Pakistan Economy - News & Updates - Archive

[Neo]

Pakistan and EU moving closer to Third Generation Agreement

ISLAMABAD (May 25 2007): Pakistan and European Union (EU) have discussed in depth all the aspects of Third Generation Agreement (TGA) and are moving closer despite the fact that it involves multiplicity of issues, said James Moran, European Union Director external relations for Asia.

Addressing a news conference along with Secretary Economic Affairs Division, M Akram Malik here on Thursday after the end of the first meeting of Pakistan-EC Joint Commission (JC) under Pakistan-EC Co-operation Agreement, James said that delegation of both the sides discussed ways and means to further strengthen the relations.

"We held discussion on trade development, electoral process, governance and civil and human rights issues and improved our understanding" said James adding that Pakistan International Airlines (PIA) was given a recovery plan to overcome the difficulties it had with EU.

To a question about Free Trade Agreement (FTA) with Pakistan, he said it would be too early to do anything about it and no one should expect presupposed outcome. M Akram Malik, Secretary, Economic Affairs Division led the Pakistan side whereas James Moran, Director for Asia in the European Commission, led the EC side.

Akram said the aim of the EC-Pakistan third generation agreement on partnership and development is to deepen relations between the two sides so as to promote mutual understanding and to increase co-operation in diverse areas of EU activity, and help promote socio-economic development in Pakistan.

Meanwhile, a handout said the joint commission is the primary forum for discussions between the partners under the third generation agreement, which meets once a year, alternatively between Islamabad and Brussels to review the progress in relations.

Both sides agreed that the JC is an effective instrument to explore opportunities for the mutual interest of both the partners and expressed their sincere hope that the first meeting will become a milestone in the development of co-operation and economic and trade relations between the two sides. Both the sides agreed to the formation of four sub-groups to carry forward the dialogue and report back to the commission.

The parties discussed a wide-range of subjects including education, health, science and technology, environment, alternative energy etc and expressed the desire to increase the level of co-operation in these areas.

Political and civil issues of mutual interests were also discussed. Both sides shared their views on matters relating to good governance, human rights, migration and regional co-operation.

Bilateral trade and the trade related issues are of great significance for both sides. It was agreed to expand trade relations and work towards removal of impediments in bilateral trade. The sub-group on trade, inter-alia, also agreed to monitor the impact of trade policy in the region on Pakistan's preferential access to European Union markets and will identify possible options for improvement in bilateral trade. In this regard, a study would be carried out on the impact of trade policy in consultation with Pakistan. Both sides welcomed the fact that together the 27-EU member states represent Pakistan's biggest trading partner.

The EC announced increase in co-operation grants from Euro 15 million to an average of Euro 50 million per annum for improvement of education and human resources, rural development, trade and trade related matters etc. It may be recalled that European Commission has also provided an amount of 100 million dollar for earthquake relief and reconstruction.

http://www.brecorder.com/index.php?id=568475&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

July-April motor vehicles import declines

ISLAMABAD (May 25 2007): Import of road motor vehicles, build units CKD/SKD, has declined to 1.154 billion dollar during the first 10 months of current fiscal, down by 13.18 percent from 1.329 billion dollar over the same period last year.

Official figures released by the Federal Bureau of Statistics (FBS) showed that import of almost all vehicles, excluding motorcycles CKD/SKD aircrafts, ships and boats and parts accessories, recorded a declining trend during the first 10 months of current fiscal compared to the corresponding period of last year.

On monthly basis, the import of road vehicles also declined by 2.24 percent to 144.865 million dollar during the month of April as against 148.178 million dollar during the same month last year. The import of vehicles declined to 144.865 million dollar in the month of April of current fiscal, down by 51.53 percent from 298.900 million dollar over the month of March this year.

Import of Completely Built Units (CBU) vehicles declined by 7.77 percent to 376 million dollar this year against 407.678 million dollar over the corresponding period of last fiscal.

The data showed that import of buses, truck and other vehicles in CBU condition registered a decrease of 22.77 percent in the first ten month to 109.045 million dollar during the July-April against 141.186 million dollar over the same period last year.

Statistics showed that the import of motor cars, in CBU condition, declined by 0.09 percent during the period under review, to 264.879 million dollar as against 265.113 million dollar over the same period last year.

The import of Completely Knockdown (CKD) and Semi Knockdown (SKD) vehicles was decreased to 492.879 million dollar during July-April of the current fiscal, down by 22.44 percent from 635.491 million dollar over the same period last year.

Import of buses, trucks and other heavy vehicles in CKD/SKD slightly surged to 135.936 million dollar during the first ten month of current fiscal, up by 2.02 per cent from 133.242 million dollar over the same period last year.

Import of motor cars, in CKD/SKD form, declined by 31.21 per cent during the period under review from 467.160 million dollar over the same period last year to 321.354 million dollar current fiscal.

