Pakistan Economy - News & Updates - Archive

[Neo]

May 18, 2007
Hubco allowed 225MW new plant

KARACHI, May 17: The Hub Power Company Limited (Hubco) was issued Letter of Support (LoS) by the government on Wednesday for setting up a new power plant with net capacity of 225MW, a senior company official told Dawn on Thursday.

“We had completed all formalities and forwarded to the Private Power & Infrastructure (PPIB), pre-feasibility documents for a new power plant earlier this year,” said the company official and added that after several sessions of discussions, the company was awarded LoS on Wednesday. He thought that to be a major step forward.

The company official said the new power plant would cost around $230 million.

“Tariff structure would be discussed with the National Electric Power Regulatory Authority (Nepra) in due course,” he said.

Hubco already operates the country's biggest independent power plant (IPP) with net capacity of 12,00MW located in Tehsil Hub, District Lasbella, Balochistan.

Chief Executive of Hubco, Mr Javed Mahmood, in answer to a query, responded that world-wide it was the sellers' market for power generation machinery since it was the manufacturer who dictated costs and terms.

He claimed that Hubco would have an edge in acquisition as well as delivery due to the good reputation that the company and its parent enjoy.

The CEO of Hubco would not disclose the location of the new plant but hinted that it would neither be in Karachi, nor in Balochistan. But Mr Javed made it a point to emphasise: “We are absolutely committed to Pakistan and would like to expand our activities in this country.”

http://www.dawn.com/2007/05/18/ebr9.htm

 

[Neo]

May 18, 2007
Livestock production up 30pc in 10 years

ISLAMABAD, May 17: Pakistan’s total animal production has grown by 30 per cent in 10 years (1996-2006) compared with 21 per cent in the previous decade of 1986-1996, says Pakistan Livestock Census 2006, results of which have partially been questioned by international experts.

The census conducted by Agricultural Census Organisation over the last 16 months was released here on Thursday by Secretary Statistics Division Asad Elahi. The livestock survey is carried out after 10 years.

Mr Elahi said that field work of the survey took about 11 months in five phases between September 2005 to July 2006 and sampling was carried out in 12 per cent of Pakistan areas and covered 26 per cent housing units of this area including Tharparker and Choolistan where there was large concentration of animal population. The sample survey was based on a total of 1.03 million questionnaires.

He said the cattle production has registered a growth of 45 per cent under the 2006 census compared with 19 per cent of the previous census. Of this, buffalo production grew by 35 per cent, sheep production by 13 per cent and was higher than 29 per cent and four per cent respectively of the previous census.

Goat production also increased by 31 per cent in 2006 census but was significantly lower than 42 per cent growth recorded in the 1996 census. The census revealed that cow insemination had increased from 0.05 million in 1996 to 1.68m, showing an increase of 236 per cent. Likewise, buffalo insemination increased by 106 per cent to 1.11 million in 2006 compared to 0.54 million in 1996.

Milk production increased by 36 per cent to 38.37 billion litres per annum in 2006 from 28.26 billion litres in 1996, says the livestock census. The census revealed that that number of camels in Pakistan has now reached 0.9 million, up by 13 per cent since 1996.

Interestingly, the number of mules and donkeys increased by 18 per cent and 19.9 per cent respectively since 1996 and stood at 0.155 million and 4.268 million but the number of horses increased nominally by three per cent and stood at 344,253 in 2006.

The census results were presented for review to Dr Hans-Siegfried Grunwaldt, an expert of international repute of Germany, who generally appreciated the structure and questionnaire but questioned some of the outcomes.

For example, he said that “for sheep, the stock of young animals (below one year) has increased by 22.3pc while the stock of the female animals elder than one year has increased by 3.5 per cent only. It would be helpful to have an explanation for that. Could it be change of utilisation of animals resulting in extended raising?”

He also said that the time of data collection was dispersed over time and regions between September 2005 and July 2006, which he said should have been “as far as possible at a common point of time”.

