Pakistan Economy - News & Updates - Archive

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KPT handles record cargo in 2007-08​

KARACHI, July 17: The Karachi Port Trust (KPT) handled a record 1.213 million containers in 2007-08 which included 626,598 Teus of import and 587,146 boxes of export cargo, showing a growth of 11.9 and 10.6 per cent, respectively, over the previous year.

According to official figures bulk export cargo handled by the port registered a growth of 80.37 per cent at 4,243,608 tons over the previous year owing to bulk export of clinker and cement up by 191.43 and 213.25 per cent, respectively, over the previous year.

The port also handled other bulk export cargoes including rice 936,667 tons, sugar 13,036 tons and coke 8,300 tons.

The bulk import cargo handling also registered an increase of 24.6 per cent.

This includes 1,486,512 tons of fertilisers, 477,071 tons of rock phosphate, 160,854 tons of iron scrap, 2,500 tons of sulphur, 36,203 tons of seeds, 3,556,246 tons of cement, 10,700 tons of yellow peas, 144,746 tons of canola and 473,384 tons wheat.

The dry general cargo export was up by 43.8 per cent at 5.1 million tons in 2007-08 as against 3.5 million tons.

Similarly, dry general cargo imports stood at 9.6 million tons or 2.35 per cent more than the previous year.

Liquid bulk export cargo recorded 44 per cent growth at 2.2 million tons over the previous year.

The liquid bulk cargo imports handling increased by 7.9 per cent at 9.4 million tons.

The total import cargo handled crossed 25.5 million tons mark while export cargo handling increased by 55.3 per cent at 11.6 million tons.

The port handled 2,122 ships during 2007-08 compared to 1,870 ships the previous year. Of these 1,055 were containers, 406 bulk carriers, 223 general cargo vessels, and 438 oil tankers.

KPT handles record cargo in 2007-08 -DAWN - Business; July 18, 2008

 

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Textile sector growth declines by 2.10 percent during 2007-08 ​

ISLAMABAD (July 18 2008): Pakistan textile sector performance remained dismal during 2007-08 with negative growth of 2.10 percent over the same period of last year, said Federal Bureau of Statistics on Thursday.

The textile sector performed poorly even in June over last month with statistics showing that its exports declined from $936 million in May 2007-08 to $919.052 million in June on the back of poor performance by almost all the sectors, except few.

Monthly analysis of the data showed that only tents, canvas and tarpaulin, cotton yarn, cotton corded or combed and others showed positive growth in textile in June while all the remaining sectors recorded negative growth during the period under review.

The export of raw cotton decreased by 31.27 percent, cotton cloth by 3.23 per cent, yarn other than cotton yarn 13.18, towels by 5.44 per cent, ready made garments by 4.39 per cent, art silk and synthetic textile 0.77 per cent, made up articles and excellent towels by 4.14 per cent, other textile material by 9.33 per cent.

The export of raw cotton declined from $6.923 million in May to $4.758 million in June, cotton cloth from $155.73 million to $150.692 million, yarn other than cotton yarn from $2.929 million to $2.543 million.

Business Recorder [Pakistan's First Financial Daily]

 

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Sustainable growth: Pakistan must concentrate on export-oriented industries ​

ISLAMABAD (July 18 2008): The prices of petrol and diesel are higher in Pakistan when compared with India in terms of their own currencies as on June 6, 2008, which is adding to the cost of production and giving the country tough time in global competition. The exchange rate of Indian Rupee was 39.74 viz-a-viz US dollar, whereas one dollar was equivalent to 71 Pak rupees in June, 2008.

Both the countries meet most of their demand of gasoline through imports and supply to the industrial and domestic consumers at subsidised rates in the face of regional competition. In India, the price of Petrol/litre is Rs 53.43 and Diesel/litre is Rs 36.80, whereas in Pakistan the per-litre prices are Rs 68.81 and Rs 49.05 respectively.

Pakistan and India both are developing economies but in Pakistan the pace of development has been hampered due to instability after 9/11 when it became the front line state in fight against terror. On the other hand, Indian economy grew unhindered and they are far ahead as compared to Pakistan in information technology and manufacturing.

For sustainable growth, Pakistan has to concentrate on the export-oriented industries and to stay in the global economy it has to diversify its exports. The main stay of Pakistan exports at present is textile industry, which contributes above 60 percent of the foreign exchange earnings. The textile industry is in desperate need of cheap energy mix as regional competitors like Bangladesh and India are giving tough time to the country in the global market.

