|Pakistan ICT Exports. Source: PBS|
|Double Digit CAGR in Pakistan IT-ITeS Exports in 2010-2018|
The data released by the PBS showed that Pakistan earned a total amount of $887.47 million during the first eight months (July-February) of the fiscal year 2020, up from $702.99 million during the corresponding period of the fiscal year 2018-19. Computer services exports grew 31.57% to $677.23 million from July 2019 to February 2020 as compared to $514.74 million.
It is generally believed that Pakistan's PBS and central bank underestimate the country's technology exports. Some have argued that the actual IT exports were closer to $5 billion in fiscal 2018. Some of the differences can be attributed to the fact that the State Bank IT exports data does not include various non-IT sectors such as financial services, automobiles, and health care.
Pakistan has a thriving community of freelancers. Its digital gig economy growth is the fastest in Asia and fourth fastest in the world, according to digital payments platform Payoneer.
|Gig Economy Growth in Q2/2019. Source: Payoneer|
The rapid gig economy expansion of 47% in Pakistan was fueled by several factors including the country's very young population 70% of which is under 30 years of age coupled with improvements in science and technical education and expansion of high-speed broadband access. Pakistani freelancers under the age of 35 generated 77% of the revenue in second quarter of 2019.
|Growth in Freelance Work. Source: Payoneer|
Mohsin Muzaffar, head of business development at Payoneer in Pakistan, has said as follows: "Government investment in enhancing digital skills has helped create a skilled freelancer workforce while blanket 4G coverage across Pakistan has given freelancers unprecedented access to
|Global Freelance Revenue By Age. Source: Payoneer.|
In Q2/2019, Asia cemented its status as a freelancer hub. Pakistan, Bangladesh and India, Philippines made it to the top 10 list, collectively recording 238% increase from Q2/2018.
|Online Labor Index. Source: Oxford Internet Institute|
As of 2017, Pakistan freelancers ranked fourth in the world and accounted for 8.5% of the global online workforce, according to Online Labor Index compiled by Oxford Internet Institute. India led with 24% share followed by Bangladesh 16%, US 12%, Pakistan 8.5% and Philippines 6.5%.
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India's service exports are $205 billion vs Pakistan's & Bangladesh's just over $5 billion each
India's service exports are $205 billion vs Pakistan's & Bangladesh's just over $5 billion each
Neal: "India's service exports are $205 billion vs Pakistan's & Bangladesh's just over $5 billion each"
Bulk of India's service exports are salaries of Indian H1B employees in US.
These could disappear if Trump banned H1B visas for Indians.
#Covid #Lockdown: #Pakistan’s #FDI soars 32% in April 2020 to $133.2 million, up from $100.8 million last year. #Oilandgas exploration sector led with $39.1m followed by #financialservices $30.8m, #telecom $20 million, #power $18.4 & #chemicals $14.9m. https://tribune.com.pk/story/2224412/1-despite-pandemic-pakistans-fdi-soars-32-april/
Multinational companies have continued to inject fresh investment into ongoing projects in different sectors of Pakistan’s economy like telecommunication, power, and chemical despite the global economic crisis sparked by the coronavirus pandemic.
Foreign direct investment (FDI) rose 32% to $133.2 million in April 2020 compared to $100.8 million in the same month of the previous year, the State Bank of Pakistan (SBP) reported on Monday.
Although the volume of investment stood at an eight-month low in April, “what is encouraging is that investors have continued to pour fresh capital into ongoing projects in Pakistan despite the global economic recession under Covid-19,” Overseas Investors Chamber of Commerce and Industry (OICCI) Secretary-General M Abdul Aleem remarked while talking to The Express Tribune.
Moreover, the nature of investment stands diversified. Companies from multiple countries have poured new investment, unlike Chinese firms which have been the only major investors in Pakistan in recent times.
FDI should improve in the months to come as countries are slowly lifting lockdowns in a bid to revive economic activities around the globe. Accelerating the activities, however, may remain a challenge in the absence of a coronavirus vaccine and medicines.
Cumulatively, in the first 10 months (July-April) of the current fiscal year, foreign firms injected FDI worth $2.28 billion, which was more than double the investment of around $1 billion in the same period of the previous year, according to the central bank.
Before the outbreak of Covid-19 late in February in Pakistan, foreign investors seemed poised to initiate new projects in the country. They, however, have put the projects on hold in response to the virus.
“In the recent past, some foreign companies made a new investment in food, energy, and telecom sectors in Pakistan,” Aleem said.
Hong Kong emerged as the largest investor with net FDI of $28.4 million in April 2020, followed by the Netherlands that injected $24.5 million, the US $22.5 million, Malta $18.5 million, and the UK $10.5 million.
Cumulatively, in the first 10 months of FY20, China was the biggest investor, with FDI worth $877.8 million compared to $45.5 million in the same period of last year.
Norway stood second with $288.6 million, followed by Malta that injected $185.2 million in July-April FY20.
However, in the same period of the previous year, the UAE was the largest investor with a net investment of $159.7 million, followed by Hong Kong at $147 million, while Japan invested $95.8 million.
The oil and gas exploration sector attracted the largest foreign investment of $39.1 million in April 2020, followed by the financial sector that got an investment of $30.8 million, the communication sector $20 million, power sector $18.4 million, and chemical sector $14.9 million.
Cumulatively, in 10 months, power, communication, and oil and gas exploration sectors were the top three sectors that attracted significant investment.
Investment in stock market
Although foreign investors continued to remain net sellers at the Pakistan Stock Exchange (PSX) in the first 10 months of FY20, they slowed down selling compared to the same period of last year.
They offloaded stocks worth $182.7 million in July-April FY20 compared to $408.1 million in the same period of last year, according to the central bank.
#Pakistan #domestic #savings rate up 1.1% of #GDP to 13.9% in outgoing fiscal year 2019-20. #Investment-to-GDP ratio dips to 15.4% and #economy contracts by 0.38% amid #coronavirus #lockdown, the first GDP contraction in 68 years. https://tribune.com.pk/story/2225282/2-pakistans-investment-ratio-dips-15-4/
The savings-to-GDP ratio target of 12.8% was surpassed as the ratio stood at 13.9%. The ratio was better than the previous fiscal year due to the low current account deficit projected for the current fiscal year. The gap between total investments and savings is financed through foreign savings.
The results are based on estimates of the NAC that has approved a provisional economic growth rate of negative 0.38% for the fiscal year 2019-20, ending on June 30.
Public investment showed slight improvement but it was because of using budgetary figures of the Public Sector Development Programme (PSDP) instead of actually spending that was expected to remain significantly lower than the budgeted sum.
Private investment went down further in the second year of the PTI government, suggesting that private investors were not showing their trust in the government.
Failure to achieve these crucial targets has limited the government’s ability to spend on deteriorating infrastructure and social sectors from its own resources.
This has increased the government’s reliance on external and domestic sources to meet its requirements, resulting in a mushroom growth in public debt in the past five years. The public debt-to-GDP ratio is projected to spike to 90% in the current fiscal year, according to the IMF.
The total size of the national economy is now estimated at $265 billion for this fiscal year, down from $279 billion a year ago. The size of the national economy in US dollar terms has shrunk 5%.
The investment-to-GDP ratio stood at 15.4% against the target of 15.8%, said sources. The ratio was worse than last year’s revised rate of 15.6%, they added.
The government’s inability to increase investment as a percentage of the total size of the national economy remains its biggest failure on the economic front, suggesting that the PTI government has not yet begun its journey towards addressing structural imbalances.
The private investment that had been recorded at 10.3% of GDP last year has also slipped to 10%, according to the official working. The government had set the target to increase private investment to 10.1%.
Public investment stood at 3.8% of GDP, up from 3.7%, due to using budgetary figures of development spending instead of actual expenses. Once actual numbers will be used, the public investment-to-GDP ratio is expected to fall to 3.3%.
Fixed investment remained at 13.8% of GDP in the fiscal year 2019-20 against the target of 14.2%. It was slightly down compared with last year’s level.
These figures of investment and savings would be officially published in the Economic Survey of Pakistan 2019-20, likely to be unveiled on June 11 by Finance Adviser Dr Abdul Hafeez Shaikh.
Pakistan has one of the lowest investment and saving rates in the region and the world, obstructing progress towards a path of sustainable and inclusive economic growth.
Provisional estimates suggest the per capita income shrank 6.2% to $1,366 in this fiscal year. It was lower by $89 when compared with the downward-revised per capita income of $1,455 for the last fiscal year.
The per capita income is worked out by dividing the total national income with the number of people. At the end of the PML-N tenure, the per capita income had been recorded at $1,652 and there was a reduction of 17.3% in two years due to currency devaluation.
In rupee terms, the per capita income stood at over Rs214,000. In dollar terms, the per capita income was the lowest in seven years.
