NEWS COVERAGE PERIOD FROM APRIL 20TH TO APRIL 26TH
EXPORTS TO GULF STATES JUMP 36PC
Mubarak Zeb Khan Updated April 28, 2020
ISLAMABAD: Pakistan’s exports to the Middle Eastern countries increased by 36 per cent during the current fiscal year, data released by the Ministry of Commerce showed on Monday.
The ministry claimed that the growth in export proceeds was achieved owing to several initiatives but did not share any details on the actions.
Three major commodities posted impressive growth between July 2019 and April.
The rice exports to the region increased by 59pc in value from $264 million to $420m, meat from $127m to $200m, an increase of 57pc during the period under review. And fruits and vegetables exports enhanced from $70m to $140m, an increase of 100pc.
The data compiled by the State Bank of Pakistan showed exports to the UAE surged by 28pc during the July-March period. The export value reached $1.244bn this year as against $971.173m over the corresponding months of last year.
Pakistan’s export to Saudi Arabia increased by 42.9pc to $352.164m during the July-March period this year as against $246.419m over the corresponding months of last year. Pakistan’s exports to Saudi Arabia mainly include rice, fruits, vegetable preparations, apparel and clothing, and made-up articles of textile.
Currently, negotiation on a preferential trade agreement covering both tariff and non-tariff barriers are pending before the two governments.
Exports to Qatar increased 50pc to $108.898m during the July-March period this year as against $72.49m over the corresponding months last year. Similarly, exports to Bahrain also witnessed a growth of 8.33pc to $52.856m as against $48.789m over the corresponding months last year.
Pakistan’s exports to other countries in the region remained stagnant during the period under review.
Meanwhile, exports to Iran during the July-March period stood at $0.055m as against $2.892m over the corresponding period of last year. Pakistan mostly trades on a barter basis with Iran, which does not account in the official figures. On the other hand, the country’s exports to Afghanistan, once Pakistan’s second-biggest export market after the United States, dropped by 10.8pc to $789.437m as against $885.779m over the corresponding months last year.
Pakistan has closed its border stations with Afghanistan since Mar 15. Only $61m worth of goods were exported to the neighbouring country during March. The government has virtually banned all kinds of exports to Afghanistan except kinno.
Published in Dawn, April 28th, 2020
https://www.dawn.com/news/1552822/exports-to-gulf-states-jump-36pc
PAKISTAN CAN SAVE $5-6B IN MARITIME TRADE THROUGH PNSC
By Our Correspondent Published: May 1, 2020
ISLAMABAD: Pakistan can save around $5-6 billion annually merely by using Pakistan National Shipping Corporation (PNSC) as the mainstay of its international maritime trade while also allowing it to buy more oil carriers and tankers to increase its capacity of transporting liquid freight.
The recommendation was made by PNSC former executive director Syed Muhammad Obaidullah in a webinar titled ‘Global Oil Crisis Amidst Covid-19 and its Impact on Shipping Sector: Challenges and Prospects for PNSC’ on Thursday.
Explaining the reasons for the current oil crisis, he said that chaos started with the conflict between Russia and the Kingdom of Saudi Arabia over oil supply.
“Though the conflict got resolved following the intervention of US President Donald Trump, the outbreak of Covid-19 pandemic soon after rendered the resolution almost irrelevant,” he said.
“With the suspension of air operators, transport, and rail services coupled with the lowest level of industrial productivity, the demand for oil dropped significantly.”
He detailed that the development had a devastating impact on the oil markets around the globe in general, and the US market (WTI) and Canadian market in particular, owing to storage capacity issues at both suppliers’ and buyers’ end.
As a result, the oil prices in these markets fell into negative territories affecting several industries globally including the shipping industry. Speaking of the possibility of a reduction in oil prices for Pakistan, the speaker was of the view that the situation may not benefit the country at all.
He argued that Pakistan buys Brent and Dubai crude, which stands around $15-20 per barrel at present, while the low demand for oil within the country following the pandemic may not let it gain much. Three of the five oil refineries of Pakistan shut down due to exhaustion of their storage capacities and low market demand.
“The new regulation of International Maritime Organisation (IMO) acts as another crisis for refineries,” he said. “Introduced in January 2020, the law requires diesel to have Sulphur content of 0.5% instead of 3.5%.”
The inability to produce diesel of that standard hindered the processed oil exports of Pakistani refineries considerably, he added. Explaining the current situation, Obaidullah briefed that Pakistan has been importing three types of oils ie crude oil, processed oil, and LNG.
Published in The Express Tribune, May 1st, 2020.
https://tribune.com.pk/story/2211026/2-pakistan-can-save-5-6b-maritime-trade-pnsc/
KP TRADERS DEMAND CLEARANCE OF CONTAINERS STUCK AT KARACHI PORT
By AMJAD ALI SHAH on May 3, 2020
Business community in Khyber Pakhtunkhwa has expressed its grave concern over large number of Afghan transit trade containers being held up at Karachi port on the pretext of passing them through the scanning process and urged the government to make the clearance process easy in order to mitigate their difficulties and to promote the Pak-Afghan transit trade business.
