Home Weekly Reviews Economic and Political Weekly 09-02-2020

Economic and Political Weekly 09-02-2020

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World

Politics

·Senate acquits Trump as Mitt Romney breaks party ranks

The impeachment trial of US President Donald Trump ended on 5th February night in his acquittal, capping a tumultuous few days in American politics. The Senate voted by 52 to 48 to acquit Mr. Trump on the two charges brought against him over his dealings with Ukraine, following his impeachment by the Democrat-controlled House of Representatives in December.

·    Coalition government takes power in Kosovo to end four-month impasse

Kosovo’s parliament has approved a new government four months after elections, ending a political impasse that paralyzed domestic reforms and left the future of western-backed talks with Serbia in limbo. Sixty-six deputies in the 120-seat parliament voted in favor of a cabinet led by long-time opposition leader Albin Kurti, and dominated by his Vetevendosje (Self-Determination) party and the Democratic League of Kosovo (LDK).

· Mozambique insurgency drives fears of Islamist jihad in S Africa

A brutal insurgency under way in Mozambique’s northernmost province that escalated in 2019 has raised fears that an Islamist jihad movement is seeking to establish itself in southern Africa.

South Africa-based terrorism expert Jasmine Opperman says the Islamic State terror group has claimed responsibility for nearly two dozen of the 189 attacks perpetrated by a shadowy extremist group this year in Cabo Delgado, a rural resource-rich area of Mozambique bordering Tanzania.

·The Organization of Islamic Cooperation (OIC) on 3rd February rejected United States President Donald Trump’s plan for the Middle East, calling on its 57 member states not to help implement it.

 

The pan-Islamic body, which represents more than 1.5 billion Muslims worldwide, “rejects this US-Israeli plan, as it does not meet the minimum aspirations and legitimate rights of the Palestinian people, and contradicts the terms of reference of the peace process,” it said in a statement. It called on “all member states not (to) deal with this plan or cooperate with the US Administration efforts to enforce it in any way or form”.

· UK rushing through emergency laws to keep extremists in jail

The British government is seeking to rush emergency laws through parliament before the end of February to keep convicted terrorists in prison before the imminent release of a number of extremists deemed a risk to the public. Measures to end the automatic release of terrorists halfway through their sentence will be introduced next Tuesday and pass all its stages in the Commons two days later.

·Three dead after plane skids off runway in Istanbul

A Pegasus Airlines plane flying into Istanbul’s Sabiha Gokcen airport skidded off the end of a wet runway and broke into three pieces after landing on 5th February, killing three people and injuring 179, Turkish health minister Fahrettin Koca said. The three had died in hospital, with 179 of the 183 aboard wounded, Mr. Koca told reporters in the eastern province of Van. The Boeing 737-86J split into three pieces after what Mr. Yerlikaya said was a drop of around 30 to 40 meters (98 to 131 ft) at the end of the runway. Footage showed the plane landing and continuing at a high speed off the runway.

·Two dead after high speed train derails in Italy

 A high-speed train derailed in the northern Italian province of Lodi in the early hours of 6th February, killing its two drivers and interrupting traffic on the busy line between Milan and Bologna, officials said. Video from the scene showed that the front engine and at least one passenger carriage had skipped the tracks, flipping onto their side. Photographs suggested the engine had broken clear of the rest of the train and smashed into an adjacent building. The head of Italy’s civil protection unit said the two dead were the train drivers. A further 27 people were hurt, but none had life-threatening injuries

  • Kirk Douglas, the intense, muscular actor with the dimpled chin who starred in Spartacus, Lust for Life and dozens of other films, helped fatally weaken the blacklist against suspected Communists and reigned for decades as a Hollywood maverick and patriarch, died 5th February, his family said. He was 103.

 

“It is with tremendous sadness that my brothers and I announce that Kirk Douglas left us today at the age of 103,” his son Michael said in a statement on his Instagram account. “To the world, he was a legend, an actor from the golden age of movies who lived well into his golden years, a humanitarian whose commitment to justice and the causes he believed in set a standard for all of us to aspire to.”

· Hottest day on record in Antarctica as temperature hits 18 degrees

The continent of Antarctica has experienced its hottest temperature on record, with a research station provisionally recording 18.3 degrees. The reading beats the previous record on the earth’s southernmost continent of 17.5 degrees in March 2015; according to the Argentine station Esperanza, which collected the data.

·Corona virus: China begins inquiry after public outcry over doctor’s death

China’s leaders have launched an investigation into “issues raised by the masses”, following the death of a whistle blowing doctor who tried to warn the public of the dangers of a new corona virus and later died from it. Dr Li Wenliang was threatened by police after publicizing his concerns about the novel virus in late December, and was forced to sign a confession at the time that he had “made false statements” and was “engaging in illegal behavior”. The 34-year-old Wuhan medic contracted the virus last month and died on 7th February, triggering outrage that Communist Party officials had put politics above public safety. Dr Li was one of several whistleblowers in the medical profession who tried to sound the alarm about the dangers of the virus in the early weeks of the outbreak but was silenced by authorities. Following news of his death, online platforms were awash with messages mourning the passing of a “national hero” and condemning the government for its handling of the crisis.

