Pakistan Economy - News & Updates - Archive

[Neo]

Friday, May 04, 2007

Pakistan not afraid of Indian businesses: high commissioner

* Malik says trade can be sustained only after resolution of Kashmir

By Iftikhar Gilani

NEW DELHI: Pakistan is not afraid of competition from Indian business, the Pakistan High Commissioner Shahid Malik said on Thursday. He offered to export wheat and cement to India and in turn import tea to Pakistan.

Participating in an interactive session with members of the Punjab-Haryana-Delhi Chamber of Commerce and Industry (PHDCCI), Malik asked the Indian government to provide a level playing field for Pakistani products by removing tariff and non-tariff barriers, minimising agriculture subsidies and reviewing the budgetary support extended to public sector undertakings.

He also said that the resolution of all outstanding political disputes, including Kashmir, was necessary for normal and sustained trade relations. He complained that imports in India were subject to meeting excessive standardisation requirements and procedural formalities. Over 500 tonnes of Pakistani cement is lying at the Mumbai port awaiting clearance, he said. “This is a detriment to bilateral trade.”

The envoy said Pakistan would like to enhance trade with India in a business-like manner. “We are ready to float a tender, ask India what it needs and just get on with it,” he said, dispelling concerns that Pakistan was holding back bilateral trade promotion.

Besides cement, Malik said Pakistan was negotiating to export 60,000 tonnes of wheat to India. He said Pakistan was willing to import tea that it presently gets from Kenya, from India. He said Pakistan currently has 40 million metric tonnes of surplus wheat, which could be supplied to India with a price advantage.

He said Pakistan was not blocking bilateral trade by refusing to grant India ‘Most Favoured Nation’ status. “The MFN is a misnomer.” He said the MFN did not make any material difference in the flow of bilateral trade, adding that India’s exports to Pakistan were over three times Pakistan’s imports to India last year, even without the MFN. On the opening of the Wagah route for trade, he said it was a sensitive issue and needed to be approached through the composite dialogue mechanism. “We are aware of Indian views and are willing to discuss them with the Indian government along with the issues pertaining to non-trade barriers faced by Pakistani exports to India,” he told members of the PHDCCI.

The high commissioner said Pakistan’s economy was growing at 7 percent, the flow of foreign direct investment (FDI) constituted 3.6 percent of total GDP and customs duty had been progressively reduced to expose Pakistani businesses to international competition. Second-generation reforms, which are addressing infrastructure bottlenecks, human resource development and creation of a knowledge-based economy, would further increase the competitiveness of Pakistan’s economy, he added.

Malik also expressed satisfaction over the steady growth of bilateral trade, which grew by 370 percent between 2002-03 and 2005-06. He, however, lamented that the present level of intra-SAARC trade was at just 5 percent and called for more proactive steps to enhance intra-region trade.

http://www.dailytimes.com.pk/default.asp?page=2007\05\04\story_4-5-2007_pg7_18

 

[Neo]

Friday, May 04, 2007

500,000 tonnes wheat export to India allowed

KARACHI: Pakistan on Thursday allowed the export of an additional 500,000 tonnes of wheat in the hope of making inroads into the lucrative Indian market, a senior government official said.

“The government of Pakistan allowed export of 500,000 tonnes of wheat to India, especially in view of the tender floated by the State Trading Corporation,” Ismail Qureshi, food and agriculture secretary, said. “The export will be undertaken by the private sector by sea and land route, that is railways.”

An expected bumper harvest of 23 million tonnes this 2006/07 crop year allowed Pakistan in January to lift a two-and-a-half year export ban intended to protect domestic supplies.

The country, seeking to cut bulging wheat stocks, had already allowed export of 800,000 tonnes by private traders and removed a 15-percent duty on exports. The government set a deadline of June to ship the 800,000 tonnes. So far, deals for up to 400,000 tonnes have been finalised, while a big quantity had also been sold to local flourmills. Pakistani traders are fearing that a delay in releasing additional quantity may prevent them from participating in an Indian import tender, which will be closed on May 10. Agriculture Ministry officials said the government was holding more than 2 million tonnes of wheat stocks in excess of buffer norms and more arrivals had created a storage problem.

http://www.dailytimes.com.pk/default.asp?page=2007\05\04\story_4-5-2007_pg7_8

 

[Introvert]

Cement exports surge over 50 percent​

KARACHI: Pakistan’s cement exports during July-April in the current fiscal year soared by 50 percent.

All Pakistan Cement Manufacturers Association (APCMA)’s available data showed that the cement manufacturing companies last year in the same period had exported 1.02 million tons, which has shot up to 2.015 million tons in the current year.

