Pakistan Economy - News & Updates - Archive

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ISLAMABAD (April 26 2006): The Cabinet has allowed the Commerce Ministry to start negotiations with Russia to explore the possibility of a Free Trade Agreement (FTA)/Preferential Trade Agreement (PTA), which the officials believe would help Pakistan's textile sector to enter Moscow's market, sources told Business Recorder.

They said that Pakistan had extended complete support to Russia to be part of the World Trade Organisation (WTO) on the condition that Moscow would sign FTA with Islamabad.

"Both countries had agreed in those negotiations that all possible steps will be taken to finalise the agreement as early as possible," sources said.

They said that Commerce Ministry had submitted a summary to the Cabinet, seeking permission to start negotiations, after receiving confirmation from Moscow that they were willing to start negotiations at any date suitable to both countries.

Pakistan's exports to Russia were only $43.857 million during 2004-05 against imports of $279.213 million.

"Our exports to Russia will certainly increase as a result of tariff preferences, especially in the textile sector," sources said. Russia's trade team visited Islamabad in February last year to seek support for accession to WTO.

"After carefully evaluating the impact of Russian accession to WTO on Pakistan's exports, we sought market access for leather, surgical instruments, sports goods and textile," sources added.

Russia has already agreed to return $108 million to Pakistan's exporters who had exported articles to USSR before its disintegration. Sources said that Pakistan was also making endeavours to sign bilateral protocol with Azerbaijan on goods and services against support to it in accession to WTO, besides similar pacts.

"We ink agreement on goods and services only with brother countries and some of them have already expressed their willingness," sources quoted Elmar Mammadov, Azarbaijan's Third Secretary on WTO affairs, saying in a letter to Pakistan's mission in Geneva.

 

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LONDON (April 26 2006): Minister for State for Overseas Pakistanis Senator Tariq Azeem has said a few tribal chieftains are the biggest hurdle in the way of development in the Balochistan and did nothing during their stint in power.

Addressing the expatriates at Pakistan High Commission here late on Monday, Azeem said the development funds were funnelled in the past through these tribal heads, but now the government had decided to give funds direct to the people to bring development across the province.

Referring to the situation in the province, he said of the 29 districts of the province, the conditions were normal while a few tribal heads were causing trouble only in Bugti and Kohlu districts. He said sons of these chieftains were studying at British universities, while they did not allow even to open schools in their areas just to keep their people backward.

He said 73,000 employees of Pakistan Petroleum Limited (PPL) had to be hired through Nawab Akbar Bugti which gave an inkling of the control of the tribal heads.

To a question on Kashmir, Tariq Azeem said Pakistan was striving to seek solution of the issue, which was acceptable to the people of occupied Kashmir.

He told the questioner that both President General Pervez Musharraf and Prime Minister Shaukat Aziz had raised the Kashmir issue at the United Nations, Organisation of Islamic Conference (OIC), Davos or name any forum which greatly helped bring the focus onto the issue.

Pakistan wanted peace with all its neighbours, including India, hence it was holding talks with New Delhi to find a peaceful and just solution of the Kashmir issue, said the minister.

To a question on measures taken for the welfare of the overseas Pakistanis, Azeem said he had taken many initiatives in this regard. For example, separate counters for overseas Pakistanis were being established at all the international airports of the country to give relevant information to expatriates and treat them in a decent manner. He said 19 officials had been recruited to run these counters while half of them were female to provide help to women expatriates who visited Pakistan.

Tariq said a separate wing in the ministry had been established to provide assistance to overseas Pakistani investors. Besides, Overseas Pakistani Foundation (OPF) had also started a free legal aid to help expatriates.

The minister was all praise for the contribution of the expatriates in supporting the relief, rehabilitation and reconstruction efforts of the quake-affected areas. He thanked them and appealed them to continue endeavours to back the rehabilitation drive of the government.

British MP Khalid Mehmood and Pakistan's envoy to London Dr Maleeha Lodhi were present on the occasion.

 

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ISLAMABAD (April 26 2006): The Swiss Agency for Development and Co-operation (SDC) has provided Rs 400 million to 11 micro-finance partner organisations for poverty alleviation through its Financial Sector Strengthening Programme (FSSP).

