Pakistan Economy - News & Updates - Archive

[Neo]

11 percent decline in foreign investors' repatriation of profit​

KARACHI (January 22 2009): Repatriation of profit and dividend by foreign investors has begun to move downward due to slackness in the economy and it registered significantly decline of 11 percent during first half of the current fiscal year. "The huge dip in repatriation of profit showed that the earnings of local and foreign companies operating in Pakistan were declining due to global economic slowdown," analysts said.

They said that Pakistan government has allowed 100 percent repatriation of profit to foreign investors. Therefore, they are enjoying fully the government policy by transferring their profit back. However, at present it is showing a negative trend due to global financial crisis, they added. Repatriation of profit by foreign investors witnessed a decline of $46 million during the July-December.

With this decline, the overall repatriation amount stood at $445.1 million during first half of current fiscal year as compared to $501.1 million of last year, depicting a decrease of 11.2 percent. During this period foreign investors sent $354.3 million on account of return on foreign direct investment (FDI) and $90.8 million on account of return on foreign private investment (FPI).

Out of 36 sectors, only nine sectors showed increase in repatriation amount, while remaining depicted downward trend. Major part of repatriation amount was $114.9 million in power sector, against $101.8 million of last year, depicting an increase of 13 percent.

Petroleum refining sector was second, where foreign investors sent $67 million as compared to $48.2 million of 2007-08, showing an increase of 39 percent. Repatriation from communication sector declined by 72 percent to $23.8 million from $84.3 million. Three sectors--food packing, leather and heavy transport--presented 100 percent decline in repatriation amount during the period under review.

State Bank statistics show that foreign investors sent profit worth $32.9 million from financial sector, $33.5 million from trade sector, $18.3 million from food and $9.8 million from chemicals sector. Beverages sector sent $24.4 million profit, tobacco & cigarettes sector sent $15.1 million and fertiliser sector sent $3.9 million.

 

[Neo]

'Pakistan needs to project true image among foreign investors'​

LAHORE (January 22 2009): 'Pakistan would have to take concrete and result-oriented measures to project itself as a stable economy and a peaceful country if it wants to attract foreign investment.' The Ambassador of the Netherlands, Tjreed F de Zwaan said on Wednesday.

Speaking to the office bearers of the Lahore Chamber of Commerce and Industry (LCCI) the Dutch envoy said that Pakistan could benefit from its ideal strategic location provided it improves its image and the government gives impression to foreign investors that it has the ability to tackle the issues prudently. The honorary consul of the Netherlands in Lahore, Tariq Rehman was also present on the occasion.

Zwaan said that that both the governments and the private sector would have to work hand in hand to stabilise the economy of this resource-rich country. He also highlighted the salient features of the Netherlands economy saying that both the sides should exchange delegations, which is a prerequisite of creating durable bilateral trade relations.

He also urged Pakistani business community to start joint ventures with their Dutch counterparts. Addressing the occasion, the LCCI President, Mian Muzaffar Ali said that trade volume between the two countries, is not so encouraging mainly because of lacking marketing exercise from both the sides. Such deficiencies require immediate attention while both the countries should adopt techniques to identify more tradable items, he said and stressed the need for maintaining a liaison between the business communities of the two countries.

Dutch Ambassador further said the Netherlands has the expertise in dairy sector and could guide Pakistan that needs collaboration to bring this sector in the mainstream of economy. This is now more important in the wake of WTO regulations that calls for more hygienic and preservation along with changing tastes and preferences of the consumers around the globe, he added.

The food processing industry is the largest branch of Dutch industry where food production has been automated to a large extent, he said and urged to provide assistance in mechanised farming, floriculture, and horticulture and poultry development.

The LCCI Chief also said that there are ample of opportunities that exist in various mutually beneficial areas to increase trade, joint ventures and commercial activities between the Netherlands and Pakistan. 'The LCCI could play an imperative role in the revival of trade and business between the two countries through frequent exchange of delegations,' he stated.

 

[Neo]

Cost of doing business in country increasing alarmingly​

MULTAN (January 22 2009): President Board of Management, Multan Industrial Estate, Mian Iqbal Hassan has said that if Mohtarma Benazir Bhutto would have been alive, she would not have allowed importing tractors under the prevailing economic situation of the country. The government has planned to import 20,000 tractors at a cost of over $180 million in foreign exchange.

While talking to Business Recorder, Hassan said that local industry is geared to produce over 60,000 tractors a year. This year the tractor industry has extended their production facilities from 50,000 to 60,000 tractors a year. The locally produced tractors are superior in quality and cheaper in price in this region, he added.

