Pakistan Economy - News & Updates

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2009-10 projects: Pakistan to get Rs 519 billion foreign loans, grants​

KARACHI (June 23 2009): Pakistan will acquire over Rs 519 billion foreign assistance in the shape of loans and grants for the next fiscal year from international finance institutions and different countries to run its development and non-development program smoothly, Sources told Business Recorder on Monday. They said that every year the government seeks huge foreign assistance to run its development and non-development program without financial hurdles.

"However, for the next fiscal year (2009-10) the federal government is relying more on foreign assistance due to high expenditure and less revenue," they added. They said that the government would be compelled to cut the ever highest Rs 646 billion Public Sector Development Program (PSDP) for next fiscal year if it failed to meet the target of estimated foreign assistance for development and non-development programs.

"Increase in budget deficit would be another option," they added. Sources said that delay in foreign inflows would also raise the pressure on the rupee against dollar. They said that Finance Division has estimated overall Rs 519.704 billion loans and grants (about $6.4 billion at Rs 80 per dollar exchange rate) from external sources, which is Rs 219.313 billion higher than the budget estimates of current fiscal year 2008-09. They said that estimated loans and grants by Finance Ministry for fiscal year 2009-10 are about 73 percent higher than current fiscal year.

For the current fiscal year the ministry had estimated Rs 300.319 billion inflows, while the estimated loans and grants were 39 percent higher than the revised estimates of Rs 374.497 billion for current fiscal year. Planned and non-plan assistance through external resources for development and non-development programs comprise Rs 444 billion loans and Rs 67 billion grants. External loan estimates for development and non-development expenditures stand at Rs 452.450 billion for next fiscal year against Rs 283.776 billion for the current fiscal year, depicting an increase of 59 percent.

Revenue estimates through external grants depict an increase of 310 percent to Rs 67.254 billion in fiscal year 2010 against Rs 16.393 billion in fiscal year 2009. Overall foreign assistance for the next fiscal year comprises by planned resources Rs 510.413 billion and non-planned resources Rs 9.291 billion. Project aid for federal departments is Rs 85.86 billion; Rs 26.923 billion for provinces; Rs 150.645 billion for commodity; Rs 16.385 billion for Wapda; and Rs 10 billion for National Highway Authority.

Under plan resources Asian Development Bank would provide Rs 140.954 billion grants and loans; Australia Rs 1.79 billion; China Rs 12.293 billion; European Union Rs 1.092 billion; European Commission Rs 8.027 billion; Eurobond Rs 41.250 billion; Germany Rs 5.66 billion; France Rs 8.9 billion; International Bank for Reconstruction and Development (World Bank) Rs 2.9 billion; International Development Association Rs 49.96 billion; Islamic Development Bank Rs 59.28 billion; and Iran Rs 10.89 billion.

Italy would provide Rs 4.71 billion as loans and grants under plan resources; International Fund for Agriculture Development Rs 950 million; Japan Rs 41.307 billion; Korea Rs 7.93 billion; Kuwait Rs 3.831 billion; Norway Rs 50 million; Netherlands Rs 2.64 billion; New Zealand Rs 18.9 million; Saudi Arabia Rs 34.88 billion; Spain Rs 872 million; Sweden Rs 165 million; Turkey Rs 3.3 billion; UAE Rs 10.39 billion; UK Rs 11.289 billion; United Nation Development Programme Rs 637 million; Uncief Rs 157 million; USA Rs 33.474 billion; World Bank Rs 9.9 billion; World Food Programme Rs 580 million; and Opec would provide Rs 219 million loan in the next fiscal year.

 

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Small, cottage industries in Sindh: Chinese to invest billions of dollars​

KARACHI (June 23 2009): Chinese investors will invest billions of dollars in the special industrial zone to promote small and cottage industries in Sindh, it is learnt. Sources said that China Special Industrial Zone at Shahdadpur, district Sanghar, is being developed on the special directives of the President.

They said that agreements had been signed during President's last visit to China, while a group of investors also visited the site a few days back. The industrial zone, spread over 100 acres, would be funded by federal government with 548.347 million within a short span of two years. Sindh Small Industries Corporation would be responsible for project's execution, operation and maintenance, they said."Yes, the PC-1 of the industrial zone has been prepared, and construction of double road from Benazirabad (Nawabshah) airport to the project location is underway at a very fast pace, which would be completed shortly", Secretary, Commerce and Industries, Ali Ahmed Lund, told Business Recorder on Monday.

