Pakistan Economy - News & Updates - Archive

[Owais]

Unemployment declines by 1.2 percent: PRSP third quarter report

ISLAMABAD (August 08 2006): Despite PRSP's progress in unemployment and poverty reduction, the government still faces challenges like high levels of rural poverty, rise in income inequality, gender gap in health and education, youth unemployment, sustainability in high economic growth and achievement of Millennium Development Goals (MDGs).

This is indicated in the Poverty Reduction Strategy Paper (PRSP-I) third quarterly progress report for FY2006, released by the finance ministry on Monday. "To sustain this growth momentum, more efforts and more growth critical reforms would be required," it added.

The report says unemployment level during July-December 2005-06 has declined by 1.2 percentage points to 6.5 percent as compared to 2003-04.

During July-December 2005-06, unemployed labour force stood at 3.32 million, of which 2 million unemployed were living in rural areas and 1.32 million in urban areas.

The gap between the rich and the poor (income inequality) has widened and the overall ratio has increased marginally from 3.76 percent in 2000-01 to 4.15 percent in 2004-05.

In urban areas, the gap between the rich and the poor has widened relatively more from 10.40 percent in 2000-01 to 12.02 percent in 2004-05 compared to the rural areas, where the gap remained more or less stagnant: 2.22 percent in 2000-01 and 2.19 percent in 2004-05.

As the PRSP-I has completed its three-year term in June 2006, the finance ministry has planned to prepare PRSP-II for 2006-09 period to address these challenges.

To formulate PRSP-II, ongoing process of dialogue is enriching the strategy with the input of civil society and the poor. The government has started a dialogue process with the poor, development partners, provincial governments and civil society representatives. This process will lead to ownership of PRSP-II by all segments of the society and will also help in implementing the strategy.

An effort was made to include diverse groups of participants, including small farmers, daily-wage labourers, employees of public and private sectors, unemployed, mustahiqeen of Zakat, people engaged in small enterprise, students etc.

Main considerations for PRSP-II would be building upon lessons learnt in PRSP-I, ensuring macroeconomic stability and sustained high and broad-based economic growth by taking advantage of opportunities offered by globalisation, while at the same time unleashing the potential of domestic commerce, reducing inequalities and maximising employment generation, direct public policy debate toward needs of the poor.

It would also aim at empowering the poor, especially the women and the most deprived, by increasing access to factors of production, particularly land and credit.

The ongoing PRSP process aims for a complete alignment with the MDGs and the Medium-term Development Framework (MTDF). While the MTDF provides a strategy for translating the 'Vision 2030' into action during 2005-10, its emphasis is on sustained long-term growth.

The PRSP on the other hand presents the strategy to ensure the growth is broad-based and leads to effective poverty reduction.

The report further says, "Pakistan is well ahead of its target on PRSP budgetary expenditures, which increased by 34.3 percent to Rs 258 billion during third quarter of FY2006 over FY2005 in the same period.

During the same period, as a percentage of GDP, these expenditures increased by 0.43 percentage points to 3.35 percent. Increase was also witnessed in micro-credit disbursement, a non-budgetary head of pro-poor expenditure."

Education sector is given the highest priority in terms of distribution of pro-poor expenditures as 37.4 percent of total PRSP expenditures were used for this sector during third quarter of FY2006.

Law and order stands second in priority, as expenditures made on this sector account for 15 percent of total pro-poor expenditures. Share of pro-poor expenditures made on irrigation increased from 11.1 percent during third quarter of FY2005 to 14 percent in FY2006 in the same period. Expenditures made on health and roads, highways and bridges account for 8.9 percent and eight percent, respectively, of the total PRSP expenditures during third quarter FY2006.

It also says the implementation of Tawana Pakistan project was sluggish in translating the envisaged targets. It is being redesigned and has been temporarily suspended. It is a nutrition target programme, which includes serving of meals and micro nutrient supplementation to schoolgirls. The programme has been launched in 5300 schools of 29 poor districts of Pakistan.

 

[Owais]

Business community threatens to close down units against KESC inefficiency

KARACHI (August 08 2006): Business community of Karachi has warned the government that they will go to any extent if the government failed to make public the Karachi Electric Supply Corporation (KESC)'s privatisation agreement with present owners in next 24 hours.

They also wanted of KESC to announce what fault occurred in power supply due to rains and time period they required to ratifying the defects in next 24 hours.

Leaders of business community claimed that they enjoy full support of the community and they can close down their units if they give a call to do so.