Cement exports in the month of April alone boosting up by a record 500 percent amounted to over 30,000 tons. Overall cement sale during July-April swelling up by 33 percent pegged at 19.7 million tons, according to APCMA data.
http://www.geo.tv/geonews/details.asp?id=5567&param=3

 

[Neo]

Net credit to private sector grows by over Rs 266 billion: SBP governor lauds role of banking sector

KARACHI (May 05 2007): Governor, State Bank of Pakistan, Dr Shamshad Akhtar appreciated the role of banking sector and expressed satisfaction over the growth in credit disbursement to private sector during July-April FY07 where net credit to private sector grew by over Rs 266 billion (or 12.6 percent) against Rs 339 billion (or 19.8 percent) in the corresponding period of FY06.

The SBP governor stated this while presiding over the first meeting of the Private Sector Credit Advisory Council (PSCAC) here on Friday, a press release issued here said.

PSCAC has replaced the National Credit Consultative Council (NCCC) as a consequence of the decision taken in NCCC's meeting of 4th July, 2006 to redefine objectives and functions of PSCAC in line with deregulated policy environment for the banking sector, which requires more consultation and interaction with the private sector to assess their credit requirement and better understanding the constraints facing the credit delivery.

The meeting dwelt at length on issues relating to availability of credit to the private sector and impediments, if any, in the way of enhancing credit disbursement to key sectors in the economy.

The SBP governor pointed out that despite ample liquidity in the system, commercial banks had not been able to expand lending due to low demand for private sector's credit that had borrowed quite heavily in the last few years. "While there was growth in working capital finance, the demand for fixed investment credit was subdued."

In some cases, corporate sector is meeting the requirements through retained earnings or foreign borrowings. In some sectors, banks have deliberately slowed down to re-assess and develop their own capacities to lend more prudently. The process of mergers and acquisition in a number of banks also impacted private sector credit as most "acquired banks" slowed down their business."

The governor discussed sector wise disbursement of credit, specially to corporate, consumer, SME, infrastructure, housing, agriculture segments and the issues/constraints facing credit delivery. She informed the meeting that SBP had already submitted microfinance strategy to the prime minister for which he had issued instructions for development of an action plan.

Regarding strategies for the development of infrastructure, housing, SME and Islamic banking, SBP has formed various working groups. These groups would soon submit their recommendations. Similarly, the Agricultural Credit Advisory Committee (ACAC) had submitted its report on constraints facing agricultural credit and provided effective recommendations, she added.

The SBP governor asked the council members to share their views on issues likely to be faced in the growth of private sector lending over the next five to ten years. The substantial growth in credit disbursement will be a challenge for the banking industry unless the real sector problems are addressed. The members discussed in detail the impediments in credit disbursements and suggested ways and means for their redressal in this regard.

National Bank of Pakistan gave a brief of bank's experience in outsourcing certain aspects of the Rozgar Scheme, which proved very successful. The bank has already disbursed an amount of Rs 1.3 billion under the scheme to 13,000 applicants.

On consumer financing, the governor said that despite some apprehensions in consumer financing in some circles, the delivery of credit to household sector was a positive development but both central bank and banks needed to enhance vigilance to avoid over leveraging of individuals/ households, which might enhance the probability of default.

She also conveyed wide spread public concerns regarding high bank service charges and procedural issues related to credit cards. She recommended to the Pakistan Banks' Association (PBA) to consider adoption of a standard schedule of charges and procedures with appropriate flexibility to banks to charge rates within a pre-defined range.

FPCCI's representative stated that while LTF-EOP scheme had provided relief to the Textile sector, spinning sector had been ignored where maximum fixed investments were made and suggested a moratorium of two years on principle amount of debt in the spinning sector be allowed by the banks.

PBA Chairman responded by conveying PBA's inability to accept the proposal in any form and that such moratoriums were neither feasible nor provisions of subsidies to any particular sector could be accommodated as it was against the spirit of open market economy.

On issues raised by the representatives of Pakistan Trade Development Authority relating to need for trade related product development, it was decided that a working group might be formed with PBA's participation to specifically evaluate related possibilities.

Azhar Kureshi, Executive Director Development Finance Group, Directors of Banking Policy & Regulations, SME & Microfinance, Monetary Policy, Agricultural Credit Departments of SBP, heads/ representatives of commercial banks, Pakistan Banks' Association, Federation of Pakistan Chambers of Commerce and Industry, Agriculture Chambers, representatives of federal and provincial governments and other trade bodies attended the meeting.

http://www.brecorder.com/index.php?id=560081&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

President for setting Rs one trillion revenue target for next year

KARACHI (May 05 2007): President General Pervez Musharraf has said the revenue collection target for the next year should be Rs one trillion and that the aim for next 10 years is to cross the mark of Rs four trillion. He was addressing as chief guest at the concluding session of National Conference on Tax Administration at a hotel here, on Friday evening.

The two-day moot was organised by the Central Board of Revenue (CBR). The President said "now we are targeting a revenue collection of Rs 835 billion but we expect Rs 900 billion and it is hoped that the target would be met".

