Home Weekly Reviews Economic and Political weekly 08-01-2023

Economic and Political weekly 08-01-2023

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Muhammad Arif : Chairman Centre of Advisory Services for Islamic Banking and Finance (CAIF), Former Head of FSCD SBP, Former Head of Research ArifHabib Investments and Member IFSB Task Force for development of Islamic Money Market, Former Member of Access to Justice Fund Supreme Court of Pakistan

World

Politics

6-year-old detained after shooting teacher at US school

6-year-old detained after shooting teacher at US school

WASHINGTON     –    A six-year-old student is in police custody after he shot and wounded a teacher at Richneck Elementary School in Newport News, Virginia on Friday, according to police.

“The teacher’s injuries are believed to be life-threatening. The investigation remains ongoing,” the Newport News Police Department said in a statement.

No students were injured in the incident, while the teacher was taken to a local hospital, according to the police. The teacher is a woman in her 30s, several US media outlets reported. The extent of her injuries is not known at this time, police said.

Police Chief Steve Drew said at a news conference that the incident was “not an accidental shooting” and took place during an altercation between the teacher and the student, according to CNN.

Drew said there was “some improvement” in the condition of the teacher, who is still in the hospital. An investigation into the incident is still ongoing.

China ends quarantine for overseas travellers

China on Sunday lifts quarantine requirements for inbound travellers, ending almost three years of self-imposed isolation.— AFP

BEIJING: China lifts quarantine requirements for inbound travellers on Sunday, ending almost three years of self-imposed isolation even as the country battles a surge in COVID cases.

Beijing last month began a dramatic dismantling of a hardline virus strategy that had enforced mandatory quarantines and gruelling lockdowns.

The containment policy has tanked China’s economy and sparked nationwide protests.

In the final unravelling of those rules, Sunday will see inbound travellers to China no longer required to quarantine.

Since March 2020, all arrivals had been forced to undergo isolation at centralised government facilities. This decreased from three weeks to one week this summer, and to five days in November.

Chinese people rushed to plan trips abroad after officials last month announced that quarantine would be dropped, sending inquiries on popular travel websites soaring.

But the expected surge in visitors has led over a dozen countries to impose mandatory COVID tests on travellers from the world’s most populous nation as it battles its worst-ever outbreak.

The outbreak is forecast to worsen as China enters the Lunar New Year holiday this month, during which millions are expected to travel from hard-hit megacities to the countryside to visit vulnerable older relatives.

Beijing has called travel curbs imposed by other countries “unacceptable”, despite it continuing to largely block foreign tourists and international students from travelling to China.

Despite the testing requirements, 28-year-old Zhang Kai told AFP he is planning a trip to either South Korea or Japan.

“I am happy, now finally (I can) let go,” Zhang said.

Friends of his have already landed in Japan and undergone tests, which he dismissed as a “small matter”.

Across Asia, tourist hubs are preparing for a surge in Chinese visitors.

Moscow ends self-proclaimed ceasefire, vows to press ahead in Ukraine

Plumes of smoke rise from a Russian strike during a 36-hour ceasefire over Orthodox Christmas declared by Russian President Vladimir Putin, as Russias attack on Ukraine continues, from the frontline Donbas city of Bakhmut, Ukraine, January 7, 2023.— Reuters

Russia’s overnight bombing of regions in eastern Ukraine killed at least one, local officials said on Sunday, after Moscow ended a self-declared Christmas ceasefire and vowed to push on with combat until it reaches a victory over its neighbour.

President Vladimir Putin ordered on Friday a 36-hour ceasefire along the line of contact to observe Russia and Ukraine’s Orthodox Christmas, which fell on Saturday. Ukraine had rejected the truce, and there was shelling along the frontline.

A 50-year-old man died in the northeastern region of Kharkiv as a result of Russia’s shelling, Oleh Sinehubov, the governor of the region said on the Telegram messaging app. The news came minutes after midnight in Moscow.