Addressing a joint press conference at Karachi Press Club, Leader of Businessmen Group (BMG), Siraj Kassim Teli said that KESC was privatised to improve working of the utility but instead of improving, it deteriorated further.

Lashing out on the management of KESC, he said it is for the first time in the history of KESC that after rains, power failed and it could not be restored after passing of nine days.

Siraj Kassim Teli demanded of the government to public the privatisation condition documents of KESC within next 24 hours.

He also demanded of the KESC to reveal to the public about the details of faults occurred due to rain and its plan to rectified them and time period it required to do so.

He said that in case of failure to public the privatisation agreement and announcing plan to rectify defects, the business community will be free to decide its future course of action.

President, Karachi Chamber of Commerce and Industry (KCCI) Haroon Farooki said that all major markets including Jodia Bazar, Cloth Market, Sadar, Paper market etc, are without electricity after passing nine days, which hampering business activities adversely.

He urged the management of KESC to rectify the deficits without any wasting time.

Chairman, Site Association of Industry (SAI) Amin Bandookda said that over 40 percent industrial units are still without power in Site industrial area.

He said pointed out that a meeting was held with KESC officer who assured that power would be restored by Friday but these promises remain unfulfilled.

He said that due to power failure, Site area alone suffered around Rs 8 billion production and 100 million dollars exports losses in last 9 days.

He said that many industrialists of Site area have threaten to close down their units, lay off workers and stop payment of KESC bills.

He demanded of the government to allow more companies to establish their power supply units in the city to banish monopoly of KESC.

He also demanded that transmission and distribution be separated.

Former President of KCCI, Zubair Motiwala demanded that Karachi be declared calamity hit area and army engineering core be assign task to restore power supply in the city.

He demanded that payment of KESC bills should be differed for a month whose units remains closed for six days and fix charges should be waved.

Former Chairman SAI, Majied Aziz demanded that inquiry should be initiated against KESC management about utilisation of 100 million dollars grant given for improvement of KESC services.

He demand that a representative of KCCI be included on the board of directors of KESC, Sui Southern Gas Company and Karachi water and sewerage Board.

 

[Owais]

Seafood production likely to surpass 0.7m tons

KARACHI: Seafood production is likely to surpass 0.7 million tons, said Planning Commission sources on Monday.

The seafood production during last fiscal year was recorded as 0.612 million tons and it was likely to surge up to 0.725 million tons.

The development ratio of fisheries sector will be 4.8 percent annually by 2010, the sources added.

 

[Owais]

National Bank to sell Saudi bank stake


KARACHI (updated on: August 08, 2006, 17:40 PST): National Bank of Pakistan (NBP), the country's largest bank, hopes to divest its stake in Saudi-based Al Jazira Bank within three months and at a discounted price, a top official said on Tuesday.

The sale would cash in on a 10-fold rise in Al Jazira Bank's share price since 2004, and would complete NBP's exit from a stock it acquired 35 percent of in 1975, analysts said.

The bank said the sale would remove a legal obstacle from its plan to open an NBP branch in Riyadh next year, and that some of the proceeds may be returned to shareholders.

NBP holds around 6.5625 million shares in the Saudi bank, which at Tuesday's price would cost around $548 million.

Analysts said NBP held the stock at a cost of 8.8 Saudi riyals per share, after accounting for share splits and a bonus issue, compared with Tuesday's price of 313.25 riyals.

"Because it is not going to be an open market sale, the likelihood of getting a premium is out of question," said Syed Ali Raza, president of the NBP.

"It would probably be at a discount, and that has been the experience of other foreign banks as well," Raza told Reuters in an interview.

NBP plans to open up a branch in the Saudi capital city of Riyadh in the first quarter of next year, and according to Saudi laws, no institutions can have two kinds of presences in the kingdom, said Raza.

The law also prohibits an open market sale, and thus the NBP can only sell its share to designated institutional investors, mainly pension funds.

"I anticipate that we should be able to divest these shares within three months from now, roughly," Raza said

Raza said the Saudi Arabian Monetary Agency had not set a deadline for the completion of the transaction, but it has to be completed before NBP opens a branch in the oil-rich kingdom.

State-owned NBP has a market capitalisation of around $2.8 billion.

In the year to December 2005, NBP earned a net profit of 12.709 billion rupees, with earning per share of 17.87 rupees.

Raza expected that taxes of around 15-20 percent would be applicable on the deal.

