Pakistan Eyes Trade Reboot, Awaits India’s Green Light - Business Guardian
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International Affairs

Pakistan Eyes Trade Reboot, Awaits India’s Green Light



Resuming business with its larger, fast-growing neighbor clearly makes sense, but Indian companies will require some convincing.

Last week, Pakistani Finance Minister Ishaq Dar surprised many by mentioning, almost casually, that the new government would “thoroughly examine trade matters with India.” This potential revival of trade relations signals a significant shift for Pakistan, which severed economic ties after Indian Prime Minister Narendra Modi unilaterally revoked Kashmir’s special constitutional status in 2019. Previously, Pakistani leaders had maintained that relations wouldn’t be restored until the decision was reversed.

In the realm of geopolitics, the recent statement by Pakistani Finance Minister Ishaq Dar regarding the potential resumption of trade ties with India might not be as surprising as it initially seems. Delving deeper, it’s evident that the Pakistan Muslim League-N, led by former Prime Minister Nawaz Sharif, comprises a unique coalition of semi-urban petty bourgeoisie and influential industrialists. This alliance has long recognized the mutual benefits, both economic and strategic, of fostering normalized trade relations with India.

The prospective gains from such normalization are indeed considerable, particularly for Pakistan, grappling with dire economic circumstances. According to estimates by the World Bank in 2018, Pakistan’s exports could surge by up to 80%, translating to approximately $25 billion, should trade with India be optimized. In the current scenario, where Pakistan’s economy teeters on the brink, relying on successive bailouts including a recent $3 billion tranche from the International Monetary Fund, the urgency to tap into potential revenue streams cannot be overstated. However, the asymmetry in the Indo-Pak economic equation is starkly apparent.

While Pakistan’s economy struggles, India’s remains robust and steadfastly guarded against opening its markets to potential competition from neighboring nations. With an economy over ten times the size of Pakistan’s and a significantly higher per capita income, India maintains a position of relative strength. The historical backdrop of Indo-Pak relations is fraught with tensions, often exacerbated by cross-border conflicts and political brinkmanship. India’s recent reelection of Prime Minister Narendra Modi following heightened military tensions in Kashmir underscores the complexities of bilateral ties.

Thus, any overtures towards restoring trade relations must be cautiously timed and delicately approached by Pakistani diplomats, especially considering the impending general elections in India. Moreover, Pakistan cannot afford to adopt a passive stance in this regard. While Modi has shown a willingness to engage with Pakistani leadership on certain occasions, there is no guarantee that his successor will share the same disposition. Therefore, cultivating advocacy for trade normalization within India’s private sector becomes imperative for Pakistan, aligning economic interests with strategic objectives. Indeed, for India, the calculus of trade extends beyond mere economic dividends. It represents a strategic tool to bolster stability within Pakistan, fostering an environment conducive to economic growth and deterring extremist elements.

Recognizing this symbiotic relationship, Indian policymakers must approach the prospect of resumed trade with pragmatism and foresight. In conclusion, the potential rekindling of trade relations between India and Pakistan presents a pathway towards stability and prosperity for both nations. By transcending historical animosities and prioritizing economic cooperation, Indo-Pak relations can evolve from a source of conflict to a catalyst for regional development. As Pakistan signals its readiness to recalibrate its approach, India must reciprocate with measured optimism, cognizant of the transformative potential inherent in revitalized bilateral ties.

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International Affairs

Green recovery, Israel seeks proposals for waste treatment plant near Gaza



Israel is gearing up to establish a new facility for treating natural waste in the southern regions of the country, particularly in areas near Gaza. The Ministry of Environmental Protection, as part of its “Green South” initiative, along with the Western Negev Cluster, has invited entrepreneurs to apply for financial assistance to build a facility for processing vegetable agricultural waste in the Takuma (Rebirth) region, which encompasses towns and farms near the Gaza border.

The Takuma area suffered significant devastation during the Hamas terrorist attack on October 7, and this initiative is just one of several plans aimed at rehabilitating the region. The selected firm will be eligible for a grant of up to 40 million Shekels ($10.8 million), not exceeding 40% of the total investment cost.

