Pakistan Economy - News & Updates - Archive

[Neo]

Services sector suffers $2.7 billion deficit ​

KARACHI (March 21 2009): The country had to face a deficit of 2.7 billion dollars in services trade during eight months (July-Feb) of the current fiscal year (2008-09) mainly due to high payments on account of transportation, travels and government service. However, the deficit was about 36 percent less than in the same period of last fiscal year, mainly due to the high exports and low imports.

Economists said that declining services sector deficit would help to further curtail the current account deficit, which is a major challenge for the policy markers. They said that overall performance of services is better than previous years, as exports are rising and imports are on decline, and economy needs to continue same trend in the near future.

Due to the huge services imports, the government was also compelled to spend more foreign exchange. However, with some improvement in services trade, the exchange rate would be stable in the domestic market. The State Bank of Pakistan (SBP) on Friday said that the countrys services sector performance had become better, as overall services imports and deficit were on decline, while exports of service sector were on the rise during the current fiscal year.

Services sector exports in eight months stood at 2.382 billion dollars against imports of 5.095 billion dollars, depicting a deficit of 2.713 billion dollars during the period under review. However, this is much lower than 4.237 billion dollars of the same period of the last fiscal year.

Exports of services sector surged by 13.15 percent to 2.832 billion dollars over 2.105 billion dollars of the same period of last fiscal year. The services sector imports plunged by 20 percent to 5.095 billion dollars from 6.342 billion dollar of corresponding period of last fiscal year.

Transport sector largely contributed to overall deficit with 1.625 billion dollars from 794 million dollar exports and 2.419 billion dollar imports. Meanwhile, services deficit in February 2009 stood at 248 million dollars with 469 million dollars imports and 221 million dollars exports.

Pakistan earned 148 million dollars on account of travel services, 62 million dollars in communication, 23 million dollars in insurance, and 39 million dollar from financial sector eight months.

Travel payments stood at 823 million dollars, communication 93 million dollars, construction 47 million dollars, insurance 87 million dollars, financial sector 135 million dollars, and computer and information sector imports stood at 74 million dollars during this period. Similarly, royalties and licence fee payments reached 67 million dollars against earnings of 10 million dollars and government services payments stood at 204 million dollars over the receipts of 825 million dollars during eight months.

 

[Neo]

Pakistan lobbying for three fold increase in IMF quota ​

ISLAMABAD (March 21 2009): In an effort to increase its quota three fold in the International Monetary Fund (IMF), Pakistan has started lobbying the IMF board and management with the support of the US and the European Union (EU). Reliable sources told Business Recorder here on Friday that Special Lending Facility under the Stand-By Arrangements from IMF was provided to Pakistan, Ukraine and Hungary.

"Hungary and Ukraine, after getting the first tranche of the loan from the IMF have failed to meet the requirements of the Fund for the second tranche. Now these two countries are not eligible to get further assistance from the IMF. So, the Fund can increase the quota for Pakistan from five to eight times, but this depends on the meeting of the Board of Governors of IMF that will be held in April," the sources disclosed.

They further said: "That is why Pakistan has started lobbying to increase quota with the support of America and the EU." In April, the IMF Board of Governors would decide whether to increase the quota of Pakistan from five to eight times or not.

The Board of Governors is the highest decision-making body of the IMF and consists of one governor and one alternate governor, appointed by each member country. A members quota determines its maximum financial commitment to the IMF and its voting power, and has a bearing on its access to the IMF financing. There are three ways to increase member quotas for the IMF - equi-proportional, ad hoc and selective quota increases.

An equi-proportional increases, as the name suggests, leaves the member quota relativity unchanged. The equi-proportional increase has been the most commonly used, accounting for over 70 percent of quota increases. An ad hoc increase involves increasing one members quota relative to all other members of the IMF. The ad hoc method has been used on special occasions such as the reunification of Hong Kong with Mainland China, to provide China with a larger quota.

A selective increase in quotas involves an absolute increase in quotas, but with a select group of members, having their quota shares increased at the expense of other members. For example, this method could be used to increase Asian countries quota shares, at the expense of European countries shares.

"The IMF has a special quota under the Poverty Reduction and Growth Facility (PRGF) that is the IMFs low-interest lending facility for low-income countries. "Loans under the PRGF carry an annual interest rate of 0.5 percent, while the special lending facility of 7.6 billion dollars, the one Pakistan received in November 2008 under Stand-By Arrangements, carry a relatively high interest rate", said the sources.