The matter was discussed during a meeting of traders engaged in Afghan transit trade and exporters held here at the chamber house on Saturday. The meeting was presided over by the President of Sarhad Chamber of Commerce and Industry (SCCI), Maqsood Anwar Pervaiz.
The meeting was informed that almost 7,000 Afghan transit goods containers were being held up at Karachi port under the pretext of scanning process while the traders were being charged detention charges.
The participants of the meeting said that the shipping company was also charging additional demurrage in the shape of rent from traders and exporters.
They added that there was no justification of carrying out scanning of Afghan transit trade goods trucks/containers at Karachi port and asked the authorities concerned to have this practice immediately stopped in order to accelerate the export process and boost the Pak-Afghan transit trade.
Copyright Business Recorder, 2020
HOME DEPT ISSUES NEW ORDERS FOR IMPORTS AND EXPORTS AMID COVID-19 LOCKDOWN
Salis Bin Perwaiz May 3, 2020
The Sindh home department, on the instructions of the provincial government, has issued a new policy for the import and export business.
The notification, titled ‘Order and Decisions of Import and Export Committee, reads, “In pursuance of the Government of Sindh notification COVID-19/Committee/2020 dated March 24, 2020 and April 8, 2020, and the committee constituted vide the Home Department, Government of Sindh, notification dated 28th April, 2020, the committee-I examined the requests and applications received from the export-oriented industries in the light of the Home Department Order, wherein such industries were allowed to operate subject to the condition of ensuring adherence to SOPs issued by the Home Department in view of COVID-19 measures.
“Now, therefore, on the recommendations received from the Secretary, Industries and Commerce Department, and Chairman, Committee-I, vide a letter dated 2nd May 2020, the following export-oriented factories and manufacturing units, which are found fulfilling the criteria as per the Order and SOPs referred above, i.e. verification of the export order by TDAP, undertaking by CEO/owner on ensuring arrangements within their premises as per SOPs referred above for COVID-19 prevention, and a list of workers/staff/management who will be present and working in the premises of factory and manufacturing unit during its operation…, are permitted to start their operation (for export- related items) subject to adherence to the SOPs.”
According to the notification, there are about 35 factories and industries that are allowed to operate and they include A.K. Textile F-543, SITE Karachi Permitted to start operations adhering to the SOPs, AL-Azmat D-18, SITE Karachi Permitted to start operations adhering to the SOPs, AMNA APPARELS F-271, SITE Karachi Permitted to start operations adhering to the SOPs, AL-RAHEEM WEAVING F-527, SITE Karachi , ASCO INTERNATIONAL, AFROZE TEXTILE C-8, SITE Superhighway, Karachi, AL-HADI EXPORTS D103A, and SITE Karachi.
“It is clarified that these factories and manufacturing units are bound by the conditions, directions and processes as described in the Home Department Order of even number dated 14th April 2020 and SOPs Corona/SOPs dated 14th April, 2020 respectively.”
The home department’s notification further said: “It is reiterated that the SOPs are put in place with a view to preventing the spread of COVID-19; therefore, it is absolutely necessary that the SOPs are in place before the start of work as per undertaking given. Moreover, in order to ensure timely tracking and tracing in case a positive case is detected, the required particulars of all the staff/workers/ management who would be present in the premises of the factory/manufacturing unit are to be provided. The required details are name, father’s name, designation, CNIC number, residential address, cell number (if any).”
The home department has been issuing notifications and SOPs for how businesses and industries should operate in light of the policies being adopted by the provincial government.
On April 25, the Sindh government had announced detailed standard operating procedures for online business modes of industrial establishments and shops in the province.
The notification issued by the home department reads that in view of the spread of the novel coronavirus and the resulting deaths worldwide, the Sindh government found it necessary to invoke the Sindh Epidemic Diseases Act 2014 and impose restrictions on all trade activities except those related to essential services.
According to the notification, since the government could not ban economic activities for an indefinite period, the need was being felt for facilitating trade and commerce in the province while keeping social distancing and other precautionary measures in place as the pandemic was not.
All the businesses wanting to operate through an online mode will now submit an undertaking that they will adhere to the new SOPs so that the spread of the viral disease can be prevented.
The objective of the new SOPs, according to the notification, is to ensure that the online operations and deliveries of purchase orders are made in a manner that prevents the spread of COVID-19 and such operations are made by trained staff by avoiding social interaction during business activities, contact-less buying and selling, and utilising the internet and mobile order placement and payment services.
The SOPs for e-commerce are applicable to all such owners, proprietors and individuals conducting their businesses online. The notification reads that no exemption will be granted to anyone regarding the SOPs for online businesses.
The general SOPs for any permissible business that were issued earlier on April 14, 2020, shall also apply, to the extent as is applicable, to the online and e-commerce businesses.
The online businesses are allowed to operate from Monday to Thursday between 9am and 3pm. According to the notification, the proprietor or owner has to ensure compliance with the SOPs as well as other applicable directions issued by the government from time to time.
