Pakistan Economy - News & Updates - Archive

[Neo]

ISLAMABAD, Sep 11: Pakistan is an attractive country for foreign investors due to better policies of the present government. It is also facilitating investors in terms of income tax and other taxes with no sanctions on transfer of profits to any other country.

It was stated by president Islamabad Chamber of Commerce and Industry (ICCI) Abdul Rauf in a meeting with a Canadian delegation led by Andy Merchant, president Canada Pakistan Business Council (CPBC).

He said the present government had introduced several reforms including liberalisation of trade and investments.

The delegation discussed various measures to improve economic and trade relations between the two countries, said a press release issued on Monday.

The ICCI president said that the WTO regime had abolished all trade barriers leaving international market open to all countries without any discrimination, transforming the world into a global village.

He further said that the Gwadar Port was a mega project through which a communication channel would be established with the Middle Eastern states.

Speaking at the meeting the CPBC president Andy Merchant that his delegation mainly comprised of bankers and they were interested in investing in banking sector.

He said that the Canadian investors wanted to invest in other sectors including drinking water projects and air-conditioning.

 

[Neo]

Tuesday, September 12, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\09\12\story_12-9-2006_pg5_3

* It wants to invest in power plant, cement plant, real estate and hotels and livestock sector

By Sajid Chaudhry

ISLAMABAD: Qatar has expressed willingness to make multi-billion dollar investment in four major projects in Pakistan and has linked it with provision of incentives such as five-year tax holiday, waiver of import duties on plant and machinery and help in acquisition of suitable sites.

Qatar has indicated investment in setting up a 500-megawatt power plant in Punjab, one state-of-the-art cement plant with an investment of $225 million, a livestock project to source one million live animal per annum, and construction of three five-star hotels and investment in housing colonies’ projects, a government official informed the Daily Times on Monday.

Sheikh Hamad Bin Jassim Bin Jabbor Al Thani, First Deputy Prime Minister and Minister of Foreign Affairs, has approached Prime Minister Shaukat Aziz through a letter and has pointed out some important issues to materialize the said investment projects, the official added. Hotel Development and Real Estate: The Qatar side has said that we are prepared to invest in the development and construction of five-star hotels and housing colonies in Karachi, Lahore and Islamabad. They have informed that in this connection we have already decided on suitable sites in Islamabad and Karachi, but require assistance in acquisition of suitable sites in Lahore.

Power Project: In line with the government of Pakistan’s increasing requirements for electricity supply, Qatar has shown its willingness to invest in the 500-MW power plant planned by the Water and Power Development Authority (WAPDA) in Chichokimaliam, Punjab. Qatar has requested for a 75% equity stake in this project and has also shown its interest in increasing its capacity to 700MW, with further investment.

Cement Plant: Qatar has also shown its preparedness to invest $225 million in setting up a state-of-the-art cement plant near a site offering plentiful access for raw materials. They have requested for four types of assistance and incentives for this investment, which include lease on land for quarrying possibly in Punjab or Sindh, waiver of import duties for plant and machinery, exemption from income tax for a five-year period and provision of gas and electricity connection.

Livestock Project: Qatar has informed that we are willing to source one million live animals per annum to diversify their present import base, which is focused manly on imports from Australia and India. In this regard, Qatar has requested two major incentives. They required 5,000 acres of irrigated land on government lease in Punjab or Sindh near National Highway that would be declared or have same status as an export processing zone. And land near seaport for storage of at least 30,000 live animals at one time.

Qatar has requested the government of Pakistan to approve their participation in the power project provide suitable land for the cement plant and the livestock project and finally assist in acquisition of suitable sites for real estate and hotel development. Qatar has hoped that the government of Pakistan’s assistance in the said projects would result in closer economic relationship between the two countries and would bring gains to the peoples of the two countries.


http://www.dailytimes.com.pk/default.asp?page=2006\09\12\story_12-9-2006_pg5_3

 

[Neo]

