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A member of the Overseas Chamber of Commerce and Industry (OICCI) justifiably angered by the delay in refunds totalling 45 billion rupees as of August 2015 (with some pending for a decade) stated that Pakistan's low ranking - 171 out of 189 countries in ease of doing business report compiled by the World Bank - was to be expected. A Chief Financial Officer (CFO), of a multinational company added his voice to this lament. According to him, the "tax receivable figure has now become a sizeable chunk of many balance sheets," that has compelled many a multinational company to borrow to meet the deficit which was raising the financial costs of doing business in Pakistan thereby badly impacting on the profitability of the corporates.

The country's high officialdom is indeed firmly entrenched in luxurious offices and resides in gated-colonies with their manicured lawns, but not an inch beyond that on the terra firma called Pakistan where cities, big and small, have become heaps of uncollected garbage that is invariably left to putrefy. Ever-burning trash in streets, rising piles of trash and sewerage lines admixing with drinking water supplies - that is now a day-to-day reality in all cities thanks to the municipal governments' lingering neglect of their responsibility. And, this has gone on for years, even after the Supreme Court's suo motu notice in 2003 and its order to the concerned departments to take remedial measures and report back. Thirteen years on, the provinces turned up at the apex court this past Wednesday and presented reports of their performance so hollow and perfunctory only to earn the court's stinging observation to effect 'as if you are nose-less creatures that you can't smell the stench so thickly permeating our environments'. The judges' graphic observations how neat and unpolluted were our cities that over the time have become nothing but simmering dumps of toxic gases, do evoke considerable interest of the old-timers, harking them back to what Karachi once-upon-a-time was; how refreshing was the garden city of Peshawar and where are those mountain streams of Islamabad? Chief Justice Anwar Zaheer Jamali was impressed by the 'bulky file' of the Chief Secretary Sindh carried, but to him it signified nothing because the environmental pollution in the megacity of Karachi has 'reached the pinnacle'. The Chief Secretary Punjab too had nothing worthwhile to show as his anti-pollution performance. Of some 35 magistrates appointed to punish the polluters only one has reported on duty - how more telling betrayal of the cause of clean, unpolluted cities can be!
Former Senior Member, Federal Board of Revenue (FBR), Shahid Hussain Asad, stated in an interview with Aaj News that there is a 40 billion rupee shortfall in the first quarter of the current year. This shortfall, he said, would be met through increasing taxes on luxury goods, and claimed that it would not be a mini-budget as a presidential ordinance would not be required. In this context, it is relevant to note that all those taxes that can be imposed through issuance of a statutory regulatory order notably regulatory duty do not require the promulgation of an ordinance. All other taxes, including withholding taxes, enhancement or widening of sales tax, excise and customs duty would require an amendment in the law requiring the promulgation of a presidential ordinance.
Within the Syrian civil war there are many mini-wars, some being fought by contending national stakeholders and others between regional and global powers through their proxies. And as it continues, the contestants keep revising their agendas. In its first phase, it centered on removing President Bashar al-Assad and thus rid the country of a tyrant. And as the anti-Assad movement caught regional attention, the regional powers joined the fray, and the movement splintered off in many factions, each killing and dying for the conflicting interests of their own and of their patrons and promoters. The lingering factional infighting did uproot and displace hundreds of thousands of ordinary Syrians and forced them to flee their homes and seek refuge abroad, but Bashar al-Assad, though a bit shaken, hung on to power in Damascus. Then walked in so-called Islamic State (IS) militants, flaunting their insatiable appetite for human blood, and stole the Syrian show from the anti-Assad forces. The war in Syria now acquired an unmistakable global dimension and near international unanimity that IS should be fought and defeated. With IS now occupying centre stage the removal of President Assad was no more the top priority, at least of Russia and Iran. Not that the regional powers acquiesced to his remaining in power; some of them have their strong reservations over his staying in power and haven't given up their factional preferences. But they seemed to have decided to wait the outcome of anti-IS military operations led by major international powers. Others too are in the war against IS, but want Assad to stay in power, allegedly fighting the anti-Assad forces camouflaged as anti-IS operations. But then comes with a deafening thud a spanner in the works - a Russian warplane has been shot down by the Turkish jets, lending one more twist to the conflict in Syria and a huge unknown as to how it will impact the pace and direction of the war in that unfortunate country.