The Western Negev region is often referred to as the grain storehouse of Israel, but it faces challenges with large volumes of agricultural waste accumulating without proper management, posing hazards. In response, the government has outlined plans to strengthen the authorities in the Takuma region, with the Western Negev Eshkol preparing a program for managing agricultural waste in collaboration with the Eshkol and Sdot Negev regional councils. The program is fully funded by the Ministry of Environmental Protection.

In addition to waste treatment, the program includes other initiatives such as terminal facilities for processing agricultural plastic or nylon waste, pruning management systems, subsidies for farmers to manage clean pruning, and measures for information dissemination and enforcement.

The initiative to establish a waste treatment facility in the southern region of Israel, near Gaza, comes as a response to the pressing need to address environmental and health concerns arising from the accumulation of agricultural waste. The devastation caused by the Hamas terrorist attack on October 7 further underscores the urgency of rehabilitation efforts in the affected areas.

The Ministry of Environmental Protection’s “Green South” initiative, in collaboration with the Western Negev Cluster, demonstrates a proactive approach to environmental management and sustainable development. By inviting entrepreneurs to participate in the establishment of the waste treatment facility, the government aims to leverage innovation and private sector expertise to address the region’s waste management challenges effectively.

The financial support provided to the selected firm, amounting to up to 40 million Shekels ($10.8 million), reflects the government’s commitment to facilitating the implementation of environmentally friendly solutions. This grant, covering up to 40% of the investment cost, incentivizes private sector involvement in critical infrastructure projects that contribute to the well-being of local communities and the environment.

The Western Negev region’s significance as a key agricultural hub in Israel highlights the importance of sustainable waste management practices. Without proper treatment facilities, agricultural waste poses not only environmental hazards but also economic challenges, hindering the region’s productivity and potential for growth.

In addition to the waste treatment facility, the government’s comprehensive plan for managing agricultural waste includes initiatives such as the development of terminal facilities for processing plastic and nylon waste, implementation of pruning management systems, and provision of subsidies to farmers for responsible waste management practices. These measures aim to promote sustainable agricultural practices while mitigating the adverse impacts of waste accumulation on the environment and public health.

Overall, the establishment of the waste treatment facility in the Takuma region represents a significant step towards addressing environmental challenges and promoting sustainable development in Israel’s southern regions. By investing in innovative solutions and fostering collaboration between government, private sector, and local communities, Israel demonstrates its commitment to building a greener and more resilient future for all.

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International Affairs

Japan’s Teleworking shrinks, Hybrid work surges: Govt. survey



With the gradual decline of the COVID-19 pandemic, Japan is observing a significant change in work dynamics, as more people adopt a “hybrid work” approach, blending remote and in-office work. Insights from the fiscal 2023 government survey, administered by the transport ministry in October and November, illuminate the shifting teleworking landscape in the nation.

According to the survey results, the proportion of teleworkers in Japan has declined, with 16.1 percent of the 36,228 respondents reporting working from home or elsewhere outside the office in the last year. This represents a decrease of 2.7 percentage points from the previous survey. The decline marks a departure from the peak teleworking period during the height of the pandemic, reflecting a gradual return to pre-pandemic work arrangements.

Teleworking emerged as a prominent strategy during the pandemic, as the government sought to reduce the flow of people and curb the spread of infections. However, the survey highlights a discernible shift in this trend as the pandemic situation evolves. The ratio of teleworkers stood at 21.4 percent in the fiscal 2021 survey, declining to 18.8 percent the following year, and further dropping to 16.1 percent in fiscal 2023.

Despite the decrease in teleworking overall, the survey indicates that the average frequency of teleworking remains relatively stable, with individuals teleworking an average of 2.3 days per week, unchanged from the previous year. However, there has been a noticeable change in the distribution of teleworking frequency. Following the government’s decision to downgrade the legal status of COVID-19 in May last year, aligning it more closely with seasonal influenza, there has been a notable increase in the number of individuals working remotely for one or two days a week. Conversely, the proportion of those working remotely for five to seven days a week has decreased.