The ministry of finance's economic outlook, issued on Saturday, seems a bit optimistic and relies much on validation from overseas multilateral agencies for claiming "extraordinary successes" despite external shocks. The document, which liberally quotes the World Bank, the International Monetary Fund and the Asian Development Bank (ADB), does admit that the country still faces many problems, especially related to creating jobs, reducing poverty, deteriorating physical infrastructure and worrying socio-economic indicators. However, it quotes from a recent international ranking of Pakistan which places the country in seventy-fourth position out of 175 countries. This is 60 places above India's ranking of 135. However, the fact remains that there are a host of rankings done by reputable organisations and a country's rank may vary considerably according to their scope of coverage and terms of reference. That being the case, it is not too difficult to pick a ranking of one's choosing to portray one's company in a more optimistic manner. The one mentioned by the ministry of finance relates to the ease, or otherwise, of setting up a business in a country and on that Pakistan has done well. However, on the ranking that really matters -- the UN's human development index which measures literacy, healthcare and other variables f socio-economic progress -- it has been doing dismally for quite a number of years.

This is not to say that there hasn't been economic progress in the country, especially under this government. Since the past two to three years especially, the economy has experienced substantial growth in its GDP per capita. In addition to that, inflows of foreign investment have increased considerably in recent years as well and several sectors of the economy are doing well. The problem however is very fundamental and it relates to the fact that the fruits of this economic growth have been far from equitably distributed. Of course, in any capitalist economy (this being the model of choice now), depending on the degree of domination by business and corporate interests and on the nature laws relating to trade and commerce, it is to be expected that those who control the means of production and those allied with them will stand to benefit the most.

The ministry for instance quotes from the ADB which it quotes as praising the present government's macroeconomic management which allowed the economy to emerge relatively unscathed after last year's devastating earthquake. However, this does not take away from the fact that the management of the post-quake rehabilitation effort has been far from satisfactory. Many of those who lost their houses and property have still not been able to receive government compensation, either because of red tape or because their due share has been diverted to other people by corrupt local officials. The relief effort also saw a scandal of sorts when tents of not the required quality and specification were provided to the survivors and construction of replacement dwellings -- when the next winter in the region is around the corner -- has not yet begun. Furthermore, one reason Pakistan was able to absorb the impact of the earthquake was because the economy of the region that was affected is not a major contributor to the country's GDP. Also, the reconstruction effort, purely from an economics point of view, also adds to GDP primarily because of construction of housing and the employment that is generated. Apart from issuing economic outlooks that to many may seem as overly optimistic and the result of selective quoting from sources, the ministry of finance would do well to examine its policies whose aim is to alleviate poverty and should analyse why poverty has not risen by the proportion that it should have were the fruits of economic growth more evenly distributed.

http://www.thenews.com.pk/daily_detail.asp?id=23712

 

[Neo]

By Muhammad Yasir

KARACHI: The incident of 9/11, which triggered the metamorphosis of global politics and economics, forced many Muslim countries, particularly Pakistan, to change policies in order to survive in a changed world.

Ironically, despite all its efforts in war against terrorism, Pakistan could not maintain its good image in the eyes of western world, particularly in USA. Moreover, Pakistan’s status of being a frontline state in US-led war against terror did not help the country in acquiring reciprocal economic assistance and trade facilitations.

Delays in the issuance of visa, hurdles in marketing of goods and services, complications in security, customs, shipping and cargo processes are some of the major grievances that Pakistani businesses have been suffering since 9/11 incident.

Many exporters reported they had lost deals with importers of western countries, which assumed that Pakistani products were suspicious, making market access difficult in these countries.

On the contrary, the business community of the country had been hopeful that as frontline state in the war against terrorism, the US and its allies would offer a trade corridor to Pakistan to enhance its exports.

President Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Chaudhry Muhammad Saeed said that post 9/11 policies were not fruitful for the country in terms of trade benefits.

“We (Pakistan) were not given the status of free market and quota free access in the developed countries similar to that granted to Jordan, which we were expecting as a key ally of USA in war against terrorism,” he said.

“Pakistan was anticipating strong economic ties with USA by signing Business and Investment Treaty (BIT) but due to lack of confidence and negotiation on the business laws and procedures, it has not materialised so far.”

FPCCI chief told The News that the mega industrial projects of Reconstruction Opportunity Zones (ROZs) could not be constructed at the Pak-Afghan border owing to lack of peace in the region and other notable apprehensions between two states.