He said that tractor industry is supported by over 280 vending industries. The overall employment in tractor industry is over 50,000. The Pakistani exporters are exporting tractors at 20 percent premium that of the local price in international competition.

He said that automobile industries are in serious crisis all over the world. The USA giant manufacturers like General Motors, Ford, Chryslers and many others Japanese and European companies are closing down their units because of serious recession. Their governments are trying hard and spending billions of dollars to revive their industries. It is also to be noted that their bank interest rate is 0.50 percent to 0.75 percent per annum, he stated.

Hassan further said that the cost of doing business in Pakistan is alarmingly increasing. It is impossible for Pakistani investors to pay 21 to 22 percent bank interest without insurance cost. It has become very difficult to survive for Pakistani tractor industry. If the same situation continues, the unemployment will increase to an alarming stage.

He further said that the government of Pakistan is subsidising the import of tractors to the tune of Rs 4 billion and also providing exemption on import duty, excise duty and sales tax on import of tractors. The policy of the government to import tractors has badly affected particularly the vending industry.

Hassan demanded of the government that the import of tractors may be banned or allowed to import without any concessionary duties. The subsidy should be directly given to farmers on their discretion to purchase tractors locally or import from abroad.

 

[Neo]

Oil exploration: ECC seeks details of contracts given to foreign companies​

ISLAMABAD (January 22 2009): The Economic Co-ordination Committee (ECC) of the Cabinet has sought details of exploration contracts awarded to multinational companies by the Oil and Gas Development Company Limited (OGDCL) for different blocks in different parts of the country, particularly in Balochistan, during the past two decades, official sources told Business Recorder on Wednesday.

The sources said the ECC was of the view that to dig out the exact position of wells, a study should be conducted on the issue as to how much work had actually been completed by these companies during the last two decades. In response, the Ministry of Petroleum agreed that complete details of contracts awarded to large multinational companies during the last 20 years would be placed before the ECC.

The ECC, which met on January 9 with Prime Minister's Advisor on Finance Shaukat Tarin in the chair, did not approve the 2009 Petroleum Policy, drafted and submitted by the Ministry, due to serious reservations on the proposed bid evaluation process, gas pricing formula and evolving a mechanism for involvement of indigenous people in exploration activities.

The ECC decided to constitute a committee to review and amend the draft policy, which would comprise Adviser to the Prime Minister on Petroleum, Ministers for Kashmir Affairs, Privatisation, Livestock and Dairy Development, Water and Power, Law and Justice and Deputy Chairman of Planning Commission as its members. The Secretary, Ministry of Petroleum, will act as its member/Secretary.

"Although multinational companies were awarded exploration contracts for different blocks in the past, no tangible work on the ground has been evident," the sources quoted the ECC as observing. Main objectives of the controversial Petroleum Exploration and Production Policy 2009 were acceleration in exploration and production activities by improving incentives and gas pricing terms to maximise production, promote local and foreign investment in oil and gas and provision of clarity in process and procedures.

The ECC was informed that 2007 Petroleum Exploration and Production Policy could not be implemented, mainly owing to tremendous hike in the price of oil in the international market. The type of incentives offered to the exploration companies in the 2007 policy were not found satisfactory by the exploration companies, urging its review in accordance with the price in the international market.

The ECC was assured that revised 2009 Petroleum Exploration and Production Policy was expected to be instrumental in promoting exploration on fast track basis and attract local and foreign exploration and production companies, the sources added. The ECC was also apprised of the various changes/variations proposed in the policy from the previous policy of 2007, which are:

-- The previous policy criteria for companies, entitled to acquire petroleum rights, are being changed, made flexible and simple. The main objective is to create more competition among companies (local and foreign) and to develop local technical base to reduce dependence on foreign companies.

-- The smaller local Pakistani companies will be allowed as new entrants to join consortia of other companies as non-operators to gain requisite experience to handle the operator-ship independently.

-- Concept of "call for nomination" is being done away with to reduce the time in award of the blocks.

-- To complete bidding process expeditiously, period for new bidder is being reduced to 60 from 90 days.

-- Bid evaluation procedure has been simplified by eliminating the factor of biddable gas price gradient (GPG).

-- In wind fall levy (off shore and on shore), no change is proposed except that a capping of 100 dollars per barrel is introduced to safeguard the government interest against the high international crude oil prices.

