Pakistan Economy - News & Updates - Archive

[Neo]

‘Investment in Pakistan difficult’ ​

Friday, February 06, 2009

KARACHI: Commercial Counselor of Embassy of the United States in Pakistan, William Center has said that it was very hard to prioritize Pakistan as an investment destination in the current law & order scenario.

He stated this at his visit to SITE Association of Industry on Wednesday.

He maintained, “The situation requires correction and positive changes in the perception of the country which does not sell a viable enough image to comfort the investor to direct his/her investment in the humongous available market of 170 million people.”

He said development means the general welfare of the common man who should be provided all the means and tools necessary for a reasonable living.

The responsibility of state and the civil society should be to manage development in such a way that the trickle down effects are transmitted to the needful, so that he does not resort to actions not allowed by the framework of the laws of the land.

He said that Pakistan faces the alleged position of a terrible law & order state, often contributed by disgruntled elements of the civil society feeling deprived of their rights and the share they feel they must have in the developments.

William Center, however, said that investment in infrastructure and insurance sectors in Pakistan can be considered to develop its economy for the welfare of its citizens.

While welcoming William, SITE Association of Industry Chairman Engr M A Jabbar stressed upon him to increase the volume of US investment here in Pakistan.

 

[Neo]

Global economic crisis impact: Value of textile exports plunge during 1HFY09​

By Tanveer Ahmed

KARACHI: The value of local textile products fell sharply in the first half of current fiscal year primarily because of economic slowdown in the world particularly in USA and Europe—the top export markets of Pakistan.

During July-December 2008-09, the volume of the textile products export rose substantially, however, due to the eroding purchasing power of the consumers in the west, the value of these products nose-dived compared to the corresponding period of previous year.

“The financial crisis in USA and Europe has a spiral impact and Pakistani textile products are no exception to this global issue,” Federal Textile Commissioner, Mohammad Idris remarked and said that even India and China saw the value of their products plunging during the period under review.

However, it is heartening to note that domestic products were able to keep their share in these market, he pointed out and stated: “It is now more about keeping the share in these markets intact than the value because of the gloomy situation, which appears to continue for the next two years.”

On the other hand, exporters also blame the economic crisis in the western world as the prime factor for fetching less unit price of these products. However, the rupee depreciation helped the local exporters to make-up for the losses.

A glance on the values of the textile products showed that almost all the categories suffered in terms of a fall in their values.

The value of raw cotton plunged by 9.25 percent by fetching $975.4 per metric tonne during first six months of current fiscal compared to $1074.71 per metric tonne in the corresponding period previous year.

A decline of 4.04 percent was recoded in the value of cotton fabrics at $0.95 per square metre over $0.99 previously. Knitted fabrics’ value is down by 6.98 percent.

Readymade garments’s value fell by 3.46 percent during the period under review. Value of knitwear (hosiery) was down by 10.65 percent. The value of bedwear declined by 11.48 percent and towels by 5.16 percent. The value of tents and canvas fell by 13.80 percent, Art, silk & synthetic down by almost 11 percent.

Only value of made-ups (excluding towels & bedwear) registered an increase of 2.71 percent whereas the cotton yarn’s value remained flat.

The textile exports were down by 1.79 percent during the first six months of current year, which would make it hard to achieve the export target of over $22 billion set for the current fiscal.

 

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Yahoo! News - Pakistan needs international financial help, advisor tells Japan

A key Pakistan government adviser told Japanese Prime Minister Taro Aso Friday his country needs huge international help to overcome its financial difficulties, the Japanese foreign ministry said.

Shaukat Fayaz Ahmed Tarin, finance advisor to Pakistan's prime minister, also thanked Japan for extending its naval mission to provide fuel to US-led operations in Afghanistan during a meeting here with Aso, the ministry said in a statement.

Pakistan's precarious financial situation has caused worldwide alarm due to its role as a key ally in the US-led "war on terror" and its position as the Islamic world's only nuclear power.

Aso told Tarin securing stability in Pakistan was important for the international community, and received assurances Islamabad would continue to take measures against terrorism, the statement said.


The IMF in November approved a credit line of 7.6 billion dollars for Pakistan over 23 months, the fund's first rescue in Asia since the global financial crisis began.

