Economic & Political Weekly 30th December, 2018


Week ended 30th December, 2018



·Turkey ‘determined’ to drive out Syrian Kurdish forces.

Turkey says it is working with the United States to coordinate the withdrawal of American forces but remains “determined” to clear U.S.-allied Kurdish fighters from northeastern Syria. For weeks, Turkey has been threatening to launch a new offensive against the Kurdish fighters, who partnered with the U.S. to drive the Islamic State group out of much of northern and eastern Syria. Ankara views the Kurdish forces as terrorists because of their links to an insurgent group inside Turkey.

·  Indonesian tsunami: Death toll climbs to 429, over 16,000 homeless.

The death toll had climbed to 429 with more than 1,400 people injured and at least 128 missing after the tsunami slammed into parts of western Java and southern Sumatra Island. More than 16,000 people have been displaced and that there was an urgent need for heavy equipment in remote Sumur subdistrict, a hard-to-reach area near Ujung Kulon National Park which experiences heavy damage.

·Highs of 49 degrees forecast for extreme Australia heat wave.

Australia’s post-Christmas heat wave continues to sweep across the country, with a near record-breaking 49 degrees forecast for Western Australia, and fire danger, health and air quality warnings issued across the nation. The bureau of meteorology forecast a scorching 49 degree maximum for Marble Bar and Pannawonica in the Pilbara region of WA – only 2 degrees below the highest temperature ever recorded in Australia, which is 50.7 degrees at South Australia’s Oodnadatta airport in 1960.

·Japan suffers biggest ever population decline as birthrate falls.

Japan suffered its biggest population decline on record this year, according to new figures that underline the country’s losing battle to raise its birth rate. The number of births fell to its lowest since records began more than a century ago, the health and welfare ministry said, soon after parliament approved an immigration bill that will pave the way for the arrival of hundreds of thousands of blue-collar workers to address the worst labor shortage in decades. The ministry estimates 921,000 babies will have been born by the end of 2018 – 25,000 fewer than last year and the lowest number since comparable records began in 1899. It is also the third year in a row the number of births has been below one million. The data suggests the government will struggle to reach its goal of raising the birth rate – the average number of children a woman has during her lifetime – to 1.8 by April 2026. The current birth rate stands at 1.43, well below the 2.07 required to keep the population stable.

New earthquake hits Sicily near Mount Etna volcano.

An earthquake with a magnitude of 4.8 hit an area north of Catania on the slopes of Mount Etna in Sicily early on December 26, damaging buildings and injuring about 30 people, officials say. It occurred two days after Etna, Europe’s highest and most active volcano, erupted, sending a huge column of ash into the sky and causing the temporary closure of Catania airport on Sicily’s eastern coast.

  • At least 47 killed in hours-long attack on government building in Kabul.

At least 47 people were killed and 25 were injured on 24th Dec during a seven-hour assault that began with a car bomb at a government building in the Afghan capital, authorities say. A police officer and four attackers were among the dead after the standoff at the National Authority for Disabled People and Martyrs’ Families in Kabul, according to Najib Danish, an Interior Ministry spokesman.

·  Marxist student snatched on way to Mao Zedong celebration in China.

A high-profile Marxist student activist was bundled into a car by suspected plainclothes policemen on 26th Dec on his way to celebrations for the birthday of former Chinese leader Mao Zedong. Qiu Zhanxuan, head of the Marxist Society at China’s distinguished Peking University, is the latest in a series of socialist student leaders to vanish in recent months following their attempts to support Chinese workers in labor disputes. It has raised fresh questions about the Communist Party’s Marxist credentials at a time when Chinese President Xi Jinping is working hard to paint his government as an ardent supporter of ordinary workers and citizens. Before his disappearance, Qiu had been vocal in his support of Chinese workers and had called for people to celebrate the anniversary of Mao’s birth.

·Catriona Gray, from the Philippines, claims crown as Miss Universe 2018.  

