Home Weekly Reviews Economic and Political Weekly 22-03-2020

Economic and Political Weekly 22-03-2020

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World 

Politics

·Chloroquine is a synthetic form of quinine, which has been used to treat malaria since the 1940s.

The drug has recently been used to treat corona virus patients in China and in France, where some researchers said it showed great promise, though scientists agree that only more trials would determine if it really works and is safe. The US is fast-tracking the anti-malarial drug for use as a treatment against the new virus, US President Donald Trump said on Thursday. “We’re going to be able to make that drug available almost immediately, and that’s where the FDA (Food and Drug Administration) has been so great,” Trump told reporters.

·In Indian capital, riots deepen a Hindu-Muslim divide

For years, Hindus and Muslims lived and worked peacefully together in Yamuna Vihar, a densely populated Delhi district. But the riots that raged through the district last month appear to have cleaved lasting divisions in the community, reflecting a nationwide trend as tensions over the Hindu nationalist agenda of Prime Minister Narendra Modi boil over. Many Hindus in Yamuna Vihar, a sprawl of residential blocks and shops dotted with mosques and Hindu temples, and in other riot-hit districts of northeast Delhi, say they are boycotting merchants and refusing to hire workers from the Muslim community. Muslims say they are scrambling to find jobs at a time when the corona virus pandemic has heightened pressure on India’s economy.

· Iraq’s president on 17th March named pro-Western lawmaker Adnan Zurfi, a former Najaf city governor, as the next prime minister, tasked with ruling a country hit by military unrest, street protests and the corona virus outbreak. Lawmaker Zurfi, 54, is the former governor of Najaf and once belonged to the Dawa party, an opposition force to ex-dictator Saddam Hussein who was ousted in the 2003 US-led invasion.

Zurfi is an Iraqi-US dual national who would have to renounce his American citizenship to take up the premiership, which is yet to be confirmed by parliament.

· Heavy fighting in Yemen between pro-government forces and rebels killed more than three dozen people in the previous 24 hours, Yemeni officials and tribal leaders said on 17th March.

The rebels, known as Houthis, have been attacking forces of the internationally recognized government in the district of Sorouh in central Marib province. Fierce clashes left at least 38 fighters from both sides’ dead and wounded dozens more, the officials said. The military of the internationally recognized government reported the clashes saying its forces, backed by air strikes from the Saudi-led coalition, killed at least 20 Houthi rebels. It did not report deaths from its side. The officials and tribal leaders said the rebels advanced deep into the district before government forces pushed them back and captured at least 30 Houthi fighters.

·Saudi Arabia announced on 17th March that mosques would no longer accept worshippers for the customary five daily prayers and the weekly Friday prayer, in exceptional measures intended to help limit the spread of novel corona virus.

Prayers will continue only at the two holy mosques in Makkah and Madina, state news agency SPA reported, citing a decision from the Council of Senior Scholars, the kingdom’s highest religious body. Mosques will close their doors temporarily but continue to issue the Azan, which will direct people to pray in their homes rather than come to the mosque, SPA said.

· AS the COVID-19 threat loomed heavy upon the United Kingdom and the British government advised people aged over 70 to prepare for a period of self-isolation, 100-year-old citizen Yavar Abbas had one major concern: how will the corona virus containment plan impact his upcoming nuptials?

Mr. Abbas, a UK-based filmmaker and journalist formerly with the BBC, was all set to marry his partner, Indian activist and writer Noor Zaheer, in a ceremony originally scheduled for March 27. But the corona virus outbreak and its resulting advisories from the government threw their plans into disarray. As the UK’s confirmed cases approach 2,000, with 104 deaths, British authorities are mulling lockdown measures

·US Special Representative Zalmay Khalilzad said on 18th March the corona virus pandemic adds urgency to prisoner releases agreed by Afghan President Ashraf Ghani’s government and the Taliban and that they should begin “as soon as possible.”

“No prisoners have been released to date despite the commitment to do so expressed by both sides,” Khalilzad said on Twitter. Khalilzad’s comments illustrated how the corona virus pandemic is affecting one of US President Donald Trump’s top foreign policy priorities.

·One of the South Korea top infectious disease officials delivered an urgent message: South Korea needed an effective test immediately to detect the novel corona virus, then running rampant in China.

‘Can I go to the park, can I eat out, can I meet my friends?’: Social distancing went on .Though there were only few cases in South Korea initially but we were very nervous. We believed that it could develop into a pandemic,” one attendee, Lee Sang Won, an infectious diseases expert at the Korea Centers for Disease Control and Prevention, told Reuters. However now on 19th March Corona Virus have entered as a second wave in Korea with 8565 cases, 91 deaths and 1947 since recovered.

