LOW REMITTANCES TO EXACERBATE EXTERNAL POSITIONS: MOODY’S
Tahir Amin Updated 28 Jul 2020
ISLAMABAD: Lower remittances will exacerbate Pakistan’s already weak external positions, says Moody’s Investor Services (Moody’s).
The Moody’s in its latest report, “Sovereigns – Global: Lower remittances after coronavirus to hurt consumption, raise external risks in major recipient countries”, stated that the coronavirus pandemic had triggered a fall in the wages of, and loss of employment for migrant workers.
Remittance transfers by these workers to their home countries will decline sharply as a result, by around 20 percent ($110 billion) globally in 2020, according to the World Bank estimates. The countries that are most dependent on remittances are largely low- and middle-income economies.
It further stated that for Ukraine (B3 stable), Jordan (B1 stable), Togo (B3 stable), Pakistan (B3 review for downgrade), and Mali (B3 stable), relief on import bills from lower oil prices offsets a drop in remittances of around 20 percent.
Many countries that source a large share of their remittances from the GCC and Russia, where oil production plays a dominant role in the economy, will be indirectly hit by the fall in prices.
A retrenchment in the Russian economy would feed into much of the Commonwealth of Independent States (CIS), with remittance-reliant Kyrgyz Republic and Tajikistan being especially vulnerable.
Weakness in the GCC will especially hurt South Asian economies such as Bangladesh (Ba3 stable), Pakistan and Sri Lanka (B2 review for downgrade), it added.
The decline in incomes and economic strength is likely to be more gradual; the hit to current account receipts and weakening of external position can be abrupt.
The fall in global remittances is credit negative for those sovereigns, which are most reliant on such inflows to support economic growth and their external payments positions.
Overall, based on the scale of remittance inflows relative to current account receipts, the decline in remittances will render Kyrgyz Republic and Tajikistan in the CIS most susceptible to the coronavirus shock, beyond the direct impact on trade.
The external resilience of El Salvador, Bermuda, Pakistan, Guatemala (Ba1 stable), Egypt (B2 stable) and Senegal (Ba3 rating under review) will also deteriorate.
For Ukraine, Jordan and Pakistan, net oil imports and remittance inflows are similar in size.
A 20 percent fall in remittances would be offset by lower oil prices. For most of the other remittance-reliant sovereigns, the proportion of remittance inflows to GDP is much greater than net oil imports to GDP.
The effect of a 20 percent decline in remittances outweighs that of the fall in oil prices on the current account balances for these countries.
Beside oil prices, a further mitigating factor is that lower consumption will lead to a decline in imports, such as by compressing luxury goods and services imports.
This will reduce the negative impact on the current account balance from lower remittances.
Weaker remittances will weigh on the balance of payments of remittance-dependent sovereigns, compounding the impact of lower exports and private investment inflows as the global economy weakens and investors seek safe havens.
As indicated by their respective external vulnerability indicators (EVI), many affected sovereigns such as Tajikistan (293 percent in 2020), Ukraine (204 percent), Sri Lanka (201 percent) and Pakistan (181 percent) already exhibited significant external vulnerability before the coronavirus outbreak.
For these sovereigns, lower remittances will exacerbate their already weak external positions, it added.
BANKS APPROVE RS126BN UNDER ROZGAR SCHEME
The Newspaper’s Staff Reporter Updated 28 Jul 2020
KARACHI: Under the Rozgar Refinancing Scheme, financing of Rs125.9 billion has been approved by banks for 2,068 businesses covering wages and salaries of over 1.2 million employees up till July 10, the State Bank said on Monday.
To counter the negative impact of Covid-19 on the economy, SBP introduced the Rozgar Refinance Scheme to Support Employment and Prevent Layoff of Workers — widely known as the SBP Rozgar Scheme — in April 2020. The scheme provides concessional financing to businesses for wages and salary expenses, provided they commit to not lay off their employees for the period of the loan.
According to SBP’s Progress Report of Banks, soon after the introduction of the scheme a large number of applications to avail financing were received by banks but their approvals remained slow. However, with the continuous efforts of SBP, banks streamlined their processes and pace of loan approvals increased. At the end of April when the scheme was launched, only 18 per cent of loan applications were approved. This increased to 76pc by July 10.
