Pakistan's finance minister criticizes manufacturers for importing parts instead of building them

Men walk along a street at a car part and repair market in Rawalpindi, Pakistan, on November 9, 2020. (AFP/File)
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Updated 17 August 2022
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Pakistan's finance minister criticizes manufacturers for importing parts instead of building them

  • Miftah Ismail says cellphone manufacturers were only adding five percent value to their products
  • He points out that automobile manufacturers had not exported cars to lucrative destinations in 30 years

ISLAMABAD: Federal Minister for Finance and Revenue Miftah Ismail on Wednesday highlighted the structural problems of the country’s economy, saying that Pakistani companies preferred to import parts of their products instead of manufacturing them indigenously at home.

The government recently imposed a temporary ban on the import of luxury items since it was facing a massive current account deficit along with dwindling forex reserves and a rapidly depreciating currency.

The finance minister issued the statement against the same backdrop while addressing a conference of business leaders in the federal capital where he specifically mentioned the country’s cellphone and automobile manufacturers.

“We have given subsidies and 10 percent duty advantage to mobile industry to manufacture phones in Pakistan but their value addition is not more than five percent,” he said. “They get all of their parts from outside and only assemble them here. We have given double duty protection than its value addition and the same thing holds true for car manufacturing companies as well.”

Ismail noted that automobile manufacturers had been working in Pakistan for more than 30 years, but they had not exported vehicles worth a single dollar.

“Pakistani companies are selling inside the country only, though they should try to sell [their products] in rich markets of the United States, Europe and far eastern countries,” he added. “They sell locally to earn more profit because it is a protected market.”

The minister pointed out that out of Pakistan’s $30 billion exports, around $20 billion were generated by the textile sector.

“We import $80 billion worth of goods from abroad which is unsustainable,” he continued. “Our industries have to increase exports instead of only making local sales.”

Ismail also maintained that agriculture was the backbone of Pakistan’s economy, though he added it needed more innovation by adopting advanced Agri-Tech.

“My focus is to strengthen our agriculture as we have imported $450 million tons of wheat this year and more is still required,” he said.

The money spent on the import of wheat, the minister continued, could be used to support farmers and introduce latest technology in the sector.


Service Long March Tyres to invest Rs300 billion in Pakistan

Updated 13 sec ago
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Service Long March Tyres to invest Rs300 billion in Pakistan

  • The development came during Group Chairman Jin Yongsheng’s meeting with PM Shehbaz Sharif in Lahore
  • Jin lauded the government’s investment-friendly policies and appreciated the measures to prevent smuggling

LAHORE: Service Long March Tyres has decided to invest an additional Rs300 billion in Pakistan that will help create new job opportunities and increase its exports, Pakistani state media reported on Friday.

The development came during Service Long March Tyres Chairman Jin Yongsheng’s meeting with Prime Minister Shehbaz Sharif in the eastern city of Lahore.

Jin lauded the government’s investment-friendly policies and appreciated the measures to prevent smuggling, the state-run APP news agency reported.

“Jin Yongsheng said that the new investment would help produce 1000 new jobs whereas the company’s exports from Pakistan might also reach $100 million annually by 2025,” the report read.

Pakistan, which narrowly averted a default last year thanks to $3 billion International Monetary Fund (IMF) bailout, is currently looking to attract foreign investment to support its fragile, $350 billion economy.

Over the last one year, the South Asian country has signed investment deals worth billions of dollars with friendly countries.

During Friday’s meeting, PM Sharif welcomed the decision of Service Long March Tyres Group to expand its operations in Pakistan, maintaining his government was taking measures on priority to boost investment in the country.

“A comprehensive framework was being shaped up to further facilitate the business community and the investors,” Sharif was quoted as saying.


More than 3,400 Pakistani Hajj pilgrims arrive in Madinah via 15 flights

Updated 36 min 10 sec ago
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More than 3,400 Pakistani Hajj pilgrims arrive in Madinah via 15 flights

  • Pakistan on Thursday launched its pre-Hajj flight operation which will continue till June 9
  • Out of all, seven flights were operated from Islamabad, Karachi under Makkah Route initiative

ISLAMABAD: More than 3,400 Pakistani Hajj pilgrims have arrived in Madinah via 15 flights during the first two days of the country’s pre-Hajj flight operation, Pakistani state media reported on Friday.

