Pakistan Economy - News & Updates - Archive

[Neo]

40 mmcfd gas supply approved for 'favoured' power projects ​

ISLAMABAD (December 16 2008): The reconstituted Economic Co-ordination Committee (ECC) of the Cabinet in its first meeting on December 2, 2008, presided over by Advisor to Prime Minister on Finance Shaukat Tarin, had approved 40 mmcfd gas for two rental power projects, despite the fact that their credentials were doubtful, sources in PPIB told Business Recorder.

However, one project has not been given clear signal yet, as some ECC members were not satisfied with the documents provided by the PPIB through the Ministry of Water and Power, sources said. They said that both ' favoured projects' had been processed by the Private Power Infrastructure Board (PPIB) with extraordinary speed never seen before.

The 'efficiency' of the PPIB can be gauged from the fact that the company had written a letter to PPIB on August 19, 2008, showing interest in establishing a 'rental power' project which, supposedly, would start commercial operations by June 2009, premised on securing a three-year agreement with the purchaser, Pepco. The PPIB, showing its 'efficiency', forwarded the copy of the proposal to Petroleum and Natural Resources Secretary for allocation of gas, who in turn sent the summary to ECC for approval of gas for the project.

However, the ECC in September had also constituted a committee under the chairmanship of Minister for Water and Power (who is also chairman of the PPIB) with Secretaries of Petroleum, Water and Power and Chairman National Reconstruction Bureau (now Prime Minister's Advisor on Petroleum too) as members to look into prices of gas with different British Thermal Unit (BTU) values, and possibility of allocation of gas to some other IPPs for fast track power projects.

The committee recommended that (i) 20 mmcfd gas, from Zamzama, be allocated to Aiden Ventures (Pvt) Ltd for setting up a fast tract 100 mw rental power project at Nooriabad in Dadu district and firm commercial proposal be submitted for negotiations with Pepco as soon as possible; (ii) 20 mmcfd gas, from Zamzama, be allocated to First Tri-star Modaraba for setting up a 110 mw IPP at either Nawabshah, Site Karachi or in the vicinity of Madinatul Hikmat, Karachi, and all formalities be completed under fast track initiative with the PPIB. Earlier, the company had shown interest in setting up a rental power plant at Hawkes Bay in Karachi.

Sources said that when the issue came under consideration in the ECC , it was observed that during the period December-February, demand of gas increases manifold, and it would not be possible to make available 40 mmcfd gas to IPPs during this period.

However, it was suggested that the gas can be made available to IPPs for setting up fast track power projects, after March 2009. The ECC also decided that financial viability of the proposal of First Tri-star Modaraba for setting up 110 mw power plant be also examined by the Ministry of Water and Power.

Information about First Tri-star Modaraba is available on internet, according to which it was primarily engaged in the leasing of plant and machinery, commercial and private motor vehicles and computers; providing finance on Morabaha and Musharika arrangements; purchasing and sale of marketable securities and trading in various items.

However, when Business Recorder searched the site of the other company on the internet it was found that no such company was registered. When this scribe called the listed telephone for the company, no one attended the phone. This company was not even listed in the SECP's list of registered companies.

 

[Neo]

TDAP to conduct aggressive marketing in four new zones ​

KARACHI (December 16 2008): In a bid to avoid negative impact on the country's exports in the wake of US economic recession, the Trade Development Authority of Pakistan (TDAP) will send its delegations to four huge new markets, including Africa, East Asia, Australia and Russia, to do aggressive marketing for various items.

In an exclusive interview, TDAP Chief Executive Mohibullah Shah told Business Recorder on Monday that the Authority has its primary focus on these markets under its 'new export strategy' (NES) to protect the country's exports from possible slowdown. "Search for new markets comes under the short-term plan and includes those markets which have not so far been visited eg African, East Asian, Australian, and Russian markets where Pakistan can make huge rise in exports, he said.

He said: "To compensate the loss of demand in the US market we have an understanding of foreign markets that we can go quickly through aggressive marketing in these new spheres." He added that for this plan there had been intense deliberations with the industries and other concerned stakeholders. About the markets of Latin America, he said that Brazil is a huge market for Pakistani products, but is located at a distant which would increase transportation cost. Besides, there are obstacles, like language and understanding, for the demand of products.

However, he suggested that these markets have free trade agreements with the US and could be used for exporting products in the US markets with some value-addition that would help the country's exports grow. It will also increase the country's access to US market on preferential tariffs.

