Pakistan Economy - News & Updates - Archive

[Janbaz]

14 banks earning surges by Rs 60 billion profit in 2006

JAVED MAHMOOD
KARACHI - Fourteen key listed commercial banks have announced their full year 2006 results which indicate an increase of 32 per cent in their earnings in 2006, amounting to Rs 60.10bn. This growth is slightly lower than expectations of 40% mainly due to lower than expected results of National Bank of Pakistan (NBP) and United Bank Limited (UBL). This has been disclosed in a report released by the JS Research Department on Thursday.
Amongst 22 listed banks in Pakistan, the JS Research selected 14 banks for analysis. As the remaining 7 relatively small & medium sized banks have yet to announce their results. While Bank Islami has not been included since 2006 was its first year of operations. The sample banks as on Sep 30, 2006, represent 69% and 67% of the total banking sectors deposits and assets versus all listed banks deposits & assets share of 75% and 72%, respectively.
BanksÆ earnings growth continued in 2006: In 2006, positive earnings growth of listed banks in Pakistan continued as their profitability went up by 32% to Rs60.1bn (US$990mn) versus Rs45.6bn (US$751mn) in 2005. This is the fifth consecutive year of positive profitability growth posted by the banking sector of Pakistan.
And was driven mainly by the rising net interest income of the banks which from Rs86bn (US$1.42bn) in 2005 rose by 33% to Rs115bn (US$1.89bn) in 2006. In contrast with 2002 to 2004 net interest income increase, where growth was mainly driven by the rising advances of the sector, in 2006 growth in net interest income came from the higher spreads between lending and deposits rates. As according to SBP data, banking sector average spread went up by 110bps to 7.4% while growth in advances was 18%.
or Rs365bn (US$6bn).
Non interest income of our sample banks, on the other hand, grew by 29% to Rs43.2bn (US$713mn). In which, although major contribution came from fee income (36% share in the total non interest income), its growth remained subdued as it grew by only 1% to Rs15.6bn (US$257mn). Dividend income, nevertheless, show growth of 60% driven mainly by the record payout by mutual funds & others corporates. Dividend income of the banking sector rose to Rs7.1bn (US$117mn) in 2006. While due to the dull stock market performance in 2006 capital gain income of the banking sector declined by 12% to Rs3.8bn (US$63mn) from Rs4.3bn (US$72mn) in 2005.

The Nation.
http://www.nation.com.pk/daily/mar-2007/2/bnews4.php

 

[Neo]

Portfolio investment jumps to $557 million

KARACHI (March 02 2007): Portfolio investment, as represented by Special Convertible Rupee Accounts (SCRAs), increased by about $14 million on 28th February to reach another record level of $557 million as on that date, according to the latest SBP update (1st March) on the subject.

Earlier on, it reached the year-highs at least on four occasions during February viz. $519 million on 12th, $523 million on 13th, $535 million on 15th and $543 million on 27th before jumping to $557 million on 28th February.

Between the highs of $535 million and $543 million, it dipped to $524 million on 16th and further to $515 million on 20th, $516 million on 21st before plummeting to $505 million and $509 million on 22nd and 23rd respectively.

The largest chunk of fresh investment of about $26 million poured during the last two days of February, $12 million on 27th and $14 million on 28th. On 27th February, over $5.5 million were invested by US investors followed by over $4 million by Hong Kong and $3 million by UK investors.

Switzerland, however, withdrew about $0.4 million on the same date. On 28th February, about $12 million came from UK, about $4 million from USA and over $2 million from Hong Kong. These positive flows were, however, neutralised to the extent of over $3 million by withdrawals of over $2 million by Singapore investors, about $1 million by Switzerland, $0.2 million by UAE and a small amount by Qatar.

Total fresh investments during the month of February are reported to be around $175.6 million shared by USA ($137 million), UK (over $71 million) and Hong Kong ($5.7 million) besides two small contributions originating from BV Island and Qatar. The overall positive impact of these fresh investments was partly offset by disinvestments amounting to about $38 million during the month including those by Swiss investors (about $17 million), Singapore (about $12 million), Australian (about $5.3 million) and UAE ($3.7 million) besides smaller withdrawals by Luxembourg and German investors.

All in all, by 28th February, the largest investor during FY07 so far was USA ($378 million) followed by UK ($100 million), Singapore ($99 million), Hong Kong ($23.6 million), Kuwait ($13.3 million) and relatively smaller amounts by Germany, Bahrain and Qatar. Withdrawals of $40.4 million by Switzerland, $7 million by UAE, $5 million by Australia, $2 million by France and smaller amounts by Luxembourg, Bahamas, Liberia, Guernsey, Saudi Arabia, BV Island, and Qatar during the year partly neutralised the impact of above mentioned positive flows.