Pakistan also needs to invest in the renewable energy sources to keep the wheel of its economy moving as with the sharp increase in petroleum products prices, it has become difficult to maintain cost of production at a reasonable level whether it is manufacturing or agriculture.

Both India and Pakistan are supplying subsidised diesel for the tube-wells to attract farmers to grow more to meet the increasing food demand with the increasing population.

The prices of food items are increasing world-wide and it is great opportunity for agrarian economies like Pakistan to take benefit of it and grow more for export after meeting domestic consumption.

Recent concern about gasoline prices underscores the link between energy and economy. Forecast of International Energy Agency (IEA) estimate that sustaining a 3.6 percent rate of annual growth in the global economy to 2030 will require 33 million barrels per day in global oil supplies ie an increase of 40 percent.

Economists like to say that it all boils down to supply and demand. But there are many factors affecting the tried-and-true laws of economics - and those factors have contributed to today's high-demand, tight-supply world energy market. For starters, demand is very strong, coming from mature economies like the United States and Europe plus the developing economies of countries like China and India and to some extent Pakistan. And as per capita income rises in those developing countries, the demand for energy is expected to continue growing.

Tight supplies have been aggravated by political instability, resource mismanagement and natural calamities. The Iraq insurgency, civil unrest in Nigeria and political uncertainty in Venezuela are among the examples. And hurricanes in the Gulf of Mexico have affected operations in both the United States and Mexico.

Finally, the decline in the value of the US dollar against other countries has put American consumers at a disadvantage. American consumers must now pay more for crude oil than countries with stronger currencies. The World demand oil has increased sharply in recent years rising from 77 million barrels per day in 2001 to 85 million barrels per day in 2007. The US energy information administration expects World oil consumption to grow by 1.2 million barrels a day in 2008 and by 1.3 million barrels a day in 2009.

Business Recorder [Pakistan's First Financial Daily]

 

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US to assist in meeting energy and food challenges ​

WASHINGTON (July 18 2008): Pledging close relationship with Pakistan, Deputy Secretary of State John Negroponte has said Washington stands for Pakistan's success and is working to assist it in meeting energy and food challenges. "Pakistan is a key American partner. We are working closely with Pakistan's government and people to improve economic development, resolve food and energy problems, and counter violent extremists," he stated.

The US diplomat was addressing a Seeds of Peace reception held at the State Department for young people from Pakistan and India, who completed a three-week conflict resolution programme in Maine. "The 24 young people we celebrate today will bring the skills, perspectives, and experiences gained over the past three weeks back to their homes in India and Pakistan, two countries that are important friends and partners of the United States, and two countries we want to see succeed," he told.

The reception also attended by Pakistan's ambassador to the United States Hussain Haqqani and his Indian counterpart in Washington. US top official for South Asia, Richard Boucher also attended the event. Negroponte said educational exchanges are central to efforts to deepen ties between the American people and Indians and Pakistanis.

"I know you will continue your efforts to improve relations between your countries. I encourage you to seek out opportunities at home to support tolerance and understanding. Your dedication to religious and cultural tolerance, coexistence, and dialogue is important to achieving lasting peace."

Stressing the importance of holding on to ability to imagine a hopeful future, he remarked progress on the road top peace is often frustratingly slow, and worse, sometimes suffers major setbacks. "The challenge is to keep imagining a better future and to keep working to make what you imagine real. A principle of US foreign policy is that we have no permanent enemies. This principle challenges us to imagine that our enemies today can be our friends tomorrow and to work to make that vision a reality.

Business Recorder [Pakistan's First Financial Daily]

 

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Agriculture growth target may not be achieved ​

ISLAMABAD (July 18 2008): Due to the increasing prices of agriculture inputs, the government might not be able to achieve 3.5 percent agriculture growth target for current fiscal, sources told Business Recorder on Thursday.

"Last year only 2.5 percent agriculture growth target was achieved against the set target of 4.5 percent. This year the target is 3.5 percent but considering the increase in the cost of production it is unlikely that the target would be achieved," sources said.

They said hike in input prices has increased the cost of production, which would result in decreased area under cultivation. "Although, in the budget 2008-09 the government has promised relief to the agriculture sector but unfortunately instead of providing relief to the farmers it added to their burden by increasing the prices of inputs such as electricity and diesel," sources maintained.

