Pakistan Economy - News & Updates - Archive

[Neo]

Mega projects in Chitral soon ​

Thursday, December 25, 2008

CHITRAL: The government will launch two mega projects to improve lifestyle of local people, especially womenfolk, stated Chitral Tehsil Nazim Sartaj Ahmad Khan here on Wednesday.

Briefing local journalists at his office, Sartaj Khan said a marble handicraft training centre would be set up to promote mosaic and handicraft sector. The centre would also provide livelihood opportunities to womenfolk, he said.

A management board comprising representatives of Small & Medium Enterprise Development Authority and the All Pakistan Marble Industries Association would maintain the centre. A marble mining and processing unit, a joint venture of local and foreign investors, would also be set up in Chitral at the total cost of Rs 275 million, Sartaj said, adding that the project would be completed in two years.

 

[Neo]

Target for december: Govt needs to collect Rs 65bn more tax to meet IMF's benchmark​

ISLAMABAD: The government is faced with a tough target of Rs 150 billion tax collection in the month of December 2008, which is Rs 65 billion more than normal per month tax collection. This is to meet the performance benchmark to limit the budget deficit agreed with the International Monetary Fund (IMF), a high placed source in Ministry of Finance told Daily Times.

The tax collection before the increase in the target from Rs 1.250 trillion to Rs 1.360 trillion was at comfortable level, however, the overall collection has been reportedly facing a shortfall and any deficiency in collection for the month of December 2008 would lead to a failure to meet IMF's benchmark, the official explained.

According to performance benchmark agreed with IMF, the government is required to collect Rs 150 billion in the month of December 2008 so that budget deficit is kept under control. "This enhanced tax collection target is the outcome of the increase in the tax collection target," explained the official sources.

The tax authorities have been tasked with enhanced revenue collection target of Rs 1.360 trillion as against the budgetary target of Rs 1.250 trillion projecting an increase of Rs.110 billion additional collections till June 30, 2008.

The Federal Board of Revenue (FBR) collected Rs 84.82 billion per month during July-November period of the current fiscal year 2008-09.

However, with the increased load shedding, slowdown in imports, massive decrease in oil prices in the international market and current tense situation with India would be the factors that are expected to impact the revenue collection in December 2008 onwards, the official added.

Massive reduction in oil prices in the international market from $147 per barrel to less than $40 per barrel and major decrease in edible oil prices have impacted the revenue collection at import stage in the month of November 2008. Due to decrease in oil prices and edible oil prices in international market local prices have been reduced which has also decreased the revenue collection on these products domestically. During the last fiscal year, when the oil prices were on the higher side, the government was able to collect over Rs150 billion, but scenario in this fiscal has totally changed leaving negative impact on tax collection both at import stage as well as domestic collection.

This trend is set to continue in the December as well as early 2009 and tax collection is set to face slowdown in the remaining months January-June of the current fiscal year 2008-09.

The government introduced Investment tax Scheme in the budget for legalising undeclared assets on the payment of 2 percent tax on fair market value of the asset. But this scheme is not yielded required results in the first half of the current fiscal year 2008-09. The government is expected to extend the deadline for scheme from 31 December 2008 to June 2009 to allow existing as well as new taxpayers to avail this opportunity.

On the other hand, the tax collection along with income tax returns and numbers of income tax returns during July-December is below expectations and requires tax authorities to bridge this gap in the second half of current fiscal year.

July-November: The Federal Board of Revenue (FBR) has collected Rs. 424.1 billion (net) during the first five months (July-November) of the current fiscal year (2008-09) as compared with Rs 340 billion in July- November 2007 - posting a healthy increase of 24.7 percent. In the month of November 2008 alone, FBR collected Rs. 69.8 billion, which was bolstered by a substantial collection of Rs. 50.5 billion from indirect taxes.

Breakdown of the consolidated FBR collection for the first five months of the current fiscal year (2008-09) show that all components of tax have registered stellar growth. Direct taxes, which account for 31.3 percent of total tax collection of the FBR have registered growth of 16.6 percent while indirect taxes exhibited impressive growth of 28.3 percent.