-- In the extended well testing (EWT) (off shore and on shore), reduction in discount in gas prices from 15 percent to 10 percent during the EWT phase is proposed. It would encourage companies for early production of gas.

-- For the grant of lease after expiry of lease term (off shore and on shore) the existing leaseholder is being given first right to match the highest bid.

-- Gas pricing formula (GPF) is simplified and a cap of 100 dollars/bbl has been proposed to protect government interest against high prices.

-- In the conversion policy, changes are made as a concept of GPG and gas pricing mechanism is proposed to be changed.

The sources said the ECC further directed the ministry to review the safeguards being given by the exploration companies to local population, particularly to look into the possibility of raising their remuneration.

The ECC directed that comprehensive guidelines be prepared keeping in view the participation of local population and tribes in the exploration activities and procedures, fixing their shares in the proceeds and also to look into the possibility of expanding of certain average of income proceeds in that particular area. These guidelines will be made part of the 2009 policy.

According to the sources, the Planning Commission pointed out that they, which should be taken care of and be incorporated in the policy, raised certain observations on policy. This was endorsed by the committee.

As regards the proposal of grant of lease to the existing leaseholder after expiry of lease term, it was decided that the existing leaseholder, on expiry of the lease term, be granted right of refusal if he offered 25 percent increase on the highest bid of the zone.

"Serious observations on the proposed bid evaluation process, gas pricing formula and for evolving of mechanism for involvement of local population tribes in exploration activities were raised by the ECC members," the sources said.

To resolve these issues, it was proposed that a ministerial committee be constituted, which would take decisions on behalf of the ECC on these issues for their incorporation in the 2009 Petroleum Exploration and Production Policy. The ECC agreed with the proposal.

On the issue of sale of natural gas within Pakistan, it was agreed that first right of refusal be assigned to the government of Pakistan. The ECC also directed Petroleum Ministry to (a) consider observations of the Planning Commission and also incorporate them in the policy; (b) right of refusal should be allowed to the existing lease-holder if the bidder offered 25 percent more than the highest bid of that zone. According to official documents, the ECC approved the policy in principle, but there was no agreement on some of the proposals.

 

[Neo]

PCPA Friends transferring latest technology to farmers​

MULTAN (January 22 2009): Pakistan is an agricultural based country and its major future is connected with agriculture sector. Wheat is an important crop of our country and nowadays we are in dire need to have a bumper crop of wheat. Pakistan Crop Protection Association (PCPA) Friends Group is playing a pivotal role to transfer the latest technology to farmers and to increase the production.

'Padawari Pack' is a chain of this series that helps farmers to increase their production by using this in their fields. PCPA Friends hold a draw to distribute solar tube wells, laser land leveller, drip irrigation and seed grader in Multan Arts Council. The purpose to distribute these latest agriculture equipment was to give awareness to farmers about the latest technology, so that the dream to get bumper crop could be fulfilled.

 

[Neo]

Industrial output down 5pc July-Nov 2008 ​

By Mubarak Zeb Khan

Thursday, 22 Jan, 2009

​

ISLAMABAD: Pakistan’s industrial output declined by over five per cent in the first five months of the current fiscal year in the wake of international financial crisis, sparking fears of massive layoffs, particularly in the electronic and textile industries, officials told Dawn on Friday.

The fall out of the global crisis coupled with the home-grown policies - including highest-ever interest rates and lack of energy availability - slowed down the manufacturing in the current fiscal year which may also ultimately affect the economic growth.

Due to the slump in the industrial sector, particularly in the large-scale manufacturing (LSM), the government has already witnessed decline in revenue collection and slowing down in exports proceeds, which registered negative growth in the month of December 2008.

Many sub-sectors of the LSM did not perform well during July-Nov, particularly electronic goods, textile related goods indicating that the 6.1 per cent LSM growth target set for 2008-09 is unlikely to be achieved.

The World Bank and IMF have already said that Pakistan’s economy is facing difficulties which will be aggravated by the global crisis. Massive layoffs in textile and electronic industries are feared in the next few months.

Statistics showed that textile exports already dropped by around two per cent during the first half year of the current fiscal year over last year. Any drop in production or exports is signaling massive layoffs, particularly those people who are working on daily wages to feed the families.

Data compiled by the federal bureau of statistics showed that production of cotton yarn declined by 0.31 pc, cotton cloth 0.49 pc and power-looms 48.03 per cent during the first five months of the current fiscal year over last year.

