PepsiCo Middle East CEO: Sustainability at the ‘core’ of its strategy

PepsiCo Middle East CEO Aamer Sheikh.
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Updated 19 February 2023

PepsiCo Middle East CEO: Sustainability at the ‘core’ of its strategy

  • PepsiCo aims to exchange know-how and best practices in the mission of promoting sustainable development

RIYADH: PepsiCo Middle East CEO Aamer Sheikh highlighted the company’s 100 percent local and regional water replenishment initiatives as a part of its sustainability goals on the sidelines of the second edition of the LEAP tech conference in Riyadh.

“What other companies have done is talk about sustainability. What PepsiCo has done is put sustainability at the core of its strategy. To be the leading global company in beverages and convenient foods, you have to do it while taking into account all the sustainability elements that come into play,” Sheikh told Arab News.

“When we talk about water conservation, we want to give back to the communities the amount of water we take. In our Riyadh plant, we are actually replenishing 100 percent of the water. And that simply means whatever water we use, we are working with the regional growers and the farmers to bring our best practices for them to be able to save an equivalent amount of water in their practices,” Sheikh explained.

Sheikh added that through their sustainability initiatives, they also aim to exchange know-how and best practices in the mission of promoting sustainable development.

“We are investing in technologies that are more efficient in using water. Our beverage franchise partner, Aljomaih in Riyadh, invested $10 million over the last five years. That reduces water consumption by 40 percent,” he explained.

As a part of the LEAP conference, PepsiCo also discussed its future ambition to embrace the digital revolution through the use of artificial intelligence.

“We are looking across all aspects of our value chain (to find out how we can) embrace and digitalize our organization at a much faster pace than what we have done in the past,” Sheikh said.

The PepsiCo CEO expressed the company’s mission in participating in the Kingdom’s transformation in line with Vision 2030.

“Saudi Arabia is going through a very unique transformation at this point in time, and our objective is to really embed PepsiCo in the fabric of the society. So, if you notice, we are showing up in all the key events. We are participating in all the major events, whether it’s Riyadh Season, Jeddah Season or Formula E Grand Prix,” he said.

“Our objective is to make sure that PepsiCo, through the power of its brands, is participating in the transformation that is taking place in Saudi,” Sheikh added.

Through its initiatives, he said, the company aims to educate the public on what it is doing to “drive a more sustainable organization and environment” and encourage “others to join in as well.”
 


Pakistan presents $50.4 billion budget, targets 6.54% deficit for next fiscal year

Updated 09 June 2023

Pakistan presents $50.4 billion budget, targets 6.54% deficit for next fiscal year

  • Pakistan has allocated Rs7.30 trillion, 50% of total budget outlay, for interest payments
  • The country has allocated Rs1.8 trillion for defense and Rs1 trillion for energy subsidies

KARACHI: Pakistan’s finance minister Ishaq Dar presented the federal budget for the next fiscal year with a total outlay of Rs14.46 trillion ($50.4 billion), aiming for a 6.5% deficit and allocating approximately 50% for interest payments.

In his speech at the National Assembly, Dar criticized the previous administration led by former prime minister Imran Khan, holding it responsible for the current economic turmoil in the country.

Pakistan is currently grappling with major financial challenges, including depleting foreign exchange reserves, a declining national currency, and runaway inflation.

“The overall federal expenditure will be Rs14.46 trillion, with Rs7.30 trillion allocated for interest payments during the next fiscal year,” stated the minister.

He mentioned that the government set a revenue generation target of Rs9.2 trillion through the assistance of the Federal Board of Revenue (FBR) and Rs2.9 trillion through non-tax measures.

The government aims for a fiscal deficit of 6.54% in the next financial year, with an overall federal deficit of Rs6.92 trillion.

“The primary balance would be 0.4% of GDP,” Dar added.

In terms of allocations, he revealed that Rs1.15 trillion were earmarked for the Public Sector Development Program, including Rs200 billion through public-private partnerships.

The budget also allocated Rs1.8 trillion for defense, Rs714 billion for civil administration, and Rs1 trillion for subsidies in the electricity and gas sectors.