He said that allotment of land would be made after construction work of road is completed, and added that setting up of small and cottage industries would create employment opportunities for the locals. The Sindh government would earn a remarkable amount in the shape of revenue while the investors would be provided with all basic facilities including potable water, proper drainage system, gas, electricity, etc, he added.

He said that the setting up of special industrial zones in interior parts of the province was aimed at promoting small industries and provide jobs to people of various talukas of district including Jam Nawaz Ali, Sanjhoro, Shahdadpur, Khipro, Sanghar and Tando Adam. Shahdadpur has been selected to provide easy access of industrial zone to the investors by air and road routes, he said.

To a query about which industries are going to be set up at China Special Industrial Zone, he said that industries include cattle feed, poultry farming, hotel, motel, light engineering workshop, milk plant, oil expelling units, flour milling, rice husking, steel door and windows, food industry and agricultural accessories.

 

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Approval of power projects​

EDITORIAL (June 20 2009): The Economic Co-ordination Committee of the Cabinet in its last meeting approved, among other schemes, "16-20" hydropower projects on River Gilgit as IPPs, aimed at tiding over the country's energy crisis. The meeting has also reviewed the pros and cons of effecting amendments to the 1995 Hydel Policy, and decided that all "actions" thereto might be completed within one month.

We feel that the policy of inducting hydropower IPPs needs to be realistically reviewed as the initiative may not yield the expected results, as has been the case with some thermal power IPPs. It will be recalled that representatives of NWFP and AJK attending a meeting of the Private Power and Infrastructure Board (PPIB) some weeks ago had accused the Board of allocating a majority of the prime locations to IPPs whose performance had not been quite up to the mark.

Secondly, as a result of delayed implementation of projects the sponsors often sought extensions, though all extensions, according to the PPIB chief, have been given strictly in accordance with the provisions of the 2002 Power Policy. Under the 1995 Policy, these hydropower projects fall in the jurisdiction of provincial/AJK governments, and if the provinces feel that the projects are not performing well, these can always be annulled.

Similar reservations have been voiced by representatives of Punjab government as well. In order to resolve the issue the Board has since constituted a tripartite committee, comprising the Wapda chairman, the PPIB Managing Director and representatives of the provincial governments to draft amendments to the 2002 Power Policy, relating to hydropower projects.

The provincial governments are said to be annoyed with the PPIB for neither taking them on board nor allowing them appropriate time for filing their comments on the proposed amendments to the Policy. Secondly, the provinces are keen to be allowed to seek investment directly for hydropower projects, to be executed within their jurisdiction.

Successive power policies prior to 2002 had been formulated primarily for thermal and hydel power generation sectors, but the policies did not address power generation from renewable resources in a substantial manner. As against this, the present policy not only encourages establishment of power capacity based on indigenous resources (hydel, gas and coal); it also seeks to enhance use of non-conventional and renewable sources of energy.

In addition, it emphasises the need for energy conservation and environmental protection. It will be recalled that the decade of the 1990s was crucial with regard to policy developments, focusing on involvement of the private sector in power generation, with the introduction of three distinct power policies, ie, in 1994, 1995 and 1998.

There are basically three issues over which identity of perception needs to be evolved now. One, there is the PPIB's apparent propensity to largely go it alone, and allocate projects to the IPPs of their choice without taking into account reservations of the provincial governments. Two, the provinces are keen to seek investment directly for hydropower projects, to be executed in their jurisdiction, which would give the provinces greater control over implementation of the projects.

And three, repeated extensions sought by project sponsors without there being a cut-off date, which is an essential requirement for a time-bound, cost-effective implementation of projects. All these aspects need to be incorporated in the policy framework. The 2001 policy stipulates that the sponsors will establish captive hydropower units for industry with equity from their own resources or as joint ventures with public sector.

As we have argued in this space earlier, the public sector, with its vast expertise and resources is best suited to carry out hydropower projects. And there is a perception that the performance of hydropower IPPs has not been up to the mark. At best, the government should execute hydropower projects on public-private partnership basis, with the public sector being the main player.

 

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WB refuses to finance Basha dam​

Secretary Water and Power Shahid Rafi says ADB has no objection to the project and wants to fund it​

Wednesday, June 24, 2009
By Khalid Mustafa

ISLAMABAD: The World Bank has refused to finance the Diamer-Basha dam project worth $11.8 billion while saying the site of the dam is controversial between India and Pakistan.

However, the Asian Development Bank (ADB) is ready to fund the mega project but has linked the credit supply with a consensus resolution from the Parliament in favour of the project to ensure that the project is not disputed.

In an exclusive talk with The News, Secretary Water and Power Shahid Rafi said the WB has refused to fund the project saying the site of the project is controversial and India claims the area where the dam proposed is a disputed territory.