The contribution of indirect taxes in total tax collection of the FBR has increased from 66.6 percent in July-Nov, 2007 to 68.6 percent in July-Nov of this year. Within indirect taxes, sales tax, which accounts for roughly 64 percent of indirect taxes and 43.6 percent of total taxes, grew by 28.5 percent (Rs. 185.1 billion). Sales tax collected from domestic economic activity is up by a healthy 52.2 percent while sales tax collected at import stage grew by 11.1 percent. The custom duty collection is up by 20.9 percent and the collection of federal excise duty (FED) has recorded a note worthy increase of 39.2 percent during the period under review.

 

[Neo]

PC forms task force on maritime industry​

ISLAMABAD: The Planning Commission has constituted a task force with Naeem Sarfraz as its Chairman, for the development of maritime industry.

The task force has been entrusted to propose appropriate amendments in the Merchant Shipping Ordinance 2001 and any other relevant legislation to make it suitable for the maritime industry. It would make recommendations on procurement of ships in the private sector in order to substantially reduce foreign exchange freight bill. It also aims to build capacity of all sectors supporting ship activities in ports, deepen navigable channels, develop private terminals, ship building, ship repair, container manufacture and repair, survey facilities at all ports in Pakistan.

The draft bill should be prepared within 90 days for putting up to Parliament.

Procurement of ships in the private sector can substantially reduce foreign exchange freight bill by approximately $4 billion annually.

The task force will also take measures to create an enabling environment in Gawadar for handling transshipment and transit cargos to realise the full potential of this national asset. It will also recommend on the expansion of capacity of Karachi and Port Qasim and would develop three pilot projects of inland waterways in cooperation with provincial governments.

The task force will also propose measures of the establishment of a Federal Maritime Commission for sustained development of the sector, encourage direct foreign investment, private-public partnership and commercial financing instead of enhancing foreign loans.

 

[Kumar]

Pakistan's economic problem escalate

Business-Videos-The Times of India

IMF - 3.1b$ , China -500m $ , US - 44m$

 

[Omar1984]

^^^ Any Indian source on anything that has to do with Pakistan is false propaganda.

 

[Moin91]

FBR may increase WHT on imports and exports: rate of withholding tax on cash withdrawal may also be enhanced

SOHAIL SARFRAZ
ISLAMABAD (December 26 2008): It is learnt here on Thursday that the FBR is exploring possibility to enhance rate of withholding tax on cash withdrawal, imports and exports. The proposal is part of the FBR strategy on the "impact of withholding taxes collection for the year ending June 2009".

Some of the major taxation measures may include increase in withholding tax on the imports, exports and withdrawal of cash from banks to generate additional revenue in the remaining months of the current fiscal (2008-2009). One of the possibilities is to raise withholding tax on cash withdrawals from banks from 0.3 percent to 0.6 percent; on imports 2 to 5 or 6 percent exports from 1 to 2 percent.

The issue of increase in withholding tax rates is likely to be taken up in the next board-in-Council meeting chaired by FBR Chairman Ahmed Waqar. The FBR is collecting comprehensive data on withholding tax collection from the field formations to ascertain the revenue implications of possible increase in withholding taxes, source added.

When contacted, tax experts opined that the income tax officials are legally empowered under section 159 of the Income Tax Ordinance 2001 to revise the rate of withholding tax. Legally, there is no requirement to go to the Parliament for revision of withholding tax rates. Under section 159, Board may, from time to time, by notification in the official Gazette, amend the rates of withholding tax.

In last budget, a uniform rate of 2 percent withholding tax was made applicable to commercial as well as manufacturer importers to ensure a level playing field to all stakeholders. If the board wanted to generate additional revenue, the authorities have to restore the original rate of 6 percent at the import stage. Another option could be raising rate from 2 percent to 5 percent at the import stage.

