Thursday, 5 December 2013

UN warns 1.3m people in Africa need food aid ahead of sanctioned military action

"In Central African Republic, 1.3 million people are in need of emergency food assistance due to civil unrest," the Rome-based Food and Agriculture Organisation (FAO) said in a report on world cereal production and needs. PHOTO: REUTERS
ROME: The United Nations on Thursday said that as many as 1.3 million people in the Central African Republic needed food aid, as the UN Security Council backed an African and French military intervention to halt growing deadly unrest.
“In Central African Republic, 1.3 million people are in need of emergency food assistance due to civil unrest,” the Rome-based Food and Agriculture Organisation (FAO) said in a report on world cereal production and needs.
The figure, which represents more than a quarter of the country’s total population, was up from an assessment of 1.1 million provided by the UN a month ago.
The report also issued a food warning for five Sahel countries further West – Chad, Mali, Mauritania, Niger and Senegal – saying that crops and pastures had been affected by a delayed and short rainy season.
“The situation could lead to a new surge in food insecurity and malnutrition,” it said.
The organisation said that continued civil conflicts had created “severe food insecurity” for six million people in Syria and 4.5 million in Yemen.
The report said world cereal production in 2013 is expected to reach a new high of 2,500 million tonnes – almost 8.4 per cent more than last year and six per cent higher than the previous record in 2011.
It said food prices had remained stable, with the FAO Food Price Index averaging 206.3 points in November compared to 206.6 points in October.

Dwindling foreign reserves: Pakistan urges US to fast track release of CSF dues

US Ambassador Richard Olson in a meeting with Federal Minister for Finance IShaq Dar in Islamabad, on December 5, 2013. PHOTO: PID
ISLAMABAD: 
With its foreign currency reserves hitting the dangerously low level of $3 billion, Pakistan has requested the United States to expedite the process of releasing about $900 million on account of services that Islamabad has rendered in global fight against terrorism.
The request to disburse dues on account of the Coalition Support Fund (CSF) was made by Finance Minister Ishaq Dar on Thursday during a meeting with Washington’s Ambassador to Islamabad Richard Olson. He urged the US to release the outstanding dues in order to avoid the looming threat of default on international payments.
“Early reimbursements of dues on account of Coalition Support Fund… will help Pakistan in improving its present foreign exchange reserves position,” Dar was quoted as saying in an official handout, issued by the Ministry of Finance.
But while the urgency to secure the release of CSF dues builds up on one hand, Dar’s request could not come at a more inopportune moment.
As the minister implored the US envoy to fast track the release of the fund behind the closed doors of Q Block, the workers, office bearers and parliamentarians of Pakistan Tehreek-e-Insaf were staging protests barely a few hundred yards away, outside the Parliament House, demanding the government stop the passage of Nato supplies through the country in retaliation to continuous drone strikes in the tribal areas.
The US Ambassador, meanwhile, remained non-committal about the timing of the release. An official handout stated that Olson assured the Finance Minister that he would convey Pakistan’s position to the US government.
According to the State Bank of Pakistan, the country’s foreign reserves have plunged to $3.05 billion as of November 29 – a sum sufficient to back an import bill of just three weeks. The reserves held by commercial banks stood at $5.19 billion, said the SBP. The outflows were not matching with the inflows due to heavy repayments to the IMF and other international lenders, and delays in taking certain policy decisions which the World Bank and the Asian Development Bank have demanded be implemented before release of loans.
The IMF has so far given only $547 million while another tranche of roughly the same amount is expected to be approved by the lender’s executive board before the end of this month.
For the current financial year, Pakistan has budgeted $1.2 billion on account of CSF. However, the US has so far disbursed only $322 million. Around $900 million remain outstanding. Pakistan hopes to receive at least $300 million more in coming weeks.
It is not yet clear whether the Obama Administration has notified the Congress about releasing another tranche to Pakistan on account of CSF. The administration is required to give a 15-day notification before it can release the amount. Christmas and New Year holidays in the US will start from December 23, which may adversely affect Pakistan’s bid for early disbursements.