The owners shall provide an undertaking regarding adherence to the SOPs before the start of their online businesses. They will undertake that they shall be responsible for adhering to the SOPs and for all their subordinate staff and workers, and shall provide necessary distancing space, masks, gloves, sanitisers and frequent hand washing facilities at the workplace during the duty hours.
The business owners will also have to submit the list of all their staff with their details such as CNIC, residential address and contact number so that they can be traced in case any of their colleague tests positive. Such undertaking and list of persons is to be provided to the district administration through email that shall be notified by the commissioners or deputy commissioners. A reply to the email will be sent as an acknowledgement of receipt. The email of the Karachi commissioner is commissionerkarachi@gmail.com. The other commissioners may similarly publicise their or their respective DCs’ emails.
The commissioner may further devise a mechanism and issue directions so that the spirit of the SOPs is maintained and no online businesses run in violation of the SOPs. “No separate permission and order is required for start of business after the above documents are submitted to the Commissioner Office on email,” the notification reads.
The owners are required to affix at the entrance of the workplace a copy of such email, receipt of the copy by the designated office, copy of the undertaking and list of staff so that they could be checked and verified by inspection teams. “Submission of improper undertaking or incomplete list of persons engaged in such business shall be construed as violation of the SOPs and shall be liable for action,” the notification reads.
NEWS COVERAGE PERIOD FROM APRIL 13TH TO APRIL 19TH
SUGAR MILL OWNERS EVADED TAXES WORTH BILLIONS
By Talib Fareedi Published: April 12, 2020
LAHORE: Further investigations into the recent sugar crisis in the country have revealed that the mill owners not only created an artificial shortage of the commodity to bump up its rates but also evaded taxes worth billions of rupees.
The investigation was conducted by the Federal Investigation Agency (FIA) on the directives of Prime Minister Imran Khan.
Sources in the investigation commission said that the FIA has seized all records of the mill owners. “According to the seized records, the mill owners had two accounts – external and internal. The external account was being used to dupe the tax authorities into believing that the mills owners had sold a meager amount of sugar to dealers while the details of the actual sale, which was far more than shown, were in the internal account,” said the sources.
The sources further said the investigation commission checked the records of a mill owner and found out that a dealer was sold sugar worth Rs480 million while the external account showed that the deal was made for Rs3.6 million.
In this way, the mill owner saved Rs470.64 million, ie paid tax on selling sugar worth Rs3.6 million and not Rs480 million.
This was just one entry of a mill owner. For the last five years, billions of rupees have been made by these sugar mills through the double-account system.
An FIA official, on the condition of anonymity, said, “Till now, records of 89 sugar mills have been seized and they are owned by leaders of the N-League, Q-League, Peoples Party, PTI or retired officers of sensitive institutions.”
The official said, “These mill owners belong to political parties that are rivals, but when it comes to minting money, all political differences are shunned.”
He said that efforts were being made to complete the inquiry by next week and submit a report to Premier Imran.
He said that if the production capacity of plants, stock and accounts of private dealers are taxed, the amount would cross that of the subsidy, and that too multiple times.
When The Express Tribune contacted FIA Director Punjab Zone-I Dr Rizwan, his spokesperson said, “Inquiry is under way and we have just seized the records and given it to the investigation commission. We have no idea what will come out of it.”
https://tribune.com.pk/story/2196550/1-sugar-mill-owners-evaded-taxes-worth-billions/
IMPORTANCE OF PAKISTAN’S FERTILISER SECTOR IN TOUGH TIMES
By SHER SHAH MALIK Published: April 13, 2020
LAHORE: Being primarily an agrarian state, with agriculture contributing 20% to the gross domestic product (GDP) and providing over 40% of the employment, Pakistan’s growth is and has always been heavily dependent on the health of its fertiliser industry.
With increased capital investment, advancement of technology and more players in the industry, the domestic production capacity of various fertilisers has increased to over 9 million tons per year, which has surpassed the national demand consistently over the past years.
It is to be understood that the use of earnings per share (EPS) in the comparison of two different industries and their returns is not the correct metric. EPS depends not only on the profitability of a company but also on its leverage and number of shares.
Therefore, two companies making the same level of profit could have significantly different EPS.
Furthermore, the return on equity and return on assets of the fertiliser industry at 19% and 6% respectively are way lower than many major industries including chemical, automobile, and oil exploration and production. The return on equity and return on assets for other industries are as high as 32% and 17% respectively.
Regarding the argument of cheap gas in a deregulated market, it is to be noted that the fertiliser industry has always made it a point to be toe-to-toe with and beyond the government in passing on economic benefits to the farmers.
Since FY10, the industry has passed on a total benefit of Rs600 billion to the farmers in the form of subsidised urea prices, which is three times the benefit passed on by the government through lower gas prices.
The fertiliser policy of 2001 introduced fixed and regionally competitive prices to encourage investment in local manufacturing to ensure availability of affordable fertiliser in the market.
Pakistan was facing a balance of payments crisis to which a significant contributor was urea imports and, therefore, local players were encouraged to invest in order to manage the balance of payments and ensure national food security.
It allowed billions of dollars of investment that resulted in a production capacity of almost seven million tons of urea, ensuring that Pakistan would not need to import even if the demand rose by a few percentage points in the coming years.
