Economic & Political Weekly 14-04-2019

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World

Politics

· Dalai Lama ‘doing fine’ after hospitalization with chest infection,

The Tibetan spiritual leader, the Dalai Lama, was admitted to hospital in the Indian capital of New Delhi with a chest infection, but is doing fine, an aide said on Wednesday, as social media users prayed for the Buddhist monk’s fast recovery. The 83-year-old Nobel peace laureate, who fled to India in early 1959 after a failed uprising against Chinese rule, lives in exile in the northern hill town of Dharamshala. “His Holiness is doing fine now,” said Tseten Samdup Chhoekyapa, the Dalai Lama’s press secretary. The Dalai Lama, who was diagnosed with a chest infection after being admitted to hospital on Tuesday, complaining of discomfort, will spend a few days in hospital, his personal secretary said. A hospital official declined to comment on his medical condition, citing patient confidentiality.

 

·  Sudanese president Omar al-Bashir deposed by army after 30 years

President Omar al-Bashir

 Defense minister Awad Ibn Auf

Sudan’s president Omar al-Bashir has been forced out by the military after 30 years of autocratic rule in a dramatic army-led takeover prompted by months of anti-government protests. The country’s defense minister said on Thursday that Mr Bashir had been deposed and that a military council would run the country for a two-year transitional period. Government and opposition sources said the president had been put under house arrest. State media reported that all political prisoners, including the many hundreds arrested since anti-government protests began in December, were being released. The end of Mr. Bashir’s often brutal rule is momentous for both the Arab-speaking world and Africa, marking the latest instance of the military ousting an autocrat after prolonged protests by frustrated young citizens. Sudan’s ruling military council on 12th April promised a new civilian government, a day after the armed forces overthrew President Omar al-Bashir, but mistrustful protest leaders immediately rejected the gesture. The council, which is now running Sudan under defense minister Awad Ibn Auf, said it expected a pre-election transition to last two years at most or much less if chaos can be avoided. However Sudan’s defense minister stepped down abruptly last night 12th April as head of the country’s transitional ruling military council after only a day in the post, as protesters demanded quicker political change following President Omar al-Bashir’s ouster by the armed forces.

·   Theresa May rejects call for her resignation from Tory Brexiteers.

British Prime Minister Theresa May has dismissed calls from Conservative Brexiteers for her resignation after she agreed a six-month delay to Brexit with European Union leaders early on 11th April morning. Mrs. May told MPs that she would continue to seek a compromise with Labor that could command a majority in the House of Commons. She and Jeremy Corbyn met briefly on 11th April and agreed to continue talks “in an effort to make substantive progress” towards finding a compromise plan for Brexit. “This is not the normal way of British politics – and it is uncomfortable for many in both the government and opposition parties. Reaching an agreement will not be easy, because to be successful it will require both sides to make compromises,” said Mrs May.

·    Millions cast votes in first round of Indian general elections.

Millions of Indians voted on Thursday in the first of seven rounds of polling in the country’s general elections, in which Prime Minister Narendra Modi’s Hindu nationalist Bharatiya Janata Party (BJP) is seeking a second five-year term. Voters trekked long distances, rode bicycles or hitched rides on jam-packed tractors to tens of thousands of polling stations in 91 parliamentary constituencies spread over 20 states and federally administered regions, to cast their ballot

·         Netanyahu in Israel wins fifth term in office as rival concedes

Israeli prime minister Binyamin Netanyahu secured a clear path to re-election on 10th April with far-right parties set to hand him a parliamentary majority and his main challenger conceding defeat. It will be Mr. Netanyahu’s fifth term in office. With more than 99 per cent of votes counted, Mr. Netanyahu’s conservative Likud party and his natural coalition of right-wing and religious parties looked set to control 65 of the Knesset’s 120 seats.

 

  • The International Committee of the Red Cross said 11th April it had suspended work in Afghanistan after the Taliban announced a “ban” against the humanitarian group and the World Health Organization.

