Thursday, April 14, 2016

Pakistan Received $19.3 Billion in Remittances in 2015 Amid Falling Oil Prices

Pakistani diaspora sent home $19.3 billion in remittances in 2015, representing 12.8 % increase over 2014, according to a World Bank Report titled "Migration and Development Brief" released today.

Pakistan's $19.3 billion in remittance make up 6.9% of 2014 GDP, essentially closing the rising trade deficit amid the nation's falling exports.

The 12.8% increase over 2015 is substantial but it is down from 16.7% jump seen in 2014 over 2013. The report attributes the slower remittance growth from Gulf Cooperation Council (GCC) countries like Saudi Arabia and United Arab Emirates to falling oil prices.

This report comes soon after the Panama Leaks that show how Pakistan's corrupt elite, including Prime Minister Nawaz Sharif's family, are moving and hiding in offshore tax havens the hard-earned dollars sent home by overseas Pakistanis to keep Pakistan's economy afloat.

Overseas Remittances in South Asia Source: World Bank 

In Q4 of 2015, year-on-year growth of remittances to Pakistan from Saudi Arabia and the UAE were 11.7 percent and 11.6 percent, respectively, a significant deceleration from 17.5 percent and 42.0 percent in the first quarter, said the report.

Global remittances, which include those to high-income countries, contracted by 1.7% to $581.6 billion in 2015, from $592 billion in 2014, the World Bank said.

India was the top recipient with $68.9 billion in remittances in 2015, a decline from $70 billion in 2014. This marks the first decline in remittances since 2009,  according to the report.

The growth of remittances in 2015 slowed from 8% in 2014 to 2.5% for Bangladesh, from 16.7% to 12.8% for Pakistan, and from 9.6% to 0.5% for Sri Lanka. “Slower growth may reflect the impact of falling oil prices on remittances from GCC countries,” the report said.

The only country in South Asia to see dramatic growth in remittances was Nepal. The overseas Nepalese workers sent home $7 billion in 2015, an increase of 20.9 percent in 2015 versus 3.2 percent growth in 2014. After the devastating earthquake that hit the Himalayan nation, many Nepalese migrant workers returned home to take care of their families, as the average number of returns at the airport jumped five times to around 4,000 per day.

“Remittances are an important and fairly stable source of income for millions of families and of foreign exchange to many developing countries,” said Augusto Lopez-Claros, director of the World Bank’s Global Indicators Group.

“However, if remittances continue to slow, and dramatically as in the case of Central Asian countries, poor families in many parts of the world would face serious challenges including nutrition, access to health care and education,” Lopez-Claros said.

Related Links:

Haq's Musings

Remittances to Pakistan

Pakistani Names in Panama Leaks

Pakistan Diaspora is Among the World's Largest

Pakistan's Corrupt Elite

Remittances Offer a Lifeline to Pakistan's Poor

Aid, Investment, Trade and Remittances to Pakistan


S Qureshi said...

Is there any information available regarding how much remittances going to a particular district/city in Pakistan? Say top 10 remittances receiving districts/cities in Pakistan.

Riaz Haq said...

Qureshi: "s there any information available regarding how much remittances going to a particular district/city in Pakistan? Say top 10 remittances receiving districts/cities in Pakistan."

It doesn't directly answer your question but here's an excerpt from a 2010 blog post by a World Bank economist Sanket Mohapatra:

"Migration and remittances have provided a source of income for households in Khyber Pakhtunkhwa (KP) and other provinces in Pakistan. A recent Asian Development Bank study found that foreign remittances constituted 9.4 percent of household income in KP, compared to 5.1% for Punjab, 1.5% for Baluchistan, and 0.7% for Sindh"

Anonymous said...

So Pakistan has twice the remittances per GDP.How come?

Unknown said...

problem with Pakistan is the wrong set of priorities,$ 2 billion/year on smart phone imports is stupid when 2billion/year can build a bhasha dam in 5 years.....but no we would rather beg for international assistance and be the cheapest prostitute in town

Riaz Haq said...

Anon: "So Pakistan has twice the remittances per GDP.How come?"

It's because India incorrectly reports the wages earned by India's temp tech workers abroad as IT exports, not as remittances.

There are conservatively 600,000 Indian H1B workers in the US each being paid conservatively $80,000 a year. This adds up to $48 billion from US alone. Part of this amount should be counted as part of remittances from overseas workers, not as IT exports for the year.

Ali H. said...