Similarly, the number of loans approved against the requested amount also improved. The acceptance ratio for amount of financing increased from 26pc at the end of April to 82pc on July 10. Consequently, the number of employees benefitting from the scheme in terms of acceptance ratio has also increased from 26pc to 85pc during the same period.
Out of the total approved amount, Rs31bn were for 1,449 small and medium enterprises and small corporates under the scheme as of July 10, benefit to 280,437 employees.
The performance of banks, however, in terms of processing the number of applications and financing approved is limited to few banks.
Published in Dawn, July 28th, 2020
TAX-TO-GDP RATIO DECLINES TO HISTORIC LOW
Sohail Sarfraz | Zaheer Abbasi 27 Jul 2020
ISLAMABAD: Pakistan’s tax-to-GDP ratio has declined to a historic low of around nine percent during the fiscal year 2019-2020 compared to 11.1 percent in 2017-2018, largely because of lack of leadership at the Federal Board of Revenue (FBR), increase in corruption within the tax machinery, and flawed tax policy measures.
This was stated by a very senior official, who remained at the helm of affairs in the Revenue Division/FBR on condition of anonymity.
He stated that despite imposition of 17 percent sales tax on five leading export sectors in budget (2019-2020) and other taxation measures to the tune of Rs735 billion in 2019-2020, the FBR’s tax-to-GDP witnessed a constant decline during 2019-2020.
The FBR’s policy of heavy taxation and over taxation on certain sectors such as tobacco products totally contributed to revenue collection during 2019-2020.
Harsh enforcement measures such as the condition of computerised national identity card (CNIC) numbers of the unregistered buyers further damaged the relationship between the tax collector and the taxpayers.
“The attribution of the FBR as the most corrupt institution by the leadership at the top level (government) also led to a negative impact on the entire tax machinery of the FBR,” he said.
Based on the calculations of the GDP, inflation, rupee-dollar parity, additional taxation and blockage of refunds, it is safe to state that the tax-to-GDP ratio has contracted from 11.1 percent in 2017-2018 to nearly nine percent in 2019-2020, he stated.
When contacted, a senior FBR official quoted data that the tax-to-GDP ratio was 9.5 percent in 2019-2020; 10.1 percent in 2018-2019; 11.1 percent in 2017-2018; 10.6 percent in 2016-2017; 10.7 percent in 2015-2016; 9.4 percent in 2014-2015; 9.7 percent in 2013-2014; 8.7 percent in 2012-2013; 9.4 percent in 2011-2012, and 8.5 percent in 2010-2011.
The FBR official added that the FBR had collected Rs3,989 billion in 2019-2020, which was Rs82 billion more than the revised revenue target of 3,907 billion set for 2019-2020.
The official, who supervised overall affairs of the FBR/Revenue Division for a few years, told Business Recorder that the revenue collection should have been increased during 2019-2020 due to rise in inflation, but the tax collection continued to decline during 2019-2020.
The frequent changes at the top level of the FBR during the last two years have also sent a very negative message among the entire workforce of the FBR.
“It was a massive failure of the leadership that the corruption in the field formations of the FBR has increased manifolds during the last 1-2 years,” he regretted.
Another major issue was increase in smuggling during 2019-2020 due to import compression and substantial raise in customs duties, additional customs duties (ADCs) and regulatory duties on the imported items during 2019-2020.
He rejected the FBR’s claim that the import compression reduced the FBR’s collection by 50 percent at the import stage, as actual imports in terms of rupees were increasing.
The number of tax filers increased from 1.8 million in 2018 to 2.4 million in 2020 only due to the measure taken in 2018-2019 that a person who fails to file income tax return within the due date shall not be included in the Active Taxpayers’ List (ATL) for the year for which return was not filed within due date.
However, due to the lack of capacity of desk audit, the FBR failed to achieve desired results, despite increase in the number of filers, he said.
The official explained that the present government was also unable to take advantage of new laws, which were initiated by the previous government such as Benami law, and exchange of information with international jurisdictions.
The new laws were enforced in 2019-2020, but the FBR was unable to make cases or utilise information under these laws.
About the impact of the Covid-19 on the FBR’s revenue collection, he stated that it had an impact on the FBR’s collection for the months of April and June 2020, but the remaining 10 months collection was not satisfactory in 2019-2020.
