Pakistan Economy - News & Updates

[Pk_Thunder]

WB to approve $200m for BISP this month​

Saturday, June 20, 2009
By Mehtab Haider

ISLAMABAD: The World Bank has approved two projects worth $135 million to help Pakistan strengthen its social safety net and eradicate polio.

“The WB is also likely to approve another $200 million for the Benazir Income Support Programme (BISP) in the current month,” a source told The News on Friday.

Earlier, there were expectations that the World Bank would approve $200 million for the BISP on Friday, but it did not come through because of some procedural delay. “It will be approved this month,” said an official working for the World Bank in Islamabad.

The official said that the WB would also consider $30 million technical assistance for the Thar coal project by the end of June. This amount will be used for capacity-building and holding seminars to attract investors to take part in the project. Thar has estimated reserves of around 185 billion tons of coal.

However, according to a statement issued by the Bank on Friday, increase in global food and fuel prices and Pakistan’s ongoing energy crisis have made the country’s poor more vulnerable. Pakistan’s publicly financed social safety net programmes were limited in their coverage, administration, efficiency and ability to respond to shocks, it said.

The $60 million Pakistan Social Safety Net Technical Assistance project will enhance the operation and management of a nationwide, effective and transparent safety net system for the poor to cushion the negative effects of the food and economic crisis, it said.

“The Government of Pakistan is committed to developing a modern social safety net system,” said Yusupha Crookes, World Bank Country Director for Pakistan. “This project will assist Pakistan in establishing an effective social safety net system that provides poor people with basic income support.”

The World Bank also approved $74.68 million to support the government’s efforts to eradicate polio. Pakistan has made progress in its efforts to eradicate polio since 1997, with the number of confirmed polio cases decreasing substantially from around 1,147 in 1997 to 32 in 2007. However, in 2008 there was an increase in virus transmission with 117 cases reported across all four provinces.

The Third Partnership for Polio Eradication Project, which is part of the Global Polio Eradication Initiative (GPEI), will help Pakistan move towards eradicating the disease from its territory by ensuring timely supply and effective use of Oral Polio Vaccines (OPV), targeting children less than five years of age.

The credit for polio eradication is a performance-based credit with an option to be converted into a grant on successful achievement of project objectives. Once the objectives are achieved, repayment of the credit will be undertaken by buy-down partners, including the Bill and Melinda Gates Foundation and the United Nations Foundation.

The credits from the International Development Association (IDA), the World Bank’s concessionary lending arm, carry a 0.75 per cent service fee, a 10-year grace period, and a maturity of 35 years.

 

[Pk_Thunder]

Rs 24 billion paper guarantees to be floated to bail out oil and power sectors​

ZAFAR BHUTTA
ISLAMABAD (June 21 2009): The government has decided to bailout budgetary imbalances of the oil and power sector due to circular debt by floating Rs 24 billion paper guarantees by the Finance Ministry next week, it is reliably learnt on Saturday. The Finance Ministry has calculated that the total accumulated impact of this paper injection would be Rs 79 billion in terms of circular debt reduction.

The Finance Ministry revealed that main advantage of the exercise is that cash transfers were not involved and only book adjustments would be made in the accounts, said the sources. The sources said that the main beneficiary of the process would be state-owned oil marketing company Pakistan State Oil (PSO), which fearing that its LCs might default due to liquidity problem had recently sought the SOS from the government.

The sources in the Finance Ministry revealed to Business Recorder that the process would start from Pakistan Electric Power Company (Pepco) that would pay to electricity producers after keeping their margins. In return, the electricity producers would pay to the furnace oil suppliers and the last end of the chain would be oil and gas producers.

The sources said in the end, state owned exploration companies, OGDCL and PPL would transfer the equivalent amount of their dividends to the government. They said the Finance Ministry had agreed to inject Rs 24 billion in the balance sheet of power sector to be initiated from the Pepco and the process would continue to reduce circular debt.

The sources further said that the state guarantees were expected to be launched early next week, and the process was expected to be completed within the week, as the companies would be deciding dividends at the end of fiscal year.

"The government plans to inject some cash in the system in the first quarter of the next fiscal to improve the financial health of power sector and the PSO, and the sources hoped that reduction of subsidies on electricity from July were likely to bring liquidity in the power sector.

The Finance Ministry decided to carry out the exercise as the PSO had requested the government to make immediate release of Rs 50 billion to ease its financial situation for continuing fuel supply in the country, said the sources. Earlier, the PSO management requested the Petroleum and other concerned ministries for immediate release of Rs 30 billion that was not entertained due to reluctance of the Finance Ministry.