“Pakistani private sector can not get the needed economic benefits from USA.” He pointed out that Foreign Direct Investment (FDI) has increased up to $3.57 billion at the back of privatisation of national assets during the past four years.

“Foreign exchange remittance surged to four billion dollars per annum as the foreign capital is being transacted legally through banks,” he mentioned. Chaudhry Saeed pointed out that in absence of viable and sustainable business activities the local investors started investment in the capital market and real estate leading to speculation in these sectors. Speculation in turn leads to vicious boom-bust cycles, which greatly affects the socio-economic plight of common citizen.

President Lahore Chamber of Commerce and Industry (LCCI) Mian Shafqat Ali was of the view that the country was not provided special trade packages and other concessions that it deserved for its post 9/11 role.

“USA did not do lavished aid on Pakistan as it should have given to the country instead it withdrew its one billion dollar loan for Pakistan and has given free trade market access only to the earth quake affected areas,” he pointed out.

Bilal Mulla Central Chairman of Pakistan Readymade Garment Manufacturer and Exporter Association (PREGMEA) said the value added export of the country declined sharply during this year instead of surging owing to the tarnished country image of Pakistan. “Our exports have increased in previous years but if we glance at our trade deficit then we find our country at ground level,” he said.

http://www.thenews.com.pk/daily_detail.asp?id=23649

 

[Neo]

STOCKHOLM, Sept 12 (Reuters) - Mobile phone network equipment maker Ericsson said on Tuesday it won an order worth $274 million to expand the network of Warid Telecom in Pakistan.


"Under the agreement, Ericsson will provide capacity for an additional 10 million subscribers through its mobile softswitch solution and the expansion of the radio access network in existing and new cities," the group said in a statement.
The deal includes radio, transmission and packet core network equipment, as well as multimedia services.

 

[ST1976]

Pakistan's economic momentum ahead of 2007 elections
KEY ECONOMIC INDICATORS AND FORECASTS FISCAL YEARS BEGINNING JULY 1
========================================================================== 2002/03 2003/04 2004/05 2005/06 2006/07GDP (US$ billion) 85.0 98.3 113.1 131 5 146.5GDP/capita (USD) 579.0 669.0 742.0 847.0 900.0Real GDP growth (%) 4.7 7.5 8.6 6.6 7.0Fiscal balance (% of GDP) -3.7 -2.4 -3.3 -4.2 -4.2CRI (%oya) 3.1 4.6 9.3 7.9 6.5Exports of goods ($ billion)10.89 12.40 14.40 16.80 19.50(%oya) - 13.8 16.2 17.1 16.1 -Imports of goods ($ billion)11.33 13.60 18.75 27.90 34.10(%oya) - 20.0 37.8 48.8 22.2 -Trade balance ($ billion)-0.44 -1.21 -4.35 -11.10 -14.60Current account ($ billion)3.16 1.31 -1.75 -5.80 -6.30(% of GDP) 3.7 1.3 -1 5 -4.4 -4.3Net FDI ($ billion) 0.82 0.92 1.68 3.53 5.00Fx reserves ($ billion) 10.72 12.33 12.62 13.02 13.02Total ext debt ($ billion) 35.47 35.26 35.83 36.56 38.00(% of GDP) 43.1 36.7 32.6 28.3 25.9Total public debt (% of GDP)76.9 69.7 82.5 53.3 50.8,
Exchange rate(Rs/$) 58.50 57.57 59.36 59.81 80.00(2006/07)
==========================================================================

Sources: State Bank of Pakistan, IMF, J.P. Morgan.

is this a mistake or plan of SBP? if this is a plan, SBP would be bit slow. foreign investors have paid $1=60Rs last year, they will require some time to digest this change.:biggrin: :biggrin:

 

[Owais]

is this a mistake or plan of SBP? if this is a plan, SBP would be bit slow. foreign investors have paid $1=60Rs last year, they will require some time to digest this change.:biggrin: :biggrin:

Opps!
I posted this in table form but that's become messy after posting:what1:

 

[Owais]

$340 million floating LNG terminal to be set up at Port Qasim


KARACHI (September 13 2006): A floating liquefied natural gas (LNG) terminal will be set up at Port Qasim at a cost of $340 million. According to details available here on Tuesday, 'Associated Group' has been issued 'no-objection certificate' (NOC) by the Ministry of Petroleum & Natural Resources for import of LNG, along with setting up a floating LNG terminal and re-gasification facility at PQA.

