Comment by Riaz Haq on February 25, 2021 at 1:27pm

#Pakistan #Pharmaceutical #exports up 24.92% in 7 months (July 2020-Jan 2021) to US $161.443 million from $129.242 million in the same period last year. Quantity jumped 26.73% from 8,903 metric tons to 11,283 metric tons. #COVID19 https://dunyanews.tv/en/Business/589830-Pharmaceutical-products-exp...

The exports of Pharmaceutical products from the country witnessed an increase of 24.92 percent during the seven months of ongoing financial year (2020-21) as compared to the exports of corresponding period of last year.

The country exported pharmaceutical worth US $161.443 million during July-January (2020-21) as against the export of US $129.242 million during July-January (2019-20), showing growth of 24.92 percent, according to the Pakistan Bureau of Statistics (PBS).

In terms of quantity, the exports of pharmaceutical products also increased by 26.73 percent by going up from 8,903 metric tons to 11,283 metric tons, according to the data.

Meanwhile, year- on- year basis the pharmaceutical goods export increased by 32.60 percent during the month of January 2021 as compared to the same month of last year.

The pharmaceutical exports in January 2021 were recorded at US $22.547 million against the export of $17.004 million in January 2020, the PBS data revealed.

However, month- on- month basis, the exports of pharmaceutical witnessed decrease of 9.25 percent in January 2021 when compared to $24.845 million in December 2020.

Comment by Riaz Haq on February 26, 2021 at 7:16am

AMERICA CAN’T IGNORE THE NEXT INDO-PAKISTANI CRISIS
SAMEER LALWANI

https://warontherocks.com/2021/02/america-cant-ignore-the-next-indo...

While Washington has made a strategic wager on India to reap dividends for U.S. competition with China, it still retains a significant interest in ensuring future South Asian crises do not spiral out of control and risk even a limited nuclear exchange. Such a course of events would jeopardize fundamental U.S. interests, including the non-use of nuclear weapons, the lives of U.S. citizens, and that very strategic bet on India itself. If the 2019 crisis has taught us anything, it is that being an impartial bystander is not an option.

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U.S. official strategy documents identify India as a vital and critical node in Washington’s strategy in the Indo-Pacific to balance China’s rise. But the region within which it resides remains one of the most risk-prone. The nuclear-armed Indian-Pakistani rivalry has produced several crises testing the last five presidents, and since the end of the Cold War, this rivalry composes the most commonly recurring pair in the International Crisis Behavior database. Thirty years ago, the intelligence community judged this region the “most probable” location for a nuclear exchange, a judgment that was reinforced after the 2019 near miss.

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Meanwhile, incentives for conflict and escalation may be growing. Soon after the 2019 crisis, the Indian prime minister was politically rewarded in an electoral landslide, largely attributed to his national security choices. New Delhi also enjoyed the geopolitical rewards of international diplomatic support in international fora while political pressure ratcheted up on its adversary. Pakistan too feels deeply aggrieved because of what it perceives as India’s August 2019 unilateral annexation of disputed territory of Kashmir and the abrogation of its autonomy. Pakistan may also sense a window of opportunity as the United States is once again reliant on Islamabad to help deliver the Afghan peace process while India appears embattled and stretched with a much hotter second front since the summer 2020 border crisis with China.

Certainly the recent ceasefire is a welcome pause, but its durability remains uncertain and crises can still flare up. The rivals have renewed commitments to a ceasefire agreement many times only to lapse back to fighting. The last ceasefire declaration in May 2018 portended a tempering of border hostilities but was followed months later by the Balakot crisis.

Comment by Riaz Haq on February 26, 2021 at 1:05pm

Why #Modi's seeking peace with #China & #Pakistan? “Delhi is not sure how strong Washington will be vis-a-vis Beijing, so a temporary ceasefire with Pakistan and slow disengagement with China may buy some time and relieve immediate pressure on India"#Biden https://www.bloomberg.com/news/articles/2021-02-25/india-and-pakist...