"Pakistan was forced to get loan under SDR arrangements because when the government decided to knock at the door of IMF, the quota of the Fund under PRGF for 2008 had been exhausted," the sources disclosed. Three-time increase in the Special Drawing Rights (SDR) quota means that Pakistan can get an additional 4.5 billion dollars from the IMF. Pakistans SDR in the IMF stands at 1.3 billion dollars and by translating into US dollars its value comes to 1.5 billion dollars.

Under the SBA programme, the IMF is already providing its maximum funding in the shape of five times of SDR quota that is equal to 7.6 billion dollars. According to a recent financial statement of IMF as at January 31, 2009, in descending order, Turkey, Hungary, Ukraine, Pakistan and Iceland are the five largest users of credit. The report shows that Pakistan has not been provided any loan under PRGF despite the fact that it is a low-income country with poor macroeconomic indicators.

 

[Neo]

Pro-growth strategy, development agenda foresee major investments: ADB releases Country Environment Analysis​

FAISALABAD (March 21 2009): Pakistans overall record of dealing with the environmental issues, underlines several institutional and management gaps marred by capacity constraints in the public sector, the Asian Development Bank (ADB) experts said. According to Country Environment Analysis, released by the ADB on Friday.

Pakistans present pro-growth strategy and its development agenda foresee major investments in large infrastructure projects including the priority areas of urban development, energy, power, roads, water and irrigation. The potential environment challenges associated with the new policy accentuate the need to address the existing environmental issues at the outset to support the sustained growth in the long run.

Based on the assessment of the state of environment and in view of the future policy objectives of Pakistan, the study identifies some priority areas for investment. Commenting on the Access to basic sanitation and safe water for all, the ADB experts stated that the rapid urbanisation in Pakistan over the years, has resulted in a higher demand for water and sanitation services.

This can be addressed by developing capacities of the local water and sanitation agencies in major cities and supported by province-based regulatory frameworks, the analysis said. Promoting public-private partnerships for water supply and sanitation would help improve and maintain environmental quality.

Sector wide reforms need to be introduced to achieve required level of energy efficiency in the country by addressing weak public sector capacity to (i) implement energy conservation programmes, (ii) to integrate environmental considerations into sector plans, (ii) to establish and regulate urban mass transit systems and devise strategic regulations for the transport sector. In addition, advocacy programmes could help prioritise mass transit options, they added.

The ADB experts further said that urban air quality can be improved through reduction in vehicular emissions by developing national and city specific transport polices for improved traffic management, implementation of emission control regulations and monitoring. The implementation capacities of federal and provincial agencies need to be strengthened for operational enforcement of environmental quality standards (NEQS).

To improve agriculture productivity, ADB experts mentioned that specific measures to achieve improved agriculture productivity per unit of water needs (i) introduction of water conservation strategies; (ii) research programmes for developing crop varieties that are resilient to the looming heat stress factors associated with prospective climate change; and (ii) revival of institutional processes such as National Commission on Agriculture supported by wide-ranging consultations as an input to a national agriculture policy.

For Public-Private partnerships for cleaner production and the treatment of industrial effluents, the ADB experts said that the successful experience of selected industries in promoting cleaner production and effluent treatment needs to be scaled up and underscores the need for building public sector support to private sector-driven initiatives.

Further, high-priority measures should include demonstrating the economic returns to cleaner production, as well as above mentioned operationalisation of NEQS. In addition, investment is required for institutional development and organisational strengthening and human capacity building in the priority environment areas to fill existing gaps, the ADB analysis suggested.

According to ADB report, in recent years Pakistan has experienced impressive GDP growth accompanied by a sharp decline in poverty. However, human wellbeing is critically dependent on the continued availability of essential ecological services and natural resources.

Furthermore, Pakistans environment and natural resources are increasingly polluted and under stress. Pressing environmental concerns facing the country relate broadly to the management of scarce natural resources (green issues), pollution and waste management (brown) and issues pertaining to the potential vulnerabilities to natural hazards and climate change.

In addition, Pakistans natural resources are increasingly under stress due to a rapid population growth and environmentally unsustainable practices. Renewable fresh water resources are fast depleting pushing Pakistan into the category of water stressed countries, the report mentioned.

 

[Durrani]

US, Japan, China pledge support for FoP meeting

WASHINGTON: The United States, China and Japan have vowed their support for next month’s Friends of Pakistan (FoP) meeting in Tokyo, where major economic powers are expected to back the South Asian country’s economic development programmes.

