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Thursday, 20 Jun 2013 10:06 am
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Profit's Mail
Middle class and prices
Sudden increase in prices of petrol, CNG, mutton, chicken and eggs is pretty much all it takes to choke the middle class, effectively the life and blood of a market economy. This is not to imply that upper and lower income groups are immune to price shocks, just that the middle group contributes more meaningfully to overall economic growth, and hence is most responsive to government policy. That prices of these items are on a concerning uptrend again is indicative of further price, spending, investment and saving pressures down the road. That we approach such a situation in times of already uncomfortable stagflation and unemployment implies the economy is likely to need a lot more aid than decision makers tend to acknowledge. There is little likelihood that PhDs in the finance ministry and planning commission are not aware that Pakistan’s only safe bet is to grow out of the present situation. There can be no other credible arrangement. Yet there seems little pressure on Islamabad’s real power circles regarding a visible government posture that deters growth. In the money market, the government’s incessant borrowing has eroded credit market solvency for private sector expansion, with its subsequent negative spillover on employment and consumerism. On the fiscal side, Islamabad’s inability to move on the PSE issue – whether turnaround and strategic privatisation or improved management and cutting losses – continues to drain the national exchequer of approximately Rs400 billion annually. With growth chronically low and jobs scarce, whatever consumer activity remains will be sliced by high prices. There is also an interesting, non-economic angle to middle class disappointment. Being the biggest chunk in most democracies (developed ones anyway), they also form the largest vote bank, which is why most official policies are framed with the middle class as the predominant target market. The more it finds faults with government policy, the louder its sentiment will resonate come vote time.
Bull surge
This is with regards to the news report ‘Pakistan equities return to top five regional stock list’ published on Saturday. The recent trend of bull surge has been a positive sight and now that we have returned to the top five regional stock list, we must look to cement our place over there. February was a lucrative month for Pakistan, and if we steer clear of political turmoil the coming months should also follow suit. The fact that we are only behind China, India and Indonesia in the region is also a promising stat. ALI WAHID KARACHI
IP Pipeline
This is with regards to the quick edit titled “The pipeline policy” published on Saturday. I think it is a positive stance from our government that we are ignoring all these so called threats from Washington. And now that we have made our stance pretty clear, my humble request to the Government Of Pakistan would be to stop giving statements on Pak-Iran pipeline and complete the project on Fast Track basis as this is the most economical and viable project . This would rest the debate for good. RIZWAN Lahore
Non-Tariff Barriers
This is with regards to the article, “Grilling the wrong chicken” published on Monday. The relentless debate on MFN to India is becoming a tiring affair. It is no rocket science that unless India lifts the Non-Tariff Barriers, it is impossible for MFN to be a success. They want us to hurry up and remove all the items from the negative to the positive list, but they aren’t taking the first logical step by abolishing the NTBs. I don’t think it’s a wise move to acquiesce to Indian demands; we should focus on national interests. Shakeeb Ahmed Lahore
Geniuses of their fields
This is with regards to the news report, “Auction of 3G spectrum must be transparent, says Gillani” published on Saturday. In Pakistan-today you have shown PM Gillani shaking hands with entrepreneur Bill Gates.In fact both are geniuses in their own fields: Gillani in turning politics into an ever expanding cash pot; while Bill Gates making his computer world into a cash mountain.The difference is merely in direction- Gillani is doing it for his forthcoming Gillanis while Bill is doing it for the enlightenment of mankind in future. Wali Awan Lahore
SKEPTICISM ABOUT TRADE
I have been following Profit’s articles from a while now. This is in response to the news item published on February 2nd, about Pakistan’s trade deal with the European Union, and also in response to the news item published on February 9th, about IMF blaming the SBP for inflation. Regarding Pakistan’s economic policies, although the preferential trade agreement with the EU seems beneficial on the surface, I am skeptical about the amount of difference it can make to Pakistan’s terms of trade. The news item did not specify details of the trade pact, like which items were to be traded and how much tariffs would be lowered. No matter how lenient trade agreements seem, if Pakistan is only exporting primary commodities and in turn purchasing value added goods from the EU, Pakistan’s export will remain vulnerable and low priced. In the global system imposed on third world countries today, and under current IMF regulations, Pakistan has no option but to focus on export led growth. The situation is not extremely bleak though, and there is opportunity in the EU deal waiting to be seized. My suggestion to policy makers is that they should focus on improving terms of trade with the EU, and use the export profits to invest in diversifying future export commodities. The government should also make sure that there are no latent ‘strings attached’ that could harm our already fragile economy. FATIMA AKRAM HAYAT LUMS, LAHORE
Textile exports
This is with regards to the news article, “Textile exports down by 19.2 per cent YoY”. It is a shame that textile – once an opulent sector for Pakistan – is now taking a nosedive into obscurity. Not only has our produce diminished, this has also led to a slump in exports and hence this is something that is really aggravating the economy. We need to boost our agriculture and create an environment of investment in Pakistan. The farmers must also be given incentives and proper opportunities to make sure that the output is at a level that is the need of the hour. NAMRAH SYED LAHORE