The moves reduce tensions in one of Asia’s top flashpoints, where three nuclear-armed countries regularly challenge each other’s territorial claims. While India and Pakistan have fought three wars since Britain left the subcontinent and barely have any trade, tensions between New Delhi and Beijing escalated last year to the point where Prime Minister Narendra Modi banned hundreds of Chinese apps and slowed investment approvals.

The detente in South Asia shows all three countries responding to initiatives from the Biden administration, which is formulating policy toward the region following the unpredictable years of President Donald Trump. Pakistan wants to show the U.S. its not too close to China, Beijing wants to lower the temperature as Biden courts New Delhi and India is hedging its bets as it prepares to host BRICS leaders including Chinese President Xi Jinping later this year.

“On the one hand India hopes that the U.S.-China peer rivalry means India remains important and Pakistan -- as an ally of China -- will face more pressure,” said Aparna Pande, director of the Initiative on the Future of India and South Asia at Washington-based Hudson Institute. “But Delhi is not sure how strong Washington will be vis-a-vis Beijing, so a temporary ceasefire with Pakistan and slow disengagement with China may buy some time and relieve immediate pressure on India.”


India’s borders with Pakistan and China stretch nearly 7,000 kilometers (4,300 miles), much of which is disputed. Though India and Chinese troops have started pulling back their troops from some parts of the contested border in the remote Himalayan region, there are still areas where soldiers are facing off.

India’s Foreign Ministry said Jaishankar stressed to Wang the need to improve bilateral relations and ensure peace on the contested border between the two nations. Wang, meanwhile, called on China and India to firmly follow the right path of mutual trust and cooperation and “promote pragmatic cooperation,” Chinese state media reported.

New Delhi and Islamabad in 2003 signed a cease-fire agreement along their 742-kilometer (460-mile) Himalayan frontier, known as the Line of Control, but that truce has been violated repeatedly. Tensions worsened after August 2019 when Modi revoked the constitutional autonomy of its part of Kashmir, which is divided between India and Pakistan and claimed in its entirety by both.

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Previous moves toward peace between India and Pakistan, including a statement in May 2018 after an escalation of cross-border shelling, have dissipated quickly. Whether they can actually build on this and move toward a more permanent peace remains an open question, but at least for the moment the shifting geopolitical winds are providing a seemingly rare opportunity to talk instead of fight.

“It eases the pressure,” Najmuddin Shaikh, Pakistan’s former foreign secretary and ambassador to nations including the U.S., said by phone when asked about the ceasefire. “Essentially what needs to come ahead is what has been proposed -- that there be a resumption of dialogue.”

Comment by Riaz Haq on March 8, 2021 at 6:41pm

Show of confidence in #ImranKhan: #Investors are bullish on #Pakistan, seeing clear road ahead for the next 6 months. #Karachi shares market (#KSE100) are outperforming the rest of #Asia. https://www.bloomberg.com/news/articles/2021-03-08/khan-s-victory-s...

Pakistan Prime Minister Imran Khan’s victory in a confidence vote in Parliament, gave a boost to his fragile government and may help lure investors to its equity markets.

Khan got 178 votes from members of his Tehreek-e-Insaf party and allies in the 342-seat lower house National Assembly, proving majority, Speaker Asad Qaiser said in televised meeting in Islamabad on Saturday.

His win may temporarily bring stability to the South Asian nation as its economy recovers from the pandemic-induced contraction with the help of the International Monetary Fund’s $6 billion loan program. With U.S. President Joe Biden urging allies to uphold democracy, stability in Pakistan is an advantage in the region, which is already reeling from a coup in Myanmar.

“For the next six months I see a clear road of bullishness,” said Ayub Khuhro, chief investment officer at Faysal Asset Management Ltd. The fund manager will be buying stocks, he said.

The benchmark KSE-100 Index erased earlier gains to close down 2.1% on Monday., paring its advance to 65% since March 25 when countries went into lockdown because of coronavirus

The army-backed former cricket star voluntarily sought the confidence vote after his finance minister Abdul Hafeez Shaikh unexpectedly lost an election for a Senate seat to an opposition-backed candidate on Wednesday, triggering a debate Khan had lost the majority support.

