Pakistan Economy - News & Updates

[Neo]

Govt plans to take GDP growth to 4.5 percent by 2011-12​

ISLAMABAD: Federal government under Medium Term Budgetary Framework (MTBF) set up rolling economic targets for financial years 2009-10 to 2011-12 aiming at taking Gross Domestic product (GDP) growth target from 3.3 percent in 2009-10 to 4.5 percent by 2011-12.

According to the MTBF statement of Ministry of Finance prepared after consultation with economic ministries laid in parliament Tuesday.

The government has projected revenue deficit would be reduced by 0.8 percent of the GDP in 2009-10 would be converted in to surplus 0.4 percent of the GDP by 2010-11 and 1.3 percent of GDP in 2011-12.

Size of the GDP is to be increased from Rs 13,095 billion in 2008-09 to Rs 14,824 billion in 2009-10 to Rs 16,435 billion in 2010-11 and Rs 18,205 billion by 2011-12.

The inflation to be reduced from 21 percent in 2008-09 to 9.5 percent in 2009-10, further reduced to 7 percent by 20010-11 and it would be brought down to 6 percent by 2011-12.

Total revenues of that are expected to be 14.6 percent of the GDP in 2008-09 to come down to 14.5 percent of GDP in 2009-10, increase to 15.1 percent of GDP in 2010-11 and to 15.7 percent of GDP by 2011-12.

Tax revenue to that stands at 10.5 percent of GDP in 2008-09 and would be increased to 11.1 percent in 2009-10, 11.8 percent of GDP in 2010-11 and 12.5 percent by 2011-12.

Federal Board of Revenues tax collection that stands at 9 percent of the GDP in outgoing fiscal year 2008-09 to be increased to 9.5 percent of the GDP by 2009-10, 10.3 percent of the GDP by 2010-11 and 11.1 percent of the GDP by 2011-12.

Total expenditures that stand at 19.4 percent of the GDP in 2008-09 to be reduced to 19.1 percent by 2009-10 to increase to 19.5 percent of the GDP in 2010-11 and to be reduced to 18.8 percent by 2011-12.

Current expenditures that at present estimated at 15.8 percent of the GDP in 2008-09 to decrease to 15.3 percent of GDP by 2009-10, 14.7 percent of the GDP by 2010-11 and 14.4 percent of GDP in 2011-12.

Development Expenditures that are 2.8 percent of the GDP in 2008-09 to be increased to 3.8 percent of GDP in 2009-10, 47 percent of GDP in 2010-11 and than again decline to 4.5 percent of the GDP by 2011-12.

Fiscal deficit that stands at 4.3 percent of the GDP in 2008-09 to shoot up to 4.9 percent in 2009-10 but would decline to 4.4 percent of GDP in 2010-11 and 3.2 percent of GDP in 2011-12.

Revenue deficit and surplus that stands at deficit negative 1.2 percent of the GDP in 2008-09 to be decreased by 0.8 percent of the GDP in 2009-10, and than revenue surplus to be achieved in 2010.11 and revenue surplus to be increased to 1.2 percent of the GDP in 2011-12. Public debt to GDP ratio to that stands at 55.2 percent in 2008-09 to be reduced to 54.7 percent of GDP in 2009-10, 53.4 percent of GDP in 2010-11 and 51.8 percent in 2011-12.

 

[Neo]

Trade not aid, Zardari tells EU ​

BRUSSELS (June 17, 2009): The European Union pledged on Wednesday to give Islamabad millions of euros in humanitarian aid to help people displaced by fighting between Pakistan's army and the Taliban.

President Asif Ali Zardari, in Brussels for the first summit between the EU and Islamabad, said he was certain Pakistan would win the struggle against militancy with the help of the world but that it needed trade concessions more than aid.

The EU will provide 20 million euros ($27.72 million) to help people who have fled the fighting in the Swat valley and the EU's executive will ask member states to provide a further 45 million euros from a reserve fund, an EU official said.

"We stand by the people of Pakistan," EU External Affairs Commissioner Benita Ferrero-Waldner told reporters.

But Zardari also called for trade concessions to boost Pakistan's economy, which some EU states are reluctant to agree to despite concern about the dangers to Europe posed by militants in Pakistan.

"What I need is trade not aid. I am looking for MOUs (memorandums of understanding), not IOUs, and I intend to get them," he said after a speech to NATO ambassadors in Brussels.