In their separate meetings with Pakistan’s Ambassador to the US Hussain Haqqani, Chinese and Japanese envoys based in Washington and top US officials expressed their willingness to shore up Pakistan’s initiatives for its speedy economic progress.

The meeting, scheduled to take place on April 17, would be attended by leaders and representatives from several Asian and Western industrialised and oil-rich Gulf nations.

Haqqani held meetings with US State Department officials, Chinese Ambassador to the US Zhou Wenzhong and Japan’s Ambassador to the US Ichiro Fujisaki to coordinate efforts towards a productive outcome of the conference. In addition, the Pakistani diplomat had met with US Special Representative Richard Holbrooke and visiting Japanese prime minister’s special envoy over the last week. President Zardari and Prime Minister Yousuf Raza Gilani believed international assistance would not only help meet economic development needs of the people but also serve as a bulwark against violent extremism afflicting its border regions. app

 

[Neo]

Savings schemes attract over Rs130bn ​

Sunday, March 22, 2009

ISLAMABAD: The Central Directorate of National Savings (CDNS) has crossed the Rs130 billion mark by luring investments in savings schemes till March 20 against a total target of Rs150 billion for financial year 2008-09.

Official sources confirmed to The News on Saturday that the finance ministry had set a target of Rs150 billion in investments in various schemes offered by the National Savings Scheme (NSS).

The target was set on the basis of introducing three new schemes including short-term financing certificate as well as a paper offering an attractive rate of profit to overseas Pakistanis sending remittances home.

CDNS has crossed the Rs130 billion mark and is expected to achieve s target of Rs150 billion by the first week of next month. “The finance ministry expects CDNS to hit Rs170 to Rs180 billion by the end of June,” an official source said.

When newly appointed Finance Secretary Salman Siddique was contacted for comments on Saturday, he said that the government was all set to launch much-needed restructuring of CDNS in order to equip it with latest technology. “The finance ministry will take up the issue of CDNS restructuring by next week in a high-level meeting,” he said.

However, official sources in the finance ministry said that the government has lured investments of over Rs130 billion in old schemes till March 20. The amount included investments from major public sector institutions as well as the corporate sector, which deposited their pension and other funds.

Citing examples, sources said that in the recent past some public sector institutions had invested various funds such as pensions and workers welfare fund with private banks but one such bank collapsed, causing loss of money to the employees.

Public sector institutions such as Oil and Gas Development Company, Pakistan Mineral Development Company and many others have invested billions of rupees in savings schemes being offered by the CDNS, the source added.

“In CDNS schemes there is a government guarantee, which helps public sector institutions as well as corporate giants to confidently deposit their money with them,” an official said.

On the restructuring process of CDNS, sources said that the finance ministry will submit PC-1 before the Planning Commission in order to achieve desired changes in the working of the NSS office located at every nook and corner of the country.

The main objective of the restructuring will be to introduce computerised technology by connecting all its offices with each other. It is expected that PC-1 will be approved by relevant forums of the PC within the current fiscal year, added the official.

When official sources were asked about undue delays in approving three new schemes for the NSS, they said that a conflict of interest definitely existed, because CDNS attracting more firms resulted into narrowing down the space of commercial banks and those who are at the helm of affairs are trying to protect the interests of the banking sector. —MH

 

[Neo]

Foreign banks sign 425MW power project deal ​

Sunday, March 22, 2009

BEIJING: A foreign banks consortium comprising BNP Paribas, HSBC Bank Plc and The Export-Import Bank of China signed a Sinosure Buyer Credit Facility Agreement of US$150.151 million with Northern Power Generation Company Ltd for the construction of 425 MW combined cycle power project at Nandipur, Ijaz A Babar, Finance Director of the company told APP on Saturday.

The CIC France is also a part of consortium through a participation agreement with BNP Paribas, France. Northern Power Generation Company Ltd (NPGCL) is the biggest thermal generation company operating under the overall management of PEPCO.

“The agreement was signed with the consortium comprising world top class banks like The Export-Import Bank of China, BNP-Paribas France, HSBC Bank plc Paris Branch and CIC France on Thursday,” he said.

NPGCL is constructing a 425 MW Combined Cycle Power Plant at Nandipur, near Gujranwala with EPC cost of $329 million. The main EPC contractor is a leading Chinese company, Dongfang Electric Corporation Ltd with sub-contractor G E, France. The Credit facility is covered by China Export and Credit Insurance Corporation.

