Pakistan Economy - News & Updates - Archive

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‘IT exports set to grow by 50% in 2008-09’​

KARACHI: Pakistan software export are set to grow by 50 percent by the next fiscal year with the continuation of its policies for IT, Federal Secretary of IT and Telecom Ministry Hifzur Rehman said.

Talking exclusive to Daily Times in a three-day Information Technology conference and exhibition, ITCN Asia 2008, he said that the government has focused to develop sophisticated and most advanced IT parks in Karachi and Lahore.

Federal Secretary said the government has continued to implement its policies that boost growth in IT sector and create employment opportunities in the country.

“Pakistan’ exports have touched $1.4 billion according to the World Trade Organisation formula and it has the potential to increase manifold within few years,” he added. He said the government is expecting growth in foreign direct investment (FDI) this year.

On the occasion, Chairman Pakistan Telecom Authority (PTA), Dr Muhammad Yaseen urged ICT providers to ensure the best telecommunication services to their customers and enhance their service quality, as customers satisfaction is most important in this era of competition. Dr Yaseen said that PTA is planning to launch 3G by end of this year and he emphasised all telecom providers to educate their customers regarding new technologies.

Chairman PTA said that there is friendly environment for foreign investors in telecom sector. The sector has witnessed encouraging investment that has made it possible to introduce latest technology.

He said that PTA’s role in this regard is very clear and due to deregulation policy six cellular companies are operating in Pakistan making it possible to provide telecom facilities on very nominal rates. staff report

Daily Times - Leading News Resource of Pakistan

 

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Pakistan and US for broad-based economic ties: joint communiqué issued ​

ISLAMABAD (August 12 2008): A joint communiqué, issued on Monday after third Pak-US economic dialogue, reaffirmed the two sides' commitment for deeper and broad-based bilateral co-operation in all sectors of the economy. The joint communiqué said the dialogue sought to deepen US-Pakistan economic partnership and further develop a long-term, broad-based economic relationship that mutually benefits the people of the two countries.

The two sides discussed a wide-ranging agenda, including macroeconomic policy, labour, intellectual property rights, energy, agricultural cooperation, eliminating terrorism finance network, reconstruction opportunity zones (ROZs), a GOP scholarship proposal, foreign assistance and Fata development, regional co-operation and transit trade, private sector co-operation and a Bilateral Investment Treaty (BIT).

Finance Minister Syed Naveed Qamar led Pakistan side. He was assisted by senior officials of the Ministries of Finance, Commerce, Foreign Affairs, Agriculture, Interior, Labour, Law and Justice, Water and Power, Education, the Board of Investment and the State Bank of Pakistan.

The US side was led by Assistant Secretary of State for Economic, Energy and Business Affairs, Daniel S Sullivan. Those who assisted him for the dialogue included the officials from the US Departments of State, Commerce, Treasury, the Office of the US Trade Representative, the US Agency for International Development and the US embassy.

The joint communiqué added that the two sides discussed Pakistan's macroeconomic policies, including fiscal and monetary reforms and social safety net measures the GOP has taken and plan to promote economic growth, provide protection to vulnerable groups and increase prosperity of all Pakistanis.

It said the United States and Pakistan agreed on the importance of GOP measures to stabilise the economy, to adhere to the announced macroeconomic policy and targets and to continue Pakistan's structural reforms, including monetary and fiscal policy adjustments.

It maintained that fruitful discussion was held on establishing reconstruction opportunity zones, which will facilitate job creation and economic development in the Federally Administered Tribal Areas, North West Frontier Province, the earthquake-affected areas of Azad Jammu and Kashmir and Balochistan within 100 miles of the Afghan border.

The Reconstruction Opportunity Zones will provide greater market access to exports from businesses in these areas and create employment opportunities for the border regions. The joint communiqué further said that trade liberalisation, protection of intellectual property rights and labour issues that are all aimed at fostering increased economic opportunities, were also discussed.

Useful discussions about the issues that remain in concluding a BIT, which would promote a more open, transparent, and predictable business climate, were discussed as well. Both sides agreed that the United States and Pakistan have a strong interest in resuming BIT negotiations and that their investment experts should meet as soon as possible to do so. Ways to increase the opportunity for Pakistani students to study at the US universities, including through expanding scholarship opportunities, were considered and both agreed to pursue the matter further.

Recognising rising world fuel and food prices, policy measures already taken by the GOP to cope with rising prices and ways in which bilateral co-operation in energy and agriculture could be strengthened, in particular increasing capacity and attracting greater US investment in these areas.