"I am an optimist at heart, not a pessimist, and I am always hopeful."

Zardari said the battle against Taliban militancy in Pakistan had only just begun but the army was determined and "defeat is not an option for us".

"I'm sure with the ... help of the world we will be able to fight the war and half the war is the minds of the people," he said.

The 27-country EU and the United States want better ties with nuclear-armed Pakistan because of concern about the spread of militancy there and fears that its nuclear weapons could fall into the hands of militants.

Zardari has played down concerns about Pakistan's nuclear arsenal falling into militant hands, saying officials from other governments were satisfied with the command and control system Pakistan has in place.

Draft conclusions prepared for the summit showed the EU would offer the possibility of a long-term free trade agreement (FTA), but no immediate trade incentives such as ending tariffs on goods imported from Pakistan such as clothes and bed linen.

"A number of nations such as Britain and Sweden want something now, rather than this long-term FTA which will take years to sort out," an EU diplomat said.

"Other countries, such as Italy and Spain, want to send a positive signal with this FTA, but secure in the knowledge that this will take so long to achieve there is no threat to their own industries in what is a time of economic crisis."

Annual trade between the EU and Pakistan is about 10 billion euros in imports and exports, a rise of about 10 percent since 2003.

 

[Neo]

Foreign investment declines by 47 percent in 11 months ​

KARACHI (June 17 2009): Net foreign investment has declined by 47 percent during the first 11 months of the current fiscal year mainly due to massive outflow of the portfolio investment and poor law and order situation. Net foreign investment comprising foreign direct investment (FDI) and portfolio investment is constantly on the decline due to worsening law and order situation, slow economic activities and global recession.

Net foreign investment has registered a decline of some 2.01 billion dollars during the first 11 months (July-May) of FY09. With current decline, overall net foreign investment has declined to 2.222 billion dollars during July-May of the current fiscal year as compared to 4.23 billion dollars in the same period of FY08.

Massive outflows of portfolio investment have major share in the overall decline in the net foreign investment, while slow privatisation process has also contributed to this trend in a negative way, as during the current fiscal year no new privatisation transaction could take effect.

FDI and portfolio investment have posted a decline of 19.8 percent and 1365 percent respectively during the first 11 months of current fiscal year. FDI reduced to 3.325 billion dollars in July-May of FY09 against 4.147 billion dollars in the corresponding period of FY08, depicting a decrease of 815 million dollars.

With a dip of 1365 percent, portfolio investment stood in a negative position of 1.103 billion dollars during the first 11 months of FY09 as compared to an investment of 87.2 million dollars in the same period of FY08. However, economists said that some 3.325 billion dollars foreign direct investment during the first 11 months is also an encouraging figure despite uncertainty in the country.

They said that FDI inflows are more than expectations, which is a positive sign and it means that foreign investors are still interested in investing in the Pakistan. Inclusive of privatisation proceeds, total private investment shows a decline of 34.20 percent to 2.764 billion dollars during July-May of FY09. Previously it stood at 4.2 billion dollars.

 

[Neo]

July-May current account deficit down 34 percent ​

KARACHI (June 17 2009): The country's current account deficit has reduced by 34 percent to 8.2 billion dollars during the first 11 months (July-May) of current fiscal year primarily driven by massive decline in trade and services deficit and rising trend in the remittances.

In addition, month on month basis current account balance posted a surplus of 406 million dollars during May 2009 as compared to some 538 million dollars deficit during April 2009. Current account balance was constantly presenting deficit since June 2007 largely contributed by high imports on the back of rising commodity prices on international front.

However, a major cut in imports, followed by slow trade activities and some positive steps taken by the State Bank improved the situation bringing current account balance in the surplus. The country faced a current account deficit of 8.222 billion dollars against during July-May of current fiscal year against the 12.485 billion dollars during the corresponding period of last fiscal year, depicting a decrease of some 4.263 billion dollars in first 11 months.

During May-2009 overall deficit of trade, services and income stood at 679 million dollars over the current account transfers of 1.089 billion dollar, showing a surplus of 406 million dollars in 11 months of FY09. This is the second month of current fiscal year, in which the country has posted a surplus balance.

Earlier, in February-2009 the country's current account balance witnessed a surplus of 146 million dollars as compared to some 279 million dollars deficit during January-2009. Economists have shown satisfaction over the depleting trend in current account deficit and said this would put more positive impact on the PKR and the country's economy, which was facing worrying situation for last one and half years.