Ijaz A. Babar talking to APP said that earlier, A

Foreign Banks Consortium consisting of BNP-Paribas, France, HSBC Bank plc Paris branch and CIC France had signed a Euro 68.97 million Coface buyer credit facility agreement on October 3, last year for the project. BNP-Paribas by signing both the credit facilities has now also fulfilled its commitment as initial mandated lead arranger made for the project with the Government of Pakistan, Ijaz said.

Appreciating the financial deal, Ijaz said that despite the fact that the world is passing through grave economic crisis, these banks have fulfilled their commitments which exhibited confidence that they have reposed on the strong fundamentals of Pakistan’s economy.

Ijaz said that the agreement will go a long way in improving the financing arrangements for the other projects in the pipeline by WAPDA/PEPCO’s corporatised entities namely 425 MW Chichokimallian, 700-800 MW Guddu Power Project and 969 MW Nelum Jehlum Hydro Power Project with due support from Chinese and European banks.

Muhammad Rafiq Butt, Chief Executive Officer and Ijaz A Babar, Finance Director, signed on behalf of Northern Power Generation Company, whereas Francois Cristofari, Chief Executive Officer and Gerard Lagouarde, Head of Export Finance (Middle East/Africa signed on behalf of BNP Paribas (China) Ltd. Amongst other signatories to the agreement were Zhu Li, Deputy General Manager of The Export-Import Bank of China and Simon Lee, Director Middle East and South Asia, of HSBC Bank plc. Jacques Vincent, First Vice President specially visited to sign the participation agreement with BNP Paribas.

The signing ceremony was attended by Abdul Salik Khan, Deputy Head of Mission, Sardar Aminullah Khan, Minister (Economic), and Naeem Khan, Commercial Counselor.

On the occasion, Salik Khan while expressing his views, said that the financial close of such an important project at this point reflects the confidence of financial institutions on the strong economic indicators and policies of the present Government of Pakistan and congratulated all the participants for this success.

 

[Neo]

Country to face power shortage of 2,500 MW till 31st ​

Sunday, March 22, 2009

ISLAMABAD: The country will face up to 2,500 MW power shortfall at least till March 31 owing to two reasons, substantial reduction in hydropower generation and highly increased demand with the start of the summer.

“At present, the hydropower generation is 1,000 MW against the installed capacity of nearly 7,000 MW from Tarbela and Mangla dams and Ghazi Brotha Hydropower project,î well-placed official sources in the power sector revealed to The News on Saturday.

The state of power suspension from six to eight hours every day, these sources confirmed, would continue in the whole month and a sigh of relief for people is expected in the next month when provincesí water requirement would increase with the start of the Kharif season.

ìWhat we have planned is clear that the electricity situation would prevail in the month as current demand stands at 12,500 MW against the availability of 10,000 MW, a gap of 2,500 MW,î say Pakistan Electric Power Company (Pepco) officials.

The MD (EM&C) Tahir Basharat Cheema, when contacted, confirmed that electricity shortage is close to 2,500 MW mainly due to state of water releases from dams and drop in their heights.

As electricity demand is continuing to surge, the Indus River System Authority (Irsa) has accepted the Water and Power Development Authorityís (Wapda) request not to bring the water discharge from presently 5,000 cusecs per day to zero from Mangla dam. Tarbela dam is at the dead level position of 1,369 feet height whereas the Mangla damís level is at 1,085 feet against its dead level of 1,040 feet. The water discharge from Tarbela is 25,000 cusecs daily on the basis of run of the river and 5,000 cusecs per day from Mangla dam. ìThe power generation from Tarbela dam has come down considerably despite 25,000 cusecs per day water discharge as it is because of reduced speed in water outflow,î the sources said. The power breakdown in the peak hours is 2,500 MW and in the lean hours (night) 1,500 MW following Punjab and Sindhís decreased water withdrawal demands, according to the relevant officials.

Cheema maintained that the cloudy weather enabled the Pepco to bring the demand and availability at the similar position last Thursday evening and no power suspension took place on that day.

Irsa technical committee and advisory committee meetings are expected to be held on March 25 and March 31 to take decisions to chalk out Kharif 2009 water distribution plan according to provincial recommendations.

Cheema, in response to a question, said the Pepco hopes that the target of ending load-shedding till December 2009 in on course. The projects of adding 3,500 MW power in the national grid are in the pipeline to complete within this calendar. Asked whether same position can prevail in peak summer (June-July), he admitted that the demand would increase in this period but the new projects would also come to cope with the situation.

