Economic and Political Weekly 11-08-2019

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World

Politics

·     Kashmir in lockdown after India scraps its autonomy

India’s northern disputed Jammu and Kashmir region remains cut off from the rest of the country, two days after the federal government scrapped its special constitutional status after nearly seven decades. Tens of thousands of heavily armed paramilitary personnel patrolled Kashmir’s summer capital Srinagar and surrounding areas on 6th August, in a bid to deter protests following the termination of Article 370 by India’s federal Hindu nationalist Bharatiya Janata Party (BJP) government on 5th August.

  • Droughts force thousands to abandon way of life in Somaliland

They are the vanguard of a cohort likely to soon number many millions of people in climate-vulnerable locations across the planet. They are crammed into supposedly temporary camps to cater for the tens of thousands of villagers forced off the land because of sustained droughts.

·  Calls for tighter US gun control after mass shootings leave 29 dead

The death toll from 4th August morning’s mass shooting in Dayton, Ohio, may have been higher if police officers had not responded to the attack within minutes, authorities said. Nine people were killed in the early hours of 4th August after a 24-year-old gunman went on a shooting rampage before responders shot and killed him.

· Illegal logging implicated in vast Siberian wild fires

Russian prosecutors said on 6th August that some of the enormous Siberian wildfires that environmentalists have dubbed a climate emergency were started deliberately by arsonists trying to conceal illegal logging activity. Russian president Vladimir Putin called in the army last week to help firefighter’s battle fires raging in remote Siberian forestland that had spread to an area larger than Belgium and blanketed hundreds of villages and towns in smoke.

· Trump imposes broad new sanctions on Venezuelan government

US president Donald Trump has announced a near total economic embargo on Venezuela in an effort to force President Nicolás Maduro out of office. Mr. Trump on Monday signed an executive order freezing all Venezuelan government assets in the US. It also bars foreign nationals from undertaking financial transactions with the regime as Washington dramatically ratchets up pressure on Mr. Maduro

  • A general strike in Hong Kong descended into citywide mayhem on 5th August as defiant protesters started fires outside police stations and hurled bricks and eggs at officers.

After disrupting traffic early in the day, they filled public parks and squares in several districts, refusing to disperse even as police repeatedly fired tear gas and rubber bullets from above. While previous large rallies over the past two months of anti-government protests have generally been held over the weekends, Monday’s strike paralyzed regular city operations in an effort to draw more attention to the movement’s demands. Hong Kong is on “the verge of a very dangerous situation,” said Chief Executive Carrie Lam, who insisted that she has no plans to resign despite the ongoing tumult.

  • Chief Minister of India’s West Bengal state Mamata Banerjee has said that New Delhi took the decision on Article 370 without consulting other parties, adding that her Trinamool Congress will strongly opposethe Jammu and Kashmir Reorganization Bill that proposes to bifurcate the region into two union territories.

“We cannot support this bill. We cannot vote for this bill,” Banerjee told reporters, adding that “the government should have spoken to all political parties and the Kashmiris”. “If you need to arrive at a permanent solution, then you have to talk to all stakeholders,” NDTV quoted Banerjee as saying. Banerjee also attacked New Delhi over the arrest of Kashmiri leaders Mehbooba Mufti and Omar Abdullah.

  • Former Indian external affairs minister Sushma Swaraj passed away on 6th August, according to reports by Indian media.

According to India Today, the 67-year-old Bharatiya Janata Party (BJP) leader passed away “after suffering a heart attack in the evening”. She was hospitalized at All India Institute Of Medical Sciences (AIIMS), New Delhi. Swaraj was rushed in to AIIMS between 9:30pm and 10pm (India time) on Tuesday and was “straight away taken to the emergency ward” reported News 18, quoting Goa Chief Minister Pramod Sawan. “She died a little while later,” it added. Swaraj, who had suffered from chronic diabetes, had also been admitted to AIIMS in 2016 when she suffered kidney failure.

  • At least 16 people have died in India’s western state of Maharashtra as heavy rains and overflowing rivers swamped five districts, forcing authorities to move more than 140,000 people to safer places, a government official said on 7th August.

Rivers in the region were flooded as authorities released water from dams that had filled after some districts such as Kolhapur received as much as 670 mm (26.4 inches) of rainfall in a week. “Reservoirs in these districts are full. If we get more rainfall, then we have no option but to release water in rivers,” said Deepak Mhaiskar, divisional commissioner of Pune region.

  • Toni Morrison, the first African-American woman to win the Nobel Prize for Literature and one of America’s best loved writers, has died following a brief illness, her family said 6th She was 88.