On the stocks front, the widely used KSE 100 Index, which stood at a record high level of 11,864 on 8th February started losing ground thereafter reaching the lowest of 11,379 on 16th February and touching again the highest of 11, 608 on 23rd before dipping to 11,394 on 26th. 11, 376 on 27th and 11,180 on 28th February as concerns about possible slowdown in Chinese and US economies sent shock waves causing stocks in Asia and Europe tumble down. (Report by research.dept@aaj.tv)

http://www.brecorder.com/index.php?id=534023&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Power demand growing by 9.5 percent annually: Shaukat

ISLAMABAD (March 02 2007): Prime Minister Shaukat Aziz has said that demand in power sector is growing by 9.5 percent annually and the government is encouraging local and foreign private sector investments to keep a balance between demand and supply.

He was talking to President and Chief Executive Officer, TNB Liberty Power of Malaysia Dato' Sri Che Khalib Bin Mohammad Noh who called on him here on Thursday. Liberty Power Limited, a government of Malaysia owned company established a power plant in Pakistan in 1995.

The Prime Minister said that the surge in power demand is mainly due to better living standards, growing middle class, electrification of rural areas and increase in irrigation and industrial demand, all of which necessitates more electricity generation.

The Prime Minister said that in view of the high growth projections for the future in all sectors of economy, the energy requirements are expected to rise further and the government is making focused and concerted effort to increase capacity in the energy sector to maintain the momentum of growth.

He said the government is encouraging private sector participation in the power sector. To meet its future power needs through the private sector investors, the government announced a policy for power generation projects in 2002, which received encouraging response.

The Prime Minister said consistency and continuity of policies and transparency are the hallmarks of the government and we will continue to apply the policies with equity and justice. The government will continue to extend incentives to the potential investors in a non-discriminatory manner, the Prime Minister added.

The Prime Minister said that Malaysia has made significant contribution in the power sector of Pakistan and Liberty Power is an example of Pakistan-Malaysia co-operation in the power sector. He invited the delegation to participate in the upcoming power projects in Pakistan.

The delegation appreciated the efforts made by Pakistani leadership for promoting investments in Pakistan.

http://www.brecorder.com/index.php?id=534070&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

March 02, 2007
PM reviews progress on trade corridor

ISLAMABAD, March 1: Prime Minister Shaukat Aziz said on Thursday the National Trade Corridor (NTC) will require an investment of $1 billion per year over a period of next four to five years to link Pakistan’s major ports in the south with its major cities and trade routes to the north.

Chairing a meeting to review progress on building of the NTC, he said the ports, roads and railways along this corridor handle 95pc of external trade and 65 per cent of our total land freight.

“This is a major strategic initiative to improve the logistics chain throughout the country and to interlink it with all three adjoining regions of South Asia, Central Asia and West Asia,” he said.

An official announcement issued here said an efficient logistics chain comprising roads, railways, ports and airports is a critical element to reduce the cost of business, improve competitiveness and enhance productivity of goods in the country.

He pointed out that all stakeholders including Civil Aviation Authority, National Highway Authority and Pakistan Railways should constantly benchmark their performance against global standards as it will provide critical feedback to judge the quality of the improvement in the logistics chain. He also asked these organisations to improve their marketing strategies by hiring consultants from the private sector.

He said all out efforts were needed to ensure timely completion of all projects related to the NTC. He also emphasised the need to meticulously maintain and optimise the existing infrastructure while expanding the logistics chain in the country.Mr Aziz said to speed up the process of infrastructure development the government had adopted a public private partnership model whereby the government and the private sector could work together for implementation of projects requiring significant capital investments.

He also emphasised the need for improvement in inter-ministerial coordination to achieve maximum results from the improved logistics chain.

The deputy chairman, Planning Commission informed the meeting that an energy logistics committee has been set up under secretary petroleum, which will prepare an action plan by next month to carry out assessment of energy requirement together with the identification of its resources.

He said there was a huge potential of about $7 billion savings resulting from efficiency in the private sector logistics such as warehousing, shipping, inventory control and efficient administration. The potential should be fully tapped, he directed.

Federal Minister for Railways Sheikh Rashid Ahmed told the meeting that Pakistan Railways had increased its freight carrying capacity by 12 per cent last year with the induction of three new freight trains. The fourth one, he said, would be started soon. The prime minister said that Railways’ long-term target should be to capture 30 per cent of the country's freight volume.

http://www.dawn.com/2007/03/02/ebr11.htm

 

[Neo]

March 02, 2007
Sindh seeks Rs11.6bn to improve irrigation

By Ihtasham ul Haque

ISLAMABAD, March 1: The Sindh government has sought from the centre additional Rs11.6 billion urgent funding for the rehabilitation of its ageing irrigation system.

