Pakistan Economy - News & Updates - Archive

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Large trade deficit made exports expensive​

ISLAMABAD, July 18: Commerce Minister Humayun Akhtar Khan said on Wednesday large trade deficit recorded in the fiscal year 2006-07 owing to macro-policy focus on growth, fiscal deficit and debt, which made exports expensive and imports cheaper.

The minister in his Trade Policy speech said this policy harmed industrial investment and trade competitiveness. It is important to have a balance in the macro-policy so that exports could be encouraged and the current account deficit is reduced, he added.

He also suggested regaining the export growth momentum and said,” We need to address a host of challenges and to put in place proactive policy measures.” The minister defended the role of his ministry in seeking preferential market access, facilitating exporters by announcing a large number of export facilitating measures during his last four trade polices excluding the current one.

It is a fact that higher growth levels of the economy can only be sustained by a rapid growth in exports. For example, a 7-8 per cent GDP growth is only maintainable through a 20-25 per cent annual export growth, the minister explained.

“For such growth we are dependent, in addition to textile and clothing, on our Large Scale Manufacturing (LSM) sector for generating exportable surplus. However, the declining growth trend in the LSM sector during 2006-07 from 10.7 per cent to 8.8 per cent reduced our exportable surplus,” he said.

“When there is no surplus what can be exported,” he asked.

In the current era of globalisation, free trade and intense competition, there are no short cuts to achieving exports growth and economic development. “We need to continue to address the issues of exports competitiveness,” the minister emphasized.

The technology used in manufacturing, services and agriculture sectors should continue to be upgraded. Cost of doing business has to be brought down to internationally competitive levels, he added.

Efficient utilities and infrastructure need to be provided. Inputs should be available at internationally competitive prices. Skilled manpower must be developed, he said.

Mr Humayun said successful conclusion of the WTO Doha Round was expected soon and “will provide us an excellent opportunity to increase our exports.”

In the meantime, rapid progress is being made to gain market access through our trade diplomacy efforts. It is now up to the businessmen and entrepreneurs of Pakistan to take advantage of the incentives. “We have come a long way, but we still have long way to go,” he added.

The minister dwelt upon a range of challenges the country was facing like low competitiveness, lack of productive capacity as a result of relatively low investment in new machinery and technology leading to lower productivity, and higher costs.

He pointed out that Pakistani exports fetched low prices because of low quality, fragmented export industries and the energy shortage, which are hampering growth in exports.

There have been a host of other factors affecting export growth. These include stiff international competition in textile products from China, India, Vietnam and Bangladesh in major markets of the US and the EU and the regional preferential arrangements.

Among some other factors are, a fall in unit prices in the textile sector, the 5.8 per cent average anti-dumping duties in the European market on bed-linen exports, and negative travel advisories on Pakistan.

Humayun felt this last area was of grave concern as large international importers and chains were reluctant to visit Pakistan citing security concerns. This has led to trade diversion from Pakistan to Bangladesh, China and Vietnam, who are Pakistan’s product competitors in textiles.

http://www.dawn.com/2007/07/19/ebr3.htm

 

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47pc growth in IT collection​

ISLAMABAD, July 18: The income tax collection has recorded a growth of 47 per cent to Rs330 billion during the fiscal year 2006-07 as against Rs224.988 billion over the same period last year.

Chairing the 14th National Tax Conference here on Wednesday, chairman, Federal Board of Revenue (FBR), M Abdullah Yousuf, said the number of taxpayers filing the tax returns up to June 2007 had reached 1.8 million.

He said the FBR had already taken some far-reaching measures to further expand the tax base. Sectoral studies are being conducted for detecting leakages and for tax gap analysis.

Special attention is being paid to those potential areas which are still out of the tax net.

The chairman pointed out that the present number of taxpayers was in no way near to what it should have been.

“We still have a huge gap. We have to first evaluate and analyse and then strategise to get the desired results,” he emphasised.

“We may expect some tangible outcomes, if target groups are correctly and genuinely identified.”