Barack Obama — who awarded Morrison the Presidential Medal of Freedom — led the tributes, describing her as “a national treasure, as good a storyteller, as captivating, in person as she was on the page.” “Her writing was a beautiful, meaningful challenge to our conscience and our moral imagination. What a gift to breathe the same air as her, if only for a while,” the former US president wrote on Twitter. Morrison wrote 11 novels, many of them touching on life as a black American, in a glittering literary and award-laden career that lasted over six decades.

Economy-

  • Dubai prime residential property prices fell 1.9 per cent in the first half of the year due to the market being oversupplied, real estate Company Savills said.

The Middle East financial hub’s real estate market has steadily contracted since mid-2014 as foreign investor interest cooled. Prime market prices declined 19.8pc in the past five-years to $600 a square foot “due to high levels of new build stock and global economic uncertainty,” Savills said on 5th August. Savills defines prime properties as those in the top 5pc of the market by price, according to its website. Analysts say the overall market is down by at least a quarter since mid-2014.

GLOBAL INDICES AS OF 8th and 9th August 2019

As compared to 2nd and 3rd August 2019

Global indices as of 8th and 9th August 2019
Name Current Value Prev.

Close

US MARKETS
 NASDAQ (Aug 09) 7,959.14 8039.16
EUROPEAN MARKETS
 FTSE (Aug 09) 7,253.85 7285.90
 CAC (Aug 09) 5,327.92 5387.96
 DAX (Aug 09) 11,693.80 11845.41
ASIAN MARKETS
 SGX NIFTY (Aug 10) 11,089.50 11125.00
 NIKKEI 225 (Aug 09) 20,684.82 20593.35
 STRAITS TIMES (Aug 08) 3,168.94 3184.69
 HANG SENG (Aug 09) 25,939.30 26120.77
 TAIWAN WEIGHTED (Aug 08) 10,494.49 10386.18
 KOSPI (Aug 09) 1,937.75 1920.61
 SET COMPOSITE (Aug 09) 1,650.64 1665.12
 JAKARTA COMPOSITE (Aug 09) 6,282.13 6274.67
 SHANGHAI COMPOSITE (Aug 09) 2,774.75 2794.55

 

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

 

Pakistan

Politics

  • An accountability court in Lahore on 9th August granted the National Accountability Bureau (NAB) physical remand of PML-N leader Maryam Nawaz and her cousin Yousuf Abbas after their arrest until August 21. In Parliament It was Pakistan People’s Party (PPP) chairman Bilawal Bhutto-Zardari broke the news about the arrestof PML-N vice president Maryam Nawaz on the floor of the National Assembly on 8th August that the house witnessed another repeat of an ugly drama, with almost the same characters creating the same scenes with uncontrollable mayhem, prompting the chair to abruptly adjourn the proceedings without taking up any agenda item.

We were sitting in the doors lobby when we heard the news on TV that Maryam Nawaz has been arrested,” Mr. Bhutto-Zardari told the house amid slogans of “shame, shame” from the backbencher opposition members. “An opposition leader who is a woman has been arrested by this government,” he continued. The PPP chairman said his family had been in politics for generations and had witnessed many bad times, but they had never seen such things. It was only during the military regime of dictator Gen Ziaul Haq that they had seen political victimization of women opponents.  “We are now again witnessing it in new dictatorial Pakistan. You have become so Beghairat (dishonored). If you want to fight, fight with men. If you want to arrest, come and arrest men,” an emotional Bhutto-Zardari said before announcing a walkout from the house amid loud sloganeering from both sides of the aisle. The PPP members staged the walkout, but the PML-N members remained in the house as they wanted to speak, but the deputy speaker gave the floor to hot-headed MNA from Swat and Minister for Communica­tions Murad Saeed to respond to the PPP chairman. The PML-N members protested the deputy speaker’s move and gathered in front of his dais and raised full-throated slogans “say no to selected prime minister”.

  • The National Security Committee (NSC) on 7th August, in light of India’s recent actionsin occupied Kashmir, resolved to downgrade Pakistan’s diplomatic relations with New Delhi and suspend all bilateral trade.

Key decisions taken were-

  • Downgrading of diplomatic relations
  • Suspension of bilateral trade
  • Review of bilateral arrangements
  • Matter to be taken to United Nations
  • August 14 to be observed in solidarity with Kashmir’s

The top security body’s meeting, presided over by Prime Minister Imran Khan, was held in the aftermath of India’s “unilateral and illegal actions” through which it scrapped the special status for occupied Kashmir. The situation inside occupied Jammu and Kashmir and along the Line of Control was also discussed. The meeting also decided to review Pakistan’s bilateral arrangements with India, take the matter of revocation of Kashmir’s special status to the United Nations, including its Security Council, and observe the upcoming Independence Day on August 14 “in solidarity with brave Kashmiris and their just struggle for their right of self-determination”.