The two parties spoke of positive steps to better address matters relating to eliminating terrorism financing networks and strengthening Pakistan's Money Laundering Ordinance. There was also discussion about ways to strengthen GOP efforts for sustainable socio-economic development of the border areas. The two delegations agreed to meet again in 2009 in the United States.

Business Recorder [Pakistan's First Financial Daily]

 

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BIT to provide new cooperation framework ​

ISLAMABAD (August 12 2008): The US Assistant Secretary of State for Statistic Energy and Business Affairs, Daniel S Sullivan on Monday said Bilateral Investment Treaty (BIT) is going to provide the US and Pakistan a new framework for long-term economic co-operation.

He listed agriculture, energy, bilateral trade and US investment in Pakistan among those areas, which can benefit right from the beginning of BIT singing between the two sides.

After third Pak-US dialogue held here, Daniel S Sullivan, who was accompanied by Robert Dohner, Deputy Assistant for Asia at US Treasury Department and other members of the delegation, said that two sides have shown willingness to make BIT conclusive as early as possible to enhance economic co-operation. He said BIT could also be a tool to bring the two sides closer to signing a Free Trade Agreement (FTA).

He said the two sides discussed at length the ways and means to provide Pakistan more access to the US market. He said setting up of Reconstruction Opportunity Zones (ROZs) and GSP would provide more opportunities to Pakistan to export a large number of surplus items without any duty. He said the two sides also stressed the need for greater co-operation between the State Bank of Pakistan (SBP) and US Treasury Department to eliminate terrorism financing network and strengthening Pakistan Monetary Laundering Ordinance.

He dispelled the impression that ROZs along with Pak-Afghan border will be affected by the military action in Federally Administered Tribal Areas (Fata). He said ROZs is a unique concept to keep the people away from negative activities and help them earn a better living.

In response to a question, Sullivan said Pak-US dialogue covered a wide range of issues for deepening economic co-operation between the two countries. However, it did not include the issue of civilian nuclear technology Pakistan is demanding since Washington singed an agreement with India. He was also not aware as if Prime Minister Syed Yusuf Raza Gilani took this issue with US President George Bush when they met in Washington last month.

Business Recorder [Pakistan's First Financial Daily]

 

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Some export-related decisions yet to be implemented by FBR ​

ISLAMABAD (August 12 2008): The Federal Board of Revenue (FBR) has not implemented some exports-related decisions of the trade policy 2008-09 including launching of a new scheme for exporters, amendments in Duty and Tax Remission for Export (DTRE) scheme and enhancement in drawback rates by one percent of free on board (fob) value for 14 export sectors.

Sources told Business Recorder on Monday that the trade policy 2008-09 had announced some major changes in drawback/DTRE scheme for maximum facilitation of exporters. Some of the decisions have to be implemented by the FBR. But it seems that the board is not taking any initiative for implementation of these decisions.

In the trade policy, the government has announced a new scheme for further facilitation of exports. As per proposed scheme, a notified percentage of inputs may be allowed to importers at zero duties against fob value of exports with flexibility to import any product from among the notified list in any quantity within the overall entitlement of the exporter.

So far, the FBR has not conducted any kind of exercise for implementation of this new scheme. Even initial working has not been done by the board reasons not known. All these proposed incentives aimed at bringing major facilitation to exporters, but there is no clue of new schemes or changes in the existing DTRE scheme.

Another important decision of the government was to bring comprehensive changes in the DTRE scheme. It included exemption of duties and taxes on the import of plant, machinery and equipment to set up a unit in DTRE scheme. Inputs in DTRE will also be allowed to be imported items 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) may be increased under the new scheme. According to sources, the board has not amended the DTRE scheme despite announcement of trade policy last month.

The government has also decided to increase the drawback rate by 1 percent of fob value on this account for 14 products ie tents, canvas, tarpaulin; electric machinery; carpets, rugs, mats; sports goods; footwear; surgical goods/medical instruments; cutlery; onyx manufactured; electric fans; furniture; auto parts; handicrafts; jewellery and pharmaceuticals. The incentive is being provided to encourage export of value-added products, particularly manufactured by small and medium enterprises. Sources said that this incentive has also not been implemented by the board.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistan and China have huge potential to boost trade: envoy ​

LAHORE (August 12 2008): The Ambassador of China in Pakistan, Luo Zhaohui, has said that Pakistan and China have huge potential to enhance bilateral trade while the existing volume of $7 billion was very small against the Chinese total trade volume of $2.2 trillion with other countries.

