Pakistan Economy - News & Updates - Archive

[Owais]

Country facing economic turmoil: Gilani

ISLAMABAD (July 20 2008): Prime Minister Syed Yousuf Raza Gilani on Saturday said that international companies have offered $4 billion investment in energy sector in Pakistan and vowed that every effort would be made to bring the country out of prevailing, economic, energy, law and order crises.

-- Prime Minister says long years of dictatorship have plunged the country into crises

-- According to him, there's a flour shortage, load-shedding, terrorism and extremism, restoration of judges, economic and, above all, the inflation and unemployment which have their roots in the past

-- Believes high inflation is the result of running the country by printing money and heavy borrowing from the State Bank of Pakistan

-- Asks traders, industrialists and investors to make maximum investment in Pakistan

-- Seeks people's support and co-operation by saying that reduced consumption of fuel and edible oil can save billions of dollars in foreign exchange, reduce trade deficit but also gradually reduce the external debt

-- Assures farmers that government will significantly increase the minimum wheat support price before sowing of the next crop

-- Gives small growers good news that government will pay premium for them against crop loans

-- Declares that govt is working towards increasing milk production to bring about a White Revolution

-- Claims international companies are willing to invest $4bn in power sector.

"There would be minimum load shedding by next year after the measures taken by the government to address the situation," he assured the nation in his first televised address and held the previous government responsible for the prevailing crises, urging the nation to trust the coalition government.

In order to attract investment for Thar coal, he said a conference would be held in Washington on July 29, which would be chaired by him. He said that 2.5 million-ton wheat would be imported to curtail wheat crisis.

Prime Minister stated that Pakistan is facing the crisis of flour shortage, load-shedding, terrorism and extremism, and above all the inflation and unemployment which have their roots in the past.

In this situation, he said there were two options for the government; either to surrender to these problems or face them. I have chosen the second option to face the challenge.

Gilani said these problems were because of two reasons, external factors included rising oil and food prices in the international market while on domestic front during the last eight years, the government neither realised the challenge nor did any future planning. Thus the country was plunged into these crises.

He said it unfortunate that whenever PPP government came into power, the country was facing enormous problems with grave threats to the federation. He repeated that dictatorship remained at the helm of affairs in Pakistan most of the period in its history and every dictator made efforts to prolong his rule at the cost of country.

Gilani stated that the government was committed to resolve public issues. About judges' issue, he said that soon nation would hear good news. "We will take out this country from all the crises. We will give the people confidence and fulfil their dreams," he said.

Prime Minister maintained that after Quaid-e-Azam, Qauid-e-Awam Zulfiqar Ali Bhutto gave a new consciousness to the people of the country and said whatever pledges former Chairperson PPP Benazir Bhutto made to the nation, he would try to fulfil them.

He said February 18 has given a new hope to the nation with various parties came united on unified agenda to bring the country out of prevailing crisis. He assured the nation that he would sacrifice his life for the country.

He said that abundance of automobiles and mobile phones were not the growth yardsticks but unfortunately the previous government rather than setting up new industries relied on imports and created a consumption based economy. Agriculture was totally ignored and heavy borrowing from the State Bank was major reason of inflation in the country.

Outlining efforts of the government to counter these problems, he said first I would like to urge upon business community to keep their capital in Pakistan and they would be assured protection." He said that the government is importing 2.5 million ton wheat to ensure adequate supplies, and give agriculture loans Rs 30 billion for farmers.

Gilani said that the heads of allied parties would meet on July 23, in Islamabad to formulate a comprehensive strategy to eradicate terrorism and extremism. He said the country's nuclear assets are in safe hand and no one would be allowed to take action inside Pakistan.

APP ADDS: Prime Minister Syed Yousuf Raza Gilani pledged to the nation on Saturday to render every sacrifice to meet the challenges facing Pakistan and urged people to support the government in its efforts to steer the country out of the crises.

In his first address to the nation, after taking oath three months ago, the Prime Minister said, long years of dictatorship have plunged the country into crises.

"We will take out this country from all the crises. We will give the people confidence, we will give the nation not just their dream but its fulfilment,' he said in his address presented live on television and radio.

Prime Minister Gilani gave an overview of the problems the government had inherited and various steps that have been taken to stem the economic down slide and provide immediate relief to the common man. Gilani said Pakistan was facing the crisis of flour shortage, load-shedding, terrorism and extremism, restoration of judges, economic downslide and, above all, the inflation and unemployment which had their roots in the past.

"This situation sapped people's confidence and killed their hope," he said and added in this situation the government had only two ways; either to surrender to these problems or face them up front. "Like my political predecessors, I have chosen the second path (to fight against these challenges)."

Prime Minister Gilani attributed these problems to external factors, like rising oil and food prices in the international market. Secondly, he said during the last eight years, neither the gravity of international challenges were realised nor any future planning was made that created multiple problems and plunged the country into crises.

He described inflation as the biggest challenge and part of a global crisis, saying Pakistan today is faced with an economic turmoil. "Abundance of automobiles and mobile phones are not a yard-stick of progress," he said and added that the previous government instead of setting up new industries preferred imports and made Pakistan a consumer economy.

He said agriculture was totally ignored and inflation the country faced today, was the result of running the country by printing money and heavy borrowing from the State Bank of Pakistan.

Outlining efforts of the government to counter these problems, the Prime Minister said the government was trying to overcome inflation while avoiding past mistakes. Instead of cosmetic presentation of the economic situation, the priority of the government is to improve the situation in real terms, he added.