They further said total 0.6 million tractors and 0.8 million tube wells are being used in agriculture and approximately 2 billion litre of diesel is required to run them. But the substantial increase in the diesel prices is affecting their functioning, sources added. "Before the budget 2008-09 the price of diesel was Rs 38 per litre which has now reached Rs 56 per litre," sources said.

Business Recorder [Pakistan's First Financial Daily]

 

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Fesco saves Rs 24 billion through TRW project ​

FAISALABAD (July 18 2008): The Faisalabad Electric Supply Company (FESCO) Transformers Reclamation Workshop (FTRW) has saved Rs 24.973 million as the repair of these transformers in Lahore would have cost Rs 93.198 million. FESCO has also started the fabrication of completely overhauled transformers of 10, 15, 400 and 630- KVA capacity.

While the production of 25-KVA transformers will also be started in couple of months. A spokesman for FESCO said that FTRW repaired a total of 3,850 transformers during 2007-2008. Giving details of minor repairs, he said that 454 25-KVA transformers, 302 50-KVA, 408 100-KVA, 332 200-KVA and 50 transformers of other capacities were also repaired during this period.

Regarding major repair work, he said that 711 25-KVA transformers, 449 50-KVA, 517 100-KVA and 582 200-KVA transformers as well as 45 transformers of other capacities were also repaired during last financial year. This totals 1546 transformers with minor repairs and 2304 with major defects that were fixed. Continuing, he said that only Rs 68.225 million was spent on the repair of 2304 transformers.

Business Recorder [Pakistan's First Financial Daily]

 

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Two megawatts powerhouse to be constructed at Khurkondo ​

SKARDU (July 18 2008): Two megawatt hydel powerhouse would be constructed at Khurkondo in Ghangche district of Siachan area at a cost of Rs 220 million. This was disclosed by former Advisor of Northern Areas and sitting member of NAs Legislative Assembly (NALA) from Ghangche district Haji Mohammad Ismail said while talking to Radio Pakistan Skardu.

He said that a hydel powerhouse would also be constructed at Gongma village on the river. Haji Mohammad Ismail said that a scheme has been approved for carpeting the truck road between Dumsum and Gongma at a cost of Rs 70 million and work on the pproject will be started soon. He said that work on road project between Ghursay and Dumsum is under completion.

The member Nala said that road network is being expanded to maximum villages of the area. Several bridges have been constructed. Schools, power supply and dispensaries are available in every village. In CMH Gongma civilian people are getting free treatment. A high school is being run by Siachan brigade in Sait village of Saltoro range.

Haji Mohammed Ismail thanked the team of Radio Pakistan Skardu for visiting Saltoro Areas (Mashabroom sub-division of Ghangche distt.) to see the problems of the people and to highlight the developmental activities in these areas. He also paid rich tributes to the station director of Radio Pakistan Skardu and team members and all others for providing better facilities of entertainment, education and useful and fruitful information through its local Urdu/Balti news bulletins and to protect and promote Balti culture, traditions, history, language folklore, folktale, music and heritage of Baltistan.

Business Recorder [Pakistan's First Financial Daily]

 

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‘$200 million exports loss due to political unrest’​

ISLAMABAD: The country faced export revenue loss of $200 million in the five days disturbances followed by martyrdom of Mohtarma Benazir Bhutto on December 27, 2007. Commerce Minster, Ahmed Mukhtar, said while announcing Trade Policy 2008-09 that tragic event had cast a long and dark shadow on the economic and political health of the country.

He said that Pakistan Peoples Party (PPP) led government had inherited a very difficult economic situation. The country faced difficult issues on external front including the doubling of international oil prices from around $68 per barrel to $145 per barrel during the last financial year. The slow down in the US economy and turmoil in the international financial markets reduced external demand for exports and on the internal front the last year was of constant political instability sparked off by the judicial crisis in March 2007.

The law and order situation also assumed dangerous proportions in the form of the Lal Masjid affair, the increase in frequency and lethality of terrorist bomb blasts and of course the state of militancy and insurgency in FATA and the NWFP. The saddest occurrence in this regard was the other challenges on the internal front that made it difficult for exporters to fulfill their export orders on time and at a competitive price during the year included.

In this regard power shortages and resultant load shedding of electricity and natural gas, impact of monetary and exchange rate policies, plus supply side constraints, rising costs of salary bills and raw material, particularly raw cotton, increasing competition in export markets and travel advisories of foreign governments discouraged importers to continue sourcing from Pakistan. Long term structural issues such as labour skills deficiency and poor infrastructure was also the issue. As a result of these multiple negative factors economic growth rate dropped to 5.8 percent as compared to 6.8 percent last year and that slow down was particularly evident in the commodity producing sectors such as agriculture and manufacturing with serious implications for exports.