The Kadiro creek, opposite Khiprianwala island, has been earmarked for this purpose. Pakistan is currently facing energy crisis, with soaring fuel oil prices having adverse impact on national exchequer. To fill the gap between demand and supply of fuel oil and to meet energy requirements of the expanding economy, establishment of LNG terminal is an imminent requirement. LNG is regarded as a cost-effective alternative to both oil and liquefied petroleum gas (LPG), besides being an environment-friendly fuel.

To meet the immediate LNG import requirements, a dedicated LNG vessel, with on board re-gasification facility, shall serve as a floating terminal and make re-gasified LNG available to the country within nine months. A daughter ship shall dock alongside for refilling the mother ship with imported LNG. The frequency of refilling the mother vessels shall be three to four times a month.

Floating LNG terminal is not only cost-effective but a time-efficient solution since land-based LNG storage terminal and re-gasification facility would require 3-4 years for implementation besides high project cost which would have adverse pricing impact on end-users. The development of LNG terminal at Port Qasim would also serve a larger national interest in promoting growth and development in this sector of economy.

 

[Owais]

Current account deficit up by 134 percent in July



ISLAMABAD (September 13 2006): Fuelled by the $1.54 billion trade deficit, Pakistan's current account deficit during the first month of the new fiscal year 2006-07 (July) rose by 134 percent to $0.961 billion, against $410 million of July 2005.

Asian Development Bank (ADB) in its 'Outlook' last week had also pinpointed the burgeoning current account deficit as a 'gray area' of the country's economy by projecting it at $7.9 billion (5.5 percent of GDP) for 2006-07. During 2005-06, it had reached a worrisome $5.68 billion--4.7 percent of gross domestic product (GDP).

Independent economists are of the view that the widening current account deficit poses threat to the economy simultaneously on both internal and external fronts. They also have questioned time and again as to how long the trade deficit could continue on that trajectory without disrupting the economy. And, how much longer Pakistan could continue to spend more than it earns, and support the growth.

With the start of the new fiscal year, the country's current account deficit (excluding official transfers) has witnessed a worrisome increase of $551 million or 134 percent to $961 million against $410 million of July 2005, the State Bank of Pakistan (SBP) reported.

According to independent economic experts, this external disequilibrium in the shape of current account deficit may have a significant impact on the value of the rupee. Besides, it may translate into a large increase in Pakistan's net foreign debt position. A large and growing public debt could also eventually put upward pressure on interest rates and crowd out private investment, they opine.

The government's economic managers, on the other hand, are of the view that Pakistan is enjoying an economic boom and the current account was manageable by borrowing from abroad, remittances, drawing down reserves and inflow of investment.

The country witnessed this current account imbalance, as trade deficit (in goods and services) jumped to $1.537 billion during July 2006 from just $827 million in July 2005. The trade deficit figures were arrived at using the freight-on-board value of imports and exports.

The central bank data shows that goods import stood at $2.395 billion whereas exports totalled $1.36 billion, thus leaving a trade imbalance of $1.035 billion. The services account also witnessed a large imbalance of $502 million during July 2006, as inflows under this account stood at $200 million, whereas outflows totalled $702 million. Thus, on balance, total trade deficit stood at $1.537 billion.

The factors responsible for this huge deficit include higher outflows on account of transportation, travel, insurance, construction services, royalties and licence fees.

Pakistan had to spend $265 million on transportation account whereas its earning under this head was only $92 million. Thus, the net deficit in the service account due to chartering of vessels for imports, export shipment was $173 million.

Another factor responsible for big services' account deficit was a net outflow of $80 million on account of overseas travelling. Pakistan had to spend $99 million to finance personal and business-related travelling abroad of individuals and groups whereas it earned only $19 million under this account.

