Pakistan Economy - News & Updates - Archive

[Neo]

By Khalid Qayum Bloomberg News

Published: July 19, 2006

ISLAMABAD Oil & Gas Development plans to buy rights to find oil and gas in Oman and Yemen in a first attempt by Pakistan's biggest explorer to seek energy assets overseas, according to the company's chief executive officer, Arshad Nasar.

The state-controlled company wants to increase spending this year on exploration and development of wells within Pakistan by 150 percent to $890 million, Nasar, 61, said in an interview last week. The company has not decided how much money it will invest overseas, he said.

Pakistan needs to raise oil and gas output from domestic fields and secure overseas supplies to contain a rising import bill. Of the nation's total import bill of $25.6 billion in the July-May period, $5.95 billion was spent on oil imports.

We need "to enhance the country's energy security" said Nasar, who took charge of Oil & Gas Development in April after serving as chief executive at Caltex Pakistan Oil, a unit of Chevron. "Our plan is to accelerate exploration activities and boost production from existing wells."

The company plans to raise oil and gas production by 42 percent in the year to June 30, 2007, Nasar said.

Oil & Gas pumped about 39,000 barrels of oil a day and 979 million cubic feet of natural gas daily, or 25 percent of the country's total production, as of the quarter ended March 31.

"We have a vision to make Oil & Gas a leading oil producing company in the region and to be recognized for performance and partnership," said Nasar, who worked at Chevron for 36 years.

Oil & Gas Development, the biggest company on Pakistan's benchmark Karachi Stock Exchange 100 index, produces 60 percent of the country's oil. The company competes with Shell Pakistan, a unit of Royal Dutch Shell, and Pakistan Petroleum, the second-biggest explorer also controlled by the government.

The development of new wells and higher yields will help lift Oil & Gas Development's earnings 23 percent this fiscal year compared with a year earlier, Nasar said. Oil & Gas Development has not reported earnings for the year ended June 30.

The company's profit increased to 33.2 billion rupees, or $552 million, in the nine months to March 31 from 24.4 billion rupees a year ago.

Oil & Gas Development shares have risen 32 percent in the past year, lagging behind a 42 percent increase in the benchmark KSE 100 index.

Domestic exploration and development will focus on Mela and Kohat in the nation's Northwest Frontier province, Nasar said. The spending plan this year includes digging 50 new wells, nine of which will be in Baluchistan, depending on the security situation, he said.

Tribal militants in the southwestern province of Baluchistan in past years have attacked oil and gas pipelines, which run thousands of miles in the sparsely populated province. They are demanding greater royalties on the natural resources extracted from the province. In 2003, Pakistan's government deployed 3,000 troops to protect the pipelines.

The government's plan to sell Oil & Gas Development shares overseas will help introduce the company in foreign markets, Nasar said.

The government plans to sell as much as a 15 percent stake, or 645 million shares, in Oil & Gas Development to local and overseas investors through the global depositary receipts by Sept. 30 and list it on the London Stock Exchange, he said.

ISLAMABAD Oil & Gas Development plans to buy rights to find oil and gas in Oman and Yemen in a first attempt by Pakistan's biggest explorer to seek energy assets overseas, according to the company's chief executive officer, Arshad Nasar.

The state-controlled company wants to increase spending this year on exploration and development of wells within Pakistan by 150 percent to $890 million, Nasar, 61, said in an interview last week. The company has not decided how much money it will invest overseas, he said.

Pakistan needs to raise oil and gas output from domestic fields and secure overseas supplies to contain a rising import bill. Of the nation's total import bill of $25.6 billion in the July-May period, $5.95 billion was spent on oil imports.

We need "to enhance the country's energy security" said Nasar, who took charge of Oil & Gas Development in April after serving as chief executive at Caltex Pakistan Oil, a unit of Chevron. "Our plan is to accelerate exploration activities and boost production from existing wells."

The company plans to raise oil and gas production by 42 percent in the year to June 30, 2007, Nasar said.