He said it was actually direct tax collection through which we managed to make up shortfall faced in other taxes.

He said shortfall in collection of customs duties and sales tax was mainly due to reduction in dutiable imports.

Member, Direct Taxes, Salman Nabi, informed that total advance tax collection during the year was Rs117 billion as compared to Rs63 billion in the year 2005-06, showing a growth of 86 per cent.

On payment of refunds position, Mr. M. Abdullah Yusuf remarked that the balance on this account must be totally negligible.

He directed the commissioners to address this issue through policy changes. He also advised them to send a regular feedback in this regard.

Whereas, tax collection achieved with the tax returns was Rs48 billion, as compared to Rs24 billion in the preceding year, indicating an increase of 100 per cent. However, collection out of demand and refunds issued during 2006-07 were less as compared to those of 2005-06.

Mr Yousuf reminded the tax managers that “we can do well, if economy does well”.

Directors-general of large taxpayers unit (LTUs) and regional tax offices (RTOs), in their presentations, highlighted the performance of their departments on account of revenue collection achievements in last financial year, strategy for achieving current year’s targets, liquidation of arrears, broadening of tax base disposal of pending tax /appeals, monitoring of WHT progress on data entry, progress of were on reforms units etc.

On liquidation of litigation pendency, the chairman advised the member (legal) to aggressively pursue the cases pending at Supreme Court, High Court and tribunal level.

http://www.dawn.com/2007/07/19/ebr7.htm

 

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Pakistan attracts $6.945bn foreign private investment ​

KARACHI: Pakistan received record amounts in the shape of foreign private investment and foreign public investment in 2006-07, reveals the data released on Thursday by the State Bank of Pakistan (SBP).

The country managed to attract $6.945 billion as foreign private investment (FPI) during the year. This includes $5.124 received as foreign direct investment of which the government received $266.4 million as privatisation proceeds.

The FPI also includes $1.82 billion received as portfolio investment of which investment received in equity securities stood at $1.57 billion and $250 million that was received in debt securities. The investment in equity securities included $150 million received in global depository receipts of MCB Bank Limited and $559.7 million in GDRs of United Bank Limited.

Besides, the country received $1.471 billion as foreign public investment, of which $738 million was received in GDRs of Oil and Gas Development Company and $733 million received in debt securities.

The country received $913.1 million as FDI and $853.4 million as portfolio investment from the United States. An estimated amount of $1.72 billion as FDI and $986 million as portfolio investment from the European Union was received.

However, economists said the country might not be able to sustain this trend in the future because of the uncertain political conditions and the deteriorating law and order situation. Dr Asad Saeed, an independent economist, said that the political uncertainty would hamper the foreign investment in the current year. “This year is very uncertain,” he said. He said the portfolio investment would go down and direct investment would also come down because it has peaked now.

He said the foreign investment has come in those sectors, which do not earn foreign exchange. “It would actually worsen foreign exchange position of the country in the long term when the foreign investors would be repatriating their profits and dividends,” he said.

Dr Afra Sajjad, Head of Policy Development, ACCA Pakistan, said foreign investment has commendably increased in the recent past mainly because of the positive and investor friendly economic policies of the government and improved regulatory framework.

“Foreign investment will continue to flow till such time that the perception of an investor friendly country is maintained which is dependent upon the law and order conditions of the country, continuity of investor friendly economic policies, corporate governance and tax policies of Pakistan,” she said.

http://www.dailytimes.com.pk/default.asp?page=2007\07\20\story_20-7-2007_pg5_2

 

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PIA sets strategy to recover losses of Rs 28.4bn​

KARACHI: Pakistan International Airline (PIA) has set a foremost strategy to reduce its financial losses worth Rs 28.4 billion.

This was stated by Chairman PIA Zafar A Khan while addressing the media briefing here on Thursday.

Enhancing revenue and reducing the wastage cost could recover the losses, he said

“It is unachievable to make PIA as a profitable public sector but the new leadership is considering to reduce its financial losses as much as possible,” he said this on the 100th day of his job as PIA chief.