"Surplus current account balance is a positive indication for the overall economy and we are expecting same trend in future," they added. They said that surplus balance would increase the liquidity in the domestic market, which will definitely raise pressure for cut in the policy rate.

The country's overall goods imports stood at 28.825 billion dollars and exports at 17.473 billion dollars registering a trade deficit of 11.352 billion dollars during first 11 months of current fiscal year. Trade deficit in 11 months is 16 percent lower than the same period of last fiscal year, when it stood at 13.543 billion dollars.

Services trade deficit stood at 2.982 billion dollars with 3.656 billion dollars exports and 6.638 billion dollars imports. Services sector exports have surged by 26 percent in July-May of 2009 as compared to corresponding period of last fiscal year.

Similarly, income deficit has witnessed a slight increase of 14 percent from 3.551 billion dollars to 4.054 billion dollars in July-May. The country's altogether income from abroad stood at 829 million dollars as compared to payments of 4.883 billion dollars in 11 months.

While, the overall deficit including trade, services and income stood at 18.388 billion dollars against the current account transfers of 10.269 billion dollars in July-May of FY09. Statistics show current account deficit without official transfers climbed to 8.381 billion dollars during the first 11 months of FY09 as compared to some 12.912 billion dollars during the same period of FY08.

 

[Neo]

560 megawatts Bin Qasim Power Plant: Chinese firm starts work on Rs 35 billion KESC project ​

KARACHI (June 17 2009): A Chinese firm has started the long-delayed work on 560 MW Bin Qasim Power Plant project of Karachi Electric Supply Company (KESC), which would cost the utility at least Rs 35 billion. According to sources at least four engineers of M/s Harbin of China had started initial works, like soil testing through land drilling, at the site for the last one week.

The samples of the soil at the location, where the power plants are planed to be installed, would be tested in labourites to ascertain feasibility of the location, they added. The works on the important project could not started due to the non-payment of the mobilisation charges by the public utility, since the contract for the dual-fired combined cycle plant at Bin Qasim was initially signed in June 2008 between KESC and M/s Harbin of China.

Al-Jomaiah, the previous management, the sources claimed, had vacated the site and road for the proposed power plant, and made the arrangements for accommodation of around 400 Chinese engineers and other staff but then no progress was made after change of the management.

In wake of the ongoing power crisis, whereas the citizens are facing hours' long power outages, this important should had to be executed very early, they said adding that if the undue delay and slow pace of work continued on the project the power crisis would further aggravate.

It is to be mentioned here that the World Bank had sanctioned at least Rs 27 billion which could not be released due to the lack of any development on project. The utility had also loaned Rs 8 billion from a local banking consortium last year as mobilisation charges for the project, which, the sources claimed, had been spent on the day to day expenditures.

However the company's Chief Executive Naveed Ismail in a recent interview with Business Recorder had claimed of releasing dvance payment of $56.6 million to the Chinese firm after bringing the original prices of the project down by $15 million. He further had said that the plant would be completed in four phases, with the first GT expected to be online within 24 months (May 2011), and the second and third GTs to be commissioned in June and July 2011 respectively.

 

[Neo]

Punjab develops its own economic growth strategy ​

LAHORE (June 17 2009): The Punjab Government has developed its own economic growth strategy to attain a sustained annual 7.75 percent growth rate. The growth strategy published with the budget documents here on Tuesday had been developed by Punjab Resource Management Programme with the assistance of Department for DFID TAMA in consultation with key secretaries and officers of Punjab government, members of civil society and academia.

The strategy had been approved by Chief Minister and will enable Punjab government to prioritise its reform initiatives. The strategy develops the argument that as a result of the past fertility trends, Punjab will be hit by a demographic bulge that could turn out to be a tremendous opportunity but may bring with it serious challenges.

However, the document warns that this "demographic dividend" will not come automatically, but will have to be earned by investing in human resource development, infrastructure, agriculture, manufacturing and other productive facilities.

It said in order to make best use of this demographic bulge, Punjab will have to attain a sustained growth rate of 7-7.5 per cent a year whereas, Punjab has shown an average growth rate of 5 per cent from 1992 to 2007.

