Pakistan has made some genuine advances in the right direction with regard to business in Year 2021 despite grim news on the economic and economic governance front.
The country has taken scores of steps this year required to keep the economy on the right trajectory.
Pakistan Produces Mobile Phones
Pakistan produced as many as 18.87 million mobile phones during the first ten months of 2021, Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood unveiled.
“During the period of Jan to Oct 2021, domestic manufacturing mobile plants in Pakistan produced 18.87 million mobile units, including 7.93 mln 4G mobile phones, compared to 9.45 million imported mobile phones,” he tweeted.
Earlier this month, Beijing-based smartphone manufacturer Xiaomi Inc. unveiled plans to manufacture smartphones in Pakistan in collaboration with a local distributor Air Link Communication Limited.
Dawood said they will be extended the production facility in the Quaid e Azam Industrial Estate in Lahore. Their manufacturing unit will be functional by January 2022 and will mean employment opportunities for about 3,000 people.
The Pakistan Telecommunication Authority (PTA) in August said that the production of mobile phones by local manufacturing plants has surpassed the number of mobile phones being imported in the country.
During Jan-July 2021, the production of mobile phones by local manufacturing plants was 12.27 million and imported mobile phones was recorded at 8.29 million, the PTA announced.
“This reflects a positive uptake on PTA’s Mobile Device Manufacturing Authorization regulatory regime whereby local manufacturing within the first year of regime introduction has
resulted in production of 12.27 million phones in a short span of 7 months including 4.87M 4G smartphones,” the telecommunication regulator said in a statement.
Till now, 26 companies have been issued Mobile Device Manufacturing Authorization enabling them to manufacture mobile devices in Pakistan. The companies include renowned brands e.g. Samsung, Nokia, Oppo, TECNO, Infinix, Vgotel, Q-mobile etc.
Pakistan, Russia Sign Gas Pipeline Agreement
Pakistan and Russia on July 16 signed an agreement for the construction of 1,100-kilometre-long stream gas pipeline from Karachi to Lahore which will be completed by 2023 at the cost of $2.5 billion.
The agreement of the Pakistan Stream Gas Pipeline Project was signed in a ceremony by secretary petroleum Arshad Mahmood and the director of the Russian energy ministry.
Energy Minister Hammad Azhar and representatives of the Russian energy ministry also attended the ceremony.
Hammad Azhar said that the gas pipeline project was facing a delay since 2015 and both countries have signed an agreement for technical cooperation. The project will be completed by 2023 at the cost of $2.5 billion.
He added that the north-south stream gas pipeline was an important project while local companies will complete the work for laying the gas pipeline and the material will be imported from Russia.
Azhar said that Oil and Gas Regulatory Authority (OGRA) will finalise the tariff of the gas pipeline.
In November progress made on the stream gas pipeline as the dates for the signing of relevant agreements were finalised. The construction work of the project will be commenced in 2022, sources said.
It was learnt that Pakistan and Russia have agreed on a dialogue draft for making progress on the shareholders’ agreement. An agreement to formally establish a company for pipeline’s construction will be signed on January 31, 2022. Islamabad and Moscow will sign the stream gas pipeline project’s shareholders’ agreement on February 15, said sources. The gas pipeline will enable the supply of 12.6 billion cubic meters of gas.
Hammad Azhar had said that bilateral cooperation in the economic and energy sectors will be increased through the latest agreement.
The head of the Russian delegation Alexander Tolparov had said that the gas pipeline project will become a milestone for Pakistan in terms of energy security.
Pakistan’s National Pavilion On China’s Foremost e-Commerce Platform
Pakistan’s National Pavilion on JD.com, China’s e-commerce platform was launched aimed at providing a platform to Pakistani and Chinese traders to promote Pakistan’s high-quality products through China’s huge online market.
Moin ul Haque, Pakistan envoy to China, inaugurated the country’s first online national pavilion in China at a ceremony held at the Beijing embassy. Ambassador Haque termed the launching of the pavilion on China’s largest e-commerce platform a historic occasion.