He said that “stocks of animals might vary seasonally and thus might have an impact on the regional results of this census. I guess in spring/summer more calves might be born than in autumn/winter. This could explain that in NWFP (between March and June) 72 per cent of the cattle cows had been in-milk where as in Punjab (between September and January) the rate was 62 per cent only. Moreover, it is not indicated whether or not the previous census has been conducted at the same point of time as the present census”.

http://www.dawn.com/2007/05/18/ebr13.htm

 

[Neo]

May 18, 2007
39 uplift projects approved: CDWP okays Mirani dam resettlement action plan

ISLAMABAD, May 17: The Central Development Working Party (CDWP) on Monday cleared 39 development projects estimated to cost Rs11.7 billion, including a resettlement action plan for Mirani Dam in Balochistan. These 39 projects involve a foreign exchange component of Rs1.8 billion.

The meeting was presided over by Deputy Chairman of the Planning Commission Dr Akram Sheikh.

Planning commission spokesman Asif Sheikh told reporters after the meeting that in the infrastructure sector, 26 projects costing Rs8.5 billion, six social sector projects worth Rs1.4 billion and seven projects in science and technology and other sectors costing Rs1.8 billion were either approved or recommended to the Executive Committee of the National Economic Council for approval.

The meeting recommended the Resettlement Action Plan for Mirani Dam worth Rs1.84 billion to the Ecnec for approval. However, the CDWP appointed the National Rural Support Programme (NRSP) as third party which, with the help of the Balochistan government, would re-asses the cost of land, buildings and trees under the compensation package. He said that the height of Mirani dam would be increased by 20 feet that would increase the cost of the resettlement plan.

Mr Sheikh said that in the transport and telecommunication sector, the meeting approved 12 projects costing Rs4.9 billion, five water projects worth Rs5 billion, nine physical planning and housing projects valued at Rs1.5 billion, three higher education projects worth Rs986 million, four industrial and commerce sector projects which would cost Rs995 million and two projects in the science and technology sector worth Rs450 million.Of the approved projects, seven projects valued at Rs1.7 billion would be undertaken in the Punjab province, five projects costing Rs1.8 billion in Sindh, and 10 projects worth Rs1.6 billion in the NWFP. He said for the first time, the government had approved four projects of private sector.

He said that the meeting had also approved the settinh up of a foundry service centre in Lahore on 50:50 per cent basis funding. The project will cost Rs195 million. The centre would share 50 per cent of the cost in the project while the chamber of commerce would share the remaining cost. He said that the chamber would also give Rs500 million for purchasing land for the centre. He said that the center would provide dye-making and moulding facilities besides providing materials testing facilities and training.

He said the meeting also approved a product development centre in Gujranwala at a cost of Rs98.7 million that would also provide common facility for industrial development. “The meeting also approved product development center for composite based sports goods and business and commerce centre in Sialkot which will also extend facilities for industrial development.”

In the water sector, the meeting approved the construction of Lougher and Karak dams in Karak district and the Darmalak dam in Kohat district.

http://www.dawn.com/2007/05/18/top7.htm

 

[Neo]

Friday, May 18, 2007

Govt to continue providing digital access to people: PM

ISLAMABAD: Prime Minister Shaukat Aziz on Thursday said the government will continue providing digital access to people so that they could benefit from the opportunities of globalisation.

He was addressing at a function held in connection with the World Telecommunication Day coupled with the launching of broadband service by Pakistan Telecommunication Limited (PTCL) at a local hotel here.

The PM said: “Bridging the digital divide is the need of the hour…therefore, there is an urgent need for improving the access of developing countries and disadvantaged groups and leading the way to a truly open, inclusive and prosperous telecommunication age.”

The PM said the country was experiencing a success story in the telecommunication sector as a direct result of the reform dividend.

He said with fully liberalised and deregulated environment, the telecom sector in the country attracted foreign investment on licence and infrastructure of over $9 billion during the last five years, while another $4 billion was expected by 2010.

Prime Minister Shaukat Aziz said this year’s theme of the World Telecommunication Day - ‘Connecting the Young: The opportunities of information and communication technology - had a special relevance with Pakistan, as 100 million of its population comprised youth below 25 years of age.

He said the best way to leverage this potential was to focus on human development and particularly on education and skills reflecting national and international job market.

About achievements in the telecom sector, the PM said teledensity had increased from three percent in 2000 to 40 percent in 2007, which was the highest in South Asia.

http://www.dailytimes.com.pk/default.asp?page=2007\05\18\story_18-5-2007_pg5_2

 

[Neo]

Friday, May 18, 2007

Mutual fund industry size stands at Rs 215b

LAHORE: Mutual fund industry has witnessed a phenomenal growth in the last few years, as in 2002 the industry size stood at Rs 25.1 billion, and as of March 31 2007 its accounts to 215 billion rupees.