It said Punjab had a number of assets, potential of which needs to be exploited fully. These include labour force, agriculture including horticulture, strategic location, large SME sector and potential investment opportunities. The strategy proposes the following:

Proper allocation of resources on education, health, infrastructure, investment in agriculture and creating an enabling environment for investment by improving domestic commerce and reducing cost of doing business will enable Punjab make the best of this demographic bulge. Cropping pattern should reflect the comparative advantage of the province and value added agri-products should be encouraged.

Efficiency of government machinery needs to be improved to provide better service delivery. Public Private Partnership should be encouraged and development portfolio of the province should be consolidated.

 

[Neo]

Rs 23.125 billion allocated for education sector ​

LAHORE (June 17 2009): The Punjab government has allocated an amount of Rs 23.125 billion for the education sector in the budget for the year 2009-10, against an allocation of Rs 30 billion in 2008-09. According to the budget document, Rs 26.125 billion of Daanish Schools Programme, if included in the budgetary allocations for education sector, total allocation is 35.55 percent more than the revised allocation of Rs 19.274 billion for FY 2008-09.

The provincial government has allocated Rs 2,300 million for Technical and Vocational Training which is at par with last year's original allocation but Rs 803 million more than the revised allocation. The allocation will be utilised for the diagnostic scoping study for skill mapping and job market requirements and establishment of skilled labour market placement/information system.

The funds will be used for the provision of missing facilities to existing institutions and upgrading of training equipment and labs for imparting modern skills. Six additional technical and vocational training institutes will be established in tehsils and backward areas. About 30 additional vocational institutions will also be established and 5 additional polytechnic institutes will also be set up. About 41 existing institution will be revamped and focus should be on increasing the female access to technical education and focus should be on the third party evaluation of training programs to assess quality and relevance.

The reforms and initiatives in school education include the starting of the second phase of Punjab Education Sector Reforms Programme-11 (PESRP) with the total financing of US $30 million. On successful completion of PESRP-1, World Bank and Government of the Punjab have agreed to a second phase of education sector reforms with a total financing of US $350 million.

The programme is primarily geared to address the quality, access and governance issues. Main interventions will include establishment/up gradation of primary, middle and high schools (Rs 3,500 million), provision of missing facilities (Rs 4,000 million) and Accelerated Programme for School Education (Rs 700 million). In addition, sufficient provisions have been made to strengthen the examination systems, teacher's recruitment/training, strengthening district level management and improving governance through empowered Schools Councils (Rs 438 million).

Other reforms in school reforms include Punjab IT Labs Project, which was started in previous year with some initial spadework, this ambitious project covering 4,286 high/higher secondary schools across Punjab, would be completed in 2009-10 with an allocation of Rs 2929 million.

This would be the most significant step towards bridging the information and technology divide between public sector and high-end private sector education. There would be provision of equipment for Vocational Education Project. This initiative will cost Rs 578 million would provide life skills and employability to the high school students. There will be a grant of Rs 4,000.000 million for Punjab Education Foundation.

Reforms in college education include Rs 200 million for the establishment and upgradation of colleges. An amount of Rs 800 million has been allocated to complete the ongoing programme for provision of missing facilities in colleges including labs, auditoriums, sports facilities, hostels and external development. The government has allocated Rs 400 million have been provided to improve teaching skills of the college teachers.

Government has allocated RS 100 million for the special education which includes initiatives such as establishment of International Standard Rehabilitation Center for the disabled, provision of educational opportunities and facilities to school-going disabled children (15 District Centers for Special Education), provision of healthy atmosphere to special children in the Institutions/Centres of Special Education by constructing new, and improving existing, buildings with special facilities; Skill development & rehabilitation of physically challenged children and incentives for enrolment (nutrition, stipends, free uniform, free boarding & lodging facilities, free text & Braille books, free pick & drop facility, Merit scholarships.

Eradication of illiteracy is critical for achievement of Millennium Development Goal targets. To provide yet another opportunity to return to education to an estimated 38 million illiterate/out of school population, an amount of Rs 800 million has been earmarked for 2009-2010.

The main initiatives for the eradication of illiteracy include initiatives includes literacy & livelihood programme for poverty alleviation in 4 model districts of Punjab, Demand Based Training for new literates to impart education, training and skills that can lead to economic amelioration, enhance consumable income and help alleviate poverty.

The funds will used for the establishment of 300 Adult Literacy Centres & 200 NFBE Schools in jails, factories and brick kilns under a five-year programme for imparting education and skill development for their rehabilitation and providing honourable economic opportunities to prisoners in 29 jails of the province, more than 5000 brick kiln workers and other illiterates working in factories. Funds will also be used for establishing 300 Community Learning Centers project in the province.