The finance minister informed the government had set a “modest GDP target” of 3.5% for the next year, focusing on the element of the real economy.

Dar said the country had averted default due to the efforts of the ruling coalition.

“The government has met all the conditions of the IMF program under the ninth review,” he continued. “That is why it has continued talks with the IMF on a regular basis.”

The ongoing IMF bailout program is set to expire toward the end of the month, with a pending amount of about $2.5 billion.

The IMF has asked the government to arrange approximately $6 billion from friendly nations to close the financing gap and to adopt a market-based exchange rate and a budget aligned with its program objectives.

To address rising inflation, Dar announced an increase in ad hoc relief allowance of 35% for government employees from grades 1 to 16 and 30% for employees falling between grades 17 and 22.

The government also raised pensions by 17.5% and set the minimum pension at Rs12,000.

The minimum wage in the capital territory, Islamabad, was also increased from Rs25,000 to Rs30,000.

The finance minister stated that the coalition government aimed to reduce inflation to 21% in the coming financial year.

He announced several relief measures, including a reduction of customs duty from 10% to 5% on non-localized heavy commercial vehicles and the removal of regulatory duty on second-hand clothing to support the poor segment of society.

Dar also highlighted incentives for the manufacturing of solar panels and related equipment through the exemption of customs duties on machinery and equipment imports.

He said the government aimed to strengthen the information technology sector and its exports by allowing duty-free import of IT equipment equivalent to 1% of the value of export proceeds.


Pakistan PM hopes for revival of IMF bailout program ahead of its expiry this month

Updated 09 June 2023

Pakistan PM hopes for revival of IMF bailout program ahead of its expiry this month

  • The country is announcing budget today at a time when it is in desperate need for IMF funds
  • PM Sharif says Pakistan has fulfilled all conditions for the release of IMF’s $.1.1 billion tranche

KARACHI/ISLAMABAD: Prime Minister Shehbaz Sharif on Friday said that the International Monetary Fund’s (IMF) bailout deal for the country would “hopefully be completed this month” after approval from the lender’s board since Pakistan had fulfilled all the prerequisites for the release of the $1.1 billion tranche.

The prime minister speaking at the meeting of federal cabinet ahead of budget presentation hoped that the IMF program would be secured within current month before its expiry by end June.

Sharif’s issued the statement while presiding over the meeting of his cabinet right ahead of the announcement of the country’s federal budget for the next fiscal year.

The cash-strapped country is presenting its budget at a time when it is in desperate need of bailout funds from the IMF to shore up its foreign currency reserves which are barely enough to cover a month’s imports. The IMF’s ninth review, which was part of the $6.5 billion program for Pakistan signed in 2019, has been stalled since November last year.

“We not only accepted all conditions [of the IMF] but have also implemented the prior actions required from us. But still, the staff-level agreement has not been signed, so the matter will now go to the IMF’s board for a review,” Sharif said during a speech before his cabinet ahead of the announcement of the budget on Friday.

“We must hope that, as we have fulfilled all the conditions, the IMF’s ninth review will be completed this month after seeking approval from the lender’s board.”

The Pakistani prime minister added that he had recently spoken to the managing director of the global lender over the phone and had asked her for “verbal” assurances regarding the release of the funds.

“I suggested to her that if she provided me with a verbal commitment [regarding the signing of the agreement], we would take a few more steps the lender had asked for. Once we received the verbal commitment from her, we took those steps too, so now, no other [requirements] are left that could turn out to be an impediment in signing this deal.”

The PM reiterated that while fulfilling the IMF conditions, friendly countries like Saudi Arabia and the United Arab Emirates (UAE), came to Pakistan’s rescue for which he was immensely grateful.

“They helped a lot by sending $3 billion to us in a timely manner, $2 billion by KSA, and $1 billion by the UAE.”

The premier pointed out political stability was vital for the country’s economic growth, adding that the state and all its institutions were working together to move in that direction to strengthen Pakistan financially.

“Without political stability the wheel of the economy can’t move forward,” he said.

He also maintained the government was aware of the suffering of people who were forced to deal with spiraling inflation.

“We have to take care of the salaried class and the pensioners whose income have been eroded by inflation,” the prime minister added.


