The United States on Friday announced fresh sanctions against eight top Iranian officials it accused of working to destabilise the region, as well as against more than a dozen leading producers of metals in the Islamic republic.
“As a result of these actions, we will cut off billions of dollars of support to the Iranian regime,” Treasury Secretary Steven Mnuchin told reporters at a White House briefing.
Among the senior Iranian officials targeted in the new measures were Ali Shamkhani, the secretary of Iran’s Supreme National Security Council, Mohammad Reza Ashtiani, the Iranian armed forces deputy chief of staff and Gholamreza Soleimani, the head of the Basij militia, a volunteer force loyal to the regime.
The US Treasury also slapped sanctions on 17 Iranian metals producers and mining companies which it said generated billions of dollars in revenue.
The sanctions also included a network of three entities that are based in China and the Seychelles as well as a vessel “involved in the purchase, sale, and transfer of Iranian metals products”, the Treasury said in a statement.
Mnuchin said the officials and companies were being targeted in response to Iranian ballistic strikes targeting Iraqi military bases where US forces are stationed. That attack was launched after a US drone strike in Baghdad killed top Iranian general Qasem Soleimani.
Mnuchin said that the measures hitting Iran’s economy “will continue until the regime stops the funding of global terrorism and commits to never having nuclear weapons”.
The Development of microfinance industry depends upon the resilience and risk management: SECP Chairman Amir Khan
Islamabad : SECP Chairman, Aamir Khan emphasized that in these challenging times the development of microfinance industry depends upon the resilience and risk management, achieved through quintessential pillars of liquidity-tapped through private capital and technology embracement. Khan was addressing the Non-Bank Microfinance Companies Stakeholders Forum organized by SECP to devise a way forward and collaborate strategic response to cope the challenges posed by COVID-19 pandemic and ensuing lockdowns.
The SECP Chairman Amir Khan, along with Commissioner Specialized Companies Division, Farrukh Sabzwari chaired the session. Representatives of Pakistan Microfinance Network (PMN), State Bank of Pakistan (SBP), National Bank of Pakistan (NBP), Pakistan Poverty Alleviation Fund (PPAF), Pakistan Microfinance Investment Company Limited (PMIC), Karandaaz Pakistan and multilateral donor agencies including the World Bank, International Finance Corporation (IFC) and Department for International Development (DFID) attended the session.
The Chairman SECP advised NBMFCs to go far product diversification to insurance solutions and saving products and build capacity of their workforce to attain business development and operational efficiency. He endorsed formation of a working group consisting of nominees from SECP, PMN, PMIC and NBMFCs to further analyze the situation. The working group will also take up the matters with relevant forums including ministry of finance, SBP and multilateral donor agencies for possible solutions.
Khan expressed SECP’s firm commitment to providing all possible support to industry not only during the current pandemic times but also in developing the industry on a strong footing. SECP Commissioner, Sabzwari highlighted the measures taken by SECP to provide relief and flexibility to the NBMFCs and their wholesale lender in managing funding requirements. He also talked about SECP’s advice to NBMFCs to defer and reschedule borrower loans.
Participants acknowledged SECP’s timely intervention to provide regulatory relief to NBMFCs in managing their credit lines and funding requirements. However, industry representatives expressed their concerns on potential defaults by borrower and liquidity crunch that may lead to capital crisis in the industry.
They raised the need of new money injection into the industry through collaborative efforts of microfinance regulators and the government. Representatives of international donor agencies attending the Forum expressed their resolve to extend fullest possible support to Pakistan’s microfinance sector.
Gov’t releases Rs 533.33 billion for various development projects so far
Islamabad: The federal government has so far authorized release of Rs 533.33 billion for various ongoing and new social sector uplift projects under its Public Sector Development Programme (PSDP) 2019-20, as against the total allocation of Rs 701 billion.
Under its development programme, the government has released an amount of Rs 230.3 billion for federal ministries, Rs 175.65 billion for corporations and Rs 43.46 billion for special areas, according to a latest data released by Ministry of Planning, Development and Reform.
Out of these allocations, the government released Rs 38.5 billion for security enhancement in the country for which the government had allocated Rs 53 billion during the year 2019-20.
An amount of Rs 81.37 billion has also been released for the blocks managed by finance division under the government’s 10 years development programme.
Similarly, for Higher Education Commission, the government released an amount of Rs 27.07 billion out of its total allocation of Rs 29 billion while Rs 301.47 million were released for Pakistan Nuclear Energy Authority for which the government had allocated Rs 301.48 million in the development budget.
For National Highway Authority, the government released Rs154.94 billion. Under annual development agenda, the government also released Rs 10.7 billion for Railways Division out of total allocation of Rs16 billion, Rs 7.7 billion for Interior Division, and Rs 8.38 billion for National Health Services, Regulations, and Coordination Division.
