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Pakistani Economic Stress Watch
Re: Pakistani Economic Stress Watch
^ More proof that Pakistan = Switzerland and well on it's way to becoming Riyasat e Madina
Pakistani Economic Stress Watch
PTI govt to go all out for Rs5.5 trillion tax
Video : Adviser to Prime Minister on Finance, Revenue and Economic Affairs
Video : Adviser to Prime Minister on Finance, Revenue and Economic Affairs
ISLAMABAD: Striking a defiant note, Finance Adviser Dr Abdul Hafeez Shaikh on Wednesday said that he was ready to offend people for the sake of collecting Rs5.550 trillion taxes amid high probability of protests by various business bodies against the budget.
CheersShaikh also offered himself for accountability for adding nearly Rs8 trillion in public debt during his stint as finance minister from 2010-2013 after Prime Minister Imran Khan announced to form a commission. He was addressing a post budget press conference here on Wednesday.
Pakistani Economic Stress Watch
S&P BSE SENSEX
Index Current : 39,741.36 - Pt. Change : -15.45 - % Change : -0.04
Market Capitalization of BSE Listed Co. (Rs.Cr.) : 1,53,25,806.16 - $ 1 / IN Rs 69.5900
Market Capitalization of BSE Listed Co. (U S $.) : 2,202.30 billion
P S E
Current Index : 35,403.07 – Change : 465.14 - % - Change : 1.31%
Market Capitalization of PSE Listed Co. (Rs.Tr.) : 7,122,485,287,064 - $ 1 / Tr 152 Tr Rs.
Market Capitalization of PSE Listed Co. (U S $.) : U S 46.86
B S E : P S E : : 46.99 : 1
Cheers
Index Current : 39,741.36 - Pt. Change : -15.45 - % Change : -0.04
Market Capitalization of BSE Listed Co. (Rs.Cr.) : 1,53,25,806.16 - $ 1 / IN Rs 69.5900
Market Capitalization of BSE Listed Co. (U S $.) : 2,202.30 billion
P S E
Current Index : 35,403.07 – Change : 465.14 - % - Change : 1.31%
Market Capitalization of PSE Listed Co. (Rs.Tr.) : 7,122,485,287,064 - $ 1 / Tr 152 Tr Rs.
Market Capitalization of PSE Listed Co. (U S $.) : U S 46.86
B S E : P S E : : 46.99 : 1
Cheers
Re: Pakistani Economic Stress Watch
Black or grey: What next for Pakistan at FATF?
The Financial Action Task Force (FATF) will hold its Plenary and Working Group meeting in Orlando, Florida, from Sunday onward. The FATF, an inter-governmental body that is now in its 30th year, works to “set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system”. The June 16-21 Plenary could take up a proposal to downgrade Pakistan to the blacklist on terrorist financing from its current “greylisted” status.
What Pak committed
Pakistan has been under the FATF’s scanner since last June, when it was put on the greylist for terror financing and money laundering risks, after an assessment of its financial system and law enforcement mechanisms. FATF and its partners such as the Asia Pacific Group (APG) review Pakistan’s processes, systems, and weaknesses on the basis of a standard matrix for anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.
In June 2018, Pakistan gave a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime, and to address its strategic counter-terrorism financing-related deficiencies. Based on this commitment, Pakistan and the FATF agreed on the monitoring of 27 indicators under a 10-point action plan, with deadlines.
Successful implementation of the action plan and its physical verification by the APG will lead the FATF to move Pakistan out of the greylist; failure by Pakistan will result in its blacklisting by September 2019.
In a statement, the FATF said in February: “Given the limited progress on action plan items due in January 2019, the FATF urges Pakistan to swiftly complete its action plan, particularly those with timelines of May 2019.”
Last month, at a meeting in Guangzhou, China, Pakistan presented its progress on the 27 indicators in a meeting with the Joint Group of the APG. India is co-chair of the Joint Group. Last week, the Joint Group informed Islamabad that its compliance on 18 of the 27 indicators was unsatisfactory, and asked it to do more to demonstrate strict action against eight terrorist groups, and in combating money laundering.
If Pak is blacklisted
The formal announcement will be made at the FATF Plenary scheduled in Paris from October 13-18, but the decision will be made in the forthcoming FATF Plenary in Orlando, where such a proposal could be moved.
It is theoretically possible that Pakistan is moved out of the greylist. But that would require the votes of at least 15 of the FATF’s 36 voting members.(why only 15 votes? It should have been atleast more then 50% of member votes that is 19 out of 36) At least three votes would be needed to block a move to blacklist Pakistan.
The 36 countries include mostly developed Western nations, but also China, Hong Kong (China), Malaysia, and Turkey. Pakistan will make a diplomatic push to thwart blacklisting. It claims it has done enough on the action plan, banning Hafiz Saeed’s Jamaat-ud-Dawa and Masood Azhar’s Jaish-e-Mohammed, and taking over their properties.
The FATF has agreed that there have been improvements in the AML/CFT regime and the integrated database for currency declaration arrangements. But it has also said that Pakistan must demonstrate that terror financing prosecutions result in effective, proportionate and dissuasive sanctions, enhancing the capacity and support for prosecutors and the judiciary.
It must show effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all terrorists designated under UN Security Council Resolutions 1267 and 1373, and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing movable and immovable assets, and prohibiting access to funds and financial services.
The FATF highlighted contradictory situations and poor coordination among stakeholders; the APG identified lack of cooperation among law enforcement agencies at various tiers of Pakistan’s government, and expressed serious reservations over insufficient physical action against proscribed organisations to block the flow of funds.
Where India comes in
India is a voting member of the FATF and APG, and co-chair of the Joint Group where it is represented by the Director General of India’s Financial Intelligence Unit (FIU). Pakistan had asked for India’s removal from the group, citing bias and motivated action, but that demand has been rejected.
India was not part of the group that moved the resolution to greylist Pakistan last year in Paris. The movers were the US, UK, France, and Germany; China did not oppose.
Why FATF action matters
Pakistan faces an estimated annual loss of $10 billion if it stays in the greylist (more details about this would have been nice) if blacklisted, its already fragile economy will be dealt a powerful blow.
Pakistan’s $6 billion loan agreement with the International Monetary Fund (IMF) could be threatened. The IMF has asked Pakistan to show commitment against money laundering and terror financing.
The Financial Action Task Force (FATF) will hold its Plenary and Working Group meeting in Orlando, Florida, from Sunday onward. The FATF, an inter-governmental body that is now in its 30th year, works to “set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system”. The June 16-21 Plenary could take up a proposal to downgrade Pakistan to the blacklist on terrorist financing from its current “greylisted” status.
