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Pakistan Economy - News & Updates

Discussion in 'Pakistan Economy' started by Neo, Jun 5, 2009.

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  1. Neo

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    ISLAMABAD (June 05 2009): The National Economic Council (NEC) on Thursday approved Rs 621 billion allocations for Public Sector Development Programme (PSDP) 2009-10 having Rs 421 billion federal and Rs 200 billion provincial component. Prime Minister Syed Yousaf Raza Gilani chaired the meeting that was attended by the chief ministers of provinces, AJK Prime Minister, Chief Secretary Northern Areas (NAs), federal ministers and secretaries.

    NEC also approved GDP growth rate at 3.3 percent for the next fiscal year against 2 percent projected GDP growth of the current financial year. The agriculture growth has been targeted at 3.8 percent against 4.7 percent during the current year, manufacturing 1.8 percent, services 3.9 percent for the next fiscal year 2009-10.

    The allocation for infrastructure will be Rs 209 billion, social sector Rs 190 billion and allocation for productive sector has been approved Rs 22 billion. NHA will get Rs 45 billion, water sector Rs 60 billion, health sector Rs 26 billion, allocation for education and higher education is Rs 32 billion.

    Apart from PDSP, NEC approved Rs 160 billion for Benazir Income Support Programme (BISP), Rs 50 billion for Reconstruction and Rehabilitation of Internally Displaced Persons (IDPs) and Rs 40 billion for industrial sector development, Chairman Planning Commission Sardar Assef Ahmed Ali and Minister told media here on Thursday while addressing a news conference after the meeting.

    Minister for Information said that Balochistan share will be Rs 50 billion as well as additional Rs 9 billion for budgetary support and special package. Minister said that Balochistan will also get Rs 21 billion allocation in current year PSDP in the next fiscal year.

    He said that the government had to make massive cut in PDSP this year which was reduced from Rs 371 billion to Rs 219 billion mainly because of economic crunch. The minister said chief ministers of Sindh and Punjab underlined the need to accelerate efforts to exploit the coal reserves in Thar and other parts of the country to provide cheap electricity to the people. All the provinces also expressed unity with the people of Balochistan and offered some portion of their funds for the deprived people of the province.

    Sardar Assef said that PSDP allocations may exceed Rs 421 billion as Rs 80 billion of Kerrey-Lugar bill would also come to the Planning Commission and most of it would be spent for development programmes in NWFP and Balochistan.

    He said that 3.3 percent growth target was the minimum for the next fiscal which could go up to over 4 percent on the back of good performance by two or three crops. He said that so far figures showed 24 million tons wheat crops and he hoped that total wheat output would be around 25 million tons by end of the current fiscal year. He said that agriculture growth was around 4 percent of the GDP because of good crops this year.

    The NEC also decided that Basha Dam would be started this year and the PC would meet all the demands of Ministry of Water and Power in connection for acquisition of land. Assef said that estimated cost of the project is $11.8 billion but the PC apprised the government would require only $6 billion as it wanted to complete all the civil works by itself. He said that the idea is to generate electricity from the dam through public-private partnership.

    NEC also approved Approach Paper for the 10th Five-Year Plan (2010-15) entitled "Investing in People that would be tabled and presented in Parliament during the budget". The Approach paper gives higher priority to reducing inter-Provincial disparity. It calls for "people-centric" development with the setting of a comprehensive social protection system and delivery of high quality education and health and agriculture and agro-business to be the leading sector of the economy during the 10th Plan period.

    Deputy chairman also unveiled other initiatives to be taken during the next financial year that include establishment of technical institute of international repute in 27 districts with a total cost of Rs 7 billion, Revolving fund for housing for the general public and government servants within an allocation of Rs 1 billion, Benazir Tractor Scheme costing over Rs 4 billion, Grain Storage facilities are being increased within investment of Rs 27 billion, Public-Private partnership in the field of Dairy Products with a government equinity of Rs 3.5 billion and SMEs will be promoted through advisory services in the areas of Khadi and leather crafts.
     
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    PESHAWAR (June 05 2009): Pakistan Hunting and Sporting Arms Development Company (PHSADC) is sending a delegation of small arms manufacturers from Pakistan to Turkey with the objective of advancement of production standard of non-lethal weapons through transfer of technology.