Agriculture grew by only 1.5 percent as against 3.7 percent last year and in the two major crops i.e. cotton and wheat there was a negative growth of 9.3 percent and 6.6 percent respectively. The manufacturing sector also saw the weakest growth in a decade, since overall it grew by 5.4 percent as compared to 8.1 percent last year. Large scale manufacturing was even more dismal since it registered a growth of only 4.8 percent as compared to 8.6 percent last year.

Daily Times - Leading News Resource of Pakistan

 

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Fish exports cross $200 million​

KARACHI, July 18: The fish export crossed the barrier of $200 million in 2007-08 for the first time in Pakistan’s history despite losing the European market of $55-60 million after a ban was imposed by the EU in April 2007.

According to figures of the Federal Bureau of Statistics (FBS), export of fishery products surged by 12 per cent and nine per cent in terms of value and quantity, respectively, to $212 million (134,657 tons) as compared to $188 million (123,588 tons) in 2006-07.

The ban is likely to stay till the end of this year as EU’s relevant audits and inspection plan for July-December 2008 does not carry Pakistan’s name.

The programme includes visits by the EU team to various countries, including Bangladesh, Barbados, China, Faroe Islands, Ghana, India, Israel, Malaysia, New Zealand, Republic of Korea, South Africa, Taiwan, Thailand and the US, according to the food and veterinary programme of audits and inspection for July-December 2008, issued by the Directorate-General of Consumer Protection, European Commission.

The mission will carry out inspections of fish and its products, like bivalve molluscs, including aquaculture, in these countries.

The ban on Pakistan’s fishery products was imposed after an EU inspection mission in January 2007 found deficiencies about conditions at the processing plants, fish harbour and non-existence of any record on product traceability.

The EU team during inspection of various sites at harbour and processing units in January last had noticed grave systematic failures, particularly good governance in the Karachi Fish Harbour Authority (KFHA) and Fishermen Cooperative Society (FCS), precipitating port congestions, unhygienic conditions and compliance failures across the supply chain, from fish harvesting to handling onboard, at harbour landings, in auction halls and during transportation from boats to auction sites and fish processing establishment.

Akhlaq Hussain Abidi, an exporter, said that although the first half of 2007-2008 was really bad for exporters, the second half proved a boon, thus compensating the losses of the first half as exporters fetched more than the EU price in markets like the UAE, Indonesia, Thailand and China.

Even the average unit price improved during the last six months.

“This is the solo effort of exporters in tapping new markets and the government has nothing to do with the increase in exports,” he said, adding, even fishermen and boat-owners got good price of their efforts in the last six months.

He said since the imposition of ban in April 2007, no serious efforts had been made by the Pakistan government for resuming exports to European countries. All efforts of the Ministry of Food, Agriculture and Livestock, mainly focused in holding of meetings with the Sindh government, FCS and KFHA, rather than taking any practical measures. He also confirmed that there is no visit of any EU mission this year.

He, however, said that exporters have found new buyers and hopefully there would be no problem in the current fiscal year.

Fish exports cross $200 million -DAWN - Business; July 19, 2008

 

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Trade policy widens scope for imports from India: •Export target set at $22.1bn •EPB to be activated​

ISLAMABAD, July 18: The trade policy for the fiscal year 2008-09 unveiled on Friday sets an ambitious export target of $22.10 billion, but avoids projecting an import target because of rising international oil and food prices.

The policy, announced by Commerce Minister Ahmad Mukhtar at a press conference, offered a number of incentives for traditional products. It envisages establishment of 11 new industrial clusters, reactivation of the Federal Export Promotion Board and review of the TDAP Ordinance to improve its working.

The horticulture sector has been declared an industry.

A proposed package of subsidies for the textile sector was not announced, but it is expected to be made public soon.

Import of more than 136 new items from India has been allowed. Of these, 72 tariff lines were added to the importable list for raw materials, chemicals and industrial inputs, nine tariff lines for pharmaceutical products and vaccines, two for fruit and vegetables, 19 for fertiliser, 32 for machinery and parts and two for POL and diesel.

