Pakistan Economy - News & Updates - Archive

[Neo]

New govt to face tough economic challenges​

KARACHI, Feb 12: Whoever wins the February 18 election can be sure of one thing -- there will be no economic honeymoon.

With annual inflation at its highest in over a decade, the rupee at 6-year lows against the dollar, a hefty trade deficit, pressure from high international oil and food prices and domestic energy shortages, there are pressures on all fronts.

“There are numerous challenges ahead. There is heaps of trouble,” said Asad Sayeed, director of private analysis group, the Collective for Social Science Research.

“They (the previous government) have left a monumental mess, virtually on every front.”

Compounding matters, whoever comes to power in what will mark a long-awaited transition from military to civilian-led rule, will also face the tug of populist expectations of a mainly rural electorate struggling in the face of high food prices.

Consumer prices in January rose 11.86 per cent from a year earlier, their highest level in 10- years, which analysts attribute to food shortages they say are due to a weaker agricultural crop and government mismanagement.

The caretaker government blames wheat smuggling to neighbouring Afghanistan and hoarding by shopkeepers for the shortfall.

“Inflation is high and it’s accelerating, the government’s borrowing is out of control,” said Sakib Sherani, chief economist for ABN Amro Pakistan.

“The government’s interest burden has gone up over the last few months. Its debt servicing burden has gone up, foreign exchange reserves are ... declining,” he added. “So all in all, it’s actually going to be a fairly challenging scenario for the next government.”

The State Bank of Pakistan last month revised down its economic growth forecast for 2007-08 to 6.6-7 per cent, citing a weak farm sector that has been one of the engines of growth averaging about 7 per cent a year since 2002.

Pakistan’s trade deficit widened sharply to $2.05 billion in January, double the previous month’s gap, which analysts attributed in part to factory shutdowns in the wake of the assassination of Benazir Bhutto on December 27.

Foreign investment in the first six months of the fiscal year fell 32 per cent to $2.17 billion from a year earlier, with foreign portfolio investment down 92 per cent, central bank data shows.

New govt to face tough economic challenges -DAWN - Business; February 13, 2008

Economic headache awaits next government ​

KARACHI (February 13 2008): Whoever wins upcoming general election can be sure of one thing - there will be no economic honeymoon. With annual inflation at its highest in over a decade, the rupee at 6-year lows against the dollar, a hefty trade deficit, pressure from high international oil and food prices and domestic energy shortages, there are pressures on all fronts.

"There are numerous challenges ahead. There are heaps of trouble," said Asad Sayeed, director of private analysis group the Collective for Social Science Research.

"They (the previous government) have left a monumental mess, virtually on every front." Compounding matters, whoever comes to power in what will mark a long-awaited transition from military to civilian-led rule, will also face the tug of populist expectations of a mainly rural electorate struggling in the face of high food prices.

Consumer prices in January rose 11.86 percent from a year earlier, their highest level in 10-years, which analysts attribute to food shortages they say are due to a weaker agricultural crop and government mismanagement. The caretaker government blames wheat smuggling to neighbouring Afghanistan and hoarding by shopkeepers for the shortfall.

"Inflation is high and it's accelerating, the government's borrowing is out of control," said Sakib Sherani, chief economist for ABN Amro Pakistan. "The government's interest burden has gone up over the last few months. Its debt servicing burden has gone up, foreign exchange reserves are ... declining," he added. "So all in all, it's actually going to be a fairly challenging scenario for the next government."

And is the $160 billion economy facing a slowdown given political instability and macroeconomic worries? "If not immediately, then certainly over the medium term," Sherani said. "It may not have an immediate impact, but certainly when people make investment decisions, look out into the next 5-10 years, it'll start at some stage start clouding their investment sentiment as well."

Analysts say one key factor will be how the next government deals with calls from ordinary Pakistanis to bring down prices of basic essentials, for many a priority in a land where a quarter of the 160 million population is poor, earning about $16 a month.

The state's bill from subsidising fuel at the pump to absorb high international prices is alone set to hit about 150 billion rupees ($2.4 billion) for this fiscal year.

"To be honest, I don't care whoever wins the election. What we want is that at least the essentials of life should be easily available at an affordable cost," said Mansoor Khan, a mid-level manager at a pharmaceutical company in Karachi. "If I have to spend four hours in a queue to get a few kilograms of costly wheat, than I am not too excited even if the GDP growth is 10 percent."

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Plan to develop inland water transport system along Indus River ​

ISLAMABAD (February 13 2008): Pakistan is planning to develop inland water transport system along the Indus River that would become part of National Trade Corridor Improvement Programme. Planning Commission Member, Infrastructure, Dr Asad Ali Shah said this in a meeting of NTC task force.