He stressed that "we have to increase the revenue collection and pay the taxes". Musharraf said "even now our tax to GDP ratio is low however, we can proudly say that the revenue has risen from Rs 304 billion over the years and now we are targeting Rs 835 billion".

He stressed that next year "we must cross Rs one trillion of revenue collection". The President said with all the reforms and plans that have been chalked out, "in the coming 10 years we are targeting to cross Rs four trillion".

President Musharraf said the taxes must not be increased, because there is a tremendous capacity within the country to increase the revenue. He pointed out that there are people who are minting money but not paying the taxes and are not even in the tax net.

President Pervez Musharraf said we managed to increase the revenue by more than Rs 400 billion and increased the PSDP by Rs 350 billion. Therefore, the money that was raised was utilised for development purposes in the country, he added.

The President said the government is doing a lot of development work and 20 mega projects are being carried out. These include projects like the Katchi Canal, Gwadar Port, Reini Canal, Mangla Dam Raising, improvement of the railways system and brick lining of water courses.

Therefore, he said the taxes should be paid and the target of Rs four trillion should be met in the coming 10 years and if we manage this then Pakistan would all together be a different country.

President Musharraf said the government followed the policies of deregulation, liberalisation and privatisation and created an investors' friendly environment, besides bringing about a lot of banking reforms.

He pointed out that the banking sector is a success story of Pakistan. The President said after the reforms, the country's economy is doing exceptionally well by averaging a growth of seven percent over the last five years.

He said never in the country's history the exports touched dollars 18 billion mark. Our remittances would Inshallah cross dollars five billion mark too, he added. The Foreign Direct Investment which at one stage was dollars 300 million, is going to cross dollars six billion.

President General Musharraf said the benefit of upsurge of economy would be transferred to the people of Pakistan, specially the poor. He said the focus of the government is poverty alleviation, provision of utility services - gas, electricity, safe drinking water and human resource development, health and education.

The President pointed out that poverty has reduced from 34 per cent to around 24 per cent. President General Pervez Musharraf has said that in the reference filed against Justice Iftikhar Muhammad Chaudhry, he took a decision, which is legal and according to the Constitution.

He was speaking at the concluding session of a conference on Tax Administration Reforms Programme organised by the Central Board of Revenue here on Friday. He said now he left it to the judiciary to decide the matter. The President said the reference came from the Prime Minister. He said it was a serious reference and the person concerned was confronted and shown.

The President said he had satisfied himself that this reference was correct. He said the Chief Justice used to visit his home. But now if some reference comes and there are some serious observations, it is the demand of his (President's) position like any leader to keep personal matter aside and see on merit what has to be done.

In such a case one has to rise and go beyond self and beyond relationship and decide on merit and with justice in state decisions. The President said here was a situation when statecraft demanded that he left personal relations aside and he took that decision, which was legal and constitutional and he left it to the judiciary to decide.

http://www.brecorder.com/index.php?id=560034&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Karachi stocks hit fresh all-time high

KARACHI (May 05 2007): The local share market witnessed another bullish session on the back of fresh institutional and foreign buying and the benchmark KSE-100 index breached thorough the 12,500 psychological barrier to close at its highest ever level of 12,512.08 points with a net gain of 81.92 points on Friday.

The junior free float market capitalisation based KSE-30 index also closed at its all-time high level since its launch on September 1, 2006 at 15,656.39 points level, up 104.33 points.

The market opened on a strong positive note and remained bullish during both the sessions of the day and at one time the KSE-100 index hit 12,534.02 points intra-day high, the highest ever intra-day high level of the index.

The market saw heavy trading as the ready market volume significantly increased to 343.005 million shares as compared with 309.078 million shares and the futures market turnover surged to 54.939 million shares against 54.055 million shares traded a day earlier. The overall market capitalisation increased by Rs 28 billion to Rs 3.642 trillion. Trading took place in 349 scrips out of which 199 scrips closed in the positive column and 109 in the negative while the value of 41 scrips remained unchanged.

D. G. Khan Cement was the star performer of the day with 38.779 million shares and the scrip surged by Rs 2.55 to close at Rs 103.05 followed by OGDC which gained Rs 1.45 to close at Rs 124.30 with a total volume of 36.845 million shares.

The cement sector performed exceptionally due to record imports as Lucky Cement, Pakistan Cement and Fauji Cement surged by Rs 1.25, Rs 0.10 and Rs 0.35 to close at Rs 106.80, Rs 12.90 and Rs 20.05 respectively.

Nishat Mills also performed well and the scrip surged by Rs 3.80 to close at Rs 120.70. In the other top ten volume leaders, Askari Bank gained Rs 0.65 to close at Rs 94.45, POL surged by Rs 6.70 to close at Rs 357.20, WorldCall Telecom remained up by Rs 0.20 to close at Rs 14 however Fauji Fertiliser Bin Qasim lost Rs 0.15 to close at Rs 36.25.