According to a Taliban statement, the ICRC had not “acted upon its agreements” with the Taliban. The insurgents, who control or influence about half of Afghanistan, also accused the WHO of “suspicious movements” during a vaccination campaign. As a result, the Taliban have “decided to ban the operation of these two organizations across the country until further notice,” the militants said, noting they would not guarantee health workers’ safety.

  • Britain’s high commissioner to India laid a wreath on 13th April on the 100th anniversary of the Amritsar massacre, one of the worst atrocities of colonial rule for which London is still to apologize.

The Jallianwala Bagh massacre, as it is known in India, saw British troops fire on thousands of unarmed men, women and children in the northern city of Amritsar on the afternoon of April 13, 1919. The number of casualties from the event, which galvanized support for independence, is unclear. Colonial-era records put the death toll at 379, but Indian figures put the number closer to 1,000.

  • Indonesia’s general elections will be held on April 17 pitting incumbent President Joko Widodo against Prabowo, who he defeated in the last election in 2014.

The country goes to the polls on April 17, with Joko, who is commonly known as Jokowi, seeking re-election against a challenge from former general Prabowo Subianto. Prabowo’s campaign sharply criticized the revelations, saying that they amounted to “a blatant show of thievery in Indonesian presidential election.” Prabowo’s campaign director, Sugiono, said that the opposition found it “ridiculous, disturbing and undemocratic. People in Indonesia want change and they have been showing their support to Prabowo. “The only way they can win this election is by stealing it like what they were doing in Malaysia. Is there any guarantee that this will not happen anywhere else?” Many Indonesians who live or work overseas can vote in their countries of residence. But voters based in Malaysia are not due to cast their ballots until Sunday.

 

Economy-

Goldman Sachs: No Fed rate hikes until the end of 2020

Federal Reserve Chair Jerome Powell listens to a reporter’s question during a news conference in Washington.

 

It’ll be well over a year before the next Federal Reserve rate hike, according to Goldman Sachs. The analysts, led by chief U.S. economist Jan Hatzius, now expect the next hike in the fourth quarter of 2020, compared to their previous forecast of the first quarter of 2020. Goldman’s change shouldn’t come as a surprise. In its March meeting, the Fed downgraded its rate hike expectations for 2019 to zero, compared to its previous forecast of two 2019 hikes, which was unveiled at its December meeting, much to the dismay of market participants.

 

GLOBAL INDICES AS OF 12th and 13th April 2019

As compared to 6th April 2019 

Global indices as of 12th and 13th April 2019
Name       Current Value Prev.

Close

US MARKETS
 NASDAQ (Apr 12) 7,984.16 7947.36
EUROPEAN MARKETS
 FTSE (Apr 12) 7,437.06 7417.95
 CAC (Apr 12) 5,502.70 5485.72
 DAX (Apr 12) 11,999.93 11935.20
ASIAN MARKETS
 NIKKEI 225 (Apr 12) 21,870.56 21711.38
 STRAITS TIMES (Apr 12) 3,331.98 3330.82
 HANG SENG (Apr 12) 29,909.76 29839.45
 TAIWAN WEIGHTED (Apr 12) 10,805.30 10808.77
 KOSPI (Apr 12) 2,233.45 2224.44
 SET COMPOSITE (Apr 12) 1,660.45 1659.09
 JAKARTA COMPOSITE (Apr 12) 6,405.87 6410.17
 SHANGHAI COMPOSITE (Apr 12) 3,188.63 3189.96
 SGX NIFTY (Apr 13) 11,676.00 11691.50

 

Global indices as of 6th April 2019
Name Current Value Prev.

