Economic and Political Weekly 22-12-2019

Posted on December 22, 2019

World

Politics

·Hosting a summit of Muslim leaders, Malaysia’s Prime Minister Mahathir Muhammad bemoaned the state of Islam and defended the meeting that has been shunned by Saudi Arabia and criticized for undermining the bigger Organization of Islamic Cooperation (OIC).

Divisions in the Muslim world were self-evident as only about 20 countries sent leaders, or delegations to the Kuala Lumpur summit, though all 57 members of the OIC had been invited. The Saudi king’s refusal to attend and the late withdrawal of Pakistan from the event had left the hosts scrambling to soothe sensitive relations. In welcoming remarks, Mahathir said the Kuala Lumpur Summit was meant to understand why Islam, the Muslims and their countries were “in a state of crisis, helpless and unworthy of this great religion”.

·Donald Trump impeached in historic House vote in US

History was made on 18th Dec night as Donald Trump became only the third US president to be impeached. The 435-member House of Representatives voted to impeach Mr. Trump on two articles of impeachment – abuse of power and obstruction of Congress – concluding that Mr. Trump committed impeachable offences in his dealings with Ukraine.

·Suspects in Slovak journalist’s killing to face trial in January

Four suspects in the murder of a Slovak investigative journalist and his fiancée will go on trial in January after judges ruled on 19th Dec that there was enough evidence to proceed in a case that has triggered mass protests against corruption. Jan Kuciak and Martina Kusnirova, both 27, were gunned down in their house outside the capital, Bratislava, in February 2018. Prosecutors say entrepreneur Marian Kocner, a subject of Kuciak’s reporting on fraud cases involving politically connected businessmen, had ordered his killing. The murders stoked widespread public anger and forced Prime Minister Robert Fico to resign. His ruling Smer party faces a tight election on February 29th. The case is a test of Slovak judicial independence given that the investigation exposed links between Kocner and police and public officials.

·Emily Thornberry declares she will stand to be Labor leader

Shadow foreign secretary Emily Thornberry has declared that she will stand to become leader of the Labor Party in a move that fires the starting gun in the race to succeed Jeremy Corbyn.

Ms Thornberry, who is from the “soft left” of the party, revealed that she warned the leadership weeks ago that backing a Brexit election would be an act of “catastrophic political folly”.

·Shoot-out at Moscow intelligence service HQ leaves one dead

A gunman opened fire on the headquarters of Russia’s Federal Security Service, known as the FSB, in central Moscow on 19th Dec evening killing at least one security service officer. The attack happened shortly after President Vladimir Putin had delivered his annual news conference and while he was speaking at a Kremlin event designed to celebrate the work of the security services. The FSB suspected the attack may have been planned to coincide with Mr. Putin’s evening speech, said a source close to the service. The domestic intelligence organization said it had “neutralized” the gunman and was working to establish his identity, the Interfax news agency reported. It is unclear what his motive was.

·Former WorldCom chief Bernard Ebbers released from prison

Former WorldCom chief executive Bernard Ebbers was ordered freed from prison, almost eight years before he was due to be released. A federal judge in Manhattan on 18th Dec granted compassionate release to Ebbers, who has served more than 13 years of a 25-year sentence for orchestrating an $11 billion accounting fraud that bankrupted the company. US district judge Valerie E Caproni said Ebbers’s health is failing and that letting him out early doesn’t minimize the impact of his punishment.

·Thousands renew protests in India against citizenship law

India’s federal capital New Delhi and numerous other cities across the country were gridlocked on 19th and 20th Dec as demonstrations continued unabated against the controversial Citizenship Amendment Act (CAA) that protesters claim is blatantly sectarian. Police also opened fire on demonstrators in Bangalore, used water cannons and burst tear gas shells in at least 11 other cities, including Mumbai, nearby Ahmadabad and Hyderabad, for defying a restrictive colonial-era statute that prohibits the public gathering of more than four persons. The protesters were opposing the CAA that was enacted last week by Prime Minister Narendra Modi’s Hindu nationalist Bharatiya Janata Party (BJP) and offers Indian citizenship to illegal non-Muslim immigrants such as Hindus, Sikhs and Christians from the Islamic states of Afghanistan, Bangladesh and Pakistan.

· Macron hints at concessions in French pensions stand-off

French President Emmanuel Macron “is inclined to improve” a provision that would de facto raise the French retirement age from 62 to 64, the Élysée said on 18th Dec. The “pivot age” or “age of equilibrium” is intended to balance the budget for state pensions, which is currently running a €10 billion deficit. Trade unions are vehemently opposed to the measure.

