armidaleexpresshace 65d
Tech giant's shares slide after 'software-mageddon'
Shares in Atlassian, Australia's biggest tech company, have fallen to the lowest level since early 2019 amid a huge rout in the software-as-a-service sector.
#STOCKS
Noticias Financieras
michaelwesthace 65d
Tech giant’s shares slide after ‘software-mageddon’
Shares in Atlassian, Australia's biggest tech company, have fallen to the lowest level since early 2019 amid a huge rout in the software-as-a-service sector.
#STOCKS
bostonglobehace 65d
Treasurers write about economic impacts of ICE operations
Stories you may have missed from the world of business.
#CRYPTO#STOCKS
watchlistnewshace 65d
DoorDash (NASDAQ:DASH) Director Sells 63 Shares
DoorDash, Inc. (NASDAQ:DASH – Get Free Report) Director Ashley Still sold 63 shares of the firm’s stock in a transaction dated Tuesday, February 3rd. The shares were sold at an average price of $207.42, for a total value of $13,067.46. Following the transaction, the director directly owned 2,228 shares in the company, valued at $462,131.76. [...]
#STOCKS
mininghace 65d
A years-long push to unite Glencore and Rio fell apart in a day
The two companies were locked in merger talks for at least the fourth time.
#COMMODITIES
devdiscoursehace 65d
World Bank Approves $200m Loan to Protect Vulnerable Bolivians Amid Economic Crisis
The World Bank Grouprsquos Executive Board of Directors has approved a strongUS200 million loanstrong to support the Plurinational State of Bolivia in protecting households most affected by the ongoing economic crisis and strengthening the countryrsquos social protection system to better respond to future shocks
#ECONOMY
brecorderhace 65d
Bitcoin drops, driving USD2trn slide in crypto market value
SINGAPORE/LONDON /NEW YORK: Bitcoin plunged on Thursday, its decline accelerating amid weakening risk sentiment driven in part by volatility in precious metals and a broad selloff in tech shares.The world’s largest cryptocurrency fell to a low of USD66,675.12, its weakest since October 2024, a month before Republican Donald Trump won the US presidential election, having signalled his intention to support crypto on the campaign trail. It was last down 6.5 percent at USD67,817.All told, the global crypto market has lost USD2 trillion in value since hitting a peak of USD4.379 trillion in early October, CoinGecko data showed, with some USD800 billion wiped out in the last month alone.Bitcoin has already fallen 11 percent for the week, taking its losses for the year so far to 23%. Ether, the second-largest cryptocurrency in terms of market capitalization, was down more than 7 percent at USD1,973 on Thursday. Ether has fallen nearly 14 percent this week, with losses of roughly 34 percent so far this year.Sentiment on crypto was affected by the latest selling in metals and stocks. Gold and silver, for instance, have become more volatile as a result of leveraged buying and speculative flows. Silver, for one, fell as much as 16.6 percent to a low of USD73.41.In equities, the S&P 500 slid to near two-week lows, and the Nasdaq sank to its lowest level in more than two months on Thursday, as the AI theme came under renewed pressure.“It’s clear the crypto market is now in full capitulation mode,” said Nic Puckrin, investment analyst and co-founder of Coin Bureau. “If previous cycles are anything to go by, this is no longer a short-term correction, but rather a transition from distribution to reset - and these typically take months, not weeks.” The latest crypto tumble has knocked down shares of companies holding bitcoin and other digital assets, stoking worries that the market turmoil is spreading beyond token prices.MARKETS ‘FEAR A HAWK’ WITH WARSHTrump’s selection of Kevin Warsh as his pick to become the next Federal Reserve chair has also fueled the latest rout in cryptocurrencies, due to expectations he could shrink the Fed’s balance sheet.Cryptocurrencies have widely been regarded as beneficiaries of a large balance sheet, having tended to rally while the Fed greased money markets with liquidity - a support for speculative assets.“The market fears a hawk with him,” said Manuel Villegas Franceschi from the next generation research team at Julius Baer. “A smaller balance sheet is not going to provide any tailwinds for crypto.” To be sure, cryptocurrencies have struggled for months since a record crash last October sent bitcoin tumbling from a peak as leveraged positions got washed out. That has left investors less keen on digital assets and sentiment toward the industry fragile.“We believe this broader decline is mainly driven by massive withdrawals from institutional ETFs (exchange traded funds). These funds have seen billions of dollars flow out each month since the October 2025 downturn,” Deutsche Bank analysts said in a note to clients.They added that US spot bitcoin ETFs witnessed outflows of more than USD3 billion in January, following outflows of about USD2 billion and USD7 billion in December and November respectively.“This steady selling in our view signals that traditional investors are losing interest, and overall pessimism about crypto is growing,” the analysts said.BROADER ISSUES IN TECH SECTORBitcoin’s fortunes have been tied to the broader tech sector for some time. The price tended to rise, particularly on the back of investor enthusiasm over artificial intelligence.This week’s rout in global software stocks has accelerated the slide in the value of bitcoin, ether and other tokens.Market watchers are starting to question if this decline marks the start of a steeper correction.“Concerns are being raised around the crypto miners and whether we could be looking at forced liquidations if prices continue to fall, which could lead to a vicious cycle,” Jefferies strategist Mohit Kumar said in a note.“Our view on crypto has always been that it should be never more than a very small portion of the overall portfolio.