The supply of locally manufactured urea at significantly discounted prices as compared to imported fertiliser has allowed improved consumption of the input by the farmers, leading to higher crop yields.
Growth in the consumption of urea from an average of 5.2 million tons to 5.8 million tons per year is a testimony to the contribution that the industry has made to growth in agricultural output of the country.
In the past, the company making over a billion dollars’ investment in setting up a state-of-the-art manufacturing facility was almost on the verge of bankruptcy when it did not end up receiving its allocated gas for a number of years.
Even today, some of the plants remain significantly underutilised due to low availability and affordability of gas and companies on the network are on the verge of collapse.
The diversion of fertiliser sector-specific gas of Mari field to the power sector and lowering pressure have compelled the companies to undertake huge investment to the tune of over Rs16 billion in compression infrastructure in recent years.
The fertiliser sector employs directly and indirectly over 30,000 people and contributed over Rs60 billion in duties, taxes and levies to the national exchequer in FY19.
Tax payments equate to 97% of the profit made by the sector. The corporate social responsibility expenditures and projects carried out by major players lead to improved healthcare and education in many deprived areas.
The industry has taken part in the national subsidy schemes by financing over Rs18 billion in the past and is still struggling to receive its outstanding subsidy of over Rs19 billion.
Similarly, GST refunds of around Rs29 billion are awaited, adding to the financial cost of borrowing. The industry also remitted around Rs129 billion on account of GIDC to the government in the past.
Basing cost of production of local fertilisers on an ever-changing index comprising volatile spot LNG prices could greatly hamper market stability as any sudden change in LNG prices would directly reflect in the end-cost afforded to the consumers.
This could create unnecessary market disruption as changes in the cost of production would merit frequent changes in selling prices.
It is evident that this solution only works on the back of direct subsidies being provided by the government and that is not a viable option in the absence of the requisite data base, tested disbursement mechanism and in the current economic crisis affecting the country.
It is, therefore, extremely important to understand the critical role the fertiliser industry plays in ensuring food security of the nation. This has been achieved by industry players by making massive capital investment with long-term payback that also supports job creation, import substitution and significant contribution to the national exchequer.
The writer is the Executive Director of Fertiliser Manufacturers of Pakistan Advisory Council
Published in The Express Tribune, April 13th, 2020.
https://tribune.com.pk/story/2196494/2-importance-pakistans-fertiliser-sector-tough-times/
GOVT MULLS ZERO TAX, DUTIES TO BOOST EXPORTS
Mubarak Zeb Khan Updated April 16, 2020
ISLAMABAD: The Ministry of Commerce (MoC) has proposed to exempt duties and taxes on exports proceeds to cope with the fallout from Covid-19 on exports, said Commerce Adviser Abdul Razak Dawood.
“We had a meeting with the Federal Board of Revenue for implementation of this principle on several of our products including leather, poultry and electric fans,” the advisor said, adding that the policy the Commerce Division is following is there should be no element of duties and taxes in exports.
The presumptive tax at the rate of one per cent is currently applied on export proceeds to facilitate exporters and exempt them from the normal taxation.
Razak, however, did not elaborate whether exporters’ complete income will be exempted from income tax. He further said the duty drawbacks will be revised and the system vastly simplified for exporters.
As most of the world is in a state of lockdown, he said the reliance on IT-enabled services has increased manifold. “I strongly urge the world to look at Pakistan as your business destination,” the adviser said.
With the easing of the lockdown, “I hope our exporters will be able to move forward under the new SOPs of the provinces,” he said, adding “If you face any difficulties please inform the Ministry of Commerce.”
Razak further informed that to facilitate businesses, refunds of Rs47.5 billion were paid in the last 100 days in textile and non-textile sectors.
Meanwhile, he also briefed the Standing Committee on Commerce under the Chairmanship of MNA Naveed Qamar, saying that 61 essential medical items identified by the Ministry of National Health Services were exempted from all duties and taxes on March 20 while a ban was placed on export of 10 essential medical items.
He added that in support of countering the health emergency, Expo centres at Karachi and Lahore were given to respective provincial governments for setting up field hospitals.
A number of consultative sessions were held with top exporters and chambers to assist and formulate strategy to deal with COVID-19 related challenges and offer all kinds of assistance they require from commerce ministry, the Trade Development Authority of Pakistan (TDAP) as well as the concerned officers posted abroad, he said.
Published in Dawn, April 16th, 2020
https://www.dawn.com/news/1549598
MARCH EXPORTS DECLINE BY 15.23PC
ABDUL RASHEED AZAD April 18, 2020
ISLAMABAD: The country’s exports during March 2020 against February 2020 have witnessed a reduction of 15.23 percent, from $2.140 billion to $1.814 billion, the Pakistan Bureau of Statistic (PBS) said. According to advance release on external trade statistics for March, 2020 the country exported various goods and services to the tune of $1.814 billion against $ 2.140 billion in February, 2020. The data said on Year-on-Year (YoY) basis the country’s exports also witnessed a declining trend as it registered a decline of 8.11 percent from $1.974 billion in March 2019 to $1.814 in March 2020.
