Wednesday, July 31, 2019

Trump Vows to At Least Quadruple US-Pakistan Trade

Talking with the media during Pakistan's Prime Minister Imran Khan's visit to the White House on July 22, 2019, US President Donald Trump said the United States “have a fantastic trade relationship (with Pakistan). I don’t mean we’ll increase it by 20 per cent. I mean, I think we can quadruple it. I think it could go — I mean, literally, it sounds crazy — you could go 10 times more. You could go 20 times more.” This is good news for Pakistan which has seen its exports stalled over the last 5 years. This has created a serious balance of payments crisis forcing the country to seek yet another IMF bailout.

US-Pakistan Trade Volume:

So what is the current volume of bilateral US-Pakistan trade?  The United States is currently Pakistan's largest export market accounting for 16% of the country's exports. The United States Office of the Trade Representative (USTR) website says that "Pakistan is currently our 56th largest goods trading partner with $6.6 billion in total (two way) goods trade during 2018. Goods exports totaled $2.9 billion; goods imports totaled $3.7 billion. The U.S. goods trade deficit with Pakistan was $783 million in 2018."

Pakistan's Exports to US: 

Pakistan's major exports to the United States are made up of garments and other textiles. In aggregate the apparel and textile industries accounted for 37.8% and 35.1% respectively of all U.S. imports from Pakistan in the 12 months to May 31, according to S&P Global Market Intelligence. Given Pakistan accounted for just 1.7% of U.S. apparel imports and 8.4% of textiles there may well be room for increased market share, particularly in light of US-China trade tensions.

Pakistan's Exports to the United States. Source: Standard and Poor Global


Pakistan's garments exports to the United States have jumped 12% in first quarter of 2019 from the same period a year ago, according to USITC Dataweb.  This double digit exports growth is being partly attributed to US President Donald's Trump ongoing trade war with China with the US government imposing 10% to 25% tariffs on certain Chinese goods. Pakistani rupee devaluation has also contributed to the nation's overall competitiveness.

Textile Exports to United States. Source: Bloomberg

American buyers are diversifying their supplier base away from China, the No. 1 exporter of these goods to the U.S. Already, Bangladesh is close to snatching the trousers-to-towel crown, according to Bloomberg News. Pakistan, at No. 6 last year, has grown its own shipments to the U.S. by almost 12% this year. It may overtake India, which has seen virtually no improvement.

Major US Importers of Pakistani Apparel: 

Who are the largest American importers of apparel and textile products from Pakistan? The largest importer of apparel and textiles from Pakistan in the past 12 months, aside from trade finance houses, has been Levi Strauss with 1,682 TEUs (Twenty Foot Equivalent Unit Containers) shipped. That followed a 101.5% year over year surge in shipments in 2Q. Other importers have also already been expanding their shipments. That was followed by JC Penney with 991 TEUs shipped after a 13.3% rise in 2Q while Adidas shipped 641 TEUs and grew by 9.9%, according to Standard and Poor Global Market Intelligence.

Biggest Importers of Apparel From Pakistan. Source: Standard and Poor Global


Pakistani Apparel Exporters: 

Pakistan's Interloop Limited based in Faisalabad is one of the largest manufacturers and exporters of apparel and textiles. The company recently raised nearly Rs. 5 billion on Karachi Stock Exchange to expand production of stitched denim designs for its clients including Levi’s and H&M. Interloop's major clients also include Nike, Reebok, Adidas, and Puma, as well as other major clothing retailers like Uniqlo and Target.

Pakistani Export Competitiveness: 

Pakistani apparel exports are becoming more competitive in international markets because Pakistani rupee has declined by almost 25% recently. This has wiped out the currency’s overvaluation adjusted for inflation differences with trading partners, as estimated by the IMF.

Average Annual Cost of Manufacturing Worker in US$ in Asia. Source: JETRO

Textiles industry is just one the export industries seeing exodus of manufactures and buyers from China.  Electronics industry is seeing similar moves. Engadget is reporting that Google is moving production of its US-bound Nest thermostats and motherboards to Taiwan. The Wall Street Journal has reported that Nintendo is shifting at least some production of its Switch console to Southeast Asia.

Last November, Nomura Securities strategists had said they expected Malaysia, Japan and Pakistan  to be the top 3 beneficiaries of import substitution triggered by US-China trade war escalation. Nomura's analysis is based on detailed study of 7,705 items which will be subject to tariffs and counter tariffs by US and China if the stand-off continues. Nomura developed two indices as part of its research on the subject: NISI (Nomura Import Substitution Index) and NPRI (Nomura Production Relocation Index). This is good news for Pakistan which has seen its exports stalled over the last 5 years. This has created a serious balance of payments crisis forcing the country to seek yet another IMF bailout.

Pakistan's Stalled Exports. Source: Standard and Poor Global

Summary: 

President Donald Trump at his July 22, 2019 White House meeting with Prime Minister Imran Khan vowed to at least quadruple trade with Pakistan.  It means the bilateral trade between the two countries could grow from the current $6.6 billion to at least $26.4 billion.  Pakistan's garments exports to the United States have jumped 12% in first quarter of 2019 from the same period a year ago, according to USITC Dataweb.  This double digit exports growth is being partly attributed to US President Donald's Trump ongoing trade war with China with the US government imposing 10% to 25% tariffs on certain Chinese goods. Pakistani rupee devaluation has also contributed to the nation's overall competitiveness. This is good news for Pakistan which has seen its exports stalled over the last 5 years. It has created a serious balance of payments crisis forcing the country to seek yet another IMF bailout.  Pakistan's Interloop Limited based in Faisalabad is one of the largest manufacturers and exporters of apparel and textiles. The company recently raised nearly Rs. 5 billion on Karachi Stock Exchange to expand production of stitched denim designs for its clients including Levi’s and H&M. Interloop's major clients also include Nike, Reebok, Adidas, and Puma, as well as other major clothing retailers like Uniqlo and Target.

Here's a discussion recorded prior to the Trump-Imran Summit in Washington:

https://youtu.be/Y6fFRSpuNh0




Related Links:

Haq's Musings

South Asia Investor Review

Can Pakistan Avoid Recurring Balance of Payment Crisis?

Pakistan Economy Hobbled By Underinvestment

Pakistan's IT Exports Surging

Can Indian Economy Survive Without Western Capital Inflows?

Pakistan-China-Russia Vs India-Japan-US

Chinese Yuan to Replace US $ as Reserve Currency?

Remittances From Overseas Pakistanis

Can Imran Khan Lead Pakistan to the Next Level?

China to Expand Manufacturing in Special Economic Zones

33 comments:

Riaz Haq said...

#India registers strong protest over #US military sale worth $125 million for #Pakistan’s F-16s via @htTweets https://www.hindustantimes.com/india-news/india-registers-strong-protest-over-us-military-sale-worth-125-million-for-pakistan-s-f-16s/story-UtPkvasNVpGaS09AQ2nEPI.html

India has registered a strong protest over the US approving a proposed military sale worth $125 million for Pakistan’s F-16 combat jet fleet, calling in the American envoy in New Delhi to convey its “grave concern”.

Days after the meeting between Pakistan Prime Minister Imran Khan and US President Donald Trump, the Pentagon announced on July 26 that the state department had approved the proposed deal for “24/7 end-use monitoring” of the F-16s.

“We have taken up the matter with the US ambassador in Delhi, as well as with the US government in Washington through our ambassador. We have expressed grave concern over US military assistance to Pakistan,” external affairs ministry spokesperson Raveesh Kumar told a regular news briefing on Thursday.

People familiar with developments said the US envoy was called in to the external affairs ministry for lodging a strong protest.

In response, Kumar said, the US side had informed India the “proposed sale does not indicate any change in the US policy of maintaining a freeze in military assistance to Pakistan”.

“The US has publicly stated the proposed sale is intended to enable the US to continue technical and logistics support services to assist in the oversight of the operations of F-16 aircraft in Pakistan’s inventory,” he said.

Trump snapped military and security aid for Pakistan in January last year after accusing Islamabad of resorting to “lies and deceit” in return for billions of dollars of assistance over the past two decades.

However, the warmth displayed by Trump during his first meeting with Khan last month and the US reliance on Pakistan’s support for pushing forward talks with the Afghan Taliban had led observers to conclude that Washington might resume military aid for Islamabad.

The Pentagon statement announcing the proposed sale had said it was cleared after Pakistan requested a “continuation of technical support services; US Government and contractor technical and logistics support services; and other related elements of logistics support to assist in the oversight” of the F-16s. It had added that the proposed sale “will not alter the basic military balance in the region”

Skeptic said...

I think Riaz Huq sahib have been writing about Pakistan economy for many years. His economic comentry has always been a balanced view. His amazing research encompass various data backed information. I think writers like him should be celebrated and Govt of Pakistan should announce some award for him instead of Lifafa writers.

Above all he is Pakistani at heart.

Falcon said...

What we really need to do is to grab USA software and maintenance outsourcing jobs. Right now Indians have almost complete control over it. Export of services from Pakistan can generate tremendous high dollar value .

Ja**ar said...

I agree with Skeptic. It is high time we recognize Riaz sb with some kind of civilian honor in Pakistan. I will do my part and put in a word with Team IK. He has single handedly managed the narrative in favor of CPEC and highlighted the immense contribution from our forces. He has called out the bluff by Hindus and Jewish lobby time and again.

Riaz Haq said...

