The US State Department announced on Friday that the Trump administration is set to approve $125 million for Pakistan to provide technical support to its fleet of F-16 aircraft.
The proposed programme has already been given the go-ahead by the State Department and sent to Congress for approval.
The announcement followed Prime Minister Imran Khan’s ice-breaking visit to Washington earlier this week, which included a three-hour visitto the White House as well.
During an unprecedented 47-minute joint press talk with the prime minister on July 21, US President Donald Trump also offered to mediatebetween India and Pakistan to help them resolve the 70-year old Kashmir dispute.
“The State Department has made a determination approving a possible Foreign Military Sale (FMS) to Pakistan for Technical Security Team (TST) in continued support of the F-16 program for an estimated cost of $125 million,” said an official announcement released on Friday evening.
The US Defence Security Cooperation Agency delivered the required certification, notifying Congress of this possible sale on July 26, three days after the prime minister’s visit.
The government of Pakistan requested a continuation of technical support services, which includes US government and contractor technical and logistics support services. The request also includes other related elements of logistics support to assist in the oversight of operations in support of the Pakistan Peace Drive advanced F-16 program. The total estimated program cost is $125 million.
“This proposed sale will support the foreign policy and national security of the United States by protecting US technology through the continued presence of US personnel that provide 24/7 end-use monitoring,” the State Department said.
“The proposed sale of this support will not alter the basic military balance in the region,” the statement added, in an effort to assuage possible Indian irritation.
The principal contractor for this support program is Booz Allen Hamilton Engineering Services LLC, Fairborn, Ohio.
Implementation of this proposed sale will require the assignment of 60 contractor representatives to Pakistan to assist in the oversight of operations as part of the Peace Drive F-16 program.
The US Defence Security Cooperation Agency informed Congress that “there will be no adverse impact on US defence readiness as a result of this proposed sale.”
This notice of a potential sale is required by law and does not mean the sale has been concluded.
Almost all such requests, however, are approved after a possible debate. In case Congress rejects the request, the administration can still use a waiver to provide the requested services.
All FMS support programs for Pakistan were halted by the Trump administration after accusing Islamabad of not helping Washington in achieving its objectives in Afghanistan. But during the prime minister’s July 20-23 visit to Washington, both sides announced they were now on the same page on Afghanistan.
The prime minister said that he would soon call Taliban leaders to Islamabad to persuade them to hold direct talks with the Taliban. President Trump thanked him for Pakistan’s support that enabled direct talks between US and Taliban delegations in Doha, Qatar.
Since the prime minister’s return, the Taliban have conveyed their willingness to visit Islamabad to meet Mr. Khan while President Trump has dispatched his top general and a senior diplomat to Kabul to brief the Afghan government.
LAHORE: PML-N vice president Maryam Nawaz Sharif has taken a gibe at the ruling PTI saying the government is ‘powerless’ as the order to release senior columnist Irfan Siddiqui has been issued without even bringing it into the notice of the prime minister.
“This is the level of the selected and his government. The decisions are taken and withdrawn while he [the prime minister] is totally unaware of. What’s the use of such a rule wherein the government and the selected are humiliated on a daily basis and they are left as bystanders! But the talk of respect and ego can be understood only by the respectable,” reads her tweet issued in response to a press conference by the Special Assistant to Prime Minister on Accountability, Shahzad Akbar.
Ms Nawaz also embedded a combo of TV screen grabs of Mr Akbar’s presser and of National Assembly Speaker Asad Qaiser’s.
Mr Siddiqui, an adviser to former prime minister Nawaz Sharif, was released on bail on Sunday two days after he was arrested by police for violating the tenancy act in a late-night raid.
Responding to one of her followers’ tweet that the bail plea of Mr Siddiqui was accepted after the prime minister learnt that Maryam Nawaz’s speeches were written by herself and not Mr Siddiqui, she said: No, it is because it [the arrest decision] backfired. There is a limit to everything and that limit has been crossed. Whatever excesses they commit now will only be counterproductive. So watch out!
In yet another tweet she denied a claim made by a senior journalist that Nawaz Sharif as prime minister had asked for sacking of some [army] officials and tendering of apologies on a tweet issued from the official account of the director-general of the ISPR, public relations wing of the armed forces.