A ministry official attributed this shift to a growing trend of combining office-based work with telework, reflecting a broader adaptation to changing work dynamics in the post-pandemic era. This hybrid work model allows individuals to enjoy the benefits of both remote work, such as flexibility and reduced commuting time, and in-office collaboration and social interaction.

The survey also highlights regional variations in teleworking rates, with bigger cities exhibiting higher rates of remote work. For instance, the greater Tokyo area, including Tokyo and its surrounding prefectures, recorded a teleworking rate of 28 percent, indicating a strong prevalence of remote work practices in Japan’s bustling capital. In comparison, regions such as the Kinki region (covering Osaka and Kyoto) and the Chukyo region (centered on Nagoya) reported lower teleworking rates.

Overall, the findings of the fiscal 2023 government survey underscore the evolving nature of work arrangements in Japan, characterized by a shift towards hybrid work models that blend remote work with traditional office-based work. As organizations and individuals continue to adapt to the post-pandemic reality, flexible work arrangements are likely to remain a key feature of Japan’s work culture, promoting efficiency, resilience, and work-life balance in the years to come.

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International Affairs

More than 23 million Afghans urgently require humanitarian aid: UNAMA report



The latest report from the United Nations Assistance Mission in Afghanistan (UNAMA) paints a bleak picture, revealing that a staggering 23.7 million people are in desperate need of humanitarian assistance as of 2024, as reported by Khaama Press. Despite a slight decrease in violence, Afghanistan remains entrenched in significant humanitarian crises, as highlighted by UNAMA recently.

Among the millions in need, 5.9 million are women and 5.4 million are men, according to UNAMA’s statement, underscoring the breadth of the crisis. This sentiment is echoed by the International Federation of Red Cross and Red Crescent Societies, which has also drawn attention to the dire state of affairs in Afghanistan.

The roots of this crisis run deep, stemming from four decades of conflict, poverty, recurrent disasters, and a struggling economy. The situation has only worsened since the Taliban’s assumption of power in August 2021. Political instability, economic downturns, and dwindling donor funding have heightened risks and needs at the local level.

Forced deportations and diminishing international aid have exacerbated the humanitarian crisis, leaving many vulnerable Afghans in dire straits. Those returning from neighboring countries face a litany of challenges, including shortages of food, clean water, suitable shelter, and job opportunities. Recent waves of migrant expulsions from neighboring nations, coupled with natural disasters like earthquakes and floods, have further underscored the urgent need for humanitarian assistance, as reported by Khaama Press.

According to TOLOnews, on May 1, the Taliban’s Ministry of Refugees and Repatriation reported that approximately 2,800 Afghan migrants were returned from Iran, both voluntarily and forcibly. The United Nations High Commissioner for Refugees (UNHCR) has described the human rights situation in Afghanistan, particularly for women, girls, religious minorities, and ethnic minorities, as dire, emphasizing the critical need for humanitarian aid to support the 23.7 million people struggling to survive.

The report indicates that Iran and Pakistan are hosting around 7.7 million Afghan citizens, with approximately 1.6 million deported to Afghanistan since 2021. Meanwhile, Amnesty International and various human rights organizations have voiced concerns over the continued expulsion of Afghan migrants from Pakistan, calling for an immediate halt to these actions.

In summary, Afghanistan is facing an unprecedented humanitarian crisis, with millions of its citizens struggling to access basic necessities and facing significant challenges in their daily lives. Urgent international intervention is required to address these pressing needs and alleviate the suffering of millions of vulnerable Afghans.

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Banking & Finance

Bank of England’s rate cut plan set to differ from Federal Reserve’s



Bank of England might be cutting interest rates ahead of the US Federal Reserve. Tune into this detailed analysis to understand the key.

As the Bank of England gears up for its upcoming decision, speculation mounts on potential interest rate cuts this summer, contrasting with investors’ expectations of a postponed easing outlook. Governor Andrew Bailey has emphasized the UK’s divergence from escalating consumer price pressures in the US, highlighting “strong evidence” of receding inflation domestically. While economists anticipate the central bank to maintain rates at a 16-year high of 5.25 per cent, attention will be on hints regarding whether policymakers view June or August as opportune moments to initiate reductions in borrowing costs.