8 #Chinese firms keen to invest in #Pakistan #textile sector. A delegation from these firms led by Huang Weiguo, chairman of Shanghai Yuanyi Industry called on #ImranKhanPrimeMinister in #Islamabad recently. #China #Investment https://www.fibre2fashion.com/news/textile-news/8-prc-firms-keen-to-invest-in-pak-textile-sector-251096-newsdetails.htm#.XUcGyxxn_lw.twitter

Eight Chinese textile companies evinced keen interest in investing in Pakistan's textile sector when a delegation from those firms led by Huang Weiguo, chairman of Shanghai Yuanyi Industry, called on Prime Minister Imran Khan in Islamabad recently. Khan highlighted Pakistan’ strategic location, a large market and cost-effective and skilled labour.

The delegation also met minister for industry, trade, information and culture of Punjab province Mian Aslam Iqbal, who said China can help raise Pakistan’s exports by relocating export-oriented industries and initiating joint ventures in various fields, according to Pakistani media reports.

A garment city spread over 400 acres is being established at Kasur Road and China Railway will invest $500 million there to generate 3000 employment opportunities, Iqbal added. (DS)

Riaz Haq said...

#Tech #Investments Put #Pakistan’s #Karachi based Denim Manufacturer Siddiqsons Back on Track to Regain Global Marketshare in Jeans. #garments – Sourcing Journal

https://sourcingjournal.com/denim/denim-mills/investments-siddiqsons-regain-marketshare-157798/

It’s never too late to teach an old dog new tricks—including legacy denim manufacturers.

Siddiqsons Group is rebooting its denim business with major investments in sustainable innovation, including adopting Archroma’s aniline-free indigo across its entire production, and becoming the first fully-operational Jeanologia 5.0 laundry in Pakistan.

The vertical company helped lay the framework for denim manufacturing in the country, setting up a spinning unit in 1982 and its first denim fabric unit in 1989. Knit and garment units followed with success, leading the company to diversify into other industries including real estate, construction and energy. However, with large investments and success in other sectors, Siddiqsons’ footprint in denim manufacturing started to diminish—and it’s rebuilding that business today through strategic investments and supply chain commitments.

"They made a decision that they wanted to regain market share and to become relevant in the world today,” said Matthew Fuhr, a consultant brought on by the firm to help kickstart its denim business for the next generation of brands and consumers. Siddiqsons, he said, is making investments in areas that will put the business “ahead of the curve of what’s happening in the marketplace.” The company plans to use those investments to rebuild the relationships they previously enjoyed in the U.S. market.

Each investment, Fuhr said, be it in spinning, finishing or garment processing, is a step closer to transparency and sustainability.

“They have to go hand in hand because people talk about being sustainable, but they’re not willing to share what they’re doing or how they can validate it,” he said.


The roll-out of Archroma’s aniline-free denim indigo dye timed well with Siddiqsons’s renewed focus on denim and its expiring contract with Dystar. The mill, Fuhr said, contemplated shifting a portion of its production to Archroma, but after a series of wash down tests with the aniline-free dye, they were satisfied with the results.

“We looked at all of our shades that we were running and how we were doing our product development and we figured out that we could make more of a commitment to the transition of a new dyestuff,” Fuhr said.

The decision to be sustainable across the entire supply chain led the vertical operation to adopt Jeanologia 5.0 for laundry, and the laundry will be operational in Q3 2019.

“Our intent is to produce a large percentage of our internal fabric capacity into garments,” Fuhr said.

To reduce the time and cost of sampling, Fuhr said Siddiqsons is developing fabrics that are conducive to the technology of 5.0, including no stones, ozone, laser and limited chemicals.

“You can develop the fabric so that is reacts in an appropriate manner,” he said. “We can manage the expectation of what design wants and what the production team

Up next, the company is planning to set up a lab in the United States in 2020 to give its brand partners a place where their design and merchandising teams can gather and innovate with the Siddiqsons team.

“The way our technology is set up, you can develop something in the U.S. and it can be transferred to a production unit anywhere in the world,” Fuhr said. The lab, he added, will help the company have an “upper end” research development environment, which could bring better business to Pakistan for production purposes.

These investments, Fuhr added, have been made knowing Pakistan is viewed as a lower cost producer.

“We have to engineer the plant and make our investments knowing that it’s always going to be a place where people are looking for an inexpensive product,” he said. “With that being said, based on the technology and the investments, we are able to offer a more premium product at a more affordable price.”

Riaz Haq said...

A Denim Factory Could Hold the Key to Reviving Pakistan’s Exportshttps://www.businessoffashion.com/articles/news-analysis/a-denim-factory-could-hold-the-key-to-reviving-pakistans-exports


KARACHI, Pakistan — A denim factory in Karachi could hold the key to reviving Pakistan’s ailing exports.

With many retailers shifting textile orders to cheaper and more timely suppliers in rival Bangladesh and Vietnam, Pakistan’s manufacturers have long-suffered from power cuts, an expensive exchange rate and what they claim is government indifference. Yet while hundreds of factories have shut down in recent years, shedding more than half a million jobs, Artistic Denim Mills Ltd., which operates as a one-stop shop turning cotton into jeans, is doubling production and has built a new factory in Pakistan’s financial hub.

Chief Executive Officer Faisal Ahmed is bullish and supplies retailers such as Zaraand Next Plc. He points to one key decision — unlike most industrialists, Artistic Denim started by making garments about 25 years ago instead of just shipping spun yarn or fabric. Now “we have been able to get many orders that used to go to Turkey earlier,” he said at his office in an industrial area.

The move shows a rare sign of promise in a stagnant industry that has been part of Pakistan’s economic backbone for decades. Pakistan is among the top five growers globally and cultivated has been cultivated on these lands for at least 5,000 years. Typically Pakistan has been mostly converting cotton into thread and fabric that is shipped East to other Asian countries, which then manufacture the final garment.

Homegrown Cotton

---

Pakistan has lost market share with exports growing 27 percent during 2005 to 2016, falling behind Bangladesh’s 276 percent increase and 445 percent in Vietnam, according to World Bank data. India is the second-largest apparel exporter in South Asia after Bangladesh. Nonetheless, Pakistan still has the advantage of homegrown cotton that it can capitalize on, unlike Bangladesh and Vietnam.

Pakistan's textile industry is key as it accounts for more than half of all overseas shipments.

Pakistan is targeting its first export jump this financial year after giving tax breaks to exporters, in a bid to reverse a three year slump with value added products like denim getting the biggest incentives, Mohammad Younus Dagha, secretary at the Commerce Ministry, said in an November interview.

Textile industrialists have continually lobbied the government for subsidies and incentives. Yet despite last year’s measures, Prime Minister Shahid Khaqan Abbasi said in an interview this month that no further giveaways to the industry were likely before the elections.

“Bangladesh and Vietnam governments are giving huge support to industries, unlike ours,” said Ahmed Lakhani, analyst at Karachi-based JS Global Capital Ltd. “The tax breaks are a good step, but we need to decrease electricity tariffs and keep a check on wages. I don’t think we will give all those incentives and compete globally.”


-----------

“About 95 percent of Pakistani exporters mentality is waiting for a customer rather than going out and finding them,” said Majyd Aziz, president of MHG Group of Companies in Karachi. “In the global world, you need integration and economies of scale, if you do that, you make money.”

Artistic Denim is one of them. It has chased premium brands in Los Angeles that pay more for smaller deliveries to keep changing designs rather than bulk orders. The company said this will help revenues reach as much as eight billion rupees ($72 million) in year ending June with new garment production capacity increasing sales.

“Pakistan’s denim is on an upward trend, despite the larger textile industry being in trouble,” said Ahmed. “Pakistan has a tremendous opportunity.”

Riaz Haq said...

#India's #exports fall for first time in nine months amid trade tensions. Exports fell 9.71% in June, while imports declined 9.06% as #US-#China #TradeWars hurt India’s #trade prospects https://www.livemint.com/news/india/amid-trade-tensions-india-s-june-exports-fall-9-7-to-25-billion-1563199917049.html

Exports fell 9.71% in June, while imports declined 9.06% as US-China trade row hurt India’s trade prospects
DURING June, petroleum exports fell 33% as Jamnagar, Mangalore refineries shut temporarily
India’s merchandise exports contracted for the first time in nine months in June while imports shrank first time in four months, signalling that rising protectionism and trade tensions between the US and China are impacting India’s trade prospects as well.

Data released by the commerce ministry showed exports in June fell 9.71% to $25.01 billion while imports dipped 9.06% to $40.29 billion, leaving behind a trade deficit of $15.28 billion during the month.

Comparatively, China’s exports in June fell 1.3%, while imports shrank 7.3%, leading to a trade surplus of $50.98 billion, significantly higher than what analysts projected.

Commerce secretary Anup Wadhawan said the temporary shutdown of ONGC Mangalore Petrochemical Ltd and Jamnagar refinery for maintenance in June adversely impacted exports of petroleum products.

“The shutdown of Jamnagar refinery is likely to abate by mid-July. The fall in the global Brent price by 15.6% in June is also a factor in the declining value of petroleum product exports," he added.

During June, petroleum exports declined 33% while non-oil, non-gems and jewellery exports contracted by 4.86%.

Among other major items, exports of gems and jewellery (10.7%), readymade garments (-9.18%), chemicals (-8.17%) and engineering goods (-2.65%) also contracted.

“The negative growth in June is also consistent with certain global trends, which have impacted India’s exports in recent months. We expect exports growth to revive to the trend growth rate of 2-3% in coming months," Wadhawan said.

The World Bank in its Global Economic Prospects released in June has projected weakening of global trade in 2019.

Global trade is projected to grow at 2.6% this year—a full percentage point below its own previous forecast.

Aditi Nayar, principal economist at Icra Ltd, said lower crude oil prices explain a portion of the contraction in the absolute level of exports and imports.

“Nevertheless, the contraction in imports of items such as transport equipment, machinery and fertilisers should be viewed with caution, as they suggest that the underlying demand dynamics are weak.