Import of parts and accessories declined by 0.56 percent apart from 65.96 percent other transport equipment during July-April period. However, import of motor cycles in both CBU and CKD form surged 50.83 and 1.42 percents, respectively. Motor cycles' import, in CBU condition, surged to 2.080 million dollar during the first 10 months of current fiscal compared to 1.379 million dollar of last year.

Likewise, import of motorcycles in CKD and SKD form also grew upto 35.589 million dollar during the first ten months of the current fiscal, up by 1.42 percent from 35.089 million dollar over the same period last year.

http://www.brecorder.com/index.php?id=568506&currPageNo=2&query=&search=&term=&supDate=

 

[Introvert]

Pakistan-Sri Lanka trade zooming to $ one billion mark
ISLAMABAD, May 25 (APP): Trade between Sri Lanka and Pakistan is growing and would reach the US $ one billion mark in the next five years, High Commissioner for Pakistan in Sri Lanka, Shahzad A. Chaudhry said. Speaking at a programme organized by the National Chamber of Exporters last week in Colombo, he said there is a sharp increase of trade after signing the FTA between the two countries in 2005, says a press release received here Friday. Trade, which was around US $ 35 million before signing the MoU,

passed the US $ 200 million mark after the MoU. "Though this is a sharp increase it is not at all sufficient. Both countries have lot of potential that has been underutilised," he said.


In the first six months of this year trade has passed the US $ 285 million mark with the trade balance being in favour of Pakistan.


Exports to Sri Lanka in the first six months were US $ 285 million. The High Commissioner said most of the countries in the region are trying to do business with Europe and have ignored the potential in regional trade.


Chaudhry said the hospitality industry is an area that has been untapped. "Some of the hotels in Sri Lanka are top of the line and are sometimes better than what they have to offer. The hospitality in Sri Lanka too is better than what is available in Pakistan," he said.


Buddhist tourism too has tremendous potential that is yet to be exploited.


Another area where there are opportunities for Sri Lankan entrepreneurs is the retail trade in Pakistan. "Pakistan has a growing upper class with relatively high per capita incomes.


"We do not have supermarket chains such as Cargills, Keells, Arpico and Laugfs and Sri Lanka could look for opportunities in this area," he said.


While Pakistan produces the best textiles and yarn they cannot match the high quality of Sri Lankan apparels. "Therefore both countries should share knowledge in these areas and joint ventures would be very gainful for both countries," he said.


"Pakistan is now the most investment-friendly nation in South Asia . Business regulations have been profoundly overhauled along liberal lines, especially since 1999.


Foreign investors do not face any restrictions on the inflow of capital, and investment of up to 100% of equity participation is allowed in most sectors (local partners must be brought in within 5 years and contribute up to 40% of the equity in the services and agriculture sectors). Unlimited remittance of profits, dividends, service fees or capital is now the rule.


World Bank report published in late 2006 ranked Pakistan (as 74th) well ahead of neighbours like China (93rd) and India (134th) on ease of doing business. Pakistan's economy is growing at 7 percent and last year they had 6 billion foreign direct investment. The automobile industry too is growing and last year 160,000 units were manufactured.


"We can assist Sri Lanka in engineering, fruit and vegetables dairy sectors and the embassy staff in Colombo would assist any local exporter", he said.


Pakistan's KSE 100 Index was the best-performing stock market index in the world as declared by the international magazine "Business Week". Pakistan exports rice, cotton, fish, fruits, and vegetables and imports vegetable oil, wheat, cotton, pulses and consumer foods.
The country is Asia ’s largest camel market, second-largest apricot and ghee market and third-largest cotton, onion and milk market.
http://www.app.com.pk/en/index.php?option=com_content&task=view&id=9616&Itemid=2

 

[Neo]

Friday, May 25, 2007

Mobile phones import up 28%

By Romail Kenneth

KARACHI: The import of mobile phones grew substantially by 28.01 percent in the first ten months of the current financial year. In the last three years, the import of mobile phones has increased by almost six times.

Pakistan imported mobile phones worth $728,283 during July 2006–April 2007 of the current fiscal year as compared with $568,930 during the same period in July 2005–April 2006.

During July 2006–April 2007 of the current fiscal year, other telecom machinery worth $1.83 million were imported as against $1.56 million during the same period in July 2005–April 2006, depicting an increase of 17.35 percent.

Shahid Khan, National Marketing manager in Samsung told Daily Times that a 21 percent increase in mobile import is expected in the next fiscal year. Chinese copies of different expensive international brands are also available in the market at a low price, which is badly affecting the image and business of original brands, he added.

In recent years, the business of the Pakistani cellular phone industry in the country has risen from 1.2 million in 2002 to 52 million in 2007. After the arrival of Warid and Telenor, an intense competition has been witnessed in the sector.

Apart from this, the manufacturing facility of mobile handsets and other telecom equipments is still lacking in Pakistan, even though the government is attracting foreign companies to invest in this area as there is a continuous demand for telecom related equipment in the country.

