Pakistan Economy : Updates and Discussions

High taxes, cost of production force breeders to cull chicks - Pakistan - DAWN.COM

Half of jute mills in Pakistan remain closed | The Express Tribune

Foreign exchange: SBP reserves drop 0.13% despite inflows from Qatar | The Express Tribune

Circular effects of a worsening economy, I suppose. It seems all businesses that rely on borrowing/lending are hit and hit hard. That combined with the falling value of PKR means the amount of money to be returned back to the lenders foreign or domestic is going to keep increasing over time. The textile, jute, poultry, rice, wheat etc are all semi-processed goods not manufactured products. They form some of the most prominent exports of Pakistan. This is going to hit livelihood of people, destroy industries and more importantly ruin public health.

Your thoughts ? @vstol Jockey @BlackOpsIndia @_Anonymous_ @Falcon @randomradio @Sathya @Nilgiri
Right now I'm extremely busy reading pearls of wisdom by arsalan123 on how Pakistan won all their engagements and wars against India including 1971 which was a tactical victory. As far as the economy goes, Pakistan has plenty of money.It's only corruption which is a problem. Please do not disturb.
 
Right now I'm extremely busy reading pearls of wisdom by arsalan123 on how Pakistan won all their engagements and wars against India including 1971 which was a tactical victory. As far as the economy goes, Pakistan has plenty of money.It's only corruption which is a problem. Please do not disturb.
@Arsalan123
 
High taxes, cost of production force breeders to cull chicks - Pakistan - DAWN.COM

Half of jute mills in Pakistan remain closed | The Express Tribune

Foreign exchange: SBP reserves drop 0.13% despite inflows from Qatar | The Express Tribune

Circular effects of a worsening economy, I suppose. It seems all businesses that rely on borrowing/lending are hit and hit hard. That combined with the falling value of PKR means the amount of money to be returned back to the lenders foreign or domestic is going to keep increasing over time. The textile, jute, poultry, rice, wheat etc are all semi-processed goods not manufactured products. They form some of the most prominent exports of Pakistan. This is going to hit livelihood of people, destroy industries and more importantly ruin public health.

Your thoughts ? @vstol Jockey @BlackOpsIndia @_Anonymous_ @Falcon @randomradio @Sathya @Nilgiri

Instead of guarding CPEC, they should start guarding their own native industry.
 
High taxes, cost of production force breeders to cull chicks - Pakistan - DAWN.COM

Half of jute mills in Pakistan remain closed | The Express Tribune

Foreign exchange: SBP reserves drop 0.13% despite inflows from Qatar | The Express Tribune

Circular effects of a worsening economy, I suppose. It seems all businesses that rely on borrowing/lending are hit and hit hard. That combined with the falling value of PKR means the amount of money to be returned back to the lenders foreign or domestic is going to keep increasing over time. The textile, jute, poultry, rice, wheat etc are all semi-processed goods not manufactured products. They form some of the most prominent exports of Pakistan. This is going to hit livelihood of people, destroy industries and more importantly ruin public health.

Your thoughts ? @vstol Jockey @BlackOpsIndia @_Anonymous_ @Falcon @randomradio @Sathya @Nilgiri

They are in for some real pain this year and next. There is a huge debt payment coming this year and next, so very little room for them (in using traditional methods via deficit etc) even with IMF package....esp given FATF greylist. This combines with their reliance on crucial imports now becoming lot more expensive from PKR devaluation.

It is best to let this year play out first to gauge more results....as they may on the back of IMF package get some more loans from other countries/banks:

Pakistan will get $38 billion to meet financing needs: IMF | The Express Tribune

This creates more reluctance by actual institutional investors to invest into Pakistan directly (it will reflect in credit rating etc as more loans to pay earlier loans is frowned upon since you did nothing yourself)...i.e Pakistan will have to do serious reforms first before it can structurally attract answers (which is investment - already really low).