Oil & Gas pumped about 39,000 barrels of oil a day and 979 million cubic feet of natural gas daily, or 25 percent of the country's total production, as of the quarter ended March 31.

"We have a vision to make Oil & Gas a leading oil producing company in the region and to be recognized for performance and partnership," said Nasar, who worked at Chevron for 36 years.

Oil & Gas Development, the biggest company on Pakistan's benchmark Karachi Stock Exchange 100 index, produces 60 percent of the country's oil. The company competes with Shell Pakistan, a unit of Royal Dutch Shell, and Pakistan Petroleum, the second-biggest explorer also controlled by the government.

The development of new wells and higher yields will help lift Oil & Gas Development's earnings 23 percent this fiscal year compared with a year earlier, Nasar said. Oil & Gas Development has not reported earnings for the year ended June 30.

The company's profit increased to 33.2 billion rupees, or $552 million, in the nine months to March 31 from 24.4 billion rupees a year ago.

Oil & Gas Development shares have risen 32 percent in the past year, lagging behind a 42 percent increase in the benchmark KSE 100 index.

Domestic exploration and development will focus on Mela and Kohat in the nation's Northwest Frontier province, Nasar said. The spending plan this year includes digging 50 new wells, nine of which will be in Baluchistan, depending on the security situation, he said.

Tribal militants in the southwestern province of Baluchistan in past years have attacked oil and gas pipelines, which run thousands of miles in the sparsely populated province. They are demanding greater royalties on the natural resources extracted from the province. In 2003, Pakistan's government deployed 3,000 troops to protect the pipelines.

The government's plan to sell Oil & Gas Development shares overseas will help introduce the company in foreign markets, Nasar said.

The government plans to sell as much as a 15 percent stake, or 645 million shares, in Oil & Gas Development to local and overseas investors through the global depositary receipts by Sept. 30 and list it on the London Stock Exchange, he said.

http://www.iht.com/articles/2006/07...rg/sxpakoil.php

 

[Neo]

Pakistan will be declared a poppy-free country in one year as cultivation of poppy has been reduced from 7,000 hectares to 3,000 hectare area and it will be reduced up to 1,000 hectare in one year, the country's narcotics control minister said on Wednesday.

Ghous Bux Maher was talking to newsmen after arrival from Moscow, where he attended the regional conference on drug trafficking issues.

"If the area of drug cultivation could be reduced up-to 1,000 hectare, Pakistan would be declared a poppy free country," the minister said.

There are reports that poppy has been cultivated in some inaccessible parts of Pakistan's rugged tribal region in the North West Frontier Province.

The minister said that over 247 heroin making laboratories have ben destroyed so far and there is not any lab of heroin working in Pakistan.

He said a national survey on drug abuse shows that there are 3.01 million drug abusers in Pakistan, in which chronic heroin users in the age of 15-45 years are about 500,000.

He disclosed that a total of 6,008 cases have been registered so far in which 3,864 were decided and 3,381 were convicted while acquitted cases were only 483.

He said that 2,144 cases are still under trial.

Bux Maher said the government is working to control the import of such chemical which is used in heroin making and for the purpose all importers were advised that they should submit a report about buyers and users of such chemicals to the Ministry of Narcotics Control to control its uses.

He said the government is making efforts to provide alternative sources of livelihood for the people of poppy cultivation areas.

A national plan has already been prepared and the government is working for providing tube wells and agricultural equipment free of cost to the people of such areas.

He informed the media people that it was decided in the Moscow conference that joint efforts would be made to eliminate drug trafficking and poppy cultivation from the region and all regional states will cooperate with Pakistan for the purpose.

He said the conference also lauded the efforts of Pakistani government in minimizing the poppy cultivation and drug trafficking from its border.

http://www.irna.ir/en/news/view/men...95620182214.htm

 

[Neo]

19 July 2006

ISLAMABAD — Pakistan government is urgently importing a used 150MW thermal power station from the United States in order to partially offset the current energy crisis.