“Prime Minister Nawaz Sharif neither demanded dismissal of anyone nor sought tendering of apologies by others. He had only stated that he was a humble person and didn’t want anyone to seek his forgiveness. But, yes, the tweet containing the word Rejected is an insult of the elected prime minister and the Constitution and that must be withdrawn.”
The ISPR had in a tweet back on April 29, 2017 rejected the report issued by the PM’s office regarding a news leak report. The tweet was withdrawn after about 10 days.
Commenting on JUI-F president Maulana Fazlur Rehman’s threat of marching on Islamabad in the month of October if the incumbent government didn’t resign next month (in August), she said “unlike a similar march by Imran Khan when except some individuals involved in the behind the scene conspiracy masses were not part of it, a very big people’s power is behind the Maulana. If other parties joined in [the march] then if God wills, the game will end. Those arrogant of power know that a war cannot be waged against the masses. The end of the conspiracy will be terrible, if God wills.”
Then in opposition, the Imran Khan-led PTI had earlier marched on Islamabad in August 2014 and then attempted to lockdown the federal capital in November 2016.
ISLAMABAD: Amid ongoing probes into dollar-based tariff indexations, ‘unnatural profits’ in the power sector and last year’s capacity payments of over Rs466 billion, the government will be raising about Rs200bn through Islamic bonds next month to reduce circular debt after securing about Rs11bn relief from independent power producers (IPPs).
The finance ministry has called a meeting of presidents of 10 commercial banks in the country on Monday (today) to finalise a term sheet for Pakistan Energy Sukuk-II amounting to Rs200bn for power sector liquidity through Power Holding (Pvt) Limited — an assetless shell company of the power division. Finance Secretary Naveed Kamran Baloch will lead the government side.
The consortium, led by Meezan Islamic Bank, comprises nine other commercial banks — Habib Bank, Bank Alfalah, Bank Islami, Dubai Islamic Bank, Bank Al-Habib, Bank Albaraka, National Bank of Pakistan, United Bank and Faisal Islamic Bank. This will be the second Sukuk financing worth Rs200bn for the power sector in less than six months.
Government finalising out-of-court settlement with IPPs
The government had raised Rs200bn through Pakistan Musharqa Sukuk in March this year to bail out the power sector after the IPPs started international arbitrations to secure their overdue unpaid bills. The consortium at the time consisted of six banks — Meezan Islamic Bank, Bank Islami Pakistan, Faysal Bank Limited, MCB Islamic Bank, Dubai Islamic Bank and Al-Baraka Bank.
MCB Islamic Bank has stayed away this time.
The government had lost a case in the London Court of International Arbitration (LCIA) to about 10 IPPs, creating about Rs35bn liability, including interests and other costs, against taxpayers’ money.
Power division secretary Irfan Ali had last month told the Senate Standing Committee on Power that the government was in talks with the IPPs to get some concessions, particularly on late-payment surcharges.
The government has now finalised those negotiations under which the 10 IPPs, which had won international arbitration against the government, have agreed to reduce their mark-up payments on overdue arrears from Kibor plus 4.5 per cent to Kibor plus 2pc. They have also agreed to apply mark-up after 90 days of non-payment instead of the existing 35 days, while the mark-up will now be payable on the outstanding amount once instead of compound interest rate.
As a result, the government is estimated to get a financial relief of about Rs11bn against the original cost of about Rs34bn awarded in favour of the IPPs by the LCIA. The two sides are expected to sign the settlement agreement over the next couple of weeks.
On the directives of Prime Minister Imran Khan, the power division had started negotiations with the 10 IPPs set up under the 2002 power policy for out-of-court settlement of originally Rs16bn award allowed by the LCIA. The arbitration cost had increased to Rs34bn on account of interests and other costs.
An official in one of the IPPs said the government might be overestimating the relief because the negotiations were limited to the extent of interest payments. It might be a couple of billions of rupees and nothing like Rs11bn, he said, adding that the out-of-court settlement would be a time-bound discount and in case of non-clearance of dues within 45 days, the original mark-up would get revived.