In mean time China likely will grab more equity in lieu of loan repayment:

IMF Won't Stop China From Turning Pakistan Into The Next Sri Lanka
 
'Locusts! Locusts!': Pakistan's crucial cotton crop under threat

The war in Yemen has prevented its authorities from controlling the insects, which now threaten Pakistani agriculture.

by Asad Hashim, 8 Jul 2019
320fed636524425b8cee2f599a3b730e_18.jpg

Locusts like this one in Pakistan''s Nara desert are threatening the country's crucial cotton crop [Asad Hashim/Al Jazeera]

Thari Mirwah, Pakistan - Azmatullah, a 45-year-old farmer in the southern Pakistani province of Sindh, clearly remembers the moment his worst fears came true.

A young girl, he says, one of the workers on his 40.5 hectares of land on the frontier with the Nara Desert in Thari Mirwah, about 400km north of Pakistan's largest city of Karachi, came running into the farm's main courtyard from an adjacent cotton field, screaming.

"'Makar! Makar!' she cried," he says. "Locusts! Locusts!"

Azmatullah is among the thousands of farmers who cultivate more than 246,000 hectares of cotton, nearly 23 percent of Pakistan's entire crop, in Sindh province, an arid region where most fields are fed by canal irrigation from the Indus River.

Cotton and cotton products are one of Pakistan's main exports, accounting for $11.7bn of the country's $24.7bn in exports last year, according to central bank data. The industry is also one of the country's main employers, providing jobs for tens of thousands across the country, from farmers to spinners and weavers.

For the past month, authorities have been battling a swarm of desert locusts which has been threatening the country's main cash crop, at a time when Pakistan is already going through a major economic crisis, with slowing growth, a skyrocketing exchange rate and rising inflation. The board of the International Monetary Fund (IMF) gave its final approval last week to a $6bn loan facility for Pakistan, its 13th bailout since the late 1980s.

Any threat to the cotton crop, analysts say, could be catastrophic, especially for the country's already stagnant exports.

"We called a few of the farmers and lit fires to raise smoke and drive them away," says Azmatullah, as he walks through his fields to survey the damage.

"The crops right now are not so strong that they can withstand the attack," he says, pointing to damage to the stems and leaves of some of his crops from the small group of locusts that hit the fields.

"If the locusts come in large numbers, then it is unlikely that any of the crop will survive. The locusts will not rise until they have completely eaten the crop.

"Then they will attack others' fields."

'Like a war'

Deep in the Nara desert, about 25km away, Fakhar Zaman is a man on a mission.

The entomologist is in charge of a crew of eight officials from Pakistan's federal food security ministry that is conducting eradication and control operations against the locusts in this area, investigating reports of locust sightings and coordinating the spraying of powerful pesticides to control the swarm.

"All of this," he says, gesturing to a large number of locusts dying from an aerial spray minutes earlier, "is like a war for us."

"The border we are protecting is the crop area. And we must fight this war, it is for our country."

e21415d3a7ff426e944bae853bdae0de_18.jpg

'We must fight this war, it is for our country' says an entomologist who is working with local authorities to control the locusts by spraying insecticide from the air [Asad Hashim/Al Jazeera]

Around him, poisoned locusts appear to be dazed, unable to fly much higher than a few feet. The contrast to before the spraying of the pesticides is stark: just minutes earlier, the trees and shrubs of this desert were full of the voracious insects.

Now, the trees appear to be half their size, as those locusts that were not killed by the spray attempt to escape its effects.

"It is an insect weighing two grams, and in 24 hours, it can eat food that is equal to its body weight," Zaman says, picking up a bright yellow locust. "So you can imagine just how dangerous it is. If it sits on the crops, God forbid, then it will eat all of [them]."

Pakistan has suffered previous major locust invasions in 1993 and 1997, but nothing on this scale has been seen since then, farmers and government officials told Al Jazeera. The current invasion has its roots in Yemen, where due to the Saudi-led war against the Houthis, control activities could not be carried out in time.

"Because there is a war going on there [in Yemen], it wasn't treated there," says Tariq Khan, technical director of the food security ministry's crop protection department.

