Pakistan Economy - News & Updates - Archive

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Remittances take leap to $1.88bn ​

Wednesday, October 15, 2008

KARACHI: Remittances sent home by overseas Pakistanis continued to rise as an amount of $1.88 billion was received in the first quarter (July-September 2008) of the current fiscal year. That represented an increase of $378.61 million or 25.22 per cent when compared with the same period of last fiscal year, the State Bank of Pakistan (SVP) said on Tuesday.

The SBP said that out of the total amount, $0.11 million was received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

During September 2008, Pakistani workers remitted a record amount of $660.35 million, almost $144.3 million or 27.96 per cent up when compared with $516.05 million sent home in September 2007. The previous highest amount remitted in a single month was recorded in July 2008, when $627.21 million was sent back by overseas Pakistanis.

The inflow of remittances in July-September 2008 from USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UAE, UK and EU countries amounted to $499.65 million, $398.02 million, $315.37 million, $312.18 million, $118.57 million and $51.78 million respectively. These compared with $420.90 million, $294.99 million, $217.14 million, $237.39 million, $119.91 million and $44.78 million in July-September 2007.

The country received remittances from Norway, Switzerland, Australia, Canada, Japan and other countries during the first three months of the current fiscal year 2008-09 amounting to $184.18 million against $165.51 million in the same period last year.

The monthly average remittances for the period of July-September 2008 comes out to $626.62 million as compared to $500.42 million during the corresponding period of the last fiscal year, registering an increase of 25.22 per cent.

The inflow of remittances into Pakistan from almost all countries of the world increased during September 2008 as compared to the corresponding month of the last fiscal year.

The break up shows that during September - 2008 remittances sent back by Pakistanis living in USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $179.81 million, $133.38 million, $110.73 million, $108.67 million, $43.75 million and $19.08 million respectively.

Moreover, remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries was recorded at $64.88 million as compared to $59.91 million in September, 2007.

 

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Nothing new in WB’s $1.4bn loan pledge ​

Wednesday, October 15, 2008

ISLAMABAD: The World Bank’s commitment for $1.4 billion loan facility as well as 480 million pounds from UK Department for International Development (DFID) is nothing new and Islamabad will have to meet pre-requisite conditions attached with various projects for achieving these dollar inflows in order to avoid risk of a ‘technical default’, The News has learnt.

“The commitment of the WB worth $1.4 billion per annum has been in the pipeline from several months but there is nothing new in it as Islamabad is striving hard to get immediate inflows in order to meet yawning external imbalances,” official sources confirmed while talking to this scribe here on Tuesday.

They said there is definitely a great difference between commitment and the authorities’ ability to materialise it into a reality.

Regarding DFID’s commitment for providing 480-580 million pounds, a donor agency official based in Islamabad told The News that the DFID decided to double its assistance for Pakistan from 2008 to 2010, which was already announced in the past. The DFID’s assistance stood at 480 million pounds for a three-year period and if earthquake related assistance is included it would be jacked up to 580 million pounds.

“The DFID has recently approved 50 million pounds for State Bank of Pakistan and its first tranche will be released shortly,” said the official.

The DFID, the official said, is also negotiating with Pakistani authorities for providing around 150 million pounds for education sector but this program will take several months for reaching a stage where the money will be released.

The World Bank, the sources said, has clearly conveyed to Islamabad that it will not extend budgetary support to Pakistan if its macroeconomic situation remains unsatisfactory. “I don’t think that the WB is going to change its mind on immediate basis,” said a senior official at Finance Ministry.

President Asif Ali Zardari held an extensive meeting with WB’s President Robert Zoellick in New York recently during his visit and now the newly appointed Advisor to PM on Finance Shaukat Tareen also met with WB high-ups but nothing concrete came out.

“There are many slips between the cup and the lips and Islamabad will have to deliver on macroeconomic front for resuming assistance from the World Bank, which was suspended from the last year,” said the official sources while talking to this scribe here.

Under the World Bank’s procedures and rules of engagement with the government, the Bank cannot provide budget support if the overall macroeconomic situation is unsatisfactory.