Pakistan's economy contracts for first time in 68 years
For the first time in 68 years, Pakistan’s economy has marginally contracted by 0.38% in the outgoing fiscal year due to adverse impacts of novel coronavirus coupled with economic stabilisation policies that had hit the industrial sector much before the deadly pandemic.
Except for the agriculture sector that grew 2.7%, the industrial and services sectors witnessed negative growth rates, pulling the overall growth rate down to negative 0.38% in the fiscal year 2019-20, ending on June 30. The per capita income in dollar terms has also dipped to 1,366 – a contraction of 6.1%, but it increased in rupee terms to Rs214,539.
The National Accounts Committee approved the provisional gross domestic product (GDP) growth rate for the outgoing fiscal year besides a downward revision of the economic growth rate for the first year of the PTI government. For fiscal 2018-19, the NAC cut the provisional growth rate of 3.3% to 1.9%, which is the lowest in 11 years.
The SBP’s quest for hot foreign money has adversely hit the industries even much before the Covid-19 started impacting the economy. In the end, neither the hot foreign money stayed in Pakistan nor the country achieved sustainable economic growth. There is a need to investigate the sources of hot foreign money inflows in Pakistan that created an artificial sense of economic stability.
Former finance minister Dr Hafiz Pasha had disputed the PTI government’s claim of a 3.3% growth rate and instead claimed a year ago that the growth in the first year of the PTI government was 1.9%. His assessment has become true and finally admitted by the government.
The Planning secretary chaired the National Accounts Committee meeting, which has representation of all the federal and provincial departments concerned, including the State Bank of Pakistan (SBP).
It is for the first time since 1951-52 that Pakistan’s economy contracted, although the pace of contraction was far lower than -1.5% growth rate predicted by the International Monetary Fund (IMF), the World Bank, the finance ministry and the SBP.
The GDP — the monetary value of all goods and services produced in a year — is projected to have a negative growth rate of 0.38% during the fiscal year 2019-20 ending on June 30, according to the NAC. These estimates are based on six to nine months provisional data projected for the whole year and adjusted for the impact of Covid-19 followed by the lockdown, it added.
The economic contraction coupled with currency devaluation has caused the size of the economy — in the US dollar terms — to slip to around $265.6 billion from $280 billion a year ago. At the end of the Pakistan Muslim League-Nawaz (PML-N) government’s term, the size of the GDP in dollar terms was $313 billion.
The GDP at the current market prices stands at Rs41.7 trillion for 2019-20. This shows a growth of 9.9% over Rs.37.9 trillion for 2018-19 due to double-digit inflation. The per capita income for 2019-20 has been calculated as Rs214,539 for 2019-20, showing a growth of 8.3% over Rs198,028 during 2018-19. However, in dollar terms, the per capita income has shrunk by 6.1% to $1,366.
The NAC also confirmed the 5.53% economic growth rate for the last year (2017-18) of the PML-N government. The growth came largely from the services sector, which was less job intensive.
Planning Secretary Zafar Hasan chaired the 102nd meeting of the NAC that endorsed the provisional economic growth rate figure on the basis of data received from the federal and provincial governments.
#US urges #China to waive #Pakistan’s #debt. “At a time of crisis like Covid-19, it is really incumbent on China to take steps to alleviate the burden that this predatory, unsustainable and unfair lending is going to cause to Pakistan” #CPEC #PMLN #COVID https://tribune.com.pk/story/2225775/1-us-urges-china-waive-off-pakistans-debt-amid-covid-19-crisis/
The United States on Wednesday urged China either to wave off or renegotiate what it called “unsustainable and unfair” debt of Pakistan as it once again raised serious questions about the lack of transparency in the multibillion-dollar China-Pakistan Economic Corridor (CPEC).
“At a time of crisis like Covid-19, it is really incumbent on China to take steps to alleviate the burden that this predatory, unsustainable and unfair lending is going to cause to Pakistan,” said Alice Wells, the outgoing US Assistant Secretary of State for South and Central Asia.
“We hope China will join in either waving off debt or renegotiating these loans and creating a fair and transparent deal for Pakistani people,” Ambassador Wells said while addressing a farewell news briefing through a video link attended by journalists from South and Central Asia.
This was not the first time the US and Wells in particular publically questioned the viability of CPEC. Wells in the past also expressed similar views, declaring CPEC detrimental to Pakistan’s economy.
China always dismissed the US claims and instead challenged Washington to match its economic assistance to Pakistan.
Ambassador Wells, who is retiring this week, said the US supports CPEC and other development projects as long as they meet international standards, uphold environmental and labour standards.
“I enumerated my concerns and the United States government’s concerns over CPEC, over the lack of transparency involved in the project, over the unfair rates of profits that are guaranteed to Chinese state organisations to the distortions it caused in the Pakistani economy including by the massive imbalance in the trade Pakistan now has with China,” she argued.
Pakistan has been seeking debt relief from G20 countries to offset the negative fallout of coronavirus on its economy.
The top US diplomat also spoke about President Trump’s South Asia strategy, which according to Wells, brought fundamental change in approach towards Pakistan.
She said that Trump’s strategy had made it clear that Pakistan had to take decisive action against terrorist and militant groups that supported conflict in Afghanistan.
The suspension of security assistance by President Trump in January 2018 was a demonstration of that resolve to hold Pakistan accountable for the alleged presence of terrorist groups on its soil, she added.
According to Wells, since then Pakistan had taken “constructive steps” to advance Afghan peace process. She said Ambassador Zalmay Khalilzad had developed “solid cooperation” with Pakistan civil and military leadership.
The US senior diplomat also praised Pakistan’s steps to eradicate threat posed by terrorist groups to regional stability.
“Pakistan is also taking initial steps towards curtailing other terrorist groups that threatened the region such as arresting and prosecuting Laskhar-e-Tayaba leader Hafza Saeed and beginning to dismantle terrorist financing structures.
“And as Pakistan’s commitment to the regional peace grown, we see initial growth in our relationship with Pakistan as well particularly in trade,” she further said.
Overseas #remittances to #Pakistan increase 6% to $18.8 billion in 10 months (July-April), up by $980.6 million from $17.8 billion in the corresponding period a year earlier.
In April, remittances amounted to $1.79 billion, recording a decrease of $104.4 million, or 5.5 percent, over remittance received during the previous month of March. There was a 1.1 percent increase in April from $1.77 billion in the corresponding month a year earlier.
The World Bank expected remittances to Pakistan to fall in the current fiscal year compared with $22.5 billion in the preceding fiscal year due to global economic crisis caused by the COVID-19 pandemic and oil fall.
The COVID-19 might cause a significant drop in remittances since all the four major countries – Saudi Arabia, UAE, US and UK – from where 80 percent of the total remittances are received reeled from the coronavirus lockdown. Alone Saudi Arabia and UAE account for 60 to 70 percent of remittances inflows in Pakistan. Oil producing economies are facing decade-worst oil price crash.
In April, larger amounts of workers’ remittances ($451.4 million) were received from Saudi Arabia, followed by USA ($401.9 million), UAE ($353.8 million) and UK ($226.6 million), recording an increase of 14 percent for USA, whereas a decrease of 0.2 percent, 15.8 percent and 8.8 percent for Saudi Arabia, UAE and UK respectively as compared to March, the SBP said.
Pakistani workers living in Saudi Arabia sent home $4.3 billion in July-April FY2020, compared with $4.1 billion in the corresponding period of FY2019. Remittance from the USA rose 21.3 percent to $3.282 billion in July-April period. Pakistan attracted $2.7 billion from the UK, compared with $2.7 billion last year. Remittances from the European Union countries rose 6 percent to $515.2 million. Remittances from UAE stood at $3.9 billion, compared with $3.7 billion last year. From gulf cooperation council countries, the inflows amounted to $1.7 billion, up 3.6 percent year-over-year.
Workers’ remittances showed a 4 percent year-on-year increase in the monthly average till January.
Remittances grew at a compounded annual rate of nearly nine percent during five years (2012/19), with inflows mainly coming from gulf cooperation council countries – 54 percent of total remittances in 2019 –, followed by the US (16pc), the UK (16pc) and Malaysia (7pc). Remittances have grown even more, in terms of local currency, because the rupee depreciated more than 40 percent over this period.
Goldman Sachs gives #India’s growth forecast a ‘gigantic downgrade’. GS revised its growth forecast and said India's #economy is expected to contract by 5% for the fiscal year that began in April and ends in March 2021. #Modi #Recession2020 #BJP #Hindutva https://www.cnbc.com/2020/05/22/coronavirus-goldman-sachs-on-india-growth-gdp-forecast.html?__source=sharebar|twitter&par=sharebar
Prachi Mishra, chief India economist at the investment bank, said two reasons factored in the forecast revision: the poor set of economic data released in March and April as well as the extended nationwide lockdown that is expected at least until end of May.
The extended period of lockdown in India due to the coronavirus outbreak is set to take a toll on the country’s growth outlook, according to investment bank Goldman Sachs.