"Prime Minister Nawaz Sharif's family, are moving and hiding in offshore tax havens the hard-earned dollars sent home by overseas Pakistanis to keep Pakistan's economy afloat."

How does that work, Sir?

Riaz Haq said...

Ali H: "How does that work, Sir?"

There are 4 sources of US dollars in Pakistan: Exports, Foreign Aid, FDI and Remittance from Pakistani diaspora.
Of these, remittances represent the largest or the second largest share.

These are the dollars in Pakistan that are moved and hidden offshore by Pakistan's corrupt elite.

James Patel said...

Per The Economist and IMF India is set to grow by 7.6% and Pakistan by 4.8% in2016-17. You mention remittances showing high growth for Pakistan and software service exports from India inflated.

I am puzzled or there is a bubble about to burst?

Riaz Haq said...

#Pakistan service economy shows strong growth in 1H FY16: SBP. #Transport, #Telecom, #Finance, #Government sectors …

"While it is too early to make a robust assessment of services sector performance for the full year, most of the indicators suggestive a positive trend," said the SBP report.

Production and sales of commercial vehicles has registered a phenomenal growth during first half of the current fiscal year, on the back of the Apna Rozgar scheme launched by the Punjab government, and up tick in overall commercial activity in the country.

According to the report, the transport sector performance included a sharp increase in petrol sale, an increase in cargo handling at domestic ports and most importantly a drastic containment of losses borne by Pakistan Railways and Pakistan International Airlines.

Low oil prices and stable exchange rate have indeed played an important role in improving financial health of these public sector entities. Pakistan Railways has also gained from growing volumes of both freight as well as passenger transport.

In case of telecommunication sector, the report added, the role of increased usage of 3G/4G broadband services all across the country has been dominating, adding that the financial health of most telecom firms has improved, benefiting primarily from data revenues.

According to the report, cellular firms have also partnered with leading commercial banks in the country to support the penetration of Internet banking services. These firms also are actively participating in money transfer services all across the country. The reports said that the telecom sector is now playing a dominant role in modernising the country's payment system infrastructure, and is also contributing to the wider objective of enhancing financial including in the country for marginalised or unbanked segments of the society.

PTCL, the market leader, has continued to incur losses during first half, however, it has been able to reduce its losses compared to the same period of last year.

The financial and insurance sub-sector had recorded 6.1 percent growth during FY15, which was mainly driven by exceptional increase in profitability of commercial banks. These profits further increased during the first half of current fiscal year, however, its space remains significantly lower than the last year. The general government services had registered 9.5 percent growth against the annual target of 4.3 percent of FY15. This year, the sub-sector also is expected to end up registering a modest growth.

The wholesale and retail trade is likely to benefit from higher large manufacturing growth in first help compared to the same period of last year. The continuous increase in imports (especially non-oil) and domestic demand is also likely to keep trading margins intact while expectations of a bumper wheat crop on the back of strong yields will also benefit the wholesale and retail sectors.

Shah said...

Riaz Sahib Why Can't We Do The Same Thing India Did And Is Now Reaping Rich Fruits.Why Can't We Lobby US Government for H1B Visas and Also Lobby The Silicon Valley Giants To Come And Offer Placements To Pakistani Students The Same Way They Offer IIT Students.If India Is Earning $48 Billion Every Year We Should Earn At Least That Amount

Riaz Haq said...

Shah: "Why Can't We Lobby US Government for H1B Visas and Also Lobby The Silicon Valley Giants To Come And Offer Placements To Pakistani Students The Same Way"

There's a reason why no nation other than India does this: Body shop business run by Tata and Infosys and other Indian "IT" companies is a highly exploitative form of human trafficking that is akin to indentured servitude. It takes a great human toll on young educated Indian professionals who serve as code coolies.

The preferred path is to keep your human capital at home and use them to develop real software products and services that can be used at home and also exported.

Ali H. said...

Well just one problem with this theory and it is at a fundamental level. Over invoicing can lead to loss of tax revenue which got nothing to do with remittances !
Plus, the point of over invoicing is somehow to keep the earning/money hidden. Why would he then remit the money and document the transaction ?

Riaz Haq said...

Ali H: "Over invoicing can lead to loss of tax revenue which got nothing to do with remittances ! "

It has everything to do with remittances that make up the biggest or the second biggest source of hard currencies in the country. Payments of over-invoiced imports are made with these funds that are derived from remittances. The over-invoiced amounts are then taken by the corrupt officials kept in offshore accounts

r_sundar said...