While speaking at the contract singing ceremony for technical assistance, deputy country director Richard Kohli said the SDC is co-ordinating for the developmental and humanitarian activities in Pakistan.

He said besides FSSP, SDC assists the State Bank of Pakistan in building specific micro-finance-related staff capacities and provides technical assistance for setting up onsite examination and offsite surveillance systems for micro-finance banks.

The SDC is also partnering with the Leasing Association of Pakistan (LAP) and four private leasing companies to facilitate their downscaling from big-ticket leasing to micro-leasing, he added.

He said the SDC considers micro-finance a powerful tool for poverty alleviation, provided financial services for the poor are integrated in financially self-sufficient and socially sensitive financial systems. FSSP director Khalid Nawaz presented highlights of the project, its objectives, scope and overall performance.

Microfinance partner organisation are: Swabi Women Welfare Society (SWWS), Organisation for Participatory Development (OPD), Sarhad Rural Support Programme (SRSP), ASASAH in Punjab, Sindh Agricultural and Forestry Workers Co-operation (SAFWCO), First Microfinance Bank Limited (FMFB), Thardeep Rural Development Programme (TRDP), Pakistan Microfinance Network, Sindh Microfinance Network, Sarhad Microfinance Network and Centre of Excellence in Microfinance, Peshawar.

 

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ISLAMABAD (April 26 2006): The petroleum ministry has offered 19 onshore and offshore oil exploration blocks to the visiting Chinese by entering into joint venture with Oil and Gas Development Corporation (OGDC) and Pakistan Petroleum Limited (PPL).

They have also been offered 15 more bocks but through open bidding.

On the opening day of three-day Pak-China Energy Forum, the delegation was informed that Chinese oil companies could invest in oil and gas exploration by working with OGDC and PPL in various offshore and onshore blocks, official sources told Business Recorder on Tuesday.

Out of 34 blocks, Chinese companies were offered to acquire 15 blocks through an open bidding while the rest through joint ventures with OGDC and PPL, sources added.

In a presentation, they were informed Chinese oil companies could enter into joint venture with ODGC for 14 blocks, of which 11 blocks would be onshore, and three offshore, they added.

While in the remaining five blocks, they have to work with the PPL of which four blocks would be onshore and one offshore, sources said. Sources further said the remaining 15 blocks would be offered through open bidding.

 

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26 April 2006

ISLAMABAD — Pakistan government has agreed, in principle, to allow one per cent increase in the interest rates of all the ongoing national saving schemes to make them competitive in the market.

Informed sources said the Central Directorate of National Savings (CDNS) has formally submitted its proposal to the ministry of finance to augment this one per cent increase in line with the improved rates of Karachi Interbank Offered Rate (KIBOR), Treasury Bills (T-Bills), Pakistan Investment Bonds (PIBs) and some other secondary market rates.

The new saving rates were to be announced on January 1 this year but were delayed due to unknown reasons. The CDNS, to be officially converted into "Pakistan Savings," is supposed to bi-annually review its interest rates policy.

Sources said that CDNS needed to function on par with market forces and would face investment problems if it did not offer increased interest rates to its investors.

"The issue is being linked with the market position that demands that CDNS should offer gradual increase on its saving rates," a source said, adding that one per cent proposed increase would help improve the country's poor savings rate.

Currently, various national savings offer 8-9 per cent interest rate which many government officials believe was less and needed to be revised upward to promote investment in the country.

Meanwhile, Prime Minister Shaukat Aziz has approved the conversion of CDNS into a "Corporation" which will now work under a proposed 8-member autonomous board. The federal cabinet is expected to formally approve the new Corporation shortly.

The head of the new Corporation will be called as chief executive instead of the director-general. The chief executive of the new Corporation would also be one of the members of the policy board.

The secretary finance will also be the member and

the chairman of the board. Others members will include the economic advisor to the minister of finance, the additional secretary budget, ministry of finance and four other members to be taken from the private sector.

However, the cabinet division, sources said, has authorised the government to change the composition of the members of the policy board as and when required.

Pakistan Savings will have its own salary structure based on free market mechanism and the authority to expand the organisation with a view to substantially increase and diversify the saving products of the new organisation.

