India’s change of Kashmir status puts LoC trade prospects on the line

Goods trucks at the border town of Chakothi in Azad Kashmir, some 3 km from Line of Control on Feb 20, 2019. Following the Pulwama attack, India revoked MFN status to Pakistan and slammed 200 per cent import duty on imports. (AFP/File)
Updated 07 August 2019
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India’s change of Kashmir status puts LoC trade prospects on the line

  • Businessmen rue use of full-body scanners along several points in Jammu and Kashmir
  • Suspension of economic activities impacting 12,000 on both sides of border

KARACHI: India’s unilateral decision to abrogate the special status of Jammu and Kashmir has put a question mark on the future prospects of border trade along the Line of Control (LoC), officials said on Tuesday.
Ten years ago, on October 21, 2008, the first truck drivers and traders met on the Chakothi-Uri Bridge in Kashmir. This was made possible due to an agreement between Pakistan and India as part of the two countries’ Confidence Building Measures (CBMs).
Hostilities between the nuclear-armed neighbors had continued since the division of the subcontinent in 1947 into present day India and Pakistan.
Both countries have held several rounds of talks in the past to mitigate the bitter rivalries between the two, with the latest round of dialogue taking place in Agra in July 2001.





A vehicle begins driving to Azad Kashmir during cross-border trade at ​​​​​​Islamabad, 107km (66 miles) west of Srinagar, Oct. 21, 2008. (REUTERS)

At the time, it was decided that there was a need for a platform which could facilitate travel for families on either side of the border seeking to meet each other.
Following the Pulwama attack in Indian-administered Kashmir in February this year, multiple violations on part of India along the LoC further escalated the tension between the two nations, eventually leading to the suspension of crossborder trade.
In April this year, trade was suspended from both the Chakothi-Uri and Tetrinote-Chakan da Bagh crossing points following a notification from the Indian Ministry of Home Affairs, alleging the misuse of these routes by unnamed elements in Pakistan.
On Monday, India revoked Article 370 of the Indian Constitution which guarantees significant autonomy for the Muslim-majority state, sparking fears of violence and demographic shift in the disputed territory.
“By suspending the LoC trade, it seems that India was preparing the ground for the current situation.” Brig. (retired) Tahir Hameed Malik, Director General DG, Travel and Trade Authority (TATA) told Arab News, “ruling out the possibility of LoCtrade resumption in the near future.”
“Now the status of Jammu and Kashmir is not clear and if India declares Kashmir as international border...the new agreement would be drawn up, considering the trade between Azad Kashmir and Indian held Kashmir,” Malik added.
“Everything has been confounded,” DG TATA said, adding that in case the status of the territory is changed, “trade, if resumed, would be renegotiated and its terms and conditions would be determined because earlier it was CBM and it was LoC trade at zero tariff.” 
“Kashmiri products were traded among Kashmiri people.. and now it all depends on what step India has taken... what new status of Jammu and Kashmir emerges at the international level, whether it will be international trade or LoC it is a matter of understanding,” he said.
Prior to the decision on Monday, traders on both sides of the border were expecting a resumption of intra Kashmir tradewhich could have provided relief to nearly 12,000 people who are were affected by the frequent travel and trade bans.
“The losses are equal on both sides due to the suspension of the intra Kashmir trade. We have estimated that directly around 12,000 people are immediately forced to incur losses and financial damages at all four points,” Sardar Qazeem Khan, President of LoC Trade Union told Arab News from Tetrinote in Azad Jammu and Kashmir (AJK). 
AJK traders say they were assured by their counterparts from Indian-administered Kashmir that trade would be resumed after mid-August, with several choosing to be optimistic about the situation.
“The word suspend is used (in the notification) that means it would resume. The work on the installation of full-body scanners is underway here and hopefully it would be completed in a moth or half. There is no date fixed but when the work on full-body scanners is completed then any date may be announced for trade resumption,” Pawan Anand, President, Cross LoC Traders Association of Poonch told Arab News by phone on Sunday. 
Anand added that nearly 609 traders in both Uri and Chakan da Bagh were involved in the border trade. “Around 380 traders from Jammu and Poonch side and 229 from Kashmir side are affected by the trade suspension,” he added.
Similar number of traders and around 200 laborers directly associated with the trade are deprived of their livelihood, Qazeem said, adding: “Our 150 trucks used for the trade have been rendered off roads while half of them are completely out of work.”
Under the terms and conditions of the Loc trade charter, both sides were allowed entry and exit for 35 trucks carrying 21 items each on a daily basis, while the loading and unloading was done at a trade center set up on both sides of the divided territory.
Traders fear that the recent steps taken by India would mean that any Indian citizen would be able to buy land in Kashmir and become a trader as well. “Under the CMBs, only Kashmiris could trade earlier. Otherwise, it would be Pak-India tradeinstead of intra-Kashmir trade,” Qazeem said.
Traders call for giving trade a chance, for creating lasting peace in the long held disputed territory which has seen three wars and bloodshed in the past seven decades. 
“Trade brings peace. When the gate is opened, the soldiers on both sides meet prior to which they communicate through hotlines which improves communication.. and when trade is suspended all such initiatives also become inactive,” Qazeem said.
Not all hopes have died down, as the travel of people on special permits is still allowed from Tetrinote. “There is a ray of hope still alive.”