Mr Khan believed the national flag carrier is experiencing tough competition in the International aircraft market as its image was tarnished by the EU ban on flights and other airlines of petro-dollar regime that is growing strong.

“The EU has restored 11 PIA aircrafts while it continues to restrict nine aircrafts for its territory, causing a decline in PIA business, whereas the soaring oil prices in the international market could aggravate its budget and fares,” PIA chief added.

The PIA is considering to hedge finance the 25 percent annual fuel to control its expenditures, Mr Khan said while responding to a query and adding that Sukook bonds would also be issued in the market, which also supports to minimise hemorrhaging.

He said that PIA in its latest strategy abolished all the discount tickets and restricted its routes to those territories, which provide better benefits to national flag carriers. “ The sole aim is to surge its revenues and minimise losses.”

“The government would not provide any subsidy to PIA but would assist for obtaining loans from the banks on the condition of increasing its shares in the organisation,” he further added.

Briefing the media about the current strategy, he said the board of directors decided to reduce the aircraft age by 10 years as against 30 years previously as it also reduced company’s expenses, he said, adding that all efforts are taken to rebuild PIA’s image to strengthen its reliability.

PIA chief said that all the 737 aircrafts would be replaced by Boeing 777 and Airbus 310 by 2009, which have capabilities to consume oil more efficiently than others while they will also reduce the maintenance expenses more effectively.

Regarding PIA privatisation, he said that the Council of Common Interest of Supreme Court has enlisted this public sector organisation for privatisation but authorities did not establish any contact with me in this regard.

http://www.dailytimes.com.pk/default.asp?page=2007\07\20\story_20-7-2007_pg5_3

 

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Export target challenging, but achievable: Humayun​

ISLAMABAD: Humayun Akhtar Khan, Federal Minister for Commerce while terming the $19.2 billion export target as challenging has said that it would be achieved and imports will be restricted to $32 billion to contain the trade deficit at $12.8 billion.

There would be no addition in importable items’ list from India and only new HS codes will be incorporated in this list. China would import goods worth $1 billion from Pakistan to bridge the growing gap in bilateral trade.

Explaining the shortfall in exports in the last fiscal year he said that overall policy framework is more focused on revenue generation rather exports.

Speaking at a post-Trade Policy briefing the minister said that exports and imports are affected by the government’s fiscal policies and if the government wants to raise more revenue it just levies a tax and collects Rs 20 billion.

The government had set the export target at $18.6 billion but remained short of it by $1.6 billion. The minister defended his ministry by saying that though the trade deficit increased to $13.46 billion during FY 2006-07 but the same ministry worked hard and took exports from $7.6 billion in 1999 to $17 billion in 2006-07.

On a query how would the government achieve next year’s exports target of $ 19.2 billion when security was deteriorating day by day, giving a negative message to the international business community, the minister acknowledged that the circumstances were challenging in the region but the government was trying to face it and would definitely search out a solution.

Furthermore, he said that though the exports target was challenging but was still achievable. The scope of long-term financing has been enhanced and tax holiday regime is re-introduced and Rs 20 billion Research and Development subsidy (R&D) was given to boost exports during last two years, he added.

Replying to a question relating to ban on export of wheat the minister said that there should be continuity in any such policy either to export or not at all, adding that this is not the way to compete in the world market.

He said that in agriculture sector the country is mainly dependent on rice and to bring value-addition in this sector the government was providing facilities under National Trade Corridor Policy. The success of Doha Round of talks would open international agriculture market for Pakistani products, he added.

Admitting the impacts of inflation on the trade, Humayun said that inflation has hit the manufacturing sector and its growth has declined to 8.4 per cent from above than 10 per cent due to increase in cost of doing business and similarly, exports and imports are also affected.

On the question of loosing the Afghanistan market, the commerce minister said that major decline was in POL products that resulted into loss of $300 million this year and this was because of escalating tensions and Afghanistan’s tilt toward rival state.