Most Ukrainian Orthodox Christians have traditionally celebrated Christmas on Jan. 7, as have Orthodox Christians in Russia. But this year, the Orthodox Church of Ukraine, the country’s largest, allowed also for a Dec. 25 celebration. Still, many observed the holiday on Saturday, flocking into churches and cathedrals.

The Kremlin said that Moscow will press ahead with what it calls a “special military operation” in Ukraine and which Kyiv and its Western allies call an unprovoked aggression to grab land.

“The tasks set by the president (Putin) for the special military operation will still be fulfilled,” the Russian state TASS agency quoted Putin’s first deputy chief of staff, Sergei Kiriyenko, as saying.

“And there definitely will be a victory.”

There is no end in sight to the war, now in its 11th month, which has killed thousands, displaced millions and turned Ukrainian cities into rubble.

Ukrainian officials also reported blasts in regions that make up the broader Donbas region — the war’s frontline where fighting has been raging for months.

Pavlo Kyrylenko, governor of the Donetsk region in Ukraine, said that there were nine missile strikes on the region overnight, including seven on the battered city of Kramatorsk. According to preliminary information, there were no casualties.

Blasts were also heard in the city of Zaporizhzhia, the administrative centre of the Zaporizhzhia region, a local official said, without giving any immediate report on damage or casualties.

Ukraine’s President Volodymyr Zelenskiy said on Wednesday that Russia is planning a major new offensive. The Pentagon said on Friday that Putin’s aim of seizing Ukrainian territory has not changed, even if his military continues to suffer blows.

There’s been growing concerns that Belarus — a staunch backer of Moscow — could be used as a staging post to attack Ukraine from the north after increasing military activity in the country and fresh transfer of Russian troops there.

Unofficial Telegram channels monitoring military activity in Belarus reported late on Saturday that some 1,400-1,600 Russian troops arrived from Russia into the northeastern city of Vitebsk in Belarus over the past two days.

China fx reserves rise $11bn to $3.128 trillion in December

China fx reserves rise $11bn to $3.128 trillion in December

China s foreign exchange reserves rose in December, official data showed on Saturday, as the dollar fell against other major currencies.

The country s foreign exchange reserves – the world s largest – rose $11 billion to $3.128 trillion last month, compared with $3.154 trillion predicted by a Reuters poll of analysts and $3.117 trillion in November.

The yuan rose 2.8% against the dollar in December, while the dollar last month fell 2.3% against a basket of other major currencies .

China held 64.64 million fine troy ounces of gold at the end of December, down from end-November. The value of China s gold reserves rose to $117.24 billion at the end of December from $111.65 billion at end-November.

Deaths spike as Denmark battles ‘triple epidemic’

Deaths spike as Denmark battles ‘triple epidemic’

DENMARK     –   Around 1,400 people died in Denmark during the last week of 2022, at least 30% higher than estimates, according to the country’s infectious diseases agency. The State Serum Institute (SSI) said the ongoing “triple epidemic” – flu, respiratory syncytial virus (RSV), and COVID-19 – was possibly the biggest factor, having particularly impacted Denmark’s elderly population. “It’s a steeper curve than we usually see, and it surprises us a little bit. We usually see a higher mortality in the winter months, but the figures show that right now there is higher mortality than there usually is at this time of year,” Lasse Vestergaard of the SSI said in a statement on Thursday. While December’s last week also saw more hospitalizations for flu, the increase was not as high as previous weeks, the SSI reported, but warned that flu cases are likely to increase in the coming weeks. At the same time, there was a decline in RSV cases and hospitalizations, but the “level is still high compared to the seasons that preceded COVID-19,” the health agency said.

US backs Pakistan’s ‘right to defend itself from terrorism’

Erdogan asks Putin to declare ‘unilateral’ Ukraine ceasefire

ISTANBUL-Turkish President Recep Tayyip Erdogan on Thursday pressed Russian counterpart Vladimir Putin to declare a “unilateral” ceasefire in Ukraine.