Development Policy Credits are among a variety of instruments and approaches that the World Bank and its clients adopt with mutual understanding for achieving a set of outcomes. Different circumstances and situations may require adoption of different instruments, for example project versus programmatic approach or a combination of programmatic and project approach.

The timeframe will be determined by the state of preparedness for different programs and projects’ implementation.

“The Poverty Reduction Strategy Paper (PRSP-II) can only pave the way for approving the PRSC credit line worth $300 to $500 million,” said the official. By November 2008, the government will table the PRSP-II before the federal cabinet for getting approval, which would pave the way for getting loans under the PRSC from the WB and other donors in months to come.

Pakistan is striving to get dollar inflows in order to build up its dwindling foreign currency reserves that have already dipped to around $8bn. The reserves, in real terms, are hovering around $3bn, which cannot meet import bill requirements for one-month period.

 

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Pakistan’s first wind mill near completion ​

Wednesday, October 15, 2008

KARACHI: A Turkish company is close to completing the first windmill in Pakistan, which is suffering from severe energy shortage and a ballooning current account deficit as it continues to spend billions of dollars on import of fuel oil to run thermal power plants.

Zorlu Enerji Pakistan has almost completed foundation work for five wind turbines in Jhimpir, 70km from Karachi, each capable of producing 1.2 megawatts of electricity. Though initially 6MW of electricity will be produced, the project will be expanded to 50MW in the next few years.

“We are looking forward to erecting the structures by the end of November,” said Osman Ipek, CEO Zorlu while talking to newsmen on Monday. “The potential is immense, wind density and speed is sufficient.”

It has been quite some time since a natural wind corridor from Gharo to Keti Bandar in Sindh province was discovered. This windmill will mark the first of many such projects in the pipeline. Alternative Energy Development Board (AEDB), a government body tasked with promoting indigenous sources of renewable energy, has successfully formulated a policy which ensures better return for investors.

Project Manager Yagmar Ozdemir said sale price of wind energy in Pakistan is better than other countries. “Internal rate of return of 15 per cent (annually) is very good. Other countries do not offer more than 12 per cent.”

National Electric Power Regulatory Authority (NEPRA) has awarded the company a tariff of 12.1 cents per kilowatt hour (kWh) while the government has insured purchase of electricity. Getting a reasonable tariff has been a thorny issue in the establishment of wind mills and many companies including Zorlu have had to seek new tariff repeatedly.

The company is waiting to sign Energy Purchase Agreement (EPA) with National Transmission and Dispatch Company (NTDC), a power ministry’s arm which buys power from generation companies. Total cost of the project is $110 million. The company has also applied for carbon credits as it will replace emission of 10,500 tonnes of carbon dioxide every year. Since creation of AEDB in 2003 a lot of companies had applied for wind power generation licenses, but not a single megawatt has been added to the national grid up till now. An AEDB official says reasons for lackluster progress are technical issues like Sindh government’s delay in leasing out land. “Agreement on 33,000 acres of land has just been issued to us,” he added.

Meanwhile, Sindh Alternate Energy Minister Asakri Taqvi on Tuesday warned that the government can cancel land lease if wind power projects failed to show progress in a given time. Speaking at a conference here, he said Sindh Governor Ishratul Ibad has informed him during a recent briefing on wind power that land of those projects will be given to other interested wind mills. The minister said that the governor has expressed his disappointment over the delay in the implementation of wind power projects.

 

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Oil industry aims to minimise imports ​

Wednesday, October 15, 2008

KARACHI: Pakistan’s oil industry is preparing a strategy to minimise import of petroleum products to stop exodus of foreign exchange, an Oil Companies Advisory Committee (OCAC) statement said.

In this regard, an OCAC meeting on Tuesday drew up industry’s recommendations, which will be shared with the government after completion.

It said refineries and oil marketing companies (OMCs) are carrying out a review of stocks of petroleum products in order to minimise imports and maximise local product availability. Focus will be on imported products like HSD, jet fuel and furnace oil. “This analysis will ensure that targeted volumes keep country stocks at acceptable levels, and ensure that petroleum product demand is met.”