International tax expert Dr Ikramul Haq told Business Recorder that the government of Pakistan Tehreek-i-Insaf (PTI) took Rs735 billion worth of taxation measures in the budget 2019-2020, while the nominal GDP growth was projected at 15 percent (three percent real GDP plus 12 percent inflation), which was required to help collect additional taxes of Rs574 billion.
The growth in revenue collection in the first four months was at the level of nominal GDP growth of 15 percent.
But the FBR believed that its efforts have been undermined by import compression as there is a healthy growth of over 20 percent at the domestic stage.
Dr Haq said that the tax-to-GDP ratio was the lowest and that too after withholding bona fide refunds of exporters.
The FBR officials admitted before the National Assembly Standing Committee on Finance that refunds of Rs532 billion were due from June 2014 to June 2019.
The FBR did not report the refund claims outstanding from before June 2014 and also for the period of July 2019 to June 2020.
If we take all the figures, the collection was even lower and the tax-to-GDP ratio would have been lower than nine percent, had all the refunds been issued, he stated.
The tax expert added that Pakistan’s tax structure was characterised by a narrow tax base, massive tax evasion, a large number of concessions and exemptions, regressive tax regime, reliance on indirect taxes, and tax administration challenges. The combined effect of these challenges has a low tax-to-GDP ratio during 2019-2020.
Copyright Business Recorder, 2020
SINDH GOVERNMENT URGED TO IMPROVE INDUSTRIAL ZONES’ INFRASTRUCTURE
Recorder Report 22 Jul 2020
KARACHI: President of SITE Association of Industry (SAI), Suleman Chawla Tuesday demanded of the Sindh government to first improve the infrastructure in existing industrial zones prior to proceeding with setting up of new industrial zones.
He said that business & industrial community is not against setting up of new zones but have concerns over neglecting the existing ones. Welcoming setting up of two new industrial zones in the Sindh provinces but at the same time, drawn attention of the Chief Minister towards the miserable condition of infrastructure in existing zones, particularly SITE industrial area, Karachi, he r said that Karachi is the hub of economic activities of the country and contributes approx. 70pc revenue to the national exchequer. In addition, almost 90pc revenue of the Sindh province is collected from Karachi.
Not only this, the city provides employment opportunities to thousands of laborers from rural areas of Sindh and other provinces. Despite all these badges on the shoulder of Karachi, the city is being grossly neglected which is creating apprehensions among the business community.
“We welcome setting up of new industrial zones but the government should also see the state of infrastructure in existing industrial zones such as SITE Karachi which is the oldest one in Pakistan.
The infrastructure in SITE Karachi has totally collapsed, which makes extremely difficult to reach the factories. Broken and uneven roads also hamper the supply of industrial raw material to factories. This has been brought to the notice of authorities concerned time & again but there was no outcome”, added Chawla.
Chawla also drew attention of Chief Minister Sindh towards the Plan submitted for roads maintenance in SITE Karachi costing PKR one billion and requested for an early disbursement of funds to improve roads condition in SITE area Karachi.
Due to big potholes on the roads, trailer trucks often overturn. Law enforcement agencies personnel face difficulties in routine patrolling as well as in apprehending criminals. According to them, due to uneven roads & potholes, traffic runs slow of which, the criminals take advantage by looting the passengers. Not only this, the industrialists are unable to invite their foreign buyers to visit their factories for business matters.
What should we understand from the setting up of new industrial zones and neglecting existing ones? Should we shift our industries to new industrial zones with better infrastructure & facilities? Chawla questioned.
He also appealed the Chief Minister Sindh to take notice of other issues such as loadshedding of electricity and gas. He also demanded to streamline the working of SITE Limited and send surplus employees to the Surplus Pool of the Sindh government, so as to save funds for the infrastructure development.
Copyright Business Recorder, 2020
TEXTILE EXPORTS DECLINE 6PC TO $12.5BN
The Newspaper’s Staff Reporter Updated 17 Jul 2020
ISLAMABAD: Pakistan’s textile and clothing exports posted a negative growth of over six per cent year-on-year to $12.526 billion in the fiscal year 2019-20 compared to $13.327bn in the corresponding period last year, data released by the Pakistan Bureau of Statistics showed on Thursday.
The pace of fall in textile exports slowed down in the last two months owing to a recovery in the international orders. Compared to 36.5pc decline in May, exports in June declined by 5.43pc over the last year.