·Corona virus: the detectives racing to contain the virus in Singapore

In Singapore, one of the first places hit by corona virus, detectives are tracking down potential positive cases to try to stay one step ahead of the virus. How did they do this and is it too late for the rest of the world? In mid-January, a group of 20 tourists from the Chinese city of Guangxi arrived in Singapore for Chinese New Year. They visited some of its most glamorous sights. Also on their itinerary was a non-descript traditional Chinese medicine shop, selling crocodile oil and herbal products. The Chinese group finished the tour and went home. But they had left something behind. However now on 21st March Singapore reported 40 new corona virus cases, mainly imported infections from the United Kingdom, and advised further social distancing measures in its fight against the pandemic. Its tally of cases stands at 385, with no deaths. The health ministry said all gatherings of 250 people or more must be cancelled. Among other measures, it asked employers to facilitate working from home and stagger working hours to reduce contact between staff.

· Italy locks down millions as its corona virus deaths jump

Italy has just surpassed China for the most number of deaths related to corona virus, making it the world’s deadliest center of the outbreak. The number of deaths in Italy reached 4,032 on 21st March, the Italian Civil Protection Agency said at a news conference more than China’s toll, which, according to Johns Hopkins University, stands at 3,249. The total number of cases in Italy rose to 47,021 from a previous 41,035, an increase of 14.6 percent, the Civil Protection Department said.

Economy

·  ECB launches €750bn emergency bond purchasing program

The European Central Bank has announced a massive €750 billion program of bond buying after a late night emergency phone conference of its governing council. The move is to try to fight off pressures emerging in euro-zone government bond markets and prevent a new financial crisis taking hold. In a tweet after the meeting, ECB president Christine Lagarde said it intended to use all its tools to defend the euro as “there are no limits” to its commitment to the single currency.“Extraordinary times require extraordinary action,” Lagarde tweeted. “There are no limits to our commitment to the euro. We are determined to use the full potential of our tools, within our mandate.”

GLOBAL INDICES AS OF 22nd March 2020

As compared to 15th March 2020

 

Global indices as of 22nd March 2020
Name Current Value Prev.

Close

US MARKETS
 NASDAQ (Mar 20) 6,879.52 7150.58
EUROPEAN MARKETS
 FTSE (Mar 20) 5,190.78 5151.61
 CAC (Mar 20) 4,048.80 3855.50
 DAX (Mar 20) 8,928.95 8610.43
ASIAN MARKETS
 SGX NIFTY (Mar 21) 8,178.00 8776.00
 NIKKEI 225 (Mar 19) 16,552.83 16726.55
 STRAITS TIMES (Mar 20) 2,410.74 2311.00
 HANG SENG (Mar 20) 22,805.07 21709.13
 TAIWAN WEIGHTED (Mar 20) 9,234.09 8681.34
 KOSPI (Mar 20) 1,566.15 1457.64
 SET COMPOSITE (Mar 20) 1,127.24 1044.19
 JAKARTA COMPOSITE (Mar 20) 4,194.94 4105.42
 SHANGHAI COMPOSITE (Mar 20) 2,745.62 2702.13

 

Global indices as of 15th March 2020
Name Current Value Prev.

Close

US MARKETS
 NASDAQ (Mar 13) 7,874.88 7201.80
EUROPEAN MARKETS
 FTSE (Mar 13) 5,366.11 5237.48
 CAC (Mar 13) 4,118.36 4044.26
 DAX (Mar 13) 9,232.08 9161.13
ASIAN MARKETS
 SGX NIFTY (Mar 14) 10,015.00 9979.00
 NIKKEI 225 (Mar 13) 17,431.05 18559.63
 STRAITS TIMES (Mar 13) 2,634.00 2678.64
 HANG SENG (Mar 13) 24,032.91 24309.07
 TAIWAN WEIGHTED (Mar 13) 10,128.87 10422.32
 KOSPI (Mar 13) 1,771.44 1834.33
 SET COMPOSITE (Mar 13) 1,128.91 1114.91
 JAKARTA COMPOSITE (Mar 13) 4,907.57 4895.75
 SHANGHAI COMPOSITE (Mar 13) 2,887.43 2923.49

 

 Pakistan

Politics

  • A lieutenant, two Sepoys and a lance Havaldar were martyred while seven terrorists were killed in an operation on a militant hideout near Datta Khel, North Waziristan, the Inter-Services Public Relations (ISPR) said on Wednesday.