The minister claimed that trade deficit of $13.46 billion in 2006-07 would not impact balance of payment (BOP) as the country enjoys more than $15 billion forex reserves and trade deficit is not affecting government’s ability of spending.

http://www.dailytimes.com.pk/default.asp?page=2007\07\20\story_20-7-2007_pg5_4

 

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Trade policy ignores export potential of surgical sector ​

KARACHI: The government has not shown any mercy to save the declining surgical instruments’ export while announcing the trade incentives for priority export sectors, Surgical Instrument Manufacturers Association of Pakistan (SIMA) said on Thursday.

The announcement in the trade policy 2007-08 to allow surgical sector importing machinery, equipment and raw materials on zero-rating duty is merely eyewash, Chairman SIMA, Aamir Riaz Bhinder said while talking to Daily Times.

Mr Bhinder said that the machinery and equipment import allowed in the trade policy were mainly the components and simple grade machinery, which was easily available in the local manufacturing market.

He said that precision and state-of-the-art equipments and machinery was not mentioned in the SRO nor even declared in the trade policy speech.

He said that import duty on steel has already been enhanced from 15 percent to 17.5 percent for the industry and this reflected the fact that authorities prepared policies without prior consultation with relevant industry and then expect the business community to mould according to the policy.

“We asked the concerned ministry before the policy making that without consulting the sector people, this would be fruitless”, he added.

He said that this was due to the lack of proper liaison between the industry and the government that surgical export sector was facing hardships.

He said that according to SRO, it was impossible to any exporter to submit the amount equivalent to the import value and then wait for the refund for long through complicated procedures.

“We have submitted these proposals to the Central Board of Revenue before hand but with no avail, he said.

He said that surgical instruments export declined by around $7million during July-May 2007, as exports stood $183 million in July-May 2007 compared to $190 million during same period last year.

Chairman SIMA said that the export of surgical forgings and semi and unfinished products are the most critical components for decline in the surgical instruments exports.

“If these products will be exported to other countries, then the local industry will suffer heavily in shape of loss of export orders,” he added.

He said that leakage of production technology, rise in production costs and the export of steel scrap are causing havoc for the metal related industries as scrap is the major source of locally produced stainless steel, which fulfils approximately 30 percent of the requirement.

He asked the Commerce Ministry and Central Board of Revenue to immediately impose ban on export of forgings, semi-finished and unfinished products.

He said that the surgical industry can start earning at least $300 million annually within three years time, provided, it is given due attention by the government departments. He said that the estimated world market of surgical instrumentation industry is currently around $30 billion and growing, whereas our exports hover between $180 to $200 million for the last one or two decades, despite the fact that there is no reason on the part of surgical manufacturers and exporters for this below par performance.

The rising utilities’ cost, increasing prices of raw materials, high banking service charges, high export refinance rates of central bank and uneven taxation system are added barriers to the falling exports, he added.

He said that surgical businessmen in Germany, Japan, UK, and USA have full support of their governments in shape of technology up-gradation, training, export marketing strategies, linkage with academia etc.

http://www.dailytimes.com.pk/default.asp?page=2007\07\20\story_20-7-2007_pg5_12

 

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Moody brings drastic change in Pakistan's business set up ​

LAHORE (July 19 2007): Moody International has been playing a vital role in bringing a revolutionary change in Pakistan's business environment by introducing the management system certification service to our client.

Managing Director Moody Pakistan, a British multinational established in 1911, Rashid Mehr said this while addressing the 10th anniversary of Moody International Pakistan here on Wednesday.

He said that the growing economy of Pakistan during the latter half of the 1990's encouraged Moody International and presently it is operating in 80 different countries across the world to explore new avenues for business and expand its boundaries of markets as well.

He further said that the office began providing with engineering services, which included quality assurance/ quality control services, construction supervision and project management & vendor inspection services to the oil & gas industry.

http://www.brecorder.com/index.php?id=594405&currPageNo=1&query=&search=&term=&supDate=

 

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KPT to invest $105 million on CVIP project ​

KARACHI (July 19 2007): The Karachi Port Trust (KPT) would invest 105 million dollars on the construction of proposed Cargo Village and Industrial Park (CVIP) project, which is to commence in September this year.