    "We are sending the arms manufacturers so that they could be apprised about new technology and advancement in gun manufacturing and replication of the modern technique in our country," said Nauman Wazir, Chairman PHSADC.

    The delegation, comprising of six members, would leave Pakistan for Turkey on June 11 and will return after staying there for six days. During the visit, Nauman adding the delegation members will hold meetings with owners of different gun manufacturers, engineers besides holding discussion with heads of government departments regulating arms production in Turkey.

    Nauman Wazir said gun manufacturing technology is very latest and advanced in Turkey and the PHSADC realised this during an international exhibition of arms recently held in Germany. He said production standard, value addition of the product and its finishing is very fine in Turkey and PHSADC wants to get information about the technology and its replication in Pakistan.

    "Without improving the production standard and value addition of the product, we cannot attract foreign buyers for hunting and sporting arms being produced in Pakistan, he observed. PHSADC Chairman said the company is set up with the objective of harnessing the untapped potential of gun manufacturing in Pakistan.

    The PHSADC, he continued, is striving to increase export of hunting and sporting arms manufactured in Pakistan by developing and enhancing the skills and craftsmanship of gunsmiths. He expressed the hope that visit of local arm manufacturers to Turkey will help a lot in improving the standard of hunting and sporting arms in the country through transfer of technology.
     
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    KARACHI (June 05 2009): The Karachi Electric Supply Company (KESC) has launched the first phase of its 180 MW, GE Jenbacher power plant, which will replace the existing 50 MW plant in SITE. The deal was signed by new management at KESC with the Austrian supplier in a ceremony in Dubai, UAE, in late 2008.

    According to a press released issued by KESC on Thursday, Dale Sinkler, the company's Chief Operating Officer, Generation and Transmission, while addressing the daily briefing at KESC headquarters on Thursday said that work on the four-phased US $53 million project had started on January 15 and would be completed by the middle of July this year.

    He said that KESC's fast-track total 180 MW power project is under construction and commissioning of its two sites, the one is being set-up in SITE and the other in Korangi Industrial Area. Each site having 90 MW capacities comprises of 32 gas engines.

    The first section out of four, which shall generate 21 MW, is under commissioning at SITE. On Thursday, the engines have been commissioned and tested for operation. The complete section shall be fully commissioned early next week, providing 21MW to the grid.-PR
     
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    Friday June 05, 2009

    WASHINGTON: The World Bank on Thursday said it approved an aid package worth USD 900 mn for Pakistan, the bulkaimed at educational projects.

    The assistance will help Pakistan "improve education in Punjab and Sindh Provinces and ... further scale up a community driven development project that is already active in some 35,000 villages throughout the country," the Bank said in a statement.

    The credits from the International Development Association, the World Bank‘s concessionary lending arm that specializes in helping the world‘s poorest 78 countries, carry a 0.75% service fee, a 10-year grace period, and a maturity of 35 years.

    "Even where there have been gains in student enrollment as in Punjab and Sindh, these have yet to translate into improved student learning," World Bank country director for Pakistan Yusupha Crookes said in the statement.

    A USD 350 million package was approved for the Punjab province and a USD 300 million package approved for the Sindh province.

    The aid will help education by focusing on "improving governance, management, and capacity in education -- which are at the heart of both the provincial governments‘ reform strategies," Crookes said.

    The Bank also approved USD 250 million package for an anti-poverty program that has received USD 646 million from the World Bank since 2000.

    The program, which has reached more than 2.5 million people, includes funds for micro-credit loans and skills and enterprise development training.
     
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  5. Omar1984

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    Trade between Sri Lanka and Pakistan improves

    Saturday, June 06, 2009
    By our correspondent

    KARACHI: Consul General of Sri Lanka in Karachi, V S Sidath Kumar, has said that Pakistan is the second largest trading partner of Sri Lanka in the SAARC region and total trade between the two countries increased by 169 per cent from $158 million in 2005 to $265 million last year.

    While Sri Lanka’s exports increased from $43 million in 2005 to $73 million in 2008, Pakistan’s exports rose from $115 million to $192 million, he said.

    Kumar, in a statement, said that Sri Lanka is participating in ‘My Karachi Oasis of Harmony’ exhibition being held at the Karachi Expo Centre from June 5 to 7. The Sri Lanka pavilion is located at Hall No 1 of the Expo centre.

    He said that this will be a good opportunity to promote Sri Lankan products in the Pakistani market, utilising the duty-free market access offered under the Pakistan-Sri Lanka Free Trade Agreement.