What Pak committed
Pakistan has been under the FATF’s scanner since last June, when it was put on the greylist for terror financing and money laundering risks, after an assessment of its financial system and law enforcement mechanisms. FATF and its partners such as the Asia Pacific Group (APG) review Pakistan’s processes, systems, and weaknesses on the basis of a standard matrix for anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.
In June 2018, Pakistan gave a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime, and to address its strategic counter-terrorism financing-related deficiencies. Based on this commitment, Pakistan and the FATF agreed on the monitoring of 27 indicators under a 10-point action plan, with deadlines.
Successful implementation of the action plan and its physical verification by the APG will lead the FATF to move Pakistan out of the greylist; failure by Pakistan will result in its blacklisting by September 2019.
In a statement, the FATF said in February: “Given the limited progress on action plan items due in January 2019, the FATF urges Pakistan to swiftly complete its action plan, particularly those with timelines of May 2019.”
Last month, at a meeting in Guangzhou, China, Pakistan presented its progress on the 27 indicators in a meeting with the Joint Group of the APG. India is co-chair of the Joint Group. Last week, the Joint Group informed Islamabad that its compliance on 18 of the 27 indicators was unsatisfactory, and asked it to do more to demonstrate strict action against eight terrorist groups, and in combating money laundering.
If Pak is blacklisted
The formal announcement will be made at the FATF Plenary scheduled in Paris from October 13-18, but the decision will be made in the forthcoming FATF Plenary in Orlando, where such a proposal could be moved.
It is theoretically possible that Pakistan is moved out of the greylist. But that would require the votes of at least 15 of the FATF’s 36 voting members.(why only 15 votes? It should have been atleast more then 50% of member votes that is 19 out of 36) At least three votes would be needed to block a move to blacklist Pakistan.
The 36 countries include mostly developed Western nations, but also China, Hong Kong (China), Malaysia, and Turkey. Pakistan will make a diplomatic push to thwart blacklisting. It claims it has done enough on the action plan, banning Hafiz Saeed’s Jamaat-ud-Dawa and Masood Azhar’s Jaish-e-Mohammed, and taking over their properties.
The FATF has agreed that there have been improvements in the AML/CFT regime and the integrated database for currency declaration arrangements. But it has also said that Pakistan must demonstrate that terror financing prosecutions result in effective, proportionate and dissuasive sanctions, enhancing the capacity and support for prosecutors and the judiciary.
It must show effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all terrorists designated under UN Security Council Resolutions 1267 and 1373, and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing movable and immovable assets, and prohibiting access to funds and financial services.
The FATF highlighted contradictory situations and poor coordination among stakeholders; the APG identified lack of cooperation among law enforcement agencies at various tiers of Pakistan’s government, and expressed serious reservations over insufficient physical action against proscribed organisations to block the flow of funds.
Where India comes in
India is a voting member of the FATF and APG, and co-chair of the Joint Group where it is represented by the Director General of India’s Financial Intelligence Unit (FIU). Pakistan had asked for India’s removal from the group, citing bias and motivated action, but that demand has been rejected.
India was not part of the group that moved the resolution to greylist Pakistan last year in Paris. The movers were the US, UK, France, and Germany; China did not oppose.
Why FATF action matters
Pakistan faces an estimated annual loss of $10 billion if it stays in the greylist (more details about this would have been nice) if blacklisted, its already fragile economy will be dealt a powerful blow.
Pakistan’s $6 billion loan agreement with the International Monetary Fund (IMF) could be threatened. The IMF has asked Pakistan to show commitment against money laundering and terror financing.
Re: Pakistani Economic Stress Watch
India to take up Pakistan’s failure to comply with 90% of “action points”
India will take up Pakistan’s failure to comply with more than 90% of “action points” set by Financial Action Task Force (FATF) at its upcoming plenary and urge the inter-governmental body formed to help combat terror funding and money laundering to put Pakistan in its blacklist.
New Delhi is likely to provide fresh evidence compiled by its National Investigation Agency on the role of Hafiz Saeed’s Falah-e-Insaniyat Foundation (FIF) and its deputy Shahid Mahmood in a conspiracy to create sleeper terror cells in the garb of religious work in India, at the FATF meeting to be held in the US starting Sunday, government officials said.
The Indian delegation for the meeting will be headed by Financial Intelligence Unit (FIU) chief PK Mishra with representatives from the ministries of home affairs, external affairs and finance, NIA, Enforcement Directorate, and Intelligence Bureau, among others.
India will lobby to put Pakistan in the blacklist and bring more curbs on the activities of Pakistan-based militant groups, sources said. Citing investigations into FIF, New Delhi is likely to argue that the Pakistan-based militant groups continue to create unrest outside Jammu and Kashmir too.
According to NIA’s chargesheet into the FIF terror funding case, “Hafiz Saeed and deputy chief of FIF Shahid Mahmood had financed terror modules in Delhi and Haryana in garb of construction of mosque, madrasa education, and financial assistance for marriage of poor Muslim girls”.
Mahmood, according to NIA, was sending funds from Pakistan to India via Dubai and through hawala channels.
The agency had arrested two Indian nationals late last year for allegedly using the funds provided by Mahmood for the construction of a mosque in Palwal, Haryana.
India will take up Pakistan’s failure to comply with more than 90% of “action points” set by Financial Action Task Force (FATF) at its upcoming plenary and urge the inter-governmental body formed to help combat terror funding and money laundering to put Pakistan in its blacklist.
New Delhi is likely to provide fresh evidence compiled by its National Investigation Agency on the role of Hafiz Saeed’s Falah-e-Insaniyat Foundation (FIF) and its deputy Shahid Mahmood in a conspiracy to create sleeper terror cells in the garb of religious work in India, at the FATF meeting to be held in the US starting Sunday, government officials said.
The Indian delegation for the meeting will be headed by Financial Intelligence Unit (FIU) chief PK Mishra with representatives from the ministries of home affairs, external affairs and finance, NIA, Enforcement Directorate, and Intelligence Bureau, among others.
India will lobby to put Pakistan in the blacklist and bring more curbs on the activities of Pakistan-based militant groups, sources said. Citing investigations into FIF, New Delhi is likely to argue that the Pakistan-based militant groups continue to create unrest outside Jammu and Kashmir too.
According to NIA’s chargesheet into the FIF terror funding case, “Hafiz Saeed and deputy chief of FIF Shahid Mahmood had financed terror modules in Delhi and Haryana in garb of construction of mosque, madrasa education, and financial assistance for marriage of poor Muslim girls”.
Mahmood, according to NIA, was sending funds from Pakistan to India via Dubai and through hawala channels.
The agency had arrested two Indian nationals late last year for allegedly using the funds provided by Mahmood for the construction of a mosque in Palwal, Haryana.