According to water expert and former Wapda Chairman Shamsul Mulk, this time the WB excused for funding the project on the plea that the site of the project is controversial, it had not only funded the project of the Mangla dam which was also erected in the area of AJK it was, according to New Delhi, also a disputed territory.

“It is pertinent to mention that India also provided the funds for building the Mangla dam,” said Mulk.

However, Rafi said the ADB has no objection to the project and is poised to fund it, but the Manila-based bank first wants to make the project undisputed among the stakeholders within the country, that is why it desired the consensus resolution from the parliament in favour of the project.

Pakistan is expecting $5 billion from the ADB, but the bank, which earlier indicated to lend loan amounting to $2.5 billion for the dam, is likely to increase the credit in the range of $3 to $4 billion in the aid memoir, but linked it with certain conditions including seeking of resolution from the parliament in favour of the dam.

He said people of Northern Areas have some objections to the demarcation of the site of the project and claimed that the proposed powerhouse also land is in the Northern Areas, but NWFP claims that the powerhouse is proposed in its jurisdiction.

“I have asked Kashmir and Northern Areas secretary to put up the summary seeking the re-demarcation of the site of the project to make every thing transparent.

I want to settle this important issue along with other issues pertaining to the resettlement of the people to be displaced prior to tabling the resolution before the Parliament so that the incumbent regime could not face any sort of embarrassment after passing the resolution in favour of the mega project.”

The government has already come up with commitment to initiate a formal work on dam portion of the mega project and allocated over Rs23 billion for next fiscal year.

It is pertinent to mention that the fact finding mission of the ADB in a meeting of official of Economic Affairs Division held on June 5, had conveyed its advice (terms and conditions) to qualify for the aid memoir for the Diamer-Bhasha dam. Wapda Chairman Shakil Durrani was also part of the meeting.

The ADB has also communicated to the EAD top authorities that Pakistan needs to first ensure the other financial resources other than ADB’s loan, which is required for completion of the whole project. The bank, the official said, also took up the issue of transmission and distribution system, which will carry the electricity to load centers from the dam, waterside canals, and alignment in Karakorum Highway.

The bank asked for the timely completion of the said projects so that the social benefits and dividends could be reaped on time.

 

[Neo]

India says no to compensation for blocking Chenab in Aug ‘08​

Wednesday, June 24, 2009

ISLAMABAD: New Dehli has refused to extend compensation both in shape of water or in monetary form to Islamabad for the blockade of Chenab river by India in August, 2008 that inflicted huge monetary loss to agrarian economy of Pakistan.

“During the three-day dialogue between Pakistan and India at Permanent Commission of Indus Waters (PCIW), held in New Dehli from May 31 to June 2, Islamabad raised the issue of compensation of massive dip in water availability that Pakistan experienced in August 2008 owing to filling of Baglihar hydropower project, but India has turned down any compensation saying that it does not believe the data of Pakistan and argued that water dip that the lower riparian country experienced was not because of the filling of Baglihar project, rather it was because of the hydrological conditions of Chenab river,” reveals the document containing the minutes of the Delhi meeting exclusively available with The News.

However, India, the document says, desires to verify the data collected by Pakistan authorities when the River Chenab experienced dip in the month of August 2008.

Syed Jamaat Ali Shah headed Pakistan delegation during the meeting at Permanent Commission of Indus Waters level.

Under the Indus Waters Treaty, India cannot reduce the flow in Chenab River below 55,000 cusecs between 21st June and August 31, 2008, whereas Pakistan had been receiving a discharge of as low as 20,000 cusecs during August-September 2008.

When contacted spokesman of Ministry of Water and Power, Zarar Aslam confirmed that India has refused to compensate Pakistan for the water shortage that the country faced in August 2008 in River Chenab. However, he refused to share the modus operandi that the government will adopt to tackle this issue.

Pakistan Commission of Indus Water Commissioner Syed Jamaat Ali Shah was not available for comments despite many attempts to contact him.

India is currently spending around $200 billion on the construction of water tunnels to the River Indus, which could turn parts of Pakistan barren, a senior official at the Ministry told The News.

According to, Advisor to the Punjab Irrigation Department advisor M H Siddiqui says that Chenab blockade in August 2008 affected over 10 million acres of land in the province and the standing paddy crop in the area suffered losses, as it was the time of maturity and needed the last watering, which could not be completed just because of the blatant violations of Indus Waters Treaty 1960 by India and continuing to fill up the dead shortage of Baglihar HPP beyond August 31, 2008.

