Pakistan’s external sector doing good, but the way

ahead is thorny
Pakistan's Current Account has fared pretty well on the back of high
capital inflows from remittances and the textile sector, but the recent
downward trajectory shows that government needs to work on policy
reforms to diversify the export portfolio and maintain the promised
"sustainable growth".

ByNews Desk
26 July 2021

The month of June witnessed a downward turn for the country as

according to the State Bank of Pakistan (SBP) data, the current account
deficit (CAD) for June 2021 has increased from $650 million in May
2021 to $1,644 million in June 2021.

Although the exports for June 2021, the last month of the fiscal year
2021 (FY21), increased 63.32 percent month on month (MoM), the
imports also went up 20.39 percent offsetting the positive trend in
exports and increasing the trade deficit by 0.61 percent (in dollar terms).

According to the data released by the Pakistan Bureau of Statistics, the

year-on-year (YoY) increase in the trade deficit for June 2021, compared
to June 2020, has been 63.96 percent, which has been majorly attributed
to the opening of the economy.

However, it is worth mentioning that despite the nosedive in the last

quarter, the current account in FY21 remained relatively good as it took
a full year for CAD to go into a deficit of $1.85 billion (0.6% of GDP)
versus $4.45 billion (1.7% of GDP) in the previous year.

Not only the preceding year, but the CAD also saw a significant
decrease compared to FY18 and FY19, with $19.9 billion and $13.4
billion, respectively.

The exports for the 12MFY21 stood at $25.3 billion compared to $21.4
billion in the same period of the preceding year, showing an increase of
18.28 percent.

Some record positive statistics were seen during the FY21 as the country
saw the highest ever merchandise exports and high remittances, both
adding to high capital inflow in the country.

The year recorded the strongest-ever remittances inflows of $29.3 billion

and exports worth $25.6 billion in Pakistan’s history while imports stood
at a 3-year high of $53.8 billion.

Textile exports reached their highest level in history at $15.4 billion in

12MFY21 with the value-added segment registering an uptick of 28.5
percent YoY from $12.5 billion in 12MFY20 as the country benefitted
from trade war between China and US/EU, and business disruptions in
competitive economies. Knitwear saw the biggest jump with 36.6
percent YoY, while the raw cotton exports saw a 95.27 percent decline.

Similarly, the services sector saw an increase in exports YoY, reaching

$5.9 billion, up from $5.4 billion FY20, decreasing the deficit in the
sector from $3.3 billion in FY20 to $1.9 in FY21 supported by a
decrease in imports.

Forecast 
Experts at AKD Securities forecast that the CAD for the current FY22 would reach $8.3 billion
or 2.6 percent of the GDP, keeping in mind the government’s growth agenda.

However, according to the experts, the “swing factor” is remittances, which have recorded a low
during June 2021. AKD analysts believed that the funding side should balance enlarged CAD,
which should withhold excessive pressure on dollar-rupee parity.

The recent Fiscal Year 2021 has been relatively positive for Pakistan in terms of the current
account, and the government in its recent statements has reiterated that it would like the trend to
be sustainable under the proposed “sustainable growth” framework that Finance Minister
Shaukat Tareen has presented in the recent budget.

Also, the CA balance’s dependence on remittances had rightly been deemed dangerous by the
finance minister in his speech while launching Economic Survey for the FY21, the government
launched initiatives to counter this problem.

Setting up a new Amazon Facilitation Centre in Multan guarantees a greater market access to the
SMEs in Pakistan, in the end helping achieve the government’s growth objective. This is because
the already growing merchandise export will get a boost from these initiatives.

Similarly, the government has set up a National Export Development Board (NEDB) and an
Export Facilitation Scheme (yet to be approved by the Parliament) to incentivize exports.

Under the scheme, the government is going to follow up on the vision of aiding the development
of SMEs in the country by providing them with loans and incentivizing them to develop
technologically and increase their target market.

Read More: Exports to Australia surge by 33 pc over the recent fiscal year 2020-21

The NEDB would be a monitoring body comprising stakeholders like relevant ministers and
representatives of the business community from the Federation of Pakistan Chambers of
Commerce and Industry and the Pakistan Business Council.

Commenting on the mentioned increase in CAD, Chairman AKD securities Aqeel Karim Dhedhi
said Pakistan’s economy is in the expansion phase. He said that the import in machinery has
gone up in the second half of the FY21, showing a 15 percent increase.