Unilever and Rafhan Maize were the highest gainers which gained Rs 90 and Rs 78.05 to close at Rs 2200.00 and Rs 1652.00 respectively while Treet Corp and Arif Habib were the highest losers which lost Rs 7.50 and Rs 6.50 to close at Rs 211 and Rs 290.00 respectively.

Faisal Shaji an analyst at Capital One Equities said that although the Karachi share market one of the cheaper markets in the region however the investors should take cautious stance at the present levels. The market is up as compared with the FY07 and FY08 earnings valuation and a correction is expected.

He said the cement sector is performing well on the back of its record exports. The demand of Pakistani cement is increasing in Middle East and Afghanistan and cements exports could increase by 35 percent to 40 percent.

Ahsan Mehanti at Shehzad Chamdia Securities said that the KSE-100 index has reached its all-time high level on the back of fresh funds injection by foreign investors and institutional support. The SCRA balances have reached at its highest-ever level of $719 million and the cement sector's record export also aided to the flurry of fresh buying.

Hasnain Asghar Ali at Aziz Fidahusein Securities said that despite negative rumours circulating pertaining to standing committee's stance on the stock market March crisis hearing and likely delay of PSO's privatisation the bull run continued at the local bourses.

KSE-100 index after witnessing consolidation led by the cement and fertiliser stocks charged major resistance of 12,490-12,496, the rally stick was then handed over to the oil and gas exploration stocks, the rally then made possible an intra-day high of 12,533, up 101 points.

The concern expressed by the Prime Minister over the performance of textile sector and commitment expressed by him on subsidising the sector for better performance tempted fresh funds in the textile stocks leading from the front was NML.

The announcement of the likely date upcoming budget seems to have prepared the bulls for connecting the ongoing rally with the pre-budget rally. Timely decision of the regulator to address the issue of CFS amount enhancement of cap in accordance with the market demand will allow the index a smooth movement towards north.

Technically, ability of the index major resistance stays at 12,670-12,677 while the support has moved up to 12,325-12,333. The stocks trading at low multiples can be looked for trading and placement while commitments of cement exports by the regional importers can allow the rallying cement stocks further highs despite high multiples.

http://www.brecorder.com/index.php?id=560062&currPageNo=3&query=&search=&term=&supDate=

 

[Neo]

Saudi group keen to invest in Punjab

LAHORE (May 05 2007): Punjab Minister for Industries, Muhammad Ajmal Cheema said that Pakistan had unlimited opportunities for investors and due to the investment-friendly policies of the government, industrial sector had shown rapid boom and world's renowned multi-national companies were coming to Pakistan for investment.

He stated this while talking to a delegation of Al-Rajhi Investment Group of Saudi Arabia, which called on him at the head office of Punjab Small Industries Corporation, here on Friday.

The minister said that various foreign investors would invest more than 20 billion dollars in Punjab especially in Lahore during next three years, which would further boost the economy of the province and thousands of new job opportunities would be created.

He said that after Dutch Company "Makro", German's Multi-National Company "Metro" Cash & Carry had also started its operation in Lahore and first store of Metro would be opened in next few months.

He said the government was also paying full attention on road infrastructure and a number of new projects had been started. Ajmal Cheema said that construction work on Lahore-Sialkot Motorway would start soon and this Motorway would consist of eight lanes.

He said that Al-Rajhi Investment Group wanted to invest in real estate sector, and the government would provide all possible facilities to the foreign investors in this connection. On this occasion the delegation said that they had already invested in various Arab countries and now they wanted to invest in Pakistan.

http://www.brecorder.com/index.php?id=560169&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Pakistan fifth among 20 states with highest piracy rates

LAHORE (May 05 2007): Pakistan ranks at number five among the top 20 countries with the highest piracy rates while Vietnam with 90-percent piracy rate is ahead of all countries in the world. Piracy rate in Pakistan is on declining trend over the last 12 years, which moved down from 96 percent in 1994 to 86 percent in 2005.

If Pakistan is to achieve the maximum economic benefits of software development, the piracy level must be brought down drastically, said Aly Harakeh, a spokesman of Business Software Alliance (BSA) while talking to Business Recorder.

"Once the piracy is reduced, a greater amount of foreign investment will come to Pakistan from the BSA member companies," he added.

Prior to year 2005, Pakistan had become one of the world's leading producers and exporters of pirated optical discs. The country had been identified as a major source of infringing products and harming markets in USA, Europe, Middle East and Africa, he added.

The international software companies are reluctant to share their "source code" with a company, if they suspect that their intellectual property will be pirated. Therefore, when software houses belonging to a country like Pakistan with a high piracy rate of 86 percent bid for foreign projects they are at a disadvantage, he opined.

Aly Harakeh disclosed that nine known facilities in Pakistan produced about 230 million optical discs in 2004, nearly all illegal and most of these were being exported around the world to at least 46 countries.

