Economic and Political Weekly 29-09-2019

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World

Politics

·US intelligence committee releases whistleblower report on Trump-Ukraine dealings White House tried to ‘lock down’ records of Ukraine phone call, whistleblower says. Report alleges president used office to solicit interference in 2020 election from a foreign country

President Donald Trump meets with Ukrainian President Volodymyr Zelenskiy

The US House Intelligence Committee on 26th Sept released a declassified version of a whistleblower report alleging that president Donald Trump used his office to solicit interference in the 2020 presidential election from a foreign country. “I am deeply concerned that the actions described below constitute ‘a serious or flagrant problem, abuse, or violation of law or executive order’ that ‘does not include differences of opinion concerning public policy matters,’ consistent with the definition of an ‘urgent concern’,” the report says.

·UK Supreme Court unanimously rules against suspension of parliament

The United Kingdom Supreme Court has ruled that Boris Johnson’s advice to Queen Elizabeth that parliament should be prorogued for five weeks at the height of the Brexit crisis was unlawful. The unanimous judgment from 11 justices on the UK’s highest court followed an emergency three-day hearing last week that exposed fundamental legal differences over interpreting the country’s unwritten constitution. The momentous decision was read out by Lady Hale, president of the Supreme Court. Unusually, none of the parties were provided with advance copies of the judgment due to its sensitivity. Only seven of the 11 justices who heard the case were present in court.

·Thousands protest against new criminal code across Indonesia

Thousands of students across Indonesia took to the streets to protest a “disastrous” draft criminal code that would include outlawing extramarital sex and a controversial new law that could weaken the nation’s anti-corruption body. On 24th Sept, the second consecutive day of protests, thousands of students gathered outside the parliament building in Jakarta, calling for the government to suspend its plans to ratify the draft code. Police fired tear gas and water cannons to disperse the demonstrators. If passed, the new laws would usher in sweeping changes that activists have described as a “disaster” for human rights and democratic freedoms.

· Pelosi announces formal impeachment inquiry into Trump

The House of Representatives is to launch an impeachment inquiry into Donald Trump amid allegations the US president asked Ukraine’s president to investigate unproven claims of corruption against political rival Joe Biden and his son. Following a meeting of House Democrats on Capitol Hill, House Speaker Nancy Pelosi announced the first stage in a formal impeachment process would begin – a remarkable about-turn for Ms Pelosi who has avoided talk of impeachment in recent months. “I’m announcing the House of Representatives is moving forward with an official impeachment inquiry,” she said. “The president must be held accountable. No one is above the law.” She said the actions taken to date by Mr Trump had “seriously violated the constitution”.

·Ghana claims to have foiled a coup attempt, though Ghanians have doubts

Ghana’s government says it has halted a coup attempt, arresting three suspects, though analysts and citizens have expressed doubt at how serious the incident was. In a statement, Ghana’s minister of information said it had foiled “an elaborate plot targeted at the presidency, and with the ultimate aim of destabilizing the country”, after 15 months of monitoring the main suspects and others associated with them. Information minister Kojo Oppong Nkrumah also issued a list of the weaponry it said was found. It included six pistols, three smoke grenades, 22 improvised explosive devices (IEDs), and a long knife, along with seven mobile phones, a modem, a voice recorder and two iPads, among other items. “State security agencies assure the general public that they remain vigilant, and will work to safeguard national security and public safety. The public is encouraged to remain calm and advised to provide information on any suspicious persons or activities to the police for necessary action.”

·Sisi government moves to quash further protests

Egyptian security forces tried to head off protests on Friday amid reports that 2,000 Egyptians have been arrested since last weekend’s unexpected demonstrations demanding an end to corruption in the military, and the resignation of President Abdel Fattah al-Sisi. Sources reported protests on 27th Sept in Giza on the edge of Cairo and in the provinces where the security forces cannot exercise full control. There were also government-arranged pro-Sisi demos in east Cairo.