According to Pakistan Telecommunication Authority (PTA), the import of other telecom equipment has also witnessed increase due to expansion of telecom network and services. Mobilink has over 25 million clients followed by Ufone with 12 million, Warid with 9.7 million and Telenor with 9.6 million. In the month of April 2007, Warid recorded an 8.5 percent increase and is now in third place.

To compete with each other, mobile phone companies are reducing the rates of sets, boosting the trend of replacing old mobiles with new ones.

According to an estimate, there are more than 1,75,000 mobile phone shops across Pakistan generating employment for over 6,45,000 people. Mobile phone shops include high-end franchise show rooms to small kiosks in markets and shopping malls.

A cellular phone retailer at Saddar Electronic market said the sale of used mobile has dropped as the mobile companies are launching cellular phones equipped with latest features at low prices. But still many shopkeepers are selling used mobiles and also guarantee to remove apprehensions from the minds of customers, he added.

http://www.dailytimes.com.pk/default.asp?page=2007\05\25\story_25-5-2007_pg5_3

 

[Neo]

Friday, May 25, 2007

Investors not to worry: Pakistan’s reforms will be continued: Humayun

ISLAMABAD: Humayun Akhtar Khan, Federal Minister for Commerce, has assured the investors that Pakistan’s reforms would continue with governments of the future and the investors need not worry.

He was addressing a two-day international symposium on ‘Pakistan in Regional and Global Politics” organized by Institute of South Asian Studies (ISAS) at the National University of Singapore, according to an official statement issued here on Thursday.

The minister gave a wide overview of Pakistan. He said Pakistan is a modern and moderate Islamic state, but faces many challenges. He briefly discussed the history of Afghanistan issue - how while fighting the Soviet Union, the Taliban gained control and how they got involved in the 9/11.

He said Pakistan since becoming partner in war on terror has taken a number of significant measures, which include deployment of troops at the border with Afghanistan. He said the terrain is very inhospitable and manning it is a brave step. Pakistan has suffered high casualties in the region, which he said shows Pakistan’s commitment to war on terror.

Explaining Pakistan’s perspective on incidents of terrorism inside Pakistan, the minister said that a few Pakistanis have unfortunately become suicide bombers because of their poverty. He expressed hope that with the economic growth Pakistan is achieving, there will be better employment opportunities and in turn such incidents will cease to happen.

Humayun Akhtar, deliberating on investment opportunities in Pakistan, said that Pakistan liberalized and de-regulated its economy in the early 1990s, a policy which has been expedited by the Musharraf government. These reforms will continue with governments in the future. On the question of current constitutional crisis, the minister said that Pakistan’s constitution allows a reference to be filed. He said it is for the court to discuss the matter.

http://www.dailytimes.com.pk/default.asp?page=2007\05\25\story_25-5-2007_pg5_7

 

[Neo]

May 25, 2007

Pakistan’s euro bond fetches record $3.538bn subscriptions

ISLAMABAD: Pakistan’s Euro Bond launched in the international capital market attracted record $3.538 billion subscriptions from more than 200 investors, which is seven times more than the government’s expectations, Prime Minister Shaukat Aziz said on Thursday.Talking to reporters here, Aziz said that Pakistan had initially set a target of minimum 500 million subscriptions, but it received an overwhelming response from the international capital market. Aziz said the marketing team headed by Dr Salman Shah was deciding the price of the bonds and the interest rates to be paid to investors, which would be finalised later on Thursday.He said the government had decided to get $750 million from the market out of the $3.538 billion subscriptions which would be divided equally among Asian, European and US investors. He said the maturity period for these bonds would be 10 years. To a question, Aziz said the government’s wheat policy was well coordinated and it had allowed the export of old stocks before the new crop came in the market to protect farmers’ interest and ensure them the support price announced by the government. He said the government had banned wheat export after wheat prices in the domestic market increased. He said the government would look into the individual cases of exporters whose consignments were in the transition phase. Aziz said the price of flour in Pakistan was less than in other countries of the region, adding that the price of flour in India was Rs 22 per kilogramme while it was Rs 13 per kg in Pakistan.

http://www.dailytimes.com.pk/default.asp?page=2007\05\25\story_25-5-2007_pg7_8

 

[Neo]

MoF ditches Planning Commission, CBR on budgetary targets

ISLAMABAD (May 26 2007): The Ministry of Finance on Friday opposed as big as Rs 549 billion Public Sector Development Programme (PSDP) size for 2007-08, and recommended to cut it down to below Rs 500 billion. However, it suggested that revenue collection target for Central Board of Revenue (CBR) should be increased to Rs 1.5 trillion.

The CBR officials are not ready to accept Finance Ministry's new demand. In their opinion revenue target fixed earlier of Rs 1.15 trillion would be reasonably achievable in next fiscal year. The Finance ministry's senior officials told a high-level meeting, chaired by Prime Minister, Shaukat Aziz, here that a big jump in PSDP size for the next fiscal will aggravate current account deficit problem.

The government is facing huge current account deficit and it's a serious worry for its economic team. Even after unprecedented inflows of foreign direct investment (FDI) and remittances that will be around $12 billion by June 30, and using untraditional ways such as global bond issue, they are yet to plug the current account deficit.

