Pakistan Economy - News & Updates - Archive

[Owais]

Pak-China Trade and Economic Development Forum established PESHAWAR: To give boost to the trade between Pakistan and China, Pak-China Trade and Economic Development Forum has been established.

The forum President Ziaul Haq Sarhadi, talking to newsmen here Saturday, said that forum was built in collaboration with NWFP government so that traders of the province could come into direct contact with the Chinese traders.

This forum comprises various people from local business community including provincial secretary for trade and commerce, he said.

Ziaul Haq said the forum would take up initiatives for the exchange of traders’ delegations from both countries.

An international trade fair would soon be held in Peshawar, he added.

 

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LAHORE (August 11 2006): With the functioning of Sundar Industrial Estate (SIE), there will boom in industrial activities and Punjab's GDP is expected to increase by over 25-percent. Punjab Secretary Industries Anwar Ahmad Khan stated this during his visit to the Sundar Industrial Estate.

Mansoor Abbas, Director, Punjab Industrial Estates (PIE) and industrialists of Sundar Industrial Estate (SIE) were present on the occasion. Anwar maintained that industrial production volume is likely to increase with the functioning of industrial units in 47 different sectors at the Estate. Appreciating the efforts made by the management of SIE, he expressed the hope that the Estate would be functional within stipulated time.

 

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KARACHI (August 11 2006): The growth of Pakistani auto industry, which is almost touching the figure of producing 200,000 four wheelers annually has resulted in an increased interest for making fresh investments by Japanese automobile industry, according to Japan External Trade Organisation (Jetro) here.

In a press release Jetro said that it had organised and dispatched an automotive study mission to Japan from July 22 to 29, consisting of eight chief executives of leading automotive vendors of Pakistan. The participants, while observing the latest die making and press processing methods, also exchanged views and ideas with members of Die making association of Japan.

The study tour provided Pakistani vendors with the opportunity for amplifying their public/personal relations with the Japanese members, who were briefed about the prevailing situation of auto vendors in Pakistan.

Numerous study missions of similar nature have been organised in the past by various organisations, however, to their long duration of more than two weeks, it was always difficult for the chief executives to accommodate such a schedule. Considering this situation, a tailor made special study programme of an appropriate duration of seven days was organised by Jetro to enable chief executives participate and observe the press processing, die making, particularly making casting dies, machine tool makers and press parts welding shops of automotive assemble plants.

Expectedly, the mission provided every participant a chance to discuss and exchange about all the concerned subjects with their counterparts. They also visited die-making organisations and discussed the possibilities of future technical exchanges between the two countries.

 

[Neo]

LAHORE (August 11 2006): Punjab Chief Minister Chaudhry Pervaiz Elahi has said that Lahore Mass Transit System project would be launched in July 2007 and its first phase would be completed by 2010. He said international investors are showing keen interest in the project costing Rs 155 billion.

He expressed these views while presiding over a high level meeting held to review Lahore Mass Transit System project, here on Thursday, disclosed an official.

Chaudhry Pervaiz Elahi said that this mega project would not only result in provision of modern travelling facilities but also leave a positive impact on the living standard of the masses. "A separate authority would also be constituted for the implementation of Lahore Mass Transit System. This project would be completed within next five years," he added.

According to him, this project of international standard would comprise an underground tube system and latest ground level rail system. Twenty-seven km long first phase of the project would be from Hamza Town to Shahdara and would comprise 22 stations out of which 12 would be underground.

This phase would be 12-km long at ground level from Hamza Town to Linear Park Model Town and 10-km underground from Linear Park to Data Darbar via Ferozepur Road, Fatima Jinnah Road, Mall Road, Lower Mall while 5-km will be from Data Darbar via Badshahi Mosque to Shahdara.

He said that the second phase would start from Thokar Niaz Beg and pass from Chauburji, GPO Chowk, McLeod Road, Railway Station and conclude at G.T. Road. "Implementation of this project would boost constructive activities and generate job opportunities at a large scale. This revolutionary project of communication would serve as link between different areas of Lahore besides improve the image of the city," he added.

He said that the government is taking solid measures for the provision of better communication facilities and elimination of environmental pollution. He said that Lahore Mass Transit System would operate through electricity that would greatly help maintain a clean environment. "Tourist activities would accelerate as a result of this scheme, which would also result in improvement of the socio-economic conditions of the people as well as economy of the province.

Later, Regional Director of international company MVA Asia Ltd, Mazhar Iqbal gave a briefing about the project.

