Economic cost of Benazir’s death

Govt faces tough time to meet export target

Sunday, December 30, 2007
By Mansoor Ahmad

LAHORE: The economic cost of the death of Benazir Bhutto would bring about difficulties for the government to meet its growth, revenue and export targets which were already under pressure due to government’s reluctance to take hard economic decisions in the election year.

The country has lost billions of rupees in revenues and exports besides colossal loss to property and life in two days of strike and riots after the death of former prime minister Benazir Bhutto.

All economic activities have suddenly stopped. Not only normal trading activities have halted but also the public transport is completely off the roads.

The industries have been closed. Angry protestors have destroyed valuable infrastructure. Banks have been looted and set on fire. The trains have been burnt and scores of Railway Stations have been demolished. The initial estimates of loss to public property are around Rs10 billion out of which Pakistan Railways alone has suffered a loss of Rs3.5 billion.

Experts estimate the revenue loss for Rs7 billion during the two days. This appertains to the loss suffered as per revenue targets.

The loss would be much higher as private sector would book losses for the vehicles burnt and property and stocks lost during the agitation. This would put further pressure on revenue collection. The government is already spending Rs13 billion averagely per month for providing protection to the consumers on petroleum rates. The budget deficit has already ballooned to unmanageable limits. The current pressure could trigger inflation beyond the control of economic managers.

The government is unlikely to risk its acceptability further by increasing petroleum rates so soon after the demise of the PPP’s chairperson.

Experts pointed out that CBR (now FBR) had been able to overshoot the tax revenue targets for last four years due to uninterrupted industrial and trading activities.

They said during the last five years neither the industry nor the trade observed any strike or closure even for one day. They said it is for the first time after five years that every economic activity in the country halted for the two days. They said past riots, rallies, protest-march and terrorist activities failed to stop production or trade activities. They said the present disruption has come at a time when revenue generation was already under pressure.

The exports had remained below targets for the last two years and were likely to remain so this fiscal. The imports on the other hand had shot much above the government estimates that have increased the trade deficit.

Most of the developed countries had already advised their citizens to avoid traveling to Pakistan after the killing of Benazir. This would further put pressure on exports. Many garment and knitwear exporters informed The News that they have received queries from their buyers on their ability to timely execute the orders already placed with them.

The exporters apprehend that the new orders would be fewer as the buyers would shift to risk free countries. They said per unit rates of Pakistani products that are already very low would also come under pressure. Economic experts think that it would require some time and effort to restore the confidence of the foreign buyers.

http://thenews.jang.com.pk/daily_detail.asp?id=88418

Loss of 7 billion is more than the American aid of 5 billion which is already spend .An heavy price to pay.

yeaa no kidding...if there is anything that scares me more than Raw, Mossad, and CIA operations in the country, as well as traitors....it's the stupidity of the people itself.

Banks suffer loss of billions in violence
By Shahid Iqbal

KARACHI, Dec 29: When banks will open their business, only then will they find how much loss banks have to incur after violent protests to mark the anger over killing of Benazir Bhutto last Thursday.
Banks were busy collecting information about damages to their branches, but the estimate could reach over 150 branches, as 41 branches of Allied Bank alone were targeted by violence.

Most of the banks were targeted in small towns and cities of Sindh while Karachi was also badly affected and at least 40 bank branches were set on fire, looted or partially damaged. Eyewitnesses said in most of the cases banks were looted and then set on fire.

Banks have no idea or information that how much losses were made to them, neither they were able to know which branches were targeted and to what extent.

Reports from different parts of the country suggest that at least 150 branches were burnt and most of them were in the interior of Sindh.

The ATM machines were especially targeted during violence in Karachi and at least a dozen of ATMs were either looted or damaged in different parts of the city.

An eyewitness said an ATM machine in Ghas Mandi was taken away as looters failed to break the pocket of the machine where cash is deposited.

The MCB Bank has the highest number of ATMs in the city.When contacted, a spokesman for the MCB revealed that damage was serious in Karachi. So far, his information disclosed that at least nine branches of the MCB Bank were either set on fire after being damaged and looted in parts of Karachi.