#CRYPTO#COMMODITIES
brecorderhace 65d
Barrick reviews Reko Diq project amid security concerns
LONDON: Barrick Mining’s board is reviewing all aspects of a gold and copper project in Balochistan region, including capital allocation, due to security concerns, CEO Mark Hill said during a post-earnings call.Barrick said the decision has been taken after the recent escalation of security risks and a rise in security incidents in the province.The miner added the review of the Reko Diq project’s security arrangements, development timetable and capital budget would begin immediately, with an update once the process is completed.The gold and copper project is owned 50 percent by Barrick, 25 percent by three federal state-owned enterprises and 25 percent by the Government of Balochistan.
#COMMODITIES
brecorderhace 65d
Financial institutions & VASP’s governance
The crypto market has entered a phase where volatility, tightening regulations, and institutional participation are converging, and that convergence has fundamentally changed the compliance obligations of financial institutions that touch digital assets in any form. The regulatory pressure, the supervisory scrutiny, and the enforcement posture across major jurisdictions now make crypto exposure a core financial crime and prudential risk topic rather than a niche innovation question.Compliance expectation is no longer limited to direct crypto service providers, because the exposure increasingly arises through wires, counterparties, customers, custody models, tokenized instruments, and balance sheet relationships that connect traditional banking rails with digital asset activity.Modern compliance programme must therefore treat crypto exposure as an enterprise-wide risk category that requires structured identification, quantified assessment, and defensible controls supported by evidence, governance, and technology. The practical roadmap for such a programme is reflected in leading institutional guidance on crypto compliance frameworks for banks and financial institutions.Pakistan’s financial sector is moving toward formal crypto service regulation, with licensed exchanges and virtual asset platforms expected to begin supervised operations, which will significantly expand bank interaction through accounts, payments, custody, and settlement channels. The shift from informal to regulated activity will place direct responsibility on banks to perform institution wide crypto exposure mapping, risk classification of crypto linked customers and counterparties, and enhanced due diligence on exchanges and service providers.An effective bank compliance framework must therefore combine exposure identification, crypto-specific risk assessment, enhanced due diligence, source of wealth verification, wire and wallet monitoring, and regulator aligned governance controls to ensure controlled and audit ready participation. The comprehensive compliance programme for banks set out below transforms these responsibilities into structured operational pillars, procedures, and control standards for practical institutional implementation.The first pillar of a crypto compliance programme for financial institutions is the systematic identification of crypto exposure across the entire institution rather than within a single product or line of business. The enterprise exposure mapping must include retail banking, commercial banking, private wealth, asset management, correspondent banking, investment banking, payments, custody, lending, and employee outside business activity channels. The exposure identification must specifically analyze wires to crypto linked entities, flows to and from exchanges and custodians, stablecoin issuers, mining equipment vendors, tokenization platforms, and digital asset investment vehicles.The exposure identification must include the wires to wallets dimension, where fiat wires act as the bridge between bank accounts and blockchain wallets, because that bridge is repeatedly used in laundering, scam, sanctions evasion, and layering typologies. The exposure identification must also include indirect exposure through customers who maintain significant crypto activity but interact with the bank only through fiat deposits and withdrawals and it must be documented, repeatable, and refreshed on a defined cycle to remain regulator ready.The second pillar of a programme is the structured risk assessment of crypto-related exposure using global supervisory standards. Financial Action Task Force (FATF) virtual asset and virtual asset service provider guidance must be embedded into the institutional risk methodology, including the travel rule expectations, risk based customer due diligence, and virtual asset service provider controls. The Basel prudential framework expectations must be reflected in capital, liquidity, and operational risk treatment where banks hold or collateralize crypto related assets.The risk assessment must align with Wolfsberg style financial crime principles and with jurisdictional Anti Money Laundering(AML) and Combating the Financing of Terrorism(CFT) statutes that require enhanced due diligence for higher risk sectors. The risk assessment must evaluate customer risk, product risk, geographic risk, channel risk, and counterparty risk with crypto specific factors added to each dimension.The risk assessment must treat self-hosted wallets, privacy enhancing assets, mixers, cross chain