Economics URC NEWSCLIPPINGS JULY TO DECEMBER 2019 ECONOMICS Urban Resource Centre A-2, 2nd floor, Westland Trade Centre, Block 7&8, C-5, Shaheed-e-Millat Road, Karachi. Tel: 021-4559317, Fax: 021-4387692, Email: [email protected], Website: www.urckarachi.org Facebook: www.facebook.com/URCKHI Twitter: https://twitter.com/urc_karachi Page 1 Economics URC Budget madness IT might be one of the most consequential budgets passed by any government in recent times, yet it is surprising to see how little of its most important aspects have been discussed. The budget is built around a massive hike in revenues and an accompanying need to keep current expenditures in check, with the express purpose of bringing down the primary deficit as per the preconditions set by the International Monetary Fund. Many of the projections in the budget are surprising, such as the overall fiscal deficit remaining elevated at 7.1pc of GDP, only slightly below the level in fiscal year 2019, while inflation is projected to rise to almost 13pc and GDP growth to slow to 2.4pc by the end of this fiscal year. Those who understand would know that something stunning is being described in these numbers. The numbers talk of rising inflation and unemployment and a government struggling hard to do everything in its power to meet its obligations to its creditors. Yet very little of this emerging situation was discussed during the budget debate, where the most highlighted portion of the exchange centred on the speaker‘s ruling disallowing the use of the words ―selected prime minister‖ in the course of the proceedings. The tax plan also deserved in-depth discussion. A closer look shows that the burden of the incremental revenues for the year disproportionately falls on salaried people, and is followed by a vigorous attempt to net undisclosed incomes of industrialists and small and medium enterprises, and to document trader incomes. All this is fine and necessary. Tax evasion and undocumented businesses have become a way of life in this country, and the FBR chairman‘s repeated insistence that somewhere around 30pc of all bank accounts are, in fact, benami accounts may well be true. But the wisdom of doing all this in one go, on the back of a vigorous and muscular implementation strategy that seeks to intimidate people into compliance more than anything else, deserved a thorough debate in parliament. Traders and business people understandably felt that parliament and the opposition parties were too busy with their own issues to be responsive to the genuine concerns of their constituents. Those concerns revolve around jobs, cost of living, ease of doing business and harassment by government officers, to name a few. This budget and its accompanying finance bill are about to aggravate all these issues simultaneously. The wheels that are ready to be set into motion are larger and more menacing than anything we have seen in well over a decade. That is what makes the budget so significant, yet it sailed through parliament with hardly any imprint being left by the opposition. Let‘s hope politics is not becoming irrelevant to the real-life concerns of the very people it is supposed to serve. (By Editorial Dawn, 06, 01/07/2019) Worried about your job prospects? This man can help Starting your career can be quite a daunting process. Most corporate entities require candidates to have prior experience, even if they are hiring for starting roles. Then there is the cumbersome application process, interviews and probationary period. At each step of this selection process, the candidate is judged for various qualities – many of which they haven‘t been prepared for in their academic careers. Muhammad Jaffar Khan, a resident of Karachi, realised these pressures as soon as he graduated from college. For the last 14 years, he has been striving to make the transition from student life to a professional career a little easier for fresh graduates. Around 14 years ago, Khan founded the Karsaz Education and Welfare Organisation, which provides trainings and certification to aspiring professionals or those who want to advance in their career. Essentially, the courses aim to bridge the gap betwee n theoretical knowledge and its practical application – something that most varsities in the country barely think about. The idea When Khan completed his MBA from Hamdard University in 2004, one of his teachers advised him to ensure he ‗closed‘ all the courses required for the degree. What the teacher basically meant was that he should get professional certification for the courses he had undertaken during his MBA. Khan got certifications for almost 30 out of his 34 courses. The certifications were provided by professional institutes and they cost him hundreds of thousands of rupees. ―I was able to afford it because I came from a business-oriented family,‖ he told The Express Tribune. ―But then I thought of my fellow students who were unable to pay the fees for these kinds of courses.‖ The idea had struck a chord and Khan decided to do something about it. At first, he started providing guidance and consultation for students of various colleges and universities on a voluntary basis. Soon, he enlisted some friends and they started providing the training courses on a much larger scale. ―The most common complaint among youngsters is that they don‘t receive calls after submitting their CVs and giving interviews,‖ said Khan. ―The main reason for this is that the youngsters are not making any value additions to their skillset.‖ For exampl es, most candidates who apply for a particular job don‘t even bother to read the company‘s mission statement or its vision. ―Many aspiring candidates fail to stand out in terms of their presentation skills, body language, dress code and physical appearanc e,‖ said Khan. Moreover, they are unaware of the responsibilities of the role they are applying for. They have little knowledge of current affairs, the market and the country‘s economy. ―These are all valuable additions to your profile when you walk into t hat interview room,‖ he said. KEWO This is where Khan‘s organisation – the Karsaz Education and Welfare Organisation – steps in. ―The idea behind this organisation was to aid students develop soft skills as well as provide them professional trainings,‖ Khan told The Express Page 2 Economics URC Tribune. Over the years, he has enlisted the help of top professionals from renowned multinational companies who voluntarily teach professional courses at the organisation. According to Khan, most centres charge anywhere north of Rs100,000 for these courses and certifications. KEWO charges no fee for any of the 87 courses it offers in 20 different categories. Over the years, over 30,000 students have benefitted from the guidance of the 140 professionals associated with Khan‘s organisation. In response to a question, Khan says that the male-to-female ratio of these students is almost half. Besides, Khan has also signed memorandum of understandings (MoUs) with over 30 companies to provide assistance to the students in getting job placements. The students are sent for internships to these companies and many of them have ended up with job letters based on their performance. Need of the hour Khan believes that the demand for skilled manpower is rapidly increasing in Pakistan. Export-oriented firms need employees to meet the requirements of human resource management in order to meet the international standards of certification (ISO). Similarly, larger conglomerates need their staff to be trained in basic life support and rescue efforts – something that is quite unheard of among fresh graduates. Today, the largest demand for manpower arises from the IT, engineering and textile sectors, says Khan. Besides, there are ample opportunities for quality control experts in the food sector but there is a dearth of trained profes sionals in the field. KEWO is currently offering special courses to bridge this gap. Building on what it has accomplished thus far, KEWO is now looking to expand and Khan wants to work with the provincial and federal government to make the courses available to more students. It also enjoys the support of the Employers Federation of Pakistan. Besides, KEWO has recently entered into a contract with the government of Sindh under which a call centre facility will be established for training and consultation of youngsters in the province. For Khan, the centre may have achieved more than he set out for, but there is still a long way to go. ―The idea is to improve the standard of available manpower in the power, and at the same time, eliminate poverty through the provision of employment opportunities.‖ (By Kashif Hussain The Express Tribune, 04, 01/07/2019) Reading the IMF programme THE executive board of the IMF has approved Pakistan‘s request for accession to a three-year, $6 billion programme. The programme now begins and the first tranche of the money will be transferred into State Bank accounts within days. Equally important, the programme document that details all the commitments agreed to between the Fund and the government of Pakistan will be uploaded onto the Fund website, also within days. This is a crucial document and all those with a keen eye on Pakistan‘s economy, and with an interest in knowing where things are expected to go in the future, will give it a careful read. So I thought I‘d share some tips on what sort of things to look for in the document that a layperson could understand, and that will reveal important details about what to expect for the next three years. This is not some sort of a definitive list, and others may well point out other areas that will also be of critical interest.