The PSO dues against different clients have piled up to Rs 83.6 billion, putting heavy burden on the state-run marketing company. The PSO is the major supplier of furnace oil to power sector that is to recover Rs 20.823 billion from Water and Power Development Authority (Wapda); Rs 33.252 billion from Hubco; Rs 21.203 billion from Kapco; and Rs 2.736 billion from PIA.

The PSO is to recover Rs 5.092 price differential claims (PDCs) on petroleum products from the government. Owing to non-payment of dues from the power sector, the PSO has defaulted to oil refineries and it is getting problems to get fuel supply from them. The PSO is to pay Rs 62.126 billion to the oil refineries - Rs 30.221 billion to Parco; Rs 9.612 billion to PRL; Rs 9.187 billion to ARL; Rs 8.059 billion to NRL; and Rs 5.047 billion to Bosicor.

 

[Pk_Thunder]

Pakistan has good investment prospects: Dutch envoy​

KARACHI (June 21 2009): The Netherlands is the fourth largest EU investor in Pakistan, despite being a small country with a population of only 16 million people. This was said by Marc Mazairac, Deputy Head of Economic Affairs of the Embassy of the Kingdom of the Netherlands at an informal meeting with the media in Karachi.

Trade relations between Pakistan and the Netherlands are more than six decades old, and the Netherlands is very much involved in Pakistan's economic activities be it in the shape of the ABN Amro bank or the pharmaceuticals giant ICI. The Dutch business sector has had very active relations with traders of this region since 1930s and the Dutch flag carrier KLM was flying to Karachi since the 1930s before it stopped operations to Pakistan recently.

Mazairac said the Netherlands viewed Pakistan as a country with very good prospects because Pakistan is strategically located in a region between two booming economic giants China and India. The Dutch envoy was of the opinion that Pakistan should exploit it geo strategic position between these two giants to promote trade in the region.-PR

 

[Pk_Thunder]

EU assured 100 million euros support for Pakistan: Zardari​

KARACHI (June 21 2009): President Asif Ali Zardari has said that European Union responded in "a very positive manner" and assured Pakistan financial support of 100 million euros. Addressing a meeting on Saturday at Bilawal House here, the President, who returned on Friday from Brussels after leading Pakistan's delegation at first ever Pakistan-EU Summit, said that European countries would also import fish in large quantities from Pakistan.

The meeting, attended by Sindh Chief Minister Qaim Ali Shah, provincial ministers and senior officials, lauded the untiring efforts of the President due to which Pakistan is getting full co-operation of international community on various issues.

Reviewing the ongoing and proposed development projects in the province, the President directed Sindh government that the scheme regarding land distribution among landless haris, especially women, should be treated as a special project.

He also directed that Sindh government and Agriculture Development Bank should work together to make the project a success. Tractors should be provided, land being given to landless haris must be fertile, with all necessary facilities, and women should be major beneficiaries.

The meeting discussed Keti Bunder, Katchi Abadis, Thar coal, Gorakh Hill, and RBOD issues. The President directed that no watercourse should be provided without lining. Provincial Irrigation Minister said that hydrological and geotechnical studies of Baran Dam would be completed soon, and work would start in the next few months.

The President called for starting work on dams, and introduction of drip and sprinkle irrigation system to make maximum use of water. He asked the officials to chalk out plan for treatment of TBOD water to make it usable and supply to people of coastal areas. He was told of road construction from Karachi to Keenjhar in public-private partnership. Projects in Nau Dero and Benazirabad were also discussed.

APP adds: President Asif Ali Zardari has expressed concern over the slow progress in the completion of several development projects in Sindh and asked the authorities to complete these schemes at the earliest.

This was stated by Sindh Information Minister Shazia Marri while briefing newsmen about the decisions of a meeting, which reviewed the progress on various development schemes underway in the province at Bilawal House here on Saturday.

President Zardari chaired the meeting which was also attended by Sindh Chief Minister Syed Qaim Ali Shah and provincial ministers and high officials.

"We need to deliver the benefits of these development schemes to the people of Sindh as soon as possible", he noted. The President said that the elected government had completed one year in the office and development schemes should be completed with focussed approach and on faster speed, Marri said.

He agreed that although the government was facing so many challenges, it should not affect the pace of work on development schemes. Expressing dissatisfaction over the progress of these schemes, he said that the pace of work was slow. The speed is missing. Expedite the pace and complete them on fast track basis, he asserted.

"I have been visiting here frequently and reviewing the progress of these projects, yet I do not see a speed which is required", he noted. Referring to the development of two recreational resorts in Sindh, Gorakh Hill and Keenjhar Lake, the Minister said that the president has issued orders to complete these projects as soon as possible.