Out of these, seven flights were operated from Islamabad and Karachi under the Makkah Route project, an initiative of the Saudi government to streamline the immigration process for pilgrims.

Currently, only Islamabad and Karachi airports in Pakistan are functioning under the initiative to facilitate pilgrims during the Hajj days.

“Filled with excitement and devotion, the pilgrims, who have been preparing for this moment for years, stepped foot in the Prophet’s (SAW) city, marking the beginning of the Hajj season,” the state-run APP news agency reported.

“Approximately three million pilgrims from around the world, including 179,210 Pakistanis, will converge on the holy cities to perform the sacred Hajj.”

From the airport, the passengers were transported to residential buildings located in Markazia, some 20-minute away from the Prophet’s Mosque.

Hajj is one of the five pillars of Islam, and requires every adult Muslim to undertake the journey to the holy Islamic sites in Makkah at least once in their lifetime, if they are financially and physically able.

Pakistan has a Hajj quota of 179,210 pilgrims this year, according to the Pakistani religious affairs ministry. Of them, 63,805 pilgrims will be performing the pilgrimage under the government scheme, while the rest would be accommodated by private tour operators.

Pakistan began its pre-Hajj flight operation on May 9, which will continue till June 9. This year’s pilgrimage is expected to run from June 14 till June 19.


Pakistan signs contract with consulting giant McKinsey in push to digitize tax collection system 

Updated 44 min 25 sec ago
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Pakistan signs contract with consulting giant McKinsey in push to digitize tax collection system 

  • IMF-led structural reforms require Pakistan to raise tax to GDP ratio from around 9 percent to 13 percent-14 percent
  • Global lender wants Pakistan to broaden its existing tax base and improve tax administration

KARACHI: Pakistan signed an agreement with McKinsey and Company on Friday for the digitalization of its tax system, the finance ministry said, as the South Asian nation strives to deliver reforms amid talks with the International Monetary Fund for a new bailout loan.

Among reforms the IMF will likely push for a new package, like the last two packages, are strengthening public finances including through gradual fiscal consolidation, broadening the existing tax base, improving tax administration, and debt sustainability.

In a media brief in December 2023, Pakistan’s main tax collection agency, the Federal Board of Revenue (FBR), said the country had a “very narrow tax base” of around 5.2 million people in 2022, out of a population of 240 million people. The FBR said it plans to add 1.5 million new taxpayers to the existing base during the current fiscal year.

A high-level meeting was held at the FBR headquarters on Friday, following the signing of the contract with the global consulting firm, McKinsey and Company. The meeting was attended by officials from the ministry of finance, FBR, McKinsey and Karandaaz, a not-for-profit company promoting access to finance for small and medium sized enterprises and financial inclusion for individuals.

“The digitalization of the tax system is a pivotal step toward modernizing tax collection which will enhance transparency and revenue growth,” the finance division said in a statement.

“Digital transformation is a key priority for the government, and this collaboration [with McKinsey] underscores the government’s commitment to improving tax collection for promoting sustained economic growth. We look forward to seeing the positive impact of this initiative on Pakistan’s economy,” Finance Minister Muhammad Aurangzeb was quoted as saying in the statement. 

FBR Chairman Malik Amjed Zubair Tiwana said FBR was committed to enhancing revenue collection by leveraging technology to modernize its operations.

“This project [with McKinsey] is a significant step toward achieving FBR’s goals of transparency and efficiency to better serve the people of Pakistan,” Tiwana added. 

With a chronic balance of payment crisis, Pakistan needs $24 billion in payments for debt and interest servicing in the next fiscal year starting July 1 — three times more than its central bank’s foreign currency reserves.

The South Asian nation is seeking yet another long-term, larger IMF loan, with finance minister Aurangzeb saying Islamabad could secure a staff-level agreement on the new program by early July.

If successful, this would be the 25th IMF bailout for Pakistan.

The IMF-led structural reforms require Pakistan to raise its tax to GDP ratio, stop losses in state-owned enterprise and manage its energy sector losses which run into trillions of rupees. 

Pakistan’s finance ministry expects the economy to grow by 2.6 percent in the current fiscal year ending June, while average inflation is projected to stand at 24 percent, down from 29.2 percent in fiscal year 2023/2024.

