The China Pak Economic Corridor (CPEC) promises to be the solution to the countryâ??s energy woes with the majority of the investment targeted towards the energy sector. Out of the $44.4 billion investment portfolio, $34 billion is earmarked for energy projects which include solar, coal and hydel power plants.
Is now the time to finally start worrying about the never-changing rather skewed picture of trade in Pakistan? Despite the government touting the much-contested GDP growth of 4.7 percent; and announcing a strategic trade framework for three years with a package of Rs6 billion budgeted for FY16 and again for FY17; and multiple measures to easy financing in subsequent budgets, exports have only plummeted.
The shock weekend announcement made by Raghuram Rajan, the Governor of the Reserve Bank of India (RBI), has caused anxiety among Indian and global markets alike. Rajan decided not to seek the second term as the governor of RBI and informed his colleagues via an unconventional method of sending a letter. Raghuram Rajan surprisingly mentioned that he is stepping down and moving back to the University of Chicago. Although, in his letter he hinted the fact that he would like to seek the second term and follow through the reforms he started back in 2013.
The China-affect has taken over foreign direct investment (FDI) in Pakistan. During the last three years of PML-Ns government, China has been largely funding the investments in the country - whether it is the telecommunication sector attracting investments for 3G/4G or the China-Pakistan Economic Corridor (CPEC) bringing in infrastructure and energy.
The latest export numbers paint the same old bleak picture for the countrys rice industry, as both Basmati and non-Basmati varieties have shown a decline in dollars earned - for the eleven months ended FY16. %D%APakistans Basmati rice exports are down 7 percent year-on-year in terms of volume and a whopping 27 percent in value. Meanwhile, the long-grained rice exports have increased 12 percent by volume yet also registered a small decline of 3 percent in dollar earnings.
The ailing small and medium enterprises of the country are in dire need of a lifeboat amidst lack of financing, energy crisis as well as weak institutional support. So how does the budget fare in increasing competitiveness and productivity for these ailing enterprises that should be catalysts for overall economic growth?
The alarm bells should ring for Pakistan's mango export sector as Indian mango exports are under severe threat due to higher pesticide residues than the prescribed limit by the global standards, and discovery of pests and diseases in some consignments to the United Arab Emirates.