Provincial Minister for Transport, Rana Shamshad Ahmed, Chief Secretary, Salman Siddique, Chairman P and D, Suleman Ghani, Secretary Transport, Agha Nadeem, Secretary Communication and Works, Ahmed Yar, DCO Lahore, Mian Ejaz, Special Secretary Finance, Azmat Ali Ranjha and other senior officers were present.

 

[Owais]

$40 billion exports target projected by 2012-13

ISLAMABAD (August 12 2006): The Planning Commission has projected a $39-40 billion exports target by 2012-13to take the share to GDP from 12 to 15 percent. Sources said the plan, based on two-pronged strategy, was prepared by the Planning Commission to achieve the enhanced target of exports and its being placed before the stakeholders, in particular exporters, here on Saturday for their views.

Planning Commission Deputy Chairman Dr Akram Shaikh will chair the meeting which will be attended by policy makers, exporters and concerned ministries and divisions officials.

The Planning Commission is of the view that traditional strategy will not work to the expectations to get enhanced share in today's competitive world. It wants more vibrant role from the private sector to take targets to the new heights.

Pakistan's exports are on the rise for the last few years but the top brass are still not satisfied with the share to GDP that currently stands at 12 percent. Shortfall in exports in 2005-06 added to their concern. These feelings led to serious thinking to have a new approach to ensure a U-turn in exports.

The policy makers are of the view that main objective of setting up a long-term exports target is to have a clear destination with a clear objective. They say that the strategy will have to get enhanced exports target through diversification of the markets and exportable surplus.

The policy makers are also giving high priority to public sector, in particular the exporters, to get the job of increased exports done. They said that the government would really push forward the exporters by facilitating them to concentrate on non-traditional markets and items to get the exports target. The policy makers also want to listen to private sector representatives before finalising the exports strategy.

Sources said that President General Pervez Musharraf and Prime Minister Shaukat Aziz had tasked the Planning Commission to prepare an exports plan to increase the exports shares to GDP from existing 12 percent to 15 percent. The matter was discussed in more than one meetings during last few months and as a follow-up of the consultations the Planning Commission has worked an exports plan based on long-term strategy.

 

[Owais]

Over Rs 2.907 billion funds misuse detected in NHA accounts

ISLAMABAD (August 12 2006): The Auditor General of Pakistan (AGP) has unearthed misappropriations of more than Rs 2.907 billion in National Highway Authority (NHA) accounts, exposing wasteful expenditures and overpayments by the Authority. According to the audit report, the NHA suffered a loss of Rs 1.142 billion due to non-competitive award of works.

The construction work of Lyari Expressway, Karachi, was awarded for Rs 4.892 billion to Frontier Works Organisation (FWO) without tendering, on negotiation basis, at 9.89 percent above engineers estimate in May 2002, whereas the work of Karachi Northern Bypass Project (Package-II) was awarded for Rs 645.175 million through open bidding to ECI the same month at 15.78 percent below engineers estimated cost.

Deviation from codal provisions regarding tendering procedure and acceptance of higher rates during negotiation caused unjustified expenditure of Rs 1142.831 million, the report said.

It said that the Authority caused a loss of Rs 478.777 million to national kitty due to wasteful expenditures. It was observed that the NHA did not plan the Additional Carriageway Chablat-Nowshera Project properly. That resulted in an abnormal delay of 10 years in its completion.

The Authority did not fulfil the prerequisites, like site clearance and availability of funds, and design of the project was deficient which called for frequent changes during execution. This hampered the progress of contractor and consequently, escalation claims of Rs 478.777 million had to be paid to the contractor.

In another case, the Authority suffered a loss of Rs 302.702 million due to payment of escalation for delay on the part of the contractor. The NHA paid price escalation beyond contract period of Islamabad-Murree Dual Carriageway although progress reports attributed the delay in completion to DITCO for deployment of inadequate and old machinery and less manpower. The audit report shows that NHA faced a hefty loss of Rs 187.503 million due to incorrect rates in Kohat Tunnel Project.

The NHA management did not derive new rates from composite schedule of rates 2000 for the items whose specifications were changed to NHA general specifications. Application of rates quoted on the basis of original contract specifications resulted in overpayment of Rs 187.503 million.

It was observed that Director Revenue NHA, Islamabad received less revenue in the account than actually realised by the contractor as was evident by the comparison of monthly statements of toll plazas. Non-depositing of actual revenue in NHA account resulted in less receipt of Rs 106.910 million. The institution also suffered a loss of Rs 91.557 million on Mansehra-Naran-Jalkhand project.