>>>"It takes a great human toll on young educated Indian professionals who serve as code coolies."

People take pride, no one is shackled to be a "code coolie". PASHA and other agencies have tried in Pakistan and have barely been able to make a dent. So don't trivialize or ridicule it.

It is one of the most important factors that has been helping India grow. "Code Coolie" economy has helped a whole bunch of other supporting Industries and innovation to thrive.

Forget about the papers and numbers, when I visited India earlier this year, the development all round was abundantly visible, not just in the urban areas, but also in rural areas as well. No wonder many Indians want to go back...

Majumdar said...

Prof sb,

The preferred path is to keep your human capital at home and use them to develop real software products and services that can be used at home and also exported.

Why dont you take your own advice and send your own human capital (yourself) back to Pakiland and develop "real software products and services" that can be used at home and exported. And what about the millions of Pakis who work elsewhere and send back the USD 19 billion remittance that you proudly speak about. Why not ship them back so that they can develop (software and other) products and services that can be used at home and also exported.


Riaz Haq said...

Majumdar: "And what about the millions of Pakis who work elsewhere and send back the USD 19 billion remittance that you proudly speak about. "

There is no organized body shop business in Pakistan like there is in India in the form of Infosys and TCS.

You know nothing about the horror stories all too common for Indians who are brought to the US shores under H1B that ties their fate to them like that of slave to his or her master.

The closest thing to it are the brick kiln slaves in India.

Here's an excerpt of a recent TOI story:

Here's a Janus image for you. On the one side, half a dozen H-1B workers bunkered in a choked 'guesthouse' in America, anxious to be summoned by their labour broker to a job they know will pay discriminatory wages and mean long hours. When they do get the job, the broker often pockets a cut and can even sue if the employee quits or switches jobs.
Cut to India where hundreds of young men line up outside the offices of the very same labour brokers, ready to pay out large sums for their American dream.

The nightmarish story of the 'indentured' Indian tech worker in America has found its most recent rendering in a graphic novel published by The Center for Investigative Reporting (CIR), a non-profit American organization. A Pulitzer Prize finalist in 2012 and 2013, CIR may just be in the running again for its work on the mercenary practices of the tech 'in-sourcing' industry, which thrives on the inflow of highly-skilled Indian tech workers on H-1B visas.

CIR's graphic novel has been scripted and sketched by Silicon Valley reporter Matt Smith, who along with fellow journalist Gollan, spells out the tech staffing firms' damning five-point modus operandi - 1. Companies lure Indian workers to the US with phantom jobs. 2. Workers are often unpaid (brokers withhold salaries). 3. Brokers demand cash for visas. 4. Workers often feel pressure to "spice up," or falsify, their resumes (brokers often suggest they do this in order to get hired). 5. Bonding and penalties are heaped on workers who quit. They also write about the culpability of US government departments that have looked past H-1B violations.

Smith and his colleagues, Jennifer Gollan and Adithya Sambamurthy, spent a large part of their year-long investigation tracking down workers who would actually talk to them. "The wall of silence from Indian IT workers can only be compared with attempting to investigate an organization under a strict Omerta," says Smith on email. "Early on I was writing and calling people I found through LinkedIn and Nexis, and databases such as Benchfolks, chat rooms such as MyVisajobs and, and a list of industry contacts used by labour brokers. Ultimately, it turned out that the most effective way to find workers willing to talk was to go physically to local courthouses with a digital scanner in hand, seeking to find lawsuits involving suspect companies."

Few victims are willing to challenge staffing companies or employers in court because judgments against Indian workers who have 'violated' their contracts by switching jobs or quitting before time can incur penalties in excess of $50,000, CIR discovered.
Gobi Muthuperiasamy took that risk. The software engineer from Madurai spent three years in court when his labour broker sued him for switching jobs. Although Muthuperiasamy won the case, and didn't have to pay his broker a penny, he was still poorer by $25,000 in legal costs.

Majumdar said...

Prof sb,

There is no organized body shop business in Pakistan like there is in India in the form of Infosys and TCS.

Are you saying that it wud be better for India/Pakiland to have unorganised body shops?

And what about the millions of unskilled Indians/Pakis who work in ME, under far worse conditions. These are the guys who bring in the USD 69 billion/19 billion that you refer to. Surely you are aware of that.


Majumdar said...