Catriona Gray from the Philippines claimed the Miss Universe crown for 2018 on 24th Dec, beating contestants from 93 other countries. The 24-year-old Filipina-Australian has become the fourth Filipina to bring home the coveted title.

· 4,400-year-old tomb discovered in Egypt.

A more than 4,000-year-old private tomb containing “exceptionally well-preserved” drawings has been discovered south of Cairo, according to Egypt’s Ministry of Antiquities. Antiquities Minister Khaled al-Anani said the tomb had been discovered at the Saqqara archaeological site and was from the 5th dynasty of the pharaohs, which ruled roughly 4,400 years ago. The tomb belonged to a royal purification priest known as “Wahtye,” al-Anani. Inscriptions suggest the priest had served during the reign of King Nefer-Ir-Ka-Re and was the king’s supervisor and inspector of the holy boat.

·No explosives detected at site of helicopter crash that killed Mexican politicians,

No trace of explosives has been found at the site of the helicopter crash that killed the new governor of the Mexican state of Puebla and her politician husband, a government official. Puebla governor Martha Erika Alonso and her husband, Senator Rafael Moreno Valle, died in the Christmas Eve crash in central Mexico, as did the pilot, co-pilot and a fifth person on board, according to officials. Authorities believe the helicopter crashed nose first.

· Dubai and Saudi Arabia towers in time war to be world tallest towers.

A Dubai and Saudi Arabia tower are in time war to be the world’s tallest towers. The race to the top has just gotten tighter, with two rising mega-towers in the Middle East battling to become the world’s tallest. Construction has now begun on The Tower at Dubai Creek Harbor, a vast waterfront development, with completion scheduled for ahead of Dubai’s Expo 2020 world fair, which kicks off in October that year. Piercing through a canopy of clouds, The Tower, at 3,045ft (928m), aims to take the title of worlds tallest tower, which the 2,723ft-tall (830m) Burj Khalifa, also in Dubai, has held since 2010.

But it’s got competition. The Jeddah Tower, in Saudi Arabia, is also slated to finish in 2020. When completed, this gleaming vertical will be 236ft (72m) taller than Dubai’s creation. If The Tower in Dubai wants the world title, even for a short time, it has to open its doors before the Jeddah Tower.

· Recent protests in Sudan are much more than bread riots.

Sudan has erupted in protest against the military dictatorship that has ruled the country for almost three decades. People took to the streets following a tripling of bread prices to demand “freedom, peace, justice and the downfall of the regime.” But international coverage framing the protests as bread riots obscures the larger political context, misrepresents protesters’ demands and inadvertently supports the regime’s insistence that the crisis can be resolved by simply reintroducing targeted subsidies and stabilizing the Sudanese pound. Representing potentially the greatest threat to the regime of President Omar Hassan al-Bashir since it came to power in a military coup in 1989, protests have been intensifying. The government has declared a state of emergency and imposed curfews in towns where some of the first protests took place. Schools and universities have been closed. National newspapers have been censored or shut down. The Internet has been disrupted, and several phone carriers have restricted access to WhatsApp and other social media sites. Security forces have deployed tear gas and live ammunition against protesters as the death toll reaches 37 and continue to rise.

·Angelina planning to contest US Presidential election.

Hollywood star Angelina Jolie has recently hinted she might be joining politics. In a wide-ranging interview with presenter Justin Webb, Jolie discussed US politics, social media, sexual violence and the global refugee crisis, reports BBC. When asked whether she would one day run for US presidency, the Maleficent star commented, “If you asked me 20 years ago, I would’ve laughed… I always say I’ll go where I’m needed. I don’t know if I’m fit for politics… but then I’ve also joked that I don’t know if I have a skeleton left in my closet.”

· Sporadic clashes as ‘yellow vest’ protesters on French streets again.

France’s “yellow vest” demonstrators kept numerous roads across the country blocked on 29th Dec as groups of protesters marched in city centers, but the anti-government backlash was more dispersed and muted than in previous weeks. Driven by anger over a perceived squeeze on household income, the movement has shaken Emmanuel Macron’s presidency and hurt retailers and other businesses after the spontaneous protest against fuel taxes gave way to riots in early December.