However, a dovish shift in tone by Bailey and Deputy Governor Dave Ramsden in April caused some economists to reckon that the timing of BOE cuts may be closer to the European Central Bank — which is widely expected to act in June — than to the Federal Reserve, whose chief, Jerome Powell, has avoided offering a timeline for US easing.

Bailey expects UK inflation to fall close to his 2 per cent target in upcoming data for April, though some on the nine-member Monetary Policy Committee are still concerned over underlying price pressures. “The BOE has sounded increasingly dovish at each of its meetings this year. We think there could be a similar theme in May with policymakers having lately signaled little concern about recent upside data surprises.”

The central bank decision will be followed on Friday by gross domestic product data predicted to show the UK economy exited a shallow recession in the first quarter. Economists expect the figures to show output growing 0.4 per cent after two consecutive quarterly drops last year.

Elsewhere, a cliffhanger decision in Sweden, a likely hawkish hold in Australia and rate cuts in Brazil and Peru are among the central bank announcements due.

The US economic data calendar is light. On Friday, the University of Michigan will issue its preliminary survey of consumer sentiment for May. Confidence is expected to be little changed as Americans assess elevated prices, high interest rates and a moderating job market.

A day earlier, the government will issue weekly jobless claims figures. Applications for unemployment benefits remain near historically low levels.

In the week after the Fed held rates unchanged, several central bank officials are scheduled to speak. They include New York Fed President John Williams and the Richmond Fed’s Thomas Barkin on Monday, followed by Neel Kashkari of Minneapolis on Tuesday. Later in the week, investors will also hear from Chicago Fed President Austan Goolsbee and Fed Governor Michelle Bowman.

The Bank of Canada on Thursday will publish its annual financial system review, assessing stability risks to the country’s banking sector. Officials previously flagged concerns about homeowners’ ability to manage debt in a high-rate environment.

On Friday, economists expect Canada’s April labour force survey to show job gains remain well below the pace of population growth, bolstering an argument for policymakers to pivot to rate cuts as early as June.

Asia The Reserve Bank of Australia may amplify its hawkish tone when it meets on Tuesday in the wake of hotter-than-expected inflation gauges for the first quarter, as well as robust jobs stats. The board will consider revised growth, inflation and labour-market projections, with any revisions probably signaling no policy pivot any time soon. Overnight Index Swaps are now pricing more chance of an Aussie rate hike than a cut this year.

On Thursday, Malaysia’s central bank sets its benchmark rate and the Bank of Japan releases a summary of opinions from last month’s meeting, when Governor Kazuo Ueda’s seemingly sanguine stance on the yen helped usher in more losses for the beleaguered currency.

In data, Indonesia first-quarter economic growth is seen staying around 5 per cent year on year, while it may contract a tad versus the prior quarter. The Philippines also releases GDP data. Consumer inflation figures are due in the Philippines, Thailand and Taiwan, while China, the Philippines and Taiwan all get trade data.

Japan’s wage stats on Thursday will probably look a little glum as the outsized pay increases pledged by companies after negotiations with unions won’t fully kick in for a few more months.

Europe, Middle East, Africa On Wednesday, Sweden’s Riksbank could become the second major developed-world central bank – after the Swiss National Bank – to lower rates in what looks likely to be a cliffhanger decision.

After their meeting in March, Governor Erik Thedeen said he and colleagues expect to make their first easing move in May or June. Domestically, there are now very few obstacles to them acting sooner rather than later. Inflation has slowed and looks set to fall below the central bank’s 2 per cent target, the economy remains sluggish, and companies appear to have concluded that they won’t be able to raise prices to the extent they have in the past couple of years.

However, the krona still concerns policymakers, who’ve watched the currency weaken almost 5 per cent against the euro this year. If they decide they can’t risk further deterioration, that could be a reason to delay a first cut, much as Norway did on Friday.

