Pakistan Economy - News & Updates - Archive

[Neo]

In this case I hope the rivallery expands past borders, let them both come to Pakistan.

 

[Bushroda]

In this case I hope the rivallery expands past borders, let them both come to Pakistan.

Reliance would follow diktat from the Indian Government. I doubt if Pak would like that. Shashi Ruia OTOH has resigned from PM's economic advisory committee because of the differences. So, he is a safer bet.

 

[Neo]

Reliance would follow diktat from the Indian Government. I doubt if Pak would like that. Shashi Ruia OTOH has resigned from PM's economic advisory committee because of the differences. So, he is a safer bet.

As long as the industrial output, GDP and employment grow GoP has no problems with FDI from India.
We have local laws to protect FDI and local Industry and there's severe shortage of Steel and Ferrum based industries aswell as Petrochemical products. It wouldn't be wise for GoI to spoil the opportunity to do good business in worlds second most lucrative market in terms of returns.

 

[Bushroda]

As long as the industrial output, GDP and employment grow GoP has no problems with FDI from India.
We have local laws to protect FDI and local Industry and there's severe shortage of Steel and Ferrum based industries aswell as Petrochemical products. It wouldn't be wise for GoI to spoil the opportunity to do good business in worlds second most lucrative market in terms of returns.

I've always favored dehyphenation of business from politics. China & US apart from all their political differences have a strong business relations. I don't see why India-Pak cannot do so. Time is good. There is some goodwill between the two nations after all the cricket diplomacy & easing of Visa restrictions. Hostilities won't die down easily but that shouldn't stop the two nations from developing atleast business relations. Indian construction industry needs huge amount of cement. Pakistan can step in to fill the void to some extent. Similarly, steel import from Brazil would cost Pakistan a huge amount of surcharge. It can very well be reduced by exporting from India. Maybe, if only we can set aside our differences for next 20 years and concentrate on betterment of our own people, we might approach our differences with a better understanding & hopefully some solution could follow.

 

[Neo]

Well said mate!

 

[Neo]

Pakistan short of 7.6 mn houses ​

Fri, Jun 2008

Islamabad, June 6 (IANS) Pakistan is short of 7.6 million houses. But it is only partly addressing the problem by seeking Rs.10 million to build one million houses for low-income government employees and others.

Housing and Works Minister Rehmatullah Kakar said he had sought Rs.10 million for fiscal 2008-09 for building one million houses for government employees and poor people.

'Housing schemes will be initiated in separate phases. Some projects will be government-funded and others will be joint ventures of developers, bankers and the ministry,' Dawn newspaper Friday quoted him as saying.

Housing Secretary Samiul Haq Khilji said the shortfall in dwelling units would be addressed through a number of projects to be launched under the Prime Minister's Housing Programme.

Without giving any numbers, he said these houses would be provided on easy instalments.

According to Sher Afzal, estate officer of Islamabad's Capital Development Authority, hundreds of former government employees continue to illegally occupy government houses.

These employees had either retired, gone abroad or died, but they or their families were not ready to vacate the government accommodation, he added.

'A plan (is ready) to end such illegal occupation. The former employees and their families have not been paying any rent, causing an annual loss of millions of rupees to the exchequer,' Afzal said.

Pakistan short of 7.6 mn houses - Yahoo! India News

 

[Neo]

China-based Pakistani company to invest in CNG bus manufacturing​

KARACHI, June 06, 2008: A Pakistani company established in China has shown interest to manufacture CNG buses in Karachi with an investment of 5 million dollars.

A 3-member delegation of Pakistani Company Commerce and Sourcing House (CASH) and China's King Long United Automobile Industry, internationally famous for manufacturing CNG buses, met Sindh Transport Minister Akhtar Hussain Jadoon at his office here Friday.

They informed about their plan for manufacturing CNG buses having capacity to carry 45 seat and 30 standing passengers and discussed plan to ply these buses on six-month experimental basis in Karachi and interior of Sindh.

The investment of 5 million US dollars will be provided by Commerce and Sourcing House while technology will be provided by King Long United Automobiles Industry.