The bank revised its growth prediction this week for the full fiscal year in India that began in April and will end in March 2021. Gross domestic product is expected to contract by 5% for the year, worsening from the bank’s earlier prediction of a negative 0.4% growth.
“This is a really gigantic downgrade,” Prachi Mishra, chief India economist at Goldman Sachs, told CNBC’s “Street Signs” on Friday. “A forecast of minus 5% for the year as a whole would be as deep as compared to the deepest recession India has witnessed since 1979.”
India’s first-quarter GDP data is expected next week and the outlook remains bleak among economists.
The South Asian country was already facing an economic slowdown before the virus outbreak pushed the government to impose a nationwide lockdown that began in late March and has subsequently been extended multiple times at least until the end of May. Economic activity grounded to a halt as a result, affecting millions of small businesses as well as large corporations, while millions of people lost their jobs.
India now has over 118,000 cases of infections and more than 3,500 people have died, according to the health ministry.
Amid #COVID19, #Pakistan looks to #China for economic boost. Projects like #diamerbhashadam , #Gwadar airport, #western #motorway being finalized as part of #CPEC, ahead of a visit by President Xi Jinping to #Islamabad. #coronavirus #economy https://www.scmp.com/week-asia/economics/article/3085523/coronavirus-bites-pakistan-looks-china-belt-and-road-economic?utm_source=Twitter&utm_medium=share_widget&utm_campaign=3085523 via @scmpnews
Projects including a dam, airport and motorway are being finalised in the China-Pakistan Economic Corridor, ahead of a visit by President Xi Jinping
Prime Minister Imran Khan is keen to generate jobs for the country’s workers, 25 million of whom have been rendered jobless during the pandemic
After a two-year slowdown in the execution of the China-Pakistan Economic Corridor (CPEC) following the 2018 election of Imran Khan as prime minister, Pakistan officials are finalising proposals for new infrastructure projects worth billions, ahead of a state visit by Chinese President Xi Jinping this year.
According to recent statements by Pakistan’s CPEC Authority, which was established during Khan’s visit to Beijing last October, officials are close to wrapping up the “action plan” for the estimated US$8 billion ML-1 project to rehabilitate Pakistan’s rickety railway network.
It would be the single largest project of the CPEC, the first phase of which saw a collective US$19 billion of Chinese credit and investment poured into energy, motorway and other projects, said Chinese ambassador Yao Jing at a conference last year.
Asim Saeed Bajwa, the retired three-star general appointed as founding chairman of the CPEC Authority, said last month he expected to soon sign an agreement with the China Three Gorges Corp for the US$2.5 billion Kohala hydropower project, which would generate 1,124 megawatts of electricity.
Bajwa announced on May 7 that construction work had begun for a US$230 million airport at Gwadar, the site of a Chinese-developed and operated port on the Arabian Sea. Pakistan last month granted approval for the port to handle Afghanistan transit trade.
Bajwa said work on building a second motorway route through western Pakistan, to improve overland transit connectivity between Gwadar and China’s Xinjiang province, had accelerated. Contractors were recently invited to bid for the second section of motorway connecting the Karakorum Highway to Quetta, the administrative capital of Balochistan province, where Gwadar is located.
Andrew Small, author of the China-Pakistan Axis, said in the lead-up to Xi’s visit – which earlier this year was said to be happening in July – there had been a push from China and Pakistan to put together “a decent new package of projects, and also to ensure that any elements of the phase-one plans that had been stalled were pushed forward”.
The political stakes had been raised since CPEC was dragged into the “informational war” which erupted between Beijing and Washington last year, said Small, a Brussels-based senior fellow at the German Marshall Fund, a US think tank.
“Given the scrutiny that any visit from Xi would bring, and the need to convey a narrative of progress and success, there would always have been an effort of this sort,” he said.
#Digital #Education: The Foundation Of #DigitalPakistan. Digitization of education and moving on to technological education must be the foundation of digital #Pakistan that is compatible with a #technology-led world. #literacy #distancelearning #Covid_19 https://academiamag.com/digital-education-the-foundation-of-digital-pakistan/
Pakistan’s oft lauded “strategic position” happens to see us situated in South Asia. Apart from the geopolitical advantage that some claim we inherit because of this location, there is precious little that the world’s most underdeveloped region has to offer. According to a well-researched study by Mahbub ul-Haq published in 1997, “South Asia is fast emerging as the poorest, most-illiterate, the most malnourished, the least gender-sensitive–indeed, the most deprived region in the world.” Over two decades later, much of that still rings true. If we were to just focus on one aspect of the aforementioned quote, as is the scope of this article, education alone hasn’t progressed at a rate one would expect it to. Currently, Pakistan has the world’s second-highest number of out-of-school children (OOSC), with an estimated 22.8 million children aged 5-16 not attending school.
That represents 44 percent of the total population in this age group. In the 5-9 age group, 5 million children are not enrolled in schools and after primary-school age, the number of OOSC doubles, with 11.4 million adolescents between the ages of 10-14 not receiving formal education. Disparities based on gender, socio-economic status, and geography are significant. In Sindh, 52 percent of the poorest children (58 percent girls) are out of school, and in Balochistan, 78 percent of girls are out of school, as reported by UNICEF.
With such a dismal background, it is extremely unsettling to note that these statistics only refer to basic education. The world has moved to digital and technological education and skill development, the likes of which the school children of our country have probably never even heard of. Furthermore, if we were to just look East, Bangladesh is one of the top four countries in terms of ‘improvement and remarkable growth’ in digital economy in the last four years, according to Huawei Global Connectivity Index (GCI) 2019. The GCI report was published by Huawei on digital development based on how ICT innovation and ICT applications can grow national economies, and a result of open research into the digital economy with top universities, think tanks, and industry associations.
Bangladesh has come a long way in literacy by efficiently responding to the Basic Literacy Project and by incorporating technology within the education sector. Bangladesh’s literacy rate has risen significantly in the past decade, estimated at 72.76%, according to the latest data from UNESCO Institute for Statistics (UIS). The rate is increasing as the present government is adopting multifaceted programs and it is one of the major reasons that UN Committee for Development Policy (CPD) has promoted Bangladesh to a ‘Developing Country’ status. To realize the plan for Digital Bangladesh, many institutions in the education sector have adopted information technology to engage the attention of students through visual representation of sounds, concepts and pictures alongside interactive activities.
With such an effective digital infrastructure already in place, Bangladesh was in a much better position to implement disaster management strategies to deal with COVID-19 outbreak with respect to education, a far cry from what has happened in Pakistan Online classes, remote and distant learning facilities were much easier to establish in Bangladesh. We, on the other hand, have just started to venture into the world that is digital education.
With the prime minister’s initiative of “Digital Pakistan” we seem to be on the right path, albeit a little too late. We must leverage all that we can from such a scheme for Pakistan to bridge the gap between where other nations stand and where we stand.
Amid #COVID19 #lockdown, #Pakistan’s #textile #exports plummet 65% in April 2020 to $404 million from exports of $1,138.35 million in the same month of 2019. #economy #trade https://tribune.com.pk/story/2226611/2-pakistans-textile-exports-plummet-65-april/
Textile enterprises have demanded that the government reopen all the textile industries along with the restoration of the zero-rated sales tax status as textile exports have been severely affected. In April 2020, textile exports declined 65% to $404 million against exports of $1,138.35 million in the same month of the previous year.
“This should set off alarm bells for the official quarters concerned,” remarked All Pakistan Textile Mills Association (Aptma) Punjab Zone Chairman Adil Bashir.
In the wake of a heavy fall in exports as well as domestic sales of textile products, Bashir demanded the restoration of the zero-rated status for the five major export-oriented sectors in order to give a boost to the textile industry in its endeavours to increase local production and exports, and save millions of jobs.
He urged the government to take serious measures to overcome the liquidity issues of the textile industry.
Sales of all major textile categories plummeted in April, with garments being the most affected. Cumulatively, textile exports dropped 3% year-on-year in the first 10 months of the current fiscal year to $10.82 billion, said JS Research analyst Ahmed Lakhani.
Some improvement is expected in May as shipping delays have been reduced. Moreover, buying countries were also gradually easing the lockdown, which should support demand recovery, he added. In the prevailing situation, it is pertinent to see what special incentives can be offered to the export-oriented sectors. On the other hand, “the risk remains that despite the incentives, a potentially severe second and third wave of Covid-19 can neutralise any impact from the government incentives,” commented the analyst.
The Aptma chairman said the trend of exports in April 2020 was very frightening as Pakistan’s annual shipments to EU countries and the US, exceeding $10 billion, were fraught with risks due to delay and cancellation of export orders after the coronavirus lockdown and liquidation or closure of many retail chains. Pakistan Cloth Merchants Association Secretary-General Arif Ismail urged the Sindh government to allow all textile and allied industries to resume operations and comply with the prescribed SOPs.