Experts said that the withholding tax on all export proceeds has been charged at the rate of one percent as final tax to remove distortion and provide level playing field to the export sector. If the Board wanted to rationalise withholding tax on exports, the department has two options. Firstly, the board has the authority to double withholding tax rate on exports for increasing revenue collection.

Secondly, if the board does not want to increase withholding tax on exports, it could end the final tax regime for exporters. The final discharge of tax liability could be abolished for the exporters. However, it is at the board's discretion either to raise withholding tax on exports or abolish final tax regime.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Local investors as much capable as foreigners

Experts suggest privatisation of only loss-making firms​

Friday, December 26, 2008

LAHORE: The government needs to revisit its privatisation policy by facilitating formation of local consortia and ensuring that only loss-making public enterprises are handed over to foreign investors who start repatriating profits immediately after taking over running units.

Economists and industrialists point out that a flawed privatisation policy of the previous government has effectively stopped foreign direct investment in green projects in the country. All foreign investors are eying public sector companies at throw-away prices, they say and add they do so to squeeze out profits without going through the hassle of planning and developing a project and then wait for two to three years before going into profit.

During the past 18 years, they say, the government has privatised national assets worth Rs476 billion. Out of these, major profit-making enterprises have been sold to foreign buyers. These include Pakistan Telecommunications Company sold to Etisalat for Rs156.32 billion (since the payment was in dollars as on July 5 and full payment has not yet been received the amount would exceed in rupee terms), Kot Addu Power Company for Rs11 billion and Habib Bank for Rs22.4 billion.

The foreign investors did buy some banks and other companies which were revamped and were on the verge of turnaround like the United Bank and Bank Alfalah. In fact, a local bank was the highest bidder of the UBL but the then government rejected its bid and resorted to a non-transparent method for its sale to a foreign buyer.

There was no need to hand over liquefied petroleum gas businesses of Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Ltd (SNGPL) to foreign oil companies. These could have been handed over to domestic investors through better marketing, convincing and awareness.

Experts point out that outflow of huge capital during the past one decade shows that local investors have money but they do not have confidence in their government. Foreign investment is fully protected while local investors are prone to blackmail by authorities.

The argument that foreign investors bring in better technology or boost productivity has been proved wrong if the performance of companies acquired by foreign investors or local entrepreneurs is compared. Allied Bank has made all its branches online much earlier than the banks taken over by foreign investors. MCB Bank has made handsome progress after being handed over to a local investor.

Al-Ghazi Tractor was acquired by a foreign investor and Millet Tractor was taken over by the Employees Management Group. The performance of both companies is open to all. No doubt Al-Ghazi has made good progress but Millat has taken equivalent or better leaps.

The cement sector acquired mostly by local investors has reached new heights and is on way to become a major source of bringing in foreign exchange in coming years. The experts say that public sector companies earmarked for privatisation still include lucrative profit-making enterprises like Oil and Gas Development Company, Pakistan Petroleum Ltd, Pakistan State Oil, Sui Northern and Sui Southern gas companies. Though share prices of all these companies have declined to unrealistically low levels, these companies are performing excellently.

It would be a folly, the experts warn, to privatise these companies until their share prices in stock markets rebound to actual values. The foreign investors would willingly take over these companies at current low values and local investors would also take a keen interest, they say, adding it would be a crime to hand over these high profit-making firms to foreigners.

 

[Neo]

Private sector begins wheat import: first consignment arrives ​

KARACHI (December 26 2008): After three years, the first imported wheat consignment booked by the private sector reached Karachi on Thursday, which is aimed at lowering the prices of the commodity in domestic markets by bridging the rising gap between wheat's demand and supply, sources said.

Vessel M/V Tourloti carrying around 33,000 tonnes of red wheat has arrived at Port Qasim, and unloading of the commodity has started, they said. A private trader, who imported the red wheat at 190-dollar (cost and freight) per tonne from Russia, would directly supply the commodity to the millers at around Rs 17 per kilogram, sources said.