Moody's Investors Service recently changed the outlook for Pakistan's banking system to stable from negative, reflecting the improvement in the country's economic growth, driven in turn by the government's commitment to economic reforms under the EFF arrangement with the IMF. According to Moody's projections, the country's GDP will expand by 4.0 percent ending June 2016 compared to a sluggish average growth of 2.8 percent during 2008-13, mainly driven by higher spending on infrastructure projects as the government aims to ease energy shortages and execute projects related to the China-Pakistan Economic Corridor (CPEC). With the strengthening of the economy together with the central bank's accommodative monetary policy, credit growth will be stimulated which would support the banking sector's loan performance over the next 12 to 18 months. The credit rating agency expects that problem loans will decline to around 12 percent of total loans by the end of 2016 compared with 12.4 percent at the end of June, 2015. Nonetheless, banks would remain heavily exposed to the low-rated Pakistan sovereign due to linkage of the banks' creditworthiness to that of the sovereign. Banks' earnings will also ease slightly over the outlook period, mainly because of the lower coupon rate on government securities in a declining interest rate environment and as the market's perception of Pakistan's risk profile eases. Besides, the rating agency expects that Pakistani banks would maintain ample liquidity and continue to benefit from large volumes of low-cost and stable consumer deposits. Moody's Assistant Vice President, Elena Panayiotou, said: "the Pakistani banks' deposit-based funding structure remains a credit strength. We expect inflows of remittances from migrant workers will continue to drive the growth in bank deposits and support banks' funding bases." While banks will use part of their liquid assets to fund lending, Moody's expects the sector to maintain strong liquidity buffers, with core liquid assets - defined as cash and bank placements - at 12 percent of total assets and liquid securities, more broadly defined, at 41 percent of total assets.
In functioning democracies, the sitting governments try keeping political opponents out of the power corridors by defeating them in elections - but there are exceptions also. For example, Bangladesh's Sheikh Hasina wants absolute control over the levers of state power essentially, by keeping the door shut on her traditional rival Bangladesh Nationalist Party (BNP) chief Begum Khaleda Zia. The corruption cases against Khaleda Zia hadn't worked, and the election, set-up as it was, was boycotted by the opposition. It was a Pyrrhic victory, depriving Sheikh Hasina of her much-craved democratic legitimacy. Physical elimination of her political opponents was the only option now with the incumbent prime minister of Bangladesh, and she hasn't shrunk back from exercising it. Two of her principal political opponents, Salahuddin Qadir Chowdhury and Jamaat-i-Islami secretary general Ali Ahsan Mohammad Mujahid, were executed on Sunday following a trial that was found to be seriously flawed by global human rights bodies and others. Both of them had refuted the war crime charge, but they did not file mercy petitions with the BD president because they had not committed any crime. But no one in the kangaroo courts listened to them, much less hearing their witnesses. Salahuddin, six times elected MP and son of former Speaker of Pakistan National Assembly Chowdhry Fazalul Qadir, was in Karachi at the time he allegedly committed the 'war crime'. Unfortunately, however, he was still charged with 'war crime'. And in support of that alibi, the former President of Pakistan Mohammad Mian Somroo had sent an affidavit to the trial court and offered his presence as a witness. But of no avail; he was not called to elicit his observation: It is a dangerous precedent in Bangladesh. What goes around comes around. The US House Foreign Affairs Committee has voiced concern over "very flawed trial and political retribution ... the democratic space is shrinking in Bangladesh". In the words of ranking US Democrat Senator Patrick Leahy, "It is a tragedy that there appears to be little wish for calm, political reconciliation for the sake of the country". Bangladesh is now on high alert.
As anticipated by this newspaper, the State Bank decided to keep the policy rate unchanged at 6 percent over the next two months. According to Monetary Policy Statement (MPS) released on 21st November, 2015, the main reason for maintaining the status-quo is the expectation of a reversal in the declining momentum of headline inflation. The average July-October inflation at 1.7 percent this year was much lower than 7.1 percent recorded in the same period last year. With a subdued outlook of international commodity prices including oil and in the absence of any shock to supply of food items, the average inflation was likely to remain below the FY16 target of 6 percent but the present trend of a sharp decline in the inflation rate was expected to reverse in the coming months. Current account deficit had narrowed down to dollar 532 million during July-October, 2015 compared to dollar 1.9 billion in the corresponding period last year due to a substantial reduction in the oil import payments, healthy workers' remittances and the realisation of Coalition Support Fund (CSF). At the back of official disbursements and Eurobond inflows, surplus in capital account had supported the overall balance of payments position thus ensuring an upward trajectory in foreign exchange reserves. While realisation of investment inflows from the CPEC would strengthen the external sector outlook over the medium to long-term, continued flow of external resources was required to maintain a stable balance of payments position.


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Foreign Debt $62.649bn
Per Cap Income $1,512
GDP Growth 4.24%
Average CPI 8.6%
Trade Balance $-2.197 bln
Exports $1.729 bln
Imports $3.926 bln
WeeklyNovember 23, 2015
Reserves $19.713 bln