Analysts say the sale would result in a one-off increase in earnings per share of NBP of around 30 rupees even if the stake was sold at a discount of 20 percent, and if 20 percent tax is also paid.

ONE-OFF DIVIDEND?

They also expect the resulting extra earning to be paid out as a one-off higher dividend. But Raza said this was yet to be decided.

"This is something we will have to decide, how much to retain, how much to give back to the shareholders," said Raza.

"We are already in the thinking process, but we have not made a decision yet.

 

[Owais]

Standard Chartered to buy 81 percent UBL shares


KARACHI (updated on: August 08, 2006, 17:26 PST): Britain's Standard Chartered has finalised a deal to buy around 81 percent of Union Bank Ltd (UBL) for around $414 million, sources close to the deal said on Tuesday.

"The deal has been finalised," said one source.

"They will buy around 81 percent shares of Union Bank at a price of 91 rupees per share," said the source, requesting anonymity.

Another source said an agreement for the deal was likely to be signed in the next day or two.

At 91 rupees a share, the cost of 81 percent of UBL, or around 274 million shares, would be slightly over $414 million.

"As per the laws, there would also be a tender offer in the stock market once the deal is signed," said the first source.

In May, Standard Chartered began due diligence checks on UBL -- Pakistan's sixth-biggest listed lender with assets of over $2 billion and deposits of around 93 billion rupees ($1.54 billion).

Earlier in the day, Standard Chartered's chief executive Mervyn Davies told reporters in London that he was optimistic about sealing a major purchase in Pakistan. Standard Chartered declined further comment.

UBL's chairman, Saudi investor Abdullah Basodan, is the major shareholder with a 49.06 percent stake as of December 31.

 

[Neo]

Tuesday, August 08, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\08\08\story_8-8-2006_pg5_12

ISLAMABAD: The export earnings of Pak Suzuki Motor Company Ltd were 0.957 million US dollars during the 2005-06 financial year, according to figures supplied by the company to the Engineering Development Board (EDB).

 

[Neo]

Tuesday, August 08, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\08\08\story_8-8-2006_pg5_5

* Inquiry committee to look into price of land

By Fida Hussain

ISLAMABAD: The federal government has sanctioned an amount of Rs 1.2 billion for the purchase of land for the establishment of an airport in Gwadar, according to a senior government official. He added that matters relating to the purchase of land would be the responsibility of the Balochistan government and not the ministry of defence.

“It will be the responsibility of the Balochistan government to purchase land for the new international airport at Gwadar,” the official said. “The provincial government will purchase land on the basis of a three-year average of the price of land in the locality adjacent to the proposed site. The Balochistan government has been asked to hand over the land to the ministry of defence for the building of the new airport.”

The ministry of defence has received several complaints about the cost of acquiring land for the new international airport. The is because the proposed price is said to be over 180 percent higher than the amount paid by Pakistan Railway (PR) for land in the same area in the recent past.

The Planning and Development Division (P&D) has formed an inquiry committee to look into the issue and to recommend ways to resolve the issue.

The ministry of defence put forward a price of Rs 155,000 per acre for the land for the new airport in Gwadar. The proposed cost is 180 percent more than the Rs 55,000 per acre paid by the PR in the recent past. The site proposed for the Gwadar airport is an area of 6,600 acres some 26 kilometers northeast from Gwadar. The government plans to make Gwadar into a regional economic hub and has thus issued a directive for the construction of an international airport in Gwadar.

The airport will be given international status and is expected to operate under the open skies policy. In the meantime there are plans to improve facilities at the existing airport in Gwadar to facilitate the movement of wide-bodied aircraft, the official said. The authorities concerned had objected to the proposed price of the land and said that the issue must be looked into separately from the overall project. The ministry of defence defended the proposed price and it had informed the inquiry committee that the price of land had been calculated by the Military Land Cantonments Department. The committee, which includes officials from the ministry of finance, ministry of defence, and the government of Balochistan will present its report on the issue to the planning commission.

The land acquired by the PR and the planned acquisition of land for the airport is part of the government’s overall strategy to connect Gwadar to the rest the world through rail, land and air routes as Pakistan hopes that the under construction Gwadar Port will be a great hub for economic activity in the region, the official added.

 

[Neo]

8th Aug, 2006

KARACHI : Al Habtoor Group Chairman, Sultan Al Habtoor said Pakistan offers best investment opportunities in the region under the dynamic leadership of General Pervez Musharraf and Prime Minister Shaukat Aziz.