He said industrial and agriculture production would be increased to counter inflation and reduce financial deficits. Hoarding and profiteering will be done away with, he added. Prime Minister Gilani asked the traders, industrialists and investors to make maximum investment in Pakistan. "I appeal to my business community to keep their capital in Pakistan. We assure them every protection."

He also appealed to the nation to reduce consumption of those items, which were costing the country hugely in terms of foreign exchange. The Prime Minister said that reduced consumption of fuel and edible oil could save billions of dollars in foreign exchange, which will not only reduce trade deficit but also gradually reduce the external debt.

Being an agriculturist, Prime Minister said he was fully aware of the problems of the farming community. He regretted that an agrarian country like Pakistan was facing the problem of food shortage. The Prime Minister underlined steps the government has taken to overcome the problems.

The Wheat Support Price has been increased to Rs 625 per 40 kg from Rs 475 and the government will significantly increase the minimum support price before sowing of new crop. The government is importing 2.5 million tonnes of wheat to ensure adequate supplies, he added.

Agriculture loans for farmers have been increased by Rs 30 billion and an amount of over Rs 20.50 billion has been allocated for the agriculture development programme. He said the government has already announced a new policy for import of agriculture equipment and cheap tractors. Sizeable subsidy is being given on fertiliser besides abolishing sales tax on it, he added.

The insurance scheme for crop loans has been approved and he announced that the government would pay the premium for small growers. The Prime Minister said water reservoirs would be constructed on priority basis, as development of agriculture sector was impossible without adequate water supplies.

Prime Minister informed that the government was giving incentives to some 10,000 dairy farmers to increase milk production to bring about a White Revolution in the country.

Pakistan was facing the acute power shortage, which, the Prime Minister attributed to the neglect of the sector in the past eight years, which created an imbalance in supply and demand. The Prime Minister recalled that the country faced similar load shedding problem during the second government of Shaheed Benazir Bhutto.

At that time, he said, the private power producers were given incentives, adding today a large portion of the total energy production is obtained from projects set up by these companies.

"Just think what would have been the situation if the government of Pakistan People's Party (PPP) had not started these projects 14 years back," he posed a question. The Prime Minister said the government has taken a series of measures in a short span of time, which would help overcome load shedding significantly by next year.

Gilani said reposing confidence in the government's policies, international companies have offered to make $ 4 billion investment in power sector and work on the proposals is being undertaken at fast track. The government has taken practical steps to utilise the huge reserves of coal in Thar and for this purpose Thar Coal Authority has been set up.

The Prime Minister said he would chair a roundtable conference attended by international financial institutions on July 29 in Washington for investment in the sector. Moreover, special attention has been focused on alternative sources of energy including wind, solar and atomic energy, Gilani said.

Under the programme to conserve energy, besides various other steps, supply of energy saver bulbs would be ensured and due to these steps the future needs of energy would be fulfilled, he said.

The Prime Minister pointed out that no country could attract investment, or make progress, if the lives of ordinary citizens are insecure. "When we took over, hundreds of lives were lost in numerous suicide attacks in 2007, affecting thousands of people," he added.

He recalled that chairperson of Pakistan People's Party (PPP) Benazir Bhutto also became the target of dreadful wave of terrorism. The personnel of law enforcement institutions were also being targeted, he added. The Prime Minister informed that an extraordinary meeting of the heads of allied parties would be held on July 23, in Islamabad to formulate a comprehensive strategy to end terrorism and extremism.

Prime Minister Gilani said Pakistan was fighting the war against terrorism in its own interest and added that the country for its geographical location can play a central role for economic progress and peace in the region.

"This role of Pakistan is being acknowledged all over the world." He said good relations with neighbouring countries were the major planks of the country's foreign policy. It was with this spirit that Pakistan has agreed to hold fifth round of composite dialogue to improve ties with India and resolve all disputes, he added.

Referring to his first speech in the National Assembly, the Prime Minister said that he had clearly stated that resolution of Kashmir issue in line with the aspirations of Kashmiri people is essential for durable peace and prosperity of south Asian region. He said Pakistan wanted friendly ties with the entire world and vowed that sovereignty of Pakistan will never be compromised.

Gilani made it clear that no foreign power will be allowed to take action on Pakistan soil and added that any decision or action within its boundary will be taken by the country itself. The Prime Minister said the government is preparing a comprehensive strategy to improve and reflect true image of Pakistani nation in the world, particularly in the west.

This "can tell the world that we are the victim of terrorism and will leave no stone unturned to counter the menace." The Prime Minister reaffirmed that by the grace of Allah Almighty, Pakistan's defence is strong and "we are responsible nuclear power and our (nuclear) assets are in safe hands."

The whole nation has full trust in its armed forces and the government will utilise all resources to fulfil country's defence needs. The Prime Minister also announced a number of measures to provide relief to the common people.

The Prime Minister said under Benazir Income Support Programme, targeted support of Rs 1,000 each will be provided to the poor families to help them overcome poverty and inflation. He said initially, 3.4 million families would benefit from the scheme, which would be expanded later. For this scheme, he added, special Benazir Cards will be issued and the scheme will be formally launched on August 14.

The Prime Minister said that another scheme has already been launched for free issuance of national identity cards, which would benefit some 25 million people. He said Utility Stores would be established at every Union Council level to provide basic commodities of life including flour, ghee and pulses at cheaper rates.