The easing of lockdown in the North American and European countries — top export destinations for Pakistani textile goods are expected to help revive the sinking exports. The Covid-19 has collapsed the demand for the country’s exports during the last five months.
Piled up containers at ports since March 22 were mostly cleared in the month of June. Moreover, the government also reopened exports through the land route to Iran and Afghanistan in June.
A report produced by the customs authorities — who compile export data from good declaration forms — showed that cargo handling at Karachi ports posted a growth of 7.23pc in June as 49,953 export containers were shipped this year as against 46,583 of last year. It clearly shows that exports picked up in the month of June from a year ago.
It was only in February when the textile and clothing exports jumped nearly 17pc on a year-on-year basis — growth witnessed after a long time as the past few years had been marred by single-digit increases.
Details showed ready-made garments exports dipped 3.81pc in value and drifted much lower in quantity by 10.07pc during July-June FY20, while those of knitwear dropped 3.64pc in value and 10.11pc in quantity, bed wear posted negative growth of 4.91pc in value and 2.31pc in quantity.
Towel exports fell 6.52pc in value and 6.39pc in quantity, whereas those of cotton cloth dipped by 12.94pc in value and 17.66pc in quantity.
However, exports are expected to revive in July as exporters have resumed production to honor their international orders.
Among primary commodities, cotton yarn exports dipped by 12.49pc while yarn other than cotton by 23.81pc, made-up articles — excluding towels — by 13.16pc, and raw cotton 16.64pc. Exports of tents, canvas and tarpaulin increased by a massive 5.95pc during the months under review.
On a monthly basis, exports of textile and clothing posted a negative growth of 5.43pc to $959.130 million in June as against $1.014bn over the corresponding month of last year.
Exporters are already receiving inquiries about personal protective equipment from foreign buyers as the government allowed exports of disposable gowns, disposable gloves, face shields, biohazard bags, goggles, shoe covers and hand sanitisers with immediate effect. Previously, the government allowed exports of textile masks as well.
Published in Dawn, July 17th, 2020
CM LAUNCHES WORK ON JALOZAI ECONOMIC ZONE
Bureau Report Updated 16 Jul 2020
PESHAWAR: Khyber Pakhtunkhwa Chief Minister Mahmood Khan on Wednesday performed the groundbreaking of the Jalozai Economic Zone in Nowshera district.
The zone’s development by the KP Economic Zones Development and Management Company over 257 acres of land is likely to generate 50,000 direct and indirect jobs and attract Rs6 billion investment, said a statement issued here.CM Mahmood Khan termed the groundbreaking a historic event, which, he said, marked the beginning of the rapid industrialisation in KP.
“Jalozai will prove a game-changer for the region due to its strategic location,” he said.
Mr Mahmood said the government had planned to improve industrial output through the establishment of new zones for the economic prosperity of the people.
Promises rapid industrialisation in the province
He also planted a sapling on the premises to inaugurate a tree plantation campaign under the Clean and Green Pakistan programme in the zone.
EZDMC CEO Javed Khattak told the chief minister that the company had expedited efforts towards industrialisation, especially to build a sustainable agro-based industrial ecosystem in southern KP and capitalise on the CPEC route and interchange, which promises hundreds of thousands of jobs, and huge international investments.
He said the project would provide impetus to investments in the upcoming projects.
The statement said the new economic zone will accommodate Pakistan hunting and sporting arms cluster that will revive the livelihood of the skilled labor associated with it and also provide projection to the regularisation of the potential market of hunting and sporting arms production in the region.
The statement said due to the availability of labour in Jalozai, industries including pharmaceutical, food processing, construction, marble and granite, food packaging and furniture would benefit from the investment in the zone.
It said that the well-placed zone connects with Peshawar and Islamabad through M-1 Motorway. It said that the located in the proximity of Peshawar, adjacent to University of Engineering and Technology Jalozai campus and new housing schemes in the locality, this zone offers promising potentials to the enterprising locals who either intend to expand their industrial presence or want to come up with new start-ups.
The statement said that industrial products from Jalozai could find themselves in high demand areas like Afghanistan, Central Asia, China and urban centres in the region.
It said that regarding provision of all necessary utilities to the zone, EZDMC is already negotiating with the Provincial Housing Authority for the supply of 5 to 10MW power from the 132KV grid through 11KV feeder planned for nearby housing society.