However, the country would continue to face 800-1200mw power shortfalls at least for the next two years in peak summer.

A senior government official said the quickest way to start additional power production was to import pre-commissioned plant from the United States on a three-year rent. "It would be installed near Multan within 70 days and would be Pakistan's first ever rented power plant," he said.

The plant is estimated to produce electricity at a tariff of about 3.2 US cents per unit excluding fuel cost that would be borne by the Wapda and translate into an overall tariff of slightly over four cents per unit.

The energy crisis would, however, not be over until August 2008 because the next power plant to come on stream would be Wapda's thermal plant at Chichuki Malyan with 340mw production in August 2008 and another 160mw by December 2008.

A Wapda official said the electricity shortage had come down to almost zero in the last few days as result of higher hydel power generation from Tarbela and Mangla dams but has again risen to about 400-500mw on Monday mainly because of transmission problems after providing about 750mw to Karachi. The production from two dams has increased to 5,600mw from 4,900mw a week ago against an installed capacity of 6,100mw.

The source said the secretary water and power finalise a short-term strategy to overcome power crisis on Tuesday in consultation with the Wapda and KESC for presentation to the Prime Minister today. These sources said the commissioning of four second-hand thermal stations donated by the United Arab Emirates (UAE) of 320mw was expected to start by mid of next year. Of these, an 80mw plant would be installed at Shahdra near Lahore in Wapda's

jurisdiction and would take about 11 months from now on.

The plant was commissioned in the UAE in 1996. The whole dismantling, transportation to Pakistan and installation was being done by the UAE government as donation to the people of Pakistan. The remaining three plant of 80mw each of 1975 model would be donated to Karachi and would take more than 15 months to start production, these sources said.

The sources said the Wapda has operationalised a new 220KV line from Jamshoro to TM Road in Hyderabad on Sunday besides commissioning seven 220KV grid stations in the last few months at a cost of Rs14 billion.

These sources said the Wapda has been authorised by the government to install three furnace oil based thermal power stations in Faisalabad, Nandipur and Lahore with a total capacity of 600mw on supplier's credit.

The Wapda has already advertised these plants for construction and provision of suppliers' credit.

These plants would come on stream in June 2008.

Similarly, Wisdom Associates, a local group has been asked to install a 117mw station in Aimanabad near Gujranwala with in a period of 15 months.

 

[Owais]

Fiscal Year 2006 exports up 14.4 percent

ISLAMABAD (July 20 2006): The country's exports during July-June period of fiscal year 2005-06 were recorded at 16.469 billion dollar showing an increase of 14.4 percent over the corresponding period of the last fiscal year. According to the provisional trade figures released here on Wednesday, the exports during the FY 2004-05 totalled at 14.391 billion dollar.

The exports worth 1.515 billion realised in the month of June of previous fiscal year, registering a decrease of 1.1 percent in the corresponding period of the last year when it was recorded at 1.532 billion.

During the out going fiscal year (July-June 2005-06), the imports also witnessed 28.581 billion showing an increase of 38.8 percent over the corresponding period of last year.

The country's imports in June 2006 were recorded at 2.986 billion dollar, witnessing an increase of 33.9 percent over imports worth 2.23 billion dollar realised in the corresponding month of the last fiscal year.

The imports worth 2.986 billion dollar realised in the month of June 2006 also registered 12.8 percent increase when compared with 2.648 billion dollar imports achieved in May 2006.

The balance of trade during June-July period of FY 2005-06 has reached to 12.113 billion dollar from 8.207 billion dollar in FY 2004-05.

 

[Neo]

ISLAMABAD (July 20 2006): Prime Minister Shaukat Aziz has said that substantial progress has been made on re-designing of procedures and processes, strengthening of infrastructure ie roads, railways, airports and seaports which will facilitate trade and investment as well as will contribute to achieving the export target of $18.6 billion

"The benefits of faster and efficient movement of goods across the country will go directly to the consumers and reduce cost of business and increase productivity of goods", he added. The prime minister was chairing a meeting of the Task Force on the development of National Trade Corridor at the PM's House on the Wednesday morning to review the implementation status of the decisions earlier taken particularly the progress on matters related to trade facilitation, modernisation of railways, ports and shipping, motorways, trucking and aviation and air transportation sectors.