On quarterly basis, the exports witnessed an increase of 2.23 percent during July–March 2019-2020 totaled $17.451 billion against $17.071 billion in the corresponding period of last year.
Main commodities of exports during March 2020 were knitwear Rs33.236 billion, readymade garments Rs33.123 billion, cotton cloth Rs26.804 billion, bed-wear Rs25.936 billion, rice others Rs20.124 billion, cotton yarn Rs13.055 billion, basmati rice Rs11.017 billion, towels Rs10.667 billion, made-up articles (excluding towels and bed-wear) Rs8.398 billion, and fish and fish preparation Rs6.127 billion.
Pakistan imports during March 2020 also registered a negative growth of 20.76 percent as it fell down from $4.185 billion in February to $3.316 billion in March 2020.
The country’s imports on annual basis also went down by 19.44 percent, as in March 2019, Pakistan’s exports were $4.116 billion, which came down to $3.316 billion in March 2020.
The imports during July–March, 2019-2020 totaled $34.817 billion as against $40.679 billion during the corresponding period of 2018-19 showing a decrease of 14.41 percent.
Main commodities of imports during March 2020 were, petroleum products Rs51.265 billion, electrical machinery and apparatus Rs31,517 billion, palm oil Rs31.269 billion, natural gas, raw cotton Rs.26,384 billion, plastic materials Rs26.016 billion, iron and steel Rs23.174 billion, petroleum crude Rs21.707 billion, mobile phones Rs18.187 billion, and iron and steel scrap Rs16.293 billion.
https://epaper.brecorder.com/2020/04/18/1-page/833978-news.html
NEWS COVERAGE PERIOD FROM APRIL 6TH TO APRIL 12TH
BIG BUSINESS CALLS FOR LEMON SOCIALISM
Afshan Subohi Updated April 06, 2020
THIS is an unprecedented situation globally. Like many others, Corporate Pakistan did not get it. Not yet at least, their behaviour indicates. Applying a conventional approach, fixated on the bottom line, it is again attempting to socialise risks and losses by asking the government for bailing it out.
How long it will take the business community to digest the enormity of the challenge, shake off its habit of leaning on the government and adjust its strategy to the new reality is hard to predict. The pandemic, global news testifies, is not classist. It infected and marooned the symbols of wealth and power as much as the wretched of the world. Whether we swim or sink will depend, to a great extent, on the quality of our response individually and collectively.
The business community of Pakistan has weathered a lot in this crisis-prone country and did manage to succeed. It has experience and is resourceful. Its stakes are high as it has more to lose than others. The pandemic has put to test, like never before, its wisdom and animal skill to work through the odds.
The overwhelmed government has responded compassionately to the business community’s demands, promising moon and committing packages, tax breaks and concessions at a time when its own budget is in tremendous stress and even the routine inflows are threatened. The donors’ money can provide some relief, but how much and for how long is hard to predict in these tumultuous times.
Corporate Pakistan is not only demanding relief but also making a case for altering the tax structure to the benefit of the most resourceful segment of society
The Pakistan Business Council (PBC), the most vocal and well-equipped platform, worked out a well-worded wish list to shield its members from the fallouts of local and global lockdowns. In a letter addressed to the finance minister that it shared with the media, it outlined high points of a relief package “to sustain employment and preserve ability to swiftly commence operations when circumstances permit”.
It admitted that it is the responsibility of companies to keep regular workers on the payrolls. There is no mention of millions of contractual workers who have been laid off. The PBC acknowledged the government’s predicament in the current trying times. This did not, however, stop it from asking for a deferral of tax payments and other levies (EOBI, WWF/WPPF contributions) citing disruptions in cash flows and the need to retain solvency.
It wanted output sales tax and excise duties for February and March be paid in instalments, 100pc input adjustment to sales tax, writing off three per cent additional sales tax at the import stage, turnover tax slashed to zero from current 1.5pc, suspension of all advance taxes, immediate release of income/sales tax refunds, restoration of Section 65 B, tax credits to firms sustaining workers, tax rebate of 50pc to the earners of Rs1.8m per annum and reduction of corporate and property taxes by 5pc and 50pc, and the withdrawal of Sindh Infrastructure Development Cess among other things.
Claiming to be pragmatic, in essence they not only demanded relief but also made a case for altering the tax structure to the benefit of the most resourceful segment in a country where the tax structure is already skewed towards indirect taxes. PBC CEO Ehsan Malik responded thus to Dawn’s queries.
“At a time when cash flow is under extreme pressure, 80pc of the relief sought is temporary deferrals and one-off remissions. The emphasis is on sustaining employment,” he said.
“The window for unconventional demands doesn’t exist. Our government has limited capacity to match what other countries have done to assist business. Hence, we have taken a pragmatic approach. Sustain the present whilst the government negotiates a more plausible set of targets with the IMF. Fortunately, the IMF is open to help,” he added.