· Corporate America, not banks, could cause the next recession.

There’s a $6.3 trillion elephant in the room. And it just might cause the next recession. The last downturn was triggered by Wall Street and Americans accumulating too much debt — particularly in the sizzling housing market in 2008. Now egged on by extremely low rates, US companies have piled on a record-setting $6.3 trillion of debt, according to S&P Global Ratings. All that debt is easy to ignore right now. Default rates are minuscule. Companies are sitting on tons of cash, and their coffers are growing thanks to the soaring US economy and corporate tax cuts.

· U.S. dollar share of global currency reserves hits near 5-year low: IMF.

The U.S. dollar’s share of currency reserves reported to the International Monetary Fund fell in the third quarter of 2018 to a near five-year low, while the euro’s share of reserves grew to its largest in almost four years. The Chinese Yuan’s share of allocated reserves shrank for the first time in the third quarter since the IMF began reporting its share of central bank holdings in the fourth quarter of 2016. Reserves held in Japanese yen reached a 16-year peak in the third quarter, IMF data shows. Global reserves are assets of central banks held in different currencies, primarily used to support their liabilities. Central banks sometimes use reserves to help support their respective currencies. Total allocated reserves increased to $10.71 trillion in the third quarter from $10.51 trillion in the previous quarter. Reserves held in U.S. dollars rose to $6.63 trillion, or 61.94 percent of allocated reserves, the share of allocated currency reserves held in Yuan, also known as renminbi, slipped to 1.80 percent in the third quarter from 1.84 percent in the prior quarter. Ranked second behind the greenback, the euro’s share of global reserves climbed to 20.48 percent, it’s biggest since the fourth quarter of 2014. It was 20.25 percent in the quarter before. The yen’s share of allocated reserves expanded to 4.98 percent, it’s largest since the third quarter of 2002. The Japanese currency’s share of reserves was 4.86 percent in the second quarter.

Global indices as of Dec 28 as compared to Dec 21, 2018.


US stock markets rallied late on 27th Dec to end in positive territory, continuing their roller coaster ride towards the end of the year. In Asia, most markets were following suit except Japan’s Nikkei 225, which was down 0.5% in 28th Dec morning trade. Markets have been volatile as global, political and economic uncertainty continues to haunt investors. The Dow Jones – which fell by more than 500 points or 1.8% earlier finished the trading day 1.1% up. The S&P 500 and tech-heavy NASDAQ also rallied by the end of the trading day. The S&P 500 had fallen by 48 points or 2% at one point, while the NASDAQ also sank by more than 2% or 135.4 points. The earlier sell-off was sparked by weak US consumer confidence data for December. However, analysts had cautioned that volatile share price movements were exacerbated by thin holiday trading. Earlier, European markets slumped in their first post-Christmas trading session. London’s FTSE 100 slid as the day progressed, ending 1.5% down, with UK shares at their lowest in over two years

Global indices as on 28th Dec 2018
Name Current Value Change
 NASDAQ (Dec 28) 6,584.52 5.03     
 FTSE (Dec 28) 6,733.97 149.29     
 CAC (Dec 28) 4,678.74 80.13     
 DAX (Dec 28) 10,558.96 177.45     
 NIKKEI 225 (Dec 28) 20,014.77 -62.85     
 STRAITS TIMES (Dec 28) 3,053.43 8.69     
 HANG SENG (Dec 28) 25,504.20 25.32     
 TAIWAN WEIGHTED (Dec 28) 9,727.41 85.85     
 KOSPI (Dec 28) 2,041.04 12.60     
 SET COMPOSITE (Dec 28) 1,563.88 15.51     
 JAKARTA COMPOSITE (Dec 28) 6,194.50 3.86     
 SHANGHAI COMPOSITE (Dec 28) 2,493.90 10.81     
 SGX NIFTY (Dec 29) 10,950.50 29.00