The delegation led by Jamshedullah, President CASH included King Long's Project Manager Andrew Chen and Manager Chang Hua.

Secretary Transport Rasheed Alam and Director Investment Board, Nasrin Ali were also present on the occasion.

The delegation informed the Minister that on six-month experimental buses two CNG buses will be plied in Karachi and interior of Sindh in the year 2009. These buses would be manufactured keeping the weather conditions of Karachi and interior of Sindh in view and could run through earth, sand and even 3-feet water and will have a 10 year life span.

Akhtar Jadoon was further informed that in the second phase the buses would be manufactured locally after one year for whcih the company would require 10 acres of land for setting up its plant.

They said that spare parts for these buses would be available on very cheap rates for which parts centres will be setup.

The Transport Minister assured the delegation of Sindh government's complete cooperation and said that Pakistan fully revere the friendship, love and sincerity of China.

The delegation presented the models of Chinese buses to the Minister.

China-based Pakistani company to invest in CNG bus manufacturing : Business Recorder | LATEST NEWS

 

[Neo]

Russia lifts ban on Pakistani rice and fruits import​

ISLAMABAD (June 07 2008): Russia has decided to lift the ban on rice import from Pakistan, sources told Business Recorder here on Friday. They said that a Russian delegation met here with the representatives of the Ministry of Commerce and Food Ministry and agreed to lift the import ban imposed on Pakistan's rice.

Russia used to import about 0.5 million tons rice per year from Pakistan. In 2007 from November 21 to December 26, a Russian delegation visited Pakistan to review the sanitary and phyto-sanitary conditions regarding the packing and processing of the citrus fruit and mangoes to lift the ban on import of these fruits imposed by it two years ago and finally the ban has been lifted.

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

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

In the meeting held here on Friday, June 6, the ban imposed on the import of the other fruits and vegetables has also been removed by Russia. "Now the country will start exporting fruits, vegetables and rice again to Russia that will indeed result in earning heavy foreign exchange", sources added.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

IMF says Pakistan needs to cut oil subsidies ​

Saturday, June 07, 2008

ISLAMABAD: Pakistan has to focus on decreasing its oil subsidies in the coming 2008/09 fiscal year to cut its fiscal and current account deficits, Henri Lorie, a senior representative at the IMF mission in Pakistan, said on Friday.

A new government, sworn in at the end of March, is due to present its first budget on June 11.

Lorie said it should take investor friendly steps to help drive growth, but he feared a turbulent political climate had stalled policy makers.

“What seems to (have) happened is that political uncertainty and political debate probably has made it more difficult for the authorities to react quickly to the economic policy front,” Lorie told Reuters in an interview.

There is intense speculation that President Pervez Musharraf, who came to power as a general in a coup in 1999, will quit in the next few weeks or months, and leave the new civilian leadership to run the country’s affairs.

“Our hope is there is... a greater focus on economic reform and also macro-economic adjustment policies,” Lorie said.

He said one of the most pressing requirements, because of high global commodity prices, was to reduce domestic demand for oil so as to bring down the country’s large current account deficit.

Government figures released in May showed that Pakistan’s current account deficit in the first 10 months of the fiscal year (July/June) ballooned to $11.586 billion from $6.628 billion in the same period last year.

The figure is equivalent to about 7.3 per cent of Pakistan’s GDP.

Lorie said lowering subsidies will encourage users to reduce oil and energy use, which will in turn reduce imports.

While the higher consumer prices would increase inflation in the short term, the reduction in subsidies would reduce long term inflationary pressures by reducing government borrowing, one of the main drivers in monetary growth.

“Coming to inflation, the lower deficit, budget deficit, will also mean less need for financing,” said Lorie.

Analysts say Pakistan suffered from a paralysis in decision making during the last months of the previous government, and during a caretaker administration that held the reins until the new government was formed after an election in February.

Their failure to trim food and fuel subsidies exacerbated spending overshoots, while revenue collection has lagged and after averaging 3.7 per cent of GDP for the previous five years, the fiscal deficit ran out of control in 2007/08.