    Pakistan implemented the final phase of concessions in March this year and more than 4,500 products have become duty free under the FTA.

    The consul general mentioned that there has been substantial improvement in bilateral trade after the implementation of the FTA.


    Trade between Sri Lanka and Pakistan improves
     
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    US company to finance energy projects in Pakistan

    Saturday, June 06, 2009
    NEW YORK: Bergamo Acquisition Corp a publicly traded US company announced that agreement on all terms with its lender to finance energy projects for Pakistan has been completed. The value of all projects is $1.5 billion.

    President and CEO of Bergamo Acquisition Corp, Hillard Herzog will travel to Pakistan to sign the contracts.

    The projects have expanded in scope. In addition to the clean coal plant and the LED high efficiency lighting mentioned previously, financing now includes several solar lighting facilities. The first of these solar lighting facilities is anticipated to be operational within 90 days after signing of all agreements.

    Herzog commented, “Clean energy is very important to the people of Pakistan. I am very pleased that we have been able to work with President Zardari, Chief Minister Sindh and Minister for Water & Power, meeting this most urgent need. Abundant clean energy is needed as Pakistan continues to modernize its infrastructure.”


    US company to finance energy projects in Pakistan
     
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    Saturday, June 06, 2009

    ISLAMABAD: The government has approved projection of the oil import bill to the tune of $9.365 billion in the upcoming budget for 2009-10 against revised estimates of $9.858 billion in the outgoing fiscal year 2008-09.

    According to a summary for Annual Plan 2009-10 approved by the National Economic Council (NEC), a copy of which is available with The News, the government had estimated an oil import bill of $13.669 billion on eve of budget 2008-09, which was scaled down in accordance with revised estimates to the tune of $9.858 billion, owing to reduction in international prices of POL products.

    Now the oil prices have started witnessing a surge in the international market, touching an average price of over $60 per barrel. But the government has projected oil import bill of $9.365 billion for 2009-10.

    The Annual Plan 2009-10 envisaged GDP growth at 3.3 per cent, while inflation target is set at 9 per cent in the next budget. In real GDP growth of 3.3 per cent, the contribution of agriculture will be 3.8pc, manufacturing 1.8pc and services 3.9pc. GDP at the current market price would increase by 12.9 per cent as it would touch Rs14779 billion.

    The target rate for CPI inflation is set at 9 per cent for 2009-10 against expected inflation of 20 per cent in 2008-09. “This projection has been made in view of the improvements in macroeconomic indicators and weakening international oil and commodity prices,” the summary states.

    Total investment is projected to be around 20 per cent of the GDP in 2009-10. National Savings as a ratio to GDP is projected at 14.7 per cent, implying that almost 74 per cent of investment will be financed through national savings. This will leave 26 per cent of the investment to be financed from foreign savings, which will be 5.3 per cent of GDP.

    Fiscal policy for 2009-10, the summary states, would be to keep the fiscal deficit within a sustainable limit by furthering reforms in tax system, broadening its base, improving tax compliance and minimizing evasion.

    “The main objective of this policy would be to allocate adequate resources for development activities, particularly for pro poor expenditures, in conformity with the Fiscal Responsibility and Debt Limitation Act, 2005, to achieve the projected economic growth of 3.3 per cent, reduce unemployment and poverty, and improve social indicators,” the summary states.

    Monetary expansion for the year 2009-10 will be in line with the projected GDP growth of 3.3 per cent and CPI inflation of 9 per cent. To keep M2 growth rate in the vicinity of the targeted level and to encourage private sector credit, it is imperative that government borrowing should be limited to a safe level. This will help in bringing down CPI inflation and strengthening growth prospects of the economy. On account of the global economic slowdown, and due to the domestic energy and law and order situation, exports for 2009-10 are projected to slightly increase to $19.9 billion against $19.5 billion estimated for 2008-09.

    Imports during 2009-10 are estimated to decrease by 5 per cent to $28.7 billion from $30.2 billion in 2008-09. As a result, the trade account is projected to be in deficit by $8.8 billion in 2009-10.

    Prospects for an invisible balance will continue to be governed mainly by the behavior of remittances, which are projected to be around $7 billion for 2009-10 compared to the estimated level of $7.2 billion in 2008-09.

