Thursday, September 17, 2020

With Covid19 Under Control, Pakistan Enjoys V-Shaped Recovery in Manufacturing

With coronavirus spread contained, Pakistan economy is rebounding with V-shaped economic recovery.   Pakistanis have once again defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now. There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% in June, 2020.  The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News.  Pakistan has successfully overcome the challenges posed  by the pandemic and its economic impact. Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.



Covid19 Cases in Pakistan. Source: Our World in Data


Broad Recovery: 

The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now.  There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output has increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% if compared to June 2020. Month-wise trend of QIM from July, 2018 to July, 2020.    

Pakistan Monthly Quantum Index of Manufacturing. Source: PBS

Cement Sales: 

Pakistan is once again experiencing a construction boom with new incentives under Naya Pakistan Housing Program. Monthly cement sales rose to near all-time high of almost 5 million tons in July 2020 as construction activity picked up in both housing and CPEC-related projects. 

Pakistan Cement Sales. Source: Bloomberg


Car Sales:

Gasoline sales in June, 2020 hit new record  and local car deliveries rose to about 10,000 units as people returned to work after easing of lockdown in May, 2020. Kia Motors Corp.’s local unit is planning to add a second shift at its factory in Karachi from January.  

Pakistan Car Sales Recovery. Source: Bloomberg

Multiple Sectors Growing: 

Sectors including food, beverages & tobacco, coke & petroleum products, pharmaceuticals and non metallic mineral products saw an increase in production in July 2020.  Muzzammil Aslam, chief executive officer at Tangent Capital Advisors Pvt., was quoted by Bloomberg as saying, “It has surprised everybody".  Aslam expects Pakistan economy at 4%-5% in current fiscal year, higher than the government’s 2.1% target. “The growth is led by an aggregate demand push.”

Summary:

Pakistanis have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Monthly cement sales have rebounded to pre-pandemic level, fuel sales have increased, tax collection is up,  exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties,  Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

Related Links:

Haq's Musings

South Asia Investor Review

COVID19 in Pakistan: Test Positivity Rate and Deaths Declining

Naya Pakistan Housing Program

Construction Industry in Pakistan

Pakistan's Pharma Industry Among World's Fastest Growing

Pakistan to Become World's 6th Largest Cement Producer by 2030

Is Pakistan's Response to COVID19 Flawed?

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Coronavirus Antibodies Testing in Pakistan

Can Pakistan Effectively Respond to Coronavirus Outbreak? 

How Grim is Pakistan's Social Sector Progress?

Pakistan Fares Marginally Better Than India On Disease Burdens

Trump Picks Muslim-American to Lead Vaccine Effort

Democracy vs Dictatorship in Pakistan

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

Panama Leaks in Pakistan

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

PakAlumni Social Network

24 comments:

Riaz Haq said...

In the outgoing FY (2019-20), Pakistani expatriates remitted a record of $23.12 billion with more than 6% year-on-year (YoY) growth compared to $21.74 of FY 2018-19.


http://tribune.com.pk/article/97174/the-curious-case-of-pakistans-spiralling-remittances

The momentum has not only persisted but amplified in on-going FY 21 with a whopping $2.77 billion remittance in July, followed by an inflow of $2.095 billion in August. This unprecedented surge is bemusing, and what has baffled many is the fact that this escalation has occurred during the pandemic. So, what could the potential triggers to this mammoth inflow be?
The extraordinary leap can be primarily due to the tightening of informal money markets, which has augmented the inflow through formal banking channels. In the budget for FY 2020-21, the incumbents allocated Rs25 billion to formalise foreign remittances, which would aid in stockpiling foreign exchange reserves to service colossal national debt obligations.
Pakistanis typically used to carry cash in their luggage physically. But due to flight reduction and sparse international travels, they would have been compelled to access official banking channels for money transfers. Also, remittances might have incremented on account of significant job losses in the Gulf region due to the Covid-related recession. Hence the spiral may demonstrate high one-time repatriation of money back to Pakistan.
On the other hand, the State Bank of Pakistan (SBP) has emphasised an orderly ‘market-based’ exchange rate management and sound policymaking under the Pakistan Remittance Initiative. The SBP sheds the spotlight on the reduction of the threshold for eligible transactions from $200 to $100 under the Reimbursement of Telegraphic Transfer (TT) Charges Scheme. It also stressed on adoption of digital channels and targeted marketing campaigns to promote formal routes. Similarly, IT-related freelance services’ payment limits have increased from $5,000 to $25,000 per individual per month. The SBP believes that it has facilitated to enhance home remittances through formal banking channels in Pakistan.
The crux of the matter is remittances will upslope further in the future due to effectuated compliance of formal banking channels. Still, the recent abnormal increment will ease down in the coming months when the western economies recuperate from the ramifications of the Covid-related slump.

samitr sardana said...

COVID is an opportunity to re-orient the manufacturing strategy,of Pakistan - Part 1

1st some basic facts.

1stly,there is no material requirement of Pakistan,whose complete import can swing international prices,or create temporary shortages or warrant preniums.Thus,besides the Agri,defense and Nuke industry,no other industry is strategic.Until there is cross border
wheeling of power,from the North Pole to the South Pole,power will have to be produced in Pakistan - although that can also imported, at a far cheaper rate from Iran.

2ndly,when a nation makes some product,which can be imported at a far cheaper rate,it is essentially FORCING the users of that product,to pay a higher price,in the Billions of USD,so that other citizens of the importing nation,can be employed in those factories,and their supply chains.This is a conscious decision to keep humans occupied,and living from cheque to cheque,TDS to TDS,home loan to car loan etc.Else,people will revolt or be captivated and captured,by demagogues.Of Course the consumers,paying the higher price,have to clue about this sacrifice - as they are also,slaves to some car loan ponzi.