Abbas Sajjad, Head of Business Development at Atlas Capital Markets, said this figure in itself is the proof of trust and credibility people have in this industry. He told Daily Times that an impressive number of foreign investors are investing in Pakistan’s capital markets as they see Pakistan as a developing economy offering exceptional returns.

Regarding Atlas Capital Markets (Private) Limited (ACML), Mr Sajjad told that it is a wholly owned subsidiary of Atlas Bank Limited and one of the 12 financial and engineering entities falling under the banner of the Atlas Group. It has formally launched an advisory and distribution service of open-end funds by the name of ‘Inbest’ from May 14, 2007. Initially, this service will be restricted to four major cities; Karachi, Lahore, Islamabad and Faisalabad.

He said mutual fund is a pool of assets of scattered investors. It is becoming popular among investors with every passing day. Since mutual funds offer easy redemption option by enabling the investor to enter or exit as per its wish, it is emerging as a buzzword among investors’ circles.

Sajjad further added that the competition is set to become fierce Due to the entrance of big commercial banks as they are now tapping the retail market, which was earlier neglected. These banks are able to do so because of their extensive branch networks and customer databases and huge advertising budgets. A healthy contribution has been possible because of the emergence of distribution and advisory services for mutual funds. Indeed the competition is increasing at an alarming rate but this will bring out the best fund.

http://www.dailytimes.com.pk/default.asp?page=2007\05\18\story_18-5-2007_pg5_11

 

[Neo]

Pakistan has 58.39 million mobile users in April
Thursday 17 May 2007

Pakistan had a total of 58.39 million mobile subscribers at end-April, up from 55.62 million at end-March, according to the Pakistan Telecommunication Authority (PTA). Mobilink had the highest number of subscribers with 25.21 million subscribers, followed by Ufone with 12.49 million subscribers, Warid with 9.71 million subscribers, Telenor with 9.63 million subscribers, Paktel with 1.02 million subscribers and Instsphone with 0.33 million subscribers. The mobile density was 37.58 in April 2007 compared to 35.79 in March

http://www.telecompaper.com/news/article.aspx?id=168330&nr=&type=&yr=

 

[Neo]

PAKISTAN'S LIVESTOCK EARNINGS RISE TO HIGHER SHARE OF GDP

Thursday May 17, 2007

ISLAMABAD, May 17 Asia Pulse - The share of livestock as a proportion of Pakistan's gross domestic product (GDP) has increased from 25.3 per cent in 1996 to 49.5 per cent of the agricultural value added in 2006, the 4th Livestock Census 2006 has revealed.

Growth during last 10 years in terms of cattle head count was 45 per cent, with buffalo 35 per cent, sheep 13 per cent, goats 31 per cent, camels 13 per cent, horses 3 per cent, mules 18 per cent, asses 20 per cent and domestic poultry, which has witnessed an increase in population of 18 per cent.

Sikandar Hayat Khan Bosan, the Federal Minister for Food Agriculture and Livestock, made the announcement at a press conference.

Secretary Agriculture Ismail Qureshi and officials from Agriculture Census Organisation (ACO) were also present.

The minister said the Livestock Census was undertaken regularly by the ACO every 10 years.

The census exercise was carried out in 1976, '86, '96 and now in 2006.

The census was carried out on a sample basis and 1.003 million households were counted during the census. An entire field operation was spread over five phases from September 2005 to July 2006.

The Livestock Census clearly indicates that headcount of economically important livestock shows an increasing trend, in terms of productivity.

Milk production has also improved in both cattle and buffalo and the comparative growth rate of livestock between 1986 to 2006 had shown an increasing trend, the minister said.

Census results shows that head count of the livestock have increased significantly during 1996 to 2006 and cattle population have increased from 20.42 million to 29.56 million with a 45 per cent increase, buffalo from 20.27 million to 27.3 million, with a 35 per cent increase, sheep 23.54 million to 26.49 million with a 13 per cent increase, goats from 41.17 million to 53.79 million with a 31 per cent increase, camels from 0.82 million to 0.92 million with a 13 per cent increase, horses from 0.33 million to 0.34 million with a 3 per cent increase, mules from 0.13 million to 0.16 million with an 18 per cent increase, asses from 3.56 million to 4.27 million with a 20 per cent increase and domestic poultry have from 62.26 million to 73.65 million with an increase of 18 per cent, the minister added.

