Last update: Thu, 25 Aug 2016 05am



Rules and regulations governing the import of gold have, by and large, been a matter of contention between various parties and changed frequently over time. According to the latest reports, SBP has now asked the Ministry of Finance to formalise gold imports as the existing two policies to import this commodity are being grossly misused. The first policy allows the import of gold against export of jewellery without any import payment; only jewellery making charges are received through banking channels from abroad. This leads to smuggling of gold to the neighbouring country due to a high import duty of 10 percent imposed in India. Moreover, artificial jewellery in the garb of original one is exported to fulfil the legal requirement. Under the second policy, gold imports are allowed on the condition that importers arrange their own foreign exchange to make payments. This leads to the depreciation of rupee in the open market and the interbank rate follows suit. The SBP has, therefore, suggested that the existing two modes of importing gold may be discontinued, gold imports should be formalised by allowing payments through the interbank market and customs duty and other applicable taxes may be imposed at par with India to discourage smuggling of gold. In case imported gold is converted into jewellery and then exported, duty drawback should be allowed to exporters after export proceeds are realised. However, in order to prudently monitor the process, only two banks may be designated to manage gold imports and selected large importers with adequate financial resources may be allowed to import the commodity. Such a policy will not only provide legal channels to the importers but will also ease the pressure in the kerb market.
Prime Minister Nawaz Sharif distributed the General Sales Tax (GST) refunds yesterday, according to newspaper reports. Our political governments, be they civilian or military, regard any decision to reimburse the affected people from the public exchequer, be they displaced persons or be they those impacted by natural calamities, as the personal largesse of the chief executive. Unfortunately, however, this practice has not died with the advent of democracy in 2008 and carries on to this day.
The dizzying events in Karachi on Monday and Tuesday shook the country and left the political actor at the heart of what evolved into a major crisis, the MQM, reeling. First, a recap. MQM had mounted a hunger strike before the Karachi Press Club in protest at the alleged disappearance of dozens of its workers at the hands of the security agencies, some of whom, according to the MQM, have been tortured or extrajudicially killed. The pressure on the federal government first and foremost as the controller of the Rangers leading the operation in Karachi reached a critical point when the health of some of the hunger strikers, including parliamentarians, deteriorated. Islamabad then dispatched Information Minister Pervez Rashid to Karachi to hold talks with MQM leader Dr Farooq Sattar and his colleagues. At the end of their deliberations on Monday, it appeared as though a breakthrough had been achieved when the minister revealed that he had heard the MQM and conveyed to them the message of Prime Minister Nawaz Sharif that an MQM delegation should visit Islamabad to see him and that the government would try to redress their grievances. After this announcement, it was stated from the MQM side that the hunger strike had been ended. What followed surprised all and sundry. Altaf Hussain, whose incendiary speeches from London have been banned from being broadcast on the electronic media, spoke to the to-be-dispersed hunger strike camp and delivered a broadside to beat all his previous efforts. Not only did he castigate Pakistan in terms that have been construed as treasonous (a case under Article 6 has reportedly been lodged against him and others), he instigated the hunger strikers to 'attend' to the media houses that were refusing to broadcast his speeches. Unfortunately for them, two media houses in particular were located near the Press Club and therefore were on the receiving end of the unwanted attentions of the angry MQM workers, led by women. Not only were the offices and studios of these media outlets trashed and staff attacked, clashes with the small contingent of police on the spot resulted in one death and about a dozen wounded. A police motorcycle was set on fire and many cars and vehicles smashed. Eventually, a heavier contingent of police arrived, along with Rangers, to quell the violence. The incident was condemned from all sides, including the prime minister. CoAS General Raheel Sharif instructed the DG Rangers in Karachi to arrest all those involved in raising anti-Pakistan slogans in response to Altaf Hussain's instigation and perpetrating violence against the media. In the evening, Farooq Sattar and other MQM leaders who arrived to conduct a press conference at the Press Club were arrested and taken away by the Rangers but then later released. MQM workers were arrested all over the city, all the party's offices, including its headquarters Nine Zero, were sealed and some 13 workers allegedly guilty of the Monday violence were sent on police remand by an anti-terrorism court. The following day, Tuesday, Farooq Sattar held a press conference in which he made the startling announcement that henceforth, decisions of the MQM would be made in Pakistan (ie Karachi) and not in London. This effectively meant sidelining the MQM supreme leader Altaf Hussain and his London Committee, although Farooq Sattar and other MQM leaders cautiously tried to 'balance' the distancing from the supremo with ritual declarations of Altaf Husain still being the leader of the party. Farooq Sattar also distanced himself and the MQM Pakistan (as it is now being called) from the anti-Pakistan slogans authored by Altaf Hussain as well as violence in any form or for whatever reason. Sattar's 'caution' was visible in his reluctance to answer journalists' questions at the press conference.