Hence, the services account deficit in July 2006. The same applies to spending on insurance and royalties and licence fees paid to international organisations and their employees operating in Pakistan.

The imbalances in trade and services were so large in July 2006 that the current account turned negative despite a strong build-up in current transfers. Net current transfers rose to $778 million during the month from $606 million in July 2005. Current transfers went up as Pakistan received $377 million in workers' remittances or foreign exchange sent back home by overseas Pakistanis during this month, up from $313 million in a year ago period.

A big increase in foreign currency deposits, held by the resident deposit holders, also boosted current transfers. However, it declined to $19 million against $54 million in corresponding month primarily because of the stable rupee.

 

[Owais]

Musharraf seeks greater EU market access: out-of-box Kashmir solution stressed

BRUSSELS (September 13 2006): President General Pervez Musharraf on Tuesday urged the world to do more to rebuild Afghanistan and later after meeting European Commission president Jose Manuel Barroso called on the European Union to grant greater market access for Pakistani products.

"With trade our industry expands and creates jobs and when it creates jobs it strikes at the root of poverty and also strikes at the root of extremism and terrorism," he said. Barroso praised Pakistan for helping foil the British airline bomb plot in August and said the two sides had agreed to step up ties, although he gave no figure for the enhanced aid.

"The European Union greatly appreciates Pakistan's role in acting against terrorist networks," Barroso said. The EU president also said Musharraf had given "encouraging signals" regarding a readmission agreement the Commission has been seeking for illegal migrants. President Musharraf warned the West that Taliban insurgents were a more dangerous terrorist force than al Qaeda because of the broad support they have in Afghanistan.

The President defended his commitment to counter-terrorism. He told EU lawmakers Taliban fighters had regrouped in southern Afghanistan. "The centre of gravity of terrorism has shifted from al Qaeda to the Taliban," he said. "This is a new element, a more dangerous element, because it (the Taliban) has its roots in the people. Al Qaeda didn't have roots in the people." He said he was certain Taliban fighters were being commanded by former Taliban ruler Mullah Omar from a base in southern Afghanistan, where Nato troops are struggling to contain an insurgency. He rejected criticism that Pakistan was not doing enough to prevent the Taliban from mounting attacks on Nato troops by infiltrating its porous borders with Afghanistan.

"No one should blame us or doubt us for not doing enough," he said, adding that Pakistan had deployed 80,000 troops on its side of the border to tackle militants.

OUT-OF-BOX SOLUTION OF KASHMIR President Musharraf has said "we have to remain engaged for an 'out-of-box solution' of the Kashmir dispute for lasting peace in the region". Addressing the opening session of global discourse on Kashmir at the European Parliament here, he reminded the audience that he had offered 'food for thought' to break the deadlock in 2001, which included 'demilitarisation', 'self-governance' and 'joint management', but the Indian response "is still awaited".

At the same time, he said, he stood by the firm resolve that Pakistan would not move away from its principled stand unless India also moved from its stand. President Musharraf said Kashmir "runs in the blood of every Pakistani" and Pakistan wants peace and stability on the basis of "sovereign equality, honour and dignity".

He said the confidence-building measures (CBMs) were important, "but we need to address the malaise and not only the symptoms". He said the "fleeting opportunity must be seized" to resolve the decades-old dispute by showing "sincerity, flexibility, courage and boldness" on the part of the leadership of the two countries. He emphasised that such issues could not be put in the cold storage.

TALKS WITH BELGIUM PRIME MINISTER President Musharraf and Prime Minister of Belgium Guy Verhofstadt on Tuesday held talks on boosting economic ties between the two countries as the Pakistani leader called for the European Union (EU) to play a major role in resolving the crisis in the Middle East.

The meeting, on the second day of President Musharraf's four-day visit to Belgium, covered bilateral issues and regional and international matters of mutual concern. The two leaders discussed ways and means to further strengthen ties between Pakistan and Belgium, particularly in trade and economic fields.

The recent crisis in Lebanon and the situation in Afghanistan were the focus of discussion between the two leaders as they agreed on the need of resolving problems in the Middle East as soon as possible.