Simultaneously, officials are expecting that Rs200bn Sukuk financing will also be approved by the Economic Coordination Committee (ECC) of the cabinet later this week to ensure timely clearance of not only the arbitration liability to the litigants but also other outstanding dues to all the IPPs and fuel suppliers suffering cash flow problems because of around Rs1.4 trillion circular debt.
An official said the ECC had approved in principle up to Rs400bn Islamic financing for the power sector in February this year in two phases, but a fresh approval by the ECC as well as the cabinet was required for the second tranche because of changed financing costs arising out of more than 500 basis points increase in the central bank’s policy rate to 13.25pc under the IMF programme.
The Islamic financing for the power sector has already been declared statutory liquidity ratio eligible by the government and the State Bank of Pakistan.
The assets belonging to a number of public sector power companies have been mortgaged in favour of the financiers as well as the previous bond backed by a government guarantee with a 10-year maturity at a rental return of Kibor plus 80 basis points. The bonds entail half-yearly rental repayments from the date of draw-down and repayments are made directly by the central bank on the basis of a budgetary allocation by the finance ministry on its standing instructions to direct debit for return and maturity repayment at the SBP counter.
The boards of directors of all power distribution and generation companies have agreed to pledge the properties/assets in the trust for banks. Some additional properties and assets have been selected in the distribution and generation network as collateral against rental payments.
At present the National Electric Power Regulatory Authority, National Accountability Bureau and newly created Inquiry Commission on Debt are probing the IPPs financials for purported higher than normal profits. The government is also considering appointing a specialised commission comprising international engineering, legal and financial experts on the issue.
Amidst the spectacle of Khan-Trump camaraderie, one of the bones tossed around was the increase in bilateral trade.
“I see great trade with Pakistan. And I’m not talking about a little bit more. I’m talking about 10 and even 20 times what we’re doing right now,” said US President Donald Trump.
Those are big numbers to throw around. The United States is Pakistan’s top market accounting for 16 per cent of its exports in 2018. An increase of this magnitude would mean a jump of over $67 billion in our bilateral relationship, with exports increasing by $38bn.
Any increase in exports will remain marginal until firms move out of their comfort zones and improve their operations and product offerings
Clearly, the words are hyperbolic. Trump pooh-poohed a 20pc increase in trade but even that would indicate a nearly $1bn increase in exports. Textiles dominate and make up over 80pc of exports to the United States.
Assuming an ideal scenario in which Pakistan and the United States are best buddies, what would it take for Pakistan’s textile sector to make such a leap?
Amongst the many hurdles are the age-old woes of ease and cost of doing business that the textile sector has been lamenting since time immemorial. Then there is the current macroeconomic environment that is scaring off investors. And last but not least, the shortcomings of the textile sector that render it uncompetitive even if all other variables are in place.
After the 2012 Baldia fire tragedy at a garment factory, Walt Disney sent a letter expressing concern about the safety standards in the industry. The upshot of it was that Pakistan was removed from the list of permitted sourcing countries since it scored 18 points on the World Governance Index (WGI) when the minimum qualifying requirement was 25 points.
“When Disney pulled out, it gave us two options — improve our WGI standing or join the Better Work Programme,” said Pakistan Textile Exporters Association Chairman Khurram Mukhtar.
Better Work is a programme run by the International Labour Organisation and the International Finance Corporation. Its objective is to improve working conditions in the garment industry and make the sector more competitive by bringing together diverse groups such as governments, global brands, factory owners, unions and workers.
However, when Pakistan approached Better Work, it was informed that it “currently had more candidate countries that it could accommodate”. This was back in 2013. An arduous process followed requiring feasibility studies and assessments.
Fast-forward to 2019, the process is finally bearing fruit and Pakistan is expected to be part of this programme this year, which will be funded by the Export Development Fund.
While there may not be a direct link between the Better Work programme and Pakistan’s exports, it increases arsenal in Pakistan’s ammunition, says Majyd Aziz, president of the Employers’ Federation of Pakistan.
The Disney ban did not materially impact Pakistan’s exports, which have averaged around $3.6bn over the last 10 years.
However, it did highlight concerns regarding compliance.