An incorrigible optimist, premier’s adviser on commerce and industry Abdul Razak Dawood talked to Dawn in between countless meetings in Islamabad. He said he was in constant touch with business leaders, adding that he enjoys a personal relationship with many of them because of his long career in the corporate sector. “Every morning I hold a video conference with the leaders of business chambers and trade bodies from around the country to listen to their problems and enrich my own understanding for a more informed input in official huddles for their benefit. The government is keen to do all in its power as it understands the value of the sector for the economy and the country,” he said over the phone.
“Things have started moving,” he said, probably referring to the tax refund distribution and multiple packages announced by the prime minister and the finance minister to calm the anxious business community. He promised a written detailed response that did not reach within the deadline.
The experience of the last one month amply demonstrated how the pandemic shook the world, tearing the order at its very seams. The future continues to be uncertain as the collective wisdom is currently being applied to contain the outbreak and sustain people under the lockdown.
Attempts to reach Anjum Nisar, president of the Federation of Pakistan Chambers of Commerce and Industry, did not succeed. The Overseas Chamber of Commerce and Industry Secretary General M Abdul Aleem defended the private sector’s position. “All governments, including that of the United States, are bailing out private companies. Else they will be forced to lay off, default and cause systemic risk,” he wrote back.
Majyd Aziz, president of the Employers’ Federation of Pakistan, has self-quarantined because of his interaction with PPP leader Saeed Ghani before he was tested positive for the coronavirus. He said the private sector currently finds itself trapped between a rock and a hard place. “The panic motivated business leaders to scale up their usual demands for relief, relief and more relief. Their demands are the same: quick disbursement of refunds, reduction in the markup rate and deferral of payments to the FBR, utilities, etc. However, for probably the first time, they also voiced their concern for wages and salaries,” he said.
“There is no unity in business leadership that seldom sits on the same side of the table. Each body is focused on issues. This is a time to realise that the treasury is under severe pressure as the FBR continues to miss monthly collection targets, political instability looms and uncertainty continues,” he added.
“Prime Minister Imran Khan is on TV every other day announcing relief for one sector after another. I have only heard business leaders demanding more but they rarely offer support in hard times. If exporters are getting refunds, shouldn’t a percentage be donated for relief?” he asked.
He said the business community should volunteer to help the government in the current crisis and “wait for the dark clouds to lift before asking for deliverance for selves”.
“We will swim or sink together,” another business leader critical of what he called the inward-looking mindset of the business community commented.
“The pandemic is testing the government and its structures. There is a possibility of its crumbling down under its own weight. Where are thought leaders and economists? Why have they gone underground? This is the time when we would like to hear from them,” he added, requesting anonymity.
“Despite all the hype about the dynamism of the market and its futuristic driver i.e. the private sector, it cranked at the first major jolt. Governments with all their flaws are functional and trying solutions. Some work some don’t, but they are at it,” another champion of lean, clean, effective and strong government argued.
“How come the booming drug industry of Pakistan is nowhere to be seen in the health crisis? They have sufficient cash to throw around for advertisement and image-building social exercises, but see no role for themselves in the provision of necessary basic medical supplies and testing kits in the current emergency,” he added.
own understanding for a more informed input in official huddles for their benefit. The government is keen to do all in its power as it understands the value of the sector for the economy and the country,” he said over the phone.
“Things have started moving,” he said, probably referring to the tax refund distribution and multiple packages announced by the prime minister and the finance minister to calm the anxious business community. He promised a written detailed response that did not reach within the deadline.
The experience of the last one month amply demonstrated how the pandemic shook the world, tearing the order at its very seams. The future continues to be uncertain as the collective wisdom is currently being applied to contain the outbreak and sustain people under the lockdown.
Attempts to reach Anjum Nisar, president of the Federation of Pakistan Chambers of Commerce and Industry, did not succeed. The Overseas Chamber of Commerce and Industry Secretary General M Abdul Aleem defended the private sector’s position. “All governments, including that of the United States, are bailing out private companies. Else they will be forced to lay off, default and cause systemic risk,” he wrote back.
Majyd Aziz, president of the Employers’ Federation of Pakistan, has self-quarantined because of his interaction with PPP leader Saeed Ghani before he was tested positive for the coronavirus. He said the private sector currently finds itself trapped between a rock and a hard place. “The panic motivated business leaders to scale up their usual demands for relief, relief and more relief. Their demands are the same: quick disbursement of refunds, reduction in the markup rate and deferral of payments to the FBR, utilities, etc. However, for probably the first time, they also voiced their concern for wages and salaries,” he said.
“There is no unity in business leadership that seldom sits on the same side of the table. Each body is focused on issues. This is a time to realise that the treasury is under severe pressure as the FBR continues to miss monthly collection targets, political instability looms and uncertainty continues,” he added.
“Prime Minister Imran Khan is on TV every other day announcing relief for one sector after another. I have only heard business leaders demanding more but they rarely offer support in hard times. If exporters are getting refunds, shouldn’t a percentage be donated for relief?” he asked.
He said the business community should volunteer to help the government in the current crisis and “wait for the dark clouds to lift before asking for deliverance for selves”.
“We will swim or sink together,” another business leader critical of what he called the inward-looking mindset of the business community commented.
“The pandemic is testing the government and its structures. There is a possibility of its crumbling down under its own weight. Where are thought leaders and economists? Why have they gone underground? This is the time when we would like to hear from them,” he added, requesting anonymity.