The statement said 5mmcfd gas was planned to be provided through an SMS that is approximately one kilometer away from the zone.
Despite high land cost in the vicinity, the EZMDC has kept the price of plots subsidized to promote industrialisation.
Published in Dawn, July 16th, 2020
FY20 REMITTANCES SOAR TO RECORD $23BN
Shahid Iqbal Updated 14 Jul 2020
KARACHI: Pakistan received record $23 billion in remittances in 2019-20 while the inflows jumped by 51 per cent year-on-year to $2.466bn in June, data released by the State Bank of Pakistan (SBP) showed on Monday.
Despite economic slowdown caused by the Covid-19, the remittances in the last quarter of the fiscal year 2019-20 i.e. March-June increased significantly helping the country get more than expected inflows.
“Workers’ remittances rose by a significant 50.7pc during June to reach record high of $2.466bn compared with $1.636bn in June 2019,” said the SBP press release.
The inflows in the month grew significantly compared to May when the country received around $1.866bn, rising despite the negative outlook due to the impact of coronavirus on the global economy.
“On a cumulative basis, workers’ remittances increased to a historic high level of $23.120bn during FY20, witnessing a growth of 6.4pc over $21.739bn during FY19,” said the SBP.
June sees 51pc increase
Policy makers had earlier feared remittances to slump in the last quarter of fiscal year 2020 because of the impact of Covid-19 on the economic activity around the world, but the inflows increased by 7.8pc.
During June, major chunk of the workers’ remittances were from Saudi Arabia at $619.4 million, USA $452m, UAE $431.7m and UK $401m recording increases of 42pc, 7.1pc, 33.5pc and 40.8pc respectively as compared to May.
Highest remittances during the 12 months ending June 30 were received from Saudi Arabia, rising 6.8pc to $5.432bn against 3pc growth in FY19.
Meanwhile, despite 0.98pc growth, the remittances from UAE were second highest in terms of total inflows reaching $4.662bn in FY20. In FY19, remittances from the UAE grew by 6pc.
The highest growth in remittances was witnessed from the United States as it jumped by 25pc to $4.163bn compared to 16.6pc in FY19.
On the other hand, remittances from the UK increased by 1.5pc to $3.465bn in FY20 compared to 18pc in FY19.
The remittances from the Gulf Cooperation Council countries were up by 2pc to $2.162bn while inflows from Malaysia were down 8pc to $1.426bn in FY20. The growth in remittances from Malaysia was 35pc in FY19.
The SBP said the significant increase in remittances during June can be attributed to a number of factors.
“Since many of the countries eased lockdown in June, overseas Pakistanis were able to transfer accumulative funds, which they were unable to send earlier,” it said. Further, it is also believed that they sent remittances to support extended families and friends due to Covid-19, it added.
Seasonal inflows in the month of Ramazan coupled by zakat and charity funds collectively increased the inflows during the last fiscal year.
In addition to these, the government and the SBP also played their role in increasing inflows during the FY20 in general and Covid-19 period, said the SBP.
Supportive government policies in terms of extension of Reimbursement of TT Charges Scheme (Free Send Remittance Scheme) to small remitters by reducing threshold amount from $200 to $100. In addition, financial institutions also increased the incentives for sending remittances through regular channels.
“Financial institutions were motivated to use effective marketing campaigns with particular focus on digital channels for sending and receiving remittances to promote the use of legal channels,” said the SBP.
Published in Dawn, July 14th, 2020
COVID-19 MAY CAUSE $3.6BN LOSS TO GDP: WORLD BANK REPORT
Amin Ahmed Updated 10 Jul 2020
ISLAMABAD: A new World Bank policy brief on the tourism sector of South Asia estimates that the potential loss to Pakistan’s gross domestic product (GDP) due to the impact of Covid-19 pandemic would be $3.64 billion, while Khyber Pakhtunkhwa province is likely to suffer $10 million to $20m in losses.
The policy brief, ‘Covid-19 and Tourism in South Asia’, further estimates that the impact of coronavirus outbreak has put at risk 880,000 jobs in the tourism sector of Pakistan.
The highest impact of Covid-19 pandemic is on India which faces a potential loss of $43.4bn to the GDP, followed by Nepal with potential loss of $460m and the Maldives $700m to the GDP.