An official close to the meeting told Business Recorder, this idea is at nascent stage and further work will be done on it, which is believed to be breakthrough in the government efforts to reduce the cost of doing business. The water channel would revolutionise the transport system in the country.

Further work including pre-feasibility and feasibility studies would be done by acquiring the services of reputed firm. After these studies, the proposal would be forwarded to the PC.

The issue of provision of water for the transport channel would also be discussed in the pre-feasibility study, said the official. Some circles are of the view that water availability for the channel could be ensured only after the construction of large dams especially the Kalabagh dam.

The task force established a committee on Public-Private Partnership for NTC to accelerate private sector investment in infrastructure along the corridor. The committee will also consider the development of IWTS, the official said. It was agreed that for implementation of the recently approved trucking policy, the Ministry of Industries, Production & Special Initiatives will establish a management unit for the policy implementation.

The task force reviewed the implementation status of various activities under NTC strategic framework. Launched in August 2005, the strategic framework for the National Trade Corridor Implementation Program (NTCIP) has been developed based on a holistic and integrated approach.

The project is aimed at reducing the cost of doing business, improve competitiveness and enhance productivity by improving the trade and transport logistics chain in Pakistan and bringing it up to the international standards.

Chairing a meeting to review the progress of NTC, the PC deputy chairman planning Dr Akram Sheikh said that this was a major strategic initiative to improve the logistics chain throughout the country and to interlink it with all three adjoining regions of South Asia, Central Asia and West Asia. Since inception, substantial progress has been made, undoubtedly NTCIP is moving in the right direction, he said. The task force reviewed the overall progress of all the sectors including; Ports & Shipping, Railways, Trucking, Trade Facilitation, Highways, Aviation & Air Transport, Energy Logistics & Cool Chain.

The operations of KPT, Port Qasim and Gwadar Port were reviewed to enhance their efficiency. The meeting was informed that four "Express Freight Trains" and one wheat special train running daily from Karachi to Lahore has been started. Door-to-door cargo services have been introduced from Faisalabad to Lahore, which will be expanded further to major cities.

At Jamroud construction of multimodal-agency border terminal, including access roads and other facilities has been completed. The Chaman and Taftan border terminals are under construction, while the cargo handling operation at Wagha border terminal will start shortly.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Plan chalked out to achieve $5 billion software export target ​

KARACHI (February 13 2008): The federal government has chalked out a plan to facilitate the Information Technology (IT) sector, with a view to achieving the $5 billion target of software export set for 2010-11. Sources in the Technical Education and Vocational Training Authority (TEVTA) told Business Recorder on Tuesday that the current level of software exports of the country was about $50 million per annum.

'As the government realises that in current circumstances the marked target can not be achieved amid the competitive international market with insufficient IT professionals, hence it has taken the initiative of the IT development program to facilitate students by providing quality education and training at affordable fee packages, which would help produce sufficient IT professionals across the country', they said.

"Government has planned to facilitate IT students on the maximum aimed at increasing the production of trained, diversified and well skilled IT professionals upto 53,000 per annum in next two years," they informed. Software development primarily depends upon the qualified professionals, however the targeted growth rate in the domestic software market will require over thousands of software engineers every year, they added.

However, at present about 150 software engineers are being produced by the reputable institutes, while 100 to 150 are being trained by software houses and user organisations, they said. Sources said that about 400 to 500 software engineers were produced by substandard institutions with lack of proper arrangements.

Due to poor education, they failed to meet the market's requirements and earn low salaries as compared to qualified professionals, they said. In wake of the situation, the government has evolved a policy to provide incentives on software exports and manufacturing of computer hardware, besides establishing software technology parks and data networks, they said.

Business Recorder [Pakistan's First Financial Daily]

 

[solid snake]

$30bn needed for dams, mass transit plans

By Ihtasham ul Haque​

ISLAMABAD, Feb 13: Like the previous government, the caretaker set-up also has failed to secure $30 billion foreign funding needed for five big dams and mass transit systems in Karachi, Lahore and Rawalpindi.

It is against this backdrop that the Ministry of Finance is holding an international conference in Islamabad from May 11 to 13 to invite foreign investors, including banks and multinational funding agencies, to take part in Pakistan’s infrastructure development projects.

Official circles believe that by May the newly elected government will be able to win back foreign investors’ confidence.

Mr Aijaz Ahmad, chief executive officer of the Infrastructure Project Development Facility (IPDF) of the Ministry of Finance, told Dawn on Wednesday that effort would be made at the conference to arrange about $20 billion funding for five major dams -- Kalabagh, Bahshah, Akhori, Munda and Kurrum Tangi.