“Despite all the hype about the dynamism of the market and its futuristic driver i.e. the private sector, it cranked at the first major jolt. Governments with all their flaws are functional and trying solutions. Some work some don’t, but they are at it,” another champion of lean, clean, effective and strong government argued.
“How come the booming drug industry of Pakistan is nowhere to be seen in the health crisis? They have sufficient cash to throw around for advertisement and image-building social exercises, but see no role for themselves in the provision of necessary basic medical supplies and testing kits in the current emergency,” he added.
Published in Dawn, The Business and Finance Weekly, April 6th, 2020
https://www.dawn.com/news/1546712
WTO SEES TRADE PLUNGE WORSE THAN FINANCIAL CRISIS
By Reuters Published: April 9, 2020
BRUSSELS: The World Trade Organisation (WTO) on Wednesday forecast that goods trade would shrink more steeply this year than in the global financial crisis a decade ago before rebounding in 2021 as the Covid-19 pandemic recedes – if countries worked together.
The WTO said global trade would fall this year by 13% to 32%, giving a wide range because so much about the economic impact of the health crisis was uncertain.
“These numbers are ugly – there is no getting around that,” WTO Director-General Roberto Azevedo said in a statement. “But a rapid, vigorous rebound is possible. Decisions taken now will determine the future shape of the recovery and global growth prospects.”
Keeping markets open and predictable, he said, would be critical to spurring renewed investment. Countries working together would see a faster recovery than if each country acted alone. The Geneva-based WTO said that for 2021 it was forecasting a rebound in global goods trade of between 21% and 24%, depending largely on the duration of the coronavirus outbreak and the effectiveness of policy responses.
The WTO also confirmed that 2019 had ended on a sombre note, with a 0.1% decline in goods trade, weighed down by trade tensions, notably between the United States and China, and an economic slowdown.
In October, the WTO forecast trade to grow 2.7% in 2020 after expanding 1.2% in 2019. It said that this year, nearly all regions would suffer double-digit percentage declines in trade, with exports from North America and Asia the hardest hit. Sectors with complex value chains, such as electronics and automotive products, would also see steeper falls.
Published in The Express Tribune, April 9th, 2020.
https://tribune.com.pk/story/2193789/2-wto-sees-trade-plunge-worse-financial-crisis/
NEWS COVERAGE PERIOD FROM MARCH 31ST TO APRIL 5TH
PM AIDE FOR EXPORT-DRIVEN GROWTH STRATEGY
By Our Correspondent Published: April 2, 2020
LAHORE: The government is committed to coping with the challenges faced by the country, for which export culture and an export-driven growth strategy should be introduced, remarked Adviser to Prime Minister on Commerce, Textile, Industry, Production and Investment Abdul Razak Dawood.
Speaking at a teleconference with Lahore Chamber of Commerce and Industry (LCCI) President Irfan Iqbal Shaikh, the adviser said the responsibility of the government was to correct things and it was rectifying the mistakes made in the past.
“It is the government’s responsibility to give businessmen market access. Moreover, engineering and other sectors are also being focused on for exports,” he added.
Dawood emphasised the need for bringing quality culture as it would help in enhancing exports. He pointed out that he was persuading Pakistani manufacturers to send their products outside of the country in maximum quantity to grab more market share.
Speaking on the occasion, the LCCI president said special permission should be granted to industries for loading export cargoes on vessels. He stated that to create more liquidity in the economy, it was requested that tax refunds of export-oriented industries should be released immediately.
Shaikh appreciated the recently announced initiatives by the government to enhance export growth in the wake of economic slowdown caused by the COVID-19 outbreak.
The chamber president stressed that the government should revive the zero-rating facility for the five major export-oriented industries. “Income tax refunds of Rs100 billion should be released immediately to help the industry to overcome liquidity challenges.”
Furthermore, he stressed, the government should not make collections under the Duty and Tax Remission for Exports (DTRE) and Drawback of Local Taxes and Levies (DLTL) schemes so that the issue of refunds did not arise at all. He underlined the need for giving special travel permission to labourers of export-oriented industries so that they could reach their workplaces.
Shaikh suggested that the government should again allow the BMR tax credit of 10% under Section 65B of the Income Tax Ordinance.
Published in The Express Tribune, April 2nd, 2020.
https://tribune.com.pk/story/2189023/2-pm-aide-export-driven-growth-strategy/
APTMA PUNJAB CHIEF SEEKS GOVT’S INTERVENTION AS EXPORT ORDERS MAY DROP BY 50PC
By RECORDER REPORT on April 3, 2020
The All Pakistan Textile Mills Association (APTMA) Punjab Chairman Adil Bashir demanded of the government to freeze the interest rate on loans and urged the State Bank of Pakistan to issue directions to banks for suspension of interest on long-term as well as working capital loans and advances for a period of 3 months from April 2020 till June 30, 2020.
In a statement issued here on Thursday, Adil Bashir said that Rs100 billion relief announced by the prime minister could be utilized to defray this cost.