All major electrical production witnessed negative growth as refrigerators recorded a negative growth of 0.23 pc, deep-freezers 26.02pc, air-conditioners 10.52pc, electric bulbs 22.91pc, electric tubes 16.68 pc, electric fans 2.63 pc, electric motors 24 pc, electric meters 19.93 pc, switch gears 3.59pc, electric transformers 0.14pc, TV sets 30.53pc and bicycles 12.25 pc during the period under review.

An official in the industry ministry said industrial production has been adversely affected by the crisis through both price effects that increase the cost of production and income effects that decrease the demand for products in the markets.

The severe power shortage and highest-ever increase in energy prices also further fuel the crisis, which led to cuts in production, particularly in the textile based industries resulting into lower exports.

Federal Minister for Industries Mian Manzoor Wattoo on Thursday informed the Senate standing committee that his government was committed to revive the industrial sector by addressing the core issues plaguing the industry.

However, he did not mention the measures to arrest the decline in the manufacturing sector and a possibility of coming up with an industrial policy in the near future.
Secretary industries Shahab Khawaja meanwhile attributed the fall in the industrial output to highest ever interest rates, high input cost, power and gas outages.

In the food group, the production of vegetable ghee dipped by 13.83 per cent during the first five months of the current fiscal year followed by cooking oil 4.05 pc, wheat and grilling 11.19 per cent during the period under review.

It is feared that as a result of decline in industrial output, the import bill of consumer and electronic goods swelled during the period under review, which would also put pressure on the balance of payment.

The industrial growth had been shrinking for the last three years as it grew by 5.4 per cent in the year 2007-08 down from 19.9 pc growth recorded in the year 2004-05 owing to capacity constraints and high cost of doing business that resulted into closure of many units.

 

[Neo]

Services exports posts impressive growth ​

Thursday, 22 Jan, 2009

​

ISLAMABAD: Services sector export up by 42.01 per cent in the first five months (July-Nov) of the current fiscal year over the same months last year.
Federal Bureau of Statistics data issued here on Thursday showed that proceeds from services export totaled $1.533 billion against $1.079 billion over last year.

The upward trend in the services exports has followed greater market access for financial, telecom and tourism etc.

The import of services, meanwhile, recorded a decline by 8.40 per cent to $3.935 billion during July-Nov against $3.923 billion last year.

However, the services imports witnessed a deeper cut of more than 40 per cent in the month of November 2008 over last year month. But the exports of services recorded a marginal growth of 6.07 per cent over the same month last year.

 

[Neo]

Afghan transit trade soars to Rs25.7 billion ​

By Parvaiz Ishfaq Rana

Thursday, 22 Jan, 2009

KARACHI: Afghan Transit Trade (ATT) has recorded 71.45 per cent growth at Rs25.763 billion during first six months (July-Dec) of the current fiscal year over the corresponding period last year when it stood at Rs15.026 billion.

According to official figures, there had been an increase of Rs10.737 billion in imports of goods through ATT during this period. Much of the growth was noted in items which have little or no demand in the Afghan market, prompting concerns of smuggling.

Import of machinery and electronic items registered the highest growth of up to 192.31 per cent at Rs4.027 billion against Rs1.377 billion over last year.

An underdeveloped and war-torn country having no demand for modern electronic gadgets, there is a sustained growth in import of such goods. Similarly, Afghanistan having no basic infrastructure facilities and road networks could not import machinery where industry is almost non-existence.

As far as import of electronic items is concerned refrigerators, air-conditioners, vacuum cleaners, TV sets, DVD players etc are being largely imported and one cannot understand who their customers are in a country, which has no electricity.

Similarly, there is a tremendous growth of 39.99 per cent in import of iron and steel and other metals under ATT at Rs746.56 million from Rs533.28 million recorded in the same period last year.

Import of fabrics under ATT also increased by 28.90 per cent at Rs5.143 billion during July-Dec period as against Rs3.990 billion recorded in the same period last fiscal. Such a large quantity of fabrics imports under ATT is not justified because Afghan culture is still far away from modern exposure and has no such market demand.

Foodstuff imports under ATT increased by 32.31 per cent during first six months of current fiscal at Rs6.227 billion compared to Rs4.706 billion last year.

During July-Dec period vehicles worth Rs933.70 million were imported compared to Rs433.12 million earlier registering a growth of 78.37 per cent.

Other items, including household goods, tiles, paper, chemicals, plastic etc worth Rs9.684 billion were imported during period under review as against Rs3.985 billion during last fiscal.

