Economic & Political Weekly 13th January 2019




• Violence erupts in France as yellow vests take to the streets.

Police in Paris fired water cannon and tear gas to repel gilets jaunes (yellow vest) demonstrators from around the Arc de Triomphe monument on 12th January. This is the ninth straight weekend of protests against French president Emmanuel Macron’s economic policies. Thousands of protesters also marched noisily but peacefully through the Grands Boulevards shopping area in northern Paris. This is close to where a gas explosion in a bakery killed three people, including two firefighters, and injured nearly 50 early on 12th January.

• European elections will test resilience of EU’s mainstream parties.

The turn of the New Year has ushered in the EU’s election season. In five months, voters across the union will cast ballots in a European Parliament vote that is an important test of the ability of the EU’s mainstream political families to resist the tide of populism that has swept the continent. The vote will also determine in a real sense how governable the EU is – the parliament is now a genuine co-legislator in many areas of EU policy and budgeting. Unless a working majority from across the mainstream parties – supporters of European integration – is sustained, there is a real danger that populists and Euro-skeptics can bring about legislative gridlock.

• Turkish journalist sentenced to jail for work on Paradise Papers.

A Turkish journalist has been sentenced to more than a year in jail for her work on the Paradise Papers investigation into offshore tax havens, because the inquiry revealed details of the business activities of Turkey’s former prime minister and his sons. Pelin Ünker, a member of the International Consortium of Investigative Journalists (ICIJ), has been found guilty in an Istanbul court of “defamation and insult” for writing about companies in Malta owned by Binali Yildirim and his sons. Mr Yildirim was prime minister of Turkey from 2016 to 2018, when the post was abolished, and is now the speaker of the country’s national assembly.

• Yellow vest riots are too close to home for city-dwelling elites.

“Death to the bourgeois state,” says graffiti left by gilets jaunes rioters next to a front door in Paris. The protest movement turned insurrection has come too close for comfort. “The Future”, says graffiti on a shop in the boulevard St Germaine, next to the circular A symbol of anarchy. The Banque Nation ale de Paris protected its windows with plywood, on which the rioters listed the bank’s supposed sins, including “climatic idée” and fomenting war in Sudan.

• The country with the world’s most powerful passport in 2019 is Again. Japan.

Japan retains its top spot as the world’s most travel-friendly passport thanks to the document’s access to 190 countries. South Korea edged up the ranking from October’s index to join Singapore, offering access to 189 jurisdictions, thanks to a new visa-on-arrival agreement with India.

• President Donald Trump walked out of discussions to end a partial government shutdown, now in its third week, calling the talks with congressional Democrats “a total waste of time.”

Trump left a meeting with Chuck and Nancy saying it a total waste of time. Trump said “I asked what is going to happen in 30 days if I quickly open things up, are you going to approve Border Security which includes a Wall or Steel Barrier? Nancy (House Speaker Nancy Pelosi) said, NO. I said bye-bye, nothing else works!”

• Rahaf al-Qunun has been given UN refugee status.

The 18-year-old Saudi woman who fled to Thailand to escape her family has been declared by the UN refugee agency (UNHCR) to be a legitimate refugee, Australian officials said. Australia is conducting health, security and other background checks on Rahaf Mohammed al-Qunun ahead of her possible resettlement in the country as a refugee. Qunun had flown to Thailand from Kuwait to escape her family who she feared would kill her. She intended to fly on to Australia, but barricaded herself in a hotel room in Bangkok’s main airport on Sunday after Thai immigration officials attempted to deport her back to the Middle East.

• On January 2, Bindu Ammini, a 40-year-old law lecturer, and Kanakadurga, a 39-year-old local government employee, made history when they entered India’s Sabarimala Hindu temple in southern Kerala state — the first women to do so since the country’s top court scrapped a rulebarring the entry of girls and women of child-bearing age.

Majority of Supreme Court judges say the rule was unconstitutional, setting off what has become an increasingly fractious national debate about gender, religion and the limits of the law. Several other women have attempted to enter the temple since the ruling. But they’ve been blocked by angry mobs. Bindu Ammini and Kanakadurga’s entry was like a bolt of electricity: It invigorated those who say that issue boils down to gender equality in an open, democratic society. And it angered those who say that the courts have no business intervening in what they see as a matter of faith.

• Malaysia’s royal families are understood to have held a meeting to discuss a date to select a new king, after Muhammad V announced his abdication.