"There is a nine percent import duty on Pakistan textile exports in the US market," he added. He said that TDAP would extend its all-out support to exporters intending to reach these new distant markets, and would help them in completing the process. For reaching the Brazilian market, he reckoned that exporters have the opportunity to use the Macao route--a territory of Portuguese language located in the south of China, to utilise the preferential tariff incentive.

In line with the medium-term plan, he said, the Authority was working on developing new "investable and profitable products" for boosting exports. He said that the plan is to create several products out of a raw product.

In this connection, a portfolio of each sector is being made, and the Authority has set up an investment wing that, along with the production division, would interact with the chambers, trade bodies and private sector to encourage the investors. "TDAP will help in getting the government's support for initiating these projects," the TDAP chief added. He said that the Authority has sketched a clear objective to develop skilled labour to cater to the local industrial demand and needs.

Regarding the research and development (R&D) subsidy to the textile sector, Mohibullah said that it should not be confined to only one sector, and should be provided to other exporting sectors, "but on the value-added production and exports only".

However, he made it clear that the provision of R&D facility to other sectors primarily depends on the volume of exports, and it should continue to all exporting sectors. He said that the government is considering to continue R&D facility to the textile sector and it was hoped that it would be resumed.

Under its 'new export strategy', the Authority is working out to increase the country's overall exports. However, the already thriving sectors would be put on top of the priority list to save time and energy, while other sectors will be provided help to grow.

 

[Neo]

Crash programme to expedite mineral exploration​

ISLAMABAD (December 16 2008): A crash programme has been prepared by mineral department of Balochistan to expedite mineral exploration in the province aimed at providing equitable jobs to locals in a bid to eradicate poverty from the province. Director Mines and Minerals department Government of Balochistan Dr Muhammad Saeed Baloch on Monday told a TV channel that the per annum mineral royalty of the province would be enhanced to over Rs 750 million by next year.

He said the royalty money from minerals was persistently on the raise. A couple of years ago royalty was Rs 120 million and this year it was Rs 600 million. Every possible measures are being taken to explore minerals from the province as according to an authentic survey 305 minerals are present in the Balochistan out of a total of 315 minerals, he added.

Additionally three more skill development institutions would be set up in Nowshki, Chaghi and Quetta to enhance skill of the labours. One each marble cities are working excellently in Hub and Loralai. Planning has already been finalised to establish another marble city in Khuzdar, he said.

 

[Neo]

New water reservoirs on Chenab: Punjab to conduct special feasibility study ​

LAHORE (December 16 2008): Punjab Irrigation Department has decided to conduct a special feasibility study in collaboration with Wapda for the construction of new water reservoirs on River Chenab at Marala and Chiniot. The Senior Punjab Minister, Raja Riaz Ahmed said this to a delegation of students from Agriculture University Faisalabad on Monday.

According to a handout, Wapda Chairman will give the Irrigation Minister and senior officers of the department a briefing on this project on December 22 near old bridge in Chiniot. The minister said that Irrigation department has decided to undertake computerised monitoring of water channels for fair distribution of Irrigation water.

He said that Punjab Information Technology Board is developing a special software is being developed for the purpose at a cost of Rs 207 million. The project would be launched in 2009-10. Riaz said that instructions have been issued to farmer organisations to seek police help to prevent water theft.

Irrigation Minister said that GIS system is also being developed to monitor canals. 'It is being developed by the Programme Management and Implementation Unit of the Irrigation department,' he added. Canals reforms are vitally linked to agriculture output therefore practical measures are being taken for their success, stressed the minister.

 

[Neo]

This whole meltdown is avoidable ​

EDITORIAL (December 16 2008): The Governor of State Bank of Pakistan, Dr Shamshad Akhtar, has been repeatedly arguing that world financial trouble has not impacted Pakistan. It has certainly not impacted our banks, thanks to a conservative SBP approach as the central bank did not allow Pakistani banks to invest abroad aggressively because our forex reserves position did not allow the banking sector this luxury, available to some other developing countries.

In fact, SBP was not very favourably disposed to the government taking on more forex liabilities through dollar bond floatations to meet its fiscal deficit target. SBP's conservative approach was viewed as "bureaucratic" by banks wanting to invest abroad or to copycat the financial instruments such as 'Derivatives' since SBP required them to obtain its permission for every deal.