Riaz Haq said...

#India’s rich party under a growing cloud of gloom. India’s #gdp growth has slowed for 4 quarters in a row and shows little sign of picking. “I’ve been working for 35 years. I’ve never seen so much gloom and despair,” #Modi #economy up.https://www.ft.com/content/d6aeb708-b51f-11e9-bec9-fdcab53d6959 via @financialtimes


The recent suicide of India’s “coffee king”, VG Siddhartha, was seen by many in the business world as symptomatic of a wider malaise. “If you look at India Inc, they are not in an ebullient mood. They are concerned. Alarm bells are ringing. We need to hear them,” Mrs Shaw says. 

After Mr Modi’s landslide re-election victory in May, some Indian industrialists were cautiously optimistic that the prime minister would turn his attention to reviving an economy showing signs of trouble. 

That hope was not realised. Instead of new stimulus measures or a fresh wave of bold structural reforms, the new government’s first budget in July set an aggressive target of increasing tax collections by 20 per cent. Businesses fear the ambitious goal will exacerbate what some call “tax terrorism” by officials under pressure to meet unrealistic targets.

The budget also levied a steep new tax surcharge on the super-rich, raising the effective tax rate for those earning more than $285,000 to 39 per cent, and nearly 43 per cent for those earning around $700,000. Nirmala Sitharaman, the finance minister, said no more than 5,000 individuals would be affected and that they should be willing to contribute to the nation.

“The signal she sends is that rich Indians deserve to be penalised,” wrote the columnist Tavleen Singh. Ms Singh believes the latest tax rise will encourage more rich Indians to follow in the footsteps of the more than 23,000 dollar-millionaires that Morgan Stanley estimates have left India since 2014. The new taxes have had other unforeseen consequences, hitting foreign portfolio investors, who pulled an estimated $5.5bn from the stock markets in July. 

As the mood sours, the luxury industry is feeling the pinch. Footfalls in Delhi’s most upmarket shopping mall are said to have fallen 11 per cent last year, as the rich feared they would be under surveillance there. Once blistering sales for designer wear have tapered off. “The feelgood factor is extremely low — the lowest I’ve seen in decades,” Mr Tahiliani told me after his show. “There is such unease. Nobody is investing. People are just nervous about spending.”

Riaz Haq said...

#India’s rich party under a growing cloud of gloom. India’s #gdp growth has slowed for 4 quarters in a row and shows little sign of picking. “I’ve been working for 35 years. I’ve never seen so much gloom and despair,” #Modi #economy up.https://www.ft.com/content/d6aeb708-b51f-11e9-bec9-fdcab53d6959 via @financialtimes


The recent suicide of India’s “coffee king”, VG Siddhartha, was seen by many in the business world as symptomatic of a wider malaise. “If you look at India Inc, they are not in an ebullient mood. They are concerned. Alarm bells are ringing. We need to hear them,” Mrs Shaw says.

After Mr Modi’s landslide re-election victory in May, some Indian industrialists were cautiously optimistic that the prime minister would turn his attention to reviving an economy showing signs of trouble.

That hope was not realised. Instead of new stimulus measures or a fresh wave of bold structural reforms, the new government’s first budget in July set an aggressive target of increasing tax collections by 20 per cent. Businesses fear the ambitious goal will exacerbate what some call “tax terrorism” by officials under pressure to meet unrealistic targets.

The budget also levied a steep new tax surcharge on the super-rich, raising the effective tax rate for those earning more than $285,000 to 39 per cent, and nearly 43 per cent for those earning around $700,000. Nirmala Sitharaman, the finance minister, said no more than 5,000 individuals would be affected and that they should be willing to contribute to the nation.

“The signal she sends is that rich Indians deserve to be penalised,” wrote the columnist Tavleen Singh. Ms Singh believes the latest tax rise will encourage more rich Indians to follow in the footsteps of the more than 23,000 dollar-millionaires that Morgan Stanley estimates have left India since 2014. The new taxes have had other unforeseen consequences, hitting foreign portfolio investors, who pulled an estimated $5.5bn from the stock markets in July.

As the mood sours, the luxury industry is feeling the pinch. Footfalls in Delhi’s most upmarket shopping mall are said to have fallen 11 per cent last year, as the rich feared they would be under surveillance there. Once blistering sales for designer wear have tapered off. “The feelgood factor is extremely low — the lowest I’ve seen in decades,” Mr Tahiliani told me after his show. “There is such unease. Nobody is investing. People are just nervous about spending.”

Riaz Haq said...

#Pakistan’s ‘Exports surge 14.2pc, imports drop 18.3pc in July' 2019 . #exports #imports #trade - Profit by Pakistan Today

https://profit.pakistantoday.com.pk/2019/08/07/exports-surge-14-2pc-imports-drop-18-3pc-in-july/


Adviser to Prime Minister on Commerce Abdul Razak Dawood said on Wednesday that Pakistan’s exports had increased by 14.23pc in July this year, as compared to the same month of last year.

In term of dollars, the country’s exports increased from $1.63 billion in July 2018 to $1.87 billion in July 2019, the adviser informed while addressing a press conference at the commerce ministry.

He continued that Pakistan’s imports from other countries also reduced by 18.39pc during the month.

The adviser said during the period under review, an increase in exports was witnessed in various sectors, including rice (71pc), readymade garments (17pc), home textiles (14pc), plastic goods (34pc), chemicals (26pc), mangoes (33pc) and footwear (24pc).

Replying to a question, he said that China-Pakistan Free Trade Agreement (CPFTA), a comprehensive tariff policy, reforms in National Tariff Commission (NTC) and an increase in local exports were among the major hallmarks of his ministry during the first year of this government.

He informed media that Afghanistan had offered a Preferential Trade Agreement (PTA) to Pakistan in order to enhance trade between the two countries.

During the visit of Afghan President Ashraf Ghani, both sides had discussed issues pertaining to bilateral transit trade, he said, adding that both countries were willing to increase the volume of bilateral trade.

He said Afghan Ambassador Shukrullah Atif Mashal had invited him to visit Afghanistan on August 20th.

“I will visit Afghanistan to share the agenda of bilateral trade and to chalk out ways to increase the volume of transit trade.”

On a query, the adviser said that Pakistan had successfully gotten market access to the China, European Union (EU), Indonesia, Malaysia and the Association of Southeast Asian Nations (ASEAN).

“We are committed to getting trade access to the potential markets of the United States (US), Canada, Japan, South Korea and Australia so as to increase the volume of our exports,” he maintained.

Regarding his recent visit to South Korea, Dawood informed that during his visit, he held meetings with various Korean companies who were willing to bring their investment to Pakistan, particularly in the textile and agriculture sectors.

He noted that Pakistan has been facing a trade deficit with South Korea, as the former’s exports to latter were $300 million as compared to the imports of $600 million.

“We have arranged the business-to-business meetings with Korean investors in order to negotiate on a Free Trade Agreement (FTA), similar to those it signed with India, Vietnam, Bangladesh and Chile,” he stated. “Both sides decided to hold a working group meeting in October to discuss ways to increase the volume of bilateral trade.”

Riaz Haq said...

Jeans Sourcing Landscape Sees Major Changes as China Fade Continues
By Arthur Friedman

https://sourcingjournal.com/denim/denim-retail/jeans-sourcing-china-163400/

Reflecting the volatile sourcing environment created in great part by the U.S.-China trade war, the first half of 2019 saw significant swings in denim apparel sourcing.

Imports of the category from China dropped 10.44 percent in the six months through June to a value of $369.97 million. This brought China’s market share of the category–97 percent of which are denim jeans–down to 22.82 percent, a 5.11 percent decline for the year ended June 30.

Levi Strauss & Co. said it has drawn down its reliance on China as a source for its jeans. Imports from China now represent less than 8 percent of overall production for Levi’s and the company said it is in the process of bringing that number down to “very low-single-digits” by 2020. Many brands have followed suit in denim and overall apparel to limit risks from tariff threats by President Trump and increased costs in China.

-----------

All of the other Top 5 suppliers posted gains in the amount of denim they shipped to the U.S., with each growing their market share. Mexico, the No. 2 denim supplier to the U.S., inched up on China to hold a 22.16 percent market share. Jeans imports from Mexico rose 14.44 percent to $410.07 million, leading a Western Hemisphere increase of 12.03 percent to $509.74 million, which also included a 28.02 percent gain by Nicaragua to $55.19 million, and a 12.06 percent advance by Guatemala to $16.22 million.

Among the major Asian apparel suppliers, Vietnam and Pakistan are the big winners so far this year, while Cambodia and Indonesia lost ground, and Bangladesh maintained the status quo.

Jeans imports from Vietnam jumped 29.36 percent to a value of $142.36 million. The country’s market share rose 36.39 percent to 8.38 percent for the 12 months, as makers look to capitalize on its apparel manufacturing expertise.

Pakistan, which benefits from also being a major supplier of denim fabric, saw its first-half imports to the U.S. rise 15.49 percent to $119.72 million. The country’s market share increased 16.27 percent to 6.69 percent.

Riaz Haq said...

Where Does All the World’s Cotton Come From?
By Arthur Friedman

https://sourcingjournal.com/market-data/cotton-data/world-cotton-124059/

Cotton is perhaps the most recognized fiber in the apparel market, and is used, either in its pure form or blended with other materials, to make much of the world’s clothing.

The soft, fluffy staple fiber grows in a boll around the seeds of a cotton plant, and the fiber is nearly pure cellulose, the most abundant organic polymer on Earth. Fibers from the cotton plant are spun into yarn or thread and made into fiber, yielding soft, breathable textiles. Cotton is the most widely used natural fiber in clothing today.