Muhammad V’s abdication marked the first time in modern history that the country’s constitutional leader has stepped down. Muhammad V was elected the 15th Yang di-Pertuan Agong — Malaysia’s head of state — in December 2016. For the six years prior to that he reigned as Sultan of Kelantan province. According to state-run news agency Bernama, the cars of the rulers of six of the royal houses arrived at the Istana Negara — the King’s official residence. The royal houses were believed to be meeting to discuss a date to elect Muhammad V’s successor.

• Democratic Republic of the Congo Main opposition leader secures surprise victory

The leader of the main opposition party in the Democratic Republic of the Congo (DRC) has been declared the surprise winner of the country’s December 30th presidential election. The result giving victory to Felix Tshisekedi, announced early on 10th January, means the first electoral transfer of power in 59 years of independence in the DRC. It will come as a shock to many observers who believed authorities would ensure the government candidate, Emmanuel Ramazani Shadary, would be the winner in the polls, the third since the end of a bloody civil war in 2002. Mr Tshisekedi has paid his respects to outgoing president Joseph Kabila, whom he described as “an important partner” in democratic transition in our country”. However church in Congo has asked not to accept the election results.

• May suffers key Brexit defeat as Commons exerts power.

UK parliament forces prime minister to quickly present ‘plan B’ if withdrawal deal is rejected. UK Prime Minister Theresa May got in a fiery exchange with the leader of the opposition, Jeremy Corbyn, when confronted on the lack of change on her Brexit deal. MPs have given British Prime Minister Theresa May less than a week to come up with an alternative plan if the House of Commons rejects her withdrawal deal.

• Gabon thwarts military coup attempt in president’s absence

Gabon foiled an attempted military coup on Monday, killing two suspected plotters and capturing seven others just hours after they took over state radio in a bid to end 50 years of rule by President Ali Bongo’s family. Government spokesman Guy-Bertrand Mapangou announced the deaths and arrests after soldiers briefly seized the radio station and broadcast a message saying Mr Bongo was no longer fit for office after suffering a stroke in Saudi Arabia in October.

• Saudi women to be informed of divorce by text message

Women in Saudi Arabia will be notified by text message when their husbands divorce them, under a new law designed to protect them from having their marriages ended without their knowledge, the Saudi government said on6th Jan 2019. The new law, which came into effect, was seen as a way to end secret divorces and ensure women are fully aware of their marital status so they can protect their rights, such as the right to alimony.

• Rakhine Buddhist rebels kill 13 police in Myanmar.

Buddhist Rakhine insurgents killed 13 policemen and injured nine in attacks on four police posts in Myanmar’s Rakhine state on Friday as the country marked Independence Day, the official news agency said. Fighting resurged in Rakhine in early December between government forces and the rebel Arakan Army, which wants more autonomy for the Buddhist ethnic Rakhine minority.

• Arab world begins to normalize relations with Syria.

Saudi Arabia, the United Arab Emirates and Egypt have begun to normalise relations with Syrian president Bashar al-Assad with the aim of reducing Iran’s influence in the Levant and countering Turkey’s military presence in Syria. During a meeting in the Gulf last month of intelligence chiefs from the three, and, reportedly, from Israel, it was decided to return

• With his country in crisis, Venezuelan President Nicolas Maduro begins another six-year term

Venezuelan President Nicolas Maduro begins another six years in power on 10th January with a collapsing economy that shows no sign of bottoming out and a threat from some Latin American neighbors who say they will not recognize his government. And still, there are few in or outside of Venezuela who are predicting Maduro’s downfall in 2019 or beyond. “It seems that Maduro has gained the upper hand in terms of his control over the key institutions in the country, including the military, which is most key. It is an insight long held by Taina Nieves, who has just returned to Venezuela’s capital Caracas after scouring both Peru and Columbia for a better life and is more disillusioned than ever. “Now that that man will remain in power, prices will go up again. In fact, the International Monetary Fund predicts inflation will hit 10 million percent in 2019. The Maduro regime continually raises the minimum wage, fueling ever more inflation, so every raise actually buys Venezuelans less and less every month.

• Devastating floods and near-freezing temperatures bring death and more chaos to Syrian refugee camps in Lebanon.