The document also reveals that Jammat Ali Shah has sought permission from New Delhi to visit three large hydropower projects that India is constructing at Laddakh Area on River Indus, which is the lifeline of Pakistan. —KM

 

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Pakistan may get additional $200m aid​

Wednesday, June 24, 2009

KARACHI: US Ambassador to Pakistan, Anne Patterson informed that an additional $200 million aid assistance for Pakistan, was approved on Tuesday, while at the same time, the US is also working on the $1.5 billion annual financial assistance promised to the country for the next five years.

She further said $30 million had already been provided for the Internally Displaced Persons (IDPs) earlier. Patterson added that the US was also ready to provide assistance to deal with the energy crisis of Pakistan.

She also stated that the Obama administration is working hard towards implementing the bill on the Reconstruction Opportunity Zones (ROZ) of Pakistan and she was optimistic that work would soon begin on it.

Addressing the media at the inauguration ceremony of the new American Business Council of Pakistan (ABC) office premises on Tuesday, she admitted that while the House of Bills had approved of it, there were some differences in the Senate which the Obama administration was working to resolve.

Patterson said that it was a challenge for the US to expand their trade to developing countries when they themselves were facing critical times due to recession as the western country was also facing losses and increasing unemployment threats.

However, she added that the Obama administration was working on increasing investments in the country and she too personally encouraged American businessmen to visit Pakistan and invest here.

Speaking about Pakistan and US trade relations, Patterson said that US was Pakistan’s largest trading partner and had made investments worth billions of rupees. She further said that Pakistan should increase trade within the region and also with neighbouring countries which would help it to experience a much needed boost in trade relations.

To a question by the media, the ambassador also said that while the US wasn’t working particularly to increase trade between India and Pakistan, they would encourage the two countries to do so as it would be advantageous for all three nations in terms of trade and economic benefits.

Patterson said that Pakistan has a highly productive youth based population which has a “good appetite for consumer goods” and therefore, opportunities are abundant in the country for development and progress.

To another question regarding the gems and jewelry sector of Pakistan of which the US is the largest importer, Patterson said that American businessmen are driven by price and quality which in turn determines the trade potential and level with other countries.

“I would be very surprised if Americans pull out of any deal in Pakistan where they are benefitting in terms of price and quality,” she expressed.

Referring to the IDP camps, Patterson said that USA had been the largest donor to this country and would continue to be generous even in the future. She continued to say that millions had also been donated by the American companies based in Pakistan and the employees working for them.

She further stated that the US was not involving UN agencies in their aid work for the IDPs. Nevertheless, they had involved the local NGOs for the cause of which the Human Development Fund was playing a pivotal role in working with the US to provide financial aid here.

 

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Govt to set up 400 livestcok farms​

Wednesday, June 24, 2009

KARACHI: The government planning and development division has planned to initiate a 3-year project for poverty reduction through livestock development.

The project ‘Poverty Reduction through Smallholder Livestock Development’ will be implemented this year across the country with sponsoring of Planning Commission and Ministry of Livestock and Dairy Development.

According to details obtained by The News the project will be operated and maintained by Livestock Holders Associations on self-financing and self-sustaining basis under the guidance of project management. The community will share Rs472.45 million in a project of Rs3539.13 million. Livestock sector is the major contributor with 52 per cent of the agriculture GDP and is a source of livelihood for around one third population or 55 million people.

Pakistan is 5th largest milk producer in the world but production of milk animals remains low. More than 90 per cent livestock are owned or kept by small farmers and landless rural households (52 per cent female, 48 per cent male). About 90 per cent of total milk supply come from these smallholders. In most parts of the country, women dominate the livestock in terms of feeding, milking and marketing of milk.

During 2007-08, about 42.2 billion liters of milk was produced, of which 34 billion liters (81 per cent) were used for human consumption and only 1.26 billion liters are being processed and rest of the milk are marketed raw.

According to project details, the primary objective of the proposed project is to bring social and economic transformation of rural Pakistan by empowering millions of small livestock holders comprising the poor landless farmers including women.

The project envisages establishing 400 smallholders’ livestock farms in the country in three years specifically designed to cater to the needs of poor farmers and landless livestock smallholders who subsist on milk animals for their livelihood. The government will provide a grant up to 80 per cent for infrastructure development.

 

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Mango export doubles this year​

KARACHI: Pakistan’s mango export during the current season has doubled compared to corresponding period of the last year as the current pace may help exporters to accomplish desired goal of total 1,25,000 tonne exports.

Fruit traders and exporters claimed from May till June 20, 2009 the country has exported around 30 thousand tonne of fruit, which is far better compared to around 15 thousand tonne achieved during the same period of 2008 while the total export at the end of the mango season stood at around 70 thousand to 75 thousand tonne.

