Economic and Political Weekly 04-08-2019

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World

Politics

·  Saudi women to be able to travel without guardian’s permission, reports say

Women in Saudi Arabia will no longer need the permission of a male guardian to travel, according to local news reports. The policy, if confirmed, would mark a key step in dismantling controls that have made women second-class citizens in their own country. Saudi women over the age of 21 will be able to apply for a passport and travel outside the country without approval, Okaz newspaper reported on IST July.

·  Osama Bin Laden’s son Hamza reported dead by US officials

Osama bin Laden’s son Hamza bin Laden, who was long viewed as heir to the leadership of al-Qaeda, is dead, according to two American officials. Hamza bin Laden, who had repeatedly threatened to attack the United States was killed in the past two years during the Trump administration, but it took time to confirm his death, the officials said.

· Greece’s swing to the right brings some positives

I was wrong. Despite poll predictions of a landslide to New Democracy (ND) in last month’s elections, I didn’t think they would achieve an overall majority. I expected 140 seats, leaving Kyriakos Mitsotakis, Greece’s new premier, needing a coalition. And I hoped for that, because his overall majority (158) allows him to pursue centre-right policies without restraint, to the possible detriment of the most needy. In Greek elections, the party with the most seats is awarded a 50-seat bonus. ND won 108 seats to 86 for the outgoing Syriza government, which, ironically, had pledged to rescind the bonus as part of a more proportional representative system. On the other hand the 22-seat difference indicates that Syriza will provide a vigorous opposition.

  • At least 40 people have been killed and dozens wounded in a missile attack and coordinated suicide bombings in the southern port city of Aden.

The official says the missile struck a military parade underway on Ist August in Aden, the temporary seat of the UN-recognized Yemeni government. They spoke on condition of anonymity as they were not authorized to talk to reporters. The website of the country’s Houthi rebels quoted spokesman Brig Gen Yehia Sarea as saying the rebels fired a ballistic missile at forces loyal to the United Arab Emirates, a member of the Saudi-led coalition fighting the Iran-backed Houthis since 2015. The parade was taking place in Aden’s neighborhood of Breiqa. The official didn’t give a breakdown for the casualties at the parade but said several commanders were among the casualties.

. Netherlands’ ‘burka ban’ set to unravel before it begins

Two days before it even comes into effect, the Netherlands’ new “burka ban” has been rendered largely unworkable by operational decisions by police and public transport staff not to support its implementation. The ban – first proposed in 2010 as a stratagem to persuade right-wing politician Geert Wilders and his Freedom Party to support a minority coalition government led by prime minister Mark Rutte – is scheduled to come into effect on Thursday, August 1st. The Partial Ban on Face-Covering Clothing Act will apply in all public buildings – schools, hospitals and universities, for instance – as well as on public transport, but not, crucially, in the street. Crash helmets and ski masks will also be banned, but not headscarves where the face is visible. Infringements will carry a fine of €150 – but it now looks likely that there will be very few, if any, penalties imposed.

·Jailed Russian opposition leader may have been poisoned, says lawyer

Russian opposition leader Alexei Navalny was discharged from hospital and returned to a Moscow jail on 29th July, but speculation continued to swirl that the Kremlin’s arch foe had been deliberately poisoned. Mr. Navalny, who is serving a 30-day sentence for organizing an unauthorized public protest, was hospitalized on 28th July suffering from what doctors described as an “acute allergic reaction”. However, both his lawyer and personal physician questioned the diagnosis, saying their client, who has never suffered from allergies before, could be a victim of a chemical poisoning News of Mr. Navalny’s mysterious illness came as Moscow reeled from a violent police crackdown on a demonstration in the city centre on 27th July where more than 1,380 people were arrested.