 

[Neo]

Fast track rental power projects: Tariff bids of 8 firms opened for 1,021 MW​

ISLAMABAD: Eight bidders have shown keen interest in the fast track rental power projects of 1,021 megawatts (MW) and demanded of the government that the tariff should range from 14.624 US cents per kWh to 18.9655 cents per kWh.

The received tariff bids will now be placed before the Bids Evaluation Committee for formal decision and the qualified bidders would be notified after approval of the tariffs by the government.

The financial proposals of bids received for fast track rental power projects will be commissioned by December 2009. These bids had been opened in a meeting held at Private Power and Infrastructure Board (PPIB), chaired by the Managing Director PPIB Fayyaz Elahi.

All directors of PPIB, the responsive bidders and members of the evaluation committee as per 2005 GoP Tariff Guidelines also attended the meeting. The bids evaluation committee had earlier declared eight bids: 73.92 MW AVS (Pvt) Ltd, a Tapal Group Project, 138 MW Intermash-Stolitsa of Russia, 170 MW MHK Energy (Pvt) Ltd, 63.81 MW Premier Energy (Pvt) Ltd, 220 MW Reshma Power Generation Ltd, 170 MW Ruba Energy Pakistan (Pvt) Ltd, 85 MW Sialkot Rental Power, and 100 MW Trimax Power (Pvt) Ltd, as ‘responsive’ after evaluation of envelope-I (Technical/Financial qualification).

The readout tariff of AVS (Pvt) Ltd a Tapal Group Project is US cents 13.5878 cents per kWh, Intermash-Stolitsa of Russia is 18.9655 cents per kWh, MHK Energy (Pvt) Ltd is 13.9615 cents per kWh, Premier Energy (Pvt) Ltd is 13.264 cents per kWh, Reshma Power Generation Ltd is 13.7539 cents per kWh, Ruba Energy Pakistan (Pvt) Ltd is 13.8557 cents per kWh, Sialkot Rental Power is 13.423 cents per kWh and Trimax Power (Pvt) Ltd is 14.0276 cents per kWh. The term of the tariff for all these projects is 60-month each.
In order to address the immediate power shortfall in the country, the government approved its fast track rental power projects initiative, which was advertised on December 23, 2008 on the basis of international competitive bidding. Ten bids for establishing fast track rental power project of 1191 MW cumulative power generation capacity were received within the bids submission deadline, and the technical and financial qualifications envelopes were opened on February 16, 2009 in the presence of Bids Evaluation Committee, senior officials of the PPIB and bidders. The Bids Evaluation Committee has been mandated to process these bids in a timely manner so as to issue Letters of Award to the successful bidders by end April 2009. These rental power projects were expected to start their operation by end 2009.

 

[Neo]

PC for slashing PSDP by Rs 108.9 billion​

ISLAMABAD (March 22 2009): All ministries may face a total cut of Rs 108.9 billion combined in Public Sector Development Programme (PSDP) 2008-09 due to financial constraints, well informed sources revealed to Business Recorder on Saturday.

The fiscal deficit was targeted to decline by nearly half in the current fiscal year - from a high of 7.4 percent last year to 4.2 percent of gross domestic product (GDP) in current financial year as stipulated in the letter of intent (LoI), submitted by the government of Pakistan to the International Monetary Fund (IMF) as a pre-requisite for the approval of the 7.6 billion-dollar standby arrangement.

However revised estimates place the deficit at 4.3 percent of the GDP that would be further reduced to 3.3 percent of the GDP during the next financial year 2009-10. The government has also committed to IMF in the LoI to reduce domestically-financed development spending by about one percent of the GDP through better project prioritisation.

The sources said that the Planning Commission (PC) had moved a summary to the Prime Minister Secretariat, seeking approval to slash the PSDP by Rs 108.9 billion under rationalisation programme. The said reduction also includes dropping 140 locally funded projects worth rupees seven billion in different sectors to reduce expenditures.

Earlier, the government had announced to make througforward adjustment of Rs 100 billion spending in the PSDP, but now the Planning Commission had moved a summary, proposing Rs 108.9 billion cut in the PSDP to the Prime Minister Secretariat due to financial crunch. Total PSDP volume for the current financial year is Rs 371 billion that will be reduced to Rs 262.1 billion if the Prime Minister accords his approval.

The government has already released Rs 71 billion in the first six months (July-December) of the current financial year against Rs 132.6 billion in corresponding period of last year. The sources said that the Finance Ministry had stopped releasing the funds for the development projects pending the decision of the Prime Minister regarding the rationalisation of the projects.