Pakistani Economic Stress Watch
X Posted on the Teroristan Thread
Rupee takes historic plunge in inter-bank market - Salman Siddiqui
KARACHI: Pakistani currency weakened to a record low at Rs156 to the US dollar at a point of trade in the inter-bank market on Friday.
The currency has freshly lost Rs3.10 from yesterday’s close Rs152.90— a cumulative drop of Rs8.62 in the past six working days since June 3.
“[Apparently] the mounting import payment and foreign debt repayment pressures have led to the rupee’s plunge,” Next Capital Managing Director Muzammil Aslam said while talking to The Express Tribune.
A long list of import orders— which could not be processed by banks due to the Eid and weekly holidays from June 4 to 9— created higher demand for dollars in the inter-bank market, he said.
Secondly, Pakistan is scheduled to make most of the external debt repayment and interest payment by the end of June. “These two developments have created massive demand for dollars at a time when the country’s foreign currency reserves are depleting consistently,” he said.
The State Bank of Pakistan (SBP) reported on Thursday “during the week ended June 3, 2019, the SBP’s reserves decreased by $55 million to $7,807.2 million due to payments on account of external debt servicing.”
The reserves stand insufficient to cover even two months of import payments. On an average, Pakistan has made import payments worth $4.5 billion a month over the past 10 months. Apart from the drop in the reserves, market talk suggests the PTI government will allow the rupee to depreciate to Rs160-165 to the greenback under the International Monetary Fund (IMF)’s condition for a bailout package of $6 billion.
High government officials have, however, denied this time and again and have stated no level has been agreed for rupee depreciation. However, the government will end state control of the rupee-dollar exchange rate and let market forces determine the rate.
Adviser to PM on Finance Dr Abdul Hafeez Shaikh said at the post-budget press conference on Wednesday that the IMF Executive Board would approve the loan in two to four weeks.
Taurus Securities analyst Mustafa Mustansir said that heavy tax-loaded budget has made market participants panic as the government has announced withdrawing zero-rated tax incentive from the five main export sectors including textile, leather, carpet, sports and surgical goods. Accordingly, the government has imposed 17 per cent general sales tax on the five zero-rated sectors. This may further deteriorate Pakistan’s exports, which have already remained sluggish for past several years due to lack of planning, he said.
The government has announced narrowing down current account deficit to $7 billion in next fiscal year compared to estimated $12 billion in the outgoing year.
“However, the government did not announce concrete measures in the budget as to how it would contain the deficit,” he said. “The situation has created panic-like situation in the inter-bank market and mounted pressure on the rupee,” he said.
Cheers
Rupee takes historic plunge in inter-bank market - Salman Siddiqui
KARACHI: Pakistani currency weakened to a record low at Rs156 to the US dollar at a point of trade in the inter-bank market on Friday.
The currency has freshly lost Rs3.10 from yesterday’s close Rs152.90— a cumulative drop of Rs8.62 in the past six working days since June 3.
“[Apparently] the mounting import payment and foreign debt repayment pressures have led to the rupee’s plunge,” Next Capital Managing Director Muzammil Aslam said while talking to The Express Tribune.
A long list of import orders— which could not be processed by banks due to the Eid and weekly holidays from June 4 to 9— created higher demand for dollars in the inter-bank market, he said.
Secondly, Pakistan is scheduled to make most of the external debt repayment and interest payment by the end of June. “These two developments have created massive demand for dollars at a time when the country’s foreign currency reserves are depleting consistently,” he said.
The State Bank of Pakistan (SBP) reported on Thursday “during the week ended June 3, 2019, the SBP’s reserves decreased by $55 million to $7,807.2 million due to payments on account of external debt servicing.”
The reserves stand insufficient to cover even two months of import payments. On an average, Pakistan has made import payments worth $4.5 billion a month over the past 10 months. Apart from the drop in the reserves, market talk suggests the PTI government will allow the rupee to depreciate to Rs160-165 to the greenback under the International Monetary Fund (IMF)’s condition for a bailout package of $6 billion.
High government officials have, however, denied this time and again and have stated no level has been agreed for rupee depreciation. However, the government will end state control of the rupee-dollar exchange rate and let market forces determine the rate.
Adviser to PM on Finance Dr Abdul Hafeez Shaikh said at the post-budget press conference on Wednesday that the IMF Executive Board would approve the loan in two to four weeks.
Taurus Securities analyst Mustafa Mustansir said that heavy tax-loaded budget has made market participants panic as the government has announced withdrawing zero-rated tax incentive from the five main export sectors including textile, leather, carpet, sports and surgical goods. Accordingly, the government has imposed 17 per cent general sales tax on the five zero-rated sectors. This may further deteriorate Pakistan’s exports, which have already remained sluggish for past several years due to lack of planning, he said.
The government has announced narrowing down current account deficit to $7 billion in next fiscal year compared to estimated $12 billion in the outgoing year.
“However, the government did not announce concrete measures in the budget as to how it would contain the deficit,” he said. “The situation has created panic-like situation in the inter-bank market and mounted pressure on the rupee,” he said.
Cheers
Re: Pakistani Economic Stress Watch
Pakistan has lost $1 trillion due to the world not giving Pakistan $1 Trillion
Re: Pakistani Economic Stress Watch
Look at the positive side: rupee may have hit historic lows but history has been made!! Jazakallah!
Re: Pakistani Economic Stress Watch
You kafirs you see how strongly we have resisted not letting our toilet paper trade at $1=180? The rate today is just 157 and hence we are victorious. We are strong and have jazbaa and Inshallah the rate of 180 that the scheming YYY wants will not be reached for another 4-6 weeks. You just watch how we resist with our donkey meat induced stamina.
Last edited by Vips on 15 Jun 2019 02:32, edited 1 time in total.
Re: Pakistani Economic Stress Watch
Berry True!Anujan wrote:Pakistan has lost $1 trillion due to the world not giving Pakistan $1 Trillion
Bhaat you habe mizzed 10% baksheesh onlee!
With that 100b the Aotmy Takat of PurePukeStan and Paki-Satan will be combined into almighty answer to Bharat!
Eben if Gaawd says = “ex nihilo nihil fit” - by Gaawd ze must pay 10% - otherbise bow will the bekonomy run??
PS: At $5tillion ++ economy India ought to just subsidize Paki-Satan like she does Kashmir valley today.
Socialism, Capitalism and then there is Baksheehism or Bakistanism.
I say this only in some mirth, but if the policy is to just let Paki stew in juices, then that is the outcome one is heading for....
Re: Pakistani Economic Stress Watch
Its simple math that you kuffars cannot understand.
1 USD = 157 PKR
1 USD = 70 INR
157 > 71 so pak wins again.
1 USD = 157 PKR
1 USD = 70 INR
157 > 71 so pak wins again.
Last edited by vimal on 16 Jun 2019 10:14, edited 1 time in total.