The swarm grew in number, passing through Saudi Arabia and Iran, before entering Pakistan through its western border, eating crops in Balochistan and then in Sindh.

So far, more than 8,000 hectares of land have been treated with pesticides to battle the locusts in Pakistan, according to the United Nations Food and Agriculture Organization (FAO). In Iran, authorities have treated more than 247,000 hectares, FAO data shows, and Pakistan is working with both Iranian and Indian authorities to control the pests' spread, Khan said.

Officials say the locusts have not yet bred, but that if adequate rainfall was to occur in the burgeoning monsoon season, due to begin this month, they could lay eggs and multiply in number, forming a huge swarm that would then turn towards cultivated areas in search of food.
"There is risk of a significant spread and full-on swarm [forming], with relatively serious impact on agriculture, if there are early monsoon rains both in Sindh and Punjab [provinces]," the FAO said in a statement emailed to Al Jazeera.

The FAO says it is working with Pakistani authorities, as well as regional governments in Iran, India and Afghanistan to control the spread of the insects.

Smallholder farmers, large debts

The threat to Pakistan's cotton sector is real, and any attack by locusts on Sindh's crops could exacerbate difficulties the industry has been facing with dwindling yields and high input prices, analysts and industry leaders say.

Pakistan is the fourth-largest producer of cotton in the world, and its third-largest consumer, according to government data. In the financial year ending in 2018, Pakistan produced 7.55 percent of the entire world's cotton, slotting in behind India, China and the US, according to the Pakistan Central Cotton Committee's annual report.

"It could cause huge damage for the country's cotton area," says Usman Lutfi, deputy general manager of cotton at Tata Pakistan, a major textile company. "Sindh's cotton is much better than Punjab cotton in all respects - it has better strength, colour and longer staple."
Cotton with a longer 'staple length' results in higher-quality cotton that is stronger and softer.

Lutfi says a crop failure in Sindh would add to a three-year stretch of lower than expected cotton production in Punjab province, the country's main agricultural area, and force the country to increase imports of cotton crops to feed its industries.

Last year, Pakistan imported more than 2.9 million bales of raw cotton, mainly from the US and India, compared to 11.9 million bales in domestic production, according to government data.

Pakistan's currency, however, has depreciated more than 30 percent in the last year, now trading at roughly 156 rupees to the US dollar, causing concerns that imports will be too expensive to make up the gap.

"When we make deals with the exchange rate at 130 rupees, and then it goes to 160 rupees, we face a huge loss," says Lutfi.

More than industrialists, however, the main brunt of any attack on the crops would be felt by small-time farmers, such as Azmatullah in Thari
Mirwah.

b15bd83994c84e77b1ae09ac090d9710_18.jpg

Swarms of locusts like these from the Middle East threaten the livelihoods of thousands of farmers [Asad Hashim/Al Jazeera]

"Everything in our life is dependent on the crops. We don't have any other business or capital. Everything depends on the crops ... The locusts will leave only destruction. They will destroy our lives," he says, pointing out that he makes only roughly 10,000 Pakistani rupees ($63) in profit for each acre of land under cultivation.

Other smallholder farmers echoed that sentiment, adding that they take loans from local money lenders each year to sow their crops and treat them with fertiliser.

Khan Muhammad, 38, farms his 10 hectares of land in the village of Magan Khan, about 20km south of Azmatullah's land, and spotted locusts on his crops earlier this month. He has taken on more than a million rupees ($6,325) in debt this year to sow his seeds.

"Based on our everyday needs, we don't have enough money to pay for our expenses and also sow the crop every year, so that is why we take on debt, and farm on that debt."

8fc654f8d2f0446aa62ba4b7a4adb4e5_18.jpg

Farmers like Khan Muhammad say they can't afford for their crops to fail because of their large debts [Asad Hashim/Al Jazeera]

His story is hardly unique, with most farmers Al Jazeera interviewed saying they take on debts every year in order to sow their crops.