The report further says that NHA on Kohat Tunnel Project and Rahim Yar Khan-Trinda Muhammad Pannah-Bahawalpur Project paid Rs 28.947 million and Rs 13.514 million, respectively, on account of advances for relocations of utilities but no adjustment was made despite the fact that projects had been completed. Non-observance of provision of code resulted in non-adjustment of advances of Rs 42.461 million.

 

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President vows to launch manned flight into space

ISLAMABAD (August 12 2006): President General Pervez Musharraf has vowed to exploit space through advancement in science and technology. He was addressing the first commencement ceremony of the Institute of Space Technology (IST) at Rawat near Islamabad on Friday.

The President said the Space and Upper Atmospheric Research Council has been tasked to exploit space, which could bring enormous economic benefits to the people of Pakistan.

He asked space scientists to develop the capacity to indigenously produce and launch different types of satellites into orbit through indigenous launch vehicles. The President vowed to launch a manned flight into space and even to moon through indigenous efforts in coming years.

He said the country should also develop the capacity to send unmanned aerial vehicles into orbit as it has acquired the basic technological know-how to reach space and moon. The President said the establishment of the Institute of Space Technology is a milestone in the direction of taking Pakistan into space age.

The President said Suparco, which was neglected since its inception in 1961, has now been revived with new directions and goals to bring Pakistan on the world map of space-faring nations.

He said the premier space organisation has been brought under the umbrella of National Command Authority at par with other strategic organisations to achieve strategic objectives. He lauded support and efforts of the various organisations to making a premier educational institution in a short period of time.

The President announced Rs 500 million for Suparco in the first phase and said Rs 500 million would be provided to top space research organisation in the second phase. The President, who is also the chancellor of the IST, conferred degrees among first graduates of passing out from the institute. He also awarded goals medals to top achievers in various disciplines.

 

[Owais]

Steel import from China increases

KARACHI (August 12 2006): Steel import from China has surged substantially by around 35 percent during the last three months due to low price factor and availability of the stocks of different products in bulk, market sources said on Friday.

They said that private importers had started placing steel import orders in China around three months back when they were quoted lesser rates there than the international market.

"The import of galvanised coils, hot-roll coils and cold-roll coils from China have grown smartly to around 35 percent as we (importers) get lesser rates of these products compared to European products which are still not viable for consistent and smooth trade," said a Karachi-based importer.

Commenting on the prices in China, he said that the international market including China's market is seeing a major fluctuation phase these days and the prices of different steel products varies everyday, therefore, it is difficult to declare any commodity's price now with certainty.

"However, we could say that the prices of galvanised coils in China are ranging between $780 to $800 per tonne, while hot-roll coils are being tagged around $470 to $500 per tonne," he said and added, "Similarly, cold-roll coils are currently being sold at around $530 per tonne."

Market sources have pointed out that steel prices in the European region are still higher and the major import orders are being placed in China and Ukraine by the local importers.

"Some factors which have diverted the importers from Europe to China, is the facility of chartered vessels and availability of the material in bulk," a senior trader said.

Citing reasons of decreasing trend in the Chinese steel prices, he said, "The steel production in China has witnessed a mammoth growth during the last two years, so they have sufficient stocks in hand."

He added that China has also widened its clientele and was receiving a number of big orders from different countries around the world.

"Around two years back, China was one of the consumers of international steel and used to import huge quantity of different steel varieties, however, now the enhanced production capacity has provided an edge to China in export of steel," said another importer.

He added that previously China's share in the total imports of the country was not countable due to similarity in the prices with different competitors, however, when China offered lesser rates the trade gained momentum. Some of the importers have hinted more decline in the existing rates in China and said that in the next two to three months the prices of steel products could fall further.

"Weather conditions mainly moisture in China usually affect the material and cause rusting during the months of November and December, therefore, we expect more decline in almost every commodity prices besides increase in import orders," said another trader.

 

[Owais]

Switzerland, Hong Kong and UK pull out $1.5 million from SCRAs

KARACHI (August 12 2006): Switzerland, Hong Kong and UK pulled out on August 07 amounts worth about $1.5 million from their Special Convertible Rupee Accounts (SCRAs) maintained in Pakistan for portfolio investment.

Switzerland withdrew $1.1 million followed by Hong Kong and UK who withdrew $0.3 million and $0.1 million respectively. The overall impact of these withdrawals on the cumulative total was, however, limited to $0.6 million only because of fresh arrivals of $0.9 million from USA.

As a result of the foregoing developments, cumulative withdrawals of Switzerland during the year so far amounted to $10.2 million and those of Hong Kong to $1 million. UK's cumulative flows stood lower at $1.27 million on 7th August compared with $1.35 million on 4th. No other worth reporting development took place in the case of any other investor country. No update was available after 8th August, which provided figures for the 7th.

