Investigation Agency (FIA), such news report is misleading,” ministry of Planning said in a press release here.

It explained that the report probably referred to the “indemnity” clause (Section 23) of the bill, which is a standard clause in many similar laws which indemnify authorities for actions done in good faith, under the respective laws. The indemnity clause is provided for in Public Procurement Regularity Authority (PPRA) Ordinance 2002 (Section 23), Oil & Gas Regulatory Authority (OGRA) Ordinance 2002 (Section 39), Alternate Energy Development Board (AEDB) Act 2010 (Section 21), Competition Commission of Pakistan (CCP) Act 2010 (Section 48) and Public Private Partnership Authority (PPPA) Act 2017 (Section 26) and similar other laws.

It is further clarified that the clause in question was also a part of the CPEC Authority Ordinance promulgated in Oct 2019 and is not a new insertion.
It is in consonance with other similar laws. The speculation regarding this clause is therefore misplaced and unfounded, the statement added.

Textile Exports Up 2.92% To $3.4bln In Q1, 11.30% In September

ISLAMABAD, Oct 18 (APP): The exports of textile commodities witnessed an increase of 2.92 percent during the first quarter (Q1) of the current fiscal year as compared to the corresponding period of last year. The textile exports from the country were recorded at $3469.585 million in July-September (2020-21) against the exports of $3371.376 million in July-September (2019-20), showing growth of 2.92 percent, according to latest data of Pakistan Bureau of Statistics (PBS).

The textile commodities that contributed in positive trade growth included knitwear, exports of which increased from $779.293 million last year to $860.758 million during the current year, showing growth of 10.46 percent. Likewise, exports of bed wear increased by 8.40 percent by growing from $601.024 to $651.487 while the exports of tents, canvas and tarplin grew by 78.71 percent, from $15.771 to $28.184, the PBS data revealed.

The readymade garments’ exports were recorded at $701.442 million during the current year against the exports of $666.157 million last year, showing an increase of 5.24 percent while exports of madeup articles (excluding towels and bead-wear) increased by 16.58 percent from $148.050 million to $172.604 million. Meanwhile, the commodities that witnessed negative growth in traded included raw cotton, exports of which declined by 97.50 percent, from $10.826 million to $0.271 million while the exports of cotton yarn decreased by 42.65 percent, from $297.237 to $170.475.

Exports of cotton cloth also decreased by 8.49 percent, from $499.390 million to $457.060, yarn (other than cotton yarn) by 22.77 percent, from $7.230 million to $0.931 million, art silk and synthetic textile by 2.93 percent from $77.894 million to $75.615 million whereas the exports of cotton (carded or combed) witnessed 100 percent decline during the period under review.

Meanwhile, on year-on-year basis, the textile exports increased by 11.30 percent during the month of September 2020 as compared to the same month of last year. The exports during September 2020 were recorded at 1189.739 million against the exports of $1068.906 million. On month-on-month basis, the exports from the country increased by 18.09 percent during September 2020 when compared to the exports of $1007.509 million in August 2020.

The country’s overall merchandize exports registered negative growth of 0.94 percent, by going down from $5.510 billion during the first quarter of last year to $5.458 billion during the current year. On the other hand, the imports decreased by 0.56 percent, from $11.199 billion last year to $11.262 billion during the current year, the PBS data revealed.

PakistanUndertaking Power Sector Reforms

(October 5, 2020)

ISLAMABAD: The government has taken two major steps with remarkable degree of success – report on independent power producers (IPPs) and the follow-up agreement which will reduce power generation costs by a whopping Rs1 trillion over the next 10 to 20 years, provided all generation companies including government and CPEC ones are included.

If implemented finally, it would be a major achievement. Secondly, the government is finally going for revival of Pakistan Electric Power Company (Pepco) in the form of a managing agent, although a holding company could have been a better choice, which would separate policymaking role of the Power Division and keep it away from day-to-day involvement in the running of companies.

Pepco was made dysfunctional in the hope that distribution companies’ (DISCOs) boards would be more effective than Pepco. This has not happened. Appointments on boards could not be merit-based and a two-hour board meeting of unqualified and disinterested directors could not achieve much. It is hoped that the government would be able to equip the reorganised Pepco with competent people – some through transfers from DISCOs and some from the open market.

We have elaborated on it in an earlier article. We will briefly touch upon other steps the government should take in order to bring about the required change and impact in the power sector. Surplus capacity and rising capacity charges are contributing to circular debt. More capacity is coming in while demand is not increasing. About 25,000 megawatts of new capacity is under various stages of implementation.

People are nervous as to how capacity payment would be made. Circular debt is being projected to go as high as Rs4 trillion. One solution is to slow down the capacity buildup as much as one can. All interested parties are trying to push their projects, lest their projects are dropped.

Lower tariffs

Tariff reforms are badly needed. The other approach for slowing down the accumulation of circular debt is to increase demand – easier said than done. But it is possible. There is a known and accepted negative relationship between price and demand. Demand can increase with lower prices and tariff. When fixed costs are high, increased demand at lower prices can increase the contribution to overheads, if not profit.

However, there are several provisos to it. One, the price reduction has to be in paying sectors and not in the subsidised sector, which is already a loss sector. Two, the industrial sector can definitely expand, if electricity prices go down. New products and industries can come up. Products which, hitherto, are not viable can be introduced. Industries can be encouraged to add third shifts.

Three, the IT industry can expand and become competitive, if tariffs are low. Exports can increase. Four, there is much less electricity demand in the night and a special night-time industrial tariff could be introduced. Five, winters may have a reduced tariff to encourage people to switch from gas where a shortage is being forecast for the next two years. Some steps have been taken in this respect but these were based on mediocre calculations. A scientific study would be required. Six, there are other areas which should be looked into. Currently, even well-to-do are benefiting from the consumption-based tariff.

Competition

Market and competition should be another focus of reforms in the power sector. Immediate possibilities are in the area of wheeling and competitive bidding for new projects. Unfortunately, the National Electric Power Regulatory Authority (Nepra) and Private Power and Infrastructure Board (PPIB) are continuing with the traditional system despite their avowed commitment to competitive tariff at least in the area of renewable energy like solar and wind. We have seen how competition brings down prices in the case of Asian Development Bank (ADB)-funded coal power plant vs other projects. A new framework is under process, called Competitive Trading Bilateral Contract Model (CTBCM). It has to be revised to make it more purposeful.

Currently, it is focused on bilateralisation of generation companies (Gencos) and DISCOs, which will create electricity pricing disparity – something the government is combating in the gas sector in the form of weighted average cost of gas (Wacog). CTBCM, in many ways, is almost the same as the current merit order. It does propose wire-only DISCOs and a retail electricity competitive regime, which is perhaps its only positive side. The issue is from where the free electricity will come for competition. All capacity and even new capacity would be bound under long-term “take-or-pay” contracts.

The market can be brought about gradually. Initially, both competitive and regulated sectors would co-exist. A voluntary market exchange should be organised wherein captive power plants and the to-be-retired power plants can trade and compete. Some portion of take-or-pay contracts may be allowed to be traded. Some new plants may be encouraged to get into the market on a take-and-pay basis. Theoretically, it is possible to pay off the present value of take-or-pay contracts to developers and issue bonds, adjusted through income, under the new market.