 

[Neo]

Security, energy and economy: Zardari for special SCO mechanisms for Pakistan ​

YEKATERINBURG (June 17 2009): President Asif Ali Zardari on Tuesday stressed the need for addressing the transnational challenges of terrorism and narcotics, and proposed creation of special mechanisms for Pakistan's involvement in three key areas of SCO's activity, including security, energy and economic co-operation.

Addressing the 9th Shanghai Co-operation Organisation Summit in this Russian city, the Pakistan President stressed the need for a common framework to ensure co-operation in security, energy and economy, and said that the SCO needed to develop a vision of regional prosperity and security.

The Summit was attended by the heads of governments and states of SCO member countries--Kazakhstan, China, Kyrgyzstan, Russia, Tajikistan and Uzbekistan--while Pakistan, Mongolia, India, and Iran attended as observers. Zardari deliberated upon important issues including tackling the international financial crisis and expanding regional co-operation in political, economic, and security matters.

He said that at the SCO platform, the countries were meeting at a moment of remarkable change and challenge. "Tectonic shifts of great consequence are reshaping the global geo-strategic and geo-economic landscapes," he said, adding that it was forcing upon every country fresh agendas to confront and conquer new challenges. About SCO, he said that it was a blend of East and the West, and its combined resource base, geographic expanse, and demographic strength were second to none.

"Pakistan remains committed to deepening and strengthening our bonds of friendship and co-operation with each SCO member state, bilaterally and in the SCO framework," he said. He said that Pakistan stood firmly to help SCO and the SCO community of nations to realise their common objectives and fulfil their common destiny.

He expressed Pakistan's desire to become a full member of the SCO to play its role in a positive manner, and appreciated the recent steps to afford the observers greater access to SCO meetings. The President proposed that special mechanisms be created for Pakistan's involvement in three key areas of SCO's activity, mainly security, energy and economic co-operation.

He stressed Pakistan's need for mechanism on security to meet the threat of terrorism, narcotics and organised crime, besides mechanism on energy for exploiting complementarities among energy-surplus and energy-deficit countries of the region. He said the mechanism on economic co-operation would help Pakistan build trade and communication corridors within the region.

He said that SCO represents half of humanity and unmatched potential, and added that Pakistan admires SCO's adherence to the principles of equality, non-interference and respect for diversity. He appreciated the organisation's spirit of reaching out for common good and common benefit.

President Zardari said it was time to get painfully aware of the wrongs of the past few decades and take lessons from the textbook of history and turn a new page. He said that for over 30 years, Afghanistan has remained mired in conflict as prolonged international neglect and pervasive poverty had stoked the fires of terrorism and extremism.

He said that no country had suffered more from the fallout of this conflict than Pakistan, and no country stood to gain more from peace and stability than Pakistan. He pointed that for eight years, the global community had fought, in Afghanistan, the symptom but not the disease. Zardari said the region's crises were systemic, including the economies reeling under a world-wide recession.

He stressed that the quest for finding comprehensive solutions to such problems needed courage and leadership, vision and unity. "It [SCO] must apply indigenous solutions to indigenous problems, and find effective ways to rally the region's resources to the region's needs," he said. The President said that resource deficits have to be addressed through greater trade and commercial partnerships.

 

[Neo]

'Special Economic Zones' to be set up to attract investment: minister ​

ISLAMABAD (June 17 2009): The government is planning to establish 'Special Economic Zones' to attract investment for speeding up the process of industrial revival. This was stated by Saleem Mandviwalla, Minister of State for Investment, while addressing the business community at Islamabad Chamber of Commerce & Industry (ICCI) here on Tuesday.

He said that these Zones would enjoy 10 years' tax holiday, and would be provided all required facilities along with installation of captive power plants to ensure consistent power supply to run the industry without hindrance. He invited the business community to take advantage of these 'Zones' providing handsome incentives.

He said the Board of Investment was being made a true autonomous body, and majority of its members would be taken from the private sector to further enhance the role of private sector in decision making for promotion of national economy. He said that CDA would be asked to speed up the process of establishing new industrial estate in I-17 Sector of Islamabad.

Saleem said that the government was working on different projects to overcome energy shortage to facilitate the growth of trade and industry and attracting more investment. He said that construction of big and small dams, installation of rental power plants on immediate basis, and signing of agreement with Iran for supply of gas were part of such projects to cope with energy shortage issue.