  • New UK PM contradicts Michael Gove’s assertion that UK believes no-deal is most likely

 

Boris Johnson has contradicted Michael Gove’s assertion that the British government was working on the assumption that a no-deal Brexit is the most likely outcome. Speaking at a nuclear submarine base in Scotland, the prime minister said there was “every chance” he could reach a deal with the European Union before Britain leaves on October 31st. “My assumption is that we can get a new deal, we’re aiming for a new deal. But, of course, Michael is absolutely right that it’s responsible for any government to prepare for a no deal if we absolutely have to,” he said. Mr Johnson has ruled out agreeing to any deal that includes what his government now routinely calls “the anti-democratic backstop”. But he said on Monday that he wanted to engage with other EU leaders, including Taoiseach Leo Varadkar, with whom he is expected to speak later this week. “Look, my approach is to be very outward-going. I don’t want the UK to be aloof or hanging back. I want us to engage, to hold out the hand, to go the extra mile, the extra thousand miles. And what we want to do is to make it absolutely clear that the backstop is no good, it’s dead, it has got to go. The withdrawal agreement is dead, it’s got to go. But there is scope to do a new deal,” he said.

· Death toll from Brazil prison riot rises to at least 57

A clash between two prison gangs has left at least 57 inmates dead with 16 of them decapitated, authorities in the Brazilian state of Para said. It is the latest deadly clash in the country’s overcrowded jails as the government struggles to control the penal system. State authorities said the riot began around 7am on 29th July at a prison in the northern city of Altamira. Prisoners belonging to the Comando Classe A gang set fire to a cell containing inmates from the rival Comando Vermelho, or Red Command, gang, Para’s state government said in a statement. Most of the dead died in the fire, they said, while two guards were taken hostage, but later released. “It was a targeted act,” state prison director Jarbas Vasconcelos said, adding that there was no prior intelligence that suggested an attack would take place. “The aim was to show that it was a settling of accounts between the two gangs.”

· India’s opposition fiercely opposes ‘draconian’ anti-terror law

India’s opposition parties and political activists are fiercely opposing the passage of a controversial anti-terror Bill through the country’s parliament by the Hindu nationalist Bharatiya Janata Party (BJP) government, claiming it infringes on human rights and is liable to abuse. The Congress Party, which staged a walk-out in parliament, last week when the Unlawful Activities (Prevention) Amendment (UAPA) Bill 2019 was being debated, warned that the proposed legislation was “draconian” and could turn India into a “police state”.

· Estranged wife of Dubai ruler applies for forced marriage protection order

The estranged wife of the ruler of Dubai is applying for a forced marriage protection order, the UK high court has heard. Princess Haya Bint Al Hussein arrived at the Royal Courts of Justice in London on 30th July ahead of the latest hearing in the legal battle between her and Sheikh Mohammed bin Rashid Al Maktoum over their children.

  • Indian lawmakers on 30th July approved a bill to end the Muslim practice of instant divorce two years after the Supreme Court ruled that it violated the constitutional rights of Muslim women.

Law Minister Ravi Shankar Prasad said the bill’s approval by the upper house of Parliament reflects the empowerment of women and India’s changing profile. The more powerful lower house approved the bill last week. It will become law after India’s president approves it, which is a formality. Most of the 170 million Muslims in India are Sunnis governed by the Muslim Personal Law for family matters. The law has included allowing Muslim men to divorce their wives by saying “Talaq”, the Arabic word for divorce, three times and not necessarily consecutively, but at any time, and by any medium, including telephone, text message or social media post. More than 20 countries, including Pakistan and Bangladesh, have banned the practice.

  • Sudanese protest leaders cancelled planned talks with the country’s ruling generals on 30th July as hundreds of schoolchildren demonstrated in Khartoum against the shooting dead of five pupils at a rally.

“Killing a student is killing a nation,” chanted crowds of schoolchildren, dressed in their uniforms and waving Sudanese flags, in the capital’s eastern district of Burri. Sporadic protests by schoolchildren were also held in other parts of the capital. Demonstrators accused feared paramilitaries of the Rapid Support Forces of shooting dead the five teenagers on 29th July in the central town of Al-Obeid at a rally against shortages of bread and fuel. The killings came a day before protest leaders were due to hold talks with generals on the remaining aspects of installing civilian rule after the two sides inked a power-sharing deal earlier this month. But three protest leaders said the dialogue would not take place as planned. “There will be no negotiations as we are still in Al-Obeid,” Taha Osman, a negotiator from the protest movement, said.