“We can’t take the risk to not be compliant, we will be sued!” Soorty Enterprises Managing Director Shahid Soorty says, contending they have to be ready for spot checks at all times. These words represent the generally held views of different big manufacturers/exporters representing various associations.
While the major players may be compliant with international standards, they do tend to outsource to Cut-Make-Trim (CMT) units, said a source in the sector.
CMT units are the most basic form of operations in the ready-made garment industry. Input and product specifications are provided by the retailer while garments are manufactured and packaged by CMT units.
Compliance covers issues like minimum wage, working hours, child labour, fire-fighting systems, working conditions, treatment plant, disposal of hazardous waste and so on. Some renowned international chains require a suite of additional compliance certificates as well.
While the big boys fulfil the requirements, the CMTs fly below the radar and adhere to far lax standards. Incidents like the Baldia factory fire draw attention to non-compliance in the sector and paint a negative picture, which costs the textile sector across the board.
A lot of pens have dwelled on the high cost of doing business in Pakistan, especially in the current macroeconomic environment, but it bears repeating.
“About 90pc of garment exporters are small and medium enterprises (SMEs),” says Shaikh Muhammad Shafiq of the Pakistan Readymade Garment Manufacturers and Exporters Association. “With the withdrawal of zero-rating and a liquidity crunch, they will have to leave the market.”
This sentiment was echoed by various associations of textile exporters that asserted that the medium and smaller players were being forced to exit.
“Bangladesh can supply five-pocket jeans at $7-7.5 while Pakistan quotes $8-8.5,” said Mirza Ikhtiar Baig, a denim exporter. “This is why the bulk of orders go to countries like Vietnam, Cambodia and Bangladesh whereas Pakistan gets only spillover orders.”
“We have a factory in Bangladesh because of its lower cost of production. We get a 7pc discount there by default,” said Mr Soorty. In order of importance, he stated the ease of doing business, wages, labour laws, energy and other facilities were the reasons why Soorty Enterprises opts to export from Bangladesh while also having operations in Pakistan.
Since the majority of Pakistan’s exporters are SMEs, they do not have the critical mass to enjoy economies of scale. At most, they manage to get a stall in international exhibitions but lack marketing skills. Nor are they savvy enough to bid online for tenders with competing nations.
The sector’s concerns and complaints notwithstanding, demand-side trends have changed over the last decade, which makes a dramatic increase in textile exports to the United States unfeasible in the short and medium terms.
Oil-based synthetic fibres have a lion’s share at 60pc of the world market while cotton’s share is about 25pc. Technological advances in synthetic fibres, better moisture absorbency and a lower cost of raw material make manmade fibre textiles a preferred option compared to Pakistan’s cotton-dominated exports.
There is a lack of research and development within the sector, a factor highlighted by the State Bank of Pakistan’s 2016-17 annual report that flagged a decrease in textile exports to the United States. The report stated that textile players are still “excessively focused on cotton-based textile and apparel products” when the market is moving elsewhere.
This situation is exacerbated by the absence of a strong domestic polyester industry with demand for manmade fibres largely met by imports.
The share of cotton products in the US textile imports decreased from 40pc in 2010 to 29.7pc in 2017, indicating a changing preference of consumers in foreign markets. Pakistan’s share in the textile and apparel imports of the United States in 2016 was 3pc, as per the US Office of Textile and Apparel. It was 5pc for cotton-based products. The manmade fibre imports by the United States in 2016 were $52bn, of which Pakistan’s insignificant exports were $200 million.
Yet the sector opts to fixate on its cost of doing business woes without taking into account the evolving trends that have come after years of high cotton prices and improving synthetic technology. The polo shirts and assorted apparel manufactured nearly two decades back are still the bread and butter of the garment industry.
Admittedly, the macroeconomic and business environments are key variables for Pakistan’s textile export competitiveness. However, till firms move out of their comfort zones and take it upon themselves to improve operations and product offerings, any increase in exports will remain marginal at best.
Source: Dawn News
rime Minister Imran Khan, while addressing a large crowd at a community event at Washington's Capital One Arena on Sunday, said that a 'Naya Pakistan' was being created in front of people's eyes.
"People ask where is 'Naya Pakistan', it is being created in front of your eyes," the premier said.