Talking to reporters after the meeting, the Belgian Prime Minister said President Musharraf urged the European Union to play a bigger role in finding solutions to the Middle East crisis. The two leaders also exchanged views on regional issues, including the situation in Afghanistan and how the country could have peace and stability.

Responding to a question on the recent peace agreement the government has signed in North Waziristan, he said military force can only buy time and it does not produce an ultimate solution. He said while the government was committed to fight terrorism militarily, extremism is a state of mind and a different strategy is needed to deal with it.

ADDRESS TO PAKISTANI COMMUNITY Speaking to the Pakistani community here on the first day of a four-day visit to Belgium, President Pervez Musharraf said that he looked forward to enhancing relations between Pakistan and Belgium, and urged the Pakistani community to promote Pakistan's image and work for well-being of their adopted country.

The President said it had warm relations with Pakistan. Both the countries had common understanding on international and regional issues and were also trying to enhance this co-operation in the economic sector, he added.

 

[Owais]

Minfal told to enhance agriculture exports to $10 billion by 2013


ISLAMABAD (September 13 2006): Prime Minister Shaukat Aziz has directed the Ministry of Food, Agriculture and Livestock (Minfal) to enhance its agri exports target to $10 billion by 2013, instead of $6.5 billion. He further directed the ministry to focus on four major areas, which have a meagre contribution to the national kitty, sources in the Ministry said on Tuesday.

The Prime Minister gave these directions over a briefing by Minfal on 'Export potential: High growth scenario' by Secretary, Minfal, in which the Ministry proposed an estimated export target of $5.25 to 6.5 billion, to be met by 2013.

To achieve the export target of $10 billion, the Prime Minister directed the Ministry to formulate a comprehensive strategy and plan of action for making the target viable in the stipulated time.

The sectors include horticulture, livestock, fisheries and primary commodities. Besides rice, which had a contribution of $0.964 billion in exports last year, the remaining agri sector had a dismal performance despite there being a huge export potential.

The Ministry had prepared a two-phase estimated export targets, ranging from $3.2 to $4 billion by 2010, and $5.25 to $6.5 billion by 2013, against current exports of $2.29 billion. The export potential of livestock was estimated at $1 to 1.2 billion by 2010, and at $1.5 to $2 billion in 2013, against the current exports of $0.868 billion.

Fisheries exports of $0.5 to $0.7 billion have been estimated by 2010, and $1 to $1.2 billion by 2013, against the current figure of $0.2 billion. Horticulture exports of $0.3 to $0.4 billion are targeted by 2010, and $0.6 to 0.8 billion by 2013, against the current level of $0.13 billion.

And, the exports of primary commodities, including rice and wheat, are projected $1.2 to $1.4 billion by 2010 and $1.6 to $2 billion by 2013, against current exports of $0.964 billion and $0.1 to $0.15 billion by 2010, and $0.25 to 0.3 billion by 2013 against current nil exports.

The Prime Minister assured the Ministry all assistance to meet its needs, sources said. The Prime Minister also constituted task forces for these sectors, for originally producing surplus in the agri sectors, and later making the export targets achievable.

The task forces would not only chalk out strategy for producing agri surplus but also making compliance to the value-added products at par with international sanitary and phytosanitary rules.

The target would be within reach if the constraints and bottlenecks in exports of value-added agriculture products were redressed, said an official, but the worrisome task is first to make the country agri exportable.

Last year, agriculture sector showed negative growth and the economic survey said that lower than expected growth was mainly because of poor performance of the agriculture sector, which contributed only 2.5 percent to the GDP.

The agri managers in the ministry are again anticipating low growth in the sector, as one of the major cash crops is expected to contribute below target mainly because of increased pest and cotton leave curl virus (CLCV) attacks and floods and monsoon rains damage.

The major exportables of the agri sector include primary commodities, cotton manufactures and other items. The primary commodities are rice, fish, fruits, vegetables, wheat flour, spices, oilseeds, nuts, kernels, leguminous vegetables, raw hides and skins, raw wool, animal hair, crude animal material, molasses, raw cotton, cotton waste and tobacco.