3rdly,Economies of Technological scale (based on latest technology that maximises yield and throughput and reduces wastages,losses, power and material requirement) will always exceed, by a huge margin,the economies of labour scale (which relies on technology,which leverages large numbers of low to medium paid labour).Exception is the Pakistan sports industry,which is labour driven and exports soccer balls etc.But that is because,no one is APPLYING HIS MIND, to Robotics in that area, and handcrafted products,are commaning a premium price,TODAY.Ultimately ROBOTS will take over,as there is no competition to 24 hours service (and no ESI and PF and Medical and other staff costs)

4thly,No matter what Pakistan does,no agri output produced by Pakistan,will have a COST OF PRODUCTION AT MANDI,which is even LESS THAN 150% of the CIF price of the imported product at KPT.In the future,USA and PRC (ignoring Africa),will be able to produce the ENTIRE FOOD OUTPUT,OF THE HUMANS AND ANIMALS AND SEA LIFE,at a cost, less than half of current costs, and in a time span of less than half,of what is takes today. However, the farmers have to be OCCUPIED and kept HAPPY,as else,they can overthrow any state, and easily get radicalised. The FACT is that,7 Billion humans COULD get food,at less than a fifth of the current prices (NOT COSTS),and double the quantity,that they eat today.They are suffering, to ensure that the farmers of North America, South America,LATAM, Russia, Australia are kept HAPPY,and that the farmers of INDIA do not hang from the trees and create a revolution. On principles of evolutionary perfection,farming is viable ONLY in nations with large land tracts and LOW DENSITY OF POPULATION.India is NOT in that GRID.PRC is in that grid,as it can CREATE LOW DENSITY OF POPULATION,AND ALSO,CREATE LARGE LAND TRACTS - as it is ruled by the CCP.dindooohindoo

Fiftly,Unlike the Technology Exports services,all service sectors,hinge upon manufacturing. Manufacturing drives all else.Even a Technology Export sector,has to have a domestic anchor - which is contingent upon Manufacturing.A manufacturing plant brings to life,a society and its eco-system,and over few decades leads to large wealth creation,which primarily begins from land and real estate prices and ends with bank credit.So unlike the Isle of Man - there are no Manx companies in Pakistan - and so,manufacturing is critical.

So the Manufacturing Strategy,has to be created within the above pentagonia,based on the competitive and comparative advantages of the raw material supply chain NSIDE Pakistan - as also,the ECONOMIC costs of the raw materials,which are NOT AVAILABLE,INSIDE PAKISTAN.

Riaz Haq said...

#Pakistan earns $1.44 billion in #IT #exports, up 20.72% from $1.19 billion from last year. #computer services exports grew 23.44% as it surged to $1,106 million from US $ 895.990 million last year. #technology #economy #trade https://dunyanews.tv/en/Business/561082-Pakistan-earns-US$1438-million-from-IT-services-export-during-FY2019-20

Pakistan earned US $ 1438.827 million by providing different information technology (IT) services in various countries during July-June (2019-20).

This shows growth of 20.72 percent when compared to US $ 1191.864 million earned through provision of services during the corresponding period of fiscal year 2018-19, Pakistan Bureau of Statistics (PBS) reported.

During the period under review, the computer services grew by 23.44 percent as it surged from US $ 895.990 million last year to US $ 1106.027 million during July-June (2019-20).

Among the computer services, the exports of software consultancy services witnessed increase of 14.98 percent, from US $ 354.397 million to US $ 407.492 million while the export and import of computer software related services also rose by 11.62 percent, from US $ 285.235 million to US $ 318.368 million.

The exports of hardware consultancy services decreased by 16.55 from, US$ 2.345 million to US$ 1.957 million whereas the exports of other computer services rose by 51.91 percent from US$ 247.976 million to US $ 376.699 million. In addition the export of repair and maintenance services however witness decline of 74.97 percent from $6.037 million to $1.511 million.

Meanwhile, the export of information services during the period under review increased by 61.39 percent by going up from US $ 1.580 million to US $ 2.550 million.

Among the information services, the exports of news agency services increased by 100.89 percent, from US $ 0.677 million to US $ 1.360 million whereas the exports of other information services also increased by 31.78 percent, from US $ 0.903 million to US $ 1.190 million.

The export of telecommunication services also witness increase of 12.22 percent as these went up from US $ 294.294 million to 330.250 million during the fiscal year under review, the data revealed.

Among the telecommunication services, the export of call centre services increased by 26.17 percent during the period as its exports increased from US $ 98.858 million to US $ 124.730 million whereas the export of other telecommunication services also increased by 5.16 percent, from US $ 195.436 million to US $205.520 million during the period under review, the PBS data revealed.

It is pertinent to mention here that the services trade deficit of the country during the fiscal year (2019-20) decreased by 42.96 percent as compared to the corresponding period of last year.

During the period from July-June, 2019-20, services exports decreased by 8.66 percent, whereas imports reduced by 24.25 percent, according the data released by Pakistan Bureau of Statistics.

The services worth US $ 5.449 billion exported during the period under review as compared the exports of US $ 5.966 billion in same period of last year, whereas imports of services into the country was recorded at US $ 8.284 billion as against the imports of US $ 10.936 billion, the data revealed.

samir sardana said...

COVID is an opportunity to re-orient the manufacturing strategy,of Pakistan - Part 2

The Manufacturing Matrix in Pakistan

Option 1 - The Pre-Requisite

Captive Raw Materials - For Captive Raw Materials in the Agri and Mining Sector,the State has to support the complete value addition of the product,near the source.These 2 cordinates,combined with Tax Holidays,will make it a viable venture,for any Foreign Capitalist - subject to Politiical Risk.Take the Sugar sector - for Political Risk - and so, only Pakistani Politicans,can set up Sugar Mills.

However, one needs to be practical here. Just because Pakistan has the best Cotton in the world (along with long staples, from Egypt),does not mean that yarn or fabric units, will be viable in Pakistan. Large Technologies of Scale, allow imported raw material from the Moon (like Helium),and still be viable. So there is no harm in exporting the cotton or some minerals. If the same technologies of scale, were set up in Pakistan - it will involve
large capital costs - and would accentuate the financial and politcal risk,of the project. And if it sinks,it will doom the Pakistani Banks (like in India).dindooohindoo

Pakistani Capital should be used where Pakistani has an exceptional edge,like in the Cement Sector (with complete maaterial and logistics integration).Another example is the Agri Processing,Foos and Agri Waste Insustry.These also provide large scale employment,as they have extensive supply and value chains.

Option 2 - Strategic Leverage

Some Manufacturing is required as a strategic leverage,to ensure that Pakistan is not coerced, in pricing,in international procurements.Therefore,there have to be sufficient capacities,in some critical sectors,like steel,oil,food,fertilisers etc. Howvever, this is an offset,to procurement price risk.If there is a Force Majeure event or a Trade embargo - then,there will be no raw material imports,in any case - and the fertiliser plants etc,will be mothballed.