Official sources disclosed that a new agreement on ATT is going to be negotiated next month. The present agreement only allows up to 10 per cent of ATT cargo examination but it is being suggested that the same should be increased to 50 per cent to discourage smuggling under its cover.

Secondly, it is also being recommended by trade and industry that the ATT should be put up before the National Assembly prior to its approval, because the last ATT agreement was signed under pressure and it created lot of problems for the domestic industry.

The customs intelligence wing, which was made ineffective by the Shaukat Aziz government should be reactivated to curtail rampant smuggling under the ATT cover. Inside sources disclosed that presently the Appraisement Intelligence Branch is poorly equipped and the government should pump in some funds to improve their working by giving them proper equipments.

The reward system to customs officials on tracing out mis-declaration or under-invoicing was also done away by the previous government. This used to be a boon for honest officers, who avoided illegal gratifications.

Even today a large number of ATT consignments in containers do not leave city jurisdiction, customs sources told Dawn. They further said there were yards where such containers are taken and after removing goods are held back for a week to show that a box has traveled up to Pak-Afghan border.

But some smart players, who do not want tamper with the seals of containers, only remove nuts and bolts of its doors and after removing goods fix them back and allow it to be taken (empty) up to Pak-Afghan border.

Customs sources requesting anonymity disclosed that it is an open secret that ATT official seals are prepared in a narrow lane opposite Customs House and are also being openly used by unscrupulous people involved in such illegal trade or smuggling.

To prevent such cases it is being suggested that the examination of ATT goods should be done at Karachi and not at Pak-Afghan border.

 

[Neo]

Pakistan Forex Reserves Down To $9.949 Billion For Week Ended Jan 17​

KARACHI-(Dow Jones)- Pakistan's foreign exchange reserves fell to $9.949 billion in the week ended Jan. 17 from $10.002 billion the previous week, the State Bank of Pakistan said Thursday.

Of the total reserves, holdings of foreign exchange reserves by the central bank were $6.585 billion, compared with $6.656 billion in the previous week.

Foreign exchange deposits held by commercial banks were $3.364 billion, compared with $3.346 billion in the week ended Jan. 10, the central bank said.

 

[Neo]

Govt to seek $60bn FOP help in four areas ​

Tarin says assistance sought for economy, security, energy and development projects​

Friday, January 23, 2009

ISLAMABAD: In a major policy shift, Pakistan has decided to seek $50 to $60 billion assistance from the Friends of Pakistan (FOP) forum for four major areas including economic and financial issues, terrorism-related matters, energy sector and mega development projects, it is learnt.

Instead of asking the FOP forum to provide funds only for 71 development projects, Islamabad has now decided to broaden its strategy to include all kinds of areas liked by donors in its wish list rather than restricting them to investment in mega development projects.

A stumbling block in attracting investment as well as financial assistance from the donors is confusion in Islamabad whether to pursue donors from the FOP forum or Pakistan Development Forum (PDF) or donors’ conference because all multilateral as well as bilateral donors on these three forums are similar. It does not seem feasible to approach all these forums simultaneously, added the sources.

When Adviser to Prime Minister on Finance Shaukat Tarin was contacted for comments on Thursday, he said that the government has identified four areas for seeking assistance from the FOP forum. “These four areas are economic and financial assistance, security-related assistance, energy cooperation and undertaking of development projects,” he added.

The finance adviser also said that a technical-level meeting of the FOP forum would be held by the end of January or early Feb in Islamabad. “But the ministerial level meeting of the FOP will be held by March probably in Tokyo,” he added.

Earlier, Pakistan had tabled 71 development projects before the Friends of Pakistan forum meeting held in Dubai but the donors’ response was lukewarm as they termed it a ‘wish list’ or a ‘long shopping list’. Keeping in view the response, Islamabad has transformed its strategy to give an opportunity to various donors to help Pakistan in areas where they desire to invest in years ahead.

However, the sources admitted that it was not a right approach to table 71 development projects before the donors on which huge investment in terms of money as well as time is required. It was the decision of the Planning Commission to seek assistance for 71 projects but now the input of finance ministry was also taken, resulting in expansion of Islamabad’s strategy for the FOP forum.

A detailed feedback obtained by Pakistan’s Foreign Office as well as Economic Ministries in the aftermath of last FOP meeting held on November 17, 2008 at Abu Dhabi spells out in details about the prevailing thinking of developed world, which clearly states that if Islamabad did not prioritise its list, the member countries would remain non-committal to come forward to undertake these projects owing to worldwide financial crisis, whose brunt was feeling by all the developed countries.