Sources said that CDNS, whose portfolio has increased from Rs80 billion to over Rs1 trillion along with 4 million plus clients, will enjoy the considerable financial autonomy after becoming Pakistan Savings.

The government had restored last month the agency functions of all the authorised banks to sell savings certificates of the Pakistan Savings.

The CDNS, which is currently fulfilling the requirement of deposit banking functions, is expected to offer good salary packages to the employees after it becomes Pakistan Savings.

The government, sources said, has also in principle, agreed that the new Corporation could go into the Mutual Fund business to be managed by professional assets management companies having a private sector management. This mutual fund will be a subsidiary of Pakistan Savings for which the government will initially provide the equity.

The proposed Pakistan Savings will diversify its business and play an important role in resource mobilisation and increasing the availability of domestic resources for investment.

The new organisation will also allow to introduce new products like offering funding for education, housing and marriage.

The ongoing pensioners and welfare schemes of the organisation are also likely to be further improved once the CDNS is converted into an Pakistan Savings.

The sources said that about 25 per cent of the total portfolio of the CDNS belonging to institutional investment including banks, has been rapid due to which there was some drop in the net portfolio. The government is considering to allow the proposed Pakistan Savings to also work like other Financial Development Institutions (DFIs). "A number of multi-dimensional targets and goals are currently being finalised," a source said.

 

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ISLAMABAD, April 25: Jordan’s Shaheen Business and Investment Group has expressed its interest to set up 800-mw thermal power plant in Pakistan on fast track basis and reaffirmed their commitment to invest in various other sectors.

These views were expressed by ex-deputy prime minister and head of the four-member delegation of Jordan Dr Jawad Ananai during a meeting with Federal Minister for Water and Power Liaquat Ali Jatoi here on Tuesday.

Dr Anani said that the group had planned to complete the project by June 2008. He said that due to good economic policies of the government of Pakistan the group was also interested in other energy sector projects and needed full cooperation in this regard.

Liaquat Ali Jatoi while welcoming the delegation said that the economy of Pakistan had made significant progress over the last few years. “Pakistan is witnessing massive upsurge in economic activity, not seen before in many decades.”

The confidence of the domestic as well foreign investors was gaining new heights on the back of a stable macroeconomic environment, the minister said.

“The economy is now more stable, economic policies are transparent and predictable, confidence of the private sector is restored to a larger extent; expatriate Pakistanis are bringing their capital back; stock market is buoyant and Pakistan’s credit rating in international capital markets has significantly improved,” he explained.

He also stated that private power producers were getting high returns on their investment and Pakistan was a safe and secure place for investment coupled with a number of incentive and streamlined procedures.

He also assured that Ministry of Water and Power and the PPIB would provide all the assistance and their proposal would be processed on top priority basis.

Dr Ananai also thanked the minister for extending full cooperation regarding their proposal for setting up of power project in Pakistan.

 

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By Ahmed Hassan

ISLAMABAD April 25: Prime Minister Shaukat Aziz has said that there will be no U-turn in the economic policies, which have earned the country record foreign direct investment (FDI) of $2.2 billion in last nine months of the current fiscal.

Talking to a delegation of Pak-US Business Council, led by Citigroup CEO Jay Collins, which called on him at Prime Minister House on Tuesday, the premier said that the government was working to increase the absorptive capacity to prepare the country to gain from opportunities offered by globalisation.

He said consistency in policies had created a predictable environment for investors and record high FDI was a manifestation of restored confidence of foreign investors.

He claimed that the economic recovery achieved by the country was one of deepest and broad based reforms ever undertaken which had steered Pakistan out of economic wilderness.

The per capita income stands at $800, double to what it was six years back, he maintained.

He emphasised the need to further expand Pak-US business relations and expressed the desire of an early finalisation of Bilateral Investment Treaty (BIT) with the United States and the council could play an important role.

He said that the government was paying special attention to improve infrastructure and had most modern telephone systems in the world with 95 per cent fibre optic.

