Business
Pakistan going through an investment emergency’: Report
New Delhi: With exports stagnating and cost of doing business skyrocketing, Pakistan is going through an ‘investment emergency’ amid ad-hocism and a lack of transparency in policy affairs, a new report has revealed. According to the Federation of Pakistan Chambers of Commerce and Industry, the cost of doing business in Pakistan is 34 per cent higher than that of its neighbours and regional states.
“This pushes the entire gamut of the economy on a slippery note as industries, entrepreneurs and start-ups struggle to stay afloat, having been cowed down at the hands of exorbitant energy prices, illogical and lopsided taxation and an uncertain exchange rate,” argues The Express Tribune.
FDIs are on a downturn, and no promising investor is taking Pakistan’s route. Several big-ticket businesses have called it a day, “complaining of a lack of a conducive environment, harassment on the part of taxation officials, pestering political instability and poor law and order,” the report mentions.
Moreover, Pakistani products are uncompetitive in international markets, and the slump in exports is one of the main reasons behind the economy not taking off. Electricity has soared to Rs 56 per unit and oil and gas are being imported at a skyrocketing dollar-rupee parity.
Exports have stagnated since 2022 despite global trade recovery in several sectors. A rescue and rehabilitation strategy is indispensable to save the industry from extinction, said the report. The recent admission by Pakistan Finance Minister Muhammad Aurangzeb that some multinational companies have left the country due to ‘high taxes and energy costs’ has proved that doing business there is becoming extremely difficult for global firms.
In the recent past, apart from big companies like Procter & Gamble, Eli Lilly, Shell, Microsoft, Uber and Yamaha, scores of companies shifted their offices from Pakistan to Gulf countries and other destinations “in the face of excessive taxation”. Telenor Group has also finally exit Pakistan.
Qatar-based Al Thani Group was the latest among a string of foreign companies to pull out of Pakistan because of the economic uncertainty and political turmoil in the country.
Business
Spirit starts monthslong process of dismantling airline after biggest collapse in a generation
Spirit Airlines‘ more than three-decade run ended over the weekend, but on Tuesday it was just starting the monthslong process of dismantling the company after the biggest U.S. airline collapse in a generation.
Spirit and its stakeholders were in bankruptcy court in White Plains, New York, to start that process, which will take months. The hearing included discussions about airport landing fees, aircraft and staffing.
The carrier filed a cumulative wind-down budget of around $217 million, though that number could change.
The budget went out to February 2028. It included more than $52 million in employee costs through July and another more than $52 million for aircraft-related expenses.
The airline had 59 Airbus A320s in service and 63 in storage, as well as 37 of the larger A321s in service, and 13 of them in storage, according to aviation data firm Cirium. More than three-quarters of its fleet was leased.
Spirit shut down operations after years of struggles, most recently from heavy debt loads and a surge in costs.
Spirit’s lawyer, Marshall Huebner of Davis Polk, told a bankruptcy court on Tuesday that the jump in jet fuel prices following the U.S.-Israel attacks on Iran in February left the carrier with no choice but to shut down. That added $100 million in incremental costs for Spirit in March and April, he said.
U.S. bankruptcy court in White Plains, N.Y.
Leslie Josephs/CNBC
Talks for a potential government bailout in the form of a $500 million loan that could have given the government an up to 90% stake in Spirit fell apart late last week, and the carrier officially shut down at 3 a.m. ET on Saturday.
Spirit passengers scrambled to rebook reservations. American Airlines, JetBlue Airways, Southwest Airlines, United Airlines and others said they have flown tens of thousands of Spirit customers who were stranded by the collapse.
Spirit had flown about 50,000 people in the day leading up to its closure. The airline said about 17,000 direct and indirect employees lost their jobs.
“The closing of Spirit Airlines is a sad and unfortunate event that adversely affects many parties, and that’s particularly true for the thousands of folks who are Spirit employees and families who depend on them,” the presiding judge, Sean Lane, said at Tuesday’s hearing.
“The stress level for these employees and affinities is very high, and they likely have many questions,” he continued. “Hopefully there’ll be some information discussed today to provide some answers to some of those questions, or provides information about where to get those answers. Bankruptcy can be a very difficult process, and today is a sad example of that.”
Business
Lidl’s loyalty card becomes less generous, shoppers say
Under the changed system customers collect points rather than reward coupons, with £1 spent equalling one point.
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Business
UK government long-term borrowing costs reach 28-year high
There have been extra jitters in UK government debt markets ahead of Thursday’s local and national elections.
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