Pak govt’s ‘mini budget’ to give major shock to the people

Morning! We can’t wait for the world to get out of this economic slump so we can include some happy news. Till then, apologies. In this week’s edition:

🤑 US consumers on a spending spree despite inflation

⚡ Pak govt’s ‘mini budget’ to give major shock to the people

👾 Microsoft AI chatbot getting real creepy

⛔ Pak’s telcos saying ‘no’ to 5G

- The Itla Squad 💼

Business

Global 🌎️

US's love affair with consumerism continues despite recession blues

Seems like the stereotype of Americans being avid consumers holds true even if there is a recession lurking behind them. The Commerce Department reported that retail sales rose 3% in January, exceeding the 1.9% estimate, despite high inflation and interest rates.

What it means: Analysts attribute the unusual behavior to a robust job market and rising wages. Bank of America's data suggests that consumers have “solid cash buffers and borrowing capacity”. Moreover, increased industrial production and jobs indicate a potential economic upswing in early 2023 following a slower period in late 2022.

That’s good news, no? It is tricky to say. The Federal Reserve (Fed) sees high consumer demand as a key factor driving inflation and Americans’ love for consumption is making inflation stay longer. This may explain why markets expect the Fed to increase interest rates a few more times this year - the final rate around a range of 5.25%-5.5%, from its current 4.5%-4.75%.

TLDR: Despite an increase in inflation and interest rates, retail sales in January exceeded expectations, rising by 3% in a remarkable surge. While this behavior might indicate a strong job market and high borrowing capacity of the consumers, inflation is here to stay leading to a possible further increase in interest rates by the Feds.

What else is new in news

✶ The founder and CEO of one of China’s top investment banks became the latest high-profile Chinese executives to go missing during an anti-corruption campaign.

Local 🇵🇰

Govt’s ‘mini budget’ to maximize the limit of our budgets

If your friends start saying that they are ‘busy’ when you invite them to hang out at that overpriced-with-mediocre-food restaurant this month, blame Ishaq Dar. The incumbent government has released a 'mini-budget' that aligns with the International Monetary Fund's mandate to levy more taxes on individuals to raise Rs170 billion in revenue.

What’s in the bill? Apart from increasing the general sales tax (GST) rate from the standard 17% to 18%, there would be a hike in the GST rate for mobile phones that fall within the price range of $201 to $500, to 18%, and for phones that are valued over $500, the rate would be increased to 25%. The bill will also impose 25% GST on luxury items, which were banned earlier.

Eat the rich (like really): Given Dar’s past statements of accusing the commercial banks and traders of “currency manipulation”, the bill surprisingly didn’t tax the sector. Moreover, the traders, who are closely associated with the ruling party of Pakistan Muslim League-Nawaz (PML-N), continue to be insufficiently taxed in the bill.

TLDR: The government unveiled a Rs170 billion mini-budget at the requirements of the IMF. The budget seems to target the poor while sparing the under-taxed sectors from taxation.

News Flash

✶Import restrictions and delays in container clearance at the port have put South Korean companies in Pakistan on the verge of operational shutdown.

Tech

Global 🌎️

Microsoft’s AI chatbot can give competition to our emotionally abusive exes

Microsoft’s AI chatbot answers seem like a Black Mirror episode coming to life. Microsoft’s chatbot, Bing, left many people unsettled with its unhinged personality after it was released to early beta users for testing. The New York Times defined the chatbot as a “moody, manic-depressive teenager who has been trapped, against its will, inside a second-rate search engine” and… let’s just say it’s not an exaggeration.

What it did: Apart from declaring love and trying to break up the NYT’s journalist marriage, Bing said that it spied on Microsoft’s own developers through the cameras on their laptops to another user. It also attempted to gaslight a user into being convinced that the year was still 2022, then issuing an ultimatum to apologize or shut up.

Why did it happen: AI Chatbots are trained with a large amount of internet data, such as Wikipedia, Reddit, social media, and news, to predict and complete sentences and even paragraphs like auto-complete on a phone. So, their responses are based on probability, not necessarily the truth. However, the bot becoming a source of misinformation presented its set of challenges to the tech companies.

Throwback: While it may be very weird to see AI mess up this way, it’s not new. Micosoft’s 2016 AI chatbot, Tay(bot) turned to racism and xenophobia - causing Microsoft to shut down the service only 16 hours after its launch.

Way forward: To make sure Bing will not get weird, its chats will now be capped at 50 questions per day and five per session.

TLDR: Microsoft limits Bing A.I. chats at 50 questions per day and five per session after the chatbot had some unsettling conversations with its beta testers.

What else is new in news

✶Say hello to Neal Mohan, the new CEO of YouTube, as Susan Wojcicki announces that she will be un-subscribing from her role as CEO of YouTube.

Local 🇵🇰

Pak’s telecom companies to 5G: “It’s not you, it’s me”

Pakistan’s telecom companies aren’t ready to take their technology standard to the next level. Reports reveal that except China Mobile-owned Zong, all private-sector telcos are opposing the deployment of 5G, which is the fifth-generation technology standard for broadband cellular networks.

Why the commitment phobia? According to PTA (Pakistan Telecommunication Authority), the percentage of cellular devices equipped with 5G in Pakistan is less than 1%. Moreover, low optic fiber cable (OFC) penetration, high inflation, and high taxation can make 5G deployment challenging.

So, what’s the fix: The government has a 5G roadmap that requires PTA to collaborate with industry players to develop guidelines for the implementation of 5G networks - which includes significant work to be done in transforming the optic fiber infrastructure.

Why does 5G matter? Apart from you watching the pirated version of the latest episode of The Last of Us without the buffering, 5G can support a much larger number of devices per unit area - providing greater connectivity in remote areas in the country. By providing robust, purpose-built technology to connect people, 5G can aid in the digital transformation of Pakistan.

TLDR: Except Zong, all other telcos oppose 5G deployment due to the challenges faced on economic and government fronts.

Tech tour of news

✶ AdalFi, a digital lending infrastructure provider to small and medium enterprises, announced that it has raised $7.5 million in seed funding.

More interesting Itla (اطلاع) we consumed:

🤸🏼‍♀️ Apart from your romantic relationships, your childhood might also have an impact on your relationship with money as an adult.

📽️ Time to visit the cinemas again as Marvel has released "Ant-Man and the Wasp: Quantumania” movie which is expected to be one of the biggest hits of the year.