    The current account deficit is targeted at $9.5 billion in 2009-10 compared to the estimated deficit of $9.357 billion for 2008-09, the summary added.
     
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    Saturday, June 06, 2009

    ISLAMABAD: The Asian Development Bank (ADB) has linked Aid Memoir for $11.8 billion Diamer-Bhasha dam with a consensus resolution by the National Assembly in favour of the dam to have across the board ownership in the country.

    “A fact-finding mission of ADB has conveyed this to Pakistan in plain words here in a meeting held in the Economic Affairs Division (EAD),” a senior official who attended the meeting told The News. WAPDA Chairman Shakil Durrani was also part of the meeting.

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

    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.

    The official said that Pakistan in the meeting asked the bank to come up with $5 billion loan for the mega project against its offer of $2.5 billion. “The bank responded to Pakistan’s request saying, lets wait for the Aid Memoir.”

    EAD Secretary Furrukh Qayyum when contacted said that the fact finding mission actually came up with advisory report containing the guidelines and benchmarks as per the international best practices for loan generation prior to initiating the formal work on mega project such as a Diamer-Basha dam.

    Once the project becomes marketable after bringing project document in line with advice of the fact mission of the Bank, it would be very easy to generate funding for the project. “So far the bank has shown ownership for the project in all shapes, but wants the advisory report to get implemented first.”

    When asked if ADB has indicated to come up with Aid Memoir in next 15 days, he said it is too premature, as Pakistan will first have to implement the advice, which the mission has given to the WAPDA chairman and then the stage will come for Aid Memoir. However, he admitted that the Bank has asked for the unanimous resolution in favour of Diamer-Bhasha dam to avoid any dispute.

    However, the official said that the ADB has 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 centres from the dam, water side canals, 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.

    The bank also seeks the assurance under its advisory, for better and effective modus operandi to tackle the issue of resettlement and rehabilitation for the people to be displaced and also desired for better prices for the lands of the affected people to be submerged in the dam. The official said that WAPDA chairman in the meeting assured the ADB mission that the government would soon table the resolution in the National Assembly seeking the unanimous consensus in favour of the dam.
     
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    Saturday, June 06, 2009

    KARACHI: The Acting Governor and Speaker Sindh Assembly, Nisar Khuhro, has said that the new NFC Award would be constituted in 2009-10, adding that the common man would be given special consideration in the upcoming budget.

    Speaking to the media at the inauguration of ‘My Karachi Oasis of Harmony” being held at the Karachi Expo Centre from 5th to 7th June, Khuhro said that though Pakistan has internal and external threats, “we have to move forward as we are a resilient nation and we will fight back all threats.”

    Adviser to the CM on Investments, Zubair Motiwala informed that a special zone has been allocated to Japanese entrepreneurs and investors and 1,900 acres of land has already been given to Japan.

    He informed that Yamaha and Sony along with others have committed to come to Pakistan and invest in industries here. He said that the entire zone would be dedicated to Japanese entrepreneurs only and their residences would also be set up within the zone.

    Motiwala added that Pakistan-China export zone in Punjab is on the stage of completion and this new Japan zone would be established along the same lines.

    Sindh Minister of Industries, Rauf Siddiqui invited the business community to invest particularly in Karachi, Hyderabad, Nawabshah and Sukkur as he said that these are the areas that have been targeted for setting up new industrial zones.

    President of KCCI, Anjum Nisar said that Pakistani businessmen have the skills, education, strength and the natural resources but what they need is government’s support to help them utilize their opportunities to the maximum.

    He urged the Sindh government to provide equal playing field to trade and industry of Sindh and particularly Karachi. Nisar said that measures should be taken to reduce high cost of doing business, rising prices of utilities, prolonged power and gas outages etc.

    Nisar also highlighted that small and medium enterprises (SMEs) are the backbone of the economy of any country and therefore the government should pay special concentration on them.

    He said, “I would urge the concerned circles of the government to establish more SME zones especially for women entrepreneurs.” He further stated that it is the small and medium enterprises that bring about economic revolution.

    Leader of BusinessMen Group, Siraj Kassam Teli stated that KCCI has no commercial motives for organizing the exhibition. “We are making our humble contribution in restoring and uplifting the image of Karachi,” he expressed.

