Economic and Political Weekly 07-07-2019

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World

Politics

· Extrajudicial killings detailed as thousands march in Venezuela

UN human rights chief Michelle Bachelet presented a damning report on atrocities carried out by the Venezuelan government, as thousands marched through Caracas on Independence Day demanding an end to President Nicolás Maduro’s rule. Ms Bachelet told the UN Human Rights Council in Geneva on 5th July that the Maduro regime was guilty of “arbitrary detention, torture and ill-treatment, sexual violence and killings.

· Resurgent centre-right party poised for victory in Greek election

As the sun sets over the Acropolis, bathing the monument in the gentle light of a dying day, Kyriakos Mitsotakis ascends the podium, punching the air in jubilant mood. The backdrop may be antiquity’s most famous site but before him is a sea of blue and white, the colour of the Greek flag being waived by the crowd. The man poised to become Greece’s next Prime Minister Takes in the scene. “On 7th July Greece will become blue, the blue of the sky, the blue of the sea,” he thunders. “On 7th July we vote, on 8th July we turn a page.”

·Sudan breakthrough as military agrees to hand over power

Sudan’s ruling military council and a coalition of opposition and protest groups reached an agreement to share power during a transition period leading to elections, setting off street celebrations by thousands of people. The two sides, which have held talks in Khartoum for the past two days, agreed to “establish a sovereign council by rotation between the military and civilians for a period of three years or slightly more”, African Union mediator Mohamed Hassan Lebatt said at a news conference.

·Dubai ruler and his wife begin legal battle in London

A legal battle between two of the most prominent Middle Eastern royals has been launched in London. Princess Haya bint al-Hussein, daughter of the late King Hussein of Jordan, and her husband, Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, are understood to have parted. They are now engaged in a formal dispute in the high court. The Emirati royal family was last year in the spotlight over the case of Princess Latifa, Sheikh Mohammed’s daughter, who allegedly escaped Dubai and was subsequently seized off the coast of India by commandos and forcibly returned to her home. Emirati authorities dismissed the allegations over Princess Latifa’s treatment and abduction at the time as fiction, saying that she was “vulnerable to exploitation” and had been kidnapped.

·14 Russian sailors killed in research submarine fire

Fourteen Russian sailors were killed when a fire broke out while their deep-water research submarine was carrying out a survey of the sea floor near the Arctic, the Russian defence ministry said on 9th July. A Russian media outlet, RBC, cited an unnamed military source as saying the submarine was nuclear-powered, but Russian officials made no comment on the type of vessel involved. The incident was the deadliest involving a Russian naval submarine since August 2000, when the nuclear-powered Kursk sank to the floor of Barents Sea after two explosions in its bow, killing all 118 men aboard. The latest incident also took place in the vicinity of the Barents Sea. Authorities in nearby Norway said they were monitoring but had not detected abnormally high levels of radiation.

·At least 40 dead after air strike hits migrant centre in Libya

At least 40 people have been killed after an air strike hit a detention centre for migrants in the Libyan capital, a health official in the country’s UN-supported government said. The air strike targeting the facility in Tripoli’s Tajoura neighborhood also wounded 80 migrants, said Malek Merset, a spokesman for the health ministry. The Tripoli-based government blamed the self-styled Libyan National Army (LNA), led by Khalifa Hifter, for the air strike and called for the UN to investigate.

· Mumbai struggles to recover from worst flooding in 14 years

Mumbai on 3rd July was reeling from the heaviest monsoon rains in more than a decade that flooded parts of the city and surrounding region, killing more than 80 people and partially closing the international airport in India’s financial capital. India Meteorological Department figures on 2nd July evening showed the city received a total of 375mm of rainfall on the day – the highest since deadly rains in 2005 that were the worst in Mumbai’s history. Highlighting India’s failing infrastructure, the flooding forced Mumbai’s city government to declare a public holiday on 2nd July while more than 100 flights were cancelled at its international airport after a Spice Jet plane overshot the runway as it landed in a torrential downpour. The city’s municipal corporation, one of India’s wealthiest, has come under heavy criticism for failing to prepare adequately for the monsoon, prompting the body to appeal to residents on Twitter by saying “we are truly trying our best”. The rains highlight the pressure on the government of Narendra Modi, India’s prime minister who won a second term in May, to improve infrastructure and India’s ability to deal with annual monsoon rains.

