Regional Economy Update & Overview

South Asia

• Pakistan's New Budget is entirely business & investment friendly with no new tax with other incentives.
• Daewoo Corp is going to open a holding company in Pakistan.
• Pakistan's Foreign Exchenge Reserves fell from $1.094 billion on May 10, 1997, to $897.76 million on May 17, a massive decline of $196.24 million within just a week
• The South Korean multinational Hyundai Corporation, have evinced interest in investing $250 million in infrastructural projects in Pakistan, including power generation, ports, telecommunications, and development of motorways in Pakistan.
• The US oil conglomerate, Mobil Corporation, is to set up a fully owned holding company in India.
• The Pak Governmnet does not appear to be falling in line with the World Bank dictate of Privatising the National Bank of Pakistan but the Habib ($400 million) and United Banks would be sold to the private sector.
• Pakistan is likely to face a Revenue Shortfall of Rs. 50 billion during the current financial year while the Trade Deficit is forecast to mount to $3.1 billion.
• Pakistan and other Asian exporters of unbleached Cotton Fabric will not face European Union Anti-Dumping duties.
• Pakistan is taking requisite steps to develop the Gwadar Deep SeaPort and the Gwadar National Highway to provide international standdard facilities to foreign investors.

Global Economy

• OPEC has lost nearly $11 billion over the past three months due to a price fall resulting from over-production.
• The Grain Trader A.C.Toepfer said that world Wheat Stocks should be stable (580 million tons) in 1997-8, but consumption is forecast to rise by three to four million tons.

Rule by Financial Infraction by Ghulam Rasul

AN ACT which threatens monetary stability by devaluation gives rise to inflation by means of money printing and creates unemployment in consequence of consumption of reproductive capital, constitutes what may be called financial terrorism. These acts are carried out by the governmnet itself in order to rule by terror.

The motto of our political leadership is, "borrow, consume and refund," It encourages loan financing and is irresponsible. It leads to mounting debt, which is, in turn secured through incurring more debt.

It forces the government of the day to take shelter behind devaluation and to finance its outlay with money printing. It fuels inflation and unemployment. The govermnet tries to satisfy the people with a regular dosage of slogans. Each governmnet inherits a bad economy and leaves it in a still worse shape.

IN PAKISTAN, LEGISLATORS' FIRST CONCERN HAS BEEN TO EXTRACT MAXIMUM BENEFITS FROM THE EXCHEQUER AS THE FRUIT OF THEIR ELECTION DRILL. CONSEQUENTLY, THERE HAS BEEN A STEADY INCREASE IN THEIR PAY AND ALLOWANCES.

Politicians contribute a lote in uncollected income tax. Some idea of the undeclared income of the politicians can be had from the perks of the MNA which include;