Officials told Dawn on Thursday that the provincial government was ready to provide Rs1.5 billion from its own resources for improving the irrigation infrastructure, including main and branch canals, distributaries and minors.

The Sindh government maintained that it needed the additional amount to enhance long-term sustainability of developing institutions by improving operation and maintenance of the irrigation system and cost recovery.

The immediate objective is to improve efficiency and effectiveness of irrigation water distribution in three Area Water Boards (AWBs) of Ghotiki, Nara and Left Bank. It also covers areas for improvement under the jurisdiction of the Sindh Irrigation and Development Authority (Sida), AWBs of Ghotki feeder, Nara canals in Khairpur, Sanghar, Mirpurkhas and Umerkot and Left Bank (canals) in Tando Mohammad Khan, Hyderabad and Badin and areas where barrages are located i.e. Guddu, Sukkur and Kotri.

The improved water management, Sindh believed, would lead to increased agricultural production, employment and income over an area of about 1.837 million hectares or more than 30 per cent of the irrigated areas.

The project would supplement efforts which are presently underway, including the World Bank-assisted Sindh On-Farm Water Management project, Revamping/Rehabilitation of Irrigation and Drainage System project, National Drainage Programme (Reprogramming) and Lining of Distributaries and Minors project in the province.

Benefits include annual incremental agriculture production with an estimated value of Rs3.4 billion (June 2006 prices) and creation of 4.39 million workdays per year of farm labour at full development due to increased cropping intensity and yields.

It will also help achieve self-reliance in agricultural commodities, ensure food security and improve productivity of crops.

The Centre was informed that Sindh had evolved an interim strategy that would yield quick dividends while building the foundation for the longer term strategy.

The interim strategy has three inter-related elements -- fostering an institutional, policy and operational framework conducive to efficient and self-sustaining operation and management of the irrigation system, supporting farmers’ organisations in implementing high payoff infrastructure improvements needed for improved water management, and enhancing agricultural productivity and incomes by introducing improved technology, 'agronomic' practices and information/knowledge system.

To ensure the quality of civil work construction, the federal government was informed that works would be packaged for bidding purposes to attract qualified contractors, while contract management and construction supervision would be carried out with the assistance of qualified engineering firms.

http://www.dawn.com/2007/03/02/top5.htm

 

[Janbaz]

Punjab industrial estates reap fruit of improved infrastructure

By our correspondent

LAHORE: Public-private partnership has improved investment climate in Punjab as all industrial estates of the province have seen improvement in infrastructure, law and order and rehabilitation of closed industries.

Almost all industrial estates of the province are operating under private sector representatives with Sunder the only exception where private sector CEO has been replaced by former Nespak chief. A study by The News revealed that small and medium industries at the renovated Multan Industrial Estate have revived with more than three dozen green projects in leather, food and agricultural implants commencing their production.

Similarly more than 50 new projects including two multinationals have started operating at the newly-built Sunder Industrial Estate. More than 100 new industries are under different stages of completion. They include pharmaceuticals both domestic and multinationals, textile, particularly knitwear and garment, and auto-parts manufacturers.

The most astounding success was however achieved at Quaid-e-Azam Industrial Estate (formerly Township Industrial Estate). It was until the establishment of Sunder the largest industrial estate of the province. When this 565-acre industrial estate was managed by public sector, it was plagued by broken roads, destroyed sewerage network and alarming law and order situation. Two years back the average dacoities in this industrial area were three per week. Industrialists were closing their units.

A new board of management of this industrial estate was constituted two years back comprising public-private sector representatives with private sector representative as its head. The new board gave security the first priority and collaborated with Lahore Police in this regard. The police provided the personnel while vehicles, drivers and petrol were provided by QIE for 24-hour surveillance. The police employees are provided three times meal, snacks and regular washing of their uniform. According to president QIE Nauman Kabir there has been no incidence of dacoity or theft during the past 16 months.

The board then revamped the internal road structure of the QIE along with a refurbished sewerage system. Better infrastructure resulted in rehabilitation of 35 industrial units while 14 new industries were established, including a multinational beverage company. QIE president said at present 435 SMEs are in operation, employing over 45,000 workers. He said improved security encouraged women workers to seek employment in QIE. He said currently more than 9000 workers in QIE are women.

The powers for transfer of property had been handed over to QIE board two years back. The board reduced transfer fee by half but has settled all but 18 of the 197 property transfer cases during two years.

The 18 unresolved cases are pending in courts. The QIE established its own solid waste management system. Its staff and vehicles pick garbage round the clock and keep the sewerage system clean. The board has also established water supply system through its own water tank and has established its own fire brigade station.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=45077

 

[Neo]

Pakistan eyes $100 bln foreign investment in next ten years: Salman

ISLAMABAD: March 02, 2007: Advisor to the Prime Minister on Finance and Revenue, Dr. Salman Shah said on Friday that Pakistan expects $100 billion foreign investment in Construction and other sectors during the next ten years as its economy is growing on fast track.