However, it did not divulge on how it intends to cut imports when the government was allowing installation of more furnace oil-fired power plants. It is not clear if industry will recommend cutting down minimum quantity of oil stock maintained by it.

It is prudent to recall that oil industry has still not come to terms with the government’s move of cutting margins of OMCs and refineries.

From August this year, a change in pricing formula for diesel had brought down margins of refineries. Last year petroleum development levy (PDL) was excluded from retail price-build-up, on the basis of which margins of OMCs and their dealers were calculated.

In 2006, sales tax was removed from the formula for calculating petrol price which had a direct impact on the earnings of the OMCs and dealers.

 

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ICCI for seeking China’s help in energy sector ​

Wednesday, October 15, 2008

ISLAMABAD: Currently Pakistan depends mainly on hydel power generation to meet its energy needs which has dropped considerably due to water shortage in the country. This is high time that Pakistan should seek China’s help in energy sector to meet its growing energy needs to strengthen economic growth in the country.

This was stated by Islamabad Chamber of Commerce and Industry (ICCI) President Muhammad Ijaz Abbasi in a statement on Tuesday. Pakistan should explore coal, nuclear, wind and solar energy resources as well as installation of more nuclear power plants with China’s help to increase its power generation capacity.

President Asif Ali Zardari’s first official visit to China carries great significance and substantive value as the history of more than half a century of Pak-China relations has been marked by frequent, intensive and fruitful interactions between the top leadership of the two countries, he added.

Abbasi said Pakistan is facing a widening gap between the demand and supply of energy. “Our leadership should request China to give Pakistan its full support, particularly for the development of its energy sector”, he added.

 

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IDB pledges support for Pakistan ​

Wednesday, October 15, 2008

WASHINGTON: The Islamic Development Bank (IDB) on Tuesday pledged its full support for Pakistan’s efforts towards overcoming its current financial difficulties, with chief of the Bank assuring of additional support and increased financing for the country’s imports from member countries.

President of the Bank, Dr Ahmad Mohamed Ali Al-Madani said the IDB will respond positively to the cooperation the Pakistani delegation sought from it at the annual World Bank-IMF meetings.“We will do everything possible to help Pakistan, Dr Al Madani stated in an interview, when asked to comment on the Bank’s response to Pakistan’s call for support as the country strives to bridge the financing gap in meeting its international payment commitments.

Dr Al-Madani was commenting on the IDB’s role in Pakistan’s efforts in the context of his meeting with Pakistan’s Finance Adviser Shaukat Tareen and his delegation of top economic managers.

He did not give any figures but said the bank will shortly inform Pakistan about its support. The top Pakistani finance officials said here on Monday that they expect about $ 2 to 2.5 billion from international financial institutions including World Bank, Asian Development Bank and the IDB to overcome a $ 3 to 4 billion financing gap facing the country in a year.

 

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Pepco facing 4,000MW deficit​

LAHORE, Oct 14: The Pakistan Electric Power Company is facing a deficit of over 4,000MW against a demand of over 14,000MW, causing countrywide protests against loadshedding.

A Pepco official told Dawn on Tuesday that the company could not do anything to reduce loadshedding because its overstretched generation system was facing a huge deficit.

“It can only request people to understand causes of the crisis that are beyond the mandate of the company.”

Listing reasons for the drop in generation, the official said that the water releases from Tarbela Dam had been cut to 33,700 cusecs per day from over 100,000 cusecs last week, and from Mangla lake to 29,000 cusecs from 39,000 cusecs a few days ago.

He said the company had suffered a drop of 4,300MW in hydel power generation to 1,800MW from 6,100MW last week.

Reduction in gas supply to rental power and Faisalabad Gas Turbine Station had also caused another loss of over 350MW, he added.

The previous highest deficit during the current season was 3,500MW — a generation of 13,500MW against a demand of 17,000MW.