    Teli asked the government to reduce interest rates by 5pc to move the economy towards growth. “The government and its economic managers were informed many times to loosen up the monetary policy and bring down the interest rates into single digits,” he stated. “By not accepting our point of view of following supply side of economics, it has increased the cost of doing business to such a level that our industry has become uncompetitive and at the same time, the standard of living has become costly for our people,” he added.
     
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    Saturday, June 06, 2009

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) registered 24 companies having foreign investment in the month of May, indicating renewed confidence in Pakistan’s markets and economy. In April, the SECP had registered 16 such companies.

    US investors have poured money in five companies followed by the UK, Canadian and Chinese investors with investment in three companies each. Investors from Nigeria and Afghanistan invested in two companies each, while those from Denmark, North Korea, Germany, Zambia, Ghana, Switzerland, Iran and Turkey invested in one company each.

    Of the registered 24 companies, investment has been made in five companies each in the top sectors of services and trading. Others include three companies in communications, two each in food and beverages, construction and power generation and one each in information technology, tourism, fertiliser and mining. The trend shows the wide range of sectors in which foreign investment is taking place.

    In addition, nine foreign companies were registered in May for establishing their place of business in Pakistan. Of these, four companies have UK as the country of origin, two from the UAE, and one each from Japan, the Netherlands and Singapore.
     
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    ISLAMABAD: Pakistan has joined International Renewable Energy Agency (IRENA) after signing the statutes in Berlin to become the 87th member of the newly set up world body on renewable energy.

    Pakistan 's Ambassador to Germany, Shahid Ahmad Kamal signed the statutes at the German foreign office in the presence of Thomas Meister, Head of Division for International Energy Policy at the German Federal Foreign Office.

    Ambassador Kamal noted that Pakistan had participated in the preparatory conferences and workshops of the IRENA and continue to make its positive contributions. He said Pakistan's supported in the formation of the IRENA had been acknowledged by the German government. The ambassador also mentioned the AEDB's contribution in Pakistan's accession to the IRENA saying it could not have been possible without the AEDB's support.

    The International Renewable Energy Agency was established on 26th January 2009 in Bonn . Germany was one of the driving forces along with Spain and Denmark for this venture. Together with the German Ministries of Environment (BMU) and Economic Cooperation and Development (BMZ), the German Foreign Office has campaigned for the IRENA and helped secure the necessary international support by dispatching special envoys and launching a global demarche effort. IRENA was solely dedicated to the promotion of renewable energy, and its membership is open to all United Nations member States. The IRENA welcomed Pakistan into its folds saying: "The signing exemplifies the world demand for a strengthened use of renewable energy technology." Now being a member of the preparatory commission, Pakistan would participate in its second session slated for 29-30 June 2009 in Sharm-el-Sheikh (Egypt), when the agency's interim headquarters and the Interim Director-General would be elected.

    Pakistan had on January 26, 2009 participated in the signing ceremony of the founding treaty of the International Agency for Renewable Resources (IRENA) in Bonn (Germany). The AEDB Chief Executive Arif Alauddin represented Pakistan at the ceremony.

    The AEDB had been nominated as the focal body by Government of Pakistan for coordination with IRENA. Speaking on the occasion Alauddin said: "After becoming the full member of IRENA we want to contribute to the sustainable development of renewable energies' vast global potential. This will also benefit those who don't have access to the electricity and thus are unable to use development opportunities to the same extent." He further said Pakistan would play its role in helping IRENA achieve its objective of becoming the main driving force for promoting a rapid transition towards the widespread and sustainable use of renewable energy on a global scale.
     
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    KARACHI: The cement exports were unexpectedly high at 1.17 million tonnes in May-09, up 16 percent month-on-month (MoM) and 37 percent year-on-year (YoY), the latest numbers released by All Pakistan Cement Manufactures Association said.

    According to the latest numbers released, the region-wise export suggests that growth is broad-based. On the back of robust exports, overall cement sales volumes rose by 2 percent YoY (+5 percent MoM) in May-09. However, exports since January-09 to date up 50 percent YoY to 10.10 million tonnes.

    Region-wise export data suggests that the growth is broad-based across the key markets of Afghanistan (25 percent share), the Middle East (45 percent share) and Africa (12 percent share) while Indian exports lag (7 percent share).

    The demand from UAE is expected to continue and much of the Middle East to contract sharply, possible upside to FY10 exports is contingent upon the relatively new markets of Africa and Iraq which now claim a joint 17 percent share of Pak exports and where export volumes have more than doubled relative to a year ago, an analyst said.