He said pavilion will serve as a starting point in exploring opportunities offered by the Chinese digital economy and it would also complement the efforts of Pakistan’s offline pavilions which have already been in active operation in various cities of China including Chengdu, Kunming, Urumqi Yiwu and Zhengzhou.
“Moreover, this pavilion would also provide a window for promoting Pakistan’s culture, cuisine, tourism and people-to-people exchanges.”
He also mentioned that the platform would promote Pakistani products to the Chinese markets, adding, “our traders and exporters can open their shops and introduce their products through this platform and Chinese importers can also sell their products.”
Ambassador Haque remarked that China is already the world’s largest e commerce market and for Pakistani traders it is a very important time to benefit from this opportunity.
Ambassador said Pakistani food products, garments, leather products, sports goods and even furniture could be promoted through this online platform.
He said the Prestige International is developing a bilingual app in both English and Chinese to bridge the language barrier and the Pakistan traders could use this app to connect to this platform.
JD.com is one of the most popular and influential e-Commerce platforms in China with almost 700 million active customers.
Record Increase in Textile Exports
The country’s textile and clothing exports saw a record increase of $1.74 billion in Nov 2021, data released by the Pakistan Bureau of Statistics (PBS) showed.
Textile exports rose by 8 per cent when compared to October 2021. The value-added textile and readymade garment sector saw an increase of 11pc while bed wear and towel exports grew by 9pc and 28pc, respectively.
November’s textile exports rose by 35 per cent as compared to the same month a year ago. The exports of knitwear were up by 40pc, bed wear 32pc, and readymade 27pc.
Textile and clothing exports grew by 28pc to $7.8 billion in the first five months (July-Nov) of the current fiscal year, the data showed. Whereas, the value-added and basic textile were up by 28pc and 35pc.
Pakistan’s Textile exports are likely to rise to a whopping $18 billion if the US and European countries don’t impose any lockdown amid the spread of Covid Omicron variant.
‘Pakistanis Have US$20 Billion Cryptocurrency’
“Pakistanis currently have cryptocurrency of US$20 billion,” the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said in a statement.
The trade body stated this in the proposals submitted to Governor Sindh Imran Ismail for the use of cryptocurrency in Pakistan.
President FPCCI Nasir Hayat said that they had submitted three research papers to the governor Sindh regarding the use of cryptocurrency.
“Pakistan currently has a cryptocurrency of US$20 billion,” he said adding that they had suggested proposals regarding encashing the currency within Pakistan.
The development came days after Information Minister Fawad Chaudhry dismissed any early chance of allowing the use of digital currency in the country.
Bringing clarity on the use of cryptocurrency in the country, Federal Minister for Information Fawad Chaudhry said that there are no chances of Pakistan legalizing digital currency anytime
soon.
“There are no guarantees behind the currency and we cannot allow the use of any digital currency just on the basis of its trust level in the market,” he said.
“We are also bound through FATF conditions to refrain from allowing any such mode of payment in the country,” he said. The information minister, however, added that ultimately the world has to move towards the mechanism of digital payments.
In 2018, the State Bank of Pakistan (SBP) had warned the commercial banks and general banks against the use of cryptocurrencies like Bitcoin, Litecoin etc.
According to a notice issued by the central bank, cryptocurrencies like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin and Pay Diamond are neither recognized as a Legal Tender nor has SBP authorized or licensed any individual or entity for the issuance, sale, purchase, exchange, or investment in any such virtual currencies or tokens in Pakistan.
Auto Industry Development and Export Policy
The federal government has prepared Auto Industry Development and Export Policy (AIDEP) 2021-26 with objectives of ensuring better quality, safety features in cars and
affordability of small cars to Pakistani customers.
According to a draft prepared by the Ministry of Industries, the government has recommended tax exemption for locally assembled cars of up to 800cc engine capacity.
Under the new auto policy, the Ministry of Industry has recommended ending additional customs duty on small cars, excise duty on locally assembled cars and withholding tax on cars with engine capacity up to 800cc.
The draft, released by the Engineering Development Board of the Ministry of Industries and Production, also recommended decreasing import duty on electric vehicles in order to
encourage people to use environment-friendly EVs.
As per the Auto Policy 2021-2026, the import duty on electric vehicles will be reduced from 25% to 10% for one year.