According to a press release issued here on Monday, he said this while talking informally to leaders of the corporate world and financial sectors, gathered at a dinner hosted in his honour in Karachi by Saad Zaman, CEO Dubai Islamic Bank.

Al Habtoor Group, a known name in the UAE business community, has grown tremendously in the past thirty years, and while best known for construction, it is now recognised internationally through hotels, real estate, education, insurance, automobile dealership and publishing.

It is one of the UAE's most successful business corporations that also operate in the Middle East and the UK, the statement said. Commenting on the investment scenario in Pakistan, Sultan Al Habtoor said: "Investment from abroad and even within the country can only progress and prosper if continuity of policies is guaranteed both at the micro and macro levels." "Short-term benefits offered by any economy today, are the biggest impediment in the way of investments that are long-term oriented."

 

[Neo]

GUJRANWALA (August 08 2006): The government is determined to convert Gujranwala into a model Industrial City and under 'Made in Gujranwala Vision', it intends to establish a model Industrial Estate on the pattern of Sundar Industrial Estate, Lahore.

These views were expressed by Federal Minister for Industries, Production and Special Initiatives, Jahangir Khan Tareen at the ground breaking ceremony of Gujranwala Business Center to be established jointly by the Small and Medium Enterprise Development Authority (Smeda) and Gujranwala Chamber of Commerce and Industry (GCCI), here on Monday.

Kamran Rasool, Federal Secretary Industries, Shahab Khawaja, Chief Executive Officer, Smeda, Ikhlaq Ahmed Butt, President, GCCI and M Aslam Sheikh, Vice-President, FPPCI also spoke on the occasion. A large number of industrialists, traders and representatives of trade bodies attended the function.

Tareen maintained that the government's pragmatic economic policies had not only increased the profitability of entrepreneurs in the country, but also increased the government revenue. The government is undertaking development plans throughout the country and besides Gujranwala Business Center, it has decided to set-up modern Tools, Dies and Molds (TDM) center at a cost of Rs 14 billion at Gujranwala. He urged the GCCI office-bearers to set up a company for establishment and operation of the proposed TDM center.

Tareen announced that the government is considering to establish a modern Industrial Estate at Gujranwala. He asked the GCCI to form a four-member committee to identify the site for this project. He disclosed that Punjab government had assured to provide a piece of land for this purpose. He assured all out co-operation of the federal government in this regard.

He said that "Made in Gujranwala Vision" is the first location specific strategy which will be followed in other industrial cities of the country as well.

Shahab Khawaja, Chief Executive Officer Smeda gave a briefing on Gujranwala Business Center. He disclosed that the project involved a capital outlay of Rs 86.5 million including capital cost of Rs 60.84 million and an operating cost of Rs 20.66 million for three years. He assured that the project would be completed within stipulated period.

Kamran Rasool, Federal Secretary for Industries said that the Ministry of Industries, Production and Special Initiatives was committed to convert Gujranwala into a modern Industrial town. He assured that like Gujranwala Business Center, the other projects identified under "Made in Gujranwala Vision" would be materialised in the near future.

Earlier, GCCI Chief Ikhlaq Ahmed Butt, in his address of welcome hoped that the establishment of Gujranwala Business Center would help increase exports from Gujranwala. He was confident that this Center would help increase exports from US $620 million to US $1 billion in the near future.

 

[Neo]

LAHORE: Federal Minister for Science and Technology, Nouraiz Shakoor has said that brain drain is the biggest challenge facing the developing world and to cope with this phenomenon the government is going to offer a special salary package to scientists, researchers and professors in two to three months as a summary to this regard is with Prime Minister Shaukat Aziz for approval.

The minister expressed these views while speaking at two-day conference on “Proposed Framework for a Model National Science and Technology Policy” at the Lahore Chamber of Commerce and Industry on Monday.

The minister appreciated the LCCI initiative on science and technology and said that his ministry would incorporate all the LCCI proposals in the national policy on science and technology to be announced shortly.

He admitted that lack of proper research adversely affecting the whole economy of the country. He said that the present government while realising this fact had already doubled the allocation for education and health sectors. About ongoing energy crisis, the minister said that the government is giving a special focus towards the renewable energy projects in collaboration with private sector.

Speaking on the occasion, the LCCI President Mian Shafqat Ali said that Pakistan’s agriculture produce is among the best in the world but it has failed to fully exploit the traditional strength in agriculture, horticulture, livestock breeding & food processing because of lack of technology.