He was talking with Lahore Chamber of Commerce and Industry (LCCI) President Muhammad Ali and other office-bearers here on Monday. He said that country is planning to open its commercial office in Lahore soon to facilitate the people in general and the business community in particular so that bilateral trade could further be enhanced. The Chinese embassy has decided to open an office in Lahore keeping in view the problems being faced by the people who want to visit China, he added.

Zhaohui said that political stability in any country was a prerequisite for direct foreign investment and to giving boost to the bilateral trade. Pakistan is the first Asian country with which China had initiated Free Trade Agreement and this was enough to make the point that China gives top priority to Pakistan in terms of business and trade, he said. The establishment of Pak-China Joint Investment Company was first of its kind that China had established in any country of the world, he added.

The Ambassador said that he had meetings with Punjab Governor and Chief Minister and found them very pragmatic. Both leaders were very optimistic about future trade relations between Pakistan and China, he said.

The LCCI President highlighted the prospectus of investment in different sectors. He invited the Chinese businessmen to invest in Pakistan in priority sectors including oil and gas, mining, infrastructure, power (coal, hydel, gas based), IT and telecom, chemicals (fertiliser (urea), glass, pv and polymers), value-added textile manufacturing, engineering goods, textile machinery, electronics, automotive, agricultural and agro based industry, pesticides, food and fruit processing and packaging, live stock and dairy farming.

Pakistan because of its strategic location could be a more suitable destination for Chinese investments and thus offering liberal investment policies allowing 100 percent foreign equity and equal treatment to local and foreign investors. Pakistan has a network of export processing zones and industrial estates ready to accommodate Chinese investors especially in Punjab province, he added.

Ali said the LCCI is shortly organising a special seminar on 'Pak China Investment Opportunities' for improving the five-year development programme on trade and economic co-operation between the two countries.

He said globalisation had provided Chinese investors a golden opportunity to relocate their large-scale industry to Pakistan to reap the benefits of its most conducive business policies as compared to other regional countries.

Business Recorder [Pakistan's First Financial Daily]

 

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US, Pakistan agree to revive talks on BIT​

ISLAMABAD, Aug 11: Pakistan and the United States on Monday decided to revive the stalled negotiations on Bilateral Investment Treaty (BIT) and further strengthen controls against terrorism financing.

These issues were discussed and decided under a new framework for deepening economic cooperation in a wide range of areas, including energy, investment and agriculture sectors.

The US side would help strengthen Pakistan’s money laundering ordinance by providing necessary support to the State Bank of Pakistan to ensure legal transfer of funds from abroad.

“While new options were discussed to help reduce Pakistan’s energy problems, it was also decided to separately undertake dialogue for improving Pakistan’s agriculture sector,” Mr Daniel S Sullivan, US Assistant Secretary, Bureau of Economic, Energy and Business Affairs, told a news conference after the completion of third Pakistan-US Economic Dialogue. He was heading a six-member US delegation, while Minister for Finance Syed Naveed Qamar represented Pakistan at the dialogue whose next round would be held soon in Washington.

He said since Pakistan was facing rising food prices, the $150 million food aid announced during Prime Minister Gilani’s visit to the US last month was being expedited.

Pakistan, he pointed out, would be provided increased market access to its products in the US.

In this regard, he referred to a bill moved in both houses of the Congress which is expected to be approved soon to help Pakistan increase its “thousands of duty-free export items to the US.”

Moreover, he said under the Generalised System of Preference (GSP), Pakistan was being allowed to export a number of duty- free items to his country.

“We are creating most beneficial opportunities for Pakistani goods into the US,” he said, adding that this process would receive further impetus once Doha round of talks was completed.

He told a reporter that there had been problems in the finalisation of BIT due to which negotiations were stalled in 2007.

“But now there is a breakthrough to restart these talks,” he said, adding there was no plan to make BIT part of the Free Trade Agreement (FTA) which was also still to be concluded between the two countries.

Responding to a question, he said no discussion took place to offer India-like civilian nuclear energy cooperation to Pakistan.

This issue, he clarified, did not figure during talks between President Bush and Prime Minister Gilani during his visit to Washington.

“There is no quick fix as we too are facing energy problem in the US.”

He also said that the US delegation did not talk about the issue of impeaching President Musharraf by major political parties as it was Pakistan’s domestic issue.

“We talked about improving investment climate but not internal dynamics of Pakistani politics,” Mr Sullivan said.

In reply to a question, he said that Reconstruction Opportunity Zones (ROZs) would be established on border areas from where Pakistan could export its duty-free products into the US. He said Turkey had assured to invest in ROZs.

He told a reporter that there were security challenges in tribal areas, but they were not hampering promotion of economic activities there.