In terms of milk production 1996-2006, the minister said that milk production from cows had witnessed an increase of 42 per cent, which stood at 13.33 billion litres in 2006, as compared to 9.39 billion litres in 1996.

Milk production from buffaloes increased from 18.90 billion litres in 1996 to 25.04 billion litres in 2006, projecting an increase of 32 per cent.

Total milk production has increased from 28.26 billion litres in 1996 to 38.37 billion litres in 2006, with an increase of 36 per cent.

http://au.biz.yahoo.com/070517/17/18lra.html

 

[Introvert]

Border trade with Iran up by 100pc in three years

QUETTA, May 18: The border trade between Pakistan and Iran witnessed an increase of almost 100 per cent in last three years and both the countries have prepared a list of items to reduce duty and taxes for further enhancement of trade volume.

This was stated by the Governor-General of the Iranian Province of Sistan, Dr Habibullah Dhamardha, and Balochistan Governor Owais Ahmed Ghani while jointly addressing a press conference at the Governor’s House here on Friday.

The border trade would be brought to $1 billion between Iran and Pakistan and this increase would be 200 per cent more than the present trade volume, they said.

They said in 2004-04 the border trade volume between Pakistan and Iran was Rs7.5 billion, but it increased to Rs16 billion during 2005-06 during the various measures taken.

"We have fixed the target of trade increase to Rs60 billion," they announced and added that both the countries have suggested various steps for achieving the target.

Governor Owais Ahmed Ghani informed that Pakistan had prepared a list of 465 items while Iran included 400 items in the list on which customs duty and taxes would be reduced in near future.

He said both the countries have decided to improve infrastructure for free movement of goods, besides simplification of issuance of visa.

Railway line between Quetta-Zahidan would be improved and air link would be established between both the provinces, he said, adding launching of a ferry service between Gwadar and Chahbar ports was also discussed in the meeting.

He said that Pakistan had established four entry points other than Taftan while some more points would also be opened soon.

He said that dispute on land allotment for construction of Pakistani consulate was also resolved and construction of the new building was launched.

He said that Zahidan and Balochistan would also extend help and cooperation in the field of education and would also provide cold storage and other related facilities to each other.

The Governor General of Sistan Balochistan, Dr. Habibullah Dhamardha, while replying to a question said that Pakistan and Iran have very cordial relations and his country wanted to extend more cooperation in various fields for the development of Pakistan.

He said that Iran wanted to discourage smuggling on its border for increasing legal trade between both the countries and both the countries have decided to take steps in this regard.

Referring to Gwadar port, the Iranian head of delegation said that Iran would review the available opportunities at Gwadar port and would take benefit of it.

He said that Iran was supplying electricity to various towns of Makran and would expand its supply to other areas.

Replying to a question, Dr. Dhamardha said the old Quetta-Zahidan railway track would be improved for increasing rail speed.

He said that Quetta -Zahidan highway would be improved. Joint venture could be launched for providing maximum communication and other required facilities, he said.

He said that as Islamic countries, Pakistan and Iran should come forward and extend help and cooperation to other Islamic countries.
http://www.dawn.com/2007/05/19/ebr1.htm

 

[Neo]

Portfolio investment plummets after scaling new heights

KARACHI (May 19 2007): Portfolio investment in terms of the Special Convertible Rupee Accounts (SCRAs) maintained at the State Bank scaled new heights ever since it touched the record figure of $700.4 million on April 23, 2007.

It stood at $827.5 million a few days ago on May 14, 2007, after posting an increase of $4 million on May 13, and an increase of over $127 million during the intervening 20 days since April 23. Portfolio investment, however, plummeted to $784 million on May 16 after posting decline of $3 million and $40.4 million on May 15 and 16 respectively.

It appears that up to May 14, the day marking the countrywide mourning of the May 12 Karachi killings, foreign investors remained undaunted of the brewing political crisis. They continued to purchase Pakistani equity at depressed prices as the KSE Index first plunged from the record high of 12,512 points on May 4,to the low of 12,080 by May 7. Then after gradual picking in the following days, plunged again from 12,368 on May 11 to 12,259 on May 16, the period when the foreign investors became confused about the future prospects of the stock market in Pakistan.