Pakistani Economic Stress Watch
Pakistan to receive $3.4 billion from ADB in budgetary support
CheersISLAMABAD: Asian Development will give $3.4 billion to Pakistan in budgetary support, said Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh.
Re: Pakistani Economic Stress Watch
https://www.sundayguardianlive.com/news ... ip-92-year
Imports from Pakistan slip by 92% in a year
Navtan Kumar, June 15, 2019
New Delhi: Imports from Pakistan declined by 92% to $2.84 million in the one-year period till March this year, following imposition of 200% customs duties on all products imported from the neighbouring country.
According to data of the Ministry of Commerce and Industry, imports from the neighbouring country stood at $34.61 million in March 2018. Out of the $2.84 million, about $1.19 million was accounted for by cotton imports by India.
During the January-March period of the 2018-19 fiscal, imports from Pakistan declined by 47% to $53.65 million. India’s exports to Pakistan, too, dipped by about 32% to $171.34 million in March. However, exports grew by 7.4% to $2 billion during 2018-19.
After the Pulwama terror attack, India took strong economic action against Pakistan, raising the customs duty to 200% on all goods imported from the neighbouring country, including cotton, fresh fruits, cement, petroleum products and mineral ore.
India had also revoked the MFN (most favoured nation) status to Pakistan after the attack. The country has repealed a security excep tion clause of the World Trade Organisation (WTO) to withdraw this status. The MFN status on Pakistan was granted by India in 1996, though the former did not reciprocate.
....
Gautam
Imports from Pakistan slip by 92% in a year
Navtan Kumar, June 15, 2019
New Delhi: Imports from Pakistan declined by 92% to $2.84 million in the one-year period till March this year, following imposition of 200% customs duties on all products imported from the neighbouring country.
According to data of the Ministry of Commerce and Industry, imports from the neighbouring country stood at $34.61 million in March 2018. Out of the $2.84 million, about $1.19 million was accounted for by cotton imports by India.
During the January-March period of the 2018-19 fiscal, imports from Pakistan declined by 47% to $53.65 million. India’s exports to Pakistan, too, dipped by about 32% to $171.34 million in March. However, exports grew by 7.4% to $2 billion during 2018-19.
After the Pulwama terror attack, India took strong economic action against Pakistan, raising the customs duty to 200% on all goods imported from the neighbouring country, including cotton, fresh fruits, cement, petroleum products and mineral ore.
India had also revoked the MFN (most favoured nation) status to Pakistan after the attack. The country has repealed a security excep tion clause of the World Trade Organisation (WTO) to withdraw this status. The MFN status on Pakistan was granted by India in 1996, though the former did not reciprocate.
....
Gautam
Pakistani Economic Stress Watch
Mods : Please move this Post to Appropriate Thread as I am posting on this and the P E S W Thread
Fellow Cricket Loving BR-Fites :
Met Office - Today's Weather at Old Trafford+Manchester
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Fellow Cricket Loving BR-Fites :
Met Office - Today's Weather at Old Trafford+Manchester
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Re: Pakistani Economic Stress Watch
Pakistan fails to fulfil 25 of 27 FATF points, downgrading by IMF, World Bank to continue.
Pakistan has failed to complete 25 of the 27 action points given by the international terror financing watchdog FATF to check funding to terrorist groups such as LeT and JeM and frontal groups like Jamat-ud-Dawah and Falah-e-Insaniat Foundation.
With this, multilateral lenders like the IMF, the World Bank and the EU may continue downgrading Pakistan, making its financial situation more
precarious.
The Paris-headquartered Financial Action Task Force has asked Pakistan to explain whether it has launched any investigation into the $7 million
allocated to maintain schools, madrasas, clinics and ambulances originally operated by terror groups like Lashkar-e-Taiba, Jaish-e-Mohammad, and LeT fronts Jamat-ud-Dawah and Falah-e-Insaniat Foundation.
JuD and FIF are founded by terror mastermind Hafiz Saeed.
LeT is responsible for a number of terrorist strikes in India, including the 2008 Mumbai attacks and the hijacking of an Indian Airlines aircraft to Afghanistan in 1999. Most recently, it attacked a CRPF bus in Pulwama in Feb this year, killing 40 soldiers.
Pakistan is in deep trouble at the FATF meeting beginning Sunday in Florida in the US, people aware of the development said. "It has been unable to complete 25 of its 27 action points. It has one last chance, till its 15-month deadline ends in October 2019, when the FATF Plenary will be held," one of them added.
In June 2018, Pakistan was placed in the 'Gray' list and given a 27-point action plan by FATF. This plan was reviewed at the last plenary in October 2018 and for the second time in February this year, when the country was again put into the 'Gray' list after India submitted new information about Pakistan-based terrorist groups.
The FATF continuing Pakistan in the 'Gray' list means its downgrading by IMF, World Bank, ADB, EU and also a reduction in risk rating by Moody's, S&P and Fitch.
This will add to the financial problems of Pakistan, which is seeking aid from all possible international avenues. In a bid to bluff the financial watchdog, Pakistani authorities have shown arrests of LeT, JeM, JuD and FiF cadres. But all were apprehended under its Maintenance of Public Order Act and not under the Anti-Terrorism Act, 1997.
Under the MPO Act, authorities cannot hold a detainee beyond 60 days.
Pakistan has detained JeM founder Masood Azhar and LeT founder Hafiz Saeed mostly under the laws that provide for detention for apprehension of breach of peace; they have never been prosecuted under anti-terror laws.
The FATF implements UN designations, which do not warrant arrest. They ask only for freeze of funds, denial of access to weapons and travel embargo. The financial watchdog also wants nations to impose penalties that are proportionate and dissuasive.
The MPO Act is not seen as satisfying either of the two conditions. Therefore, none of these arrests will satisfy the FATF or the UN Designations Committee.
Pakistan has also seized several hundred properties of LeT, JuD, FiF and JeM, including schools and madrasas. However, these properties are now being run by its provincial governments.The Punjab provincial government has allocated $2 million (Pakistani Rs 30 crore or Indian Rs 14 crore) per annum for their upkeep. Similarly, other provinces have allocated $5 million.The annual expense allocated by Pakistan totals $7 million (Pakistani Rs 105 or Indian Rs 49 crore).
The FATF has now asked Pakistan to explain whether there are any terror-funding investigations to unearth the sources and entities that funded these organisations with $7 million per annum for the past several years.
The FATF currently has 35 members and two regional organisations — European Commission and Gulf Cooperation Council. In the last meeting of the FATF in Paris, the FATF said Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, including by adequately demonstrating its proper understanding of the terror financing risks posed by the terrorist groups and conducting supervision on a risk-sensitive basis, demonstrating that remedial actions and sanctions are applied in cases of Anti-Money Laundering and Combating Financing of Terrorism violations and that these actions have an effect on AML/CFT compliance by financial institutions.