Close

.
US MARKETS
 NASDAQ (Apr 05) 7,938.69 7891.78     
EUROPEAN MARKETS
 FTSE (Apr 05) 7,446.87 7401.94     
 CAC (Apr 05) 5,476.20 5463.80     
 DAX (Apr 05) 12,009.75 11988.01     
ASIAN MARKETS
 NIKKEI 225 (Apr 05) 21,807.50 21724.95     
 STRAITS TIMES (Apr 05) 3,322.64 3316.21     
 HANG SENG (Apr 04) 29,936.32 29986.39     
 TAIWAN WEIGHTED (Apr 03) 10,704.38 10690.30     
 KOSPI (Apr 05) 2,209.61 2206.53     
 SET COMPOSITE (Apr 05) 1,646.18 1644.22     
 JAKARTA COMPOSITE (Apr 05) 6,474.02 6494.63     
 SHANGHAI COMPOSITE (Apr 04) 3,246.57 3216.30     
 SGX NIFTY (Apr 06) 11,796.50 11773.00     

 

Pakistan

Politics

  • CJ Asif Saeed Khosa has regretted that parliament seems to be dragging its feet in acting swiftly to address imbalances and deficiencies in the judiciary, explaining that the provision of justice is a shared responsibility.

“It is unfortunate that parliament has not been paying attention to legislative matters. Up till now, we have already sent 70 reports to parliament and the law ministry. Provision of justice is not just the judiciary’s job — the legislature has to do its part,” he said while addressing a gathering in Islamabad. Furnishing an example, the chief justice said: “The Anti-terrorism Act (ATA) can be applied to anything under the sun. From theft to rape, the law can be applied to any crime in the country. The Supreme Court created a seven-judge bench to review the ATA and a judgment has been reserved on the matter, so I will not say more — but clarifying the ATA should have been the parliament’s job.”

·         At least 18 killed in suicide bomb attack on market in Quetta.

A suicide bomb ripped through an outdoor Pakistani market on12th April, killing at least 18 people, half of them ethnic Hazaras, officials said, in an attack apparently aimed at minority Shia Muslims. Some 48 people were wounded in the blast in the southwestern city of Quetta, capital of resource-rich Baluchistan province, officials said.

 

  • Prime Minister Imran Khan on11th April , during a high-level meeting on his upcoming visit of China, said that his government’s focus during the second phase of the China-Pakistan Economic Corridor (CPEC) would be on agriculture, education and various other sectors.

The prime minister, who is scheduled to embark on his second visit of Beijing later this month, reviewed preparations regarding mutually beneficial projects that Pakistan and China are expected to initiate as part of the CPEC. The premier, according to a press release issued by the PM’s office, remarked that the “first phase of CPEC comprised merely of a few power plants and three roads.”

  • Saudi Arabia’s interior ministry has announcedthat two Pakistani nationals, a husband-and-wife duo, were executed on 11th April after being found guilty by its courts of smuggling heroin into the Kingdom

 

The country’s ministry, in a press release, stated that Muhammad Mustafa and Fatima Ijaz were “arrested when they smuggled a quantity of heroin”. The case was referred to the court where an investigation led to the indictment of the accused, said the Saudi ministry, adding that the punishment was also supported by the court of appeals as well as the Supreme Court. Therefore, the ministry said, a royal order to implement the death sentences were issued, and the duo were executed in Jeddah.

  • Pakistan Television (PTV) Managing Director Arshad Khan was removed from his position on 11th April, a notification issued by the Ministry of Information and Broadcast said.

According to the notification, Hassan Immad Mohammedi, the director of admin and personnel with the state broadcaster, has been given the managing director’s charge. Information Minister Fawad Chaudhry confirmed the change, adding that the move had Prime Minister Imran Khan’s blessing. The appointment of the MD as well as the board of directors of the state-run television had been a bone of contention between the information minister and Prime Minister’s Special Assistant on Political affairs Naeemul Haq.

 

Economy

  • The rising influence of lending by China to developing nations is increasingly under the spotlight amid concerns the growing debt burden and onerous conditions could sow the seeds of a crisis.

The global development lenders, the International Monetary Fund and World Bank, are calling for more transparency about loan amounts and terms, and cautioning governments against relying too much on debt. At the spring meetings of the institutions on 11th April , newly-installed World Bank President David Malpass warned that “17 African countries are already at high risk of debt distress, and that number is just growing as the new contracts come in and aren’t sufficiently transparent.”