But it is highly complicated. A beginning has to be made as it is said that a thousand miles journey starts with the first step. DISCOs’ reforms are essential. Privatisation has been on the agenda but does not happen for one reason or the other. Wire-only has offered a new opportunity for reducing DISCOs’ risks in the public sector. In the second stage, DISCOs could be privatised under the leasing model. An immediate step for improving DISCOs’ efficiency would be to divide large DISCOs into smaller ones, especially the ones spread over large geographical areas such as Pesco, Hesco and Mepco.

For reduction in theft and technical loss, the discussion may become lengthy. We would emphasise the redesign and revival of the smart meter programme, which has the potential of controlling theft. The current programme is purposeless and not feasible. If implemented throughout Pakistan, it would take more than seven years and almost 10 years. A redesigned programme focused on distribution transformers would be cost effective and can be fast-tracked and completed in two years. Priority should be given to high-loss DISCOS like Pesco, Mepco, Hesco, etc where initial grounding already exists through the earlier US-aided pilot projects.

Finally, Nepra reforms should be on top of the agenda. The IPP report and the subsequent agreement have made it clear that Nepra has been a partner, by design or by default or due to sheer ignorance and lack of capability. IPP agreement terms should be adopted by Nepra by toning down financial parameters, based on which it has been awarding high tariff, high capex, escalations, high return on equity, interest rates and cash flow-based tariff spread over shorter debt period. Cash flow-based tariff increases the initial tariff for first five years by 25%, making it even worse.

A formal external review of Nepra is highly desirable. Its members should be appointed on merit rather than on the current provincial representation, which promotes nepotism. If the Oil and Gas Regulatory Authority (Ogra) can have a merit-based system, why shouldn’t Nepra have the same? It is a separate matter that some provincial enthusiasts want to bring Nepra system to Ogra.

A supervisory board, however, could be introduced in both the regulatory bodies to take care of provincial interests. An appellate tribunal, which has long been opposed by Nepra, has now become a reality under the Supreme Court order. It should be established as early as possible. Later on, the oil and gas sector should also be included in the tribunal.

OGDCL Earns Rs 100.081 Bln Profit in FY 2019-20

(September 29, 2020)

ISLAMABAD (APP): The Oil and Gas Development Company (OGDCL) on Monday announced financial results for the year 2019-20, declaring earnings of Rs 100.081 billion profit. “The Company’s net sales revenue clocked at Rs 244.856 billion with profit after tax at Rs 100.081 billion. This translated into earnings of Rs 23.27 per share,” an OGDCL press release said. The company’s Board of Directors announced a final cash dividend of Rs 2.50 per share, which stood 25 percent.

“This is in addition to interim dividends already paid at Rs. 4.25 per share i.e. 42.5 percent. The cash dividend will be paid to the shareholders whose names will appear in the Register of Members on Wednesday, October 21, 2020. The Share Transfer Books (STB) of the Company will be closed from Thursday, October 22, 2020 to Wednesday, October 28, 2020 (both days inclusive).” During the period under review, the company also paid Rs 42.983 billion and Rs 27.626 billion on account of taxes and royalty respectively.

On the exploration and development side, the company made significant progress in seismic and drilling activities as 25 wells were spud in comparison to 16 of the corresponding year. “Exploratory efforts resulted in five discoveries of oil & gas reserves. The Board of directors appreciated the efforts of the Management for ensuring production enhancement and significant exploratory work during the period.”

The production was optimized through injection of 14 new wells in the production gathering system. “Deployment of Electrical Submersible Pumps (ESP) also contributed to production enhancement and the company will continue to use the latest technology for better efficiency,” the company vowed. The newly injected development wells would add to the hydrocarbon reserves base of the OGDCL and the country besides bringing significant savings to the exchequer through import substitution. “The increase in oil & gas production will also help in mitigating ever growing demand of domestic consumers and industry.”

ECC Approves Rs 3.850bn for PSM Employees’ Salaries

(September 24, 2020)

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet Wednesday approved an amount of Rs 3,850 million for provision of salaries to the employees of Pakistan State Mills (PSM) for the financial year 2020-21, which will be disbursed every month. However, though the ECC agreed in principle that the dues to the retired non-litigant employees should be paid, the forum decided to seek a detailed report from the Ministry of Industries and Production on the PSM’s liabilities, including retirement dues, which would accrue as a result of the retrenchment plan, expenditures on account of utilities or any other charges.

Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh chaired the ECC meeting, according to a Finance Ministry press release. The Ministry of Industries and Production had presented the two separate summaries to the Economic Coordination Committee (ECC) for the disbursement of salaries to the PSM employees and for clearing the liabilities of those employees, who have not approached the court (Sindh High Court). The Economic Coordination Committee (ECC) was briefed that earlier this month, the retired employees of the PSM were paid Rs12.741 billion as retirement dues but the court had asked to pay the non-litigant retired employees as well that would further add Rs.11.68 billion to the expenditure of the Federal Government.  

The ECC also considered and approved two technical supplementary grants (TSGs) for the Ministry of Interior amounting to Rs111 million for clearing various liabilities of the ICT (Islamabad Capital Territory) administration. Two other TSGs were approved for the Islamabad High Court amounting to Rs102 million and the National Heritage & Culture Division of Rs 8.5 million for various expenditures. The ECC also granted waiver of guarantee fee on foreign loans of K2/K3 projects, the press release said. According to a report prepared by the Pakistan Atomic Energy Commission (PAEC) and the Economic Affairs Division (ADB), there would be a benefit of Rs.0.07/KWh to the general public by the waiver of this fee.

For the centralized procurement of the vaccines under the Expanded Programme on Immunization (EPI), the ECC approved shifting of Federal EPI from development to revenue expenditure with an allocation of Rs 9, 903.195 million through TSG for vaccine procurement in CFY to avoid interruption in the immunization programme. Now the vaccine would be procured by the Federal EPI on behalf of the provincial governments and later reimbursement would be made by Punjab and Sindh governments, and deduction at source from the shares of Khyber Pakhtunkhwa and Balochistan for their respective vaccine shares would be made.

In order to increase the share of man-made fibers (MMF) in the textile goods for better unit prices in the international markets, product diversification and most importantly, value addition, the Additional Customs Duty (ACDs) and Regulatory Duty (RDs) on selected HS codes of textile sector was allowed to be removed. The total revenue impact of these exemptions would be Rs 533 million. The ECC also allowed notifying the Kharlachi Border Crossing between Pakistan and Afghanistan as a rebatable border point for export of goods to Afghanistan. Earlier the opening of this border point helped in the release of congested transit trucks at the Afghan border due to COVID-19 restrictions.

It allowed the exemption from re-lending of the funds for the Pakistan National Emergency Preparedness and Response Plan for COVID-19 to cover the country’s requirements for 12 months through emergency operations. In order to administer the programme, the Asian Development Bank would provide a loan of US$ 100 million and an additional US$ 5 million would provided by the Government of Norway as a grant administered by the ADB. The Asian Development Bank has already signed a loan agreement with the Ministry of Economic Affairs to finance the said project.