And face the reality, sir. If Pakiland had a Infy/TCS with billions of dollars in revenues and m-cap, you wud be proudly writing about them, not calling them body shopping firms.


Riaz Haq said...

Majumdar: "And what about the millions of unskilled Indians/Pakis who work in ME, under far worse conditions."

Vast majority of those who toil in the Middle East come from a different stratum of society; they are not the best educated and the most skilled; they are not the cream of the crop. They have fewer choices.

Anonymous said...

"You know nothing about the horror stories all too common for Indians who are brought to the US shores under H1B that ties their fate to them like that of slave to his or her master. "

And you know nothing about 100s of 1000s employees of IBM/Oracle/MS/Intel in India and who bring $ to India. Body shopping companies are not a major part of India IT industries. India has moved far up in value addition. You don't seem to be aware of that, or may be you are pretending so that you can feel better.

Pakistan could not do anything in IT , not because they don't want to, but because they are not capable. Surely Pakistanis are not stupid to focus only on low value addition of underwears and towels, where they are increasingly getting squeezed out.

BTW do you know the horror stories of the working conditions in Chinese factories like Foxconn. they have protective nets to stop suicides when workers jump from floors.

Anonymous said...

Actually I should not have said "Pakistanis are not capable". they can do it too, provided the country sets its priorities right.

Riaz Haq said...

#Pakistan’s Enormous Long-Term #Growth Potential. Young #demographics, expanding #economy, #CPEC … via @barronsonline

To Western eyes, building a business in Pakistan seems nearly impossible with the country’s history of political turmoil and bouts of deadly terrorism committed by Islamic extremists.

But there is a long-term growth story in the frontier market, where the economy is expanding at a roughly 4.5% annual pace. As part of a $6.6 billion loan package, the International Monetary Fund got the country to raise taxes and cut subsidies—notably for electric power. But the IMF program expires this year, a key risk. Still, the IMF noted in a recent review that Pakistan has shored up foreign reserves thanks to low oil prices, and it praised the creation of an independent monetary-policy committee. It also acknowledged that restructuring or privatizing ailing public enterprises has been disappointingly slow.

The key to long-term growth is Pakistan’s population. At roughly 190 million, it is the sixth largest in the world. Importantly, more than half of Pakistan’s citizens are under age 25, eager for education and interested in success, says Najeeb Ghauri, CEO and founder of NetSol Technologies (ticker: NTWK), a California software company with a Pakistani campus.

“Contrary to the negative headlines,” says T. Rowe Price frontier markets portfolio manager Oliver Bell, “Pakistan has been slowly progressing on a much more stable path; we saw successful elections and the peaceful handover of power in 2013, and the new government has shown a commitment to adhere to the IMF program.” Bell adds that Pakistan’s aggressive privatization of companies “is creating liquidity and buying opportunities” in its stock market.

ONE OF THE BEST WAYS for retail investors to access this growth—a decidedly long-term bet—is the Global X MSCI Pakistan exchange-traded fund (PAK). The year-old ETF’s total return is negative 11% since inception. But that’s better than the iShares MSCI Frontier Market ETF (FM) and the iShares MSCI Emerging Markets ETF (EEM), which each fell 18%.

Financials account for a third of the Pakistan ETF, and Bell likes banks. A favorite is Pakistan’s largest lender, Habib Bank (HBL.Pakistan), which the government took public last year. A high percentage of Pakistan’s population don’t use banks, and Bell expects expanded loan growth. China’s investment in Pakistan’s infrastructure, especially power plants, should boost long-term growth. Earnings on Friday beat analysts’ expectations. Bell thinks the bank’s return on equity can expand to 25% in 2018 from 17% in 2013. But he doesn’t think the stock is expensive, at 1.4 times book value, given its growth and 8% yield.

Of note: Habib Bank’s New York branch got an enforcement order from U.S. authorities in December, after they found repeated “significant breakdowns” in anti-money-laundering efforts.

Multinationals are taking notice of Pakistan’s strides. Coca-Cola (KO) is expanding its Pakistan operations, which boasted double-digit growth in the latest quarter, says Curt Ferguson, president of Coke’s Middle East and North Africa business. He told Barron’s last week, “Pakistan is growing again. We just made a huge investment near the India-Pakistan border, in Mutan, which has a gorgeous new airport. Pakistan would really surprise people.”

Perhaps, but not everyone wants the risk. Paul Christopher, global strategist at Wells Fargo, told us that Pakistan is among the frontier markets whose volatility makes it “not investible.”