But experts estimate more than a billion dollars in additional funding is needed to stabilise Pakistan's economy.

Tarin also expressed hope Japanese businesses would invest in infrastructure and energy projects in the country, the statement said.

 

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GDP growth rate may drop below 1pc: official

Pakistan is feared to experience negative growth this year in all sectors of economy except the agriculture sector, a senior official at Ministry of Finance confided to The News.

Growth in agriculture sector is expected around 4.5 per cent depending on wheat production, if this target was missed the Gross Domestic Product growth rate would be even less than one percent, he said.

Pakistan experienced negative growth in 1952 and if the agriculture sector does not perform up to expectations, then once again the country would be exposed to negative growth of 0.3 per cent.

In the last fiscal year, the agriculture growth was 1.5 per cent and now the country is expecting 4 to 4.5 per cent growth, which is to be the only factor that would take the GDP growth into positive zone.

“We are expecting negative growth by the end of the ongoing fiscal in all sectors of economy except agriculture. The massive negative growth is to hit Large Scale Manufacturing (LSM) and Construction,” the official said keeping in view the preliminary estimates worked out with regard to the expected GDP growth by the end of ongoing fiscal.

“Electricity & and gas distribution, Transport And Communication, Wholesale and Retail Trade, Finance and Banking, Public Administration and Defence and Social and Community Services are also not likely to perform, but the Agriculture sector would be in the positive zone with no major positive impact on overall GDP growth,” he said.

The government is alarmed over the performance in the said sectors of economy and is all set to revise the targets of GDP growth, tax revenue, inflation and exports with International Monetary Fund (IMF) which has extended to Pakistan the 23 months $7.6 billion bailout package under Stand By Arrangement (SBA).

For the ongoing fiscal, the official said, IMF had earlier fixed the target of 3.4 percent GDP growth, 21 percent average inflation, 12 percent growth in export and Rs1,360 billion tax revenue.

Pakistan and IMF would revise the targets during the appraisal process by IMF review mission that is to be held in Dubai during February 14 to 24 period.

Pakistan and IMF would revise downward the target of GDP to about less than one percent, as the global economic outlook has entirely changed from the world scenario during the October-September 2008 period because of the massive decline in oil and commodity prices in the international market.

The official said that Large Scale Manufacturing has 19 per cent weight in GDP growth and it is expected to experience negative 6.5pc growth in this fiscal.

Construction sector with 2.7pc weight on GDP would witness six per cent negative growth against 15pc growth in 2007-08.

Electricity and gas distribution has 1.6pc weight in GDP and its growth is likely to decline 5.5pc from 14.7pc in last fiscal. Mining and Quarrying has 2.5pc in GDP growth and it is likely to experience 3pc growth in this financial year. “This means the overall growth in industrial sector would be in negative zone,” the official said.

Transport and communication sector growth dropped to 1.5pc from 4.4pc in last financial year. Likewise zero growth in wholesale and retail trade is likely to decline to zero per cent from 6.4pc in 2007-08. This particular sector owns the weight of 17 percent in GDP growth of the country.

Finance and banking sector depicting 17pc growth in last fiscal is expected to show negative growth of 4.5pc. The weight of this vital sector stands at 6.5pc in GDP.

The government is expecting status quo in growth of 3.5 percent in ownership of dwellings sector. This sector carries the weight of 2.6 percent in GDP growth. Public Administration and Defence, which has weight of 6.5pc in GDP is likely to witness 5pc growth against 10.9pc in last fiscal year.

 

[Neo]

ADB releases $200 million for Sindh and Punjab projects​

ISLAMABAD (February 06 2009): Asian Development Bank (ADB) has released 200 million dollars to Pakistan for two projects - 100 million dollars for Sindh Growth and Rural Revitalisation Programme and another 100 million dollars for Punjab Millennium Development Goals. Another 100 million dollars, earmarked for Balochistan Resource Management Programme, is likely to be released soon.

Sources said that State Bank of Pakistan (SBP) had received 200 million-dollar loan for the two projects and funds for the Balochistan programme were still awaited.