A summary of Covid-19 tourism response activities by the Pakistan government lists cash grant or subsidies, tax rebates/relief/extension, fee/bills waivers, tourism communications or crisis task force, support for industry to address contamination, repurpose tourism assets for crisis operations, national carriers waiving cancellation fees and maintain cargo operations of national carriers.
Statistics in the World Bank brief show that the domestic spending percentage of the whole economy GDP in Pakistan on tourism is 4.09 per cent, while the percentage of flow of South Asia intraregional visitors placed Pakistan at 3.25pc. Highest 63.94pc is of India, followed by Bangladesh 13.02pc, Sri Lanka 11.19pc, Nepal 6.22pc, the Maldives 2.37pc and Bhutan 0.01pc.
The World Bank policy brief says South Asia is highly dependent on travel and tourism, especially as a generator of jobs — 47.7m jobs were created in 2019. With fewer economic options, the Maldives archipelago is particularly dependent on tourism, while other South Asian regional countries have more diversified sources of the GDP, including agriculture and remittances.
The report says that the impacts of the pandemic will likely mute the demand for travel and tourism services for at least six to nine months, and recovery will likely take twice this time. Domestic tourism and drive-to-markets are likely to be the first to recover, and intraregional travel between “Covid-19 safe zones” is likely to be the next markets that rebound after domestic travel.
The pandemic is affecting nearly 47.7m travel and tourism jobs across South Asia, many held by women and vulnerable communities working in the informal sector. Losses of over $50bn in gross domestic product in the region are expected in the travel and tourism sector alone as a result of the crisis.
Published in Dawn, July 10th, 2020
CHINA’S SERVICES SECTOR GROWS AT FASTEST PACE IN OVER A DECADE
Reuters Updated 04 Jul 2020
BEIJING: China’s services sector expanded at the fastest pace in over a decade in June as the easing of coronavirus-related lockdown measures revived consumer demand, a private survey showed on Friday, though companies continued to shed jobs.
The Caixin/Markit services Purchasing Managers’ Index (PMI) rose to 58.4, the highest reading since April 2010, from May’s 55.0, pulling further away from the trough hit in February as the coronavirus lockdown paralysed the economy.
The 50-mark separates growth from contraction on a monthly basis.
The rebound suggests China’s overall recovery is becoming more balanced and broader based as life slowly returns to normal in one of the world’s biggest consumer markets, though analysts believe it will take months for activity to return to pre-crisis levels.
The services sector accounts for about 60 per cent of the economy and half of the urban jobs, and includes many small, private companies which had been slower to recover initially than large manufacturers. Heavy job losses, pay cuts and fears of a second wave of infections have made some consumers cautious about spending and going out again.
“This (latest survey) suggests the services sectors recovery is gaining traction,” said analysts at Nomura, which recently raises its forecast for China’s second-quarter GDP growth to 2.6pc year-on-year from 1.2pc.
“However, we caution that the recovery momentum could lose some steam in coming months.” The Caixin survey showed a sub-index for new business received by Chinese services firms rose to 57.3 from 55.8 in May, with the rate of growth accelerating to the fastest since August 2010.
New export business also expanded for the first time since January on firmer foreign demand, in contrast to overseas orders for manufactured goods, which continued to contract as many of China’s trading partners remained in lockdowns.
Services companies were also able to raise their prices slightly, ending a six-month streak of discounting as firms promote sales, while business confidence over the next 12 months strengthened to a three-year high.
But employment remained stuck in contractionary territory for fifth consecutive month, with corporate headcounts falling at a faster pace than in May, highlighting the immense pressure facing Chinese policymakers this year as they vow to stabilise the labour market.
“Although businesses were optimistic about the economic outlook, they remained cautious about increasing hiring, with employment in both the manufacturing and services sectors shrinking,” said Wang Zhe, Senior Economist at Caixin Insight Group, in an statement accompanying the data release.
Published in Dawn, July 4th, 2020
PTDC MOTELS IN NORTH OF COUNTRY CLOSED, STAFF SACKED
Jamal Shahid Updated 03 Jul 2020
ISLAMABAD: The Pakistan Tourism Development Corporation (PTDC) has closed all its motels in northern areas and terminated the services of employees.
A notification issued on Thursday said that the corporation was forced to take this decision as it had been suffering losses continuously.