In hindsight, SBP has earned kudos for protecting the forex side, but unfortunately the performance on the rupee side is not up to the same mark. Despite its commitment, the SBP could not deliver on replacing its Continuous Funding System (CFS) - 'Badla' in local parlance. The relationship of SBP with the other regulator, Securities and Exchange Commission of Pakistan (SECP), has also been less than cordial.

In fact, it has grown more tense with a battle over turf between them. Non-bank financial institutions sided with the SECP when SBP wanted them to come under its ambit. In return when the liquidity crisis erupted and SBP pumped up the credit market, it did not appreciate the crisis in the capital market for it was not its prime responsibility.

SECP also has done an even shoddier job. Although it cannot be solely blamed for the "floor rule" on KSE for 103 days, the Ministry of Finance needs to shoulder responsibility for this trouble. The legal wrangle in the courts between the broker community and the lenders (banks, DFIs, NBFIs and Mutual Funds) is a regulatory failure in the first place.

SECP was bound to fail as the main lenders, who are not their regulatees (are under SBP) could not be successfully persuaded by SECP to resolve the differences over CFS Mark-II contracts. Unfortunately, even the regulatees under the ambit of SECP could not agree to any proposal emanating from it. The broker community leaders believe that the SECP proposals are drafted in the offices of MUFAP, Mutual Funds association.

The MUFAP leadership is of the opinion that SECP circulars are drawn up keeping the broker community's interest paramount. This is indeed a sad reflection on SECP. But the story does not there. Even the frontline regulator, ie the Board of Directors of the KSE, has failed to address the key issues. The experiment of bringing non-broker directors on KSE Board has not proved successful.

The objective of the exercise was to be the first step towards complete demutualisation of the exchange so that vested interests do not hold sway over investor interests. The broker directors are considered more knowledgeable about the technical working of the exchange than the non-broker Chairman and Directors and have by and large taken the decisions for the protection of brokers in the board meetings. The placement of the floor on August 27th is said to have been a highly controversial development.

Being one man short, the non-broker directors were outvoted. At the last Board meeting (on December 13th), there was a split in the Board over the directive of SECP to withdraw the floor and suspend the Board's powers for 90 days on this issue. The Chairman's casting vote was used to block the resolution to seek legal opinion on the SECP circular of December 12, 2008. The Lahore High Court decision on Monday shows who is more conversant with the law, rules and regulations of SECP.

While blaming the regulators we do not absolve either the broker community or the financial institutions. Pig headedness from both sides has landed the issue in court. Both sides know fully well that this issue cannot be resolved quickly in courts and it is clear to both that they need each other to stay in business. The brokers need credit to conduct business and settle their daily transactions.

The lenders know that the brokers do not have the cash to provide additional margins on account of the expected steep fall of the KSE index. Brokers have invested, besides shares, in properties and in the current economic conditions they cannot sell these properties to raise cash as there are hardly any buyers for them.

After all, banks exposed to financing against shares have had to accept properties as additional collateral, while rolling over the financing against shares into one-year term loans instead of cash and shares. Similarly, CFS is a structured product. The terms of default are clearly defined.

Is it in the interest of Mutual Funds to have 25 odd brokers default first and later agree to work out modalities to salvage them? On the other hand, it is highly unfair for brokers to walk away from CFS contracts (declaring them null and void) - leaving the shares held by the lenders as margins, as the full and final payment under the CFS contract.

After all, the brokers are servicing their loans against shares. Banks need not take a position: why should we bail out the big boys? Well, some of these big boys not only own brokerage houses, but also Mutual Funds as banks. The blame for this lies squarely on past SECP Chairman Khalid Mirza and SBP Governor Ishrat Husain.

But all this is the past. It is the present situation that needs to be addressed. Unfortunately, however, the situation is evolving every hour, every day. The Advisor on Finance Shaukat Tarin needs to get the two regulators to sit with him and ask all the major regulatees to sit across the table and come up with a fair and amicable solution that both sides can live up to.

For the future, a solution to stop pumping up the capital market through excessive leveraging needs to be put in place. It is the reversal, ie fall which always causes the crisis of liquidity. We have been able to avoid the US subprime crisis affecting us. Now we need to resolve the KSE crisis as it could otherwise lead to a meltdown.

 

[asaad-ul-islam]

^^haha... I was right, the global financial crisis has barely anything to do with Pakistan, our problems are all home-made.