The board has also decided to reduce the regulatory duty on CBU import of hybrids (15% for above 1,800cc, 0% for 1,800cc and below).
Islamabad-Tehran-Istanbul Freight Train resumes
Federal Minister for Railways Azam Khan Swati inaugurated the Islamabad-Tehran-Istanbul freight train to boost trilateral trade among these countries.
The cargo train service connecting the three countries was resumed after a gap of 10-years suspension.
While inaugurating the Islamabad-Tehran-Istanbul freight train along with Minister for Foreign Affairs Shah Mahmood Qureshi and Adviser to Prime Minister for Commerce and Investment Abdul Razak, Dawood, the railways minister termed the launching of train service as a game-changer in the region.
He hoped the freight would also transform the Pakistan Railways into a profitable entity.
The minister revealed that Pakistan Railways was also planning to run a passenger train among these countries in the near future. “We have opened our trade routes and it is a great opportunity for importers and exporters.”
It is pertinent to mention here that the trial run of the Islamabad-Tehran-Istanbul (ITI) train was launched in August 2009 as a project under the Economic Cooperation Organization (ECO), a 10-nation Asian trade bloc.
After the inauguration of the project, about eight trains were made operational, though the service was closed in 2012 due to security reasons.
Pakistan Is Third Largest Contributor To Online Labor: ILO
Pakistan has risen through the ranks to become the third-largest contributor of the Online manpower in the world owing to a booming tech-savvy population and a rapidly increasing interest in digital freelancing.
The International Labor Organization (ILO), in a report published in February said that Pakistan now ranks 3rd in the world in terms of the amount of technical labor purveyed for online services.
“The role of digital labor platforms in transforming the world of work”, report covers a client pool based in developed countries, with the United States of America (USA), the United Kingdom (UK), Australia, and Canada as the top demanding countries.
Software development and technology were the most sought-after occupations, and other areas like translation, financial, and design and software development services were also in high demand.
The supply of labor for work on these platforms originated mainly from a number of developing countries including Bangladesh, India, Pakistan, the Philippines, and Ukraine in particular, apart from the UK and the USA.
9) Pakistan officially added to Amazon Sellers List
E-commerce giant Amazon added Pakistan to its sellers’ list, Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood announced in May this year.
“Today @amazon has confirmed that Pakistan has been added to its Sellers’ List,” he tweeted.
The PM’s aide said, “It is a big accomplishment for our E-Commerce & will open up vast opportunities for a new breed of young men & women entrepreneurs. We congratulate everyone involved.”
Addressing a press conference earlier this month, Dawood said: “It is a big opportunity. But there are challenges as logistics companies will have to work efficiently and properly to ensure products are delivered in a timely manner.”
“Secondly, we are working on quality assurance and standardization,” he maintained.
Logistics companies have an opportunity to scale up their businesses and develop international partnerships for effective delivery, he said. Pakistan Post is also preparing itself for parcel deliveries, he added.
Musk’s Starlink Satellite Internet Soon To Enter in Pakistan
Elon Musk’s Starlink internet-providing service will likely to be available in Pakistan soon. Operated by SpaceX, Starlink is a satellite internet constellation that provides internet access across the globe.
Starlink Pakistan has already been registered and will soon be operational, sources said.
SpaceX has expressed interest to launch Starlink’s satellite broadband internet in Pakistan.
In this regard, a delegation of US-based global satellite broadband provider called on Minister of Information Syed Aminul Haque recently to discuss the policy and operation model.
The group comprised SpaceX Director Middle East and Asia Ryan Goodnight and Head of Global Site Acquisition Ben Macwilliam.
IT Minister mentioned that 40,000 schools and small and medium enterprises presented a unique opportunity to the company. He said the Starlink internet could also be expanded to the unserved and underserved areas of Pakistan.
The Starlink delegation also discussed the launch of the service in Pakistan with the PTA during a visit to Pakistan Telecommunication Authority (PTA) Headquarters in Islamabad on December 13, 2021.
The delegation met with Chairman PTA, Maj General Amir Azeem Bajwa (R) and Executive Director, Frequency Allocation Board.