President asked the government to complete the repair work on Karachi-Keenjhar Road on fast track basis under public-private partnership. She said that President Zardari has also asked the provincial government to also focus on Bhambore project which is a historical site.

Marri said that President Zardari has ordered the authorities to ensure that fertile land is allotted to women folk under land grant policy where 70 percent of this land would be provided to women peasants.

This project should be treated as special project and the allotted land should have all the required qualities. Also ensure that these landless women peasants also get other facilities including farm credit from Zarai Tarraqiati Bank of Pakistan (ZTBL) as well as tractors, he said.

Ms Marri said that the President has also asked Sindh Government to treat Lyari development as special project and develop fisheries sector to boost country's seafood exports.

Earlier, the president was briefed about the water reservoirs and dams by provincial Minister Syed Murad Ali Shah who said that work on Barani Dam would begin in next few months. He was told that hydrological and geo-technical reports about these dams were completed.

Shazia Marri said that the president instructed the concerned department to expedite work on the dams. He also directed to adopt sprinkles and drip irrigation system to conserve water and get maximum results in crop cultivation.

She said that the president has also instructed to ensure that only lined water courses are handed over to farmers. President Zardari also asked experts to prepare a study for treatment of water discharged in right bank drain outfall (RBDO) so that it can converted for potable use.

He said that people of coastal areas specially Badin area are deprived of fresh water and if this water can be converted into drinkable water through treatment. He also underlined the need for the lining of canals to save irrigation water.

 

[Pk_Thunder]

Pakistan and China ECG to meet in August​

BEIJING (June 21 2009): The Economic Co-operation Group (ECG) of Pakistan and China for the implementation of Joint Five Year Programme for Trade and Economic Co-operation will be held in coming August. The two sides also agreed to convene Joint Economic Commission meeting in near future. The decision to this effect has been taken in a meeting held between Secretary General to the President of Pakistan Salman Faruqui and Chinese Vice Minister for Commerce (MOFCOM) Chen Jian.

During the meeting both sides also reviewed whole range of bilateral economic, commercial and trade relations between the two countries. The Secretary General underlined that the President of Pakistan, Asif Ali Zardari has sent him to China to expedite all economic projects currently under implementation between the two countries. He highlighted that the President Zardari accords highest importance to the economic development of Pakistan.

He stated that President of Pakistan is keenly interested in the development of energy, housing, infrastructure development, small and medium sized dams, water conservancy and water reservoirs in all the four provinces, as well as agriculture, hybrid seeds and social sector development. Faruqui mentioned that despite tremendous difficulties, Pakistani economy had recovered noticeably since the present democratic government took charge of the affairs.

The Chinese Vice Minister (MOFCOM) said that Pakistan and China were 'all-weather friends', close associates and intimate partners. He reiterated Chinese government's commitment to extend all sorts of assistance and co-operation to Pakistan.

 

[Pk_Thunder]

Rate cut hopes, US aid help recover losses on KSE​

Sunday, June 21, 2009
By our correspondent

KARACHI: Strong signs of a reduction in interest rate in near future and news from Washington to triple non-military aid to Pakistan compensated the negative impact of the 2009-10 budget for the Karachi bourse during the week ended on June 19.

The market, however, ended the week with modest losses. The KSE 100-share index fell by 16.58 points or 0.23 per cent and closed at 7,039.73 points. The parallel-running junior 30-index, which is based on free-float market capitalisation, also fell by 70.82 points or 0.94 per cent and ended the week at 7,448.03 points. Only one session during the week i.e. on Wednesday closed on a positive note. On that day, the benchmark 100-index rose by 202.97 points or 2.95 per cent on news of a 100 basis point cut in the yield of 12-month treasury bills auctioned by the State Bank of Pakistan. Cut in the T-bills yield is a strong sign of expected reduction in interest rates, experts said and added if that happens it will prove healthy for the stock markets.

Moreover, the same day’s (Wednesday) newspapers flashed news from Washington that its senate committee on foreign relations has unanimously passed the bill aiming at tripling non-military aid to Pakistan to $7.5 billion. This aid would be granted to Pakistan in the next five years after the approval of full senate.

This news also helped to revive bullish sentiments in the market, as this aid is believed to greatly help Pakistan manage its badly hit economic affairs, they added. The first two sessions of the week (Monday & Tuesday) reacted negatively to the shocking budget, which was presented on last Saturday for the next fiscal year 2010.