"EDITORIAL (December 16 2008): The Governor of State Bank of Pakistan, Dr Shamshad Akhtar, has been repeatedly arguing that world financial trouble has not impacted Pakistan. It has certainly not impacted our banks, thanks to a conservative SBP approach as the central bank did not allow Pakistani banks to invest abroad aggressively because our forex reserves position did not allow the banking sector this luxury, available to some other developing countries."

 

[Neo]

IMF asks Pakistan to stop SBP intervention ​

Wednesday, December 17, 2008

ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to adopt a market-based approach in exchange rate policy by stopping intervention of the State Bank of Pakistan (SBP), curtail fiscal deficit and increase tax-to-GDP ratio up to 15 per cent, the IMF’s Director of Middle East and Central Asia Development, Masood Ahmed said on Tuesday.

In an exclusive chat with The News after attending a seminar jointly organised by the Pakistan Institute of Development Economics and IMF here, Masood Ahmed said that Pakistan’s oil import bill decreased by $1.3 billion per annum after a fall of $10 per barrel in prices of crude oil in the international market. “It will help reduce the financing gap in the current fiscal, which was earlier estimated by the IMF at $4.5 billion,” he added.

He did not rule out the possibility of revising downward the FBR’s tax collection target of Rs1,360 billion due to the changing scenario in the wake of a massive fall in crude oil prices in the international market. “Yes, a substantial revenue is generated at the import stage and fallout for revenue collection can be discussed with Pakistani authorities,” he added.

He said Pakistan could jack up its fiscal deficit target to 4.7 per cent from 4.2 per cent if it was able to generate additional $2 billion from donors.

On flexible exchange rate, he said it should reflect macroeconomic indicators by adopting a market-based approach depending upon the demand of the rupee against the dollar in the market. The IMF viewed that efforts should be made to avoid keeping the rupee artificially strong, he maintained.

To another query about possible sectors which can be brought into the tax net, he said that there are a lot of sectors and it depends on the government how it moves to bring new taxpayers into the tax net. “Around one per cent population in the whole country is under the tax net and there is a lot of potential, which can be tapped to increase the tax to GDP ratio from 10 per cent to 15 per cent,” he added.

When Ahmed was asked about GDP growth’s projection of 3.5 per cent for the current fiscal mainly relying upon the performance of the agriculture sector, he conceded that the GDP growth target depends upon the performance of agriculture and exports sectors of the economy.

Earlier, in his address during the seminar, the Fund’s Director Middle East and Eastern Department said that it was the projection of the IMF that the real GDP growth would remain zero after 1940 in developed countries like USA, UK, Japan, Germany and others during 2009 owing to severe financial crisis witnessed by the economies after September 2008.

The GDP growth of China would be cut down from 9.5 per cent to below 5 per cent, he said.

He said that there might be some economic recovery by 2010 but it mainly depends upon US treasury market. “There is a need of $1.2 trillion stimulus to avoid recession in the economies,” he maintained. Citing an example, he said the oil producing countries estimated a surplus by $450 billion but now they expected only a $4 billion surplus after the financial crisis that resulted in a steep decline in the prices of crude oil from $140 per barrel to $40 per barrel.

On this occasion, Juan Carlos Di Tata Deputy Director, Middle East & Central Asian Development of the IMF said the tightening of monetary policy was inevitable to achieve macroeconomic stability in Pakistan. The fiscal deficit target will be brought down from 7.4 per cent of the GDP to 4.2 per cent of the GDP in 2008-09 and further lowered down to 3.3 per cent by 2009-2010, he observed.

To achieve the fiscal deficit target, he said, Pakistan would focus more on enhancing tax to GDP ratio which is quite low compared to other regional states. He said that the expenditures on social safety nets would be increased from 0.3 per cent of the GDP to 0.9 per cent of the GDP in the current fiscal year. The Government of Pakistan agreed to eliminate borrowing from the central and continuation of tightening monetary policy.

“We have estimated that the finance gap will be hovering around $4.5 billion for the current fiscal which will further come down to $3.5 billion by 2009-2010,” he added.

Talking about projected Current Account Deficit (CAD), he said that there might be some need of adjustments owing to weaker remittances mainly from the Gulf and USA, lower exports and foreign direct investment, which would offset substantial reduction in prices of crude oil in international market.

 

[Neo]

Pakistan’s IT sector as good as India’s: ICT task force ​

Wednesday, December 17, 2008

LAHORE: Pakistan’s IT infrastructure by and large is comparable to India, except for a few pockets in Bangalore and other areas.