 

Pakistan Entrepreneurs Must Develop Brands

(September 21, 2020)

ISLAMABAD (APP): Pakistani entrepreneurs on Sunday were urged to develop international standard brands products to capture open global markets by fully exploiting indigenous potentials, expertise and resources. Talking to a delegation of exporters and traders led by Mian Faiz Bukhsh Arain here on Sunday, President SAARC Chamber, and Chairman United Business Group Iftikhar Ali Malik highlighted the significance of brands and said it was high time for Pakistani entrepreneurs, corporate sector, especially younger business magnates, to focus on developing brands.

He said vertical integration and institutional network were to be strengthened on modern scientific lines to meet the future challenges of global marketing. “By the grace of Allah, Pak entrepreneurs have full potential to compete the international markets but unfortunately they do not develop their own brand like KFC, McDonald’s, Guard, Bata, Chenone etc,” he added.

He said that private sector had to come forward to develop their own brands on war footings for their survival otherwise the neighbouring countries would continue to dominate and sweep international markets. He said Pakistan was producing some of the best products in the world in sports, textile, fruits, vegetables, handicrafts and in several other sectors but not exporting them under its own brands. Iftikhar Ali Malik said “We must not only develop but promote brands through manufacturing the best quality products which is the need of the hour.”

He urged the government to conduct market research in an attempt to search new export destinations for Pakistani products, which were considered the best in the world as far as quality and prices were concerned. “Pakistani missions abroad should be duty bound to introduce Pakistani products there and ensure dissemination of trade-related information so that local entrepreneurs can avail trade opportunities to the maximum,” he said. He said he always encouraged genuine exhibitors and facilitate them at optimum level. He urged the private sector to restore consumer faith and trust by manufacturing best quality products on competitive prices for the promotion of brands.

Iftikhar Malik also called upon the government, private sector, academia and civil society to put efforts together to mentor, guide and support youth to unleash immense economic and social potential. “We need a national and sub-national policy framework and develop institutions to assist these young entrepreneurs to grow,” he said. He said that youth accounted for over 60 percent of Pakistan’s population and it was essential to encourage them in entrepreneurship so that they could become more productive and contribute positively to the growth of the national economy.

Iftikhar Malik who is also founder chairman Pak US Business Council said they would also try to ensure a business-friendly environment by sharing views with the government and taking all the stakeholders on board on all economy-related issues.

Power Sector Gets Relief Amid Protest by Petroleum Stakeholders

(September 19, 2020)

ISLAMABAD: Amid strong protest by the petroleum division and its corporate entities, the Cabinet Committee on Energy (CCoE) on Friday decided to exempt three Punjab-based power plants of 3,900mw from compulsory purchases of liquefied natural gas (LNG) quantities from January 2022. The move to change gas supply agreements (GSAs) of these government-owned power plants (GPPs) reportedly originated at the request of the Privatisation Commission to attract better proceeds from sale of these LNG-based power plants and also forms part of overall efforts to reduce power costs.

Two of these GPPs are at the advance stages of privatisation under the International Monetary Fund programme and the government has set a Rs100 billion target for privatisation proceeds this year. “Changing the contracts structure will not only make the electricity cheaper but also significantly reduce the circular debt buildup in coming years,” said an official announcement after the CCoE meeting presided over by Minister for Planning Asad Umar. It said the committee “decided that from January 2022 the 66pc of Take-or-Pay under the GSAs will be removed and the gas companies will be free to market and sell the additional gas to other customers”.

Cabinet committee says changing contracts structure will make electricity cheaper, reduce circular debt buildup in coming years. The petroleum division, which was represented by Special Assistant to the Prime Minister Nadeem Babar, said the entire LNG supply chain, including 800 million cubic feet per day (mmfcd) imports from Qatar and open market, regasification terminals, PSO and gas network, had been put in place on the basic premise of GPPs and would become unsustainable in the long term just for short term gains of privatisation proceeds.

“Any reduction or waiver of minimum take-or-pay commitments of three GPPs will lead to a cascading default of all the three public sector entities of RLNG supply chain which may include encashment of sovereign guarantees and Standby Letters of Credit (SBLCs),” the petroleum division put on record in writing while opposing the proposal. The petroleum division said if the CCoE was adamant on ending 66pc take or pay clause for the GPPs, then it “insists on Finance Division providing subsidy for the price differential to keep the Petroleum Division companies (Pakistan State Oil, Pakistan LNG Ltd, Sui Southern Gas Company, Pakistan LNG Terminal Ltd and Sui Northern Gas Pipelines Ltd) from going bankrupt on account of breaking of contracts by Power Division’ companies”.

The power division said an impact analysis of ‘must-run commitments’ of three GPPs suggested that due to signification of devaluation of currency, transition of generation mix towards cheaper and local resources and addition of efficient and low variable cost fleet of plants transpired LNG-based GPPs as uneconomical. Also, the upcoming addition of nuclear and renewable plants would further reduce the overall unit cost of national pool and lead to under-utilisation of the GPPs.

Moreover, “if these trends in prices, as well as currently load forecast remain unchanged, the existing minimum guaranteed offtake of 66pc for three RLNG plants would yield in the loss of approx Rs143bn up to 2023”. On the other hand, the petroleum division said the losses to be faced by the oil and gas companies (about Rs100bn per annum for many years) would be many times higher that savings in the power system. It said the decision to end the GPPs commitments was being taken “while completely ignoring the financial implications on the part of entire RLNG supply chain considering back-to-back agreements attached with the transaction”.

It said the CCoE had reaffirmed in November 2019 that “all the existing arrangements of RLNG Power Plants will remain intact until the date when Price Review Clause under the LNG Sales Purchase Agreement (SPA) takes its effect in year 2026 which is the 10th anniversary to the first Qatar Gas LNG supply made in 2016”. It said the decision to relieve the GPPs from LNG agreements would shift the entire exposure to the PSO and the PLL. If this entire amount of LNG brought for RNLG plants (185mmcfd for four plants and totaling 740mmcfd) is sold to other consumers, the total loss created in the LNG chain will be larger than the savings being projected by the power division for not taking 66pc take or pay at three plants.

“Essentially without funding this loss as a budgeted subsidy, we will simply be transferring Circular Debt from Power Division companies to Petroleum Division companies and in fact increasing it,” the petroleum division said, adding that from a governance point of view, shifting of this loss to the PSO or the SNGPL through a government decision was not legally tenable. It was pointed out that the SNGPL was already facing non-recovery of Rs77bn against diversion of RLNG to domestic sector in last two winters on government directions. Subject to adequate demand, the estimated financial implications of diversion of the minimum guaranteed 66pc (366mmfcd) RLNG volumes to other sectors would be about Rs100bn per year. This is more than double the savings being projected.

