Economic & Political Weekly 28-10-2018

Economic & Political Weekly



  • Turkish President Recep Tayyip Erdoganin his dress to the parliament has offered more details of how Saudi journalist Jamal Khashoggi was killed earlier this month, saying death was likely a “Planned operation.”

Meanwhile U.S. President Donald Trump has also threatened Saudi Arabia that U.S. officials are looking into the killing of journalist Jamal Khashoggi by Saudi Arabian agents. His move is just to pressurize Saudi Arabia to keep away from China that is willing to provide its oil in Yuan and not in dollar that can devalue US $ further.

  • President Paul Biyahas been declared the winner of Cameroon’s disputed elections- two weeks after a vote marred by violence, boycotts and unrest.

Now her tenure has been extended for another rule over the central African nation.

  • Chinese president Xi Jinping presided over a ceremony in the city of Zhuhai to open the 55km-long bridge linking it to the semi-autonomous regions of Hong Kong and Macau.

The bridge carries immense economic and political significance.

  • Ethiopia on 25th Oct, 2018 has appointed a woman to the largely ceremonial position of president for the first time, further increasing female representation in the government of Africa’s second most populous nation.

In a unanimous vote, Ethiopian lawmakers picked career diplomat Sahle-Work Zewde, 68, to replace Mulatu Teshome who resigned in unclear circumstances.

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  • Former Sri Lankan president Mahinda Rajapaksawas sworn in as prime minister on 26th Oct 2018 after President  Maithripala Sirisena sacked incumbent Ranil Wickremesinghe in a surprise move that threatens political turmoil in the Indian Ocean nation. However sacked PM says that “I retain the confidence of the house. I am the prime minister and I have the majority,” Mr. Wickremesinghe says. “According to the constitution I’m the prime minister. That is not legal.”

Underlining the risk of chaos in Sri Lanka, where the government had been under pressure over a misfiring economy, media the finance minister Mangala Samaraweera said on Twitter that the appointment of Mr. Rajapaksa as prime minister was a violation of the constitution, which was amended in 2015 to curtail the executive powers of the president. “This is an anti-democratic coup,” Mr. Samaraweera tweeted.


  • The EU Central Bank’s director general for financial conduct, Derville Rowland, has said that individuals working in insurance and banking remain the biggest threat to customers as the financial industry go through technological advances at speed.

With advancement and adoption of technology the threats to customers are on increase that requires a check

  • In Capital Market this week the Dow Jones Industrial Averageclosed 296.24 points lower at 24,688.31 after dropping 539 points at its lows of the day. The Nasdaq Composite dropped 2.1 percent to 7,167.21. At its lows, the tech-heavy NASDAQ had fallen more than 3 percent. The S&P 500 fell 1.7 percent to 2,658.69 and briefly entered into correction territory, trading more than 10 percent below its record high reached in September. The average stock market correction, since WWII, results in a 13 percent drop and lasts for four months if it does not turn into a full-fledged bear market.

The pan-European Stoxx 600 closed lower by around 1.2 percent. France’s Valeo sank to the bottom of the benchmark, after the car parts company slashed its sales and earnings targets citing industry disruption. Shares of the Paris-listed stock tanked 20 percent on the news. Financial markets have been hit hard by a range of worries this week, including the U.S.-China trade war, a rout in emerging market currencies, rising borrowing costs, earnings, and economic concerns in Italy. Dollar topples from two-month high as Wall St worries persist.

Asian markets finished broadly lower with shares in Hong Kong leading the region. The Hang Seng is down 1.17% while Japan’s Nikkei 225 is off 0.40% and China’s Shanghai Composite is lower by 0.19%.

  • Oil prices headed for a third weekly drop after Saudi Arabia warned of oversupply, while a slump in stock markets and concerns about trade clouded the outlook for fuel demand

Saudi Arabia says that it would continue to meet customer demand for crude despite looming U.S. sanctions that are expected to reduce oil exports from Iran. Saudi Energy Minister Khalid al-Falih said at an investment conference in Riyadh that the oil market was in a “good place” and he hoped oil producers would sign a deal in December to extend cooperation to monitor and stabilize prices.“We have to continue to monitor the market in the next two to three months,” Falih said. “We will decide if there are any disruptions.

  • A study from accounting firm EY examined fintech adoption rates across 20 major economies. It found 69 percent of Chinese consumers had used at least two fintech services in the last six months. India came in second with 52 percent of consumers using fintech, followed by the United Kingdom at 42 percent.