He said: "While we expand our logistics chain, it is important that the existing infrastructure is meticulously maintained and used by the business and industrialists community to ensure a seamless and fast movement of goods.

Shaukat Aziz said that Pakistan, situated at the confluence of three important regions - South Asia, Western Asia and Central Asia - enjoys a unique and strategic position to inter-link these regions.

He said because of its geo-strategic location Pakistan is in a position to play a vital role in promoting regional trade and achieve this objective we are building trade, energy and transportation corridors.

In addition to this, the prime minister said Pakistan provides the pre-requisites to become the regional hub of manufacturing and trade. The National Trade Corridor Plan, he said, will be instrumental in building of these corridors as well as in making Pakistan a regional hub of manufacturing and trade.

The Deputy Chairman Planning Commission, Secretary Communications, Secretary Ports and Shipping, Secretary Defence, Secretary Railways and Chairman CBR made presentations on the various sectors of the NTC. Federal Communication Minister Muhammad Shamim Siddiqui also attended the meeting.

The meeting was informed that a deep-water terminal is being built at Kemari and the Port Qasim will have more berths with the assistance of the private sector.

It was also informed that substantial progress has been made in trade facilitation by reducing the port dwell time and port charges; customs clearance has been reduced to an average of 5.57 hours at KICT from earlier average of 4.1 days; whereas for imports, the customs clearance time has been reduced to an average of 7.24 hours, the exports goods are cleared within an average time of 0.50 hours at KICT in Karachi.

While reviewing the performance of Pakistan Railways, the prime minister said railway is being converted into a corporation. He appreciated that railway is leveraging its land and other assets for optimal use. He was informed that freight revenues of railway have increased and the first version of railway business plan is ready.

The communication secretary informed the meeting that as a result of the substantial investment made by the government for the improvement in highways significant progress has been made in this sectors and motorway quality roads will be available throughout the country, all the way from Karachi to Torkhum.

"The construction of Torkhum-Peshawar Road, Peshwar Northern Bypass, M-4, Faisalabad-Khanweal, E-5, Sukkur-Shikarpur, E-6, Shikarpur-Ratodero, M-7 Dadu-Dureji-Hub, P.Bhattian-Wazirabad, Hasanabdal-Mansehra will be initiated in 2007 while M-1 linking Lahore-Peshawar will be completed in 2007 and the Karakoram Highway is being improved with the help of China", he added..

The defence secretary, in his presentation, said that progress has been made on planning of the construction of two new airports at Islamabad and Gwadar and expansion of Multan airport. The construction of Islamabad airport will begin by the end of the year and the National Aviation Policy has been prepared and is under discussion with all stakeholders, he added.

The prime minister expressed satisfaction at the progress so for made. He asked all departments concerned to continue the pace of progress and ensure timely completion of the projects.

 

[Owais]

CRR and SLR increase pushes up Kibor

KARACHI (July 20 2006): Kibor-the benchmark for lending rates-moved upward on Wednesday by 53 basis points for six months and by 66 basis points for three months in the wake of enhancement of Cash Reserve Ratio and Statutory Liquidity Ratio by the State Bank of Pakistan.

In the auction for treasury bills, held on Wednesday, participation by banks was thinner, as some banks scrambled to readjust their portfolios to meet the new CRR-SLR requirements by Saturday.

However, the SBP still managed to sell the six-month paper worth Rs 15 billion (against maturity of Rs 14 billion) without changing the cut-off yield of the previous auction.

According to sources, the CRR obligations of scheduled banks have gone up from Rs 150 billion to Rs 190 billion; and SLR requirements also have increased from Rs 445 billion to Rs 530 billion due to the new classification. However, as banks are holding at least 40 to 50 percent more than the statutory requirement in government papers, there will be no acute pain to them in meeting the SLR demand.

