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Wider economic support for Pakistan

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WASHINGTON (November 19 2008): Seeing a vital opportunity to forge broad-based US-Pakistan relations following victory of President-elect Barack Obama and emergence of a democratic government in Islamabad, a panel of top American experts on Monday urged wider international economic support for the South Asian country as well as focused efforts to address its regional security concerns including Kashmir.

"The United States needs to make a shift in its approach to Pakistan, recognising both the importance of Pakistan to regional and international security, as well as the limitations of US power," a new report released on Monday by the Center for American Progress said, asking the incoming Barack Obama Administration to work with regional and other major powers to help Pakistan overcome its economic and security challenges.

Entitled "Advancing a New Strategy for Prosperity and Stability in Pakistan and the Region," the report has been drafted after a year-long study by about three dozen experts. It particularly underlines the need to foster long-term relations with Pakistan that benefit its people and address disputes on its borders with India and Afghanistan.

"The new US administration, with Congress and the international community, should strive to help Pakistan weaken al Qaeda, the Taliban, and affiliated militant groups so that they no longer threaten stability in Pakistan, Afghanistan, India, the broader region, the United States or the world and secure borders between Pakistan and its neighbours, with all border disputes including Kashmir and the Durand Line (the disputed boundary between Afghanistan and Pakistan), either resolved or in a credible process for resolution."

At the same time, the panel of security, trade and economic relations experts and foreign policy analysts - including Bruce Riedel, who is now an Obama adviser on South Asia - remind that the "US policy must recognise that the military component alone is insufficient to build stability and security in Pakistan."

They stress pursuance of "a diverse approach, including strengthening governance and rule of law, creating economic opportunities, and exploring political negotiations" to curb militancy. "A fundamental strategic shift in US policy on Pakistan should occur away from a narrow focus on military and intelligence co-operation.

Pakistan's problems will not be solved by military means alone. Long-term stability in Pakistan depends not only on curtailing extremism and militancy in Pakistan, but on strengthening Pakistan's economy and democracy and on reducing tensions between Pakistan and its neighbours. US military approaches must be integrated into a wider political strategy for the region.

"The US government should engage with leaders of Pakistan's civilian institutions and civil society in addition to its military establishment. Integrating the full range of US and other countries' powers diplomatic, economic, and political" the United States should quietly and carefully expand US-Pakistan partnerships on a broad set of issues, including intelligence co-operation, economic development, energy, education assistance, and more.

"The Obama administration should embark on a strategic dialogue with Pakistan that sets common goals for the two countries, building on the major non-Nato ally status it has already achieved. These goals should include both tactical counter-terrorism and longer-term counterinsurgency objectives and should specifically engage Pakistan's security concerns."

The authors note since the Pakistani parliamentary elections in February 2008, the US government has begun to make some changes in its policy toward Pakistan. It has shown support for the new civilian government and increased assistance to the Pakistani people through programmes in education, economy, energy, health care, and more. However, these changes are not sufficient to meet the considerable challenges.

Advocating the need to build trust between the two countries under the new US Administration, experts point out that the "current distrust that the government of Pakistan and its people hold toward the Bush administration has undermined a co-operative Pakistan-US relationship." "Furthermore, the strains between the Bush administration and numerous other countries including our European allies have hurt our nation's efforts to cooperate and co-ordinate on Pakistan".

"The Obama administration has the potential to mend the strained US-Pakistan relationship and offers a fresh opportunity to reach out anew to other strategic players in the region and the world to co-ordinate international efforts on Pakistan."

Despite the seemingly overwhelming challenges facing the country, numerous factors offer an opening for a positive shift in the US-Pakistan relationship. "For the first time in almost a decade, the United States and the world have partners in a democratically elected government of Pakistan. The government has greater legitimacy than previous governments because of February 2008 elections, which were a legitimate expression of the will of the Pakistani people."

"US engagement in Pakistan has been inconsistent, transactional, and reactive for decades. The United States has suspended aid, imposed sanctions, and then intermittently renewed contacts, depending on paramount strategic concerns at the time.

The United States must create a long-term plan to partner with Pakistan, understanding its challenges will not be resolved in the short-term. Even if Osama bin Laden were captured tomorrow in Pakistan, challenges to its stability and the regions would remain," the report says urging President-elect Obama to assist Pakistan in confronting its biggest challenges of insecurity, governance, and economic difficulties.