Sources said the Finance ministry officials gave a detailed presentation to the meeting that lasted for over four hours, covering total inflows/ outflows in 2006-07, and current account deficit position. They argued that PSDP size below Rs 500 billion can help the government overcome current account deficit in 2007-08.

Sources said PSDP size and revenue collection targets were complex issues of any budget and they need more meetings to reach their mutually agreed figures. They said the Prime Minister heard the arguments of different ministries/ divisions' officials and left PSDP and revenue collection issue for them to resolve in next two days.

Sources said the prime minister directed the officials working on forthcoming budget to meet on daily basis to reach an understanding on the controversial issues. After sorting out the issues, the officials team will go back to the prime minister for PSDP size and revenue collection figures' endorsement. This process is required to be completed by May 29, to present mutually agreed budgetary estimates to the National Economic Council (NEC) meeting, scheduled here for May 31. NEC approval is a pre-requisite to lay down annual budget before the Parliament.

http://www.brecorder.com/index.php?id=568786&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Completion of mega deals during current fiscal year directed

ISLAMABAD (May 26 2007): The Privatisation Commission (PC) Board here on Friday directed completion of PSO-HBL IPO-UBL GDRs transactions during the current fiscal year. According to a statement, the meeting of the Board of Privatisation Commission was held under the chairmanship of Zahid Hamid Federal Minister for Privatisation and Investment here.

The meeting reviewed in details the progress achieved in the privatisation of Pakistan State Oil (PSO), launching of Global Depository Receipts (GDRs) of United Bank Limited (UBL), Initial Public Offering of Habib Bank Limited (HBL), Heavy Electrical Complex (HEC), land/assets of Services International Hotel and Republic Motors and Hazara Phosphate and Fertilisers Limited. The Board issued necessary directions for expediting all these transactions within the current fiscal year.

Zahid Hamid Federal Minister for Privatisation and Investment informed the Board that during the past ten months of the current fiscal year the total foreign investment was a record US $6 billion, which was indicative of the confidence of the foreign investors in the economic policies of the government and its leadership.

This very positive and favourable investor sentiment was also evident from Thursday's issue of the $750 million 10-year bond which was oversubscribed 7 times and priced very favourably at 6.875 percent. The PC Board appreciated these highly significant and encouraging developments, which would give further boost to the economy.

These were the fruits of the government's remarkably successful economic reforms based on privatisation, liberalisation, deregulation, transparency, good governance and continuity and consistency of policies, he added.

The Board also took note of the misleading reports regarding the privatisation of National Investment Trust Limited (NITL) and observed that according to the approved transaction structure, which was reopened in November 2005 and was on going since June 2003, 47.75 percent of total NITL units (ie the units not covered by the Letters of Comfort issued by the Ministry of Finance) would be divided into three (3) equal parts and management rights of each part would be sold to three (3) different parties at the highest bid price.

Hence no one party could purchase management rights to more than 16% holding and the apprehensions of manipulation were therefore misplaced. Moreover in view of large number of parties, which had expressed interest in the transaction, the PC expected very competitive bidding. Members of the Board of the Privatisation Commission, senior officials of the respective Ministries and departments attended the meeting.

http://www.brecorder.com/index.php?id=568790&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

CBR may allow 100 percent depreciation allowance on machinery

ISLAMBAD (May 26 2007): The Central Board of Revenue (CBR) is likely to allow 100 percent depreciation allowance on the plant and machinery in budget 2007-2008 to create a hassle-free environment for the investors as well as local industry.

The CBR has also decided to reduce customs duty on the raw materials/inputs used by certain industries in coming budget to facilitate and reduce cost of doing business in Pakistan.

CBR Chairman M Abdullah Yusuf told Public Accounts Committee (PAC) on Friday that depreciation allowance was the deferment of income tax liability. An investor can claim this allowance at any time, which will ultimately reduce his income tax liability.

However, there is no government revenue involved on claiming capital allowance. The whole issue is that whether the department has correctly given the allowance or not. The government policy is to encourage capital investment for which one of the major tools is to give maximum depreciation in the initial years of investment.

The policy makers are thinking that why not 100 percent depreciation allowance be given once for all. In this regard, the CBR is considering relief pertaining to depreciation allowance in coming budget to end litigation and day to day problems confronted by the taxpayers.

An announcement is expected in federal budget 2007-2008 to facilitate investors, CBR chairman added. Officials of the Auditor General of Pakistan said that if the government was considering incentives for the investors through amendment in rules/regulations in coming budget, it was a positive move. But, presently, new law was not in place in case of under-assessment of income tax due to inadmissible depreciation allowance.

In case of certain sugar mills, excess depreciation allowance was allowed by the income tax department causing shortage of Rs 540.827 million tax. However, PAC members said that if the government wanted to give concession in terms of depreciation allowance, it would be a positive step without causing loss to the national exchequer. It is important to mention that depreciation allowance @ 10 percent is admissible in the case of machinery and plant in addition to initial allowance of 50 percent.