Riaz Haq said...

#Pakistan: A #Pakistani Farmer from a #Punjab #Saraiki village Dicovers in #Dubai There's No Place Like Home

In the remote Pakistan village of Hakimwala, farmers battle a deadly pest that is ruining their cotton crops. Many find it difficult to afford the pesticide and face mounting debts.

The elders of the village encourage the young men to travel abroad to earn better pay and help lift the village out of poverty.

Twenty-nine-year-old Sharif has lived in Hakimwala all his life. He is an only son and drives the only car in the village. He is responsible for driving the sick to the city hospital three hours away.

But with the infestation of his cotton crops and rising debts, Sharif decides it is time to seek his fortune elsewhere.

Sharif decides to go to Dubai despite warnings from his friends. The villagers sell the car and his family sells their hard-earned lands to cover his expenses.

For the first time in his life, Sharif leaves his village, flies in an airplane and experiences a foreign land. In spite of mounting debts, Sharif is about to learn that there is more to life than money. Or is there?

Source: Al Jazeera

Riaz Haq said...

#Pakistan's rising volume of lending a positive sign- all economic indicators up except exports down double digits

The latest trend of rising volume of commercial lending to the private sector coupled with larger industrial output and better energy supply and rising FDI inflows are now signalling a significant uptick of the Pakistani economy in FY-2017 that starts from July 1. Commercial banks' lending to the private sector rose by Rs352.3 billion so far in FY-16 as compared to Rs222.3 billion in the same period of FY-15, the latest statistics by Stat Bank of Pakistan (SBP) showed.

"A significant part of this credit was availed by the private sector businesses. There was a high credit off-take in December 2015 which was enough to compensate for the lower cumulative flow during the earlier months of FY-16," the SBP said. The demand for the private sector credit was high due to lower cost of credit and better market conditions. The cost of borrowing declined to six per cent - an all time low in last 12 years - as a result of SBP's easy money policy.

At the same time, there was a "high deposit growth, and a lower government budgetary borrowing," which created a surplus with the banks that was lent to the private sector. "The improvement in credit to the private sector over the previous year, primarily, was due to larger borrowing by the manufacturing sector, followed by commerce and trade, construction and electricity."

The SBP also reported that with the exception of ship breaking which received Rs13.4 billion credit that was lower than the sectors past borrowing, the improvement in larger credits to other sector was broad-based. While credit for working capital and fixed investment categories, showed higher growth. But credit for trade financing was lower. One of the reasons for larger lending to the private sector was that government borrowing to cover its big budgetary deficit was lower than last year. In fact, government was funding its requirements by launching its longer - term investment bonds, rather than short-term and more expensive borrowing from the commercial banks which also had squeezed the bank credit for the private sector.

That covers the broad spectrum of the commercial lending. Does it also indicate in which direction is the economy moving?

Another key factor for a potentially good omen for the economy to grow faster is expansion of the large-scale manufacturing (LSM) sector. Its output growth rose 4.35 per cent year-on-year in the first eight months July-February of FY-16. In February, 2016 alone the LSM sector growth was 2.83 per cent higher as compared to the like month of FY-15, according to the SBP report. The key sub-sectors which contributed to the LSM growth in the first eight months of FY-16 were: automobiles 27.67 per cent, fertiliser 16.95 per cent, chemicals 11.26 per cent, leather products 11.51 per cent, rubber products 11.64 per cent, and non-metallic mineral products 8.61 per cent.

In the same period, iron and steel sector produced 19.76 per cent more billets and ingots. The capacity of the sector also expanded in this period in order to feed lager exports. The automobiles sector expanded as production of trucks rose 44.23 per cent, buses 77.54 per cent, cars and jeeps 37.10 per cent, light commercial vehicles (LCVs) 104.45 per cent, and motorcycles was up 17.1 per cent. However, tractor production was down 44.65 per cent.

In the electronics sector, production of air conditions rose 28.05 per cent, switch gear by 28.14 per cent, electric transformers 1.8 per cent, TV sets 1.74 per cent and storage batteries 2.89 per cent, besides various rises in production of other electronics.

Riaz Haq said...

#Pakistan’s Economy- Need to Accelerate #GDP Growth, Continue Structural Reforms, Increase #Exports via @WorldBank

Pakistan continues its modest growth recovery. Growth rate in 2017 is expected to rise to 4.8 percent the World Bank says.