Global indices as on 21st Dec 2018
Name Current Value Change
 NASDAQ (Dec 21) 6,333.00 -195.41
 FTSE (Dec 21) 6,721.17 9.24
 CAC (Dec 21) 4,694.38 1.92
 DAX (Dec 21) 10,633.82 22.72
 NIKKEI 225 (Dec 21) 20,166.19 -226.39
 STRAITS TIMES (Dec 21) 3,046.04 -4.58
 HANG SENG (Dec 21) 25,753.42 129.89
 TAIWAN WEIGHTED (Dec 22) 9,642.05 -34.62
 KOSPI (Dec 21) 2,061.49 1.37
 SET COMPOSITE (Dec 21) 1,595.33 -0.77
 JAKARTA COMPOSITE (Dec 21) 6,163.60 15.72
 SHANGHAI COMPOSITE (Dec 21) 2,516.25 -20.02
 SGX NIFTY (Dec 22) 10,755.50 -4.50



· Ex-Pakistani PM Sharif sentenced to seven years over corruption.

Former Pakistani Prime Minister Nawaz Sharif was sentenced to seven years in prison on 24t Dec and fined $25 million on corruption charges that he says were politically motivated. The anti-corruption court in Islamabad said in its ruling that the three-time prime minister was unable to prove the source of income that had led to his ownership of a steel mill in Saudi Arabia. Under Pakistani law, this is taken to prove corruption. Sharif had already been sentenced by the same court to 10 years in prison on charges related to the purchase of upscale apartments in London, after the Supreme Court removed him from power. He was freed from custody in September pending an appeal. Sharif’s supporters say he would also appeal against his latest conviction. He has been shifted to Kot Lakhpat jail Lahore from Adiala Jail Rawalpindi on his request.

  • Former Muttahida Qaumi Movement (MQM) leader and ex-MNA Syed Ali Raza Abidi was shot dead in Karachi’s DHA neighborhood on 25th Dec evening, He was 46.

Two unidentified assailants riding a motorcycle opened fire on Abidi’s car near his residence on Khayaban-e-Ghazi Street in DHA’s Phase V, according to Station House Office Gizri Asad Mangi.

Abidi was alone in his car when the attack took place and was taken to PNS Shifa hospital by his father, Akhlaq Abidi. The former MQM leader succumbed to his injuries during treatment, SSP South Pir Muhammad Shah said.

  • The joint investigation team (JIT) report on fake bank accounts has revealed that former president Asif Ali Zardari and his accomplices “grabbed” state-run entities in Sind through corruption tactics.

According to the report submitted to the Supreme Court, the Omni Group (allegedly owned by Mr Zardari and his close aides) acquired four state-run entities — Thatta Cement Factory, Thatta Sugar Mills, Naudero Sugar Mills and Dadu Sugar Mills — in Sind at throwaway prices. Special Assistant to the Prime Minister on Accountability Shahzad Akbar says that first the Sindh government intentionally turned these entities into sick units by suspending funds/subsidies and then closed them down. These entities were later purchased by companies owned by the Omni Group, he adds. Now their names have also been put on ECL.

· PM approves launching of Sial Airline.

Prime Minister Imran Khan has granted approval for the launching of a new private airline from Sialkot International Airport. Special Assistant to the Prime Minister on Youth Affairs Usman Dar, Air Sial Chairman Fazal Jillani and other members of the local business community met with the prime minister and Minister for Privatization and Aviation Muhammad Mian Soomro in Sialkot. The airline is to be launched through cooperation with local traders and businessmen. The chairman of Air Sial said the airline would become operational within the next year.

  • The Federal Investigation Agency (FIA) has recommended to the Supreme Court to close the verdict implementation case citing its inability to gather evidence required to launch criminal proceedings.

The FIA, in its report submitted in the apex court, states that the case is more than 25 years old and therefore relevant banks do not have the details of deposits made at the time. The report, says that the statements of important witnesses in the case contradict each other, whereas the accused politicians have denied receiving any payments. Subsequently, the agency says that it does not have enough evidence to restart criminal proceedings, suggesting that the case’s file be closed.