Cotton plants are native to tropical and subtropical regions around the world, found largely in India, Egypt, Africa and the Americas.

Production
Representing an estimated 50 percent share of the global fiber market, cotton is grown on six continents. There were an estimated 119.3 million 480-pound bales of cotton produced in the just-completed 2018-2019 season, according to the U.S. Department of Agriculture (USDA). This marked an increase of 0.7 percent from the previous year’s 118.5 million bales.

India’s market share has grown in recent years, surpassing the U.S. and China as the world’s top cotton cultivator. India produced 26.5 million bales of cotton in 2018-2019 compared to 29 million bales the prior year, according to USDA data.

China is the second-largest producer of cotton, a plant that is cultivated into a raw material, growing 26.5 million bales in the season, a drop from 27.5 million bales in 2017-2018. The U.S. is the third-largest producer of cotton, which in its raw form is sold as a commodity on the global market, growing 27.8 million bales in 2018-2019 compared to the prior season.

Brazil produced 12.8 million bales this last crop season, after harvesting 10 million bales in the prior current season. Rounding out the top five is Pakistan, which grew 8.5 million bale’s worth of cotton in 2018-2019, a slight increase from the year before.

World trade
Global trade reached 41.4 million bales this past season, about on par with the previous year. China was the largest importer in the world this past season, bringing in 9.3 million bales. Vietnam imported 7 million bales this year, followed by Bangladesh, with 6.9 million bales imported.

Rounding out the top five, Indonesia brought in 3 million bales this year, while Pakistan imported 2.9 million bales.

The U.S. was by far the world’s largest exporter of cotton. In 2018, the country exported 14.5 million bales, a falloff of 8.2 percent compared to the 15.8 million bales exported the prior year but still representing roughly 40 percent of global exports. The decline was mainly due to a steep drop in exports to China as a result of the trade war between the two countries.

Brazil exports increase to 6.24 million bales from 4.2 million bales last year, while India saw its shipments decline to 3.8 million bales from 5.2 million bales exported in 2017-2018.

Australia’s exports fell to 3.6 million bales this year compared to 3.9 million bales last year. Benin, the largest African cotton exporter, exported 1.3 bales in 2018-2019.

Riaz Haq said...

Pakistan fast gaining access to markets of developed nations
By Salman SiddiquiPublished: August 24, 2019

https://tribune.com.pk/story/2040817/2-pakistan-fast-gaining-access-markets-developed-nations/

Pakistan is fast strengthening trade ties and getting access to markets of several developed countries around the globe in an attempt to increase exports, which is a must to do away with the pressure on the rupee, build foreign currency reserves and steer the country out of the financial crisis.

“We have got increased market access to China, Europa, Indonesia…and a small market access in Qatar,” said Adviser to Prime Minister for Commerce, Investment, Industries, Production and Textile Abdul Razak Dawood during a visit to a Dawlance factory on Friday.

“Now I am going to the United States to get more market access there,” he said, adding that there were four other countries with whom Islamabad was negotiating to get more market access, which included Canada, Japan, South Korea and Australia.
“All of us in Pakistan must understand that without (revival of) exports this country is not going anywhere,” he remarked while emphasising that exports were increasing at a fast pace.

“Are the country’s exports increasing fast,” he asked and said in the same breath “the answer is yes.”

He said exports increased 14% in July 2019 compared to July 2018. “That is good, but still not good enough. We have to do a lot more. Data for August is keenly awaited to see whether the trend is sustained,” he said.

Pakistan’s exports remained almost static at $24.22 billion in FY19 compared to $24.76 billion in FY18, according to the central bank.

Dawood said exports, which started improving at the outset of second year of his government, would help ease pressure on the rupee and build foreign currency reserves of the country.

The current account deficit dropped significantly to $13.5 billion in FY19 compared to a record high of around $20 billion in FY18. “The deficit will be further restricted in the range of $5-7 billion in the current fiscal year,” he said.

He, however, regretted too much reliance on textile exports and urged other sectors of the economy to play their role in diversifying exports. “We have to now move towards export of engineering goods, chemicals, IT products, processed food and others,” he said.

The PM aide was happy to note that engineering firms like Millat Tractors and Dawlance had started exporting their products to African and European countries respectively.

He asked the large-scale manufacturing (LSM) sector to help small and medium-sized enterprises (SME) to enter the manufacturing sector.

“We actually had a de-industrialisation situation. That is over. We are now back on the track of industrialisation,” he said, adding that the new industrialisation phase would help build the brand of ‘Make in Pakistan’ for exports and import substitution.

“Prime Minister Imran Khan holds weekly meetings to stay updated on the issues and problems faced by the industrial sector and how to resolve them,” he said.

Dawood said the government was trying to correct the duty structure. “I am not satisfied (with the current duty structure). There is a lot to be done. We have to correct the duty structure to facilitate the ease of doing business.”

He invited budget proposals from the industries to resolve their outstanding issues and added that such challenges may be overcome much earlier than the next budget presentation.

“What do you want in the next budget or before the budget (for industries),” he asked.

The adviser said the Chinese were relocating their industries to Pakistan, which would help build the export sector and promote import substitution. A large Chinese delegation of 65 parties is due in October. They are believed to make a huge participation in the new industrialisation phase in Pakistan.

He said fundamentals of textile exports had also changed to positive. Exports of value-added textile goods like garments and knitwear increased notably in July while exports of raw material – yarn – dropped 18%.

Riaz Haq said...

US, China, UK top three export destinations of Pakistani products

https://www.thenews.com.pk/latest/519182-us-china-uk-top-three-export-destinations-of-pakistani-products

The United States remained among the top exports destinations of the Pakistani products followed by China and United Kingdom during first month of current financial year 2019-20 as compared to the corresponding month of last year.

During the month of July, 2019, the total exports to the US were recorded at $373.514 million against the exports of $328.090 million, showing an increase of 13.84 percent during the period under review, according to the data issued by State Bank of Pakistan (SBP).

This was followed by China, wherein Pakistan exported goods worth $167.058 million against the exports of $152.043 million same month of last year, showing growth of 9.87 percent.

To United Kingdom (UK), Pakistan exported products worth $147.333 million during the current fiscal year against the exports of $153.702 million during last fiscal year, showing decrease of 14.4 percent, SBP data revealed.

Among other countries, Pakistani exports to Germany stood at $116.041 million against $116.064 million during last year, showing decline of 0.01 percent while the exports to Afghanistan were recorded at $108.642 million against $127.475 million last year, the data revealed.

The exports to Netherlands (Holland) were recorded at $85.398 million against $80.424 million whereas the exports to Spain were recorded at $81.468 million against $74.632 million last year.

During the period under review, the exports to Italy were recorded at $70.195 million against $68.008 million whereas the exports to Bangladesh stood at $66.957 million against $58.370 million.

Pakistan’s exports to France were recorded at $40.699 million against $38.209 million last year where as the exports to Turkey stood at $30.924 million against $29.267 million.

Similarly, the exports to Saudi Arabia during the period under review were recorded at $30.139 million against $27.008 million while the exports to Singapore stood at $ 27.155 million against $15.157 million.

During first month, Pakistan’s exports to Kenya were recorded at $24.101 million during the current fiscal year compared to 22.703 million same month of last year, the exports to Canada stood at $23.975 million against $25.792 million, to Japan $20.301 million against $17.608 million whereas the exports to Malaysia stood at $14.901 million during the current year against $14.013 million during last year.

Riaz Haq said...

#American denim giant Levi Strauss partners on #Pakistan #water project to restore #Ravi River basin around #Lahore | Apparel Industry News | just-style https://www.just-style.com/news/levi-strauss-partners-on-pakistan-water-project_id136922.aspx via @juststyle


The project is part of the company's better water management strategy in sourcing countries.

Riaz Haq said...

#Pakistan managed to successfully address major #energy and #infrastructure issues in the first phase of #CPEC. Phase 2 can put Pakistan economy back on track via #industrial and #agriculture #development and #trade. https://tribune.com.pk/story/2052518/2-cpecs-second-phase-can-put-pakistans-economy-back-track/

With the completion of major infrastructure and energy projects, the first phase of the China-Pakistan Economic Corridor (CPEC), which has helped Pakistan manage huge deficits in the energy sector and transportation infrastructure, is coming to an end.

Before CPEC, Pakistan was going through the worst load on power management and according to the government of Pakistan, the country was losing $4-5 billion every year due to energy shortages, while the estimated cost did not include social costs to society.

On the other hand, the National Highway Authority (NHA) estimated that Pakistan needed $1.2 billion to rehabilitate the transportation infrastructure, which along with the energy shortage, was hindering the country’s fast economic growth.
Pakistan managed to address these major issues with the help of the first phase of CPEC, which is now entering the second phase. Once again, the time is critical as all economic indicators are painting a miserable picture – inflation is on the rise, the rupee has depreciated against the US dollar – and new opportunities are few.

The government is striving to reverse the order and is aggressively pursuing any available opportunity for investment and job creation. The second phase of the economic corridor can be the answer to that, but the question is what strategies and tools are required by Pakistan to benefit from the next phase. Moving forward, there are three points which need to be taken into consideration.

First, the initial phase of CPEC was dominated by infrastructure development. All these interventions needed the lead role of the government, although, with certain reservations, the government managed to play a good role. Secondly, Pakistan should keep in mind the economic and development status of the country before designing any intervention. The first point to recognise here is that Pakistan lies between the primary and secondary phase of economic development, which means the country has started to graduate from commodities or natural resource stage and is trying to enter the second phase.

Although the process is slow, the country is still making progress. Therefore, the future plan should be developed keeping in mind the current status of development.