Anti-apartheid hero Nelson Mandela dies aged 95

Mandela, who was elected South Africa's first black president after spending nearly three decades in prison, had been receiving treatment for a lung infection at his Johannesburg home since September, after three months in hospital in a critical state. PHOTO: REUTERS/FILE
JOHANNESBURG: Nelson Mandela, the revered icon of the anti-apartheid struggle in South Africa and one of the towering political figures of the 20th century, has died aged 95.
Mandela, who was elected South Africa’s first black president after spending nearly three decades in prison, had been receiving treatment for a lung infection at his Johannesburg home since September, after three months in hospital in a critical state.
His condition deteriorated and he died following complications from the lung infection, with his family by his side.
The news was announced by a clearly emotional South African president Jacob Zuma live on television, who said Mandela had “departed” and was at peace.
“Our nation has lost its greatest son,” said Zuma.
“What made Nelson Mandela great is precisely what made him human,” he said.
Mandela, once a boxer, had a long history of lung problems after contracting tuberculosis while in jail on Robben Island.
His extraordinary life story, quirky sense of humour and lack of bitterness towards his former oppressors ensured global appeal for the charismatic leader.
Once considered a terrorist by the United States and Britain for his support of violence against the apartheid regime, at the time of his death he was an almost unimpeachable moral icon.
The Nobel Peace Prize winner spent 27 years behind bars before being freed in 1990 to lead the African National Congress (ANC) in negotiations with the white minority rulers which culminated in the first multi-racial elections in 1994.
A victorious Mandela served a single term as president before taking up a new role as a roving elder statesman and leading AIDS campaigner before finally retiring from public life in 2004.
“When he emerged from prison people discovered that he was all the things they had hoped for and more,” fellow Nobel Peace laureate Archbishop Desmond Tutu once said.
“He is by far the most admired and revered statesperson in the world and one of the greatest human beings to walk this earth.”
He was a global cause celebre during the long apartheid years, and popular pressure led world leaders to tighten sanctions imposed on South Africa’s racist white minority regime.
In 1988 at a concert in Wembley stadium in London, tens of thousands sang “Free Nelson Mandela” as millions more watched on their television sets across the world.
Born in July 1918 in the southeastern Transkei region, Mandela carved out a career as a lawyer in Johannesburg in parallel with his political activism.
He became commander-in-chief of Umkhonto we Sizwe (Spear of the Nation), the armed wing of the by now-banned ANC, in 1961, and the following year underwent military training in Algeria and Ethiopia.
While underground back home in South Africa, Mandela was captured by police in 1962 and sentenced to five years in prison.
He was then charged with sabotage and sentenced in 1964 to life in prison at the Rivonia trial, named after a Johannesburg suburb where a number of ANC leaders were arrested.
He used the court hearing to deliver a speech that was to become the manifesto of the anti-apartheid movement.
“During my lifetime, I have dedicated myself to this struggle of the African people. I have fought against white domination and I have fought against black domination. I have cherished the ideal of a democratic and free society.
“It is an ideal for which I am prepared to die.”
He was first sent to prison on Robben Island, where he spent 18 years before being transferred in 1982 to Pollsmoor prison in Cape Town and later to Victor Verster prison in nearby Paarl.
When he was finally released on February 11, 1990, walking out of prison with his fist raised alongside his then-wife Winnie.
Ex-prisoner 46664 was entrusted with the task of persuading the new president F.W. de Klerk to call time on the era of racist white minority rule.
Mandela and de Klerk were jointly awarded the Nobel Peace Prize in 1993 for their role in the ending of apartheid.
Derived from the Afrikaans word for “apartness,” apartheid was a brutally enforced system that discriminated politically and economically against “non-whites” and separated the races in schools, buses, housing and even public toilets and beaches.
After the ANC won the first multi-racial elections, Mandela went out of his way to assuage the fears of the white minority, declaring his intention to establish “a rainbow nation at peace with itself and the world.”
Critics said his five-year presidency was marred by corruption and rising levels of crime. But his successors, Thabo Mbeki and Jacob Zuma, have never enjoyed anywhere near the same levels of respect or affection.
In retirement, he focused his efforts on mediating conflicts, most notably in Burundi, as well as trying to raise awareness and abolish the taboos surrounding AIDS, which claimed the life of his son Makgatho.
His divorce from second wife Winnie was finalised in 1996.
He found new love in retirement with Graca Machel, the widow of the late Mozambican president Samora Machel, whom he married on his 80th birthday.
In one of his last foreign policy interventions, he issued a searing rebuke of George W. Bush on the eve of the US invasion of Iraq in 2003, calling him “a president who has no foresight, who cannot think properly, is now wanting to plunge the world into a holocaust”.
Bush’s predecessor Bill Clinton perhaps had a higher opinion of Mandela.
“Every time Nelson Mandela walks in a room we all feel a little bigger, we all want to stand up, we all want to cheer, because we’d like to be him on our best day,” he said.
Mandela is survived by three daughters, 18 grandchildren, nine great-grandchildren and three step-grandchildren. He had four step-children through his marriage to Machel.
His death has left his family divided over his wealth. Some of his children and grandchildren are locked in a legal feud with his close friends over alleged irregularities in his two companies