Private sector has imported milling wheat, the quality of which is better than the TCP-imported wheat which, the source said, was the "feed wheat". They said the samples of imported wheat were also positive, proving that it would certainly reduce the cost of commodity for the millers. This is the first consignment of wheat after three years imported by private sector in the wake of its shortage across the country.

Earlier, in 2005 private sector imported some one million tonnes of wheat from Australia and other countries due to shortage of the commodity, however in 2006 the country's wheat production was satisfactory, therefore wheat was not imported.

In 2007, despite the bumper crop of 23.5 million tonnes, the federal government was compelled to import the commodity from international market, amid wheat crisis due to smuggling and hoarding.

However, the federal government gave the task to Trading Corporation of Pakistan (TCP) to import wheat for meet local demands and in the last two years, the TCP importer some over 3 million tonnes of wheat. Later, the federal government waved the regulatory duty imposed on the wheat import and allowed private sector to import the commodity.

The private sector in November 2008 decided to import wheat, taking the advantage of government's move and declining prices of the commodity in world markets, sources said. They said that private importers have finalised contracts for the import of some 0.15 million tonnes of wheat.

However, the first imported wheat consignment has reached Karachi and the second one of some 35,000 tonnes will likely reach in the first or second week of January 2009, they added. "Department of plant protection has also issued Non Objection Certificate (NOC) for unloading of the imported wheat, " they apprised.

However, it interesting to note that the private sector is importing wheat at $185-190 per tonne and TCP has imported wheat at $300-400 per tonne during the last few months. Recently, the TCP awarded another wheat import contract at $213 per tonne.

Sources said that the import of wheat by the private sector is a joint venture of flour millers and importers. They added the milers have already booked imported wheat due to its low price. At present, the government is providing imported wheat at a rate of some Rs 19 per kilogram and local wheat price is Rs 27/kilogram, therefore it is expected that the import of wheat by private sector would reduce the price of flour.

 

[Neo]

No dredging at Gwadar Port since its construction ​

KARACHI (December 26 2008): The government, which has persistently been pressing for full operationality of Gwadar Port, has not carried out maintenance dredging at the deep-sea port since its construction early 2006. According to well-placed sources a sizeable siltation, ranging from 0.6 to 0.7 meter, has reduced draft in the 4.8-kilometer-long navigational channel of the newly constructed port at different points.

They said the 14.1-meter outer and 13.8-meter inner channel of Gwadar Port, which was fast clogging up with huge inflows of silt every year, was in dire need for maintenance dredging. In this regard, the sources said, Gwadar Port Authority (GPA) had floated tenders twice, one last year and the second one this year.

Siltation at the 13.8-meter-deep turning basin and the 14.5-meter-deep pocket area was making the Balochistan based deep-sea port unusable for the deeper-draft mother vessels, which as per transshipment vision of Islamabad, would soon be arriving at Gwadar, they added. The sources claimed that GPA had to cancel last year's tender under pressure.

They said the Authority had again floated a tender and was evaluating documents filed by the national and international dredging companies. They said siltation had reduced the draft at "alongside" to 12.5 meter last year, when M/v PS Glory, the first deep-draft ship carrying over 70,000 tonnes of wheat, was due at Gwadar Port. GPA had to rush to Karachi Port Trust for its dredgers for clearing the channel, said the sources. According to the sources maintenance dredging on yearly basis was required at Gwadar Port to avoid problems.

 

[Neo]

India halts exports through Wagha ​

ISLAMABAD (December 26 2008): India has stopped exports to Pakistan through Wagha border on Thursday. According to private TV channel, India halted export of tomato, potato, onion, meat and other commodities through Wagha border. Pakistan, in response, has also halted exports to India.

 

[Neo]

Rice export through Torkham exceeds 0.5 million tonnes ​

ISLAMABAD (December 26 2008): Rice export through Torkham border has exceeded 0.5 million tonnes, registering 80 per cent increase as compare to last year, well-placed sources told Business Recorder on Thursday. During the last fiscal year, 0.1 million tonnes of rice was exported through the border, which has now increased to 0.5 million tonnes.