Speaking at a TV program on 23rd July he claimed that the State Bank has lent Rs500 billion for
the import of machinery, and this is good news in the long term as it is capital expenditure and
will become a source of increased exports in the future.
Mr. Dhedhi said that Pakistan’s exports for June 2021 stood at $2.8 billion, and it would become
$34 billion for the fiscal year. On the other hand, he said that if the remittances come up to $30
billion, the $64 billion in capital inflow from these two sources is very good for the country.

He claimed that if the expansion happens as seen, Pakistan’s exports can hit $37 to $40 billion in
the fiscal year 2022, arguing that the overall economy is heading towards major expansion as
demand is expected to rise.

Commenting on the recent policies such as Housing, Auto and Textile policies would lead to
increased demand in the economy, so much so that the industries will have to expand.

He quoted the expansions in the cement sector in the FY21, saying that all different industries
will have to follow suit.

Similarly, the development of the ICT sector under the umbrella of Special Technology Zones is
important as the regulation of the sector has seen positive results. In FY21, the
Telecommunications, Computer, and Information Services exports reached $2.1 billion
compared to $1.4 billion in FY20 and $1.2 billion in FY19.

If the exports in the IT sector reached $5 billion by 2023 as forecasted by the Minister for IT &
Telecommunication Syed Amin ul Haque, it would be a positive development for the CA
balance of the country.

Read More: Pakistan to boost rice exports to record level after gaining access to Russia

All in all, the policy interventions seem to be working for Pakistan, and export growth continues
as forecasted by experts and the government, it can be a good long-term trajectory for the
country.

Search
Latest

News Desk - 26 July 2021

Pakistan's Current Account has fared pretty well on the back of high
capital inflows from remittances and the textile sector, but the recent
downward trajectory shows that government needs to work on policy
reforms to diversify the export portfolio and maintain the promised
"sustainable growth".

Board Of Investment, Bahrain’s EDB To Sign Deal To Boost Trade

ISLAMABAD: The Board of Investment (BoI), Pakistan will sign a memorandum of

understanding with the Economic Development Board of Bahrain during the second session of
the Pakistan-Bahrain Joint Ministerial Commission, a statement said on Monday.

Under the agreement, the two countries can develop and undertake collaborative activities and
projects; share knowledge and have integrated technical exchange and assistance in the areas of
mutual interest, it added.

Being the premier investment promotion agency of Pakistan, the Board of Investment is
mandated to promote and facilitate local and foreign investments.

The second session of the Pakistan-Bahrain Joint Ministerial Commission is scheduled to be held
on July 28 to 29, 2021, in Manama, Bahrain, it said.
The Bahraini side will be led by Minister of Foreign Affairs, Dr Abdul Latif Bin Rashid Al
Zayani, while Foreign Minister Shah Mehmood Qureshi would co-chair the session.

The Pakistani delegation will comprise several high officials from the Board of Investment,
Petroleum Division, Ministry of Commerce, Ministry of Economic Affairs and the Ministry of
Overseas Pakistanis and Human Resource Development.

The meeting will focus on bilateral cooperation in various sectors, including political, defence,
economic, commerce, finance and banking, industry, public health, overseas employment, higher
education, science and technology, information, culture and arts, agriculture and livestock,
cultural cooperation and parliamentary exchanges.

Regarding the promotion of trade and business development, some sectors of interest include
manufacturing, financial services, tourism, healthcare and education, logistics, information and
communication technology and vocational training, the statement said.

The first session of the Pakistan-Bahrain Joint Ministerial Commission was held on February 5
to 6, 2017, in Islamabad.

During the first session, the meeting had reached a consensus on the low volume of bilateral
trade, while it also discussed the future prospects. The Pakistani side had also proposed to offer
Special Economic Zones to the Bahraini investors.

The volume of bilateral trade between the two countries stood at $117.23 million in 2019/20.
Pakistan’s exports to Bahrain included rice, cotton yarn, textured yarn, printing ink, etc, whereas
the major imports from Bahrain included ferrous waste and scrap, iron or steel and petroleum
bitumen.

The second session would be a major breakthrough in terms of showcasing Pakistan’s lucrative
investment opportunities to Bahrain.

Pakistan has adopted a very liberal and investor-friendly investment policy, which provides no
restriction on remitting capital.

All the sectors are open for investment and equal treatment will be given to local and foreign
investors, it added.

https://www.bolnews.com/latest/2021/07/board-of-investment-bahrains-edb-to-sign-deal-to-
boost-trade/

Pakistan’s fish exports hit China’s ban

scottkrantz
Karachi [Pakistan], July 26 (ANI): Pakistan’s seafood exports are in jeopardy after China, an
“all-weather” ally, banned fish exports in January after a coronavirus was detected at the time of
shipment. rice field.