Pakistan, it said, should demonstrate that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services, demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for terror financing (TF), improving inter-agency coordination including between provincial and federal authorities on combating TF risks besides others.
Pakistan has failed to complete 25 of the 27 action points given by the international terror financing watchdog FATF to check funding to terrorist groups such as LeT and JeM and frontal groups like Jamat-ud-Dawah and Falah-e-Insaniat Foundation.
With this, multilateral lenders like the IMF, the World Bank and the EU may continue downgrading Pakistan, making its financial situation more
precarious.
The Paris-headquartered Financial Action Task Force has asked Pakistan to explain whether it has launched any investigation into the $7 million
allocated to maintain schools, madrasas, clinics and ambulances originally operated by terror groups like Lashkar-e-Taiba, Jaish-e-Mohammad, and LeT fronts Jamat-ud-Dawah and Falah-e-Insaniat Foundation.
JuD and FIF are founded by terror mastermind Hafiz Saeed.
LeT is responsible for a number of terrorist strikes in India, including the 2008 Mumbai attacks and the hijacking of an Indian Airlines aircraft to Afghanistan in 1999. Most recently, it attacked a CRPF bus in Pulwama in Feb this year, killing 40 soldiers.
Pakistan is in deep trouble at the FATF meeting beginning Sunday in Florida in the US, people aware of the development said. "It has been unable to complete 25 of its 27 action points. It has one last chance, till its 15-month deadline ends in October 2019, when the FATF Plenary will be held," one of them added.
In June 2018, Pakistan was placed in the 'Gray' list and given a 27-point action plan by FATF. This plan was reviewed at the last plenary in October 2018 and for the second time in February this year, when the country was again put into the 'Gray' list after India submitted new information about Pakistan-based terrorist groups.
The FATF continuing Pakistan in the 'Gray' list means its downgrading by IMF, World Bank, ADB, EU and also a reduction in risk rating by Moody's, S&P and Fitch.
This will add to the financial problems of Pakistan, which is seeking aid from all possible international avenues. In a bid to bluff the financial watchdog, Pakistani authorities have shown arrests of LeT, JeM, JuD and FiF cadres. But all were apprehended under its Maintenance of Public Order Act and not under the Anti-Terrorism Act, 1997.
Under the MPO Act, authorities cannot hold a detainee beyond 60 days.
Pakistan has detained JeM founder Masood Azhar and LeT founder Hafiz Saeed mostly under the laws that provide for detention for apprehension of breach of peace; they have never been prosecuted under anti-terror laws.
The FATF implements UN designations, which do not warrant arrest. They ask only for freeze of funds, denial of access to weapons and travel embargo. The financial watchdog also wants nations to impose penalties that are proportionate and dissuasive.
The MPO Act is not seen as satisfying either of the two conditions. Therefore, none of these arrests will satisfy the FATF or the UN Designations Committee.
Pakistan has also seized several hundred properties of LeT, JuD, FiF and JeM, including schools and madrasas. However, these properties are now being run by its provincial governments.The Punjab provincial government has allocated $2 million (Pakistani Rs 30 crore or Indian Rs 14 crore) per annum for their upkeep. Similarly, other provinces have allocated $5 million.The annual expense allocated by Pakistan totals $7 million (Pakistani Rs 105 or Indian Rs 49 crore).
The FATF has now asked Pakistan to explain whether there are any terror-funding investigations to unearth the sources and entities that funded these organisations with $7 million per annum for the past several years.
The FATF currently has 35 members and two regional organisations — European Commission and Gulf Cooperation Council. In the last meeting of the FATF in Paris, the FATF said Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, including by adequately demonstrating its proper understanding of the terror financing risks posed by the terrorist groups and conducting supervision on a risk-sensitive basis, demonstrating that remedial actions and sanctions are applied in cases of Anti-Money Laundering and Combating Financing of Terrorism violations and that these actions have an effect on AML/CFT compliance by financial institutions.
Pakistan, it said, should demonstrate that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services, demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for terror financing (TF), improving inter-agency coordination including between provincial and federal authorities on combating TF risks besides others.
Re: Pakistani Economic Stress Watch
Rajya Sabha TV discussion on Pak Economy
https://youtu.be/h0-FYFw09xA
https://youtu.be/h0-FYFw09xA
Re: Pakistani Economic Stress Watch
Sir, Jacobabad base was used for ops in AFG, not for US-Iraq war. CSF was for supporting operations in AFG not in Iraq.K Mehta wrote:Yes it did, it was used as a base for staging ops. Jacobabad is still in use as a US base. And we know how much money they have got as CSF. And the Afghan war is more pertinent.CalvinH wrote: How? Did US-Iraq war benefitted Pakistan. It may lead to completely opposite of what you mention. Oil prices will go through the roof leading to more pressure on Paki economy. with Saudi backing US and Pakistan backing Saudis Paki will see more internal conflicts between Shia and Sunni.
Plus if US is able to have a favorable government in Iran they won’t need Pakistan to manage AFG.
Many bases in Balochistan have been used by America and it is right next to Iran. The main target will be strait of Hormuz and guess which naval base is sitting at the entrance of the strait.
Oil prices are being taken care of by Saudis. See how they are bankrolling them and ask yourself why is Saudi bankrolling Pakistan. Notice how Pakistan is no longer badmouthing US.
With the kind of ruthless oppression Pak army does, Shia Sunni question does not arise. Notice how Lashkar e Jhangvi has been wiped out, they were the anti Shia militia.
Re: Pakistani Economic Stress Watch
ADB distances itself from govt’s budget support claim
In ararerebuff, the Asian Development Bank (ADB) on Sunday distanced itself from a Pakistan government announcement about provision of $3.4 billion budgetary support by the Manila-based lending agency.
Re: Pakistani Economic Stress Watch
^^^^
What a backstabbing by the Iron brother. If Pakistanis had any H&D they will avenge this humiliation!“These discussions are ongoing and details of the plans as well as the volume of ADB’s financial support, once finalised, will be contingent upon the approval of ADB management and its Board of Directors,” said ADB’s Country Director for Pakistan Xiaohong Yang in the statement.
Re: Pakistani Economic Stress Watch
Sir why do you have to select Iraq over Afghanistan. The crux of the matter is that pakistan received money when a neighbouring country is invaded. Whether that country is Afghanistan or Iran.CalvinH wrote: Sir, Jacobabad base was used for ops in AFG, not for US-Iraq war. CSF was for supporting operations in AFG not in Iraq.
It will be used as a staging area for Iran attack also. And will benefit from it.
Please tell me why it will not be used as a staging area in case of Iran? Apart from the spectre of Shia militia being aided by Iran, which I believe the Pak army will be able to control and even exploit.
