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Pakistan State Bank Targets Digital Currency by 2025 and Fully Digital Economy by 2030

A top official of the State Bank of Pakistan, the nation's central bank, announced that the institution aims to issue a digital currency (Central Bank Digital Currency or CBDC) by 2025, according to media reports.   Speaking at the launch of regulations of Electronic Money Institutions (EMIs), central bank officials said that EMIs will be non-bank entities to be licensed by the central bank to issue e-money for the purpose of digital payments.  Pakistan's finance minister Asad Umar and the central bankers said they are targeting Pakistan's economy to go fully digital by 2030.

“As we move towards digital economy, it is absolutely important to ensure cybersecurity,” said the finance minister, according to Dawn newspaper.  Mr. Umar added that even a single high profile incident could cause irreparable loss of confidence to the economy and the banking system.

Deputy Governor Jameel Ahmad of the State Bank of Pakistan told the audience at the EMI launch that the central bank is working on a concept of issuing digital currency by year 2025 to promote financial inclusion and reduce inefficiency and corruption. Moreover, he said, the central bank would adopt evolving-realities of time and would be fully digitized and technology equipped by year 2030.

Cryptocurrencies use blockchain technology. Bitcoin is the name of the best-known cryptocurrency, the one for which blockchain technology was invented. A cryptocurrency is a medium of exchange, such as the US dollar, but is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds. The blockchain is a decentralized ledger of all transactions across a peer-to-peer network. Using this technology, participants can confirm transactions without a need for a central clearing authority. Potential applications can include fund transfers, settling trades, voting and many other issues.

Peer-to-peer cryptocurrencies such as Bitcoin were often explicitly aiming to disrupt the existing monetary order – central banks will aim for an evolutionary approach. In many ways, central bank digital currencies (CBDC) would simply be the latest in a long line of technological upgrades that central banks have been through over the years, according to ING Bank.

There's a long history of the use of money as a medium of exchange in trade. It started with metal coins in Mesopotamia, then changed to paper currency in China and bank checks (sakks) in Arabia before becoming electronic in modern age.  Here's how International Monetary Fund (IMF) chief Christine Lagarde answers the question "should central banks issue a new digital form of money?"

"A state-backed token, or perhaps an account held directly at the central bank, available to people and firms for retail payments? True, your deposits in commercial banks are already digital. But a digital currency would be a liability of the state, like cash today, not of a private firm. This is not science fiction. Various central banks around the world are seriously considering these ideas, including Canada, China, Sweden, and Uruguay. They are embracing change and new thinking—as indeed is the IMF. ...... I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy. This currency could satisfy public policy goals, such as (i) financial inclusion, and (ii) security and consumer protection; and to provide what the private sector cannot: (iii) privacy in payments".

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Comment by Riaz Haq on April 3, 2019 at 10:28am

World Bank Report: #Technology is transforming #governance in #Pakistan. 64 million #internet connected #digital-savvy, #Pakistanis are now expecting better digital services from their #government. 
http://tinyurl.com/y2ef4cx2 via @WorldBank

To meet these demands, the Government of Punjab has been working to modernize over the last decade.

As part of the government’s governance reforms, and learning from earlier pilot programs in education and health, the Punjab Public Management Reform Program (PPMRP) has aimed to transform citizens’ experience, improve access to administrative services, and boost public employee performance and the management of public resources.

Before that, Punjab authorities were facing several challenges in delivering public services. This, in turn, impacted social outcomes in the province: the health sector’ performance was affected by the absenteeism of vaccinators, resulting in a low immunization rate in Punjab (49% in 2014).

The education and agriculture departments faced similar absenteeism issues with teachers, students, and agriculture workers in the field.

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Citizens now have easy access to information about institutions, policies, procedures, and investment projects available on the websites of 84 provincial public entities, including government administrative departments, attached bodies, hospitals, and universities. 