At the same time, though, the new CRR demand will mean temporary problems for some banks, which have aggressively lent to customers, and their loan-to-deposit ratio is nearly 80 percent.

Most bankers appreciated the SBP's incentivization for encouraging deposits beyond six months tenor. The reduction in CRR from seven percent to three percent for tenor above six months would cost 0.5 percent less to the banks on annualised basis, which can be passed on to customers by raising the return on longer term deposits.

Surprisingly, banking stocks came under pressure on the bourses on Wednesday despite the fact that the rise in lending rates would far enhance their profits as rates on loans would go up immediately while the profit on deposits to customers would rise after a time lag.

The hike in CRR is, of course, expected to put pressure for raising the yields on T-bills, and the enhancement in SLR itself would nullify this pressure as it pushes the other way to lower the yields on T-bills.

While the SBP's Wednesday move gave a clear signal of liquidity tightening, most economists feel that using SLR and CRR instruments is an indirect method of curbing credit expansion. "A better way to attack inflation directly through a slowdown in credit availability would be hiking of interest rates."

Further, as a treasurer of a leading bank said, "Exporters are being pampered while the sectors responsible for growth in large-scale manufacturing (LSM) will now be affected as loans for consumer financing will start drying up." Auto loans, leasing of air-conditioners, refrigerators, deep-freezers, washing machine, and dryers would be more costly, thereby easing the demand for these consumer durables.

With T-bills worth Rs 77 billion maturing this week, and Rs 54 billion T-bill adjustments due to SLR change, followed by the sale of Rs 15 billion of T-bills in the Wednesday's auction, the interbank market should be able to easily square off liquidity-wise at the end of the week, said a treasurer.

 

[Neo]

ISLAMABAD (July 20 2006): The government is likely to enhance the revenue collection target for 2006-07 to Rs 850 billion, against the original projection of Rs 835.5 billion, keeping in view the extraordinary high collection of Rs 711 billion during 2005-06.

Sources told this correspondent on Wednesday that the revenue collection target of Rs 835.5 billion was fixed in the budget on the basis of Rs 704-706 billion collection in 2005-06. But the amount rose to Rs 711 billion, following reconciliation of final receipts.

"The Ministry of Finance may fix Rs 850 billion revenue target for 2006-07 based on the growth of receipts to Rs 711 billion by CBR in 2005-06," sources said. They said that the Finance Ministry has not yet conveyed the increased target to CBR, but it is expected that the target would be revised upward.

They said that if the target is enhanced to Rs 850 billion for the current financial year, CBR would have to generate an additional amount of Rs 14.5 billion. This amount should be utilised for the health and education sectors, as the Ministry of Finance has not yet allocated the additional amount for any specific expenditure.

They added that the government was expecting over 20 percent estimated growth in revenue collection. On the basis of continuos upbeat trend during last fiscal year, the CBR would be able to cross Rs 835.5 billion in 2006-07.

 

[Neo]

ISLAMABAD (July 20 2006): Chinese Vice Foreign Minister Wu Dawei said his country was giving active consideration to the idea of using Pakistan as energy corridor and strengthening their communication links for common socio-economic uplift.

Talking to a visiting Pakistani delegation at the Chinese Ministry of Foreign Affairs, he hoped that Gwadar deep seaport could provide an easy communication link to China for transportation of crude oil from Middle East and other regions. "We will make best efforts for developing and promoting the Gwadar port as a hub of economic activities between the two countries," he added.

Leader of Pakistani delegation, Secretary Ministry of Youth Affairs Saleem Mahmood Saleem thanked the Chinese leadership and the people for their consistent support to Pakistan in various projects.

 

[Neo]

KARACHI (July 20 2006): The country's export is expected to achieve the target of $18.6 billion set by the ministry of commerce for the current fiscal year 2006-07. This was stated by Tariq Ikram, Chairman, Export Promotion Bureau (EPB) while talking to Business Recorder after speaking at a reception in his honour hold by the EPB employees here on Wednesday.