swaps, and high risk jurisdictions as explicit risk indicators rather than generic anomalies. The risk assessment must produce a documented risk appetite statement that defines which crypto related activities are acceptable, restricted, or prohibited.The third pillar of the programme is deep due diligence and onboarding framework for virtual asset service providers and other crypto nexus institutions. The Virtual Asset Service Provider (VASP) due diligence must verify jurisdictional footprint, regulatory licencing, registration status, and supervisory history across all operating locations.VASP due diligence must confirm money services business registration where required, and equivalent licencing under regimes such as MiCA, FINTRAC,FinCen and SEC or other national frameworks where applicable.VASP due diligence must analyze the service model, including retail versus institutional focus, custody capability, on chain transfer capability, and exposure to non-custodial wallets. VASP due diligence must evaluate asset listing standards, presence of privacy coins, and controls around new token onboarding.VASP due diligence must assess AML and Know Your Customer (KYC) controls, transaction monitoring, sanctions screening scope, enhanced due diligence triggers, and compliance staffing depth. VASP due diligence must incorporate blockchain intelligence analysis of counterparty exposure, illicit flow ratios, sanctioned exchange connectivity, and highrisk facilitator relationships. VASP due diligence must be applied consistently across all business lines to prevent control gaps and audit findings.The fourth pillar is the specialized onboarding and monitoring framework for customers with crypto nexus or crypto derived wealth. The customer onboarding must include crypto specific questionnaires that ask about digital asset activity, exchange usage, wallet control, mining, staking, and token investment history. Customer due diligence must classify whether the crypto exposure is incidental, material, or dominant in the customer profile. Enhanced due diligence must be triggered where crypto forms a significant portion of net worth or transaction activity.The source of wealth assessment for clients with substantial crypto assets must integrate client narrative, supporting documentation, and blockchain based verification. The source of wealth verification process must request wallet addresses, transaction hashes, exchange statements, and proof of wallet control where appropriate. The source of wealth process must test consistency between the declared narrative and blockchain transaction history.The source of wealth process must look for red flags such as mixer usage, sanctions exposure, chain hopping without economic logic, structuring, splintering, and repeated use of high risk services. Similarly, this process must follow FATF enhanced due diligence as well as domestic legal requirements for higher risk customers.The fifth pillar of the programme is transaction monitoring and investigation framework that understand both wires and wallets. Wire monitoring rules must include typologies specific to crypto nexus activity, including rapid multi exchange wires, inconsistent further credit instructions, ramping transfer sizes, and mismatches between customer profile and crypto flow size. The investigation workflow must include counterparty due diligence on crypto linked beneficiaries rather than treating them as generic entities.The investigation workflow must integrate blockchain intelligence tools that can risk score wallet addresses, map exposure to sanctions, ransomware, fraud, terrorist financing, and child exploitation typologies. The investigation workflow must recognize that tracing through services such as exchanges or omnibus wallets creates false attribution risk and must be handled with technical discipline. The investigation workflow must evaluate behavioural indicators such as peel chains, cross chain swaps, address hopping, and reconsolidation patterns that indicate obfuscation. The investigation workflow must produce documented rationales that can withstand regulatory and prosecutorial scrutiny.The sixth pillar pertains to governance, technology, and regulator engagement architecture that makes the framework operational and credible. The governance model must establish a digital asset center of excellence or equivalent cross functional control group that coordinates compliance, risk, legal, technology, and business units.The governance model must define clear approval gates for new crypto-related products, partnerships, and customer segments. The technology stack must integrate blockchain intelligence, entity screening, wallet risk scoring, and crypto aware transaction monitoring into existing AML systems. The training programme must equip investigators, onboarding teams, and relationship managers with crypto typology and wallet literacy. The regulator engagement model must require early, proactive dialogue with regulators before launching crypto-related services.The regulator engagement model must include documented risk assessments, control designs, and pilot results to address supervisory skepticism. The regulator engagement model must demonstrate that the institution understands the risks, measures the risks, and controls the risks with evidence.The comprehensive crypto compliance programme is therefore not a single policy or a single control but an integrated control system that connects exposure mapping, risk assessment, VASP diligence, customer onboarding, source of wealth verification, wire and wallet monitoring, blockchain intelligence, and governance oversight.The robust crypto compliance programme must be risk based, technology enabled, regulator aligned, and evidence driven. The programme must evolve with FATF updates, Basel prudential developments, and jurisdictional crypto statutes. The compliance programme is a prerequisite for any financial institution that intends to operate safely at the intersection of traditional finance and digital assets.Copyright Business Recorder, 2026