In addition to the exposure on the take or pay, there is exposure on the terminal charges since gas companies had signed terminal agreements with Engro and Pakistan Gasport terminals for 4.5 million tonnes per annum (600mmcfd) each for 15 years. The SSGCL has provided $40m SBLC to Engro and the PLL $22m to Gasport and it involved liquidity damages in case of variation in LNG supplies. The CCoE asked the petroleum division to take all mitigation measures to reduce the cost impact on gas sector and to avoid build up of liabilities. “Government will fund any revenue shortfall for the publicly listed companies, if required,” it said. Asad Umar said this measure would bring overall efficiency in the energy sector.

KMBL Partners with United Auto Industries

(September 16, 2020)

ISLAMABAD: Khushhali Microfinance Bank Limited (KMBL) has signed an MOU with United Auto Industries (Pvt) Limited to facilitate Khushhali Microfinance Bank customers with 2 wheeled and 3 wheeled vehicles.Under the partnership, Khushhali Microfinance Bank customers will be able to get bikes and loaders on easy finance via Khushhali Sarsabz Karobar and Khushhali Sarmaya product lines. Bikes or two-wheeler financing will be offered to employees of existing partners with whom Khushhali Microfinance Bank already has an agreement, via Sarsabz Karobar. Whereas, loader or three-wheeler financing will be offered in the open market, via Khushhali Sarmaya.

“Access to transport is instrumental in ensuring individuals’ participation in economic activity. This collaboration with United Auto marks an important step towards increasing this access for our customers by going beyond the convenience of mere banking facilities. The two programs will enable customers to purchase vehicles on easy financing and thus allow them to cover their travelling needs without hassle”, said Khushhali Microfinance Bank President, Ghalib Nishtar.

Financing of United Auto Industries three-wheeled loaders will be done under the category of commercial vehicle financing against each sale. Commercial vehicle finance is a cost-effective option for micro-entrepreneurs who don’t want to be left in a pile of debt to acquire a vehicle they wouldn’t otherwise afford. The success of the two products is reflected by the fact that many successful micro-entrepreneurs have availed Khushhali Sarmaya through which they were able to access necessary transportation assets to support their businesses. This aided in long-term cost reduction and profit growth.

PPL Ensures Traders Full Support

(September 3, 2020)

KARACHI: Amid the COVID-19 pandemic, when most businesses in Pakistan suffered due to halt in operations, Pakistan Petroleum Limited (PPL), achieved a milestone with nearly zero decline in production from operated assets to provide much-needed energy supplies for the nation. This was highly appreciated by industry partners and stakeholders. As such, the support from Board of Directors and Ministry for measures adopted by PPL enabled the company to perform optimally during this difficult time.

Despite a series of challenges posed by the pandemic, including 170 employees affected by COVID-19, most of whom have recovered now, besides 6 active cases, the company showed exemplary resilience to ensure business continuity without compromising on health and safety of its employees and contractors.

“It is a story of great resolve, dedication and commitment of our staff and senior management to deal with extraordinary circumstances, never seen before. Keeping the momentum for business operations without compromising the health and safety of our staff and contractors was the real challenge. However, over the last five months, we have proven remarkable resilience in all facets of our operations, ensuring business continuity with no decline in our operated exploration and production activities,” highlights MD & CEO PPL Moin Raza Khan.

This was made possible through the effective use of technology and communications tools with effective teamwork by staff, especially those directly responsible to provide relevant services, including Medical Services, Quality, Health, Safety and Environment, Administration, Human Resources, Information Technology and Procurement functions.

Among significant efforts to ensure employee safety and continuity of business activities was pro-active preparation and implementation of COVID-19 best practices and Standard Operating Procedures (SoPs) as well as strict vigilance at all locations. To this end, regular awareness sessions were conducted for staff who were kept abreast of COVID-19 developments. Wearing of masks and use of hand sanitizers was a norm along with regular disinfection of offices and practicing ‘social-distancing.’

For field staff, rotations were efficiently handled to ensure staff presence

for smooth operations with implementation of COVID-19 SOPs. Most head office and Islamabad-based staff worked from home during the first few months with seamless 24/7 connectivity.

All internal and external meetings, including Board and relevant Committees as well as procurement committee meetings were held virtually using tools such as Microsoft Teams, Zoom and BlueJeans. Besides, digital signatures ensured safe and secure approvals.

Procurement processes worked effectively in line with given procedures to ensure that critical business operations remained unhindered.

Given the challenges of remotely located 48 exploration assets and 59 fields and discoveries all over Pakistan, each with unique socio-cultural-political settings, it was not easy to implement new organizational norms to contain the spread of COVID-19, ensuring a ‘new normal’. Besides, going virtual was a unique experience for most staff, who also faced power and connectivity issues. Nonetheless, staff stepped up to the challenge and delivered well beyond expectations.

As a result, PPL was able to ensure continuous supply of hydrocarbons from its fields. However, due to low consumption of oil due to low demand nationwide, production of both oil and gas had to be curtailed across the country, mostly in partner-operated areas.

Even so, PPL managed its production in such a way that a balance was created between both oil and gas production.

MPAs Receive Orientation on Budget 2020-21, Challenges and Features

(September 1, 2020)

PESHAWAR: The Khyber Pakhtunkhwa Finance Department in collaboration with the UK Foreign, Commonwealth and Development Office (FCDO) funded Sub-National Governance Programme organized an orientation for MPAs of KP Assembly to enhance their understanding of public finance management, budget analysis and key challenges of budget 2020-21.

The Orientation session was chaired by Speaker Provincial Assembly Mushtaq Ahmad Ghani and Finance Minister Taimur Saleem Jhagra.

Public financial management (PFM) is critical to economic governance and essential in establishing the performance, legitimacy and accountability of functional states. PFM leverages effective administration of funds collected and spent by governments. Moreover, the budget is an important document in ensuring transparency, accountability, comprehensiveness and good governance.

“The Year 2019-20 was progressing as a year of economic growth for Khyber Pakhtunkhwa, however, the province observed a significant dip in progress due to COVID. Despite all challenges we successfully and launched universal health coverage for the entire population of KP” said Taimur Saleem Jhagra Minister Finance KP in his presentation.

He added, “This year’s budget was one of the most challenging in recent times due to COVID-19 pandemic but government adopted a bold agenda of reforms, conducting budget rationalization exercise, adopted strict austerity measures and presented a balanced budget”.

In his detailed presentation on PFM, Waqas Paracha SNG-II PFM Advisor noted that Public financial management was not only crucial in meeting fiscal aims, monitoring progress against targets and effective utilization of resources, but a sound system could aid the government in setting future priorities and ensuring fiscal sustainability.

Speaking in his keynote remarks, Mushtaq Ghani, Speak Provincial Assembly KP said that such sessions increase the legislator’s public finance knowledge on the core processes of budget preparation and enable legislators to understand and analyze the budget to promote accountability and transparency. Therefore, sensitization of the legislators on key challenges to the budget 20-21 is very important. He appreciated the joint efforts of the FD and SNG in organizing this

session.

“By providing a detailed description of proposed expenditure, it allows Provincial Assembly and the general public to “know where does the money come from and go” and thus increases transparency,” said the SNG-II Provincial Team Lead Muhammad Salim Khan in his closing remarks.

He said the budget is based on key assumptions about income and expenditure next year. There is huge work on the back to establish these assumptions. The MPs must understand such assumptions for ensuring the element of accountability.