Talking about Monday’s pledge of the federal minister for water and power that there would be no “unannounced loadshedding”, he said: “If reality bends to talk, there would be no loadshedding at all in the country. But, unfortunately, that has not been the case. The country is faced with huge a power shortage, so neither Pepco nor the ministry can do anything about it.”

He said that conceding over 10-hour a day loadshedding would be politically and socially too risky for the government. The ministry would call it “unannounced” loadshedding and blame it on Pepco despite being fully in the picture about the supply and demand situation.

About the sacking of some Pepco employees, the official said the action might provide some political mileage to the government, but it would not solve the problem.

He said that power generation did not seem to be a priority area for any government agency.

“The Indus River System Authority squeezes water as per its irrigation priorities and gas companies stop supplies as per their own maintenance schedule without even bothering to consult Pepco. With both inputs virtually squeezed out of existence where would the power come from.”

 

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Benazir Income Support to cover four million poorest of poor​

ISLAMABAD, Oct 14: The government has decided to enhance the ambit of Benazir Income Support Programme from existing 3 million to 4 million poorest of the poor households throughout the country.

“We have extended the facility to give support to maximum families, who are hard hit by over 24 per cent inflation,” National Coordinator Benazir Income Support Programme (BISP) Dr Qaiser Bengali told Dawn on Tuesday.

Poor family would be given Rs2000 after every two months under the scheme to the people of four provinces including federally administered tribal areas, Azad Jammu and Kashmir and Northern Areas.

Under the scheme, 1,640,000 families would get the assistance in Punjab province followed by 776,000 in Sindh, 520,000 in NWFP, and 312,000 in Balochistan.

Moreover, 160,000 families will get assistance under the scheme belonged to Fata, 48,000 in the federal capital territory and 80,000 minorities across the country.

He said that every effort has been made to make the scheme more transparent and apolitical. “I have no office or staff at the stage of evolving of the programe. I have done it entirely alone,” Dr Qaiser claimed.

He said it is the third largest allocation in the current budget and constitutes 0.3 per cent of the GDP adding it will cover up to 12-14 per cent of the population in low income bracket in the entire country, including Fata, Northern Areas and the AJK.

For families earning Rs5000 per month, the Rs1000 payout will amount to a 20 per cent increase in their current purchasing power, he elaborated. He said that those people who were already getting more than Rs6000 per month would automatically not qualify for the scheme.

A letter sent to the legislators of the upper and lower houses by the office of the national coordinator of the Benazir Support programe, a copy of which was made available to Dawn, narrated the detailed procedures for availing the facility.

The family defined under the scheme as wife, husband and children. Parents or married sisters or daughters living in the same house will classify as another family and may qualify separately for payment. And only one adult female member from each qualifying family will be eligible to apply.

The eligible family will be a female having CNIC, monthly income is less than Rs6000, widowed/divorced without adult male members in the family, any physically or mentally retarded person in the family and any person suffering from a chronic disease.

The family cannot avail itself of the facility if any of its members is in employment of government, semi-government, authority, department or armed forces or drawing pension from either of these offices; receiving any post-retirement benefits from any department or agency or a family member owns more than three acres agriculture land or residential house/plot of more than eight square yard (3 marlas).

Those members are also not entitled where any member of a family is receiving income support from any other sources; family posses machine readable passport; possess national identity card for overseas Pakistanis and where any person has account in foreign bank branches.

Application forms filled in by the applicant will be verified by any one union councilor and by the MNA/Senator according to the criteria. MNAs/Senators will collect completed and signed forms and mailed them via post office to NADRA in pre-addressed envelopes provided by BSIP.

The NADAR will verify the applications and prepare a final list, which will be forwarded to Pakistan Post. Those not meeting the criteria will be excluded.

Pakistan Post will prepare money orders accordingly and deliver the amount of Rs2000 every alternative month to designated female members of identified families on production of CNIC copy.

Third party validation of all recipients will be carried out. If the information provided in the form is found to be incorrect, the name of the recipient will be de-listed from the programme and the benefits withdrawn, he added.