With the inclusion of these items, the total list of tradable products with India has been increased to 1,938 tariff lines from earlier 1,837. The global import of these 136 tariff lines stood at $2.8 billion of which $2.2 billion was spent only on import of POL and diesel.

This means the government has diverted this import value of $2.8 billion to India which will increase its exports to over $3 billion from the current level of $1 billion and become the second largest trading partner of Pakistan after China.

After this increase in imports from India, the grant of MFN status to India would become meaningless, but commerce minister linked it with the removal of non-tariff measures by India.

A Halal Certification Board will be set up to devise a standard and certification mechanism for the export of Halal food products. Import of paddy harvesters and dryers from India will be allowed through Wagha by road.

The government will allow the import of used buses not more than 10 years old under the transfer of residence scheme for overseas Pakistanis and import of CNG buses from India.

If Indian manufacturers of CNG buses make a firm commitment to manufacture such buses in Pakistan, the ministry of commerce may provide special dispensation for import of 10 buses by road via Wagha from each possible investor as test consignments.

Duty and taxes have been withdrawn on plant, machinery and equipment imported to set up a unit under the Duty and Taxes Remission for Export (DTRE) scheme. Inputs in DTRE have been allowed to be imported from India, even if these are not included in the importable items from India, or manufactured locally.

The period of retention of raw material and components for export under temporary importation scheme (SRO 1065) has been increased from 12 months to 18 months -- at par with DTRE.

The duty drawback rate has been increased by one per cent of the FOB value for 14 traditional products, including tents, canvas and tarpaulin, electric machinery, carpets, rugs and mats, sports goods, footwear, surgical goods/medical instruments, cutlery, onyx printers, electric fans, furniture, autoparts, handicrafts, jewellery and pharmaceuticals.

A new scheme has been introduced under which a notified percentage of inputs may be allowed to be imported at zero duties against FOB value of exports with flexibility to import any product among the notified list in any quantity within the overall entitlement of the exporter.

The trade policy proposed to allow the temporary import of PET bottle scrap for manufacture and export of PSF in the DTRE scheme, subject to non-hazardous certification. It has been decided to support the setting up of new pharmaceutical plants by providing it with the incentive of having an accelerated depreciation allowance facility of 90 per cent in the first year on investment in plant machinery and equipment.

Imports of gold, silver, platinum, palladium, diamond and precious stones have been exempted from customs duties and sales tax to increase exports and encourage investments in the sector.

The import of machinery/equipment for mining/quarrying and grinding of minerals (along with spares) will be allowed from India to improve availability of good quality stones for further processing.

It has been decided that the subsidy given to exporters to comply with environmental standards from the Export Development Fund (EDF) will be increased to eight per cent or 50pc of the mark-up, whichever is lower.

The horticulture sector has been declared an industry to qualify it for industrial credit, relief in taxation, etc., thus facilitating much-needed modernisation and infrastructure development in the sector.

Under the import regime, it has been decided to allow the import of used cryogenic containers/cylinders and second-hand cement bulkers not more than 10 years old and increase the age limit of prime movers to five years.

Import of Job and Stock lots of raw material, which attracts duty up to five per cent, will now be allowed.

Import of stainless steel and cotton yarn by trucks through Wagha has been allowed. Import of used motorcycles or tri-wheeler vehicles, especially designed/made or altered for the handicapped, will be allowed, subject to a disability certification from the ministry of health.

Re-export of vehicles imported by overseas Pakistanis and import of academic, scientific and reference books from India have been allowed.

Trade policy widens scope for imports from India: •Export target set at $22.1bn •EPB to be activated -DAWN - Top Stories; July 19, 2008

 

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Mukhtar defends increased trade with New Delhi ​

ISLAMABAD (July 19 2008): Commerce Minister Chaudhry Ahmed Mukhtar on Friday defended measures of allowing imports of diesel and fuel oil and other items from India saying that Pakistan should come out of 'India-phobia' as the neighbouring country is becoming a very good trading partner of the country.

Addressing a hurriedly-called press conference after announcing Trade Policy 2008-09, he said that liberalised trade with India would gradually benefit Pakistan. However, the minister said the government could not grant MFN status to India due to some qualitative and quantitative barriers.

He said that India had given MFN status to Pakistan, but due to tariff and non-tariff barriers, Pakistan could not get any kind of benefit. Even without granting MFN status to India, Pakistan can enhance trading relations with the neighbouring country. He said that throughout the world trade between the neighbouring countries had always been beneficial for both.