The water rose to nearly half a meter at many of the Syrian refugee camps in Lebanon’s Bekaa Valley this week. Aid workers in the area say that some 600 refugee families were forced to evacuate their homes, braving rain, sleet and strong winds to find shelter. They trudged through sewage water that burst through the drainage system to get to shelter. In the northern town of Minyeh, an 8-year-old Syrian girl died during the storm after she fell into a river and drowned.

• Hundreds of thousands of US workers left without pay.

Members of Congress left Washington for the weekend with no deal in sight to end the government shutdown, as hundreds of thousands of workers were left without pay on 11th January. With the government shutdown set to become the longest in history when it reaches the 22-day mark this weekend, both sides looked as far apart as ever on an agreement.

Data published by the Chinese government on 10th January has added to worries about a sharp slowdown in the world’s second largest economy.

Prices in China rose by much less than expected in December. The consumer price index dropped to 1.9%, well below the 3% upper limit set by the central bank, and producer prices grew at the slowest pace in two years. Evidences are there that China’s economy is slowing at a worrying pace. Weak inflation gives Chinese policymakers more room to loosen monetary policy in order to boost economic growth. The big question is how much stimulus will be needed.

• US crude prices have crashed 40% since hitting four-year highs above $76 a barrel in October 2018. Brent crude, the global benchmark, slumped this week to its lowest level since August 2017.

Oil is an important bellwether of future economic growth, and wild price swings in recent days mirror those of global stocks. Sustained downward pressure on oil prices reflects concerns about surging US production and a weaker global economy. Not even output cuts by OPEC and its partner states have been able to reverse the trend. The dynamic could make for a wild 2019.

• International Monetary Fund economists expect global growth to slow to 2.5% next year from 2.9% in 2018. Reduced economic activity means less demand for energy products.

The International Energy Agency has warned of “relatively weak” demand in Europe and developed Asian countries. It also flagged a “slowdown” in demand in India, Brazil and Argentina caused in part by weak currencies. OPEC warned this month that demand for its oil next year would be about 1 million barrels a day less than in 2018. Some support may come from lower oil prices but overall the global economy appears likely to slow.”

  • Global indices as of 11th January 2019 as compared to January 04, 2018.


Global indices as on 11th January 2019
Name Current Value Change Prev.Close
 NASDAQ (Jan 11) 6,971.48 -14.59 6986.07
 FTSE (Jan 11) 6,918.18 -24.69 6942.87
 CAC (Jan 11) 4,781.34 -24.32 4805.66
 DAX (Jan 11) 10,887.46 -34.13 10921.59
 NIKKEI 225 (Jan 11) 20,359.70 195.90 20163.80
 STRAITS TIMES (Jan 11) 3,198.65 15.14 3183.51
 HANG SENG (Jan 11) 26,667.27 145.84 26521.43
 TAIWAN WEIGHTED (Jan 11) 9,759.40 38.71 9720.69
 KOSPI (Jan 11) 2,075.57 12.29 2063.28
 SET COMPOSITE (Jan 11) 1,597.04 9.41 1587.63
 JAKARTA COMPOSITE (Jan 11) 6,361.46 32.75 6328.71
 SHANGHAI COMPOSITE (Jan 11) 2,553.83 18.73 2535.10
 SGX NIFTY (Jan 12) 10,855.00 38.00 10817.00




Global indices as on 4th January 2019
Name Current Value Change Prev.Close
 NASDAQ (Jan 04) 6,738.86 275.36 6463.50
 FTSE (Jan 04) 6,837.42 144.76 6692.66
 CAC (Jan 04) 4,737.12 125.63 4611.49
 DAX (Jan 04) 10,767.69 351.03 10416.66
 NIKKEI 225 (Jan 04) 19,561.96 -452.81 20014.77
 STRAITS TIMES (Jan 04) 3,059.23 46.35 3012.88
 HANG SENG (Jan 04) 25,626.03 561.67 25064.36
 TAIWAN WEIGHTED (Jan 04) 9,382.51 -109.91 9492.42
 KOSPI (Jan 04) 2,010.25 16.55 1993.70
 SET COMPOSITE (Jan 04) 1,575.13 15.10 1560.03
 JAKARTA COMPOSITE (Jan 04) 6,274.54 53.53 6221.01
 SHANGHAI COMPOSITE (Jan 04) 2,514.87 50.51 2464.36
 SGX NIFTY (Jan 05) 10,887.00  





  • Late Asghar Khan’s legal heirs ask Supreme Court to ensure implementation of the landmark 2012 verdict in the Asghar Khan case.