The budget was termed an anti-business, trade and industrial activities, which the adviser to the PM on finance has agreed to rectify on next Monday, June 22. The first reaction to the budget, however, forced investors to take an exit at the current levels, an analyst commented. Under the uncertain economic outlook, therefore, the two last sessions of the week (Thursday & Friday) also closed under the selling pressure, but did not incur heavy loss. The cumulative losses of all four negative closing sessions of the week together stood at 219.55 points.

Owing to the proposed imposition of 16 per cent Federal Exercise Duty (FED) on the services provide by the stock brokers under Value Added Tax (VAT) regime, the daily turnover decreased to three month low at 64.4 million shares in a single session on Tuesday.

Moreover, the average daily turnover of the week slashed down by about 20 per cent on week-on-week basis to 101.6 million shares against 126.6 million shares changed hands last week. On the contrary, the overall market capitalisation luckily steadied by Rs6 billion to stand at Rs2,088 billion.

This also included an inflow of Rs105.9 million (i.e. $1.3 million) from overseas investors recorded this week. The most active stocks of the week remained the same as were last week.

The only one difference between the two weeks was that investors had injected funds due to the hope for witnessing a business friendly budget in last pre-budget week and disinvested in first post-budget week. Those leading stocks were from cement and textile sectors, followed by the securities companies, bank, telecom and fertilizer sectors. Selective stocks on the anticipated buying by foreigners, however, managed to close on positive note. Gul-e-Zehra Jafri at KASB Securities suggested that the forthcoming meeting of government high officials with the IMF team has been scheduled for June 28; rectification of anomalies pointed out in the budget and finance bill for 2010; and the July monetary policy announcement by the central bank should be kept in the close focus. Decision in three events would impact the market in some ways.

Movement in weekly volume leaders

Symbols Opening on Close on Difference

Monday (Rs) Friday (Rs) (Rs)

AH Securities 27.45 28.72 1.27

Azgard Nine 23.78 21.89 -1.89

DGK Cement 28.37 27.69 -0.68

JS Company 25.27 24.5 -0.77

Lucky Cement 57.24 57.21 -0.03

MCB Bank 148.57 142.06 -6.51

National Bank 60.97 64.85 3.88

Nishat Mills 40.87 36.96 -3.91

OGDC 73.12 75.42 2.3

PTCL 15.47 16.53 1.06

 

[Pk_Thunder]

Pakistan has vast potential for carbon credit​

Sunday, June 21, 2009
ISLAMABAD: Pakistan has vast potential for carbon credit in sugar and cement industries and the ministry of environment is making all possible efforts to realise this potential.

Being a party to Kyoto Protocol, Pakistan is eligible to benefit from the projects under Clean Development Mechanism (CDM) and exploring carbon credit potential in different industries.

The ministry of environment is the Designated National Authority for CDM in Pakistan and has a mandate to raise awareness and encourage potential partners to benefit from opportunities in CDM.

The ministry has also identified tremendous potential of CDM in sugar industry in the processes like ethanol production, process and boiler efficiency, co-generation, composting, waste heat recovery, generator replacement and fuel switching, which can be tapped to gain additional revenues by generating carbon credit.

This also helps in addressing environmental and social development values and a number of CDM projects are already being developed in these sectors. The ministry has also established a CDM Cell to explore the carbon credit potential and the cell frequently interacts with industrialists.

The cell has also organised workshops on “Carbon Credits Potential in Industry” where experts deliberated on ways and means to benefit from the global carbon credit initiative.

These workshops brought together environmentalists, industrialists and investors who would be focusing on this area as countries such as India, China and Brazil are already earning millions of dollars through carbon credit.

 

[opinion786]

View budget details and give valuable input and observations:

Budget 2009-10 Economic Pakistan

 

[Neo]

Pakistan may buy BT cotton seed worth $1bn​

Tuesday, June 23, 2009

KARACHI: The country has finalised issues in its negotiations with Monsanto about growing BT cotton which is expected to increase the yield by 40 per cent.

“Last year, around 28 per cent land was cultivated with BT cotton, but this year our target is 60 per cent,” Textiles Adviser Dr Mirza Ikhtiar Baig told The News. “There are also arrangements to produce BT seeds locally, and the Economic Coordination Committee (ECC) has approved growing BT cotton to increase production,” he said. Pakistan is in the process of signing a $1bn agreement for the purchase of BT cotton seed from Monsanto, a seed developing company of the United States, with a view to increasing cotton production by 40 per cent.

However, it has not been agreed so far how much quantity the country would purchase. BT (Bacillus thuringiensis) is a live microorganism that kills unwanted insects from forests and agriculture crops. Provided in cotton seed, it boosts the yield and protects the crop from most of the pests. Currently, farmers are using BT cotton seed on around 2.7 million acres of land against total cultivation of over eight million acres in the country.