He said that the government was fully aware of the bureaucratic approach of the Commercial Counsellors abroad, and was working on a mechanism to have these Counsellors from private sector so that they could better promote the country's trade and exports.

He said that the government has focused on reviving and stimulating the economy by encouraging public-private partnership, and asked the businessmen to come forward to play their due role. He said that the budget had been announced and business community should forward with their suggestions for incorporating in the final budget document.

Shaukat Masud, President of Islamabad Chamber of Commerce & Industry, highlighted the problems being faced by the business community. He said that businessmen had forwarded many budget proposals to make it business-friendly, but unfortunately their proposals were ignored. He said the present budget was focused more on revenue generation, and that too from the existing taxpayers, instead of bringing untaxed sectors into the tax net.

He said that the year 2009-10 was declared as 'Year of Industrial Revival', but no worthwhile relief measures were announced in the budge for reviving the industry. He said that improving law & order situation, reducing mark-up rates to single digit level, providing non-stop supply of energy, introducing business-friendly tax culture, and developing healthy relations between businessmen and the tax machinery were the essential conditions for restoring confidence of local and foreign investors, reviving industry and attracting investment. He said that unless these things were assured, economy would not witness any turnaround.

 

[Omar1984]

Work on feasibility of Iran-Pakistan gas pipeline project launched


ISLAMABAD: Work on feasibility of Iran-Pakistan gas pipeline project has been launched and it will be completed by the middle of next year.

Petroleum ministry sources told Online Tuesday work had been started to give final shape to drafts on Iran-Pakistan gas pipeline project under which a frame work agreement between the two countries had been signed. Work on feasibility of project has also been undertaken.

Following the approval of feasibility, the process will soon be begun to raise funds through different banks at country level and investment institution to initiate the gas pipeline project. The work for laying pipeline will start by the end of next year if fund collection process concludes.

Sources told Iran had finalized 50 percent work on the project and Pakistan will start the work of laying gas pipeline by the end of next year which is likely to be completed by the end of 2013. Gas pipeline will be extended from Pak-Iran borders at Gwadar to Nawabshah. Besides Inter State Gas Sales Limited, Sui Sidran and Sui Northern are also share holders in the project.

In line with gas sale-purchase accord between the two countries, Iran will provide 750 million cubic feet natural gas to Pakistan on daily basis. Gas will be provided by Iran at the rate equivalent to 78 percent of the prices in international market at the time of completion of the project.

Sources informed the preliminary overall cost of the project was estimated at $ 7.5 billions under which the work was to be started in the current year of 2009 and was to be completed by September, 2012.

The project has been delayed by one year due to lack of sincerity shown by India in the project. Despite it, India can join the project as third partner at any stage.


ONLINE - International News Network

 

[Neo]

Business community rejects Budget 2009-10​

Says it is anti-business, trade & industry, full of anomalies​

Thursday, June 18, 2009
By Salman Siddiqui

KARACHI: The entire business community of the country has unanimously rejected the federal budget for the next fiscal year of 2009-10 and said it was anti-business, trade & industry, full of anomalies and would empower the corrupt elements in tax departments.

At a press conference held at the Karachi Chamber of Commerce & Industry (KCCI) on Wednesday the leadership of the Chamber has given a 48-hours deadline to the Advisor to PM on Finance Shaukat Tarin to come to Karachi and hold meeting with business community aiming at removing the underlined anomalies.

“The raised concerns should be addressed before the formal approval of the proposed budget in the national assembly likely on June 26,” demanded the leader of Businessman Group, Siraj Kassam Teli.

Pakistan Bedwear Exporters Association (PBEA), Chairman, Shabbir Ahmed appealed to the Members of National Assembly (MNAs) not to pass the proposed budget before it was rectified, while KCCI President Anjum Nisar seconded the appeal on behalf of the entire business community of the country.

Textile industrialist S M Obaid and Rafiq Habib Godil, Chairman, Pakistan Knitwear & Sweaters Exporters Association (PKSEA), threatened to relocate their textile units to Bangladesh, if anomalies in budget were not removed in the given time. They recorded their statements at another press conference held on the issue of budget anomalies by the Council of All Textile Associations (CAPTA) at PHMA office under the chairmanship of Zubair Motiwala, who is also Advisor to Chief Minister Sindh on Investment.