Mobile Utility Stores in remote areas have already been started, while 1600 new Utility Stores are being set up soon. The Prime Minister said 20 percent increase in salaries and pension of government employees has been made, while minimum wages of labourers have been enhanced from Rs 4600 to Rs 6000 per month.

Yousuf Raza Gilani said a revolving fund of Rs 2 billion has been created under the Prime Minister's Housing Scheme and he would soon inaugurate its pilot projects at the federal as well as provincial capitals. Government employees and rural areas would be given special importance in this scheme, he added.

The Prime Minister said under the Green Transport Scheme the government has decided to run 8000 CNG buses in ten big cities. The scheme will cost around Rs 40 billion and its investors were being given special incentives, he added.

He said the Lady Health Workers programme introduced by Shaheed Mohtarma Benazir Bhutto in 1994 was appreciated and welcomed at the local and international level.

The government will add another 20,000 lady health workers this year in the existing number of 100,000, the Prime Minister said and added the quota of lady health workers for Balochistan had been doubled. The Prime Minister said a mother, child health-care programme had been initiated at a cost of Rs 20 billion, under which 20,000 community midwives would be recruited this year.

He said for the first time a new programme would be introduced for diagnosing diseases, which would specially help in preventing hepatitis and polio diseases. Besides, the Prime Minister said, a special programme for treatment and control of Hepatitis had been initiated, which was being supervised by him. He also appealed for co-operation from the local and international institutions in this regard.

He said a new Rs 5 billion school-feeding programme has been initiated in rural areas to provide food to boy and girl students in the primary schools. The Prime Minister said quota for women in government jobs has been doubled, while the legislation is underway for the protection of women and their rights.

He said government was focusing to make operational the Chinese Economic Zone, especially created for Chinese investors in Lahore. The Prime Minister said the restrictions on trade and student unions had been lifted and in this respect legislation work had been initiated. The measures were afoot to restore the government servants forced out of jobs on political grounds, he added.

He said the government had regularised the services of contract employees from Grade 1 to 15. The Prime Minister said the government believed in equal rights for minorities and would ensure protection of their religious sites as well as freedom of worship.

He said a bill had been tabled in the National Assembly for amendment in the PEMRA Ordinance to ensure freedom of media. The legislation work on the Freedom of Information Bill 2008 had been initiated, he added. The Prime Minister said a Journalist Victim Fund had been created to provide protection to journalists. Consultation process on Wage Board Award had started to support the working journalists, he added.

Business Recorder [Pakistan's First Financial Daily]

 

[Owais]

US urged to allow enhanced market access

ISLAMABAD (July 20 2008): Foreign Minister Shah Mahmood Qureshi on Saturday stressed the US to allow enhanced market access to Pakistani products in a meeting with Reuben Jeffery, US Under Secretary for Economic, Energy and Agricultural Affairs' here. Sources said investment particularly in energy sector also came under discussion.

To counter the extremism and terrorism in the tribal belt, development of infrastructure and industry was also discussed to provide the people better job opportunities, they added. Sources said that Reconstruction Opportunity Zones (ROZs) legislation is now before the Congress.

This legislation aims to promote economic growth in Fata by allowing companies, that set up operations there, export their products duty-free to the United States. Development of agriculture sector also came under discussion. The US has recently pledged wheat support to Pakistan to meet its growing food demand.

A statement issued by Foreign Office said: Foreign Minister Shah Mahmood Qureshi emphasised the importance of a broad-based and long-term relationship between the two countries, going beyond counter-terrorism cooperation and extending to deeper trade and economic interaction as well as people-to-people contacts. The Foreign Minister particularly emphasised the need for enhanced market access for Pakistani products in the US and collaboration in energy sector, and cooperation in the field of agriculture.

Under Secretary Reuben Jeffery underlined the importance the US attached to its relationship with Pakistan and support for strengthening bilateral trade and economic ties. He also offered support for closer bilateral cooperation in the energy and agriculture sector.

Matters relating to Reconstruction Opportunity Zones (ROZs) and Bilateral Investment Treaty (BIT) were also discussed. US Ambassador Anne W Patterson and Zafar Mahmood, Secretary Ministry of Petroleum and Natural Resources were also present.

Business Recorder [Pakistan's First Financial Daily]

 

[Owais]

Pakistan invites Japanese investment in major projects
Updated at: 2253 PST, Friday, July 18, 2008


Pakistan invites Japanese investment in major projects ISLAMABAD: Pakistan is to offer Japan, a number of projects for investments in diverse fields with emphasis on participation in energy related projects including construction of Bhasha Dam, Thar Coal, development of Gwadar Port and establishment of industries in ambitious Japan specific Special Economic Zone, a senior Official at Pakistan Embassy in Japan said Friday.

A 10-member Japanese Study group comprising prominent bussinessmen, industrialist and members of chamber and commerce from both the countries and led by Pakistan Japan business Forum will undertake a week-long visit to Pakistan from July 20 during which they will hold meetings with their counterparts in Karachi and Islamabad.

The Minister Economic at Pakistan Mission in Tokyo Iftikhar Babar giving details on Friday said that we are putting every effort to attract Japanese investors to set up industries in ambitious projects in a Special Economic Zone that will be established in an area of 2500 acres of land in Karachi.

Pakistan invites Japanese investment in major projects - GEO.tv

 

[Owais]

USAID to assist in boosting fruit production in Sindh
Updated at: 0400 PST, Saturday, July 19, 2008


USAID to assist in boosting fruit production in Sindh KARACHI: The USAID Competitiveness Support Fund will assist the Sindh Government in boosting production and exports of mangoes, bananas and dates in Sindh.