    Domestic demand meanwhile remains weak where sales dropped by 14 percent YoY (-1 percent MoM) to 1.65 million tonnes in May-09. Higher infrastructure spend in FY10, a possible uptick in govt development spending (PSDP) in the 13th June budget and demand from dams, could be the key upside variable on the domestic front, analyst said.

    The time-lag between PSDP allocation and actual cement demand is 6-9 months while the lag for demand for dam construction may be longer yet.

    Retail domestic cement prices (Rs 347 per bag) remained unchanged in May-09 amid low construction activity. It is notable that if a proposed 20 to 25 percent cut in excise duty comes through, Rs 10 to Rs 13 per bag could be drop in retail prices come July with no meaningful impact on margins.

    Coal prices were also subdued hovering around $64 per tonne. While oil prices have strengthened in the past month on back of OPEC cuts and expansive fiscal and monetary policies, coal prices have lagged as global supply pressure has eased in the face of flat demand.

    Lucky Cement’s (LUCK) total volumes grew by 4 percent YoY to 5.25 million tonnes in 11MFY09. Local dispatches of the company declined by 16 percent YoY to 2.21 million tonnes, as it mirrored the overall industry’s decline.

    D.G.Khan Cement’s (DGKC) total volumes declined by 13 percent YoY to 3.50 million tonnes in 11MFY09. In the domestic market, the company’s market share got slashed to 12 percent in 11MFY09 from 16 percent in 11MFY08.

    Bestway Cement (BWCL) recorded 28 percent YoY growth in volumes in 11MFY09 on the back of 8 percent YoY growth in local dispatches, and a 119 percent YoY increase in exports.
     
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    ISLAMABAD (June 06 2009): Islamic Development Bank (IDB) on Friday pledged $ 140 million loan for Neelum Jhelum Hydropower Project and inked a Memorandum of Understanding (MoU) in this regard with the government. Economic Affairs Division Secretary Farrukh Qayyum has confirming the report told Business Recorder that Pakistan and IDB are currently working to finalise three rolling financing plans.

    In first phase, Pakistan and IDB entered an agreement to finance Neelum Jhelum Hydropower Project. The three-year rolling plan includes loan for Neelum Jhelum Hydropower Project, Nust Development Project worth $57 million and Modernisation of Signalling System $130 million and Diamer Basha Dam $30 million.

    The government is also going to allocate Rs 16 billion in Public Sector Development Programme (PSDP) 2009-10 for the Neelum Jhelum Hydropower Project and a consortium is going to finance Diamer Bhasha Dam and IDB is part of the consortium. IDB has also pledged to provide $ 30 million for the dam. After finalising the modalities of the deal regarding the loan for Bhasha Dam, MoU will also be singed between the two sides, sources added.

    The government has also decided to allocate Rs 30 million for the Bhasha Dam that includes Rs 15 billion for construction of the dam and Rs 15 billion for land acquisition and resettlement plan for the affected families, sources said.

    Sources said that the country dialogue mission of IDB visited Pakistan in February and held meetings with concerned ministries/divisions/departments. During the meeting, IDB agreed to provide financing to Pakistan for National Trade Corridor in collaboration with Asian Development Bank (ADB). The IDB agreed to consider providing a loan for the Kharan and Wadhuk projects in Balochistan for an indicative amount of $15 million. The mission indicated that the bank was willing to be a part of any viable financing arrangement that supported Diamer Bhasha Dam.
     
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    MULTAN (June 06 2009): Former Punjab Minister for Industries and ex-President of Multan Chamber of Commerce & Industry(MCCI) Khawaja Muhammad Jalaluddin Roomi called upon the US administration to sign a free-trade agreement (FTA) with Pakistan and grant it free access to American Markets to compensate it for its losses in the war against terror.

    Talking to newsmen, here on Friday, Roomi said that total trade between the two countries had shot up to $5.6 billion last year from $2.6 billion in 2001, the year Pakistan joined the US-led war on terror, following the September 11 terrorist attacks.

    Stronger economic ties with Pakistan would help advance America's geopolitical goals in South Asia, he said and sought a review of US tariff policy on Pakistan, saying that duties on Pakistani textiles were higher than on those from other key producers. He backed a proposal by Senator Maria Cantwell and Congressman Chris Van Hollen for a duty-free import of certain products from Pakistan, describing it as a good suggestion. Roomi stressed the need for a broad-based relationship with Pakistan, which needs to include enhanced co-operation in areas of trade and investment and energy security.

