Tag: second quarter

January 19, 2020 (MLN): Pakistan’s Power Sector has received the highest net FDI worth $80.9 million in December’20, followed by the Trade and Oil & Gas Exploration sector with net negative FDI of $28.2 million and $26.5 million respectively.

Cumulatively, during 6MFY21, the Power sector remained the major recipient of the foreign inflows, as it fetched a net $434.9 million, showing an increase of 66% YoY when compared to the net inflows of $262.2 million in the corresponding period of FY20.

According to the latest data released by the State Bank of Pakistan (SBP) on total Foreign Investment received by sectors, Coal Power projects under Power Segment attracted the most of investors’ attention as it received the highest net inflows of $252.2 million during 6MFY21 compared to the net outflows of $153 million in Jul-Dec FY20. This was followed by Hydel Power Projects which attracted a net FDI of 105.7 million during the period mentioned above as against $54.6 million in the corresponding period of last year.

The detailed analysis revealed that the second sector with higher net flows in Pakistan is Financial Business. During Jul-Dec FY21, the sector fetched a net $145.9 million, which was 10% lower when compared with the net investment of $162.1 million in the same period of FY20.

The third-highest net FDI receiver is the Oil & Gas Exploration sector with net inflows of $123 million during the period under review, showing a decline of 13% YoY as the sector observed $141.5 million net foreign inflows in Jul-Dec FY20.

The next in line is the Electrical Machinery sector which fetched a net of $60.2 million, compared with the net investment of $117.8 million net in 5MFY20, showing a fall of 49% YoY.

Furthermore, the Trade sector received net inflows of $56.5 million against $19.1 million reported in the same period of last year.

Other sectors such as Construction, Automobile, and Chemicals also managed to fetch decent investments worth $24 million, $17.2 million, and $13.4 million respectively during Jul-Dec FY21.

On the other hand, the Communication sector which attracted net FDI of $432 million during 1HFY20, witnessed net divestment of nearly $1 million in 1HFY21 as the Telecommunication sector under the Communication head pulled in $27 million foreign direct investment in the first half of this fiscal year, compared to the inflows of $419.7 million during Jul-Dec FY20.

Moreover, the other sectors that saw notable foreign disinvestment during the period include; Petroleum Refining (-$11.9 million), and Mining & Quarrying (-$7.7 million).

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January 12, 2021: Ambassador of China to Pakistan Nong Rong Tuesday said that the projects under China Pakistan Economic Corridor (CPEC) were heading in the right direction and would continue to progress at an expedited pace.

Talking to Secretary Planning Development and Special Initiatives Mathar Niaz Rana here, the envoy said that CPEC was the flagship project that manifested the longstanding friendship between the two friendly countries and would bring prosperity and progress for Pakistan.

"CPEC is a product of the vision of two brotherly countries that goes beyond traditional business dealings reflecting decade’s old strong bonds of bilateral cooperation and shared goals with a win-win situation for all," he added.

During the meeting, matters related to bilateral relations projects under CPEC and the progress of the upcoming 10th Joint Coordination Committee on CPEC (JCC) came under discussion.

The secretary of Planning said that CPEC, as stated by Prime Minister Imran Khan, was a project of great national significance for Pakistan, which would be a harbinger of development and prosperity for Pakistan and the region.

He said that Pakistan in consultation with the Government of China has succeeded in expanding its scope to include other priority areas under its framework including socioeconomic development, poverty alleviation, agricultural and industrial cooperation.

"The second phase will focus, among others, on welfare projects for the betterment of the people of Pakistan and we are thankful to the Government of China for broadening its framework which will contribute to the sustained development of Pakistan", he added.

The secretary reiterated that the government remained fully committed to realizing the potential and opportunities under the CPEC framework.

The two sides expressed satisfaction with the meetings of Joint Working Groups (JWGs) held in recent weeks, for various sectors.

APP

January 12, 2021: In a major achievement towards ensuring ease of doing business, Pakistan has improved 31 positions, from 142nd to 111^th, on the rank of Trading Across Border Index.

The aforesaid announcement was made by the Federal Board of Revenue (FBR)’s spokesperson on an official Twitter account.  

FBR made trading across borders easier by focusing on three crucial areas. They include enhancing the integration of various agencies in the Web-Based One Customs electronic system; reducing the number of documents required for import/ export clearances and enhancing capacities of Customs officials for playing a proactive role in regulating border trade.

Climbing up the ladder in the Trading Across Border Index has enabled Pakistan in jumping up 28 places – from 136th to 108th – in World Bank's (WB)’s 'Ease of Doing Business 2020'.

This milestone has led Pakistan to be the sixth global reformer and first in South Asia that has brought ease in doing business for the national/international trade.

It is important to note that border facilitation is amongst the top priority areas as per the comprehensive policy laid down by the Government.

Concerted efforts by Pakistan Customs, under FBR, led to impressive performance in terms of compliance to the provisions of the World Trade Organization (WTO)’s Trade Facilitation Agreement; hence, complementing Pakistan’s rise in the Trading Across Border Index.