BT cotton seed being sold in the country was smuggled and therefore illegal, said the textile adviser. BT cotton seed being produced and consumed in Pakistan is from its first generation and plant insects can develop resistance power against it. Experts say once BT cotton lost its resistance, the insect could damage the crop and the seed itself.

BT cotton seed requires continuous improvement in order to cope with growing immune power of insects. French expert Pierre Louis Dupont, who has around 20 years of experience in cotton seed development, was offered to become Pakistan’s consultant in its negotiations with Monsanto. Dupont, in an interview with The News, said there was a need to supply second generation BT cotton seed with weed control capability. With the use of BT cotton seed, he said, yield could be increased by 40 per cent.

India has boosted its cotton production to 30 million bales from 18 million. Pakistan can increase it to around 18 million bales from the current 12 million. The textile adviser said they were going to improve the supply chain. In the last couple of years, cotton production was low and industrialists suffered due to imports.

“Our requirement is 16 million bales but production was nearly 12 million bales. Thus, import reaches around 4 million bales. We can save $5 billion annually by increasing the yield,” Baig said. “We can negotiate a package with Monsanto to get more effective results.”

The package includes latest BT cotton seed with weed control technology called ‘Bollguard II with round-up ready flex’, which would save up to $250 million spent on pest control. According to preliminary talks with the company, it would charge $21 or Rs1,680 for sowing BT seeds over one acre.

Of that amount, the company would return $4.2 or Rs336 to the farmer for research purpose. “I wish this experience should have been done in 1996 like India did and we would have saved billions of rupees,” said Dr Baig opposing usage of smuggled BT cotton seed.

“It can change the destiny of the nation either way.” Growers have also welcomed the decision but have some reservations about seed distribution. Farmers Association of Pakistan’s Director Brigadier (retired) Rasheed Baig said it was good to import hybrid seeds.

However, he asked what guarantees the government would give to the farmers if pests attacked the crop and how the government would ensure the seed’s availability at controlled rates. A grower of BT cotton in Mianwali (Punjab), Khan Ameer Azam, supported the import of Bollguard II, saying if weeds, which swallowed around 25 per cent of fertiliser, were removed it would boost cotton production.

In Punjab and Sindh, he said, around 75 per cent of land was already cultivated with BT cotton, but imports at the government level would be fine. He also expressed reservations about possible black-marketing of the seed.

 

[Neo]

Rupee fall never helped increase exports: study​

Tuesday, June 23, 2009

LAHORE: Decline in rupee value has always played havoc with the economy as it has never helped increase exports but added to the debt burden and discouraged foreign direct investment in the country.

Adviser to the Prime Minister on Finance Shaukat Tarin and former federal finance minister Dr Salman Shah at a recent debate on the budget differed on the impact of rupee depreciation on economy. Tarin insisted it boosts exports while Shah argued it was injurious to exports in the long run and the economy as a whole.

A study by The News reveals Pakistan’s exports stagnate after depreciation and registers a healthy increase when the rupee is stable and that also attracts higher foreign direct investment.

The most massive devaluation was done in the decade of 90s when the rupee fell from Rs27 to a dollar to Rs54 by the time the Nawaz government was thrown in October 1999. Despite this massive devaluation, exports inched up from $7 billion in 1990-91 to $8.1 billion in 1999-00.

Exports started picking up after 2002-03 as the rupee moved towards stability. On June 22, 2001 the rupee was valued at Rs66.69 against the dollar while exports totalled $9.14 billion in 2001-02. The rupee appreciated against the greenback next year and by June 22, 2002 the rupee was valued at Rs60.24 to a dollar. However, that increase in the rupee value did not impact exports which rose to $10.88 billion in 2002-03.

The value of the rupee increased again next year and on June 22, 2003 the dollar was valued at Rs57.80. Exports in 2003-04, however, rose to $12.39 billion. Next year, the rupee remained stable at Rs57.90, but exports continued rising and reached $14.48 billion in 2004-05.

In 2005, the rupee depreciated by less than five per cent to reach Rs59.76 on June 22 and exports increased to $16.55 billion in 2005-06. The rupee remained stable next year as on June 22, 2006 it stood at Rs59.98 to a dollar while exports rose to $17.27 billion in 2006-07. Then the rupee fell to Rs60.77 and exports rose to $20.42 billion in 2007-08.

In 2008, the rupee value was Rs67.51 to a dollar on June 22 and by the second quarter of that fiscal year it crossed Rs80. It is currently valued at Rs81.28. Exports in the first 11 months of 2008-09 stood at $17.47 billion and in all probability these are expected to decline by five per cent despite a massive depreciation of the rupee.