Revenue Division received Rs 4.3 billion whereas the Cabinet Division also received Rs 30.18 billion for which an amount of Rs 39.986 billion has been allocated for the year 2019-20.
The government also released Rs 26.9 billion for Azad Jammu and Kashmir (AJK) block and other projects out of its allocations of Rs 27.26 billion and Rs 16.54 billion for Gilgit Baltistan (Block and other projects).
Pakistan’s small businesses hit hard by COVID-19
Small businesses in Pakistan have been adversely affected by the Covid-19 pandemic. The low demand at home, disruptions in supply chains, constraints in international trading, and expected prolonged lockdowns are now leading to severe cash flow problems, the inability to pay back debts and cancellation of orders from clients.
This rising uncertainty is gradually leading them to lay off employees which will have welfare implications. In some sectors where recovery is difficult to predict, small businesses have started planning for the worst: complete shutdown. This crisis could also imply a much bleaker outcome for the startup ecosystem in Pakistan.
The government has announced a SME relief package. The central bank has also come forward to relieve some of the funding and finance related concerns of private enterprises. Yet, many micro and small businesses do not understand how to apply or if they are eligible, to receive such assistance. There are others who argue that this one off relief may not be enough given that businesses are going to face depressed demand for a longer term. Pakistan’s past record of small businesses trying to access such fiscal packages is also not encouraging, partly because many such firms do not access formal banking channels for their needs or banks impose steep collateral requirements. Also, large segments of micro enterprises have the entire or some components of their businesses in the informal sector.
Federal and provincial governments have two issues to address now: how to ensure that small businesses are able to access and utilize existing government-provided assistance, and secondly, what more can be done to support private enterprise in these times.
A progressive fiscal policy and commitment to redistributive taxation is in line with the spirit of Riasat-e-Madinah to which Prime Minister Imran Khan often refers to. A sincere effort is required to reduce the burden of compliance costs faced by small firms- often filing returns several times during a year and to multiple tax bodies across the country.
Dr. Vaqar Ahmed
On the former, it would be best to start by addressing information and outreach gaps. As the problems for businesses are evolving in real-time, hence there remains a need for structured and more frequent public-private dialogue which should be inclusive enough to also give representation to women, youth-led firms and social enterprises. Such a dialogue will also give a sense to the government about how these businesses will get affected in the forthcoming rounds of Covid-19.
On the latter, I believe the forthcoming budget for the fiscal year 2020-21 should be seen as an opportunity not only to provide support to collapsing businesses but also to put in place economic incentives that encourage enterprises to consider resilient business models. A large part of this has to do with reimagining a better taxation regime.
A progressive fiscal policy and commitment to redistributive taxation is in line with the spirit of Riasat-e-Madinah to which Prime Minister Imran Khan often refers to. A sincere effort is required to reduce the burden of compliance costs faced by small firms – often filing returns several times during a year and to multiple tax bodies across the country. It is an opportunity now to automate, rationalize or eliminate several filing and payment layers in taxation to ultimately help reduce the cost of doing business.
After a lot of persuasion from local think tanks and the International Monetary Fund (IMF), federal and provincial governments agreed to establish a National Tax Council (NTC) to harmonize the general sales tax (GST).
Currently all provinces have a different structure of GST on services. There are also issues regarding definition of certain activities which the federal government may assume to be under its jurisdiction. Perhaps smaller firms have been the hardest hit due to the fragmented tax structure across the federation and it is time now to expedite NTC’s establishment and work in this direction. Even when the system is finally harmonized, the GST should not be collected by multiple windows at federal and provincial levels. A unified tax return and collection should be made possible through online mechanisms.
It will also be timely to think about which sectors should be motivated to scale up production and services in the face of this health-related emergency. Hospitals and private clinics operating at micro, small, and medium scale are primary candidates for cut in GST on services and even rationalization in direct tax rates. Firms producing personal protective equipment should also see a relief in taxes. The trade taxes faced by such producers or even hospitals importing from abroad need to be revisited. The agro-based and food processing enterprises will need similar help as their input supplies face price and supply volatilities.
Covid-19 also increased demand on several other sectors providing essential services. Our policy circles have rarely seen these sectors as important for the social and mental wellbeing of society until the pandemic struck. It will now be timely to recognize the services of firms (including schools) providing online services. The economic policy managers must think out of the box how best to leverage e-commerce in the battle against Covid-19.
– Dr. Vaqar Ahmed is an economist and former civil servant. He is author of ‘Pakistan’s Agenda for Economic Reforms’ published by the Oxford University Press. Twitter: @vaqarahmed
Courtesy : ArabNews
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