Underlining the anomalies, Former President-KCCI Haroon Farooqi said that there used to be only one tax commission to deal with the pertaining issues, but from next fiscal year there would be four tax commissions under different heads.

Moreover, government has conferred discretionary powers to these commissioners and other officials in the taxation department. This is said in the proposed finance bill that any of the tax commissioners can appoint an auditor and deploy him at any department of the industry for any purpose.

Therefore, the giving of these discretionary power to them and increase in number of commissioners are meant to harass the business community and would empower the elements of corruption in the system, he reiterated.

Moreover, the condition of selling goods to only those buyers who either provide their NTN numbers or CNIN numbers is also not practically viable, highlighted many participants of the meetings held at KCCI and PHMA.

Hundred per cent increase in Withholding Tax (form two per cent to four per cent) on import of raw material would prove fatal for many industries in the provided environment for doing business here. Moreover, the withdrawal of subsidies from electricity and gas would automatically raise the cost of doing business here, while shortfall in generation of electricity was rising on every passing day too.

Businessmen also criticised the proposed imposition of five per cent carbon-tax on carbon-less fuel i.e. Compressed Natural Gas (GAS), which was known as green fuel at world because of its environment friendly nature.

The government has set a growth target of 1.8 per cent for Large Scale Manufacturing (LSM) sector for the next fiscal year. But to achieve this target, the LSM will have to grow by 9.5 per cent next year, as this government-neglected major sector is measured to post a decline of 7.7 per cent at the end of current fiscal year, calculated Motiwala.

They asked as why the government failed to tax landlords in agriculture sector, who made massive transactions on the sale & purchase of orchards and explained themselves that as assemblies are represented by 70-80 per cent feudal lords. They felt that they should also do lobbying in assemblies to get their issues resolve.

The government has declared the next fiscal year, which is round the corner to being, as the year of industrial revival in the country, but each angry businessman declared this government’s slogan as a joke with the industry.

Nisar said the KCCI was backed by 18 other chambers of the country to resolve this anomalies issue with the government. These chambers were included of Rawalpindi, Islamabad, Lahore, Faisalabad, Sarhad, Sargodha, Shakupura, Sialkot and others.

During the press conference, president of many chambers were taken on telephone and everyone of them rejected the budget while couple of them said they would not forward budget proposals to the government from next year, as their proposals are not due considerations.

 

[Neo]

Pakistan, China to intensify cooperation in telecom, water​

Thursday, June 18, 2009

BEIJING: Pakistan and China will intensify their cooperation in the fields of telecommunications, sugarcane production, housing and management of water resources.

Discussions took place with the Chinese government and top Chinese corporations in these vital areas, during Secretary General to the President, Salman Faruqui’s, visit to China.

The secretary general is leading a high level delegation, which includes Ambassador-at-Large/Federal Minister, Khalil Ahmed, Advisor to the Prime Minister on Water Resources, Kamal Majidulla, Secretary Economic Affairs Division, Farrakh Qayyum, and Chairman Water and Power Development Authority, Shakil Durrani.

Faruqui started his visit in Shenzhen, China’s busting industrial town opposite Hong Kong, and visited China’s telecom giants ‘Huawei and ZTE’ which have their representative offices in Pakistan.

The secretary general invited the leadership of the two Chinese telecom conglomerates to establish manufacturing facilities and to open a telecommunications university in Pakistan in partnership with the Government of Pakistan. Corporate leaders of the two companies said that they would initiate work on these projects.

In Shenzhen, Faruqui witnessed the signing of a landmark Memorandum of Understanding (MoU) between Pakistan Agricultural Research Council and Guangzhou Sugarcane Research Institute. From Pakistan, the agreement was signed by Kamal Majidulla.

The MoU facilitates the development of various kinds of sugarcane varieties in Pakistan through the use of germplasm technology. It would also help in producing sugarcane varieties that require less water irrigation and disease control, as well as being pest and drought resistant.

In Shanghai, Faruqui saw the city planning exhibition and explored the possibility of cooperation in building low cost houses and apartments in Pakistan.

WAPDA chairman held meetings with Zhejiang Zhengbang Hydro Electric Power Construction Corporation and China Electric Power Generation Group and invited them to invest in twelve small and medium sized hydropower dams in Pakistan. Both companies expressed keen interest in the projects.