 

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Bristol-Myers Squib to wind up Pakistan operations​

KARACHI: A leading multinational pharmaceutical company Bristol-Myers Squib (BMS) has decided to wind up its operations in Pakistan.

“The company has circulated confidential papers among the potential buyers in the local pharma industry recently,” well-informed sources in the sector confided to Daily Times here on Tuesday.

The American BMS, located in Korangi Industrial Area Karachi, has decided to wrap up its business in the country due to pressing economic conditions, which are making it difficult for the company to continue operations.

The fast-deteriorating business environment especially for the pharmaceutical companies in the wake of high cost of production has been burdening the local pharma sector.

Also, the cap on drug price by the government for the last seven years has further aggravated the situation. The last price increase, which was of 3 to 4 percent, was allowed by Ministry of Health in December 2001.

The prices of the Active Pharmaceutical Ingredients (APIs) used for the manufacturing of drugs as well as of the other raw materials like paper, plastic, glass, rubber, etc. have increased manifold since 2001. The cost of oil, gas, electricity, transportation and labour has also spiked dramatically during this period.

BMS has an annual turnover of around Rs 1.5 billion and is the second multinational pharmaceutical company, which is going to pack up from the country. Earlier, Merck Sharp & Dohme (MSD) closed down its operation in Pakistan some months back and was acquired by a local pharmaceutical firm Organon Bio Sciences (OBS).

“It is not the end but the beginning of the pharmaceutical companies’, especially the MNCs shutting down business because of tough business conditions,” a high official of a leading pharmaceutical company pointed out as many more MNCs are mulling to close operations in Pakistan.

“After MSD and BMS, two more firms will follow suit in the near future,” he said and added that the local pharmaceutical companies are also facing hard times as well and they are opting for merger to survive in the present scenario.

Recently two local pharmaceutical companies Hilton Pharma and SAMI Pharmaceutical consolidated their operations in order to survive in the current situation.

“The potential buyer for BMS might be again a local pharma company as the MNCs are least interested to go for this venture at present”, sources said.

Sources didn’t rule out a major retrenchment by laying off employees once the company is sold.

According to people in the pharma industry, the crisis has been haunting the sector for quite some time and the industry has been demanding the government to increase the drug prices, frozen since 2001.

There are more than 500 pharmaceutical companies operating in Pakistan out of which twenty are MNCs. The pharma industry provides direct employment to over 70,000 and indirect employment to around 150,000 across the country.

 

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Remittances soar by 28pc in September​

KARACHI, Oct 14: Overseas Pakistani workers sent 28 percent higher remittances during September, showing their trust in the government which needs dollars to meet its foreign obligations.

While the economic mangers are trying to get loans to meet the rising trade deficit, overseas Pakistanis sent $1.879 billion during the first quarter (July-September 2008) which is 25.22 per cent higher than the first quarter of last year.

During last month, Pakistanis remitted a record amount of $660.35 million, up $144.3 million or 27.96pc when compared with an amount of $516.05 million sent home in September, 2007.

The previous highest amount remitted in a single month by Pakistani workers was recorded in July, 2008, when an amount of $627.21 million was received in the country.

The rising trend of remittances showed that the overseas Pakistanis ignored rumours that the government was planning to seize foreign currency accounts to use dollars lying in commercial banks. Both the Central Bank and the government denied such a move.The monthly average remittances for July-September, 2008, come to $626.62 million as compared to $500.42 million during the same period in the last fiscal year, registering an increase of 25.22 per cent.

The amount of $1,879.86 million includes $0.11 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

The inflow of remittances into Pakistan from almost all countries of the world increased last month as compared to September, 2007.

 

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Violence deprives Sindh of $5bn investment​

KARACHI, Oct 14: Investment worth $4-5 billion committed to projects in Sindh was thwarted by worsening law and order situation that prevailed in the country following the assassination of Benazir Bhutto, political uncertainty during and after elections and recent suicide bombing incidents in Islamabad and elsewhere, industry sources revealed this week.

Sources in the Sindh industries department told Dawn that the Qatari government had shown interest in investing in a huge livestock farm on 10,000 acres at Nabiser on National Highway, apart from a cement plant, and a five star hotel in Karachi.