The Aptma chairman stressed that the textile industry was the backbone of the country with more than 60% of total exports and the largest employer with widespread employment for professionals, skilled and unskilled workers.
He said the zero-rated regime was introduced in 2005-06 with declared objectives of eliminating cash liquidity issues, wiping out refunds of billions of rupees stuck for long, avoiding unproductive waste of man-hours in chasing tax refunds and eliminating the additional cost borne on the filing and follow-up of refund claims.
Bashir stated that 17% of sales tax was imposed on the textile industry with effect from July 2019 with lofty claims of the Federal Board of Revenue (FBR) of processing refund claims within 72 hours through the newly developed FASTER software system.
FASTER still lacks basic provisions like Section 8B, eight-digit HS code, etc, which hampers the system.
He raised eyebrows over the working of FASTER system and stated that due to inherent weaknesses in the system a large number of taxpayers had not been able to even file Annex-H.
#TikTok’s Desi Version #MitronApp Popular in #India is a Copy of #Pakistan’s #TicTic App. Analysis of its source code reveals that #Mitron, which has ridden high on an anti-#China and anti-TikTok sentiment, was developed by a #Pakistani developer. https://www.thequint.com/tech-and-auto/mitron-app-indian-tik-tok-rebranded-from-pakistani-app-tictic-qboxus-anfroid-playstore
“Well, there is no problem with what the developer has done. He paid for it and got the script which is okay. But the problem is with people and Media referring to as Indian made app which is not the truth.”
Irfan Sheikh, Founder & CEO, QBoxus
The Pakistani company has raised two specific issues:
The real author of the app to be acknowledged and credited instead of attributing Shivank Agarwal as the creator of the app.
The absence of any original modifications to the purchased code. “The worst thing is that the developer even didn't bother to fix bugs and issues in the app and directly uploaded it on Play Store, which is really a shame,” he added.
The Quint has reached out to Mitron App for comments on the claims made by QBoxus along with details the publication has found. The story will be updated once Mitron responds.
Identical Login Screen
The login screen for both apps shares an identical schema as well. Both can be seen using “action_login.xml”
TicTic Strings Left Behind in Mitron’s Code
Further, a ‘change_log’ file present in the decompiled Mitron source code contains the string “com.dinosoftlabs.tictic” – which is the package name of the TicTic application developed and released by QBoxus.
However, there are some minor differences to be noted in the User Interface (UI).
The splash screen which welcomes the user to the app differs visually across both. Further, Mitron does not currently allow users to log in via Facebook, whereas TicTic does.
Apart from this, the application programming interface (API) for both applications are completely identical, which alone allows one to fully ascertain the claim that Mitron is indeed only a re-skinned iteration of TicTic.
TicTic’s Security Flaw Also In Mitron
Regardless, while re-skinned applications are not an entirely new phenomenon, they come with their own drawbacks.
For instance, a vulnerability that exists in the original codebase is likely to propagate to all other instances of the application and remain unfixed in each and every one of them.
This is also the case for TicTic and Mitron, as both applications share a common security flaw in the way through which the ‘follow account’ action is handled.
The flaw can allow a malicious actor to force other users to follow any given account, simply by tampering with a few parameters on the ‘follow user’ request.
Mitron Has A Different Backend Though
Although it would be correct to state that both applications share the same code base, it should be clarified that this does not mean the same backend is shared among both applications.
The Mitron app’s server and API are located on shopkiller.in, whereas the TicTic application communicates with bringthings.com. This means that both user data as well as uploaded videos for Mitron are stored on a separate server (an Amazon Web Services S3 instance to be specific) in contrast to TicTic.
This particular application was able to blur the lines between an individually developed platform versus a generic rip-off.
This is made evident by the number of people who have so far downloaded and installed the application (a number which is resting at 5 million at the time of publication).
In the context of Mitron, it’s meteoric rise in popularity can probably be attributed to it being touted as an “Indian version” of Tik Tok.
#Indian TikTok Clone Mitron’s Publisher Admits The App Is Actually Made In #Pakistan. #socialmedia #software #MobileApp https://inc42.com/buzz/indian-tiktok-clone-mitron-admits-the-app-is-actually-made-in-pakistan/ via @inc42
Mitron, which gained 5 Mn users within a month, claimed to be made in India
The application was created by Pakistan-based app developer Qboxus
Mitron's publisher had bought the source code for INR 2600 and rebranded it
In a surprising turn of events, Mitron, the TikTok-like short video app, which shot to fame for being made in India, has actually been developed in Pakistan. Mitron, which amassed over 5 Mn within a month, claimed to be an Indian-made app to garner downloads. But the publisher of the app, ShopKiller, admitted it is developed by Pakistan-based app development company Qboxus.
According to a report by News18, Qboxus sold the source code of the Mitron application for just $34 (INR 2600). Founder and chief executive of Qboxus Irfan Sheikh said that its customers are expected to use the code and build something on their own. “But Mitron’s developer has taken our exact product, changed the logo and uploaded it on their store,” he added. Such white label apps are routinely sold around the world to create apps quickly and earn revenue through ads.
Sheikh pointed out that there is no problem with buyer purchasing and using the code. But he finds the fact problematic that Indians are referring to Mitron as an Indian app, which is not true especially because they have not made any changes to the code, Sheikh added.
In the past, Qboxus had created clones for apps such as Instagram called Hashgram, a food delivery app called Foodies Single Restaurant and a TikTok clone called TicTic. In this case, Qboxus sold TicTic’s code to ShopKiller who rebranded it to Mitron.
While Mitron may not be Indian, the published of the app who uploaded it to the Google Play Store seems to be Indian. The identity of the buyer and the publisher of the application still remains unknown.
However, Inc42 accessed the details of ‘shopkiller.in’, the official website of Mitron’s publisher, and found that the buyer entered ‘Uttrakhand’ as the state while purchasing the domain from GoDaddy.
Responding to News18, ShopKiller said that the company is working in stealth mode, and didn’t want people to know the team by their name. “I would have liked you to appreciate the fact that we are working hard on the app, and the reason for developing the app was just to give a ‘Make In India’ alternative to people,” the company added.
Mitron’s rise in India at a time when the central government is pushing for local products indicates that many Indian users are convinced by the pitch of a homegrown app, regardless of whether it is actually a superior product. At the same time, TikTok facing the wrath of Indian internet users after it got involved in two major controversies also helped its clone app to amass new users.
#Pakistan IT, ITeS #Export Remittances Surge 23.42% In 10 Months Of Current FY to $1.003 billion, up from $812.648 during the same period in FY 2018-19. #technology UrduPoint
Pakistan's information technology (IT) and IT-enabled Services (ITeS) export remittances comprising of computer services and call center services have surged to US $1.003 billion at a growth rate of 23.42% over the first 10 months of Financial Year 2019-20 (July April), in comparison to US $812.648 during the same period in FY 2018-19.
According to performance report of Pakistan Software Export board (PSEB), an organization under Ministry of IT and Telecommunication, IT Industry has been a star in Pakistan's economy and has achieved positive year on year growth as a result of strong government support, skilled entrepreneurs and a talented workforce.
Over 6,000 Pakistan based IT companies were providing IT products and services to entities in over 100 countries. Strong inventive were being provided to the IT industry and there were several projects intended to facilitate and assist IT Industry in its growth trajectory and to ensure continued upward momentum in local and export earnings.
Pakistan was ranked the 3rd most popular country for freelancing in the world and Pakistani IT companies are providing products and services to world's largest companies. Pakistan's ICT Industry had been a resounding success story for Pakistan, having achieved a stellar remittance inflow growth rate and being the largest net exporter in the services sector.
On the direction of Federal Minister for IT and Telecommunication to promote Pakistan's IT industry and to enhance its exports, all possible steps were being taken to ensure sustainable growth of Pakistan's IT Industry including strong incentives, tax breaks, capability and capacity improvement of the IT industry among others.
In view of the possible fallout of COVID- 19 pandemic, the Secretary IT directed to ensure close coordination with the IT industry to minimize the impact of the pandemic on the IT Industry and to take all possible steps to ensure maximum facilitation and assistance to the industry during these challenging times.
Economic Survey of Pakistan 2019-20
As the economy has been subjected to demand and supply shocks, the outgoing fiscal year
2020 has witnessed a contraction in economic activity. The provisional GDP growth rate for
FY2020 is estimated at negative 0.38 percent on the basis of 2.67, -2.64 and -0.59 percent
growth in agricultural, industrial and services sectors respectively. For FY2020, the negative
performance of both Industry and Services overshadowed the growth in the agriculture
Total public debt was recorded at Rs 35,207 billion at end March 2020 compared with
Rs 32,708 billion at end June 2019, registering an increase of Rs 2,499 billion during first
nine month of current fiscal year while Federal Government borrowing for financing of its
deficit was Rs 2,080 billion. This differential is mainly attributable to depreciation of Pak
Rupee, increase in cash balances of the Federal Government and difference between face
value (which is used for recording of debt) and the realized value (which is recorded as
budgetary receipt) of PIBs issued during the period.