The second phase is all about industrial cooperation, development of agriculture and trade, therefore, its needs and demands are entirely different from the first phase. The first required the leading role of the government, while the second phase requires a 180-degree change in management and roles of actors. It demands the leading role of industrialist, the private sector and the business community, while the government’s role would be only of a facilitator.

The government needs to start future planning and phasing of implementation for the second part of CPEC, accordingly. In this regard, the government has started to engage the business community of Pakistan by creating a ‘business council’ under the chairmanship of Abdul Razak Dawood. However, the direction of the business council is not clear yet and the terms of reference (ToRs) are not depicting the required changes and instruments for practical interventions.

Riaz Haq said...

Special Economic Zones (#SEZs) in #Faisalabad alone would help #Pakistan grow its #exports by $1billion to $1.5 billion per year in the short span of time by ensuring effective and comprehensive planning, Says (FIEDMC) Chief Mian Kashif #economy https://nation.com.pk/15-Sep-2019/sezs-to-boost-exports-to-1-5b-per-annum-fiedmc

Appreciating economic vision of Prime Minister Imran Khan, he said the premier has directed all the concerned departments to remove hurdles in the way of development of SEZs and establish them on priority basis.

Fortunately, he said almost hundred percent plots in M-3 Industrial Estate have already been sold out while hundreds of units have become operational and were playing their role in providing exportable surplus in addition to accommodating thousands of workers.

Mian Kashif said that the industrial city would house more than 400 textile, steel, pharmaceutical, engineering, chemical, food processing, plastic and agriculture appliances units in addition to providing jobs to 250 thousand workers.

He claimed that the city was also expected to attract Rs400 billion local and foreign direct investment which would help Pakistan to stabilise its economy. He further said that Faisalabad was strategically located in the heart of Pakistan with two motorways passing from its eastern and western sides.

He said that this city has a unique privilege to contribute 60 percent towards textile exports and 45 percent towards total exports of the country.

He further said that it was not only restricted to textile which was its iconic identification but hundreds of SMEs hailing from chemicals, steel, food processing and others were also playing their role in the overall economy of Pakistan.

FIEDMC Chairman further said investors from China, Turkey, Korea and Britain have pumped $ 1.10 billion and their confidence in Pakistan have been restored as they are also bringing more investors from their respective country to invest in SEZs.

He said these investors expressed their eagerness to explore the possibility of investment in diverse sectors of Pakistan especially in ceramics, chemicals, steel, food processing and automobiles.

He said Prime Minister Imran Khan clearly directed them to focus on developing such industry in SEZs which is based on export and import substitution to restrict the import bill.

He said the good thing is that a number of Chinese industries have started pumping investment in SEZs and apparently the reason behind this is the production cost in China has increased which is making Pakistan one of the beneficiaries of on-going US China trade war.

He emphasised that consistent policies were imperative to attract foreign investment into the country, which could lead the economy towards sustainable growth.

He said industries operating in the FIEDMC will have an immediate access to high-quality infrastructure, un-interrupted power supply, public facilities and support services along with simpler ease of doing business.

Chief Operating Officer Muhammad Aamer Saleemi also briefed the delegation and said FIEDMC in collaboration with Industrial Police Liaison Committee has established police post at M-3 Industrial City and the industrial community will work under safe environment.

“The whole industrial estate will be monitored by high resolution surveillance cameras and 24 hours police patrolling will be provided in the estate,” adding he said this would make FIEDMC the safest industrial estate in the country.

He said CPEC will attract $40 billion worth of investment which will directly raise investment-to-GDP ratio by 2.8 percentage points besides some indirect investment addition.

“The investment in hard currency will also support exchange rate stability in the country and stabilise balance of payments situation in the country,” he added.

Riaz Haq said...

At Bluezone, Collaborations Help Kickstart Creativity in Denim

https://sourcingjournal.com/denim/denim-trade-shows/bluezone-collaborations-kickstart-creativity-denim-168343/

The Munich, Germany trade show held last week was home to several collaborations that demonstrate how each player in the supply chain contributes to creativity and innovation in the industry.

From mills and trim suppliers, to the next generation of denim designers, here’s a look at some of the notable partnerships found at the show.

Creative collaboration
Bluezone’s trend curators at Monsieur T introduced a new layer to their seasonal forecast with the All Related Collaboration, a project that emphasized teamwork and creativity.

----------------

In partnership with Greek denim label Salt & Pepper Jeans Co., Pakistan denim mill Naveena presented a line of nostalgic-inspired jeans and overalls recreated with contemporary fabrics and sustainable processes. The result is a collection of unique handmade jeans that capture the spirit of American craftsmanship with a touch of European aesthetics and an environmentally-friendly process.

The capsule collection, custom made by Salt & Pepper Jeans Co., are made with Naveena’s Retro Tech fabrics, which are designed to provide the wearer comfort without sacrificing a vintage authentic look. The jeans were washed by Italian chemical company, Officina+39, using its Trustainable substances and technology. The Trustainable portfolio uses fewer hazardous chemicals, reduces power usage and conserves water.

Naveena also teamed with Lenzing and Chottani for the show giveaway denim sailor bag made of Tencel x Refibra Lyocell.

“By collaborating with our partners, we link progressive design with technical innovation, making innovative and beautiful products in a clean, transparent way,” said Aydan Tuzun, Naveena head of global sales and marketing.

Riaz Haq said...

Jeans Imports From China Tumble as Sourcing Gets Increasingly Diverse

https://sourcingjournal.com/denim/denim-business/jeans-imports-china-sourcing-167733/

China’s jeans market share came down to 22.48 percent, just a tick above Mexico’s 22.27 percent, according to OTEXA. For the first seven months of the year, jeans imports from Mexico grew 12.53 percent in value to $483.58 million, topping China’s shipments so far this year. This was notably in contrast to Mexico’s overall apparel shipments in the period, which were down 2.94 percent to $1.89 billion.

Among the suppliers gaining ground this year from Asia were Vietnam, with imports to the U.S. up 30.24 percent to $192.74 million, and Pakistan, with shipments rising 8.72 percent to $148.3 million. Losing ground in the region were Bangladesh; with imports down 1.51 percent to $306.82 million, Cambodia, which saw shipments decline 9.48 percent to $60.76 million, and Indonesia, which dropped 13.89 percent to $40.21 million. Sourcing executives have pointed to labor and quality issues in these countries as the reasons for brands shying away from manufacturing there.

Production picked up in the Western Hemisphere, where Nicaragua saw its shipments to the U.S. increase 28.57 percent to $67.71 million, and Guatemala, with shipments up 13.25 percent to $20.37 million. Overall Western Hemisphere jeans imports to the U.S. were up 10.66 percent in the period to $605.13 million. For the year through July, the region saw its market share reach 28 percent.

Africa continues to get more attention from denim apparel producers, too. Countries showing substantial gains this year include Egypt, Jordan, Madagascar, Kenya, Mauritius, Tanzania and Ethiopia.

Riaz Haq said...

#Pakistan #exports up 6%, #imports down 17% in October 2019. Exports rose to $2.0 billion against $1.89 billion in Oct, 2018. Imports down to $3.98 billion from $4.8 billion in Oct 2018. Monthly #trade gap declined 32%.
https://www.thenews.com.pk/print/550103-pak-exports-up-by-6pc-imports-down-by-17pc-in-october-2019

During July-Oct 2019/20, exports increased by 3.6 percent to $7.53 billion and imports down by 19.3 percent to $15.34 billion. During these four months of last financial year, exports were at $7.27 billion and imports were recorded at $18.966 billion.

During these four months, the economy racked up trade deficit of $7.78 billion against $11.7 billion recorded in same period of last financial year depicting a decline of 33.5 pc.

It is worth mentioning that since 2003, Pakistan has been consistently accumulating trade deficit, mainly due to high energy products imports. Interestingly, since 2012, China has emerged as Pakistan’s largest trading partner replacing the United States. In recent years, the biggest trade deficits were recorded with China, India, United Arab Emirates, Saudi Arabia, Kuwait and Malaysia. Pakistan records trade surpluses with the United States, Afghanistan, Germany and United Kingdom.

Experts say diversification in exports to other markets, especially those located in Latin America, Africa, Asia and the Middle Eastern countries is the call of the day. The government should also encourage technological upgrades in exports, develop agriculture, cottage industry, handicrafts, as well as gems and jewelry sectors, they added.

It is worth mentioning that in last financial year [2018/19], Pakistan trade deficit stood at $31.8 billion against $37.6 billion in 2017/18.

During the FY19, imports dropped by 9.9 percent to $54.8 billion compared with $60.8 billion in the preceding fiscal year. Exports during July-June 2018/19, totaled $22.98 billion against $23.2 billion in same period of FY15 depicting a decline of 1 percent.

Riaz Haq said...

#Taiwanese #textile companies may relocate to #Pakistan. #Taiwan will transfer new #technologies & #manufacturing processes & Pakistan will not have to compete with #China or #Bangladesh or #Vietnam on price. Instead, it will add value to its products. https://tribune.com.pk/story/2100996/2-cpec-affect-taiwanese-textile-companies-may-relocate-pakistan/

Being a cheap labour market (after huge currency devaluation), Pakistan can transform into an excellent destination for Taiwanese textile companies, which are willing to relocate their units outside Vietnam, said Taiwan Textile Federation President Justin Huang.

“At present, Vietnam is crowded, which causes difficulties for Taiwanese textile firms there, such as labour shortages,” Justin said in an interview with The Express Tribune. “In Pakistan, however, labour issues will not emerge at least for the next 10 years and this is something attractive for us.”

He pointed out that China had invested massively in Pakistan’s infrastructure development projects under the China-Pakistan Economic Corridor (CPEC) and stressed that Taiwanese businessmen could take maximum advantage from such investment.