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The number of inquiry and feedback calls increased from 50,000 calls received in 2013 to 2.9 million in 2018. Province-wide, 161 citizens’ facilitation centers have been set up to provide selected services under one roof and closer to the citizens – promoting social accountability in Pakistan’s largest province.

PPMRP also helped expedite the online provision (application and processing) of other government services, such as registering a vehicle, paying for stamps, collecting agriculture subsidies, and applying for a government job and college admissions.

Smart management to improve staff performance

The PPMRP also developed smart management tools to help some government departments improve their staff performance and overall user experience. 

For example, smartphone applications and central dashboards helped track and analyze daily more efficiently the activities of hundreds of field workers in the health, agriculture and education departments.

Combined with users’ feedback, this data helped identify low performing areas and take remedial measures.

In the health field, E-VACCS has been instrumental in tackling absenteeism of field vaccinators by locating their daily activity routes (and activities), thereby enabling the management of Health Department to check whether children in remote areas had received their vaccinations. 

As a result, immunization coverage marked a rise from 49 percent in 2014 to 84 percent in 2017.

Similar tools have helped assess staff performance in schools and the agriculture sector and, when applicable, informed remedial actions for improvement.

Digitizing tax collection 

The PPMRP also supported technology solutions to collect taxes better, thus expanding the tax base and improving transparency.

For example, old manual cadasters of urban properties have been digitized and geo-mapped in all 36 districts of Punjab, adding more than 1 million new properties to the tax base.

This system helped issue digital tax invoices and provide an online tax calculator and online property title verification system. Citizens can also now access detailed information about transactions and when their payments are due.

As a result, the urban property tax receipts in Punjab have increased by 115 percent since 2013.

Together, these promising initiatives and reforms have changed the governance landscape in Punjab and brought government services a step closer to citizens.

Comment by Riaz Haq on April 4, 2019 at 11:21am

5G to establish foundation for #Pakistan's digital economy. #5G #mobile #broadband offers massive potential to boost #DigitalTransformation in #Pakistan as the country has already derived some benefits from digitization, according to the World Bank . https://tribune.com.pk/story/1933011/2-5g-establish-foundation-digi...

Fifth generation (5G) mobile broadband possesses massive potential to boost digital development in Pakistan as the country has already derived some benefits from digitisation, according to a World Bank report titled ‘Pakistan @100: Shaping the Future’.

Although the Pakistan Telecommunication Authority (PTA) had unveiled a road map for public testing of 5G services in the country this year, delays in its deployment would postpone a revolutionary leap in capacity from 4G to 5G, the report said.

The World Bank in its report revealed that delay in the issuance of 3G and 4G licences, which were eventually completed in 2014, prevented telecom companies from building and upgrading their networks for the provision of data services. Moving forward, “5G networks will establish a robust foundation for a digital economy in the country,” it said. “Although Pakistan has already derived some of the benefits from digitisation, the scope for further growth still remains.”

Quoting figures, the World Bank pointed out that demand for internet access had risen rapidly, from 6 million internet subscribers in 2013 to an estimated 48 million in 2017.

Moreover, Pakistan is the third-largest country providing workers to global online freelancing platforms and from this, it generated approximately $1 billion in export revenues in 2016.

“However, broadband and mobile penetration (basic and data/internet-enabled mobile phones) in Pakistan remains relatively low,” the report said.

It emphasised that further network expansion and quality improvements would improve mobile broadband access and could ensure access to underserved and unserved areas.

Digital development should come with safeguards including national cyber security and personal data privacy, it suggested. At the same time, providing an enabling environment for a competitive and open market for telecom and digital players and digital skills for potential employees was critical to ensuring meaningful uptake of digital solutions,” it continued.