Sources said that after lifting of the ban on rice imports by Russian Federation, every month almost 40,000 to 50,000 tonnes of rice is being exported via Torkham (Pak-Afghan Border) to Russia and the Central Asian States. According to the sources, traders from Kabul are purchasing rice from Pakistani rice exporters and selling it to Russia and the Central Asian States.

They said that the rice exports may even exceed 0.6 million tonnes till the end of this fiscal year. In May 2008 Russia decided to lift the ban on rice import from Pakistan. Russia used to import about 0.5 million tonnes rice per year from Pakistan. In 2007, from November 21 to December 26, a Russian delegation visited Pakistan to review the sanitary and phyto-sanitary conditions regarding the packing and processing of the citrus fruits and mangoes to lift the ban on import of the fruits imposed by Russia two years ago. Consequently, the ban was lifted.

Similarly, the officials of Russian Federal Veterinary and Phytosanitary Surveillance Services (VPSS) recently visited Pakistan on April 23 to discuss plant protection and Phyto-sanitary issues with Rice Exporters Association of Pakistan (Reap).

"During the visit, the Russian delegation was told by Reap representatives that Pakistan's rice is now free of 'Khapra' beetle and asked them to conduct a survey of the processing factories to ensure that the country has observed the sanitary and phyto-sanitary conditions and the import of any commodity from Pakistan does not involve any risk at all", sources explained.

 

[Neo]

Pakistan's weather ideal for solar energy: US expert ​

KARACHI (December 26 2008): Chief Executive Officer, eSolar Company of United States, Asif Ansari has underlined the need for due exploitation of Pakistan's big potential of solar energy. "Pakistan having mostly sunny days is an ideal of solar energy," he remarked during his presentation on solar energy as viable alternative source of energy, the related issues and the possible solutions to members of Federation of Pakistan Chambers of Commerce and Industry, late on Wednesday here at Federation House.

Among other senior businessmen, FPCCI Vice Presidents Zubair Tufail and Khursheed Ahmed Gogezai, Chairman, FPCCI Standing Committee on Alternative Energy Development, Khurram Sayeed, FPCCI Secretary General, MA Lodhi, Media Manager Shoab Ansari were present.

The solar energy, which is targeting market potential, will change global dynamics of energy. He noted that Pakistan has very good weather, with very sunny days. The people here should take advantage from this great natural gift.

"Solar energy will become a reality even in Pakistan," he asserted. Pakistan can afford to install even 20 MW power generation plants due to availability of labour at lower cost. In the developed countries, solar plant below 46 MW capacity is considered viable due to cost effect, he said.

Project Director, Al-Tawargi Steel Mills of a Saudi Group, Zaigham Rizvi informed the CEO eSolar Asif Ansari that the Mills needs 45 MW electricity for the second phase of its operation and that they would welcome eSolar's initiative in this regard. The Mills first phase of its operation is based on gas-fired power generation, he said.

Ansari showed his interest and decided to have a detailed meeting with Al-Tawarqi Mills authorities for possible agreement on this project. He deliberated upon the unique features of the technology used by eSolar, the US-based alternative energy development company operating in various countries. FPCCI leadership underlined the need for more interactive sessions between the private sector people here and eSolar officials for initiating certain projects.

 

[Neo]

Marriott set to reopen three months after bombing ​

ISLAMABAD (December 26 2008): Pakistan will Sunday see the re-opening of the luxury Marriott Hotel in Islamabad, just three months after it was ripped apart by a truck bomb that killed 60 people and wounded another 260. The attack, by a suicide bomber whose vehicle was packed with 600 kilogrammes of explosives, was the worst in the besieged country this year and reduced the hotel to a charred shell on September 20.

The blast sent shudders through Islamabad, causing damage to hundreds of other buildings when the bomber rammed the truck into the outer gates of the Marriott, near presidential palace and key government facilities. The city's expatriate community was left reeling by the bombing, which killed the Czech ambassador, two Americans and a Vietnamese woman.