“Then we need to raise about $10 billion for three mass transit projects in Karachi, Lahore and Islamabad, two shipyards, one in Karachi and the other in Gwadar, CNG bus project in Karachi and some projects in the horticulture sector. We also need funding for the Iran-Pakistan-India (IPI) gas pipeline which will be discussed at the conference,” he added.

A number of international law and advisory firms have also been invited.

Mr Ahmad said that Pakistan also needed foreign investment for new power projects. He expected that during the first year of the next government about $2 billion would be raised through foreign investment.

He said that power and telecom sectors had witnessed an increase in private investment in Pakistan. But it has been difficult to attract funding for infrastructure projects.

Mr Ahmad said that 44 infrastructure projects were in the pipeline of which 21 were on the active list while the rest were being developed.

“IPDF’s active project portfolio consists of 44 such projects worth $1.4 billion,” he said.

The IPDF chief expressed the hope that the recently approved public-private partnership policy would greatly enhance the confidence of top international players in the country’s infrastructure development projects.

Sources said that the growing fiscal constraints had forced the government to withdraw from its traditional role of financing PSDP projects by having an effective public-private partnership from the 2008-09 financial year.

Initially, it was proposed to cut 50 per cent government funding in the PSDP and the gap will be filled by the private sector. The World Bank and Asian Development Bank are believed to have approved the proposal in principle and indicated that they would be willing to provide necessary support for improving and expanding infrastructure services for public-private partnership in Pakistan.

The Planning Commission, the IPDF and the two international donors are in touch with leading investors to have the next PSDP shared by public and private sectors on a 50:50 basis.

However, the private sector maintains that the government should first come up with a regulatory framework for the public-private partnership on a sustained basis for a longer period.

A draft law and the regulatory framework are being prepared and expected to be finalised soon.

$30bn needed for dams, mass transit plans -DAWN - Top Stories; February 14, 2008

 

[Introvert]

Pakistan: Kinno export may exceed 0.2m tons

Pakistan’s kinno export crossed 80,000 tons mark by the end of January, mainly due to the revival of supplies to the Russian market. Exporters hope that the exports will gain momentum in February. Exporters and officials of Pakistan Horticulture Development and Export Board (PHDEB) said that the exports had been slow in January for logistical reasons. Exports to Iran suffered due to political reasons as major shipping lines refused shipments due to US sanctions.

"The country should be able to cross its export target of 200,000 tons easily with abundant crop this year", says Muhammad Iqbal of PHDEB. Before the start of the season export to Russia was uncertain as no shipping line had spared cargo space for shipment. Now these lines are readjusting their shipments and have promised to spare more containers, exporters added. This would accelerate shipments to Russia in the days to come. The shipping lines had also planned their cargo space taking into account last year exports quantity, when the country suffered from a short crop and exported only half of this year’s target.

The weather, specially the recent chill, improved both the taste and colour of the fruit. The bumper crop this year kept the price to a manageable level and the improved colour and the taste increased its demand in foreign markets, he said.
In addition to increased exports to Russia and Iran, the country has also sent its first kinno container to China. The Chinese market alone could absorb over 100,000 tons if the quality issues do not hit the export in next five years, the PHDEB official said.

"Export has also increased because our close competitor, China, had a bad crop this year", says Daniel Benjimen, a local exporter. The Chinese citrus crop suffered up to 20 per cent damage facilitating demand of Pakistani kinno in markets abroad.
With all these factors helping kinno exports from Pakistan, the country should be able to cross 200,000 tons mark in the next two months, he hoped.

Pakistan: Kinno export may exceed 0.2m tons

 

[Neo]

Govt borrowing balloons to Rs317bn ​

Thursday, February 14, 2008

KARACHI: Government borrowing from the State Bank of Pakistan (SBP) ballooned to Rs317 billion on Wednesday from Rs239 billion last week, in a sign of further mounting inflationary pressures on the country’s economy.

From July 1, 2007 to Feb 2, 2008 in the backdrop of excessive government reliance on borrowing from the central bank, broad money (M2) grew to Rs247.486 billion, which was recorded at Rs236.045 billion in the same period of last fiscal year.

The central bank’s latest statistics revealed that bulging net domestic assets of the banking system, which grew by 13.98 per cent from July 1, 2007 to Feb 2, 2008, besides depleting net foreign assets of banks by virtue of government’s borrowing mainly for budgetary support, were the major contributory factors behind the current 6.09 per cent expansion of M2 growth.