 

[Neo]

‘Diamer-Basha dam to bring green revolution’​

Thursday, June 18, 2009

ISLAMABAD: Federal Minister for Water and Power, Raja Pervez Ashraf said that the construction of Diamer-Bhasha dam would be started this year as Rs8000 million have already been allocated for the project in the recently announced federal budget.

Talking to media persons here on Wednesday, the minister said that the construction of this dam would ensure green revolution in the country by producing power generation of 4500 MW, as well as water storage of 6.4 MAF, which would contribute towards meeting the demand of electricity and water for the irrigation of thousands of acres of land in the country per annum.

The minister said that the construction of the dam would begin by the end of this year in either September or October, according to the scheduled finalised for the project.

WAPDA authorities have already been directed to follow the schedule to ensure that the given time frame for the completion of the mega project is met, Ashraf said. WAPDA authorities are working to complete the resettlement plan for the affectees of the dam site belonging to the Northern areas and NWFP, he said.

The minister said that the generation of 4,500 MW of inexpensive hydel power from Diamer-Bhasha dam would reduce dependence on thermal power, resulting in savings of huge foreign exchange and making available 6.4 MAF of water for irrigation.

He said that the project would also create massive infrastructure and job opportunities leading to an overall socio-economic boost for the area.

Responding to a question about land acquisition and resettlement of the dam site affectees, the minister said that ECNEC had already approved the project for land acquisition and resettlement of the dam at a cost of about Rs60 billion.

It may be mentioned here that the Diamer-Basha dam is being built at Indus River near the Chilas area in the North, partly stretching across the Kohistan district of NWFP.

According to the project, construction will begin in September this year and will be completed within sevens year. It will be the highest roller compacted concrete dam in the world, at a height of 272 meters.

 

[Neo]

‘Pak-BD trade growing at 10pc per annum’​

Thursday, June 18, 2009

KARACHI: Bilateral trade between Pakistan and Bangladesh was growing at a rate of 10 per cent per annum and is expected to cross $460 million this fiscal year.

This was stated by Deputy High Commissioner Bangladesh, Saquib Ali, while addressing members of Rice Exporters Association of Pakistan (REAP) at a luncheon meeting here on Wednesday.

He said that trade volume between the two countries has surged from $320 million in 2006-07 to $412 million in 2007-08 with the balance of trade in Pakistan’s favour. He noted that cotton was the largest item of the total Bangladeshi imports from Pakistan.

He underlined the need for exchange of trade delegations between the two countries. “We need to shift from government-to-government contact to private sector contacts if we really want to boost the bilateral trade,” he noted.

Ali pointed out that Bangladesh produces nearly 28 million tons of coarse rice every year which is 100 per cent of its total requirements. He, however, mentioned that his country would need a buffer stock of about 1.6 million tons of rice to meet any eventuality in the future.

Consul General of Sri Lanka V S Sidhat Kumar emphasised on creating awareness among the business community about the free trade agreement between Pakistan and Sri Lanka to increase bilateral trade. He suggested that REAP submit a proposal for increasing rice quota under FTA from the current 6000 metric tons to 15000 MT in the next meeting between the trade officials of Pakistan and Sri Lanka.

He said that Sri Lanka was producing 2.6 million tons of coarse rice, which meets 95 per cent of domestic requirements.

Kumar said that Sri Lanka imports about 8400 MT of basmati rice to meet the demand for high quality rice in the country.

To a question, he said Sri Lankan trade with other countries including Pakistan will grow after the elimination of Tamil Tigers.

 

[Neo]

Gwadar to be linked through rail, road networks: PM​

ISLAMABAD: The government plans to link the Gwadar seaport with the rest of the country through rail and road networks, Prime Minister Yousaf Raza Gilani said on Wednesday.

Responding to a suggestion of Pakistan Muslim League-Quaid (PML-Q) parliamentarian Ghous Buksh Mehar during the debate on the 2009-10 budget in the National Assembly, he said the government would develop the infrastructure in Balochistan and link Gwadar to other parts of the country. He said the Gwadar port was being used to import wheat and fertilizer, adding it would be transformed into a business and economic hub that would generate employment opportunities for the local population.

Mehar had suggested the government take steps to develop the agriculture sector and ensure the provision of agricultural inputs on cheap rates. He asked the government to provide at least 500 bulldozers to Sindh province to increase agricultural yield through land leveling. He also suggested the Gwadar port be linked to the main railway network.