SNG is a four-year FCDO-funded programme supporting the Governments of Khyber-Pakhtunkhwa and Punjab, as well as local governments in selected districts, to improve the way they are governed and manage their resources for better service delivery.

BOP Announced Financial Results For 1st Half of Year 2020

(August 28, 2020)

LAHORE: A meeting of the Board of Directors of The Bank of Punjab was held on August 27, 2020 to consider and approve the un-audited Financial Statements for the six months period ended June 30, 2020.

While reviewing the Bank’s performance for first six months of the year 2020, the Board appreciated the efforts of Bank’s management and staff for ensuring provision of banking services to clients under very tough operating environment resulted from COVID-19 pandemic. The Board expressed its satisfaction on Bank’s overall financial performance in prevalent economic situation.

During the 2nd quarter of the year 2020, economic depression created by COVID-19 pandemic started taking its toll. However, owing to better return from investments, the Bank was able to minimize the adverse impact and substantial capital gains accrued on books of the Bank.

Net Interest Margin (NIM) remained at Rs. 11.5 billion as against Rs. 13.1 billion during corresponding period last year. However, Non-Markup/ Interest Income increased to Rs. 6.9 billion as against Rs. 1.8 billion showing a substantial increase of 283%.

During 1st half of the year, pre-provision profit improved to Rs. 9.8 billion as against Rs. 8.0 billion during corresponding period last year thereby registering a rise of 23%.

However, the Bank posted after tax profit of Rs. 3.6 billion as against Rs. 4.0 billion earned during 1st half of year 2019.

Earnings per Share (EPS) for the 1st half of year 2020 remained at the level of Rs. 1.38 per share.

As of June 30, 2020, Bank’s Total Assets crossed Rs. 1.0 Trillion mark and stood at Rs. 1,018.4 billion as against Rs. 868.9 billion as of December 31, 2019. The Deposits of the Bank touched the level of Rs.

805.7 billion, while Investments and Gross Advances were recorded at Rs. 497.7 billion and Rs. 431.4 billion, respectively. The Tier-I equity remained at Rs. 43.0 billion and Capital Adequacy Ratio (CAR) also improved to highly comfortable level of 17.82% from 14.80% as on December 31, 2019.

As on June 30, 2020, the Bank stands fully compliant with the SBP’s prescribed requirement of CAR with substantial positive margin.

The Bank has been assigned long term entity rating of “AA” by The Pakistan Credit Rating Agency (PACRA) with short term rating being at the highest rank of “A1+”.

The Bank currently has a network of 624 online branches, including 100 Taqwa Islamic Banking Branches, strategically located across the Country. Further, Bank also has a vast network of 563 ATMs providing 24/7 banking services to the customers.

Pakistan launches first Business & Biodiversity Platform at Port Qasim

(August 26, 2020)

ISLAMABAD: The Port Qasim Authority (PQA) of Ministry of Martime Affairs has launched Pakistan's first Business and Biodiversity Platform (BBP) at Port Qasim.

According to 2 years performance report August 2018 -2020 of the government, following the Prime Minister Initiative of Green Year Pakistan, plantation of over 1 million mangroves was underway.

A detail study of the new master plan for the Port Qasim has completed. Plan has also been finalized to uplift the entire infrastructure of PQA and its industrial area.

This include up-gradation of the roads, laying of sewerage line, water distribution channels and power supply, residential accommodation for

PQA employees, Primary and Secondary school, State of the Art sports Complex with a cricket ground fit to first class matches at an approximate combine cost of Rs3 billion.

UK Faces Record Recession Because of Corona

(August 12, 2020)

LONDON:  The United Kingdom officially went into a recession after the economy contracted by a record 20.4% in the second quarter with the country in lockdown over the coronavirus pandemic, official data showed on Wednesday. "It is clear that the UK is in the largest recession on record," the Office for National Statistics said.

Britain officially entered recession in the second quarter after gross domestic product (GDP) contracted by 2.2% in the first three months of the year. The technical definition of a recession is two quarterly contractions in a row. The ONS said that the contraction for the first six months of 2020 "was slightly below the 22.7% seen in Spain but was more than double the 10.6% fall in United States".

It added that Britain's dire second quarter was driven by a 20% drop in output in April, "the biggest monthly fall on record reflecting widespread... declines in output across the services, production, and construction industries".

The economy is beginning to rebound, however, as the government eases its lockdown restrictions. GDP output growth was 8.7% in June, the ONS said. "The economy began to bounce back in June, with shops reopening, factories beginning to ramp up production and house-building continuing to recover," noted Jonathan Athow, deputy national statistician as the statistics office.

"Despite this, GDP in June still remains a sixth below its level in February, before the virus struck. "Overall, productivity saw its largest-ever fall in the second quarter. Hospitality was worst hit, with productivity in that industry falling by three-quarters in recent months," he added. Britain's recession is its first since the 2008 global financial crisis.

The grim economic news comes despite unprecedented government interventions, including spending tens of billions of pounds on job support schemes in a bid to avoid mass layoffs.

The Bank of England (BoE) is meanwhile pumping out hundreds of billions of pounds in cash stimulus and has slashed its main interest rate to a record-low 0.1%.ONS data released on Monday showed that around 730,000 workers have been removed from the payrolls of British companies since March.

Announcements of job cuts have become a daily occurrence, with companies expected to pick up the pace of layoffs as the government's key employment support scheme ends in October. The BoE expects the unemployment rate to shoot higher to around 7.5% by the end of the year from 3.9% currently.

The central bank forecasts also that the UK economy will have contracted by 9.5% for the whole of 2020. It estimates that UK gross domestic product will rebound in 2021 by nine percent.

Business Confidence of Pakistan Declines

(August 9, 2020)

KARACHI: The Covid-19 added fuel to the pessimism among Pakistani businessmen, who had already been affected badly by the sluggish economy, reported the Overseas Investors Chamber of Commerce and Industry (OICCI) while citing its Business Confidence Index (BCI) Survey - Wave 19.

The OICCI shared results of its BCI Survey - Wave 19, which showed that the overall Business Confidence Score (BCS) in Pakistan stood at negative 50%, a further drop of 5% from the -45% score in the Wave 18 Survey conducted in August 2019.

“The huge scare caused by the pandemic came during a period when the country was already in the midst of a major economic stabilisation programme,” said OICCI President Haroon Rashid while commenting on the low BCS.

Since early 2019, with a significant devaluation of currency, a 38% decline had been observed in the past 12 months to June 2019 due to high State Bank of Pakistan’s (SBP) policy rate (13.25% in December 2019) and resultant high inflation impacting all businesses, he said.

“Therefore, the poor BCS in the last two surveys, despite being a matter of concern to all the stakeholders, is not surprising, in fact quite understandable, under the current challenging circumstances,” he added.

The latest BCI survey results reflect the continued pessimism across all sectors in general and particularly in the manufacturing and services sectors.

The BCS of the manufacturing sector, which represents about 42% of the respondents, declined by 5% over the past six months and stood at -48% compared to -43% in Wave 18.