The bank’s figures showed that during aforesaid period government borrowed Rs235.581 billion from banking sector for budgetary support as compared to this during corresponding period of last fiscal year the government had scrounged Rs49.905 billion from banks for budgetary support.

Out of total government’s budgetary borrowings SBP lent Rs316.991 billion to the government from July 1, 2007 to Feb 2, 2008 against Rs34.530 billion last year. However, during this period the government retired Rs56.668 billion of scheduled banks. The government borrows from scheduled banks it is mainly through fortnightly auctioning of market treasury bills and it also borrows for long term by auctioning Pakistan Investment Bonds (PIBs). The federal government also gets loans directly from SBP either through ways and means advance or purchase of market related treasury bills.

The bank’s figures showed that during above mentioned period the credit to non-government sector increased to Rs278.328 billion against 224.827 billion of last fiscal year which also played a key role in growth of broad money.

Govt borrowing balloons to Rs317bn

 

[Neo]

Two Chinese pharmaceutical companies to invest in Pakistan ​

Thursday, February 14, 2008

ISLAMABAD: Two Chinese pharmaceutical companies have shown interest to invest in the country through joint ventures and desired that their medicines will be standardised and available in a market at low prices.

A visiting delegation of Chinese Shetang Zhong Industry Co Ltd and China Liu Enterprises Pharmaceutical Group, led by Yang Yu and Liu Kong, called on Islamabad Chamber of Commerce & Industry President Ijaz Abbassi here on Wednesday.

During the meeting, Yang Yu praised the far-reaching economic reforms introduced by the government of Pakistan, which have resulted in excellent investment opportunities in the country. Abbassi expressed great concern over the prices of medicines in the country, which are higher than other regional countries and multinational companies have a monopoly over the sale of medicines and are earning billions of rupees as profit. He recalled the existing excellent ties between both the sides in various fields and welcomed investment by the pharmaceutical industry.

He also appreciated the achievements made by China in developing herbal medicines and hoped that Chinese businessmen would also invest in this field and would be transferring their expertise to Pakistan.

Two Chinese pharmaceutical companies to invest in Pakistan

 

[Neo]

Economy grew on wrong path: speakers ​

Thursday, February 14, 2008

KARACHI: Praising the frequently quoted average seven per cent GDP growth in the last three years in Pakistan by government officials, the speakers at a one-day seminar on “Economic Challenges for the Next Government” questioned the quality and pattern of economic growth and observed that the economy was growing on a wrong path.

The seminar was organised by Investment Marketing Conferences (IMC) here at a local hotel on Wednesday, which started after more than one and a half hour delay from its scheduled time.

The speakers identified a number of issues in various economic sectors, which were needed to be addressed by the next political government following the Feb 18 parliamentary election. “Having mobile phone in everyone’s hand and constructing a network of roads and bridges in the country do not mean economic development, but to reduce poverty and create employment in fact,” they pointed out.

The theory of trickle-down effect of economic growth to common man had failed, as achievements in some of the macroeconomic areas had not benefited the people so far. The percentage of people living below the poverty line had not come down remarkably with growth in GDP and it stayed around 30 per cent at present. Moreover, creation of employment opportunities in the country remained a big question mark on the government’s performance.

“The poor are getting poorer and rich becoming richer,” said S B Hassan, IMC President in his opening remarks. The speakers developed consensus on removing “income inequality” among the masses, which could be made possible through spending more on the social sectors ie education and health by the next government. They also agreed on the need to privatise state-owned entities, but called for them to be sold to local managers in the private sector despite giving first priority to foreign buyers.

“For how long, can we continue the ongoing privatisation process to overcome the budgetary burden,” questioned Shaukat Tarin, Chairman of Karachi Stock Exchange (KSE) and National Commodity Exchange Limited (NCEL).

The sale of government assets to locals would be more beneficiary as compared to foreigners. This step would help the government to increase domestic savings and ultimately it would also help to generate employment and reduce poverty, it was argued.

Tarin suggested forming a club for local investors and entrepreneurs, who would be taking part in the ongoing privatisation and they should be given priority. “Government needs to increase revenue to GDP percentage. For this purpose, it has to widen the direct taxpayers’ net, which is mere 20 per cent in the country,” he argued. He proposed to appoint 50 per cent Board of Directors from the private sector in the Federal Board of Revenue (FBR).

Sakib Sherani, Head of Economic Unit of ABN Amro Bank was of the view that the government should pass on increase in international oil prices to domestic consumers and should also withdraw subsidy on POL products gradually to ease the inflationary pressure.

He argued that government borrowing from the central bank for budgetary support and for subsidy was one of the causes, which was increasing inflationary pressure on the economy. “Inflation is a monetary phenomenon,” said Sherani.