Pakistan was also placed on the Priority Watch List of the United States Trade Representative (USTR). The USTR has created a "Priority Watch List" and "Watch List". Placement of a trading partner on the Priority Watch List indicates that particular problems exist in that country with respect to IPR protection or enforcement or market access for persons relying on intellectual property. Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas, he maintained.

The Central Board of Revenue (CBR) has already issued a directive requiring customs officers to inspect every shipment for export to ensure it contains only Pakistani repertoire. The customs authorities of Karachi enforced this directive and pirate exports were disrupted, although small scale smuggling of optical discs continues in hand luggage and courier services, he said.

"We are also keeping the prices of BSA member companies products in the local market lower than the developed countries," he maintained. In its efforts to develop IT industry in Pakistan, Microsoft, one of the BSA members, is fully helping the students and educational institutions in installing reliable software by giving them up to 90 percent discounts on the original prices, he added.

In Pakistan, like many developing countries, copyright law is not fully enforced to punish the pirates, who continue to steal the intellectual property of the talented people. Counterfeiting and piracy in most countries around the world was a high margin low risk activity, he added.

He said piracy also discouraged the creative people and the talented people avoid putting in their energies in producing software and prefer to leave the country, which resulted in brain drain and further shortage of the skilled workers.

Brain drain is also of great concern because a big proportion of those who study locally, at a considerable cost to the country resources, migrate abroad to take up well-paying jobs. Majority of the IT graduates from Pakistan's best institutions left the country for employment opportunities abroad, he added.

Most of the companies, those are based in the developed parts of the world, prefer to select those software houses based in developing countries, which use licensed software for processing and where anti-piracy laws are strongly implemented.

When there were big business investments in a country like Pakistan, a greater number of IT experts would get employment, there would be greater exports and tax revenues for the government would also increase, resulting in accelerated socio-economic development in the country, he concluded.

http://www.brecorder.com/index.php?id=560176&currPageNo=3&query=&search=&term=&supDate=

 

[Neo]

77 development schemes completed under MPAs Priority Programme

LARKANA: May 05, 2007: A huge amount was released to execute 77 development schemes in various sectors in Larkana district under MPAs Priority Programme 2006-07.

According to details, Rs 4.997 million were incurred to complete seven water and sewerage schemes recommended by MPA Dr. Hameeda Khuhro in drainage sector, Rs 2.882 million were spent to execute five schemes recommended by MPA Haji Munawar Ali Abbasi in education, road and drainage sectors, which are near completion, work on 15 schemes proposed by MPA Aziz Ahmed Jatoi worth Rs 4.178 million were underway in road, education and drainage sectors.

Most of the schemes have been completed and remaining work is near completion.

Similarly, 29 schemes recommended by MPA Nisar Ahmed Khuhro have been completed under MPAs Priority Programme in road and drainage sectors, two schemes of road sectors recommended by MPA Altaf Hussain Unar with an approved cost of Rs 5.000 million have also been completed under the above programme.

Besides, 16 schemes costing Rs 5.000 million recommended by MPA Mohammad Ayaz Soomro were completed in education and drainage sectors and remaining work is near completion, while two schemes of road sector costing Rs 1.000 million were also completed under above programme recommended by MPA Najamuddin Abro in district Larkana, a report stated here.

Brecorder.com

 

[Neo]

China Mobile adopts Pak identity as CMPak

ISLAMABAD: Phone subscribers would reach 100 million in next three years Minister for Information Technology, Awais Ahmad Khan Leghari said at unveiling of China Mobile’s new company name, CMPak Limited here on Friday.

Awais expressing hopes that CMPak would be providing quality cellular services to their clients assured on part of government that Pakistan is a lucrative destination offering a level playing field to all investors.

Zahid Hamid, Minister for Privatisation and Investment said that Pakistan has tremendous potential of robust growth for telecom sector and CMPak’s ambitious plans would further develop the sector.

With the liberal policies of the government, the foreign investment in the first nine months touched $5.6 billion mark, as it was only $3.9 billion in 2005-06, he added.

Guo Yonghong, CEO of CMPak limited, said “It would be our prime objective to be rated as the best cellular service provider by expanding our service area to every corner of the country which is to be backed by excellent after-sales services. We have awarded contract to four different vendors in Pakistan who will simultaneously help us with the most aggressive network expansion in the history of the country.”

He said, “It is China Mobile’s part of HR policy to retain and recruit the local employees, which would benefit both the parties, thus we would be contributing in reducing the unemployment rate in the country by providing new job opportunities and the opportunities of training and development.”

China Mobile took over Paktel on February 13, 2007 with 89.86 percent shares. The acquisition of Paktel is China Mobile’s first venture outside of China.