Pakistan had a duty-free export agreement with the European Union and in December, the second phase of a free trade agreement (FTA) with China would also become functional, which would prove to be helpful for the Taiwanese investors and trade and industrial development in Pakistan, he said.

“We are different from China and other countries because we focus more on technical and functional textiles,” he emphasised.

Justin added that he would forward all the information collected from Pakistan to other federation members in Taiwan including the fact that Pakistan was a huge market of 200 million with excess labour and the government was willing to support foreign investment.

The federation president expressed the resolve to devise a mechanism for enhancing trade and investment collaboration between Taiwan and Pakistan in the textile and garments sector. He was of the view that Pakistan’s textile industry produced excellent products for home use and had the capacity to produce quality apparel as well.

“If things follow the right direction, we will transfer new technologies and manufacturing processes to Pakistan, which will facilitate the country in upgrading its products,” Justin stressed.

“After that, Pakistan will not have to compete with China or Bangladesh on price issues and the country will be able to add value to its products.”
Textile companies based in Taiwan have already designed products for global brands like Nike and Adidas. Sixteen teams in the football World Cup 2018 used Taiwan-based fabric in their kits.

He voiced hope that the FTA with China would also assist Taiwanese companies, which had already invested in China and had set up their units in the country.

“Our officials can bring in their work experience to Pakistan along with the academia to train the local human resources,” he pointed out. “In future, Pakistan will need a lot of textile engineers, hence, there is a need to provide sufficient training to them so that the country can utilise its manpower.”

He also stressed the need for easing the visa approval process for the Taiwanese investors.

“Right now, it is difficult for us to visit Pakistan due to a long process of applying for the entrance visa,” he said. “It took me more than three weeks to get approval for Pakistani visa.”

Riaz Haq said...

A day earlier, the central bank had said the during the first quarter of this fiscal year, the current account was negative with a cumulative $1.572 billion deficit, however, in October it has turned positive.

The country’s current account deficit, in the last fiscal year, clocked in at $12.75 billion, down 36 percent from record-high $19.9 billion in FY-18.

According to the Pakistan Bureau of Statistics (PBS), the trade deficit fell 33.5 percent in July-October FY-20, while imports of goods dropped 22.9 percent to $14.656 billion in the first four months of the current fiscal year.

Exports grew slightly by 3.4 percent to $8.220 billion, the SBP data showed. Foreign direct investment into Pakistan rose 238.7 percent in the first four months of the current fiscal year to $650 million.

Exports of services during the four months clocked in at $1.749 billion compared to $1.709 billion during the last fiscal year. Imports of services, on the other hand, reached $3.117 billion compared to $3.076 billion in FY18.

“In particular, the onset of fiscal stimulus and successful resolution of trade negotiations involving major economies would be instrumental in supporting global consumer demand, which would, in turn, bode well for exporting partners, including Pakistan, along with improved prospects of foreign investments,” SBP report said.

The Free Trade Agreement (FTA-II) with China and preferential trade agreement with Indonesia might also boost exports, it suggested.

Riaz Haq said...

State Bank of #Pakistan unveils Rs200 billion exports stimulus in the form of loans for #export oriented sectors under concessionary Long Term Financing Facility (LTTF) and Export Financing Scheme (EFS). https://www.thenews.com.pk/print/605526-state-bank-of-pakistan-unveils-rs200-billion-exports-stimulus


“Rs100 billion at concessionary rate had been allocated for LTTF for all exporting sectors,” Baqir said. The existing rate of refinance under LTTF is 6 percent for the end user. “The maximum limit of borrowing for an industry has been increased from Rs2.5 billion to Rs5 billion.” Governor Baqir, previously, emphasesd that the country needs a shift to an export-based economy to achieve high and sustainable growth.

The economy expanded 3.3 percent in the last fiscal year of 2019, the weakest annual pace in more than nine years, as exports - a key growth driver – had declined amid high cost of doing business and a strong rupee.

The government estimates economic growth to plummet to 2.4 percent, the slowest pace in over a decade, in the year started July. Governor Baqir said the SBP would announce another concessionary policy for small exporters.

“The business community is facing hardship due to changes in advance import payment… Considering their problems, advance payment restriction is eased and the central bank allowed 50 percent advance payment,” he added. “In the latest decision, the SBP allowed 100 percent advance import payment.”

Besides, related to import on open account basis, the SBP governor announced to include commercial importers in this regime. He said that the SBP received several representations from commercial importers to allow open account facility as allowed to other sectors of the economy.

The per project limit for LTFF has been increased by 100 percent to Rs5 billion to counter impact of rupee devaluation. The EFS limit meant for working capital has also been increased by an additional PKR100 billion. Amended foreign exchange regulations to support manufacturing sector.

Almost 100 percent of letter of credit amount can be made in advance for machinery, spare parts and raw materials. Importers other than manufacturers can import on behalf of manufacturers on open account. Pakistan’s exports of goods declined 3.96 percent year-on-year in December 2019 despite cash support and multiple currency depreciation. Exports clocked in at $1.99 billion in December, down 3.96 percent over $2.07 billion in corresponding month last year.

For the six-month period between July and December, exports edged up by 3.17 percent to $11.53 billion, as against $11.18 billion in same half last year. Analysts, however said the numbers are not commensurate with the level of cash support, concessions in utilities and multiple currency depreciations.

Riaz Haq said...

U.S., CHINA, U.K. TOP EXPORT DESTINATIONS FOR #PAKISTAN. #Exports to #US in 1H/FY20 at $2,074.168 million, against $2,018.797 million in 1H/FY19. #China $889.642 million and #UK at $863.347 million in 1H/FY20 https://www.newsweekpakistan.com/u-s-china-u-k-top-export-destinations-for-pakistan/

DATA RELEASED BY CENTRAL BANK SHOWS MASSIVE DROP IN EXPORTS TO INDIA DUE TO FROSTY RELATIONS
The U.S. was the top export destination for Pakistani goods in the first half of the current fiscal year (FY2019-20), while neighboring India witnessed a massive plunge, according to data released by the State Bank of Pakistan.

The central bank’s monthly report on export receipts revealed that total exports to the U.S. during July-December 2019 stood at $2,074.168 million, against $2,018.797 million in July-December 2018, showing a mild increase of 2.74 percent. Similarly, Pakistan exported $936.858 million to China in FY19-20, compared to $889.642 million in FY18-19, an increase of 5.3 percent.

Coming in third, the U.K. received Pakistani exported products valued at $863.347 million during the first half of the current fiscal year, showing a decrease of 3.54 percent from last fiscal’s $895.074 million.

The data issued by the State Bank also revealed that the Pakistani exports to the United Arab Emirates hit $827.731 million in FY19-20, against $638.221 million in FY18-19, a substantial increase of 29.69 percent. Exports to Germany, meanwhile, were recorded at $670.833 million in the current fiscal, showing an increase of 3.64 percent against the $647.285 million recorded last year.

Additionally, the data shows, exports to Afghanistan reached $543.159 million, showing little change from the $534.654 million they stood at last year. Similarly, exports to Spain hit $445.086 million this year against $448.162 million in FY18-19.

Other major trade partners that showed little change in exports between last fiscal and this year were: Italy, which hit $386.969 million in FY19-20 against $379.409 million last year; Bangladesh at $369.313 million this year against $378.193 million in FY18-19; Belgium at $266.187 million (FY19-20) against $301.740 million (FY18-19); France at $222.013 million (FY19-20) against $228.707 million (FY18-19); Singapore at $117.594 million (FY19-20) compared to $130.160 million last year; Canada at $143.424 million against $148.368 million; and Saudi Arabia at $243.213 million against $151.389 million.

Pakistan witnessed a dramatic decrease in exports to neighboring India in the current fiscal, hitting $16.878 million against the $213.655 million that was earned last year. This is a massive drop of 92.1 percent. The reduction in exports is largely linked to ties worsening between the two nations in recent years, especially in light of New Delhi unilaterally scrapping the special autonomy for Jammu and Kashmir that had been enshrined in the country’s constitution.

Riaz Haq said...

#Pakistan’s #trade deficit down 27% to $15.7billion in first 8 months of FY 2019-20. In #February, #export jumped 13.6% to $2.13 billion, giving a reason for celebration.Total exports up 3.6% to $15.6 billion in Jul-Feb of current FY. #economy #PTI https://tribune.com.pk/story/2168222/2-pakistans-trade-deficit-contracts-27-15-7b/

Pakistan booked a trade deficit of $15.7 billion in first eight months of current fiscal year, down 27% due to suppression of imports, amid rekindled hopes for the revival of exports that bounced back after contracting for three months in a row.

In February, export receipts showed an increase of 13.6% and amounted to $2.13 billion, giving a reason for celebration to members of the government’s economic team, who immediately started sending congratulatory tweets.

Export receipts in February hit the highest level in nine months. Last time in May 2019, the exports had risen to $2.1 billion, according to Pakistan Bureau of Statistics (PBS) figures.
Since then, exports have fluctuated between $1.7 billion and $2 billion, which does not reflect the true potential. Historically, exports have stayed around $2 billion a month. The Ministry of Commerce took to Twitter to announce the trade statistics, which otherwise is the responsibility of the PBS.

Total exports increased 3.6% to $15.6 billion in Jul-Feb of the current fiscal year, announced Commerce Secretary Ahmad Nawaz Sukhera through his Twitter handle.

In absolute terms, Pakistan managed to increase exports by $547 million from July through February.

The cumulative increase in exports was appreciable when compared with the export trend in Pakistan’s competing countries and the global economic situation, stated the commerce secretary.