However, the BCS of the services sector, representing 29% of the survey respondents, suffered a significant dip from negative 49% in Wave 18 to negative 59%.

The BCS of retail and wholesale trade remained unchanged at negative 44% in both Wave 18 and Wave 19 surveys. The results of the latest BCI survey, conducted across Pakistan from May to June 2020, were largely influenced by the Covid-19 pandemic, which has negatively impacted nearly all the businesses.

The prolonged uncertainty, due to the pandemic and strict lockdowns and other corrective measures taken by the authorities, impacted a large segment of business activities.

During the past six months, a majority of the respondents experienced a decline in their sales volume, profits and ROI and were unable to expand their business. However, for the next six months, the survey respondents are comparatively more positive.

One of the key factors affecting the overall sentiment was a poor view of the survey participants of the global business situation in the past six months (from -9% in August 2019 to -79% in May 2020), of Pakistan’s business situation (from -75% in August 2019 to -81% in May 2020) and

survey participants’ own business situation (from -65% in August 2019 to -83% in May 2020).As mentioned above, the BCS of the services sector recorded the highest net negative sentiment of 10% overall.

Major services sub-sectors, showing increasing negative confidence scores, were real estate (-78% versus -68%), community, social and personal sectors (-70% against -51%), transport and communication (-53% compared to -68%) and financial services (-37% versus -41%).

In the manufacturing sector, tobacco (-76% against -73% in October 2019), chemicals and cement (-58% versus -51%) and non-metallic (-38% in comparison to -35%) sub-sectors recorded declines while petroleum, oil and gas (-18% compared to -42% in October 2019), automobile (-52% versus -66%) and food (-40% against -55%) sub-sectors showed significant improvement in the current BCI Wave 19.

Sentiment of the OICCI members, who were randomly included in the survey, also recorded a sharp decline of 38%, from negative 36% in Wave 18 to negative 74% in the latest Wave 19, as opposed to the overall confidence scores, which declined from negative 45% to negative 50%.

In all the previous 18 BCI surveys conducted so far, the business confidence of foreign investors had remained much higher than their local counterparts included in the surveys.

The BCS in metropolitan cities has increased marginally by 3% (from -49% in August 2019 to -46% in May 2020) while it dropped 4% in non-metros (from -34% in August 2019 to -38% in May 2020).

The BCS score improved by 3% in Karachi (from -53% to -50%) while it dropped by 12-13% in Rawalpindi and Islamabad (from -47% to -59%) and in Lahore (from -41% to -54%).

The OICCI expects that various positive measures recently taken by the federal government and various initiatives undertaken by the central bank to support and sustain vulnerable stakeholders in the business and industry to successfully navigate the current economic challenges will bring positive results, stated Haroon Rashid.

Proposals to Contain Population Discussed:Dr. Arif Alvi (August 8, 2020)

ISLAMABAD: President Dr. Arif Alvi chaired the third meeting of the Federal Task Force on Alarming Population Growth in Pakistan to evolve strategy to lower population growth in the country. The meeting extensively discussed various proposals to contain the increasing population. All provincial governments, including Azad Jammu & Kashmir and Gilgit Baltistan, briefed the meeting about the steps taken by them about family planning.

The provinces informed they had been taking serious measures to check increasing population. Chief Minister Balochistan, Jam Kamal Khan, proposed that financial incentives for the people would help reducing population growth. Chief Minister Sindh, Murad Ali Shah suggested that the provinces, which will lower population growth, needed to be incentivised financially under NFC Award.

The meeting agreed to seek the cooperation of media and Ulema to play their role in educating the people about the implications of fast-growing population. In order to create public awareness, the meeting underscored the need to launch national campaign on family planning and reproductive health through print, electronic and social media.

It emphasized that all provincial governments needed to seek support of ulema to sensitize the people about the importance of family planning. The meeting tasked Ministry of Religious Affairs and Interfaith Harmony and Council of Islamic Ideology to convene meeting of the Ulema within a month to seek their cooperation with regard to population growth.

It also directed the Ministry of National Health Services, Regulations and Coordination to study population models of the countries which have succeeded in controlling their population and submit report to the Task Force based on the findings.

The meeting stressed the need to integrate family planning and primary health care services to achieve the objectives of family planning. It also recommended to increase funds for the family planning-related programs. The President assured that he would ask the Prime Minister to increase funds in this regard. It was agreed to conven the next meeting of the Task Force after 45 days.

He advised the provincial governments to include mother & child healthcare in their education curriculum. The President asked all Federal and Provincial Governments to implement the decisions of the Task Force on fast track basis so as to check growing population.

The meeting was attended by Federal Minister for Religious Affairs and Interfaith Harmony Pir Noor ul Haq Qadri, Advisor to Prime Minister on Commerce, Textile, and Investment, Abdul Razak Dawood, SAPM for Poverty Alleviation and Social Protection/Chairperson Benazir Income Support Program (BISP), Dr. Sania Nishtar, SAPM for National Health Services, Regulations and Coordination, Dr. Faisal Sultan, Chief Minister Sindh, Syed Murad Ali Shah, Chief Minister Balochistan, Jam Kamal Khan, Caretaker CM GB, Mir Afzal, Chairman, Council of Islamic Ideology, Prof. Dr. Qibla Ayaz, Chief Secretary Sindh, Mumtaz Ali Shah, Chief Secretary KP, Dr. Kazim Niaz, Chief Secretary Balochistan, Capt. (R) Fazeel Asghar, Country Director Population Council Islamabad, Dr. Zeba Sathar, Representative UN Population Fund (UNFPA), Ms. Lina Mousa and provincial ministries and secretaries of population welfare departments.

There is good demand and PIA received many applications from the local community to resume service from Manchester as competitors had doubled fares with PIA retracting from the market.

After the resumption of PIA Service now fares have again normalised and it comes to show the key role the National Flag carrier plays to service the Pakistani expatriate community – PIA spokesman Abdullah Hafeez Khan.

PIA to Restore Its Flight Operations to United Kingdom

(August 7, 2020)

KARACHI: Alternate arrangements have successfully been implemented by PIA to restore its Flight Operations to Great Britain or United Kingdom consequent to the recent suspension.

An agreement has been finalised with a Portuguese company to operate PIA flights. A modern and amenities laden Airbus A330 aircraft with a capacity of over 300 seats will operate PIA flights to its destinations in the United Kingdom.

PK call sign and slots will be used during this operation. It will be a two-class operation, Business and Economy with all the modern comforts an airliner can offer. Social Distancing will be observed on these flights, PIA spokesman Abdullah Hafeez Khan.

PIA will commence these flights on the Independence Day of Pakistan, August 14 to celebrate the occasion and mark its resurgence. The first flight with the callsign PK 9702 will depart from Manchester Ringway Airport on August 14, 2020 carrying 250 passengers for Islamabad while PK9786 will depart from Islamabad to London Heathrow on August 15, 2020.

Booking and ticketing on these flights have already commenced and the first flight has already been filled. Seats a limited and those passengers that have urgent need should book as early as possible, 45Kgs of Free Baggage Allowance is permissible with each ticket. Inflight Entertainment Service will also be available onboard, – PIA spokesman Abdullah Hafeez Khan.