Another farmer, Khawand Dino, 50, himself more than $6,000 in debt this year, said he would lose everything if the locusts were to return.

"This crop is all that we have, I have no other means of income," he says. "If it is finished, then we are at Allah's mercy. We will starve without it, we will be forced to beg on the street."

Later, he adds, giving it a few moments thought: "Even if we become beggars, no-one will give us any money, because no-one will have anything. If everyone's crops are destroyed, where will they find charity from?"

Asad Hashim is Al Jazeera's digital correspondent in Pakistan. He tweets @AsadHashim

'Locusts! Locusts!': Pakistan's crucial cotton crop under threat
 
'Locusts! Locusts!': Pakistan's crucial cotton crop under threat

The war in Yemen has prevented its authorities from controlling the insects, which now threaten Pakistani agriculture.

by Asad Hashim, 8 Jul 2019
320fed636524425b8cee2f599a3b730e_18.jpg

Locusts like this one in Pakistan''s Nara desert are threatening the country's crucial cotton crop [Asad Hashim/Al Jazeera]

Thari Mirwah, Pakistan - Azmatullah, a 45-year-old farmer in the southern Pakistani province of Sindh, clearly remembers the moment his worst fears came true.

A young girl, he says, one of the workers on his 40.5 hectares of land on the frontier with the Nara Desert in Thari Mirwah, about 400km north of Pakistan's largest city of Karachi, came running into the farm's main courtyard from an adjacent cotton field, screaming.

"'Makar! Makar!' she cried," he says. "Locusts! Locusts!"

Azmatullah is among the thousands of farmers who cultivate more than 246,000 hectares of cotton, nearly 23 percent of Pakistan's entire crop, in Sindh province, an arid region where most fields are fed by canal irrigation from the Indus River.

Cotton and cotton products are one of Pakistan's main exports, accounting for $11.7bn of the country's $24.7bn in exports last year, according to central bank data. The industry is also one of the country's main employers, providing jobs for tens of thousands across the country, from farmers to spinners and weavers.

For the past month, authorities have been battling a swarm of desert locusts which has been threatening the country's main cash crop, at a time when Pakistan is already going through a major economic crisis, with slowing growth, a skyrocketing exchange rate and rising inflation. The board of the International Monetary Fund (IMF) gave its final approval last week to a $6bn loan facility for Pakistan, its 13th bailout since the late 1980s.

Any threat to the cotton crop, analysts say, could be catastrophic, especially for the country's already stagnant exports.

"We called a few of the farmers and lit fires to raise smoke and drive them away," says Azmatullah, as he walks through his fields to survey the damage.

"The crops right now are not so strong that they can withstand the attack," he says, pointing to damage to the stems and leaves of some of his crops from the small group of locusts that hit the fields.

"If the locusts come in large numbers, then it is unlikely that any of the crop will survive. The locusts will not rise until they have completely eaten the crop.

"Then they will attack others' fields."

'Like a war'

Deep in the Nara desert, about 25km away, Fakhar Zaman is a man on a mission.

The entomologist is in charge of a crew of eight officials from Pakistan's federal food security ministry that is conducting eradication and control operations against the locusts in this area, investigating reports of locust sightings and coordinating the spraying of powerful pesticides to control the swarm.

"All of this," he says, gesturing to a large number of locusts dying from an aerial spray minutes earlier, "is like a war for us."

"The border we are protecting is the crop area. And we must fight this war, it is for our country."

e21415d3a7ff426e944bae853bdae0de_18.jpg

'We must fight this war, it is for our country' says an entomologist who is working with local authorities to control the locusts by spraying insecticide from the air [Asad Hashim/Al Jazeera]

Around him, poisoned locusts appear to be dazed, unable to fly much higher than a few feet. The contrast to before the spraying of the pesticides is stark: just minutes earlier, the trees and shrubs of this desert were full of the voracious insects.

Now, the trees appear to be half their size, as those locusts that were not killed by the spray attempt to escape its effects.