The speakers also called for aggressively focusing on agriculture, textile and manufacturing sectors in order to increase country’s exports. It would help the government to tackle the trade deficit and curb current account deficit too.

The biggest challenge for any government would be to deal with fast growing energy crisis and for that the government needed to restructure WAPDA and KESC, they suggested. Also human resource development, trained and skilled manpower and professional managers would remain another big challenge.

They questioned why people of the country were importing vehicles that was increasing trade deficit when it (Pakistan) was already having assembling plants of vehicles.

They suggested to make Pakistan an export-based economy by transfer of technology with attracting foreign investment in first phase and then exporting same things ie cars and mobiles in the second phase, they added. Last but not the least, the government needs to construct homes at affordable prices for the poor.

Economy grew on wrong path: speakers

 

[Neo]

Pakistan attracted $8.2bn investment in 2006-07: Soomro ​

Thursday, February 14, 2008

KARACHI: Caretaker Prime Minister Mohammedmian Soomro has said that Pakistan has attracted a foreign investment of $8.2bn during 2006-07 due to continuity and consistency of economic policies while the economy has maintained a GDP growth of more than 7 per cent in the past several years.

While talking to a delegation of German investors led by German Consul General Han Joachim Kiderlen at the Governor House on Tuesday, the Prime Minister noted that Pakistan’s macroeconomic policies were widely acclaimed by the multilateral institutions and investor communities.

He observed that the robust economic growth presents a strong case for investment in the infrastructure of the country. Soomro said 100 million out of 162 million of the population in Pakistan is below 25 years of age, who are a great asset for the country as well as an attraction for foreign investors.

He stated that because of rapid economic growth there was a surge in energy demand and the government is trying its best to bridge the demand and supply gap. Mohammed Mian Soomro pointed out that besides resorting to conservation of energy, the government has approved a number of projects to increase the power generation as well as working on alternative sources of energy.

He also appreciated German investment in various sectors of the national economy and welcomed the willingness to invest more in various fields particularly in the energy sector. Replying to a query on intellectual property rights (IPR), he said a body is already in place to check the violation of IPR issues in the country.

Responding to the interest of German delegation to establish special industrial zone in Pakistan, the Prime Minister said Pakistan would welcome the setting up of Pak-German industrial zone. The delegation appreciated the government’s policies and expressed the desire to invest more in Pakistan.

Pakistan attracted $8.2bn investment in 2006-07: Soomro

 

[Neo]

Government fails to initiate 5 export oriented projects​

* Nine projects did not utilise 86% released funds​

ISLAMABAD: The ministry of industry production and special initiatives (MIP&SI) has failed to start export oriented five developmental projects, worth Rs 969.97 million related to ceramic development, glass products, foundry services, composite based sports goods and cutlery.

Although first half of the current fiscal has been completed, these projects have totally failed even to spend a single penny. Even till June 2007, these export oriented developmental projects were unsuccessful to start the projects. But during the annual budget for the year 2007-08, the government has allocated a reasonable amount of Rs 452.08 million for these projects for the only aim to enhance country’s exports, sources told Daily Times here on Thursday.

The government has approved a project namely, Ceramic Development and Training Centre, Gujranwala (ADB assisted) worth Rs 314.470 million. But till December 2007 the ministry has totally failed to get start the project despite of allocation of Rs 220 million in 2007-08.

The ‘Glass Products Design and Manufacturing Centre, Hyderabad Sindh’ worth Rs 33.500 million had been approved for the development of glass related products that would ultimately lead to increase country’s exports. The government allocated an amount of Rs 37.08 million in 2007-08 and also released Rs 3.75 million. But the project managers failed to get it start till December 2007.

A project, ‘Foundry Services Centre Lahore’ worth Rs 202 million has been approved by the government and an amount of Rs 90 million has been allocated as well as released in 2007-08.

Similarly, ‘Product Development Centre for Composite based Sports Goods Sialkot’ approved with a cost of Rs 380 million. An amount of Rs 90 million has been allocated and released during the year 2007-08. But the projects managers of the above schemes failed to spend a single rupee till December 2007.

The government had also approved a project, namely, ‘Revival of Cultery Institute of Pakistan, Wazirabad’ with estimated cost of Rs 40 million. An amount of Rs 15 million has been allocated and released during the year 2007-08 but not a single rupee was spent till December last year, sources added.

Apart from above-mentioned five projects, there are nine other projects, that were failed to utilise completely their allocated /released funds till December 2007. Total released to these nine projects was Rs 847.217 million and they utilised only Rs120.44 million. It showed that 86 percent released funds were not utilised till December 2007.