Fuel and Food prices drive inflation to 9.3% in July, 2020

(August 5, 2020)

ISLAMABAD: Inflation edged up to 9.3 % in July, from 8.6 % in June, on the back of a hefty jump in prices of petroleum and food products, showed data released by the Pakistan Bureau of Statistics (PBS) on Monday. In July 2019, the price levels rose by 8.4 %.

The PBS data show that wheat price surged by 28.5 % in July from the previous month, wheat flour 18.5 %, and wheat products 16 %, respectively. Similarly, an increase of 17 % was noted in the retail price of sugar across the country.

Prime Minister Imran Khan has held several meetings especially on the wheat issue, with the latest one on Monday to contain the rising prices of the crop but so far, no letup has been observed. The average CPI in FY20 rose to 10.74 %, from 6.8 % in the year before highest level since 2011-12 when it stood at 11.01 %.

The Covid-19 outbreak has weakened consumer demand putting downward pressure on commodity prices, but there are risks of supply disruptions. However, the subdued production of sugar and wheat has also contributed to an increase in food inflation in the last few months.

On the other hand, the government has also increased petroleum product prices substantially, causing an increase in non-food inflation. Food inflation is still in the double-digits, posting a rise in the outgoing month. In urban areas, it jumped by 15.1 % in July on a yearly and 3 % on a monthly basis, whereas the respective price level growth in rural areas stood at 17.8 % and 4 %.

In urban areas, food items which saw an increase in prices in July from the previous month included tomatoes, soaring by 179.19 %, vegetables 23.84 %, onions 16.61 %, eggs 10.82 %, spices 7.57 %, wheat 7.42 %, potatoes 4.58 %, meat 3.97 %, sugar 3.82 %, beans 3.07 %, chicken 2.6 %, milk products 1.74 % and milk 1.37 %.

The items whose prices declined in urban areas were: daal moong, down 10.72 %, daal masoor 6.27 %, fruits 6.24 %, daal mash 2.71 %, gram whole 2.7 %, pulse gram 2.39 %, wheat flour 1.51 % and cooking oil 1.34 %.

In rural areas, price increase were seen in tomatoes, higher by 241.4 %, onions 25.57 %, vegetables 21.63 %, eggs 13.84 %, wheat 10.84 %, potatoes 5.33 %, sugar 3.67 %, rice 2.96 %, chicken 2.58 %, honey 2.06 %, meat 1.82 %, bakery and confectionary 1.74 %, wheat flour 1.73 %, readymade food 1.72 %, condiments and spices 1.48 %, beans 1.47 %, and milk fresh 1.23 %.

On the other hand, drag on price levels came from daal moong, decreasing by 13.42 %, fresh fruits 6.62 %, pulse gram 4.98 %, besan 4.42 %, daal masoor 4.06 %, daal mash 4.04 %, and gram whole 4 %. Meanwhile, non-food inflation in urban centres was recorded at 3.9 % year-on-year and 1.7 % month-on-month whereas in rural areas, it rose by 6.3 % and 2 %, respectively.

The increase in non-food inflation was mainly driven by a hefty rise in oil prices in July. The urban consumer price index covers 35 cities and 356 items, while the rural one tracks 27 centres and 244 products. The former grew by 7.8 % year-on-year in July whereas the latter jumped by 11.5 %. Core inflation in urban areas was 5.3 % in July as against 6.5 % the previous month. In rural areas, the corresponding increase was 7.6 % and 8.8 %, respectively.

The central bank determines the key policy rate currently at 7 % based on the core inflation rate. The SBP has reduced the rate by a cumulative 625 basis points since March 17 to combat uncertainty amid growing coronavirus outbreak. Average inflation measured by the sensitive price index crawled up to 13.15 % during July from 8.9 % during the same period last year, while the wholesale price index dipped to 3.2 % during the month under review from 13.13 %.

Rs30bn Subsidy Allocated to Naya Pakistan Housing Scheme, Announces PM Imran (August 2, 2020)

ISLAMABAD: A sum worth Rs. 30 billion has been allocated to the Naya Pakistan housing scheme, Prime Minister Imran Khan announced in a live televised address on Friday, in line with helping the underprivileged class build their own homes.

Addressing the nation after chairing a meeting of the National Coordination Committee on Housing, Construction, and Development, PM Imran said the scheme was aimed at the "working class, the welder, the small shop owner, who do not have a lot of money to build their own houses".

"The goal of the Naya Pakistan housing scheme was to construct houses for this stratum of the society, which doesn't have cash. "We faced many hindrances while launching the scheme due to some existing legislation, such as the foreclosure law, which allows banks not to lend out money without a confirmation of repayment. "[However] despite a lot of hurdles, we were successful in passing the law for Pakistan, which is now implemented around the world," he said.

The prime minister also spoke of the construction sector, saying it faced a lot of obstacles, but that the NCC had worked on formulating policies for its revival. "We have decided to revive our economy with housing and construction industry so that people can get jobs and we can generate revenue in times of global recession and pandemic," he noted.

"I, myself, will preside this meeting every week to supervise the working and progress of the committee regarding the Naya Pakistan housing scheme. "We only have time till December 31 to provide incentives to the construction industry," he added.

PM Imran explained that under the Naya Pakistan housing scheme, Rs30 billion had been allocated as a subsidy, which would translate into Rs300,000 for each of the 100,000 households during the first phase of the programme.

A 5% interest is levied on a Five-Marla house and 7% for 10-marla, he noted. "We have also directed the SBP (State Bank of Pakistan) to keep 5% of the portfolio for the construction industry, which is calculated to be Rs330 billion," he said.

The government had coordinated with all of the provinces for a one-window operation so as not to have people worry about obtaining No-Objection Certificates (NOCs), the premier announced, adding that there would be a time limit for the approvals of houses maps. "We have reduced provincial taxes so that people can benefit more and more with the subsidies," he added.

PM Imran mentioned yet another relaxation in terms of questions about the sources of investment, saying it would not be questioned only during the ongoing year "due to recession caused by the coronavirus".

"We have requested the global financial bodies for these subsidies because most of our economy is undocumented. Therefore, I would request people to make the most benefit from these incentives.

"We are hoping that these incentives will create employment opportunities for people in these hard times of pandemic," he said. "Around the world, banks provide loans for construction but banks in Pakistan only provide 0.3% loans, which is quite less."

Nokia Claims to Return to Profit Despite Drop in Sales Due to Virus Pandemic (August 2, 2020)

HELSINKI: Finnish telecommunications equipment provider Nokia said Friday it had returned to profit in the second quarter and hiked its 2020 forecasts, despite a drop in sales due to the coronavirus pandemic.

Net profit came in at 94 million euros ($112 million) compared to a loss of 193 million euros during April-June last year. The result was still far below the analyst consensus of a profit of 142 million euros compiled by Factset.

"Nokia delivered a strong improvement in Q2, with better-than-expected profitability, significant improvement in cash generation, clear indications of a return to strength in mobile radio, and a year-on-year increase in earnings-per-share, despite the challenges of COVID-19," outgoing CEO Rajeev Suri, who will leave his post on Saturday, said in a statement.