 

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Wednesday April 26, 2006

ISLAMABAD: Uzbekistan Deputy Minister for Foreign Affairs Mr. Mustafa Aey Sao Faihbaev heading a six-member delegation met Secretary Ministry of Food, Agriculture and Livestock (MINFAL) Mr. Ismail Qureshi to discuss issues of mutual interest and cooperation.
Deputy Minister said Uzbekistan wanted to enhance trade with Pakistan in energy resource development, promotion of quality cotton production and improvement in plant quarantine.

The secretary MINFAL said Pakistan was desirous in seeking Uzbekistan cooperation in the fields of Agriculture Policy Studies, Agriculture and livestock production and marketing, and the exchange of Agriculture expert delegation.

The secretary further said that two separate MOU on Agriculture Policy Studies, Agriculture and Livestock production and marketing, and Impact Evaluation and Research in Agriculture Extension Approaches/Technology transfer would be signed during the visit of Uzbekistan President to Pakistan.

During the meeting Additional Secretary MINFAL, Muhammad Saleem Jhagra and other high officials of the ministry were also present in the meeting.

 

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Wednesday April 26, 2006

ISLAMABAD: The government will invite bids by international investors to establish a $1.3 billion oil refinery in its southwest province of Balochistan after Iran’s refusal to carry out the project.
About 2,000 acres of land was acquired at Khalifa Point in Balochistan’s coastal area of Hub for the Pakistan-Iran venture but in 2002 Tehran had refused to help in establishing the refinery, saying it would have no rate of return.

According to official sources, the petroleum ministry has now indicated that the land acquired by the Petroleum and Petrochemical Corporation (Perac) at Khalifa Point in Balochistan for the refinery is available.

The petroleum ministry plans to seek proposals from investors through international competitive bidding to set up a state-of-the-art deep-conversion refinery at Khalifa Point on a ’Build-Own-Operate’ basis, sources said. On May 16, 1991, Pakistan and Iran had signed an agreement to initiate the project, with a capacity to refine 120,000 barrels crude oil per day, but later Tehran backtracked.

Pakistan’s current demand of petroleum products is about 16 million metric tonnes per annum, 82 per cent of which is met through imports (crude and finished products) and the rest through indigenous resources.

The country’s total refining capacity at present is about 12.8 million tonnes. Energy demand and supply projections indicate that by 2011-12, the total deficit of petroleum products in the country would be over nine million and 11 million tonnes, respectively.

 

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Thursday April 27, 2006

ISLAMABAD: A delegation of US businessmen currently visiting Pakistan has termed the business environment in Pakistan friendly and conducive for the foreign investors.
They expressed these views in a meeting with Jahanghir Bashar, Secretary Board of Investment on Wednesday.

Welcoming the delegation, Secretary BOI pointed out that due to the liberalized policies and the economic reforms introduced by the government, foreign investors find Pakistan a safe place to invest in.

He said that more than 600 foreign companies are operating in Pakistan reaping high interests.

He said that Pakistan has received an unprecedented FDI of over 2 billion with 3 months still to go. All the economic indicators have shown an upward trend, which add to the investors confidence.

Jay Collins appreciating the steps taken by the Government of Pakistan for the economic turn around said that YS is the biggest investor in Pakistan and more investment are keen to invest here.

He said that US-Pakistan Business Council was established with the aim to advance the investment opportunities trade and commerce and to develop the business relationship between the two countries.

They have come to Pakistan with the view to bring the private sectors of the two countries closer to create a conducive environment and also to give a positive signal to rest of the world that Pakistan is a safe place to invest in, he added.

 

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Thursday April 27, 2006

ISLAMABAD: Chairman, Central Board of Revenue, Mr M Abdullah Yusuf has directed the sales tax collectors to conduct a sectoral study in the areas of their respective collectorates to identify the sectors which have the potential to pay more taxes.
He was addressing the Quarterly Conference of Collectors of Sales Tax & Federal Excise held here on Wednesday held under the auspices of CBR.

Mr. Yusuf said that our major thrust should be on the expansion of the tax base in order to generate more revenue. This can only happen through concerted efforts by improving the tax collection system and bringing all the potential taxpayers into the tax net, he added.

He said, the revenue so generated would be utilized by the government for the development of the country and improving the lot of the common man.

Expressing satisfaction over the achievement of the targets of sales tax and federal excise collections set for first three quarters of the current financial year, the Chairman hoped that this trend will continue in all the federal taxes in the last quarter as well.