Comment by Riaz Haq on April 5, 2019 at 9:47am

C/A Deficit = 22% ⬇️

Trade Deficit = 11% ⬇️

Imports =6% ⬇️

External loans(July-March)= 37% ⬇️

Remittances = 11.8% ⬆️

Exports = 2% ⬆️

FDI inflow(excluding china) = 17% ⬆️

Forex Reserves = ⬆️ than 25/7/2018

Private Sector Credit = ⬆️

Comment by Riaz Haq on April 5, 2019 at 10:08am

THE EXPRESS TRIBUNE > BUSINESS
Trade deficit contracts 11% to $21.5b in eight months


https://tribune.com.pk/story/1928130/2-trade-deficit-contracts-11-2...


Pakistan’s trade deficit contracted over 11% to $21.5 billion in first eight months of the current fiscal year, primarily because of a steep decline in imports but the growth in exports remained sluggish, underscoring the need for a review of the policy of subsidising exporters.

Exports, both on month-on-month and year-on-year basis, fell in February 2019, which put a question mark over the claims made by the Ministry of Commerce while giving huge fiscal incentives to the exporters, especially the textile sector. Despite the fiscal incentives and currency depreciation, the exports stood below $2 billion in February.

Trade deficit that stood at $24.2 billion in July-February FY18 shrank 11% to $21.5 billion in the corresponding period of current fiscal year 2018-19, the Pakistan Bureau of Statistics (PBS) reported on Tuesday.

Comment by Riaz Haq on April 17, 2019 at 5:24pm

#ImranKhanPrimeMinister chairs meeting on #digitalization of #government processes in #Pakistan. The discussion encompassed transparency and efficiency in government processes using emerging technologies like #blockchain. https://www.thenews.com.pk/latest/459262-pm-imran-chairs-meeting-on...

Prime Minister Imran Khan on Wednesday chaired a meeting on digitalization of the government processes and how the latest IT solutions such as blockchain could help ensuring efficiency, transparency, eliminating red-tapism and improving overall service delivery in line with the vision of the Government.

A team of Pakistani IT experts from UAE, invited by Special Assistant to Prime Minister Sayed Zulfiqar Abbas Bukhari, briefed the Prime Minister on way forward in digitalization of various government processes.


The discussion encompassed transparency and efficiency in government processes using emerging technologies like blockchain.

From among the proposed use-cases, the briefing focused on a next generation trade platform for Pakistan that will usher Pakistan into the next era of trade efficiency with its trade partners.

The Prime Minister in his remarks said that digitalization is critical to ensuring efficiency and transparency in conduct of official businesses.

He said IT solution will help addressing some of the major issues that have hampered steady growth of economy in past.

“The digitalization will also create much needed synergies among the government organizations for ensuring friction-less service delivery and improving ease of doing business in the country,” he added.

Comment by Riaz Haq on April 18, 2019 at 4:46pm

#3G/#4G #Mobile #Broadband Subscribers in #Pakistan Reaches 66.14 Million in March 2019 https://www.phoneworld.com.pk/3g-4g-subscribers-in-pakistan-reaches...


The number of 3G and 4G users in Pakistan reached 66.14 million by end March 2019, said Pakistan Telecommunication Authority (PTA). The number of mobile phone users in Pakistan reached 159.024 million by end-March compared to 156.92 million by end of February, which registered an increase of 2.104 million during the period under review.

Jazz’s total count for 3G users stood at 13.622 million by end-March compared to 13.714 million by end February, registering a decrease of 0.0092 million. Jazz 4G user numbers jumped from 8.144 million by end February to 8.774 million by end-March.

3G/4G Subscribers in Pakistan
Zong 3G subscribers increased from 8.738 million by end February to 8.764 million by end-March while the number of 4G users jumped from 11.026 million by end February to 11.600 million by end March 2019.

The number of 3G users of Telenor network decreased from 8.851 million by end February to 8.764 million by end-March 2019 i.e. registering 0.087 million. The number of 4G users jumped from 5.569 million by end February to 5.905 million by end-March.