  • Former finance minister Miftah Ismail was on 7th August arrested by the National Accountability Bureau (NAB) after the Islamabad High Court rejected his request for an extension in his pre-arrest interim bail in the LNG import case.

Ismail, a PML-N leader, is wanted by NAB in connection with an inquiry against the authorities, including minister for petroleum and natural resources, the secretary concerned and others regarding illegal award of LNG terminal-1 to a private company. The bail application submitted by former managing director of Pakistan State Oil Sheikh Imranul Haque, another suspect in the LNG corruption case, was also rejected.

  • The joint parliamentary session convened on 7th August to debate the country’s future course of action in the wake of India’s decision to scrap Kashmir’s special status passed a resolution condemning New Delhi’s “unilateral move”.

The resolution was presented by Kashmir Committee Chairman Syed Fakhar Imam and was passed unanimously. It rejects India’s “illegal, unilateral, reckless and coercive attempt to alter the disputed status of Indian occupied Kashmir as enshrined in the UNSC resolutions”. Moreover, it decries “other regressive measures” to change Kashmir’s demographic structure as well as “the recent surge in unprovoked firing and shelling on unarmed civilian population across the Line of Control and use of cluster bombs by Indian forces in Azad Jammu and Kashmir”. The resolution also denounces the “deployment of additional troops and atrocities in Indian occupied Jammu and Kashmir and other recent developments”. It emphasizes that the “enforcement and legitimacy of resolutions of the UNSC can never be diluted by unilateral actions”.

  • Justice Qazi Faez Isa challenged in the Supreme Court on Wednesday the filing of a presidential reference against him, wondering if it was moved by a proxy with mala fide intention to achieve a collateral purpose.

Drafted and filed by Justice Isa himself under Article 184(3) of the Constitution, the 71-page petition sought a declaration that the in-camera hearing on the references by the Supreme Judicial Council (SJC) was without lawful authority and in breach of the fundamental rights. “This petition is not just about a judge but sends a signal to all, that they too will be subjected to the same treatment if they persist in acting independently and decide cases according to the Constitution and the law by disregarding vested interest,” said Justice Isa, himself a Supreme Court judge, in the petition. It also sought a restraining order against the SJC till the disposal of the petition since the references undermined the independence of the judiciary. While rebutting the allegations of possessing properties in the United Kingdom in the name of his wife and children, Justice Isa criticized the “unreasonable conduct” of SJC Secretary Arbab Mohammad Arif, who happens to be the Supreme Court registrar, and asked why Barrister Mirza Shahzad Akbar, chairman of the Assets Recovery Unit, and Zia-ul-Mustafa Nasim, the ARU’s legal expert, were carrying out the functions of bureaucracy when they were not civil servants.

 

  • The Supreme Court on 6th August came down hard on the Sind government, municipal authorities and K-Electric, the primary supplier of electricity to Karachi, over the deaths of dozens of people due to electrocution during recent rains in the metropolis.

A three-judge larger bench headed by Justice Gulzar Ahmed was hearing a number of applications regarding various civic issues in Karachi at the apex court’s Karachi registry. Justice Faisal Arab and Justice Sajjad Ali Shah were the other members of the bench. Justice Arab during the hearing noted that 22 children had died after suffering electric shocks during the recent rains in Karachi and other parts of Sindh but that the deaths had had no impact on the power utility. “Why were the electricity providers not grabbed by the collar over these many deaths?” Justice Ahmed asked the top Sind law officer.

  • At least one person was killed and 10 others injured in an explosion in Quetta’s Mission Road area on 6th August evening, police said.

The bomb went off in a market located on Mission Road where most of the shops are owned by members of the Hazara community, Deputy Inspector General (DIG) Quetta Abdul Razzaq Cheema said. He said the injured were rushed to nearby Civil Hospital Quetta for treatment. “We are investigating the nature of the blast,” the police officer told 

  • The Pakistan Electronic Media Regulatory Authority (Pemra) on 6th August slapped a fine of Rs1 million on Geo Newsfor airing a “highly seditious and scandalous program against National Accountability Bureau Chairman retired Justice Javed Iqbal and maligning state institutions”.

According to Pemra, anchorperson Shahzaib Khanzada in his program “Aaj Shahzaib Khanzada Kay Sath,” on July 18, discussed the matter of a scandalous video targeting the NAB chairman unilaterally, without taking into account the point of view of NAB. The electronic media regulatory body in a statement said that Geo News, by airing the content, violated the “Electronic Media (Program and Advertisements) Code of Conduct 2015 and orders of the Supreme Court”. “Geo News, in its reply and arguments made by its representative during the personal hearing, failed to defend the allegations leveled in the show cause [sent to the channel],” read the statement. The media regulator also warned the channel that in case of non compliance and repeated violation, strict legal action will be taken, which may result in suspension of license given to Geo News.