The strong military, which has an outsized role in Khan’s administration - with a say in matters from foreign policy and security to economic decisions, - may be relieved to see him surviving the vote.

“Political uncertainty has decreased because of this,” said Amjad Waheed, chief executive officer at NBP Fund Management Ltd., the nation’s largest fund manager with 170 billion rupees ($1 billion) in assets. “It can never end in Pakistan. It’s a favorite pass time to talk about politics. We don’t talk about health, education or anything else.”

Khan indeed faces another test this week. The nation’s upper house will elect a chairman on March 12 in a secret ballot. Should Khan’s candidate win that vote, it will make it easier for the premier to get laws enacted, said Faysal Asset’s Khuhro.

Army Tightens Grip on Pakistan as Imran Khan’s Popularity Wanes

Meanwhile, the Senate result has been a boost for the opposition alliance that plans to march on Islamabad on March 26 to topple Khan’s government, two years before he finishes a five-year term. The alliance includes the Pakistan Muslim League-Nawaz led by ex-premier Nawaz Sharif and the Pakistan Peoples Party of former President Asif Ali Zardari.

“For the last couple of years, politics was not an active variable but now we will need to follow it,” Muhammad Asim, CIO at MCB-Arif Habib Savings and Investments said by phone.

Comment by Riaz Haq on March 9, 2021 at 8:20pm

#India to Buy 30 #US-Made MQ-9B Predator Armed #Drones to Counter #China, #Pakistan. #Modi doing $250 billion military modernization. Gen Lloyd Austin to visit India this month. #Biden will soon join leaders of India, #Japan & #Australia in #Quad summit.
https://www.bloomberg.com/news/articles/2021-03-09/india-to-buy-fir...

The South Asian nation will approve next month the $3 billion purchase of 30 MQ-9B Predator drones manufactured by San Diego-based General Atomics, the officials said, asking not to be identified speaking with the media. The deal would add to India’s military capabilities as the drones it has now can only be used for surveillance and reconnaissance.

India is emerging as a strategic defense partner for the U.S., particularly in countering Chinese influence in the Indian Ocean and some areas of Southeast Asia. Prime Minister Narendra Modi’s government is in the midst of a 10-year, $250 billion military modernization.

Spokespeople from India’s Defense Ministry and General Atomics didn’t respond to requests for comment. Pentagon officials didn’t respond to a request for comment either.

U.S. Defense Secretary Lloyd Austin is expected to visit India this month, according to local media, while President Joe Biden will soon join counterparts from India, Japan and Australia in the first-ever meeting of the “Quad” bloc. The leaders will meet virtually on March 12, according to an announcement posted on the Indian government’s website, which said they would discuss issues including supply chains, maritime security and climate change.

The MQ-9B drone can fly for about 48 hours and carry a payload of about 1,700 kilograms (3,700 pounds). It will give the Indian Navy the ability to better monitor Chinese warships in the southern Indian Ocean, and equip the army to engage targets along the disputed India-Pakistan border in the Himalayas.

Last year, India leased two unarmed MQ-9 Predators as border tensions with China threatened to spin into a full-blown conflict. In the end they weren’t deployed after the Air Force expressed apprehension about drones manned by U.S. personnel flying over the border.

Comment by Riaz Haq on March 16, 2021 at 10:29am

Pakistan’s economy reaches its peak production levels, record growth of 9.1% reported

https://www.techjuice.pk/pakistans-economy-reaches-its-peak-product...

The Minister for Industries and Production, Hammad Azhar, has announced that large scale manufacturing, including automobiles, textile, sugar, and medicine, in Pakistan has grown by 9.1% – the second-highest growth recorded after many years.

The minister also added that sustained and robust growth in the industry is expected to lift economic growth beyond earlier forecasts.