On the other hand, there’s scope to argue that whatever the Swedish central bank does, the currency’s destiny is determined by other factors, including risk aversion and US bond yields. If that view wins the day, the Riksbank could well cut.

Three other monetary decisions are expected around the wider region: On Tuesday, sticky inflation may persuade Madagascar’s central bank to keep its rate at 11 per cent for a third time in a row.

Two days later, Poland’s central bank will likely also leave borrowing costs unchanged, even after April inflation stayed within its target range. Governor Adam Glapinski, who holds his briefing the following day, has repeatedly quashed expectations for rate cuts this year.

And the National Bank of Serbia on Friday is likely to keep its rate at 6.5 per cent for a 10th month, cautious to avoid premature easing while watching to see how long peers in bigger economies wait before cutting.

In the upcoming week, alongside other central bank events, a Bank for International Settlements conference in Basel will host monetary leaders from Germany to Singapore. The European Central Bank (ECB) agenda includes appearances by Belgian governor Pierre Wunsch and Executive Board members Luis de Guindos and Piero Cipollone. Additionally, a report detailing the central bank’s April 11 decision will be released on Friday. Due to public holidays occurring on various days across economies such as the UK and France, the frequency of data releases will be restricted.

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International Affairs

Dubai RTA enhances bus network with ‘Stadium’ bus station launch



Dubai RTA launches ‘Stadium’ Bus Station, improves several bus routes. This Bus Station is designed to shorten travel times.

Dubai’s Roads and Transport Authority (RTA) will unveil the new Stadium Bus Station on Friday, May 3rd. Situated near the Stadium Metro Station in Al Qusais, it’s strategically positioned to meet the rising demand for bus services.

The station aims to reduce travel times and facilitate smooth transfers to other mass transit modes, enhancing convenience for commuters across the emirate. Buses on routes 19, F22, F23A, F23, F23, F24, and W20 will start from the new bus station, while route 23 will also pass through it.

The Public Transport Agency of the Roads and Transport Authority will make some improvements to the express lines with the aim of ensuring that passengers reach their destinations faster during the trip for the following lines: 62-X02-X23- X22-X13-X25-X92-X64-. X94, and modifications will be made to the routes of the lines, including reducing the route of the X28 line to end at Agora Mall.

The Inter-city bus line E102 will be modified to serve Musaffah Bus Station on weekends and improve commuting times between Al Jaffiliya Station and Zayed International Airport Terminal A. Additionally, improvements will be made to the schedules of 30 routes, namely: 19, 23, 27, 43, 62, C04, C10, C15, C18, D03, E102, E307, E400, F08, F17, F22, F23, F23A, F24, F51, W20, X02, X13, X22, X23, X25, X28, X64, X92, X94. All these improvements take effect on 3rd May 2024.

On the same date, Route 91A will be cancelled. Commuters can use the alternative route 91 from Al Ghubaiba Bus Station to Jebel Ali Port Zone. RTA remains committed to expanding the public bus network and integrating it with other public transport means, including the metro, tram, and marine services.

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International Affairs

Hirokazu Matsuno allegedly received 10 million yen in kickbacks



Matsuno belongs to the ruling Liberal Democratic Party’s largest faction, formerly headed by Prime Minister Shinzo Abe, which has been recently suspected to have pooled secret funds amounting to over 100 million yen.

In a recent development that has sent shockwaves through Japanese politics, Chief Cabinet Secretary Hirokazu Matsuno, a prominent member of the ruling Liberal Democratic Party’s (LDP) largest faction, is under scrutiny for allegedly receiving over 10 million yen (USD 70,000) in kickbacks from fundraising events organized by his party group. The revelation comes amidst suspicions of various LDP factions amassing secret funds exceeding 100 million yen, signaling a potential scandal that could have far-reaching consequences for the political landscape.

The information, disclosed by a source close to the matter and reported by Kyodo News, a reputable non-profit cooperative news agency based in Minato, Tokyo, has intensified concerns about corruption within the highest echelons of Japanese politics. Matsuno, who belongs to the faction formerly headed by Prime Minister Shinzo Abe, addressed the media at a regular press conference on Friday, vehemently denying any intention to resign.