Option 3 - Manufacturing Hydrogen for the Balloons

So let us say,you have floated a billion balloons,by importing hydrogen - and now, the balloons are used,for entertainment,space travel and advertisements. Next Step,is to manufacture the Hydrogen.Just like Pakistan,is sponsoring the manufacture of mobile phones and accessories,in Pakistan to STOP their imports,as it is a waste of USD and much cheaper to make.Just like the Auto sector,it is an assembly operation - and so,the capacities are modular for the phones and their parts.At any stage,of the manufacturing, any process can be outsourced to PRC,at any time,by IMPORTING the interemediate products.

Thus,there is large scale employment - with impact on entrepreneurship and tax revenues and FX savings and reduction in economic costs.

The Crux is to LET THE PRIVATE SECTOR EXPAND THE BALLON (THE MARKET).LET THEM USE ANY MEANS (SMUGGLING ETC.).Then when the supply chain,logistics,servicing,spares,maintenance,skilled and unskilled labour value chain,is in place - BRING IN MANUFACTURING OF THE PRODUCT.

samir sardana said...


COVID is an opportunity to re-orient the manufacturing strategy,of Pakistan - Part 3

The Manufacturing Matrix in Pakistan

Option 4- Manufacturing to Stop Smuggling

There are several imports into Pakistan where the market is highly matured and seasoned.No one likes to pay import duty.The Philosophy is,that the importer has spent time and monet to locate and hide the supplier,and is giving JOY to 200 million people,by selling cheaper and attractive products.If you travel to Yiwu or Guangzhou, you will find Pakistanis relabelling their cargos (to be shipped),so that competition CANNOT trace the supplier.They stuff the container far away from the port - drive it to the port - seal the container - and then,track it on GPS sites ! There is a large group of the Pakistani traders - as they carry large amounts of cash (which has to be stored and guarded) - as the suppliers are paid in cash - and since,there is no insurance or underinsurance, there is a lot of tension in the supply chain.dindooohindoo

So Y Should they pay Import Duty ?

However,after the market in Pakistan,is seasoned and matured - the Pakistani state should ban imports,and allow manufacturing.The same importers can bring in the Chinese,as a JV into Pakistan.For FMCG and Consumer Goods,like Toys,Stationery etc.,all the raw materials, which are used in PRC,are available in Pakistan.Labour Cost in China is 10 times that of Pakistan.It is simple Maths

But the real gain is that - IT WILL BOOST GOVTT REVENUE.As the manufacture will leave a forensic trail,from power meters to pollution,and so,the state will earn large revenues which were lost before,and also save FX.

Option 5 - Manufacturing Intermediation

If you look at the state of pollution and effluents, in Karachi - it is a BAD and SAD situation. However,that is what has led to the COVID immunity in Pakistan.So the Good news just does not end.But this poisoning of the air,water,food,fish and meats - will take an incalculable toll on the intellectual,spiritual,social,sexual and physical evolution of Pakistanis.

Therefore,it is time to OUTSOURCE pollution,using Manufacturing Intermediation,by carrying out Manufacturihg from Intermediates.Hence,Pakistani manufacturing should use imported intermnediate products - wherein,all the poison,effluents and pollution,are in the exporting nation.PRC has the effluent treatment and waste recovery plants and dump sites on a scale,cost and technology,WHICH NO NATION IN THE WORLD HAS (not even the USA - as the USA,imposes a TAX,on storage of Hazardous Cargos).Of course,then COVID breaks out - but then,the PRC export it,and recover all the costs,of the effluent treatment.

Riaz Haq said...

#India continued its surge in #coronavirus cases, adding 93,337 new confirmed infections in the past 24 hours to reach a national caseload to more than 5.3 million, with the death toll reaching 85,619. #COVID19 #Modi #BJP #Hindutva https://www.scmp.com/news/asia/east-asia/article/3102214/coronavirus-latest-indias-cases-surge-japan-relaxes-rules-crowd


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

#India's #Economy Heads for Double-Digit Plunge as #CoronaVirus Spikes. Goldman Sachs estimates a 14.8% contraction in #GDP for fiscal 2020-21, while #ADB is forecasting -9%. OECD sees the #Indian economy shrinking by 10.2%. #COVID19 #Modi #BJP #Hindutva https://www.bloomberg.com/news/articles/2020-09-17/india-s-economy-heads-for-double-digit-decline-as-virus-spikes

India’s economic recovery prospects have gone from bad to worse after the nation emerged as a new global hotspot for the coronavirus pandemic with more than 5 million infections.

Economists and global institutions like the Asian Development Bank have recently cut India’s growth projections from already historic lows as the virus continues to spread. Goldman Sachs Group Inc. now estimates a 14.8% contraction in gross domestic product for the year through March 2021, while the ADB is forecasting -9%. The Organisation for Economic Co-operation and Development sees the economy shrinking by 10.2%.

The failure to get infections under control will set back business activity and consumption -- the bedrock of the economy -- which had been slowly picking up after India began easing one of the world’s strictest and biggest lockdowns that started late March. Local virus cases topped the 5 million mark this week, with the death toll surpassed only by the U.S. and Brazil.

“While a second wave of infections is being witnessed globally, India still has not been able to flatten the first wave of infection curve,” said Sunil Kumar Sinha, principal economist at India Ratings and Research Ltd., a unit of Fitch Ratings Ltd. He now sees India’s economy contracting 11.8% in the fiscal year, far worse than his earlier projection of -5.8%.

Goldman Sachs’s latest growth forecast came last week after data showed gross domestic product plunged 23.9% in the April-June quarter from a year ago, the biggest decline since records began in 1996 and the worst performance of major economies tracked by Bloomberg.

India is “likely to see a shallow and delayed recovery in corporate sector profitability over the next several quarters,” said Kaushik Das, chief economist at Deutsche Bank AG in Mumbai, who has downgraded his fiscal year growth forecast to -8% from -6.2%. That will “reduce the incentive and ability for fresh investments, which in turn will be a drag on credit growth and overall real GDP growth,” he said.

Still, foreign investor sentiment will likely return once the pandemic eases, said Todd Buchholz, a former White House economist and now author.

“The virus is seen as a temporary phenomenon,” he said in an interview. “Those investors who were lining up to invest in India in January 2020 will do so in 2021 also, and deregulation has to continue.”

samir sardana said...