The fiscal deficit is on course to stand at around 9 to 9.5 per cent of GDP in 2007/08, but the government is hoping loans from foreign lenders in the next few weeks will drag the deficit down to 6.5 percent, still well above a target of 4 per cent.

The current account deficit is expected to come in somewhere between 7.3 and 7.8 per cent of GDP for the year, compared with a target of 4.8 per cent.

Inflation was at 17.2 percent year-on-year in April, a level not seen since the 1970s.

Government expenditure: Lorie said the government also needs to trim its expenditure in the upcoming budget.

“The government expenditure has increased very rapidly over the past few years, and there is some question about implementation and effectiveness so I think there is room for pause in the growth of government expenditure,” said Lorie.

Pakistan is allocating 541 billion rupees ($8.01 billion) to the Public Sector Development Programme in the 2008/09 fiscal year, a government official said earlier this week.

This compared with 520 billion rupees allocated for current fiscal year ending June 30.

Lorie said the government needed to put more focus on addressing Pakistan’s energy crisis.

Aside from becoming increasingly dependent on imported oil and gas due to dwindling domestic production, Pakistan is also suffering from acute power shortages and electricity cuts several times a day are a feature of life in Pakistani cities. “High priority is energy, investment in trying to solve the energy problem,” Lorie said.

IMF says Pakistan needs to cut oil subsidies

 

[Neo]

Pakistan's foreign exchange reserves slide ​

KARACHI (June 07 2008): The country's foreign exchange reserves fell by $334 million to $11.178 billion in the week that ended on May 31, said the central bank. Reserves held by the State Bank of Pakistan fell to $8.684 billion from $9.061 billion a week earlier, while those held by commercial banks rose to $2.494 billion from $2.451 billion.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Inflation under control, minister says presenting FY61 budget ​

Saturday, June 07, 2008

KARACHI: Muhammad Shoaib, the then Finance Minister of Pakistan had presented the budget of 1960-61 of Rs1.7138 billion on June 30, 1960 with the message that inflation had been controlled and a plea that country need a consolidated spirit of long struggle for progress.

There were no new direct taxes in the budget; however there were an increase in rate of sales tax, excise and custom duty in the budget. Government expected that new tax rates would generate additional Rs90.9 million.

The country’s trade deficit remained Rs139.4 million whereas the allocated amount for defence budget was Rs1.120 billion.

In the budget of 1960-61, an amount of Rs45 million had been allocated additionally if compared to the year of 1959-60 for the development of agriculture, education and health.

For the development of new capital of the country, Islamabad, Rs200 million funds would be use over a period of 5 years time.

Inflation under control, minister says presenting FY61 budget

 

[Neo]

Industry to get land on easy terms: minister ​

Saturday, June 07, 2008

KARACHI: The Government of Sindh will provide land to industrialists on 10-year easy instalments in Sukkur and Nawabshah and would ensure that the land is not sold before constructing a proper factory on it, said Rauf Siddiqui, Sindh Minister for Commerce and Industry.

The minister was speaking to media after inaugurating ‘My Karachi’ exhibition at the Karachi Expo Centre on Friday.

He said that the government would equally facilitate local and foreign industrialists regardless of the size of industry.

He stressed that the problems the industry was presently facing could be termed difficulties and these difficulties do not tantamount to crisis.

Shehla Raza, Deputy Speaker Sindh Assembly, said that people of Pakistan know that the upcoming budget would not solve their problems as the government is only four-month-old and budget-making needs a minimum six months.

Siddiqui added that exhibitors from 12 countries were participating in the My Karachi expo. He said trade exhibitions were very productive for the business and trade.

There was low participation of general public in the event despite the fact that there were number of foreign businessmen present under the roof of Karachi Expo Centre.

Industry to get land on easy terms: minister

 

[Neo]

PIA facing loss of Rs 40 billion, National Assembly told ​

ISLAMABAD (June 07 2008): Defence Minister Chaudhry Ahmed Mukhtar on Friday told the National Assembly that the Pakistan International Airlines (PIA) is presently facing a loss of Rs 40 billion and the government would soon come up with a an effective strategy to bring the national flag-holder out of the financial lapse.