'The construction sector activities in Pakistan are growing at a pace Karachi, Lahore, Rawalpindi, Islamabad and other parts of the country which requires a lot of investment in the sector', he told APP in a panel interview here on Friday.

Salman said that government is also initiating low cost housing projects for overcoming shortage of housing in the country.

He added that Foreign investment is rising and workers remittances have also increased due to prudent economic policies of the government.

Salman Shah said that consistency and continuity of economic policies and investment-friendly policies bring pursued by the government during the past six years have restored the confidence of investors.

They are now keen to invest in various sectors of the economy." Dr. Shah said that 150-200 investors will attend the Overseas Pakistanis Investment Conference (OPIC) here from March 5. "The conference will bring more foreign investors and joint ventures in the country," he added.

He said that all sectors of the economy, including agriculture, are performing well and expressed the hope that Pakistan's GDP would cross 7 percent during the current financial year.

He added that financial sector investors are also taking keen interest in establishing Banks and expansion of their network in Pakistan.

Citing examples, he said that Standard Chartered Bank has purchased Union Bank adding said that this is a long term investment which would benefit the country in the long run. Tamasec of Singapore investment company is also buying a bank, he added.

He said that private sector is participating in the privatisation programme of the country and making investments in large industries in the country.

Shah said that EMAAR Group and NAKEL group are also investing a huge amount in the country's construction sector.

Shah said one of the best companies in the world has shown interest in the purchase of Pakistan State Oil (PSO) company.

There is no shortage of capital for investment in the country and Dr Shah expressed the hope that huge investments would lead to further socio economic prosperity.

He said if Pakistan sustains its GDP growth at 7-8 percent, maintains consistency and continuity in the economic policies and invest more on the human capital there is no reason why Pakistan cannot progress like China and east Asian Countries.

He said that few years back the foreign investment in Pakistan was only US $ 250 million and today it has reached to US $ 6 billion.

Dr. Salman Shah said it is firm commitment of the government to reduce inflation as it is affecting the masses specially the poor segment of the society.

He added that government is focusing on pro-poor economic policies adding said that core inflation has reduced to 5.5 percent and food inflation is around 8 percent.

He said that government is also concentrating on the development of agriculture sector in the country.

He regretted that after Tarbela dam no major reservoir was built in the country.

"Had we built more such dams in the past, Pakistan would have produced food which was enough for its own needs and also for export," he said.

Salman said that Pakistan has advantage of being rich in water resources adding that Kalabagh dam would benefit Sindh province the most.

He added that Pakistan will attract over $6 billion during the current financial year and expatriates remittances have also registered 25 percent growth in the seven months of the current financial year.

Shah said that government has announced establishment of a special economic zone at Kala shah kaku (Punjab) covering an areas of 3000 acres for Chinese investors and their joint ventures.

The Advisor to the prime minister said that the government under a comprehensive plan is establishing special industrial parks, and business centres for industrialisation of the country.

Talking about government's efforts for the development of National Trade Corridor, he said this would be a major strategic initiative to improve logistics chain throughout the country adding said that through provision of road infrastructure from Karachi-Khunjerab via KKH and Karachi to Gwadar ports would be modernised according to international standards to reduce cost of transportation.

He added through this project Pakistan would be able to save US $ 7 billion per annum.

He termed NTC programme as one of the biggest infrastructure development programme in the country's history adding that this would greatly benefit the people and improve their quality of life beside creating more job opportunities for them and also play an important role in the socio economic development.

Salman said that in Public sector Development Programme (PSDP) for the year 2006-07, the government has allocated Rs.435 billion adding apart from it the Higher Education Commission (HEC) would establish ten engineering universities in the country.

He added government has also decided to bring improvement and quality in education system and a huge amount is being spent on human resource development sector.

Shah said for skill development of the young generation and creating employment opportunities for educated youth, under the special directives of prime minister Shaukat Aziz and comprehensive training programme called National Vocational and Technical Education Commission (NAVTEC) has already been launched.

He said there is shortage of skilled manpower with tremendous opportunities in various sectors including construction sector.

He added that under the programme short courses and long term technical courses would be provided and skill training to create employment opportunities within the country and abroad to at least one million people in next two years.

He said these persons will be given training in the fields of electrician, livestock, health, domestic appliances, construction, food preparation, domestic services, paramedics, beauty and health, livestock, agriculture and services sectors.

Shah said that President and Prime Minister have directed Central Board of Revenue (CBR) to take steps for the collection of more revenue to meet social sector development and infrastructure requirements for socio economic development and improving quality of life of the people by providing them maximum opportunities in the development process.

Shah said that development of health, education and infrastructure sectors are top most priorities of the government adding that more funds would be allocated to these sectors in the forthcoming budget.