During Jul-April FY2020, remittances increased to $ 18.8 billion as compared to $ 17.8
billion during same period last year, with a growth of 5.5 percent. During July-March
FY2020, current account deficit (CAD) reduced by 73.1 percent to US$ 2.8 billion (1.1
percent of GDP) against US$ 10.3 billion last year (3.7 percent of GDP). The significant
reduction in CAD reflected mainly the impact of macroeconomic stabilization measures
taken by the government.
Pakistan’s total liquid foreign exchange reserves increased to US$ 17.1 billion by end March
2020, up by US$ 2.6 billion over end-June 2019. The improvement in the Foreign Exchange
reserves led to 3.6 percent appreciation of Pak rupee against US dollar during Jul-February
Exports during July-April, 2019-20 remained $ 19.7 billion compared to $ 20.1 billion
during July-March, 2018-19, posting a decline of 2.4 percent. A sharp decline in REER due
to market based exchange rate and the government’s initiative to provide cheaper electricity
to the textile sector have enhanced the competitiveness of the Pakistani products in the
global market. The total imports during July-April FY2020 declined to $ 36.1 billion as
compared to $ 40.3 billion same period last year, thus registered a decline of 16.9 percent.
During Jul-April FY2020, remittances increased to $ 18.8 billion as compared to $ 17.8
billion during same period last year, with a growth of 5.5 percent. During July-March
FY2020, current account deficit (CAD) reduced by 73.1 percent to US$ 2.8 billion (1.1
percent of GDP) against US$ 10.3 billion last year (3.7 percent of GDP). The significant
reduction in CAD reflected mainly the impact of macroeconomic stabilization measures
taken by the government.
#Pakistan receives #PPE #export orders worth $100M. Orders include N95 #masks, gloves, goggles, face shields, gowns, shoes cover and bed sheets. Exports could top $500 million in the coming months as the #COVID19 #pandemic sweeps the world. #coronavirus http://v.aa.com.tr/1877892
Pakistan has bagged export orders worth $100 million for its domestically manufactured personal protective equipment (PPE), a government official said.
Fawad Chaudhry, the minister for science and technology, said many countries are interested in Pakistani equipment, and the figure could top $500 million in the coming months.
Pakistan’s Federal Cabinet earlier this month approved exports of PPE despite complaints by doctors and healthcare workers of shortages of protective gear including face masks, gloves, and overalls.
"Now we are producing masks including N95 masks, gloves, goggles or face shields, gowns, shoes cover and bed sheets for our hospitals, and even importing to other countries," Chaudhry told Anadolu Agency on Monday.
He said Pakistan also developed a coronavirus diagnostic kit, which has been approved by the Drug Regulatory Authority of Pakistan. "This is a big achievement," he said, adding that the kits are entirely domestically produced, which will "help cut our import bill."
So far, Pakistan has imported and received PPE and testing kits mostly from its Chinese allies.
"We are importing the kits from China at the moment but when the commercial production of our kits begins, we will not have to import," Chaudhry said, adding that the kits are low priced, which could bring the cost of virus tests to a one-third.
Chaudhry praised the efforts of experts at the National University of Sciences and Technology (NUST) Islamabad who developed the testing kits, saying he is proud of them.
"The kits developed by our experts are better than the imported kits, and have over 90% accuracy," he said.
Pakistan, the second worst-hit in South Asia, has registered a total of 144,478 virus cases, including 2,729 deaths and 53,721 recoveries.
Many lawmakers, including two former prime ministers, an opposition leader, and several state ministers, have contracted the virus, forcing them to self-quarantine.
The World Health Organization has called on the government to implement “intermittent” lockdowns to counter a surge in infections after relaxing restrictions in recent weeks.
#Asian Development Bank (#ADB) projects #Pakistan’s #economy to grow at 2% in the upcoming fiscal year 2020-21. It added #India’s #GDP was forecast to contract by 4.0% in fiscal year 2020, ending on March 31, 2021. #COVID19 #Lockdown #ImranKhan #Modi https://tribune.com.pk/story/2245558/2-pakistan-economy-grow-2-next-fiscal-year-adb/
The Asian Development Bank (ADB) has projected Pakistan’s economy would regain some pace and grow at 2% in the upcoming fiscal year 2020-21, after contracting by 0.4% in the outgoing fiscal year 2019-20 in the wake of Covid-19 pandemic.
The ADB said in a regular supplement to its annual flagship economic publication, the Asian Development Outlook (ADO) 2020 that inflation rate in Pakistan would remain at 11% as against the earlier projection of 11.5% in current fiscal year ending on June 30.
“Pakistan’s economy was on the path to recovery before Covid-19, and once the Covid-19 impact subsides, Pakistan will resume its efforts to address macroeconomic imbalances and initiate structural reform, likely holding economic growth to a projected 2.0% in FY2021,” the bank said.
“Inflation rate in Pakistan would remain at 11% as against the earlier projection of 11.5% in current fiscal year,” it said, adding that in next fiscal year, the inflation rate would remain 8% against the earlier projection of 8.3%.
The supplement said that South Asia’s economy, which had been hit hard by Covid-19, was forecast to contract by 3.0% in 2020, compared to 4.1% growth predicted in April. It added India’s was forecast to contract by 4.0% in fiscal year 2020, ending on March 31, 2021, before growing 5.0% in 2021.
The ADB said that the developing Asia overall would barely grow in 2020 as containment measures to address the coronavirus pandemic hampered economic activity and weakened external demand. It forecast growth of 0.1% for the region in 2020 – down from the 2.2% forecast in April.
The growth of 0.1% would be the slowest for the region since 1961. Excluding the newly-industrialised economies of Hong Kong, China; Republic of Korea; Singapore; and Taipei, China, developing Asia is forecast to grow 6.6% in 2021,” the supplement said.
“Economies in Asia and the Pacific will continue to feel the blow of the Covid-19 pandemic this year even as lockdowns are slowly eased and select economic activities restart in a ‘new normal’ scenario,” ADB Chief Economist Yasuyuki Sawada said in a statement.
“While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year, and this will not be a V-shaped recovery. Governments should undertake policy measures to reduce the negative impact of Covid-19 and ensure that no further waves of outbreaks occur.”
5G trials have begun in #Pakistan. In January 2020 the telecom regulator issued trial #5G licenses to Zong and Jazz. Ministry of Information #Technology is aiming to launch 5G services later in 2020. #Broadband #mobile https://www.globenewswire.com/news-release/2020/06/10/2046350/0/en/5G-trials-have-begun-in-Pakistan.html
Just released, this edition of Paul Budde Communication’s focus report on Pakistan outlines the major developments and key aspects in the telecoms markets.
Regulator postpones renewal of Telenor Pakistan’s GSM licence due to CPOVID-19 crisis,
Fixed line market predicted to decline further over the next five years to 2024;
Dominance of the mobile platform continues to hinder development of fixed-broadband segment;
Universal Service Fund (USF) and Ufone signa contract to provide broadband coverage for the Makran Coastal Highway;
MoIT aiming to launch 5G services later in 2020;
Report update includes operator data to Q1 2020, regulator’s market data for 2019, Telecom Iaturity Index charts and analyses, assessment of the global impact of COVID-19 on the telecoms sector.
Key companies mentioned in this report:
Pakistan Telecommunication (PTCL); Ufone (PTML, PTCL’s subsidiary); Telenor Pakistan; Warid Telecom; Zong; WorldCall; TeleCard; PakNet; Wateen Telecom (subsidiary of Warid Telecom); Mobilink; NayaTel; Wi-Tribe; National Telecommunications (NTC), Instaphone
#Pakistan #trade deficit contracts 27% to $23.2 billion in FY20 from $31.8 billion in the preceding fiscal year, Pakistan Bureau of Statistics (PBS) said on Friday.: PBS - Profit by Pakistan Today https://profit.pakistantoday.com.pk/2020/07/03/trade-deficit-contracts-27pc-to-23-2bn-in-fy20-pbs/#.XwCoM-vg3Io.twitter
Pakistan’s trade deficit narrowed by 27 per cent to $23.18 billion in the fiscal year 2019-20, as against the deficit of $31.8 billion in the preceding fiscal year, Pakistan Bureau of Statistics (PBS) said on Friday.
The country’s import bill declined significantly by 18.61pc to $44.57 billion during July–June 2019-20, as compared to $54.76 billion in the same period of the preceding year.
Exports from the country also fell by 6.84pc to $21.38 billion in the fiscal year 2019-20 as compared with $22.95 billion in the preceding fiscal year.
The fall in import bill and export receipts may be attributed to Covid-19, which adversely affected international trade. Moreover, declining oil prices also played a key role in reducing the import bill.