Re: Pakistani Economic Stress Watch
twitter
Pakistan has won the toss and decided to take the coin to double their forex reserves.
Pakistan has won the toss and decided to take the coin to double their forex reserves.
Re: Pakistani Economic Stress Watch
Against Iran staging area would be Saudi Arabia not pakistan.K Mehta wrote:Sir why do you have to select Iraq over Afghanistan. The crux of the matter is that pakistan received money when a neighbouring country is invaded. Whether that country is Afghanistan or Iran.CalvinH wrote: Sir, Jacobabad base was used for ops in AFG, not for US-Iraq war. CSF was for supporting operations in AFG not in Iraq.
It will be used as a staging area for Iran attack also. And will benefit from it.
Please tell me why it will not be used as a staging area in case of Iran? Apart from the spectre of Shia militia being aided by Iran, which I believe the Pak army will be able to control and even exploit.
Re: Pakistani Economic Stress Watch
Pakistan would be also used and be benefited from this.abhijitm wrote: Against Iran staging area would be Saudi Arabia not pakistan.
Re: Pakistani Economic Stress Watch
Raheel Sharif is being given a year's extension in his job in KSA
His usefulness is related to Pakistan's cooperation with KSA in relation to the possible upcoming war with Iran
His usefulness is related to Pakistan's cooperation with KSA in relation to the possible upcoming war with Iran
Pakistani Economic Stress Watch
S&P BSE SENSEX
Index Current : 39,046.34 - Pt. Change : +85.55 - % Change : +0.22
Market Capitalization of BSE Listed Co. (Rs.Cr.) : 1,50,23,047.46 - $ 1 / I N R 69.7600
Market Capitalization of BSE Listed Co. (U S $.) : 2,153.53 Billion
P S E
Current Index : 34,681.72 - Change : -487.10 - % Change : -1.4%
Market Capitalization of PSE Listed Co. (Rs.Tr.) : 6,991.213556007 - $ 1 / 157.00
Market Capitalization of PSE Listed Co. (U S $.) : 44.53 Billion
B S E : P S E : : 48.38 : 1
Cheers
Index Current : 39,046.34 - Pt. Change : +85.55 - % Change : +0.22
Market Capitalization of BSE Listed Co. (Rs.Cr.) : 1,50,23,047.46 - $ 1 / I N R 69.7600
Market Capitalization of BSE Listed Co. (U S $.) : 2,153.53 Billion
P S E
Current Index : 34,681.72 - Change : -487.10 - % Change : -1.4%
Market Capitalization of PSE Listed Co. (Rs.Tr.) : 6,991.213556007 - $ 1 / 157.00
Market Capitalization of PSE Listed Co. (U S $.) : 44.53 Billion
B S E : P S E : : 48.38 : 1
Cheers
Re: Pakistani Economic Stress Watch
Gas consumers to face up to 200% price hike
Domestic consumers are set to face up to 200% hike in gas prices from July 1, mainly due to the rupee depreciation against the dollar. However, the Petroleum Division has proposed no increase in gas prices for the elite who use gas in bulk.
The Economic Coordination Committee (ECC), scheduled to meet on Wednesday (today), is likely to approve the proposed hike in gas tariff, an official said. The Pakistan Tehreek-e-Insaf (PTI) government has already increased gas prices by up to 143% during the ongoing financial year.
The Petroleum Division has proposed 25% increase in gas prices for domestic gas consumer in the first slab. Fifty per cent (50%) increase is recommended for the second slab, 75% for the third slab, 100% for the fourth slab, 150% for the fifth slab and 200% for the sixth slab gas consumers.
Re: Pakistani Economic Stress Watch
https://tribune.com.pk/story/1995384/2- ... ct-people/
PM’s tax amnesty scheme fails to attract people
PM’s tax amnesty scheme fails to attract people
Less than 250 Pakistanis have so far availed the tax amnesty scheme and paid a paltry sum of about Rs450 million in taxes despite personal appeal by Prime Minister Imran Khan through his televised address.
Re: Pakistani Economic Stress Watch
WB just gave them around 600 million$ (out of grant of 900m$) for the purpose of better revenue generation. Here is a country who is unable to fund even its tax collection agencies - FYI, the overhead of tax collection itself is well below 5% in India, i.e. the expenses of the tax offices/officers is less than 5Rs for a collection of 100Rs. Easily the first thing a country should invest in, and even for that the Pakis have to take a loan.
Now that they have taken huge loans, let's see what the returns are going to be. Also watch the reactions as people revolt against taxation - the middle class which has been hung out to dry, and the moneyed folks who have a hundred ways - legal/illegal, ethical/unethical and criminal - to not pay up.
Now that they have taken huge loans, let's see what the returns are going to be. Also watch the reactions as people revolt against taxation - the middle class which has been hung out to dry, and the moneyed folks who have a hundred ways - legal/illegal, ethical/unethical and criminal - to not pay up.
Pakistani Economic Stress Watch
S&P BSE SENSEX
Index Current : 39,601.63 - Pt. Change : +488.89 : % Change : +1.25%
Market Capitalization of BSE Listed Co. (Rs.Cr.) : 1,51,30,670.73 – U S $ / 69.4650
Market Capitalization of BSE Listed Co. (U S $.) : 2,178.17 Billion
P S E
Current Index - 34,995.91 – Change : 339.79 - % Change : 0.97%
Market Capitalization of PSE Listed Co. (U S $.) : 7,035,476,237,886 - U S $ / 157.0801
Market Capitalization of PSE Listed Co. (U S $.) : 44.79 Billion
B S E : P S E : : 48.63 : 1
Cheers
Index Current : 39,601.63 - Pt. Change : +488.89 : % Change : +1.25%
Market Capitalization of BSE Listed Co. (Rs.Cr.) : 1,51,30,670.73 – U S $ / 69.4650
Market Capitalization of BSE Listed Co. (U S $.) : 2,178.17 Billion
P S E
Current Index - 34,995.91 – Change : 339.79 - % Change : 0.97%
Market Capitalization of PSE Listed Co. (U S $.) : 7,035,476,237,886 - U S $ / 157.0801
Market Capitalization of PSE Listed Co. (U S $.) : 44.79 Billion
B S E : P S E : : 48.63 : 1
Cheers
Pakistani Economic Stress Watch
Rupee stable against dollar
KARACHI: The rupee remained stable against the dollar at Rs156.8/157.3 in the inter-bank market on Wednesday compared with Tuesday’s close of Rs156.8/157.3, according to forex.pk. Recently, the State Bank of Pakistan (SBP) let the rupee depreciate massively in the inter-bank market after finalising an agreement with the International Monetary Fund (IMF) for a loan programme on May 12. The rupee has weakened Rs9.04 or 6.11% since June 3. The IMF has asked Pakistan to end state control of the rupee and let the currency move freely to find its equilibrium against the US dollar and other major world currencies. Also, the World Bank, which finances some of the infrastructure and social safety net projects in Pakistan, has supported the idea of leaving the rupee free from state control in a bid to give much-needed boost to exports and fix a faltering economy. Cumulatively, the rupee has depreciated almost 49% since December 2017, according to the central bank.