Earlier, organiser of the event Dr Abdullah Riar had said that they were expecting between 15,000 and 20,000 at the event.
PM Imran was accompanied by Foreign Minister Shah Mahmood Qureshi, Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh, Adviser to Prime Minister on Commerce Abdul Razak Dawood, and Minister of State for Overseas Pakistanis Zulfi Bukhari.
Addressing the crowd in the American capital, Prime Minister Imran Khan said that the problem in Pakistan was that when political leaders were asked for answers, they say that political revenge is being taken, and when courts make decisions they say 'kyun nikala'.
"Today, what you see happening in Pakistan is what Naya Pakistan was about: these people had never been asked for answers before."
The premier said that there were two main reasons — a system of merit and accountability — due to which democracy had succeeded as a governance system and left monarchy behind.
Citing a sports example, the PM said that the Australian cricket team had dominated the sport as they have a system that brings up talent and relies on merit.
"I have played cricket all around the world. I have seen the most cricketing talent in Pakistan. But [because] there is no system of merit, we can't bring that talent up.
"This is why we are not dominating the world [in cricket] — because there is no meritocracy."
PM Imran said that America had succeeded thanks to a system based on meritocracy, through which good leaders replaced bad ones.
He regretted that in Pakistan there was a "type of monarchy" and merit did not come into play in the country.
"A society that doesn't have merit, doesn't go forward."
The premier said that the second factor that took democracy forward was leaders being held accountable.
"Democracy is successful when the leadership is answerable."
Prime Minister Imran said that cases against political leaders in Pakistan were not new.
"All the cases against them are old. We did not [start] any case [...] all we have done is make institutions independent."
"We have seen Pakistan go down before our eyes," he said, adding that when he was growing up in the country during the 1960s, Pakistan was considered to be the fastest developing country in the subcontinent and Asia.
He said the Pakistani bureaucracy was considered the top one in Asia and people used to come from abroad to study in the country.
"This is the same Pakistan we saw go down."
PM Imran explained that the form of socialism in place during the 1970s had led to industrial growth in the country stopping and then after 1985, bribery came into politics when the "real damage" took place.
"We saw Pakistan go down before our eyes."
He said two things — public office holders being held accountable and merit — were required to lift the country up.
"Anyone who is a public office holder should answer to the people."
While referring to political leaders in the country, the premier said: "They have one purpose, they want to hear three words from me NRO [National Reconciliation Ordinance]."
He said that now the powerful individuals in Pakistan were being held accountable, which included the seizure of their benami properties.
"Remember this is the time that Pakistan will change, it is changing before you."
The premier added that a merit-based system was required in the country.
"A system of merit will come when family-based politics end.
"Pakistan Tehreek-i-Insaf (PTI) is the first party where no relative or friend of Imran Khan is in any post," he said, adding that new leaders, such as Minister for Communications and Postal Services Murad Saeed and Federal Minister for Economic Affairs Division Hammad Azhar, would emerge from the party.
"Our country will rise before you. You will see we will fix the system and let the lower segment come up."
The premier said that ten years ago, the country's debt was Rs6,000 billion.
"After ten years, these two raised it to Rs30,000 billion," referring to former prime minister Nawaz Sharif and former president Asif Ali Zardari.
"Where did the money go? We need to take [back] this money from them. I want to tell them again that you can do what you want.
"Everyone comes together to save democracy, to save their money. Come together, if you want to stage a 'dharna', I will give you containers.
"Do what you want, you will have to return the money."
While referring to Nawaz, PM Imran said that he would remove the former premier's TV and air conditioner from jail.
"I know that Maryam [Nawaz] bibi will make a lot of noise, but Maryam bibi give back the money, then he can go from jail."
PM Imran said that he had noticed that when former president Zardari went to jail, he would spend all of his time in the hospital.
"Asif Zardari, [we] will also keep you in jail, there will no TV nor will there be an air conditioner."
"It is very easy to be released from jail: return the money, we will release you from jail."
"Until today, the powerful in Pakistan were never questioned. This is the biggest change and this is why our country will rise."
PM Imran said that the education system in Pakistan did not allow the less privileged to come up.
"There is an education apartheid. Here [in America] people are given opportunities."