  • The International Monetary Fund (IMF) on 10th April forecasted Pakistan’s fiscal deficit continuously elevated at close to 8pc and deteriorating debt-to-GDP ratio to reach 86pc over the next five years.

 

In its Fiscal Monitor released on the sidelines of spring meetings, also attended by a Pakistani delegation led by Finance Minister Assad Umar, the Fund also bites that performance-based salaries of the Federal Board of Revenue officials significantly contributed to both higher bribes and tax collection. The IMF estimates the deficit increasing further to 7.2pc in FY19 and then peaking at 8.7pc during FY20, before coming down to 8pc of GDP in FY21, followed by 7.8pc and 7.6pc in FY22 and FY23 and then rising again to 7.7pc by FY24. The fiscal monitor had put Pakistan’s net debt-to-GDP ratio at 67.2pc in FY18 and estimated it going up to 72.7pc during current fiscal and 75.3pc by end of next year (FY20). It said the ratio will keep increasing to 77.7pc in FY21, followed by 79.6pc in FY22 and 81.4pc in FY23 and then hitting peak at 83.2pc in FY24.

  • The government’s steps to deal with the external sector deficits may have begun to bear fruit, but it has yet to overcome the growing shortfall in revenue collection.

The figures during the first nine months of the current fiscal year show that aggregate revenue under the income tax, sales tax and federal excise duty (FED) reached Rs2.186 trillion posting a shortfall of Rs303 billion against the Rs2.488tr target set for the period. However, during the same period, custom collections surpassed the set target of Rs509.3bn clocking in at Rs510.11bn.

Despite buoyancy in the customs collection, it is estimated that the annual shortfall in revenue collection from all taxes will be around Rs450bn by the end of the ongoing fiscal year.

  • The government’s borrowing for budgetary support increased by 8.8 per cent year-on year during 9MFY19, reported the State Bank of Pakistan (SBP) on 12th

The budgetary borrowing rose to Rs876 billion from July to April 5 FY19, compared to Rs805bn during the same period last fiscal year, representing an increase of Rs71bn or 8.8pc. The government is under serious criticism over the ballooning domestic debts which Finance Minister Assad Umar recently justified in order to pay interest on debts. Pakistan’s budget deficit came in at 6.6pc of the GDP in FY18 and with the increase in budgetary borrowing this year, coupled with limited revenue collection, could further push the fiscal deficit. The trend remained the same as the government borrowed from SBP and retired debts to scheduled banks during the year. From July to Apr 5, an amount of Rs3.733 trillion was borrowed from SBP while Rs2.588tr of scheduled banks was retired. The government says no borrowing from schedule banks is the policy to keep maximum liquidity available for the private sector but latest data show the private sector has increased its borrowing compared to last year. Private sector credit off take jumped by 30.5pc to Rs577bn during 9MFY19, against Rs442bn in same period last year — a jump of Rs135bn.

                                              

F.C Exchange Rates of PKR as of 13th April 2019 as compared to 6th April 2019
Countries PKR rate as of 6th April 2019 PKR rate as of 13th April 2019
U.S.A. 143.00 142.50
U.K. 188.00 186.00
Euro 161.00 160.50
Japan 1.3000 1.2900
Saudi Arabia 38.25 38.00
U.A.E. 39.15 38.90

 

 

Pakistan Stock Exchange Indices

As of 12th April 2019 As Compared

To 5th April 2019  

 

Position as of 12th April 2019
Symbols KSE100 PSX-KMI
Advanced (Curr.) 253
37337.87
17950.32
Declined (High) 63
37420.92
17982.62
Unchanged (Low) 16
36741.70
17629.35
Total (Change) 332
550.23
266.39

 

Position as of 5th April 2019
Symbols KSE100 PSX-KMI
Advanced (Curr.) 142
37521.81
18160.85
Declined (High) 140
37592.27
18200.36
Unchanged (Low) 16
37307.14
18060.52
Total (Change) 298
5.69
28.60

 

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