He added that government is also focusing on improving the law and order situation so that these could not be a hurdle in the way of country's economic progress.

Brecorder.com

:flag: :flag: :flag: :flag: :flag:

 

[Neo]

Trade volume between Pakistan and UK to double

LAHORE: March 02, 2007: Trade volume between Pakistan and the United Kingdom is bound to double in near future as consistency in policies and economic reforms in Pakistan are sending positive signals to the foreign investors.

This was stated by Mohammad Ahmad, leader of 14-member strong business delegation from Yorkshire while speaking at the Lahore Chamber of Commerce and Industry (LCCI) on Friday.

Mohammad Ahmad said Yorkshire is one of the fastest growing economic areas in the United Kingdom with solid industrial base.

Yorkshire is a region of exciting opportunities for being gateway to 370 million customers in Europe and having a huge potential in Engineering, Information Technology, Biotechnology, Healthcare, Education and Tourism for Pakistani businessmen.

The head of the delegation, who spoke at length on various issues, was of the view that visit of a large number of UK delegations to Pakistan is enough to prove that the level of trust of the foreign investors is going up with every passing day.

Mohammad Ahmad, who has been instrumental in building key partnerships with SMEs and multinational corporations world-wide, said there is a need that some high-powered sector-specific delegation from the Lahore Chamber of Commerce and Industry should visit Leeds to have first-hand knowledge about the businesses and for initiating joint ventures with their British counterparts.

UK Deputy High Commissioner Hamesh Danial said this delegation is part of Chamber Management Services Overseas Market Visit Programme and would help boost the image of Pakistan.

He said Britain, being the largest investor in Pakistan, wants to multiply its investment and is taking all necessary steps in this regard. He assured participants that the British government would continue to facilitate Pakistani businessmen for the promotion of trade between the two countries.

Speaking on the occasion, the LCCI President Shahid Hassan Sheikh invited the UK businessmen to invest in low-cost housing sector as there is a shortage of over 5 million houses in Pakistan.

Hassan said a lot of progress could be made on trade front through identification of new tradable items and this is possible through the active engagement of the Chambers of Commerce and Industry of the two countries and by arranging single country exhibitions and also by holding socio-cultural programs in each other's country.

Participation of Pakistani exporters in the international trade fairs in UK and vice versa can also expand trade between the two countries.

He said Pakistan offers good scope for investors in information technology, telecommunication, infrastructure, textiles (value addition), oil and gas, water and power, food and food processing, SMEs, engineering, tourism and services.

"We are particularly keen in British investments that could provide transfer of technology to Pakistan," he added.

Brecorder.com

 

[Neo]

March 02, 2007 Friday
Pakistan, EU to discuss market access issues: Joint commission formed

ISLAMABAD, March 1: Pakitan and the European Union (EU) have decided to set up a joint commission under the third-generation agreement — a trade plus treaty — to discuss market access issues for enhancing trade, said commerce minister Humayun Akhtar Khan here on Thursday.

Both the sides have nominated members of the joint commission under which a working group on trade will be established in spring next, said commerce minister while speaking at a press conference here on Thursday.

Mr Khan said Pakistan and the European Union agreed that the working group would start discussion on market access not precluding a free- trade agreement.

The European Union parliament has already ratified the agreement, added the minister.

This does not mean that the EU and Pakistan have agreed to talk on the FTA, like they had with India, but a forum has been designated by the EU and Pakistan to start discussion on market access, the minister said, quoting the relevant part of the agreement.

Responding to a question, the minister said Pakistan cannot say that the European Union has declined to talk to Islamabad on FTA.

He ruled out such kinds of reports, which, he said, were factually incorrect.

The EU has apparently made economic criteria for selection of country to negotiate a free-trade agreement with them.

This criterion includes tariff barriers and non-tariff barriers and size of economy. On the basis of this approach, the European Commission has picked up a few countries to negotiate FTA with them.

The EC has announced that they would start negotiations on FTA with four to five countries, including South Korea, Asean and India, etc., though negotiations have not yet started.

To a question, the commerce minister said that Brussels has not said that they would not go for an FTA with Pakistan.

We are trying to tell the European Union about the economic advantages to be accrued out of this agreement in addition to political requirements for Pakistan to improve its economy for having a better market access for its products. The dialogue is very much on the issue, the minister said.

The minister said that the government at a higher level had already been lobbying with the EU states to seek their support on the issue.

I am not saying we do not want unilateral concessions from the European Union under the FTA.

We will also give similar concessions to the EU. We have given concessions to China on equipment under FTA, which would replace the import of machinery imported from Europe.

It is in the Europe’s interest to consider Pakistan for the treaty, the minister asserted.

Answering a question, the minister said that Pakistan hoped that the US would soon table a legislation for establishment of reconstruction opportunity zones.