  • Dozens of passengers, mainly women and children, were killed in western Afghanistan early 31st July when the bus they were travelling in hit a roadside bomb, officials said.

The attack, which came one day after the United Nations said civilians are being killed and wounded at a “shocking” level in Afghanistan’s war, occurred around 6:00 am (0130 GMT), authorities said. “A passenger bus travelling on the Kandahar-Herat highway hit a Taliban roadside bomb. So far at least 28 killed, 10 wounded,” said Muhibullah Muhib, the spokesman for Farah province. All were civilians, mostly women and children, he said. Farooq Barakzai, a spokesman for Farah’s governor, confirmed the toll but warned it may rise higher. There was no immediate confirmation from the Taliban that it was behind the blast. The group, which has resurged since its regime was toppled by the US invasion in 2001, made a vague pledge this month to reduce civilian casualties. Civilians have long paid a disproportionate price in the nearly 18 years since the US invaded Afghanistan.

 

Economy-

  • Dubai’s financial regulator said on 30th July it had imposed a record fine of nearly $315 million on two affiliates of the collapsed Abraaj equity group for unauthorized activities and misusing investors’ funds.

The Dubai Financial Services Authority (DFSA) said in a statement that it fined Abraaj Investment Management $299.3m and Abraaj Capital Limited $15.3m. The two companies are affiliates of the Abraaj Group that once was the leading private equity firm in the Middle East with nearly $14 billion of assets under management. The group entered into liquidation over a year ago following allegations of misuse of funds that forced investors to recover their money. Some key investors in an Abraaj $1bn healthcare fund were The Bill and Melinda Gates Foundation and a World Bank affiliate. The DFSA said that after a complex investigation spanning over 18 months it found Abraaj Investment Management “carried out unauthorized financial services … [and] actively misled and deceived investors in Abraaj funds over an extended period.” The firm also “misused investors’ monies in various funds to meet operating and other expenses … and to meet ever-increasing cash shortfalls.” Abraaj Capital breached regulations by failing to “observe minimum standards of integrity and fair dealing” among other violations, according to the DFSA.

  • The Federal Reserve cut interest rates on 31st July for the first time since 2008, citing concerns about the global economy and muted US inflation, and signaled a readiness to lower borrowing costs further if needed.

Financial markets had widely expected the quarter-percentage-point rate cut, which lowered the US central bank’s benchmark overnight lending rate to a target range of 2pc to 2.25pc. In a statement at the end of its latest two-day policy meeting, the Fed said it had decided to cut rates “in light of the implications of global developments for the economic outlook as well as muted inflation pressures.” The Fed said it will “continue to monitor” how incoming information will affect the economy, adding that it “will act as appropriate to sustain” a record-long US economic expansion.

GLOBAL INDICES AS OF 2nd and 3rd August 2019

As compared to 26th and 27th July 2019

Global indices as of 2nd and 3rd August 2019
Name Current Value Open
US MARKETS
 NASDAQ (Aug 02) 8,004.07 8056.42
EUROPEAN MARKETS
 FTSE (Aug 02) 7,407.06 7584.87
 CAC (Aug 02) 5,359.00 5427.55
 DAX (Aug 02) 11,872.44 12033.68
ASIAN MARKETS
 SGX NIFTY (Aug 03) 10,976.50 11016.00
 NIKKEI 225 (Aug 02) 21,087.16 21211.06
 STRAITS TIMES (Aug 02) 3,261.11 3271.40
 HANG SENG (Aug 02) 26,918.58 26950.53
 TAIWAN WEIGHTED (Aug 02) 10,549.04 10641.28
 KOSPI (Aug 02) 1,998.13 1995.31
 SET COMPOSITE (Aug 02) 1,684.71 1680.52
 JAKARTA COMPOSITE (Aug 02) 6,340.18 6341.12
 SHANGHAI COMPOSITE (Aug 02) 2,867.84 2861.33

 