The Quantum Index of Large Scale Manufacturing Industries (QIM) maintained by the Pakistan Bureau of Statistics records the growth of businesses involved in large scale manufacturing, registered under the factories Act 1934

The index covers the establishments registered under the factories Act 1934. The index had touched the highest level ever recorded, 175.17, in Mar 2018 and has now recorded the second-highest level of 175.15 in Jan 2021. During the first seven months of the present fiscal year, the overall production increased by 7.85 % compared to the previous fiscal year’s corresponding period.

https://www.pbs.gov.pk/sites/default/files//industry_mining_and_ene...

Comment by Riaz Haq on March 17, 2021 at 6:53pm

Pakistan Is Said to Hire Banks for International Bond Sale

https://www.bloomberg.com/news/articles/2021-03-17/pakistan-is-said...

Pakistan has hired banks for a possible foreign-currency bond offering, according to people familiar with the matter.

The government has mandated Deutsche Bank AG, JPMorgan Chase & Co., Credit Suisse Group AG, Standard Chartered Plc and Emirates NBD Bank PJSC, the people said, asking not to be identified because the details are private.

The South Asian nation is looking to raise funds after reaching an agreement with the International Monetary Fund on resumption of a $6 billion bailout program that was secured in 2019 to avoid bankruptcy. Pakistan is also separately planning to issue a $500 million green note in the next few months to help boost its development of hydroelectric power.

There were no replies to requests for comment from the finance ministry secretary and media team. Muhammad Umar Zahid, director debt at the Ministry of Finance, said in a webinar last month that the country expected to raise more than $1.5 billion in global bonds if market conditions were conducive. It was setting up a medium-term note program that would keep it registered for 12 months instead of a single transaction, he said.

Borrowing costs in debt markets globally have jumped in recent weeks after a spike in rates fueled by rebounding economic activity around the world. Pakistan is also currently contending with an increase in coronavirus cases that has seen new restrictions imposed in most major cities.

Comment by Riaz Haq on March 25, 2021 at 6:13pm

IMF says #PMLN government overstated #Pakistan #gdp and understated #debt to gdp ratio starting in 2016. This was done as part of sovereign loan guarantees. Current #PTI government has taken remedial action to correct the error to #IMF's satisfaction https://www.imf.org/en/News/Articles/2021/03/24/pr2182-pakistan-imf...

The Executive Board of the International Monetary Fund (IMF) approved a 39-month Extended Arrangement under the Extended Fund Facility (EFF) for Pakistan in the amount of SDR 4,268 billion (about US$6 billion), equivalent to 210 percent of quota, on July 3, 2019. The first review under the arrangement was completed by the Executive Board on December 19, 2019, based upon, inter alia, the reported observance of the quantitative performance criteria (PC) at end-September 2019, including the amount of government guarantees. Upon completion of the first review under the EFF, Pakistan made a purchase equivalent to SDR 328 million (about US$452.4 million).

Subsequently, new information that came to the authorities’ attention, and which was shared with Fund staff, has revealed that the data on government guarantees dating back to FY 2016 was reported inaccurately. The revised data indicates a nonobservance of the PC on government guarantees at end-September 2019 by a margin of PRs 357 billion (about 0.9 percent of GDP), which resulted in a noncomplying purchase and a breach of obligations under Article VIII, Section 5 of the IMF Articles of Agreement. The authorities previously reported that the PC had been met with a margin of PRs 55 billion (0.1 percent of GDP) at end-September 2019. The statistical revision only had a small impact on public debt.

The authorities have taken strong corrective actions to address institutional and technical short-comings that gave rise to the inaccurate information, including: (i) creating a working group to reconcile and cross-check guarantees and debt data; (ii) announcing additional functions for the Debt Policy Coordination Office (DPCO), including to act as custodian of all guarantees issued by the federal government; and (iii) publishing a semi-annual debt bulletin that consolidates key debt statistics. Beyond these actions, the authorities have committed to include a list of all new guarantees expected to be issued in the FY 2022 budget submitted to Parliament.