For the present, we foresee more dis-investments in the coming days until the investors return to the market with recuperated confidence as soon as the dust of political killings settles down.

Between May 14 and May 16, nearly all big investors went on unloading their portfolios with Malaysia alone dis-investing some $33.4 million followed by UK dis-investing $6.7 million, USA $5.7 million and Hong Kong $1 million. Strangely enough, Switzerland, which had been by far the largest dis-investor during FY07, dis-investing some $57.4 million by May 14, brought in fresh funds in the amount of some $1.3 million during May 15 and 16.

Among others, Singapore and UAE made fresh investments of $1.5 million and $0.8 million respectively amid minor inflows observed also in the case of Japan ($0.25 million) and Liberia ($0.03 million). No change was observed in the case of other relatively minor investors/dis-investors, numbering 13 in all, as their positive or negative balances under the SCRAs remained unchanged during the period.

http://www.brecorder.com/index.php?id=565860&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Sindh government demands ban on wheat export

KARACHI (May 19 2007): Sindh government on Friday contacted the federal government for the imposition of immediate ban on the wheat export because of its rising prices in the domestic market and a probable shortfall of 0.150 million in procurement, sources closed to food ministry told Business Recorder.

Last December, federal government had allowed around 1.3 million tons of wheat for export including 0.550 million from open market. Government took this decision by keeping in the estimated bumper crop of 23 million tons during the current season.

Sources said that wheat exporters are buying huge quantity of wheat from open market for export purpose, which is the basic factor behind its soaring prices in the domestic market.

Wheat prices in the local market have raised by Rs 100 per bag to Rs 1215 per 100-kg bag during last two weeks, which was earlier being tagged at Rs 1115 per 100-kg bag, they added.

On Thursday a delegation of Pakistan flour Mills Association met the secretary food Sindh and demanded for a ban on wheat export. This demand by the millers was endorsed by the Sindh food department on Friday and finally sent an official request through formal channels to the federal government, in which it has demanded imposition of the immediate ban on wheat export.

Government of Sindh has informed the federal government in the letter, stating that, "due to the high price of wheat in domestic market, making it impossible for the Sindh Food Department to achieve the wheat procurement target," sources said.

Some 0.550 million tons wheat has been procured by the Sindh food department against the target of 0.7 million during last one and a half month, while further procurement process has come to a standstill due to high prices of wheat in the market, Sindh government said in letter.

"We were procuring around 20-25 thousand tons per day till last week and now procurement has declined to one thousand tons per day in the wake of high price of wheat," letter added.

Sindh food department said that these days wheat price is higher than the last year one, which is around Rs 12000 per ton against the government's support price of Rs 10625 per ton in the Sindh and it is also expected that procurement target of Sindh food department will not be achieved.

It is requested to the federal government to take immediate steps and suspend the wheat export at least till the target of wheat procurement is achieved, they demanded.

Sources said that due to high price offered by the wheat exporters, farmers prefer to sell their crop to exporters against food department. At least 25 flour mills on Thursday suspended their operations due to increasing wheat-grain price on the back of extra ordinary buying by the export houses, they said and added despite arrival of fresh crop, wheat price is on the constant rise in the open market, they added.

They informed that some flour mills in Sindh province have raised their product price by Rs 0.50 to Re 1 per kg to Rs 16-18 per kg on Thursday and some have closed their operations in the wake of hike wheat price.

They said that some indications show that government estimation of bumper wheat crop is incorrect and the figures of crop will be different than of that announced by the government.

http://www.brecorder.com/index.php?id=565849&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Nepra offers to buy electricity from 'captive power'

KARACHI (May 19 2007): The National Electric Power Regulatory Authority (Nepra) has offered the industrial sector to generate electricity from their 'captive power' capable to generate 300-400MW in to the national grid.

This was stated by the Chairman of Nepra, Lieutenant General Saeed-uz-Zafar (Retd) while speaking as a chief guest at the first anniversary celebration of Energy Update here on Friday.

He said, "We will give them (captive power) the permission to sell this energy or use it for their industrial needs to reduce burden from national grid and cater electricity shortfall." "Presently the electricity losses loom between 27 to 42 percent, of which the transmission loss is only at 8 percent while rest is power theft," he pointed out.