This was said by the officials of the Competitiveness Support Fund in a meeting with the delegation of the Sindh Abadgar Board here on Friday.

They told that presently plants are being established for processing of 6,663 tons of fruit in the country. Included in them are the plants for 1,944 tons of kino and oranges, 1,675 tons of mangoes, 622 tons of dates and 158 tons of bananas.

The fruit processing plants include 4,197 tons for Punjab, 983 tons for Balochistan, 945 tons for Sindh and 513 tons for NWFP.

The officials of the Sindh Abadgar Board suggested the Competitiveness Support Fund to establish processing plants for value addition of mangoes in Tando Allahyar.

USAID to assist in boosting fruit production in Sindh - GEO.tv

 

[Neo]

Trade with India to benefit Pakistan: Mukhtar ​

Sunday, July 20, 2008

ISLAMABAD: Minister for Trade and Commerce Ahmed Mukhtar has stressed the need for coming out of Indian phobia to reap maximum gains of bilateral trade between the two countries.

“India is becoming an important economic partner and trade with this country will be in the interests of Pakistan”, he told journalists here on Saturday. The minister was of the view that trade with neighbouring countries including India would be very much cost effective as compared with trade with other countries.

He said there are certain trade barriers, hampering Pakistan to give India the status of most-favoured nation (MFN) status while India has given MMFN to Pakistan. Mukhtar said Pakistan has not changed its polices. He however added that everything is done through composite dialogue between India and Pakistan.

The minister stressed the need for developing agriculture of the country, arguing that “future is of agriculture.” Declaring China most potential market for Pakistan’s exports, the minister called upon Pakistani exporters to explore the vast Chinese market to boost the country’s exports. He added that after the signing of the Free Tarde Agreement (FTA) with China, Pakistani exports have increased four times.

He said the only way to stopping smuggling is to bring commodities prices at the level of neighbouring countries, indicating that the government would be increasing prices of diesel to check its smuggling.

Answering a question, he said Pakistani rice exports have increased to a considerable level as the exports of the commodity were recorded at $1.9 billion during the last financial year. He said it was not easy to prepare the trade policy in these hard times, adding that the financial situation was not favourable, however “we must not loose our heart and continue to make effort to overcome this challenge.”

Terming the export target of $22.12 billion realistic, he said he is optimistic to achieve the target with ease. Replying to a question, he said the Commerce Ministry never sets target for imports as prices in the international market remain unpredictable including that of oil.

Replying to another question regarding the provision of Research and Development Fund to the textile sector, he said he will be holding a meeting with the prime minister on Sunday to discuss the issue.

He assured the exporters of textile sector that efforts would be made to meet the demands of the sector for its promotion and benefit of the country. Regarding market access, he said Pakistan has signed Free Trade Agreements and Preferential Trade Agreements with China, Malaysia, Iran, Sri Lanka and Mauritius, while a similar agreement would be signed with the European Union in the beginning of the next year.

He added that initiation of Reconstruction Opportunity Zones with the USA would also facilitate Pakistani exports to US markets. The minister said last year Pakistan exported defence equipment worth $63 million and expressed the hope that this year the country’s exports of equipment would further increase.

Trade with India to benefit Pakistan: Mukhtar

 

[Neo]

BP to start offshore drilling in 2010 ​

Sunday, July 20, 2008

KARACHI: BP Pakistan Exploration and Production Company will start drilling in its offshore block in 2010, company’s Vice President Mosouf Ahmed said on Friday night.

A survey of the block, spread over an area of 34,000sq km in offshore region, has been completed and has shown positive results, he said here at a reception organized by JGC-Descon, which recently signed an agreement to provide British Petroleum engineering services in the country.

“Few years back our production from Badin was declining at rate of 30 per cent annually,” he said, adding then it seemed the business had to be wind off in three years. “But because of service providers that decline was brought down and now business will continue.” Stressing the importance of relationship between exploration companies and engineering service providers, he said BP was in Pakistan for past 30 years and expected dedicated support on part of service providers.

BP to start offshore drilling in 2010

 

[Neo]

Aviation Policy 2008 to attract private sector​

ISLAMABAD: National Aviation Policy 2008 aims at allowing private sector to construct and operate new and existing airports, to start private air taxi service through aircrafts, helicopters on chartered or non-chartered basis, 10-year tax holiday will also be offered to the companies intending manufacturing aircrafts in Pakistan.

National Aviation Policy 2008 is likely to be presented before the federal cabinet in its next meeting for formal approval to facilitate national aviation sector surpass air traffic growth from 7% to over 8% per annum.

Market Access in Air Service: Pakistan shall liberalise bilateral arrangements on reciprocal basis with our bilateral partners to provide service from/to Karachi, Lahore and Islamabad after completion of new airport to the destinations in Western Europe, North America and Africa and to destinations towards East.

While finalising new Air Service Agreements (ASAs), multiple airlines designation clause and article on Code-Share shall be incorporated. There shall be no commercial agreements as part of bilateral agreements. However, airlines shall be free to enter into such co-operative marketing arrangements as are mutually agreeable, which would be outside of ASAs.

Market Access in Cargo Service: Pakistan shall continue to follow open skies policy for cargo operations based on 3rd, 4th, 5th freedom traffic rights. Karachi and Gwadar international airports to shall be promoted as transshipment hub. Cargo villages shall be established on public private partnership at major international airports and linked with National Trade Corridor.