At the conclusion of the meeting, Deputy Managing Director Antoinette Sayeh and Acting Chair, stated:

“The Executive Board of the International Monetary Fund (IMF) reviewed Pakistan’s remedial actions and data revisions linked to a noncomplying purchase under the Extended Arrangement under the Extended Fund Facility as well as a breach of obligations under Article VIII, Section 5. The non-complying purchase arose as a result of a lack of inter-agency coordination in the compilation of government guarantees provided by the federal government to state-owned enterprises that contributed to incorrect estimates of government guarantees starting as far back as FY 2016.

Comment by Riaz Haq on May 26, 2021 at 9:12pm

Pakistan’s growth miracle

https://tribune.com.pk/story/2301343/pakistans-growth-miracle

The World Bank projected that Pakistan’s economy would grow by 1.3% in 2020-21. The IMF predicted 1.5% growth, whereas the State Bank of Pakistan (SBP) estimated 3%. But official (provisional) estimate of nearly 4% GDP growth exceeded all expectations. Pakistan’s economy has indeed made a comeback from the pandemic, with a bang!
The services sector grew by 4.4%, industrial sector by 3.5% and agriculture 2.7%. Within services, the highest growth came from wholesale and retail trade, whereas within the industrial sector, it was the large-scale manufacturing that grew by 9%. Considering that these two sub-sectors together constitute 28% of the GDP and both suffered a serious contraction last year, these growth estimates are hardly surprising. Other major contributors to the growth include bumper crops of wheat, rice, sugarcane and maize, construction, finance & insurance and housing services.
Part of this growth may be attributed to our resilient economy with a rapidly growing population and a sizeable middle class. Then comes the low-base effect, owing to the contraction of our GDP last year. But attributing this entire growth miracle to low-base effect and resilience would be injustice to the government actions that contributed to this turnaround.
Pakistan’s strategy to deal with Covid-19 — through NCOC-coordinated lockdowns and restrictions — aided in a quick recovery. The massive Covid-stimulus package worth Rs1.27 trillion (2.9% of GDP) greatly helped in battling the spread of the virus and provided much-needed targeted financial support to the poor and relief to businesses. Government’s construction package also had a big role to play, as manifested in 8.3% growth posted by the construction sector and a massive increase of 25% in the cement sector. A drastic reduction in interest rate by the SBP and measures like Long-term Financing Facility (LTFF) and Temporary Economic Refinance Facility (TERF) for the businesses also contributed in stimulating growth. The government can therefore rightly claim the credit for this turnaround.

Comment by Riaz Haq on May 26, 2021 at 9:12pm

Pakistan’s growth miracle

https://tribune.com.pk/story/2301343/pakistans-growth-miracle

Some people have raised questions about the credibility of the data, but those claims do not seem to hold ground. These growth estimates reflect the performance of the previous finance minister. If anything, Shaukat Tarin would have benefitted from lower growth, which could have made next year’s numbers healthier. The out-of-whack projections, however, underscore the need for having regular quarterly estimates of GDP, which can prevent such miscalculations.
Moreover, these numbers are not counter-intuitive. For instance, the growth in LSM is in line with long queues of booked orders for new SUVs and vehicles. Anecdotal evidence from textile industry also confirms that the factories are running at near-full capacity.
But is this growth sustainable?
Considering that the third wave of pandemic is subsiding, the recovery is likely to continue unabated. The indication that government will be holding off on tough IMF conditions and will instead be giving a pro-growth budget would also help. The government may be better off focusing on sectors that have performed poorly such as cotton, mining, and transportation & communication, which with some effort can yield greater dividends.
But further growth without investment will increase inflationary pressure and will also boost imports. The inflation is already on the rise, confirming that we may not have much more excess capacity. The trade deficit is also touching $24 billion. For now, we are being compensated through high remittance inflows but if continued, this can lead to another current account crisis in the next three years. The government therefore needs to keep inflation under check, diversify exports and increase investment. All of this however is easier said than done and needs structural reforms.
In short, while this growth cannot be sustained without structural reforms, the next two to three years look good and more promising. It is therefore time to celebrate!

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