The weakened rupee has also increased the burden of servicing foreign loans. In June 2007, the dollar was valued at Rs60.77 and at that value the current foreign debt of $51 billion would have amounted to Rs3,099 billion. However, owing to the current rupee-dollar parity of Rs81.28, the debt has grown to Rs4,145 billion.

In other words, debt burden has mounted by Rs1,040 billion in terms of local currency just because of the massive depreciation of the rupee. Foreign investors, who invested during the period of stability for the rupee during 2002 to 2007, are also in a fix. Now they have to earn 25 to 26 per cent more on their investment to remit the same amount of dollars that they sent about three years ago. This is the reason for increase in rates of multinational corporations.

Since Pakistan is an importer of commodities like crude oil, edible oil , industrial raw material and chemicals and its imports are almost double than its exports, the depreciation of the rupee also fuels inflation in the country.

 

[Neo]

Cement exports rise to $750 million​

Tuesday, June 23, 2009

ISLAMABAD: The cement industry, despite being affected by the global economic crisis, has managed to boost exports to $750 million in fiscal year 2008-09.

“Being an irregular sector if compared with textile, the cement industry increased exports to $750 million,” a senior official at the Ministry of Industries told The News. “Though the industry has been given relief of Rs200 per ton in central excise duty, it is to be fully passed on to end-consumers. This means the price of a cement bag will fall by Rs10 from July 1.”

Before the budget relief, the cement industry was paying Rs900 as central excise duty which has been reduced to Rs700 per ton. Despite a cut in the Public Sector Development Programme to just Rs219 billion owing to which domestic cement consumption has dropped sharply, the industry has performed well in foreign markets in these times of worldwide recession.

The official said the government has extended Rs40 billion to the textile industry as research and development support, but other sectors like cement, which has fared well, were given no further relief in duty drawback for exports. The official said that in 1997, the Nawaz government had provided duty drawback of Rs24 per ton on exports but its impact has now become negligible keeping in view general sales tax on limestone, 30 per cent depreciation in currency and transportation charges to the port city of Karachi. Eighty-five per cent cement production is being done in northern parts of the country.

When contacted, All Pakistan Cement Manufacturers Association General Chairman (Retd) Rehmat said that land transportation cost and port handling charges stand at $25 per ton and if the duty drawback facility is enhanced to Rs120 per ton ($1.5), exports will easily increase to $1.5 billion.

Rehmat said that the government collects Rs30 billion as revenue from the cement industry, but if the duty drawback of Rs24 per ton is not increased then the cement industry may lose its foreign market.

To a question, he said that if the government edges up the duty drawback facility, the government will absorb a hit of Rs1.2 billion per annum through guaranteed Rs29 billion revenues in return. “Now the ball is in government’s court.”

To a question, he said that Pakistan has explored the markets of Afghanistan, Iraq, Sri Lanka, India and Sudan. He said more orders from Sri Lanka are on the cards in the next financial year as the Lankan government wants to build infrastructure which was destroyed in the civil war with Tamil Tigers. “Since the war is over, Pakistan’s cement industry will have more orders from Sri Lanka.” He said that if the government remains stuck to next years’ PSDP, then the cement consumption would also enhance manifold if kept in view the construction of Diamer Bhasha dam, Neelum-Jhelum hydropower project and many other national highways. To a question he said that cement production capacity has increased to 43 million tons from 10 million tons in 2003-04 with huge investment of Rs200 billion.

 

[Neo]

Govt plans to add 2,845MW electricity by December 2009​

ISLAMABAD: To ensure smooth supply of power, the government plans to generate 2845 MW power till December 2009, sources told Daily Times Monday.

The power generation schedule for the current year consists of 6 projects based on oil/gas, which would generate 1304 MW power and 13 rental projects would generate 1541 MW.

According to schedule, the Atlas Power Project has to complete in June with total cost of $227 million that would generate 225 MW and using oil as fuel.

Orient Power Project to be completed by July 2009 with cost of $170 million would help in generation of 225 MW and it would use both oil/gas as fuel.

The sources said the Fauji Mari Power Project would be completed by September this year with cost of $217 million and would generate 202 MW by using gas as fuel.

About 200 MW power generation capacity would be added to the system from completion of Nishat Power Project with total cost of $204 million. It would use oil as fuel.

The oil/gas based Muridke (Sapphire) Power Project would be completed by Oct 2009, and would generate 225 MW power with total cost of $169 million. The gas base Engro Power Project would be completed by Dec 2009 with generation capacity of 227 MW. It would cost the government $205 million.

In the annual budget 2009-10, the government proposed the allocation of Rs139.20 billion for the power sector, which would focus on improving infrastructure, system modernization and up-gradation of the power transmission network.