This was pointed out in a meeting of the Task Force on Information & Communication Technologies (ICT) with Salim Ghauri in the chair.

He supported the idea of encouraging the industry to take part in more international events and present its young faces to paint a soft image of Pakistan worldwide. The chairman appreciated the proposal of producing multi-media content and short films on Pakistan as well as its IT industry to promote its soft image abroad.

It was also suggested in the meeting that revenue estimation study of the IT sector in Pakistan will not only discover the industry structure, major players, etc, but will also try to project how the industry will evolve over time in the next 5-10 years. For example, he said, the technician that fixes ATM machines for banks is in all probability not included in any revenue estimation exercise currently. That ought to change.

Building on the revenue estimation study, added the participants, further steps would be taken in collaboration with Pakistan Software Export Board (PSEB) to conduct an HR study to assess the skill set and number of students that should be graduating to match the needs of the industry. These studies will help the government in the allocation of appropriate budgets for certain segments of ICT education, launching programmes and encouraging private sector by offering incentives in certain segments of ICT.

The Chairman ICT Task Force also agreed with the participants that a grand IT conference at convention centres in Islamabad, Karachi, etc, with everyone connected to the IT industry may also be organised with invitees including consumers of IT (banks, multinationals, govt departments), producers of IT and intellectual property (companies in PSEB, P@SHA and others) and academic institutions.

 

[Neo]

GoP finalises plan to offer ownership of agri lands to investors​

ISLAMABAD: The government has finalised plans to offer ownership of agricultural lands to investors for farming to achieve self-sufficiency in agriculture produce, Federal Minister for Investment, Senator Waqar Ahmad Khan told Daily Times.

“We are extremely enthusiastic in providing areas for farming with great incentives,” he added. Under the plan the investors can own the land, cultivate it and export 100 percent of the produce. “In this regard we are specially targeting investors from the UAE and other Gulf countries, as it would help these countries to have their own food resources,” he informed.

“Pakistan needs more than $40 billion of foreign direct investment and our target is to attract $20 billion by the end of 2009, Khan told.

The agriculture sector is still the largest employer of the workforce and around 70 percent of Pakistan’s population lives in rural areas.

Khan said that leasing and transfer of land would be facilitated by the ministry, which is now working in close association with the law ministry to finalise the modalities. “Once an investor shows his interest, we will have draft agreements ready for him,” he assured.

Pakistan is creating a special task force to protect investment and provide security to potential investors in the country. The task force would be comprised of officials from the ministries of interior, defence, investment and finance, he revealed. “We are aware of the security concerns and that is why we are creating a special task force to protect investors and their investment,” added Waqar Ahmad Khan.

“Pakistan is open to investments in any field,” he added.

The priority areas are oil and gas, energy, food, agriculture, information technology and infrastructure. Due to past experiences, the investors are uncertain regarding the continuation of policies. “The present democratic government has proposed legislation to ensure continuation of projects even if there is a change of government, the minister said. The government has launched a multi pronged strategy to attract investors, which includes: 100 percent repatriation of money; five tax exemption for investors and ten years of tax exemption to those investors who set up a commercial zone; customs duty and general sales tax exemptions on certain items.

Pakistan is also looking for investors who are able to enhance our existing infrastructure requirements. Pakistan is the fifth largest milk producer in the world but 70 percent of the milk is auto consumed or wasted and does not reach the market. “We need people to exploit this huge market, which employs around 8 million people in rural areas.” The modernisation of dairy sector can have huge impacts on poverty alleviation, which has risen to an alarming level of 28 percent.

The ministry plans to launch a media campaign to attract investors to Pakistan.

“We will ensure one-window operation and all problems an investor faces will be solved by this ministry,” he said.

Waqar Ahmad Khan concluded with the resolve that “in future no investor will face any problem.”

 

[Neo]

‘Pakistan will fulfil IMF requirements’​

* Zardari says govt to ensure self-sufficiency in fuel, edible oil​

ISLAMABAD: Pakistan will stand on its own feet and achieve its goal of self-sustained high economic growth, President Asif Ali Zardari said during a meeting with a delegation of the International Monetary Fund (IMF) on Tuesday.

The delegation, led by Masood Ahmad, the director of Middle East and Central Asia development, also met Prime Minister Yousuf Raza Gilani.

Zardari and Gilani assured the IMF that Pakistan would implement the measures it had agreed on with the IMF authorities as conditions for a $7.6 billion bailout loan.