“President Erdogan said that calls for peace and negotiations should be supported by a unilateral ceasefire and a vision for a fair solution,” his office quoted Erdogan as telling Putin in a telephone call.

Erdogan was due to follow the talks with a separate conversation with Ukrainian President Volodymyr Zelensky later on Thursday.

The Turkish leader has used his good relations with both Moscow and Kyiv to try and mediate an end to the war.

Turkey hosted two early rounds peace talks and helped strike a UN-backed agreement restoring Ukrainian grain deliveries across the Black Sea.

Erdogan has also repeatedly tried to bring Putin to Zelensky to Turkey for a peace summit.

Erdogan’s call for a “unilateral” ceasefire followed a proposal earlier Thursday by Russia’s spiritual leader Patriarch Kirill for an Orthodox Christmas truce this week.

Economy (World)

GLOBAL INDICES AS OF 08-Jan-2023

Pakistan

Politics

PM Shehbaz leaves for Geneva to co-host climate conference

Prime Minister Shehbaz Sharif boarding a plane. — APP/File

Prime Minister Shehbaz Sharif on Sunday announced his departure to Geneva for the International Conference on Resilient Pakistan which is aimed at marshalling support to rebuild the country after devastating floods.

Taking to Twitter, the prime minister said that he will take the opportunity to present the case of flood victims before the world and throw light on steps the government has taken for relief and rehabilitation.

“We will place a comprehensive post-disaster framework plan for recovery, rehabilitation and reconstruction with resilience before development partners and friendly countries. Bridging the funding gap is key to restoring critical infrastructure, rebuilding lives and livelihoods and reviving the economy,” the premier wrote.

PM Shehbaz, IMF chief hold ‘constructive’ call on Geneva moot

Prime Minister Shehbaz Sharif (L) and International Monetary Fund (IMF) Managing Director Kristalina Georgieva (R). — PID/AFP

  • IMF chief expresses sympathy again to flood-affectees.
  • Supports Pakistan’s efforts to build more resilient recovery.
  • Earlier, she declined PM’s invitation to attend conference.

ISLAMABAD: Prime Minister Shehbaz Sharif had a “constructive” call with International Monetary Fund (IMF) Managing Director Kristalina Georgieva regarding the International Conference on Resilient Pakistan to be held in Geneva, said the global lender’s spokesperson on Sunday.

On the call with the prime minister, Georgieva once again expressed her sympathy to those directly affected by the floods and supported Pakistan’s efforts to build a more resilient recovery, added the statement.

“The IMF delegation is expected to meet with Finance Minister Dar on the sidelines of the Geneva conference to discuss outstanding issues and the path forward,” it said.

PM Shehbaz will lead a high-level delegation to Switzerland where he will co-host the conference along with United Nations Secretary-General Antonio Guterres, starting on January 9. The conference will help mobilise international support to help Pakistan’s people and government recover more effectively from the devastation caused by recent floods.

IMF chief declines PM’s invite

Earlier this week, the IMF chief declined PM Shehbaz’s invitation to attend the conference, however, showed a willingness to attend the moot virtually. She explained that as the IMF board meetings had been prefixed for January 9-10, “she will only be able to join the conference virtually”.

The IMF chief thanked for the invitation but explained that as the IMF board meetings had been prefixed for January 9-10, “she will only be able to join the conference virtually”, a statement issued by the Prime Minister’s Office said.

“Georgieva called PM Shehbaz over the telephone and expressed her deep sympathy and concern on the human and material losses due to the recent floods and reiterated her commitment to helping Pakistan in this difficult period,” it added.

The premier thanked the managing director for her concern about the fallout of the floods and assured her that Pakistan is “committed to successfully completing the ongoing IMF programme”.

IMF delegation visit to Pakistan

PM Shehbaz said an IMF delegation was slated to visit Pakistan in two-three days to “take up and finalise” the ninth review of the economy to unstick a direly needed bailout tranche of $1.1 billion.