He said that Pakistan’s exports are rice, textiles and sports goods, which are not high in value addition. On the other hand, Pakistan continues to be the importers of machinery, petroleum products, chemicals, transport equipment, edible oil, iron & steel, fertilizers etc., which are highly value added items.

The latest developments in the region indicate a grim requirement to have a forward-looking policy on science and technology. The LCCI president said the fact is that unlike India, Pakistan has always neglected the education sector for quite a long time especially in the area of science and technology.

Last year, India’s IT exports were more than Pakistan’s total exports. In his address, LCCI’s Senior Vice President Abdul Basit called for short-term and long-term policies to achieve desired results in education sector.

He also urged the federal minister to enhance the retirement age of scientists and professors at least by five years. He said that unfortunately, a National Science & Technology Policy, enforced in 1984, could not be implemented at all and thereafter no successive government ever thought to update and enforce it. Consequently, science and technological development in the country, which also covers engineering sectors, remained at very low level.

 

[Neo]

ISLAMABAD: The four federating units have, so far, failed in getting respite from the Centre in paying back the costly loans amounting to Rs 133.831 billion by borrowing from the banks on low interest rate, a senior government official at the Ministry of Finance told The News.

“The provinces have since long been seeking permission for borrowing the loans from the open market, which is available at 4-5 per cent interest rate, to pay back the federal government’s costly cash development loans that hovers at Rs 133.831 billion as on July 1, 2006.”

The provinces have taken the loans at high interest rates ranging from 8-9 to 16-17 per cent and want to pay back by borrowing from the open market, but the federal government is not paying heed to it.

It is pertinent to mention that under the Constitution, the provinces cannot borrow directly from the banking sector without permission from the Centre. According to the latest data of loans the provinces own to pay back to the Centre available with The News, Punjab owes to pay back Rs 64.862 billion as on July 1, 2006; Sindh needs to settle up Rs 33.917 billion; NWFP Rs 24.575 billion; and Balochistan Rs 10.477 billion.

When contacted over the issue, Adviser to prime Minister on Finance Dr Salman Shah said that refinancing of the loans by the provinces is not allowed, and the cash development loan should be returned on the same interest rates on which these were expected to the provinces.

However, he said the limited restructuring of these loans can be made on case-to-case basis. The official said if the of provinces demand gets entertained, then the provinces will have substantially fiscal space and will be able to concentrate on their respective development projects.

“The provinces are of the view that cash development loans have become a liability, which is showing their respective economies,” the official. However, the official of the ministry, to a question, said that as per the amended NFC Award, provinces will get additional

Rs 80 billion form the dividable pool which will provide them substantial ease in this regard.

 

[Neo]

PAKISTAN'S FISHERIES SECTOR BOOKS 42% RISE IN EXPORTS IN FY05-06
Tuesday August 8, 2006, 5:00 pm

KARACHI, Aug 8 Asia Pulse - Pakistan's seafood exports hit a new record last financial year, climbing 41.17 per cent to US$196.15 million. This phenomenal growth in exports exceeded the financial year target of $160 million by 22.5 per cent. The country exported fish and fish preparations worth $16.466 million in June compared to $14.06 million in the corresponding month of last year, according to data released by Federal Bureau of Statistics. Furthermore, despite the problems faced by the fish processing industry, it managed to boost exports on the back of a huge tuna catch. Tuna remained the main contributor to the overall exports while the performance of the conventional sector declined slightly due to the problems faced by local fishermen. Amid fears of a ban on exports of seafood to the European Union, this growth is remarkable, as the sector has been struggling to maintain its share of the international market.

 

[Neo]

ISLAMABAD, Aug 7: The Asian Development Bank on Monday said it would consider financing the Bhasha dam whenever it received a request from Pakistan after finalising technical details of the project.

In an announcement, the ADB said it agreed with the government on the need to address the infrastructure deficit in the country for high-sustained growth and was committed to providing assistance for the purpose. Therefore, it said, the bank would consider the request for assistance for constructing large dams, including the Bhasha dam, which were important for meeting the country’s water needs and ensuring energy security.

It said Pakistan was one of the ADB’s largest and most important partners in developing Asia. Its assistance has substantially increased in recent years and amounted to $1.5 billion in 2005.

 

[Neo]

QUETTA: Federal Minister for Communications Shamim Siddiqui has said that the federal government intends to spend more than Rs 100 billion on the development of infrastructure, including a roads network, in Balochistan over the next 10 years.