He said that a decision had been taken to provide necessary support to explore thermal/hydro mix to help remove Pakistan’s energy problems.

A joint communiqué was also issued at the end of US-Pakistan Economic Dialogue which sought to deepen economic partnership between the two countries and further develop a long-term, broad-based economic relationship.

The two sides discussed a wide-ranging agenda, including energy, agricultural cooperation, eliminating terrorism, finance networks, foreign assistance and Fata development, regional cooperation and transit trade, private sector cooperation.

The two delegations discussed Pakistan’s macroeconomic policies, including fiscal and monetary reforms and social safety net measures the Government of Pakistan has taken and plans to take to promote economic growth, provide protection to vulnerable groups, and increase prosperity of all Pakistanis.

The United States and Pakistan agreed on the importance of GOP measures to stabilise economy, to adhere to the announced macroeconomic policy and targets, and to continue Pakistan’s structural reforms, including monetary and fiscal policy adjustments.

A fruitful discussion was held on establishing Reconstruction Opportunity Zones, which would facilitate job creation and economic development in the Federally Administered Tribal Areas, North-West Frontier Province, the earthquake-affected areas of Azad Jammu and Kashmir, and Balochistan within 100 miles of the Afghan border.

The Reconstruction Opportunity Zones would provide greater market access to exports from businesses in these areas and create employment opportunities for the border regions.

Trade liberalisation, protection of intellectual property rights, and labour issues, all aimed at fostering increased economic opportunities were also discussed.

Useful discussions about the issues that remain in the conclusion of a BIT, which would promote a more open, transparent and predictable business climate, were discussed as well.

“We agreed that the United States and Pakistan have a strong interest in resuming BIT negotiations and that our investment experts should meet as soon as possible to do so.”

Ways to increase the opportunity for Pakistani students to study at US universities, including through expanding scholarship opportunities, were considered, and “we agreed to pursue the matter further.”

The two parties spoke of positive steps to better address matters relating to eliminating terrorism financing networks and strengthening Pakistan’s Money Laundering Ordinance.

There was also discussion about ways to strengthen GOP efforts for sustainable socio-economic development of the border areas.

The two delegations agreed to meet again in 2009 in the United States, the communiqué said.

US, Pakistan agree to revive talks on BIT -DAWN - Business; August 12, 2008

 

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Inflation at all-time high of 24.33pc during July ​

Wednesday, August 13, 2008

ISLAMABAD: Fuelled by unprecedented 33.81 per cent food inflation, the Consumer Price Index (CPI) during July 2008 kissed an all-time record high 24.33 per cent, after 3.34 per cent raise in consumer prices on June 2008, last year in July CPI inflation stood at 6.37 per cent, the Federal Bureau of Statistics (FBS) reported on Tuesday.

On the other hand, the dwindling value of Pakistani rupee touching lowest as a result of huge current account deficit, also deteriorating the situation and pushing prices of essential commodities up. This also makes imports costlier.

At the moment the government seems helpless to rein in the spiraling inflation and save rupee from free fall. Households struggling to meet the minimum standards of living might have no choice but to cut down their expenditures on health and children’s education.

Rising inflation is also making it more difficult for pensioners and low income masses living on their very nominal income a month in the country. CPI that covers the retail prices of 374 items in 35 major cities reflects roughly the changes in the cost of living of urban areas.

According to it, in July 2008, transport and communication charges increased by 37.18 per cent, food and beverages 33.81 per cent, fuel and lighting 20.49 per cent, clearing laundry and personnel appearances 18.18 per cent, apparel textile and footwear 13.78 per cent, house rent 13.27 per cent, recreation and entertainment 11.50 per cent, household furniture and equipments 11.13 per cent, education 10.04 per cent and medical expenses 9.83 per cent over July 2007.

Under the food and beverages group, during July 2008, tomatoes prices increased by 104.51 per cent, potatoes 25.98 per cent, eggs 24.68 per cent, vegetables 16.03 per cent, condiments 15.61 per cent, onions 15.18 per cent, sugar 6.25 per cent, chicken farm 5.89 per cent, wheat 5.70 per cent, pulse masoor 4.98 per cent, gur 4.16 per cent and wheat flour price up 2.19 per cent over June 2008.

According to the CPI, train fare increased by 33.40 per cent, diesel 17.08 per cent, petrol 14.58 per cent, transport fare/charges 10.40 per cent and CNG filling charges up 8.40 per cent.

Footwear prices edged up by 11.95 per cent, cotton cloth 2.19 per cent, natural gas 19.55 per cent, kerosene 17.41 per cent and firewood 2.60 per cent over previous week.