Tariq Ikram said the country exports are increasing tremendously during the last few years and has touched the figure of over $17 billion in the last fiscal year.

He said that after establishment of Trade Development Authority of Pakistan to replace the EPB, the country's export would increase tremendously and the target of $18.6 billion is not a difficult target to achieve.

The new establishment would focus to improve supply chain management, marketing and research communication. The main focus would be to develop institution which would be a role model organisation in the country, he added.

Earlier, while speaking at the reception, he said that the performance of the department would be tremendously increased after establishment of Trade Development Authority of Pakistan (TDAP) to replace the EBP. This new establishment would work more independently than the EPB, he added.

Being a department of ministry of commerce, there were some delays had to face to implement the decisions, he said and added that now the establishment would be independent to take its decisions and to implement on it immediately.

The chairman EPB announced on this occasion that all the employees of the EPB from grade one to 15 would be given option to join the TDAP and nobody would be sacked from the organisation. All these employees would be provided proper training from reputable institutions for the skill development of them. After the training these employees would be adjust in various departments of the TDAP according to the ability of the employees.

Regarding Commerce and Trade (C&T) officers, Tariq Ikram said that all these officers would also be given the option to join the TDAP and they would go thorough the process of human resource audit. The audit would be conducted through a reputed independent private agency to assess the abilities of the C&T officers. These officers would be accommodated according to their abilities in various departments of TDA, he added.

He asked the employees to work hard to prove their ability and to make the TDAP as a role model organisation in the country.

 

[Neo]

ISLAMABAD (July 20 2006): Emaar Properties, 32 percent owned by Dubai government, would be launching joint ventures with Pakistani companies for development of mega residential, commercial and leisure real estate projects, industrial parks, tourist sites and port terminals.

Emaar Properties Chairman Muhammad Ali Al-Abbar, who is also advisor to the government of Dubai on economic affairs, informed Prime Minister Shaukat Aziz about the plan, when he along with an 11-member delegation called on the Prime Minister here on Tuesday evening. The visit of Muhammad Ali Al-Abbar is a follow up to the visit of UAE Prime Minister and ruler of Dubai Sheikh Mohammed bin Rashid Al-Maktoum.

Shaukat Aziz apprised him about wide ranging structural reforms coupled with macro-economic stability, aimed at reducing the cost of doing business, better governance and consistency and transparency in policies and procedures, transforming Pakistan into a destination of choice for investors resulting in record high foreign direct investment (FDI) during the last year.

The Prime Minister said the investments had led to employment generation, upgradation and modernisation of technologies and value-addition and contributed to enhancement at exports.

The Prime Minister said the government was providing a level playing field to local and foreign investors, and added that transparency was the hallmark of the government policies.

Giving an overview of the economy, the Prime Minister said the structural reforms of the government had changed the entire economic landscape of the country. The economy had expanded during the last four years, which enabled it to position itself as one of the fastest growing economies of the Asian region.

He said the size of the economy, which was 134 billion dollars today, had doubled during the last seven years. Per capita income had also doubled during this period and today stood at 847 dollars, and Pakistan offered tremendous opportunities to local and foreign investors, he added.

Muhammad Ali Al-Abbar said Pakistan had achieved impressive growth and his company was impressed with economic stability achieved by Pakistan.

He said joint ventures being launched by their company in Pakistan till led to major investments, job opportunities, increase in revenues, infrastructure strengthening, and improvement in education and healthcare facilities.

The meeting was attended among others by Minister for Communication Muhammad Shamim Siddiqui, Minister for Tourism Nilofar Bukhtiar, Minister of State for Finance Omar Ayub and senior officials.

 

[Neo]

KARACHI (July 20 2006): Porsche Pakistan is proud to announce the official launch of Porsche operations in the cosmopolitan hub of Pakistan, with the official inauguration of Porsche Centre Karachi here on Wednesday.