Guo Yonghong said, “The Company has acquired Paktel for over $460 million enterprise value while $700 million worth of FDI has already been made in the country and on top of that we will be investing millions of dollars in the future “

“China Mobile is here to stay and we restarted sales to resume business as usual as soon as we arrived in Pakistan. China Mobile has the resources and technical expertise to become one of the largest operators of the country,” he added.

The company plans to increase coverage in several thousands of cities, locations and roads with the capacity of 20 million subscribers, which will be enhanced, with the passage of time.

http://www.thenews.com.pk/daily_detail.asp?id=54305

 

[Neo]

Saturday, May 05, 2007

Awais sees 100m mobile phone users by 2010

ISLAMABAD: Minister for Information Technology, Awais Ahmad Khan Leghari Friday projected a growth of 100 million mobile phone users within next three years due to what he called "a hunger for telephony and innovative services being introduced by operators."

He said a fast-paced progress and investment trends in the telecom sector were likely to continue for the next few years with major benefits accruing to the phone users.

He stated this while unveiling CM Pak Limited - a company launched by China Mobile to run the erstwhile Paktel's operations in Pakistan. "The entry of world's largest telecom company China Mobile into Pakistan's telecom market sends the right kind of signals for the nature of healthy competition and innovative services, the phone users are going to benefit from in the coming years," he added.

He opined that while mobile companies were expected to be embroiled into a stiff competition in the days ahead, the ultimate winners would be market players excelling in content provision which had the potential to drive the appetite for phones in coming years.

He said the launch of CM Pak was a historic occasion as it was for the first time that China Mobile had come out of China to invest into another country and it also marked a shift in the attitude of Chinese companies which had begun to invest in the service-based sector in Pakistan instead of looking merely for contracts for providing vendors' services. Mr Awais observed that while the progress in telecom sector owed largely to the general appetite for better telephony, the credit was also due for the transparent policies introduced in the sector.

"At no stage during the deregulation process or afterwards, there was any effort from any quarters within the government to bend rules and reward a sweetheart company or individual.

http://www.dailytimes.com.pk/default.asp?page=2007\05\05\story_5-5-2007_pg5_5

 

[Neo]

Saturday, May 05, 2007

Energy: signs of tough times ahead

Are we already in the middle of the countrywide power crisis the experts had predicted down the years? The federal water and power secretary, Ashfaq Mehmood, announced Thursday that Pakistan faced a shortage of 978 megawatts of electricity and this could jump to 1,500 MW in the next three weeks. How will we cope with this power gap? Apparently, by “load-management”, which will save us barely 550 MW, while the rest will be made up with “load-shedding”.

This year April temperatures were the highest in history. This means that climate change is also upon us even as we mull the energy problem in an economy that wishes to grow at over 6 percent indefinitely. But the heat will play havoc with the not-so-rich in Pakistan and the poor will stand no chance of bettering their quality of life as we rely on measures of “load-management” that damage the economy. Closing shops at 8 pm will mean curtailment of commerce; in our hot summers no one shops during the day anyway.

The government will apply closure to urban commerce at 8 pm, and also ask farmers to run their tube-wells only during the day. By so demanding it hopes that industries will get the power they need for production. But load-shedding will go on as always and might even increase, as figures of April show. Consumption through air-conditioners will jump up and load-shedding will be lengthened as power falls short. Will the river flows during summer come to our rescue? No, they won’t, because we don’t have enough water storage capacity to catch the water for balanced releases later on.

Climatic change is upon us for many reasons, some of our making and some global, but we have not been able to act providentially in this regard too. We have quarreled over the dams and found no solution. Indeed, there is uncertainty looming over the dams planned under the Musharraf government that may not come on line till 2015 or even later. In Karachi, the street scenes during power outages foreshadow increasing bouts of trouble for the government. And the trouble may be starting from this year! Our electricity is already more expensive than the economies we want to compete with, even after consuming our gas at one-third the international price. The economy is unviable!

Pakistan produces about 19,500 MW of electric power; WAPDA provides about 11,363 MW, or 58 percent of this. The remaining power is supplied by the KESC, nuclear and the private sector companies called the IPPs. Currently there is load-shedding of up to 700 MW a day because of shortage and poor transmission. Electricity demand is expected to grow by 8 percent a year till 2015 by which time the price of oil will climb to $100 a barrel — requiring an annual installation capacity of about 2000 MW for the next 10 years.

Pakistan’s power production is 48 percent from gas; 33 percent from hydroelectricity; 16 percent from oil; 2 percent from nuclear power stations, and 0.2 percent from coal. According to the World Bank, the worldwide electricity production is: 40 percent coal; 19 percent gas; 16 percent nuclear; 16 percent hydro; and 7 percent oil. We cannot exploit our hydro potential because of internal strife, we are stymied in our nuclear power because of external impediments, and we have not woken up to coal although we have a major deposit of it in South Asia. Other methods are too expensive for us.

