Pakistan Economy - News & Updates - Archive

[Neo]

IMF report does not reflect ground realities​

ISLAMABAD (March 09 2009): An International Monetary Fund (IMF) report, titled, The Implications of Global Financial Crisis for Low-Income Countries, presents statistics that no longer reflect the changing ground realities because of the deepening global recession. This is manifest for the GDP growth estimates for Pakistan. The report shows a projected GDP growth rate of 2 percent in 2009.

However, during the quarterly review of the state of Pakistan economy in February 2009, a requirement for the release of the next tranche of the 7.6 billion dollars standby arrangement by the end of March, 2009, GDP growth was scaled down by IMF staff from the original 3.5 percent to 2.5 percent. This was stated by Shaukat Tarin, Advisor to Prime Minister on Finance, on his return from Dubai.

This figure remains at odds with those presented by the State Bank of Pakistan (SBP) in its detailed monetary policy statement, January-March 2009. The projected SBP growth rate was 3.7 percent, lowest in last six years.

The central bank said that poor law and order situation, besides structural weaknesses such as power shortages, etc, were responsible for slow economic growth during the current fiscal year.

"Precarious and unsustainable balance of payment position and heavy reliance of the government on borrowings from the SBP remained the major sources of macroeconomic instability in the initial months of FY09. High international commodity prices, global financial crisis, and slowing economic growth world-wide aggravated the domestic vulnerabilities " the SBP had said in its statement.

The global economy is in the midst of a deep downturn as an adverse feedback loop between the real and financial sectors is taking its toll both in advanced and in emerging and developing countries. As a result, commodity prices are unlikely to recover in the short run.

The IMF report says that the global financial crisis is expected to have a major impact on low-income countries (LICs). The crisis is projected to increase the financing needs of LICs by at least $25 billion in 2009.

 

[Neo]

19,000 poverty alleviation schemes progressing under PPAF​

ISLAMABAD (March 09 2009): Chief Executive Pakistan Poverty Alleviation Funds (PPAF) Kamal Hayat said on Sunday that about 19,000 different poverty alleviation schemes are progressing in various parts of the country. Talking on state-owned tv channel, he said Pakistan Poverty Alleviation Funds is working in about 90 percent of the districts the country with aim to alleviate poverty from the areas.

He said about 75 partners are also with working PPAF. To a question he said PPAF is working in about 3,4000 villages throughout the country. He said the aim to establish PPAF was to provide help to the poor by enabling them to gain access to resources for their productive self-employment, to encourage them to undertake activities of income generation, poverty alleviation and for enhancing their quality of life. Kamal Hayat said the Pakistan Poverty Alleviation is sponsored by the government and funded by the World Bank.

To a question he said PPAF has a very effective monitoring system. Every three months a team visits different villages to review the performance of schemes, he added. He said donors also visit after six months to monitor the different schemes.

 

[Neo]

Poverty alleviation: IDB will double annual allocation of $500 million, says Tarin​

ISLAMABAD (March 09 2009): Advisor to Prime Minister on Finance Shaukat Tarin has expressed the hope that Islamic Development Bank will double its existing annual allocation of $500 million for the poverty alleviation programme in Pakistan. He said a steering committee would be set up in this regard, wherein the donor agency would have membership for monitoring it, said a message received here from Jeddah.

Shaukat Tarin called on the President, Islamic Development Bank Dr Ahmad Muhammad Ali at the IDBs headquarters in Jeddah and discussed with him matters relating to the co-operation between the bank and Pakistan in various sectors. He briefed the Banks President about the present economic situation and Pakistans successful come out of the economic crisis.

Pakistan needs support of the true friends like Saudi Arabia for putting its ship on an even keel, he said. He said that Pakistan had made a breakthrough and succeeded in controlling the inflation, particularly the prices of the eatables.

We expect that inflation will come down to 10 per cent by the end of June, this year, he added.

Advisor to PM on Finance said that the stock Exchange had been restored and the index gone up to 600 points. The current account deficit and the fiscal deficit has considerably been lowered with satisfactory level of foreign exchange reserves, sufficient to cover a period of 4 to 5 months, he said.