Wholesale Price Index (WPI) has also inched up to 34.02 per cent during the month under review as compared to 7.60 per cent in the corresponding month of the last fiscal.

Over the previous month, it scaled up by 4.35 per cent, signaling toward more price hike in the coming months.

In a bid to cope with the mounting inflationary pressure in the economy, the State Bank of Pakistan (SBP) last month raised its key discount rate by 100 basis points to 13 per cent effective July 30, 2008, which is the fourth consecutive hike in last one year.

Earlier, the central bank raised the rate by 50 bps from 9.5 per cent to 10 per cent in July 2007 and some 100bps in January 2008 from 10 per cent to 10.50 per cent. In May 2008, the SBP suddenly took a tight monetary stance due to rising inflation and continuous depreciation of Pak rupee against the dollar and increased the discount rate by 150 bps to 12 per cent.

It is interesting to note that the imported inflation (as a result of escalating crude oil prices that kissing records) was also a source of cost push inflation, caused by substantial increases in the cost of important goods or services where no suitable alternative is available.

For each one per cent increase in inflation, more and more people fall into poverty indicating that inflation was hitting poor consumers harder than the more affluent ones. Specifically, the poor are highly sensitive to the price changes in food, particularly staple food items, economists believe. It is interesting to note that high inflation trend in food has been noticed since the start of the last fiscal (July 2007), food inflation stood at 8.47 per cent, August 8.62 per cent, September 12.97 per cent, October 14.67 per cent, November 12.47 per cent, December 12.21 per cent and January, 2008 it stood at 18.25 per cent, February 16.05 per cent, March 20.61 per cent, April 25.5 per cent, May 28.48 per cent, June 32.05 per cent and now during the month under review (July 2008), it stood at 33.81 per cent. Despite their adverse impact on the low-income group, no effective steps are being taken by the government to reverse the trend.

The government seems to be indifferent to the plight of the poor and the lower middle class who find it increasingly difficult to make both ends meet with soaring prices of foodstuff and medical expenses.

While, main concern is that in the basket of WPI, fuel, lighting and lubricants expenses up by 56.49 per cent, building materials 42.11 per cent, food 32.53 per cent, raw materials 20.74 per cent and manufacturers’ price up by 13.71 percent in July 2008 over corresponding month of the last fiscal. However, comparison of the WPI of July 2008 with the last month (June 2008), shows that during this one month prices of tomatoes rose by 60.05 per cent, potatoes 25.82 per cent, eggs 24.88 per cent, onions 11.31 per cent, vegetables 11.01 per cent, sugar refined 9.40 per cent, wheat flour 9.10 per cent, besan 6.32 per cent, masoor 6.10 per cent, wheat 5.71 per cent and powder milk 5.58 per cent.

Raw materials (including Mustard/rapeseeds 9.68 per cent, cotton seeds 8.33 per cent, tobacco 4.50 per cent, pig iron 2.12 per cent and wool 1.76 per cent) increased by 1.76 per cent, fuel lighting and lubricants 7.88 per cent, building materials 4.93 per cent, food 3.51 per cent and manufacturers prices 1.80 per cent over the last month (June 2008).

Inflation at all-time high of 24.33pc during July

 

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Workers remit $627m in July ​

Wednesday, August 13, 2008

KARACHI: Pakistanis working abroad remitted a record amount of $627.21 million in July 2008 against $495.69 million in the same month of the last fiscal year (July 2007), showing a jump of $131.52 million or 26.53 per cent.

According to the State Bank of Pakistan (SBP), the amount of $627.21 million includes $0.05 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs). The SBP said that the previous highest amount remitted in a single month by Pakistani workers was in March 2008, when $602.21 million was sent to the country.

The inflow of remittances into Pakistan from almost all countries of the world increased last month as compared to July 2007. According to the break up, remittances from USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UAE, UK and EU countries amounted to $168.39 million, $133.26 million, $105.31 million, $100.10 million, $42.04 million and $17.07 million respectively, as compared to the corresponding receipts from the respective countries during July 2007, ie $127.99 million, $106.55 million, $70.30 million, $77.35 million, $39.50 million and $14.81 million.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during July 2008 amounted to $60.99 million as compared to $58.90 million during July 2007.

Workers remit $627m in July

 

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‘Govt needs to establish steel cities’ ​

Wednesday, August 13, 2008

ISLAMABAD: The government needs to establish steel cities in different zones of the country with sufficient infrastructure and provide land to the steel industry on buyback basis.