During the meeting, the two sides discussed matters pertaining to provision of satellite broadband connectivity in Pakistan and Starlink’s future plans for connecting Pakistan to their global network. Chairman PTA apprised Starlink representatives about prospects in Pakistan’s evolving market for quality broadband internet. He assured Starlink’s representatives about PTA’s support in line with regulatory framework for Starlink’s operations in Pakistan.
Musk is trying to seize control of the future internet space market and has already sent about 300 Starlink satellites into orbit — with plans to grow that number, potentially up to 42,000.
Pakistan Pavilion at Expo 2020 Dubai
The Pakistan Pavilion at Expo 2020 Dubai has received over 550,000 visitors in the first 82 days of its opening, hosting more than 100 business and thematic events as well as daily cultural performances representing different regions of the country.
The pavilion promotes the country’s tolerant, inclusive and progressive image by featuring its past, present, and future. It also highlights the tourism, trade and investment opportunities that the country offers.
The pavilion received visitors of diverse nationalities including the Pakistani Diaspora as well as citizens of other nationalities around the world.
In December, the Pakistan Pavilion launched a new tourism campaign through an engaging AI interactive screen for interested visitors to connect with tour operators in Pakistan to plan their visits to the country.
Highlighting the immense tourism potential, Prime Minister Imran Khan remarked during the opening of Skardu airport that the country can gross at least $30-40 billion from tourism in Gilgit-Baltistan alone.
Jordan, Egypt Okay Meat Import From Pakistan
Adviser to the Prime Minister on Investment and Commerce Abdul Razak Dawood on November 19 announced that Egypt has green-lighted the import of meat from Pakistan.
Taking to Twitter, he said Egypt’s Veterinary Quarantine Department okayed ten Pakistani slaughterhouses for meat export. “This has been done as a result of audit conducted by the Egyptian Veterinary authorities,” the adviser said.
“This is a part of our policy of geographical & product diversification. Our exporters are urged to go full speed ahead to capitalize on this opportunity as this sector has immense potential.”
On October 28, Dawood had announced that Jordan has approved three Pakistani slaughterhouses to export meat to the Middle Eastern country.
The government is exploring new markets for export of meat and dairy products with focus on global Halal Food Trade.
Many Muslim countries are dependent on imported meat and Pakistan can significantly increase its exports by focusing on modern and hygienic slaughter houses that can meet international standards for frozen or chilled red meat.
Sources earlier said that efforts are being made for market access in Russia, China, South Africa, Egypt, Hong Kong and Indonesia besides Middle-East countries for meat and meat products.
Grim Challenges To Economy
Apart of positive indicators, there are also grim facts, which have destabilizing impact over the country’s economy.
Sliding Pakistani Rupee A Major Challenge To Economy
Pakistani rupee strengthened and remained on average at Rs152 against the US dollar till April this year. Since April 2021, however, the currency witnessed a fresh wave of depreciation as it touched Rs156 against the US dollar in June 2021, Rs168 in September 2021 and Rs170 in November 2021. In ongoing December, the rupee has reached Rs177 against the US dollar.
This free fall of Pakistani rupee is a major challenge to the economy.
Related: Reasons behind unstoppable rupee down-slide
The value of the currency has dropped by 30.5 percent against the US dollar during the tenure of the PTI government. In August 2018, when it came into power, the rupee stood at Rs123 against the US dollar, according to experts.
Pakistan’s Loans Surge To $4.6B In First Five Months Of Current Fiscal Year
Another serious challenge to the country’s economic future posed by foreign loans, which surged to $4.69 billion in the past five months (July-November) of the current fiscal year.
The loan details have been made public two days after Minister for Information and Broadcasting Fawad Chaudhry highlighted the gravity of the situation, saying that the government was taking new loans to pay off the old debt secured by the previous
government.
The report said an amount of $1.53 billion was received in foreign commercial loans from banks during the first five months of the current fiscal year.
The multilateral lenders gave nearly $2 billion in loans in the corresponding period, which had started picking up on hopes for the revival of the IMF deal.
The PTI-led federal government took a loan of $120.8 million with the bilateral agreements.