These nine projects, that failed to utilise the released funds are: agro food processing facilities Multan, Aik hunar aik nagar, Gujranwala Business Center, sports industries development centers Sialkot, 2 MGD water desalination project, Gawadar industrial estate Balochistan, strengthening of planning monitoring and evaluation cell in MOIP&SI Islamabad, development products of Pakistan Gems and Jewellery Development Co, development of marble and granite sector and dairy Pakistan horizons.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Industrial output target may not be achieved: Slowdown worries planners​

ISLAMABAD, Feb 13: The industrial production has grown by paltry 6.9 per cent in the first five months (July-November) of the current fiscal year raising serious worries that annual industrial growth target of 10.5 per cent would remain unachievable.

The slump in manufacturing production was witnessed in November 2007, when it grew by a meagre 4.74 per cent, the lowest growth recorded in any month of the past recorded history, Federal Bureau of Statistics (FBS) data revealed on Wednesday.

The figures for December and January have not been compiled as yet, but the worst energy crisis, reduced working days on the back of strikes have dampened the chances of any reverse in industrial growth in the last two months.

The growth in industrial production had been steadily on decline for the last three years as it declined to 8.8 per cent in the year 2006-07 from 19.9 per cent in the year 2004-05 owing to capacity constraints and closure of many units as a result of high cost of doing business in the country.

Analysts said the steady dip in industrial growth will also affect its contribution in the overall GDP, which would make it difficult for the economic managers to achieve the GDP target.

The GDP rate is worked out in the month of May. It would be very difficult to have that much growth in the next three months to recover the plummeting recorded in industrial growth to reach closer to the target.

As there is no industrial policy in the country, except some product-specific policies, the country is going to face the brunt of closing down of vulnerable industries to cheaper imports. And also there is no effective policy or facilities for encouraging small industries to diversify the narrow industrial base of the country.

The industry specific data shows that many sub-sectors were not performing well in the first five months of the current fiscal year mostly electronic goods. As a result of the decline, the import bill of consumer and electronic goods have steadily recorded an upsurge during the period under review. With this slump in the industrial growth, the export of commodities has also affected to a great extent, which recorded a marginal growth of six per cent during the period under review.According to the figures, the production of cigarettes has increased by 8.7 per cent, while cotton yarn grew by 4.57 per cent and cotton cloth production 1.42 per cent during the first five months this year over last year.

In the food sector, the vegetable ghee production declined by 1.06 per cent. However, cooking oil production was up by 1.78 per cent, wheat 6.34 per cent, starch and its products 2.47 per cent, beverages 41.38 per cent during the period under review over the last year.

Among the electrical production, refrigerators recorded a growth of 10.85 per cent, deep freezers 13.05 per cent, TV sets production 19.06 per cent, electric fans 32.27 per cent, switch gear 18.8 per cent, bicycles 3.87 per cent and electric bulbs 2.22 per cent during the period under review over the last year.

However, production of air-conditioners dipped by 6.71 per cent, electric tubes 5.32 per cent, electric motors 12.32 per cent, electric meters 29.09 per cent and electric transformers 36.37 per cent during the period under review over the last year.

The production of paper & board has also dropped by 12.24 per cent. But petroleum products were up by 8.07 per cent and cement 24.15 per cent during the first five months of the current fiscal year over last year.

The production of glass sheet declined by 7.92 per cent, steel products 1.39 per cent, billets 3.92 per cent and HR sheets 0.78 per cent during the period under review over the last year.

However, the coke production was up by 14.72 per cent, pig iron 1.06 per cent, soda ash 17.25 per cent, caustic soda 11.44 per cent, nitrogen fertilisers 3.37 per cent and phosphate fertilisers 5.74 per cent during the period under review.

Industrial output target may not be achieved: Slowdown worries planners -DAWN - Business; February 14, 2008

 

[Neo]

Replacing ageing gas system to save $580m​

RAWALPINDI, Feb 13: While the shortage of gas is felt across the country, a new report of Asian Development Bank says Pakistan’s gas distribution system is ageing and is suffering from high technical losses of 25 to 30 per cent against the industry standard of five per cent.

Losses could be eliminated by replacing medium- and low-pressure pipes with more efficient and corrosion-free pipes, the bank suggested.

The ADB in a technical assistance report says a more efficient gas distribution system would result in significant national savings up to $580 million per year, and increased use of cleaner fuel by more domestic, industrial and commercial consumers.

Natural gas accounted for 43 billion cubic metres, which is half of the country’s primary energy supply in 2006.