He said that by enhancing the bank rate, inflation had come down, which he added had stabilised the economy and now it was moving in the right direction.

When apprised about the Presidents visit to ECOs headquarters, Tarin said that there was also a need of promoting trade between ECO and Saarc. Tarin appreciated IBDs assistance of $307 million for Neelum- Jehlum Project and also invited its participation in the 12 billion dollars energy project of the construction of Basha Dam.

Dr Ahmad Muhammad Ali appreciated the achievements of the present democratic set up. He assured to extend full co-operation to Pakistan government in overcoming the difficulties. He said the IDB would look into the possibility of financing mega projects in Pakistan.

 

[Neo]

Efforts to revive tourism in Kaghan and Swat underway​

ISLAMABAD (March 09 2009): Efforts, though belated, are underway by both public and private sectors to revive tourism activities in earthquake hit areas of Kaghan as well militancy prone Swat, where tourism sector used to provide livelihood to one out of every ten persons.

Both of these fascinating valleys were visited every year by thousands of tourists not only from Pakistan, but also from around the globe. Pakistans spectacular tourism industry had suffered after 9/11 incident in the United Sates, however, it gradually improved in the ensuing years. Then came the devastating earthquake on October 8, 2005 followed by militancy in Swat and NWFP. This phenomenon ground the potential tourism industry to a lull.

Pakistans tour operators, Pakistan Tourism Development Corporation (PTDC) and many others linked to travel and tour sector bear witness to the this grim situation that made countrys tourism industry as principal victim. Realising the pressing need for reviving tourism upon which, rely most of the world economies, the Ministry of Tourism is making elaborate measures to extract benefits for Pakistan from this multi-billion dollar trade.

We have prioritised to boost our tourism, said Minister for Tourism, Maulana Atta ur Rahman, who has recently assumed charge as the minister, after the slot remained vacant for about one year.

Maulana Atta, who holds a Masters degree in Islamic Studies from Gomal University, DI Khan, is also ambitious to see improvement in law and order to elevate tourism activity in NWFP for the promotion of the industry. We need to let the world know that we are a peace loving country, progressive nation and hospitable people, the minister said stressed on drawing an end to militancy in the area.

He regretted that Pakistan is being negatively projected by the Western media, where certain countries have had issued negative travel advisories. It is a national obligation that we all should serve our country in our respective capacities, he said and urged national media to counter anti-Pakistan and anti-Islam propaganda in the West for the best interest of the country.

The minister is likely to embark upon a foreign tour to allay the fears of Western people about either Pakistan or Islam. The tour will also be used to learn from the expertise of such countries that have developed their tourism industry, he remarked.

Meanwhile, PTDC and Usaid jointly launched a project at Abbottabad that aimed at fostering public-private partnership to restore tourism linked with livelihoods in Kaghan Valley, devastated by earthquake in 2005. In this connection, PTDC and USAID-funded Improving Livelihoods and Enterprise Development (I-LED) programme implemented by CNFA, Tourist Facilitation Centre (TFC) at Abbottabad.

One out of ten persons in Kaghan Valley was linked with tourism industry that suffered massive setback in the October 8, 2005 devastating earthquake, depriving hundreds of thousands of people of livelihood.

MD PTDC Brigadier Amanullah (Retd) said the federal government was fully equipped with the latest multimedia and fixtures for the convenience of the tourist transiting to Kaghan Valley from all over Pakistan.

PTDC has already started a daily bus service to Kaghan from Rawalpindi and its hotels are operational in Kaghan Valley to facilitate tourists. A large number of people, who were affiliated with tourism industry in picturesque Kaghan Valley, were rendered jobless in the wake of deadly earthquake in 2005. We need to improve and promote our local tourism industry. Amanullah appreciated the efforts of US Agency for International Development efforts for promoting tourism in Pakistan, besides contributing to other sectors. He emphasised on improvement of the local tourism industry in Pakistan.

