June 19, 2017
By Web Desk

This week, the Federal Reserve, as expected, raised interest rates by a quarter of a percentage point. The move was most likely mistaken - there is precious little sign of wage or price inflation, which have both consistently undershot expectations - but a 25 basis-point move here or there is unlikely to be disastrous. Of more interest for the Fed’s long-term future is the question of its leadership and political independence. Donald Trump, who inveighed against the Fed in general and its chair Janet Yellen in particular during the election campaign, has since appeared to swing back and forth on whether he approves of her...


By Sarah O’Connor

Everyone knows that high unemployment means an unhealthy labour market. But does it follow that high employment means a healthy one? More people have jobs in the developed world this year than in buoyant 2007 before the financial crisis hit. The forecasts for next year show employment rising in almost every country in the OECD. Yet there is a swell of popular discontent with the economy and how it works. Economists are troubled by the dissonance between their statistics and the mood on the streets. Organisations such as the OECD use unemployment and employment rates to assess labour market performance - they are easy to measure and...


By Web Desk

Implementing a national sales tax, with all its political and technical problems, is always likely to be a difficult endeavour. It is particularly so in an emerging market country of 1.3bn people and regional economies in wildly different stages of sophistication - and a tradition of intense lobbying for special favours for particular groups. Given those constraints, it is remarkable that in a few weeks India, just three months from passing the legislation, will have put its goods and services tax (GST) into place. The tax should help to ease commerce between the states, which had previously been hampered by a patchwork of different...


By Web Desk

The British public is tired of austerity. So even supporters of the government have concluded from the unexpected success of Jeremy Corbyn’s new old Labour, which promised much higher spending and fiscal deficits than the Conservatives in last week’s general election But is it safe to give the public what it wants? Brexit is likely to bring economic disappointment. To add fiscal destabilisation to the mix would seem highly unwise. The UK will remain an open trading economy dependent on the confidence of strangers, as investors and workers. It would be idiotic to jeopardise its reputation for sound management further in return...


By Zeeshan Haider

FOCUS The crisis in the Gulf is a cause of concern for the entire Islamic world but it entails serious political and economic consequences for Pakistan if, God forbid, it deepens. Pakistan has traditionally maintained close relations with all Gulf states but it has had strong, special and strategic ties with Saudi Arabia for decades. On political issues Pakistan always sided with the Gulf states and has historically tried to stay neutral if they have any disputes within. However, Pakistan has to walk a very tight tightrope in the existing crisis between Qatar and Saudi Arabia after Riyadh accused Doha of supporting extremist and...


By Ihtasham Ul Haque

INSIGHT With the passage of 2017-18 federal budget sans the participation of the opposition, perplexing issues are confronting the government that could gravely hurt the struggling economy if timely actions are not taken under a new strategy. By Mach 2018, the crisis would deepen because of losing $6 billion as the central bank’s reserves would have gone down from $18 billion to $12 billion by that time. So far the reduction of $3.5 billion in reserves is being seen a big jolt. By May 17, the government desperately borrowed $1 billion from China and is further negotiating with Asian Development Bank (ADB) to acquire $600 million by...


By Ahmed Ali Siddiqui

FINANCE The Islamic banking industry of Pakistan, with over 13 percent share of the banking landscape in the country, has placed high hopes with the Federal Budget 2017-18 and banking analysts are expecting aggressive measures in the fifth budget of the current government will at least double the size of the industry in the next three years. As we analyse the Federal Budget 2017-18 speech of the finance minister Ishaq Dar, we find positive steps proposed to provide a level playing field to the Islamic banking sector, including tax neutrality for Islamic banking instruments, such as Musharakah, Ijarah, Murabaha as compared with...


By Sirajuddin Aziz

MANAGEMENT ‘The pleasure that arises from inward beauty, serenity is due to the confidence that one has in one’s own inner truth.’ (Yi Tung) Self-confidence is ‘a feeling of trust in one’s abilities, qualities and judgement. All failures of humanity are the result of man’s lack of faith and confidence in his true self. Self-confidence is the key to success. Confident people carry on themselves the contagious viral of giving and promoting confidence, to those with whom they interact. They make others confident. Many management gurus and writers say that self-confidence can be built up by listing your key...


By Hussain Ahmad Siddiqui

INDUSTRY Reportedly, the government has decided to dissolve, with immediate effect, the Engineering Development Board (EDB), a wing of the Ministry of Industries and Production, for alleged involvement of its staff in corruption and malpractices as well as for creating hurdles in the way of large investment flows into the automobile sector pursuant to the Automotive Development Policy 2016-21. Apparently, the government is implementing its undeclared policy of phase-wise wrap-up of the national strategic institutions, in particular engineering, perhaps, with a reprisal and vengeance. The modus operandi is simple. First, the incompetent...