Paid up Capital and Fleet Registration: Paid up capital for Regular Public Transport License shall be increased from Rs.100 million to Rs.500 million, which shall be reviewed periodically by CAA Board. Fleet registration in Pakistan shall be mandatory for all Pakistani aircraft operators except pure cargo aircrafts. Requirement of minimum fleet size for a Regular Public Transport (RPT) license holder shall be at least 3 airworthy aircrafts for domestic operations and at least 4 airworthy aircrafts for international operations. There shall be no permanent addition to capacity by inducting foreign registered aircraft on wet lease other than pure cargo aircraft. Temporary induction of foreign registered aircraft on wet lease may be permitted under extra ordinary circumstances for a short period subject to a maximum period of 90 days. For induction of aircraft, the criteria of minimum remaining operational cycles/hours shall be prescribed by the Director General CAA through Air Navigational Order (ANO).

Tax Holiday: Some 10 year tax holiday would be granted to air craft manufacturers to encourage them invest in aircraft manufacturing units in Pakistan along with establishment of aircraft maintenance companies, flying training schools and ground training schools. Government would rationalize and reduce taxes chargeable to passengers on international and domestic routes. The government would also exempt all taxes and duties on air tickets on secondary destinations. The same privilege shall be extended to operators of small aircrafts and helicopters.

Security equipments and weapons imported by Airport Security Force, CAA, private airports and other operators shall also be exempted from all taxes and duties.

Air Taxi Service: New National Aviation Policy to introduce Air Taxi Service Concept in Pakistan. According to the draft policy document, about 64% of Pakistan population lives in rural areas, with little or no access to air travel even in emergency, for want of air strip, helicopter, helipads and suitable aircrafts to commute to/from remote areas. There are fairly large numbers of cities, which are developed to adopt the concept of air taxi and private owned aircraft for commuting.

In order to develop Air Taxi Service concept in Pakistan the procedure for acquisition and operation of aircrafts, including helicopter, micro-light ultra-light air crafts and hot air balloons shall be liberalized to encourage travel and sports activities.

Use of helicopters for tourism, emergency operations and adventure sports in private sector would be promoted and encouraged and no charges would be imposed for such operations. Liberalized guidelines would be formulated, in consultation with users, to promote and encourage private investment in flying clubs, air taxi service, private ownership of the aircraft, and aero-sports activities i.e. hang gliding, ballooning, heli-skiing and para-jumping. Flying clubs shall be facilitated to overcome shortage of pilots in the country i.e. to develop air strips out side control zones of major air ports fort exclusive use of training flights and to lease Civil Aviation facilities to flying clubs where available.

Charter Service: Under the new policy domestic charter operations would be allowed to Pakistani Operators only using Pakistani registered aircraft including helicopters flown by Pakistani pilots. International charter originating from Pakistan would be allowed on all international routes irrespective of the scheduled operations. On routes

Commercialization of Airports: “Airport Cities” shall be developed including hotels on public private partnership at all major airports. Vacant land at airports shall be evaluated and developed for construction of aviation facilities like cargo complexes and aircraft maintenance facilities. Land at remote and non-operational airports shall be utilized for non-aeronautical commercial and recreational purposes. CAA shall formulate land lease policy to make it commercially viable for private investors.

New Airports: Construction of new commercial airports would be permitted to meet the air traffic. Private sector shall be free to construct and operate new as well as existing airports, airstrips, helipads, heliports including cargo complexes on BOO, BOT, or any other management arrangement and to raise non-aeronautical revenues from these premises. Privatization of airports shall be pursued to make them more efficient and productive.

Consumers Protection: To protect the interests of the users, facilitation committee consisting representatives from government, passengers, travel and tour operators, aircraft operators, airport operators, exporters, importers, cargo handling agents, aero-sports and flying clubs would be set up at national regional and local levels.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Govt eyeing $12.4 billion investment in power sector​

ISLAMABAD: Pakistan is eying $12.4 billion investment in the power sector to generate 13,335MW power by 2016, it is learnt.

Sources said that government is encouraging the private sector to make investment in the power sector and is hoping that the private sector would invest $12.4 billion by 2016 on the 51 power projects that are under process by Private Power Infrastructure Board (PPIB).

According to the document available with Daily Times, PPIB is planning 51 power projects that would generate 13,335MW power and would attract $12.4 billion investment by 2016.

According to the power projects under process in PPIB, the focus is being laid on the hydel power generation and as many as 20 hydel power projects would be operational that would generate 4,478MW power by 2016. In the said sector, first project would start generating hydel power of 84MW in the year 2011 and three additional power projects would be added to hydel power generation that would generate 332MW by 2012.

In the year 2013, two more hydel power projects of 251MW would be operational. Three hydel projects of 422MW would be operational in the year 2014 and as many as 8 hydel power projects would be operational by 2015 that would generate 2,047MW power. Three hydel power projects of 1,342MW would be operational in the year 2016.

PPIB is processing as many as 14 projects that would be running on oil to be operational by 2016 that would generate 2,919MW power. The electricity being generated by oil use would be dearer as compared to the power generation by other sources including hydel, coal and dedicated gas. Three projects of 575MW would be operational in the year 2009 and six projects of 1,429MW would be generating electricity by 2010.Three projects of 600MW would be operational in 2011 and one project of 150MW would be added by 2012.

