Pakistan Economy - News & Updates - Archive

[Owais]

Govt seeks review of blocked PSM sale
ISLAMABAD (updated on: September 08, 2006, 18:43 PST): The government of Pakistan on Friday asked the Supreme Court (SC) to review a decision to block the sale of the country's biggest steel producer, Pakistan Steel Mills (PSM).

In a blow to the country's beleaguered privatisation programme, the court in June stopped the sale to a Russian-led consortium, saying privatisation laws were violated and "acts of omissions and commissions" committed by government officials.

The court also ruled that the valuation of the project and the final terms offered to the consortium had been adversely affected by the violations.

A team of government lawyers filed a petition in the court on Friday asking that the judgement be "reviewed, recalled and set aside".

The privatisation of PSM was referred to the SC after a petitioner said the firm was a "strategic asset" that was being sold to the consortium in haste at a throw-away price.

The consortium, made up of Russia's Magnitogorsk Iron and Steel Works Open JSC, Saudi Arabia-based Al-Tuwairqi Group of Companies and Pakistani firm Arif Habib Securities, made a bid of $362 million for a 75 percent stake in PSM at an auction on March 31.

In its review petition, the government said the court's judgement "incorrectly holds" that the valuation of the share of PSM was not carried out in line with the laws.

The country's privatisation programme has been far from smooth and the government has had to abort several sales.

 

[Owais]

Two new ghee plants being set up in Karachi


KARACHI (September 09 2006): To local firms have received government approval for setting up edible oil refineries in Karachi, which would cost about $10 million, sources said on Friday. They said that these two parties who would establish their plants in Karachi are Waheed Hafeez Ghee Industry and Hamza Edible Oil Refinery of Lahore (Sufi Group).

Both (Waheed Hafeez and Sufi Group) have acquired land near Port Qasim. Construction of the plants is likely to begin in December this year, which may take 18 months to complete. Thus, production is likely to commence by February 2008.

These units would have production capacity of around 500 tonnes per day. With the induction of these two edible oil plants, the number of big refineries in the country would reach 10, while the total edible oil production would rise to 7,000 tonnes per day, which currently is 5,000 tonnes.

About the technology that would be used in these edible oil refineries, Sources said that these plants would have the latest, world-class technology. However, both parties were reluctant to divulge from where they would procure the machinery. "The technology which they (units) would use, is 'Continuous Refinery' and might be bought from the European market, which runs the plant smoothly without getting heated," sources added. These refineries would use crude palm oil, to be imported from Malaysia and Indonesia.

Waheed Hafeez Ghee Industry is basically an Islamabad-based party. The country's demand for edible oil is 1.5 million tonnes per month, which goes up to 3 million tons during Ramazan. Of this 3 million tonnes, around 0.6 million tonnes is supplied by some 128 small and big edible oil refineries across the country.

 

[Owais]

Pakistan to host second Islamic Economic Forum


ISLAMABAD (September 09 2006): Pakistan will host the three-day 2nd World Islamic Economic Forum starting November 5 here with the theme "Unleashing the Economic Potential" in collaboration with the World Islamic Economic Forum Foundation.

This was disclosed at a joint news conference addressed by chairman of the World Islamic Economic Foundation Tun Musa Hitam and minister of state for economic affairs Hina Rabbani Khar on Thursday.

They said key issues to be taken up by the forum are: Muslims economic renaissance, revitalising the OIC, promotion of Muslim solidarity in economic, social and political affairs, the role of Muslim leadership in a globalised world, the development of entrepreneurship and leadership qualities among youth and women, promoting inter-faith harmony, understanding trends in science and technology and Islam and the western world.

Keeping in view the forum's theme, deliberations at the event will also focus on exploring investment opportunities in tourism and infrastructure development, information, telecommunications and outsourcing, water, energy and resources and enhancing competitiveness of Muslim companies and businesses.

The forum will be attended by over 400 delegates from all over the world. Delegates include high-level government officials, business and economic leaders, besides some heads of states and governments.

Tun Musa Hitam said on the occasion, MoUs will be signed among four/five selected universities on research and development of different technologies and enhancing of training facilities in vocational, technical education.