 

[Owais]

Gwadar economic and energy zone: Pak-China joint venture consortium to be formed


ISLAMABAD (September 13 2006): Pakistan and China will set up a joint venture consortium to finalise the preferential policy and tax incentives package for the establishment of 'Gwadar Economic and Energy Zone' comprising an oil refinery, LNG terminals and petrochemical industry.

Sources said on Tuesday that the Central Board of Revenue (CBR) is examining a proposal of Economic Affairs Division for possible exemption of duties and taxes for the 'Zone'. They said that Pakistan and China would ink a Memorandum of Understanding (MoU) for establishment of the zone, which would allow setting up a joint venture consortium for designing, developing, constructing and managing the Zone.

Under the proposed MoU, both governments would establish a 'working group' to identify appropriate sites and work out the incentives package to facilitate the setting up of the joint venture consortium, sources added. The two countries would jointly conduct technical and financial studies on setting up of an oil refinery, LNG terminal and petrochemical industry to be located in the Zone.

Sources said that Pakistan government would provide land and an incentives package to ensure that the enterprises based in the Zone are commercially viable. The Pakistan government would also ensure safety and security of Chinese experts working on these projects. In this connection, Pakistan's Ambassador in Beijing has conveyed to the government to work out the concessions for the Zone, sources added.

The governments of Pakistan and China had signed a declaration on bilateral trade development as well as a Treaty of Friendship Co-operation and Goods-neighbourly Relations in April 2005.

Both countries are determined to promote mutually beneficial co-operation in the field of energy in accordance with the framework agreement on energy co-operation signed in Beijing in February 2006. Pakistan and China recognise the importance of establishing an Economic Energy Zone by setting up storage sites, oil refinery and LNG terminals as well as related petrochemical industry at Gwadar.

 

[Owais]

ISLAMABAD (September 12 2006): Prime Minister Shaukat Aziz on Monday said the investment regime of the government coupled with incentives and the level playing field provided to investors have reduced the cost of doing business in Pakistan.

The openness of government policies and transparency in transactions is attracting higher investments and Pakistan is geared to become a regional hub for trade and manufacturing, he added.

He was talking to Canadian Pakistan Business Council (CPBC) President Anwar Merchant, who called on him here at the Prime Minister's House. The prime minister said that macro-economic stability, continuity and consistency of policies have restored the confidence of investors, and helped the business to flourish. These polices have made Pakistan an investment-friendly place and the record ($3.8 billion) foreign direct investment (FDI) in the last financial year is reflective of the success of government's policies, he added.

Shaukat Aziz identified construction, agri business, infrastructure, energy, mining and IT and telecom as areas with vast opportunities for the investors. Giving an overview of the economic recovery achieved by the country, the prime minister said the broad-based and multifaceted reform agenda undertaken by the government has changed the entire economic landscape of the country.

He said the size of the economy has almost doubled during the last seven years, and Pakistan's economy has grown at an average rate of almost 7 percent per annum during the last four years, and over 7.5 percent in the last three years, thus positioning itself as the second fastest growing economy of the Asian region.

The prime minister said Pakistan was able to achieve 6.6 percent growth during the last financial year despite the losses caused by earthquake and surging oil prices at the international market.

"Pakistan's economy has proved itself remarkably resilient in the face of shocks of extra-ordinary proportions", he added. Shaukat Aziz said the per capita income, which is considered one of the main indicators of development, grew by an average rate of 13.9 percent per annum during the last four years rising from $562 in 2003 to $647 in 2006, adding that 12.6 million people were brought out of poverty net during 2002-05.

He said the economic philosophy of the government is based on the broad principles of privatisation, deregulation and liberalisation and transparency is the hallmark of the government's transactions. Anwar Merchant, the head of the delegation, appreciated the Pakistan government for streamlining the investment policies and procedures.

He said Pakistan is a great place for investment as it offers tremendous opportunities and a conducive environment for the private sector. Anwar Merchant said Canadian companies are keen to invest in Pakistan particularly in infrastructure and power sector. Among others, Privatisation and Investment Minister Zahid Hamid, Minister of State for Privatisation and Investment Umar Ahmad Ghumman, Canadian High Commissioner David Collins, and senior officials attended the meeting.