Meanwhile, PAC under the chairmanship of Malik Allah Yar Khan, Chairman of the committee, appreciated overall efforts made by the CBR in effectively dealing with various issues confronting with the board especially maximisation of revenue generation, clearance of huge litigation backlog and settlement of audit objections.

He made this observation after a comprehensive briefing by CBR Chairman on achievements during the last few years. Other members of PAC and senior officials of CBR were also present in the meeting.

"Your (Chairman CBR) efforts are commendable. We are extremely happy and appreciate the measures you have taken to put the things on right track in CBR," remarked Malik Allah Yar Khan and added: "Similar spirit has to be shown by other departments."

He, however, was of the opinion that CBR had to do little more to respond to PAC's directives and implement its decisions. Earlier, CBR chairman, in his briefing to the committee, enumerated the successes made on various fronts including the clearance of huge pendency of tax cases. He said, in the last couple of years, 82,000 tax appeals were disposed of at Collectorate/ commissionerates level and we were now totally current having only 1,200 tax appeals on direct tax side and 2,200 on indirect side, which were all fresh.

Clearance of pendency helped us to reduce the number of Commissioners (Appeal) from 34 to 5 and Collectors (Appeal) from 14 to 6, he added. One more Collector (Appeal) is likely to be withdrawn in a month or so, he said.

At Supreme Court level, CBR Chairman informed the Committee, a total number of 1,950 appeals were pending. Out of this 1,650 cases have been disposed of and current pendency is just 293. He said, some of the disposed of cases were pending for the last over 30 years.

He further informed the PAC that 7,950 appeals had been decided in the last two years at High Courts level. Similarly, out of total 25,000 appeals, pending at tribunal level, 21,414 have already been decided.

Since 2001, Federal Tax Ombudsman (FTO) has handled 9,293 complaints filed by the taxpayers. Only 345 have now left with FTO for decision, he added. The CBR Chairman also apprised the committee that Alternate Dispute Resolution Committees had also played a positive role in reducing the level of litigation. These committees received a total number of 251 applications on direct tax side and 957 on indirect side. Majority of these applications had been disposed of and the current balance pendency is 68 on direct tax side and 223 on indirect tax side.

Later, various pending audit paras and actionable items came under discussion in the meeting and necessary decisions were taken. There was a unanimity of the views in the PAC meeting that time and energy may not be wasted on audit paras in which nominal amounts were involved and committee asked CBR to do the needful to get them written off.

http://www.brecorder.com/index.php?id=568809&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Economic boom behind power crisis: Musharraf

KARACHI (May 26 2007): President Pervez Musharraf said on Friday that demand for energy was growing annually in double digit due to economic boom and the government was utilising all sources of energy production in a big way. "This challenge of energy shortage has to be met," he said while speaking at the inauguration of $50 million LPG terminal of Progas Pakistan Ltd phase II at Port Qasim.

Port and Shipping Minister Babar Khan Ghauri, State Minister for Petroleum and Natural Resources Naseer Mengal and diplomats were also present on the occasion. "On the one hand we are glad that economy is growing while on the other side we have to work very hard to meet the challenges like rising power demand," he said.

He said the government was focusing on gas and electricity. The country needed gas for the industry as well as for generating electricity. The President said the government needs to generate electricity from all sources, cheapest being the hydro-power. "We are looking at this source and nuclear energy as well in a big way," he added.

President Musharraf said that the government was also working to produce electricity through coal, gas and alternate energy sources. Oil is the only source, which is being left aside due to bad experience in the past as a result of rising oil prices.

He pointed out that the government was importing electricity from Iran to meet demand in the coastal areas. Besides, he said, search for oil and gas was in full swing and OGDL has made 11 successes in drilling for gas, hitting a major gas field in NWFP.

This gas is being extended to the southern districts of Frontier including Peshawar and Islamabad. The President said that the government has devised short-term, mid- term and long-term strategies to enhance energy production in the country. The short-term energy plan is designed to increase energy production up to December 2008. However, he said this plan was not meeting the targets in some areas and needs a push to achieve targets and this is being done.

He said the mid-term strategy from 2009 to 2011 was going all right as it was on track. The long-term strategy up to 2016 was also going alright, he added. He said investment inflow has taken a quantum jump rising from $300 million in 1999-2000 to over $6 billion this year.

When the investors come in, they seek guarantees on energy and to do so the country has to have more gas and electricity, he pointed out. The President said that this challenge has to be converted into an opportunity and the government was determined to do so. He said that the demand for liquified petroleum gas (LPG) was 3000 metric tons while its production was only 1600 metric tons, posing a huge gap.

The President urged LPG producers to put up more terminals to meet the growing demand for this source of energy in the country. "We want to reach out to consumers in mountainous areas to check the on-going deforestation and we need more LPG for this purpose," he noted.