The KPT sources told Business Recorder on Wednesday that out of this amount the Trust would spend an estimated 55 million dollars on infrastructure development of the satellite facility.

The Cargo Village would stretch over an area of 1,500 acres, which would include areas to cater for containers, general and bulk cargo, processing plants, customs and other related facilities, sources said. They said the designing work of the project was underway by the German firm Inros Lackner.

KPT in 2005, sources said, had awarded the task of conducting a study on CVIP project to the US firm Louis Berger, which had recommended setting up of a Cargo Village.

The KPT had set September 2011 as deadline for the completion of the Village, which would be developed in the vicinity of Karachi Port, sources said. They said the project would be undertaken in different phases. In the first phase, an area of around 330 acres would be developed. They said that the village would also have connectivity with Northern Bypass and Lyari Express Way.

The KPT had devised a comprehensive plan to extend its infrastructure and other facilities including incentives for transshipment of containers to facilitate and boost the trade.

The Trust had also determined to develop a container terminal with a total cost of 1,087 million dollars at Keamari Groyne in which KPT would invest 345 million dollars to handle deep draft vessels. The construction work on the project would also be started in September 2007, while the remaining amount of 742 million dollars would be invested by other stakeholders from the private sector, as the project was based on public-private partnership. KPT eyeing June 2010 as deadline for completion of the project.

http://www.brecorder.com/index.php?id=594351&currPageNo=3&query=&search=&term=&supDate=

 

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Railways to involve private sector in setting up three dry ports in Punjab ​

KARACHI (July 19 2007): Pakistan Railways (PR) has planned to set up three new dry ports in collaboration with private sector in Punjab region to felicitate cargo handling operations effectively, railways officials told Business Recorder on Wednesday.

They said that the proposed dry ports would help the department attract potential investors, who would be provided with advanced facilities to handle their cargo operations without any problems.

"Our imports are higher than the exports for which the PR is making efforts to establish new dry ports in different parts of Punjab to attract more investors," said PR Dry Ports Department head Junaid Qureshi.

One of the dry ports would be established at Prem Nagar, near Lahore, in collaboration with three companies, he said, adding the PR would provide land while the private companies would build infrastructure and install other required facilities.

"The Prem Nagar dry port will be constructed over 100 acres of land with an estimated cost of one billion rupees, which will be funded by the private sector", he pointed out. "The second dry port will be built at Jeaya Bhaga near Lahore in collaboration with the National Logistic Cell (NLC).

The basic infrastructure of the railway was already exiting there, while the NLC would bear the cost of construction of a platform for loading and unloading cargo, he said. "The third dry port will be set up at Kot Radha Kishan, which will be established through the financial assistance of the private sector", Qureshi added.

He said that the dry ports in Peshawar, Rawalpindi, Lahore, Karachi, Quetta and Faisalabad were already functional and earning profits for the Pakistan Railways. However, he said, the dry ports at Larkana and Sukkur had failed to generate income for the railways.

"We are managing four freight trains at present for cargo transportation and in case, there is an increase in import or export of cargo, then the PR has the infrastructure to operate eight cargo trains at a time", he said.

http://www.brecorder.com/index.php?id=594375&currPageNo=3&query=&search=&term=&supDate=

 

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Importable items from India: 'list being re-arranged in descending order' ​

ISLAMABAD (July 20 2007): Commerce Minister Humayun Akhtar Khan said on Thursday that list of importable items from India is being re-arranged in descending order without adding any thing to the positive list. "We are not increasing the number of importable items from India, however, list is being re-arranged in descending order based on the new H.S. code to make the list user-friendly," he said while addressing post trade policy press conference.

He also admitted that there were some problems in the implementation of South Asia Free Trade Agreement (SAFTA) and it was not taking off as per expectations. Replying to a question, he said that the Trade Development Authority of Pakistan (TDAP) has been established in accordance with the constitution and government would continue to issue ordinances to keep it intact until it becomes an Act.