"We are not meeting merely for business collaborations but we are actually saying that we are doing so in the context of a changing system: one that is increasingly favouring and accepting Islamic finance and services as an important component of the international financial system.

Thus, the forum acknowledges this underlying strength and advantage and offers participants with discussion topics that take into account this renewed vigour, unleashing the economic potential that is inherent in our emerging markets," Musa added. Hina Rabbani Khar said the forum will be a panel-oriented conference which will concentrate on exploiting the potential of emerging markets.

The first World Islamic Economic Forum was held in October 2005 in Malaysia and was attended by more than 600 participants, she said. "In today's energy-dominant economic order, it is important to ensure revenues from the vast oil and gas reserves found in Islamic countries are channelled into assisting sustainable economic development of other Muslim countries.

The forum will address this and other issues that promote cross-border trade, commerce and investment by providing a conducive ground for interaction and networking among government representatives, industry heads, regional experts, professionals and corporate managers," Hina added.

The event would be addressed by a host of distinguished personalities, including Prime Minister Shaukat Aziz and Malaysian Prime Minister Abdullah Ahmad Badawi. Similarly, President General Pervez Musharraf will join other global leaders in a special keynote leadership panel on "Muslim Leadership in a Globalised World".

 

[Owais]

Kuwait for joint ventures in SME sector


LAHORE (September 09 2006): State Minister and Secretary General of Manpower and Government Restructuring Programme of Kuwait Dr Waleed Al Wohaib has said that Kuwait is keen to promote joint ventures with Pakistan in SME sector.

He stated this while speaking at a reception hosted by chief executive officer of Small and Medium Enterprises Authority (Smeda) Shahab Khawaja in his honour.

Dr Waleed maintained that he was highly impressed with the industrial development of Pakistan, and was trying to identify the areas where Kuwait could join hands. The two sessions of formal meetings with Smeda officials during the last two days were highly useful and hoped that the discussions would soon lead to a memorandum of understanding between Smeda and the Kuwaiti Manpower Department.

Aqeel Al Jassem, while expressing his views on this occasion, emphasised upon the need for enhancing economic co-operation among the Islamic countries. He was of the opinion that Pakistan should share its experience with the brother countries like Kuwait in SME development strategies. Earlier, Shahab Khawaja, CEO, Smeda assured the Kuwaiti delegation of the best possible co-operation to promote bilateral relations in the fields of manpower, industry and trade, especially in the SME sector.

Besides, former Secretary General, Islamic Chamber of Commerce and Industry, Iftikhar Hussain, General Manager Central Support, Khalid Kifah, Deputy GM, Technical Innovation, Imran Chaudhry, Manager Donor Co-ordination, Fayyaz Riaz, Manager Smeda-JICA Industry Support Cell, Salman Khalid, Project Director, Industrial Information Cell, Sheharyar Tahir, Manager, AHAN and Liaqat Ali Gohar, Manager PR & Marketing were also present on the occasion.

 

[Owais]

Canadian firm and FPCCI sign MoU


KARACHI (September 09 2006): In order to boost the country's exports and to promote the image of its products in local and international markets it is necessary to educate the manufacturers about the importance of branding.

In this connection a memorandum of understanding (MoU) was signed between the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and Canadian based company ABC Namebank at the Federation House, here on Thursday.

According to the MoU, seminars and workshops would be held in the eight industrial cities of the country to educate the top management of major exporters about the branding issues. About 100 exportable brands would be developed which would carry assurance of world class quality.

The Canadian firm would help in establishing a secretariat at the FPCCI to facilitate the exporters on marketing issues pertaining to overall image and branding.

On the occasion, Chaudhry Muhammad Saeed, president, FPCCI, said that the registration of new products with their brand names would increase the reliability of Pakistani products world-wide.

A brand name would enable a local company to boost 200 percent of its exports because after the introduction of Intellectual Property Rights, people across the world rely on branded products, he said. The brand names would give the best price to the local manufacturing companies, which were already famous in the international market, he added.

He said that several international companies were selling their products due to popularity of their brands while the real manufacturers are in different countries. The branded companies were now only putting their energies on research and innovative ideas to improve the image of their brands.