The MBC Bank is yet to receive assessment of damage to branches in the interior of Sindh and other parts of Pakistan.

MBC Bank branches in old Sabzi Mandi, Safoora Chowrangi, Korangi Industrial area, Bhittai Colony, Malir City, Lea Market, SITE and Pakistan Quarters were looted and burnt.

The cause of damage was known to the bank, but the loss was yet to be calculated.

“One ATM machine costs around Rs30 to 40 million and our three ATMs were destroyed,” said Kafil Barni, senior official of MCB Bank. The ATMs at Lea Market, Pakistan Quarters and Safoora Chowrangi were destroyed.

Bankers said all bank branches in Korangi industrial area were set on fire while bankers were yet to know how much damage was caused to them.

Banks were busy to gather information regarding the damage of their branches across the country and were facing difficulty to visit the affected branches due to disturbances all over the country especially in Sindh.

An Allied Bank spokesman Arshad Khan said the bank has so far received report of damage to 41 branches in the country. These branches were looted and set on fire while several were looted and damaged. He said computers and fax machines were stolen from their branches.

He said 19 branches were set on fire in Sukkar, nine in Hyderabad, six in Nawabshah, four in Karachi, one each in Sadiqabad, Multan and Bahawalnagar.

The ATMs of the ABL were looted and damaged mostly in Punjab. Six ATMs were looted and destroyed in Rawalpindi, two in Karachi, one each in Rahimyaar Khan, Shaikhupura and Sialkot.

The estimated loss could be in billions while the restoration and renovation would cost more to make the damaged branches functional.

No bank received report of looting or damage to lockers.

The MCB Bank said several branches which were looted, have strong rooms which remained intact and safe. ABL also did not receive any report about loss to lockers.

They, however, said if lockers were broken, loss would be much higher than the expectations. Some major banks have insurance of the lockers while others do not provide insurance cover.

http://epaper.dawn.com/ArticleText.aspx?ar...12_2007_009_006

Banks don't have all the cash in them. and whatever is burnt, can be reprinted.

There is difference between 7 billion RS and 5 billion$.

Charge it to PPP. Especially Sherry Rehman.

so right, here is the formula

(Rs 7 billion + lose of independence + lose of self respect - Gains from foreign aids) > $50 billion

and a 2 bit US Senators calls on our president to question him like he is their servant , what a pathetic way to live
why doesnt our president open his mouth now and answer back those aid givers, makes me feel like we really have no leader when there is time for leadership.
This should be a lesson for future Tyrants, this is how you end up, you loose your dignity, dont you think he stays up all night and question his integrity

all this american ally stuff is utter BS. All they care about is themselves and they've proved it time and time again. If they really cared about the country and its welfare they wouldnt have sent BB back here to loot uss for a third time. Well what do you know guys, we're third time lucky arent we!

LOL..... third time unlucky for some, lucky for others.

True, charge and sue the PPP-chairpersons.

Musharaff knows what to do, the govt. will some way or the other get back the money...

Get it back from Zardari, he has plenty and should have inherited.

7 billion was in rupees man.



Heres your bill sir!




He won't be smiling for long. Lol.

KSE loses 1,419 points in three days

Thursday, January 03, 2008

KARACHI: The psychological sale of stocks on a massive level continued for the third consecutive day on Wednesday on the Karachi bourse where offloading in heavyweight scrip remained prominent on board.

The leading benchmark KSE 100-share index shed another 313 points and closed at 13,353 points. Therefore, the accumulative losses of three successive sessions together stand at 1,419 points in 100-index or market has declined by 9.6 per cent to date since Benazir Bhutto was killed on last Thursday (Dec 27).

Energy, banking and telecom stocks led the losers on board and generated relatively higher volumes, a broker noted. “Now looking forward towards the elections, if it is postponed, the market will take a swift drift initially and would remain range bound,” S Kashif Mustafa of ECL Research noted.