Launching the report experts including Caroline Wadhams, Senior National Security Policy Analyst, Center for American Progress, Jonah Blank, Chief Policy Advisor for South Asia, Central Asia and Archipelagic Southeast Asia, Majority staff of the Senate Foreign Relations Committee, Steve Coll, President & CEO, New America Foundation, Robert L. Grenier, Managing Director and Chairman for Global Security Consulting at Kroll and Lawrence Korb, Senior Fellow, Center for American Progress & Senior Advisor, Center for Defence Information, also agreed on the need for greater trade access for Pakistan, co-operation in the energy field, provision of counter-terrorism equipment like night vision goggles, support by the major powers at Friends of Pakistan forum and backed the Biden-Lugar legislation as way forward to sustained economic partnership.
 

AgNoStiC MuSliM

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Pakistan seeks $55 billion investment in various sectors
MONITORING DESK

KARACHI (November 19 2008): Pakistan is believed to have requested the Friends of Pakistan for as much as $55billion investment in a host of projects in various sectors. According to Dubai-based Khaleej Times, Pakistan has sought funding for projects worth about $55 billion in sectors such as infrastructure, energy, agriculture and services from the members of Friends of Pakistan Group at a meeting held in Abu Dhabi on Monday.

Quoting a senior Pakistan finance ministry official who, according to the newspaper, requested anonymity, the projects Pakistan has offered for investment include construction of dams, electric power generation plants, roads, highways, agriculture development, privatisation of state-owned industries and investment into social and services sectors.

The official was also quoted as saying that the group would present responses on Pakistan's request from their respective governments in the next meeting to be held in Islamabad in the third week of February. Friends of Pakistan group have agreed to a roadmap or a work plan with a resolve to enabling Pakistan overcome its present financial crisis.

The experts meeting, which was jointly chaired by the UAE and Pakistan, also overwhelmingly offered complete support to Pakistan in providing financial resources, investments, technical assistance and technology to help better its economy. Delegates from Australia, Canada, Britain, US, China, Saudi Arabia, Turkey, European Union, European Commission, UN, Japan, Germany attended the meeting.

Business Recorder [Pakistan's First Financial Daily]
 

AgNoStiC MuSliM

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Donors pledge $328m for Neelum-Jehlum project

LAHORE (updated on: November 19, 2008, 18:01 PST): International donors have pledged an initial financial assistance amounting US $ 328 million for the construction of 969 MW Neelum-Jehlum hydroelectric project.

The announcement was made in a meeting attended by delegates of Islamic Development Bank, Saudi Fund for Development, Kuwait Fund for Development and Abu Dhabi Fund for Development, according to a press release here Wednesday.

Islamic Development Bank representative Farrukh Muhammad said that the financial assistance is meant for the first three lots of the contract of the Neelum- Jhelum hydroelectric project.

Terming the project an important one, he assured that more funding would be made available as the project proceeds further.

Speaking on the occasion, WAPDA chairman Shakil Durrani said that Neelum-Jhelum is an environment friendly project with 26 percent Economic Internal Rate of Returns (EIRR).

He said the project will help increase hydel ratio in the overall power generation by contributing more than five billion cheap electricity units annually to the national grid.

The chairman expected the project to be completed ahead of schedule, as a bonus clause pertaining to early completion of the project has been introduced in the contract.

Donors pledge $328m for Neelum-Jehlum project : Business Recorder | LATEST NEWS

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I believe investment in the 12 billion Basha dam was sought as well. So, a movement towards 'wider economic support' finally?

I completely support this sort of investment - it creates jobs, boosts the infrastructure and has a ripple effect on other sectors of society and economy. Investors also gain a stake in these projects, and if they are financially viable, stand to recoup their investment and some. The government needs to put everything on the table, and aggressively work to bring more projects on line, and aggressively market them to potential investors.
 

AgNoStiC MuSliM

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$60 billion uplift projects presented to Friends of Pakistan

RECORDER REPORT
ISLAMABAD (November 20 2008): Pakistan has presented about 71 projects worth nearly $60 billion to the Friends of Democratic Pakistan Group in Abu Dhabi seeking partnership to support its ventures in infrastructure, agriculture and education development alongwith medium/small dams construction.

The copies of presentation were distributed among media persons at a briefing held in Planning Commission here on Wednesday. The major thrust is on education, small and medium dams, agriculture along with market access.

These development projects encompassed strategy of balanced rural and urban growth to generate equitable economic activity, job opportunities for improving living standard of the people. The project areas have been selected keeping in view the provision of basic facilities and security situation. The demand for improvement of education system including madarassa reforms is US $1.876 billion.