While sales & service activities have already been operational in Karachi since January 2006, the official opening of Porsche operations in Karachi signifies the serious commitment of the company towards the Pakistani market.

Abuzar Bokhari, Chairman of Autotechnik Pvt Ltd, stressed the significance of holding on to previously set targets: "Meeting targets is one way of assessing a company's professionalism and strong commitment to its business case. From this perspective, it is with utmost pleasure that I present to you the Porsche Centre in the business capital of Pakistan, Karachi. It is with this kind of work that Autotechnik proves its full commitment to spreading Porsche's culture of pure-bred sports car excellence throughout Pakistan."

On the other hand, Attique Ahmed, CEO of Autotechnik Pvt Ltd, detailed the progress on ground for Porsche in Pakistan: "Frantic activity in the past one year has resulted in great accomplishments. A Porsche showroom has already opened in Lahore, while another one is planned for Islamabad. Meanwhile, the construction of the state of the art Porsche Centre Lahore is about to commence. Currently, Autotechnik employs a staff of highly experienced and competent employees.

As usual, training is an integral part of the development programme all employees are subjected to." Announcing the official launch of Porsche operations in Karachi lays the foundations for a true sports car, and a class leading SUV experience like no other. Every Porsche driver deserves the best, and the company's strict corporate identity guidelines, to which every Porsche Centre adheres, definitely guarantee that.

 

[Neo]

Thursday, July 20, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\07\20\story_20-7-2006_pg5_1

* Imports stood at 131.2% of the target
* Petroleum import bill increased by 64.5% in nine months of previous fiscal


ISLAMABAD: The government has managed to achieve only 96.9% of the export target of $17 billion during the July-June period of last fiscal year 2005-06 compared with the 105% achievement in the previous fiscal year 2004-05 with exports of $14.391 billion against the actual target of $13.7 billion.

However, the imports were at 131.2% of the target and stood at 28.581 billion against the actual import target of $21.790 billion in the last fiscal year 2005-06.

The imports were 123.3% and finished at $20.598 billion against the actual target of $16.7 billion in the fiscal year 2004-05.

According to trade data released by the ministry of commerce here on Wednesday, the total exports during July-June period of last fiscal year 2005-06 stood at $16.496 billion against the exports of $14.391 billion in the previous fiscal year 2004-05, indicating an increase of 14.4%.

The imports during the July-June period of last fiscal year 2005-06 amounted to $28.581 billion compared with the imports of $20.598 billion in the previous fiscal year 2004-05, indicating an increase of 38.7%.

The trade deficit amounted to $12.112 billion in the July-June period of last fiscal year 205-06 compared with the deficit of $6.207 billion in the previous fiscal year, indicating an increase of 95.1%.

The exports during June 2006 ended with $1.153 billion compared with the exports of $1.153 billion during June 2005 were less than 1.1%. The imports witnessed an increase of 33.9% during June and stood at $2.986 billion compared with the imports of $2.230 billion in June 2005. Trade deficit was $1.471 billion during June 2006 compared with the deficit of $697 million in June 2005, projecting an increase of 110.9%.

Non-availability of certain products, commodities and goods for exports such as sugar, wheat, poultry, livestock and less availability of industrial goods and agri-products also contributed to the decline in exports during last fiscal year 2005-06, an official explained to the Daily Times.

The major negative factor in the past year was the rapid increase in the international oil prices to unprecedented levels of around $70- 75 per barrel. As a result, in the first nine months of last year the petroleum group import bill increased by 64.5 percent. This fact has had two unpleasant effects.

First, it has resulted in a dramatic increase in our import bill and therefore our trade gap. Second, it has meant increase in the cost of production in particular and the cost of doing business in general, thereby adversely impacting the competitiveness of our exports.

 

[Neo]

Dubai: Pakistan hopes to sign a free trade agreement (FTA) soon with the GCC countries as it expects to complete negotiations by the end of this year, said a senior diplomat.