He said his ministry was also working on a plan to enhance growth in export of commodities.

To a question, he said many steps would be taken for increasing trade with Afghanistan.

http://www.dawn.com/2007/03/02/ebr3.htm

 

[Neo]

March 02, 2007
US firm plans 11 gemstone training centres

ISLAMABAD, March 1: Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon has said that the government is taking concrete steps to explore precious stones and other metallic and non-metallic deposits in the Northern Areas, AJK, NWFP and other parts of the country.

The minister was talking to the president of World’s Gold and Diamonds Company of US, Mr Nasiruddin Rupani, who called on him here on Thursday and briefed him about his company’s plan to set up 11 gemstone cutting and polishing training centres in the Northern Areas and other parts of the country by investing $4 million.

The minister said that the government had already set up three training centres to train unemployed youth in gemstone-cutting and polishing trade.

The minister said that the government would launch a programme to train youth in precious stones cutting, polishing and marketing with a view to give a boost to export of finished precious stones in world market.

He said the government would encourage and facilitate the World’s Gold and Diamonds Company in setting up gemstone training centres and mining of deposits on scientific lines.

The president of World’s Gold and Diamonds Company informed the minister that the company had already imparted training to 100 unemployed youth, enabling them to earn their livelihood in a dignified manner.

He said that Pakistan was endowed with vast mineral deposits and his company would make further investment in the days ahead for the mutual advantage.

Director-general (Minerals), Mr Irshad Ali Khokhar, and other officials of the ministry were also present during the meeting.

http://www.dawn.com/2007/03/02/ebr1.htm

 

[Owais]

Pakistan's foreign exchange reserves hit fresh high
KARACHI (March 03 2007): Pakistan's foreign exchange reserves increased by $62 million to another new high of $13.343 billion in the week ending on February 24, the central bank said on Friday.

Reserves held by the State Bank of Pakistan (SBP) rose to $10.998 billion from $10.929 billion, however, those held by the commercial banks fell marginally to $2.345 billion from $2.352 billion, the central bank said in a statement.

Pakistan's foreign exchange reserves have grown sharply in recent months, from healthy remittances from overseas Pakistanis, and a rise in foreign direct investment.

Foreign direct investment rose more than 69 percent to $2.1 billion in the first seven months of the 2006/07 fiscal year (July-June), led by inflows into the financial, communications and energy sectors, official figures show.

Inflows from foreign portfolio investment during July-January were $697.4 million, up from $400.5 million in the corresponding period last year. During the period, remittances sent by Pakistanis abroad were recorded at $2.96 billion, up from $2.44 billion in the year-ago period.

http://brecorder.com/index.php?id=534318&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Exports to grow at four percent this year: minister

KARACHI (March 03 2007): Federal commerce minister Humayun Akhtar has said that country's export will continue to grow at four percent average during the coming months of current financial year.

Responding to queries of newsmen at a press conference on Friday, minister did not see any negative impact on the whole year export target because of major slump of 22 percent in the export of textile products in month of January compared to its preceding month of December.

"This decline was because of bulk buying for new year and Christmas season in month of December compared to January, when this buying spree came to end", he pointed out and sounded optimism about the achievement of export target at the end of current fiscal.

Humayun Akhtar talked at length on the issues ranging from Free Trade Agreements (FTAs) with various countries to textile sector and issues related to trade with India especially the recent Safta-related tariff concessions.

About the possibility of signing of FTA with European Union (EU), he said that a trade working group will be established under joint commission of Pakistan and EU would provide a forum to discuss the bilateral trade issues not precluding FTA.

Signing of FTA with Gulf Co-operation Council (GCC), minister said that there is problem on part of Pakistan, but it is GCC Secretariat, which is moving slowly in this regard. "During my visit to Saudi Arabia, I discussed it with my Saudi counterpart and urged to expedite the process in this connection", he told the reporters.

On a question related to market access, he declared that there is no issue of market access of the country products to various markets. The trade diplomacy in the last few years has worked well.

The FTA with China, Reconstruction Opportunities Zones (OPZs), Safta in South Asia, PTA with Iran are reflective of this trade diplomacy. Besides, we are also going to sign FTA with Asean. Humayun said that government is studying issues related post-quota regime, and added that we are benchmarking the textile sector to determine the current situation.

In reply to query about high cost of production in the country due to high charges of gas and electricity, minister claimed that the rates of gas and electricity are less than India, Sri Lanka and China. "I say with authority that Pakistan is not the most expensive country as far as the rates of gas and electricity are concerned", he added.