He said that auto sector was also need LPG as more and more vehicles were switching to this cheaper fuel. The government was trying to create investment friendly environment in the country and changing laws and regulations to remove bottlenecks and hurdles, he said.

Referring to the performance of multinational companies operating in Pakistan, he said that the product of Unilever has surged by 50 percent while the sale of Pepsi Cola also went up by 50 percent. The government was also trying to improve law and order in the country with sincerity.

"We are trying to address the issue of terrorism and extremism under a well laid out strategy to ensure the transformation of Pakistani society in due course." Earlier, Chairman Progas Pakistan Ltd Dr Ali Allawi, a cousin of former Iraqi prime minister, in his welcome address, lauded the business friendly policies of the government and the economic revival.

He noted that more foreign investment will flow in, if the government ensures the continuity of its friendly economic policies.

LAW & ORDER SITUATION REVIEWED The obtaining law and order situation in Sindh with particular reference to Karachi was reviewed at a high-level meeting under the chairmanship of President Pervez Musharraf at the Chief Minister House here Friday.

The meeting was attended by Sindh Governor Dr Ishrat-ul-Ebad Khan, Chief Minister Dr Arbab Ghulam Rahim, Federal Minister Information Mohammed Ali Durrani, Advisor Home Waseem Akhtar, Chief Secretary Shakil Durrani, IG Sindh Niaz Ahmed Siddiq, Home Secretary Brigadier Ghulam Mohammed Mohtaram (Retd), CCPO Karachi besides senior civil and army officers.

On the occasion the President was apprised about the prevailing situation in the aftermath of May 12 incident and given a special briefing on law and order. Earlier, at Chief Minister House, the President and Chief Minister Dr Arbab Ghulam Rahim had a one-to-one meeting. The Chief Minister acquainted the President with existing political situation in the province.

He informed that Sindh government is working for the prosperity of people of Sindh. He also apprised the President of law and order situation in the province.

COMPENSATION FOR MAY 12 VICTIMS DOUBLED President Pervez Musharraf announced to increase the amount of compensation by 100 percent to be paid to the families of those killed in May 12 violent incidents in Karachi. Addressing a cross-section of people at the Chief Minister House here, the President said that the provincial government has announced compensation of Rs 300,000 for families of those killed and said it is being doubled with another Rs 300,000 to be paid by the federal government. The President said the compensation to be paid to the injured will also be doubled.

http://www.brecorder.com/index.php?id=568783&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

$500 million bond issue fetches $3.5 billion on world markets: Salman

NEW YORK (May 26 2007): Pakistan raised 3.5 billion dollars on a 10-year 500 million-dollar bond issue on international markets, said Adviser on Finance Dr Salman Shah on Thursday, an added that this was "unprecedented" in the country's history.

Announcing this at a press conference, he said that the bond was oversubscribed by seven times in sharp contrast with last year when 1.7 billion dollars were raised against a similar offer of 500 million dollars.

He said that the markets included London, Boston, New York, Hong Kong and Los Angeles, and the composition of the subscription was 34 percent from Europe, 34 percent from Asia and 32 percent from the United States. In contrast, last year, the United States had subscribed only nine percent.

"This is a very good news," he said, adding that it represented a vote of confidence in Pakistan economy and the country's potential, despite the political developments at home. "It is a ringing endorsement" of the present government's policies, he said.

He said this year's subscription obtained two percent above the US Treasury rates of 4.8 percent. Before coming here for Pakistan's bond roads how, Salman said there were some reservations whether the bonds should be floated in view of the political situation. But, he said, the government decided to go ahead and continue this annual feature.

Shah said that the continued international confidence in Pakistan would have a positive impact and help bring more foreign investment into the country, even though private investors were usually very cautious.

He said that the government had fully prepared its information portfolio regarding Pakistan's economy, highlighting that the fiscal deficit had been halted, public debt to equity had been reduced and projecting foreign investment at six billion dollars this years, with foreign exchange reserves likely to reach up to 14.4 billion dollars against 13 billion dollars of last year.

About reasons behind the growth, the Adviser said that Pakistan "has a labour force of 100 million" in a population of 100 million, who are under 25. It would reach 200 million in 2050 to become the fourth largest workforce in the world. This was one of the strengths of the economy, he said.

In addition, he said, middle class was expanding, markets were growing, as also there was shift from textiles to engineering and high tech. Besides, the government was now going to make more investments in human resource developments, physical infrastructure, national trade corridor and dams.

He cited Goldman Sachs report, which termed Pakistan among top 20 emerging economies. As regard the increase in foreign exchange reserves, he said that non-debt flows were on the rise and remittances this year were likely to amount to 5.5 billion dollars. Dr Shah called for a consensus in Pakistan on the economic policies, irrespective of political differences, to maintain the present momentum and growth, "which is vital for the country's well-being".

http://www.brecorder.com/index.php?id=568822&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

'Pak-Sri Lanka trade to attain $1 billion mark'

ISLAMABAD (May 26 2007): The trade between Sri Lanka and Pakistan is growing, and would reach one billion-dollar mark in the next five years, High Commissioner for Pakistan in Sri Lanka Shahzad A Chaudhry said. Speaking at a programme organised by 'National Chamber of Exporters' last week in Colombo, he said there was a sharp increase in trade after signing the FTA between the two countries in 2005.