The expected mango yield during the current season is anticipated to be in the range of 1.6 million to 1.8 million tonne and out of this quantity, the target of 1,25,000 tonne appears inadequate as indicated by most of the exporters which they blamed on account of lack of marketing in foreign markets and not enough support at the government level to help raise export target to substantial level.

Currently the major exporting variety of mango includes Sindhri and Chaunsa from Sindh and by the first week of the next month, different variety of Chaunsa from Punjab would start finding their way in the international markets.

Major mango importing countries includes Europe, whole Gulf region, Afghanistan and Iran.

Chairman All Pakistan Vegetable and Fruit Exporting Association, Abdul Wahid informed out of total 30 thousands tonne of the mango exported so far, some 5 thousand tonne were dispatched through air routes while the rest by sea.

Owing to high tariff charged by the national Flag carrier PIA, exporters preferred to send little quantity of the mango through the same while the bulk was send off through foreign airlines charging less.

The airfreight rates difference stood at around Rs 30 per kg which was enough to lure exporters to book their cargo with them.

He said currently a delegation from Japan External Trade Organization (JETRO) headed by Minoru Uga was visiting Karachi for inspection of Vapour Heat Treatment Plat (VHT) at Malir, donated by the country some four years ago for treatment of different varieties of mango rendering them worth exporting to Japan.

The plant was installed with the objective to eliminate the menace of fruit fly from Sindhri and Chaunsa as Japan has indicated to import Pakistani mango from next year, which is regarded as lucrative and rewarding market for exporters.

Fruit exporters association has also planned to hold a seminar during July of the current year, which is expected to be participated by Japanese fruit importers.

 

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Govt targets 20% rise in real per capita income in 5 years​

ISLAMABAD: The government set a target of 20 percent increase in real per capita income in next five years that will base on an average Gross Domestic Product (GDP) growth rate of 6 percent, official document with Daily Times revealed.

To achieve the increase in real per capita income, the government also set population growth rate at 1.8 percent in the specified period. More efforts would be required to further increase real per capita income to 25 percent with average growth of GDP of 6.5 percent to 7 percent during Tenth 5-year plan (2010-2015).

According to the Economic Survey 2008-09, Pakistan’s per capita real income had risen by 2.5 percent in 2008-09 as against 3.4 percent last year. Per capita income in dollar term rose from $1042 last year to $1046 in 2008-09, thereby showing marginal increase of 0.3 percent.

For the purpose, the government has to bring down inflation rates in single digits during the Tenth Plan Period along with overcoming energy shortfall and significant improvement in the condition and outreach of physical infrastructure across the country.

The government also planned to improve Pakistan’s standing in international comparison of the cost of doing business and business environment for private and foreign investors.

A significant improvement in delivery, cost effectiveness and quality of output of public sector investment programme through adoption of new development vehicles, Public-Private Partnership (PPP) and active involvement of the private sector and civil society in formulation, management and delivery.

Set up measurable targets and performance indicators that would allow monitoring of improvement in governance and delivery of good quality basic services, timely justice, enforcement of contracts and assistance to ordinary people in overcoming problems they face in everyday life, the document revealed.

A sharp increase in growth, development and job creation in Balochistan and FATA, the revitalisation of growth in NWFP and targeted growth of less developed districts in Punjab and Sindh (together termed as Nation Building Regions).

A well-targeted, comprehensive and dynamic social protection system in place for the needy and vulnerable which also helped build their assets and skills to exit out of poverty, the Five-year plan revealed. Meeting the Millennium Development Goals (MDGs) by 2015 by increasing resources and supporting policies for achieving target where Pakistan was falling behind.

Sharp decline in poverty to move as close as possible to the MDG target of 13 percent of population living below the poverty line by 2015. Decent and good quality employment generated with unemployment reduced to 3.5 percent– 4 percent by 2015 and real wages increased significantly.

The document revealed a favorable business environment would be created to encourage foreign investment in new areas to supplement domestic development efforts and acquire latest technology.

To meet the resource gap and overcome foreign exchange availability constraint, donor assistance from multilateral and bilateral sources would be sought but it must be ensured that this was used efficiently in line with Tenth Plan (2010-15) priorities. It should not crowd-out domestic resource mobilisation effort or used, as a cushion to postpone needed structural reforms.

To ensure long-term stability and sustainability of the economy, effort would be made to keep the foreign and domestic debt within manageable levels. The limits set by the Fiscal Responsibility and Debt Limitations Act 2005 would be adhered, it revealed.