He told a news conference at the Quetta press club on Monday afternoon that the government was going to implement Rs 40 billion worth of development projects in the roads sector in the next 3 to 4 years.

Flanked by Chairman National Highways Authority (NHA) Maj-Gen Farrukh Javed, General Manager NHA Attique Ahmed and other senior officials of the authority, the minister, however, added that the total allocation for Balochistan’s roads projects was Rs 8.565 billion. “This will definitely contribute a lot to the economic development of the province,” he hoped.

Giving details of the under-construction projects in the roads sector, Shamim said work was in progress on a number of projects in the province. He added that construction work on the 400-kilometre-long Kuchlak-Mughal Kot road was under way. “This will be completed by 2008,” he added. After completion of the project the journey between Quetta and Peshawar/Islamabad would take only 10 hours as against the current 24 to 30 hours.

The minister added that the road would enable the Balochistan growers to have an easy and speedy access for their products to markets in the Punjab and the NWFP, which is sure to improve their socio-economic conditions.

Shamim said that the 50-kilometre N-5 road would be completed by 2008 at a cost of Rs 986.308 million. He also said that work was in progress on the Quetta Western Bypass (N-25) project, which would be completed by 2007 at a cost of Rs 290.846 million.

Besides, he said construction work on the Kalat-Quetta-Chaman road of N-25 as well as the Lak Pass Tunnel was also under way. The 250-kilometre-long Kalat-Quetta-Chaman road would cost Rs 7 billion and it would be completed in the last quarter of 2008. Similarly, work on the Lak Pass Tunnel has also been started. The 180-meter-long tunnel, with four flyovers and an interchange, would be completed by December 2007 at a cost of Rs 800 million.

He said the NHA was also working on improvement of a 200 kilometres portion of the Kalat-Dalbandin-Taftan road, which would be completed by 2008. He added that the Karachi-Quetta RCD Highway would be upgraded.

Shamim also said that work was under way to build an alternate road linking Gwadar to Iran. He hoped that construction of these and other roads would usher in a new era of economic prosperity in the province.

The minister said arrangements have been made to appoint Motorway Police on the Gwadar Coastal Highway. Vehicles and other necessary equipment, including surveillance cameras, have been arranged for the purpose, he added.

The Motorway Police would start functioning from next month. The Motorway Police would also be appointed on the Quetta-Karachi RCD Highway.

Shamim said the decision would help improve the law and order situation and road safety on the national highways. He added that the locals would be preferred for jobs in the Motorway Police.

Source: http://www.thenews.com.pk/daily_detail.asp?id=18981

 

[Neo]

LAHORE - Pakistan’s foreign debt and liabilities have shown a hefty increase of 1.31 billion dollars in first three months of this calendar year, The Nation learnt on Monday.

By March 31, 2006, the external debt and liabilities of the country have expanded to 36.55 billion dollars, from 35.24 billion dollars in December 2005.
The total external debt of Pakistan has increased to 34.903 billion dollars while foreign exchange liabilities of the country amounted to 1.654 billion dollars by March this year.

Details obtained by The Nation showed that this hefty increase in the external debt and liabilities of the country has negated the federal government’s claim of reduction in the foreign exchange debt and liabilities. Break-up of Pakistan’s external debt and liabilities show that by March 31, 2006, the public and publicly guaranteed debt stood at 31.821 billion dollars, from 30.742 billion dollars in December 2005 while private non-guaranteed debts rose to 1.588 billion dollars as against 1.289 billion dollars during the comparative period.

Official sources said that the foreign debt liabilities of the country would further increase as the government was not only floating international bonds to raise foreign exchange, but also seeking more loans from the donor agencies for earthquake rehabilitation and ensure sustainability of the current economic growth.

Sources said that neither the State Bank of Pakistan nor the Finance Ministry had disclosed the latest quantum of foreign debt and liabilities of the country at the end of fiscal year 2005-06. They said that the central bank and the ministry were deliberately delaying the release of this data knowingly that its release would lead to a flurry of criticism against the government. Because the government had been claiming for the last two years that it had broken the ‘kashkoal’ and increase in debt and liabilities would negate this claim of the rulers, said sources.

In fact, the government had been borrowing more aggressively from the day it had broken the IMF ‘kashkoal’ in December 2004, they added. In December 2004 the federal government had refused to receive last two tranches of the PRGF loan of the International Monetary Fund that involved a total loan of 1.4 billion dollars.