COVID is an opportunity to re-orient the manufacturing strategy,of Pakistan - Part 4

The Manufacturing Matrix in Pakistan

Option 6 - The Ponzi Manufacturing Model

Robbing Peter to Pay Paul,is the Principle of Collaborative Capitalism - because,Humans have to be occupied - mentally and physically.Else you have chaos,anarchy and revolution.

Country A has to produce a Product X,although the said product,can be impored at 2/3rd the cost,in Country A (excl importing duty).Hence,The nationals of Country A,have to pay Billions of USD EXTRA,to consume Product X,made in Nation A,since the factories which produce X,in nation A,employ millions of nationals of nation A.This is Ponzi Manufacturing, like we have in India - and which has doomed,the entire Indian Banking system.

Y ?

As time passes,nation A which is a Bogus nation - like India,as a part of its strategic politics,will ally with the US and EU etc., and will have to drop tarriffs and non tarriff barriers.Then the imported substitutes of X,will storm the market and wipe out,the local factories.dindooohindoo

Y ? Simple ! The nationals of nation A,will ask 1 question ! Y should be pay more ? End of Ramayana - Part 1 !

There is 1 more Ponzi Angulature.A Bank - B,gives project loans to the factory,which makes X.Then the factory finds a banker - C,to give the working captal loans to the factory.After some time,Banker D comes in,and gives loans to the staff of the Factory,which makes Product X for cars,homes etc..After some more time,Banker E comes in,to give consumer credit,to the buyers of Product X.After a few years,Banker F to Z,give project and working capital loans, to the auto,real estate,cell phone companies,whose products were sold to the staff,of the factory of Product X (whose staff loans were funded by Bank D).This is the multiplier
effect,of the Ponzi Model.After some time,Bank A which gave the term loan to the factory, which makes Prouct X,targets the borrowers of Bank B,C,D and E and the employees of the borrowers.After 5 years,the factory which makes Product X,goes bust - and then,all the Banks from A to E,using the profits that they earned,from the No Brain Credit spreads - do a CDR/OTS,and fund a NEW ENTREPRENEUR,To take over the factory,which makes Product X.

The only fools who DO NOT GET THE CDR,are the fools working for the factory,which made product X - and who TOOK Consumer loans for cars,houses etc.- and the fools,who took bank loans,to finance the purchase,of Product X.But the biggest fools,are those who put their cash,in the banks,as depositors.

Pakistan also needs this Ponzi model,as it HAS To employ,the millions of urban and rural folk.Therefore,selection of the industry is critical,and the Economic Costs are to be considered.Focus has to be on SME (so that capital,political and Technological risk,is,as low as possible) and labour intensity and medium technoology and medium power consumption - such as imports on CKD/SKD form,and/or last point of manufacturing,packaging and re-packaging etc.

In the next stage,comes in all the items of daily consumption.As an example,if a person wants to buy a T-Shirt,there is no need to set up a yarn,textile,fabric and garment unit,in Pakistan.Just Import it - and the downstream retail,will employ 10s of 1000s of people.But for some applications,like school bags or uniforms - you can just import the fabric - and then the SME take over.Like this, there will several fool proof Ponzi Models - which will ensure the minimal loss - even in a doomsday scenario.

samir sardana said...

COVID is an opportunity to re-orient the manufacturing strategy,of Pakistan - Part 5

The Manufacturing Matrix in Pakistan

Option 7 - Decentralised SME manufacturing

Transportation is a dead loss and an economic loss.Suppose you transport a raw material from Torkham,to a place near Karachi,to make a Product Z,and then transport it back,to near Torkham to sell it to dealers - then you have a disaster of freight.The only happy person,is the transporter and the transportation supply and value chain.Therefore,Pakistan needs SME manufacturing near Point of Sale of end product,with labour intensive operations, and a combo of Entry Tax and 1st Point/Last point Tax,to ensure that the market of the SME,in a 100 kms radius,is protected.The Incremental NSR for the SME,due to savings of freight,will offset the probable higher manufacturing costs,of SME - which can also be offset by labour intensity of operations.

Volumetric cargo transportation,is a disaster for a nation,in terms of economic value.The happiness is only for the transporter as he charges the same freight as for a Bulk Cargo - but his fuel and operating costs,are lower.In a nation like Pakistan - freighting should be expended, on metric cargos.dindooohindoo

Option 8 - Cash Based Manufacturing

Pakistan should NEVER make the BLUNDER of the CHAIWALA's Notebandi.This clown has destroyed the unorganised manufacturing forever.Notebandi + GST + COVID Lockdown ! The CASH MODEL of manufacturing is a REALITY OF LIFE in the whole of Asia - including Nippon.It is a legitimate FORM OF COST REDUCTION.A person who buys a car does not get any VAT or IT offset on the taxes paid.If he could buy the same car free of taxes and lose out on some benefits like scope of insurance - he would take it ! There are many people who will NOT buy a car WITH TAXES.

To make a car w/o taxes,you need steel free of VAT.For that,you need to do your purchases, and all costs,in CASH.You need to borrow in cash.And that credit comes from BLACK money operators,and the CREDIT COST IS,in many cases,less than half the bank cost - and has PERFECT SENTIENT no asset collateral.You do not pay - you die !

If Taxes on a box of choclates is,say 25%,then the cash producer,can sell it at,less than half of the branded price,as he has NO TAX,across the supply chain,NO PF/ESI and most importantly - No Advertisement costs and ultra low finance costs.It is a manufacturing model for a CERTAIN CLASS OF PEOPLE,AS USERS AND WORKERS.

And this sector,employs billions across the world - who would,otherwise just die ! And that is what the Chaiwala has killed,and COVID has incinerated,the dead body.

Pakistan should NOT make that mistake.

Riaz Haq said...

#Pakistan central bank holds interest rate at 7% as outlook improves. "Business confidence and the outlook for growth have improved..This reflects the decline of COVID-19 cases in Pakistan and the easing of lockdowns." #COVID19 #economy https://finance.yahoo.com/news/pakistan-central-bank-holds-interest-130637851.html?soc_src=social-sh&soc_trk=tw via @YahooFinance


Pakistan's central bank held its benchmark policy rate at 7% on Monday, saying the economy looked set to pick up due to the lifting of lockdown restrictions aimed at curbing the coronavirus pandemic though risks remained.