Prime Minister Nawaz Sharif performed the ground-breaking ceremony of the Lahore-Sialkot motorway project after due process was completed a mere few hours before approval of the Executive Committee of the National Economic Council (Ecnec) chaired by Federal Finance Minister Ishaq Dar. Different estimates of the cost of the project have been released: Ecnec estimated the project cost at Rs 45.38 billion with independent media sources claiming that Rs 1.6 billion has been earmarked as National Highway Authority's (NHA) administrative expenses; Radio Pakistan gave total cost of the project as Rs 42.38 billion in one report and Rs 56 billion in another. The difference in cost cannot be explained away by citing different lengths of the motorway as Ecnec approved 89 kilometers at a higher cost than the 91 kilometers claimed by Radio Pakistan.
It is widely believed that good people are good because they have come to wisdom through failure. Prime Minister Nawaz Sharif does not seem to learn from his mistakes. He, in his last trip to Karachi, stopped at the head office of National Bank of Pakistan (NBP). Ostensibly, the visit was meant to oversee how the NBP had fared during the last three years. He could have received a briefing at the Sindh Governor's House for this purpose. However, it appears that he wanted to expedite the PM's Youth Loan Scheme. NBP has disbursed around Rs 7.5 billion under the PM's scheme with little or no NPL incidence. In his first term as PM Nawaz Sharif had grossly misused government-owned banks under the so-called 'Yellow Cab Scheme' based on imported vehicles. In the process, SBP forex reserves declined to an alarming level. PM Sharif needs to know PML (N) has been elected to determine how government collected revenue is to be spent but should not have any control over depositors' savings. The 'green tractor scheme', for example, did not help Benazir Bhutto either.
A three-member bench of the Supreme Court hearing an appeal against the verdict of Islamabad High Court moved by several Karachi-based companies importing cellular phones and textile goods, delivered a judgement that not only provided relief to the appellants but also reminded the government how a parliamentary democracy must function. The petitioners had pleaded that notifications withdrawing sales tax exemptions on cellular phone and textile goods importers were issued by a non-competent authority, an additional secretary, rather than the federal government. The court struck down the impugned notifications declaring them ultra vires, ruling that any fiscal notification increasing tax and issued by revenue division secretary or minister would be against the law. The case is symptomatic of the malaise that typifies this government's style of functioning whereby rules are ignored or arbitrarily bent to suit its purposes. Hence the court felt it necessary to aver that the Rules of Business, 1973, are binding on the government, and that failure to follow them would lead to an order lacking any legal validity. And further that any rule which enabled the Prime Minister to dispose of matters bypassing the cabinet was ultra vires.
According to a Business Recorder exclusive, Pakistan has lost the Iranian rice market to India due to lack of proper transaction channels. The lack of transaction channels refer to the justifiable reluctance of Pakistani commercial banks, particularly those with branches in the US and Europe, to engage in business with Iran due to the prevailing US sanctions. In other words, fear of reprisals by the US government in the event that business is carried out with Iran, prima facie, justifies the decision of our commercial banks.