· Italian socialist Sassoli elected head of European Parliament

MEPs meeting in Strasbourg have elected Italian socialist David-Maria Sassoli as parliament president, completing a key element of EU leaders’ complex “top jobs” deal. The former journalist, who is a member of the Partito Democratico, the second largest party in the S&D (Socialists and Democrats) grouping, takes over from fellow Italian Antonio Tajani. EU leaders on 2nd July night urged MEPs to support the balanced package. As part of the leaders’ deal, Mr. Sassoli is expected to share the five-year term with the centre-right EPP’s Manfred Weber, who was rejected as European Commission president at the Brussels summit in favour of German defence minister Ursula van der Leyen. The latter’s ratification by MEPs is expected to take place in the week of July 15th

·Japan orders 1m people to evacuate amid heavy rain and landslides

Japanese authorities have directed more than one million residents in parts of the southern main island of Kyushu to evacuate to designated shelters as heavy rains batter the region, prompting fears of landslides and widespread flooding. The Fire and Disaster Management Agency said the directive was issued in three southern prefectures

· China lodges protest with UK over ‘fantasizing’ Jeremy Hunt

China lodged an official protest with the UK on 3rd July and hit out at foreign secretary Jeremy Hunt’s comments on the recent Hong Kong protests, saying he “seems to be fantasizing in the faded glory of British colonialism” and was delusional and obsessed with lecturing others. During a Conservative Party leadership debate on ist July, Mr. Hunt had warned of “serious consequences” if China did not honor the “one country, two systems” formula that enshrines the basic freedoms of the people of Hong Kong for 50 years after the 1997 handover.

Economy-

  • Christine Lagarde’s departure stirs speculation at IMF, Singapore’s Tharman among those talked about as successor

With Ms Christine Lagarde, the current leader of the International Monetary Fund, poised to become the next president of the European Central Bank, the big questions are who would succeed her and whether the United States would break with tradition and try to install an American in the post. The top job at the IMF has traditionally gone to a European but there have been some suggestions that the practice be changed to reflect Asia’s growing influence in the global economy. Among the names that have emerged on early shortlists are Singapore’s Senior Minister Tharman Shanmugaratnam, who was the chairman of the International Monetary and Financial Committee; Mr Agustin Carstens, a former deputy managing director of the monetary fund; and Mr Mohamed El-Erian, the former chief executive of Pimco. On Tuesday (July 2), European officials nominated Ms Lagarde to succeed Mr Mario Draghi as the European Central Bank’s president. Ms Lagarde, a stabilizing force who has lent star power to the IMF since taking over as its managing director in 2011, plans to step away from her responsibilities while the nomination process moves forward.

GLOBAL INDICES AS OF 5th and 6th July 2019

As compared to 28th and 29th June 2019

Global indices as of 5th and 6th July 2019
Name Current Value Open

Prev

Close

 NASDAQ (Jul 05) 8,161.79 8123.28

8170.23

EUROPEAN MARKETS
 FTSE (Jul 05) 7,553.14 7603.58

7603.58

 CAC (Jul 05) 5,593.72 5613.92

5620.73

 DAX (Jul 05) 12,568.53 12632.12

12629.90

ASIAN MARKETS
 SGX NIFTY (Jul 06) 11,791.00 11810.00

11817.50

 NIKKEI 225 (Jul 05) 21,746.38 21703.61

21702.45

 STRAITS TIMES (Jul 05) 3,366.81 3376.93

3372.25

 HANG SENG (Jul 05) 28,774.83 28785.53

28795.77

 TAIWAN WEIGHTED (Jul 05) 10,785.73 10785.85

10775.90

 KOSPI (Jul 05) 2,110.59 2111.00

2108.73

 SET COMPOSITE (Jul 05) 1,731.23 1725.45

1724.37

 JAKARTA COMPOSITE (Jul 05) 6,373.48 6373.32

6375.97

 SHANGHAI COMPOSITE (Jul 05) 3,011.06 3004.74

3005.25

Global indices as of 28th and 29th June 2019
Name Current Value Open

Close

US MARKETS
 NASDAQ (Jun 28) 8,006.24 7988.76

7967.76

EUROPEAN MARKETS
 FTSE (Jun 28) 7,425.63 7402.33

7402.33

 CAC (Jun 28) 5,538.97 5491.17

5493.61

 DAX (Jun 28) 12,398.80 12302.77

12271.03

ASIAN MARKETS
 SGX NIFTY (Jun 29) 11,854.50 11841.50

11838.00

 NIKKEI 225 (Jun 28) 21,275.92 21282.22

21338.17

 STRAITS TIMES (Jun 28) 3,321.61 3336.08

3328.60

 HANG SENG (Jun 28) 28,542.62 28632.59

28621.42

 TAIWAN WEIGHTED (Jun 28) 10,730.83 10786.66

10773.90

 KOSPI (Jun 28) 2,130.62 2135.06

2134.32

 SET COMPOSITE (Jun 28) 1,730.34 1731.89

1731.64

 JAKARTA COMPOSITE (Jun 28) 6,358.63 6367.02

6352.71

 SHANGHAI COMPOSITE (Jun 28) 2,978.88 2992.24

2996.79

 

Pakistan

Politics

  • THE circumstances of arrest would be laughable if they did not involve matters of such grave national importance (Dawn Editorial).