  • Several prominent political figures and government officials, including Prime Minister Imran Khan’s sister Aleema Khanum, own benami properties in Dubai, a report submitted by the Federal Investigation Agency (FIA) to the Supreme Court revealed on 26th Oct 2108.

The report, covering details of properties owned by Pakistani nationals, also revealed that the government’s spokesperson on economy and energy issues, Farrukh Saleem’s mother, Senator Taj Afridi and PPP leader Makhdoom Amin Faheem’s widow also made it to the list.

  • Minister for Justice and Law Dr Farough Naseem has announced introduction of

Whistleblower Protection Bill through which whistleblowers will receive 20 per cent of the recovered money and assets from corrupt people.

  • The Chinese ambassador and deputy ambassador to Pakistan have dismissed the notion that the China-Pakistan Economic Corridor (CPEC) is a burden on the Pakistani economy, assuring that the multi-billion-dollar project is of as much benefit to the local economy as it is to the People’s Republic. Chinese Ambassador to Pakistan Yao Jing, while giving a media briefing in Islamabad, said: “CPEC is beneficial not only for China but also for Pakistan.” Jing said that “it is a wrong impression that only Chinese companies are benefiting from CPEC” or that “CPEC is a burden on Pakistan’s economy.” The Chinese deputy ambassador, meanwhile, claimed that CPEC would create a further 700,000 jobs by 2030, while by 2022 Pakistan’s energy needs will be met through its various initiatives.

Jing said that China wants to “improve and grow” Pakistan’s industry and exports through CPEC and the One Belt, One Road initiative, adding that “$19 billion over 22 CPEC projects are being spent” as part of CPEC. The Chinese deputy ambassador also rejected reports that CPEC projects carry a 14 per cent interest rate, branding them a “pack of lies”. “China’s debt to Pakistan is 6.3pc of Pakistan’s total debt,” he said. “Pakistan only has to pay 2pc interest. It has 15 to 20 years to repay the loan. From 2020 to 2021, Pakistan has to pay between $300m and $400m.” Of the 22 initial projects, he said, 10 — seven of which are power plants — have already been completed, whereas 12 are ongoing.


  • The $12 billion Saudi government’s bailout package for Pakistan has lifted Pakistani Stock Exchange up and has stabilized PKR, a day after the government announced the Saudi financial and oil support for Pakistan in the wake of Prime Minister Imran Khan’s recent visit to Saudi Arabia.

Saudi Arabia has announced a much needed bailout package 12 billion dollars support for Pakistan _ three billion dollars cash support on immediate basis and nine billion dollars oil supply on deferred payment for three years with annual supply of three billion dollars worth oil on delayed payment. Saudi Arabia’s cash payment of three billion dollars would support for foreign exchange reserves of Pakistan, avert pressure on the value of rupee, stable its exchange rate and enable the government to manage the balance of payment problem in a comfortable manner.

  • Pakistan’s Foreign Minister Shah Mahmood Qureshi has said that Islamabad has requested the United Arab Emirates (UAE) for a deferred payment facility for oil imports akin to the one secured with Saudi Arabia earlier this week. The foreign minister said the UAE delegation had expressed an interest in establishing an LNG terminal in Pakistan.

While sharing further details of the UAE delegation’s visit, Mr Qureshi said a member of real estate giant Emaar was also part of the team and apprised them that the PTI government was planning to build 5 million housed and asked if they could help in this regard.

The foreign minister concluded, “Another issue which we are facing these days is that of water shortage. UAE holds expertise in water desalination and if they could invest in setting up a plant in Karachi or Gwadar, our water crisis will be resolved, and it will be a massive development,”

  • To enhance foreign investment in export-oriented sectors, a draft investment document named “Trade-Related Investment Framework” has been shared by the Commerce Division with the Board of Investment (BoI) and all stakeholders.

The “Trade-Related Investment Framework” document outlines a detailed makeup to allure investment in export-oriented sectors and recommended measures to remove all impediments hindering investments.


  • The week continued with gains in the stock markets as of 26th October 2018 as compared to 20th October 2018.
Position as of 26th Oct 2018

Symbols     KSE100 All Share      KSE 30                            KMI 30 PSX-KMI
Advanced (Curr.) 237
Declined (High) 106
Unchanged (Low) 14
Total (Change) 357
Position as of 20th Oct 2018
Symbols             KSE100       All Share        KSE 30       KMI 30 PSX-KMI
Advanced (Curr.) 273
Declined (High) 61
Unchanged (Low) 16
Total (Change) 350


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