Peter Alex, the chief operating officer of the Hashoo group which owns the 289-room hotel, says "new concepts of security and safety" have been used in the extensive renovation work to ensure guests can check in without fear.

"It will be the Fort Knox of Pakistan," Alex told AFP, referring to the site where the United States stores most of its official gold reserves. Alex said 60 rooms would be available from Sunday for the Marriott's "soft re-opening", with the entire hotel due to be open for business by March. He said the re-opening would "bring back to life a hotel which has been the centre of activity in Islamabad for more than 30 years."

There is little sign that the hotel suffered a major attack, following months of hectic work by about 2,000 labourers. Alex showed AFP a new bombproof wall - which is 14 feet high and 15 feet thick - erected in front of the freshly repainted building.

The new blast wall has been designed to absorb the shock of even a massive explosion outside, like the one in September. Visitors will have to pass through a bombproof room within the wall in order to gain access to the hotel, which will feature sophisticated scanning equipment, Alex said. "All the restaurants - Chinese, Lebanese, Thai, Japanese, American steak house and the main Nadia cafe - are ready to serve our guests," he added.

 

[Neo]

'We must build a corporate image of Pakistan' ​

ARTICLE (December 25 2008): Saudi Arabia has shown keen interest in investing around half a billion dollars on floating liquefied natural gas (LNG) storage facility at Karachi for which a mother ship would transport 50,000 metric tons of LNG to Port Qasim. It is high time that security concerns are appropriately addressed and a corporate culture to build confidence of foreign investors is developed with a view to attracting more and more FDI.

This was stated by Waqar Ahmed Khan, Federal Minister for Investment, in a panel interview with Business Recorder at Islamabad. The panel comprised Raja Aqeel, Mushtaq Ghumman, Sohail Sarfraz and Fida Hussain.

THE FOLLOWING ARE EXCERPTS FROM THE INTERVIEW:

BUSINESS RECORDER: What has been the outcome of last month's visit of one hundred Pakistani investors to Saudi Arabia with the objective of attracting investment?

WAQAR AHMED KHAN: I was not the minister at that time, but I had an interesting meeting with the Ambassador of Saudi Arabia the other day. M/s Al-Tuwariqi Group of Saudi Arabia has initiated steel mill project at Port Qasim, Karachi in 2004 and $350 million has been invested in the first phase. They committed to spend another $700 million to enhance the capacity of the plant in the second and third phases.

They also showed interest in spending about half a billion dollars on floating LNG storage facility to bring gas from Saudi Arabia to Pakistan and indicated that all they have to do is to bring a mother ship to transport 50,000 metric tons of gas to Port Qasim as there is no facility there. The Petroleum Ministry, after my meeting, asked for the proposal and they are pursuing it.

BUSINESS RECORDER: What steps have been taken to meet the security concerns of foreign investors?

WAQAR AHMED KHAN: We are extremely conscious of security problems faced by the foreign investors. My interaction with multinationals shows that they do not dwell on the security issues but on what we are doing to ease their concerns. We have proposed establishing a task force to be headed by the Minister of State for Interior, in which the four provincial home secretaries, secretary investment, secretary interior and foreign secretary would also participate.

The idea is that the task force will set up 'response teams' who would co-ordinate meetings of foreign investors according to their requirements. This would entail making appointments and travel arrangements of foreign investors prior to their landing on Pakistani soil.

The second important concern of foreign investors was the current travel advisory for Pakistan and they are proposing life insurance cover during their stay in Pakistan as a means to deal with this.

There is also a need for continuation of investment policies. A proposal for this will be tabled in the cabinet as we believe investment policy and development projects must continue in the larger national interest. And transparency to facilitate foreign investors is also critical. We are working on resolving all these concerns.

BUSINESS RECORDER: Is there any progress on Bilateral Investment Treaty (BIT) with the US?