Programme Director USAIDs I-LED programme Mark Treacy who was the Chief Guest of the inauguration ceremony stated that USAIDs I-LED programme was helping the tourism sector by providing training to the local community in front office management, tour operations, housekeeping management, food and beverage operations, quality assurance and hotel management in terms of providing better facilities and quality services to tourists visiting the valley.

He said I-LED supported with grants scheme for renovation and upgrading of the hotels according to international standards of one-, two-, and three-star levels. So far nine hotels are upgraded in Kaghan Valley in Naran and Shogran, he said.

 

[Neo]

Government refuses to give six percent R&D support to apparel sector​

ISLAMABAD (March 10 2009): The government has refused to provide six percent research and development (R&D) support to the apparel sector due to lack of sufficient financial resources even after the issuance of the SRO, reliable sources in the Ministry of Textiles told Business Recorder here on Monday.

According to the sources, even after getting loan from the International Monetary Fund (IMF) the government is unable to pay a single penny to the textile sector in the name of R&D.

"We know that Syed Naveed Qamar, who was having the additional charge of the Ministry of Finance some time ago, had announced continuation of six percent R&D support to the apparel sector even after June 30, 2008, but now this promise cannot be entertained further," sources disclosed.

To make our textile sector more competitive and to attract foreign investors, the government had been continuously providing six percent subsidy to the textile sector prior to the 2007-08 fiscal, but due to the lack of financial resources, the former Governor of the State Bank of Pakistan (SBP) announced that the government would abolish the R&D support being provided to the textile sector from June 30, 2008 onwards.

The subsidy was withdrawn on June 25, 2008 without informing the textile exporters. This made the textile sector to face a loss of Rs 12 billion. A textile industrialist, speaking on the condition of anonymity, told this scribe that an SRO had been issued a week ago by the government in which the textile exporters were assured refund of 40 percent of the total shipment bill deposited by them in the SBP till June 30, 2008. "From where would we get the rest of 60 percent," the industrial said.

He said that the textile exporters were already facing strict competition in the international market. Bangladesh, India and China had reduced their cost of production by 12 percent as compared to Pakistan, he said, adding that China had increased its rebate from seven percent to 15 percent to protect its textile exporters.

Textile exports of the country during the first seven months of the current financial year decreased by 3.79 percent as compared to the corresponding period of 2007-08. Exports of textile products during January-July (2008-09) were recorded at 5.82 billion dollars as compared to exports of 6.05 billion dollars registered during July-January (2007-08).

Exports of cotton yarn increased by 215.22 percent during the period under review from 22.82 million dollars during the last fiscal year to 71.96 million dollars during the corresponding period of current financial year. During the first seven months of the current financial year, the exports of cotton cloth increased by 8.9 percent, towels by 14.31 percent and made up articles 1.26 percent.

However, the highest decrease of 56.51 percent was registered in the export of yarn other than cotton yarn. During the period under review, the exports of yarn other than cotton yarn were recorded at 13.12 million dollars as against exports of 30.17 million dollars registered during the last financial year.

Similarly, the textile exports during the month of January 2009 were decrease by 8.98 percent as compared to December 2008. Exports during January 2009 were of 753.9 million dollars as compared to exports of 720.3 million dollars recorded during December 2008.

The industrialist said that during the last month, gas supply to the industrial areas decreased by 50 percent. "We do need the continuous supply of gas to run the captive power plants as well as boiler. The shortage of gas and electricity has already discouraged the foreign investors, while most of the textile industrialists, by keeping this thing in view, are shifting their businesses to Bangladesh and India," said the industrialist.

 

[Neo]

Trade deficit swells to $11.621 billion in July-February​

ISLAMABAD (March 10 2009): Pakistan trade deficit has swelled to $11.621 billion in the first eight months of current fiscal with $23.777 billion imports against $12.156 exports, according to Federal Bureau of Statistics (FBS). Provisional trade figures released by the FBS here on Monday, however, showed that trade deficit in July-February 2008-09 has declined by 6.86 per cent over the same period of last year.

As a result the trade deficit has come down from $12.477 billion of the same period of last year to $11.621 billion in the current fiscal. Detailed analysis of the data showed an increase of 4.25 per cent in exports in July-February 2008-09 as compared to the same period of last year. Exports increased to $12.156 billion during the period under review from $11.660 billion of last year.