INFRASTRUCTURE: Pakistan has placed demand for construction of new roads before the Friends of Democratic Pakistan to improve market access and transportation of goods from Karachi to upcountry destinations. The proposed amount for National Trade Corridor is US $9.0 billion; connectivity of Gawadar Port US $300 million; Gharo-Keti Bander Road US $50 million; Upgradation of KKH (Mansehra-Sazin Section) US $258 million; Realignment of KKH, US $200 million; Construction of 18 km long elevated highway (Rawalpindi Flyover) US $250 million, Lowari tunnel project US $125 million; Basha-Diamir Dam Site Road US $2.600 billion; Munda Dam project US $1150 million and Thar Coal Development project US $1000 million.

The cost of 32 small and medium dams is Rs 115 billion of which 22 are ready for construction costing Rs 78 billion. The demand for Livestock and Dairy development projects is US $119 million, Crop maximisation project US $100 million; Agri Research US $47 million and Special Agriculture Projects US $2 billion.

Business Recorder [Pakistan's First Financial Daily]
 

AgNoStiC MuSliM

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South Korea extending $161 million loan

MUSHTAQ GHUMMAN
ISLAMABAD (November 20 2008): South Korea is extending $161 million loan to Pakistan for energy, health and infrastructure, of which $1,573,800 will be paid to a Korean consultant, official sources told Business Recorder. The agreement signing ceremony will be held on Thursday (November 20) in the Economic Affairs Division (EAD).

Secretary EAD, Farrukh Qayyum will sign the documents on behalf of Pakistan government whereas Korean ambassador Shin Un will represent his country. The sources said Gujranwala Electric Supply Company (Gepco) has indicated to the EAD that the company's Board of Directors has agreed to undertake the consultancy with the consortium of M/s Kepco and M/s Buycksan of Korea at a cost of $1,573,800. The board has also authorised Gepco CEO to enter the deal.

Business Recorder [Pakistan's First Financial Daily]
 

foxhound

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Interesting article::coffee:

Ref:
Pakistan seeks $25bn investments from ‘friends’ -DAWN - Top Stories; November 20, 2008

Pakistan seeks $25bn investments from ‘friends’


By Our Staff Reporter

ISLAMABAD, Nov 19: Pakistan has sought from friendly countries $25 billion investments for projects ranging from big and small dams to development of Fata and madressah reforms.

The Planning Commission has submitted a report containing details of the projects at a recent technical-level meeting held in Abu Dhabi with the Friends of Pakistan group.

After securing the $7.6 billion loan from the IMF, Pakistan is now in a position to attract investments from the group which includes the UAE, Saudi Arabia, China the United States.

The report released here on Wednesday indicates Pakistan is seeking $4.75 billion for major projects -- $2.6 billion for Bhasha-Diamer dam, $1.150 billion for Munda dam and $1 billion for Thar coal development.

An estimated $1.452 billion will be required for building small dams in the four provinces -- $147 million for eight dams in Punjab, $672 million for eight dams in Balochistan, $221 million for seven dams in Sindh and $412 million for nine dams in the NWFP.

An investment of $646.1 million has been sought for surface, sprinkler and drip irrigation. An estimated $9 billion will be spent on national trade corridor involving construction of 3,000km roads.

The government has sought $1.163 billion for construction of highways. Out of these, $250 million is for construction of 18km-long elevated highway (Rawalpindi flyover), $125 million for Chakdara-Dir-Chitral (120km) road; $200 million for realignment of Karakoram Highway, $238 million for upgradation of 258km long segment of road to 7.3m width carriageway for Bhasha dam, $50 million for Charo-Keti Bander road and $300 million for connectivity of the Gwadar port.

An amount of $2 billion is required for special agricultural projects, including value-addition, research, farm forestry and foodgrain storage.

The friends’ help has also been sought for initiating free trade agreements with the EU, US, Russia and other countries. A joint study group has been set up to explore the possibility of an FTA with Japan.

Pakistan has sought $750 million for madressah reforms. The fund will be utilised for bringing madressahs on a par with the formal education sector and for training khatibs and ulema.

An amount of $1.126 billion has been estimated for improving basic and college education. Of these, $250 million is for elementary, $188 million for basic education and community schools, $188 million for secondary, $250 million for higher secondary and $250 million for technical education.

An investment of $2.073 billion has been sought for establishment of universities of engineering, science and technology from China, Germany, Austria and Italy.:pdf:
 

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* Asks for $750 million for madrassa reforms​

ISLAMABAD: Pakistan has asked the Friends of Pakistan forum for $60 billion for 71 projects to improve education and infrastructure, and the establishment of a World Bank Trust Fund to help enhance Pakistan’s capacity to fight terrorism in FATA.