 

[Neo]

Budget 2009-10: We missed everything again ​

Majority of the Pakistanis were dejected after hearing the budget speech on the evening of June 13, 2009. Not because there was no relief for the poor section of society. This was not expected by anybody from a government dealing with war time economy. The real cause of disappointment was demonstration of lack of will to tax the rich - especially the absentee landlords.

The government failed to outline any measures for revival of ailing economy. All the taxation proposals show that the poor will have to face more miseries. On the contrary, the rich and the mighty have again managed to escape taxation on their colossal income and wealth. The gigantic bureaucratic apparatus - epitome of bad governance - is given 15% pay raise but not a single step is made to curtail their monstrous wasteful expenditure and monetize all their perquisites and benefits received in kind.

The analyses done by independent economists and observers reveal that the government of Pakistan People's Party (PPP) has failed to meet the economic challenges of the day in its second budget. Is it the budget of PPP-once a social-democratic party? Certainly not, it is, in fact, as economist Nadeemul Haque aptly said, "the 10th Citibank budget and the 64th bureaucrat-controlled budget and what do we get? Same old! Same old! Same old"

What should have budget 2009-10 been like? This question was never discussed by the elected government inside or outside the parliament. Resultantly, the annual budget, as usual was prepared in the same old mould - bureaucratic-controlled, IMF-sponsored and pro-rich.

Nobody has realised, while preparing this important document, that at this juncture of history, Pakistan needs class stability to avoid chaos, civic strife, lawlessness and religious obscurantism. The tragedy of 2.5 million Internally Displaced Persons (IDPs), burgeoning debt servicing, increased military budget, high inflation, unjust tax system, wasteful expenses, industrial slowdown, recession, State inefficiency and bad governance pose serious challenges to our economic survival.

But, in the budget no serious efforts are outlined to meet these challenges - the budget-makers were more interested to balance their books through foreign and domestic borrowings. What else could one expect from a banker trained by Citi Bank? But the question is where the stalwarts of PPP were. People like Chaudhry Manzoor Ahmad and Sardar Asif Ahmad Ali, who are known champions of pro-poor socialist economic policies.

Sadly, budget 2009-10 provides only Rs 31.6 billion for education and merely Rs 6.4 billion for health. Can this be called a pro-poor budget? The burden of indirect taxes, constituting nearly 70% of total taxes, stands shifted to the poor, yet, PPP claims it has pro-poor economic policies. Have PPP stalwarts studied the model of greater social mobility in the Nordic countries? Have they bothered to adopt their tax and welfare systems? The systems of these countries, unlike that of America which we follow with pride, deliberately try to help the children of the poor to do better than their parents. This is what pro-poor polices imply.

It is more than obvious that Budget 2009-10, is totally oblivious of redistributive fiscal policies and social welfare programmes for social mobility. Our poor have been given a so-called "economic relief package" by way of mercy - Benazir Income Support Programme. The relief (sic) is only of cosmetic nature and there is nothing in the policies or budget that aims at helping the poor to move upwards. Education remains at the lowest level of priority in our state policies.

The federal and provincial governments not only allocate meager amounts for this sector but also do not know how within given resources through innovative means they can revamp the entire system to become effective tool for social mobility. There is a complete lack of understanding of this issue by the rulers and the result is that poor segments of society are condemned to remain mired in abject poverty and their children have no chance to move up as education is either not available to them or is of no practical use.

Thus, by all standards, budget 2009-2010 is yet another routine exercise of balancing the books (that too by domestic and foreign borrowings). Pakistan needs meaningful redistribution policies that specifically benefit those at the bottom. There is nothing in this budget towards achieving this goal. It is, as usual, a disappointing document-prepared by bureaucrats at the behest of the rich classes for the perpetuation of an exploitative economic system.

(The writers are tax lawyers and authors of many books
on Pakistani tax laws.)

 

[Neo]

'First Data' to extend business in Pakistan: Gul Agha​

KARACHI (June 22 2009): Global technology leader in information commerce 'First Data' has captured over 15 percent market share in Pakistan, with full range of payment card and loan processing services unique services, products, fraud and risk management and highly experienced people.

Khurram Gul Agha, Country Manager, First Data Pakistan, in an exclusive interview with Business Recorder said that after this success, now 'First Data' has planned to extend its business in Pakistan by developing new clients. He is also expecting that information commerce would be in high demand in the current economic climate.

Agha said that major changes in economic situations raise new opportunities for information commerce, especially where increased efficiency is required. "Therefore, we are very pleased with the strategic decision to open office in Pakistan and look forward to working with financial and retail partners throughout the country", he said.