"It is an insect weighing two grams, and in 24 hours, it can eat food that is equal to its body weight," Zaman says, picking up a bright yellow locust. "So you can imagine just how dangerous it is. If it sits on the crops, God forbid, then it will eat all of [them]."

Pakistan has suffered previous major locust invasions in 1993 and 1997, but nothing on this scale has been seen since then, farmers and government officials told Al Jazeera. The current invasion has its roots in Yemen, where due to the Saudi-led war against the Houthis, control activities could not be carried out in time.

"Because there is a war going on there [in Yemen], it wasn't treated there," says Tariq Khan, technical director of the food security ministry's crop protection department.

The swarm grew in number, passing through Saudi Arabia and Iran, before entering Pakistan through its western border, eating crops in Balochistan and then in Sindh.

So far, more than 8,000 hectares of land have been treated with pesticides to battle the locusts in Pakistan, according to the United Nations Food and Agriculture Organization (FAO). In Iran, authorities have treated more than 247,000 hectares, FAO data shows, and Pakistan is working with both Iranian and Indian authorities to control the pests' spread, Khan said.

Officials say the locusts have not yet bred, but that if adequate rainfall was to occur in the burgeoning monsoon season, due to begin this month, they could lay eggs and multiply in number, forming a huge swarm that would then turn towards cultivated areas in search of food.
"There is risk of a significant spread and full-on swarm [forming], with relatively serious impact on agriculture, if there are early monsoon rains both in Sindh and Punjab [provinces]," the FAO said in a statement emailed to Al Jazeera.

The FAO says it is working with Pakistani authorities, as well as regional governments in Iran, India and Afghanistan to control the spread of the insects.

Smallholder farmers, large debts

The threat to Pakistan's cotton sector is real, and any attack by locusts on Sindh's crops could exacerbate difficulties the industry has been facing with dwindling yields and high input prices, analysts and industry leaders say.

Pakistan is the fourth-largest producer of cotton in the world, and its third-largest consumer, according to government data. In the financial year ending in 2018, Pakistan produced 7.55 percent of the entire world's cotton, slotting in behind India, China and the US, according to the Pakistan Central Cotton Committee's annual report.

"It could cause huge damage for the country's cotton area," says Usman Lutfi, deputy general manager of cotton at Tata Pakistan, a major textile company. "Sindh's cotton is much better than Punjab cotton in all respects - it has better strength, colour and longer staple."
Cotton with a longer 'staple length' results in higher-quality cotton that is stronger and softer.

Lutfi says a crop failure in Sindh would add to a three-year stretch of lower than expected cotton production in Punjab province, the country's main agricultural area, and force the country to increase imports of cotton crops to feed its industries.

Last year, Pakistan imported more than 2.9 million bales of raw cotton, mainly from the US and India, compared to 11.9 million bales in domestic production, according to government data.

Pakistan's currency, however, has depreciated more than 30 percent in the last year, now trading at roughly 156 rupees to the US dollar, causing concerns that imports will be too expensive to make up the gap.

"When we make deals with the exchange rate at 130 rupees, and then it goes to 160 rupees, we face a huge loss," says Lutfi.

More than industrialists, however, the main brunt of any attack on the crops would be felt by small-time farmers, such as Azmatullah in Thari
Mirwah.

b15bd83994c84e77b1ae09ac090d9710_18.jpg

Swarms of locusts like these from the Middle East threaten the livelihoods of thousands of farmers [Asad Hashim/Al Jazeera]

"Everything in our life is dependent on the crops. We don't have any other business or capital. Everything depends on the crops ... The locusts will leave only destruction. They will destroy our lives," he says, pointing out that he makes only roughly 10,000 Pakistani rupees ($63) in profit for each acre of land under cultivation.

Other smallholder farmers echoed that sentiment, adding that they take loans from local money lenders each year to sow their crops and treat them with fertiliser.