The 2012 SC verdict was issued on a petition filed in 1996 by Asghar Khan, requesting the top court to look into allegations that the Inter-Services Intelligence (ISI) had secretly bankrolled many politicians in the 1990 elections by dishing out Rs140 million. In the latest development, Khan’s wife Amina Asghar Khan, his daughters Nasreen Ahmed Khattak and Sheereen Awan, and son Ali opposed the FIA’s suggestion and highlighted what they perceived to be halfhearted efforts of the authorities.

· Pakistan looks for investment pacts with Saudi Arabia, UAE

Pakistan expects to sign investment agreements with Saudi Arabia and the United Arab Emirates in the coming weeks, the prime minister’s office said, as Islamabad builds on its ties with states that have recently lent it billions of dollars. A memorandum of understanding was expected with Saudi Arabia this month, with an investment framework accord set to be signed with the UAE in February, Prime Minister Imran Khan’s office said in a statement following a meeting on 9th January. The MoUs follow a similar agreement signed last month with China, it said.

·Imran Khan sacks SSGC and SNGPL heads on disaster.


Putting responsibility of the acute gas shortage in the country on heads of the gas utilities companies, Prime Minister Imran Khan on 9th January sacked managing directors of the Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipeline Limited (SNGPL). “SSGC’s board of directors has appointed Imran Farookhi, DMD (corporate affairs), as the acting managing director till a new incumbent is appointed, Similarly, the government appointed Amir Tufail as SNGPL managing director after accepting resignation of outgoing MD Amjad Latif.

  • Police and other law enforcement personnel on 11th January arrested five suspects, belonging to banned Baluchistan Liberation Army (BLA), from Karachi, Hub and Quetta over the terrorist attack on the Chinese consulate in Karachi in November last year.

Additional Inspector General of Police (AIG) Dr Amir Shaikh told reporters that the mastermind of the consulate attack was BLA commander Aslam alias Achu. The attack was planned in Afghanistan and carried out with the assistance of India’s Research and Analysis Wing (RAW), he added.

  • Police on 11th January arrested two security guards from Jamshoro who allegedly attacked a Chinese national in Karachi’s DHA neighborhood with a knife and robbed. him of Rs3 million cash and other valuables late on 10th January night.

The held suspects are guards of a private security company named Polizia, DIG South Sharjeel Karim Kharal said. The injured Chinese national, Shi Qingpu, was residing in Karachi while doing private business, the officer revealed.

  • World Health Organisation (WHO) has shed light on the issue of child marriages in Pakistan saying such practice is most common in rural areas. It further said that more than 140 million underage girls are likely to get married between 2011 to 2020.

According to the WHO report titled ‘Demographics of child marriages in Pakistan’, child marriage remains a serious concern in Pakistan, with 21 per cent of girls getting married before reaching the age of 18, especially in the rural areas.

  • Selfie Quadcopter Conquers Pakistan. The Idea Is Genius…


This Pakistan Selfie trend is going viral worldwide… Phone selfies are boring. People aren’t doing them anymore and they’ve become unpopular… First, there was the standard selfie, then the selfie stick, and now the next evolution of the selfie has arrived! Nobody knows who did it first, but soon thousands of people in Pakistan started uploading incredible selfies from insane angles. They uploaded them to social media and soon EVERYONE wanted to do the same! Now, this new type of selfie has taken off – Literally – across the world!

Economy –

  • Government borrowing increased by Rs2.24 trillionin the first five months of the fiscal year, according to data released by the State Bank.

On the face of it, the figure is alarming. Opponents of the government, as well as headline-hungry TV anchors, seized on it to make all sorts of analytical claims that the government has lost control of its fiscal effort and is borrowing in record amounts to make up for its failure to mobilize revenues.

  • Federal Minister for Finance Asad Umar on 10th January said that the government was still negotiating the bailout package with the International Monetary Fund and as soon as any suitable programme for the betterment of the economy finalised, the agreement with the fund would be signed.

He said the government after coming into power had announced exploring and utilising other alternative sources for economic development and stabilisation, besides negotiating with the IMF.

  • The Drug Regulatory Authority of Pakistan (Drap) on 11th January, with the approval of the federal government, announced up to 15 per cent hike in the prices of medicines, apart from life-saving drugs that have received 5% hike.