"Now banks across the world are thinking creatively not only to manage liquidity crisis but also to improve operational efficiency, while 'First Data' successful business models offer both reduced costs and drive revenues for customers," he added.

"Having a full range of products, in a vast number of markets can only be of benefit, and we are working hard to analyse the situation so that we can take advantage of any opportunities arising in the current economic climate", Agha said.

Some studies on the current crisis also suggest that the current situation will bring an opportunity to banks to implement measures which have been postponed for too long but which are necessary to ensure their competitiveness at the regional and global level, he added.

"Our plan is to continue to grow our business presence across all our existing lines of business and keep supporting our existing clients, going forward," he added.

He said that 'First Data' is already providing a complete range of services to Bank Al-Falah and Allied Bank. "However, we are looking forward to developing clients further, as the office gets established and local institutions start to realise the potential benefits of working with First Data". First Data, global technology leader in information commerce, helps different businesses, such as merchants and financial institutions, to process electronic payment transactions across all modes of payments, safely and efficiently, he said.

With operations in 37 countries, First Data serves more than 5.4 million merchant locations and more than 2,000 card issuers and their customers across the world, he added.

First Data opened its office in Karachi in August 2008 with full range of payment card and loan processing services, merchant acquiring solutions, ATM and point-of-sale management, fraud and risk management to Pakistan's financial institutions, Agha said.

He said that entry in the fast growing Pakistan market reflects First Data's strategy of developing local presence in major markets around the world to deliver its global payment solutions.

Talking about the rising fraud cases in the financial sector, he said that First Data has a full suite of fraud solutions which are tried and tested across the world.

"Our comprehensive range of solutions provides fraud detection and prevention services at every stage of the payments life cycle from application, activation, authentication and pre-transaction, through to transaction and beyond", he added.

In addition, First Data also provides a comprehensive suite of operational fraud services designed to deliver early detection of potential fraud events and to minimise customer inconvenience. Agha said that like any economy in the world, people in Pakistan would be looking for payment mechanisms that are convenient, accessible and secure. Therefore, First Data is expecting better achievement in Pakistan.

Confidence should also be gained from the fact that First Data processes more payments globally than any other provider, with 33.9 billion global merchant transactions in 2007, across 66 countries, enabling customers to efficiently gather, integrate and understand transaction data across payment types and regions.

"We have also 27,000 experts employed world-wide including professionals based in Pakistan who are aware of local requirements. So, the in-house knowledge is at hand to provide solutions to all issues", he added.

He said that considering the comprehensive range of flexible payment processing and consumer finance outsourcing solutions, First Data has a wide range of audiences but in the main these can be characterised as financial institutions, banks and retailers.

"Our wide range of tailored solutions enables us to provide a single source for payment processing virtually anywhere and any format as determined by our customers," he added.

He said that in the recent global financial crunch, First Data with unique services, products and highly experienced people, is well positioned to cope with any changes in the economy in the short and long terms.

 

[Interceptor]

Govt to set up 400 livestcok farms​

Wednesday, June 24, 2009

KARACHI: The government planning and development division has planned to initiate a 3-year project for poverty reduction through livestock development.

The project ‘Poverty Reduction through Smallholder Livestock Development’ will be implemented this year across the country with sponsoring of Planning Commission and Ministry of Livestock and Dairy Development.

According to details obtained by The News the project will be operated and maintained by Livestock Holders Associations on self-financing and self-sustaining basis under the guidance of project management. The community will share Rs472.45 million in a project of Rs3539.13 million. Livestock sector is the major contributor with 52 per cent of the agriculture GDP and is a source of livelihood for around one third population or 55 million people.

Pakistan is 5th largest milk producer in the world but production of milk animals remains low. More than 90 per cent livestock are owned or kept by small farmers and landless rural households (52 per cent female, 48 per cent male). About 90 per cent of total milk supply come from these smallholders. In most parts of the country, women dominate the livestock in terms of feeding, milking and marketing of milk.

During 2007-08, about 42.2 billion liters of milk was produced, of which 34 billion liters (81 per cent) were used for human consumption and only 1.26 billion liters are being processed and rest of the milk are marketed raw.

According to project details, the primary objective of the proposed project is to bring social and economic transformation of rural Pakistan by empowering millions of small livestock holders comprising the poor landless farmers including women.

The project envisages establishing 400 smallholders’ livestock farms in the country in three years specifically designed to cater to the needs of poor farmers and landless livestock smallholders who subsist on milk animals for their livelihood. The government will provide a grant up to 80 per cent for infrastructure development.