He said, overall revenue collection in first nine months stood at Rs. 490 billion and hoped that the annual collection will be around Rs. 708 billion against the target of Rs. 690 billion.

Stressing upon the improvement and upgradation of the sales tax system of processing and refunds, Mr. Yusuf said that we have to deal with all relevant issues in a professional manner.

He called upon the concerned officials to immediately plug all the weaknesses of STARR and STREAM systems to address the concerns of the taxpayers. He asked the officials to ensure that new automated system does not allow manipulated tactics to stay which were used in the past. " The new system must ensure equity, transparency and efficiency", he added.

The Chairman told the Conference that 12 new RTOs in 12 major cities of the country and a Large Taxpayers Unit (LTU) in Islamabad will be rolled out in the next financial year. He hoped that these offices would make a difference in terms of efficiency and transparency and towards facilitation of the taxpayers.

While reviewing the goals/targets set for sales tax registration, the Chairman advised that all problems in this regard be dealt on priority basis to achieve the desired result.

On payment of refunds issue, Mr. Abdullah Yusuf directed the collectors to keep a strict vigilance over the claimants of refunds on fake and bogus invoices . The conference considered, in detail, a number of proposals for the formulation of next federal budget. The proposals will be finalized in consultation with all the stakeholders.

Earlier, Member (Sales Tax & Federal Excise), CBR, Mr. Shahid Ahmed informed the conference that as against Rs 165.379 bn sales tax collected in first nine of the last financial year, the collection of sales tax in the same period this year stood at Rs. 202.452 bn showing an increase of 22.4 %.

Similarly, the collection of excise duty has also shown an increase of 3.3% as compared to the last financial year.

The growth recorded in major revenue spinners in sales tax were POL products (10%) telecommunication (36%), sugar (6%) etc. and in federal excise were cigarettes (12%), cement (13%) POL products (-11.7%), beverages (28.4%) etc.

Later, Member (Tax Policy & Reforms) CBR, Kh. Tanvir Ahmed, briefed the participants over the progress made so far on the opening of 12 Regional Tax Offices and one LTU in the financial year 2006-07.

He told that four RTOs at Abbottabad, Peshawar, Rawalpindi and Hyderabad would become fully operational by December, this year.

All necessary administrative formalities are being completed in this regard, he added.

 

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Wednesday, April 26, 2006

ISLAMABAD: The Pakistan Railways has struck a deal with a Chinese company for the purchase of 300 wagons at 15% lower rates of FOB price of $39,447 and CFR price of $41,819 per wagon. According to an official announcement, delivery of wagons would be completed within six months by December 31, 2006. Of the 300 wagons, 150 have already been manufactured, 80 would be assembled in Pakistan and 70 would be manufactured in Pakistan under the deal. About 35 leading national and international companies participated in open bidding and companies from China, Iran, Egypt, Ukraine, Malaysia and the Czech Republic participated in the bidding. After a pre-bid conference, the Pakistan Railways opened 19 financial offers. Chinese company Beijing Research and Design Institute came up with the lowest bid at FOB price of $39,447 and CFR price of $41,819 per wagon. This price is 15% lower than an earlier agreement signed by the Pakistan Railways with other Chinese companies at $47.934 per wagon in 2003. The second lower rate ($44,000) was of the other Chinese company followed by $81,800 by Iran and $83,790 by Ukraine. The Pakistan Railways management had been praised for making a deal at 15% lower rates. staff report

 

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Wednesday, April 26, 2006

ISLAMABAD: Prime Minister Shaukat Aziz said on Tuesday that Pakistan sought Chinese cooperation to meet its target to generate 8,800 megawatts of electricity through nuclear power plants in the next two decades.

Addressing the inaugural ceremony of the three-day Pak-China Energy Forum, Aziz said that Pakistan was negotiating with China for cooperation in nuclear power.

The prime minister also said Pakistan would enhance its exploitation of hydropower to generate cheaper electricity. The two countries would also cooperate in power generation through coal and other energy alternatives, he added. He said the government of Pakistan wanted to develop coal reserves and accelerate indigenous oil and gas production including offshore drilling. “We are also working on various options to import gas from Iran, Turkmenistan and Qatar,” he added.