Pakistan increases price of petrol by Rs1.35 per liter till next fortnight

Updated 6 sec ago
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Pakistan increases price of petrol by Rs1.35 per liter till next fortnight

  • New price of petrol increases from Rs247.03 per liter to Rs248.38 per liter, says Finance Division 
  • Petroleum prices revised based on price variation in the international market, says notification international market, says notification 

ISLAMABAD: Pakistani authorities have increased the price of petrol by Rs1.35 per liter till the next fortnight, the country’s Finance Division said in a notification late Thursday. 

As per the notification, the new price of petrol has been increased from Rs247.03 per liter to Rs248.38 per liter. 

“The Oil and Gas Regulatory Authority (OGRA) has worked out the consumer prices of petroleum products, based on the price variation in the international market,” OGRA said in a statement. 

Meanwhile, the government also increased the price of high speed diesel by Rs3.85 per liter, increasing it from Rs251.29 per liter to Rs255.14 per liter. 

The price of kerosene was slashed by Rs1.48 per liter, decreasing it from Rs163.02 per liter to Rs161.54 per liter, and the price of light diesel oil was slashed by Rs2.61 per liter, bringing it down from Rs150.12 per liter to Rs147.51 per liter. 

Pakistan revises petroleum prices every fortnight. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers in Pakistan while any increase in the price of diesel is considered highly inflationary as it is mostly used to power heavy transport vehicles and particularly adds to the prices of vegetables and other eatables.

However, the negligible decrease in petrol and diesel prices is unlikely to provide much relief to the inflation-stricken Pakistanis.


Middle East burger chain Salt to begin operations in Pakistan ‘soon’

Updated 14 min 51 sec ago
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Middle East burger chain Salt to begin operations in Pakistan ‘soon’

  • ’Salt’ has branches in Saudi Arabia, Qatar, UK and Hungary already 
  • Salt did not mention which Pakistani cities it plans on opening outlets in

ISLAMABAD: International fast food chain “Salt” announced on Wednesday that it will expand its operations into Pakistan, vowing to provide its customers in the South Asian country high quality food “soon.”

Salt is a Middle East fast food chain based in Qatar since 2005 that specializes in burgers containing wagyu beef — a type of high-quality beef that comes from the Wagyu cattle breed native to Japan. The company founded by Qatar-based Ali Ahmed Buhindi has been running branches in Qatar, Saudi Arabia, the United Arab Emirates, the United Kingdom and also Hungary. 

“Time to pass the salt, Pakistan! SALT, is coming in hot with all the good vibes and flavors to slide right into your cravings,” the burger joint Salt said in a post on Instagram with a picture titled “coming soon.”

Salt did not mention which Pakistani cities it plans on opening its branches in. 

The burger chain offers a wide range of beef burgers that include brisket, truffle, signature, hook and original sliders. 

Its chicken burgers include Cheetos, pine chicken and crispy chicken sliders flavors. 

International fast food restaurants are quite popular in Pakistan with the likes of McDonald’s, KFC and Hardees operating successfully in multiple cities for decades. 


Pakistan’s national airline attracts $36 million bid from real estate company

Updated 31 October 2024
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Pakistan’s national airline attracts $36 million bid from real estate company

  • Sole bidder Blue World City refuses to match government’s minimum price for Pakistan International Airlines
  • Pakistan plans to sell over 51 percent of its stake in loss-making PIA as envisaged under an IMF deal this year