#CRYPTO
brecorderhace 65d
The prohibited zone: why Pakistan’s tax policy cannibalising growth
“A state which dwarfs its men, in order that they may be more docile instruments in its hands even for beneficial purposes—will find that with small men no great thing can really be accomplished.” — John Stuart MillPakistan is currently a state suffering from a profound identity crisis. We have attempted to graft the tax burden of a sophisticated European social democracy onto a population that receives the public services of a medieval fiefdom.We are not a welfare state; we lack the institutional nervous system, the documentation, and the moral contract to sustain one. Yet, our fiscal policy remains obsessed with squeezing the productive few to fund a bloated, unproductive bureaucracy. By early 2026, this taxation under the disguise of collecting revenue has strangled a resilient, hardworking population under the weight of a welfare-level tax regime without a single welfare benefit in return.With only 3.4 million effective taxpayers, a mere 4% of the 85.6 million-strong workforce funding the entire state, we have declared war on the middle class. Having forced this captive minority to bridge a multi-trillion rupee deficit while the informal elite remain untouched, we have classified excellence as a taxable offence and transparency as a path to insolvency.If we seek a roadmap of where this ideological confusion leads, we must look at the state of the United Kingdom. Once the engine of global industry, the UK enters 2026 as a cautionary tale of high tax and low growth, pushing its tax-to-GDP ratio to a record 38%, and through that signing its own economic death warrant.This fiscal squeeze has birthed a productivity paradox where, despite record-breaking levies, British productivity has stagnated. The reward for risk vanishes the moment the state signals it will seize nearly half of every incremental pound earned. As a result of this model, 2025 saw a record-breaking 9,500 millionaires flee the UK, the highest migration of wealth in British history, as entrepreneurs pivoted to more hospitable climates like the UAE.UK business investment now languishes as the lowest in the G7. It did not take much time for many to realize, that regardless of London having a reputation for the global elite to spend their summer or keep apartments in, if taxes are going to target in that manner it is much favourable to just leave. If a G7 economy with centuries of institutional depth is buckling under this weight, Pakistan’s attempt to mimic this model without the underlying infrastructure is not just misguided, but suicidal to say the very least.According to 2025 Islamabad Policy Research Institute data, the state has crossed the fiscal Rubicon into that dangerous territory of the Laffer curve where higher rates shrink total revenue by incentivizing mass evasion and informality.When a salaried professional is taxed at 35% but must still pay out-of-pocket for private security, power, and education, the government is effectively charging a luxury premium for a social contract it has already breached. The outcome of that is already seen in the form of 800,000 skilled architects of our future economy leaving Pakistan by 2025 who had no choice but to either be crushed under our current policies or go into exile.The prevailing counter-argument, often echoed by the IMF and state technocrats, is that the fiscal deficit leaves us no choice. They argue that with debt-servicing requirements nearing Rs9 trillion, the state must extract every possible rupee from the documented sector.This logic is fundamentally flawed. You do not foster a forest by chopping the only trees that manage to grow. High rates on a microscopic base are the cause of our stagnation, not the cure. By maintaining such high rates, the state ensures the “shadow economy” remains in the shadows. True fiscal solvency is a product of volume and trust, not the velocity of extraction.To break this debilitating cycle, Pakistan must decisively abandon this welfare mirage presented to us, and pivot toward an incentive driven growth model that transforms the country into a high-performance economic tiger. Let us reclaim the promise of a nation that once stood proud as the economic tiger of the east.This begins with a radical flat-tax revolution, slashing both corporate and individual income taxes to a competitive 20% cap. It would move the state out of the fiscal prohibited zone and signal not only to global markets that Pakistan is a sanctuary for ambition, but to our youth that they too can grow and build in their own country. Crucially, this must be paired with uncompromising productivity accountability through a mandatory public value audit, establishing a firm “no service, no