Imports during the eight-month period dropped 14.4% to $31.3 billion, according to the commerce secretary. In absolute terms, imports contracted $5.3 billion, which provided some relief for the government.

After the first review, the International Monetary Fund (IMF) projected that the trade deficit of Pakistan in the current fiscal year would narrow down to $24.3 billion, also slightly lowering its projections due to weakening exports.

The IMF had earlier predicted that exports would grow to $26.8 billion but in its latest report the estimate was revised down by nearly a billion dollars to $25.7 billion.

Overall, the trade deficit, which stood at $21.5 billion in the first eight months of previous fiscal year, shrank to $15.7 billion in the same period of current fiscal year. In absolute terms, there was a reduction of $5.8 billion in the trade deficit and 91% of the improvement came from the import side.

Eight-month exports were equal to 58.2% of the annual target of $26.8 billion while imports were equal to 60% of the target of $51.7 billion.

In the ongoing financial year, due to global slowdown and other factors such as Brexit, exports of India declined 1.9% and Bangladesh’s exports fell 5.2% while Pakistan’s exports increased 3.6%, said Aliya Hamza Malik, Parliamentary Secretary for Commerce and Industry.

She said the textile sector was running on full production capacity and food exports were also rising significantly.

Successive governments have been providing subsidised loans, gas and electricity to the exporters but they have always asked for more. The Pakistan Tehreek-e-Insaf (PTI) government has once again reached an understanding with the exporters, promising them to provide cheaper electricity and gas.

Over a year ago, the PTI government had also given huge benefits to the exporters and in return they promised to revive 200 closed units. But no one talked about the revival of units after winning concessions from the government.

On a yearly basis, exports increased 13.6% to $2.13 billion over the same month of last year, a net increase of $256 million.

Riaz Haq said...

#China #Pakistan FTA-2: #Pakistan textile #exports to rise to $25 billion in new regional hub. As #coronavirus outbreak puts the globalisation into reverse and challenges existing global value chains, new supply chains continue to form behind the scenes.


https://www.outlookindia.com/website/story/news-analysis-china-pakistan-fta-2-a-new-regional-hub-for-cotton-garments-in-the-offing/348942

With the second phase of the CPFTA, there is a possibility of relocating the production of international brands, many of which have facilities in China that import cotton fabric from Pakistan as raw material—to Pakistan itself. The inflow of Chinese investment in machinery and technology in order to set up production bases in Pakistan will drive innovation and economies of scale, thereby making Pakistan regionally competitive in cotton-based garments. In addition, Pakistan will garner a favourable position for exporting to other markets that have so far been trading primarily with China as well as potentially to other Regional Comprehensive Economic Partnership (RCEP) members.

-----------------

In January 2020, Pakistan and China entered into the second phase of China-Pakistan Free Trade Agreement (CPFTA2), under which China has eliminated tariffs on 313 priority tariff lines of Pakistan’s export interest. In return, Pakistan has offered China market access to raw materials, intermediate goods, and machinery.

Of the 313 high-priority products that Pakistan can now export without duty payments to China, 130 are from textiles and clothing sector. Reduced tariffs, an expected surge in Chinese investment into Pakistan and the potential shift of production base from China to Pakistan, may change the regional dynamics of textiles trade. The numbers explain how.

Under the CPFTA2, many Pakistani textile products will now enjoy duty-free access to China, which has extended similar tariff reductions to other trading partners - Bangladesh, Thailand and Vietnam among others - under the ASEAN-China FTA. Tariffs on readymade cotton garments (HS codes 61, 62 and 63), have been massively reduced. For example, men’s ensembles of cotton (HS code – 62032200), Pakistan’s top world export, was traded with China at 17.5 per cent (MFN rate) which reduced to 12 per cent under Phase-I of FTA and has dropped to 0 per cent in the Phase-II of FTA. This places Pakistan at a more than equal footing with Bangladesh, and ahead of India which faces a tariff rate of 8 per cent on the export of this product to China.

---

Pakistan is likely to be preferred over Bangladesh given the former country’s comparative advantage in producing cotton fabric (nearly 25 per cent of Pakistan’s total cotton exports in 2018 were to China); ease of doing business (Pakistan ranks at 108 compared to Bangladesh at 168 and India at 63 under the World Bank’s Doing Business 2020 study); ease of trading across borders (Pakistan ranks at 111 compared to Bangladesh at 176 and India at 68) and ease of starting a new business (Pakistan ranks at 72 compared to Bangladesh at 131 and India at 136).

Pakistan’s government targets raising the country’s textile and clothing exports from USD 13.5 billion in 2018 to USD 25 billion by 2025. As China has the world’s largest textile industry—in terms of both production and export—it is an inevitable trading partner for Pakistan to meet this 2025 target.

For Pakistan, to fully reap the benefits of the CPFTA2, access to cheaper imported inputs will be crucial to its export competitiveness for cotton-based readymade garments.

While Pakistan grows cotton domestically, 37 percent of its cotton imports came from India. After the trade ban between India and Pakistan in 2019, Pakistan began sourcing cotton/yarn from the US and Vietnam, thereby witnessing a rise in cotton prices, amid low production and higher import tariffs (11% from the US and Vietnam, compared to 5 per cent from India for cotton yarn (HS Code 520524), one of Pakistan’s major imports from India).

Riaz Haq said...

#Pakistan #COVID19 #Lockdown Idles Factories. “It’s a pity as February 2020 garment exports increased by over 20%, an all-time record..... March to June it...could be slashed by at least 60-70%..” #textile #garments #exports #economy https://sourcingjournal.com/topics/sourcing/pakistan-coronavirus-lockdown-garment-factories-closed-synergies-worldwide-levis-202444/ via @SourcingJournal

There’s a new kind of supply chain disruption in 2020—and it’s the kind that could leave destitution in its wake.

In the past week, key sourcing countries, including India and Bangladesh have put country-wide lockdowns or stay-at-home orders in place, and Pakistan has done the same.

Monday marked the beginning of a two-week lockdown that has all factories in the country, as well as other business producing or selling non-essentials, closed completely. Only medical, food and pharmaceutical facilities are still in operation, in addition to some gas stations and banks that remain open.

While the World Health Organization (WHO) has Pakistan’s confirmed cases at 991, with 104 new COVID-19 virus infections reported in the past 24 hours, local sources say the number of infected persons is closer to 1,100. And the country is trying to stanch the spread.

“All over Pakistan it’s a complete lockdown in all the provinces everywhere,” Hafiz Mustanser Ahmed, managing director of Lahore-based factory U.S. Apparel & Textiles, told Sourcing Journal Thursday. “The transportation when it comes to taking the employees to the factories or the public transportation, it’s all 100 percent closed. All the factories are closed.”

For now, moving goods back and forth between the ports and Lahore, Pakistan’s second-biggest textile manufacturing hub after Karachi, is still allowed, but there simply aren’t many goods to move, said Ahmed, whose factory produces denim bottoms for Levi’s, Target, H&M, J.Crew, Primark and Costco, to name a few.


--------------

“It will happen. Nobody can stop this,” Ahmed said. “In this part of the world, where Pakistan is operating, where Bangladesh is operating, the governments are not rich at all so they don’t have that much sufficient funds available with them. They won’t be able to pay for the salaries for them… For the workers who are on the piece rate, it’s going to happen because there are no pieces to produce, and the workers on the daily rate, it’s going to happen, and the workers who are on the salaries, it’s going to happen there as well.”

In the coming days, the government is expected to announce details of support package for workers, which could include food rations and subsidies for utilities. Factories, however, may not see funds to help facilitate their operations, though Schlossman said some duty refunds are being paid back to factories to partially ease the financial impact.

For now, retailers who are still willing to accept goods they had ordered, the government in Pakistan is making concessions to certain factories to deliver them.

“If you have a product that is almost ready for dispatch and if my customer is accepting the product, [the government] is allowing us to partially operate the factory to deliver those goods,” Ahmed said, noting, however, that the allowance is granted by application and under strict rules for the temporary operating period. Workers cannot stand too close to one another, buses shuttling them from home to work can only transport a limited number of passengers, the factory must have thermometers on hand to take workers’ temperatures, and immediately on dispatching the goods, the closure goes back into effect.

Riaz Haq said...

Coronavirus challenge and Pakistan’s exports

https://tribune.com.pk/story/2171994/2-coronavirus-challenge-pakistans-exports/


According to statistics released by Pakistan Bureau of Statistics, exports increased 13.82% year-on-year in February 2020. Amid a global slowdown in trade, exports from Pakistan have increased by 3.65% in the current fiscal year. Imports have continued to decline, registering a decrease in value of 14.06%.

The trade deficit in the first eight months of FY20 was 26.52% lower than the same period of FY19.

Interestingly, although exports increased sharply in February 2020 in terms of year-on-year and month-on-month growth, the decline in imports became much more subdued. Imports decreased 1.71% only over the same period of previous fiscal year.

Therefore, as the value of imports stabilises after reaching its apparent trough, the linkage between exports and imports must be maximised in order to ensure that Pakistan optimises its participation in international trade activities.

In essence, exports from Pakistan have shown a reversing trend as a general declining trend has now turned positive. Exports had declined from $25.1 billion in 2013 to $23.6 billion in 2018.

On the other hand, exports to the EU increased from $6.3 billion in 2013 to $8 billion in 2018.

This suggests that the unilateral trade incentives provided by the EU to Pakistan in the form of GSP Plus status did help boost export sales to the region and limit what otherwise could have been a complete decay of the export sector between 2013 and 2018. The trade linkages established between Pakistani exporters and their clients can help increase exports and tap newer markets as supply chains are threatened due to the spread of the coronavirus.