Humayun Akhtar was also critical of government's monetary polices which according to him was focusing more on fiscal deficit, revenue collection and debt serving rather on enhancing exports.

Replying to a question, he said that monetary policy and currency issued were being handled by the State Bank of Pakistan (SBP), however, he always expressed his views on such issues in the meeting of monetary and fiscal policy committee.

About the exportable surpluses, he said that high interest rate in large scale manufacturing (LSM) and low yield were the major hurdles in the availability of exportable items and government is focusing more on these issues as well. Humayun further said that despite several challenges and difficulties the Pakistani exports increased from $8 billion to $17 billion in the last couple of years.

http://www.brecorder.com/index.php?id=594655&currPageNo=1&query=&search=&term=&supDate=

 

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Chinese team inks deals with 15 firms ​

ISLAMABAD (July 20 2007): The visiting Chinese Trade Mission on Thursday signed agreements with 15 Pakistani companies to import cotton, chrome ore, marbles, leather, celestite, gur gum and rapeseed meal. A 50-member Chinese delegation presently visiting Pakistan, headed by Assistant Commerce Minister Wang Chao, held meetings with Pakistani officials and signed MoUs/agreements.

The Chinese business groups placed on-the-spot purchase orders for Pakistani products and the government expects a total deal of one billion dollar. China National Light Industrial Products I/E Corporation signed agreement with Pakistani company Zehri Corporation to import marbles.

Sharmeen Pakistan Limited to import cotton linters and cotton yarn while Sinochem Corporation of China signed agreement with Sinochem Hebei of Pakistan to import Celestite and with Black Diamond mines and minerals to import chrome ore.

Similarly, China National Native Produce and by Products I/E Corporation signed agreement with the S Tahir Iqbal Harman International to import leather, Sinosteel Corporation with Costal Enterprises to import Chrome Ore, China Minmetals Corporation with D-Tek International Limited Pakistan to import Chrome Ore, China National Township Enterprises Corporation with Gaziani Industries Limited to import gur gum.

The other agreements included China National Mineral Co Ltd with Crystal Minerals Corporation, Karachi to import Manganese Ore. China National Light Industrial Production Corporation with Ihsanullah Khan. Pakistan Stone Development Company to import marble and China Grains and Oils Group Corporation with Tayyab Razaq Sea Trade Limited to import rapeseed meal.

The Ministry of Commerce and Trade Development Authority organised a one-day mini exhibition on "Made in Pakistan," to providing an interaction opportunity to the Chinese importers with the Pakistani exporters. The Assistant Minister of China and the Secretary Commerce inaugurated the exhibition.

Addressing the opening ceremony, the Wang Chao said China attaches high importance to Pakistan's trade and commercial relations. He hoped the visit of the Chinese Trade Mission would help increasing Pakistani exports to China.

Addressing on the occasion, the Secretary Commerce Syed Asif Shah called upon the Pakistani business community to explore the plenty of opportunities available under the Pakistan-China Free Trade Agreement (FTA) operational since July 1, 2007. Pakistan has the potential of exporting to China some very important products of Chinese interest on which duty is zero under the FTA, he added.

Major sector covered in the display centres included textiles, marbles, agro products, fresh vegetable and fruits, engineering goods. The business people from both sides hoped that this initiative would let the exporters and importers to continue constant interaction for follow up and future action plans.

An official hand-out said during the Prime Minister's visit to China in April 2007, the Prime Minister met the Chinese Prime Minister and various other leaders including the Vice Premier Madam Wu Yi, who looks after the economic and trade affairs of the country.

In his meetings with the Chinese leadership, Prime Minister raised the issue of trade imbalance between the two countries in responding Chinese side assured that, in order to rectify the trade imbalance with Pakistan, China was ready to dispatch purchase mission to Pakistan.

During the Financial year 2006-07 (July-March), Pakistan's imports from China are recorded at 2.45 billion dollar. The major import products include all sorts of machinery, steel products, industrial chemicals synthetic yarn and fabric, tyres and tubes. The exports from Pakistan to China during the same period are recorded at 407 million dollar showing a trade balance of (-) 2.04 billion dollar.