The country would be having five power projects of 1050 MW electricity that would be run on dual fuel (oil and gas). One project of 225 MW would be operational in current calendar year whereas two other projects of 450 MW would be added to national power grid. The country would have two more power projects of 375 MW by 2010.

PPIB is processing six projects to add to the national power grid that would generate 1,338MW power and these projects are gas based. Two projects of 429MW would be operational by 2009 and one more project would be generating 205MW power in the year 2010. PPIB is processing three more projects out of which two power projects of 584MW would start generating power by 2011 whereas one project of 120MW would be added to the existing national power grid.

Government is encouraging the utilisation of coal based power plants and six coal based power projects of 3,550 MW would be operational by 2014.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Govt aims to enhance marble export to $500m by 2013​

ISLAMABAD: The government has set marble and granite export target to $500 million by 2013 after establishment of model quarries and Marble Cities initiated by Pakistan Stone Development Company (PASDEC).

During 2007-08, the country earned around $35 million from the marble export while in 2006-07, the government earned $22 million from export to mainly USA, Italy, China, UK, Germany and others, officials in the Ministry of Industry, Production told Daily Times Saturday.

According to them, extraction of mines were usually carried out in outdated method of blasting that resulted wastage of mines about 85 percent. The international standard for wastage is only 30 percent to 35 percent.

The first of its kind project initiated in Khuzdar Balochistan namely Model Quarry Khuzdar and it would be fully operational within 6 months.

The government would be able to extract 50 to 60 thousands tonne of material through machineries.

On the other hand, the government get only 5,000 tonne per annum extraction of mines through blasting and other methods.

After completion of the Khuzdar project, the country would be able to generate $7 million per annum alone from the export of raw marble and granite. If the marble and granite further processed, then the government would be able to get $13 million from its exports.

The government has decided to establish model quarries and model marble cities in different parts of the country so as to develop this important sector. Citing the example of Turkey and Italy, the official said they had few marble factories but their marble/granite exports reached in billion of US dollars.

About 7,000 million tonne of quality marble ranging from super white, silky and grey varieties exist in Mohmand, Khyber and Bajaure agencies.

Currently, about one million tonne of marble are excavated from FATA annually. A marble city in Mohmand Agency on an area of 300 acres has also been planned in collaboration with the PASDEC.

In Ziarat FATA quality marble mines exist, and the government has started extraction from there.

According to the agreement Rs 2,000 per track was paid to the area tribes as Surface Rent. This amount is usually utilised for the welfare of these local tribes.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

‘Continuous power, gas supply can make export target, achievable’​

ISLAMABAD: Business Community here on Saturday termed the Trade Policy for the financial year 2008-09 as liberal and open and said that export target of $22 billion could be within reach if government ensures continuous power supply and gas tariff incentives to the industrialists.

“The country is passing through hard times and the steps taken by the government regarding the trade policy are need of the hour,” President Islamabad Chamber of Commerce and Industry, Muhammad Ijaz Abbasi said here.

He was of the view that solid measures should be taken to enhance country’s exports and increase foreign exchange reserves. He said that the export target of $22 billion could be within reach if government ensures continuous power supply and gas tariff incentives to the industrialists, adding that adequate measures should also be taken to help the textile and other sectors of the economy.

Regarding the enhanced trade relations with India, the ICCI President said that doing business with neighboring countries was a good decision.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Extra-long grain rice hybrid evolved​

LAHORE: The private sector, after two years successful trial based on seven years field research, evolved a new variety of extra long grain hybrid rice with better yield.

Dr Ghulam Mustafa Avesi told APP Saturday after successful trial, Pakistan Agriculture Research Council has cleared the latest variety named ‘Guard LP3 Rice Hybrid’ for commercial cultivation, which was most suitable for better yield in Sindh, Balochistan and some parts of the Punjab. He said first time in history, Guard Agricultural Research and Services in collaboration with Chinese has established hybrid seed production in Pakistan.

Project director, Shahzad Ali Malik said by adopting hybrid rich technology, Pakistan could earn eight to $10 billions through rice export by 2012.

He said last year, rice crop through hybrid technology was cultivated on more than 150,000 acres of land and growers got double production. This year they plan to bring 300,000 acres of land under rice cultivation for surplus production.

He said that now it was high time for Pakistan to earn agro-dollars through research-oriented agriculture like Arab countries were earning Petro-dollars through petroleum products and Pakistan has the potential to capture the world market. The new variety seed has received tremendous response from growers and was being cultivated in lower Sindh on large scale under the supervision of Chinese scientists.

Three Chinese Tian Yongjiu, Liu Linhui and Yizhenhua are now engaged in rice seed cultivation in Badin district of Sindh. During two years trial, this variety is produced 90-100 maund rice per acre and with the adoption of rice hybrids in place of existing coarse rice varieties, the rice production can be doubled, he added. app

Daily Times - Leading News Resource of Pakistan

 

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Pakistan and Morocco sign trade agreement​

KARACHI: Morocco and Pakistan signed an accord at the concluding session of Pak Morocco Joint Ministerial Commission (JMC) at Rabat to enhance the bilateral trade and investment. Advisor to Prime Minister on Industries and Production, Mian Manzoor Wattoo and Ahmad Chami, Minister for Industries and Commerce of Morocco signed the accord. Both the governments agreed to start negotiation for signing Preferential Trade Agreement (PTA) by Oct 08 followed by signing FTA. The accord would help to double the trade between the two countries, which was presently at a modest level of $20 million. Moroccan government is also considering a joint venture of DAP/ fertilizer in Pakistan.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

More trade with India is good​

The commerce minister, Mr Ahmad Mukhtar, on Friday crossed one big psychological barrier when he announced Pakistan’s Trade Policy 2008-09: he set aside all the so-called “reasons of the state” of the past not to trade with India with new targets for increased trade with India. The “directional change”, welcomed by Lahore’s traditionally conservative Chamber of Commerce and Industry, will clearly go in favour of Indian imports into Pakistan, but it will “substitute” imports from other more expensive sources to the tune of $2.8 billion. The 136 items added to the tradable items brings the total to nearly 2000. When we began trading with India under General Zia-ul Haq, this list was just 40.