Pakistan targeting fiscal deficit of 6.54% next fiscal year

Updated 09 June 2023

Pakistan targeting fiscal deficit of 6.54% next fiscal year

  • The budget needs to satisfy the IMF to secure the release of stuck bailout money
  • Government targeting primary surplus at 0.4% of GDP, finance minister says

ISLAMABAD: Pakistan's government is targeting a fiscal deficit of 6.54% of GDP for the 2023-24 fiscal year, the finance minister said in his budget speech on Friday, much wider than the current year's original estimate of 4.9%.

The budget needs to satisfy the IMF to secure the release of stuck bailout money for the crisis-struck country, which is due to hold a general election by November.

The government was targeting primary surplus at 0.4% of GDP, the finance minister said. 

"This is not an election budget. This budget is for the success of the country, it has no political elements in it," Ishaq Dar said on the floor of the house.

For the next year, GDP growth had been budgeted at 3.5 per cent, Dar said, calling it a “modest target.”

The country’s economy has suffered record high inflation and an economic slowdown compounded by devastating floods last year and a failure so far to unlock crucial finances from the International Monetary Fund. The IMF had demanded a number of prior actions from Pakistan, including reversing subsidies, a hike in energy and fuel prices, jacking up its key policy rate, a market-based exchange rate, arranging for external financing and raising over 170 billion rupees ($613 million) in new taxation.

“Owing to the depreciating value of the rupee and the rapid increase in interest rates, the economic woes of the country increased but the government adopted the policy of saving the state instead of saving political interests,” Dar said in his budget speech. 

Pakistan's Prime Minister Shehbaz Sharif in a televised address to his cabinet on Friday reiterated that he was hopeful that the agreement with the IMF would go to its board for approval this month.

He added that the United Arab Emirates, Saudi Arabia and China had been "very helpful" in recent months in providing funding to Pakistan.

The IMF said earlier this week that it was discussing the budget with Pakistan's government. Sharif's government is hoping to persuade the IMF to unlock at least some of the $2.5 billion left in a $6.5 billion programme that Pakistan entered in 2019 and which expires at the end of this month.


Saudi Arabia’s voluntary production cuts support oil prices

Updated 08 June 2023

Saudi Arabia’s voluntary production cuts support oil prices

RIYADH: Oil prices rose on Thursday as tighter supply resulting from Saudi Arabia’s pledged production cut and a potential pause to US interest rate hikes offset worries over demand weakness and a global economic slowdown.

At a recent meeting of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, Saudi Arabia said it will cut its crude output by 1 million barrels per day in July on top of a broader deal to limit supply into 2024 as the producer group seeks to boost flagging prices.

Brent crude rose 25 cents, or 0.3 percent, to $77.20 a barrel by 1328 GMT. US West Texas Interme- diate crude gained 20 cents, or 0.3 percent, to $72.73.
“With the OPEC+ meeting out of the way, focus is now shifting toward the next move the Fed will make when it meets next week,” said Tamas Varga of oil broker PVM.
There is growing consensus that the central bank will skip a rate hike, which could lift oil prices even before falling supply starts draining global oil inventories, Varga added.
OPEC+ cooperation praised
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman praised their collaboration during a phone call on Wednesday in a discussion of the work of OPEC+, the Kremlin said.
“The topic of ensuring stability on world energy markets was discussed in detail,” according to a Kremlin statement on the Telegram messaging app.
“Both sides praised cooperation within the framework of OPEC+, allowing for the adoption of timely and effective steps to ensure a balance between supply and demand for oil.”
The statement noted the impor- tance of agreements reached at the group’s meeting this week.
UAE ship insurance rules
Tougher requirements for some ship insurers covering the UAE ships are aimed at boosting environmental safety amid growing concerns over unregu- lated shipping, reported the state- run news agency WAM.
The UAE’s Energy and Infrastructure Ministry, in a June 2 circular, announced it would tighten insurance criteria for vessels registered under its flag for insurers that are not part of the leading ship insurers, known as the International Group of Protec- tion and Indemnity Clubs, which cover 90 percent of the world’s ocean-going fleet.
“By prioritizing stringent P&I standards, we ensure the safety, financial security, and environ- mental stewardship of our maritime activities, attracting reputable investors,” said Hessa Al Malek, adviser to the minister for maritime transport affairs.
The WAM report added that the move would reduce the risk of accidents and oil spills, leading to a safer and more secure marine environment.