The Pakistan Pharmaceutical Manufacturers Association (PPMA) Chairperson Zahid Saeed said that the drug manufacturing companies have been demanding 40pc increase in the prices of medicines. He said that the increase was inevitable because of the increase in dollar’s value, adding that PPMA was reviewing the contents of the notification.

  • Remittances from overseas Pakistanis jumped 10 per cent to $10.718 billion during the first six months of this fiscal year as compared to $9.744bn in same period last year, reported the State Bank of Pakistan on 10th

The data reveal that Saudi Arabia remained the biggest source of inflows as Pakistani workers in the kingdom remitted $2.567bn during the first half of this fiscal year. This represented a 1.46pc increase from $2.53bn recorded in 1HFY18. The United Arab Emirates closely followed with inflows of $2.292bn, up 6.1pc, over $2.16bn in the same period last year. Malaysia is also emerging as a major source of remittances with recent inflows surging by 46pc — highest growth from any destination — during this period. Remittances from Malaysia rose to $735m as against $501m in 1HFY19. The United States and the United Kingdom remained healthy contributors. Inflows from the US grew 29.3pc to $1.655bn while UK remittances were up 13.5pc to $1.533bn during the period under review. On the other hand, inflows from Gulf Cooperation Council countries declined by 7pc to $1.047bn while those of EU dipped 1.3pc to $310m.

  • Investment Scenarios in Pakistan-2019

In 2018, gold gleamed as an investment option, a safe bet in volatile times. Gold has an inverse correlation with most other asset classes — a group of securities that behave similarly in the marketplace — so that when returns on stocks were negative, and almost all else in single digit, the 21.8 per cent gain in gold eclipsed all save the dollar. Investors in the greenback sat on the highest gain of 25.8pc due to a massive depreciation in the value of the rupee.

Opinion holds that in 2019 investor in securities are likely to be winners. But, winners those who put their money using stock ‘technical’s’ and not ‘fundamentals’. Real estate can provide good returns if investments are made in properties that are on the outskirts of major cities and not in the centre, Stock market would likely provide a return of around 20pc; National Saving Schemes (NSS) and government securities a return of 11.3pc. Money in the bank, which in 2018 earned just 3.2pc, is likely to provide 9pc in 2019. The dollar could generate 6pc and gold 12pc.

According to the above, returns on all asset class — save for gold and dollar — will improve, but the equity market will take the cake. In 2019, for investors with an appetite for risk, equity market returns are expected to be higher than those of other asset class. For risk-averse investors fixed income instruments, money market and government securities are considered to be avenues of choice.

  • The trade deficit in first half of the current fiscal year shrank 5% to $16.8 billion on the back of numerous measures to squeeze imports but exports could not pick up pace despite a steep currency depreciation of 33% in the last one year.

The trade deficit, which stood at $17.7 billion in July-December 2017, shrank 5% to $16.8 billion in the corresponding period in 2018, stated the Ministry of Finance in a press statement.


F.C Exchange Rates of PKR as of 12th January 2019
Countries PKR rate as of 5th January 2019 PKR rate as of 12th January 2019
U.S.A. 139.20 139.10
U.K. 175.40 177.00
Euro 158.10 159.80
Japan 1.3000 1.2900
Saudi Arabia 37.00 36.95
U.A.E. 37.90 37.95


Pakistan Stock Exchange Indices as of 11th January 2019

Bearish trading was witnessed at the Pakistan Stock Exchange on 11th January as the index once again retreated to finish in the red. After remaining somewhere positive during the week, the KSE-100 index dived nearly 310 points on concerns over Moody’s warnings regarding Pakistan’s debt repayment situation. Investors were concerned about the falling foreign exchange reserves, which led to the selling pressure. However, the market soon recovered and staged a modest recovery to finish just 41 points in the red. Slight volatility was witnessed in the latter half of the session as the index oscillated between red and green zones before finishing negative. At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 41.2 points or 0.11% to settle at 39,049.08.



Position as of 11th January 2019
Symbols KSE100 PSX-KMI
Advanced (Curr.) 130
Declined (High) 161
Unchanged (Low) 30
Total (Change) 321

Position as of 4th January 2019  
Symbols                                                                                                KSE100                    PSX-KMI
Advanced (Curr.) 135
Declined (High) 136
Unchanged (Low) 28
Total (Change) 299



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