Imports have also declined by 1.49 per cent from $24.137 billion last year to $23.777 billion during the first eight months of current fiscal. Monthly analysis of the data showed that exports in February declined by 6.94 per cent over the previous month and shrunk to $1.266 billion in February from $1.360 billion in January 2009.

A comparison between February current and last fiscal showed that exports registered a decline of 17.68 per cent in February 2009 over the same month of last year with total exports going down to $1.266 billion in February 2009 from $1.538 billion in the same month of last year.

The imports have also witnessed decline of 16.02 per cent in February 2009 over previous month. Imports of the country witnessed a decline of 41.95 per cent in February 2009 with total imports at $2.133 billion as against the imports of $3.657 billion in February 2008. With this decline in imports the trade deficit also declined in February 2009 by 59.56 per cent over the same month of last year. The trade gap in February 2009 was recorded $857.247 million against $1.167 billion for the pervious month indicating a decline of 26.59 per cent.

 

[Neo]

Donors’ consortium to be set up for financing Basha Dam ​

Tuesday, March 10, 2009

ISLAMABAD: The government will establish a consortium of all major multilateral and bilateral donors led by the Asian Development Bank (ADB) before the next budget for arranging $12.1 billion funding for the construction of Diamer-Basha Dam, it is learnt.

The World Bank (WB) may become part of the consortium for the project but it will not assume the driving seat in terms of providing funding for the multibillion dollar Basha Dam. In rupee terms, the cost of Basha Dam has been jacked up to Rs1 trillion as depreciation of rupee against dollar by 30 per cent alone increased its cost by Rs280 billion during the current fiscal year, said the official sources.

“When the rupee stood at 60 against a dollar, the cost of $12.1 billion translated into rupee was Rs720 billion, which was jacked up to around Rs1 trillion when the rupee touched 80 to a dollar,” official sources explained.

“Although, the government has not yet made official request to the World Bank for becoming part of the consortium as it is believed that the multilateral donors are not in competition with each other. When the ADB is on the driving seat the WB will not be involved up to that extent,” official sources, having knowledge about working of the multilateral donors, confirmed while talking to The News on Monday.

When Secretary Economic Affairs Division, Farukh Quayum was contacted for comments, he confirmed that the consortium of donors would be established by April 2009 in order to arrange financing for Diamer Basha Dam.

He said that the Islamic Development Bank (IDB) would also become part of the upcoming consortium for investing into Basha Dam. However, the sources said that it was understood that when the ADB would play major role in the construction of the Basha Dam other donors including the WB might become part of it but it would not play major role because these donors pursued projects in synchronization with each other.

The government, the sources said, is likely to establish donors consortium before the ministerial level meting of Friends of Pakistan in its scheduled meting of April 17, 2009 in Tokyo, enabling the donors to become part of the consortium.

The government is all set to divide Diamer-Basha Dam into two main categories for meeting financing requirements of $12.1 billion.

The tentative project cost of Diamer Basha Dam, the official document states, would be $12.1 billion, with total installed capacity of 4500 MW. There will be 12 units having capacity of 375 MW and the average annual generation of the dam will be 19000 GWH.

The Diamer-Basha Dam project is located on Indus River about 315 km upstream of Tarbela dam, 165 km downstream of Northern Areas capital Gligit and 40 km downstream of Chilas.

On the main dam, the type of the Diamer-Basha Dam will be Roller Compacted Concrete (RCC). The maximum height of the dam will be 270 m (height of its type in the world). On diversion system, there will be 2 number Diversion Tunnel (right side) and 1 number Diversion Tunnel (right side).

Regarding main spillways, there will be 14 gates and the size of gate will be 11.0 x 16.5 m. On the reservoir side, the maximum operating level of Diamer Basha Dam will be EI. 1160 m and minimum operating level of EI.1060 m. The Gross Capacity of the dam will be 9.0 BCM (7.3 Million Acre Feet (MAF). The live capacity of the dam will be 7.9 BCM (6.4 MAF).