+++++
HISTORICAL RATE OF CURRENCIES
PACIFIC Exchange Rate Service
Foreign Currency Units per 1 U.S. Dollar, 1950-2018 1950 : INDIA 04.7610 – TERRORISTAN 3.3085
1956 : INDIA 04.7619 - TERRORISTAN 4.7619
Economic Milestone: Devaluation of the Rupee (1966)
Rupee Rate : On June 6, 1966, in one fell swoop, the Indira Gandhi government devalued the Indian rupee by 57 percent, from Rs 4.76 to Rs 7.50 to a dollar, triggering bitter criticism in the Parliament and media. The people, too, joined in claiming that this was the ultimate “sell-out to America and the World Bank”. TERRORISTAN : 04.76
TODAY – INDIA - 69.4650 TERRORISTAN – 157.0801
Thank God for the Indian Administrators / Political Leaders. Compare it with their Terroristani Counterparts!
Cheers
KARACHI: The rupee remained stable against the dollar at Rs156.8/157.3 in the inter-bank market on Wednesday compared with Tuesday’s close of Rs156.8/157.3, according to forex.pk. Recently, the State Bank of Pakistan (SBP) let the rupee depreciate massively in the inter-bank market after finalising an agreement with the International Monetary Fund (IMF) for a loan programme on May 12. The rupee has weakened Rs9.04 or 6.11% since June 3. The IMF has asked Pakistan to end state control of the rupee and let the currency move freely to find its equilibrium against the US dollar and other major world currencies. Also, the World Bank, which finances some of the infrastructure and social safety net projects in Pakistan, has supported the idea of leaving the rupee free from state control in a bid to give much-needed boost to exports and fix a faltering economy. Cumulatively, the rupee has depreciated almost 49% since December 2017, according to the central bank.
+++++
HISTORICAL RATE OF CURRENCIES
PACIFIC Exchange Rate Service
Foreign Currency Units per 1 U.S. Dollar, 1950-2018 1950 : INDIA 04.7610 – TERRORISTAN 3.3085
1956 : INDIA 04.7619 - TERRORISTAN 4.7619
Economic Milestone: Devaluation of the Rupee (1966)
Rupee Rate : On June 6, 1966, in one fell swoop, the Indira Gandhi government devalued the Indian rupee by 57 percent, from Rs 4.76 to Rs 7.50 to a dollar, triggering bitter criticism in the Parliament and media. The people, too, joined in claiming that this was the ultimate “sell-out to America and the World Bank”. TERRORISTAN : 04.76
TODAY – INDIA - 69.4650 TERRORISTAN – 157.0801
Thank God for the Indian Administrators / Political Leaders. Compare it with their Terroristani Counterparts!
Cheers
Re: Pakistani Economic Stress Watch
X-post from Terroristan thread
viewtopic.php?f=1&p=2362288#p2362288
https://www.livemint.com/news/world/pak ... 60437.html
Pakistan avoids being placed on FATF blacklist with Turkey's support
However, Islamabad requires at least 15 out of 36 votes to move out of the watchdog’s grey list, which is causing an estimated loss of $10 bn per year
viewtopic.php?f=1&p=2362288#p2362288
https://www.livemint.com/news/world/pak ... 60437.html
Pakistan avoids being placed on FATF blacklist with Turkey's support
However, Islamabad requires at least 15 out of 36 votes to move out of the watchdog’s grey list, which is causing an estimated loss of $10 bn per year
Pakistani Economic Stress Watch
X Posted on the Terroristan Thread
Asad Umar discloses IMF demands for loan package - Shahbaz Rana
ISLAMABAD: The International Monetary Fund (IMF) had initially demanded 94% increase in gas prices and 50% in power tariffs but the final staff-level agreement largely reflected concessions that Pakistan won during protracted negotiations, said former finance minister Asad Umar on Thursday.
The staff-level agreement reached between Pakistan and the IMF last month was largely in line with the concessions that he secured during four months of negotiations, said Umar in the National Assembly while revealing details of closed-door talks for the first time.
But Umar criticised at least five tax measures that he said would discourage future investments and increase burden on the poor and middle-income group.
Pakistan fulfills all IMF commitments: SBP chief
The fund’s conditions also included a 6% upfront increase in the key interest rate, free float of exchange rate and increase in the tax-to-GDP ratio to 13.2% in the next fiscal year, said Umar. The former finance minister’s speech would help end speculations that the deal struck by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh after Umar’s ouster was different from what Pakistan had negotiated.
Pakistan and the IMF reached a staff-level agreement on May 11 and the IMF Executive Board is scheduled to approve the $6-billion package on July 3. Those who had billions of rupees in assets abroad were not affected by the IMF programme and he had to think about 210 million people, said former finance minister while explaining the delay in finalising the deal with the IMF.
Umar said there were five main conditions of the IMF deal. These were electricity prices, gas prices, tax rates, policy rate of the State Bank and rupee valuation.
The IMF had demanded that Pakistan should opt for free float of the exchange rate but Umar’s position was that the country could not afford the free float.
Umar said he was “very happy” that the SBP governor said there should not be a “free float currency regime in a country like Pakistan”. The free float would allow speculators to play with the currency’s value. He pointed out that the SBP governor had said that Pakistan would follow a flexible exchange rate.
However, the local currency was constantly losing its value and was traded at Rs156.96 in the inter-bank market on Thursday. Umar said the IMF also demanded that electricity prices should be further increased by 50%, but the National Electric Power Regulatory Authority’s (Nepra) determination suggested that the increase would not be more than 15%.
On gas prices, the IMF wanted a 94% price increase but the hike would be far less than half of what the IMF had demanded, said the former finance minister.
Umar said when the interest rate in Pakistan was 9%, the IMF wanted a 6% upfront increase to 15%. From there, the interest rate was to be increased to 23% due to increase in inflation, said the ex-finance minister.
On the increase in taxes, Umar said the IMF had demanded that in the first year the tax-to-GDP ratio must be increased to 13.2%. But the final agreement showed that the tax-to-GDP ratio would be 12.6% by the end of next fiscal year and that meant a Rs250-billion reduction in tax burden, said Umar.
These conditions were relaxed due to four-month-long negotiations with the IMF, he said. “The IMF programme is tough today but is not even closer to what the IMF had initially demanded,” he reiterated.