·  Trade Agreement-II with China likely in June.

Advisor to the Prime Minister on Commerce Abdul Razzaq Dawood has said that Trade Agreement-II was expected with China by June next year. “China would hopefully open its markets for Pakistani products while efforts were also being made to ensure greater access to other international markets, including Korea,” he was quoted as saying by Radio Pakistan.

  • The foreign exchange reserves of the State Bank of Pakistan (SBP) fell by $591 million to $7.457 billion on Dec 21.

Holdings of commercial banks jumped by $23.8m to $6.56bn while the country’s total liquid reserves stood at $14.017bn during the period under review. The SBP says that outflows were utilized for external debt servicing and other official payments. After Saudi Arabia agreed to bailout Pakistan with $6bn package, the UAE also announced its intention to deposit $3bn in the SBP. The announcement was made by the UAE media quoting the Abu Dhabi Fund for Development as saying it would deposit the amount in the “coming days”.

  • The federal cabinet approved a strategy to issue so-called ‘Panda bonds’ in the Chinese market to raise foreign exchange from global markets, though the size of the issue has not been released at the moment. The bonds will be denominated in Chinese Yuan.

The cabinet meeting headed by Prime Minister Imran Khan approved the strategy on 27th Dec, the Panda bond has been finalized “after several rounds of discussions with Chinese banks, investment groups, regulatory authorities in China and stock exchange and traditional financial advisers.” “They will help government diversify investor base of capital market issuance and provide a source of raising renminbi (RMB).”

  • Vendors from the auto sector are claiming a ‘recession’ in their sector, which they claim has lost over 12,000 jobs in the last three months, with another 50,000 jobs on the line.

But the data for production and sales of automobiles and motorbikes released by Pakistan Automotive Manufacturers Association (PAMA) covering the last five months paints an altogether different picture. Auto vendors are claiming that tractor production has gone down by 60 per cent followed by 35pc fall in cars and 30pc drop in two-wheelers. But data released by auto assemblers’ shows production of Honda, Toyota and Suzuki cars, the three auto assemblers in Pakistan, has surged to 100,262 in the first five months of the fiscal year, from 91,189 units in the same period last year. Likewise, production of bikes (Honda, Suzuki, Yamaha and United Auto Motorcycle) soared to 665,531 units in the same five months of the fiscal year; up from 635,502 in same period last fiscal.

F.C Exchange Rates of PKR as of 28th Dec 2018
Countries PKR rate as of 21st Dec 2018 PKR rate as of 28th Dec 2018
U.S.A. 140.30 139.20
U.K. 176.00177.0 176.00
Euro 159.00160.0 158.30
Japan 1.2600 1.2500
Saudi Arabia 37.30 36.90
U.A.E. 38.20 38.00


Pakistan Stock Exchange Indices as of 28th Dec 2018

Bears prow­led the stock shares to down the KSE-100 index by 364.50 points (0.95 per cent) and to close at 37,853.57.

The equities pushed gap up and rose to intraday high on 28th Dec by 242 points. But the market lost momentum as the index succumbed to selling pressure with the last hour witnessing panic selling across the board.

in the quarter Sept-Dec (with two sessions remaining), the index is down 17pc in dollar terms, representing its worst performance since the 2008 crisis; in rupee terms it would be the third worst performing quarter in 10 years.

The PSX on 27th Dec moved in sharp contrast to the international markets which recovered on the back of increase in crude oil prices. Things have started to heat up on the political front as the government placed ex-president Asif Ali Zardari on exit control list due to ongoing graft cases against him.

 Position as of 28th Dec 2018


Symbols                                                          KSE100                        PSX-KMI
Advanced (Curr.) 90
Declined (High) 209
Unchanged (Low) 14
Total (Change) 313

Position as of 21st Dec 2018

Symbols                                                           KSE100                         PSX-KMI                                 
Advanced (Curr.) 151
Declined (High) 139
Unchanged (Low) 24
Total (Change) 314


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