Despite rising interest rate, most banks continue to prosper

The latest data shows most banks continuing to prosper notwithstanding the central bank’s initiatives to curtail their margins in a rising interest rate environment. PHOTO: FILE
KARACHI: 
Casting aside all doubts about shrinking interest margins resulting in decreased profitability, Pakistan’s banking sector seems all set to benefit from a rising net interest income, declining non-performing loans and sound capital adequacy ratios.
Several analysts believed that the decision of the State Bank of Pakistan (SBP) on September 27 to link commercial banks’ minimum deposit rate with the prevailing repo rate would shrink their interest margins, thus hurting their bottom lines.
However, the latest data shows most banks continuing to prosper notwithstanding the central bank’s initiatives to curtail their margins in a rising interest rate environment.
According to AKD Securities Head of Research Raza Jafri, the listed banking sector has gained 42% since the beginning of 2013 – broadly on a par with the KSE-100 Index – because tighter regulatory directives on interest rate margins have been ‘countered by strong balance sheet growth’ and an improvement in asset quality. “We believe similar themes will persist over the next year,” Jafri said.
United Bank
According to Elixir Securities research analyst Ujala Adnan, her brokerage house expects the UBL stock will trade at Rs160 a share in June 2014 because of its recent non-performing loans reversals and the expectations of a slightly higher net interest margin.
Its closing rate on the Karachi bourse on December 4 was Rs130.72 a share.
UBL’s net interest margin for the third quarter of the current year was 5.1%, which is up 20 basis points on a quarterly basis, despite low interest rates and higher effective savings rate. Adnan says the increase was mainly due to the 30 bps quarter-on-quarter reduction in the cost of funds owing to a higher exposure to foreign exchange deposits, which constitute roughly 28% of the bank’s total deposits.
Bank Alfalah
Elixir Securities estimates that the stock price of the country’s sixth largest bank will reach Rs38 per share in June 2014. Its share price was Rs25.09 at the end of trading on December 4, which means the stock’s value can potentially increase by more than 50% in the next seven months.
Bank Alfalah’s Islamic deposits constitute 16% of its balance sheet, which provide a cushion against rising cost of funds because Islamic savings deposits are not subject to an interest rate floor.
Habib Bank
The most profitable bank in Pakistan is undertaking cost-cutting initiatives in order to curtail its cost of funds, Adnan said. The bank has improved its net interest margin to 3.4%, up 40 bps from the last quarter mainly because of higher proportion of current and savings deposits in its total deposits, she added.
Elixir Securities expects the HBL stock to trade at Rs190 per share in June 2014 as opposed to Rs162.31 a share at the end of trading on December 4. This translates into a potential upside of 17%. “We expect HBL’s net interest margin to improve further going forward,” she added.

Clean chit: PM’s investment package doesn’t break law, says CCP

Tax experts and civil society activists call the amnesty scheme a reward for the tax thieves, which would also impede the drive to broaden the country’s narrow tax base. PHOTO: FILE
ISLAMABAD: As the anti-trust watchdog gives a clean chit to the prime minister’s blanket amnesty scheme for investors, the national tax agency has issued a draft of rules in the first phase of implementing the PM’s package, which is widely perceived to be pro-industry.
The rules, issued by the Federal Board of Revenue (FBR) on Thursday, deal with reporting requirements for banking companies about those account holders who are not taxpayers.
The FBR agreed with the prime minister’s decision that barred the tax authorities from getting access to bank accounts of existing taxpayers.
Describing it as a package that will promote growth and investment, Nawaz Sharif had last week announced incentives for the industrialists – who are called his traditional voters. Experts say the incentives offer the industrialists a chance to legalise their black money by investing in various projects.
He also stopped the FBR from accessing the bank accounts of taxpayers and exempted a category of existing and all new taxpayers from tax audit.
Tax experts and civil society activists call the amnesty scheme a reward for the tax thieves, which would also impede the drive to broaden the country’s narrow tax base.
However, Competition Commission of Pakistan Acting Chairman Dr Joseph Wilson believed that the prime minister’s package was not a violation of the Competition Act of 2010 and would not damage the cause of competitiveness.
He said though the package was not applicable to certain industries like sugar, cement, beverages and cigarettes, these industries were “well entrenched” and would be immune from any adverse competitive implications.
“It is the discretion of the government and the PM to provide any incentive to any industry and there is nothing in the package that raises concerns of competitiveness,” said Wilson at a seminar here on Thursday.
USAID Trade Project’s Regional Trade Adviser Dr Manzoor Ahmad said exemptions granted to certain businesses through Statutory Regulatory Orders (SROs) were providing unfair advantage to large businesses at the expense of small and medium enterprises.
For the first phase of implementation of the PM’s package, the FBR has notified the draft rules for obtaining monthly information from banks about depositors and loan defaulters. The FBR would consider the proposals for seven days since publishing the draft after which the amendments would be considered part of the Income Tax Rules 2001.
As desired by the PM, the FBR allowed the banks not to give any information about monthly transactions and written-off loans of those who either hold the National Tax Number or are active taxpayers.
This came in the backdrop of hue and cry the industrialists and traders were making against the government’s move to give the FBR access to their bank accounts.
According to the banking companies’ reporting requirements, in case a person does not have an NTN and is a non-filer, every banking company will furnish the FBR a monthly account holder deposit statement, credit card payment details and any loan written off.
However, any such information becomes useless when a person decides to file the income tax return and pay a minimum tax of Rs25,000 irrespective of what he owes to the exchequer.
The PM had also announced that those who decide to come in the tax net, their accounts will not be accessed and they will be exempted from the audit.
The decision to exempt people from the audit is seen as a major blow to the government’s drive to broaden the tax net, as those who owe millions can get away by paying just Rs25,000.