He said that the ministry of commerce was initially thinking that export target for 2008-09 fiscal year should be fixed at $24 billion, but the poor performance of some key sectors, the target has been fixed at $22.1 billion.

Responding to a question, he said that Pakistani traders did not utilise the Free Trade Agreement Pakistan has already signed with China. "The FTA with China is not benefiting us in real terms," he added. The business community must come forward and take the maximum benefit of Pak-China FTA, the minister said.

He called for increasing the diesel price in the country so that its smuggling to Afghanistan, and even Iran could be stopped. He said the government was discussing market access with European countries and the US. He said we are also persuading the US to set up ROZs in militancy-hit Fata. We are keen that the US must move quickly on the proposal, Mukhtar added. He said that Trade Policy 2008-09 was industries as well as agriculture friendly and the two sectors are required to help the government in enhancing exports.

About R&D support to the textile industry, the minister said the textile ministry was vigorously pursuing the case with the Prime Minister. "I will shortly hold a meeting with the Prime Minister on the issue. About 90 percent of the demands of the textile ministry, if accepted, will be more than enough," he said.

Business Recorder [Pakistan's First Financial Daily]

 

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$860 million wheat import in fiscal year 2008 due to ineffective government policies ​

KARACHI (July 19 2008): The ineffective policies of the previous government made the country spend $860 million in the fiscal year 2007-08 to import wheat to cope with the crisis, sources said on Friday. The previous government allowed wheat export in December 2006, when the harvesting season was going to start, and the final wheat production figurers had not been received.

Although, after wheat export decision only 0.5 million tons wheat was exported and the government had banned further export in May 2007, a huge buying of grains, which the exporters and traders had made earlier, finally created a panic in the market and raised its prices to an alarming level, they said.

Therefore, the negative impact of erroneous decision of wheat export is still being witnessed in the country, as it is continuously importing huge quantity of the commodity to meet local demand. Besides, it is paying millions of rupees subsidy on its import to ensure that the commodity is available at reasonable rates in the local markets.

Sources said that wheat import price had surged by 1969 percent during the last fiscal year to meet the local demand due to increased smuggling of the commodity to Afghanistan and its huge hoarding in the country. Official statistics show that the government has spent $860.001 million for wheat import in fiscal year 2008 as compared to $41.559 million in fiscal year 2007, depicting an increase of $818.441 million.

In terms of volume, wheat import during last fiscal year stood at 1.823 million tons against 0.135 million tons in the fiscal year 2007, witnessing a rise of 1241 percent in 2008. Interestingly, the country exported wheat at $220-250 per ton during February to May 2007, while it imported at $430-665 per ton during last fiscal year.

The import at high rates also compelled the government to pay billions of rupees subsidy to stabilise the prices of wheat and wheat flour in domestic market, sources said. The huge import of wheat at higher than previous prices also pushed the import bill to peak level of $20 billion in the fiscal year 2008.

Despite some initiatives to ensure the frequent supply of wheat and to bring down its prices, at present the prices of wheat and wheat flour are the ever highest in the country. Due to import of over 1.8 million tons wheat during last fiscal year the country is facing wheat crisis and wheat flour is being sold at the level of Rs 25-32 per kg. Recently, the federal government has also raised the wheat flour prices at utility stores by Rs 5 to Rs 20 per kg on the back of rising wheat prices in the local market.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistan, U.S discuss economic, energy cooperation​

Islamabad, July 20, IRNA

The U.S Under Secretary for Economic, Energy and Agricultural Affairs Reuben Jeffery and Pakistani Foreign Minister Shah Mahmood Qureshi on Saturday discussed bilateral relations with particular focus on economic cooperation, officials said.

The Foreign Minister emphasized the importance of a broad-based and long-term relationship between the two countries, going beyond counter-terrorism cooperation and extending to deeper trade and economic interaction as well as people-to-people contacts, a Foreign Ministry statement said.

The Foreign Minister particularly emphasized the need for enhanced market access for Pakistani products in the U.S., collaboration in the energy sector, and cooperation in the field of agriculture, it said.

Under Secretary Reuben Jeffery underlined the importance the U.S.

attached to its relationship with Pakistan and its support for strengthening bilateral trade and economic ties.

He also expressed support for closer bilateral cooperation in the energy and agriculture sector.

Matters relating to Reconstruction Opportunity Zones (ROZs) and Bilateral Investment Treaty (BIT) were also discussed.