The Finance Ministry has also indicated its inability to fund ongoing projects and has been forced to slash 35 percent in funds releases during the second half of the current financial year. The concerned ministries have been directed to identify the projects for the purpose of reduction in funds releases. The sources said that the projects near completion would not face a freeze in release of funds.

The Planning Commission has monitored 513 projects so far and expects timely completion of only 44 projects, including five projects in infrastructure, nine projects in social sector and 30 other projects. The Planning Commission has assessed that 325 projects would face delay in implementation for more than one year that include 82 projects in infrastructure, 173 projects in social sector and 70 projects in other sectors.

As many as 102 projects would face one year delay. They include five projects in infrastructure, 34 in social sector and 63 projects in other sectors. As many as 42 projects are at initial stage.

As many as 170 projects are facing delay due to lack of management capacity and 73 projects for delay in fund releases. Contractors inefficiency is causing delay in implementation of 60 projects - 16 projects delay attributed to land acquisition problems, nine projects due to poor law and order situation, eight projects due to lack of co-ordination between the Federal and provincial governments and five projects are facing delay due to loan disbursement.

The Planning Commission has already excluded 120 projects from monitoring network and has revised monitoring targets from 705 projects to 580 projects for the current financial year. The Commission reduced projects from 205 to 150 for monitoring in infrastructure sector, 300 to 250 projects in social sector, and 300 to 250 projects in other sectors. The monitoring of the projects assists in facilitating implementation of the projects.

 

[Neo]

EoIs invited for exploration licences​

ISLAMABAD (March 22 2009): The Ministry of Petroleum and Natural Resources has invited expressions of interest (EoIs) for grant of petroleum exploration rights (exploration licences) for 53 blocks in the country. After the unveiling of Petroleum (Exploration and Production) Policy 2009, the ministry has invited all the interested companies to submit EoIs for grant of exploration rights.

The blocks are: 2769-16 (Mari East), 3066-5 (Bostan), 3068-6 (Killa Saifaullah), 2771-3 (Khangarh West), 2967-3 (Quetta South), 2764-3 (Palantak), 3170-6 (DI Khan), 2568-19 (Digri), 3272-16 (Lilla), 3072-7 (Okara), 2564-3 (Parkini Block B), 2569-3 (Sanghar South), 2866-3 (Khuzdar North), 2763-4 (Kharan West), 3372-23 (Hisal), 3371-13 (Peshawar), 3270-7 (Zindan) and 3371-15 (Dhoke Sultan).

 

[Neo]

US, China and Japan pledge support for Friends of Pakistan moot​

WASHINGTON (March 22 2009): The United States, China and Japan have vowed their support for next months Friends of Pakistan meeting in Tokyo, where major economic powers are expected to back the South Asian countrys economic development programmes.

In their separate meetings with Pakistans Ambassador to the United States Husain Haqqani, the chief Chinese and Japanese envoys based in Washington and top US officials expressed their willingness to shore up Pakistans initiatives for its speedy economic progress.

The meeting, taking place on April 17 in Tokyo, would be attended by leaders and representatives from several Asian and Western industrialised and oil-rich Gulf nations. Haqqani held meetings with the US State Department officials, Chinese Ambassador to US Zhou Wenzhong and Japanese Ambassador to US Ichiro Fujisaki to co-ordinate efforts towards a productive outcome of the conference.

In addition, the Pakistani diplomat had meetings with US Special Representative Richard Holbrooke and visiting Japanese Prime Ministers special envoy over the last week. The US diplomats have also been meeting separately with envoys of other countries toward the objective. US Secretary of State Hillary Clinton is expected to represent Washington at the meeting, which is likely to be chaired by President Asif Ali Zardari.

Top Pakistani democratic leaders, President Zardari and Prime Minister Yusaf Raza Gilani believe that international assistance will not only help meet economic development of the people but also serve as a bulwark against violent extremism afflicting its border regions. The economic stability of Pakistan - the frontline partner against violent extremism - is considered key to regional peace and stability.

 

[Neo]

Value-added products: TDAP develops 12 projects to augment export​

KARACHI (March 22 2009): The government has approved 12 new projects which the Trade Development Authority of Pakistan (TDAP) has developed with a view to augmenting the export of value-added products.

The Export Development Fund Board (EDFB) has approved all 12 projects of TDAP which include College of Fashion and Design-Karachi, Dazzle Park - Karachi, Pack House & Cold Storage - Multan and Nawabshah, Processing Institute - Khairpur, Carpet Training Institute - Quetta, Expansion & upgradation of Gems & Geological Institute of Pakistan - Peshawar, Agro food technology Institute - Lahore, Institute of Leather Technology - Lahore, Institute of Marble Technology - Karachi and Peshawar, Carpets & Crafts training institute - Hala, Expo Center - Multan, Pakistan Packaging Institute - Karachi.