Pakistan is also among those countries where big companies have placed orders to local manufacturers for their products. These manufactured products sold in the world market with the big companies' logo, he said.

Several sectors like textile, surgical and sports goods, which have good demand in the international market, but could not get better return due to non availability of popular brands, he said.

Nasim Javed, President ABC Namebank, said that the company would provide training, technical facilities and consultancy to local entrepreneurs about the branding which would boost their confidence in manufacturing. The signing ceremony was also attended by Akbar Abdullah, vice president FPCCI and Mohsin Ashraf of ABC Namebank International.

 

[Owais]

French group identifies 10 sites for chain of hotels


ISLAMABAD (September 09 2006): Accor Group of France will build a chain of its hotels in all major cities of the country. Gerard Pelission, President of Accor Group, disclosed this during a meeting chaired by Zahid Hamid, Federal Minister for Privatisation and Investment here on Friday.

Pelisson, accompanied by senior officials from the Accor Group, said that the Group has identified 10 sites for its chain of hotels and will soon start their projects.

He said that the company is aware of the potential that Pakistan offers in the tourism sector and this is the reason why they have decided to enter into long lasting partnership with Pakistani investors.

He pointed out that Accor will also brought its 5-star and 4-star hotel chain of Novotel in Pakistan and are currently in the process of finding good locations.

Zahid Hamid, Federal Minister for Privatisation and Investment, welcomed the decision of Accor Group and said their presence in Pakistan will be a welcome addition to the hotel industry.

Earlier, Hamid briefed the delegation about the economy, privatisation and investment climate in Pakistan. Saleem Gul Sheikh, secretary tourism also made a presentation on the tourism sector in Pakistan. Talat, acting secretary Board of Investment, Pakistan Investment Counsellors and senior officers of BOI also attended the meeting.

 

[Owais]

Textile exports to increase to $50 billion till 2016: ABL chief


MULTAN (September 08 2006): Allied Bank Ltd (ABL) President, Naeem Mukhtar has expressed the hope that volume of textile exports would increase to $50 billion till 2016 and it would help develop Pakistan economically. Addressing a gathering of industrialists, traders and ginners on Thursday.

The ABL chief said that replacement of outdated, old, discarded machinery and infrastructure and establishment of new industry and value addition was necessary to compete China and India in the world market.

He urged upon ginners to run their business personally and avoid leasing out their ginning factories. He asked them to modernise their factories, besides using fibre-testing equipment to meet the global market challenges and WTO conditions.

He said the ABL was rated in five major banks in Pakistan, adding that it would advance loans of 5, 7 and 10-year terms on reasonable mark-up to replace the old machinery with modern and digital ones so that the textile industry could meet the demand of international buyers.

He said that Pakistan had been progressing by leaps but unfortunately, our ginning industry lagged behind, adding that ABL would advance loans for the modernisation of ginning industry after textile mills.

He said that all the ABL branches were connected with on-line system and it would finance the trading and business concerns in the information technology and trading experts would be sent to Southern Punjab to help local traders. He hoped that by this step we could develop ourselves like Korea and China.

 

[Owais]

'10 times growth in microfinance in six years'


ISLAMABAD (September 09 2006): The microfinance sector in Pakistan has grown tenfold, to 600,000 clients, over the past six years, but the further growth would be impeded if the lending rates continued to remain low, notes a latest United States Agency for International Development (USAID) funded report.

The report, titled 'Microfinance Performance in Pakistan 1999-2005: Growth - But a Structural Flaw Persists', observes that micro-finance industry is capable of providing financial services to the poor, who traditionally lack access to commercial banking services.

Various public and private organisations, such as Pakistan Poverty Alleviation Fund, Khushhali Bank, and a range of other microfinance banks and NGOs have invested at least $400 million for providing microcredit services. This investment has led to remarkable progress, as the microfinance sector has grown from 60,000 active borrowers in 1999 to more than 600,000 in 2005, the report notes.

The study applauds the incredible progress made in the country's microfinance sector in terms of rapid expansion, solid repayment rates of loans and low delivery costs.