On the stock front, KSE 100 Index, which continued rising amid leaps, relatively smaller jumps and a couple of back-steps between 24th July and August 07 to reach 10,847 from a low of 10,350, slipped to 10,828 on 8th August. Profit taking was stated to be the major factor behind the decline. SBP General Index of Share Prices which stood at over 452 on 7th August also declined by few points to 450 on 8th. Aggregate market capitalisation, in the meanwhile, declined from Rs 2,992 billion on 7th August, a figure short of only a few billion rupees from the landmark Rs 3 trillion, to Rs 2,985 billion on 8th August.

 

[Owais]

Micro-scholarship programme: US envoy awards $40,000 grant to RCDC Gwadar

GWADAR (August 12 2006): US Ambassador to Pakistan Ryan C Crocker signed an agreement on Friday to award a grant of 40,000 dollars to Rural Community Development Council (RCDC), Gwadar to run English Access Micro-scholarship Programme at Gwadar Grammar School for next two years.

The goal of the programme is to prepare bright students in both written and spoken English, so that they can more easily integrate into global marketplace and have access to the world.

 

[Owais]

US ready to help Pakistan launching communications satellite ISLAMABAD: The US was ready to help Pakistan in building and launching its communications satellite, said US Coordinator for International Communications and Information David A Gross here on Friday.

“ We are ready to hold bilateral technical talks over launching Pakistan’s communications satellite,” David A Gross told a news conference.

Pakistan was going in right direction in terms of policies regarding economic development, David said adding that Pakistan had great potential for foreign investment.

Lauding the pace of development in telecommunication sector, David A Gross said the US investors were keen to take the benefit of investment opportunities in various sectors in Pakistan.

 

[Owais]

Debate concerning PSM's privatisation at NA floor continues

ISLAMABAD: The National Assembly finally kicked off on Friday a debate on the Supreme Court’s judgment with regard to the privatisation of Pakistan Steel Mills.

The opposition demanded the resignation of Prime Minister Shaukat Aziz and warned that the apex court judgment could lead to the use of 58-2 (b) of the Constitution, leading to the National Assembly dissolution.

Opening the debate, Aitzaz Ahsan said if the prime minister does not step down, it would make the situation worse that could be used as an FIR for using Article 58-2 (b) of the Constitution.

Treasury member Farooq Amjad Mir termed the Supreme Court verdict a guideline for the government’s future programme of privatization. He reminded the fate of Supreme Court’s decisions during the governments of Benazir Bhutto and Nawaz Sharif.

As Aitzaz Ahsan spoke, there was pin-drop silence. Whenever he quoted paragraphs from the Supreme Court’s judgment, the opposition members raised the slogan of ‘Resign, Resign’. When Farooq Amjad Mir, during his speech, called Benazir Bhutto an absconder, rumpus started.

Earlier, at the speaker’s chamber, an agreement was reached between the opposition and government for debating the Supreme Court’s judgment till Friday next. Criticising the government’s privatisation policy, Aitzaz alleged that vital national assets are being sold without following set procedures, resulting in huge losses to the national exchequer.

Aitzaz alleged the government was selling strategic assets of the country. The PSM is the largest steel producing industry of the country. “What the Supreme Court has said in its verdict falls under the definition of corruption,” he said, asserting action could be initiated under Clause 9 of the NAB Ordinance. He said the Supreme Court has raised objections to the cabinet privatisation committee.

He said no corruption case has been instituted against Javed Hashmi and Makhdoom Yousaf Raza Gillani, but they are kept behind the bars. The Supreme Court judgment is an FIR against Prime Minister Shaukat Aziz, Aitzaz said, adding, “The government failed to prove a single case against Benazir Bhutto despite the fact that NAB courts belonged to them.” He said if such a decision has been given against Indian and UK prime ministers, they would have quit.

“The allegations stand proved against Shaukat Aziz; therefore, he should resign and set a new tradition,” he said. Treasury member Farooq Amjad Mir said the government has always held the judiciary in highest esteem and gives due respect to the apex court’s decision.

He said during the previous governments, the process of privatisation was carried out through executive orders and there were no rules governing the process. He said the government would try to remove shortcomings, which have been pointed out by the Supreme Court and carry out the privatisation process of the PSM afresh. He recalled the attack on the Supreme Court during a previous government because it did not give the verdict of its liking. The debate will continue today.

