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China CPEC Transparency Saudi Oil Facility LNG Qatar Political Economy Dada Pota Show 31-12-2018

Dada Pota Show of 31-12-2018. The only program of business and economy in Pakistan.

China CPEC Transparency Saudi Oil Facility LNG Qatar Political Economy Dada Pota Show 31-12-2018

Dada Pota Show 31-12-2018 based on China CPEC Transparency Saudi Oil Facility LNG Qatar Political Economy.

Today, Dada G shared his opinion on important news that China adds more transparency to CPEC.

The Embassy of China in Pakistan has taken note of a recent report by a Pakistani journalist (not from Aaj News or Business Recorder), in which he claimed that Pakistan will repay $40 billion debt to China under the China-Pakistan Economic Corridor (CPEC).

This number of $ 40 billion is wrong and misleading, the embassy said in a statement. The Ministry of Planning has issued a statement for clarification.

The Embassy in a clarification said that CPEC is a major and important economic cooperation project between China and Pakistan and all CPEC projects are based on consensus of the two countries, and fully comply with relevant laws and regulations.

The embassy issued the following details:

Currently, 22 early harvest projects under the CPEC have been completed or are under construction, with a total investment of $ 18.9 billion. These projects aim at resolving two major bottlenecks hindering economic development of Pakistan, namely lack of transportation infrastructure and energy shortage. The financing details of 22 projects are as follows:

I. The Chinese Government provided concessional loans of $ 5.874 billion for Pakistan Government’s major transportation infrastructure projects, with a composite interest rate of around 2% in repayment period of 20-25 years. The Pakistani government provides sovereign guarantee for the abovementioned loans and will start the repayment from 2021.

II. Chinese companies and their partners invested $ 12.8 billion in energy projects in Pakistan. Among them, Chinese companies provide $3 billion from their own equity. The rest $ 9.8 billion is raised from commercial banks with interest rate of about 5%. The repayment period is 12-18 years. All the CPEC energy projects are investment in nature, which is purely independent business behavior of these companies. The companies are responsible for their own profits and losses and repayment of loans. The Pakistani government does not repay these loans under CPEC. The business cooperation between the two sides is in full compliance with internationally accepted business practices.

III. The Chinese government provides interest-free loans for Expressway East Bay in Gwadar.

IV. The Chinese government provides grant for some livelihood projects.

V. The Pakistani Government provided funding for the feasibility study of ML-1 up-gradation.

Therefore, Pakistan will repay only $ 6.017 billion (Category I $ 5.874 billion and Category III $ 0.143 billion) and their interests to China. China and Pakistan are discussing how to use Chinese grant to implement new projects such as new Gwadar international airport, Gwadar vocational training center and friendship hospital, etc. Once the financial details are available, they will be shared.

During Prime Minister Imran Khan’s visit to China in November 2018, the two sides reaffirmed their commitment to the CPEC and agreed to ensure the normal operation of the completed projects and the smooth completion of the on-going projects. The two sides also agreed to consult with each other on the future path and direction of CPEC, taking consideration of Pakistan’s priority of economic and social development and the demand of Pakistani people.

On December 20th 2018, China and Pakistan successfully held the 8th JCC meeting of CPEC in Beijing and decided to set up a social economic joint working group under the CPEC. The Chinese side will provide more support to the people’s livelihood projects such as education, agriculture, poverty alleviation, health care and vocational training. Both sides signed an MOU on industrial cooperation, and agreed to jointly promote the construction of Special Economic Zones. The CPEC has entered a new phase of broadening and expansion in the next 5 years.

The Chinese Embassy appreciates the Pakistani people for their support on CPEC and welcomes the supervision from all works of life. We are willing to join hands with Pakistani friends to nourish CPEC and create a favorable environment for cooperation. We believe that CPEC, as an important project for China-Pakistan all-weather cooperation, will not only help Pakistan to ease energy load shedding, improve infrastructure connectivity, promote economic growth, but also benefit the people of Pakistan and make an important contribution to the building of China-Pakistan Community of Shared Future.

By & large, Dada G & Pota G presented a very good show. We received huge feedback in the form of SMS & facebook posts. If you missed today’s Dada Pota Show, there is no need to worry because you are just a click away. You can download and listen it now. “Dada Pota” show on-air at www.dadapota.pk.

FTA Pak China CPEC Loan E-Commerce Knitwear Exports Political Economy Dada Pota Show 28-12-2018

Dada Pota Show of 28-12-2018. The only program of business and economy in Pakistan.