He hinted that per unit cost of electricity is likely to shoot-up to Rs 15 per unit in future due to high power tariffs. Saeed said, "We are importing oil for consumption and for last few years we are discussing about gas import from various options and now we are planning to import electricity from Iran."

He said why should we enhance oil and gas explorations as our country have huge reserves of fossil fuel to meet the country's growing demand. Earlier, the Chief Executive Officer of Karachi Electric Supply Corporation (KESC) Lieutenant General S. M. Amjad (Retd) said, the outstanding amount of power utility on city's consumers is Rs 20 billion, excluding government departments. Only Rs 3 billion bills were disputed, he maintained This was due to our weak recovery system that would not able to collect pending outstanding, he said, adding that the government should made legislation for dues recoveries.

"There is a communication gap between the KESC and the consumers and we have to tell truth whether someone likes it or not," he added. He said, power demand of the city stand somewhere at 3000MW, of which the corporation and IPPs were generating 1600MW. The shortfall meet through Wapda's supplies, which meet our demands, he added.

The city witnessed before the hot summer a demand of 2350MW and it is likely that the demand would further increase, he observed. Abdul Haseeb Khan said, the private sector is able to invest in power generating plants of 500MW, if the federal government provide guarantee of investment and generation purchase.

The Managing Director of Asia Petroleum Limited, Naved Alam Zubairi said, only 55 percent of population has access to electricity, while 22 percent receiving piped gas. The Pakistan is extremely low energy intensity economy of 14 MMBTU per capita per annum.

He said, the substantial energy injection is required for lifting the general standard of living especially if we do not want to sustain growth rate. The gas distribution system is exhaustive but rising demand and declining fields make expansion of further distribution system infeasible, he added. Demand indigenous supply gap of energy will keep on steadily increasing creating more and more room for imports, he pointed out.

As far as primary energy supply of concerned, the country cater about 80 percent and the long term goal is to create a competitive, efficiently run, financially and largely viable privatised oil and gas sector, he added. Primary energy demand for next 15 years is expected to grow at 6 percent. In 2020 annual energy requirement would be 130 MM TOE from existing 57.85 MM TOE.

http://www.brecorder.com/index.php?id=565824&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Pakistan 2nd largest importer of US cotton

By Mansoor Ahmad

LAHORE: Pakistan after China has emerged as the second largest importer of Puma cotton from the US, overtaking the European Union, Indonesia, Russia, Thailand, India and Taiwan in the last seven years.

The US Agriculture Department’s data reveals in the year 2000 Pakistan was placed at second last spot among top 18 importers of US Puma cotton. At that time, Pakistan imported 450,000 bales of 480 pounds compared to 4,770,000 bales imported by the EU, which was the largest importer of US cotton. China imported only 230,000 bales.

Among Asian countries, Indonesia was the largest importer of US cotton in 2000 with imports of 2.65 million bales. India imported four times more cotton from the US than Pakistan in the same year. Its imports stood at 1.56 million bales.

In 2006, when textile quotas were abolished, the markets of US cotton changed dramatically. China emerged as the largest importer with imports of 17.5 million bales, followed by Pakistan, which imported 2.3 million bales.

India imported only 400,000 bales, which were less than what Pakistan was importing in 2000.

Pakistan’s dependence on US cotton increased steadily from 2000 to reach the present level. Similarly, Chinese imports of US cotton increased rapidly every year till reaching the historic peak of 19.28 million bales in 2005, when there was a short cotton crop in the country. However, cotton imports by China declined by 1.8 million bales to 17.5 million bales last year.

Giving the reason for the demand of US cotton, market analysts pointed out it was long staple used for producing fine-count yarn. They said import of a large quantity of quality cotton showed Pakistan was well poised to produce quality fabrics.

At present, the impact of this large import of long-staple cotton is not being felt in exports as the spinners are mainly exporting yarn made from this cotton.

They said the value added garment sector was not yet geared to use finer fabrics as it was still catering to low-end markets in Europe and the US. They said the sector would gradually acquire skills and know-how to produce high-value garments from fine quality fabrics.

However, they pointed out the decline in Indian import of long-staple cotton was not because of any flaw in marketing fine-count yarn or fabric.