Pakistan, U.S discuss economic, energy cooperation - Irna

 

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Pakistan new trade policy allows FDI from India ​

Nirupama Subramanian

ISLAMABAD: In a significant shift of policy, Pakistan has for the first time put aside its deep-seated sentiments over Kashmir to invite foreign direct investment from India.

Announcing the government’s trade policy for 2008-2009, Commerce Minister Ahmed Mukhtar said a decision had been taken that if “Indian manufacturers of CNG buses made a firm commitment to establish manufacturing of such buses in Pakistan,” his Ministry might allow the import of 10 buses by road via Wagah “from each possible investor as test consignments.”

The government has already made the import of CNG buses duty-free. The removal of the earlier 15 per cent duty was announced in the 2008-2009 budget.

No details are available yet on how much investment is being sought. Pakistan has a liberal investment policy, even allowing 100 per cent foreign ownership but officials said that in the case of India, “the devil may be in the details.”

It’s not just for CNG buses that the Pakistan government is signalling its readiness to embrace Indian investment.

Official sources said the government had invited at least three Indian companies — Tata, Reliance and Essar — to a meeting of potential investors in the power sector to discuss the development of the Thar Coal Power Project. The meeting is to be held in late July or early August.

Besides investment, Pakistan’s new trade policy opens the door for more imports from India than before, in order to cut down on transport and manufacturing costs that in turn would make its own exports more competitive and help it narrow its trade deficit.

The Minister said Pakistan had allowed imports of fuel oil, diesel, machinery such as paddy harvesters, rice driers, and mining equipment. “These items are included in the 136 additions to Pakistan’s positive list of imports from India. With this, the positive list has increased to 1,938 items. The full list has not yet been made public.”

Indian officials, who had given a list of 484 items for inclusion in the positive list, expressed disappointment that only 136 had been accepted, but conceded that overall, the new trade policy contained many positive steps for improvement of trade relations with India.

In addition to the expanded list of permitted imports, Pakistan will also allow the import of raw materials and machinery not on this positive list for manufacturing units set up under its DTRE (Duty and Tax Remission for Export) schemes.

Also, cotton yarn and stainless steel will be allowed in by road, through the Wagah border, from India. Presently, these two items are sent only by train. “Cheaper raw material sourced from India would make our exports more competitive in international market. We are [also] allowing import of diesel and fuel oil from India, because it will be cheaper due to the difference in transportation cost. This will also help us to address our global trade deficit.”

He said Pakistan was in the process of “gradually” liberalising bilateral trade with India. “The Composite Dialogue process, especially on economic and commercial cooperation, has been instrumental in addressing the bilateral issues,” Mr. Mukhtar said, referring to the four-year-old peace process between the two countries.

India and Pakistan have a bilateral trade of $1 billion, but unofficial trade is estimated at double or treble the amount. The Dawn said on Saturday that by widening the scope for imports from India, this figure could go up to over $3 billion, making India Pakistan’s second biggest trading partner after China.

He made the grant of MFN status to India conditional to New Delhi removing certain non-tariff barriers on imports, but the newspaper commented that with the proposed increase in imports from India, that conditionality was “meaningless.”

Pakistan’s efforts at liberalisation of trade with India appear to be in line with the sentiments voiced by Pakistan People’s Party chairman Asif Ali Zardari that the new PPP-led government wanted to improve economic relations and would not allow the differences on Kashmir to come in the way of this.

An indication that the new policy may not be welcomed by all was evident in some of the headlines in Saturday’s newspapers: “Indian imports to flood Pak markets,” said the News, while the Nation, said “Pakistan shows tilt towards India.”

The Hindu : International : Pakistan new trade policy allows FDI from India

 

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Aviation Policy 2008 to attract private sector

By Sajid Chaudhry

ISLAMABAD: National Aviation Policy 2008 aims at allowing private sector to construct and operate new and existing airports, to start private air taxi service through aircrafts, helicopters on chartered or non-chartered basis, 10-year tax holiday will also be offered to the companies intending manufacturing aircrafts in Pakistan.

National Aviation Policy 2008 is likely to be presented before the federal cabinet in its next meeting for formal approval to facilitate national aviation sector surpass air traffic growth from 7% to over 8% per annum.

Market Access in Air Service: Pakistan shall liberalise bilateral arrangements on reciprocal basis with our bilateral partners to provide service from/to Karachi, Lahore and Islamabad after completion of new airport to the destinations in Western Europe, North America and Africa and to destinations towards East.