About the Safta, minister said that non-tariff barriers (NBTs) on part of India are big hurdles in implementation of this agreement. India says that Pakistan is not compliant with this agreement, which is not correct, minister asserted.

http://www.brecorder.com/index.php?id=534315&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

US pressure can destabilise Pakistan: Mahmud

WASHINGTON (March 03 2007): US pressure, including congressional threats to cut or put conditions on billions of dollars in aid, could destabilise Pakistan and maybe even bring down President Pervez Musharraf, Islamabad's envoy to Washington said on Thursday.

In an interview with Reuters, Ambassador Mahmud Ali Durrani expressed concern that anti-terrorism co-operation among the United States, Afghanistan and Pakistan was eroding and rejected what he said were attempts to unfairly blame Islamabad for an upsurge in cross-border violence.

Tampering with US aid levels will fan anti-Americanism, strengthen the extreme right and Taliban supporters, be counterproductive, and "create problems for Musharraf to be able to continue the way he is," Durrani said.

Asked if it might trigger Musharraf's ouster, he replied: "I don't know. Possibly it could bring him down. It could destabilise the whole country. It could cause mega-problems there. That is possible."

His comments came after top American intelligence officials said the front-line US ally in the war on terrorism had allowed a resurgence of al Qaeda and Taliban forces and training camps in Pakistani tribal areas that could someday lead to another September 11-type attack on the United States.

"What I'm worried about today more than anything else is this unhinging of the co-operative relationship ... In this very critical field of (co-operation on) counter-terrorist operations there seems to be a problem. We need to fix it," Durrani said.

US Vice President Dick Cheney visited Afghanistan and Pakistan earlier this week and urged Musharraf to take tougher action against militants on his side of the lawless border. He also called attention to efforts by the US Congress to restrict or alter billions of dollars in annual US aid to Pakistan.

On Thursday, Pakistani security forces captured a high-ranking Taliban leader in the south-western city of Quetta, a senior Pakistani security official and Taliban sources reported.

The Bush administration considers Musharraf a key ally who has taken great risks to help defeat Afghan-based militants after the September 11 attacks, including by providing access to bases and over-flight rights. But with continued instability in Afghanistan and reports that extremists are building new bases in Pakistan possibly abetted by Pakistani intelligence services, many in Washington wonder whether a new strategy is needed.

A recent report by experts at the Center for Strategic and International Studies questioned whether the US alliance with Musharraf has "run its course," while acknowledging there is no obvious successor to lead nuclear-armed Pakistan as a moderate Muslim state.

Durrani argued that the United States, "distracted" by Iraq, failed to finish the job in Afghanistan and is now looking for someone to blame. He acknowledged problems in Pakistani tribal areas, including "a possibility of some presence of al Qaeda, definitely some presence of Taliban" but he insisted 90 percent of the violence stems from Afghanistan.

Some US experts have questioned whether more than $10 billion in aid to Pakistan over the past five years may be too heavily weighted towards military operations and should focus more on education and other "softer" projects, but Durrani said the mix should not be changed. He urged Washington to expedite delivery of attack helicopters and night vision devices in time for an expected Taliban spring offensive.

http://www.brecorder.com/index.php?id=534338&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

External debt reaches $38.42bn

By M Israr Khan

ISLAMABAD: Pakistan’s total outstanding external liabilities - external debt plus foreign exchange liabilities - during the first half of the current fiscal swelled by $1.159 billion to $38.42 billion from $37.26 billion. While, the official liquid reserves declined by $126 million to $10.639 billion from what it was at the end of June 2006 ($10.765 billion).

Of the total liabilities, the external debt has surged by $1.228 billion to $36.907 billion at the end of December 2006, against $35.68 billion recorded at the end of June, 2006. While, the foreign exchange liabilities declined to $1.517 billion as compared to $1.586 billion recorded at June 2006.

Finance ministry, especially the Debt Office (responsible for managing debt), looks reckless about huge borrowing and claim that it was not a bad sign for the economy to borrow more. While, on the other hand, in its ‘Debt Policy Statement 2006-07’ which it (Debt Office) unable to present to the National Assembly at the due date (January 2007), blaming past governments for excessive borrowing and says that it has curtailed their ability to invest in social sector ie education, health, population planning, nutrition and employment creation.

It is pertinent to note that during the last five years, the country’s public and publicly guaranteed debt (including multilateral and bilateral debt) has been on the rise.

On June 30, 2003, it was $29.23 billion, at the end 2004 ($29.87 billion), 2005 ($31.08 billion) and the end of the same month of 2006 it increased to $32.603 billion. And now, after six months at the end of December 2006, the publicly guaranteed debt further inched up to $33.739 billion.

In public and publicly guaranteed debt, the medium and long-term debt (more than one year) during the period under review augmented by $1.282 billion to $33.739 billion as it was $32.407 billion at the end of June 2006.

According to the break-up of the medium and long-term debt, the multilateral debt by end-December, 2006 grew by $1.226 billion to $17.75 billion and bilateral debt up by $93 million to $940 million compared to June 2006 when these stood at $16.527 billion and $847 million respectively.