This was stated by TDAP Chief Executive Syed Mohibullah Shah at a press conference held at the authoritys main office on Saturday. He said that EDFB has given approval of these projects in its 54th meeting held on March 20, 2009. He pointed out that these projects have been developed as part of new initiatives of the authority in pursuance of its new export strategy, which is aimed at increasing the countrys exports particularly the share of value-added products.

Shah said that these projects have been identified after an intense research and study carried out in the export-oriented sectors. About funding to establish these institutes, he said that initially EDF will be utilised to undertake work on them, however afterwards finance will be acquired from Public Sector Development Program (PSDP). He hoped that these projects will be functioning fully in next four to five years.

 

[KaranArjun]

Tourist plunge exacerbates Pakistan woes

Mar 11, 2009

KARACHI (AFP) — Fida Hussain, 52, was once a frequent visitor to Pakistan's scenic northwest, driving north into the mountains every time he flew over from the United States. But not any more.

"I won't go to Swat or any other place in the area as the Taliban rule there now and no one is guaranteed safety," Hussain said.

Thousands of fighters loyal to firebrand Taliban commander Maulana Fazlullah have waged a blistering campaign to enforce sharia, or traditional religious law in Swat valley, once affectionately known as the Switzerland of Pakistan.

"I last went three years ago -- it was heaven on earth, with a beauty beyond imagination. Now all is doomed," Hussain said on a recent visit to relatives in Pakistan's financial capital of Karachi.

He is just one among many thousands who have scratched Pakistani resorts from their holiday wish-lists -- and in doing so ensuring that the tourism sector adds to the country's growing economic woes.

The bloody attack on touring Sri Lankan cricketers in Lahore this month was just the latest high-profile militant attack in an avalanche of violence that has killed more than 1,600 people since July 2007.

The World Economic Forum's Travel and Tourism Competitiveness Report 2009 put Pakistan at 113 out of 130 countries.

The decline has been slow but steady since the September 11, 2001 attacks on the United States but reached a crescendo last September when the Marriott hotel in Islamabad was bombed, with 60 people killed.

"Terrorism halved our receipts from tourism last year," tourism minister Ataur Rehman told AFP.

Pakistan earned 16 billion rupees (200 million dollars) from 800,000 visitors in 2007. Fewer than 400,000 visitors came in 2008, bringing in just eight billion rupees.

"People are not coming from the rest of the world as they have been advised by their governments not to go to Pakistan," Rehman said.

"Terrorism has affected investment in the country, made our beautiful places short of tourists and now forced sportsmen out of Pakistan."

Pakistan has diverse culture, a rich archeological heritage, ruins from the ancient Gandhara and Indus civilisations, serene valleys, pristine coastline and vast deserts.

K-2, the world's second highest mountain after Everest, sits atop a region of 120 other peaks that soar above 7,000 metres (22,950 feet).

But buffeted by bombings, insurgency and global financial turmoil, Pakistan was hit last year by 25 percent inflation and saw 10 billion dollars wiped off its international reserves in the year to October 2008.

The country only managed to stave off a looming balance-of-payments crisis when the International Monetary Fund approved a stand-by loan of 7.6 billion dollars and released an initial 3.1 billion dollars in November.

Hotel industry and tour operators have been hard hit. Global recession and militant attacks have forced investors to abandon projects.

"Plans for many new hotels have been shelved until the tourism industry improves," said Mustansar Zakir, chairman of Pakistan's Hotels Association.

He said nationwide hotel occupancy fell to 35 percent from 50 percent after the attack on the Sri Lankans, down from 70 percent before the Marriott blast.

Many Western countries have issued advisories against travel to Pakistan and European airlines such as British Airways and Lufthansa have suspended routes to the nuclear-armed Muslim nation.

There were hundreds of hotels and guest houses in Swat before Fazlullah rose up in July 2007. What few remain are deserted.

"Thousands of people associated with hotels and tourism in that area have lost their jobs," said Zahir Khan, head of the Swat hotels association.

Rehman believes that Sri Lanka, which has a healthy tourism market despite the civil war with Tamil separatists, could be the most pragmatic example.

"Is it the fault of our rivers, mountains, deserts and blossoming flowers that we are victims of terrorism? We should not stop attracting tourists and follow what Sri Lanka did," he said.