·Czechs call for billionaire prime minister to resign

Thousands of Czechs protested against Prime Minister Andrej Babis for a second week in a row on 17th Dec after prosecutors reopened a case into alleged subsidy fraud and Brussels declared a conflict of interest between his businesses and political role. The civic group Million Moments for Democracy has sought to put pressure on the billionaire premier with a series of demonstrations this year, although Mr Babis’s political party Ano maintains a solid lead in polls.

·Netherlands’ most wanted man arrested in Dubai

Dutch police carried out a string of raids across the Netherlands on 17th Dec after the country’s most wanted man was arrested in the Gulf emirate of Dubai. Ridouan Taghi, who had posted photographs of himself on social media relaxing by the sea, was surrounded in a raid on the suburban villa where he had been living with his wife, six children and a number of “assistants” believed to have doubled as bodyguard.

·Hizbullah-backed academic set to be prime minister of Lebanon

 

Academic Hassan Diab was named Lebanon’s new prime minister on 19th Dec after Saad Hariri, who resigned at the end of October, withdrew his candidacy. A low-profile engineering professor who briefly served as education minister, Dr Diab (60) enjoys the support of the largest parliamentary faction which, with 70 of the 128 seats, includes the Maronite Catholic Free Patriotic Movement of president Michel Aoun; the Amal Movement, which has a Shia support base; and Hizbullah. A second nominee, ex-diplomat Nawwaf Salam, had less backing than Dr Diab.

· Liberal mayors of central European capitals unite to defy own governments

The leaders of the so-called Vise grad Four countries have ganged up against Brussels on issues including immigration, climate change and the rule of law. They are now facing a new kind of opposition from within: the mayors of their own capitals. On 16th Dec, the mayors of Budapest, Prague, Warsaw and Bratislava met in the Hungarian capital to sign a “Pact of Free Cities”, vowing to work together in defense of a pro-EU urban electorate standing against socially conservative national governments and in favor of green policies.

Economy

  • Emerging market and developing economies (EMDEs) pushed their borrowing to a record $55tn (£42tn) last year, according to the World Bank, marking an eight-year surge that is the “largest, fastest and most broad-based in nearly five decades”.

While much of the growth in debt levels was driven by China, the Washington-based development agency said most of the 100 countries covered by its analysis were affected, following an increased dependency on borrowing by both private and public sector organizations. The analysis in Global Waves of Debt, a study of the four significant episodes of debt accumulation since 1970, found the debt-to-GDP ratio of developing countries had climbed 54 percentage points to 168% since the debt buildup began in 2010.

GLOBAL INDICES AS OF 21st December 2019

As compared to 14th December 2019

Global indices as of 21st December 2019
Name Current Value Prev.

Close
US MARKETS
 NASDAQ (Dec 20) 8,924.96 8887.22
EUROPEAN MARKETS
 FTSE (Dec 20) 7,582.48 7573.82
 CAC (Dec 20) 6,021.53 5972.28
 DAX (Dec 20) 13,318.90 13211.96
ASIAN MARKETS
 SGX NIFTY (Dec 21) 12,278.50 12292.50
 NIKKEI 225 (Dec 20) 23,816.63 23864.85
 STRAITS TIMES (Dec 20) 3,212.39 3207.42
 HANG SENG (Dec 20) 27,871.35 27800.49
 TAIWAN WEIGHTED (Dec 20) 11,959.08 12018.90
 KOSPI (Dec 20) 2,204.18 2196.56
 SET COMPOSITE (Dec 20) 1,572.92 1573.51
 JAKARTA COMPOSITE (Dec 20) 6,284.37 6249.93
 SHANGHAI COMPOSITE (Dec 20) 3,004.94 3017.07

 

Global indices as of 14th December 2019
Name Current Value Prev

Close
US MARKETS
 NASDAQ (Dec 13) 8,734.88 8717.32
EUROPEAN MARKETS
 FTSE (Dec 13) 7,353.44 7273.47
 CAC (Dec 13) 5,919.02 5884.26
 DAX (Dec 13) 13,282.72 13221.64
ASIAN MARKETS
 SGX NIFTY (Dec 14) 12,149.00 12149.50
 NIKKEI 225 (Dec 13) 24,023.10 23424.81
 STRAITS TIMES (Dec 13) 3,214.05 3194.67
 HANG SENG (Dec 13) 27,687.76 26994.14
 TAIWAN WEIGHTED (Dec 13) 11,927.73 11836.42
 KOSPI (Dec 13) 2,170.25 2137.35
 SET COMPOSITE (Dec 13) 1,573.91 1563.85
 JAKARTA COMPOSITE (Dec 13) 6,197.32 6139.40
 SHANGHAI COMPOSITE (Dec 13) 2,967.68 2915.70