According to a press release received here on Friday. Trade, which was around 35 million dollars before signing the MoU, passed the 200 million-dollar mark after the MoU. "Though this is a sharp increase it is not at all sufficient. Both countries have lot of potential that has been under-utilised," he said. In the first six months of this year, trade passed the 285 million-dollar mark with the trade balance being in favour of Pakistan.

Exports to Sri Lanka in the first six months rose to 285 million dollars. The High Commissioner said that most of the countries in the region were trying to do business with Europe and had ignored the potential in regional trade.

Shahzad said the hospitality industry was an area that had been untapped. "Some of the hotels in Sri Lanka are top of the line and are sometimes better than what they have to offer. The hospitality in Sri Lanka, too, is better than what is available in Pakistan," he said.

"Buddhist tourism, too, has tremendous potential that is yet to be exploited," he added. Another area where there are opportunities for Sri Lankan entrepreneurs is the retail trade in Pakistan. "Pakistan has a growing upper class with relatively high per capita incomes. We do not have supermarket chains such as Cargills, Keells, Arpico and Laugfs, and Sri Lanka could look for opportunities in this area," he said.

While Pakistan produces the best textiles and yarn, these cannot match the high quality of Sri Lankan apparels. "Therefore, both countries should share knowledge in these areas and joint ventures would be very gainful for both countries," he said. "Pakistan is now the most investment-friendly nation in South Asia. Business regulations have been profoundly overhauled along liberal lines, especially since 1999.

"Foreign investors do not face any restrictions on the inflow of capital, and investment of up to 100 percent of equity participation is allowed in most sectors (local partners must be brought in within five years and contribute up to 40 percent of the equity in the services and agriculture sectors). Unlimited remittance of profits, dividends, service fees or capital is now the rule."

The World Bank report published in late 2006 ranked Pakistan (as 74th) well ahead of neighbours like China (93rd) and India (134th) on ease of doing business. Pakistan's economy is growing at seven percent and last year it had six billion dollars foreign direct investment. The automobile industry, too, is growing and last year 160,000 units were manufactured.

"We can assist Sri Lanka in engineering, fruit and vegetables and dairy sectors and the embassy staff in Colombo would assist any local exporter", he said. Pakistan's KSE-100 Index was the best performing stock market index in the world as declared by the international magazine 'Business Week'. Pakistan exports rice, cotton, fish, fruits, and vegetables and imports vegetable oil, wheat, cotton, pulses and consumer foods. The country is Asia's largest camel market, second largest apricot and ghee market and third largest cotton, onion and milk market.

http://www.brecorder.com/index.php?id=568890&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

NWFP ADP to increase by 33 percent in next budget

PESHAWAR (May 26 2007): NWFP Chief Minister Akram Khan Durrani has directed for 33 percent increase in the next annual development programme (ADP) for the rapid completion of ongoing and new schemes throughout the province. These schemes were a public welfare and should be completed on priority basis.

The new schemes were public demand driven one and being initiated for the progress and welfare of the people and the province. This he stated in the meeting at Chief Minister's House Peshawar on Thursday. Minister Planning and Development Inayatullah, Ex-Chief Secretary Abdullah, Chief Secretary Riaz Noor, ACS Dastagir Khan, Secretary Finance, P&D and other attended the meeting.

The meeting thoroughly reviewed the ADP funded schemes. The chief minister said that the provincial government has already injected Rs 2 billion additional funds for the expeditious completion of ongoing schemes. He said that funding the ongoing schemes was not the real problem. However, the real problem was the capacity of the departments for the judicious utilisation of resources for the in-time completion of all the projects.

Provincial government would wish to see the cent percent targets were achieved. The access release of Rs 2 billion was justifiable, as it would change the entire developmental outlook of the province. The entire taxation system needs revamping, he told the meeting.

The chief minister directed for a mechanism to keep the prices of essential commodities well under control. The government did not stop developmental work on schemes initiated in the previous areas. These were prioritised and completed with the spirit of public service.

The provincial government managed arranging funding for such schemes, which was an accommodative gesture, never witnessed in the past. "We set a new trend for the development of the province and hopefully it will go on in future for the public interest and development of the province," Durrani maintained. His government returned back expensive loans and the tail-end result would be that the province would get a relief of Rs 30 billion in terms of reduced mark-up on these expensive loans.

The provincial government gets its share in the developmental strategy. That was not enough otherwise still we believe something is better than nothing. There would be small dames irrigational and drinking water facilities and by the end of this fiscal year the people would see for themselves the completions of schemes in the stipulated period. The chief minister wished to make a purchasing committee for medicine in all tertiary and district headquarters hospitals.