Pakistan must continue with its policies to boost total exports. Although the growth in global trade is likely to slow down this year, Pakistan must consider developing its export sector to take advantage of opportunities as a result of challenges reported by the large manufacturing powerhouses.

Riaz Haq said...

#Pakistan, #China universities sign agreement on #textile cooperation between National Textile University (NTU) Pakistan and #Shanghai University of Engineering Science (SUES) of China| Associated Press Of Pakistan

An agreement on textile cooperation was jointly signed by National Textile University (NTU), Pakistan and Shanghai University of Engineering Science (SUES), China last week.
According to SUES, NTU is the very first Pakistani partner for SUES, and the move is of great significance when it comes to the educational exchanges and cooperation between universities of South Asian countries involved into China’s Belt and Road Initiative (BRI), China Economic Net reported on Friday.
Xia Jianguo, the President of SUES, noted that the signing ceremony was SUES’s first move of international cooperation ever since the COVID-19 outbreak. The iron-clad friendship between China and Pakistan has laid a solid foundation for the cooperation and exchanges between both universities.
President Xia spoke highly of the competences and characteristics of research and talent training in NTU regarding textile. Over the years, SUES has conducted a wide range of international exchanges and cooperation with overseas universities and enterprises, he mentioned, adding that he firmly believed the cooperation would provide both with more opportunities for common development.
Prof Dr. Tanveer Hussain, the Rector of NTU, expressed his heartfelt thanks to SUES for the arrangement and preparation for the video signing ceremony.
He said NTU has been the premier institute of textile education in Pakistan, meeting the technical and managerial human resource needs of almost the entire textile industry of Pakistan ever since its inception.
What is more, he expressed full confidence and keen expectation for a long-term cooperation between the two universities in multiple levels and fields.
The signing ceremony was held in video form. Directors from SUES’s Office of International Cooperation and Exchange and the Institute of Textile and Garment were present.

Riaz Haq said...

#Pakistan Denim Manufacturers Are Cautiously Optimistic About Recovery. Pak denim industry experiencing “a surge of orders,” due to “pent-up demand for garments, particularly from Europe.” #exports #garment #jeans #denim https://sourcingjournal.com/denim/denim-mills/lenzing-pakistan-manufacturers-artistic-garment-soorty-naveena-219550/ via @SourcingJournal

Most industries in every country have been adversely effected by the coronavirus. In Pakistan, however, the textile industry is among the hardest-hit sectors.

“Pakistan textile industry is a key exporter for the country accounting for more than half of all overseas shipments,” said Tricia Carey, Lenzing’s director of global business development-denim.

In a recent Carved in Blue webinar, Carey moderated a conversation with representatives from denim fabric and garment manufacturers in Pakistan, checking in on the status of their business and how they plan to navigate the challenges that lie ahead.

With more than 200,000 confirmed cases of the coronavirus, the country remains on a “smart lockdown” that requires shopping malls and restaurants to be closed, but essential businesses and export industries have received permission to operate under strict guidelines, explained Hasan Javed, director of Artistic Garment Industries (AGI).

AGI resumed business slowly at the end of April. Initially, Javed said, the main focus was to implement training and awareness sessions held in small groups at the facility about how to conduct work safely under the new guidelines.

“It took some time for everyone to get used to the social distancing rules and the ‘new normal’ as they say,” he said. “Now in the last few months we have gradually ramped up our production, and at the moment we’re running close to 80 percent [capacity].”

The goal for July, Javed added, is to run at close to full strength, both on the fabric and garment side of AGI’s business. “We’re fairly optimistic about the next couple of months,” he said.

Business in Pakistan has improved since April when the country was in a total shutdown, said Rashid Iqbal, Naveena Denim Lahore (NDL) executive director. NDL’s production is running at 40-50 percent capacity and Iqbal expects those numbers to hold steady for July.

Momentum is also building for Azgard Nine Ltd. Ahmed Humayun Shaikh, CEO of Azgard Nine Ltd., said the company is experiencing “a surge of orders,” which he attributes to “pent-up demand for garments, particularly from Europe.”

But he warned that this flurry of orders is fleeting. “I don’t think we can expect the pandemic to actually increase demand so it will settle down at some reduced rate once people get what they need,” Shaikh said.

When markets do finally resume at a normal level, executives anticipate that Pakistan will regain its share and perhaps be in better standing in the global denim market.

“The reason being, when it comes to the supply chain Pakistan is the fifth-largest cotton growing country in the world with a fabric capacity of 500 million meters a year,” Iqbal said. “We’re very ideally placed.”

To fully realize this this opportunity, Iqbal said agility is going to be the “name of the game.”

However, in order to be agile, companies may want to eliminate the number of suppliers essential to production.

As brands recover, Crescent Bahuman Ltd. representative Zaki Saleemi said companies will want to simplify their suppliers and inventories, which may bode well for Pakistan’s crop of vertical denim manufactures.

“We are a lot more vertical than a lot of other countries,” he said. “Vertical is key.”

Shaikh agreed, adding that customers want goods quickly because “they’re nervous and they want to fill the shelves.”

Riaz Haq said...

More than 70% of Jewish men and half of the Arab men whose DNA was studied inherited their Y chromosomes from the same paternal ancestors who lived in the ...

https://www.science.org/content/article/jews-and-arabs-share-recent-ancestry


COLD SPRING HARBOR, NEW YORK--As fighting continues in the Middle East, a new genetic study shows that many Arabs and Jews are closely related. More than 70% of Jewish men and half of the Arab men whose DNA was studied inherited their Y chromosomes from the same paternal ancestors who lived in the region within the last few thousand years.

The results match historical accounts that some Moslem Arabs are descended from Christians and Jews who lived in the southern Levant, a region that includes Israel and the Sinai. They were descendants of a core population that lived in the area since prehistoric times. And in a recent study of 1371 men from around the world, geneticist Michael Hammer of the University of Arizona in Tucson found that the Y chromosome in Middle Eastern Arabs was almost indistinguishable from that of Jews.

Intrigued by the genetic similarities between the two populations, geneticist Ariella Oppenheim of Hebrew University in Jerusalem, who collaborated on the earlier study, focused on Arab and Jewish men. Her team examined the Y chromosomes of 119 Ashkenazi and Sephardic Jews and 143 Israeli and Palestinian Arabs. Many of the Jewish subjects were descended from ancestors who presumably originated in the Levant but dispersed throughout the world before returning to Israel in the past few generations; most of the Arab subjects could trace their ancestry to men who had lived in the region for centuries or longer. The Y chromosomes of many of the men had key segments of DNA that were so similar that they clustered into just three of many groups known as haplogroups. Other short segments of DNA called microsatellites were similar enough to reveal that the men must have had common ancestors within the past several thousand years. The study, reported here at a Human Origins and Disease conference, will appear in an upcoming issue of Human Genetics.

Hammer praises the new study for "focusing in detail on the Jewish and Palestinian populations." Oppenheim's team found, for example, that Jews have mixed more with European populations, which makes sense because some of them lived in Europe during the last millennium.

Riaz Haq said...

The Invention of the Land of Israel by (Jewish History Professor) Shlomo Sand (Professor Emeritus at Tel Aviv University) – review | History books | The Guardian

https://www.theguardian.com/books/2013/apr/18/invention-land-israel-shlomo-sand

The "Land of Israel" is barely mentioned in the Old Testament: the more common expression is the Land of Canaan. When it is mentioned, it does not include Jerusalem, Hebron, or Bethlehem. Biblical "Israel" is only northern Israel (Samaria) and there never was a united kingdom including both ancient Judea and Samaria.

Even had such a kingdom ever existed and been promised by God to the Jews, it is hardly a clinching argument for claiming statehood after more than 2,000 years. It is an irony of history that so many past Zionists, most of whom were secular Jews, often socialist, used religious arguments to buttress their case. Besides, the biblical account makes it quite clear (insofar as such accounts are ever clear) that the Jews, led by Moses and then by Joshua, were colonisers themselves and were commanded by God to exterminate "anything that breathes". "Completely destroy them – the Hittites, Amorites, Canaanites, Perizzites, Hivites and Jebusites – as the Lord your God has commanded you." Imagine if the Amorites came back and claimed their ancient land. If they did, this is what Deuteronomy 20 has to say: "Put to the sword all the men ... As for the women, the children, the livestock and everything else ... you may take these as plunder for yourselves." Today, such an injunction would take you straight to the international criminal court.

The uncertainty as to what exactly constitutes the "Land of Israel" endures to this day. There is an internationally recognised state of Israel with clearly defined boundaries (the Green Line of 1967, itself the result of the enlargement following the 1948 war) and then there is the "Land of Israel" whose boundaries depend on who is talking: for some, it includes the whole of the West Bank, for others it extends to Jordan. It could be worse: God promised Abraham and his descendants "this land, from the river of Egypt unto the Euphrates", which would include also bits of Turkey, Syria and Iraq.

In traditional Judaism there is no injunction to "return" to the "land of Israel". The ritual "next year in Jerusalem" that is part of the Passover Seder prayer was never a call to action, or to reconstitute a state.

By the 19th century, those who wanted Jews to "return" to the Holy Land were more likely to be Christian Zionists than Jews. Lord Shaftesbury, a compassionate Tory who contributed to improving the conditions of lunatics in asylums and children in factories (The Ten Hours Act, 1833), agitated endlessly for promoting a Jewish presence in Palestine. Sand describes him as an Anglican Theodor Herzl before Herzl; and with reason, since Shaftesbury appears to have even coined the famous line: "A country without a nation for a nation without a country." He hoped, of course, the Jews would also convert to Christianity. Lord Palmerston, on the Liberal side, warmed to the idea, not because he cared in the slightest about Jews (or Christians), but because he thought that British Jews colonising a part of the Ottoman Empire would increase British influence.