Economy

·The US trade gap narrowed last year for the first time since 2013 after President Donald Trump escalated trade confrontations, causing imports from China to plunge, according to data released on 5th February.

The narrowing of the US trade gap — the stated goal of Trump’s trade policy — comes after a year when the deficit reached its highest level in a decade. The total trade deficit shrunk by nearly $10bn to $616.8bn in 2019 as exports fell by 0.1pc and imports dropped 0.4pc, the Commerce Department reported. Excluding services, the US deficit in goods fell by nearly $20bn to $866bn last year, as imports of Chinese products hit by Trump’s punitive tariffs dropped 17.6pc, according to the report.

GLOBAL INDICES AS OF 9th February 2020

As compared to 2nd February 2020  

 

Global indices as of 9th February 2020
Name Current Value Prev.

Close

US MARKETS
 NASDAQ (Feb 07) 9,520.51 9572.15
EUROPEAN MARKETS
 FTSE (Feb 07) 7,466.70 7504.79
 CAC (Feb 07) 6,029.75 6038.18
 DAX (Feb 07) 13,513.81 13574.82
ASIAN MARKETS
 SGX NIFTY (Feb 08) 12,059.00 12084.50
 NIKKEI 225 (Feb 07) 23,827.98 23873.59
 STRAITS TIMES (Feb 07) 3,181.48 3231.55
 HANG SENG (Feb 07) 27,404.27 27493.70
 TAIWAN WEIGHTED (Feb 07) 11,612.81 11749.68
 KOSPI (Feb 07) 2,211.95 2227.94
 SET COMPOSITE (Feb 07) 1,535.24 1535.79
 JAKARTA COMPOSITE (Feb 07) 5,999.61 5987.15
 SHANGHAI COMPOSITE (Feb 07) 2,875.96 2866.51

 

Global indices as of 2nd February 2020
Name Current Value Prev

Close

US MARKETS
 NASDAQ (Jan 31) 9,150.94 9298.93
EUROPEAN MARKETS
 FTSE (Jan 31) 7,286.01 7381.96
 CAC (Jan 31) 5,806.34 5871.77
 DAX (Jan 31) 12,981.97 13157.12
ASIAN MARKETS
 SGX NIFTY (Feb 01) 11,943.00 11987.00
 NIKKEI 225 (Jan 31) 23,205.18 22977.75
 STRAITS TIMES (Jan 31) 3,153.73 3170.68
 HANG SENG (Jan 31) 26,312.63 26449.13
 TAIWAN WEIGHTED (Jan 31) 11,495.10 11421.74
 KOSPI (Jan 31) 2,119.01 2148.00
 SET COMPOSITE (Jan 31) 1,514.14 1523.99
 JAKARTA COMPOSITE (Jan 31) 5,940.05 6057.60
 SHANGHAI COMPOSITE (Jan 23) 2,976.53 3060.75

 

Pakistan

Politics

The Pakistan Railways (PR) will begin a “grand operation” from 10th February for the removal of encroachments along both tracks of the Karachi Circular Railway (KCR), officials said.

The decision was taken after Justice Gulzar Ahmed of the Supreme Court ordered authorities to immediately remove encroachments from railway lines and revive the KCR. Justice Ahmed, who was chairing a meeting at the apex court’s Karachi registry, said time should no longer be wasted in the revival of the KCR, which was abandoned around two decades ago.

  • The Upper House of the parliament on 3rd February rejected a bill proposing an increase in the salaries of lawmakers after an intense debate on whether parliamentarians should give themselves a raise in the current economic situation.

Only 16 votes were cast in favor of the Chairman and Speaker (Salaries, Allowances and Privileges) (Amendment) Bill, 2020, while 29 senators voted against it. The ruling Pakistan Tehreek-i-Insaf (PTI), Pakistan People’s Party (PPP) and the PML-N opposed the bill, citing the country’s weak economy, while the Muttahida Qaumi Movement-Pakistan (MQM-P) and Pakhtunkhwa Milli Awami Party (PkMAP) declared their support. Further, two other bills including the Deputy Chairman and Deputy Speaker (Salaries, Allowances and Privileges) (Amendment) Bill, 2020 and the Members of Parliament (Salaries and Allowances) (Amendment) Bill, 2020 were rejected through a voice vote.

  • The Global Climate Risk Index has placed Pakistan on the fifth spot on the list of countries most vulnerable to climate change in its annual report for 2020, which was released by the think-tank German watch on 5th February.

According to the report, Pakistan lost 9,989 lives, suffered economic losses worth $3.8 billion and witnessed 152 extreme weather events from 1999 to 2018 and based on this data, the think-tank has concluded that Pakistan’s vulnerability to climate change is increasing.

  • An accountability court in Lahore on 3rd February acquitted former prime minister Raja Pervaiz Ashraf and seven others in case related to illegal recruitments in the Gujranwala Electric Power Company (Gepco).