FTA Pak China CPEC Loan E-Commerce Knitwear Exports Political Economy Dada Pota Show 28-12-2018

Dada Pota Show 28-12-2018 based on FTA Pak China CPEC Loan E-Commerce Knitwear Exports Political Economy.

Today, Dada G shared his opinion on important news that E-commerce grows massively in 2018 due to larger internet use.

This year Pakistan’s e-commerce sector has performed better than ever before as digitalisation and larger internet accessibility paved the way for almost 100% increase in sales of local and international merchants.

Sales reached Rs40.1 billion in FY18 compared with Rs20.7 billion in FY17, an encouraging growth of 93.7%, according to a State Bank of Pakistan (SBP) report released in late October.

The online market witnessed a boom in the outgoing year owing to the services sector, which now has a 60% contribution to the gross domestic product (GDP), increasing from the previous 52%.

This is the data which the central bank has compiled through digital transactions like credit/debit cards, interbank fund transfers (IBFT), prepaid cards and mobile wallets. However, market estimates that cash on delivery (COD) settlements are about 90% of the total volume and about 60% of the total value of B2C e-commerce.

COD is hindering the growth of e-commerce in Pakistan, though it is a general phenomenon in most of the developing countries. Buyers do not trust sellers as products, which they receive, are usually not what they see on web portals.

The trust deficit, which is not allowing people to pay through online payment solutions, still exists. Nevertheless, e-commerce in the country is growing as digitalisation has made it possible to bypass middlemen, who used to eat up most of the business margins. Leading producers of apparel, smartphone, food and electronics have set up websites to connect with their customers.

Large-scale investments in the business-to-business (B2B) category are underway; however, business to consumer (B2C) sector is growing at a faster pace on the back of relatively larger internet penetration in areas where the online connectivity has never reached before.

The country has got 153 million cellular subscribers, more than 73% of the total population of 207 million, out of which 61 million are 3G/4G subscribers with total internet subscribers at 63 million.

By & large, Dada G & Pota G presented a very good show. We received huge feedback in the form of SMS & facebook posts. If you missed today’s Dada Pota Show, there is no need to worry because you are just a click away. You can download and listen it now. “Dada Pota” show on-air at www.dadapota.pk.

Ali Raza Abidi MQM Karachi Law & Order Pakistan Railways Fair Political Economy Dada Pota Show 27-12-2018

Dada Pota Show of 27-12-2018. The only program of business and economy in Pakistan.

Ali Raza Abidi MQM Karachi Law & Order Pakistan Railways Fair Political Economy Dada Pota Show 27-12-2018

Dada Pota Show 27-12-2018 based on Ali Raza Abidi MQM Karachi Law & Order Pakistan Railways Fair Political Economy.

Today, Dada G shared his opinion on important news that Slain ex-MQM leader Ali Raza Abidi’s funeral prayers offered in Karachi.

The funeral prayers of former MQM leader Syed Ali Raza Abidi, who was shot dead in Karachi’s DHA area on Tuesday night, were offered on Wednesday afternoon.

Abidi’s funeral prayers led by Allama Hassan Zafar Naqvi were offered at the Imambargah Yasrab and attended by relatives, friends, and political and social figures, including MQM-P leaders Farooq Sattar, Khawaja Izharul Hassan and Khalid Maqbool Siddiqui.

Two unidentified assailants on a motorbike had opened fire on the ex-MNA’s car near his residence on Khayaban-i-Ghazi last night. Abidi was alone in his car when the attack took place and was taken to PNS Shifa Hospital by his father where he succumbed to his injuries.

A postmortem examination revealed that Abidi sustained four bullet wounds — two in his chest, and one each in his neck and arm.

Counter-Terrorism Department officer-in-charge of the Transnational Terrorism Intelligence Group (TTIG) Raja Umer Khattab had said yesterday that the attackers appeared to be expert at target killings as they had targeted Abidi within a span of just 10 seconds.

By & large, Dada G & Pota G presented a very good show. We received huge feedback in the form of SMS & facebook posts. If you missed today’s Dada Pota Show, there is no need to worry because you are just a click away. You can download and listen it now. “Dada Pota” show on-air at www.dadapota.pk.

IMF Conditions Punjab Food Authority Gourmet Bakers PMLN Political Economy Dada Pota Show 26-12-2018

Dada Pota Show of 26-12-2018. The only program of business and economy in Pakistan.

IMF Conditions Punjab Food Authority Gourmet Bakers PMLN Political Economy Dada Pota Show 26-12-2018

Dada Pota Show 26-12-2018 based on IMF Conditions Punjab Food Authority Gourmet Bakers PMLN Political Economy.

Today, Dada G shared his opinion on important news that Bailout impasse caused by 3 IMF conditions.