The major exports include cotton yarn and fabrics, ores and non-ferrous metals, leather, fish and fish preparations, chemicals and cotton waste. Under the FTA both countries have eliminated or substantially reduced customs duty to enhance market access. Ministry of Commerce is planning to participate in the Guangzhou Export-Import Fair to exploit this opportunity and to help Pakistani exporters accessing Chinese market.

A joint study for five years trade development programme is also underway which would provide a road map for future course of action to fortify the trade relations between the two countries. China may consider faster conclusion of quadrilateral Transit Agreement between Pakistan, Kazakhstan and Kyrgistan.

Apart from the purchasing and trade activity of the mission, the Assistant Trade Minister and the official delegation have also witnessed the signing of following MoUs/Agreements/event, Exchange of Letters on Digital Seismic Network with EAD, handing over of Certificate on donation of 400,000 dollar in cash to EAD for repatriation of Afghan refugees, handing over of Certificate on donation of 200,000 dollar in cash to NDMA for flood relief work and signing of agreement on Pak-China Joint Investment Company.

http://www.brecorder.com/index.php?id=594664&currPageNo=1&query=&search=&term=&supDate=

 

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Pakistan's foreign exchange reserves up by $166 million ​

KARACHI (July 20 2007): Country's liquid foreign exchange reserves have increased by 166 million dollars to 15.6459 billion dollars during the week ending July 14. During the last week, foreign exchange reserves, held by State Bank of Pakistan (SBP), has been risen to 13.3888 billion dollars up from 13.3456 billion dollars as on July 7, depicting an upsurge of 432 million dollars.

The reserves, held by commercial banks, have been decreased by 266 million dollars to 2.2571 billion dollars as compared to 2.2837 billion dollars.

http://www.brecorder.com/index.php?id=594693&currPageNo=1&query=&search=&term=&supDate=

 

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'Roadmap for enhancing trade with China being worked out' ​

ISLAMABAD (July 20 2007): The trade delegation under Chinese Assistant Trade Minister Wang Chao met with Commerce Minister Humayun Akhtar Khan, a Commerce Ministry statement said on Thursday. The delegation consisted of traders and importers from China. Secretary Commerce, Syed Asif Shah also attended the meeting.

The Federal Minister for Commerce welcomed the delegation and said that it is the desire of our leadership to have good friendly relationship with China. He said that steps have been taken for the roadmap for enhancing trade relationship.

The important step is the acquisition of Paktel. The Chinese minister also thanked the Federal Minister. The recent years have witnessed steady growth of Pakistan's exports to China. According to Chinese statistics its import from Pakistan in the year 2006 was valued at US $462 million an increase of 32 percent over 2005.

http://www.brecorder.com/index.php?id=594685&currPageNo=1&query=&search=&term=&supDate=

 

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'Trade policy to give boost to economic activities in country' ​

MULTAN (July 20 2007): Different sectors of the economy have welcomed the Trade Policy 2007-08 saying that it would further strengthen economic activities in the country. Multan Chamber of Commerce and Industry (MCCI) President Anis Ahmed Sheikh and vice president Khawaja Muhammad Ali said.

The government should support the manufacturing sector for creating export surplus, which is a pre-requisite for achieving the export target of $19.2 billion. MCCI office-bearers while stressing implementation of Trade Policy 2007-08 said that there is need to take aggressive measures. They said that last year the government announced establishment of carpet cities but the project could not materialised.

MCCI office-bearers said that Trade Competitiveness Institute of Pakistan would plug research gaps. They hoped that this institute would become a premier body for capacity building and human capital development in commerce. This Institute will also provide an important forum for the discussion and dissemination of information on issues of commerce.

They said that the new Trade Organisation Ordinance was a long-standing demand of MCCI. New Trade Organisation Ordinance would not only help to eliminate fake and ghost trade bodies but would also bring true leadership. MCCI office-bearers said that it is the need of the hour that newly announced policy must be implemented in true letter and spirit.