"Business confidence and the outlook for growth have improved," the State Bank of Pakistan said in its monetary policy statement. "This reflects the decline of COVID-19 cases in Pakistan and the easing of lockdowns."

The central bank had slashed rates by 625 basis points in the three months to June, the most pronounced cuts in its history, as the pandemic hit the South-Asian nation.

The bank said that economic growth was expected to pick up to around 2% in the financial year 2021, compared to a contraction of 0.4% in the year ended June.

The decision was largely in line with expectations that the bank would ease off its dovish stance due to the rosier economic outlook while being mindful of the risks to inflation, which had ticked higher in June and July after it cut rates.

"As expected rates remain unchanged, (the) SBP highlighted risks to inflation while economic recovery this year can lead to GDP growth of more than 2%," said Mohammad Sohail, head of Topline Securities.

However, progress was expected to be patchy with construction and manufacturing driving growth in part due to central bank incentive policies, and remittances holding up despite global economic uncertainty.

Hospitality was expected to remain weak and the bank cautioned there heightened risks remained on the horizon due to the pandemic.

"Risks include a potential second wave of COVID-19 domestic infections, a possible sharp increase in infections...in Pakistan's major export markets in Europe and the U.S. and the threat to agriculture from locust attacks," the bank said.

Riaz Haq said...

#COVID19 Lessons for #Pakistan #Climate Advisor: For every $ invested in nature, you get 9 dollars back.
Imbalances between humans & natural world have led to zoonotic #pandemics. Pakistan's billion tree project has helped the economy and the community.
https://www.weforum.org/agenda/2020/09/two-things-nature-taught-us-during-covid-pakistan-climate-advisor/

Pakistan's climate minister and advisor Malik Amin Aslam says nature has taught us two key things during the coronavirus pandemic.

Firstly, if you treat it badly, it will strike back. And secondly, if you treat it well, there are many benefits.

The minister for climate change, who also advises Pakistan's prime minister, was speaking on the first day of the World Economic Forum's Sustainable Development Impact Summit.

"When you start investing in nature, nature always pays you back," he said, referring to Pakistan's billion tree planting project, which has reaped dividends by creating jobs, engaging the community and helping develop a new economy.


He said his country's experience proved that for every dollar you invest in nature, you get nine dollars back.

"We don't have to come out of this pandemic on the same pathway that got us in there. You've seen the different world during this pandemic when humans have retreated. What has happened? You've seen the blue skies, the clean air that we've all built," he said, describing this as a positive opportunity.

Hanging in the balance

On the other hand, treating nature badly could lead to more difficulties down the line, the minister warned.

"The stark warning that nature has given to all of the world is that there are boundaries and nature works within certain limits and certain balances. And if we tried to tilt that balance, nature will strike back," he said.

The minister pointed to the fact that we are living in the middle of a zoonotic pandemic because humans have invaded the territory of animals as evidence of nature striking back.

Zoonotic diseases are those that jump from animals to humans. Rats, bats, monkeys and apes are among those more likely to spread zoonotic germs. Other illnesses and diseases that have been spread this way include Ebola, HIV, SARS and MERS, and Zika.

The UNEP has warned that human activity including urbanization and industrialized agriculture has laid the foundations for pandemics by causing biodiversity loss and environmental damage.

The coronavirus is now present in more than 200 countries, with more than 31 million global cases and almost one million global death, according to figures compiled by the Johns Hopkins University.

Riaz Haq said...

#Pakistan current account balance reached a surplus of $805 mn during Jul-Aug FY21 compared to a deficit of $1.2 billion in the same period last year. Higher #remittances, flexible exchange rate and relatively benign #import prices explain the improving current account balance.

https://twitter.com/StateBank_Pak/status/1308635186922430464?s=20

https://twitter.com/StateBank_Pak/status/1308635188822507520?s=20

Riaz Haq said...

WHO chief praises #Pakistan’s successful handling of #coronavirus #pandemic . In an Op Ed in the #UK’s “The Independent”, he writes: “Pakistan deployed infrastructure built up for polio to combat Covid-19” #COVID19 #PTI #ImranKhan | The Express Tribune https://tribune.com.pk/story/2266237/who-chief-praises-pakistans-successful-handling-of-pandemic

One million lives have been lost to coronavirus, but it's never too late to fight back

This milestone is a difficult moment for the world, but there are glimmers of hope that encourage us now and in the near future

Tedros Adhanom Ghebreyesus
@DrTedros

https://www.independent.co.uk/voices/coronavirus-deaths-cases-global-vaccine-news-trials-who-b668755.html

Pakistan deployed the infrastructure built up over many years for polio to combat Covid-19. Community health workers who have been trained to go door-to-door vaccinating children against polio have been redeployed and utilised for surveillance, contact tracing and care. This has suppressed the virus so that, as the country stabilises, the economy is also now picking up once again. Reinforcing the lesson that the choice is not between controlling the virus or saving the economy; the two go hand-in-hand.



Riaz Haq said...

Here's a hit job on Pakistan...seems that Economist never heared of #COVID19 “positivity rate” that is guiding #California and most of the world in decision making. #Pakistan positivity rate has been below 2% since August, thanks to #ImranKhan’s policies https://www.economist.com/asia/2020/09/30/is-pakistan-really-handling-the-pandemic-better-than-india?fbclid=IwAR0yF2OU9Hv2eQv7blorstFHhwGV9-OpUhlcS0eYv8dQR1sYznPGUYS8c6I


According to this Economist piece, "Imran Khan crowed" about Pakistan's success against COVID19 pandemic. It quotes an Indian professor at Princeton saying "Test not, find not" and Pakistan's "relative backwardness" as the reasons for Pakistan's lower cases. Conspicuously absent from Economist's narrative is the fact that the percentage of tests (25,000-30,000 a day) that are positive has been below 2% since August, 2020.

Excerpt: " “We have not only managed to control the virus, stabilise our economy, but most importantly, we have been able to protect the poorest segment of our society from the worst fallouts of the lockdown,” crowed Imran Khan, Pakistan’s prime minister, in a recent video address to the un General Assembly."

Excerpt: "There are less heroic reasons for Pakistan’s lower covid toll, too. Some, ironically, stem from its relative backwardness. “Basically, it is undertesting on a massive scale,” contends Ramanan Laxminarayan of Princeton University. He notes that Pakistan tests for covid at less than a quarter of India’s rate, per person, adding that the relatively poor Indian state of Uttar Pradesh, with a population equal to Pakistan’s and a similar failure to test widely, has also registered similar numbers of cases and fatalities (see chart). “Test not, find not,” says Mr Laxminarayan. “It’s the same with authoritarian regimes the world over.”