There is a stalemate in ongoing discussions between International Monetary Fund (IMF) and Pakistan for a bailout package with the government’s refusal to accept three Fund conditions: free float exchange rate, across the board 22 percent increase in power tariff to address the issue of circular debt (in addition to the recent rise in rates by 11 percent) and full disclosure of the financing details of all China Pakistan Economic Corridor (CPEC) projects with an estimated inflow/outflow chart for a number of years.
This was revealed by a senior Finance Ministry official, a participant of the negotiations with IMF, on condition of strict anonymity.
The impasse is not on the amount of the package itself, he added, but on the conditions that are not acceptable to the government. No administration can possibly accept a free float, especially not given the current state of the economy, as it would lead to hyper inflation in the country; nor accept a notification of an additional across the board 22 percent increase in electricity that would not only have serious implications on the disposable income of the poor but also seriously raise input costs making Pakistani products even more uncompetitive in the international market; and neither is the government in a position to release CPEC details without explicit Chinese approval with China identified as the third major ‘friendly’ country willing to support the country deal with the prevailing economic crisis, he further clarified.

However, Advisor & Spokesman Ministry of Finance Dr Khaqan Najeeb stated, “The issue of exchange rate never came under discussion during recent talks with the IMF. The government has given no commitment on the exchange rate target.” He further stated that Pakistan and IMF continue to remain engaged on all issues and the discussions are focused on what measures to take to put the economy on the path of fiscal consolidation, macroeconomic stabilization and structural reforms. Najeeb added that the government has shared CPEC project details with the IMF, a claim supported by Asad Umer recently, and added that Pakistan is committed to strengthen its revenue collection and this is not because of IMF as broadening of tax base has always been on top of this administration’s agenda.

This statement was echoed by the IMF resident representative Teresa Daban in response to Business Recorder query and she wrote “at this stage there is a strong understanding between the Pakistani authorities and Fund staff on the diagnostic of Pakistan’s macroeconomic challenges, the need for adjustment policies, and the goals to be achieved.”

The understanding is for the need to implement “good” polices, including a revenue-based medium-term fiscal consolidation, monetary policy tightening, transition towards a flexible exchange rate regime, with a strong, independent and accountable SBP, the reduction of the losses of public enterprises (including circular debt), and the strengthening of the social safety net to protect the most vulnerable from the adjustment.

Against this background, dialogue and discussions continue. Main items for discussions are the composition, sequencing, and prioritization. The objective continues to be the achievement of understanding on these items, and on a set of “good” policies that could be the base of a staff-level agreement”.

Clearly both Najeeb and Daban’s intent is not to scuttle the talks that are expected to resume in February next year.

The World Bank local representative stated, “We have not yet made any decision on Development Project Financing. It will be dependent on a sound and adequate macro economic framework and the ambition of the policy reform agenda. An IMF letter of assessment will inform our decision making.

“We have not made any determination yet on the volume of financing as it depends on the ambition of the reform agenda. We will consider instruments including guarantees for Pakistan to access markets and direct budget support to boost human capital outcomes in the country”.

Business Recorder has calculated that the total policy loans disbursed by World Bank and Asian Development Bank to Pakistan were on average around one billion dollars till 2016 and subsequent to the end of the previous Fund package, Extended Fund Facility, in September 2016 no policy loan by either of these two multilaterals has been disbursed to Pakistan.

On 18 December, 2018, Finance Minister Asad Umar informed a Senate Standing Committee on Finance that the Memorandum of Economic and Fiscal Policies (MEFP) for a new package had been sent to the IMF but the country is not in an urgent need for a Fund bailout package as the financing gap of $12 billion for the ongoing fiscal year had been managed due to assistance from the friendly countries including Saudi Arabia, UAE and China. There is a difference of opinion as to how much of the 18 billion dollar current account deficit needs to be met on an emergent basis.

Pakistan has reportedly offered a rate of 150 rupees to the dollar, unconfirmed by official sources, by the end of the fiscal year and to-date has refused to raise electricity rates by a further 11 percent and has informed the IMF in no uncertain terms that a further raise of the same amount before August-September 2019 may be politically suicidal. Additionally the government has refused to raise rates for those who consume up to 200 monthly units. However, the government has committed to the IMF that it would put in place measures to reduce the flow of circular debt by July 1, 2019.

By & large, Dada G & Pota G presented a very good show. We received huge feedback in the form of SMS & facebook posts. If you missed today’s Dada Pota Show, there is no need to worry because you are just a click away. You can download and listen it now. “Dada Pota” show on-air at www.dadapota.pk.