Those martyred include 26-year-old Lt Agha Muqadas Ali Khan, 36-year-old Lance Havaldar Qamar Nadeem, 24-year-old Sepoy Muhammad Qasim and 23-year-old Sepoy Touseef. According to the military’s media wing, security forces had conducted an intelligence-based operation (IBO) in Mama Ziarat after receiving confirmed reports of a militant hideout in the area. An exchange of fire took place between the troops, who had cordoned the area, and the terrorists, who were trying to escape.

  • Chinese President Xi Jinping said on 17th March special friendship between Pakistan and China was choice of the history as it had deep roots in the hearts of people of the two countries.

“We want to see a united and strong Pakistan with stability and prosperity,” he said during a meeting with President Dr Arif Alvi here at the Great Hall of People. President Xi said no matter how international landscape might change, China would always stand firmly by Pakistan. “China will stay committed to our ironclad friendship and will expand our strategic cooperation.” President Xi said China backed Pakistan in stepping up its constructive role in regional and international affairs.

  • During a hearing, the chief justice regretted and said the country’s airports as well as the PIA were responsible for the spread of novel corona virus. But the government did nothing to contain the spread rather courts were asked to close and suspend the functioning of judicial work in the country, the chief justice regretted.

“If this is the state of affairs of security in the country then no one could block the entry of diseases inside the country,” he feared.

  • SIUT gets diagnostic kits, begins tests for corona virus

The Sind Institute of Urology and Transplantation has started testing corona virus after getting diagnostic kits from the Sind government. The testing facility would be available round-the-clock throughout the week at the SIUT. “The testing facility, which is totally free, will go a long way in augmenting clinical activities at the medical institution of tertiary care. Some 5,000 transplant patients already in the care of the institute can also be beneficiary of this facility,” said an SIUT official. He appreciated the support extended by the provincial government as patients with other health complications were at a high risk of corona virus infection.

·As on 21st March Punjab reports 96 new corona virus cases as Pakistan’s tally jumps to 501 with 3 deaths (One on Sind and two in KPK)

The number of confirmed corona virus cases in Pakistan have jumped to 501 after Punjab, Sind and Khyber-Pakhtunkhwa announced an increase in their provincial tallies The country’s tally of the novel corona virus patients pushed 501 with 252 confirmed cases in Sind, Baluchistan 92, Punjab 96, K-P 23, Gilgit-Baltistan 30, Islamabad seven and Azad Jammu and Kashmir one. The numbers will change as new information becomes available.

  • To contain the spread of the corona virus, the Pakistan Railways has decided to suspend 12 trains from March 22 (Sunday) and may close 20 more from April 1, depending on the gravity of the situation then.

Addressing a press conference at the press information department on19th March , Minister for Railways Sheikh Rashid Ahmed said the measures had been taken for the safety of people and to contain the spread of Covid-19 in the country. The suspended trains include: Khushhal Khan Khattak Express (from Peshawar to Karachi-Karachi to Peshawar), Akbar Express (from Lahore to Quetta-Quetta to Lahore), Sind Express (from Karachi to Multan-Multan to Karachi), Ravi Express (from Lahore to Shorkot-Shorkot to Lahore), Shah Latif Express (from Dhabeji to Mirpurkhas-Mirpurkhas to Dhabeji) and Rohi Passenger from Sukkur to Khanpur. “The passengers who already got seat reservations in these trains will be returned the fare without any deduction. All the tickets will be refunded to the passengers and they will also be given a choice to use other trains in this fare,” he said.

Economy

  • Moody’s Investor Service on 17th March lowered its forecast for Pakistan growth rate at 2.5 per cent for the current fiscal year owing to Covid-19 even though it said risks for the entire Asia-Pacific (APAC) region were generally on the downside.

In December 2019, the New York-based rating agency had projected Pakistan’s growth rate at 2.9pc for the current year. This coincided with the State Bank of Pakistan (SBP) estimating the GDP growth rate for the current year at 3pc, down from its earlier projection of 3.5pc. “Risks for the APAC firmly tilted to the downside, including from much weaker European and American economies than currently assumed”, said Moody’s in its latest “Regional Credit Outlook Update on Evolving Corona virus Impact”.

  • Import of petroleum products surged by 76 per cent year-on-year in February, witnessing an increase for the first time since June 2018, reported the Pakistan Bureau of Statistics (PBS) on 17th March.