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

Demography is another factor. Both Pakistan and India have a far smaller proportion of old people than rich countries do. Just 4% of Pakistanis are over 65, for example, compared with 23% of Italians. Yet the median age in Pakistan, 23, is four years lower than India’s, and its average life expectancy, 67, is two years shorter. This puts a far smaller proportion of Pakistanis in the age bracket most vulnerable to covid.

Although both countries remain largely rural, Indians are much more mobile, both domestically and internationally. Some 160m Indians travel by air annually compared with fewer than 10m Pakistanis; passenger traffic on Indian railways is 130 times greater. Mr Modi’s lockdown, ironically, first bottled tens of millions of migrant workers inside cities that were often reservoirs of covid and then, as pressure mounted to let them return to their villages, distributed the epidemic more widely. Pakistanis, by and large, have instead stayed put at home, which more often means a family home in a village, and less often the kind of crowded workers’ colonies that ring Indian cities. The laxness of Pakistan’s lockdown meant that most small businesses stayed open, whereas nearly all in India were forced to close.

--------

Despite the starkly different trajectories covid has taken so far in India and Pakistan, experts warn against drawing firm conclusions. “Our lockdown may have hurt India more than the disease itself, but in other respects we are much like Pakistan,” says Jayaprakash Muliyil, an adviser to India’s National Institute of Epidemiology. None of the numbers coming from either country is likely to present a true picture, he suggests: “We both really cannot see what is happening in villages, where most people live, and we share the same disdain for proper data.”

Riaz Haq said...

#Coronavirus Study: #Kids And Superspreaders Are Driving COVID-19 Cases In #India. This will have major implications for #children returning to classrooms, to sports and to other activities where kids tend to be in close contact to each other. #COVID19 https://www.npr.org/sections/goatsandsoda/2020/10/01/919237103/kids-and-superspreaders-are-driving-covid-19-cases-in-india-huge-study-finds?utm_campaign=storyshare&utm_source=twitter.com&utm_medium=social

In the largest study ever of transmission patterns for COVID-19, researchers in India tested more than a half-million contacts of 85,000 cases to examine how and to whom the coronavirus is spreading.

The first interesting finding: Children are spreading the virus amongst themselves and also to adults. Second: The greatest risk for infection among the people studied in the two southern Indian states of Tamil Nadu and Andhra Pradesh is a long bus or train ride.

The attack rate — or the risk of transmission from a primary case to someone else — was 80% for passengers sitting next to an infected person on a bus or train for more than 6 hours without a mask. By comparison, there was only a 9% chance of an infected person giving the virus to another member of their household. The chances of a person passing on the virus in a hospital or clinic was 1.2% and the attack rate was just 2.6% for interactions in the general community.

In fact most people — 71%, according to this study — appear to have never passed the virus on to anyone. Given that the outbreak continues to grow, this means there are a small minority of patients responsible for the vast majority of spread.

"Some people just transmit more than other people do because they shed virus," says Ramanan Laxminarayan, the director of the Center for Disease Dynamics, Economics and Policy in New Delhi and one of the lead authors of the study, published this week in the journal Science.

"We've never had a good handle on [superspreaders], and certainly no large-scale study," he says. "Here in this study, we found that 8% of the people who were infected were responsible for 60% of the infections that grew out of these primary cases."

India, unfortunately, has become an ideal place to study the spread of the novel coronavirus. Recently, the country has been reporting nearly 100,000 new cases per day. Testing is widely available and in the states of Tamil Nadu and Andhra Pradesh, where this study was carried out, public health workers have been aggressively tracking local infections.

Riaz Haq said...

#Pakistan’s Orange Line #Metro train project under #CPEC completed in #Lahore. A total of 27 sets of trains will be put into use which are expected to provide traveling service for 250,000 passengers daily, at the early stage of the commercial operation. https://www.wefornews.com/pakistans-orange-line-metro-train-project-under-cpec-completed/


The Orange Line Metro Train project in Lahore under the China-Pakistan Economic Corridor (CPEC), has been completed and was delivered to the Pakistani side, it was announced.

As an early-harvest project of the CPEC, the Orange Line is Pakistan’s first-ever mass rapid urban transit train service, and the project is built by a joint venture of China State Railway Group Co., Ltd. and China North Industries Corporation, Xinhua news agency reported.

With a total investment of around $1.6 billion, the construction work of the Orange Line project started in September 2015, and the project is expected to be put into commercial operation soon.

Wang Yunlin, executive deputy general manager of the Orange Line project, told the media that despite the Covid-19 pandemic and tight construction schedule, the project was successfully completed and delivered.

Over 2,000 local people were employed at the peak of the project’s construction, he said, adding that the travelling of local people will be greatly improved after the project is put into commercial operation.

According to the joint venture, the length of the Orange Line project is 25.58 km, and the project has 26 stations including 24 elevated stops and two underground stations, connecting several densely-populated areas of Lahore.

A total of 27 sets of trains will be put into use which are expected to provide travelling service for 250,000 passengers daily, at the early stage of the commercial operation.

Riaz Haq said...

Shahid Ali Habib on double digit increase in corporate earnings in Pakistan:


83 companies of #PSX have so far announced quarterly (July-Sep) results showing an AVG earning growth of 51% yoy. Out of KSE100, 43 companies have announced so far showing an AVG earning growth of 46% yoy. Outstanding growth pace in this quarter!

#Pakistan #EmergingMarkets



https://twitter.com/shahidalihabib1/status/1320225106522738688?s=21

Riaz Haq said...

Shell #Pakistan quarterly profits jump from Rs 570 million last year to Rs 1.8 billion in Q3/2020 in spite of the impact of #coronavirus #pandemic. #oil #energy https://profit.pakistantoday.com.pk/2020/10/28/shell-pakistan-posts-rs1-8bn-profit-for-q3-2020/

The Board of Directors of Shell Pakistan Limited on Wednesday announced the company’s financial results for the third quarter ending September 30, 2020.

The company posted an after tax profit of Rs1,812 million in 3Q2020 compared to the profit of Rs570 million in the same period of last year.