“I will continue to fulfill my duties with a sense of responsibility,” Matsuno asserted, asserting that his faction is actively engaged in verifying the facts surrounding the allegations. However, the scandal has triggered a wave of investigations by prosecutors, following a criminal complaint that accuses five LDP factions, including Prime Minister Fumio Kishida’s group, of underreporting their revenue from political fundraising parties.

Traditionally, LDP factions have set quotas for their lawmakers to sell party tickets, typically priced at 20,000 yen. Investigative sources suggest that if lawmakers exceed their quotas, the surplus income is often returned as kickbacks within certain intraparty groups, creating a clandestine system of financial transactions. The Seiwaken, or the Seiwa policy study group, the largest LDP faction, reportedly collected approximately 660 million yen in party revenue over a five-year period through 2022, according to its political funds reports.

Shockingly, revelations indicate that at least ten out of the 100 lawmakers in the Seiwaken faction have received kickbacks, with some allegedly receiving sums exceeding 10 million yen. The severity of these allegations has prompted prosecutors to contemplate interrogating the implicated lawmakers once the ongoing parliamentary session concludes on December 13.

The scandal has further tarnished the image of the LDP, which has already been grappling with accusations of financial improprieties. The fact that Matsuno, a high-ranking official within the party and a key player in the government, is implicated in the scandal adds significant weight to the controversy. The allegations also cast a shadow on the faction’s former leader, Shinzo Abe, who remains a formidable figure in Japanese politics.

The involvement of prosecutors in investigating the kickback scandal underscores the gravity of the situation. The criminal complaint targeting multiple LDP factions suggests a systemic issue within the party, raising questions about the transparency and integrity of political fundraising practices in Japan.

If proven true, the scandal could have profound implications for public trust in the political system. As the investigations unfold, there is growing speculation about the potential fallout within the LDP and the wider political landscape. Calls for accountability and transparency are resonating among the public, demanding that lawmakers uphold the highest standards of integrity.

The timing of the scandal, coming at a crucial juncture in Japanese politics, adds another layer of complexity, as the government grapples with pressing domestic and international issues. The Seiwaken faction’s reported accumulation of substantial party revenue over the years brings attention to the broader issue of political financing in Japan.

The revelation that a significant portion of this revenue may have been funneled back to lawmakers as kickbacks raises concerns about the lack of oversight and accountability in the financial dealings of political factions.

In response to the allegations, Prime Minister Fumio Kishida’s office released a statement expressing concern and emphasizing the need for a thorough investigation. Kishida, who leads one of the factions under scrutiny, faces the challenging task of navigating the political fallout and ensuring that his government remains focused on addressing the pressing issues facing the nation.

The kickback scandal also raises questions about the effectiveness of existing regulations and enforcement mechanisms aimed at preventing financial misconduct in Japanese politics. If proven true, the allegations could prompt a reevaluation of these mechanisms, potentially leading to reforms to strengthen oversight and accountability in political fundraising.

The implications of the scandal extend beyond individual lawmakers and factions to the broader political culture in Japan. Public trust in political institutions is a vital component of a healthy democracy, and any erosion of that trust can have lasting consequences. The LDP, as the ruling party, faces the challenge of restoring public confidence and demonstrating a commitment to transparency and ethical conduct.

As the investigations progress, it remains to be seen how the implicated lawmakers and the LDP as a whole will respond to the allegations. The outcome of the investigations will likely shape the political landscape in the coming months, influencing public perceptions and potentially reshaping the balance of power within the ruling party.

In conclusion, the kickback scandal involving Chief Cabinet Secretary Hirokazu Matsuno has sent shockwaves through Japanese politics, revealing a potential web of financial improprieties within the ruling Liberal Democratic Party. The allegations of kickbacks, combined with suspicions of secret fund accumulation by multiple LDP factions, have ignited a firestorm of controversy that could have far-reaching implications for the political landscape in Japan. As investigations unfold, the public is keenly watching how lawmakers and party leaders respond to the allegations and whether the scandal will lead to meaningful reforms in the realm of political financing and accountability.

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