“Due to continuous and irreparable financial losses having no other resource and the current Covid-19 pandemic, the federal government and PTDC Board of Directors unanimously resolved to close down the operations of the company,” the notification said.
It said the decision was taken following an “in-depth analysis of the present situation and consideration of the facts and circumstances in the company and in the best interest of the employees, company and shareholders for survival and future viability. The company was left with no other option but to take these painful decisions”.
Tour operators term the decision a setback to industry
Reacting to the decision, tour operators termed it a major setback to the tourism industry.
Pakistan Association of Tourism Operators president Maqsoodul Mulk told Dawn that the PTDC motels were ideally situated for tourists to rest and then wake up the next morning and continue their journey farther into the north.
“In a way, the government has now officially told local and international tourists that there is no place to stay between Chitral and Gilgit, in Swat in Khyber Pakhtunkhwa (KP) and Naran,” he said.
About 24 or 25 properties now shut down in the entire north are other than the six ‘sick’ motels and restaurants the corporation had closed down in March last year.
Last year, the PTDC had shut down its motels at Taxila in Punjab, Chattar Plain in KP, Astak in Gilgit-Baltistan and at Khuzdar in Balochistan, as well as Chakdara restaurant in KP and Daman-i-Koh restaurant in Islamabad.
“This is discouraging news, especially when the government is trying to promote tourism in the country with the prime minister forming the National Tourism Coordination Board (NTCB) to accomplish that goal,” said Maqsood ul Mulk.
He argued that the federal government should retain the PTDC and all its properties. Provinces lacked resources to promote tourism, he asserted.
The Alpine Club of Pakistan said that from travelers’ perspective, PTDC motels were established and carefully selected to offer them a break and much-needed rest after covering great distances before proceeding further to their destination.
NTCB member Aftab Rana said the motels had already been shut after the outbreak of the coronavirus pandemic. “However, it has already been decided that the federal government would withdraw from the business mode of the corporation and exclusively promote tourism and that its properties will be privatised,” he said.
He said the PTDC had decided to offer a $1.4 billion package to its employees as golden handshake.
“Unfortunately, the PTDC employees decided to take the matter to court where it is still pending,” he said.
He said the corporation had accumulated losses of up to Rs1 billion. “It has been running on taxpayers’ money and only paying salaries to an unproductive staff. There was no income being generated through its properties.
“It is a hard decision to close down these operations, but keeping all these considerations in view the government has decided to privatise PTDC properties. There is no other option,” Mr Rana said.
Published in Dawn, July 3rd, 2020
FALL IN REMITTANCES MAY AFFECT 5 MILLION HOUSEHOLDS
The Newspaper’s Staff Reporter 02 Jul 2020
- Irfan returned to Pakistan some months ago after he lost his driving training and testing job in the Gulf. Here, he would teach at a small academy in Sultanpura and operate his car with an online ride. When pandemic snatched both jobs, he stated selling face masks on his car. — White Star / Aun Jafri
LAHORE: Almost five million households – who have a family member abroad – can be impacted by a fall in remittances to Pakistan.
The situation was described by Dr Rashid Amjad, Centre on International Migration, Remittances and Diaspora director, at a webinar by CIMRAD and the Lahore School of Economics on Wednesday.
The discussion highlighted the impacts of the pandemic on the current situation of overseas Pakistani workers and the government efforts to facilitate their orderly and safe return.
Kashif Noor, Bureau of Emigration and Overseas Employment director general, spoke about the role of the government agencies working for a smooth reabsorption of returnees. He said that the Gulf and other countries had increasingly competitive job markets.
Dr Piyasiri Wickramasekara, an international migration expert, emphasized the need for facilitating the overdue payments of workers and the protection of migrants in an irregular situation.
Remittances have been a lifeline for the Pakistani economy since several years. The Covid-19 pandemic is expected to significantly dampen these flows as economic activity in countries from which majority remittances are received shrinks.
One participant presented projections for future remittance flows, that are expected to decline by 21.2 percent in 2020 and 19.4 percent in 2021, from the earlier projections. Asma Khalid, senior economist at the State Bank of Pakistan, said that the impacts of Covid-19 on remittances would be felt after June, and will be visible in the next 12 to 18 months.