tax” principle where a state that spends Rs. 9.3 trillion, must justify to a greater standard before demanding more. By abandoning the predatory tax to spend mentality in favour of an invest-to-grow philosophy, the government can finally stop subsidizing a bloated bureaucracy and start rewarding the true builders of the nation through massive credits for job creation and technology exports.Pakistan’s greatest natural resource is not its minerals or its geography. It is the sheer, unyielding eagerness of its people to work and prosper. For how long will we place a concrete ceiling of taxation over their heads? We must choose our path.Do we remain a high-tax, low-growth museum of failed European ideas, or do we become a lean, high-incentive tiger of the Global South? If anything, we owe it to our youth to not place these shackles on their feet that stop them from growing. Iqbal once lamented the same thing:Shikayat Hai Mujhay Ya Rab, Un Khuda wandan-e-Maktab SeSabaq Shaheen Bachon Ko De Rahay Hain Khaak—Bazi Ka”(I have a complaint, O Lord, against the masters of the academy; they are teaching the young falcons to play in the dust.)The path to a USD 500 billion economy is not written in the fine print of an IMF agreement. It is found in the freedom of the Pakistani citizen to earn, keep, and build.Copyright Business Recorder, 2026
#ECONOMY
brecorderhace 65d
IMF and WB conditionalities, and domestic policy — IV
In the aftermath of the Covid-19 pandemic, there was talk of moving away from the previously held austerity consensus – to basically narrow current account, and fiscal deficits, and in turn, to manage debt distress – for the International Monetary Fund (IMF) programme countries. Programme conditionalities under International Monetary Fund (IMF) structural adjustment programmes – mostly received through short-term standby arrangements (SBA), and more medium-term extended fund facility (EFF) programmes –implemented this austerity agenda.Similar austerity-centric and overall neoclassical economics-based structural adjustment conditionalities were provided through World Bank’s development policy loans.These aggregate demand curtailing policies led to economic growth sacrifice, with negative impact on employment, and with enhancing impact on poverty, and income inequality. As a remedy therefore, these structural adjustment programmes called for provision of targeted subsidies for social protection, along with making, at least, some minimum level of social expenditure, for example, mainly in health and education sectors, and only in passing in terms of making expenditures to reduce gender disparities.READ MORE: OPINION: IMF and WB conditionalities, and domestic policy– IThese structural adjustment programmes comprised of binding, and non-binding conditionalities that required implementing austerity policies, more broadly they called for implementing neoliberal-minded policies that see little role of government and regulation, mainly focusing on deregulation, liberalization, and privatization. Both neoliberal- and related austerity-based policies over the years neither allowed reaching sustained macroeconomic stability nor achieving inclusive and sustainable economic growth within programme countries; while resilience to shocks could also not be built in any meaningful way.The (2008) book ‘Beyond the World Bank agenda: an institutional approach to development’ pointed out in this regard: ‘The third approach – the use of modified control studies – attempts to control for differences in the external environment when comparing the countries that adopted structural adjustment programs to those that did not. An example of this type of work is Elbadawi (1992). His paper uses several before-and-after analysis and concludes that the countries that undertook structural reforms suffered from exogenous shocks and were weaker, thus explaining the lack of economic improvement.’In addition, structural adjustment programmes also negatively impacted foreign investment due to once again lack of role of public sector, which is otherwise important in providing needed governance and incentive structures for domestic and foreign investment.READ MORE: OPINION: IMF and WB conditionalities, and domestic policy—IIMoreover, such programmes, curtailed public expenditure under over-board fiscal austerity policies hurting, in turn, the scope for public-private partnerships along with reduced or low-level investment in research, which otherwise plays an important role in laying the basis for incentivizing private investment. Also, over-board role of monetary austerity unnecessarily enhances cost of capital, which, in turn, feeds into overall cost of doing business and creates an important disincentive for investment.With regard to impact on investment, the same book highlighted, ‘Elbadawi then uses a modified control group analysis to determine other effects of structural adjustment. He finds a... negative and statistically significant impact on investment. ...Several other authors, including Corbo and Rojas (1991), have also echoed the important finding that investment rates drop in countries that are undergoing adjustment.’It is naïve to say the least that authorities, economists in general and media overall continue to see these structural adjustment reforms as ‘hard reforms’, something which need to be overall adopted for putting the economy on strong footing, instead