He also said that the government should make arrangements for deferment of installments against all the loans for a period of one year and issue a clear Standard Operating Procedure (SOP) to restart production and protection of jobs. He proposed setting up of monitoring committees at the district and provincial levels to monitor production activities at the mills.
The Punjab APTMA chairman said payment of utility bills of the textile industry should be deferred by three months, adding that the government should also direct the Federal Board of Revenue (FBR) for immediate payment of all the sales tax refunds up to 80 percent of the claim within 72 hours of the filing of refund claims.
Adil was of the view that in case the lockdown continued beyond one month, the government should share the burden of salaries from the funds of Social Security, the Employees Old-Age Benefits Institution, the Workers Welfare Funds and such other arrangements under the control of the government.
He said major buying chains of textile products, namely, Inditex Group, JC Penney, Mango, H&M, GAP, Levis, Bed, Bath & Beyond, Nike, American Eagle and IKEA had already suspended operations, and many other chains and stores were in the process of closing down their operations as well.
The industry estimates suggest that more than 50 percent of the orders that were to be shipped in the next 30 days had been either deferred or cancelled altogether.
It would add pressure on the cash flow and force many industries into laying off workers especially when there were rampant reports that the big buyers were filing for bankruptcies.
In addition to setbacks to exports, he said, COVID-19 had also adversely affected domestic commerce due to the lockdown and closing down of all the shopping outlets.
He expressed his hope that the government would streamline the issues faced by the textile industry without delay in the larger interests of exports, investments and employment in the country.
Copyright Business Recorder, 2020
FRAMEWORK FOR SEZS: BOI INITIATES CONSULTATION PROCESS
BR Web Desk April 04, 2020
The BOI prepared a standardised template for the development agreement in line with the SEZ Act 2012 for public but in a process of developing template for private sector SEZs.
The Ministry of Law and Justice has been consulted, whether the status of SEZ may be awarded to a single enterprise under the SEZ Act 2012 and rules frame thereunder.
The ministry has principally endorsed single zone applications.
The notification of Sheikhupura Sun Tao Paper Mills (Pvt) Limited, Sheikhupura as sole enterprise SEZ is pending with the BOI.
No private developer is, however, allowed to develop SEZs under the China-Pakistan Economic Corridor (CPEC).
The documents available with Business Recorder show that a total of nine SEZs under the CPEC will be developed by public sector and the participation of private developer is not permitted. The BOI has notified only one SEZ under the CPEC and rest eight have been under process.
The participation of private developers has been allowed in development of non-CPEC SEZs. Total 13 SEZs have been notified since the promulgation of the SEZ Act 2012. One SEZ under the CPEC and 12 comes under non-CPEC, which have been notified.
Total number of non-CPEC SEZs is 22. Out of total, four will be developed by the public sector and six by the private sector as 12 were already notified. The government approved allocation of Rs19.90 billion for five years and Rs2.19 billion was allocated for the current financial year.
The board in consultation with the Power Division and the Planning Commission has evaluated the required amount of funds, which will be allocated in the financial year 2020-21.
A meeting of the Board of Approvals constituted under Section 5 (i) of the SEZ Act 2012 was held under the chairmanship of Prime Minister Imran Khan on March 4, 2020.
The committee evaluated two applications Bostan and Hub for award of status of SEZs in Balochistan.
Two more applications of Naushahro Feroze and Bholari, Sindh for award of status of the SEZ were evaluated.
A private developer applied for Bolhari SEZ in Sindh.
The BOI prepared a standardized template for the development agreement in line with the SEZ Act 2012 for public but was in a process of developing template for private sector SEZs.
COTTON MARKET: TEXTILE INDUSTRY IN CRISIS DUE TO LACK OF BASIC FACILITIES
BR Web Desk April 05, 2020
Rate of seed cotton per 40kg in Sindh low quality was at Rs2800, while the best quality was unchanged at Rs4100, and in the Punjab prices of low quality were at Rs2800 while the fine type was available at Rs4600, they said.
In Sindh, Binola prices per maund were at Rs1400-1800, in Punjab rates were at Rs1650-1800, they said and the rate of polyester fibre was at Rs167 per kg, they added.
The whole textile sector is in deep crisis due to unavailability of basic requirements, cotton analyst Naseem Usman said. The ginners shared the same ideas and said that the ginners were disturbed as mills were on the sidelines due to prevailing crisis in the world, he added.
The big issue is unsold cotton stock, whish is not in demand and causing huge losses, other experts. According to the International Cotton Advisory Committee, the impact of COVID-19 on the cotton and textile industry is uncertain, but the sector has been impacted along with the general economy.
Reuters adds: ICE cotton futures rose 2% on Friday helped by positive federal exports data while a surge in oil prices added support, but the contract was still on its way to a fourth straight week of losses.
Cotton contract for May settled up 0.99 cent, or 2%, at 50.98 cents per lb. after recovering from 11-year lows on Thursday. It traded within a range of 49.67 and 51.14 cents a lb. Total futures market volume fell by 15,623 to 37,235 lots. Data showed total open interest fell 3,266 to 195,507 contracts in the previous session.
Copyright Business Recorder, 2020