Masood Gul, Patron-in-chief of the Pakistan Melters Association and its convener floated this idea in the first meeting of a committee, held here on the development of steel industry, formed by the Engineering Development Board (EDB) to firm up recommendations for the steel policy.

The meeting was told that installed melting capacity of existing units in the country is five million tonnes while utilisation is in the range of 2.5 to three million tonnes due to various reasons. The need for technology transfer was also stressed. In this regard, the experience of India was described as suitable for Pakistan.

Gul in his welcome remarks, assured that the stakeholders were to contribute substantially in formulation of the steel policy and called upon the members to concentrate on the development rather than tariff. He also mentioned other issues of the industry such as dearth of skilled labour, modernisation of existing mills and identification of processes of steel making. The meeting also underlined the need of value chain analysis of the industry and benchmarking in order to provide products at affordable price to the consumers.

The issues of energy conservation, capacity building and importance of high speed steel rolling mills also came under discussion. The representatives of PCSIR informed that 1000 millions tonnes of ore reserves were available in the country which needs a little up-gradation. He said that at laboratory scale they have been successful in steel making from Kalabagh iron-ore.

The committee also firmed up its Terms of Reference (TOR) which included availability of inputs and finished products, their standardisation and certification, mechanism to implement and monitor the quality of products, energy conversation, industry and academia linkages, availability of skilled manpower, establishment of factory schools etc.

‘Govt needs to establish steel cities’

 

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IT sector carries outsourcing potential ​

Wednesday, August 13, 2008

KARACHI: Admitting that Pakistan is far from catching up with the world’s outsourcing trend in overall businesses, Federal Secretary IT & Telecom Hifz-ur-Rehman, has however, said that the country’s IT market is an exception that has emerged with full potential to grab a substantial share in the international IT sector and enhance its exports.

He said this while addressing a conference on ‘IT & Outsourcing’ and ‘Information Security and e-banking’, co-organised by the Pakistan Software Export Board (PSEB) on the second day of the ITCN Asia 2008 exhibition. The conference was attended by corporate executives and experts from leading IT companies, who were invited to interact and share their views on the latest trends that have taken place in the IT and banking sectors of Pakistan. Hifz-ur-Rehman was the chief guest for both sessions.

He further said that information technology is among the first sectors that realised the potential of outsourcing. Companies particularly in USA, Canada, Middle East, Malaysia and England have started outsourcing functions of their businesses to specialised firms, first in USA, and then anywhere they find it cost-effective.

The first session on “IT & Outsourcing” provided an opportunity for the attendees to learn about the latest trends and growth in the field of Outsourcing and Information Technology from foreign experts. During the session corporate executives and experts from IBM Pakistan, PTCL, PASHA, PIBAS, Green Packet Networks, Bahrain and TRG (Pvt) Ltd also collaborated views on the growth of this sector.

The first session was followed by a conference on “Information Security and EñBanking” which was chaired by Talib H Baloch, Managing Director PSEB. The session was attended by top executives from National Response Centre for Cyber Crimes, Teradata, Microsoft, Dubai Islamic Bank and MPAY Ltd, who shared their views on the latest trends and technology that have emerged in the field of Information Security and EñBanking.

During the session, Baloch informed the participants about how EñBanking has progressed over the years in Pakistan with the issues of information security that have emerged with technology. He said that Pakistan is undoubtedly better placed than many advanced countries when it comes to information security and electronic banking.

PSEB will continue patronising and encouraging the use of electronic banking and urge institutions to adopt the latest most advanced information security measures for all types of financial transactions.

IT sector carries outsourcing potential

 

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Pakistan explores jewellery demand in India ​

Wednesday, August 13, 2008

KARACHI: A delegation of 68 people that visited the India International Jewellery Show 2008 (IIJS Mumbai, 2008) from 7th to 11th August, explored the potential for Pakistani gemstones, mineral specimen and traditional stone-studded jewellery in the Indian market.

The delegation was led by Pakistan Gems and Jewellery Development Company (PGJDC) which regularly sends delegations to different international gems and jewellery exhibitions including IIJS Mumbai and Goa.

Fawad H Khan, CEO PGDJC said, “Attending IIJS Mumbai 2008 was a great opportunity for the Pakistani gems and jewellery industry to explore new horizons for trade and investment between the two countries. PGDJC has been attending international exhibitions and trade shows either as a participant and exhibitor or sends delegates regularly.”