The three agreements were signed by Economic Affairs Division (EAD) Farrukh Qayyum from the Centre as well as the relevant representatives from the provincial governments. Punjab, the most populous province, is facing massive challenges in providing healthcare services to a growing population. The Programme is expected to contribute towards improving health facilities for women and infants.

Sources said that that under the programme, Punjab will create better health management systems by adopting comprehensive strategy patient care and focusing more on preventive healthcare, particularly in the rural areas. Community hospitals and trauma centres will be set up in Punjab to provide healthcare facilities, especially to women and infants.

The poor women and children as well as other vulnerable population groups will be targeted under the programme and capacity for planning, costing and budgeting will be enhanced through medium-term budgetary framework exercises.

Under "Sindh Growth and Rural Revitalisation Programme" the Sindh government will invest 100 million dollars to improve public resource management and boost investment in rural areas to reduce poverty and enhance economic opportunities to relieve pressure on urban areas. The programme will promote public-private partnerships (PPPs) in an effort to mobilise investment in the much-needed infrastructure and social services sectors in the rural areas.

 

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Economic indicators falling, planners seem unfazed

Economic planners are acting like an ostrich feeling secure while all macro-economic indicators are on the decline including employment, current account balance, foreign exchange reserves, trade balance, industrial production, consumer price index and exports.

Experts are dismayed as economic policies are moving in opposite direction to those pursued by governments in competing economies while taking into account current global recession. The policies in place are meant to curtail growth when the economy is already in a deep recession.

Indian and Chinese central banks have cut policy rate to 5.5 per cent and 5.75 per cent respectively, showing a significant decline in the past six months. However, the State Bank of Pakistan has increased its policy rate to 15 per cent. Economic experts question how high policy rate would help overcome recession in the country.

“Economic managers are living in a fool’s paradise,” said senior economist Naveed Anwar Khan. He said the Board of Investment was happy that foreign direct investment had slightly improved from last year when political uncertainty was at its peak.

However, “none of the new investment has gone into green projects meaning no increase in productivity or employment. Moreover, there is a huge outflow of portfolio investment which depicts low confidence of investors in Pakistan’s economy,” he said.

He said the Adviser to Prime Minister on Finance, Shaukat Tarin, only two months ago was extremely satisfied with revenue generation. In fact, he added, he was anticipating an increase in revenues, but tax collection was below target and would likely fall further.

With crude and edible oil at one-third of the prices prevalent at the time of presentation of budget in June 2008, the import bill should have come down by $3.5 billion, he said, adding the State Bank governor seemed elated when in the monetary policy he predicted the import bill would drop by $1 billion this year. “This would not even cover the advantage obtained from the two commodities.”

Dubai-based chartered accountant Faisal Qamar said the government had weakened regulatory institutions which could have brought down inflation in accordance with ground realities. For instance, he said, the Competition Commission of Pakistan had been denied funds to run its day-to-day affairs. “Instead of using its energies to check cartels, the CCP is fighting for its survival as it does not have resources to work till March.”

The Securities and Exchange Commission of Pakistan, he added, had lost its grip on the capital market as stock prices were at lowest levels in the past five years but still there were no buyers.

He said there was internal dispute in the Federal Board of Revenue after the formation of Inland Revenue Department which merged the direct taxes department with the customs, sales tax and excise department. These experiments should have been left for some other time when economic conditions would be better, he suggested.

Canada-based certified public accountant Asif Ali Shahid said the high policy rate of 15 per cent had assured that small and medium enterprises did not get bank financing, adding it would mean almost no creation of jobs and further closure of SMEs which would leave the existing workforce jobless.

He said job opportunities for Pakistanis around the globe were also very bleak.

The United Nations had already warned that in the best case scenario 20 million jobs would be lost around the world in 2009 and in the worst case the figure would go up to 50 million.

“Jobs would have to be created within the country by giving a boost to productivity,” he suggested.

 

[keeninterest]

Indian and Chinese central banks have cut policy rate to 5.5 per cent and 5.75 per cent respectively, showing a significant decline in the past six months. However, the State Bank of Pakistan has increased its policy rate to 15 per cent. Economic experts question how high policy rate would help overcome recession in the country.