Releasing its twice-a-year Pakistan Development Update, the World Bank applauds the government for restoring economic stability but noted that much of the country’s economic growth was underpinned by external influences such as low oil prices and strong remittances while private and public investments continue to remain low.

“Pakistan has made great progress in restoring macroeconomic stability but much more needs to be done to put Pakistan on a solid, economic growth footing,” said Illango Patchamuthu, World Bank Country Director for Pakistan. “Persistent, steady progress on the structural reform agenda will be necessary if Pakistan is to accelerate its growth recovery and lift millions more out of poverty.”

The latest Pakistan Development Update sets out recent developments across the economy and identifies risks and next steps facing Pakistan’s near-term future before focusing in on a handful of key development challenges.

The report highlights that the pace of Pakistan’s economic growth will accelerate modestly through to 2019. However, significant risks remain and the country should guard against global slowdown by continuing to make key reforms, including expanding the electricity supply, boosting tax revenues, strengthening the business environment and encouraging private sector to invest.

The report identifies services and large-scale manufacturing as the key supply-side drivers of growth. Services are expected to grow over 5 percent in FY2016 while large-scale manufacturing, benefitting from low global commodity prices, is expected to grow between 4 and 4.5 percent. On the demand side, consumption is driving growth, fueled by rising remittances and a loose monetary stance.

The report is optimistic about recent progress in fiscal consolidation, highlighting a 20 percent growth in the revenues of Federal Board of Revenue for the first eight months of FY16. “Fiscal consolidation is one of the most significant reform challenges facing Pakistan today”, said Enrique Blanco Armas, World Bank Lead Economist for Pakistan. “The federal government has kept a tight rein on recurrent expenditure, while continuing to invest in Public Sector Development Program expenditure, a very positive development.”

Workers’ remittances and lower oil prices contributed most to the accumulation in foreign reserves, according to the report. Remittances of $9.7 billion in the first half of FY16 more than compensated for the trade deficit, and oil prices delivered a 9.1 percent fall in the import bill.

The strong balance of payments headline figures, however, mask the structural weaknesses in Pakistan’s export competitiveness. Exports fell by 11.1 percent in the first half of FY16 as a result of softer global demand and domestic bottlenecks. Port charges in Karachi, for example, are nine times higher than those in Dubai and Singapore. Shipping container dwelling times are three times longer than in East Asia. Exporters who want to participate in global supply chains are hamstrung by these constraints.

Riaz Haq said...

#Drought hits top rice exporters #India, #Thailand, #Vietnam, #Pakistan, #US 19 m tons now down fm 41 m tons in 2013

Crippling drought brought on by the El Nino weather pattern could cut rice stocks among the world's top exporters to levels not seen since 2008, potentially fuelling a price crisis similar to one seen that year, an industry expert warned.

Total stocks in top shippers of the grain India, Thailand, Vietnam, Pakistan and the United States are likely to fall to 19 million tonnes by the second half of the year, from a peak of nearly 41 million tonnes in 2013, said Samarendu Mohanty, head of the social sciences division at the Philippines-based International Rice Research Institute.

"If we have a bad monsoon, with drought still persisting in many parts of Asia, the risk significantly increases in terms of price response," Mohanty told Reuters in a telephone interview. Dwindling stockpiles could crimp volumes exporters are willing to ship abroad.

Although a severe El Nino is now fading, it has brought drought to swathes of Asia, drying irrigation channels and destroying crops. It has also stoked concerns on the strength of the South Asian monsoon due to start around June.

Export restrictions by major rice producers including India fed panic in the market in 2008, forcing big purchases by countries such as the Philippines that caused Asian benchmark prices to nearly triple to around $1,000 a tonne.

After that, consumers and exporters, mainly in Asia, rebuilt rice inventories to avoid another crisis, but Mohanty said stocks have been declining since 2013.

"Last year, nobody was panicking because they were sure that there's plenty of rice in the market if there's any shortfall. I think we don't have that luxury anymore this year," he said.

The price of Thai 5-percent broken rice touched an eight-month high of $378.50 a tonne in March, while Vietnam's own 5-percent broken rice last month rose to a 2-1/2-month peak of $385 a tonne.

Mohanty said India and Thailand, the world's top two exporters, would have combined stocks of around 16 million tonnes by the third quarter, around 70-percent lower than levels in 2013.