Economy

  • The stock market is once again nearing record highs amid investor hopes that a recession is off the table — at least for now. After all, economic data like retail sales and the jobless rate don’t look disastrous, a trade deal with China may be in the works and Federal Reserve Chairman Jerome Powell said 25th Sept he expects the economyto remain strong, even as the Fed cut interest rates for the second time this year.

But more than half of CFOs in the United States expect the country to enter into a recession before the 2020 election, according to a new survey released this week.  Even though the jobless rate remains near a half-century low, year-over-year payroll jobs growth — which measures the percent increase in nonfarm jobs over the past 12 months — already peaked at a three-year high of 1.9% in January. Since then, it has plunged to an eight-year low of just below 1.4%. Even though the jobless rate remains near a half-century low, year-over-year payroll jobs growth — which measures the percent increase in nonfarm jobs over the past 12 months — already peaked at a three-year high of 1.9% in January. Since then, it has plunged to an eight-year low of just below 1.4%. Here’s the danger. If economic growth and job growth keep slowing, there remains a real risk that those slowdowns will culminate into a recession.

GLOBAL INDICES AS OF 27th September 2019

As compared to 20th September 2019

Global indices as of 27th September 2019
Name Current Value Prev.

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US MARKETS
 NASDAQ (Sep 27) 7,901.08 8030.66
EUROPEAN MARKETS
 FTSE (Sep 27) 7,426.21 7351.08
 CAC (Sep 27) 5,640.58 5620.57
 DAX (Sep 27) 12,380.94 12288.54
ASIAN MARKETS
 SGX NIFTY (Sep 28) 11,531.50 11585.00
 NIKKEI 225 (Sep 27) 21,878.90 22048.24
 STRAITS TIMES (Sep 27) 3,125.63 3125.81
 HANG SENG (Sep 27) 25,954.81 26041.93
 TAIWAN WEIGHTED (Sep 27) 10,829.68 10871.99
 KOSPI (Sep 27) 2,049.93 2074.52
 SET COMPOSITE (Sep 27) 1,643.76 1636.75
 JAKARTA COMPOSITE (Sep 27) 6,196.89 6230.33
 SHANGHAI COMPOSITE (Sep 27) 2,932.17 2929.09
Global indices as of 20th September 2019
Name Current Value Prev.

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US MARKETS
 NASDAQ (Sep 20) 8,117.67 8182.88
EUROPEAN MARKETS
 FTSE (Sep 20) 7,344.92 7356.42
 CAC (Sep 20) 5,690.78 5659.08
 DAX (Sep 20) 12,468.01 12457.70
ASIAN MARKETS
 SGX NIFTY (Sep 21) 11,327.00 11340.00
 NIKKEI 225 (Sep 20) 22,079.09 22044.45
 STRAITS TIMES (Sep 20) 3,159.68 3158.80
 HANG SENG (Sep 20) 26,435.67 26468.95
 TAIWAN WEIGHTED (Sep 20) 10,929.69 10894.70
 KOSPI (Sep 20) 2,091.52 2080.35
 SET COMPOSITE (Sep 20) 1,636.20 1640.66
 JAKARTA COMPOSITE (Sep 20) 6,231.47 6244.47
 SHANGHAI COMPOSITE (Sep 20) 3,006.45 2999.28

 

Pakistan

Politics

  • A plane carrying Prime Minister Imran Khan and his entourage returned to New York on 27th Sept night after developing a technical fault while heading to Pakistan.

The prime minister had taken off from New York’s Kennedy International Airport on Friday evening in a special jet placed at his disposal by the Saudi government, but it flew back in a couple of hours to have the problem fixed. The prime minister, who led the Pakistan delegation to the 74th session of the UN General Assembly, waited at the airport for some time while technicians tried to fix the fault, but more work was needed and they decided to complete it by 28th Sept morning. Meanwhile, Ambassador Lodhi escorted the prime minister back to the Roosevelt Hotel where he was staying during his hectic seven-day trip. Officials say if the plane is not fixed in the morning, the prime minister would take a commercial flight back to Pakistan where he is anxious to visit earthquake-hit areas and visit the affected families.