Indians actually were increasing domestic production of long-staple cotton.

India, in fact, is now competing with the US in the long-staple global cotton market. Pakistan, however, has failed to upgrade cotton cultivation and production to the level achieved by India.

http://www.thenews.com.pk/daily_detail.asp?id=56582

 

[Neo]

May 19, 2007
$1bn bonds assigned B+ rating

KARACHI, May 18: Standard & Poor's Ratings Services on Friday assigned its 'B+' senior unsecured foreign currency debt rating to Pakistan's proposed global bond issue of up to $1 billion.

The encouraging rating has been assigned with few reservations about some sectors of the economy.

“The sovereign credit ratings on Pakistan reflect strong economic growth that is supported by a consistent and reform-oriented policy environment, balanced against prevailing high public debt and low fiscal flexibility,” said the rating agency.The proposed issue will consist of a new 10-year bond maturing in 2017, and the reopening of the existing bond maturing in 2036.

The 'B+' rating on the existing bond was also affirmed.

The rating agency found the economic growth of Pakistan sustainable hoping better performance in the future.

"Pakistan's generally prudent economic management and strong policy environment, which over the past several years has consistently focused on structural and institutional reforms, is translating into better growth prospects.”

The rating agency viewed economic growth healthy improving at the rate of seven per cent per year with the help of foreign investment.

Trade liberalisation and extensive privatisation are generating productivity improvements, and attracting a rising amount of foreign direct investment, much of it green field. As a result, the country is poised for a period of sustained high growth of about seven per cent per year, helping to alleviate poverty and make further inroads in debt reduction, said Standard & Poor’s.

The agency expressed disappointment over narrow tax base which has been stagnant for many years though the revenues have improved with the size of economy.

It said the ratings remain constrained by a high level of public and external leverage, and fiscal inflexibility owing to an exceedingly narrow tax base.

"This fiscal constraint limits much-needed public infrastructure investment, and hampers the effectiveness of monetary management, given that the practice of deficit financing by the central bank still prevails.”

Government revenues are estimated at 14.7 per cent of the GDP for fiscal year 2007, while the country's stubbornly low tax-to-GDP ratio of just 10.4 per cent is not expected to improve materially with the modest revenue-raising initiatives of the 2007 budget, said the rating agency.

Gross general government debt to revenues should, therefore, remain at about 380 per cent, well above the median 200 per cent for similarly rated countries.

The government has been under severe criticism by economists regarding accumulation of domestic and foreign debts which curtail availability of liquidity to invest in development projects.

However, the agency did not see any impact of political instability due to coming elections, campaign against President Musharraf and some major violence in the cities, like Karachi and Peshawar.

“The recent escalation of political tension and uncertainty posed by impending presidential and parliamentary elections are unlikely to have any significant impact on credit fundamentals,” said the rating agency.

"Yet, the longer-term challenge for the government remains, which is to expand and deepen reforms of its tax system to raise government revenues significantly from the current level, and to demonstrate that the current pro-market, pro-growth set of policies will be sustained during successive administrations," it added.

Analysts said that the assigning B+ to the bonds which the government plans to sell in the European Bonds market would encourage her to use the full potential to tap maximum from the market.

The government has adopted policies to borrow more from the markets instead of borrowing from the donor agencies or consortiums of several countries.

http://www.dawn.com/2007/05/19/ebr6.htm

 

[Neo]

May 19, 2007
Pakistan plans dollar bond roadshows

ISLAMABAD, May 18: Pakistan announced on Friday to hold road-shows in Asia, Europe and USA next week to make another issue of global dollar bonds to raise over $800-1000 million funds for general budgetary support.

The issue of bonds would be subject to market conditions, said a statement issued by the finance ministry.

The government has mandated the Citibank, the Deutsche Bank and the HSBC for this capital market financing.

Pakistan returns to the international financial market with a Rule 144A/Regulations S. bond issue for general budgetary support. The rule makes securities eligible for purchase and trade by institutional US investors.

The securities will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the US absent registration or an applicable exemption from the registration requirements of the Act.

The government plans to float these bonds in New York before the close of this fiscal year but most probably within this month. The finance ministry has been holding continuous meetings with these fund managers on the subject over the last few months.This will be Pakistan’s fourth international bond in the last five years.