Ahmad apprised the president of the details of the IMF programme –which he said was Pakistan’s homegrown.

Fuel and edible oil: The president said his government had also planned to achieve self-sufficiency in fuel and edible oils. The government had decided to accord a very high priority to the agriculture sector for this purpose, he said, adding that it would take measures to reduce the import bill of edible oil and explore the use of ethanol as fuel.

In his meeting with the delegation, Prime Minister Gilani expressed the government’s commitment to economic welfare of the people through infrastructure development and an increase in economic opportunities.

He told the visiting delegation about his government’s approach to addressing problems such as poverty, limited access to public services, and extremism through a combination of administrative, political and security measures.

He underlined the importance of economic development in the long-term to tackle these problems.

Officials privy to the meeting told Daily Times the IMF delegation also discussed problems that Pakistan’s economy is facing, and measures to improve the tax-to-GDP ratio.

The delegation was told the government had been considering various mid-year options in the customs and federal excise areas to generate additional revenue and discourage the import of luxury and non-essential goods.

The delegation was also told the Pakistani government wanted to take new income tax and general sales tax measures in the next fiscal budget (for the year 2009-10).

The IMF delegation stressed need for measures to decrease inflation, which they said had already been affecting common people and the local industry.

The visiting delegation also included Juan Carlos Di Tata, the deputy director for Middle East, Dr Jaffer Mojarrad, the executive director, and Paul Ross, the senior resident representative of the IMF in Pakistan.

 

[nitesh]

This particular measure needs to be taken in war footing, I don't see you guys in large. In my experience the ration 1:4 in terms of participation from Pakistan vis a vis India

He supported the idea of encouraging the industry to take part in more international events and present its young faces to paint a soft image of Pakistan worldwide. The chairman appreciated the proposal of producing multi-media content and short films on Pakistan as well as its IT industry to promote its soft image abroad.

 

[Neo]

Steps suggested to improve tax-to-GDP ratio ​

ISLAMABAD (December 17 2008): A delegation of International Monetary Fund (IMF) headed by its director for Middle East and Central Asia Development (MECAD), Masood Ahmad on Tuesday called on the Prime Minister, Syed Yusaf Raza Gilani. The Prime Minister expressed the government's commitment to economic well-being of the people through infrastructure development and increasing economic opportunities.

He also told the delegation about government's approach to address fundamental problems like poverty, limited access to public services, and extremism through a combination of administrative, political and security measures. He underlined that economic development is an essential component in the long-term perspective. The delegation discussed the economic challenges being faced by Pakistan's economy and suggested measures for improving the tax-GDP ratio.

The meeting was attended by Shaukat Tareen, Advisor to PM on Finance, Hina Rabbani Khar, MOS for Finance, Dr Shamshad Akhtar, Governor State Bank, Juan Carlos Di Tata Deputy Director, Middle East & Central Asian Development, IMF, Paul Ross, Senior Resident Representative, IMF Pakistan and Dr Jaffer Mojarrad.-

 

[Neo]

PC chief gives higher poverty figure than Tarin's ​

ISLAMABAD (December 17 2008): The Deputy Chairman of Planning Commission, Asif Ahmad Ali, while summing up a seminar jointly organised by PIDE and IMF on global financial crisis, estimated that poverty had reached 40 percent because of the flawed policies of the previous regime. In marked contrast, the Advisor to the Prime Minister on Finance gave the poverty figure as 28 percent.

"To the best of my understanding, poverty is 40 percent in the country," Asif stated categorically. This revelation, in the aftermath of Tarin's speech wherein he indicated the figure of 28 percent, led to visible discomfort among Finance Advisor Shaukat Tarin, State Bank of Pakistan (SBP) Governor Dr Shamshad Akhtar, and IMF Director for Middle East and Central Asia, Masood Ahmed.

The PC Deputy Chairman's statistics were calculated by Planning Commission's panel of Economists comprising well regarded economists from the public and private sectors. Interestingly, Finance Ministry in its recent Poverty Reduction Strategy Paper (PRSP) had stated that poverty was about 22.3 percent, which would be nearly half of the figure claimed by PC Deputy Chairman.

In defence of Finance Ministry's poverty figure, an official told Business Recorder that the poverty figure of the Panel of Economists was faulty because they used household consumption expenditure data of 2005-06. "The Panel of Economists did not adjust poverty line upward, keeping in view the CPI-based inflation for the fiscal years 2006-07 and 2007-08," he said.