However, it asserts that microfinance providers need to charge interest rates that meet their costs in order to make microfinance services fully sustainable. "The interest rates, service charges and other fees charged to borrowers are too low for growth to continue" in the microfinance sector.

It notes that delivering microfinance loans remains a high-cost activity because services are often delivered at the doorsteps of more difficult-to-service poor clients and remote areas. As a result, the interest rates charged on microfinance loans need to be higher than for typical loans from commercial banks, it stresses.

The study, conducted through USAID funded project 'Widening Harmonised Access to Microfinance' (WHAM), is being implemented by ShoreBank International Ltd. The report is a joint effort of ShoreBank and Pakistan Microfinance Network.

According to the report's statistics, most of Pakistan's microfinance lending organisations have a strong track record of recovering the loans. It also points out that the microfinance services have so far reached only 6 percent potential clients and 94 percent potential clients still remain without access to microfinance services.

It emphasises that microfinance lenders in Pakistan have a choice to make: they can either choose to continue to cover revenue shortfalls through subsidies and accept that the sector will never expand beyond the level of subsidised support; or they can charge higher interest rates to cover costs to build a capital base, and help in establishing strong and sustainable microfinance providers.

ShoreBank's Country Representative in Pakistan Gregory Chen, commenting on the report findings, said: "A rise in interest rates would help ensure that 94 percent of those who remain excluded from microfinance services could gain access over time."

"There is ample evidence in Pakistan, and around the globe, that most of those without access can afford to pay the full cost of access to financial services," he said, adding that "to cap interest rates at a level that does not fully cover costs will deny most potential borrowers this choice."

 

[Owais]

China, UAE intend to invest in Pakistan

ISLAMABAD: China and the United Arab Emirates (UAE) intend to invest $93 billion in Pakistan.

The UAE investors have shown their interests in Pakistan’s Bin Qasim and real estate sectors and intend to invest $43 billion in the next 10 years, while China, in a statement released here from Chinese capital Beijing, has expressed its intention to invest $50 billion in the construction and development of Gawadar Port in the next five years.

Analyst Muhammad Sohail told that Pakistan was now being ranked among the countries most attractive for investment. He said that such a huge investment flowing in would step up the development pace in the country.

 

[ST1976]

China pledges $50 billion investment


ISLAMABAD (September 08 2006): China has pledged $50 billion investment to Pakistan to develop Gwadar port on the pattern of its Shenzhen port over the next five years.

hi owais i would like to confirm the news, is it US$50bn or US$50,000Mn? thanks

 

[Neo]

Its likely to be $50 million. Gwadar is going into second phase development and China usually pledges 50-350 million.
Imho its a typo mistake by the author..:embarassed:

 

[ST1976]

Its likely to be $50 million. Gwadar is going into second phase development and China usually pledges 50-350 million.
Imho its a typo mistake by the author..:embarassed:

hi Neo, actually the news came in one more post also and it was said that total of about $93bn from UAE and China is going to be invested in pakistan. i thought if this is correct news, only china can make inflow of about $10bn on average every year solving all the problems. infact 300Mn -350Mn is also no less. this is a very good money. thanks

 

[Neo]

KARACHI, Sept 8: Overseas business support units will be set up under the umbrella of the Trade Development Authority of Pakistan (TDAP) in a bid to strengthen overseas markets for the promotion of country’s exports.

The units will be run jointly by the public-private sector, official sources said on Friday.

There is a growing concern amongst economic planners that without registering a quantum jump in exports, the country could not sustain its high growth. Consequently, a task has been given to the Planning Commission to draw a roadmap for achieving a major breakthrough in exports within next couple of years.

The Planning Commission has constituted a committee headed by Tariq Ikram, Minister of State and Chairman of the Export Promotion Bureau (EPB). According to initial working made by this committee, a target of $40 billion exports during the next five years was likely to be achievable.

The sources said the setting up of these units was part of this scheme which would be used to record a quantum jump in exports by adopting short and long-term strategies. Initially, these units will be set up in six countries as a pilot project.

The Federation of Pakistan Chambers of Commerce and Industry and the Foreign Office were being taken on board for this project because their assistance and expertise would be needed, the sources added.