WAQAR AHMED KHAN: We are working on it in co-ordination with the Law Ministry. We have an independent council providing input on it. The US wants it under International Chamber of Commerce and Industry (ICCI) jurisdiction and we have no problem with that. But historically things don't go quite the way they should. So we are putting a clause that when the matter is subjudice in case of arbitration neither side should be able to exert political pressure till the matter is decided. In the last two years we have an evolutionary process in the judiciary but international process will be taken on board so that in case of arbitration our companies should be handled on the basis of equality.

BUSINESS RECORDER: Do you think arbitration with US will be successful?

WAQAR AHMED KHAN: In my talks with Senator Kerry I've asked for Free Trade Agreement (FTA) and we would like FTA to be signed within six months to a year. If FTA is not signed within this period then we will go for BIT. We have to look for our own interest to achieve greater access to US market.

BUSINESS RECORDER: Is there any progress on Reconstruction Opportunity Zones (ROZs) in FATA?

WAQAR AHMED KHAN: The (ROZs) will not be limited to FATA. Settled areas will also have such zones as many living in tribal areas have been displaced and have taken refuge in settled areas. They will receive training in these zones. The bill for the ROZs is lying with US Congress for approval.

BUSINESS RECORDER: Would you support Indian investment in Pakistan?

WAQAR AHMED KHAN: Right now there is status quo on this issue. I am not averse to Indian investment but investment depends on the relationship between the two countries.

BUSINESS RECORDER: Given the global financial crisis what is our position with respect to foreign investment inflow?

WAQAR AHMED KHAN: There is recession in the US and Europe. Recession has affected their banking sector and they are grappling with a return on investment which is negative. In contrast oil rich states and China are sitting on huge cash reserves.

The global meltdown has not affected Pakistan much - we are not a debt-based economy as we mostly deal in cash. The rate of return on investment here is over 30 percent. So we need to provide the right incentives to attract investment from oil rich countries and China.

BUSINESS RECORDER: Which sectors are identified as an investment priority?

WAQAR AHMED KHAN: Basically we need infrastructure projects. We have shortage of three to five thousands MWs electricity presently and will have 15,000 to 20,000 MWs shortage in the next 10 years; we need oil and gas exploration and need two, three dimensional off and on shore drilling. We also need investment in agriculture. We are an agro-based economy and yet we are not self-sufficient in majority of food products due to limited farm to market access.

We are the fifth largest milk producing country but 70 percent of our milk goes waste and right now there is tremendous need for investors from Gulf countries to enter the agro-based sector here. They will set up one milk pasteurisation plant for the time being but it will be replicated. Moreover, a local feed production plant with the assistance of Saudi government is being discussed which will triple milk production.

BUSINESS RECORDER: What measures have been taken to streamline expatriates remittances sent through Hawala/Hundi?

WAQAR AHMED KHAN: I believe that the same incentives must be given to our expatriates as given to foreign investors.

BUSINESS RECORDER: Is there any variation in tax holiday depending on the location of the project?

WAQAR AHMED KHAN: There is no variation on geographical basis. We want to develop a corporate image of Pakistan, tell the world that we are ready to do business.

BUSINESS RECORDER: What steps have been taken to remove hurdles identified in the perception survey of Overseas Investors' Chamber of Commerce and Industry?

WAQAR AHMED KHAN: To overcome hurdles every sector of the economy will interact with BOI. Concept of e-government will be introduced vigorously to make management efficient. MoUs for the projects will be signed only after fulfilling all the requirements.

In the past, a lot of MoUs were signed but not implemented in the absence of feasibility studies, financial analysis, etc. What we are trying to do is that before signing MOUs we will prepare a list of say five prioritised projects from each ministry with complete information, documentation and feasibility studies conducted by our experts. For these projects the source of raw material, local or imported, will also be identified and its impact on our GDP assessed. Priority will be given to value-added exports.

BUSINESS RECORDER: What is the progress on seventy-one projects worth $60billion presented to Friends of Pakistan in Dubai?