· At least 38 dead and hundreds injured in Pakistan earthquake

At least 24 people were killed and 450 injured in an earthquake that hit Pakistani Kashmir, local officials said on Wednesday. Tuesday’s earthquake leveled homes and shops and split open roads in an area between the towns of Jhelum and Mirpur to the north, which is in Pakistan’s portion of the disputed territory of Kashmir. “The situation is slowly returning to normal, the level of panic is now less among the people, although an aftershock was felt at night,” said Sardar Gulfaraz Khan, a police deputy inspector general. Most of the damage happened in villages where old houses collapsed, Mr Khan said.

  • Prime Minister Imran Khan on 27th Sept addressedthe 74th session of the United Nations General Assembly in New York.

The highlight of his more than 45-minute-long speech was intense criticism of India for its annexation of occupied Kashmir and the continued restrictions imposed in the region. The issue which the prime minister talked in most detail about was the oppression of the people of occupied Kashmir. The prime minister pointed out that Modi’s entire election campaign revolved around an anti-Pakistan narrative. “Now I must explain what RSS is. Modi is a life member (of RSS). “It is an organization inspired by Hitler and Mussolini. They believe in racial purity and superiority. They believe they are an Aryan race. “(Nearly) 100,000 Kashmiris have died in the past 30 years because they were denied their right of self-determination. Eleven thousand women were raped. “The world hasn’t done anything.”Muslims will become radicals because of this, not because of Islam. Because they see no justice. Hence in such a case “When a nuclear country fights till the end it has consequences far beyond the borders.”This is a test of the UN. You are the one who guaranteed the Kashmiris the right (of self-determination). “This is the time not to appease but to take action.” He said the very first action that India needs to take is to lift the curfew in occupied Kashmir and then release all detained prisoners. “And then the world community must give the Kashmiris the right of self-determination,” the prime minister stressed.

The first issue addressed by Prime Minister Imran in his speech was climate change. “We depend on our rivers and 80 per cent of our water comes from glaciers. The glaciers are also in India in the Himalayas, Karakorum and the Hindu Kush. “If nothing is done, we are scared humans are facing a huge catastrophe. He said the countries contributing to greenhouse gas emissions must be pushed and the UN must take initiative.

Prime Minister Imran said the second issue he was speaking about is even more critical — that of illicit financial flows. “Corrupt elites must not be allowed to park their money (abroad). Why do we have these tax havens? “Why shouldn’t rich people pay taxes? Why are they legal, these secret accounts? “Sooner or later there will be a crisis if the rich keep getting richer and the poor poorer. “I hope the UN takes a lead on this. The IMF and ADB must find a way.

Addressing the prevalence of Islamophobia, Prime Minister Imran said it has grown at an alarming pace. “Islamophobia is creating divisions, hijab is becoming a weapon; a woman can take off clothes but she can’t put on more clothes.”This radical Islamic terrorism used by leaders has caused Islamophobia and has caused pain for Muslims. “In European countries it is marginalizing Muslims, and this leads to radicalization. He said religion was viewed differently in the west, which was why the reaction in the Muslim world to content maligning Islamic personalities was not understood. He said religion was viewed differently in the west, which was why the reaction in the Muslim world to content maligning Islamic personalities was not understood.

  • PML-N leader and former state minister for finance Rana Afzal Khan passed away on Friday after suffering from a heart ailment. He was 70.

Khan was under treatment at the Faisalabad Institute of Cardiology, where he was admitted after he complained of chest pains a few days ago.

  • The Baluchistan High Court’s election tribunal on 27th Sept Deputy Speaker Qasim Khan Suri’s election to the National Assembly as void and ordered a re-election in the NA-265 (Quetta II) constituency.