South Korea’s Eximbank plans to finance Pakistan’s large-scale IT project. #Korea to offer a $76 million-plus loan to #Pakistan for IT-related projects including electronic intelligence. #tech #informationtechnology
South Korea’s state-run policy lender Export-Import Bank of Korea plans to offer a $76 million-plus loan to Pakistan for IT-related projects including electronic intelligence, a top official told The Korea Herald on Monday.
Eximbank established the Economic Development Cooperation Fund in 1987 to support industrialization and economic growth in developing countries as well as promote bilateral economic exchanges.
“The size of the loan and project is expected to be larger than the IT Park construction project in 2017,” said the official, who requested anonymity.
The project is aimed to support Pakistan’s small-and medium-sized IT firms and bolster technology cooperation between South Korea and the South Asian country.
“But there have been discussions about expanding IT cooperation between the two countries beyond infrastructure, which led to the project taking shape,” the official added.
The project is still in its early stages due to the coronavirus pandemic, the official stressed. Key details, such as the master plan and the exact size of the loan are yet to be discussed.
Eximbank is also planning to delay debt repayment of seven loans extended to Pakistan via EDCF that face maturity this year -- there are a total of 13 of such loans extended to the country so far.
This is in line with the government’s decision, announced in April, to provide more than $400 million to developing countries for virus-related programs and delay repayment of debt from 27 developing nations.
“The debt repayment issue is being discussed via the Paris Club,” the official explained, pointing to a group of major creditor nations who seek to find solutions for payment problems that debtor economies face.
#Pakistan #informationtechnology: IT, ITeS #exports surge 20.75% to $1.11bn in 11 months compared to $917.875 million during the same period in FY19. #technology - Profit by Pakistan Today https://profit.pakistantoday.com.pk/2020/07/06/it-ites-export-remittances-surge-20-75pc-to-1-11bn-in-11-months/#.XwX98puhRhI.twitter
Over the years, incentives from the government and various projects to enhance capacity and capability of the IT Industry have resulted in strong industry growth rates. Incentives to the industry include zero income tax on IT and ITeS exports till June 2025, tax breaks for PSEB registered IT start-ups for three years, up to 100 per cent foreign ownership of IT and ITeS companies, up to 100 per cent repatriation of profits for foreign IT and ITeS investors and tax holiday for venture capital funds till 2024.
#Pakistan leaves #India, #Bangladesh behind in terms of export-growth. Pak exporters were only 6% less than 2019-20, while Bangladesh was down 17% and India down by 14%. #exports #lockdown #COVID19 https://mettisglobal.news/pakistan-leaves-india-bangladesh-behind-in-terms-of-export-growth via @Mettis Global News
Advisor for Commerce, Textile, Industry and Production, and Investment of Pakistan, Abdul Razak Dawood has appreciated exporters for showing good performance during the Fiscal Year 2019-2020 as compared to the regional counterparts.
Taking to his twitter handle on Tuesday, he wrote: ‘I want to congratulate all our exporters on the good performance in 2019-20, in spite of the very challenging situation caused by COVID-19. Our exporters were only 6% less than 2019-20, while our regional countries Bangladesh was down 17% and India down by 14%.
Earlier this month, Abdul Razzak had lauded the exporters for their contribution to Pakistan’s economic recovery, due to their continued momentum and expansion of exports with new products and more geographical diversification. ‘Overall declining trend in exports, due to COVID, has been arrested’, he had said.
‘The good performance was also due to the timely lifting of the lockdown and the good coordination between Federal and Provincial agencies at the daily meetings of NCOC. Out Exporters deserve every praise for their effort, hard work and reaching out to out customers’, he added.
Pakistan has indeed showed resilience throughout the year, especially during the first two quarters of FY20, as compared to the previous years. The fourth quarter depicted a drastic fall in exports, mainly due to the disturbance in business activity by the Coronavirus.
11MFY20: #Pakistan's deficit in #services #trade narrows 41.6 % to $2.7 billion. Pak services sector has emerged as the main driver of economic growth with its share in the #GDP increasing from 56% in 2005-06 to 61.4% in 2019-20.- Profit by Pakistan Today https://profit.pakistantoday.com.pk/2020/07/06/11mfy20-pakistans-deficit-in-services-trade-narrows-41-6pc-to-2-7bn/#.XwYpihk9YKU.twitter
Owing to the coronavirus-led lockdown, Pakistan’s services’ exports declined by 16.72pc YoY to $389.99 million in May 2020, as against $468.27 in May last year.
According to data released by the Pakistan Bureau of Statistics (PBS), the country’s services’ exports have taken a significant hit following the imposition of countrywide lockdown in March to contain the pandemic.
On a cumulative basis, services’ exports during the first 11 months (July-May) of FY20 fell by 8.52pc to $5.05 billion, as against $5.520 billion in the corresponding period last year.
On the other hand, services’ imports also fell to $7.750 billion in July-May FY20, as compared to $10.146 billion in the period of last year, reflecting a decline of 23.61pc.
In May 2020, import of services fell by 59.79pc YoY to $468.03 million.
As a result, the trade deficit in services narrowed by 41.63pc to $2.7 billion in 11MFY20 as against $4.625 billion over the same period last year.
It is pertinent to mention the services sector has emerged as the main driver of economic growth with its share in the GDP increasing from 56pc in 2005-06 to 61.4pc in 2019-20.
Its major sub-sectors include finance and insurance, transport and storage, wholesale and retail trade, public administration and defence.
#Pakistan’s forex reserves rise 65% to $12 billion in FY 2019-20, up from $7.3 billion in prior year, mainly due to inflows of $6 billion #IMF bailout, $725 million from #WorldBank, $500 million from #ADB, $500 million from #AIIB & $1 billion from #China. https://www.samaa.tv/money/2020/07/pakistans-dollar-reserves-up-by-65/
Pakistan borrowed $1 billion as GOP loan disbursement from China and returned $231 million or 23% of that amount to repay foreign debt in the week ending July 3. After adjusting that amount, the country’s net dollar reserves increased by $811 million last week.
The increase in dollar reserves in fiscal year 2019-20 can be attributed to dollar inflows caused by the signing of a $6 billion bailout with the International Monetary Fund. This includes $725 million from the World Bank, $500 million from the Asian Development Bank, $500 million from Asian Infrastructure Investment Bank and $1 billion from Chinese banks.
The IMF programme opened more doors for Pakistan as the World Bank, ADB and AIIB also pledged support. According to the IMF, the programme was supposed to unlock funding of $38 billion from multilateral donors.
Pakistan’s depleting dollar reserves were one of the main challenges for the Pakistan Tehreek-e-Insaf, when it came into power in August 2018. Within its first six months, the PTI government saw the dollar reserves falling to $6 billion, barely enough to pay for two months of imports. To tackle this challenge, PM Khan’s government signed the $6 billion bailout with the IMF.
The dollar reserves doubled from its lowest point in 2018 to 12 billion this year. The dollar account turned to a surplus in October 2019. However, going to the IMF comes at a cost and steps were taken to choke the economic growth, such as reduction in imports, rupee depreciation and increase in interest rates that made the borrowing expensive.
In the first nine months of the last fiscal year, the loss in our dollar account was reduced by 73% and we were again in surplus in May.
#CoronaVirus Protection Gear Sales Reversing #Pakistan #Exports Fall. Exports of #PPE, #masks and other protective gear -- a new market -- have increased, says Abdul Razak Dawood. New export orders for #garments coming in. #COVID19
https://www.bloombergquint.com/global-economics/virus-protection-gear-sales-seen-reversing-pakistan-exports-fall via @BloombergQuint
Pakistan has “really moved fast into that area,” Dawood said, referring to PPE. The current year should be a better one than last, he said. South Asia’s second-largest economy, whose exports dropped 7% in the year ended June, isn’t alone in stepping up production of PPEs. Neighbor India has become the world’s second-biggest maker of PPE kits after a shortage at the beginning of the outbreak pushed it to boost local manufacturing. Supply chain disruptions caused by the pandemic has meant Pakistan secured its first sportswear order from Hugo Boss AG, according to Ijaz Akhtar Khokhar, chief coordinator at Pakistan Readymade Garment Manufacturers and Exporters Association.
Pakistan plans to give tax incentives to any global brand that opens an office in the country, said trade adviser Dawood. The South Asian nation is looking to spur growth in the economy after its first contraction in 68 years in the year ended June. While exports dropped in seven out of the past 12 months, the rupee’s depreciation -- by more than 50% since late 2017 -- has made the nation’s shipments competitive globally, said Dawood. Dawlance, a local home appliances maker, exported microwaves to Bangladesh for the first time, while D.G. Khan Cement Ltd. has sent clinker to new markets such as China and Philippines. The cement maker has another order from the Philippines for supply of 20,000 tons as well as making more shipments to China, according to CFO Inayatullah Niazi.