Canada-based certified public accountant Asif Ali Shahid said the high policy rate of 15 per cent had assured that small and medium enterprises did not get bank financing, adding it would mean almost no creation of jobs and further closure of SMEs which would leave the existing workforce jobless.

the difference is where india and china have lower end, single digit inflation that is not quite the case with pakistan. the inflation has been caused by both demand pressure, and cost pressure as the supply is on the lower end and with the existing huge inflation there are huge cost pressures which further fuel higher rate of inflation. what imf forced pakistan to do today, that is to increase the discount rates/interest rates that should have happened way back when shaukat aziz was getting all the accolade for good growth rate figures, even when the inflation was hitting the roof at double digits, but that never happened and then comes a time when some one has to pay the price and the present government is paying the price for misgivings of certain people who are still seen as heroes in certain section of pakistani society. pakistan as of date can ill afford to flush the market with money be it for the aam awam or the corporate at large, or they would soon face hyper inflation, and so there will be no let up in the cash reserve ratio, or the discount rates/ interest rates, till inflation drops to single digit figures.

with the the aid/loans they are taking right now has to do more with meeting the huge foreign debts they face and to some how run the day today affairs/expenses which would be like paying off the salaries, make adequate arrangements of daily needs like adequate supply of food items and others and this has to be no way confused with the cash in hand with aam awam of pakistan. people in pakistan have to be patient as this will take time, but could be back walking and soon running if the basics are done correctly this time round.

overheating is generally a recipe of disaster so its best not ignored even if that means giving away gdp growth rate for a few quarters, which would not be as per the liking of certain sections in the society or economic experts.

 

[Al-zakir]

'Pak, Jordan free trade agreement likely

Updated at: 1455 PST, Saturday, February 07, 2009

Pak, Jordan free trade agreement likely AMMAN: Pakistan and Jordan would likely sign free trade agreement during current year.

Pakistan’s ambassador to Jordan Muhammad Akhter Tufail stated this while talking to media here.

He said negotiations to finalize the pact will be held in March and Pakistani trade secretary would visit Jordan next month. The current volume of trade between the two countries is $50 million annually, he added.

Pak, Jordan free trade agreement likely - GEO.tv

 

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World Bank to lend $2bn to Pakistan in 2009

The World Bank plans to lend Pakistan $2 billion this year, the bank said in a statement on Saturday, as the South Asian country struggles to combat inflation and prop up sagging economic growth.

“The bank plans to provide up to $2 billion in credits during this fiscal year to support economic growth and the government’s poverty-focussed programmes,” the statement quoted the country’s director for Pakistan, Yusupha Crookes, as saying.

The statement came at the end of an official visit to Pakistan by the bank’s Managing Director, Ngozi Okonjo-Iweala, who praised the government’s efforts to correct macroeconomic imbalances.

“Pakistan is now moving in the right direction,” Okonjo-Iweala said.

After years of healthy growth, Pakistan’s economy was hit by surging oil and food prices in 2008, while investment dried up because of political uncertainty and security challenges posed by Islamist militancy.

The State Bank of Pakistan is expecting about 3.7 per cent gross domestic product (GDP) growth in the 2008/09 fiscal year to June 30, down from 5.8 per cent in the previous year.

Pakistan is also faced with the worst inflationary pressure since the 1970s. The consumer price index rose 23.34 per cent year-on-year in December.

The International Monetary Fund approved a $7.6 billion package for Pakistan in November to help it avert a balance-of-payment crisis and support its dwindling foreign exchange reserves.

Pakistan has also been trying to drum up support from other donors and international lending agencies to expand its social safety net and boost development spending.

 

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343 knitwear exporting units have shut down since ’05

The knitwear industry is in dire trouble as the number of knitwear exporting units has declined from 1,183 in 2005 to 840 in 2009 and the closed units include some of the most efficient high tech larger factories in this sector.

This was revealed in the presentation on the state of knitwear industry in Pakistan given by Pakistan Hosiery Manufacturers Association to the Lahore Economic Journalist Association. The presenters stated that Pakistan has the most efficient and high tech knitwear industry in the region that produces better quality clothing than its competitors and closure of over 30 percent of the industry should be an eye opener for the economic planners.