Pakistan explores jewellery demand in India

 

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Budgetary, balance of payments support: US turns down Pakistan request ​

ISLAMABAD (August 13 2008): The United States of America (USA) has turned down Pakistan's request for budgetary and balance of payments support, sources in the government told Business Recorder. The budget for fiscal year 2008-09 has envisaged a deficit of 4.7 percent, which is unlikely to be met as the Finance Minister had remained vague about revenue sources identified in the budget.

At the same time, expenditure in general and subsidies in particular are unlikely to be curtailed, given the increase in the number of those living below poverty line due to rising inflationary pressures. Balance of payments position is also unlikely to improve if oil prices remain high in the international market. Therefore, any increase in exports, forecast at 15 percent for 2008-09 in the trade policy announced by Ahmed Mukhtar, is not expected to provide the necessary cushion to absorb the rise in the import bill.

Given the two deficits ie budget and trade deficit, the request by Pakistan government to the US team to extend assistance for budgetary support reflected its deep concerns over impending economic crisis. Sources said that Pakistan's request for further financial assistance had been placed before the US team, which was present in the Finance Ministry on Monday, for the third US-Pakistan economic dialogue, but the response was not encouraging.

"Pakistan's economy is in a serious condition, and the government has not prepared any contingency plan," sources quoted the leader of the US team, Assistant Secretary of State for Economic, Energy and Business Affairs, Daniel S Sullivan, as commenting.

The US team was also of the view that Pakistan is not aggressively seeking foreign and local investors, who are nervous due to the current state of political and economic affairs, sources said. "It was a very disappointing round of talks between the US and Pakistan as nothing was achieved in real terms," they added.

Business Recorder [Pakistan's First Financial Daily]

 

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Bill seeks to amend fiscal responsibility law ​

ISLAMABAD (August 13 2008): The government has allowed the introduction of a bill further to amend Fiscal Responsibility and Debt Limitation Act, 2005, under which the government will be required to inform the Parliament before negotiating any loan with foreign governments or donor agencies.

The bill was introduced by the PML (Q) MNA Dr Donya Aziz in the National Assembly on Tuesday, which was private member day and most of the time, the house remained engaged with legislation. Finance Minister Naveed Qamar did not oppose the legislation entitled "The Fiscal Responsibility and Debt Limitation (Amendment) Bill, 2008".

"The amendment bill aims at empowering the Parliament to look into the loans being taken by the government from foreign governments and donor agencies," Dr Donya Aziz told Business Recorder on telephone. Previously, the government was not under any compulsion to inform the legislature about the loans they were getting as Fiscal Responsibility and Debt Limitation Act, 2005 is silent on taking the parliament into confidence on the issue, she said.

"Since the debt is retired through tax payers' money, therefore, the public representatives must be entitled to looking into the loans' deals the government is making," she explained. Under the amendment bill if passed by the Parliament, the government would be obliged to inform the supreme body 30 days prior to any loan agreement the government signs with a foreign country or any other lender, she added.

The government will have to consult Parliament even if it is to take a small amount exceeding one Pakistani rupee, she added. Meanwhile, a bill to make law for compulsory school attendance of every child was also introduced in the National Assembly.

The legislation titled as "Compulsory School Attendance Bill, 2008" was introduced by opposition MNA including Yasmeen Rehman, Mrs Samina Khalid Ghurki, Chaudhry Muhammad Barjees Tahir, Mrs Shakeela Khanam Rashid and Dr Donya Aziz as the government did not oppose the bill.

Over 20 legislative bills were introduced in the house as the government did not oppose bills mostly coming from the PML (Q) legislators. The only bill introduced by Marvi Memon regarding Northern Areas (NAs) was vehemently opposed by the government.

Minister for NAs Qamar uz Zaman Kaira told the house that the government has already sent a similar bill to the cabinet division. The cabinet division sent the bill back to us with some observations, he said. The ministry of Kashmir and Northern Areas (KANA) is working on the bill and this will be introduced in the house after removing some objections of the cabinet division.

Business Recorder [Pakistan's First Financial Daily]

 

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Federal government focussing on development of Northern Areas ​

ISLAMABAD (August 13 2008): Federal Minister for Northern Areas (NAs) Qamar uz Zaman Kaira has said there were some obstacles internationally in granting NAs the status of a province. The Minister told the National Assembly on Tuesday that the federal government was giving appropriate attention to the development of NAs.

The government has already given constitutional and financial powers to NA Legislative Council, he added. He said that there were already Supreme Court and High Court operating in NAs on Azad Jammu and Kashmir pattern. Apart from this, the government has allocated Rs 5 billion for the development of the area, he added.