Regarding the outlets of the Basha Dam, the technical feasibility illustrates that there will be 7 low level outlets and five sluicing. On sluicing tunnels, the Diamer-Basha Dam will have one right bank (through conversion of one diversion tunnel) and on the left bank there will be one additional tunnel.

 

[Neo]

Pakistan-Russia business forum to be established ​

Tuesday, March 10, 2009

KARACHI: Two-way trade between Pakistan and Russia is not balanced, though Pakistani companies and businessmen are making a significant contribution to expand the Pakistani portion of trade. However, there is still a persistent need to increase efforts for growth of current low volume of trade between the two countries.

A meeting in the presence of Vladimir V Seliverstov, Consul General of Russian Federation, was held under the convenership of Abdul Rauf Tabani recently. Realising the importance of enhancing trade and business relationship between Pakistan and Russia, it was resolved to establish a Pakistan-Russia Business Forum (PRBF) in Pakistan. Tabani has been appointed convener of PRBF till a proper body is elected later.

The PRBF will work under the blessing of the Embassy of Russian Federation in Pakistan, Office of the Trade Representative of Russian Federation, Islamabad, Consulate of Russian Federation, Karachi and Office of the Deputy Trade Representative of Russian Federation, Karachi and the assistance of Trade Development Authority of Pakistan.

The aims and objectives of the Forum shall be encouragement and promotion of business, mutual understanding and friendly relations between the industrial and business communities of Pakistan and Russia. The Forum shall be non-political, non-profit and non-partisan.

 

[Neo]

Country’s trade deficit down by 5.68% in July-Feb​

ISLAMABAD: The country’s trade deficit went down by 6.68 percent in July-Feb of the current fiscal year despite slowdown in the global economy, sliding trend in aggregate demand in economy and depreciation of Pak rupee.

Country’s trade deficit has been recorded at $11.621 billion in first eight months (July-February) of 2008-09 as compared to a deficit of $12.477 billion in the same period last fiscal year 2007-08, indicating a decline of 6.86 percent.

Export (July-February): According to the official data released by the Federal Bureau of Statistics (FBS) Monday has revealed Pakistan’s exports amounted to $12.156 billion in July-Feb period of current fiscal year as compared to the exports of $11.660 billion in the same period of last fiscal year, projecting an increase of 4.2 percent.

According to the budgetary target, the exports of the country were targeted to grow by 16.5 percent in the current fiscal year to meet the annual exports target of $21.2 billion, however, recently revision in Macro-Economic targets exports growth has been projected at negative -5.5 percent, actually admitting failure in meeting export target.

Import (July-February): However, due to the low import demand in advanced economies, unprecedented power and gas loadshedding, depreciation of Pak rupee, increase in cost of capital as well as production and capacity constraints are instrumental in low growth of country’s exports, said an official at Ministry of Commerce. Similarly, around 95 percent contribution to imports during first half came from petroleum, fertiliser and wheat imports.

Country’s imports have witnessed decline by 1.49 percent and amounted to $23.777 billion in eight months as against the total imports of $24.137 billion in same period last fiscal year.

Drop in aggregate demand in economy can be witnessed by decrease in imports from 12.8 percent growth in first six months to a negative growth of 1.49 percent in Jul-February period. This clearly shows that State Bank of Pakistan and government’s steps are now yielding results and it is hoped that demand in economy would go down further in months to come, an official said.

Comparison February 2009 over January 2009: Country has exported goods worth $1.266 billion in February 2009 as compared to exports of $1.360 billion in January 2009 showing decline of 6.94 percent.

Imports amounted to $2.123 billion in February 2009 as against imports of $2.528 billion in January 2009 indicating a decrease of 16.02 percent. Trade deficit was at $857.247 million in February 2009 as against deficit of $1.167 billion indicating a major decline of 26.59 percent.

Comparison February 2009-February 2008: Exports of the country registered a decline of 17.68 percent in February 2009 with total exports of $1.266 billion as against exports of $1.538 billion in February 2008.

Imports of the country witnessed a decline of 41.95 percent in February 2009 with total imports at $2.133 billion as against the imports of $3.657 billion in February 2008.