#Pakistan’s #InfoTech #exports have been growing by double digits annually for a decade. #computers #software #technology #services
Fibre optic cables from #China border at Khunjerab to #Pakistan's capital Islamabad made operational. High bandwidth #Internet #Fiber will be laid from Islamabad to #Karachi and #Gwadar in the next phase. #digitalhighwayplan #CPEC #5G #digitalpakistan https://tribune.com.pk/story/2254533/fibre-optic-cables-from-khunjerab-to-islamabad-made-operational
The Pak-China fibre optic cable is to be laid along three main routes of the China-Pakistan Economic Corridor (CPEC), including railway tracks.
The two countries have already activated first phase of the fibre optic cable, which is an 820km-long cable project from Rawalpindi to Khunjerab. In this regard, a Chinese company has already conducted successful tests and can generate a lot of revenue for the government.
On July 10, the CPEC Authority was thanked for facilitating the realisation of the Kohala and Azad Pattan power projects, by Prime Minister Azad Jammu and Kashmir (AJK) Raja Farooq Haider, and the chief executive officers (CEOs) of China Three Gorges and China Gezhouba.
This CPEC chairman (Gen Asim Bajwa) had announced in a tweet that the meetings were held separately and discussed the process of the two projects' execution.
He had stated that a total of 1800MW of hydel power will be produced under the projects, whereas 8,000 jobs will also be created.
VM Interactive, a #UK-based #digital #technology company, invests $250,000 in seed funding in #Pakistan’s #HealthTech #startup emeds.pk. #Covid_19 brings attention to #health sector | The Express Tribune
The pandemic has brought healthcare sector to the fore in countries across the world and Pakistan’s health sector is no different. The coronavirus has exposed strengths and weaknesses in the system, which has caught the attention of angel investors.
Since the lockdown was imposed, online businesses enhanced their mark and the country’s health system witnessed a similar trend as well where a few large scale pharmacies initiated home delivery services and doctors set up e-clinics.
The trend of digitisation caught attention of VM Interactive, a UK-based digital technology company, which recently invested $250,000 in seed funding in Pakistan’s health-tech ecosystem through a locally indigenous start-up, emeds.pk.
VM interactive Chief Operating Officer Alex Kalavrezos said that having seen Pakistan’s tech industry grow by leaps and bounds, with the government focused on taking it to another level, the chance to invest in it during this time is an opportunity, which should not be missed.
“The recent pandemic has exposed vulnerabilities of healthcare systems around the globe, however, Pakistan is among the few countries that have performed relatively better,” Kalavrezos told The Express Tribune.
This shows that the country has the potential to rival some of the most developed health care systems around the world provided that a robust system is created for healthcare workers to flourish.
According to him, this was one reason why countless doctors and healthcare workers of Pakistani origin excel in western countries where healthcare systems are more developed.
“Having worked closely with the tech fraternity of Pakistan, I am familiar with the wealth of talent available here, so having first-hand knowledge and experience played a major role in convincing our investors,” Alex said.
The UK-based tech company is providing its support in terms of investments and training to the local start-up, which intends to revolutionise the concept of health-tech in Pakistan and counter the menace of fake medicines available widely in the market.
The management of the company plans to work with manufacturers to secure medicines and store them in its own warehouses rather than relying on third party suppliers.
“Medicines are temperature oriented and if a minimum temperature is not maintained, they expire,” said emeds.pk Chief Executive Officer Umaad Sheikh. “Small scale pharmacies do not consider this fact while operating business nor do they empower pharmacists to do so.
The start-up, which began operations in March 2020, received the seed investment last week.
Sheikh projected to receive next round of investment at the end of the year which would be utilised for expansion of company operations in Punjab and the rest of Pakistan.
Nevertheless, there are a handful of difficulties being faced and the company has sought help from the government in this regard.
“The government is working towards improving ease of doing business in Pakistan but to do that, a special zone for online investors should be materialised to cater to the needs of start-ups,” Sheikh said.
He stressed that tech-start-ups were the future and if government made efforts to uplift the ecosystem of this sector, all other sectors will improve alongside.
Currently, tech start-ups face issues in online payment facilities, banking sector paperwork and timely issuance of visas to foreign investors.
“The reason why most tech investors prefer India over Pakistan is the fact that our neighbouring country has a proper ecosystem in place and it facilitates them in all possible manners,” he said. “A little attention by the government in this regard will bring higher amount of tech investors to Pakistan.”
FY2019-2020: IT, ITeS export remittances surge by 23.71 percent
The Information Telecommunication (IT) and IT enabled Services (ITeS) export remittances comprising computer services and call center services surged by 23.71 percent to $1.230 billion in the fiscal year 2019-2020 compared to $994.848 million during the same period last year (2018-2019). This has been revealed in the performance report of the Pakistan Software Export Board (PSEB), the attached department of the Ministry of IT and Telecom, here on Friday.
The ITeS export remittances surged from $1.11 billion in May 2020 to $1.230 billion in June 2020 registering a nominal growth of $0.12 million compared to around $76 million during the same period of the previous year (2018-2019) as it went up from $917.875 million to $994.848 million. The ministry has set target to increase this volume to $5 billion in the next three years.
The ministry spokesperson said that the Ministry of IT and Telecommunication was committed to increasing the IT exports and taking special steps in that regard. Federal Minister for IT & Telecommunication Syed Aminul Haq has directed the PSEB to take every possible step for achieving target of IT exports remittances.
He said under the prime minister's vision of "Digital Pakistan", it was vital to take forward all the matters related to information technology and connect the youth especially students to the digital world. He said that the Ministry of IT was playing an important role regarding coping the Covid-19 pandemic through information technology, adding that the coronavirus cases were now declining in the country.
The generous incentives from the government and various projects to enhance capacity and capability of the IT industry have resulted in strong industry growth rates. Incentives to the industry include zero income tax on IT and ITeS exports till June 2025, tax breaks for the PSEB-registered IT start-ups for three years, up to 100 percent foreign ownership of IT and ITeS companies, up to 100 percent repatriation of profits for foreign IT and ITeS investors, tax holiday for venture capital funds till 2024, among other incentives.
Spokesperson of the ministry told Business Recorder that 6,000 Pakistan-based IT companies were providing IT products and services to entities in over 100 countries. Pakistan was ranked the 3rd most popular country for freelancing in the world, and Pakistani IT companies are providing products and services to the world's largest companies. Pakistan's ICT Industry has been a resounding success story for Pakistan, having achieved a stellar remittance inflow growth rate, and being the largest net exporter in the services sector.
Payoneer Global Survey of freelancers incomes in 2015:
Pakistani women freelancers charge $22 an hour, 10% more than $20 an hour that men charge.
Having a university degree does not get you more money...in fact the average rate for the world for high school graduates ($22 an hour) is about 10% higher than that of university graduates ($20 an hour).
To better understand the trends impacting this global movement, we surveyed 23,000 freelancers worldwide, including emerging markets such as Pakistan, the Philippines and the Ukraine. Survey respondents comprise a random sample of Payoneer’s cross-border payment platform users, providing unique insights into how these globally-enabled freelancers operate, what makes them successful and what rates they command.
#ImranKhan to set up Special #Technology Zones (STZs) for #IT industry in #Pakistan with land in major cities with specialised infrastructure, like plug & play buildings, for IT companies. low rents, low sales & withholding tax.- Profit by Pakistan Today
Prime Minister Imran Khan has shown keen interest in setting up Special Technology Zones (STZs) for the IT industry to support its growth and improve ease of doing business.
He expressed support for the idea in a meeting with a delegation from Pakistan Software Houses Association (P@SHA) and other representatives of the industry on Thursday. The prime minister resonated with the industry, telling the delegation he saw a lot of potential and growth in the IT sector.
The meeting was was also attended by Minister for Information Technology, Syed Aminul Haq, Minister for Information, Senator Shibli Faraz, Minister for Industries, Muhammad Hammad Azhar, Advisers Dr Abdul Hafeez Sheikh, Dr Ishrat Hussain, Abdul Razzak Dawood, Special Assistant Dr Shahbaz Gill, federal secretaries, Chairman FBR, Governor State Bank of Pakistan (SBP) and representatives of various companies belonging to the IT sector.
“The IT industry demanded Special Technology Zones (STZs) to provide opportunities for medium and small scale IT enterprises to have less infrastructure cost and overheads to enable them to do their business and earn exports and remittances for the country,” a source told Profit, elaborating the context of the meeting.
Though the proposal made headway earlier and reached the Planning Commission, the budget for it was never approved. The stakeholders are now hopeful that PM Khan has shown a lot of interest in it and he has directed that the details be shared with him and he wants to see it happen.
“PM Khan is himself very interested in seeing this succeed and he will issue instructions and the Planning Commission would have to find ways to get it through now,” said another source.
Two years ago, P@SHA, the official body that represents the IT industry, had recommended the federal government set up IT Clusters, known STZs. The concept was to emulate Special Economic Zones (SEZs) for other industries, but with certain incentives specific for the IT industry to promote its growth. The proposal was presented during the tenure of Pakistan Muslim League Nawaz (PML-N) government when Anoushay Rahman was the IT Minister.