  • Prime Minister Imran Khan on 6th August constituted a seven-member committee to make recommendations to formulate Islamabad’s legal, political and diplomatic response to the change in the status of occupied Kashmir by the Indian government.

The foreign minister, attorney general of Pakistan, foreign secretary, director general of Inter-Services Intelligence, director general military operations, director general Inter-Services Public Relations and Ahmer Bilal Soofi, Special Envoy to Prime Minister, have been appointed as members of the committee.

  • Heavy rain poured in Karachi since Saturday

A new rain system has entered Sind and heavy rain has started pouring in Karachi. The Pakistan Meteorological Department’s chief meteorologist, Sardar Sarfaraz, has said that heavy rain has been forecast in Karachi from Saturday night till August 12 morning.

Economy

  • The benchmark KSE-100 index extended losses from 6th August dipping 539 points (1.8 per cent) on 7th August to close at 29,783, falling below the psychological level of 30,000.

The markets were affected by the ongoing political compression over the Kashmir issue with the arrest of PML-N Vice President Maryam Nawaz Sharif further fuelling uncertainty. Energy stocks emerged as the major laggards after the Oil and Gas Development Company (OGDC) declined 3.2pc, Pakistan Petroleum Ltd 2.4pc and Pakistan Oilfields Ltd (POL) 5pc as international oil prices slumped on the back of bleak demand outlook amid US-China trade war. Banking, power, cement, fertilizer, and food sectors were hammered by investors cumulatively taking away 354 points away from the index.

  • Prime Minister Imran Khan on 5th August directed authorities concerned to expedite the efforts for revival of Pakistan Steel Mills (PSM).

Chairing a meeting to discuss the situation of country’s biggest steel mill, the prime minister said, “Saving and restoring PSM is the top most priority of the government.” PM Khan was briefed about the current status of the steel mills, including its losses. He was apprised that till 2008 PSM was a profit earning organization but it started facing losses since 2009 and was closed down in 2015. “Devastation of a profit earning organization is a clear example of maladministration and negligence of the previous government,” the premier said. The PM noted that the government was bearing an expenditure of Rs370 million every month in terms of salaries of PSM employees. The meeting was informed that total losses of steel mill have gone up to Rs217 billion.

  • The government seeks to raise Rs6.4 trillion through auction of treasury bills in the next three months in addition to lifting Rs300 billion through Pakistan Investment Bonds (PIBs).

The State Bank of Pakistan (SBP) released the auction calendar for both the T-bills and PIBs auction on Monday announcing its plan to raise Rs6.4tr to retire maturing amount of Rs6.369tr through the T-bills. The government depends heavily on the banks to meet its budgetary support and other expenses since the central bank has stopped supplying credit to the government after agreement with International Monetary Fund. In the last T-bill auction held on July 31, the government raised Rs886.8bn and most of the amount was picked up from short-term three-month T-bills. However, the amount raised was massively short of the Rs1.5tr target as banks were reluctant to commit in six- and twelve-month instruments.

  • The banks failed to achieve the target set for agriculture credit for the fiscal year 2018-19 despite disbursing higher amount compared to the preceding year, data published by the State Bank of Pakistan (SBP) showed on 5th August.

The SBP said the banks made disbursements of Rs1.174 trillion or 94 per cent against the ambitious target of Rs1.25tr set by Agricultural Credit Advisory Committee for 2018-19. The agri-related disbursements in FY19 were 21pc higher than Rs972.6 billion last year. The SBP said the outstanding agri portfolio increased to Rs562.4bn by the end of June registering a growth of 20pc compared to last year’s Rs469.4bn.

           

F.C Exchange Rates of PKR as of 9th August 2019 as compared to 3rd August 2019
Countries PKR rate as of 3rd August 2019 PKR rate as of 3rd August July 2019
U.S.A. 159.70 159.30
U.K. 196.00 192.00
Euro 178.00 177.50
Japan 1.48 1.48
Saudi Arabia 42.70 42.20
U.A.E. 43.70 43.20

 

Pakistan Stock Exchange Indices

As of 9th August 2019 As Compared

To 3rd August 2019

 

Position as of 9th August 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 144 (Curr) Current 29429.07 Current 13764.61
Decline 134 (High High 30034.68 High 14031.86
Unchanged 17 (Low) Low 29332.80 Low 13707.86
Total Change 295  -308.91  -142.07

 

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

 

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