Pakistan should disclose debts with absolute transparency: IMF

The International Monetary Fund (IMF) has asked Pakistan to disclose its debts with “absolute transparency” to receive a bailout package.

A day earlier, IMF Managing Director Christine Lagarde said she met with Finance Minister Asad Umar, State Bank Governor Tariq Bajwa and members of their economic team who requested financial assistance to help address Pakistan’s economic challenges.

Ahead of her meeting with the Pakistani team, Lagarade while addressing the IMF and World Bank Group annual meetings said, “In whatever work we do, we need to have a complete understanding and absolute transparency about the nature, size, terms of the debt that is bearing on a particular country.”

She added that the IMF needs to understand the extent of the position of all of Pakistan’s debt, including lending from sovereign governments and from state-owned enterprises, so that its debt sustainability can be determined.

Lagarde also said that an IMF team will visit Islamabad in the coming weeks to initiate discussions for a possible IMF-supported economic programme.

If a package is agreed, it would be Pakistan’s 13th IMF bailout since 1988. The Fund lent Islamabad $6.7 billion in 2013.

Meanwhile, the United States has said that it will closely examine Pakistan's debt position.

Responding to a question during a press conference, US State Department spokesperson Heather Nauert said, "We understand that Pakistan has formally requested assistance from the IMF. In all cases, we examine that closely from all angles of it, including Pakistan's debt position, in evaluating any type of loan programme."

"This is something that we’ve been tracking fairly closely," she added.

She added, "Secretary of State Mike Pompeo had spoken about this a few months back, I know, in some interviews not that long ago. I think part of the reason that Pakistan found itself in this situation is Chinese debt, and the fact that there is debt that governments have incurred that they maybe thought wouldn't be so tough to bail themselves out of, but has become increasingly tough."

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Sudan Economy Facing Crisis After Sharp Currency Dip

Many Sudanese are complaining after the government's sharp devaluation of the pound Sunday, cutting its official value almost in half, as an already serious economic crisis plagues the country.

The end of long-standing U.S. economic sanctions in 2017 has not produced a hoped-for economic revival, and Sudan remains on the U.S. list of state sponsors of terrorism.

Housewives shop at a vegetable market in the Sudanese capital Khartoum, following the official government devaluation of the Sudanese pound Sunday from 28 to 47.5 to the dollar. Prices of staples are going up and inflation has hit nearly 70 percent since the start of the year.

Outside investment needed

One consumer in Khartoum tells Al Hurra TV that rising prices are scaring everyone.

He said prices are very, very high for everything and it is hard to afford food, drink and medical care.

A middle-aged worker told Al Hurra TV money is tight ... and his salary does not cover half of his monthly expenses.

Sudan's recently-appointed Prime Minister Moataz Moussa told parliament Monday, the government will allow the Sudanese pound to float freely.

Moussa said it is not entirely clear what allowing the Sudanese pound to trade freely against the U.S. dollar will do to the value of the pound.

Sudanese economist Issam Ismail told Al Hurra TV it will encourage badly-needed outside investment by making the exchange rate clear to everyone.

Ismail said the Sudanese central bank and commercial banks will publicize rates in hard currency for investors and exporters to go by so they will receive their money at a known value.

The IMF has long urged the Sudanese government to have a unified exchange rate for its currency, but many observers think the economy is troubled by shortage of foreign currency.

Withdrawl has side-effects

Egyptian political sociologist Said Sadek tells VOA that the Sudanese economy is suffering from the side-effects of the withdrawal of its army from Yemen and the loss of hard currency it was receiving in exchange for its participation in the Saudi-led coalition.

Sudan, Sadek said, "had been dependent on money coming from the Gulf in return for sending troops to fight in Yemen." When Sudan was forced to withdraw its troops earlier this year, due to heavy casualties, Sadek notes "(Khartoum) lost a lot of money from the Gulf States, so the economy began to have (serious) problems." "Today, the (Sudanese) economy does not have big international support," he points out, "so nobody is saving them and they are in free fall."

Many Sudanese economists were optimistic the economy would improve after the United States ended 20 year-old economic sanctions on Khartoum a year ago, but the move did little to spur outside investment or increase trade with the West.

Some observers think investors will avoid the country until Sudan is removed from the list of state sponsors of terrorism. Normalization of ties with the United States are also dependent on Khartoum easing religious discrimination.

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Asad Umar Meets World Bank President Jim Yong Kim in Indonesia

Finance Minister Asad Umar held a meeting with the President of World Bank, Dr. Jim Yong Kim on the sidelines of the World Bank/IMF Group Annual meetings in Bali, Indonesia on Wednesday.

In the meeting, the current level of Pak-World Bank cooperation was reviewed.

The Finance Minister shared with the World Bank leader, the vision of the new government and its priorities.