Trade deficit in February 2009 declined by 59.56 percent with total deficit at $857.247 billion as against the deficit of $2.119 million in February 2008.

 

[Neo]

Services export witnesses growth of 33.86% in July-Jan 2009 ​

KARACHI: The services trade deficit narrowed down by almost 38 percent in the first seven months of current fiscal year over the same period of previous year. The services deficit came to $2.470 billion in the period under review against $3.967 billion in the corresponding period of last fiscal, Federal Board of Revenue (FBR) reported Monday. Services export registered 33.86 percent growth to $2.161 billion in July-January 2009 period over $ 1.614 billion in the same period 2007-08. The imports of services decreased by 17.02 percent to $4.632 billion in the said period against $5.582 billion in the last fiscal. In month of January current fiscal, the service trade deficit reduced even greater by 75.58 percent to $164.075 million against $671.805 million in the same month of previous year. The growth in export of services during this particular month was 40 percent while the imports decreased by 46.71 percent in the same month of last year.

The service sector comprises government services, travel services, transportation services, financial services, communication services, construction services, computer and information services, royalties and licenses. Despite having enormous potential, the growth and development of services sector in Pakistan has been quite negligible. It is perceived as supplement to the exports in the goods sector. Lack of knowledge about the international regime on services export, capacity constraints, inadequate networking, poor marketing and politico administrative environment are the major factors for underperformance in this very important area of the economy.

Government is currently working on the project to boost the export and for the purpose a special cell has been created in Trade Development Authority of Pakistan (TDAP). TDAP initially identified five high potential sectors including construction and architecture, health and medical, legal and accountancy, information technology and financial services including banking, insurance and financial management. The world market services valued more than $3 trillion in 1998 and believed to reach 50 percent of the world trade by 2020.

 

[Neo]

World Bank and PSEB: National IT industry plan in the offing ​

KARACHI: A joint plan of World Bank (WB) and Pakistan Software Export Board (PSEB) to prepare a roadmap for export-oriented national IT industry is likely to be accomplished within a month, a top official told Daily Times on Monday.

The project, which has started few months ago, will chalk out strategies for the public and private sectors development programmes in the promotion of IT industry, which will be sent to the government for approval of funds.

The government will also endorse the PSEB’s financial grant request to WB for the development of various IT industry projects to be designed under this plan. The global funding organisation is expected to provide financial aid and technical support to develop a comprehensive and export-oriented strategy for the IT industry, an official told.

Moreover, the joint framework will further be discussed with all the representatives of IT industry stakeholders particularly Pakistan Software Houses Association (PSHA) before the board forwarding it to the government for approval of funding.

As per policy, PSEB will streamline the active support and efforts of Board of Investment and Trade Development Authority (TDAP) to pursue the government’s back in the promotion of investment and service exports of IT industry.

Managing Director PSEB Talib Baluch told Daily Times that the national IT plan will obtain proposals from all the stakeholders of the industry so the joint plan would be framed to expedite industry’s growth in a rapid pace.

He added that WB in collaboration with PSEB has been working on to sort out basic challenges for the national IT industry that includes advanced infrastructure, human resources education programmes, service and product marketing and logistic support.

Baloch further briefed that the main objective of the plan is to enhance country’s exports to various parts of the world through building and facilitation of IT industry with the high preference.

Pakistan’s exports of IT and IT-enabling services have registered 40 percent growth with $118 million in July-January as compared with the same period a year-ago, it was learnt.

PSEB chief was of the view that Pakistan IT exports will not be hurt from the current global economic slowdown and sustain its growth in the developed economies of the world.

He further said that public sector departments are keen to develop IT industry through expansion of its exports of products and services to earn foreign exchange for the country.

This industry can give them immediate returns as compared to any other industry of the country without any barriers protectionism and trade conditionality, he added.