In other words, poverty line has been adjusted upward, but consumption and expenditure remained at 2005-06 level, which show that the poverty figures prepared by the Panel of Economists were faulty. "I feel the Panel of Economists compared oranges with apples," he remarked. Another official said that the World Bank had also rejected the poverty figures calculated by the Panel of Economists, saying that the economists used wrong methodology.

In the absence of household income expenditure survey, they should have raised 2005-06 household consumption expenditure by using the growth rate of private consumption and expenditure of fiscal years 2006-07 and 2007-08 to make the poverty figures comparable with alleviated poverty line. Asif expressed appreciation for Shaukat Tarin for his reform agenda, but did not talk of SBP Governor.

 

[Neo]

GSP plus scheme: Pakistan asks for greater access to EU market​

ISLAMABAD (December 17 2008): Prime Minister Syed Yusuf Raza Gilani has called upon Sweden, which will assume the EU Presidency in July 2009, to assist Pakistan gain greater access for its products to EU markets through Pakistan inclusion in European Union's GSP plus scheme, as helping Pakistan economically would serve their common counter terrorism agenda.

The Prime Minister was talking to the visiting Swedish Foreign Minister Carl Bildt, who called on him here on Tuesday. While expressing his gratitude for Sweden's strong support all along for restoration of democracy in Pakistan, the Prime Minister termed Sweden as a very important partner of his country, both at the EU platform and bilaterally.

He hoped that with the installation of democratic government in Pakistan, their countries would undertake concerted efforts to reinvigorate their ties through increased high level exchanges, people to people contacts and substantive co-operation in the spheres of trade, investment and technology transfer.

Carl Bildt, who had served as Swedish Prime Minister from 1991-1994, thanked the Prime Minister for his sentiments about his country and commended Pakistan's balanced and restrained reaction in the aftermath of Mumbai terrorist attacks. He underscored the need of Pakistan and India working together to defuse the present crisis and bring the perpetrators of the heinous crimes committed in Mumbai, to justice.

The Swedish Foreign Minister acknowledged the fact that no other country had suffered more by terrorism than Pakistan and assured the Prime Minister of Swedish support in the EU to enable Pakistan overcome its economic difficulties and adequately equip its law enforcing agencies to face the challenges of extremism and terrorism.-PR

 

[Neo]

Businessmen seek government support for musical instruments industry​

SIALKOT (December 17 2008): Business community engaged with musical instruments industry seeks government special attention and support for the modernisation and upgradation of the industry and demanded special incentives and concessions for enhancing export. According to Sialkot Dry Port sources the exports of musical instruments during 2006-07 was Rs 816 million while in 2007-08 exports were of merely Rs 165 million which indicate a sharp decline in the export.

Some leading manufacturer and exporter of musical instruments when contacted to ascertain the causes of decline in export said that it was due to the hard-hitting competition in international market. Despite of lack of modern technology and techniques the local industry was competing with the competitors in the global market and considerably contributing to the national exchequer, the said.

The obtaining of modern technology has become more imperative at this juncture for producing quality musical instruments in accordance with the changing global trends and to enhance the exports as well as to stay in international market.

More than hundred-year-old musical instruments industry was producing various musical instruments without government support and with stereotyped techniques and exporting to USA and European countries. The local musical instrument manufacturers are producing Western type of musical instruments, which are much popular in the world.

The manufacturers were of the opinion that government should take special steps for obtaining "Technology" for tracking the industry on modern production lines. The attaining of cheap technology has become more imperative at this juncture to cope with the global requirements and demands easily because the trend of the musical instruments has totally been changed. Keeping in view the rapid and sharp change in trends, the government should help exporters and manufacturers in getting "Electronic Techniques" from different countries for ensuring the manufacturing of electronic musical instruments, which are in great demand in the world market.

Some other manufacturers and exporters were of the opinion that musical industry of Sialkot was totally ignored by the concerned authorities as a result of which the industry was not modernised and the business community engaged with the industry was still using the old and stereotyped manufacturing techniques in this modern era. The government should allow duty-free import of raw material like ebony wood, brass and copper rod used in manufacturing of musical instruments, they demanded.

It may be mentioned that the ebony-wood was being imported from Africa, Kenya and Tanzania at very high cost with imported duty. The musical instruments industry has great potential and able to increase the export volume, if government announced the special incentives and concessions for the industry.