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Pakistan set for 0.29% GDP growth in FY23, well below target of 5%

Updated 08 June 2023

Pakistan set for 0.29% GDP growth in FY23, well below target of 5%

  • Finance minister says 0.29% GDP growth a “realistic achievement,” anything higher not achievable
  • Fiscal deficit 4.6% of GDP for fiscal year up until April, slight improvement from last year’s 4.9 percent

KARACHI: Pakistan has missed its Gross Domestic Product (GDP) target by 4.7 percent and is likely to post GDP growth of 0.29 percent in the fiscal year ending June 2023, well below the target of 5 percent set last year, according to the country's economic survey launched on Thursday.  

 

This was revealed as Pakistani Finance Minister Ishaq Dar presented the Pakistan Economic Survey 2022-23, a yearly flagship publication of the Ministry of Finance which highlights the trend of macro-economic indicators and development policies and strategies, as well as sectoral achievements of the economy.

Dar will present the annual budget document before parliament tomorrow, Friday. 

Addressing a press conference, Dar called the outgoing year “a difficult year for the economy,” saying the coalition government faced “extreme challenges” when it came to power in April 2022.

Indeed, the country’s economy has suffered record high inflation and an economic slowdown compounded by devastating floods last year and a failure so far to unlock crucial finances from the International Monetary Fund. The IMF had demanded a number of prior actions from Pakistan, including reversing subsidies, a hike in energy and fuel prices, jacking up its key policy rate, a market-based exchange rate, arranging for external financing and raising over 170 billion rupees ($613 million) in new taxation.

The fiscal adjustments have already fuelled Pakistan's highest ever inflation, which hit 37.97% year-on-year in May, but the IMF has yet to release the $1.1 billion funding stalled since November as part of the $6.5 billion Extended Fund Facility agreed in 2019.

 

 

 

“Pakistan has paid a huge political cost of meeting IMF reforms … the structural reforms, the power reforms, gas reforms,  the fiscal reforms … we had to do the pending actions,” Dar told reporters.

“For Pakistan, this political cost was worth it … The revival of this [IMF] program was important because of Pakistan’s credibility.”

Dar said he was hopeful the 9th review of the program would be concluded soon.

“The first priority is to pay off sovereign debts, then food and pharmaceutical imports,” Dar said, adding that the government had repaid $6.5 billion in international commercial loans, with $1.0 billion of that amount being in the form of international Sukuk.

The Economic Survey document said the Pakistan economy lost momentum in the first quarter of the ongoing fiscal year “due to the severe downturn in the global economy and flash floods of July-August 2022 and as a result the economy suffered from significant domestic supply disruptions.”

Pakistan estimated flood damage at Rs3.2 trillion ($14.9 billion) and loss to GDP at Rs3.3 trillion ($15.2 billion), and recorded the need for rehabilitation of damages at Rs3.5 trillion ($16.3 billion). On the international front, the prolonged Russia-Ukraine conflict had adversely affected global growth and inflation remained unexpectedly high, the document said.

The survey report revealed that agriculture sector growth remained 1.55 % as compared to 4.27% last year, industry posted negative growth at -2.94 % against 6.83% last year while manufacturing posted -3.91% against 10.86 % last year and wholesale and retail trade posted -4.46% as compared to 10.3% last year.

Average year-on-year inflation rate for the period up to May 2023 was recorded at 29.2 percent, the survey found.

In April and May, the country’s inflation hit record levels, which were also the highest in Asia.

The survey said Pakistan’s inflation had been driven by international commodity prices, global supply disruptions, flood damage to crops, currency depreciation, and political uncertainty in the country.

The fiscal deficit was 4.6 percent of GDP for the fiscal year up until April, a slight improvement from last year’s 4.9 percent, the survey showed, adding that the primary balance recorded a surplus of 99 billion Pakistani rupees.