ISLAMABAD: Pakistan’s national flag carrier received a Rs10 billion [$36 million] bid from real estate development company Blue World City on Thursday for sixty percent of its stakes during a televised auction, much below the minimum price for the airline set by the government.
Pakistan plans to sell more than 51 percent of its stake in the loss-making Pakistan International Airlines (PIA) as part of economic reforms Islamabad agreed to with the International Monetary Fund (IMF) for a critical 37-month $7 billion bailout deal approved in September.
Pakistan’s government had pre-qualified six groups in June, but only real estate development company Blue World City met a Tuesday deadline to submit final documents to participate in the auction.
The state-owned Pakistan Television (PTV) broadcast the bidding process live, with Blue World City as the sole bidder. The bid for $36 million was read out in front of government officials and financial advisers. The government had set a minimum price of Rs85 billion [$305 million] for the airline.
“We have considered your match price option,” Blue World City Chairman Saad Nazir said during the event. “We have decided to stand with the price we have already submitted.”
 Nazir refused to match the government’s offer of Rs85 billion, saying that as per the company’s assessment, “this was the best decision.”
“If the government doesn’t privatize [PIA], we wish the government all the best,” he said.
 Pakistan’s privatization commission has allowed some time for potential bidders to see if any would outmatch Blue World City’s bid.
“The government couldn’t get the fair price of the PIA through the auction due to the single bidder,” Haroon Sharif, a former member of the cabinet committee on privatization, told Arab News.
“There was no competition to purchase stakes of the national carrier.”
The government’s initial plan was to finalize the deal to sell PIA on the country’s Independence Day, Aug. 14, but the plan was delayed following requests from bidders waiting for the airline’s latest audited accounts, aircraft lease agreements and clarity on flights to Europe, which are currently banned.
This auction was delayed to September and October but those also did not materialize.
Sharif said the government should have extended the auction’s deadline to involve more bidders in the process.
“Now it looks like the government is privatizing the PIA in desperation,” he noted.
Official data available with Arab News shows there are 88 commercially operated state-owned enterprises in Pakistan, with collective losses of up to Rs730.258 billion ($2.61 billion) in the fiscal year 2022 (FY22).
In its five-year privatization plan ending in 2029, the government has approved 24 state-owned enterprises for sale, including the PIA.
With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s and 5 ATRs, the PIA loses traffic to Middle Eastern carriers who have a market share of 60 percent, because of an absence of direct flights to destinations.
The carrier has air service pacts with 87 countries, and landing slots at key destinations such as London Heathrow.
The reorganization plan of the business will separate the aviation-related aspects from non-core components, so freeing the operating subsidiary of a large portion of legacy debt.


Pakistan says IMF cut its inflation forecast for the country for this year to 9.5%

Updated 31 October 2024
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Pakistan says IMF cut its inflation forecast for the country for this year to 9.5%

  • No need for government to introduce mini-year budget, says finance minister
  • Aurangzeb says IMF revised down import projections for Pakistan for current fiscal year

ISLAMABAD: The International Monetary Fund has lowered its inflation forecast for Pakistan for the current year by 3.2% points to 9.5%, the country’s finance minister said on Thursday.

The IMF’s revised projection bring it closer to Pakistan’s own projections, Finance Minister Muhammad Aurangzeb said.

He said there was no need to introduce a mid-year budget, responding to local media reports saying the government needed to revise its budget to stay on track with an ongoing $7 billion, 37-month program with the IMF.

Aurangzeb said the IMF also revised down its import projections for Pakistan in the current fiscal year, which ends in June 2025.

Pakistan has been struggling with boom-and-bust economic cycles for decades, leading to 22 IMF bailouts since 1958. Currently the country is the IMF’s fifth-largest debtor, owing the Fund $6.28 billion as of July 11, according to the lender’s data.

The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation rate, pushing the country to the brink of a sovereign default last year before an IMF bailout. Inflation has since eased.


Pakistan flag carrier PIA attracts $36 million bid from real estate company

Updated 31 October 2024
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Pakistan flag carrier PIA attracts $36 million bid from real estate company

  • Pakistan is looking to offload 51-100 percent stake in debt-ridden airline to raise funds to reform state-owned assets
  • Pakistan pre-qualified six groups but only Blue World City company met deadline to submit documents for auction

KARACHI: Pakistan’s state-owned airline PIA has received a 10 billion rupee ($35.99 million) bid from real-estate development company Blue World City, the Privatization Ministry said on Thursday without disclosing the size of the stake.
The cash-strapped country is looking to offload a 51-100 percent stake in debt-ridden Pakistan International Airlines (PIA) to raise funds and reform bleeding state-owned enterprises as envisaged under a $7 billion International Monetary Fund (IMF) program.
The government had pre-qualified six groups in June, but only one — real estate development company Blue World City — met a Tuesday deadline to submit final documents to participate in the process.
Officials from three groups that chose not to bid told Reuters on condition of anonymity that there were concerns about the government’s ability to stand by agreements made for the flag carrier in the long term.
One executive voiced concern about policy continuity once a new government came in. The government of Prime Minister Shehbaz Sharif has relied on a coalition of disparate political parties.
The disposal of PIA is a step former governments have steered away from as it has been highly unpopular given the number of layoffs that would likely result from it.
Underpinning these concerns over policy continuity and honoring contracts was the government’s termination of power purchase contracts with five private companies earlier this month, as well as the process of re-negotiating other sovereign guaranteed pacts.
Changes in Pakistan’s decade-old agreements with private Independent Power Producer (IPP) projects, largely financed by foreign lenders, to address chronic power shortages, “raises the risk of investing as well as doing business in Pakistan, even in the presence of sovereign contracts as well as guarantees,” said Sakib Sherani, an economist who heads private firm Macro Economic Insights.
Other concerns raised by potential bidders included inconsistent government communication, unattractive terms and taxes on the sector, in addition to PIA’s legacy issues and reputation.
 ($1 = 277.8500 Pakistani rupees)