Pakistan is one of the major countries sending workers to the Gulf region, especially Saudi Arabia and the UAE. It sent a record one million migrant workers in 2015, followed by a major annual decline until the numbers increased to more than 600,000 in 2019.
Dr GM Arif said the pandemic was likely to cause a big decline in new outflows, in addition to the large influx of returnee workers. As many as one million migrant workers may be expected to return, primarily to Punjab and Khyber Pakhtunkhwa.
Dr Nasra Shah spoke on the Kafala system in the Gulf and the global anti-immigration attitude in host countries.
Published in Dawn, July 2nd, 2020
GLOBAL EMPLOYMENT CRISIS DEEPENING, EQUIVALENT OF 400M JOBS LOST, SAYS UN
AFP Updated 01 Jul 2020
GENEVA: The coronavirus crisis has taken a much heavier toll on jobs than previously feared, the UN said on Tuesday, warning that the situation in the Americas was particularly dire.
In a fresh study, the International Labour Organisation (ILO) estimated that by the mid-year point, global working hours were down 14 percent compared to last December — equivalent to some 400 million full-time jobs.
That is more than double the number forecast by the UN organisation back in April, when it expected 6.7 percent of working hours to be lost by the end of the second three-month period of the year.
It is also far higher than the ILO estimate in late May, when it expected 10.7 percent of global working hours to vanish during the period.
“Things are getting worse. The job crisis is deepening,” ILO chief Guy Ryder said in an interview. “We are not through this yet,” he warned.
The ILO said the new figures reflected the worsening situation in many regions in recent weeks, especially in developing economies.
Its report pointed out that 93 percent of the world’s workers live in countries still affected by some sort of workplace closures, with the Americas experiencing the greatest restrictions. The United States and Latin America are currently the areas hardest-hit by the pandemic, which has killed more than 500,000 people worldwide and infected more than 10 million.
Soaring transmission rates in the United States, which alone accounts for a quarter of all infections and deaths globally, and in countries like Brazil, which accounts more than 1.3 million cases, have hit the labour market hard.
The crisis is “hitting particularly hard the Americas, where we see the loss of jobs as being the worst in the world,” Ryder said.
Overall, the Americas lost over 18 percent of working hours during the second quarter, equivalent to 70 million full-time jobs, the ILO said.
South America has shed a full 20.6 percent of all working hours, while North America has seen its working hours dip 15.3 percent, the study found. By comparison Europe, the Arab states, and most of Asia saw working hours dwindle by around 13 percent, while they fell just over 12 percent in Africa.
The crisis had also hit women harder, threatening decades of progress, said Ryder.
Women are more likely to be in the sectors most affected by the crisis and they also bear most of the additional burden brought on by closures of schools and care facilities.
“All the evidence is that women are being hit harder than men,” he said — and the crisis risked aggravating gender inequalities in the workplace.
“The stumbling, slow and glacial gains made towards gender equality in recent decades runs the risk of simply being sent into reverse.” The ILO painted three possible scenarios for the second half of the year, but Ryder acknowledged “we cannot see a scenario in which we get back to the starting point with which we began the year.” The most pessimistic scenarios assumes a second wave of the pandemic that significantly slows recovery. Global working hours would still be 11.9 percent (the equivalent of 390 million jobs) lower at year-end than at the end of 2019, the study said.
The most optimistic scenario, which assumes a rapid recovery, would still see a 1.2-percent year-on-year loss of global working hours — equivalent to 34 million jobs.
That is “still a very, very hard hit on the global economy”, Ryder said.
He called on countries to work together to implement the policies needed to help workers and “build back better”.
“The decisions we adopt now will echo in the years to come and beyond 2030,” he said.
Published in Dawn, July 1st, 2020
THREE LABOURERS DIE IN FACTORY’S WASTE PLANT
The Newspaper’s Staff Correspondent 01 Jul 2020
FAISALABAD: Three labourers died from asphyxiation when they went into a waste water plant of a beverage factory in Sahianwala on Tuesday.
Reports said a worker went into the waste treatment well of the company for cleaning purpose. However, the worker did not return which panicked other workers who rushed to rescue him.
Five more workers entered the well, however, three workers did not return alive and the condition of three others deteriorated.
Madina Town Superintendent of Police Shahzeb Arslan confirmed the death of three workers and said the three others were safe.
He said the well was around 70-foot deep.
Published in Dawn, July 1st, 2020