of seeing them in the broad sense of their performance over the years, and in the sense of seriously outlandish underlying neoclassical economics assumptions that they are based on – reference the two models they are primarily based on and which, as discussed in earlier parts of the article, being ‘Polak model’ and ‘Swan-Salter model’ – and therefore rightly view them as highly dangerous, and wrong reforms!It also needs to be emphasised that the initial approach of the World Bank to focus on funding infrastructural projects, contributed in building industrial base in programme countries, which in turn, a significant determinant of bringing sustainability to macroeconomic stability, and economic growth, and in turn, in putting the economy on stronger resilience-bringing pathways. It needs to be noted here that sustainable macroeconomic stabilisation, and economic growth served as a more reliable, deeper and stable source for programme countries in terms of creating financing for social sector, than dependence on foreign aid in the shape of World Bank financing for social sector projects directly.READ MORE: OPINION: IMF and WB conditionalities, and domestic policy—IIIFinancing of projects by World Bank for the social sector was done through its lending arm created in 1960, International Development Association (ID), although at relatively more generous terms than IBRD (International Bank for Reconstruction and Development), which as per the book was the ‘original unit of the World Bank, [and] was created at the Bretton Woods Conference in 1944’, but as indicated earlier, with less efficacy for the programme countries in creating a sustainable source of funding into the social sectors, from otherwise less dependable foreign aid flows, that mostly came with structural adjustment conditionalities, and their serious misgivings-bringing neoliberal, and austerity policies for the overall economy.Tracing this shift of funding emphasis by World Bank, from infrastructure to social sector spending over time, the same book pointed out: ‘Eight-three percent of all pre-IDA loans to poor countries went to power and transportation projects; not a single loan was for education, health, or other social sectors... Overall... more than 60 percent of all loans went to infrastructure in the 1950s and 1960s. ...The new lending focused mostly on agriculture, with some additional commitment to social spending such as education and water supply and to “technical assistance,’ which aimed to build technical capacity in the newly independent states where it was particularly weak. By 1965, 15 percent of overall spending was going to agriculture (compared to 9 percent in 1960) and 5 percent to social spending (compared to 0 percent in 1960)... Overall... social and agricultural spending amounted to about 19 percent of the total, compared to 4 percent in the 1950s.’In addition, World Bank shifting over time away from investing into infrastructure projects did not allow build-up of financial sources in programme countries. This is because direct funding into social sectors, which, as indicated World Bank did increasingly over time, did not allow creating capacity of programme countries to generate stable sources of finance, given for instance, funding for building more schools, hospitals, etc., rather than funding economy’s overall infrastructural base attracting investment, into deepening industrial base – in terms of increased domestic production, and exports – and, in turn, accruing greater revenues, and foreign exchange, which then getting channelled into building-up social sector.Hence, putting investment into social sector on a stronger and sustainable footing – one that also did not generate significant debt responsibilities – by putting it away from foreign aid dependence to domestic revenues, and country’s non-aid foreign exchange. This, in turn, also leads to lesser debt build-up, and diminishing exposure to aid-attached policy conditionalities, which in the case of neoliberal- and austerity-based structural adjustment programmes, are detrimental to bringing sustainable macroeconomic stability, and economic growth; allowing overall to avoid the economic policy control of the creditor countries, and bringing in greater policy independence.Moreover, less dependence on foreign aid reduces impact of neoliberal mindedness of multilateral agencies, whereby allowing greater independence from foreign economic consultants and multilateral agencies’ backed policymakers – also generally called ‘Chicago boys’-styled policymakers trained in major foreign universities in the tradition of neoclassical economics –from working in important domestic policymaking positions. To elaborate further about these policymakers leads to pointing out that they hold similar policy mindset as that of the multilateral agencies, and which has shown significant inclination towards neoliberal, and austerity-based fundamentals for many decades now, and only shifting somewhat in the aftermath of Global Financial Crisis of 2007-08, and later on in the wake of fast-unfolding climate change crisis, and the related ‘Pandemicene’ phenomenon, not to mention the happening of the Covid-19 pandemic; all occasions when the serious limitations and negative implications of these policies in terms of stability, growth, distribution, and resilience, for instance, were significantly exposed.Here, it needs