Ufone 3G users decreased from 8.162 million by end February to 7.846 million by end-March registering a decline of 0.316 million. Teledensity for cellular mobile increased from 76.3 percent by end February to 77.17 percent by end-March and broadband subscribers reached 68244373 by end-March compared to 66704731 by end February.

PTA received 13685 complaints from telecom consumers against different telecom operators including (cellular operators, PTCL, LDIs, WLL operators and ISPs) as of March 2019. According to PTA data Jazz (Mobilink + Warid) leads the chart with 3881 complaints and Telenor stands at the second position as the most complained telecom operator with 2738 complaints. PTA said that it was able to get 13676 complaints resolved i.e. 99.93 percent.

Cellular mobile subscribers constitute a major part of the overall telecom subscriber base, therefore, a maximum number of complaints belong to this segment. A total number of complaints against CMOs by February stood at 10684.

In terms of the segregation of complaints on operator basis, a total of 3881 complaints were received against Jazz which is 36.32% of the total CMO related complaints. Telenor, which has the second largest number of consumers, was also second with 2738 i.e. 25.62 percent complaints were received against it. Zong stood third with 2396 complaints i.e. 22.42 percent of total complaints.

Ufone had 1669 complaints against its various services which make up 15.62 percent of the total CMO related complaints. PTA also received 1286 complaints against basic telephony where 1281 were addressed during March 2019. Further 1690 complaints were received against ISPs where 1686 were addressed.


https://www.pta.gov.pk/en/telecom-indicators

Comment by Riaz Haq on Tuesday

Pakistan currency in circulation up 18.12pc to Rs3.402 trillion

https://www.thenews.com.pk/print/184885-Currency-in-circulation-up-...

KARACHI: Hard currency in circulation – cash in hands – rose 18.12 percent to Rs3.402 trillion as of December 2016 over the preceding year as people were giving preferences to nonbanking transactions. 


The State Bank of Pakistan, in its latest report, showed that currency in circulation (CiC) amounted to Rs2.880 trillion as of December 2015. Currency in circulation jumped to Rs3.34 trillion in the mid of last year.

“Rising currency use, in our view, reflects the falling opportunity cost of holding cash,” said Bilal Khan, an economist at Standard Chartered Bank. “This is due to a combination of falling returns on deposits as a means of saving – due to monetary easing – as well as the incidence of tax on the use of the banking system for certain transactions.”

Last year, the government extended the scope of withholding tax on banking transactions by non-filers of returns. 

Chief Executive Officer Sakib Sherani at Macroeconomic Insights said the volume of currency in circulation and its rapidly-rising trend vis-à-vis both the monetary base as well as deposits in the banking system are indeed worrying signs. 

“This trend goes against the norms of a documented economy and a banking system that is playing an effective role of financial intermediation and inclusion,” Sherani said. “Prima facie it appears that the government’s taxation policy is a major cause for the shift from bank deposits to CiC.”

Pakistan’s informal economy is almost as big as the formal one, perhaps larger. It’s a source for concern for the government as it doesn’t generate revenue to national exchequer. 

“The level of CiC can be taken as a broad proxy for the degree of informalisation of the economy and its trend,” Sherani said. 

Economists are surprised why CiC is surging amid falling inflation and relatively low transactions into the real estate sector after the upward revision in the property valuation and subsequent changes in the tax rules. 

“Though a demand in urban consumption is picking up, yet inflation remains at the lower side,” said Salman Shah, former finance minister.

“We can’t rule out that some currency may be used for all kind of illegitimate activities.” 

Currency in circulation, as percent of M2 and currency-to-deposit ratio, has also been increasing over the last few years. 

Analysts said though banking deposits grew 20 percent in 2016, yet stakeholders need to render more efforts to increase the penetration of formal banking services into the economy in line with the national financial inclusion strategy. Bank deposits rose to Rs11.2 trillion in December 2016 from Rs9.3 trillion in December 2015.

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