    Khawaja Jalaluddin Roomi said greater trade engagement with the US would create new opportunities for businesses and jobs in both countries. He urged the Obama administration to work with Pakistan to boost intellectual property rights protection to foster US private sector investment in the country. Roomi said that there was a dire need of expanding trade ties with the US and for getting greater access, for Pakistani goods, to American markets to maintain balance of trade, and cutting down the trade deficit.

    He said that despite the lapse of six years, Washington did not implement the Trade and Investment Framework Agreement, signed in June 2003 and aimed at expanding bilateral economic ties, including trade between Pakistan and the United States and promoting US investment in this country. The agreement was still bogged down in procedural issues, mostly of the US's makings, and has yet to be implemented. To make matters worse, no progress seems to have been made on implementing the Science and Technology Agreement concluded at the same time as the Trade and Investment agreement. Nor has there been any progress on implementing a five-year trade capacity-building programme, agreed in June 2003 that was to be launched under the auspices of the US Department of Agriculture's Commercial Law Development Programme. That Six-year period has now run out.

    The stated purpose of the agreement was to strengthen and enhance trade and economic, and investment co operation between the two countries. But trade was not progressively liberalise.

    He further said that the agreement should provide a framework for exploring new areas and developing appropriate measures for closer economic co operation between the two countries. Pakistani exports should increase in the United States To yield meaningful results, the agreement should aim at the establishment of effective trade and investment facilitation measures, including, but not limited to, simplification of customs procedures and development of mutual recognition arrangements. Expansion of economic co-operation between the two countries should complement the deepening of trade and investment links and the formulation of action plans and programmes aimed at giving concrete shape to the agreed areas of co-operation. None of these aims can be achieved, however, unless the two countries establish appropriate mechanisms for the purpose of effective implementation of the agreement.
     
  15. Neo

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    KARACHI (June 06 2009): Traders firmly believe that the country $22.1 billion exports' target for the current fiscal will likely fall short by at least 15 percent (likely to reach $18 billion by June 30) only because of the persistent power and gas shortage, soaring input cost, global economic downturn and the deteriorated law and order situation.

    Expressing concerns over the present state of trade and economy, they said that the country's exports during the first 10 months of the current fiscal (FY09) shrank by 3.1 percent despite a contraction of 16 percent or $2.6 billion in trade deficit. It may be mentioned that exports had grown 8.5 percent during the same period of the last fiscal year.

    Presently, total exports stand at $14.762 billion during the period of Jul-Apr FY09 against the fiscal target of $22.1 billion, which is unlikely to stretch to the proposed target, they said, adding that the import bill could be scaled down with regulatory duties on luxury products from 25 percent to 50 percent.

    They said that the government will have to make exports of $7.4 billion in two months (May-June) to hit the country's historic exports target, which, in present situation was next to impossible as the country's per month average exports have been $1.5 billion so far.

    Keeping in view the poor economic situation, the country is unlikely to even reach the last fiscal year's exports target of 19.2 billion, they maintained. Former Chairman Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) Ijaz A. Khokhar told Business Recorder on Friday that the country may also face double shortfall in exports in the next fiscal year, if overall situation remains unchanged.

    He urged upon government to introduce long and short terms policies for the growth of small and medium enterprises in the coming trade policy if it really intends to augment the country's exports manifold. "Future investment in SME sector is seemed unlikely due to rising cost of input, law and order situation and surrendering of banks to lend money to the industry, he said.

    For putting the in order, the government has to resolve all the outstanding issues, which were also highlighted by the central bank of Pakistan, including the power shortage, he said, adding that the trade policy should carry long and short term policies so that survival of ailing industrial units could be made possible.

    He proposed to the government to evolve the next trade policy, which is likely for a three-year period, in such a way that it should deal with every sector separately as problems of all are not the same in many ways.

    The government should promote industrialisation in the country by providing the same investment facilities which it has been giving to foreign direct investors in the country, he demanded, adding that the local businessmen are ready to invest in the $dollars instead of Pak rupees.

    Ijaz Khokhar urged the textile ministry to first provide all the stakeholders with a copy of textile policy draft before holding talks with them so that they could properly read it and present their views on issues of textile industry more effectively.
     
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