That buffer will be much smaller than recent stock levels of 16.2 million tonnes for India and about 12 million tonnes for Thailand.

India will be "very cautious in exporting" if its rice output is hit by a weak monsoon, said Mohanty.

That could push big buyers such as the Philippines and Indonesia to accumulate the grain, a staple food for nearly half of the world's population, similar to what happened in 2008.

"We might see the same thing as we move forward and countries get scared about the weather situation around them," Mohanty said.

The Philippines is considering importing another 500,000 tonnes of rice this year to boost state reserve stocks.

Riaz Haq said...

#Pakistan To Enter #MSCI #EmergingMarkets Index. #CPEC … $VWO $EDC $EDZ $SCHE $IEMG $EMF $MSF $EEV $EUM $ADRE $EET


Pakistan likely to be added in MSCI Emerging Markets Index.

P/E multiple re-ratings on the cards; discount to regional peers likely to narrow down.

Economy moving forward on a positive track. CPEC - the real game changer.

MSCI is considering reclassifying the Pakistani equity market from frontier to emerging market status on June 14th, 2016.

MSCI - a leading provider of research-based indexes and analytics - announced that it will release on June 14, 2016, shortly after 11:00 p.m. Central European Summer Time (CEST), the results of the 2016 Annual Market Classification Review. As a reminder, three MSCI Country Indexes are currently included on the review list of the 2016 Annual Market Classification Review: MSCI China A and MSCI Pakistan Indexes for a potential reclassification to Emerging Markets and MSCI Peru Index for a potential reclassification to Frontier Markets.

It is important to note that MSCI is not the only index provider that classifies markets but is considered the reference benchmark for many markets. MSCI and other index providers base their market classification on a number of quantitative measurable and comparative criteria while aiming to avoid qualitative and/or subjective criteria.


Pakistan is a country with a population of 190 million people. Pakistan's GDP stands at USD 250 billion (Year 2015). Pakistan's economy continued to pick up in the fiscal year 2015 as economic reform progressed and security improved. Inflation markedly declined, and the current deficit narrowed with favorable prices for oil and other commodities. Despite global headwinds, the outlook is for continued moderate growth as structural and macroeconomic reforms deepen.

Selected economic indicators (%) - Pakistan 2015 2016 Forecast 2017 Forecast
GDP Growth 4.2 4.5 4.8
Inflation 4.5 3.2 4.5
Current Account Balance (share of GDP) -1.0 -1.0 -1.2
Source : Asian Development Bank


China Pakistan Economic Corridor (CPEC) is a mega project of USD 46+ billion, taking the bilateral relationship between Pakistan and China to new heights. The project is the beginning of a journey of prosperity for Pakistan and China's Xinjiang. The economic corridor is about 3,000 kilometers long consisting of highways, railways and pipelines that will connect China's Xinjiang province to the rest of the world through Pakistan's Gwador port.

Riaz Haq said...

Tragedy at Sea 3,000 Miles Away Resonates in Pakistani Village
By MEHER AHMAD FEB. 27, 2018

Local laborers in this largely agrarian area (Gujarat, Pakistan) have streamed overseas in sizable numbers since the 1970s. For years, legal migration was such a force that little towns here were given nicknames like Little Norway and Little Britain, for where their people had gone.

Homes here hint at the mass migration. Tidy mud-brick village houses, surrounded by wheat and rice fields, have been increasingly replaced by mansions with gaudy ironwork and colorful tiles, built with money from overseas relatives. In 2014, almost 30 percent of local households reportedly received foreign remittances.

The houses serve in a sense as billboards for smugglers, proof of money to be made abroad. Ansar Burney, a Pakistani civil rights activist who works to end people smuggling, said the message was persuasive. “If I’m living in these rural towns, I’d be convinced I should go, too,” he said.

For Mr. Shabir, the appeal was hypnotic. “We begged him not to go,” his mother, Hamida Bibi, said between desperate prayers for her son. “But he had made up his mind long ago.”


Legal migration from Pakistan peaked in 2015 when just under one million Pakistanis left to work overseas. It has since dropped almost by half, Mr. Burney said, with migrants seeking visas squeezed by concerns about terrorism in Europe and economic belt-tightening in the Persian Gulf.

“The Saudis took an initiative to reduce all overseas labor, Pakistanis included,” said Jabbar Chaudry of Pakistan’s Bureau of Emigration and Overseas Employment, adding, “The educated and semi-educated youth no longer have legal windows of opportunity.”