Last year, Pakistan sold $800 million in a dual-tranche sovereign bond, comprising $500 million in a 10-year issue and $300 million in 30-year paper. The proposed new sovereign bond is likely to be for 15 and 20 years maturity period.

In 2004, Pakistan raised $500 million through five-year sovereign Eurobond and in 2005 it issued $600 million five-year Sukuk (an Islamic bond) against which it had to pledge certain sections of the Motorway project.

http://www.dawn.com/2007/05/19/ebr8.htm

 

[Neo]

Pakistan on verge of economic take-off: Prime Minister

DEAD SEA (May 20 2007): Prime Minister Shaukat Aziz said here Saturday the internationally recognised broad-based comprehensive reforms undertaken in Pakistan during the last seven years have repositioned and revitalised the country which is now included among the eleven countries on the verge of economic take off.

Addressing a session of the World Economic Forum on "Success stories in development" he said on their other hand political reforms in Pakistan have ensured good governance through transparency and accountability.

He said there has been devolution of power at grass roots level, with elected representatives running the affairs at the district, provincial and national levels, with representation for women and minorities.

"Pakistan today has an active parliament, an independent judiciary and free media," he said. The Prime Minister said the economic reforms are based on the principles of deregulation, liberalisation and privatisation and they have ensured sustained annual growth at an average of 7 per cent over the past four years.

He said the government has also focused on improvement of the health delivery system, promotion of literacy and improving educational standards, empowerment of women and protection of minorities.

Shaukat Aziz said Pakistan has now embarked upon second-generation reforms including enhancement of infrastructure, development of human capital and building a knowledge-based economy. He said the lessons of Pakistan's experience of implementing the reforms could be useful for other countries facing similar challenges.

"We also believe that it is not the business of the government to be in business; the government should be a facilitator and a regulator while the private sector should be allowed to drive growth." The Prime Minister said the international community, especially the western powers, also need to play a supportive role to help bring peace and stability to the region which is also in their own interest.

Shaukat Aziz said the international community must facilitate efforts to resolve the disputes and conflicts raging in the region. They must help in finding just and durable solutions to these issues, as then it would be possible to remove the root causes of terrorism that threatens the entire international community.

The Prime Minister said the developed countries also must support efforts for socio-economic development in the Middle East region and asked them to provide market access, encourage investment and joint ventures and ensure transfer of technology.

Referring to interfaith harmony, the Prime Minister said it is also necessary for the Muslim and non-Muslim worlds to bridge the increasing gap between them through interfaith dialogue and understanding. Islamophobia and discrimination against Muslim minorities must also end, he added.

Shaukat Aziz said Pakistan would continue its efforts to promote interfaith harmony and dialogue. He said Pakistan has also put forward the concept of enlightened moderation for reform of Muslim societies as well as resolution of issues in the Muslim world with the help of the major powers.

He especially mentioned the efforts being made by Pakistan to address the challenges confronting the broader Middle East region and the Islamic world and the country's key role in the international campaign against terrorism. The Prime Minister said Pakistan has repeatedly advocated resolution of the root causes of terrorism, the disputes and conflicts that are breeding injustice, frustration and anger among Muslims, leading to extremism and violence.

Referring to President General Pervez Musharraf's efforts to resolve the Middle East problem, the Prime Minister said President Musharraf recently visited several Muslim countries to build support for a just and peaceful solution to the issues in the region.

He said Pakistan remains highly concerned over the escalating spiral of violence in Iraq and fully supports the sovereignty and territorial integrity of Iraq and deeply regrets the sectarian violence in the country. The Prime Minister said the international community must make every effort to help the Iraqi people bring this tragedy to an early end.

He said Pakistan supports negotiations to remove tension over the Iranian nuclear program and opposes any use of force. He said Pakistan believes that Iran must honour its international obligations.

Referring to Afghanistan situation, the Prime Minister said peace and security in Afghanistan is in the strategic interest of Pakistan and the region. "We fully support the Bonn process and have provided extensive support to the government of President Karzai and will continue to do so." He said Pakistan and India are engaged in a dialogue process to resolve the Kashmir dispute, emphasising that a just and durable solution of the issue must be based on the wishes of the Kashmiris.

http://www.brecorder.com/index.php?id=566175&currPageNo=1&query=&search=&term=&supDate=