The ADB report has been prepared for the provision of a technical assistance (worth $600,000) on a grant basis to Pakistan for preparing the Sustainable Energy Efficiency Development Programme by the Planning Commission. The technical assistance is estimated to cost $700,000.

The government will finance the remainder $100,000. The technical assistance will design a suitable programme proposal that supports government efforts to establish an enable policy and business environment for energy efficiency, and to provide immediate financing of priority projects.

The public and domestic sectors consume more than 60 per cent of the country’s energy. The government is looking for more efficient utilisation and conservation measures for the public sector and is eager to procure and adopt energy efficient technology in its operations and introduction of energy-efficient building codes, says the ADB report.

The domestic sector currently uses 45 per cent of the power supply. The most effective way to expedite the use of efficient compact fluorescent lamps by domestic consumers is to inject a large volume of such lamps into the market at a low price. This approach has been successful in several countries, where it has immediately reduced customers’ monthly power bills.

Preliminary analysis suggests that the introduction of 15 million high-quality compact fluorescent lamps into Pakistan’s domestic market would save customers $78 million over the lifetime of those bulbs with approximate life of 2 years.

During 2001-2006, primary energy supply increased 5.4 per cent per year. Meanwhile, consumption of electricity rose at an average annual rate of 6.8 per cent, natural gas by 10.4 per cent, liquefied petroleum gas by 17.6 per cent, and coal by 22.8 per cent.

Electricity use, in particular, is growing robustly across all sectors recording a 10.2 per cent overall jump in 2005-2006, while generation increases lagged at 9.3 per cent during the same period.

Thus, the country faced serious peak electricity supply shortfalls of 1,500-2,000 megawatts during the summers of 2006 and 2007, necessitating significant forced outages (or load shedding) that curtailed economic activity and delivery of social services.

System-wide transmission and distribution losses remain high at 24.8 per cent of dispatched power. Despite government efforts to electrify all villages, about 45 per cent of the population still does not have access to grid-supplied electricity. A crisis in the energy sector has been looming for the past two years, reveals the report.

The energy efficiency assessment conducted under ADB’s Energy Efficiency Initiative determined that Pakistan has a large and untapped energy efficiency market. It identifies several energy efficiency improvement opportunities in gas distribution (supply side) and in the government and residential sectors (demand side) that can be tapped into.

Replacing ageing gas system to save $580m -DAWN - Business; February 14, 2008

 

[Neo]

Fear of revenue shortfall: Planning Commission defers non-starter projects ​

ISLAMABAD (February 14 2008): The Planning Commission apprehends a big shortfall in revenue collection in 2007-08, which is one of the many factors forcing it to defer yet to start developmental projects for 2008-09. Sources said that the Planning Commission had presented its viewpoint on revenue collection in a meeting chaired by President Pervez Musharraf recently.

THE FBR HAD TAKEN UP AN AMBITIOUS TASK OF COLLECTING RS 1.025 TRILLION THIS YEAR: It said that the shortfall might be bigger as taxes collection trend had not been healthy during the first half of the current fiscal year and, keeping in view its adverse effects on economy and Public Sector Development Programme (PSDP), it had changed the strategy for the developmental projects.

The FBR had taken up an ambitious task of collecting Rs 1.025 trillion this year, which was perhaps unrealistic, even at the time of taking the assignment. But FBR chief Abdullah Yusuf deemed it possible.

It said that the FBR chief might have some new strategy in mind to put in place to make things happen and collect the targeted revenue for the current fiscal year. However, due to poor performance, uncertainty and discouraging response from the taxpayers in the first half of the current fiscal year it was obvious that FBR was going to fall short of the target by many billions. The FBR is facing problem in achieving the target in direct taxes, which are much less than the expected revenue.

The presentation to the President gave a clear picture of expected shortfall and its negative effect on overall economic situation. The shortfall in revenue collection forced the Planning Commission to stop clearing developmental projects for the second part of the current fiscal year.

The Planning Commission is following a new strategy for developmental projects. It has put on hold those projects which were not started by executing agencies, and keeping those projects in the second tier which fall in the slow going category.

The strategy has focused on the on-going projects but seconded the Ministry of Finance for diversion of the funds of those developmental projects, which were not launched in the first half of the current fiscal year.

It said: "To counter adverse effects of likely reduction in revenue collection and enhanced subsidies on oil, wheat and fertilisers, a professional approach has been adopted by the Planning Commission". It added that to achieve the objective of saving resources the provincial governments have been taken on board for rationalisation of the developmental projects.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistan will welcome if China joins IPI gas line project: foreign office ​

ISLAMABAD (February 14 2008): Islamabad says it will welcome if China joins Iran-Pakistan-India (IPI) gas pipeline project whether or not New Delhi stays part of the economic-cum-strategic deal being ruthlessly opposed by the United States. "We will welcome if there are prospects of China joining it," Foreign Office spokesperson Mohammad Sadiq told a weekly news briefing here on Wednesday.