The tribunal did not announce a date for the re-election. Suri, who has been de-seated following the tribunal’s verdict, remains eligible to contest the re-election. The NA-265 result had been challenged by Nawabzada Lashkari Raisani, who had filed a petition against alleged rigging in the constituency.

  • At least six people died in Karachi on 27th Sept in rain-related incidents as the city experienced heavy showers for the fourth consecutive day.

Two brothers were among five electrocuted while a boy also drowned in the rainwater-filled Lyari River. Police and rescue officials said that of the deceased, two men died when an electric wire fell down on moving motorbikes in SITE area. “The victims were riding two separate motorbikes when an electricity wire fell down on them near a seminary in SITE. As a result, Abdul Rauf and Abdul Manan suffered an electric shock and died on the spot,” said SITE-A SHO Saleem Awan.

Economy

  • The Asian Development Bank’s Asian Development Outlook 2019(ADO) reaffirms that the country’s economy is expected to grow slower than last year, with GDP growth projected at 2.8 per cent in fiscal year 2020.

The ADO, released on 25th Sept, notes that growth in Pakistan had decelerated during fiscal year 2019 and this reflected “lower investment amid policy uncertainty and persistent macroeconomic imbalances”. “Sizeable currency depreciation accelerated inflation but helped substantially narrow the current account deficit,” it noted. As per the report, provisional estimates have found that GDP growth slowed from 5.5pc in FY2018 to 3.3pc in 2019. It notes that on the supply side, all sectors had “contributed substantially less” to GDP growth than a year prior, whereas, on the demand side, private consumption has accounted for 82pc of the GDP “despite higher inflation and borrowing costs”. In the updated assessments, the ADO notes that the rupee depreciated against the US dollar by 24pc in FY2019 and inflation was also higher at 7.3pc as compared to FY2018 at 3.9pc.

  • The Ministry of Finance on 27th Sept claimed that the government’s macro adjustment policies such as monetary tightening, exchange rate adjustments and cuts in development spending have started to pay off, with stability and growing strength visible in many sectors of the economy.

In a press release, the ministry pointed out that the current account deficit contracted significantly by 32.1 per cent to $13.508 billion (4.8pc of the GDP) during FY2019 as compared to $19.897bn (6.3pc of the GDP) last year. In continuation of the trend, the current account deficit in July-August FY2020 declined by 54.7pc to $1.292 billion as compared $2.85bn during same period last year. The ministry outlined the impact of the government’s economic policies on three key sectors of the economy: exports, imports and remittances According to the statement, Pakistan’s exports during FY2019 stood at $22.979bn compared with $23.212bn during FY2018. The ministry attributed this decline of 1pc to a strong negative price effect dominating the positive quantity effect. The government’s stabilization efforts resulted in a decline of 9.86pc in imports in FY2019. Imports, which stood at $60.795bn in FY2018, fell to $54.799bn during FY2019. On the back of initiatives taken by the government, workers’ remittances increased by 9.7pc to $21.846bn during FY2019.

F.C Exchange Rates of PKR as of 27th September 2019 as compared to 20th September 2019
Countries PKR rate as of 20th September 2019 PKR rate as of 27th September 2019
U.S.A. $ 156.60 156.50
U.K. Pounds 197.00 195.00
Euro 175.00 172.50
Japan Yen 1.47 1.47
Saudi Arabia Rial 41.65 41.75
U.A.E. Dirham 42.65 42.75

 

Pakistan Stock Exchange Indices

As of 27th September 2019 As Compared

To 20th September 2019  

 

Position as of 27th September 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 200 (Curr) Current 32070.81 Current 14983.41
Decline 80 (High) High 32085.73 High 14998.34
Unchanged 20 (Low) Low 31368.81 Low 14689.82
Total Change 300  636.92  271.99

 

Position as of 20th September 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 128

(Curr)

Current 32077.84 Current 14929.05
Decline 163 (High) High 32332.73 High 15092.84
Unchanged 19 (Low) Low 32055.30 Low 14916.42
Total Change 310  -106.19                   -64.32

 

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