They attributed the decline to flawed government policies. They said that government withdrew the R&D facility although its own statistics revealed that after grant of this facility the knitwear exports increased at a high pace.

Highlighting the importance of clothing sector former chairman PHMA Shahzad Azam said that clothing sector provides the highest number of jobs in textiles and adds highest value to exports as well. He said one bale of cotton earns foreign exchange worth $238 only while knitwear exported from one bale of cotton fetches $1,600. He said $1 million additional investment in spinning or weaving creates 34 new jobs with additional exports of $270,000. He said $1 million additional investment in apparel sector generates 460 jobs and additional exports of $3.2 million.

Vice chairman PHMA Adil Butt deplored that the government continued to levy 3.36 percent taxes on exports despite claiming that export duty is zero-rated. In addition it deducts 0.58 percent of the export value as workers welfare levies, he added. Besides enormous increase in utility rates, the inflation has increase from 4.2 percent to over 20 percent and minimum wages from Rs 2,500 to Rs 6,000, he concluded.

Comparing the facilitation provided by the competing economies leading exporter M I Khurram said China increased its rebate on exports from 13 percent to 15 percent from February 1, 2009. India gives 9.5 percent rebate to its apparel exporters. The export rebate in Pakistan he added is only 0.6 percent. staff report

 

[Neo]

‘Friends of Pakistan to provide funds for rehabilitation in Swat’ ​

Sunday, February 08, 2009

PESHAWAR: Chief Minister Ameer Haidar Khan Hoti said on Saturday that internal and external Friends of Pakistan would provide funds for reconstruction and rehabilitation of the people affected by the operation in Swat.

The arrangements to this effect has been finalised by President Asif Ali Zardari with the Friends of Pakistan, Hoti said this while talking to local reporters after performing the ground breaking ceremony of Khan Abdul Wali Khan Multiplex at the Civil Secretariat.

The chief minister also named the Poverty Reduction Program in the province after Baacha Khan besides starting uplift projects named after Baacha Khan and Khan Abdul Wali Khan in all districts of the province.

He said that the president was briefed in detail about the internal security situation during his two-day visit to the city and told about the requirements of the Fata and the province with focus on beefing up the law enforcing agencies, poverty reduction plans and relief activities.

Hoti said the president was also told about the mega power project in hydel sector in the province. He said: “The president promised to give No Limit Package to the province as we are fighting a war for survival.”

He recalled that Baacha Khan had dubbed the Afghan war against Russia as “Fasad” instead of Jihad as it paved the way for destruction of the Pukhtoons, which was still continuing.

He reiterated that political and administration reforms in tribal regions were necessary so that common tribesman could be brought in the mainstream of national development. “We want their representation in the provincial assembly of the NWFP” he maintained.

The chief minister feared spill over of the fire to the rest of the country. “It is our collective duty to extinguish it here.”

Hoti said: “The previous government had closed its eyes over the fire in Swat, which has today reached Peshawar. But we cannot sit silent over the matter and we have taken some bitter decisions to stop this fire. We inked a peace pact with the Swat Taliban by following the philosophy of non-violence of Baacha Khan and not at the behest of the US.”

The use of force had become necessary there as they were continuously burning schools in Swat, he said.

Earlier, Col Ghulam Husain briefed the chief minister about salient features of the Khan Abdul Wali Khan Multiplex project.

 

[Neo]

‘Only cement sector uses coal to generate energy’​

KARACHI: The use of coal for energy generation has been in the range of 33 percent to 60 percent worldwide, while in Pakistan only the cement sector uses this method.

Chairman 12-member Standing Committee on Mineral Development Sindh, Rana Abdus Sattar talking to Daily Times Saturday hoped that Thar coalmines would start giving production within 4 years subject to the speedy work and developing of infrastructure on modern mining system.

He said large quantity of coal is used in bricks kiln while some 10 percent of the production is used domestically. He was optimistic that the present row on the matter of reviewing the upfront tariff for coal-based between National Electric Power Regulatory Authority (NEPRA) and Sindh Coal Authority (SCA) would be resolved amicably.