Inflation soared to a record high of 38 percent last May but eased to 17.3 percent this April after staying above 20 percent for almost two years


Balbirnie leads Ireland to T20 win over Pakistan

Updated 54 min 35 sec ago
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Balbirnie leads Ireland to T20 win over Pakistan

  • The opener’s innings was pivotal as Ireland reached a target of 183 with a ball to spare
  • It was Ireland’s second win against Pakistan since their shock triumph at 2007 World Cup

DUBLIN: Andrew Balbirnie’s 77 helped guide Ireland to their first victory over Pakistan in 17 years as they won the opening Twenty20 international by five wickets in Dublin on Friday.

The opener’s innings was pivotal as Ireland reached a target of 183 with a ball to spare.

Victory gave Ireland a 1-0 lead in a three-match series against a Pakistan side they will also face in the group stage of next month’s T20 World Cup in the United States and the West Indies.

It was just Ireland’s second win against Pakistan following their shock triumph at the 2007 50-over World Cup.

Pakistan skipper and star batsman Babar Azam top-scored for the tourists on Friday with 57 in a total of 182-6 that also featured Saim Ayub’s 45.

“I didn’t watch the last over. (I) went to the tent and put a towel over my head,” said Balbirnie, who shared a third-wicket stand of 77 with Harry Tector, at the presentation ceremony.

“I felt it was my job to get the team over the line... Harry said if we could bat normally till the 13th over, we could get the runs. That was a partnership which set it up.”

Azam, meanwhile, absolved his bowlers of blame for the defeat.

“I think 190 would have been a par score,” he said.

“We lost in the fielding and batting. (I) don’t think we executed the plans. Few fielding lapses cost us.

“We attacked in the first six overs but didn’t finish well.”

Ireland needed 40 to win from the last four overs, with Abbas Afridi dismissing George Dockrell for 24.

Next over, with Ireland requiring another 28 from 17 balls, Shadab Khan gave Balbirnie a reprieve by failing to hold a tough chance.

Come the penultimate over, Ireland’s target was down to 19.

But Pakistan quick Shaheen Shah Afridi bowled Balbirnie with a low full toss to end the opener’s impressive 55-ball innings, which featured 10 fours and two sixes.

With Ireland needing 11 off the last over, Curtis Campher under-edged a boundary off Abbas and eventually sealed victory with a leg bye.

The teams meet again in Dublin on Sunday and Tuesday.


Pakistan to play Japan in Azlan Shah Hockey Cup final today

Updated 11 May 2024
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Pakistan to play Japan in Azlan Shah Hockey Cup final today

  • This is first time Pakistan have advanced to tournament’s final since 2011
  • Pakistan have won the Azlan Shah Cup title thrice, in 1999, 2000 and 2003

OSLAMABAD: Pakistan remained unbeaten in the Azlan Shah Hockey Cup on Friday as their match against New Zealand ended in a tie, and will take on Japan in the final today, Saturday. 

Pakistan are already through to the final which will take place at 5:30pm (PKT) on Saturday at the Azlan Shah Stadium in Ipoh. This is the first time Pakistan have advanced to the tournament’s final since 2011.

Friday’s match ended in a draw, with both teams securing one point each, the Pakistan Hockey Federation (PHF) said.

“Pakistan has managed to make it to the finals with a total of 11 points from five matches on the points table,” PHF said. “Pakistan won the bronze medal in the last event [Thursday] by winning the third-place match. The final match between Pakistan and Japan will be played tomorrow [Saturday].”

Six teams are participating in the event, including host team Malaysia, Pakistan, Korea, Japan, New Zealand and Canada. 

Pakistan have won the Azlan Shah Cup title thrice — in 1999, 2000 and 2003 — and came third in the last edition which was also held in Ipoh in 2022. Malaysia are the defending champions of this year’s edition.

Addressing the squad via video link, Information Minister Attaullah Tarar reiterated the government’s commitment to hockey, state-run Radio Pakistan said, adding that the prime minister had ordered focusing on removing obstacles in the development of hockey in Pakistan.

“The entire nation is praying for the victory of Pakistan and is looking forward to welcome a champion team,” Tarar said. 

Pakistan is now 18th in hockey rankings after being consistently among the top four and winning a record four World Cups. The nation has not won a single hockey medal at the Olympics since 1992.