They said the National Trade Corridor Improvement Programme (NTCIP) is a step in the right direction. They hoped that this programme would help decrease the cost of doing business, which is a pre-requisite to ensure trade growth. This programme would be proved by a roadmap for improving transportation logistic chain, on the basis of identified inadequacies and weaknesses.

To increase our share in EU market social compliance certification (quality, environment and social) are considered an important tool. The policy announced a government subsidy from 50 percent to 100 percent, which would definitely increase our market access in EU markets.

All Pakistan Bedsheet and Upholstery Manufacturers Association Chairman Syed Asim Shah has welcomed government steps to continue six percent research for one year. Chairman, APBUMA said this step was direly needed to maintain momentum of garment export in the wake of fierce competition in international markets.

However, he said well sustained and long-term policy was needed to build confidence among garment exporters. He stressed that a concerted government support would keep the industry moving ahead. However, he demanded of the government to adopt recommendations of Tariq Saigol's committee report to make the industry lucrative.

He hoped that the government would take more positive steps to ensure the presence of Pakistani goods in international markets. Iqbal Hassan a leading manufacturer and exporter of engineering goods appreciated the decision of the government on inland freight subsidy for transportation of goods destined for exports.

However, he said that there was a lot to be done for this sector under the Free Trade Agreements (FTA) for international market access. Basmati Growers Association praised the decision of the government to give special attention to the agriculture sector of Pakistan under the new trade policy. "Widening trade gap has compelled the government to focus on the agriculture sector, which is vital for the economic growth of Pakistan," he remarked.

http://www.brecorder.com/index.php?id=594780&currPageNo=2&query=&search=&term=&supDate=

 

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Daimler-Chrysler abandons Mercedes plant project ​

ISLAMABAD (July 20 2007): Daimler-Chrysler and its UAE-based Coastal Group has walked out of Pakistan with their $1.1 billion Mercedes Benz manufacturing plant project as the government's last ditch efforts to save the investment plan have failed.

Daimler-Chrysler, a group of two auto sector global giants and manufacturers of Mercedez Benz, had formed a joint venture with Coastal Group of UAE to set-up a Mercedez Benz manufacturing plant in Pakistan. The joint venture was to make initial investment of $1.1 billion for the project.

Obvious loss of winding up of the project is that Pakistan missed a big investor with $1.1 billion sure investment, but the real loss is non-realisation of an opportunity to establish industrial zone for Mercedez Benz from where Pakistan could secure at least $5 billion exports annually.

The government was fully aware of the importance of the project and for the same it opened up the diplomatic channel to bring the joint venture back to Pakistan with its project. It made direct and in direct contacts to the joint venture during the last few weeks, but could not convince its management to rethink of its decision of winding up the project from Pakistan.

In today's open-sky investment world. a group like Mercedez Benz manufacturer can play very significant role in making other groups/ investors feel that the destination it selected for investment was better than the others. This type of project could bring many other companies to invest in Pakistan. Some one year back, the joint venture entered in Pakistan with a big bang and, as was expected it got very encouraging response from the authorities.

Things were moving smooth and in the right direction. The joint venture was making all possible efforts to make sure that its project comes on ground as early as possible and then not only caters to Pakistan's market demand but also export its products from here to the regional countries.

It overcame many obstacles and managed to secure a piece of land stretching over 1200 acres near Shaikhupura in Punjab for the project as well. It was a good development and no one could believe that such a big project will hit snags and one day can finish altogether specially when president general, Pervez Musharraf and, prime minister, Shaukat Aziz, were directly involved and interested to make sure that the joint venture does not face any problem in completing the project.

It happened and subsequent developments forced the joint venture to wind-up its project which, of course, was still on the papers and go back to Germany.

The officials blame media for unceremonial exit of the joint venture from Pakistan and claim that some elements with vested interested played in their own way to create problems for the joint venture. They also claim that the elements damaged the credibility of the joint venture through a malicious campaign in print media.

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