NEPRA had proposed 7.65 cents indicative upfront tariff for coal-based power plants while SCA was demanding to fix 9.5 cents upfront indicative tariff for the electricity generated through coal power plants in Thar. However, NEPRA has said that 7.65 cents/Kwh upfront indicative tariff for coal power plants was reasonable and it should be announced.

In the proposed tariff by NEPRA the cost of fuel, coal and water availability is not included and if the cost of fuel, coal and water availability is included in indicative upfront tariff then it would reach 9 to 10 cents/Kwh.

He informed that the World Bank (WB) is helping the federal and Sindh governments on policy, legal and regulatory frameworks conducive to new investment in the coal-to-energy sector. The WB officials from technical and administrative sides in November 2008 also helped to resolve the issues between the federation and province.

The WB is working on Thar Coal and Power Technical Assistance Project to strengthen institutions, develop sector policy framework and legislation at both federal and provincial levels.

In light of the WB meetings with officials of Federal Ministry of Petroleum and Natural Resources and Sindh Mines and Mineral Department, the committee will strive to ensure smooth working on different projects. The committee will watch the provision of $26 million funds for the selecting foreign firms in Sindh, which would carryout technical assistance to all coal-based power projects in the future.

 

[Neo]

Coal issue between federation and province: WB boosts efforts to help govts on Thar coal project​

KARACHI: The World Bank (WB) has geared up its efforts to help the Federal and Sindh governments on policy, legal and regulatory frameworks conducive to new investment in the coal-to-energy sector.

According to the evaluation report prepared by federal government on coal development projects, the WB is working on Thar Coal and Power Technical Assistance Project to strengthen institutions, develop and appropriate sector policy framework and legislation at both federal and provincial levels.

The project will also assist in bidding and negotiations leading to financial close on new investment into at least one coalmine and at least one independent power producer in Thar. It will ensure the coal-to-power sector development responds to the needs of Pakistan's long-term energy strategy, the federal government report further explains.

The mission comprising various officials from technical and administrative sides arrived in November 2008 to resolve the contentious issued between the center and federation, it is learnt.

The WB officials held meetings with officials of Federal Ministry of Petroleum and Natural Resources and Sindh Mines and Mineral Department. Officials of other possible stakeholders who would be a part of the coal-based projects such as WAPDA and IPPs are scheduled to meet the international funding agency.

The financial institution has pledged to provide $26 million funds to the selected foreign firms in Sindh, which would carry out technical assistance to all coal-based power projects in the future, it is also learnt.

The report said that coal sector reform with concurrent transaction advisory service is being proposed to assist Sindh government on the fuel development and the federal government on the power production with ongoing development initiatives and to rebalance Pakistan' fossil-energy portfolio.

Under this project, it will assist the government to attract qualified private investors for developing Thar coal deposits and build new capacity for coal thermal power generation, guided by high standards of environmental and social sustainability.

The Government of Pakistan claimed it places a high priority on the rapid development of the coal resources of Sindh, particularly in Thar region, for power generation in order to meet the country's requirement.

Sindh government has allocated Rs 3.41 billion for various ongoing and new mining projects in its Annual Development Programme (ADP) for the fiscal
year 2008-09.

The federal government has formed Thar Coal Authority last year to ensure the settlement of all issues between the two governments.

In its report, it has been pointed out that the results have been modest on the reform of mining sector through National Mineral Policy 1995 due to slow implement of the policy and uncertainty created by inadequacies of regulatory framework at the provincial level.

At present CMC and Oracle mining company are carrying out mining activities in Thar coalfield.

 

[Neo]

World Bank likely to finance infrastructure, energy projects​

ISLAMABAD: The World Bank here on Friday indicated IBRD financing for development projects in infrastructure and energy sector and informed that administration would start working on modalities of financing to meet Pakistan’s needs.

Managing Director World Bank, Ngozi Okonjo-Iweala along with the World Bank team deliberated with Ms Hina Rabbani Khar on the funding from the World Bank for National Corridor Programme and energy sectors.

Pakistan’s proposed development projects under IBRD arrangement include National Trade Corridor Improvement Program $300 million, National Expressways $500 million IBRD loan, Rural Telecommunications and e-Service $ 24 million (IBRD) loan, Punjab Large Cities Development Policy $100 million loan and Second Punjab Barrages Rehabilitation and Modernisation $120 million (IBRD).