Responding to a calling attention notice moved by lawmakers from Pakistan Muslim League-N, Anusha Rehman Khan, Ayaz Amir, Khuram Dastighir Khan and Anjum Aqeel on the accumulated losses of Rs 40 billion of PIA for 2007-08, the Minister said that this government has taken the charge of the PIA just two months back and efforts are being made to make the institution self-reliant financially.

He also said that overstaffing in the PIA was also a problem and some senior staff will be sent home and the foreign stations would also be reduced to control the financial burden. Till 2010, the Minister hoped, they would be able to run the unit without taking loans from the government. He said PIA is paying a huge amount of interests and the government has been requested to make new arrangements for softer loans and retiring the expensive ones to reduce losses.

He added the employees hired on huge perks and privileges would also be retrenched for this purpose. To a question about the proposal of privatisation of the Roosevelt Hotel in New York, he said that the proposal has been dropped on the ground that the Hotel is earning $15 million per year.

Nabeel Ghabol of PPP held the former PIA chairman Tariq Kirmani responsible for pushing the PIA into financial losses, asking the government to bring him to justice by putting his name in the ECL.

LOCAL GOVERNMENT: Lawmakers in the National Assembly from the treasury benches, particularly PML-N expressed their concerns over the irregularities existing in Local Government (LG) system, suggesting conducting an audit along with reforms in the system. The PML-N members voiced against the system terming it a 'adda' of corruption and irregularities.

However, PML-Q and MQM strongly defended the system terming it a best tool to address the basic issues of a common man. They also emphasised the need to strengthen the system to empower the people at the gross roots level. The PML-N members said that the local government system was designed by the previous government for protection of their own interests.

They were of the view that the system needs drastic changes. They alleged that the audit of district government expenditure was not carried out. MQM MNA Sajid Ahmed said that that the district government system has proved to be development-oriented and made significant development works in Karachi. However, if there was any flaws in the system these should be removed to make it more viable.

Chaudhry Abdul Ghafoor of PML-N said there is a need of wide range of reforms in the system and the administrative authority should be withdrawn from the system and handed over to the civil servants. Attiya Inayatuallah of PML-Q defended the system terming it public oriented, recommending that it should be further strengthened. "It was an effort to hand over the power to the elected representatives to address the masses problems at their door steps," she argued.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Pakistan fund eyes growth ​

Saturday, June 07, 2008

LONDON: Political uncertainty, occasional bomb blasts and border militant insurgency do not stop Pakistan being a good investment destination, one of the first funds to target the country says, comparing the economy to a smaller India.

The Melchior Selected Trust Pakistan Opportunities Fund, launching this month and aimed at ultimately reaching some $200 million in Pakistani equities, says the country has been poorly portrayed and its economic fundamentals remain appealing.

“We believe Pakistan has been treated unfairly by the international media,” David Graham, partner of fund manager Dalton Strategic Partnership.

Pakistan’s immediate political future remains uncertain after parties supporting President Pervez Musharraf were defeated in an election while Al Qaeda this week claimed responsibility for Monday’s suicide car bomb attack on the Danish Embassy in Islamabad that killed six people.

“In looking at the Pakistan market, we see many similarities with India,” Graham said, noting Pakistan had been described as “India at half the price.”

Along with China, India has attracted vast fund volumes from emerging investors in recent years.

Despite political problems including the assassination of former prime minister Benazir Bhutto late last year, Graham said the economy continued to grow at 7 per cent year-on-year fuelled both by its own domestic demand as well as inflows from the Middle East, which has itself benefited from record oil prices.

Graham said 3 million Pakistanis worked in the Gulf economies, sending money home and further fuelling the economy.

He said the country was in some ways a safer and more established bet than some other “frontier markets”, which have benefited this year from investors seeking to move beyond more conventional emerging destinations.