Sufficient progress was made in some of these projects and even land was selected and allocated but investors did not turn up.

The MoU for the livestock farm with a million heads of cattle was signed between the government and the Qatari investor during the previous regime and the investors even gave approval of the land. The idea was to raise milk and meat production at the farm not only to meet the local market requirements but also export surplus to the Gulf countries, which import huge quantities of mutton from India. The cost of the project has been estimated at $500 million.

The land department had processed allotment applications from investors and sent several messages to the party to collect the orders but to no avail.

An MoU was signed for setting a up a cement plant and a site near Port Qasim was also selected for the project which was not aimed at meeting the local market requirements but also to have buyback arrangements with Qatar where there is a boom in construction industry.

Sources further informed that a Qatari investor was interested in building a five-star hotel and discussed the project with the city nazim Mustafa Kamal who offered prime land near Water Board office on Sharea Faisal.

The project was supported by the Trade Development Authority of Pakistan which faced problems of hotel accommodation during mega expos and world fairs organised from time to time at the Karachi Expo Centre.

The project met the same fate as of its predecessors due to poor law and order situation.

The most ambitious project for which an MoU was signed was for an oil refinery to be set up near Port Qasim by a Kuwait-based US company Midrock Tussonia. It was also shelved for the same reasons, sources said.

The refinery to be built at a cost of $2 billion was designed for producing 30,000 barrels petrol and other products a day.

The US firm assigned its regional manager Zafar Ali to handle the refinery project in Karachi.

Sources said that the Industries Minister, Rauf Siddiqui, used his influence with some of Arab investors and they pledged to come back, but then came the most destructive suicide bomb attack on Islamabad Marriot Hotel, which killed many foreigners, and it laid a final nail in the coffin of foreign investment.

 

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Pakistan may not get all of $1.4 billion WB loan in 2008-09​

* Country’s programme loans still face suspension, only project loans to qualify after talks​

ISLAMABAD: The $1.4 billion lending to Pakistan by the World Bank (WB) is not expected to fully materialise during the current fiscal year 2008-09, as programme loans for the country were still facing suspension, and only project loans that were still to be negotiated in due course would qualify for lending, a WB official told Daily Times on Tuesday.

The figure $1.4 billion is just an indicative figure mentioned in the Country Assistance Strategy 2006-09 for proposed lending for Pakistan in the current fiscal year 2008-09 and does not necessarily mean that WB is bound to release this much amount of foreign exchange to the country.

Despite the claims of the government that the WB has agreed to provide $1.4 billion during the current fiscal year 2008-09, the actual lending to Pakistan during the current fiscal would be much less than the figure released by the Pakistani authorities after the bilateral meeting held in Washington, explained the sources.

The WB has already changed its lending strategy for Pakistan keeping in view the downturn in the economic conditions of the country. According to the existing strategy of the WB for Pakistan, until the country’s macro-economic indicators were improved according to the benchmark, programme loans for Pakistan would remain suspended.

However, the WB would continue to provide project loans to Pakistan as and when negotiations for these projects were successfully concluded between the bank and the government.

The WB country office has not recommended any project loan for Pakistan - despite the passage of the first quarter (July-September) of the current fiscal - to its Washington-based head office and any new project loan for Pakistan would undergo detailed negotiations and discussion, the sources added.

Due to the high ranking of Pakistan in the International Monetary Fund’s vulnerability index, the WB has changed its lending arrangements with Pakistan from programme loans to project loans.

This change has resulted in releases of funds in periodical installments as per progress on the project instead of release of full funding in one go for programme loans, said the sources.

Programme loans are comprised of loans for reform programme that require funding in one go for entering in to implementation phase, however, project lending requires hectic work from documentation to implementation and lending for these types of project loans comes in installments some time in years period keeping in view the progress on the project.

At present Pakistan desperately needs release of funds in one go so that it could push up its depleting foreign exchange reserves, stop further depreciation of the rupee and well as to meet enhanced imports requirements in the months to come.