It is weird that Pakistan is not major exporter of live stock after all there is such lucrative market out there and we need to grab hold of it. It is good step towards the future.

 

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France to increase cooperation in oil & gas sector ​

Thursday, June 25, 2009

ISLAMABAD: Ambassador of France Daniel Jouanneau, and Counsellor for Economic & Commercial Affairs Dominique Simon, visited the OGDCL House here on Wednesday.

During the briefing, the Ambassador stated that his government was keenly observing economic trends in Pakistan in the present scenario and is keenly assessing forward cooperation in oil & gas development and relevant activities, says a press release.

He further said that Pakistani companies were being given ample space in France and Pakistan community in France could also play an important role in bringing investment in the E&P sector of Pakistan. This objective could only be achieved by creating awareness and motivation at the highest level about the professional expertise available in Pakistan.

He said that the French government had always been in the forefront to provide transfer of technology in various fields to Pakistan. He informed that French company Total had invested in Pakistan’s offshore drilling under a joint venture. He reiterated that the French Government has always played a proactive role in boosting Pakistan’s economy.

 

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Pakistan to seek 3.5 million tons Qatar LNG quota​

ISLAMABAD (June 25 2009): Pakistan will seek quota of 3.5 million tons liquefied natural gas (LNG) from Qatar during the two-day negotiations starting on Thursday. LNG, to be imported from Qatar, would be used for power generation and industrial production, mainly the textile sector. Negotiations with Qatar Gas will also be held for import of LNG.

Qatar is one of the largest LNG producers of the world, operated by the state-owned Qatar Gas Company. LNG is one of the fastest growing fuels in the world and, due to high demand, its supply has been under stress. The Sui Southern Gas Company (SSGC) is already working to establish an LNG terminal in the country.

A delegation of Petroleum Ministry, led by Advisor to Prime Minister on Petroleum and Natural Resources, Dr Hussain, is in Doha to discuss import of LNG from Qatar. G A Sabri, Special Secretary Ministry of Petroleum, is also accompanying the Advisor. Talking to Business Recorder from Doha, Asim said that Pakistan requires a quota of 3.5 million tons LNG from Qatar, to be utilised for power generation and industrial units, including textile.

About the cost of LNG to be imported from Qatar, he said that it would be equivalent to the price of furnace oil but it would result in fuel diversification in the country, and added that it would also prove an environment-friendly fuel. He said that import of LNG from Qatar would ensure regular fuel supply to industrial units and power plants at a time when the furnace oil prices shot up in the international market.

It would also help accelerate the economic growth that is hurt by power and gas shortage, the Advisor said, adding that Pakistan also needs to secure energy for future growth. According to the working of Petroleum Ministry, Pakistan requires additional gas supply for at least five years when there is likelihood of Iran-Pakistan (IP) gas pipeline becoming operational.

Qatar produces around 1,600 million cubic feet natural gas per day, which is transferred to plants known as 'the trains', which are 300 metres long and the trains process the natural gas into the exportable liquefied natural gas (LNG). LNG production started in Qatar in 2005 and Qatar Gas exports 10 million tons per annum LNG. Qatar Gas Company plans to expand capacity in 2010 to 42 million tons per annum.

 

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UK's Ultimate Group keen to invest in Pakistan​

ISLAMABAD (June 25 2009): The Ultimate Group United Kingdom (UK) expressed keen interest to invest in various sectors of the economy including power generation, coal, motor sports and 4G licensing. A four-member delegation from United Kingdom headed by Managing Director Ultimate Group UK, Raymond Barry Walsh called on Chairman Board of Investment Saleem H Mandviwalla here on Wednesday and discussed the investment opportunities available in Pakistan.

Raymond Barry Walsh gave a presentation about the Ultimate Investments, which include property, commodity trading and waste management to energy initiatives. The Group has been involved in a wide cross section of projects in building, civil engineering, water and rail sectors.

The Chairman BOI briefed them about the energy requirements of the country. He welcomed them to bring in the technology for extraction of Thar coal, which stands at second largest in the world. The Chairman appreciated their idea of bringing in Formula 1 to Pakistan as Ultimate Group is recognised as an accepted not only as motor sports organisation but also an international facilitation company.

The delegation is scheduled to meet with the officials of Water and Power, PPIB, Communication, Tourism Division and Sports Division. The Chairman BoI highlighted the policy parameters of investment in Pakistan and underlined the policy, which allows 100 percent foreign equity in the major sectors and full repatriation of profits and dividends in all the sectors. It was further explained that the average rate of return is almost 30 percent and in some cases it was up to 50 percent. Saleem H Mandviwalla assured to extend all possible assistance required to them.