Business Recorder [Pakistan's First Financial Daily]

 

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US-Pakistan economic dialogue ​

EDITORIAL (August 13 2008): The ongoing visit of the US Assistant Secretary of State for Statistics, Energy and Business Affairs, Daniel S. Sullivan, must be seen in the context of a meaningful effort on the part of the US administration to remain engaged in Pakistan's development efforts.

The joint communiqué at the end of the wide ranging discussions where Pakistan was represented by none other than the Finance Minister were rather general and no concrete agreement was reached with respect to specific actions. There was mention of the dialogue, deepening US-Pakistan economic partnership and further developing a long-term broad based economic relationship that mutually benefits the people of these two countries.

That the agenda was truly broad based is reflected by the range of topics discussed: from macroeconomic policy to labour to intellectual property rights (a subject more dear to the US than Pakistan), energy, agricultural co-operation, eliminating terrorism finance networks, reconstruction opportunity zones, FATA development etc.

The scale of US efforts to usher in development and the reasons behind them were articulated by President George Bush during his visit to Pakistan in March of 2006: "part of the tangible evidence of our relationship is the half a billion dollars commitment to help (Pakistan) rebuild; it's the $66 million last year to help implement the President's education initiative; it is the idea of developing reconstruction zones - trade zones in remote areas so that goods manufactured in those zones can get duty-free access to the US, on the theory that economic vitality and economic prosperity for people in remote areas of Pakistan will help defeat the terrorists and their hateful ideology."

With reference to energy President Bush made clear that during the meeting with Musharraf there was a discussion on "a civilian nuclear programme and I explained that Pakistan and India are different countries with different needs and different histories." Thus while he was willing to send the Secretary Energy over to work with Pakistan to help meet our severe energy needs yet he was unwilling to either extend the same deal as to India or endorse the IPI gas pipeline.

The result more than 2 years down the line is evident to all: Pakistan's energy crisis has reached alarming proportions, the reconstruction zones have not been heard of, education levels remain low and the lot of the tribals also remains unchanged. This unfortunately is in spite of significant US monetary assistance during the last two years.

Richard A. Boucher, Assistant Secretary of State for South and Central Asian Affairs informed the Senate Committee on Foreign Relations Subcommittee on International Development, Foreign Economic Affairs and International Environmental Protection on December 6, 2007 that "since 2002 we have provided economic assistance totalling $2.4 billion.

These funds have supported education reform, including training teachers in modern teaching techniques, building schools in the Tribal Areas, providing scholarships and fostering science and technology co-operation between the US and Pakistan. We have also funded governance programmes designed to assist independent radio, reform political parties, train Parliament members in drafting laws, strengthen Pakistan's Election Commission, promote grass roots service delivery and reduce gender-based violence.

US-funded economic growth programmes have, among other things, worked to improve the competitiveness of Pakistani businesses, provided micro-finance and encouraged more effective agriculture techniques. We have also supported refugee programmes and funded rebuilding efforts following the October 2005 earthquake. Fighting terrorism is, of course, a pre-eminent goal of US policy in Pakistan. In support of that goal, since 2002 the United States has provided security assistance to Pakistan totalling $1.9 billion."

He added that the US had also begun to implement a five-year, $750 million development strategy for the frontier region that supports the Government of Pakistan's nine-year, $2 billion programme for the Tribal Areas' sustainable development. Given the scale and depth of US assistance the question does emerge as to why the US has such a poor image in the hearts and minds of the Pakistani people.

The answer is a range of US actions that include periodic attacks on our border areas with Afghanistan by the US-led coalition forces in Afghanistan and the resulting collateral damage, support for Musharraf which locally has nose-dived to less than 15 percent, and US refusal to give us the same energy deal as given to India.

Recently, of course, the Pakistani public has been exposed to such unsavoury acts by US spy agencies as tapping the telephones of our politicians with the explicit purpose of arm twisting them to ensure that US interests remain paramount in our policy making.

Ron Suskind's book includes excerpts of telephonic exchanges between Musharraf and Benazir Bhutto where Musharraf has been quoted as saying that her security "is based on the state of our relationship"; to Benazir Bhutto's call to her son Bilawal, purportedly informing him of the hidden accounts that are regarded in Pakistan as part of her 'unexplained' income.

It is critical for the US administration to understand that dealing with individual politicians and forcing them to undertake some actions that are seen as aligned with a US agenda as opposed to a Pakistan specific agenda has resulted in alienating the general public from the US.

The solution to win our hearts and minds remains simple: convince the people that friendship with the US is in our best economic interests which it is; and desist from undertaking unsavoury actions that have not done too much good to US image anywhere in the world.

Business Recorder [Pakistan's First Financial Daily]