The government had fixed a target of 3,858 MW for enhancing power generation during the fiscal year 2009-10. The sources claimed that there was also a possibility that the government might import electricity from regional countries and fill the power shortfall in near future.

Notwithstanding the systemic issues such as the failure to build new dams and previous government’s inability to add even a single megawatt of new power to the grid during nine years of its rule, it seemed that the present crisis was a result of bad management and the lack of foresightness.

The demand for electricity in Pakistan during the winter months actually goes down and this winter has not been an exception. Throughout the month of December, the electricity consumption in Pakistan hovered around 11,000 MW, down from the peak levels of 17,500 MW seen in summer.

 

[Neo]

Gilani seeks access to civilian N-technology​

* PM says nuclear programme purely of defensive nature, won’t be slowed down
* Pakistan wants peaceful co-existence with neighbours​

LAHORE: Prime Minister Yousuf Raza Gilani on Monday asked the United States to abandon the double standards in its policy on civilian nuclear technology and offer the facility to Pakistan in the same way it did to India.

Gilani was talking to reporters after addressing a gathering of scientists at the 34th International Nathiagali Summer College on Physics and Contemporary Needs at the Quaid-e-Azam University.

Defence: He said the country’s nuclear programme was a purely defensive measure and essential for national security.

“Pakistan’s nuclear programme is defence-oriented and peaceful,” he said.

Gilani said there was no question of slowing down the nuclear programme. “We are using it to meet our needs ... and cannot even think of slowing it down,” the prime minister said.

Existence: He said the country had no aggressive designs against any other state and wanted peaceful co-existence with all its neighbours. Reiterating that the nuclear programme was purely for defence purposes, Gilani said, “Pakistan could not afford to remain oblivious to this ominous development and grave threat to its security. Pakistan had to opt for developing a matching response to the Indian nuclear threat,” he said.

The prime minister said the country’s emphasis on nuclear power for meeting its energy needs was realigned after India conducted tests in 1974.

However, the prime minister said, the international community had failed to take into account Pakistan’s concern for security and adopted discriminatory policies towards the country in the form of political and diplomatic pressures and economic sanctions.

Gilani supported non-proliferation, saying developing and small nations must be given access to the nuclear energy for civilian purposes. daily times monitor/mahtab bashir

 

[Neo]

US FDI totals $ 1.3bn during 2007-08: Patterson​

KARACHI (June 23, 2009): US Ambassador in Pakistan Anne W Patterson said Tuesday that US foreign direct investment (FDI) in Pakistan during fiscal year 2007-08 totalled $ 1.3 billion.

"In the first nine months of current fiscal year, the US investment has touched $ 705 million with several multi-million dollars in the pipeline", she said while speaking at the inauguration of new secretariat of American Business Council.

The Ambassador said that USA was the single largest investor in Pakistan and she was encouraging other US investors to grab investment opportunities in Pakistan and one of such investor from Oklahoma has just invested $ 100 million and doing business here for a long time.

We want to also encouraging Pakistanis living United States to invest in Pakistan, she added.

Patterson said that USA was the largest trade partner of Pakistan with a total volume of $ 5.6 billion which is 25 percent of Pakistan's total world trade.

USA imported merchandise worth $ 3.6 billion and exported goods worth $ 2 billion during 2008, she noted.

She said that USA working to develop reconstruction opportunity zones (ROZs) in border areas of Pakistan to provide employment to those people who desperately need jobs.

Besides, setting up manufacturing units, the United States will also undertake infrastructure development projects under ROZs, she added.

Patterson said that she was optimistic about the realization of ROZs and the bill has been passed about ten days ago.

"This is now being introduced in the US Senate. There were differences between the Senate and the House. Believe me members of Obama administration have been working very hard to get this passed in both houses. Then it will go to Commerce Committee. I am very optimistic that this will move quickly since it has been passed from the Congress", she said.

She agreed that (the delay) was a big disappointment for United States.

She said that USA was also trying to encourage intra-regional trade in the region and capitalise the dynamic potential for expanding trade. This will bring in more jobs for exporters and importers and manufacturers in the region.

The USA was also encouraging to develop logistics between Karachi sea Port and Central Asian markets to reduce cost of doing business in Pakistan.

Earlier, president ABC Asif Jooma briefed the importance of new secretariat and said that the number of ABC members will soon grow from 66 to 70.

He said that ABC has developed an in-house think tank facility to guide the government on investment policies and what foreign investors would need in future.