“I spoke to Georgieva and emphasised that Pakistan wishes to complete the IMF bailout programme,” the premier said during an address at the inauguration ceremony of Hazara Electric Supply Company (HAZECO).

“I urged her to soften the terms of the deal because the masses cannot be burdened anymore. We have slapped taxes on the rich segments of society,” the premier said.

“I also pleaded with her to dispatch a delegation for the 9th review under the loan programme and she replied that IMF officials are scheduled to visit Pakistan in over a couple of days [2-3] days.”

The development came as Pakistan strives to allay fears that the country is inching towards a default, as a stalemate over the ninth review of the IMF bailout programme continues owing to differences between the two sides.

This impasse has resulted in the holdup of a $1.1 billion tranche, which could have been released somewhere in November.

ECP completes preparation for Karachi-Hyderabad LG polls: sources

A polling staff member seals a ballot box— APP

The Election Commission of Pakistan (ECP) has completed all the preparations to conduct the local government (LG) polls in Karachi and Hyderabad on January 15, ECP sources told Geo News.

Sources said the reserved verdict on MQM-P’s plea against dual voter lists would be pronounced tomorrow. The ECP bench headed by Chief Election Commissioner (CEC) Sikandar Sultan Raja reserved its verdict on Friday.

Sources say that the Election Commission has rejected MQM-P’s allegations regarding using dual voter lists and completed all preparations for the LG polls in Karachi and Hyderabad. The local body elections in Sindh’s two most populous cities will be held on the old voter lists.

It should be noted that the CEC, during the hearing on MQM’s request, said that local elections in Karachi could not be postponed anymore.

Exchange firms willing to open LCs for imports at open market rates

Bundles of dollar bills seen in this file photo. — Reuters

KARACHI: Exchange firms on Saturday offered the government to pay for the opening of letters of credit (LCs) for imports as banks hesitate to do so due to a shortage of foreign reserves.

General Secretary Exchange Companies Association, M Zafar Paracha, said in a statement that numerous sectors and industries are facing issues due to the banks’ refusal to open the letters of credit.

Taking note of the crisis, the exchange companies decided to share the load, offering to assist the government by providing the needed US dollars, just as these firms do for credit card settlement, education purposes and medical treatments abroad, as well as Hajj, Umrah, religious pilgrimages, and other travels, he added.

Paracha said, “If the government allows, the exchange companies are ready to pay up to USD 50,000/- for the pending LCs and open new LCs to facilitate the concerns for the nation and country.”

He added that this would assure the availability of essentials and ease the government’s burden.

He added that they might finance imports (letter of credit /LCs) worth $200-250 million in the next month. However, he said they would offer the financing at Rs255/$…compared to Rs227/$ in the inter-bank market.

He said that the rate in the black market has spiked to over Rs270.

Paracha said financing LCs through the open market would help divert the much-needed foreign exchange from the illegal hawala-hundi markets to the open legal market.

He said the exchange firms’ suggestion has already been delivered to Finance Minister Ishaq Dar. The currency dealers’ proposals come as the country toils with diminishing foreign exchange reserves. According to SBP data, the central bank’s foreign reserves fell by $245 million to $5.6 billion as of December 30.

The interbank and the open market gap has risen extensively as commercial banks refuse to open letters of credit for different import consignments, whereas exchange firms have yet to release dollars to even their frequent non-trade clients.

Importers have been confronting the brunt of the dollar drought, with their credit letters either denied or consignments sitting at docks for weeks because of a lack of clearance from banks. This also imposes demurrage charges on importers, additionally deepening their liquidity problems.

On Friday, January 6, edible oil importers requested the central bank to intervene as commercial banks refused to issue credit letters on the interbank rate despite the exclusion of the sector from the condition of prior permission from the central bank.