“Overall, the financials still present a challenging situation, driven primarily by the unprecedented coronavirus pandemic and its effects, which resulted in declining fuels demand and volatility in the international oil prices,” read a statement issued by the company.

Over the course of the nine months, Pak Rupee devalued against the US dollar by a further 6pc. Although Pak Rupee remained relatively stable during the quarter, its effects were felt in the overall results of the company.

Being part of an import dependent industry where a large percentage of the company’s costs are denominated in foreign currency, this devaluation had an impact on its cost base and, in turn, on its financial performance.

Riaz Haq said...

Opening Early Helped Pakistan Boost Exports During Pandemic

https://www.bloomberg.com/news/articles/2020-10-29/opening-early-helped-pakistan-boost-exports-during-pandemic

Pakistan’s decision to loosen pandemic restrictions early has helped the nation’s exports emerge stronger than its South Asian peers.

Outbound shipments have grown at a faster pace than Bangladesh and India as textiles, which account for half of the total export, led the recovery, data show. Islamabad saw total shipments grow 7% in September, compared with New Delhi’s 6% and Dhaka’s 3.5%.

Pakistan Prime Minister Imran Khan’s administration was the first in the region to ease pandemic restrictions, allowing export units to reopen in April, a month after locking them down to stem the spread of Covid-19. That’s helped draw companies from Guess? Inc., Hugo Boss AG, Target Corp. and Hanesbrands Inc. to the South Asian nation, according to people familiar with the matter, who requested anonymity since details about buyers is private.

“Pakistan has seen orders shifting from multiple nations including China, India and Bangladesh,” said Shahid Sattar, secretary general at the All Pakistan Textile Mills Association. “Garment manufacturers are operating near maximum capacity and many can’t take any orders for the next six months.”

Hugo Boss said in an email that it focuses on long-term supplier partnerships while watching for “additional or new procurement channels.” Hanesbrands said it sources from many countries, including China and Pakistan, to supplement production from company-owned facilities. Neither company provided details. Guess and Target didn’t respond to requests for comment.


Even as lockdown curbs disrupted trade in India and Bangladesh for at least two months beginning late March, Pakistan was already making face masks and personal protective gear for export. The South Asian nation also gained some orders from companies looking to diversify their supply chains amid the trade war between the U.S. and China, the world’s top textile exporter, despite factories there reopening as early as April.

“This war between two giants has given us new opportunities in polyester-cotton products,” said Khalid Mehmood, head of garment and home textile operations at Nishat Mills Ltd., the nation’s largest textile maker. “So there is a six-month slot for Pakistan now to capture maximum number of customer that were China based.”


Executives from Nishat Mills and Interloop Ltd., one of the world’s largest manufacturers of socks that counts Nike Inc. and Adidas AG among its clients, said they have seen some orders diverted to them from China. Meanwhile, Gadoon Textile Mills Ltd. has received orders redirected from Bangladesh, the world’s second-largest apparel exporter, and India, the third-largest textile exporter.

“The orders we were exporting to Europe and the U.S. have not recovered,” Muhammad Imran Moten, chief financial officer at Gadoon, said during an analyst briefing. “But diversion of orders from China and Bangladesh is the compensating factor.”

Increase in exports, which account for some 10% of Pakistan’s gross domestic product, can help spur growth in the economy after its first contraction in 68 years in the year ended June. Khan’s government is targeting a growth of 2.1% in the current financial year.

But there are risks on the horizon that may temper growth prospects for the economy. Khan’s government announced measures this week to contain a second wave of Covid-19 infections, including mandatory wearing of masks in public and early closure of markets and restaurants. Then there’s the issue of competitiveness.

Riaz Haq said...

During the period, the PTI government repaid 78 percent more debt than PML-N government, the (Finance) advisor (Hafeez Shaikh) tweeted on Saturday.

https://www.brecorder.com/news/40032870

He said that despite the challenges posed by Covid-19, Pakistan's industrial sector was thriving as Large scale Manufacturing Industry (LSMI) including textile production and auto-sales were on the rise. "PTI government incurred 48pc less external liabilities in first 9 quarters compared to

PML-N government's last 9 quarters while doing 78pc more debt servicing. Despite the challenges posed by Covid-19, Pakistan's industrial sector is thriving. LSM, textile production & auto-sales are on the rise," the advisor tweeted."

The advisor shared State Bank of Pakistan's data which showed that the net to external debt stood at $24.8 billion during PML-N tenure from March 2016 to June 2018, where as in PTI's tenure from June 2018 to September 2020, the net external debt stood at $18.5 billion.

The overall liabilities impact was recorded at $31.1 billion during the PML-N period under review whereas the overall liabilities impact has been recorded at $16.1 billion in PTI's tenure under review.

The external debt serviced (principal + interest) stood at $16.7 billion in PML's period whereas it stood at $29.7 billion during the PTI's tenure of nine quarters under review.

Meanwhile, quoting Pakistan Bureau of Statistics latest statistics, he said, the Large Scale Manufacturing growth increased 7.65 percent in September 2020, compared to last September whereas it grew by 4.81 percent during the first quarter of the current fiscal year (July-Sept 2020-21).

On year-on-year basis, the non-metallic mineral products grew by 21 percent in September 2020, pharmaceuticals by 20 percent, food by 10pc, autos by 28 percent, textiles by 2.5 percent, fertilizers by 8 percent, paper and board by 12 percent, chemicals by 8 percent and rubber 15 percent.

On the other hand, the car sales have increased from 10,853 units in October 2019 to 14,054 October 2020, showing an increase of 29 percent.

Likewise, the sale of motorcycles also increased by 12 percent, from 156,872 units in last October to 175,294 units in October 2020 whereas the sale of tractors went up from 2,861 to 4,482, showing growth of 57 percent and trucks and buses sale grew from 349 units to 388 units, a growth of 11 percent.

Riaz Haq said...

Debt comparison 9 quarters PTI vs PMLN



https://twitter.com/MuzzammilAslam3/status/1327656481366421505?s=20

Much of the increase in net ext debt during PTI period (of $18.5bn) has been thanks to the legacy left behind by PMLN of burgeoning current account deficit - $13.43bn FY18/19 + $2.96bn FY19/20. As we experience current account balance net debt increment should further decelerate

https://twitter.com/javedhassan/status/1327659911149445120?s=20

Riaz Haq said...