 

Pakistan

Politics

·Pakistan Special court sentences former military ruler Musharraf to death for treason

A Pakistani court sentenced on 17th December former military ruler Pervez Musharraf to death on charges of high treason and subverting the constitution, government officials said. Musharraf, who seized power in a 1999 coup and later ruled as president, is not in Pakistan  The verdict is split in 2-1, with Justice Shahid Karim of the Lahore High Court agreeing and Justice Nazar Akbar of the Sind High Court dissenting. It also says military personnel who ‘guarded, abetted’ Musharraf should also be held accountable

“A dictator stays in power only as long as he manages to subvert the will of his people. The usurpation of the functions of government and other organs of State established by the Constitution tantamount to subversion of the Constitution. Exercise of undue influence over judiciary (such as making them ceases office and/or take fresh extra-constitutional oath) does tantamount to subversion of the Constitution,” says the 167-page detailed judgment, authored by Peshawar High Court Chief Justice Waqar Ahmad Seth.

It also says “If for a moment it is presumed that military high command including Corps Commanders were not involved then why they failed to defend and protect the Constitution of the Islamic Republic of Pakistan, 1973 by not restraining a man in uniform […] the then Corps Commanders Committee in addition to all other uniformed officers who were guarding him each and every time, with boots on, are equally and fully involved in the act and deeds of the accused person,” says the judgment. “As a necessary corollary to what has been observed we find the accused guilty as per charge. The convict be hanged by his neck till he dies on each count as per charge,” says the verdict.

Para 68 of the verdict says that. “We direct the law enforcement agencies to strive their level best to apprehend the fugitive/convict and to ensure that the punishment is inflicted as per law and if found dead, his corpse be dragged to the D-Chowk, Islamabad, Pakistan and be hanged for 03 days”. Further “It would be in the interest of justice that all those involved (if any) in facilitation of the escape of the fugitive accused may also be brought in the net of due course of law and their criminal acts (if any) may be investigated and tried in accordance with law.”

  • Hours after a special court released its detailed judgment in the high treason case in which it ordered dragging and hanging of former military ruler retired Gen Pervez Musharraf’s corpse, the government and military authorities on 19th Dec gave an angry response to the verdict and decided to file a reference against Peshawar High Court Chief Justice Waqar Ahmed Seth in the Supreme Judicial Council (SJC), besides challenging the verdict in the Supreme Court.

The Move constitutes to file reference against Justice Seth in SJC, challenge verdict in SC, Show furore over ruling’s wording: ‘…corpse be dragged… hanged for three days. Military spokesman says order, especially the words used in it, is against humanity, religion, culture and values. Law minister terms judgment ‘unprecedented and despicable’

  • Outgoing Chief Justice of Pakistan Asif Saeed Khosa on 20th Dec said a malicious campaign has been initiated against the judiciary but the truth shall finally prevail.

Khosa made these remarks in a gathering before officially addressing a full-court reference organized at the Supreme Court on the eve of his retirement; just a day after a special court released the detailed verdict in the high treason case against former dictator General retired Pervez Musharraf. The verdict by the special court, which handed Musharraf the death penalty for his actions of imposing emergency in the country on November 3, 2007, has been severely criticized by the government and the military’s media wing as an ‘attack on the institution of army’.

  • More than a week after the attack on Lahore’s Punjab Institute of Cardiology (PIC) by a group of lawyers, Prime Minister Imran Khan’s nephew Hassaan Niazi obtained interim bail in the case on 20th Dec from an anti-terrorism court and denied his involvement in any offence at a press conference.

Niazi was among more than 200 lawyers who had gone underground to avoid arrest. Police had conducted multiple raids to arrest him in the attack case but was unable to catch him. Addressing a presser after obtaining bail, Niazi claimed that he was the first lawyer in the country who had expressed regret on Twitter over the attack on the hospital. The premier’s nephew, however, demanded across-the-board accountability and said that he was unfairly singled out. He urged the media to play its role with responsibility.

  • The northern areas of the country were jolted by a 6.4-magnitude earthquake on 20th Dec, according to the National Seismic Monitoring Centre in Islamabad.

The earthquake struck at a depth of 210km with the epicenter in Afghanistan, the China Earthquake Networks Centre announced. Among the cities where “strong” tremors were felt were Lahore, Islamabad, Peshawar, Murree, Mansehra, Battagram, Chiniot, and Gilgit-Baltistan. People left their homes in a panic to stand outside. Parliamentarians vacated the Parliament House where a session was underway. The United States Geological Survey (USGS) reported that a 6.1-magnitude earthquake had struck the region, including Afghanistan.