Rupee may lose ground in coming week due to economic crisis, says trader

A money changer counts Pakistani Rupee (PKR) notes in Karachi September 23, 2009. — Reuters/File

KARACHI: Traders expect the rupee to weaken further in the upcoming week owing to a sharp decline in foreign exchange reserves brought on by fresh repayments of external debt, worrying the investors about how the country’s economic situation will develop, The News reported Sunday.

“We expect the rupee to depreciate much further during the course of the upcoming week due to declining foreign reserves and repayment of foreign loans. Any developments on the IMF [International Monetary Fund] front are being eagerly watched by the market,” a forex trader said.

The local currency closed at 226.94 against the greenback on Monday while it ended the week at 227.14 against the dollar on Friday in the interbank market.

The country paid back $600 million to the Emirates NBD Bank and $420 million to the Dubai Islamic Bank, causing the State Bank of Pakistan’s (SBP) reserves to fall to a critically low level of $4.5 billion.

The coming week is turning out to be significant for Pakistan’s economy. Donors’ Conference is set to begin on January 9, which is led by the US in partnership with Pakistan to garner support for post-flood rehab, according to a weekly note from Tresmark.

“The IMF team is also due. If the differences between the government and the IMF targets can be bridged during this time, disbursement can quickly follow. It is still not confirmed whether the resumption requires ratification from the IMF Board,” the report said.

“The chief of army staff is visiting Saudi Arabia and the United Arab Emirates and no one is second guessing what this trip is about,” it added.

The delay in IMF funding of $1.1 billion has made Pakistan struggle to allay default fears.

Islamabad and the IMF differ over a review of policy and reforms the Fund is requiring in the country. The IMF’s programme review was supposed to be finished in November.

The IMF programme is connected to another essential foreign financing, making it difficult for the country to meet its external funding requirements. Up until June, they amounted to more than $30 billion and included imports, especially energy, and debt repayments.

The decline in the forex reserves put pressure on the rupee owing to the government’s slow progress in rolling over and securing foreign inflows from international lenders.

Given that elections are slated to take place this year, the government keeps delaying the IMF’s requirements out of concern for further political capital loss.

The local currency has lost 28.3%  of its value against the dollar in 2022.

Finance Minister Ishaq Dar has assured that the government would complete the IMF programme.

Several leaders from Balochistan join PPP after meeting Asif Ali Zardari
Leaders from Balochistan standing with PPP Co-chairman Asif Ali Zardari at Bilawal House in Karachi on January 8, 2022. — Twitter/MediacellPPP

Several political leaders from Balochistan decided to join Pakistan Peoples Party (PPP) after holding a meeting with party’s Co-chairman Asif Ali Zardari, a statement issued by the party said Sunday.

The announcement to join Sindh’s ruling party was made after a meeting with the former president at Bilawal House Karachi.

Former senator Sardar Fateh Muhammad Hassani, Nawabzada Gazin Marri and Tahir Mahmood, coordinator of the chief minister of Balochistan Nawabzada Jamal Raisani and Mir Fareed Raisani joined the PPP, said the spokesperson.

Moreover, Mir Abdullah Raheja and Mir Allah Bakhsh Rind also joined the party.

Zardari welcomed the new members to the party, saying that Balochistan and PPP have a historical relationship. “PPP has always fought for the rights of Balochistan,” said Zardari.

The PPP co-chairman said that his party is a strong part of the politics in the province, adding that the PPP will never compromise on its struggle for the rights of the people of Balochistan.

On January 1, a number of leaders of the Balochistan Awami Party (BAP) joined the PPP, parting ways with the ruling party in the province.

MPAs Zahoor Buledi, Saleem Khosa, and Arif Muhammad Hasani called on the PPP leader. Other BAP leaders who joined the party included Haji Malik Shah Gorej, Mir Wali Muham­mad, Mir Asghar Rind, Mir Faiq Jamali, Sardarzada Faisal Jamali, and Agha Shakeel Durrani.

Economy (Pakistan)

 

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