The rationale that did not appeal in the 1980s for political reasons is acceptable today for good political and economic reasons, and the PPP is to be credited for standing behind it: imports from India will undoubtedly cut the cost of raw material imports that go into many of our manufactures. In an economy which is trying to save itself from drowning in inflation owing to a hefty import bill and falling rupee, any margin gained in cost-cutting is welcome even though this logic did not permeate the planners in the past. Other “imponderable” changes for the better are expected to emanate from this opening. In a nutshell, the loosening of controls on the economy vis-à-vis India will lessen the hold of the Indian and Pakistani bureaucracies on political decision-making in the realm of economic relations in New Delhi and Islamabad.

The new approach to India in the trade policy is subtle and intellectually appealing. For instance, Wahga is going to be used more — it will have to be expanded in its capacity of clearance — for the import of CNG buses in the coming 12 months. The threshold has been lowered significantly. The number of interested importers will increase because the importable buses can be as old as ten years. And each importer will be allowed ten buses across the land border. But the rider added to this permission is even more significant: the Indian manufacturers of CNG buses will have to guarantee that they will begin manufacture of such buses in Pakistan!

In today’s context, the new trade policy is foreshadowing a change of direction in regard to the permission of Indian investments in Pakistan. When Prime Minister Shaukat Aziz was at the helm of Pakistan’s economic affairs, he had drawn a line on this matter within the overall framework of Pak-India normalisation. Since the normalisation package contained resolution of old disputes, he was clearly interested in India making some concessions in domains other than trade and investment. The supposition was that India’s interest in prying open the Pakistani market over-rode its political concerns. That supposition was wrong. The fact was that Pakistan was flying in the face of the principle of free trade, denying itself the advantage of being next to a major producer of manufactures and raw materials, and allowing itself to be punished by the extra cost of importing the same items from distant sources. That Pakistan’s policy was unrealistic was shown by figures. Pakistan kept on adding raw materials to its list of tradable items and the bilateral balance kept on tilting in India’s favour. If Pakistan intended to punish India by withholding from it the Most Favoured Nation (MFN) status, it failed. Trade Minister Ahmad Mukhtar has actually given this status to India without saying so when he clearly said that Pakistan will benefit from the much larger Indian economy. The PPP government will no doubt try to enhance the advantage of being next to India by removing the trade hurdles that exist without quarrelling too much about India’s non-tariff barriers. The entire world is telling India to remove these barriers without embargoing trade with India. On the other hand, India is becoming aware of the disadvantage it has to suffer, because of its trade barriers, in the matter of attracting foreign capital at the same level as China. So it is only a matter of time before it will have to comply.

The PPP government is landed in the eye of Pakistan’s economic storm. But it has some factors going in its favour. The import bill of $40 billion includes the exogenous trigger of the biggest ever blow-up of oil prices. But the Saudi facility of deferred payments, the falling oil price, increase in the production of hydel power, and a World Bank facility to shore up its reserves, go in its favour. According to estimates, loadshedding will be halved in another two months, and there will be some money left over for allowing important subsidies to the export sector and payment of dues to the producers of electricity. The trade opening with India is a political strategy that will undermine the warlike narrative that India retains hostile designs against Pakistan. As opposed to that, the planned American aid of over a billion dollars annually to Pakistan is an economic strategy that will have political effect. The PPP government must recognise the pragmatic exigencies of the situation. Economic improvement will follow in the wake of decisions made in favour of the welfare of the common man. *

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Pakistan has no trade in 81pc of world products: Top 200 items account for 91pc of exports​

ISLAMABAD, July 19: Pakistan does not figure in 81 per cent of products traded in the world as its top 200 export products account for 91 per cent of its total exports, but these products have only 19pc share in the international market, says a commerce ministry report.

In 2006, 5,085 products were traded worldwide; of which Pakistan only traded in 1,365 products.

It is, however, encouraging that markets in which Pakistan figures, it is ranked very high in world market shares.

For example, in cotton yarn and woven cotton fabrics, it is No. 1, while in cotton bed linen, toilet and kitchen linen and cotton knitted shirts, it is No. two, and in rice, it is No. 3 in terms of world market shares.

A good trend is the growth in non-traditional category of exports. Some of non-textile items whose exports increased in 2007-08 include petroleum group [$1.203 billion], cement [$411.055 m], chemicals and pharmaceuticals [$627.306m], jewelry [$202.742m], leather products [$687.481m], surgical and medical instruments [$255.497m].

In the category of ‘others’, the increase in exports during this period was $914.571 million.

Some of the items included in this category are marble, matches, plastic items, wood items, ceramics, tiles and sanitary fixtures and various household commodities.

Increase in this category is good evidence of progress in diversification and movement towards export of value-added items.

In terms of market diversification in 1998-99, the seven markets -- US, Germany, Japan, UK, Hong Kong, Dubai and Saudi Arabia -- accounted for 53.4 per cent of our exports, whereas in 2007-08 this share reduced to around 44.4 per cent.