Economy

  • Continuing its consistent fall for the sixth year in row, the country’s cotton output in the ongoing season is set to hit record low at 8.5 million bales.

Production data released by the Pakistan Cotton Ginners Association (PCGA) on 18th Dec rev­e­aled that the country is likely to face a shortfall of around 2.1m bales. Cotton analysts firmly believe that the total production to remain below the 9m mark. PCGA Chairman Jawed Sohail Rehmani feared the current season would be the worst as initial estimates suggest that only 8.5m bales of cotton may be produced.

  • The country’s large-scale manufacturing (LSM) shrank for seventh month in row raising fears of massive layoffs across the industrial sector.

The LSM Index contracted by 7.97 per cent year-on-year in October, the Pakistan Bureau of Statistics (PBS) reported on 18th Dec. The data further showed that between July to October, big industry output declined by 6.48pc on a year-on-year basis. The latest monthly decrease was mainly led by 41.77pc plunge in automobile sector, 39.28pc in electronic products, followed by 11.73pc in petroleum products and 8.25pc in food products. In 2018-19, the large manufacturing sectors recorded a decline of 3.64pc against the target growth of 8.1pc. The government has set LSM target of 3.1pc for the ongoing fiscal year.

  • The International Monetary Fund (IMF) on 19th Dec approved the second tranche of $452.4 million for Pakistan under the $6 billion Extended Fund Facility (EFF), declaring that Pakistan’s reform program is “on track and has started to bear fruit”.

The Fund, after completing its first review of Pakistan under the EFF, noted that “decisive” implementation of government policies had helped preserve economic stability in the country. The IMF package, which was approved in July this year, is an effort to revive Pakistan’s ailing economy through periodic release of funds over a 39-month period, conditional on the government meeting the Fund’s policy guidelines. Following the release of the latest tranche, the total amount of money so far granted by the IMF under the current program will rise to $1,440m.

  • What appears to be a major reform initiative, the World Bank is pushing for more harmonization of general sales tax on services and goods among federating units of Pakistan, arguing that this will help tap 87 per cent potential revenue, which remains largely uncollected.

The World Bank Country Director Patchamuthu Illangovan and one of his senior economists Muhammad Waheed spoke at length for almost an hour with a select group of journalists in Islamabad in support or a single GST regime, among other economic issues where the bank is playing a role. On the issue of constitutional obligation linked with the major reform initiative, Illangovan said that dialogue continues between the federating units and eventually a framework will be placed before the Council of Common Interests (CCI) for discussion. However, he did not say when that will happen. Over the years, Pakistan has been made into five markets with 13 tax authorities with no data sharing with each other he said. “The data sharing will become an overall tax base and the World Bank can provide support for this.”

  • The current account turned negative in November after posting a surplus in October, indicating the deficit is still here to haunt the economy.

 The current account deficit (CAD) plunged by 73 per cent to $319 million in November, as compared to $1,166m in same period last year, reported the State Bank of Pakistan on 19th Dec. The country witnessed a surprise current account surplus of $70m (revised down from $99m) in October — a feat achieved after four years of deficit. During July-November, CAD clocked in at $1.821bn, declining by a massive 73pc over $6.733bn in same period last year. This consistent sharp decrease has helped the government improve its foreign currency reserves and stabilize the exchange rate.

F.C Exchange Rates of PKR as of 21st December 2019 as compared to 14th December  2019
Countries PKR rate as of 14th December  2019 PKR rate as of   21st December  2019
U.S.A. $ 155.10 154.90
U.K. Pounds 208.50 203.00
Euro 173.00 173.00
Japan Yen 1.44 1.44
Saudi Arabia Rial 41.40 41.25
U.A.E. Dirham 42.40 42.25

 

Pakistan Stock Exchange Indices

As of 21st December 2019 As Compared

To 14th December 2019 

 

Position as of 21st December 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 155 (Curr) Current 40832.99 Current 19345.18
Decline 163 (High) High 41054.42 High 19391.99
Unchanged 12 (Low) Low 40493.99 Low 19090.85
Total change 330  177.62  149.68

 

 

Position as of 14th December 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 215 (Curr) Current 40916.59 Current 19251.85
Decline 133 (High) High 41077.82 High 19351.68
Unchanged 20 (Low) Low 40514.17 Low 18988.74
Total change 368  402.42  263.11

 

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