Global indices as of 26th and 27th July 2019
Name Current Value Open

Close

US MARKETS
 NASDAQ (Jul 26) 8,330.21 8294.30

8238.54

EUROPEAN MARKETS
 FTSE (Jul 26) 7,549.06 7489.05

7489.05

 CAC (Jul 26) 5,610.05 5572.72

5578.05

 DAX (Jul 26) 12,419.90 12363.86

12362.10

ASIAN MARKETS
 SGX NIFTY (Jul 27) 11,314.00 11330.50

11328.50

 NIKKEI 225 (Jul 26) 21,658.15 21700.20

21756.55

 STRAITS TIMES (Jul 26) 3,363.76 3363.56

3381.26

 HANG SENG (Jul 26) 28,397.74 28406.07

28594.30

 TAIWAN WEIGHTED (Jul 26) 10,891.98 10898.25

10941.41

 KOSPI (Jul 26) 2,066.26 2063.35

2074.48

 SET COMPOSITE (Jul 26) 1,717.97 1729.26

1730.90

 JAKARTA COMPOSITE (Jul 26) 6,325.24 6379.20

6401.37

 SHANGHAI COMPOSITE (Jul 26) 2,944.54 2928.06

2937.36

Pakistan

Politics

  • Senate Chairman Sadiq Sanjrani’s survivalof the no-confidence motion against him.

The opposition has a total of 67 members in the Senate. From the 64 opposition senators who partook in the no-trust vote, the opposition only needed 53 senators’ votes to send Sanjrani packing. Instead, the opposition fell three short when the results of the secret ballot were announced. The final vote count was 50 votes in favor of the motion, five votes rejected, and 45 casts against. Having falling short of a simple majority of the house, the motion was dismissed.

· At least 18 killed after Pakistani military plane crashes into house

At least 18 people were killed in the Pakistani garrison city of Rawalpindi early on 30th July when a military aircraft on a training flight appeared to crash into a house in a built-up area. All five crew members and 13 civilians were killed and the crashed plane started a large fire.

  • An accountability court on 30th July approved a plea bargain worth Rs2.12 billion between suspects linked to Sind Nooriabad Power Project Company and the National Accountability Bureau (NAB).

NAB authorities produced suspects Syed Asif Mahmood and Syed Arif Ali before the accountability judge, Mohammad Bashir. The investigation officer while submitting a report to Judge Bashir said the suspects were ready to deposit Rs2.12bn into the national exchequer under a plea bargain deal arrangement with NAB authorities under Section 25(b) of the National Accountability Ordinance, 1999. Judge Bashir asked the suspects if they were entering the plea bargain deal arrangement under coercion or free will to which they replied they were doing so of their own will. CEO M/S Technomen Kinetic Pvt Ltd Syed Asif Mahmood and Director Nooriabad Power Company Syed Arif Ali were arrested by NAB on May 21 in connection with alleged misappropriation and money laundering in the Nooriabad power project. NAB had stated then that the suspects were taken into custody for ext­ending illegal favours to M/S Tech­no­men Kinetic Pvt Ltd and others in projects of Sindh Nooriabad Power Com­pany and Sindh Transmission & Dis-­­­­patch Com­pany (STDC), causing $16 million loss to the national exchequer.

  • Heavy rain continued for a second consecutive day and paralyzed life in the metropolis Karachi on 30th July, nine more people died in different rain-related incidents.

The death toll rose to 18 in two days and 15 of the victims died of electrocution in different parts of the city. The K-Electric also failed to ensure uninterrupted power supply in the metropolis as many localities remained without electricity for more than 24 hours. In North Karachi, nine-year-old Masooma died of electrocution near her house in Sector 5-C/3. The girl met the deadly fate when she came outside her home and suffered an electric shock due to snapped electric wire that fell in accumulated rainwater.

  • Gujranwala Additional Sessions Judge Tariq Saleem Chohan on 2nd August summoned Senator Mir Hasil Khan Bizenjo to court on August 8 regarding his accusation that Inter-Services Intelligence (ISI) chief Lt Gen Faiz Hameed’s “people” were behind the opposition’s embarrassing failurein a no-confidence vote against Senate Chairman Sadiq Sanjrani.