The vulnerability index comprises of many factors like different economic indicators i.e. macro and micro economic situation, economic growth, current account deficit, inflation and the countries having their important economic indicators in negative zone face difficulties in getting new loans for the lending agencies.

Although the present government has taken bold decisions and initiatives, it is still trying its best to convince international financial institutions for resumption of programme loans as well as quick project loans to carryout its development agenda.

 

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SBP gives no hint about FY08 report​

KARACHI, Oct 14: As the current fiscal year 2008-09 enters its second quarter (October to December), there is apparently no indication of State Bank of Pakistan releasing its annual report for 2007-08 that would give a review of economic performance of three governments and offer a glimpse of projections under the present government.

“There is no news on meeting of the Board of Directors as yet,” an official of the State Bank of Pakistan told Dawn on Tuesday and hinted that in all likelihood the draft of the annual report had been prepared and it awaited a formal approval by the board.

“The annual report of the outgoing fiscal year is usually released in November,” he reminded.

The official was partly true as in last few years the State Bank had been releasing annual reports of the outgoing fiscal year even in first week of December. But, normally in last several decades, the SBP used to bring out its annual report by end-September or early October with a full dress review and analysis of the outgoing fiscal year giving broad hints on direction of the economy in various sectors in the current fiscal year.

The year 2007-08 was an eventful year, which in all probability has left deep imprints on Pakistan. These events during 2007-08 are still casting long shadows on current political, social and economic events of the country.

Therefore, the social scientists, politicians, media persons, bankers and many others are keenly waiting to know how the central bankers view economy from July to November 2007 when emergency was promulgated. How did the actors of economy reacted on promulgation of emergency? Are there any lessons to learn from that experience and decisions taken by the highest and mightiest in the country? Then, the tragic killing of Ms Benazir Bhutto on December 27, 2007 and the three-day frenzy that gripped Karachi and rural Sindh calls for an in-depth assessment of the central bankers on its impact on the economy.

Did the results of February 18 general elections and installation of elected popular government at the federal and provincial levels have led to any quality improvement in economic decision-making? And finally what are the prospects for the current fiscal year?

In short, the State Bank’s annual report for 2007-08 is expected to give detailed analysis and explanation of staggering 7.5 per cent fiscal deficit, over $20 billion trade imbalance, staggering current account imbalance, government’s unprecedented borrowing of about Rs800 billion and the impact of a virtual galloping inflation on the industry, trade, agriculture and a vast number of poor who have been left with nothing to lose during the year.

Also worth interesting would be to know how the central bankers look at the economic performance of the government during first quarter of 2008-09. Has the withdrawal of subsidies on gas and electricity brought some healthy looks to national budget? But how it has impacted on production cost of manufactured goods and quality of life of middle income group? Who was responsible to shake up Pakistan’s banking system immediately after Eid? Did the State Bank probe how many bankers at senior level were in the communication network that informed millions on bankruptcy of a few banks and bouncing of cheques issued by government institutions?

 

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Pakistan, China may ink civil N-pact​

* President Zardari arrives in Beijing on first official visit
* Will sign agreements, MoUs, protocols to expand co-operation
* FT report says Zardari expected to seek soft loan of between $500 million and $1.5 billion​

BEIJING/ISLAMABAD: President Asif Ali Zardari may sign a preliminary civilian nuclear pact with China during his visit to the country, Pakistan’s ambassador to China said on Tuesday.

Speaking to Geo News channel in Beijing, Masood Khan hinted that a nuclear deal could be on the cards during four days of talks.

“Both countries have always supported the peaceful use of civil nuclear energy,” Khan said, adding an agreement was “expected in this connection”.

Chinese Foreign Ministry spokesman Qin Gang also indicated that nuclear energy co-operation would be discussed during Zardari’s visit, when he will meet President Hu Jintao and Prime Minister Wen Jiabao, but he gave no specifics.

“China and Pakistan share sound co-operation in nuclear energy. China is ready, on the basis of equality and mutual benefit, to continue its co-operation with Pakistan,” he said.