Regarding coal power generation, the US produces 51 percent of its power using coal, Poland 96 percent, South Africa 94 percent, India 68 percent, Australia 77 percent, China 79 percent, Israel 77 percent, UK 35 percent, Japan 28 percent, while Pakistan produces only 0.2 percent of its power through coal. Compared to India, this low level is quite alarming, especially when Pakistan has the world’s seventh largest reserves of coal in Thar. Given our national pattern, Balochistan is protesting because of the way it has been mishandled by Islamabad and we have jeopardised gas reserves because of the trouble there. Indeed, even the coal in Sindh could actually give a big push-up to Sindhi separatism because of lack of democracy in the country.

Pakistan is ill-prepared to face the future. Everyone thought it was India and its low-growth economy that would go under, but it has been growing at the rate of 9 percent every year in recent times, thus bracing itself for the troubles lying ahead. While this was happening, Pakistan was playing its jihad card at the cost of its economy which plunged to under 3 percent when the political system collapsed under the weight of jihad in 1999. We took 3 million Afghans to facilitate our “strategic depth” nonsense; who will take the 150 million we have neglected at home? *

http://www.dailytimes.com.pk/default.asp?page=2007\05\05\story_5-5-2007_pg3_1

 

[Neo]

Pakistan soon to begin rice exports to Iran

ISLAMABAD (Khaleej Times) — Pakistan would soon be exporting different varieties of rice to Iran to help increase trade between the two countries.

Pakistan's Agriculture Storage and Supplies Corporation (PASSCO) is finalizing its plan to initially export irri-9 and Basmati to Iran as per arrangements with Iran's Government Trading Company (GTC) at preferential duty.

Though with the abolishing of rice Export Corporation of Pakistan (RECP) few years ago, the private sector had already crossed one billion dollar rice export mark last year but the government still wants to encourage yet another government department to enter into the business.

Technically, PASSCO's role would be limited to purchase of rice, if the private sector is not able to procure and purchase at the support price. Now, rice is being sold domestically at much higher than the support price.

The proposed move of the government will discourage rice export from the private sector.

Pakistan's Commercial Counselor based in Tehran has sent a letter to the Agriculture Ministry to examine whether it would be possible for PASSCO to enter into the business of rice export with GTC.

According to the letter, the GTC will import the rice at a rate of four percent customs duty as against the private sector import duty of around 150 percent. The GTC feel more easy and safe, while dealing with a government department as heavy transactions are involved.

The chairman of GTC visited Pakistan in last December and offered to purchase 400,000 metric tons of rice. Of these, agreement regarding 20,000 metric tons has so far been signed with the GTC, the letter said.

In response to this letter, the Ministry Of Agriculture has sent a letter to the chairman of Rice Exporters Association (REAP) seeking views and comments from the stakeholders for allowing PASSCO to export rice to Iran.

The Agriculture Ministry letter also sought views from the stakeholders regarding possibilities for export of rice to Iran on their terms and conditions from the private sector.

Surprisingly, while the letter from the Agriculture Ministry to chairman of REAP inquires about terms and conditions for export of rice to GTC that is acceptable to private sector exporters, the actual letter from Pakistan Embassy to the Ministry Of Agriculture (Minfal) asks a completely different question to examine the issue of allowing PASSCO to export rice to Iran. A leading rice exporter said that the private sector must oppose any move to revive the ghost of RECP in the shape of PASSCO or any other body.

"We should not agree for sale of rice to GTC Iran through any government body such as PASSCO, TCP or anyone else. Only private sector should remain in the rice export business and no government body should be allowed to export rice," he stressed.

According to the exporter, a lot of rice is reportedly being smuggled from Pakistan to Iran evading import duty. Some rice is exported through under-invoicing to avoid or reduce the high duty.

http://www.tehrantimes.com/Description.asp?Da=5/5/2007&Cat=9&Num=9

 

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May 05, 2007
Vibrant health sector vital to improve competitiveness ranking

Karachi, May 4: Health scenario in Pakistan is dismal. The situation has reached a pass where an international economic watchdog has identified it as one of the major factors impacting business environment negatively.

Pakistan’s overall ranking on health and primary education was placed at 108 among its 125 competitors, while Sri Lanka registered the highest ranking (36) according to a report on comparative competitiveness of World Economic Forum.

The health indicator identifies the assessment of the medium-term impact of tuberculosis on doing business and showed a major change in ranking from 51st in 2005 to 99th in 2006.

Prevalence of reported HIV cases increased enough to cause Pakistan to move from 5th place to 26th. Rankings for malaria and tuberculosis have also showed some backward movement.

This is despite the fact that in Pakistan health is one of the most lucrative sectors of the economy. Health professionals, private sector hospitals and drug companies businesses are roaring, posting impressive profits. This, however, has not been translated into better health of an average Pakistani.

Most Pakistanis, especially those living in backward areas and belonging to deprived segments endure additional stress and suffering for health cover cbaters to people in urban centres and privileged classes.