About nine of the top 15 exporters are currently temporarily banned by Chinese authorities,
Dawn reported.

Manzar Alam, CEO of Qadri Noori Enterprise, told Dawn that about 50 companies export fish to
China.

Elaborating on the ban, he said that if the coronavirus was detected in a single shipment, the
exporter would face a one-week ban, and in four cases, the exporter would not be able to send an
eight-week shipment. Said.

Pakistan’s seafood exports are at stake, as 60% of Pakistan’s total seafood exports go to China,
he said.
According to Alam, the coronavirus was detected in an outer box instead of destroying infected
cargo or sending it to quarantine for 15 days, and Chinese authorities stopped the shipping
company, Dawn reported.

“Since then, the rejected cargo has returned to Pakistan, and exporters are facing Rs 2 million per
container for detention, detention and taxes,” he added.

“Exporters have addressed the issue with commercial adviser Abdul Razak Dawood, who
formed the committee, but so far no progress has been made,” he added.

The price of a container containing 26 tons of fish is between Rs 7 million and Rs 10 million,
while Pakistan has an average unit price (AUP) of less than US $ 2.5 per kg from FY18 to FY21.
Deep Blue Seafood Ltd’s CEOM Faisal Iftikhar Ali is $ 5-7 per kg for India, followed by US $ 5
for Bangladesh and US $ 7-8 per kg for China. Said that he has an AUP. .. According to Dawn,
the average global AUP is $ 5 per kg.

According to the 2009 Economic Survey, the main buyers of Pakistani fish products are China,
Thailand, Malaysia, the Middle East, Sri Lanka and Japan.

According to Faisal, India and other countries are giving Pakistan a tough time as these
competitors employ shrimp farming, but Dawn reports that there is very little marine farming in
Pakistan. ..

Pakistan faces the problem that overfishing of fry causes a sustained decline in the landing of
high-value fish, he said, in 2015 with a joint study by the Food and Agriculture Organization of
the United Nations and the Federal Department of Marine Fisheries (MFD). We conducted a
comprehensive assessment of Pakistan’s marine fishery resources and found that Pakistan’s
waters are depleted of large numbers of fish resources.

In 2016, the Food and Agriculture Organization of the United Nations warned that fishing fleets
would be reduced by 50%. Failure to do so could disrupt major fish stocks, but without the
attention of the fishermen and authorities involved and the fleet is not managed. Technical
Advisor (Marine Fisheries), WWF-Pakistan, Mohammadmore Zam Khan said. (ANI)
Pakistan’s fish exports hit China’s ban

Source link Pakistan’s fish exports hit China’s ban

https://illinoisnewstoday.com/pakistans-fish-exports-hit-chinas-ban/315829/

Snapshot of Kushab district

Amjad Mahmood
Published July 26, 2021 - Updated about 11 hours ago

Established as a district on July 1, 1982, Khushab enjoys a unique topography in Punjab. Lying
along the right bank of River Jhelum, it covers an area of 6,511sqkm and comprises serene and
picturesque mountains, as well as fertile plains. Khushab city is a centuries-old settlement. Local
researchers like Imtiaz Hussain Imtiaz claim the city was named by Sultan Mahmood Ghaznavi,
deriving its nomenclature from two Persian words — Khush meaning sweet and Aab meaning
water. A Sher Shah Suri era mosque, Sharfuddin Masjid, built with mud and clay bricks still
exists in the walled city having 11 gates.
Unlike other districts, at least in Punjab, the city has not been made the headquarters of the
district from which it derives its name. Rather Jauharabad, an adjacent town located over 7.5km
away from Khushab, serves the purpose. The foundation of Jauharabad was laid in 1951 and
developed under a master plan to serve as the new federal capital of Pakistan until military
dictator Gen Ayub Khan replaced it with Islamabad. Because of its planned design, open spaces
and wide avenues, it began serving as the district headquarters when Khushab was carved out of
Sargodha as a new district.

It is also a strategically important district as it is situated roughly in the centre of Pakistan’s east-
west axis (which is stated to be one of the reasons for it originally being selected as the site of the
federal capital). It houses Khushab Nuclear Complex and Pakistan Air Force Base Sakesar, one
of the primary air defence radar stations in the country.