Khan Muhammad, 38, farms his 10 hectares of land in the village of Magan Khan, about 20km south of Azmatullah's land, and spotted locusts on his crops earlier this month. He has taken on more than a million rupees ($6,325) in debt this year to sow his seeds.

"Based on our everyday needs, we don't have enough money to pay for our expenses and also sow the crop every year, so that is why we take on debt, and farm on that debt."

8fc654f8d2f0446aa62ba4b7a4adb4e5_18.jpg

Farmers like Khan Muhammad say they can't afford for their crops to fail because of their large debts [Asad Hashim/Al Jazeera]

His story is hardly unique, with most farmers Al Jazeera interviewed saying they take on debts every year in order to sow their crops.

Another farmer, Khawand Dino, 50, himself more than $6,000 in debt this year, said he would lose everything if the locusts were to return.

"This crop is all that we have, I have no other means of income," he says. "If it is finished, then we are at Allah's mercy. We will starve without it, we will be forced to beg on the street."

Later, he adds, giving it a few moments thought: "Even if we become beggars, no-one will give us any money, because no-one will have anything. If everyone's crops are destroyed, where will they find charity from?"

Asad Hashim is Al Jazeera's digital correspondent in Pakistan. He tweets @AsadHashim

'Locusts! Locusts!': Pakistan's crucial cotton crop under threat
I hope Indian authorities, in most cases, brother in arms to their Pakistani counterparts are paying due attention and taking adequate steps. Otherwise, we'd be caught with our pants down much like the Pakistanis are.
 
  • Agree
Reactions: Sathya and Gautam
SBP reserves drop 2.6% to $7.1b

By Our Correspondent
Published: July 12, 2019
2011384-monetarypolicycopy-1562903356-547-640x480.jpg

PHOTO: FILE

KARACHI: The foreign exchange reserves held by the central bank fell 2.6% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

The central bank received the first tranche from IMF of $991.4 million on July 9, after which the SBP’s reserves increased to $8,035.5 million. Earlier, the reserves had spiralled downwards, falling below the $7-billion mark, which raised concern over Pakistan’s ability to meet its financing requirements. However, financial assistance from UAE and Saudi Arabia helped shore up the foreign exchange reserves. On July 5, the foreign currency reserves held by the SBP were recorded at $7,083.6 million, down $189 million compared with $7,272.8 million in the previous week.

During the week, the State Bank received $500 million worth of inflows out of the total promised aid of $3 billion from Qatar. The decline was recorded due to payments on account of external debt servicing, the statement added. Overall, liquid foreign currency reserves, held by the country, including net reserves held by banks other than the SBP, stood at $14,259.3 million.

Published in The Express Tribune, July 12th, 2019.

SBP reserves drop 2.6% to $7.1b | The Express Tribune
 
Pakistan slapped with $6 billion penalty in Reko Diq case

ISLAMABAD: The International Center for Settlement of Investment Disputes (ICSID) has announced a massive $5.976 billion (Rs944.21 billion) award against Pakistan in the Reko Diq case, which is one of biggest in ICSID history.

The international tribunal on Friday issued a 700-page ruling against Pakistan in the Reko Diq case. Sources revealed to The Express Tribunethat ICSID awarded a $4.08 billion penalty and $1.87 billion in interest. However, Pakistan has decided to challenge the award “very soon” by filing a revision application, sources said. The revision application may take two to three years to decide.
 
Pakistan slapped with $6 billion penalty in Reko Diq case

ISLAMABAD: The International Center for Settlement of Investment Disputes (ICSID) has announced a massive $5.976 billion (Rs944.21 billion) award against Pakistan in the Reko Diq case, which is one of biggest in ICSID history.

The international tribunal on Friday issued a 700-page ruling against Pakistan in the Reko Diq case. Sources revealed to The Express Tribunethat ICSID awarded a $4.08 billion penalty and $1.87 billion in interest. However, Pakistan has decided to challenge the award “very soon” by filing a revision application, sources said. The revision application may take two to three years to decide.
Isay kahtay hain kangaali main aata geela.