On IST July afternoon, law-enforcement personnel intercepted the PML-N leader while he was travelling from Faisalabad to Lahore and arrested him in a narcotics case involving banned outfits. According to a statement by the ANF spokesperson, drugs were also recovered from his vehicle; in a video message, the information minister said the cache was worth between Rs150m to Rs200m. Minister for States and Frontier Regions Shehryar Afridi while confirming the development said: “He is my colleague but no one is above the law”. Mr. Sanaullah on 2nd July was sent to jail on a 14-day judicial remand by a district court.

  • Two people were killed while two others were injured in a firing incident at Lahore’s Allama Iqbal International Airport on 3rd July.

Deputy Inspector General (DIG) Operations Ashfaq Ahmad Khan said two suspects — identified as Shan and Arshad — opened fire on a man near the airport’s parking area. He said their target was Zain Ali, a 30-year-old resident of the Lakhodair area in Lahore, who was returning from Saudi Arabia after performing Umrah. He died on the spot. Both the assailants, who have previous criminal records, have been arrested. According to DIG Khan, the suspects had a long-running dispute with Zain. The second victim of the shooting was a taxi driver named Akram, who had no relation to Zain but was struck during the firing. He was taken to a hospital where he succumbed to his injuries.

  • Pakistani poet, Nisar Nasik, who was widely celebrated for having penned down the lyrics of ‘Dil Dil Pakistan’, passed away at 85.

According to reports, the lyricist succumbed to physical illness earlier in the morning at the Holy Family Hospital in Rawalpindi. Son Khayal Aqdas revealed that his father was dealing with a number of health concerns including amnesia, diabetes, and high blood pressure and his health had been deteriorating since the past few years.

  • Five Pakistan Army soldiers were martyred and one other sustained injuries in an explosion that took place a few meters from the Line of Control in Chamb sector of Azad Jammu and Kashmir (AJK), the Inter-Services Public Relations (ISPR) said in a statement on 3rd July.

The nature of the blast, which took place in Barnala tehsil, is being ascertained. The military’s media wing said the incident “is evident [sic] of state-sponsored terrorism by India violating bilateral ceasefire agreement and the international rules”. The personnel martyred in the incident include: 1-Subedar Muhammad Sadiq, aged 44, resident of village Bandi P/O Jura, tehsil Athmuqam and district Neelam.2-Sepoy Muhammad Tayyab, aged 26, r/o village Surakhi, tehsil and district Khushab. 3- Naik Sher Zaman, aged 36, r/o village Shamashaki, district Karak.4-Sepoy Zohaib, aged 20, r/o village Nandi Nar Ghamir Manhdala, tehsil Hajira and district Poonch.5- Sepoy Ghulam Qasim, aged 22, r/o village Sahiwal, tehsil Sahiwal and district Sargodha.

  • The Federal Board of Revenue (FBR) has initiated proceedings against citizens who failed to declare their benami properties under the Assets Declarations Scheme, which expiredon 3rd July.

The scheme, which was rolled out on May 14, was supposed to end on June 30. However, the government had decided to extend the deadline to July 3. The government had on ist July announced the establishment of three major zones — Lahore, Karachi and Islamabad — and 11 sub-zones for adjudicating authorities to deal with benami properties as required under the Benami Transactions (Prohibition) Act, 2017. Prime Minister’s Adviser on Finance and Revenue Dr Abdul Hafeez Shaikh had announced on 30thn June the creation of an adjudicating authority as an umbrella and creation of three zones of Lahore, Islamabad and Karachi to go after those not declaring their undisclosed assets and properties. The FBR will seize the assets of any citizen who failed to declare them under the government’s Assets Declaration Scheme from now on, after the expiration of the declaration scheme.

  • Seven people, including two security personnel, were injured in an explosion in Baluchistan’s Turbat city on 3rd July, said police.

According to police, miscreants on a motorcycle lobbed a hand grenade at Buleda Staff in Turbat city. The target of the blast appeared to be the security personnel deployed there, they said. The injured were rushed to district headquarters hospital in Turbat where a state of emergency was imposed to provide treatment expediently. Police said the assailants managed to escape unhurt from the spot.