The donors are also suggesting Pakistan to formulate short-term, medium-term and long-term strategies in accordance with importance of the projects.

The best way should be to adopt an incremental approach because it would not be possible for the member countries to commit everything on the long demand list immediately.

Official documents state that the donor countries appreciated the initiative to meet two major challenges Pakistan is confronting namely security issues and economic crisis.

The donor countries also raised objections on duplication of work, saying that the Friends of Pakistan and Pakistan Development Forum (PDF) are more or less the same. The donor countries in PDF are also similar so either these two forums are merged together or existing PDF may be reactivated.

“The PDF meetings are an annual event but no such meetings have taken place for the last two years,” the donors’ response further stated.

It was pointed out that since Pakistan needs long term development assistance, it is necessary to highlight economic, political and administrative constraints for devising strategies. “There are no credible data available on necessary facts sheet is available to the international community on Pakistan’s economic situation,” they added.

The donors’ countries during the meeting were not briefed about the possible impact of the IMF program on the economy and its impact on the general masses of Pakistan.

“Pakistan may request the IMF to circulate all concerned countries, along with necessary data and fact sheet about Pakistan, highlighting the likely impact of IMF package on overall economy of Pakistan as well as the report may also recommend an additional funding to Pakistan,” it concluded.

 

[Neo]

‘President, PM want to bail out textile industry’ ​

Friday, January 23, 2009

KARACHI: Textile ministry is working on the national textile policy, and recommendations on the draft policy have been invited from all stakeholders to give this very important document a final shape at the earliest.

This was stated by Federal Minister for Textile Rana Muhammad Farooq Saeed Khan during his visit to Karachi Chamber of Commerce and Industry (KCCI) on Thursday.

He informed members of KCCI that his ministry was seriously pursuing the formulation of the much demanded textile policy to strengthen this leading exports sector the country.

President KCCI Anjum Nisar, Advisor to Sindh Chief Minister on Provincial Investment and former president KCCI, M Zubair Motiwala, Senior Vice President KCCI, Muhammad Jawed Bilwani and Vice President KCCI, Mohammad Ali along with other senior leaders of KCCI welcomed the minister.

The federal minister assured the business community that he had already taken up the issues of the textile industry relating to Ministries of Finance, and Petroleum and Electricity with the concerned authorities besides initiating various revolutionary steps in the Ministry of Textile to ensure its very dynamic role in economic prosperity of the country. He said he was pursuing the Federal Ministry of Finance and State Bank of Pakistan to pay Research and Development (R&D) claims of textile exporters amounting to around 10 billion rupees as soon as possible.

“We want to make the textile ministry a strong force to bring a revolution in this sector, which is the main contributor to foreign exchange earnings of the country,” he asserted adding that the last government did nothing on these grounds.

He said President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani are also very much concerned over the problems/irritants facing the vital industry of textile ie, high electricity and gas tariffs and their shortage and high bank mark-ups, and wanted the earliest solution for its bail out.

He said that he would be striving with all sincerity and seriousness for boosting the textile industry, an economic sector of the country holding great potential.

Rana Farooq said that unlike the past, he would take all stakeholders of the textile industry on board to make the ministry’s role very objective and target-oriented. He said cultivation of cotton crop would be encouraged through various incentives as cotton is the only crop to boost foreign exchange.

To a question, the minister said the growers had been given a green signal for BT cotton cultivation as they would be the main beneficiary.

He criticised the last government for replacing cotton crop with sugarcane crop. “Cotton is our only crop for boosting foreign exchange earning,” he remarked.

He underlined the need for close liaison between Ministry of Textile and private sector players in the textile sector.

Leading industrialist and Advisor to Sindh Chief Minister on Private Investment, M Zubair Motiwala emphasised on the need to declare the textile industry a special sector and provide it with an enabling environment to make it competitive in the regional and international markets. “We demand nothing but an enabling environment to beat regional competitors,” he said.

He regretted that Pakistan has been mainly exporting textile raw materials like yarn and grey cloth instead of value-added goods. He mentioned that till today there was no national strategy for the textile industry.

President KCCI, Anjum Nisar briefed the minister about various problems/irritants confronting the private sector, especially the textile sector in Karachi.

Earlier, the textile minister visited the office of the textile commissioner where he was given a briefing on the working of the department and future plans to enhance its role for promotion of the textile industry, which included skill development in different sectors of the industry.