The upsurge in petroleum products imports was seen both in value and quantity by 75.9pc and 59.05pc, respectively. However, imports of other petroleum groups such as crude and liquefied natural gas (LNG) continued during the month. The total oil imports rose by 18.27pc in February to $1.1bn, from $0.930bn in corresponding month last year. In terms of rupee, the bill posted a steeper jump at 31.7pc to Rs169.821bn, from Rs128.946bn. Import of crude oil decreased 29.48pc to $231.38m, as against $328.09m while the quantity also dipped 16.12pc. Similarly, LNG imports edged lower 2.72pc to $209.19m during February, from $215.04m. This would have translated into relatively lower power production through LNG — a replacement for furnace oil. The rupee value of LNG import was, however, higher by about 8.32pc at Rs32.27bn, compared to Rs29.79bn. On the other hand, liquefied petroleum gas imports inched up 2.56pc to $30.31m, but this could not drag down the overall bill of petroleum group given its limited volume. However, total oil imports fell 14.36pc to $8.23 billion during 8MFY20, from $9.61bn in the same period last year. The fall in rupee value of the bill was comparatively lower at 1.98pc to Rs1.28 trillion, from Rs1.25 trillion.

  • Pakistan’s current account deficit (CAD) shrank 71.04 per cent to $2.843 billion during first eight months of this fiscal year compared to $9.817bn in the corresponding period last year, said the State Bank of Pakistan (SBP) on18th March.

In percentage terms, the CAD narrowed to 1.5pc of GDP during the July-Feb period compared to 5pc in the same period last year mainly on the back of 26.06pc reduction in the trade balance. The Pakistan Bureau of Statistics (PBS) trade data showed the country’s imports during the period under review declined by a massive 13.81pc. However, the export sector failed to impress despite almost 50pc fall in the rupee’s value in the last 24 months. Exports inched up 3.62pc to $15.643bn during the July-February period compared to $15.097bn in the corresponding period last year. Exports are likely to remain stagnant in the remaining months as the global virus-related shutdowns have already slowed down industrial production especially in export-oriented sectors. On a month-on-month basis, the CAD shrank by 60pc to $210 million compared to $534m in January.

  • Businesses and Markets are not happy over the cut in interest rate by 75 bp announced by the State Bank on 17th March to bring it at 12.50% as they believe it should have been brought to single digits.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Anjum Nisar said the SBP’s decision of interest rate cut seems totally against the global wisdom under prevailing drastic conditions as COVID-19 rages on. Global think tanks and a large number of countries are supporting economic activities by introducing ease of doing business and market expansion policies, while the SBP is ignoring the current devastating conditions around the world that would affect Pakistan’s exports.

  • Foreign investors have pulled out more than $1.388 billion from the country’s capital markets in the ongoing month with hot money outflows amounting to $1.28bn, the State Bank of Pakistan (SBP) data showed on 19th March.

Corona virus pandemic has instigated a widespread selloff from the emerging markets as investors have dumped more than $30bn worth of riskier investments during the last 45 days towards safer bets especially currencies. Barring dollar, almost every other instrument has been blown away by panic selling despite emergency measures announced by central banks across the world including the State Bank of Pakistan (SBP) which cut interest rates by just 75bps for the first time since May 2016 disappointing the markets. In Pakistan, since March 1 foreign investors have pulled $75.645 million from equity markets, $1.28bn from treasury bills (T-bills) and $33.282m from long-term Pakistan Investment Bonds (PIBs) landing the net flows in the first 20 days of this month to negative $1.35bn.

F.C Exchange Rates of PKR as of 22nd March 2020 as compared to  15th March 2020
Countries PKR rate as of  15th March 2020 PKR rate as of   22nd  March  2020
U.S.A. $ 159.30 159.50
U.K. Pounds 200.00 196.00
Euro 178.50 174.75
Japan Yen 1.64 1.64
Saudi Arabia Rial 42.20 41.90
U.A.E. Dirham 43.30 43.30

Pakistan Stock Exchange Indices

As of 22nd March 2020 As Compared

To 15th March 2020

Position as of 22nd March 2020
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 175 (Curr) Current 30667.41 Current 14432.70
Decline 151 (High) High 30928.05 High 14538.77
Unchanged 17 (Low) Low 29903.81 Low 14073.88
Total Change 343  537.58  279.80
Position as of 15th March 2020
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 143 (Curr) Current 36060.88 Current 16856.21
Decline 180 (High) High 36212.38 High 16914.82
Unchanged 12 (Low) Low 34266.91 Low 16019.50
Total change 335  104.19  174.19

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