Some 77 per cent companies in 100-index closed in red territory, indicating major losers. The OGDCL alone contributed 53 points in minus in the total decline in 100-index and the MCB added 46 points in minus. The NBP lost 22 points, PTCL 17 points, JS Co 15 points, PPL 12 points and POL added another 11 points in minus in the aggregated losses in the this benchmark.

Other stocks from various sectors, which also closed in negative column contributed in single digit in this index. The free-floating market capitalisation based 30-index posted a bigger decline of 451 points as compared to 100-index and finished at 14,715 points.

“Investors are extremely confused about the future course of politics in the country and worried about a number of issues. They raised questions that for how long the Election Commission would delay the parliamentary elections, which were earlier scheduled for January 08, 2008. Secondly, in what political circumstances the elections would be held. And thirdly, which party would come into power,” a leading analyst said.

All political calculations of investors have gone into the vain, as majority of them have assumed that PPP would lead in the next elections and would materialise the power sharing deal brokered between President Musharraf and Benazir Bhutto, he added. He maintained that investment in shares markets was made on fundamental grounds, consistency in the economic policies and political stability. However, the Liaquat Bagh carnage has incurred the higher chances of losing money, as political instability would destabilise economic policies amid economic fundamentals, he argued.

This newly developing situation on fast pace has convinced investors to downsize their portfolios otherwise they might suffer bigger losses, another analyst added.

Relative to the previous session, market opened on nervous note and reset to the positive territory in the next opening moments. Accumulations on two-day dip levels was made, but the absence of buyers amid thin volumes did not allow the 100-index to recover beyond 13,778 points intra day high hit in middle of first half. Afterwards, the panic-like selling was noted on board where index plummeted to 13,329 points intra day low recorded just before the day-session ended. However, the session closed long before the Election Commission of Pakistan announced Feb 18, 2008 as the new election date.

Volumes in the ready market slashed slightly to 245.109 million shares against 322.487 million shares a day earlier. The overall market capitalisation further fell by Rs133 billion to Rs4.071 trillion. The minus sign dominated on board as 237 stocks declined against 104 stocks advanced, while the value of 21 scrip remained unchanged with total 362 active counters on board.

Highest volumes were witnessed in BOSI at 18.298 million closing at Rs19.30 with a loss of Re1, followed by TRG at 18.063 million closing at Rs13.40 with a loss of Rs0.44, OGDCL at 12.622 million closing at Rs113.40 with a loss of Rs3.25, NIB at 10.477 million closing at Rs20 with a loss of Rs0.80 and BankIslami at 10.248 million closing pegged at Rs15.20.

http://thenews.jang.com.pk/daily_detail.asp?id=89041

Lets hope it recovers. I believe it was just as low several weeks (maybe a month or more) back, so we know it can.

Some people hurt Pakistani economy while alive and hurt Pakistani economy even after they died.

Tsk tsk tsk !!

May Allah help Pakistan get rid of them all ASAP. Amin.

According to government Rs 100 Billion worht of loss to the nation.....
=$1.67 Billion....

Also sad part of it was, according to governement last 7 years of development fund wiped out, (i think this was spent area)

Tough times ahead for Pakistan's economy.

Even revenue target is not going to be met.

As I said before (thats why I quoted myself right now), the country can recover, and if we look at the KSE as an indicator, it has. It went back up 650 points.

Pakistan markets show life after death
By Syed Fazl-e-Haider

QUETTA, Pakistan - Pakistan stock markets, which tumbled in the wake of the assassination of former prime minister Benazir Bhutto, staged a dramatic recovery when markets reopened after being closed in the aftermath of the killing, signaling continued faith in an economy that has been growing at a 6.5% pace over the past four years.

The assassination of Bhutto on December 27, by a suicide assailant at a rally in Rawalpindi, subsequent outbreaks of violence across the country and doubt over the prospects of



general elections scheduled for January 8 encouraged investors to dump stocks when the markets opened on Monday, December 31, driving down the benchmark Karachi Stock Exchange (KSE) 100 index to 13,335 from 14,772. The 10% fall wrote off 400 billion rupees (US$6.4 billion) in market capital.