 

[Neo]

National survey on poverty to be started soon: Farzana ​

MKRMS organises seminar on Current Situation and Our Economy​

Friday, January 23, 2009

ISLAMABAD: Benazir Income Support Programme (BISP) Chairperson Farzana Raja said that the government had decided to hold the door-to-door national survey on poverty soon.

“We will organise the survey in collaboration with the BISP across the country, including Fata, Azad Jammu and Kashmir and Northern Areas,” she said while speaking at a seminar on “Current Situation and Our Economy,” organised by the Mir Khalil-ur-Rehman Memorial Society (MKRMS) of the Jang Group of newspapers in collaboration with the Centurus Pak-Gulf Construction Company.

Those who spoke among others on the occasion were Adviser to the Prime Minister on Interior Rehman Malik, PML-N Information Secretary Ashan Iqbal, Shahid Khaqan Abbasi, Adviser Pak-Gulf Construction Company Abdul Aziz Mirza, PML-Q leader Ms Kashmala Tariq, Sardar Illyas Khan, Syed Kokab Mohiuddin, Prof Dr Ahsan Malik, MA Rauf, Kazi Abdul Hamid Mughul and Anjum Aqeel.

Farzana Raja said that the government was taking measures for improving the living conditions of the people and it had taken a number of steps, including the introduction of the BISP, for the social protection of the poorest section of the society. She added that the PPP government wanted the prosperity of the country and its people and working hard at the top political level to achieve this objective.

Farzana Raja called for reaching a consensus among all the political forces in the country for the socio-economic prosperity of the country and the welfare of the people. She said that the objective and mission of every political party was to serve the people and work for the solidarity and prosperity of the country.

She attributed the current economic situation to the wrong policies of the previous government and called for the coalition partners to support the government efforts for improving the economy.

She added that the government wanted to take along all the political forces on the issues of national importance. Farzana Raja said that the government was taking measures for improving the law and order situation in the country and it had taken a number of steps in this regard.

She recalled the sacrifices rendered by the leadership and workers of the PPP for the cause of democracy in the country.She lauded the efforts and services of the MKRMS for organising seminars on the issues of national importance.

Speaking on the occasion, PML-N leader Ashan Iqbal called for making collective efforts for the economic well-being of the people and the prosperity of the country.He strongly criticised the policies, including the economic policy, devised by former president Pervez Musharraf which caused damage to the economy of the country.

He claimed that during the eight-year period of the former government, about Rs 80 billion had come to Pakistan, but regretted that no major development project, like the Diamer-Basha Dam, was initiated from that money.

He added that the agriculture sector was ignored during the period. He said that during the period, the former government focused on the consumer-led growth, instead of the export-led growth.

He called for promoting knowledge-based economy with a special focus on the skill development of the youth for the prosperity of the country.Speaking on the occasion, Ms Kashmala Tariq highlighted the major achievement of the PML-Q government.

She accepted the fact that the energy sector was ignored during the period. She called for making collective efforts to steer the country out of the current economic crisis. The other speakers also called for improving the law and order situation in the country for attracting foreign investments.

 

[Neo]

State Bank of Pakistan announces bailout package​

1-year deferment in repayment of loans for industrial sector​

KARACHI: The State Bank of Pakistan (SBP) has announced relief package for the industrial sector by allowing the banks and DFIs to provide deferment of one year in repayment of principal outstanding under Export Oriented Projects including Debt Swap Facility under and Long Term Financing Facility (LTFF) scheme.

“On the representation of industry associations, it has been decided to allow banks/DFIs to provide grace period to their deserving borrowers having availed financing under LTF-EOP and LTFF scheme,” a circular of SBP stated on Thursday.

Accordingly banks and DFIs may provide deferment of one year in repayment of principal outstanding under the above schemes as of December 31, 2008, it added.

The industrialist community has been lobbing intensely to secure this relief, which has been welcomed by the industry representatives. “It is positive development and will give breathing space to industry,” Zubair Motiwala, textile exporter and former President Karachi Chamber of Commerce & Industry (KCCI) commented.

Central bank announced that under this facility the repayment dates for all installments of principal amounts falling due during the period from January 1 to December 31 2009 may be re-fixed after a period of one year from the respective due date.

SBP directed banks/DFIs to carry out their due diligence of the individual borrowers on case to case basis. “This is a one-time facility effective from the date of issuance of the circular and will remain valid only up to March 31 2009. Any request received after March 31 2009 shall not be considered by banks/DFIs,” it said.