First visit: The president arrived in China Tuesday on his first official visit since assuming office. The formal welcome ceremony for the president will be held today (Wednesday) at the Great Hall of the People, where Jintao will receive him. Zardari will also hold meetings with National People’s Congress Chairman Wu Bangguo, Chinese People’s Political Consultative Conference Chairman Jia Qingling, and business leaders.

Agreements: Over a dozen agreements, memorandums of understanding and protocols to expand co-operation in diverse fields between Pakistan and China are to be signed during the visit.

Soft loan: The Financial Times newspaper also reported Tuesday, without citing sources, Zardari would seek a soft loan of between $500 million and $1.5 billion from China to help Pakistan out of its financial crisis. agencies

 

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Pakistan, China ink 11 agreements ​

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BEIJING (updated on: October 16, 2008, 03:35 PST): Pakistan and China on Wednesday signed eleven agreements, MoUs and protocols to enhance bilateral co-operation on sound footing in diverse sectors including infrastructure, energy, telecommunication, agriculture, industry, minerals, trade, disaster relief and space technology.

The signing ceremony held, at the Great Hall of the People here, was witnessed by President Asif Ali Zardari and his Chinese counterpart Hu Jintao after an hour long one-on-one interaction between the two leaders and two-hours long delegation level talks.

The two presidents will issue a joint statement (Thursday) reflecting their resolve and commitment to carry the bilateral relations and co-operation to new heights. President Hu Jintao hosted a banquet in honour of the President and his delegation at the Great Hall of the People after the delegations level parleys and agreements-signing ceremony.

Earlier both sides agreed to strengthen strategic partnership in all dimensions, reinvigorate the multi-faceted bilateral relations, intensify economic co-operation and foster people to people contacts in the coming years. The two leaders and their delegations had wide-ranging discussions in warm and friendly atmosphere characteristic of long-standing ties between the two countries, Pakistan's Ambassador in China Masood Khan told the media persons after the signing ceremony.

The talks emphasised upon retrieving the economic co-operation on strong footing in multi dimensions in line with the mutuality of interests and convergence of views in this regard. The importance of President's engagements on Wednesday is also marked by his threadbare interactions with the heads and chief executives of major Chinese companies operating in different sectors including banking, steel, mineral, cement, trade and other important segments of the economy.

The President' visit to China has a special significance not only as President Zardari's first official visit abroad, but also as the first interaction between Pakistan's newly elected democratic leadership and China's fourth Generation leadership that has overseen China's dramatic economic development and progress.

Meanwhile, heads and Chief Executives of major financial, industrial and investment institutions of China Wednesday called on President Asif Ali Zardari here at the State Guest House and showed keen interest for further investment in diverse fields in Pakistan.

Those who called on the President representing important Chinese institutions included China International Capital Corporation (CICC), Export and Import Bank of China (Exim Bank), Sinoma Group (Tianjin Cement and CMBC), MCC (Steel Construction Company), All China Federation of Industry and Commerce (ACFIC) and Industrial Commercial Bank of China (ICBC).

During the meetings, Foreign Minister Makhdoom Shah Mehmood Qureshi, Defence Minister Chaudhry Ahmed Mukhtar, Advisor to Prime Minister on Interior Rehman Malik, Minister for Environment Hameedullah Jan Afridi, foreign Secretary Salman Bashir, Pakistan Ambassador in China Masood Khan and other senior officials were present on the occasion.

During the interaction with the President, the heads of Chinese institutions discussed the present level of Pak-China co-operation in different sectors, which is reflective of deep-rooted bilateral relations between the two countries.

They evinced keen interest and willingness in enhancing the existing level of co-operation in important sectors of the economy including infrastructure, banking and financial sector, agriculture, cement, steel and industry.

Talking to the Pakistani media the Chairman CICC, Levin Zhu described his interaction with the President very fruitful. He said Pak-China ties are of immense importance for the mutual advantages in different economic fields. As a financial institution, he said "we can help promote co-operation in the financial sector of Pakistan. He expressed confidence that existing co-operation will not only continue but will also grow in future.