"Being a tourist in the 21st century requires some courage," he said.

 

[Neo]

Fresh water flow in Pakistani rivers reduced: ADB report​

FAISALABAD (March 21 2009): Asia development Banks (ADB) Country Environment Analysis disclosed that freshwater flows in Pakistan rivers have been substantially reduced by water diversion for agricultural irrigation in recent decades. Canal irrigation, due to low levels of efficiency has resulted in salinisation, thus adversely affecting crop yields.

According to report, an excessive and improper use of pesticides is destroying the natural biotic balance in agriculture soils and reducing the diversity of invertebrate fauna. The report said the decline in the area under the natural forest cover has implications for essential ecological services, irrigation, and for biodiversity. Mangroves, the traditional breeding grounds for commercially important sea life, have also declined.

Similarly, Pakistans arid and semi-arid rangelands are extensively degraded, due to large increase in livestock grazing. The trends and prospects for the future greatly depending on climatic conditions and social responses, the report added. According to the report, pollution due to a lack of effective management has emerged as a major environmental concern in Pakistan.

Over the years Pakistans growing energy consumption needs have resulted in its increased reliance on the imported fossil fuels. Its progress towards energy efficiency has been modest due to weak technical and institutional capacities. Measures such as conversion of vehicles to cleaner fuels (CNG), no lead gasoline and low sulphur diesel have been implemented but remain insufficient to prevent deteriorating in ambient air quality in the urban areas due to increasing vehicle numbers and their hazardous emissions.

Indoor air pollution is a major cause of widespread chronic bronchitis and other respiratory infections in rural households and poor urban households that depend on biomass for cooking particularly in winters. According to report, Pakistan also faces environmental challenges from natural hazards including floods, earthquakes, droughts, and cyclones. Pakistan is a flood prone country, while earthquakes and droughts are recurring phenomena in susceptible regions.

Cyclones cause significant damage in the coastal areas as well as destroy standing crops several hundred kilometers inland. Additional environment challenges due to climate change are expected to directly impact on Pakistans economy. A rise in temperatures can cause more droughts and reduce crop productivity while increased flooding can damage irrigation infrastructure.

 

[Neo]

3,504 megawatts more power to be added to national grid by December​

LAHORE (March 21 2009): In view of the commitment made by the Federal government to end load shedding by the end of this year, 3504 MW of additional generating capacity will be added to the national grid by December. Dilating upon the multi-pronged strategy, the spokesman of Pakistan Electric Power Company (Pepco) said on Friday that two new power projects - Malakand-III of 81 MW and Attock Gen Power of 165 MW - had started contributing to the system.

Besides, an additional 300 MW capacity had also been arranged through efficiency enhancement programme of the Pepco-owned plants, he added. He said that 19 other projects would start operating commercially from May till December.

These include 225 MW Atlas Power, 225 MW Orient Power, 232 MW Karkey Rental, 150 MW Rental Plant at Faisalabad, 110 MW Rental Plant at Guddu, 202 MW Fauji Mari Power, 225 MW Sahiwal (Saif) Power, 205 MW Walters Rental, 150 MW Rental Plant at Sahuwala, Sialkot, 192 MW Rental Plant at Multan, 200 MW Rental Plant at Satiana Road, 72 MW Khan Khwar Hydropower, 200 MW Nishat Power, 225 MW Muridke (Sapphire) Power, 62 MW Gulf Power Rental, 200 MW Independent Power Rental, 227 MW Engro Power, 150 MW Bhikki Power and 107 MW Ruba Energy.

In addition, another 300 MW of electricity would also be included in the above tally by enhancing the efficiency level of the existing power houses of the Pepco, he said. He said this would lead to a stupendous increase of 600 MW to the existing Pepco capability and would be in addition to the new capacity of 3504 MW.

The spokesperson, giving details of various ways and means to stabilise the financial health of the Pepco, revealed that after successful negotiations with the financial institutions, the term finance certificates (TFCs) worth Rs 80 billion were being issued in a couple of days. This would help discharge a big chunk of the circular debt, one of the reasons of the ongoing power crisis, he further said.

The spokesperson maintained that owing to the hectic efforts, being made by the Ministry of Water and Power to bridge the gap between demand and supply of electricity, there was certainly an improvement in the situation if compared with the corresponding period last year.

Thanking media for creating awareness amongst the consumers regarding energy conservation, he said that a tangible shift was being observed in the non-productive growth of electricity demand, while the productive sectors had made significant gains.