 

[Neo]

Pakistan to continue IPI project even if India quits: Zardari​

LAHORE: Pakistan will purchase gas from Iran even if India pulls out of the project, President Asif Ali Zardari said on Monday, adding he would discuss the matter with Iranian officials. A private TV channel quoted him as telling an Iranian news agency the Iran-Pakistan-India gas pipeline project was in the best interest of Pakistan and Iran. He said the government had already proposed to Iranian President Mahmoud Ahmadinejad that it would continue with the project even if India pulled out. Zardari is due to leave for a two-day visit to Tehran today (Tuesday). Presidential spokesman Farhatullah Babar said the president attached great importance to the visit and had chaired a meeting at the Presidency to review the preparatory work by various ministries in connection with it. sajjad malik/daily times monitor

 

[Neo]

Pakistani workers not keen on Malaysia, envoy says ​

KUALA LUMPUR (March 10 2009): Pakistani nationals are generally not interested in working in Malaysia due to perceived lower wages and perks compared to the Middle East, a Pakistani envoy said Monday. Only 21,000 Pakistani workers came to Malaysia in the last six years, following a labour pact signed by both countries which was supposed to see 100,000 workers brought in, said Nadeem Ashraf, labour attache with the Pakistani High Commission in Kuala Lumpur.

"Pakistani workers prefer to work in the Middle East countries where wages are very attractive and work conditions better. "Moreover, it is also nearer home," Ashraf told the official Bernama news agency.

Under the labour pact, the 100,000 workers would have been placed in the construction, plantation, manufacturing and services sectors. Reports of Bangladesh and Pakistani workers - who can earn from 80 ringgit (22.85 dollars) per day - running away from their employers or lodging reports of alleged abuse, are common in local newspapers. Many claim that their employers withhold their wages or place them in deplorable living conditions.

 

[Neo]

Saudis may provide multi-billion dollar aid package​

By Sher Baz Khan
Monday, 09 Mar, 2009

ISLAMABAD: Saudi Arabia is expected to announce a multi-billion dollar aid package for Pakistan in the form of oil and fertiliser on deferred payment and securitisation against workers’ remittances during the March 27 meeting of the foreign ministers of the ‘Friends of Pakistan’ group in Tokyo, informed sources told Dawn.

The Advisor to the Prime Minister on Finance, Shaukat Tarin, returned here on Monday from his two-day official visit to the kingdom.

His visit marked the start of government’s bid to lobby for getting financial assistance from friendly states as Pakistan’s macro economic indicators are witnessing a recovery and the International Monitory Fund (IMF) has already started providing its 23-month-long $7.6billion financial package to the country.

Mr Tarin held a meeting with the Saudi Minister for Finance, Dr Ibrahim bin Abdul Aziz Al Assaf in Riyadh.

According to a Finance Ministry press release issued here, both the officials discussed issues relating to Pakistan's economic reforms and development, pace of economic stability in the country and the role of the Saudi Development Fund in support of development projects in Pakistan.

They exchanged views on existing turmoil in international capital markets and global economic recession and discussed ways and means for strengthening the regional economies of South Asian states with special emphasis on Muslim countries. It was held that in order to obtain sizeable and cost effective financing within the economic cooperation framework of Muslim countries, global investors could be invited to attractive investments in secured economic instruments.

Matters relating to provision of crude oil from Saudi Arabia were bilaterally discussed.

Mr Tarin, during his discussions with his Saudi counterpart covered various subjects like securitisation of workers’ remittances, alleviation of poverty and enhancing the volume of trade, especially the export of agricultural products to Saudi Arabia. Both sides also discussed the Kingdom’s support for the supply of oil, promotion of investment and enlisting Pakistani firms in construction of mega projects in Saudi Arabia.

The advisor during his stay in the Kingdom also met the head of the IDB Dr Ahmed Ali in Jeddah. Both officials held mutually beneficial discussions to foster closer cooperation between the banking sectors of the two countries. It was agreed that financial institutions of the Muslim countries may harmonise their efforts to build stronger economies of Muslim states in South West Asian Region.

Mr Tarin’s meeting with his Saudi counterpart in Riyadh was attended by the Governor of Saudi Arabia Monetary Agency (SAMA) and Pakistan’s Acting Ambassador to Saudi Arabia.