Pakistan Customs has pursued the implementation of effective customs controls so that compliant trade is thoroughly facilitated, while lesser / non-compliant trade is diverted to detailed scrutiny.

This strategy worked well, as conceived by Pakistan Customs, and has gone a long way in reducing the dwell time (at the borders/ports) for imports/exports in Pakistan by increasing the percentage of clearances through Green Channel

For instance, the time required for documentary compliance to effect exports has been reduced from 55 hours to 24 hours, and the time required for overall border compliance to effect exports has also been reduced from 75 hours to 24 hours.

Similarly, the time required for documentary compliance to effect imports has been reduced from 143 hours to 24 hours, and the time required for overall border compliance to effect imports has also been reduced from 120 hours to 24 hours.

In order to further improve Pakistan’s position in the Trading Across Border criterion, the Federal Board of Revenue is pursuing simultaneous completion of Regional Improvement of Border Services (RIBS) and Pakistan Single Window.

Regional Improvement of Border Services (RIBS) is being implemented at Torkham, Chaman, and Wahga and is the Flagship program that aims at improving border-crossing facilities which are key transit points to Afghanistan and India.

Pakistan Single Window, on the other hand, would integrate online at least 46 departments/agencies in Pakistan and would make trading across borders a hassle-free and seamless operation.

FBR

January 12, 2021 (MLN): A meeting of the cabinet’s Economic Coordination Committee (ECC) is likely to give approval for the waiver of taxes on imports of sugar that will be held on Wednesday, January 20, 2021.

To be presided over by Federal Minister for Finance & Revenue, Dr. Abdul Hafeez Shaikh, the ECC meeting will have 14 items agenda from different ministries.

The meeting would take up the proposal of the Interior Ministry for approval of the Technical Supplementary Grant amounting to Rs 10 million within the sanctioned budget for the purchase of spare parts for Helicopter Maintenance by HQs Frontier Corps Baluchistan (North), Quetta during CFY2020-21.

The ECC would also consider expenditure for payment to Hired Solicitor for pursuing cases in the UK.

Meanwhile, the committee would also deliberate on the Planning, Development & Special Initiatives’ proposal of Technical Supplementary Grant amounting to Rs 16.63 billion. Religious Affairs & Interfaith Harmony has also forwarded its proposal for scaling up of Road to Makkah Project.

Furthermore, the ECC would discuss Textiles and Apparel Policy 2020-25 as well as the National Freight and Logistics Policy (NFLP). The summaries related to both policies were deferred in the last meeting for a comprehensive consultation with stakeholders.

The committee would also take up a proposal moved by Industries and Production for the transfer of allocation of funds to the PSDP project titled ‘1000 industrial Stitching Units’ through Technical Supplementary Grant (TSG).

The Ministry of Industries & Production has also proposed for the transfer of allocation of funds to another PSDP project titled ‘Establishment of 132KV Grid Station at Bin Qasim Industrial Park (BQIP) modified PC-I’ through TSG.

The committee would also discuss the report to the ECC of the cabinet in compliance with ECC’s decision dated 21-10-2020.

The summary moved by the Ministry of Finance on the Draft Policy on Equity Investment Abroad by Residents will also be discussed during the meeting. In addition, ECC would take up a summary of the Aviation Ministry with regards to financial charges of Roosevelt Hotel, New York.

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January 19, 2020 (MLN): China emerged as the largest direct foreign investor in Pakistan during December 2020, with a net direct investment of $53.7 million, followed by Hongkong and United States who invested $30.9 million and $27.7 million net respectively, according to SBP data issued.

However, the country witnessed a negative FDI of $16 million net in the previous month as China and Norway withdrew $78.4 million and $55.8 million from the country respectively.

Cumulatively, during July-December FY21 the country attracted $952.6 million of net FDI, with China, Hongkong, and Netherlands appeared as the top three investors in Pakistan with net FDI of $358.9 million, $86.3 million, and $72.3 million respectively.

The FDI from China was 9% lower in July- December FY21, compared to the net inflows of $395.8 million in the same period of FY20. While the inflows from Hongkong were almost the same when compared to the inflows during Jul-Dec FY20. The inflows from the Netherlands jumped by 61% YoY compared to the net FDI of $45 million recorded during 6MFY20.

On the other hand, investors from Norway showed the largest disinvestment of $44 million during 6MFY21, however, during the corresponding period last year, the country invested $288.5 million as FDI.

Other important investors were the United States (US), United Kingdom (UK), and Malta with a net FDI of $64.8 million, $63 million, and $55.9 million respectively. The Inflows from the US and UK surged by 47% and 8% YoY respectively when compared to Jul-Dec FY20 while the inflows from Malta recorded a decline of 50% YoY in 1HFY21.

Moreover, Foreign Portfolio Investment (FPI), which represents an investment in the equity market has shown a negative picture, as net FPI outflows during the period under review stood at $438 million compared to the inflows of $471 million recorded in the same period last year. The UK emerged as the biggest withdrawal of portfolio investment during the period, as it withdrew $183.6 million during 6MFY21, followed by the US with $126.3 million.

Meanwhile, UAE appeared as the largest contributor in portfolio investment with $101.7 million.

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