With a population of over 1.3 million, major tribes in the district include Awan, Aheer, Tiwana,
Joyia, Baloch, Baghoor, Arain, Bandial, Mohajir (migrants from India after the Partition) and
Rajput. It has produced men of literati like Khushwant Singh, a celebrated Indian writer who also
authored ‘Train to Pakistan’, a historical novel published in 1956 recounting the partition of the
sub-continent. A library in the name of Mr Singh is still being run by locals in his native village
Hadali. Known poet Ahmed Nadeem Qasmi and Urdu columnist Abdul Qadir Hassan also
belonged to the district.

The area under wheat, sugarcane and rice crops is on the rise with the increase in the
availability of water

The district is not only rich in wildlife like urial, chinkara, chokor, partridges, waterfowl ducks
and hawks but also minerals like bauxite, fire clay, silica sand, coal, gypsum and rock salt. In
fact, the Warchha mine is the second largest salt mine after Khewra.

Officials say gypsum is exported to India after meeting national requirements. The mineral is
used for construction as well as to improve acid soils, soil structure and water infiltration. Since
no local industry has been established to utilise silica sand, it is taken to Gujrat and Gujranwala
districts that are known for their pottery, earthenware and ceramics industries, respectively.

Khadis (hand-looms) once mushroomed in the district producing cotton delicacies like lungi and
lacha, the latter embellished with tila work. The industry is, however, on the decline with the
downward trend of wearing the two garments across Punjab.

There are two cement factories, three textile mills, a jute mill (which is lying closed now) and a
chemical manufacturing unit. To the concerns of locals, five more cement factories are in the
pipeline which may further degrade the environment of the scenic mountainous valleys, which
contain Uchhali, Khabeki and scores of other lakes, and waterfalls and thus may be developed as
a major tourist resort after Murree. Another distinct feature of the valley is a village, Peelu
Waince, which claims 100 per cent literacy, both among males and females.

As the district has three types of lands, a variety of crops, fruits and vegetables are sown there.
Two of its four tehsils — Khushab and Quaidabad — have irrigated lands, Naushehra tehsil is
mountainous, while Noorpur tehsil comprises Thal desert. The Greater Thal Canal project was
initiated during the Gen Musharraf regime to irrigate these barren lands presently known for
producing both white and black chickpeas (gram). But work on it was stopped by the succeeding
government though one of three portions have been constructed.

Wheat, sugarcane, rice, fodder, maize and cotton are major crops, while fruits include citrus,
peach, guava, melon, and watermelon. All kinds of vegetables, particularly cabbage and tomato
from Soon valley are produced here. The area under wheat, sugarcane and rice crops is on the
rise with the increase in the availability of water. Wheat was sown on 199,000 acres in 1990,
while it was planted on 312,000 acres in 2020.

Deputy Director Agriculture (extension) Qazi Afeef claims that Soon valley achieved a 100
maund per acre wheat yield and in other areas it was on an average 72 maunds per acre this year.

Rice is mostly grown on the belt along the river and its land increased from 41,000 acres in 1990
to 76,000 acres in 2020. Akhtar Islam Bali, a local grower, claims that the quality of the rice
outclasses those of Sheikhupura and Gujranwala, known for the best quality Basmati variety of
the commodity. The acreage of sugarcane improved from 13,900 acres in 1990 to 17,000 in
2020. This crop is sown after harvesting jawar and guvara, two fodder crops.

The land under maize and cotton crop, as well as moong pulse, is shrinking. Maize and moong
used to be planted on 4,900 and 4,820 acres of land in 1990 but their respective areas reduced to
2,000 and 2,330 acres by 2020 though per acre yield of both the crops improved during this
period. Mr Afeef says maize has never been planted here as a commercial crop and growers used
to plant it for feeding their livestock. About the fall of cotton, the agriculture officer says it had
low yields and attracted pest attacks therefore it became unpopular among the local farmers.

The mountain area of Naushehra tehsil is known for producing potatoes, reddish, cabbage and
tomatoes. The cabbage and tomato crops ripen after they are harvested elsewhere in Punjab and
thus ensure a good return to growers.

Mr Bali, who is also district president of Kisan Board Pakistan, laments that the incumbent
government is oblivious to the problems being faced by the local farming community. He says
that earlier ‘true’ representatives of farmers would be included in each committee concerning
agriculture. But since the Pakistan Tehreek-i-Insaf came into power, only party elders or their
close aides are given representation on these bodies who choose to ignore the plight of farmers in
general.

He says that Mohajir branch canal is allocated water by the irrigation department only for three
months which damages farming in Khushab tehsil.

Published in Dawn, The Business and Finance Weekly, July 26th, 2021

https://www.dawn.com/news/1636994
‫دھڑکنیں بڑھ رہی ہیں‬
‫وہ قریب آ رہا ہے‬