Around 150 Chinese delegates from the energy sector and 300 delegates from Pakistan are attending the forum, organised by the Ministry of Petroleum.

Aziz said Pakistan was located at the confluence of three vital regions providing the shortest access to the sea for the land locked countries of Central Asia, as well as Western China.

He said Pakistan was also fast emerging as the junction for multiple corridors between South Asia, Central Asia and Western Asia involving energy, trade, transportation and tourism. “For this purpose Pakistan is building a deep water port at Gwadar with the assistance of China. We are interested in developing Gwadar not only as a trans-shipment port but also as an energy port for reliable oil supplies to western China and Central Asia,” Aziz said.

He expressed confidence that the forum would steer the long-time allies towards greater cooperation in energy and reinforce their economic partnership.

Aziz said Pakistan intended to expand its economic cooperation with China particularly in manufacturing, information technology, telecommunications, real estate, petroleum, chemicals and infrastructure.

Hu Deping, Chinese minister and first vice chairman of the All China Federation of Industry and Commerce, said political relations between Pakistan and China had reached a new apex.

 

[Owais]

All dams will be built under Water Vision: Musharraf lays Diamer-Bhasha dam ground DIAMER (April 27 2006): President General Pervez Musharraf on Wednesday performed the ground-breaking of $6.5 billion Diamer-Bhasha dam, and declared that all dams, including Kalabagh will be built under the "2016 Water Vision" to meet the country's growing water and energy requirements.

"Water and energy are matters of life and death for us. We have to build all dams," he said at the ceremony to mark the start of construction work of the first dam in 30 years. "We have lagged far behind and have to work at a fast pace to catch up with the rest of the world", the President said.

The Diamer-Bhasha project is part of President Musharraf's "Water Vision" that also envisages construction of Kalabagh, Akori, Munda and Kuram Tangi dams by 2016.

Referring to the construction of dozens of dams in other countries every year, the President regretted that the past leadership lacked vision and interest to construct big water reservoirs for meeting future requirements.

The President assured that the government would remove apprehensions of NWFP and Sindh vis a vis water issues and said the country would move ahead with support of the nation.

"With the support of the nation, we shall move forward and achieve the goal of sustainable development," he said at the ceremony, attended by chief ministers of NWFP, Sindh and Balochistan. Punjab's Law minister represented the provincial government, as chief minister of the province is out of the country.

Information Minister Muhammad Ali Durrani, Railways Minister Sheikh Rashid Ahmed, Minister of Social Welfare, and some other members of the cabinet also attended the ceremony.

He said if there were any controversy on other dams, the work on Bhasha dam could have been started in 1990s and the dam would have been completed by now.

Emphasising the urgent need for constructing major reservoirs, President Musharraf said water and energy were needed for agricultural and industrial development and catching up with the world.

"We need water to develop our agriculture while cheap energy is needed for the industrial development," he added.

Musharraf, however, regretted the fact that Pakistan was producing a mere 6,000 MW electricity through hydropower against the available capacity of generating 40,000 MW.

He alluded to the setting up of 14 IPPs (Independent Power Producers) in 1994 which were selling Rs 7 per unit of electricity as against Re 1 per unit, generated through hydro-power.

"The entire nation is suffering from this," he said, and vowed to convert the destruction caused by expensive electricity into a success by constructing major water reservoirs. President Musharraf said soon after taking over, he gave top priority to the building of water reservoirs and initiated feasibility study of Bhasha dam in 2001.

"The work on Bhasha dam has now started and we will build all dams, we will build Kalabagh and Akori dams," he said, adding that all guarantees would be provided to NWFP and Sindh.

The President pointed out to the fact that 35 million acre feet (maf) of water is wasted every year that is equivalent to capacity of six Bhasha dams.

"This is despite the fact that the country is currently facing 9 maf of water shortage which will grow to 15-20 maf by 2020," he said. Similarly, the President said the country needed inexpensive electricity to meet the energy demand and sustain the current rate of economic and industrial growth.

"I will not let Pakistan commit suicide because of water and energy shortage," the President said.

Musharraf, in this regard, referred to the "2016 Water Vision" that gives a whole concept of meeting future demand by water conservation, saving wastage and building new water reservoirs.