Inauguration of distribution centre: Powered by USAID, HESCO expects a ‘brighter’ future

US Consul General Karachi Michael Dodman inaugurating the Power Distribution Centre (PDC) at the Hyderabad Electric Supply Company (HESCO). PHOTO: NNI
HYDERABAD: The United States Agency for International Development (USAID) is working on a five-year power distribution programme in collaboration with Pakistan’s government-owned power distribution companies, said US Consul General Karachi Michael Dodman.
The announcement was made during the inauguration ceremony of the Power Distribution Centre (PDC) at the Hyderabad Electric Supply Company (HESCO) yesterday.
“Power distribution centres have been set up in all nine distribution companies at a cost of $230 million in the country,” said Dodman. “These centres will give access to real time data of electricity load to managers of the Pakistan’s electricity grid. The programme will also improve the companies’ performance in terms of reduction in losses and improvement in revenues and customer services.”
Dodman added that the load data improvement programme will enable HESCO to monitor the power flow on their grid stations and help overcome unscheduled load-shedding. “Such programmes are providing assistance to Pakistan reform its power sector in order to end the current energy crisis in the country.”
Meanwhile, Hesco Chief Executive Officer Laiq Ahmed Khan said the programme of establishing the PDC will enable the company to control all 70 grid stations and more than 400 feeders will be monitored electronically. “Until now, we have been maintaining the power management record manually,” said Khan.
“This system will help us identify the load on each grid through a main metre installed at each grid station and inform us if any one of them is not functioning within seconds and not hours like earlier. This will also help in reducing unscheduled load-shedding, line losses and theft and, as a result, the programme will improve the company’s performance as well.
The official added that the support, provided by the US, has already helped Hesco increase its efficiency by 70%, through staff training and capacity enhancement

Cement export to Kabul in gradual decline

Total cement sales in the five-month period stood at 13.167 million tons compared to 13.127 million tons in the corresponding period of last fiscal year. PHOTO: REUTERS/FILE
KARACHI: Cement sales in the first five months (July-November) of the current fiscal year grew a meagre 0.3%, restricted by a decline in exports to major overseas markets and economic slowdown in the country.
Total cement sales in the five-month period stood at 13.167 million tons compared to 13.127 million tons in the corresponding period of last fiscal year, data released by the cement industry showed.
Capacity utilisation in five months was estimated at 70.79% — the lowest in the last five years, which industry players attributed to slower economic growth in the country.
Cement exports to Afghanistan is declining gradually due to the sluggish pace of new development projects in the country, while expected withdrawal of Nato forces from Afghanistan next year has also created a sense of uncertainty, industry officials say.
India, also an export destination for Pakistani cement, is experiencing economic slowdown, leading to a fall in cement demand.
In November alone, cement sales in the domestic market posted a growth of 8.61% while exports dropped 12.84%, resulting in an overall marginal growth of 3.03% compared to the previous year. The increase in domestic consumption was offset by a substantial fall in exports.
Data compiled by the All Pakistan Cement Manufacturers’ Association showed that total sales in November were 2.731 million tons compared to 2.650 million tons in the same month of last year