Economy

  • The Executive Board of the International Monetary Fund (IMF) on 3rd July approved a three-year bailout package worth $6 billion to Pakistan.

IMF Executive Board has approved a three-year US$6 billion loan to support Pakistan’s economic plan, which aims to return sustainable growth to the country’s economy and improve the standards of living,” Gerry Rice, the IMF spokesperson, confirmed on Twitter. The country’s economic plan seeks to return sustainable growth to the economy by adopting reforms to foster stronger and more sustainable growth,” an image in Rice’s tweet read. The IMF and Pakistan’s government had earlier already signed a staff agreement on May 12 in this regard. Under this agreement IMF would review economic indicators every quarter. Earlier, it was reported that the final budget measures passed by the assembly, along with a report on compliance with all prior actions, would be the key elements in the IMF board’s decision to grant the request by Pakistan for a bailout facility.

  • Inflation reaches new heights as new Financial Year 2020 begins

 

The month of July also ushered in a steep rise in inflation across the country. The recent hike in taxes paved way for inflation to reach new heights, creating plenty of problems for citizens.

Sales taxes, along with other taxes, have been imposed from July 1. Increase in gas prices will also be applied from July 1. The electricity prices per unit will increase by Rs0.75. the prices for vegetables and fruits will increase by Rs20 to Rs80 per kilo. The transporters alliance in Karachi has decided to go on a strike over likely hike in the price of CNG by Rs18 in Sind. The price of CNG per kilo now ranges from Rs132, to Rs140. Meanwhile, the online taxi services also announced an increase of five per cent in fares. The ticket price for Railway has also been increased from July1, with a hike of two to eight per cent.

In Faisalabad, in protest of sales tax, the textile processing mills association has announced to shut down factories. Due to the announcement, daily wage workers have been quite disgruntled.

Inflation in the month of June 2019 was recorded at 8.89 percent, according to data released by the Pakistan Bureau of Statistics (PBS), reflecting an increase of 0.36 percent as opposed to May.

  • The Asian Development Bank (ABD) has approved a $235 million loan to develop Karachi’s Bus Rapid Transit project.

According to a press release issued by the ADB on Friday, the Karachi BRT Red Line Project will deliver the 26.6 kilometers BRT Line Red Line and its associated facilities, which they said will benefit 1.5 million individuals, who live within a km of the Red Line BRT station. The ADB said that over 300,000 passengers are expected on the Red Line BRT routes daily.

  • The government’s finance team announced on 4th July that a total of 137,000 people have registered for the tax amnesty scheme and deposited a Rs70 billion in taxes until July 3.

Addressing a press briefing Adviser to Prime Minister on Finance Dr Hafeez Shaikh flanked by State Minister for Revenue Hammad Azhar and Chairman Federal Board of Revenue (FBR) Shabbar Zaidi disclosed that assets worth over Rs3, 000 billion had been declared under the scheme. However, he did not share the breakdown of how much of this was foreign versus domestic assets. Likewise, data was also not available that how many people have opted for the pay-later-option. Total amount to be received as taxes will only become known once the Federal Board of Revenue (FBR) releases this data as well.

The government paid $2.346 billion in the third quarter of last fiscal year as debt servicing payments, reported the State Bank of Pakistan (SBP) on 4th July.

Data published by SBP revealed that the government in the first nine months of FY19 paid $7.229bn — slightly less than the cumulative payments during FY18. The rising debt servicing costs have become a cause of concern for the government which is already facing an acute shortage of foreign exchange reserves. If the country pays another $2.5bn in the form of debt servicing during the fourth quarter, the cumulative payments would reach to $10bn. The cumulative payments made during the first three quarters included $5.184 as principal and $2.045bn interest.

F.C Exchange Rates of PKR as of 5th July 2019 as compared to 29th June 2019
Countries PKR rate as of 29th  June 2019 PKR rate as of 5th July 2019
U.S.A. 161.0 157.75
U.K. 203.00 200.00
Euro 183.0 180.0
Japan 1.45 1.48
Saudi Arabia 41.70 42.00
U.A.E. 42.70 43.00

Pakistan Stock Exchange Indices

As of 5th July 2019 As Compared

To 28th June 2019

Position as of 5th July 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 71 (Curr) Current 34190.02 Current 16023.76
Decline (High) 191 High 34570.62 High 16184.50
Unchanged (Low) 13 Low 34062.98 Low 15985.62
Total change 275  -380.60  -160.74

 

 

Position as of 28th June 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 185 (curr) Current 33901.58 Current 16064.88
Decline (High) 111 High 33936.23 High 16064.88
Unchanged (Low) 26 Low 33409.50 Low 15787.62
Total change 322  127.15  118.20

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