While finalising new Air Service Agreements (ASAs), multiple airlines designation clause and article on Code-Share shall be incorporated. There shall be no commercial agreements as part of bilateral agreements. However, airlines shall be free to enter into such co-operative marketing arrangements as are mutually agreeable, which would be outside of ASAs.

Market Access in Cargo Service: Pakistan shall continue to follow open skies policy for cargo operations based on 3rd, 4th, 5th freedom traffic rights. Karachi and Gwadar international airports to shall be promoted as transshipment hub. Cargo villages shall be established on public private partnership at major international airports and linked with National Trade Corridor.

Paid up Capital and Fleet Registration: Paid up capital for Regular Public Transport License shall be increased from Rs.100 million to Rs.500 million, which shall be reviewed periodically by CAA Board. Fleet registration in Pakistan shall be mandatory for all Pakistani aircraft operators except pure cargo aircrafts. Requirement of minimum fleet size for a Regular Public Transport (RPT) license holder shall be at least 3 airworthy aircrafts for domestic operations and at least 4 airworthy aircrafts for international operations. There shall be no permanent addition to capacity by inducting foreign registered aircraft on wet lease other than pure cargo aircraft. Temporary induction of foreign registered aircraft on wet lease may be permitted under extra ordinary circumstances for a short period subject to a maximum period of 90 days. For induction of aircraft, the criteria of minimum remaining operational cycles/hours shall be prescribed by the Director General CAA through Air Navigational Order (ANO).

Tax Holiday: Some 10 year tax holiday would be granted to air craft manufacturers to encourage them invest in aircraft manufacturing units in Pakistan along with establishment of aircraft maintenance companies, flying training schools and ground training schools. Government would rationalize and reduce taxes chargeable to passengers on international and domestic routes. The government would also exempt all taxes and duties on air tickets on secondary destinations. The same privilege shall be extended to operators of small aircrafts and helicopters.

Security equipments and weapons imported by Airport Security Force, CAA, private airports and other operators shall also be exempted from all taxes and duties.

Air Taxi Service: New National Aviation Policy to introduce Air Taxi Service Concept in Pakistan. According to the draft policy document, about 64% of Pakistan population lives in rural areas, with little or no access to air travel even in emergency, for want of air strip, helicopter, helipads and suitable aircrafts to commute to/from remote areas. There are fairly large numbers of cities, which are developed to adopt the concept of air taxi and private owned aircraft for commuting.

In order to develop Air Taxi Service concept in Pakistan the procedure for acquisition and operation of aircrafts, including helicopter, micro-light ultra-light air crafts and hot air balloons shall be liberalized to encourage travel and sports activities.

Use of helicopters for tourism, emergency operations and adventure sports in private sector would be promoted and encouraged and no charges would be imposed for such operations. Liberalized guidelines would be formulated, in consultation with users, to promote and encourage private investment in flying clubs, air taxi service, private ownership of the aircraft, and aero-sports activities i.e. hang gliding, ballooning, heli-skiing and para-jumping. Flying clubs shall be facilitated to overcome shortage of pilots in the country i.e. to develop air strips out side control zones of major air ports fort exclusive use of training flights and to lease Civil Aviation facilities to flying clubs where available.

Charter Service: Under the new policy domestic charter operations would be allowed to Pakistani Operators only using Pakistani registered aircraft including helicopters flown by Pakistani pilots. International charter originating from Pakistan would be allowed on all international routes irrespective of the scheduled operations. On routes

Commercialization of Airports: “Airport Cities” shall be developed including hotels on public private partnership at all major airports. Vacant land at airports shall be evaluated and developed for construction of aviation facilities like cargo complexes and aircraft maintenance facilities. Land at remote and non-operational airports shall be utilized for non-aeronautical commercial and recreational purposes. CAA shall formulate land lease policy to make it commercially viable for private investors.

New Airports: Construction of new commercial airports would be permitted to meet the air traffic. Private sector shall be free to construct and operate new as well as existing airports, airstrips, helipads, heliports including cargo complexes on BOO, BOT, or any other management arrangement and to raise non-aeronautical revenues from these premises. Privatization of airports shall be pursued to make them more efficient and productive.

Consumers Protection: To protect the interests of the users, facilitation committee consisting representatives from government, passengers, travel and tour operators, aircraft operators, airport operators, exporters, importers, cargo handling agents, aero-sports and flying clubs would be set up at national regional and local levels.