Ngozi also assured Pakistan’s economic managers of WB support for its agenda for social development and programmes like Benazir Income Support Programme.

The meeting took stock of the economic situation of the country and reviewed joint initiatives for fostering development partnership. The managing director World Bank while appreciating government’s nine point agenda indicated that the Bank will like to see GOP working beyond achievement of economic stabilisation, as this is only a means to an end.

Managing director appreciated government of Pakistan’s efforts for revenue collection and meeting the revenue targets. She added Pakistan needs to capitalise on new initiatives from institutions like IFC and other multilateral and bilateral donors. She under-pinned Pakistan’s geo-strategic position which can be leveraged as regional logistic giant by positioning itself through trade and infrastructure corridors for the South and Central Asia.

Ms Ngozi informed GOP’s team about the Bank’s support for organising a donors’ conference in order to mobilise multilateral and bilateral donors in a structured process to meet the country’s financing gaps.

The minister of state informed about the steps taken by the government to tackle the challenges on the economic front and appreciated the support of the WB in the socio economic development of Pakistan. She reiterated the continued commitment of the present government to the economic agenda and explained that the government has made tough decisions to implement the economic reform programme.

Hina informed that Pakistan expects WB support for financing in infrastructure and energy sectors. She highlighted the National Trade Corridor Improvement Programme as very vital for Pakistan’s infrastructure and economic needs. She underscored the need for Public Private Partnership initiatives and requested Bank’s assistance in this regard. The Managing Director World Bank informed that the Bank will be looking into these opportunities through its private sector arm—International Finance Corporation.

 

[Neo]

Govt and ADB ink $38m loan for Sindh​

* 570,000 families to benefit directly from investment programme
* EAD secretary says loan to be repaid in five years​

ISLAMABAD: The Asian Development Bank (ADB) and the government on Friday inked a $38 million loan agreement of a multi-tranche financing facility (MFF) for improving the water, waste management and sanitation services in Sindh.

The total value of the agreement is $300 million, with the $38 million as its first tranche.

Economic Affairs Division (EAD) Secretary Farrukh Qayyum and ADB Country Director Rune Stroem signed the documents. Sindh Additional Secretary Nazar Meher was also present on the occasion.

Speaking on the occasion, Stroem said the ADB had approved funds of $1.5 billion for the year 2009, and had disbursed $1.87 billion during the last year. He said that according to the bank’s new policy, funds were released on the basis of performance.

“The investment will help the provincial government of Sindh cope with mounting challenges in providing basic urban services to an estimated 4 million residents of Sindh’s secondary cities over the next several years,” Stroem said.

“[The] ADB's support to secondary cities will improve the quality of life of urban citizens and help these urban centres unleash their full economic potential. We believe that revitalising Sindh’s small and medium-size towns is important to foster balanced urban and rural development,” he added.

The agreement would focus on institutional change and priority infrastructure for the northern Sindh cities of Sukkur, New Sukkur, Rohri, Khairpur, Shikarpur and Larkana.

The MFF is the ADB’s first comprehensive support for Sindh's secondary cities, which demonstrates a strategic and long-term commitment to Sindh’s urban development.

As Pakistan's second most populous province, Sindh faces rising population growth, a severe deficit of basic urban infrastructure and services, and growing urban poverty.

Direct benefit: “The programme aims at ensuring quality, continuity, reliability and coverage of basic urban services through improved utility management coupled with carefully targeted infrastructure investments, including funding for systems operations and maintenance,” the ADB country director said.

An estimated 570,000 families in participating cities would directly benefit from the investment programme. The MFF would finance physical investment in water supply, wastewater, and solid waste management infrastructure, including piped water supply networks, covered drains, sewage treatment, waste collection vehicles and sanitary landfills.

Stroem said the bank had signed a $500 million agreement with the Pakistani government for the Benazir Income Support Programme (BISP) and assured that further funding would be provided to the government for the social network programme.

Repaying: Farrukh Qayyum told journalists the Sindh government would repay the loan in five years. He said the project would help Sindh to improve basic amenities of life at the tehsil municipal administration level.