 

[Owais]

PM eyes wide scope for Pak-Iraq cooperation
ISLAMABAD (updated on: August 12, 2006, 23:21 PST): Prime Minister Shaukat Aziz on Saturday said Pakistan and Iraq have historic relations based on common faith and culture and the two countries need to enhance co-operation in the diplomatic, cultural, educational, trade, investment and economic fields.

Talking to Jaffar al Hakeem, President Democratic Alliance Iraq who called on him at the PM House this afternoon, the prime minister said that the people and government of Pakistan want to see development stability and prosperity in Iraq.

He said the government is willing to provide all possible help for the reconstruction of Iraq.

The prime minister said Iraq having rich human capital and natural resources has a vast potential to develop and succeed.

Peace, harmony, security, leadership qualities and unity will help Iraq leverage its true potential. He emphasised the role of Ulema and religious leaders belonging to different groups for creating a sense of nationhood to promote interfaith, inter-sectarian harmony in the country.

He said it is important that people of Iraq have a hope for a better future, but added that for this economic opportunities and avenues of development in the country should be created so that its people may control their destiny.

He said Pakistan respects the sovereignty and territorial integrity of Iraq.

Jaffar al Hakeem appreciated the support provided by Pakistan in the reconstruction of Iraq. He reaffirmed the views of Pakistan Prime Minister about the need to enhance co-operation between Pakistan and Iraq in economic, social, diplomatic fields.

Jaffar al Hakeem said only harmony and unity would enable Iraq overcome the challenges faced by the country.

 

[Owais]

Pak-Russia trade hits 50 percent increase


ISLAMABAD (updated on: August 12, 2006, 23:26 PST): Fifty percent increase has been registered in trade between Pakistan and Russia said Consular in Pakistan Embassy in Russia Abdul Matin Khan on Saturday.

In an interview with Radio Moscow he expressed satisfaction over the progress in relations between the two countries.

He recalled the Shanghai Co-operation Organisation conference held in June in which leaders of the two countries President Putin and President Pervez Musharraf described the two countries' future relations as "bright".

Khan said that bilateral trade agreement is expected between the two countries soon.

 

[Owais]

Preparation of mega projects: Planning Commission directives to provinces

ISLAMABAD (August 13 2006): The Planning Commission has directed all provinces/regions/territories to prepare mega projects according to their needs and environment.

The projects should include components of watershed management, fuel wood and timber plantations, farm/agro forestry, flood protection, irrigated plantations, recreational and tourism plantations, bio-diversity, rangelands (grazing), eco-tourism, NTFP, alternatives of fuel wood, timber and grazing for sustainable livelihoods.

New concepts like forests role in protection from tsunami, earthquake, climatic changes and contribution of various types of natural forests and plantation in the country must be considered, said minutes of the meeting, chaired by Deputy Chairman Planning Commission on forestry mega projects and future plan of action.

The meeting reviewed long-term multipurpose forestry mega projects to achieve the MTDF, MDGs and 'vision 2030' targets. It also discussed capacity building for sustainable forest and watershed management, initiating demand management practices, restoring degraded forests and establishing, planning, managing, networking and monitoring of forests.

Deputy Chairman Planning Commission, Dr Akram Sheikh, said that the government was giving special importance to environment and gradually environment integration was taking place in the development projects and programmes. The government has also taken several steps to ensure green environment conservation, he said.

In the MTDF, the government has allocated Rs 28.3 billion for environment sector. Out of this, Rs 8 billion is for green sector, Dr Sheikh said, adding that Federal PSDP for environment has been increased from Rs 500 million to Rs 6 billion in 2006-07.

The Deputy Chairman said that despite efforts by both federal and provincial governments, forest management and forestry services in Pakistan have not kept pace with the needs of rapidly growing population and rapid changes in socio-economic conditions.

"There is dire need that federal and provincial governments come forward to cope with the emerging challenges in this sector," said, and added that lack of technology was the main cause of backwardness. He stressed the participants to come with realistic forecast figures and propose ways and means to enhance forest cover.

Forests and plantations are degrading throughout the country: the former due to over-exploitation and land use change, and the latter due to shortage of irrigation water and mismanagement.

Reliable statistics regarding current and projected supply and demand of timber and non-timber produce are not available, said Member Food and Agriculture, Dr K Abdullah Malik.

Inspector-General of Forests informed the meeting, quoting FAO estimates, that the country was losing 2,700 hectares every year and, to achieve the target of 6 percent of forest areas, there was need to plant on about one million acres land. There is also need to fill up 22 percent barren natural designated forests. The representative of Erra on environment said that Erra was supporting only those projects where there had been physical damage.