Speaking on the proposed budget, Umar said there was no doubt that Pakistan was facing tough economic conditions. But even in these difficult circumstances, there was a need to protect the middle-income class along with the poor, he said.
He echoed concerns expressed by textile exporters over delay in release of their genuine tax refunds due to imposition of 17% general sales tax at the manufacturing stage.
“We cannot lose taxes on local sales of the five export-oriented sectors but the government should be mindful that withdrawal of the zero-rating regime may create liquidity crunch for the sectors,” he added.
The former finance czar said if the liquidity crisis was created due to withdrawal of the facility, the investors’ confidence may get hurt. The government expects Rs100 billion in additional revenues from withdrawal of the zero-rating facility.
Opposition brands finance bill ‘IMF budget’
Umar said the government had increased the minimum tax, which might hurt new investment. At least, the new investment should be excluded from the minimum tax in the first five years, he added. The government aims to earn an extra Rs65 billion from the increase in minimum tax. The government has also withdrawn the tax credit facility on balancing, modernisation, rehabilitation and expansion (BMRE) by the industrialists to earn an additional Rs95 billion. Umar was of the view that this facility should continue for attracting new investment.
He criticised his government’s decision to increase the sales tax on sugar and cooking oil, saying it was not suitable to increase taxes on sugar whose prices were already rising.
Cheers
Asad Umar discloses IMF demands for loan package - Shahbaz Rana
ISLAMABAD: The International Monetary Fund (IMF) had initially demanded 94% increase in gas prices and 50% in power tariffs but the final staff-level agreement largely reflected concessions that Pakistan won during protracted negotiations, said former finance minister Asad Umar on Thursday.
The staff-level agreement reached between Pakistan and the IMF last month was largely in line with the concessions that he secured during four months of negotiations, said Umar in the National Assembly while revealing details of closed-door talks for the first time.
But Umar criticised at least five tax measures that he said would discourage future investments and increase burden on the poor and middle-income group.
Pakistan fulfills all IMF commitments: SBP chief
The fund’s conditions also included a 6% upfront increase in the key interest rate, free float of exchange rate and increase in the tax-to-GDP ratio to 13.2% in the next fiscal year, said Umar. The former finance minister’s speech would help end speculations that the deal struck by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh after Umar’s ouster was different from what Pakistan had negotiated.
Pakistan and the IMF reached a staff-level agreement on May 11 and the IMF Executive Board is scheduled to approve the $6-billion package on July 3. Those who had billions of rupees in assets abroad were not affected by the IMF programme and he had to think about 210 million people, said former finance minister while explaining the delay in finalising the deal with the IMF.
Umar said there were five main conditions of the IMF deal. These were electricity prices, gas prices, tax rates, policy rate of the State Bank and rupee valuation.
The IMF had demanded that Pakistan should opt for free float of the exchange rate but Umar’s position was that the country could not afford the free float.
Umar said he was “very happy” that the SBP governor said there should not be a “free float currency regime in a country like Pakistan”. The free float would allow speculators to play with the currency’s value. He pointed out that the SBP governor had said that Pakistan would follow a flexible exchange rate.
However, the local currency was constantly losing its value and was traded at Rs156.96 in the inter-bank market on Thursday. Umar said the IMF also demanded that electricity prices should be further increased by 50%, but the National Electric Power Regulatory Authority’s (Nepra) determination suggested that the increase would not be more than 15%.
On gas prices, the IMF wanted a 94% price increase but the hike would be far less than half of what the IMF had demanded, said the former finance minister.
Umar said when the interest rate in Pakistan was 9%, the IMF wanted a 6% upfront increase to 15%. From there, the interest rate was to be increased to 23% due to increase in inflation, said the ex-finance minister.
On the increase in taxes, Umar said the IMF had demanded that in the first year the tax-to-GDP ratio must be increased to 13.2%. But the final agreement showed that the tax-to-GDP ratio would be 12.6% by the end of next fiscal year and that meant a Rs250-billion reduction in tax burden, said Umar.
These conditions were relaxed due to four-month-long negotiations with the IMF, he said. “The IMF programme is tough today but is not even closer to what the IMF had initially demanded,” he reiterated.
Speaking on the proposed budget, Umar said there was no doubt that Pakistan was facing tough economic conditions. But even in these difficult circumstances, there was a need to protect the middle-income class along with the poor, he said.
He echoed concerns expressed by textile exporters over delay in release of their genuine tax refunds due to imposition of 17% general sales tax at the manufacturing stage.
“We cannot lose taxes on local sales of the five export-oriented sectors but the government should be mindful that withdrawal of the zero-rating regime may create liquidity crunch for the sectors,” he added.
The former finance czar said if the liquidity crisis was created due to withdrawal of the facility, the investors’ confidence may get hurt. The government expects Rs100 billion in additional revenues from withdrawal of the zero-rating facility.
Opposition brands finance bill ‘IMF budget’
Umar said the government had increased the minimum tax, which might hurt new investment. At least, the new investment should be excluded from the minimum tax in the first five years, he added. The government aims to earn an extra Rs65 billion from the increase in minimum tax. The government has also withdrawn the tax credit facility on balancing, modernisation, rehabilitation and expansion (BMRE) by the industrialists to earn an additional Rs95 billion. Umar was of the view that this facility should continue for attracting new investment.
He criticised his government’s decision to increase the sales tax on sugar and cooking oil, saying it was not suitable to increase taxes on sugar whose prices were already rising.
Cheers
Re: Pakistani Economic Stress Watch
I think rather just increasing gas prices, wood should be made available from POK to Pakjab and sindh, this will really help the poor, and get more exposure to Paki soldiers, militants, near the LOC. WOuld be nice these folks getting stuck in mud being sitting ducks during firefights and artillery targets.
Re: Pakistani Economic Stress Watch
https://twitter.com/Ind4Ever/status/114 ... 72197?s=20
INTEL @ ind4ever just tweeted that the londonistan gave credit line of 4billion pounds. Is it true? When did this happen?
INTEL @ ind4ever just tweeted that the londonistan gave credit line of 4billion pounds. Is it true? When did this happen?
Pakistani Economic Stress Watch
X Posted on the Terroristan Thread
Cheers
Cheers
Re: Pakistani Economic Stress Watch
In another tweet he's saying that this package was given to pak 3 days back very quietly, without any fanfare.RajD wrote:https://twitter.com/Ind4Ever/status/114 ... 72197?s=20
INTEL @ ind4ever just tweeted that the londonistan gave credit line of 4billion pounds. Is it true? When did this happen?
-
Mort Walker
- BRF Oldie
- Posts: 10040
- Joined: 31 May 2004 11:31
- Location: The rings around Uranus.
Re: Pakistani Economic Stress Watch
Credit line means Pak elite can live high on the hog in the UK. It may also be used to protect the RAPE assets in the UK and gulf.