Day: April 23, 2024

The World Bank has warned that Pakistan is highly vulnerable to the impacts of climate change, with extreme events frequently resulting in fiscal shocks for the economy. 'An estimated population of 49 million is residing in areas at risk of 4-5 percent decline in quality of life by 2030. Climatic shocks have caused significant loss of life, economic damage, and reversal of development gains over the last 15 years', the Bank stated in the 'Second Resilient Institutions for Sustainable Economy: Climate Change Technical Note'. The Bank further stated that the increased intensity and frequency of floods alone has caused substantial physical damage, affecting more than 30 million people since 2010, with damages and losses exceeding US$14 billion. The country is also increasingly exposed and vulnerable to various other climatic hazards, particularly droughts, heatwaves, and cyclones. These climatic shocks impact household welfare, undermine human capital formation, and are particularly challenging for the fisca l sustainability of the country, it added. The Bank stated that two prior actions in this operation are expected to yield climate co-benefits. The first prior action is to better target and reduce the fiscal cost of power subsidies, (a) the Cabinet has approved a second phase of subsidy reforms for domestic consumers that: reduces subsidies for users above 200kWh/month for six consecutive months; and eliminates the incremental block tariff benefit; and (b) the Ministry of Energy has notified DISCOs to increase electricity tariffs for users above 200 kWh/month for six consecutive months in fiscal year 2023. The Bank stated that Pakistan's Country Climate and Development Report (CCDR) identifies that significant inefficiencies across the energy sector are the result of large distortive energy subsidies. These inefficiencies are detrimental to the reliability of electricity and gas supplies and also generate large fiscal deficits that accumulate into high levels of power sector debt, commonly referred to as the 'circular debt'. To improve the efficiency of the power sector, the CCDR recommends that Pakistan implement politically difficult reforms, including tariff reforms in the electricity sector. This prior action will have positive environmental impacts by reducing subsidies for most residential consumers and thereby mitigating incentives for excessive energy use and the associated adverse effects on the environment. Further, the salient feature of this reform is the improvement of the equity of electricity subsidies through protecting disadvantaged consumers, those consuming less than 200KW per month for six consecutive months, who are likely to be the poorest. The second prior action is to support the wider usage of digital payments, the State Bank of Pakistan has: launched the Pakistan instant payment system; increased the acceptance infrastructure for digital payments; and issued a revised Foreign Exchange Manual to facilitate investments; and (b) to allow the use of digital payments to vendors, the Finance Division has amended the Treasury Rules. The Bank stated that Pakistan had already successfully deployed digital payments during the 2010 floods to provide swift and transparent compensation to the affected population. However, the payments were conducted then through ad-hoc arrangements and mainly through state-owned banks. With this new system, the entire banking sector can be utilized to rapidly deploy digital disaster aid payments and reach areas that may become physically inaccessible in the event of climatic shocks or natural disasters. Therefore, digital payments supported through this PA can be used as part of the disaster response infrastructure. The use of digital technology also ensures that the benefit transfer system itself is resilient and operational in the wake of potential disruption from climate-related natural disasters, the note added. Source: Pro Pakistani

The federal cabinet has reportedly approved allowing audit exemption certificates for secret service expenditure of the Intelligence Bureau (IB). Sources told ProPakistani that the Federal cabinet through circulation approved the Cabinet division summary concerning the audit exemption certificate for secret services Expenditure of the IB. The Federal cabinet last year May 2023 allowed audit exemption for Secret Service Expenditure of the IB. Sources claim that the cabinet division informed that the Secret Service Fund is an integral part of the working of Intelligence Agencies. As per international practices, the Secret Service Fund is exempted from the scope of the audit. In this regard, to provide exemption to the Secret Service Fund of Intelligence Agencies from the scope of audit, the Parliament (Majlis-e-Shoora) through the Finance Act, 2013 amended the Auditor General's (Functions, Powers and Terms and Conditions of Service) Ordinance, 2001 (XXXIII of 2001) and added the proviso Section 17 of the Ordinance ibid which stated that 'Provided that the Auditor-General shall exempt expenditures of secret service agencies certified by the Federal Government as relating to national security from the scope of audit.' The cabinet division informed the PM that the Administrative Audit of Secret Service Expenditure of IB for the Financial Year 2022-2023 was conducted by the Cabinet Division from 20th to 21st February 2024 and the Audit Exemption Certificate for the Financial Year 2022-2023 for AGPR shall be issued after approval of the Cabinet. Foregoing in view, the Cabinet Division proposes that an audit exemption certificate in respect of the IB Secret Service Fund may please be granted by the Federal Cabinet. Source: Pro Pakistani