The three regional groupings that are significant from Pakistan’s growth point of view are: Latin American countries, such as Brazil. Chile, Colombia, Mexico and Nicaragua, African countries, including South Africa, Kenya, Madagascar and Mozambique, non-traditional European markets, including those belonging to the former Soviet bloc, such as Scandinavian countries, Poland and Greece.

If one looks at the trend from 2003-04 to 2006-07, one sees that growth of exports during this period was around 114 pc in Latin America, 81pc in Africa and 60pc in the European group of countries.

“This diversification trend is healthy and needs to be sustained, but in the immediate future, we cannot afford not to shift our focus from textile exports since they constitute around 57 per cent of our total exports.

“It is, however, noteworthy that the share of textile and clothing exports in global trade is 4.5pc and Pakistan’s share in global exports of this sector is a mere 2.15 pc,” said the report.

This indicates that Pakistan is facing fierce competition in this sector from a number of countries.

On the other hand, new opportunities are emerging since some of our competitors, like China, are losing their competitive edge due to higher input costs. Therefore, our textile producers need to exploit this opportunity by entering into joint ventures with Chinese companies and setting up of production facilities in the China Specific Industrial Zones being established in Pakistan.

If one looks at the trend since 2003-04, in the first two years, exports rose by around $2 billion each year while in 2006-07, exports rose by only around half a billion dollars.

Imports on the other hand increased by around $5 billion in 2004-05, by $8 billion in 2005-06 and then dipped to register an increase of only $2 billion in 2006-07.

The year 2006-07 saw a decrease of growth of both imports and exports, hence confirming a correlation between higher imports and exports. This year again imports compared to last year have increased by $9.428 billion in 2007-08 whereas exports have also increased by $ 2.246 billion.

Bed-wear a major item declined in the US market due to stiff competition from India and China, as well as preferential tariffs available to our other competitors under arrangements, such as NAFTA, CAFTA and AGOA etc.

In the European Union, bed-linen exports suffered due to an average anti-dumping duty of 5.7pc.

Moreover, our competitors, such as Bangladesh, Cambodia and Sri Lanka, have duty-free access whereas our textiles attract on average a duty of 17-23pc.

The happy news is that the anti-dumping duty will run its course by January-February 2009 and our bed linen exports should pick up after that.

Towel exports have decreased due to higher cotton and yarn prices, the marketing of our textiles is hampered by visa restrictions for our businessmen and travel advisories, preventing buyers coming to Pakistan.

Less emphasis on quality and compliance issues is also hurting our textile exports, says the report.

Pakistan has no trade in 81pc of world products: Top 200 items account for 91pc of exports -DAWN - Business; July 20, 2008

 

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Cement Makers earn huge profits: Export up 182pc in value, 162pc in quantity​

KARACHI, July 19: While consumers suffered heavily by paying higher cement prices, the outgoing fiscal year proved cheerful for the cement producers, who made profits with 162 per cent increase in quantity and 182 per cent in value on the export front.

According to figures of Federal Bureau of Statistics (FBS), a total of 7.367 million tons ($411 million) of cement was exported during July-June 2007-08 as compared to 2.8 million tons ($146 million) in the same period last year.

An exporter said that the main export markets in the year under review were the Middle East, India and African countries where dispatches were made at a price ranging between $53-63 per ton.

In Afghanistan, the cement makers fetched price hovering from $38 per ton to $50 per ton.

Local cement prices had been under pressure for the last few months and currently Falcon Cement is selling at the highest price of Rs380-400 per 50 kg bag. Other brands are also costlier.

Dealers said that the government had not still taken any action against the cement makers for pushing up the rates to the peak level.

Due to failure of the Competition Commission of Pakistan (CCP) to check cartelisation, the cement markers enjoyed a free hand pushing the rates up unhindered.

A dealer said that the manufacturers had been creating artificial shortage by supplying very low quantities to the local market and exporting cement in huge quantities.

He said that there was no authority to check the monopoly of the manufacturers.

Construction activities in Karachi have been going on in full swing before the start of monsoon season in the third week of this month.

An analyst at a brokerage house said, “Exports have been more profitable for the local industry then the sale of cement in the local markets.”

He was of the view that the coal-fired and gas-based cement plants had been facing problems owing to rising price of coal in the world market. He claimed that the cement makers were working on very lower margin.

A leading cement maker and exporter, who asked not to be named, said that the price of cement bags of almost all the companies had surged by Rs40 per 50 kg bag after the budget.

He said that the maker of Falcon Cement had increased the ex-mill rate to Rs340 on Friday from Rs325 per 50 kg bag. Other producers had already enhanced the rate earlier this week. He added that the ex-mill price of almost all the producers had come to Rs340 per 50 kg bag.

He linked the price hike to increase in federal excise duty by Rs150 per ton, one per cent increase in general sales tax, coal price hike in global markets, and gas price hike for captive power plants.

The producer said that the Indonesian coal price has surged to $160 per ton (C&F Karachi) from $103 per ton six months back, while the South African coal price is now tagged at $200 per ton as compared to $151 per ton six months back.

He said that the price of cement in domestic market is likely to decline as construction activities will slow down in August owing to monsoon season. There might be a low demand of cement in Ramazan and Eid holidays in the first week of October.

Cement Makers earn huge profits: Export up 182pc in value, 162pc in quantity -DAWN - Business; July 20, 2008