The districts would be directed not to utilise the funds for medicines in some other sectors and the use of fund meant for medicines should be transparent. We would also look to the Zakat funding for the hospitals and would rationalise them.

The meeting also debated the ongoing projects and the once to be completed in the current fiscal year. The meeting also debated the spending and receipts and the provincial share in the federal receipts, the expected increase in the salaries of the government servants.

The sanctions of posts in police, education, health departments etc. The meeting was further told about the donors who would inject resources to support the budgetary expenditure and initiation of new schemes for public welfare.

http://www.brecorder.com/index.php?id=568910&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

'Green Punjab Programme will be a great success'

LAHORE (May 26 2007): With a view to making the Green Punjab Programme of the provincial government a great success, Rozgar Auto Industry (Pvt) Limited has manufactured a four-stroke rickshaw, which is available to public at reasonable rates.

Abdul Waheed, CEO Rozgar Auto Industry (Pvt) Limited told Business Recorder, here on Friday that the provincial government had already engaged around a dozen factories to improve the production of new brand rickshaws so as to replace two-stroke rickshaws with CNG-fitted four-stroke. Earlier, the government had engaged three factories to manufacture three-wheelers.

It may be mentioned that the provincial government decided in 2005 to replace two-stroke three-wheelers with CNG-fitted four-stroke rickshaws in Lahore, Multan, Faisalabad, Rawalpindi and Gujranwala by the end of 2007. Three manufacturers were ordered to produce 60,000 four-stroke vehicles, but they reportedly supplied over 6000 to the government, which were now plying on city roads.

According to Abdul Waheed, the government had also relaxed some conditions it had imposed on drivers to obtain loans from banks and corporation to buy a four-stroke rickshaw. This is good initiative on the part of the government.

"When the EPD launched a campaign against two-stroke rickshaws sometimes ago, the price of a two-stroke decreased and most of the drivers looked for four-stroke ones. But they were not available in the market thereby the price of the two-stroke rickshaws again got sustained," Waheed said. He complained that the two-stroke rickshaw was still being manufactured and transported to Sindh, Balochistan and the NWFP, which must be stopped.

He stated that his company was capable to enhance their production of 4-stroke rickshaws to make the Green Punjab Programme of the government a success. The programme has been launched to replace the 2-stroke rickshaws with 4-stroke CNG rickshaws for ensuring clean environment.

Abdul Waheed urged the government to chalk out a comprehensive plan to guide the manufacturing companies regarding the demand of 4-stroke rickshaws. He said that standard as well as production of CNG-rickshaws should be improved so that the desired results of the programme regarding pollution control could be achieved within shortest possible time.

He praised the Chief Minister Punjab, Chaudhry Pervaiz Ellahi for initiating the Green Punjab Programme. He called for simplifying the lengthy procedural formalities for getting loans through Bank of Punjab under the Green Punjab programme for which Punjab government is providing subsidy. He said that other banks should also be included in this programme and the procedure of getting loans should be simplified. He emphasised upon the need of creating maximum awareness among masses about environmental pollution.

http://www.brecorder.com/index.php?id=568917&currPageNo=3&query=&search=&term=&supDate=

 

[Neo]

Hydel projects in Punjab: 15 overseas Pakistani investors keen to invest

LAHORE (May 26 2007): Fifteen overseas Pakistani investors have shown interest to invest in hydel power projects worth Rs 3.8 billion to be constructed in Punjab. They would be provided state-of-the-art facilities at Power Department under one window operation in this regard.

Punjab Power Minister Chaudhry Armaghan Subhani said this in a meeting on Friday to review the investment tendencies of overseas as well as local investors in hydel projects in Punjab and consequently to finalise arrangements for interesting parties, disclosed an official.

The meeting was also attended by Chief Engineer (Power) Muhammad Yaqoob and Director Technical Muhammad Rahat Khan and high ranking officer of attached departments.

Chaudhry Armaghan Subhani said that successful holding of Overseas Pakistanis Investment Conference at Islamabad was a great advancement towards enhancing investment-friendly atmosphere in the country, which would yield fruitful impact on our economy.

He said that Punjab was a land of 23,712 miles long canals and cheap electricity could be produced by installing turbines of two to 50 mega watts on at least 38 selected falls on these canals.

He said that according to the government of Pakistan's Renewable Energy Policy, Wapda was bound to purchase the total quantity of electricity produced privately whereas an investor could also utilise it for its own industry despite selling the produced energy to local vicinity as well. He said that feasibility reports of four falls had been prepared whereas in the light of approved policy, the investors were supposed to produce power according to their own needs.

The minister said that the investors would be granted the Letter of Interest only if they got themselves registered with the Punjab Power Development Board. He said that on the import of machinery required for these projects, the government had waived off the excise duty, sales tax and income tax over energy production.

"The government would only charge investors the water usage price which is 15 paisas per unit." He said the government would offer land on lease for 50 years to the investors along with franchise opportunities for interested parties.

http://www.brecorder.com/index.php?id=568933&currPageNo=1&query=&search=&term=&supDate=