The price of gold in Pakistan fell by almost Rs. 8,000 per tola on Tuesday as easing concerns of an escalation in the Middle East crisis saw international prices decline. According to data issued by the Karachi Sarafa Association, the price of gold (24 carats) decreased by Rs. 7,800 per tola to Rs. 240,900, while the price of 10 grams registered a decline of Rs. 6,687 to Rs. 206,533. Today's decline is the second in successive days. Yesterday, the price of gold fell by Rs. 3,500 per tola. Cumulatively, the price of gold has fallen by Rs. 11,300 per tola in the last two days. In the international market, gold prices fell to a more than two-week low today with spot gold down 1.2 percent to $2,298.58 per ounce by 0945 GMT. Source: Pro Pakistani

The Pakistan Stock Exchange (PSX) on Monday issued notices to four listed companies to explain the unusual movement in their share prices. The main bourse issued notices to Dewan Farooque Motors Limited (PSX: DFML), Ghandhara Automobiles Limited (PSX: GAL), Standard Chartered Bank (Pakistan) Limited (PSX: SCBPL) and TPL Insurance Limited (PSX: TPLI). In four separate notices to the aforementioned firms, PSX said it observed unusual movement in the share prices of DFML, GAL, and TPLI in the past few days, while similar activity was observed in the share price of SCBPL between March 18, 2024, and April 15, 2024. Since 1 April 2024, DFML shares have surged 79.5 percent from Rs. 16.43 to Rs. 29.5 per share on April 23. During the same period, GAL's share price gained 39.1 percent to peak at Rs. 128.8 while TPLI rose 32 percent to Rs. 20 per share today. Meanwhile, SCBPL's share price went up by Rs. 21.05 (~60 percent) from Rs. 34.95 to as high as Rs. 56 between March 18 and April 15, data on the PSX portal s howed. 'In case of any material/price-sensitive information that is likely to affect the price or volume of the shares, listed companies are required to promptly disseminate the information through PSX for its onward dissemination to the public as stipulated under the PSX Regulation 5.6.1,' the notices said. The main bourse directed all firms to furnish sufficient information in order to clarify their positions which may have resulted in unusual movement in their share prices, or to disclose a statement of the fact that they are not aware of any such matter of development. Source: Pro Pakistani

Fatima Fertilizer Company Limited (PSX: FATIMA) has increased urea prices by Rs. 551 per bag. Our channel checks have confirmed that FATIMA has increased urea prices by Rs. 551/bag despite any changes in current gas rates. The producer's new rate stands at Rs. 4,400/bag effective from 23 April 2024. Earlier this month, Fauji Fertilizer Company Limited (PSX: FFC) hiked its urea prices by Rs. 633/bag to Rs. 4,400/bag. Engro Fertilizer Limited (PSX: EFERT) rates for urea remain at Rs. 4,649/bag. It bears mentioning that both FFC and FATIMA receive Mari network gas at a subsidized price of Rs. 580 per MMBtu, while other manufacturers on SSGC and SNGPL networks faced a Rs. 1,597 per MMBTU tariff hike in February 2024. This disparity in gas pricing for the same product within the industry has led to a massive disparity in urea rates. Urea prices play a crucial role in determining the prices of essential food commodities. Any arbitrary increase in urea prices by fertilizer companies can lead to higher costs f or farmers, ultimately resulting in more expensive food prices for consumers. Source: Pro Pakistani

The government of Pakistan is gearing up to launch a groundbreaking initiative aimed at modernizing regulatory frameworks and fostering a more conducive environment for businesses. In line with the World Bank's Digital Economy Enhancement Program (DEEP), the government will establish the Pakistan Business Portal (PBP), a pivotal platform set to revolutionize business-government interactions across federal, provincial, and municipal levels. Sources within the Ministry of IT and Telecom told ProPakistani that the Pakistan Business Portal will serve as the cornerstone of the DEEP initiative, designed to streamline regulatory processes and enhance the ease of doing business in the country. With a focus on simplifying and digitizing compliance procedures, the portal is poised to catalyze national digital transformation and drive economic growth. The first phase of the project will involve a comprehensive review and mapping of registrations, certificates, licenses, and other regulatory requirements across appro ximately 800 government agencies. This meticulous process will lay the groundwork for identifying areas of improvement and implementing reforms aimed at enhancing the business environment in Pakistan. To oversee the development and implementation of the DEEP program, an interim Project Management Unit will be established within the Ministry of IT and Telecom. This temporary unit will be tasked with overseeing the DEEP project, ensuring its smooth execution and adherence to established timelines and objectives. The DEEP project, supported by a financing package of $149.7 million approved by the World Bank's Board of Executive Directors, underscores the international community's commitment to Pakistan's digital transformation agenda. With a significant portion of the funding allocated to the establishment of the Pakistan Business Portal, the government is well-positioned to leverage digital platforms to expand access to services and drive greater efficiency in the business sector. In addition to its focus on regulatory modernization, the DEEP initiative aims to introduce innovative solutions such as the Civic Innovation and Technology Labs (CITL) initiative, which will harness open government data to foster innovation and entrepreneurship. Source: Pro Pakistani