Pekka Lundmark, who until now served as CEO of Finnish energy company Fortum, will take over from Suri. Sales fell by 10.6% to 5 billion euros, with Nokia estimating the impact from the coronavirus pandemic at 300 million euros for the second quarter. "We expect that the majority of sales missed in the quarter due to COVID-19 will shift to future periods," said Suri.

The company managed to increase its operating margin to 8.3% from 7.9% one year ago, using a method that is not compliant with international accounting rules. For this year it now aims to increase this measure to 9.5%, "plus or minus 1.5 percentage points," compared to an earlier forecast of 9%, with cash flow now clearly positive.

In October 2018, the company announced a 700 million euros cost savings plan, which is still ongoing. Nokia has faced more difficulties than its competitors Huawei and Ericsson in establishing itself in the market for 5G mobile network equipment.

It reported signing 83 contracts for 5G network equipment. Sweden's Ericsson said earlier this month it had signed a total of 99 contracts for 5G network equipment. Nokia's shares were up more than 13% in early afternoon trading in Helsinki, where the market was up 2.1% overall.

Post-COVID-19 Singapore Hits Recession as Economy Shrinks 41% (August 1, 2020)

SINGAPORE:  Singapore plunged into recession in the second quarter as growth fell 41.2 percent quarter-on-quarter with the trade-dependent economy hammered by the coronavirus, preliminary data showed Tuesday. Year-on-year, the economy shrank 12.6 percent between April and June, according to the data from the trade ministry, as strict curbs were imposed to fight the virus.

It marks the second consecutive quarter of contraction, meaning that the city state -- which has one of the world's most open economies -- has entered a recession for the first time in more than a decade.

The massive second-quarter drop in GDP was due to "measures that were implemented from 7 April to 1 June to slow the spread of COVID-19, which included the suspension of non-essential services and closure of most workplace premises," the ministry said in a statement.

It also attributed to the contraction to "weak external demand amidst a global economic downturn". Tiny Singapore, viewed as a barometer for the health of global trade, is highly sensitive to external shocks, and the gloomy figures are another ominous sign for the global economy.

EU-Vietnam Trade Agreement Enters into Force (July 31/2020)

BRUSSELS: EU exports to Vietnam will be taxed less as of tomorrow, 1 August. This is the immediate effect of the entry into force of the EU-Vietnam trade agreement that will ultimately scrap duties on 99% of all goods traded between the two sides. Doing business in Vietnam will also become easier for European companies: they will now be able to invest and pitch for government contracts with equal chances to their local competitors. Under the new agreement, the economic benefits go hand in hand with guarantees of respect for labour rights, environment protection and the Paris Agreement on climate, through strong, legally binding and enforceable provisions on sustainable development.

President of the European Commission, Ursula von der Leyen, said: “The European economy needs now every opportunity to restore its strength after the crisis triggered by the coronavirus. Trade agreements, such as the one becoming effective with Vietnam today, offer our companies a chance to access new emerging markets and create jobs for Europeans. I strongly believe this agreement will also become an opportunity for people of Vietnam to enjoy a more prosperous economy and witness a positive change and stronger rights as workers and citizens in their home country.”

Commissioner for Trade, Phil Hogan, commented: "Vietnam is now part of a club of 77 countries doing trade with the EU under bilaterally agreed preferential conditions.  The agreement strengthens EU economic links with the dynamic region of South-East Asia and has an important economic potential that will contribute to the recovery after the coronavirus crisis. But it also shows how trade policy can be a force for good. Vietnam has already made a lot of effort to improve its labour rights record thanks to our trade talks and, I trust, will continue its most needed reforms.”

The EU-Vietnam agreement is the most comprehensive trade agreement the EU has concluded with a developing country. It takes fully into account Vietnam's development needs by giving Vietnam a longer, 10-year period to eliminate its duties on EU imports. However, many important EU export products, such as pharmaceuticals, chemicals or machinery will already enjoy duty free import conditions as of entry into force. Agri-food products like beef or olive oil will face no tariffs in three years, while dairy, fruit and vegetables in maximum five years. Comprehensive provisions on sanitary and phytosanitary cooperation will allow for improving market access for EU firms via more transparent and quick procedures.

It also contains specific provisions to address regulatory barriers for EU car exports and grants protection from imitation for 169 traditional European food and drink products (like Roquefort cheese, Porto and Jerez wines, Irish Cream spirit or Prosciutto di Parma ham) recognised as Geographical Indications. At the same time, the trade agreement expresses a strong commitment of both sides to environment and social rights. It sets high standards of labour, environmental and consumer protection and ensures that there is no 'race to the bottom' to promote trade or attract investment.

Under the agreement, the two parties have committed to ratify and implement the eight fundamental Conventions of International Labour Organization (ILO), and respect, promote and effectively implement the principles of the ILO concerning fundamental rights at work; implement the Paris Agreement, as well as other international environmental agreements, and act in favour of the conservation and sustainable management of wildlife, biodiversity, forestry and fisheries; and involve independent civil society in monitoring the implementation of these commitments by both sides. Vietnam has already made progress on these commitments by ratifying in June 2019 ILO Convention 98 on collective bargaining and in June 2020 ILO Convention 105 on forced labour.

It also adopted a revised Labour Code in November 2019 and confirmed that it would ratify the one remaining fundamental ILO Convention on forced labour by 2023. The trade agreement also includes an institutional and legal link to the EU-Vietnam Partnership and Cooperation Agreement, allowing appropriate action in the case of serious breaches of human rights. The entry into force of the trade agreement has been preceded by its approval by EU Member States in the Council and its signature in June 2019, and the European Parliament's approval in February 2020.

Vietnam is the EU's second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth €45.5 billion in 2019  and trade in services of some €4 billion (2018). The EU's main exports to Vietnam are high-tech products, including electrical machinery and equipment, aircrafts, vehicles, and pharmaceutical products. Vietnam's main exports to the EU are electronic products, footwear, textiles and clothing, as well as coffee, rice, seafood, and furniture.

Karachi Stock Exchange: Shares Added Over Rs 221 Billion in a Week(July 31, 2020)

KARACHI: Stock Exchange saw a share value increase of over Rs 221 billion in a week. The country's economic growth, the country's economic growth, the global government's push for more trade and industrial sectors to compete with The corona, and the increase in the size of the economy, the U.S. central bank's interest rate cut, and lowering the U.S. central bank's interest, the Pakistan Stock Exchange continued to accelerate in the last week's 4-day business session, which crossed two psychological limits of 38,000 and 39,000  points.

The share prices rose by 2.38 billion, 82.16,938 rupees, to a level of Rs 72.94 billion, 27.60 crore, and 523 rupees. The government's consultation on the reduction in water power and gas tariffs for export industries after the recession, global price rise of crude oil and the rapid growth of global stock markets have had positive effects on the local stock market, stock experts said. The SSE 100 Index rose 1650.82 points, to 39258.44 points, while the FTSE 30 Index rose 755.26 points to 17070.62 points. The KMI 30 index rose 3160.04 points to 63107.65 points, and the KMPS X Index rose 689.86 points to 19229.41.

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