The access to health facilities has actually shrunk over the years as public health centres and government hospitals continue to cut a sorry picture of neglect by the government and apathy of the civil society.

Declining national health graph belies government claims of poverty reduction. It also put advocates of free market in Pakistan in a tight corner as the case of leaving essential utilities to market forces in a society inflicted with disparities is weakened.

The state of Pakistan’s Competitiveness Report of the Competitiveness Support Fund (CSF) and the World Economic Forum in its annual Global Competitiveness Report have identified health as one the most important factors in Pakistan’s low ranking on the Global Competitiveness Index.

A delegation of the Competitiveness Support Fund (CSF), in a recent special presentation to the ministry of health in a meeting attended by the ministry’s hierarchy advocated that besides taking necessary steps to improve performance of the health sector in Pakistan there is a need to update data on the primary health and education indicators and provide it to the international sources.

The presentation was a part of the exercise to bring all the line-ministries on board to address the competitiveness issues of Pakistan’s economy. The prime minister launched the State of Pakistan’s Competitiveness Report in March and termed competitiveness as the corner stone of Pakistan’s growth strategy.

The CSF head Arthur Bayhan, in the meeting discussed in detail the reasons for Pakistan’s low ranking on the Global Competitiveness Index (GCI) of the World Economic Forum. The meeting was chaired by Khushnood Akhtar Lashari, secretary health.

Abdul Basit, joint secretary, Prime Minister’s Special Programme Wing, ministry of finance also accompanied the CSF delegation.

Arthur Bayhan in his presentation briefed the ministry on the strengths and weaknesses of the ‘Health Pillar’ of the Global Competitiveness Report. Pakistan was ranked at 91 among 125 countries on GCI.

Infant mortality scores in many countries are being reduced and Pakistan will need to make even greater effort to improve its scores relative to other countries. Bayhan explained the rational behind the indicators and pointed out that the data used for these indicators is not up-to-date.

Mr Lashari informed the CSF delegation about health policy and the government’s strategies to address the primary health issues in the country. He said, “Our aim is to improve the efficiency of the healthcare services and to enhance the quality of citizens’ livelihood in the most economically vulnerable segment.

He informed the delegation about the continuation of ministry’s programmes for the control of tuberculosis (TB), HIV/AIDS and malaria.

He also briefed the meeting about the new initiatives on National Maternal and Child Health Program (NMCH) and the Prime Minister’s Programme for Prevention and Control of Hepatitis in Pakistan.

The ministry of health has made a commendable improvement in the percentage of TB cases detected and cured. The national programme for TB control has been very successful in detecting and curing 176,000 patients out of 240,000 registered in 2006 whereas only 60,000 patients were cured in 2001.

Secretary Health Mr Lashari also expressed his keen interest in assisting the CSF for the State of Pakistan Competitiveness Report for 2008. It was agreed that the ministry of health will be working closely with the CSF in improving Pakistan Global Competitiveness Rankings on the health indicators.

http://www.dawn.com/2007/05/05/ebr1.htm

 

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Pakistan To Sell 47.75% Of NITL In Three Equal Portions

ISLAMABAD -(Dow Jones)- Pakistan government will sell 47.75% of almost PKR79 billion ($1.3 billion) of National Investment Trust Limited, or NITL, in three equal parts to three parties at the highest bid price, says an official statement.

A statement issued by Pakistan's Privatization Commission says in this way no party could purchase more than 16% holdings.

"According to the approved transaction structure, 47.75% of the total NITL units would be divided into three equal parts and management rights of each part sold to three different parties at the highest bid," says the statement.

NITL is country's largest mutual fund in asset base and still needs some issues to be resolved before going in new hands.

"The timing of transaction, pre-qualification of bidders and others are under consideration in consultation with concerned ministries and are expected to be resolved soon where-after final date of bidding would be announced," says the statement.

In a previous Pakistan Steel Mill privatization case Supreme Court blocked the transaction citing irregularities also raising questions on Arif Habib Group which was a party in successful consortium.

The same group is also in bidding process to buy NITL, for Arif Habib qualification Privatization Ministry has sought clearance from Law Ministry, whose suggestion is still awaited.

Opposition political parties criticized Friday the government for pre- qualifying Arif Habib Group in NITL bidding process.

The ministry said the transaction procedures was processing on track in a transparent manner following procedures.

Privatization Commission conducted pre-bid meeting of NITL on April 24 and expects very competitive bidding process.

The net assets on NIT have increased from PKR61.0 billion as on June 30, 2005 to PKR79.08 billion as on December 31, 2005, reflecting a growth of 29.64%.

NITL is an open end mutual fund, having approximately 53,000 unit holders and 19 branches across Pakistan. Its investment is in 435 out of a total of 659 listed companies.

http://www.nasdaq.com/aspxcontent/N...CQDJON200705050931DOWJONESDJONLINE000373.htm&