 

[Neo]

'West owes sustained economic support to Pakistan'​

WASHINGTON (June 23 2009): Advocating the critical importance of democracy and economic development to defeating terrorists, President Asif Ali Zardari on Monday asked the international community, particularly the Western powers, to support Pakistan with immediate assistance as well as expanded trade to help it address challenges of global implications.

The president underlined the urgency to back Pakistani anti-terror effort with a 'robust economic package' to help the democratic government deliver for its millions of displaced people from Swat and other north-western valleys. In an opinion piece in The Washington Post, Zardari called the internally displaced persons as the latest victims of terror that has afflicted the country in recent years.

'In the battle against international terrorism, we are in the trenches for ourselves but also for the world. We have lost more soldiers, 1,200 of them, fighting the Taliban in Pakistan than all of the countries of Nato have lost, combined, fighting the Taliban in Afghanistan. Thousands of civilians, victims of attacks such as the recent bombing of the Pearl Continental Hotel in Peshawar, have died," he wrote.

At a personal level, Zardari said, 'I lost my wife (former prime minister) Benazir Bhutto, the mother of my children and Pakistan's greatest leader.' He appreciated the expression of support by President Barack Obama's administration but said the European economic powers must join the effort to back Pakistan's crucial struggle against militancy.

'We need immediate assistance. The Obama administration recognises that only an economically viable Pakistan can contain the terrorist menace.' In this respect, Zardari noted that the United States has committed $1.5 billion a year for five years to help stabilise Pakistan's economy, and the House of Representatives and the Senate Foreign Relations Committee have acted decisively to reorient the Pakistani-American relationship towards not just a military alliance but a sustained economic partnership.

'Now, the rest of the world must step up and match the US effort. Pakistan needs a robust assistance package so that we can deliver for the people and defeat the militants. And the rest of the world should again follow the American lead in helping us deal with the millions of internally displaced people who are the most recent victims of terrorism in our nation.'

Concurrently, he underscored, the rich Western countries must give greater access to Pakistani trade and launch preferential trade programmes for it. 'But aid is not enough. In the long term, Pakistan needs trade to allow us to become economically independent.' 'Only such an economically robust Pakistan will be able to contain the fanatics and demonstrate to the 1.5 billion Muslims world-wide that democracy and economic development go hand in hand.'

He applauded the United States' initiative to move forward with the preferential trade program called economic opportunity zones in Afghanistan and the Federally Administered Tribal Areas region of Pakistan. The programme, he said, will remove trade barriers and provide economic incentives to build factories, start industries, employ workers-and give hope to the people.

'This opportunity zone concept should be a model to Europe, as well. Europe must realise that it is in its own self-interest, as the United States has realised, to do everything possible to grow the Pakistani economy and to provide incentives for Pakistani exports to the continent.'

The president faulted the Western capitals for supporting Pakistani dictators in the past at the cost damage to democracy. 'The West, most notably the United States, has been all too willing to dance with dictators in pursuit of perceived short-term goals. The litany of these policies and their consequences clutter the earth, from the Marcos regime in the Philippines, to the Shah in Iran, to Mohammed Zia ul-Haq and Pervez Musharraf in Pakistan.

The West stood by as a democratically elected government was toppled by a military dictatorship in the late '70s. Because of the Soviet invasion of Afghanistan, the West used my nation as a blunt instrument of the Cold War. It empowered a General Zia dictatorship that brutalised the people, decimated our political parties, murdered the prime minister who had founded Pakistan's largest political party, and destroyed the press and civil society.

And once the Soviets were defeated, the Americans took the next bus out of town, leaving behind a political vacuum that ultimately led to Talibanisation and radicalisation of Afghanistan, the birth of al Qaeda and the current jihadist insurrection in Pakistan.'

He pointed out the problems created by the heroin mafia, which arose as a consequence of the efforts to implode the Soviet Union and said it now takes in $5 billion a year, twice the budget of our army and police. This is the price Pakistan continues to pay.

"Dancing with dictators never pays off. Frankly, the worst democracy is better than any dictatorship. Dictatorship leads to frustration, extremism and terrorism. But the past is the past, and we can't undo it. We can, however, address the consequences of past mistakes and make sure they are not repeated." 'My wife travelled the world preaching democracy to what should have been its loudest choir.

The doors of many Western governments were shut to her, but she was not deterred. She was relentless in her passion for democracy, and unwaveringly optimistic about its ultimate success". She said, famously, that "truth, justice and the forces of history are on our side.'

'Today, we shall see if America and Europe are on our side as well.' Zardari contrasted the challenges of extremism with some other recent conflicts and said after the debacle of Vietnam, the United States could pack up and leave with minimal consequences for its genuine national interests; similarly, for the British in the subcontinent and the French in Algeria.