to be pointed out that global geopolitical considerations also seemed to have played a part in who received aid from the World Bank, and how much; calling in turn for the need to have meaningful level of parity among countries in terms of voice at the Bretton Woods institutions so that allocation of resources is made only on technical requirement of countries, and not because of the political interests of countries with major voting rights. That, in turn, will also help bring greater plurality of economic thought at these institutions away from the heavy influence of economists/policymakers from major universities in the Global North and, in turn, reducing the impact of otherwise high inclination of these universities on neoclassical economics thought process.For instance, as per the book, ‘In the 1960s, the recipients who most benefited from the new commitment to social spending were not the newly emerging African nations but India and Pakistan. This concentration was not incidental; it represented a concerted effort to counter Chinese and Soviet influence. These two countries received 86 percent of all IDA loans to poorest countries between 1961 and 1968... Yet despite the disproportionate increases in lending to India and Pakistan, overall Bank loans to Africa still increased from 5.7 percent in 1960-61 to 14.7 percent in 1966-67. In addition, African nations received more than half the technical assistance projects awarded in that year...’It is indeed shocking to see that World Bank continued to defend dismal performance of structural adjustment programmes, for instance, in the case of Africa, and with regard to which the book pointed out: ‘Increasingly neoclassical economic writers – including those with close association with the Bank – have recognized that even with all of their sophisticated statistical techniques, it is difficult to counter the overwhelming signs of economic and social deterioration in Africa and elsewhere during the adjustment period. Instead of denying these trends, they have attempted to explain these patterns not by challenging the neoliberal model but by running large-scale cross-country regressions and using variables outside of their models.’The above statement calls for looking at performance of structural adjustment policies, which the same book examined from instance by taking three data points ‘...1980, 1990, and 2002’ pointing out in turn that ‘The data reveal how badly sub-Saharan Africa deteriorated over the entire structural adjustment period. Food production was unable to keep up with population growth. Merchandise exports fell dramatically in nominal dollar terms in the 1980s; there was some recovery in the 1990s, however, particularly after 1998, when export prices recovered somewhat... In a twenty-two-year period during which many regions of the world experienced phenomenal growth of international trade, sub-Saharan Africa was a mere 20 percent above the 1980 level. ...Living standards, as measured by gross national product (GNP) per capita, plummeted by 31 percent in the 1980s and a further 20 percent between 1990 and 2002. Although identifying trends in Africa says nothing about causal factors, the ubiquity of adjustment is undeniable. By 1995, thirty-seven sub-Saharan countries had received at least one World Bank adjustment loan, and thirty-three had two or more loans.’Moreover, with regard to employing weakly warranted model-building approaches, and carrying out over-exploration of statistical techniques to provide at best, weak justification of structural adjustment programmes – similar to wrongly employing institutional economics to defend these policies by the World Bank – the book pointed out that World Bank’s employment of, for instance ‘ethnicity’, and ‘social capital’ falls short of convincing that these exogenous variables significantly explain the reason for poor performance of countries undergoing structural adjustment programmes in general. The same book pointed out in this regard: ‘Arguments by Collier and Hoeffler (1998), and Easterly and Levine (1997), and others that Africa and other regions have done poorly because of their social structure (high levels of ethnic diversity and lack of social capital) have the same purpose. The aim is not to challenge the post-Washington consensus but rather to preserve it in a manner that supports its neoclassical economic microfoundations.’The main underlying reason behind poor performance of structural adjustment programmes is not shifting the focus away from their neoliberal, and austerity basis, and increasingly towards institutional emphasis of programme conditionalities. This is because, the neoclassical-based IMF, and World Bank policies – also called in a loose sense as ‘Washington Consensus’ policies because their ambit is narrower than the structural adjustment programmes, and the neoclassical assumptions they follow – saw little role of transaction costs – that is ‘search and information costs’ – and, in turn, of institutions resulting also in lack of provision of otherwise much-needed governance, and incentive structures for both better price discovery, and for reaching much more improved level of productive- and allocative efficiencies.For instance, highlighting the limitations of ‘Washington Consensus’ policies, in their (1998) World Bank published report ‘Beyond the Washington Consensus: institutions matter’ Shahid Javed