The units will be run on self-financing basis with only first two years and the government’s financial support will be there to pass the gestation period smoothly.

These business support units will be run by the local people of that country and their remunerations will be linked with their performance based on quantum of import orders generated by them. It is expected that the units in three years time will start generating fresh export orders to the tune of $1 billion per annum for country’s exporters.

The operations of these units will be closely monitored by the TDAP which will be equipped with high-level technology to run its affairs.

The TDAP is awaiting legislation, but sources said a preliminary work was in advanced stage, as the government wanted to ensure that exports were taken full care of and should record a quantum jump to arrest the ever-rising trade gap.

The economic planners are well aware of the fact that if the country does not increase its exports in coming years, a sever crisis could emerge and this will further deteriorate the trade gap, as job opportunities totally depend on exports.

The sources said high-level technology would be inducted at every operating level of the TDAP, adding that more than 50 per cent procurement had been already made. They said almost all the required hardware and software had been procured.

Similarly, the EPB has been geared up to update its records and systems for the induction into the TDAP. Arrangements are afoot to use other tools for expanding exports by establishing virtual exhibitions. Interactive facilitation and infrastructure will be made available to the exporters, and trade fairs and exhibitions will be arranged.

 

[Neo]

hi Neo, actually the news came in one more post also and it was said that total of about $93bn from Saudi Areabia and China is going to be invested in pakistan. i thought if this is correct news, only china can make inflow of about $10bn on average every year solving all the problems. infact 300Mn -350Mn is also no less. this is a very good money. thanks

JB,

Pakistan has been marketing itself quite agressively to foreign investors and respected entities like WB, ADB, Marryl Lynch to name a few have praised Pakistan for the economic turnaround since the recession of late nineties.

There are two major factors to our success:

- Arabs are looking for a safer place to invest there money rather than US, UK or Continental Europe.
- Immidiate high returns to foreign investment and governments grants to protects the asstets.
- Creation of tax free ecomomic zones throughout the country.
- Growing FTA between Pakistan and the rest of the world.
- The China factor: To counter India, Pakistan needs to grow in economic field rather then military and we're China's main ally and a potential regional hub and corridor for chinese trade.

Only major disadvantage is the political instablity in Balochistan and some other area's of Pakistan and the military rule.
The former is being dealt with properly; we've seen actions against the Bughti's and number of attacks on gas pipelines and other assets seems to have declined drastically as direct result.
The latter will be solved since elections are due early next year.

Its upto the next civil government to follow the same path by endorsing current policies.

As for the figures published lately, I can comfirm the $30-40 billion from UAE, $10 billion from KSA, $2-5 billion from Kuwait and another $2-3 from Qatar and Bahrain.
China will surpass UK as largest foreign investor and the potential is as high as $100 billion during next 7-10 years all depending on the ongoing negociations.

Things are looking good for Pakistan! :flag:

 

[Neo]

Saturday, September 09, 2006http://javascript<b></b>:; http://www.dailytimes.com.pk/print.asp?page=2006\09\09\story_9-9-2006_pg5_2

KARACHI: Export Promotion Bureau (EPB) Vice-Chairman Naveed Arif said Pakistan was the top exporter of dates in the world this year as it exported 78,000 metric tonnes of dates to 30 countries including USA, Canada, European Union, Japan, China and India.

He was speaking after the inauguration of the Pakistan Honey and Dates Show 2006 at the Karachi Expo Centre here on Friday.

The Export Promotion Bureau, that organised the show, said about 150 exporters and producers of honey and dates are displaying their products at the three-day exhibition. It added that about 30 importers from the Gulf such as Saudi Arabia, India, China and Uzbekistan were displaying products at the show.

FPCCI President Chaudhry Mohammad Saeed inaugurated the show and visited various halls.

He called for improving the quality and packaging of honey and date products for export.

He also called upon date exporters to market their products so that they reached the Pakistani market as well as Muslim countries before Ramadan.

The FPCCI president also spoke of the need to produce by-products of dates in order to increase foreign exchange earnings.

He said exports of honey had also increased from less than $1 million to $3 million this year.

Date and honey exporters called on the government to help them invest in modern machinery.