The statement came days after a media report suggested Beijing had conveyed to Islamabad willingness to participate in the multibillion dollar but troubled deal if New Delhi wanted to walk out of negotiations. India refused to attend a meeting called by Iran last week to finalise the long-delayed pipeline as it wanted to settle the transit fee issue with Islamabad before signing the pact.

But experts believe actual reason for Indian reluctance was its still-to-be-secured deal with the US to receive civilian nuclear technology for its pressing energy needs. The halted drive has recently drawn a lot of criticism from a multidimensional polity and there are doubts whether Washington and New Delhi will ever be able to take it home.

The US is opposing IPI primarily to punish an anti-American regime in Tehran seeking to fulfil nuclear ambitions to defy the world sole super power and the whole of Europe. Sadiq said Islamabad wanted India rejoin negotiations but it would go ahead with the project even otherwise because the plan was necessary for its energy security.

"We believe India is still interested in IPI," he replied to a questioner. Pakistan is facing a worse energy shortage of history and experts see IPI a project capable to steer the country out of the deepening crisis that is now posing closure threat to the industry already struggling to meet export orders and cater local demands.

MISSING DIPLOMAT: Sadiq dismissed a suggestion that Taliban had kidnapped a top Pakistani diplomat in lawless tribal areas to use him as a bargain chip for the release of an arrested Afghan commander.

Tariq Azizuddin, the Pakistani ambassador to Afghanistan, went missing on Monday morning when he was travelling to Kabul through Khyber tribal agency near Peshawar.

Some media reports later said he had been kidnapped by militants who were demanding the release of Mullah Mansoor Dadullah. A former operational commander of Afghan Taliban, Mullah Dad was arrested by Pakistani security forces from Balochistan province over the weekend.

But Sadiq said these stories were untrue. "No body has contacted the government of Pakistan (with a demand to release Dadullah for handing over Tariq). No body has claimed responsibility," he said. The spokesperson said he was sure the diplomat was alive and efforts were underway to locate and secure him.

Responding a question, Sadiq gave an impression as if Pakistan were comfortable with a recently signed Indian deal with Russian for obtaining civilian nuclear technology. "We are against anything that steps up arm race in the region," he said, "But any legitimate co-operation, Pakistan will have no objection to that."

Business Recorder [Pakistan's First Financial Daily]

 

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$250 million creek-side mall cum offices complex to be set up ​

KARACHI (February 14 2008): A creek-side shopping mall and offices complex will be developed, at a cost of $250 million, by Abu Dhabi-based Injaz Mena Investment Company, PSC, in collaboration with UK-based Global Haly Investment Ltd.

The joint venture project was announced here on Wednesday under the key sponsorship and patronage of Sheikh Sultan Bin Khalifa Bin Zayed Al Nayhan. Mubarak bin Fahad, Chairman and CEO of Pakistan-based company Global Haly Development (Pvt) Ltd, said here that his company would undertake establishment of the creek-side project.

The complex will be situated next to the Creek Golf Club along the Arabian Sea coastline, benefiting from unrestricted creek view. The planned complex will provide high quality shopping and premium office space on the 5.3 acres plot of land. It will have total built-up area of about 1.7 million sq ft, of which over 0.7 million sq ft will be saleable space.

The complex will have three basement levels for parking, ground floor, first floor and five upper floors, offering well over 0.4 million sq ft of dedicated retail space and the balance of the area will be for offices. The project will have all facilities and infrastructure required to offer a luxurious lifestyle shopping experience. Creek-side will set the benchmark, excellent example of a true mixed-use centre project combining retail, restaurants, safes, world class feed terrace coupled with an exclusive office complex.

Mubarak bin Fahad said that the 'creek-side' is an exclusively designed mixed-use facility that would bring a new level of luxury and enhancement to the standards of shopping expected today. The promoters boasts a design that gracefully maximises sea views whilst maintaining optimal functionality and practicality.

The Royal International, a leading consultant, is providing consultancy services for sub-consultants throughout the design and construction phases. Saunders Global, the lead architects for the project, undertook the structural and building services engineering design for the entire project in liaison with local engineers, Engineering Associates. Due for completion in 2011, the creek-side project is being developed around the concept of delivering a luxury retail experience coupled with executive offices which has required significant liaison with a number of consultants and local bodies to turn the design into reality.

Business Recorder [Pakistan's First Financial Daily]