Judge Chohan had accepted for hearing the petition, submitted by well-known lawyer Manzoor Qadir Bhinder, and summoned a report on the matter from the Gujranwala city police officer (CPO). As per the petitioner, after losing the Senate vote, Bizenjo had made a “baseless and false” statement against the head of a state institution. Bhinder claimed that this was an attempt to defame a key leader of the Pakistan Army. He asked the court to request the Gujranwala CPO to instruct the Civil Lines police station to register a case against Bizenjo. The Senate secretary has also been sent a notice for Bizenjo’s appearance in the court. The joint opposition had last month submitted a no-confidence resolution against Sanjrani and had named Bizenjo as its candidate for the position. On Thursday, the opposition suffered a shock defeat when it fell three votes short to dismiss the Senate chairman despite having a comfortable majority in the Upper House. After the vote, as Bizenjo was walking out of the Senate building, a journalist asked if the senator knew the 14 turncoats who had voted against their party’s stated stance. Bizenjo responded: “These are Gen Faiz’s people. You know Gen Faiz, the ISI chief? [They] were his people.”

Inter-Services Public Relations (ISPR) Director General Maj Gen Asif Ghafoor had early on 2nd August denounced the statement. In a tweet posted on Maj Gen Ghafoor’s official Twitter account early today, the ISPR chief said that Bizenjo’s remarks were “unfounded” and did not “serve democracy”.

Economy

  • Inflation has entered double digits in the first month of the new fiscal year, the biggest increase in five years and nine months.

Inflation, measured by the Consumer Price Index (CPI), rose to 10.34 per cent in July this year from 8.9pc the preceding month, the Pakistan Bureau of Statistics said on ist August. During the same month last year, inflation stood at 5.84pc. The last time inflation entered the double digits was in November 2013 and recorded at 10.9pc.

 

  • The federal government on 31st July increased the prices of all petroleum products for the month of August amid a slight reduction in the international crude price.

The sources said that the government approved all the recommendations of the Oil and Gas Regulatory Authority (Ogra) for the current month. In the latest development, the government increased the price of petrol (motor spirit) by Rs5.15 per litre and Rs5.65 for High Speed Diesel (HSD). Similarly, the price of kerosene was increased by Rs5.38 and Rs8.9 for Light Diesel Oil (LDO).

                                                    

Owing to a misperception among traders about the CNIC condition on sale of Rs50,000, the government announced on ist August it would soon introduce a fixed tax regime for small traders after which they would not be bound to record CNICs on such sales.

However, the CNIC requirement would be mandatory for B2B transactions and government would not reverse this decision at any cost. This was announced by Minister for Economic Affairs Muhammad Hammad Azhar while addressing a post-budget conference at Islamabad’s Chamber of Commerce and Industry. Azhar said that the contribution of the retail sector in GDP was 20 per cent, but its contribution to tax was just 0.25pc.

           

F.C Exchange Rates of PKR as of 3rd August 2019 as compared to 26th July 2019
Countries PKR rate as of 26th  July 2019 PKR rate as of 3rd August July 2019
U.S.A. 160.90 159.70
U.K. 202.00 196.00
Euro 180.50 178.00
Japan 1.50 1.48
Saudi Arabia 43.05 42.70
U.A.E. 43.90 43.70

 

Pakistan Stock Exchange Indices

As of 3rd August 2019 As Compared

To 26th July 2019

Position as of 3rd August 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 126 (Curr) Current 31666.41 Current 14762.52
Decline 144 (High) High 31842.30 High 14833.62
Unchanged 17 (Low) Low 31434.14 Low 14686.39
Total change 287  -172.70  -71.10

 

Position as of 26th July 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 52 (Curr) Current 32103.27 Current 14873.46
Decline 229 (High) High 32446.40 High 15054.17
Unchanged 17 (Low) Low 32031.98 Low 14813.40
Total change 298  -343.13  -173.95

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