Judge Amjad Nazir Chaudhry accepted the request for the dismissal of the case which had been filed recently after the government introduced amendments to the National Accountability Bureau (NAB) Ordinance. NAB had filed a reference against the former PM in 2016 for recruiting 437 people illegally to Gepco. According to the NAB prosecutor, individuals who had not even applied were given jobs, merit was ignored and appointments had been made on a political basis. The recruitments had also violated the policy of written examinations and domicile, NAB alleged.

  • The special public prosecutor, representing the Sindh Rangers in the Baldia factory fire case, told an antiterrorism court in Karachi on 3rd February that the Muttahida Qaumi Movement (MQM) leaders had pressured police to halt investigations into the incident a week after the deadly inferno.

It was unearthed within a week that the Baldia factory fire was a deliberate act of arson instead of an accident, but the police high-ups changed the first investigating officer allegedly under pressure from the MQM, special public prosecutor Sajid Mehboob Shaikh informed the ATC. He took this stance while initiating final arguments before the ATC-VII judge, who is conducting the trial in the judicial complex inside the central prison.

  • State Minister Shehryar Afridi on 5th February stood by his comments regarding usage of opium and other drugs to manufacture medicines, saying that the practice was followed by all developed countries.

The Minister for States and Frontier Regions (Safron) and Narcotics Control was responding to criticism over a video of a public gathering in Tirah valley, in which he can be heard saying that the state burned tonnes of drugs recovered every year when they can be used to make medicines. He had also announced that a factory was being built on the directions of Prime Minister Imran Khan where seized drugs would be used to manufacture medicines.

Economy

  • THE government appears too self-involved to care but Pakistan can’t afford to alienate the private sector. With the economy contracting at a steep pace and households in immense stress, it is whimsical to imagine a turnaround without fresh significant doses of investment.

Sadly, the rate of investment in the country has slumped further from an already low base. According to the Economic Survey 2018-19, private investment as a percentage of GDP dropped to 9.8 per cent from 10.3pc a year before while public investment also edged lower to 4pc from 4.8pc. This amounts to one third of average investment rates in India and Bangladesh.

  • Pakistan’s telecommunication, computer and information services exports jumped 18.5 per cent to $517 million during the first seven months of current fiscal year.

The major chunk of that came under the software consultancy services as exports of the segment rose around 12pc to around $159m during the period under review. Following closely behind software consultancy, exports of computer software also rose 8.17pc to $129m, from $119m during the same period last fiscal year. Citing provisional figures for the first half of current fiscal year, P@SHA Chairman Shahzad Shahid said, “IT and ITeS (information technology enabled services) is a sector which has continued to show impressive growth in exports year on year.

  • Moody’s Investors Services on 6th February announced a “stable outlook” for Pakistan’s banking system over the next 12-18 months underpinned by “robust funding and liquidity and close links with the sovereign”.

In a press release, the agency said in terms of the operating environment, economic activity in Pakistan would also be supported by the ongoing infrastructure projects as well as by improvements in power generation and domestic security. Additionally, the terms of trade gains and depreciation of the rupee were “likely” to raise private investment from low levels.

  • With around 40 per cent increase in Pakistan’s public debt and liabilities in 15 months, the government on 6th February disclosed that it intended to borrow another Rs1.9 trillion for financing of its fiscal deficit from January to July 2020.

The information was provided by the Ministry of Finance in a written reply to a question by Pakistan Muslim League-Nawaz (PML-N) MNA Afzal Khokhar in the National Assembly, which later witnessed another verbal clash between the treasury and opposition members on the issue of price hike. The information came almost a week after the government conceded major violations of the Fiscal Responsibility and Debt Limitation Act for massively exceeding debt acquisition limits. In its debt policy statement laid before parliament last week, the finance ministry had noted that total debt and liabilities, which stood at Rs29.879tr at the end of fiscal year 2018, crossed Rs41.489tr at the end of September 2019, showing an increase of Rs11.6tr, or 39pc. At the end of the fiscal year 2019, the total debt and liabilities were reported to have increased by about 35pc, or Rs10.344tr, to touch Rs40.223tr.

F.C Exchange Rates of PKR as of 9th February 2020 as compared to 2nd February  2020
Countries PKR rate as of 2nd February 2020 PKR rate as of   9th February  2020
U.S.A. $ 154.70 154.60
U.K. Pounds 204.0 203.50
Euro 171.50 172.00
Japan Yen 1.43 1.43
Saudi Arabia Rial 41.35 41.40
U.A.E. Dirham 42.30 42.20

 

Pakistan Stock Exchange Indices

As of 9th February 2020 As Compared

To 2nd February 2020

 

Position as of 9th February  2020
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 47 (Curr) Current 40143.63 Current 18613.28
Decline 276 (High) High 40869.49 High 18973.72
Unchanged 20 (Low) Low 40046.48 Low 18581.40
Total Change 343  -580.77  -328.10

 

Position as of 2nd February  2020
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 116 (Cur) Current 41630.94 Current 19560.82
Decline 211 (High) High 42137.40 High 19819.27
Unchanged 15 (Low) Low 41558.74 Low 19536.40
Total Change 342  -272.56  -138.95

 

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