Missing the old Profit
I have noticed that the number of pages have been reduced in your publication, and I actually miss the earlier pages, when there were so many interesting articles and features to read than merely the news items. In my humble opinion, the views are what readers want to read and that was what Profit used to bring on a daily basis. I hope you revert back to the old format, because I don’t think Profit had a match in the market in terms of interest and popularity as far as business publications are concerned. The center spreads especially were truly remarkable, and spread information in an aesthetic and really enjoyable manner. NOOR ZAHRA SHER LAHORE
Economic forecast
This is with regards to the article, “The economic crystal ball” published on 14/01/12. I must congratulate the writer for scribing a thoroughly enjoyable and researched article. During my time at the Oxford University, my economics professor was of the opinion that forecasting economic repercussions throughout the course of a year is a massive task, and one that requires a lot of savoir faire. I totally agree with the writer’s prediction regarding the euro. I was talking to a German friend of mine the other day; and he stated categorically - in his rather typical German accent - that if anyone can save the euro; it’s Germany. I can’t disagree with that as well. Syed Abdullah Jan Sargodha
Information Technology
This is with regards to the news story, “CM reiterates IT importance” published on 14/01/12. The man, and his party, might have their flaws but with the elections coming up, they are making all the right noises. Distributing the laptops is a great gesture on the part of Mr Shahbaz Sharif, and what is even more significant is that he has earmarked Information Technology as a significant façade of the developed countries. IT knowledge is extremely important for a progressive society and we must ensure that your young prodigies advance in this sector and in turn become the cornerstones of development in our neck of the woods. Zaina Omer Islamabad
Improving fish farming
This is with regards to the news report, “Fisheries department holds training course” published yesterday. The Punjab Fisheries Department is taking a lucrative step by holding the three-day training course for fish farmers. As the news report read, the course would include new farming techniques, which are in synchrony with the modern day techniques that are used around the globe; and hence our farmers would undoubtedly be aided via the course. I believe that all the fish farmers in our neck of the woods, especially the ones in Punjab, should avail this golden opportunity and attend the course. This would go a long way in helping their techniques and improving fishing techniques in Pakistan. Ali Murad LAHORE
European dilemma
This is with regards to the article, “Two pronged European predicament” published yesterday. The view expressed in the article is indeed interesting and worth commending. My personal opinion is that the European problem showcases the sheer shortsightedness of the European leaders. Every single leader is hankering after individual and self seeking safeguards, and no one is really bothered about the collective good of the entire continent. They might as well go their separate ways and stop dreaming about a united continent, since no one is exactly doing any effort for unity. A case in point: David Cameron; and his recent ‘holier than thou’ speech at Brussels. Saniya Wasim LAHORE
Abundant natural resources
This is with regards to the article, “Copper politics and state of economy”, published on 11/01/12. It does not need any new evidence that we have abundant natural resources in our country, but we have tried little to exploit them properly to get rid of our economic woes. The only exception was our self-sufficiency in natural gas, but thanks to our planners that millions of new connections to gain political mileage by successive governments, especially during Musharraf’s regime, criminally uncalculated distribution of CNG station permits and conversion of industries to gas for power generation due to government imposed exorbitant cost of diesel and furnace oil that today gas has become a rare commodity. The nation starved itself for the country’s nuclear programme, but it has only helped us become equipped with nuclear weapons and there are no chances that the nuclear technology can be used by our scientist for peaceful means, especially for power generation. Our celebrated nuclear scientists are not even capable to overhaul the ailing Chashma and KANUPP plants to solve the energy crisis. Trillions of rupees of the poor nation were spent over years on the nuclear and missile programmes with no audit requirement. However, the country’s nuclear assets instead of making it invincible have made it more vulnerable. LONE RANGER LAHORE
Copper politics
This is with regards to the article, “Copper politics, and state of economy” published yesterday. I totally agree with the writer, that the political confrontations and differences have resulted in utter wastage of the lucrative zone. Be it the government of Balochistan or indeed the federal government; no one has played their part appositely, according to the interests of the nation. The procrastination of the government has more often than not curtailed prosperity in Pakistan, and the Rekodeq project is one of the most noteworthy examples of how negligence on the part of the government has cost the nation dearly. And of course there are the phantoms of corruption as well.
Marble market
This is with regards to the news report, “$500b worth Middle East markets remain untapped” published yesterday. Neglect on the part of the government has made the nation suffer on many fronts, and it seems as if the market is unfortunately following suit. As highlighted in the news report, the fact that we are actually ignoring invitations of prominent construction companies from around the globe, defies belief! There is so much that we can learn from them, and there is so much that we can enhance through cooperation with foreign countries. When are we actually going to wake up? Things must change.
Profit's Mail
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