SBP also spelled out the criteria for availing this facility and states: Banks/DFIs shall take into account the track record, conduct of account, underlying collateral, financial condition and future outlook, volume of exports and overall risk profile of the borrowers in evaluating their requests for availing this facility.

In case the banks/DFIs are satisfied with the borrower and the underlying credit risk is acceptable to them, they can provide the grace period of one year under this facility.

In case a loan has already been rescheduled by a bank/*** as per its policy or in case a borrower has defaulted in repayment of installment(s) fallen due, as per original repayment schedule, and/or payment of mark-up on due dates, such cases would not be eligible for the benefit under these instructions.

The concerned bank/*** will also evaluate the general behavior of the borrowers concerned in all other financing facilities extended to them by the bank/***. No benefit under this circular should be given to the borrowers having non-performing loans, classified under SBP Prudential Regulations.

While preparing revised repayment schedule banks/DFIs will adhere to the original terms of repayment schedule already agreed at the time of grant of refinance (i.e. the original grace period and principal amount of installments shall remain the same and only dates of repayment will be changed). The offices shall, however, check the accuracy of such revised repayment schedules as per their record to ensure that no grace period is granted for a period exceeding one year.

The borrowers who have already repaid LTF-EOP/LTFF loans shall not be eligible for reimbursement of the same. Similarly in case a loan is not payable during 2009 as per its original repayment schedule, it shall not qualify for the benefit under these arrangements. Only loans outstanding as of December 31 008 shall qualify for the benefit of grace period. As such, the loans disbursed on or after January 1, 2009 shall not qualify for said benefit. The borrowers interested in availing the benefit under this circular shall approach to the concerned banks/DFIs which shall process their requests in line with parameters prescribed in the circular and as per their respective policies.

In case of consortium financing, head offices of member banks/DFIs will forward their recommendations to lead bank/*** for final approval.

The concerned office of SBP BSC (Bank) will also adjust repayment of its refinance accordingly from the concerned banks/DFIs only in respect of such borrowers to whom grace period facility shall be granted by the financing banks/DFIs or a lead bank/***, in case of consortium financing.

After approval from Head Office the concerned branches of banks/DFIs shall approach the concerned offices of SBP-BSC along-with copies of revised repayment schedules to defer the principal amount of installments for one year. staff report

 

[Neo]

Domestic debt rises to Rs 3.55 trillion​

KARACHI: Pakistan’s domestic debt has soared by 8.8 percent to Rs 3.555 trillion in last five months, according to the data released by the State Bank of Pakistan (SBP) on Thursday. The domestic debt of the country stood at Rs 3.266 trillion on June 30, 2008.

The net borrowing of the country increased by Rs 336.8 billion in the current fiscal year, which is up by 53 percent.

Large amounts were borrowed through MTBs for replenishment, showing increase of Rs 309.1 billion in the first five months.

The floating debt soared by 15.6 percent or Rs 256.9 billion in the first five months, reaching to Rs 1.894 trillion.

The government borrowed Rs 484.8 billion through market treasury bills for replenishments. It repaid Rs 52.2 billion borrowed earlier through treasury bills.

The permanent debt has reached Rs 600.6 billion in the same period. Rs 7.7 billion were retired through Rs 12.5 billion purchase of Pakistan Investment Bonds and Rs 1.7 billion through sale of prize bonds.

The unfunded debt of the country surged by Rs 1.06 trillion.Defense Saving Certificates stood at Rs 284.3 billion whereas Bahbood Saving Certificate attracted Rs 24.9 billion to Rs 253.9 billion in the said period. An inflow of Rs 8.8 billion was witnessed in the Special Saving Certificates, which stood at Rs 169.1 billion.

Besides, Pensioner’s Benefits Accounts increased to Rs 94.4 billion in this period.

The net major outflow of Rs 8.4 billion has been recorded in Saving Accounts, which decreased to Rs 19.4 billion. Besides, Defense Saving Certificates, and GP Fund recorded some minor withdrawals.

However, the country’s burden of external debt and liabilities has shown a slight decline in this period, which shows some positive signs for the economy. However, Pakistan’s total external liabilities are down to $45.540 billion at the end of November 2008 from $46.284 billion at June 30, 2008.

 

[asaad-ul-islam]

^^that's funny, the current PPP govt. kept on talking about 'musharraf not doing enough for the textile and agriculture industry'. now the agriculture industry is at risk thanks to the tax imposed by the IMF loans, and textile industry is facing decline. yet, there is no one to report this garbage that was being fed to us the past year.