Burki and Guillermo E. Perry, among other contributors to the Report, pointed out: ‘Subsequent experience has convincingly demonstrated that the policies prescribed by the Washington Consensus are paying off. ...But with one exception (namely, the protection of property rights), the policy prescriptions of the “Washington Consensus” ignored the potential role that changes in institutions could play in accelerating the economic and social development of the region.’Moreover, renowned economist, and economics Nobel laureate, Gunnar Myrdal in his (1968) famous book ‘Asian Drama: An Inquiry into the Poverty of Nations’ pointed out with regard to the importance of adopting an institutional approach: ‘The main hope must be that the economic profession will gradually turn to remodeling our framework of theories and concepts in the direction characterized as institutional. ...With strong ideological influences and vested interests working to retain the Western approach to economic analysis... attempts to change it will meet resistance from the producers and consumers of economic research in South Asia, as well as in the West.’ Sadly, this approach has continued to be engaged only at the margins, at most, while formulating domestic policies in programme countries in particular, and in policy formulation, including shaping conditionalities, for instance, at the Bretton Woods institutions.While dismal record of structural adjustment programmes over the years became very much evident, yet stickiness of the Bretton Woods institutions with the neoclassical, and related neoliberal, and austerity-basis of these programmes is strange to say the least. In the (2023) book ‘A thousand cuts: social protection in the age of austerity’ for instance highlighted in this regard: ‘...when countries in the Global South faced crisis over the few decades and turned to the IMF for financial assistance, austerity was the default policy recommendation, backed up by strict conditionality. ...Critics have been quick to point out the self-defeating logic of such policies: austerity deepens pre-existing problems and undermines economic activity, thereby plunging countries into protracted crises... Even so, the consensus among policy elites in the Global North has been that low- and middle-income countries have no alternative than to introduce austerity as a prerequisite for gaining access to international financial assistance, lest moral hazard problems emerge.’(To be continued)Copyright Business Recorder, 2026
#ECONOMY
brecorderhace 65d
Payment of past liabilities: Mian Zahid underscores need for FPCCI-govt parleys
KARACHI: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan and Chairman Policy Advisory Board FPCCI, has called for an immediate dialogue between the government and the FPCCI to devise a mechanism that allows payment of past liabilities in 2 years instalments, 25 percent upfront discount, and adjustment against the pending refunds to prevent widespread defaults and industrial closures.He said that the recent judgement by the Federal Constitutional Court upholding the imposition of Super Tax under Section 4B and Section 4C of the Income Tax Ordinance as legal which will result in approximate recovery of Rs.300 billion from the business community.While the business community respects the supremacy of the judiciary, Mian Zahid Hussain warned the government that recovery of this high volume amount from the formal sector will severe liquidity challenges and stifle industrial growth.Mian Zahid Hussain, stated that the abrupt recovery of Super Tax arrears, on high-earning sectors, applied from 2015 effectively raises the corporate tax burden to unsustainable levels. When combined with the standard 29% corporate tax and other levies, the effective tax rate for compliant industries now approaches or exceeds 50%.He further stated that the tax imposed on the exporters in the past under fixed tax regime, was full and final settlement of tax liability, as such the exporters have not included the impact of super tax in their costs because the definition of tax in Income Tax Ordinance, includes super tax as well. Therefore, the exporter should not be forced to pay the past super tax.“The formal sector is already bearing the brunt of the country’s revenue targets,” Mian Zahid Hussain said. “By upholding the Super Tax, we are penalizing the most productive sectors of the economy including textiles, pharmaceuticals, fertilizer, and banking, which are essential for job creation and exports. This decision risks draining the retained earnings that industries rely on for reinvestment, modernization, and expansion.”The veteran business leader highlighted specific challenges this judgement creates for various industrial sectors like, Textile & Export Sectors already struggling with high energy tariffs and delayed refunds, the retrospective tax liability will wipe out liquidity needed for purchasing raw materials, further depressing export volumes, Large-Scale Manufacturing (LSM) is also affected.The harsh recovery methods send a negative signal to both local and foreign investors regarding policy predictability in Pakistan. Pharmaceuticals & Fertilizers are also the critical sectors which face regulated pricing mechanisms; therefore, they do not have surplus profits to absorb an additional tax hit.Copyright Business Recorder, 2026
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