He said the work is already underway on raising the capacity of Mangla dam that will help save 2.9 maf of additional water and help produce cheap electricity. The government is also giving Rs 21 billion in compensation for those being affected by the raising of Mangla dam.

Musharraf also announced an attractive compensation package for those who would be displaced by the construction of Diamer-Bhasha dam, saying the government will provide 15 percent more than the present value in case of land and 10 percent extra in the case of a house in compensation.

Besides, Rs 300,000 would be given in compensation for land that will be flooded by the dam water, he said, adding five-marla and one-Kanal residential plots will also be given to the would-be affectees to build their houses in at least nine model villages.

The President also announced to provide vocational training facilities and said the construction of Bhasha dam would create more job opportunities for them.

He said the construction of Bhasha lake will create new economic opportunities for the people of the area as it will promote fishing.

In view of the construction of Bhasha dam, the existing Karakoram Highway will be further broadened and, in turn, will help increase more trade with China and generating more employment opportunities.

The government has planned nine re-settlement colonies to provide accommodation to the affected population while a network of infrastructure, including electricity, roads, water supply, schools and health centers would be provided for the people of the area.

 

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RAWALPINDI: April 27, 2006:

President General Pervez Musharraf on Thursday encouraged adoption of modern methods and techniques in farming to increase agricultural yield which would help alleviate poverty, particularly in the rural areas.

Inaugurating first-ever Hydroponics Greenhouse in Pakistan near Rawat set up by 'Bioblitz - Farmers Market,' he said the new ideas and methods would bolster the economy through the development of the agriculture sector.

The Hydroponics, which means process of growing plants in water or sand rather than in soil, is a modern technique widely used in Holland and is becoming popular in other countries. The method results in an increased yield while using less water and space.

President Musharraf lauded the company and chief executive officer Safdar K. Akhtar for the pioneering effort in Pakistan and said the government would encourage and support modern ideas and methods to promote the agriculture sector.

Underscoring the importance of gradually shifting towards industry and engineering, the President said the government's emphasis remains on the agriculture as it remains the backbone of the country's economy for the near future.

And, he added that related to the development of agriculture was the issue of poverty alleviation.

"Nearly 70 per cent of the population lives in rural areas and they look at agriculture for sustenance," he said and underlined the need of increasing their earnings to alleviate poverty from the rural areas.

"That can be done only by increasing (agricultural) yield and giving them more jobs," he said, adding that more jobs could be created by developing agro-based industry.

He said the government was going for yield-intensification and area-intensification by bringing more land under cultivation.

In this respect, he referred to his "Water Vision 2016" that encompasses a complete concept of water conservation, management and building of major water reservoirs.

President Musharraf said the country had a great potential to boost agro-based industry as it had the best of fruits and vegetables in the world.

Similarly, he said that despite being the 5th largest milk producer, Pakistan was not producing enough dairy products even to meet its domestic requirements.

The Bioblitz has set up its first hydroponics greenhouse covering five acres of land and will grow as much tomatoes which, its CEO said, are normally grown on an area of 100 acres through traditional methods.

The President appreciated the hydroponics techniques but asked for expanding the concept to whole of Pakistan to benefit the people and create more job opportunities.

He added that there was a need to develop an entire chain of transport and storage for the produce to reach markets.

Minister of Food and Agriculture Sikandar Hayat Bosan said the government was giving high priority to developing the agricultural sector which was the main driving force behind the economy.

He said agriculture contributes 24 per cent of the GDP and employs 42 per cent of the total labour force and accounts for two-third of the country's total export earning.

The Minister stated that the country's agricultural growth posted 7.5 increase in 2004-05 and expressed the confidence to sustain 5 per cent growth every year.

Bosan, however said that there was not much importance given to horticulture in Pakistan.

He informed that the government, with the help of the Asian Development Bank (ADB), is working on a programme to harness full potential of horticulture in Pakistan.

The CEO Bioblitz, Akhtar said that he plans to expand the hydroponics greenhouse as Pakistan provided an ideal climate and land for such a modern technique to be used for increasing yield.

Earlier, the President unveiled the plaque to inaugurate the greenhouse and also took a round of the facility.