The Karachi stock exchange is down 6.7 per cent so far this year, but the fund said it expected to see good prolonged growth.

“Notwithstanding the strong rise in the market over the past six years, the Karachi stock market is poised to benefit from the continued growth in the economy,” said Naz Khan, chief executive officer of KASB Funds in Karachi which is advising Dalton. “We like the energy and banking sectors and fertiliser, chemicals and cement should all do well.”

He said Pakistan already produced some 30 per cent of its own energy requirements and this was set to grow with new exploration.

The young population of 160 million was increasing their personal debt from a low base, boosting spending power and increasing demand for mobile phones, cars and other goods.

Karachi Stock Exchange was one of the world’s least correlated with markets in the United States, he said, providing good diversification from any Western economic downturn.

Khan said there was no reason to be particularly concerned by ongoing tensions along the border with Afghanistan, where Pakistan had fought intermittent battles against the Pakistani Taliban fighters.

“We have locked horns with India many times along the border with them in the last few decades,” he said. “This is just a different border and it shouldn’t affect the overall economy.”

Pakistan fund eyes growth

 

[Neo]

Fiscal Year 2008-09: Services sector to be backbone of GDP growth​

ISLAMABAD: The Gross Domestic Product (GDP) growth pattern set for the upcoming fiscal year 2008-09 mainly relies on growth in services sector by 6.1 percent along with industrial growth of 6 percent and agriculture growth at 3.5 percent, official sources informed Daily Times Friday.

The financial and insurance sector, wholesale and retail trade, transport, storage and communication sector would support the services sector as the major contributor in GDP for the fiscal year 2008-09, the official added.

Due to the lowering of GDP growth rate from 6.5 percent to 5.5 percent, the growth rates for the services sector and commodity producing sectors have also been lowered.

According to the downward revised growth targets in the services sector for the next fiscal year, services sector’s growth target has been lowered from 6.7 percent to 6.1 percent in next fiscal year as compared to the 8.2 percent actual growth realized in the outgoing fiscal year 2007-08. The target for the services sector’s growth was fixed at 7.1 percent for the outgoing fiscal year, however, the growth surpassed the target and stood at 8.2 percent in the said fiscal year.

The growth target for the financial and insurance sector, which was earlier, fixed at 12 percent has been retained at 12 percent for the next fiscal year due to good performance of the banking and insurance sector.

Transport, storage and communication sector’s growth target, which was earlier set at 5 percent, is now projected to grow by 4.5 percent in the next fiscal year 2008-09. This sector has achieved a growth of 4.4 percent against the target of 5.9 percent set for the outgoing fiscal year 2007-08.

Wholesale and retail trade sector’s growth target has been increased from 5 percent to 5.4 percent for the next fiscal year 2008-09. This sector has missed its growth target of 7.8 percent set for the outgoing fiscal year 2007-08 and its growth has been estimated at 6.4 percent.

Growth target for ownership and dwellings sector, public administration and defence would remain at 3.5 percent and 4 percent respectively in the upcoming fiscal year 2008-09. However, growth target for social, community and personal services have also been lowered from 8 percent to 7 percent for the upcoming fiscal year.

The growth rates for the commodity producing sectors have also been lowered. Growth target for the mining and quarrying sector has been set at 5 percent, Construction at 8 percent and electricity, gas, and water supply growth target has been set at 3 percent.

According to the downwards-revised projections, agriculture growth rate has been reduced from 4 percent to 3.5 percent, within agriculture growth target of major crops to remain at 4.5 percent, minor crops growth target reduced from 2.5 percent to 2 percent, livestock growth target reduced from 4 percent to 3.2 percent, fishery’s growth target slashed from 4 percent to 3.4 percent and forestry’s growth target kept at the same level of 1.5 percent for 2008-09.

Manufacturing sector’s overall growth target has been reduced from 8 percent to 6.1 percent, large scale manufacturing (LSM) growth target reduced from 9 percent to 5.5 percent, growth targets for the small scale manufacturing are being kept at the same level of 8 percent and others at 5.2 percent.

Daily Times - Leading News Resource of Pakistan