A speech by Pakistani President Pervez Musharraf speech and a return of relative calm has since lured the bulls back to the market. The KSE-100 recovered to 14,259 at the close on Friday, January 4, boosted by heavy buying the day for a record single day gain of 643.04 points, or 4.82%. The recovery continued into this week, with the index up more than 1% on Tuesday at around the 14,384 mark.

Banking stocks such as Arif Habib Bank, National Bank of Pakistan and Muslim Commercial Bank helped to power the recovery, with oil and gas shares also attracting interest as the international price of oil rose to $100 a barrel. OGDC, Pakistan Petroleum Limited and Pakistan Oilfields all picked up after sharing in the post-assassination sell-off.

Local analyst Ahsan Mehanti said: ''The snap recovery reflects that the basic market fundamentals are terribly bullish and no amount of negative external factors can keep it subdued for a long period.''

Commitments in a speech to the nation by President Musharraf that he would defuse tension after violence roiled the country in the wake of the assassination was one factor in restoring investor confidence. Also encouraging buying, the election commission announced on January 2 that the threatened general election would be held after all, albeit on February 18 rather than the scheduled January 9.

The following day, 215 billion rupees was added to market capital, pushing up the total to 4.265 trillion rupees, just short of the 4.5 trillion rupees reached before Bhutto's murder.

Relief that the elections were postponed rather than cancelled came after violence had erupted across the country, particularly in Sindh province, in reaction to Bhutto's death. Hundreds of vehicles, trains and public property, including Election Commission offices in many districts, were set on fire. At least 40 people lost their lives in rioting and burning, and the Federal Board of Revenue estimated a loss of 35 billion rupees to the economy due to the crisis.

The army was eventually called in to restore law and order, and President Musharraf announced that troops would stay in sensitive areas until law and order improved. He gave assurances that peaceful elections would be held on February 18 and that he would seek foreign assistance in investigating Bhutto’s assassination.

As violence subsided, sentiment improved across the country's stock markets. The Lahore Stock Exchange LSE-25 index rose 2.73% to close on Friday at 4,545.71 with turnover of 31.17 million shares, up 8.34 million on the previous day. The Islamabad Stock Exchange ISE-10 index gained more than 2% to 2,956.87 on the same day, again amid higher turnover.

The earlier sell-off, which pulled down the KSE-100 index by a record one-day drop of 696.25 points on December 31, came amid fear that doubts over the country's political future and stability in the wake of Bhutto's death would lead to a massive outflow of foreign investment. Market analysts had expressed concern that if the situation led to prolonged deterioration, capital inflows from the Gulf, a substantial source of investment in Pakistan’s state assets and real estate, might also dry up and even be reversed, with money flowing out of the country into the Dubai market.

Strong corporate earnings and the country's continued economic growth had drawn investors to the country's stocks last year, with the KSE-100 Index gaining 38% in 2007, building on a 34% gain in 2006 and making it the best performer in Asia's emerging economies. The number of new company listings increased to 13 from nine a year earlier, raising 6.5 billion rupees in 2007 against 3.6 billion rupees in 2006.

Pakistan companies also raised a total of US$1.5 billion through global depository receipts of its three companies issued on the London Stock Exchange.

As the country's economy has grown - 7% in the fiscal year ended July 2007 - foreign direct investment in Pakistan has picked up, rising 67% to $1.87 billion in the first half of the 2006-07 fiscal year (June/July), led by inflows into the communications, oil and gas, and banking sectors.

Even so, risks to the economy are increasing, according to the State Bank of Pakistan (SBP). The country is expected to miss its 7.2% GDP growth target and annual inflation may rise to 7.5% in the financial year 2007-08. fueled by increased government borrowing. According to the SBP report, the current account deficit will remain high with the foreign exchange reserves under pressure.

Doubts also remain over the political direction of the country after the elections - assuming they are held as promised.

Syed Fazl-e-Haider, sfazlehaider05@yahoo.com, is a Quetta-based development analyst in Pakistan. He is the author of six books, including The Economic Development of Balochistan, published in May 2004.

some of the costs are a result of jahaalat, not her death.

And the stock market is coming back... told you....