WAQAR AHMED KHAN: These were identified prior to my joining the ministry, but they are packaged very well. To streamline the working of this Ministry we will set up a data bank and anyone will be able to access information on specific areas where investment opportunities exist in abundance. With data bank in place one would be able to access information on investment opportunities in his sector of interest where ever he is sitting ie in Washington, Cairo or in Indonesia.

BUSINESS RECORDER: Do you envisage a role for our missions abroad?

WAQAR AHMED KHAN: We are communicating with all of our missions, we have asked them to provide information on all probable foreign investors and we have asked the Planning Commission and all the relevant ministries to give us a list of all the prioritised projects.

BUSINESS RECORDER: How much foreign investment has Pakistan received during this year?

WAQAR AHMED KHAN: About $6 billion this year and we are expecting about $10 billion in the next calendar year.

BUSINESS RECORDER: Is the government doing something to bring back politicians' money banked abroad, estimated roughly at 30 percent of investment in the country?

WAQAR AHMED KHAN: It is more than 30 percent, but we are trying to encourage everyone to invest in the country whether he is a politician or expatriate with business interests abroad. They all should bring back their money to help the country develop the economy on sound footing.

BUSINESS RECORDER: Is one window facility for investors being implemented?

WAQAR AHMED KHAN: The question is no longer of allowing one-window operation. We are at a juncture when we need to re-evaluate our position and our stance. We can't make any further mistakes on how to move forward. We are in a situation where we really want to progress and we must move forward in tandem be it politicians, civil or military bureaucracy.

BUSINESS RECORDER: What is your vision with respect to attracting investment?

WAQAR AHMED KHAN: We must build a corporate image of Pakistan with the support of all the sectors of the economy. IMF package has given credibility to our economic policies. It has been a perception builder. We are now working on our investment policy diligently. A ten-year investment policy is in the offing. We must come out with a transparent mechanism of corporate governance.

BUSINESS RECORDER: Is the government going to revisit the agreement with Singapore Port Authority?

WAQAR AHMED KHAN: We will ensure that no changes are made in the original agreement and it will be followed in letter and spirit. I think the continuation of policy is of utmost importance.

BUSINESS RECORDER: Will PPIB merge with BOI?

WAQAR AHMED KHAN: The government is considering this, but there is nothing concrete as yet.

 

[Pk_Thunder]

China keen to help propel Pakistani’s economy ​

BEIJING, Dec 26 (APP): China is keen to help boost Pakistan’s economy with closer cooperation in the fields of hydro power generation, hybrid seed development, irrigation and water conservancy. Pakistan’s Ambassador to China Masood Khan who visited Wuhan, the capital city of Hubei province at the invitation of its Governor Li Hong Zhong and Yichan where the largest Hydro power project. Three Gorges Dam is situated told APP about prospects of such cooperation in an interview on Friday.

Hubei province is the industrial hub of China. It specializes in areas of automobile manufacturing, steel, construction and fiber optics.

The Director General of the Agricultural Chen Binhuai in a meeting with

Ambassador Khan said that Hubei province will like to work closer with Pakistan

in the field of agriculture to enhance per acre yield so that Pakistan could meet

its growing agriculture demand.

He said that by setting up joint ventures the agriculture products could also be exported to various countries from Pakistan.

Ambassador Khan was also invited to visit the Three Gorges Dam, where

the General Manager of the project Li An Yong said that China is ready in sharing

technology and expertise for setting up large scale Hydro electric generation projects in Pakistan.

Three Georges Dam is the world largest hydro power generation project with installed capacity of 22000 MW.

Over 40 Pakistani students studying in Wuhan University and Wuhan Science & Technology University also met with Ambassador Khan.

Over 90 students were enrolled for under graduate and Post graduate disciplines, ranging from medicine to agricultural research, science and technology and R&D.

“The potential for cooperation between Pakistan and Hubei in industrial, agricultural and educational fields is immense. We will work consistently to tap this potential”, Ambassador Khan said.