STZs were P@SHA’s top most recommendation. All the countries that currently excel in IT have STZs like in Singapore, Philippines etc. India, for instance, has over 100 STZs.
In a clustered environment for the IT industry, P@SHA had recommended dedicating clusters of land in major cities with specialised infrastructure, like plug and play buildings, for IT companies. STZs have low land rental, less sales and withholding tax, less utility bill charges, which are all incentives to bring investors and incentives that are necessary for small IT companies to thrive in a low cost environment.
“IT companies get projects that require plug and play and power backups. This is the sort of infrastructure that is necessary for its growth. High rise technology parks do not work it for the IT industry because these buildings have high rentals which increases cost of doing business,” a representative from P@SHA told Profit.
The IT industry has also been pushing to keep FBR in check, with their undue notices to IT companies that increases cost of doing business because businesses are required to respond to these notices that incurs untimely costs. That is also an issue that the industry stakeholders believe could be solved with setting up of STZs with one-window operations, which reduces the cost of doing business.
Pakistan earned $ 286 million by providing different information technology (IT) services in various countries during the first two months of fiscal year 2020-21. This shows growth of 35.58 per cent when compared to $210.940 million earned through provision of services during the corresponding period of last fiscal year 2019-20, Pakistan Bureau of Statistics (PBS) reported.
During the period under review, the computer services grew by 37.27 per cent as it surged from $162.300 million last year to $222.790 million during July-August (2020-21). Among the computer services, the exports of software consultancy services witnessed increase of 16.10 per cent, from $62.468 million to $72.526 million while the export of hardware consultancy services however witnessed decrease of 76.01 per cent, from $0.321 million to $0.077 million.
The export of repair and maintenance services also decline by 86.27 per cent from $0.517 million to $0.071 million whereas the export and imports of computer software services witnessed increase of 13.86 per cent, from $49.854 million to $56.762 million. In addition the exports of other computer services rose by 89.98 per cent from $49.140 million to $93.354 million. Meanwhile, the export of information services during the period under review increased by 65.52 per cent by going up from $ 0.290 million to $ 0.480m.
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Among the information services, the exports of news agency services also increased by 133 per cent, from $0.100 million to $0.233 million whereas the exports of other information services rose by 30 per cent, from $0.190 million to $ 0.247 million. The export of telecommunication services increased by 29.74 per cent as these went up from $48.350 million to $62.730 million, the data revealed.
Among the telecommunication services, the export of call centres services increased by 23.19 per cent during the period as its exports increased from $16.148 million to $19.892 million whereas the export of other telecommunication services also increased by 33.03 per cent, from $32.202 million to $42.838 million during last year, the PBS data revealed.
It is pertinent to mention here that the country’s services trade deficit contracted by 50.41 per cent during the first two months of the current financial year (2019-20) as compared to the corresponding period of last year.
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During the period from July-August 2020-21, services exports decreased by 14.26 per cent, whereas imports reduced by 32.81 per cent, according the data released by Pakistan Bureau of Statistics. The services worth $758 million exported during the period under review as compared the exports of $884.14 million in same period of last year, whereas imports of services into the country was recorded at $1220.12 million as against the imports of $1815.91 million, the data revealed.
The Information Telecommunication (IT) and IT-enabled Services (ITeS) export remittances comprising computer, and call center services, surged to $379.251 million at a growth rate of 43.55 percent during the first quarter (July-Sep) of FY 2020-2021 compared to $264.187 million during the same period of 2019-2020.
This has been revealed in the latest performance report of the Pakistan Software Export Board (PSEB), an organisation functioning under the Ministry of IT and Telecommunication.
It stated that the Ministry of IT was taking all possible steps to ensure sustainable growth of Pakistan's IT industry and to ensure close coordination with the IT industry and associated stakeholders.
The generous incentives from the government and various projects to enhance capacity and capability of the IT industry have resulted in strong industry growth rates.
On the direction of Federal Minister for IT and Telecommunication Syed Aminul Haque, the Ministry of IT and Telecom is committed to increasing the IT exports, and making special efforts in this regard.
Incentives to the industry include zero income tax on IT and ITeS exports till June 2025, tax breaks for the PSEB-registered IT start-ups for three years, up to 100 percent foreign ownership of IT and ITeS companies, up to 100 percent repatriation of profits for foreign IT and ITeS investors, tax holiday for venture capital funds till 2024, among other incentives.
Spokesperson of the ministry told Business Recorder that more than 6,000 Pakistan-based IT companies were providing IT products and services to the entities in over 100 countries.
Strong incentives are being provided to the IT industry, and there are several projects intended to facilitate and assist the IT industry in its growth trajectory, and to ensure continued upward momentum in local and export earnings.
Pakistan was ranked the 3rd most popular country for freelancing in the world, and Pakistani IT companies are providing products and services to the world's largest companies.
The IT and IT enabled Services (ITeS) export remittances comprising computer services and call center services have surged to $379.251 million at a growth rate of 43.55 percent during the first three months (July-September) of 2020-2021, in comparison to $264.187 million during the same period during 2019-2020.
The ITeS export remittances surged by 23.71 percent to $1.230 billion in the fiscal year 2019-2020 compared to $994.848 million during the same period last year (2018-2019).
The government has set a target of $5 billion for export remittances through information technology and IT-enabled services during the next three years.
Federal Minister for IT and Telecommunication Syed Aminul Haque said that the government was taking all possible steps to ensure long-term IT industry growth trajectory and to enhance IT industry exports.
He also lauded the IT sector for its contributions to Pakistan, saying that Pakistan's IT industry had reached an important milestone in its journey, and it had the potential to be the largest foreign exchange earner for Pakistan.
#Pakistan’s #IT #exports, #tech stocks set to boom in next decade. Pakistan’s IT exports, estimated at $1.2 billion in 2019, grew by 46% in Q1FY21. KASB investment analyst: “We think there is an opportunity of 10x growth in IT exports". https://profit.pakistantoday.com.pk/2020/12/01/pakistans-it-exports-tech-stocks-set-to-boom-in-next-decade-report/ via @Profitpk
With more than 20,000 graduates entering the workforce each year in the technology sector and a prevailing pool of more than 300,000 IT engineers in the world’s fourth fastest growing freelance market, Pakistan’s technology exports have the potential to reach $10 billion from the present $1.2 billion in the next 10 years.
A recent report on Pakistan’s IT sector published by Karachi-based securities brokerage firm Khadim Ali Shah Bukhari Securities (KASB) argues that the technology sector has the most promising outlook in Pakistan and trends point towards a healthy contribution of IT to the overall exports and significant representation of technology stocks in the public market.
In addition to the burgeoning talent pool, Pakistan has a large and young English speaking population that gives it a competitive edge like India. India’s present IT exports are about 49 per cent of its total exports whereas Pakistan’s IT exports are around 4pc of the total exports.
“Moreover, the internet has made the virtual migration of labour much easier. Many of the fortune 100 companies and leading technology unicorns engage outsourced technology talent from Pakistan,” the report notes.
Pakistan’s IT exports, estimated at around $1.2 billion in 2019, grew by 46pc in Q1FY21. “We think there is an opportunity of 10x growth in IT exports,” the KASB report argues.
The report further outlines that in the public market in Pakistan, technology stocks have under-representation and account for 1.8pc of the total market cap.
This trend was typical of most emerging, or perhaps all markets, until the last decade, the report notes, underlining that over the last ten years, there has been a swift sector shift from E&P and financials into technology.
“Technology, which was 1.5pc in 1997, now accounts for 32pc of the MSCI Emerging Markets Index. Seven out of the top 10 companies in MSCI EM Index are technology companies, including all of the top six,” it reads.
Extrapolating on the trends, the report argues that a similar shift will happen in Pakistan over the next ten years that will be driven by both growth in the market caps of existing companies as well as new IPOs of digital businesses.
“The interest is starting to grow which is evident by the successful IPO of TPL Trakker and the 194pc increase in the share price of Systems Ltd, the largest listed company,” it adds.
Technology stocks undervalued in Pakistan
Even for the technology stocks that are listed, the KASB report argues that the said stocks are grossly undervalued. “Sell side consensus is tracking historical PE multiples, DCF, dividends or even book values to value growth based technology companies,” it says.
Consequently, there is mispricing, which is visible both while comparing Pakistani companies with regional peers and also while comparing valuations of the public with private market capital raise rounds in Pakistan.
The report noted that the stock value of two of the largest publicly-traded IT companies in Pakistan, Systems Limited and The Resource Group (TRG), was undervalued by at least by 45pc and 214pc respectively.
“While the stock has outperformed the KSE100 Index by 132 per cent year to date and the market has started to value in IBEX and Afinti, it [TRG] still remains massively undervalued compared to the portfolio valuations,” the report stated.
The report attributed the undervaluation of stock to tepid effort on investor relations and limited disclosures by the company [TRG].
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