Pakistan asked for $1.126 billion for the improvement of education system, including $250 million for elementary schools, $188 million for Basic Education Community Schools, $188 million for science education, $250 million for higher, secondary and college education and $250 million for technical education, said a copy of the presentation.

It also sought $9 billion for a National Trade Corridor Project, $2 billion for agricultural projects, $300 million for the connectivity of Gawadar Port, $438 million for the upgrade of Karakoram Highway, $2.6 billion for Bhasha-Diamer Dam, and $78 million for 32 small dams.

Madrassa reforms: Pakistan sought $750 million for a madrassa reforms project to bring religious schools at par with formal educational institutions and to train Khateebs and clerics.

Pakistan also asked for an enhanced market access in the US, the EU, Russia and Japan and trade promotion initiatives including free trade agreements.
 

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Friends of Pakistan: much ado but no cash injections

EDITORIAL (November 20 2008): A press release issued by the Foreign Office asserts that the Friends of Pakistan meeting held in Abu Dhabi adopted a work plan that envisages greater co-operation in the fields of security, energy, development and institution building - areas where Pakistan needs support.

The outcome of the Friends of Pakistan meeting was the scheduling of additional meetings, the next one from 13 to 16 January 2009, with the participation of 'experts' in each of these areas, which would lead to building of strategic partnerships. However, the Press release was ominously silent on what Pakistan needs the most urgently: financial injections to enable the government to shore up its fast depleting foreign exchange reserves, stabilise the balance of payments position as well as strengthen the declining rupee value.

To many this silence comes as no surprise. The reasons being cited for this are varied. Some believe that the Friends of Pakistan want to keep Pakistan on a tight leash in an effort to ensure that our government continues its commitment to the war on terror with little flexibility to undertake policies that are not supported by the international community.

Others argue that Pakistan must first go on an International Monetary Fund (IMF) programme which would force the government to set its house in order through adopting conditionalities that would have implications for improving governance as well as macroeconomic stability. The adoption of these conditionalities would, in turn, increase the comfort level of bilaterals with respect to how we utilise their assistance, which may follow later.

However it is relevant to note that there is a gestation period, estimated at between six months to a year, before these conditionalities begin to impact positively on the economy and increase our credit rating. Such reasoning would, therefore, imply that the government must not expect additional financing from Friends of Pakistan any time soon.

The substance of the IMF conditions was revealed by Shaukat Tarin, Special Advisor to the Prime Minister on Finance, in a television interview. First, fiscal deficit would have to be reduced from 7.4 percent during 2007-08 to 4.4 percent as envisaged in the budget, to be eventually brought down to 3 percent; however the 2008-09 budget document was vague on the actual source of revenue, and hence meeting the 4.4 percent deficit is likely to be a challenge requiring a mini budget by the end of the current calendar year that would, according to Tarin, increase taxes on agriculture, stock market, real estate and others.

The second IMF condition is to expand the revenue base from 5 to 15 percent, as per Tarin. With a decline in output in recent months - both farm as well as industrial output - it maybe difficult for the government to hasten with imposition of a new tax or raise existing taxes on the productive sectors. Tarin expressed optimism and stated categorically that the government would upgrade the farm sector and make it a profit earning. Again this would take time and in the interim period prices may well soar with the imposition of a tax on agriculture.

However, the government is considering privatisation as a means of meeting some of its expenditure requirements. According to informed sources, the plan is to generate around 5 billion dollars from privatising state-owned companies. Given today's global financial crisis, the government must put this policy on hold as it is unlikely to receive the amount that it would be able to once the crisis has blown over.

Third, the government would have to limit its borrowing from the State Bank of Pakistan, a policy that would reduce the pressure on prices. Deficit financing is a highly inflationary policy and it is hoped that the government restricts its use to what is absolutely necessary. And finally Tarin also stated that the IMF has urged the government not to make oil payments through the State Bank, which would assist in saving foreign exchange reserves and the rupee value is likely to strengthen without any intervention from the State Bank.

There is a need, therefore, for the government to accept that it is unlikely to access any additional financing in the short term at least. IMF and other international financial institutions are going to operate within our economy and impose a set of conditionalities that are unlikely to be pain-free and, unfortunately, experience shows that the poorer one is the more would be the impact of IMF conditionalities. This is in spite of the assurance by the IMF that it would ensure social protection to the poorest of the poor.

What the government should do is to ensure that belt tightening is across the board and non-development expenditure cuts must be more pronounced relative to development expenditure. Unfortunately this has not been visible in recent weeks, with numerous foreign junkets, by bureaucrats and some politicians, as well as the cabinet expansion.
 

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