India ranks 34th in global Covid resilience survey, placed below Pakistan and Bangladesh
According to the Covid Resilience Ranking by Bloomberg, 12 Asian countries have scored better than India in handling the coronavirus pandemic.

https://theprint.in/india/india-ranks-34th-in-global-covid-resilience-survey-placed-below-pakistan-and-bangladesh/551418/


India has been ranked 34th among 53 countries in the world that have handled the coronavirus pandemic most effectively, according to a Covid Resilience Ranking by Bloomberg.

The survey was published Tuesday and gives India a resilience score of 58.1, way below top performer New Zealand which has a score of 85.4. Pakistan, with a score of 61.7, has performed better than India and was ranked 27th, whereas Bangladesh, with a score of 64.2, was placed at the 24th position.

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

Effective testing and tracing is a hallmark of almost all the top 10, embodied in South Korea’s approach. The country approved home-grown diagnostic kits within weeks of the virus’s emergence, pioneered drive-through testing stations and has an army of lightning-fast contact tracers who comb through credit card records and surveillance camera footage to track down clusters. Like Japan, Pakistan and other parts of Asia, Korea has drawn on recent epidemic experience after suffering an outbreak of Middle East Respiratory Syndrome, or MERS, in 2015.

In contrast, developing countries like Pakistan and Bangladesh have benefited from their relative remoteness. Their populations are also much younger on average, which has helped hold down their overall mortality rates. Limited testing and poor-quality data obscures the picture in these places, though under-reporting of cases and deaths is occuring everywhere.

https://www.bloomberg.com/graphics/covid-resilience-ranking/?sref=4OaaL8PX&utm_medium=social&cmpid=socialflow-facebook-business&utm_source=facebook&utm_campaign=socialflow-organic&utm_content=business&fbclid=IwAR2NPfMOmHX1FU6tt-CVQhhN_p4bZzY04MLRWvl-Si8llGwH6VQi_DrRnLU

Riaz Haq said...

After sluggish growth, Pakistan’s economy is poised to bounce back in 2021, reports Pakistan Strategy Report 2021 by the Arif Habib Limited (AHL) Research.

https://www.brecorder.com/news/40037736

As per the report, the surge in economic activity plus attractive valuations could bring 20 percent growth sending the Pakistan Stock Exchange (PSX) index to 52,000 by December next year.

“Led by strong earnings growth, economic growth, broadly stable external position, and cheap valuations, we expect the KSE-100 Index to generate a lucrative total return of 28pc (USD-based: 23pc) during CY21 taking index level to 52,000 by Dec’21,” the report said.

The report was of the view that it expects the economic activity in Pakistan to continue the robust pace it has shown over the last couple of months.

The GDP growth is expected at 1.8 percent during FY21. Whereas, The Current Account, while swinging into a deficit, is expected to be manageable (-0.9pc of GDP), attributable to consumption-driven, import-dependent GDP, the report stated.

The report expects no significant depreciation of the currency with PKR/USD 168 expected by Dec’21, owing to orderly market conditions, continued robust inflows from remittances and improved exports.

Housing finance, construction package and TERF (subsidized investment scheme for industries which expires on December 2020) are some of the government’s efforts to fuel investment activities in the country, it said.

The G20 debt relief and low-interest rates would allay the stress off debt servicing expenditure, the report pointed out.

Talking about the Sectoral Outlook; the report stated that in the cement sector, aggregate demand revival and government incentives for the construction industry should help propel dispatches growth. Whereas, in the auto sector, the stability in the PKR/USD parity, and strong volumes growth amid demand revival and low-interest rates should stimulate bottom-line of companies.

Riaz Haq said...

Why are #Chinese #car makers setting up shop in #Pakistan? Master Chang'an Motors, a Pakistan-Chinese #automotive joint venture recently sold out 6 months’ production of its first compact sedan car Alsvin within five days of market launch. https://www.scmp.com/week-asia/economics/article/3118875/why-are-chinese-car-makers-setting-shop-pakistan?utm_source=Twitter&utm_medium=share_widget&utm_campaign=3118875 via @scmpnews

The sell-out success of the Chang’an Alsvin sedan is the latest Pakistani-Chinese joint venture to have raised eyebrows in the automotive world
Chinese car firms seeking new avenues for growth, while hampered in India, see Pakistan as an entry point to the right-hand-drive markets of South Asia

The stock-clearing sale of 15,000 Chang’an Alsvin passenger vehicles is the latest in a series of headlines about joint ventures between privately held Pakistani conglomerates and Chinese state-owned automotive enterprises.
The Alsvin is assembled at a US$136 million plant near the port city of Karachi owned by Master Chang’an Motors (MCM), established in 2017 as a 70:30 joint venture between the local Master Group and leading Chinese carmaker Chang’an Automobile. In addition to the 30,000 units a year of the Alsvin, it began producing two pick-ups and a multi-purpose vehicle in 2018.
Shanghai-based SAIC Motor, owner of the British car brand MG, this month broke ground at the site of a US$100 million plant near Karachi which is expected to begin production of three small-engined sports utility vehicles, or SUVs, next year.

KA Hanteng Motor, a joint venture with China’s Hanteng Automobile, is building a US$50 million plant in Pakistan and is expected to start making 15,000 SUVs and passenger cars this year.

Al-Hajj FAW, a Karachi-based joint venture formed in 2012, ramped up production of hatchbacks last year to 20,000 vehicles.
When the Master Group proposed the joint venture to Chang’an Automobile in 2016, it did so with the ambition of leveraging the estimated US$60 billion China-Pakistan Economic Corridor (CPEC) to gain access to other Asian markets targeted for investment under the Belt and Road Initiative, MCM’s chief executive Danial Malik said.

Riaz Haq said...

Pact signed to assemble European brand vehicle

https://www.dawn.com/news/1614622

The Lucky Motor Corporation (LMC), manufacturer and distributor of Kia vehicles, entered into a Licence and Technical Assistance Agreement this week with the Stellantis Group to assemble and distribute one of their European brands in Pakistan.

The Stellantis Group is the world’s fourth largest car group which was recently formed and it contains a portfolio of 14 international brands.

The LMC in mid-2019 had signed an MoU and expression of interest (EoI) with Groupe PSA which is now part of the Stellantis Group. Last year before achieving the manufacturing licence under the government’s new entrant policy, the LMC (then known as Kia Lucky Motors) had informed the government of its intentions to partner with Peugeot, a brand of the Stellantis Group.