While, during the period under review, the volume of military debt declined by $40 million to $90 million, Paris club debt increased by $24 million to $12.855 billion and Euro bonds/Saindak bonds declined by two million dollars to $1.906 billion as compared to $130 million, $12.83 billion and $1.908 billion recorded in June 2006.

The Sate Bank of Pakistan (SBP) data revealed that the short-term external debt (less than one-year) from Islamic Development Bank (IDB) declined by $221 million to only $50 million at the end December 2006, as at the end of last fiscal, it was $ 196 million.

The private non-guaranteed debts (more than one-year) during the period increased to $1.706 billion from $1.585 billion at the end of FY 2005-06.

The State Bank’s data also depict a decline of about $29 million in the International Monetary Fund (IMF) debt. At the end of December 2006, it declined to $1.462 billion as compared to $1.491 billion recorded six months back (June 2006).

The foreign exchange liabilities excluding foreign exchange bearer certificates, foreign currency bearer certificates and dollar bearer certificates (which stand at $6 million) declined by $69 million during the period under study to $1.517 billion from $1.586 billion at the end June 2006.

Of this, the special US dollar bonds declined by $48 million to $199 million, as it was $247 million at the end of last fiscal 2006. Besides, foreign currency bonds (NHA/NC) declined by $21 million to $88 million from $109 million end June last fiscal.

While the central bank deposits, NBP/BOC deposits and other liabilities (SWAP) remained unchanged for the last three years at $700 million, $500 million and $30 million respectively.

http://www.thenews.com.pk/daily_detail.asp?id=45233

 

[Neo]

March 03, 2007
Basmati crop damage causes $260m loss

By Parvaiz Ishfaq Rana

KARACHI, March 2: The country has suffered a huge loss of around $260 million (Rs15.782 billion) owing to severe damage caused by strong winds coupled with rains and fog to the standing paddy of Basmati in the Punjab this season (2006-07).

Private estimates put the damage as high as 20 per cent or around 0.4 million tons of the estimated total production of 2 million tons harvested this season. The rapidly changing climatic patterns with rising trend in accumulation of condensed fog during harvesting season of paddy crop is being taken as a major factor for higher damage.

On an average there had been 10 to 15 per cent wastage to Basmati paddy due to host of factors but lately with growing problem of fog resulting in higher moisture during the harvesting season the damage ratio has doubled and is likely to grow in years to come.

Presently Basmati rice in the world market is being quoted at around $650 per ton and this means that the cost of 0.4 million tons would come to around $260 million or Rs15.782 billion.

Major cause of recording higher wastage in Basmati paddy this season is strong winds coupled with rains which dropped the fresh but matured husk of the standing paddy on soil and could not be harvested mechanically. However, part of the fallen husk (fresh) could be picked up manually but yet it would lose its quality on absorbing moisture from the ground.

Due to condensed fog during the harvesting season of Basmati paddy there is higher content of moisture in the atmosphere and the husk which is dried in the open (natural way) retains some moisture which does not allow proper threshing thereby results in higher wastage and also affects quality of the grain.

In order to resolve the issue and save the country from losing huge foreign exchange by incurring high percentage of wastage in a cash crop like Basmati rice, exporters demand of the government to set up silos with public and private partnership in all the major crop markets in Punjab.

Talking to Dawn leading exporter of Basmati rice Haji Abdul Majeed said that if we check high percentage of wastage the country could earn $260 million more and this will also help grower to get proper return for the crop by minimising damages and wastage to such a high valued produce.

The cost of these silos having a storage capacity of around 0.2 million tons each is much less than what the country is presently losing in foreign exchange, he maintained.

He further said that mechanised dryers should also be installed in order to avoid age-old system of drying paddy in the open which causes higher wastage and damage to the rice in the process of threshing and processing.

In order to get good price the Basmati rice has to be seasoned at least for a year and this also requires proper storage facilities which is presently lacking. In the past the damage and wastage in Basmati rice was at around 10 per cent but due to rapidly changing climatic conditions and higher fog there is urgent need to set up silos so that they could be rented out to growers to save their cash crops such as Basmati.

The Irri-6 rice which is mostly grown in Sindh and Okara in Punjab after harvesting is immediately exported as it does not need seasoning and Pakistan normally harvests around 2.2 million tons out of which over 1.5 million tons are exported after meeting domestic demand.

Rice exporters are also demanding of the government to immediately stop rice exports on Draft at Sight (DA) as it is a cash crop and this could be verified from the fact there had never been any carry-over stocks of Basmati or Irri-6 rice ever since their exports came to private sector. Export of rice should be only on opening of LCs which will also ensure remittances of export proceeds.

http://www.dawn.com/2007/03/03/ebr3.htm