Asad Umar also held a number of meetings on the sidelines of the World Bank/IMF Group Annual meetings.

He also met with his Indonesian counterpart Sri Mulyani Indrawati and discussed matters pertaining to expansion of bilateral cooperation between the two countries.

Finance Minister Umar emphasized expanding Pak-Indonesia trade relations.The Minister in this regard called upon the Indonesian side to expedite the process of ratification of the additional tariff lines granted to Pakistan after comprehensive review of the PTA in 2017.

Congratulating the Finance Minister on assuming the office after recent elections in Pakistan, Sri Mulyani Indrawati reaffirmed Indonesia’s desire to expand bilateral relations and assured her support to address the points raised by the Pakistan side.

The Minister also had meetings with senior officials of Multilateral Investment Guarantee Agency (MIGA) and OECD.

Over 15,000 delegates from 189 countries are currently gathered at Bali, Indonesia for IMF/WB Group Annual meetings from 10-14 October 2018.

The Finance Minister is leading Pakistan’s delegation, consisting of the Governor State Bank of Pakistan, Secretary, Economic Affairs Division and Special Secretary, Finance Division.

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Pak-China sign eight MoU's worth 100 million for mutual investment

Pakistan and China have signed eight Memorandum of Understandings worth 100 million dollars for mutual investment in Seafood, Agriculture, Steel and Pharmaceutical sectors.

Around fourteen private companies from both sides signed MoUs for mutual investment and joint ventures to expedite the trade and business between the two countries.

Addressing on the occasion, Economic and Commercial Counselor of China Embassy, Wang Zhihua said Pakistan is a friendly country and we believe on peaceful con-existence and cooperation for shared property.

The Counselor said the China Pakistan Economic Corridor under 'One belt one road' has given new height to mutual relations and cooperation between both friendly countries.

Wang Zhihua said Pakistan and China are negotiating on phase -II of Free Trade Agreement (FTA) to increase trade and providing free trade opportunity in their markets.

He said that Pakistan has huge potential market for international investors and its strategic location gives more comparative advantages to other trading partners.

Addressing on the occasion, Additional Secretary ministry of Commerce and Textile, Syed Tariq Huda said Chinese investment in Pakistan give positive impact to local market of Pakistan.

He said that 'One Belt and One Road' initiative also gives vision for inclusions and welfare all region.

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Pakistan’s auto industry lacks competition: CCP

The Competition Commission of Pakistan (CCP) has described Pakistan’s automobile industry as uncompetitive where existing companies are not facing any meaningful competitive pressure.

“It (automobile industry) is essentially marred by a lack of competition. Complaints of quality, availability and pricing of passenger cars particularly, is characteristic of an uncompetitive market,” the CCP wrote in its recommendations to the government for the automobile industry.

CCP, in its extensive 32-page report, has recommended that prices must not be changed after a car has been booked. “We have received numerous complaints that manufacturers announce arbitrary price increases retrospectively even after a booking has been made usually on account of rupee depreciation,” the report read.
Automobile manufacturers take a calculated business risk when they apply the just-in-time inventory model and do not hedge against currency value fluctuations. These are valid business and commercial decisions that automobile manufactures take.

“Nevertheless, once customers book a vehicle, whether through partial or full payment, they have a reasonable expectation that any future price increase would not be applied to them, particularly when they have to wait several months to get delivery of their vehicles for no fault of their own,” it added.

Meanwhile, the CCP has also suggested to the government that double taxation should be removed to allow for supply-push based wholesale automotive market.

CCP spokesperson Asfandyar Khattak told that the report has been sent to all relevant government authorities including the Ministry of Finance, Federal Board of Revenue (FBR), Ministry of Commerce, etc.

The CCP has also stressed the need for taking several measures for reducing premium in the auto industry. The issue of long delays in car deliveries from assemblers is essentially due to the supply of cars being unable to keep up with growing demand.

The problem is unlikely to be resolved completely unless there is significant expansion by existing players. The entry of new assemblers and availability of new vehicles by next year may improve the situation provided the new entrants bring significant production capacity and an attractive vehicle range across all passenger car segments.

It urged the government to create a national automotive sector standards and safety authority, which should have ample powers to introduce and enforce various standards relating to production, quality, safety, fuel efficiency and emissions of both locally produced and imported cars.

Furthermore, assemblers who import CKD parts of outdated vehicle models beyond two years from the global average should be discouraged by charging higher import tariffs.

It has also been recommended that competition should be enhanced through new entry. The lack of competition in the market in general can be addressed if federal and provincial governments support timely entry of new assemblers in the market, which will have a positive effect on the market in general.

The government has also been urged to ensure continuity in policies that have attracted new entrants in the automotive manufacturing market. A competitive automobile sector will only be established if players are able to enter and challenge the hegemony of existing players and put competitive pressure on them.

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