Pakistan had decided to sign a free trade agreement with the GCC as a trading bloc a year ago.

"We have already completed one round of talks and a few more are to follow," said Bilal Pasha, Commercial Counsellor at the Pakistan Consulate General in Dubai.

He said the FTA between Pakistan and the GCC would be comprehensive in nature, covering the overall economic relations between the contracting states including the UAE, Saudi Arabia, Qatar, Bahrain, Oman and Kuwait.

Trade volume between Pakistan and GCC states stood around $4.5 billion in 2004-2005.

At present, Pakistan is importing raw materials, semi-finished goods and oil from the GCC countries and the FTA will reduce the cost of the imports.

The agreement will provide an opportunity to Pakistani exporters to tap the demand for goods in the GCC countries under the reduced tariff in the first phase and without tariff in the long term.

"It will help abolish or reduce the existing five per cent import duty imposed in GCC countries, which will ultimately help reduce prices of Pakistani products in the region," said Pasha.

Talking to reporters yesterday in Dubai, the newly appointed commercial counsellor said that exports from Pakistan to UAE have increased up to 23.6 per cent in the first nine months of the last fiscal year.

It has increased to $993 million (from July 2005 to March 2006) from $ 803 million (July 2004-March 2005).

"We hope to touch $1.3 billion by the end of this fiscal year as compared to $1 billion achieved last year," he said.

Explaining the new trade policy of Pakistan for the 2006-07 financial year, which was announced on Monday, Pasha said the export target this year has been fixed at $18.6 billion?13 per cent increase on the export levels attained last year.

The trade policy, which seeks to further liberalise foreign trade, is expected to have an import bill of $28 billion, leaving a yawning trade deficit of $9.4 billion.

Pasha said the Pakistan government has decided to focus on the export promotion of a few selected product groups in order to increase exports and reduce the trade deficit.

The product groups selected for this purpose include leather products, engineering goods, chemicals, pharmaceuticals, towels, denim and services.

"This is being done to facilitate annual exports of each of these products to a level in excess of $1 billion within three years," Pasha said.

He said the major initiative is to focus on export growth in regional Muslim countries.

Boosting trade

Export measures introduced in trade policy

- Establishment of Trade Development Authority of Pakistan
- Carpet cities in Lahore and Karachi
- Dazzle Park near Karachi Port
- Export Centres in Peshawar, Quetta, Lahore and Islamabad
- Cool Chains for Horticulture Exports
- Freight subsidy Scheme
- Skill development in textile sector
- Quality standard certification
- Warehouse city
- Cement and clinker terminal in Karachi
- Promotion of meat exports
- Long term financing for export oriented projects

 

[Owais]

Pakistan need US$ 6 billion investment in communication sector ISLAMABAD: Pakistan’s transport and communication sectors need US$ 6 billion investments during next five years.

Deputy Chairman Planning Commission Akram Shaikh talking with members of the planning commission in Islamabad said that the country would need billions of rupees investment to achieve targets of roads, rail links, ports and airport development in Pakistan for improving the infrastructure in the country.

The country was making efforts to attract foreign investments and private assistance for these projects, he added.

 

[Owais]

Interest on deposits may rise further by 200 basis points KARACHI: Following the enhancements of Cash Reserve Requirement (CRR) and Statutory Liquidity Requirement (SLR), interest rates on bank loans as well as on deposits could further surge by 100 to 200 basis points.

Standard Chartered Bank’s CEO, Badar Kazmi told this here to Geo News.

He said that the banks after the CRR and SLR enhancements would now focus on obtaining deposits mainly for over six months duration and the ongoing war for deposits would further heat up, which would benefit the depositors, especially those who wanted to keep their deposits with the banks for a period of over six months.

This step taken by the State Bank of Pakistan would bear out good results in the banking industry, as the scope of banking services would further widen, he told.

Badar Kazmi said that such banks that had indulged in much of their loan books’ expansion could now offer more readily handsome profits for obtaining the deposits.