Duplicte post neo. you have already posted that in post # 2215 and in 2218

 

[Neo]

BRUSSELS (updated on: September 13, 2006, 19:06 PST): President General Pervez Musharraf on Wednesday assured foreign investors to fully meet energy requirements of their industries in Pakistan on sustained basis and invited Belgian investors to benefit from the country's liberal economic policies, skilled manpower, improved law and order and cheap labour, making it an ideal investment destination.

"We will guarantee gas, electricity to any investor in Pakistan," he said while responding to a question at a breakfast meeting with leading Belgian companies on the third day of his visit to Brussels.

The president shared with the business leaders ground realities in Pakistan and said their investment in Pakistan was fully protected.

"I believe Pakistan is the most misperceived country and suffers from poor perception, realities are different," he said while projecting Pakistan as a destination for profitable business ventures.

On the growing energy needs, President Musharraf referred to the phenomenal growth in economy that led to a sharp rise in demand and subsequently to a supply-demand gap.

But, he assured that government has strategized the country's energy requirements and exploring all opportunities to meet the demand. "We are looking at all resources of power generation from export of energy to local production through alternative resources," he added.

In this respect, he said Pakistan was holding talks with Iran for importing gas and was even looking at buying electricity from Kyrgyzstan.

President Musharraf also cleared any misperception about Pakistan, inviting the businessmen to come to Pakistan and see for themselves the ground realties. "Don't believe me, come and see for yourself."

He said there were 700 foreign companies operating in Pakistan for the last 40 years and they never had any problem. Nestle was setting up its biggest plant in a remote Kabirwala town that bespeaks of their confidence in Pakistan's economy.

"It was true that my perception about Pakistan was quite different because of media coverage, unfortunately but now we have much clear view of what is going on in Pakistan," said Omer Baturalp of Puratos company dealing with food business.

"I foresee a sharp increase in trade and business relations between Pakistan and Belgium and the president's speech was very reassuring that it will certainly happen," said another businessmen Dirk Van Steerteghem of Flanders Investment and Trade.

President Musharraf gave a glimpse of how Pakistan's economy was performing, especially in the last four years during which it recorded 7 per cent growth on average.

He said the GDP has doubled in four years and the debt to GDP ratio has been brought down from 101 per cent to 55 per cent, which was even lower from the benchmark of 60 per cent set by the European Union for their trade.

The president said the country's foreign exchange reserves that could just meet two weeks imports in 1999 and have now risen remarkably and were now enough to meeting imports requirement of 8 months.

 

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BANGKOK (updated on: September 13, 2006, 21:03 PST): Federal Minister for Industries, Production and Special Initiatives Jehangir Khan Tareen said on Wednesday that government is focusing on the development of gems and jewellery sector and plans to enhance its exports form $23 million to $500 million through skill development, market access and tapping its rich potentials in the country.

He stated this while talking to newsmen after inaugurating the Pakistani pavilion here at "38th Bangkok Gems and Jewellery International Fair: 2006".

Earlier, Thai Minister for Commerce Somkid Jatusripitak formally inaugurated the international fair. Pakistan has established 22 stalls in the Gems and Jewellery Exhibition for the second time.

The federal minister said that Pakistan would continue to participate in the exhibition in the future as well and expressed the hope that this year exhibition Pakistan would earn up to $10 million.

Tareen said that government of Pakistan and the Ministry of Industry has adopted a strategy for the development of gems and Jewellery sector and has established Pakistan Gems and Jewellery Development Company (PGJDC) with public private partnership to achieve this objective.

He said that to market Pakistani gems and jewellery products, Pakistan plans to participate in US and Hong Kong Gems and Jewellery fairs and to enhance the sectors' exports of the country.

The minister also mentioned about "Ahan initiative" to promote local gems and jewellery sector for the benefit of the country and its people.

He highlighted the economic achievement of the government and added that the economic policies initiated by the government would continue for the betterment of the masses and prosperity of the country.

Pakistan, he said has enormous potentials for development and reiterated the commitment of the government to promote this sector for the benefit of the country.

The minister appreciated the quality and standard of Pakistani products and assured the exhibitors of the government's all out efforts support for the development of this sector.