Sources in the Finance Ministry say Japan believed the IMF package for Pakistan was not enough and that it was ready to help the country and to also show solidarity with the new US President Barack Obama who wanted to shift his focus proactively on Afghanistan and Pakistan.

US Secretary of State Hilary Clinton is also expected to attend the Tokyo meeting of the group. Britain, France, Germany, the United States, China, the United Arab Emirates, Canada, Turkey, Australia and Italy plus the United Nations and the European Union are the members of the Friends of Pakistan.

Pakistan has already invited Japan to set exclusive economic zones in Karachi and Gwadar and also develop the country’s agriculture, manufacturing and energy sectors.

Pakistan is not expecting any immediate direct monetary help from Japan, but intends to present a list of projects which shall be financed by Tokyo. Japan may also assist Pakistan in meeting its strategic needs such as development of water resources, roads and railways.

When the Pakistan Peoples Party (PPP) came into government last year, it had made a plan of obtaining $60billion financing for 71 development projects from the Friends of Pakistan to stabalise the country’s sinking economy. But, it had been termed as a ‘wish list’ by some partner countries at that time. Now, a year down the road and after improving its macro economic indicators, Pakistan is well placed to shake up its friends to contribute in various forms before the announcement of the new budget in June.

 

[ajpirzada]

Country’s trade deficit down by 5.68% in July-Feb

By Sajid Chaudhry

ISLAMABAD: The country’s trade deficit went down by 6.68 percent in July-Feb of the current fiscal year despite slowdown in the global economy, sliding trend in aggregate demand in economy and depreciation of Pak rupee.

Country’s trade deficit has been recorded at $11.621 billion in first eight months (July-February) of 2008-09 as compared to a deficit of $12.477 billion in the same period last fiscal year 2007-08, indicating a decline of 6.86 percent.

Export (July-February): According to the official data released by the Federal Bureau of Statistics (FBS) Monday has revealed Pakistan’s exports amounted to $12.156 billion in July-Feb period of current fiscal year as compared to the exports of $11.660 billion in the same period of last fiscal year, projecting an increase of 4.2 percent.

According to the budgetary target, the exports of the country were targeted to grow by 16.5 percent in the current fiscal year to meet the annual exports target of $21.2 billion, however, recently revision in Macro-Economic targets exports growth has been projected at negative -5.5 percent, actually admitting failure in meeting export target.

Import (July-February): However, due to the low import demand in advanced economies, unprecedented power and gas loadshedding, depreciation of Pak rupee, increase in cost of capital as well as production and capacity constraints are instrumental in low growth of country’s exports, said an official at Ministry of Commerce. Similarly, around 95 percent contribution to imports during first half came from petroleum, fertiliser and wheat imports.

Country’s imports have witnessed decline by 1.49 percent and amounted to $23.777 billion in eight months as against the total imports of $24.137 billion in same period last fiscal year.

Drop in aggregate demand in economy can be witnessed by decrease in imports from 12.8 percent growth in first six months to a negative growth of 1.49 percent in Jul-February period. This clearly shows that State Bank of Pakistan and government’s steps are now yielding results and it is hoped that demand in economy would go down further in months to come, an official said.

Comparison February 2009 over January 2009: Country has exported goods worth $1.266 billion in February 2009 as compared to exports of $1.360 billion in January 2009 showing decline of 6.94 percent.

Imports amounted to $2.123 billion in February 2009 as against imports of $2.528 billion in January 2009 indicating a decrease of 16.02 percent. Trade deficit was at $857.247 million in February 2009 as against deficit of $1.167 billion indicating a major decline of 26.59 percent.

Comparison February 2009-February 2008: Exports of the country registered a decline of 17.68 percent in February 2009 with total exports of $1.266 billion as against exports of $1.538 billion in February 2008.

Imports of the country witnessed a decline of 41.95 percent in February 2009 with total imports at $2.133 billion as against the imports of $3.657 billion in February 2008.

Trade deficit in February 2009 declined by 59.56 percent with total deficit at $857.247 billion as against the deficit of $2.119 million in February 2008.

Daily Times - Leading News Resource of Pakistan