The premier said that for the first time in Pakistan, they were attempting to fix the system of government schools in the country and attempting to introduce one main syllabus so that people have the opportunity to rise up.
"Our country has been left behind because of one reason: corruption," said the premier.
He said that he had met companies in the United States, Qatar, Saudi Arabia and China for investment and they all said that they don't come to Pakistan because there is corruption.
"Through a clean government [and] by ending corruption, we will lift this country."
The prime minister said that the current government's vision was to turn the country into a welfare state on the pattern of Riyasat-i-Madina, Radio Pakistan reported.
He said that the principles of Riyasat-i-Madina were compassion, justice, rule of law, and looking after women, children and elderly.
The premier said that he would present the case of the Pakistani people before President Donald Trump, who he is scheduled to meet on Monday (today).
"I will not let you be embarrassed in front of Donald Trump."
During the event, a documentary of PM Imran's journey was also shown to the audience.
The premier concluded his address by vowing that he would never let Pakistan bow down before anyone.
BEIJING: Chinese President Xi Jinping on Friday pointed out that his three meetings with Prime Minister Imran Khan over the past eight months fully reflected the high level of China-Pakistan all-weather strategic partnership and said that both countries should carry out closer coordination and cooperation under the changing regional and international situation.
“Xi Jinping pointed out that in the past eight months, I met with the prime minister three times. This fully reflects the high level of China-Pakistan all-weather strategic partnership,” said a statement issued by the Chinese foreign minister after the meeting held between President Xi and Prime Minister Khan on the sidelines of Shanghai Cooperation Organisation summit in Bishkek, Kyrgyzstan.
The Chinese president remarked that under the changing international and regional situation, China and Pakistan should carry out closer coordination and cooperation to build a closer community of shared destiny.
Mr Xi emphasised that both the countries must maintain, consolidate and develop China-Pakistan all-weather relations and all-round cooperation.
He maintained that the two sides should thoroughly communicate on issues of common concern and jointly safeguard international and regional security and stability.
“We must expand and enrich the construction of the China-Pakistan Economic Corridor (CPEC) with new focus on industrial parks, agriculture and people’s livelihood,” he added.
Mr Xi said it was necessary to seize the opportunity of the escalation of the China-Pakistan Free Trade Agreement and vigorously expand bilateral trade. China was willing to provide assistance to Pakistan within its ability, he added.
The Chinese president said his country supported Pakistan in carrying out the national anti-terrorism action plan and would help Pakistan strengthen its counter-terrorism capacity building, adding, “China supports Pakistan and India to improve relations.”
During the meeting, Prime Minister Khan said China was an all-weather strategic partner of Pakistan.
The Pakistani side thanked the Chinese side for its support and assistance for a long time and said Pakistan highly valued China’s positive role in promoting international and regional peace and security and was committed to continuously deepening its strategic relationship with China.
Published in Dawn, June 15th, 2019
Leader of the Opposition in the National Assembly Shehbaz Sharif would be returning to Pakistan on June 8, a member of his personal staff confirmed to DawnNewsTV.
According to Sharif's staff, he would be returning to the country on Saturday. The development was also tweeted by an unverified account, seemingly belonging to the PML-N supremo's son Suleman.
It is pertinent to mention here that the budget for 2019-20 is to be presented in the parliament on June 11.
Earlier, lawyers had informed an Accountability Court that Sharif would be returning to Pakistan on June 11. However, it was also earlier said in court that the opposition leader would be returning to Pakistan after Eidul Fitr.
Sharif had announced a "quick visit" to London on April 9 after his name was removed from the no-fly list on Lahore High Court orders. Party sources had said at the time that he intended to return within 10-12 days.
Sharif faces court cases regarding corruption and dishonesty. In the Ashiyana housing scam, Sharif is accused of ordering the cancellation of a contract given to successful bidder Chaudhry Latif and Sons for the low-cost housing scheme, which led to the award of the contract to Lahore Casa Developers, a proxy group of Paragon City Private Limited, resulting in a loss of Rs193 million.
In the Ramzan Sugar Mills corruption case, Shahbaz Sharif and his son Hamza Shahbaz are accused of "fraudulently and dishonestly" causing a Rs213 million loss to the national exchequer.