Pakistan Economy - News & Updates - Archive

[Owais]

SCRAs bounce back to $15 million

KARACHI (August 13 2006): The Special Convertible Rupee Accounts (SCRAs) bounced back to reach $15 million, for the second time in FY07, on August 11. Earlier on, SCRAs, which are an indicator of foreigners' perception about portfolio investment in Pakistan, had surged to the same level on July 12.

In between, SCRAs, however, had reached a record balance of $19.4 million on July 18, but dipped to about $5 million on July 24 as USA and UK withdrew about $9 million in a single day.

Between August 7, for which the last update was available, and August 11, for which the latest update is available, the surge works out to a little over $5 million. But, considering that there was a net withdrawal of $2.9 million on August 11 alone, it appears that in between the SCRAs have surged to $17 million--maybe a day prior to scaling down to $15 million on August 11. But even prior to that Singapore's stakes under SCRAs reached had well over $32 million, indicating that Singapore had brought in fresh funds amounting to some $13 million after August 7, though it was not reported, and the actual cumulative balance was much higher than even $17 million.

The present surge, therefore, owes entirely to Singapore because cumulative withdrawals of Switzerland and USA, impacting overall balance negatively, amounted to about $16 million ($11.3 million by Switzerland and $5 million by USA) during the year so far including $0.8 million and $0.1 million withdrawn respectively on August 11.

Kuwait and Hong Kong also withdrew $1.4 million and $0.1 million on that date, leaving their debit balances at $0.9 million and $2 million, respectively. After August 7 and before August 11, UAE appears to have brought in some $0.11 million, improving its cumulative inflow on August 11 to $0.2 million, compared with $0.08 million on August 7. No other worth reporting development occurred respecting any other investor.

The generally representative KSE 100 Index, which stood at 10,847 on August 7 and has been declining since then to reach 10,525 on August 10, slipped further to 10,406 on August 11.

Besides earlier profit taking, rumours about political uncertainty, likely dissolution of a provincial assembly, and fears of retaliatory activities against recent arrests of some Pakistanis linked to alleged terrorist plot involving British planes were reported to be some of the factors behind the decline.

SBP General Index of Share Prices, a composite index covering all ordinary shares, which had earlier declined to 450 on August 8, stood lower at 446 and 443 on August 9 and 10, respectively.

Aggregate market capitalisation, which was expected to reach Rs 3 trillion on August 8 after surging to Rs 2,992 billion on August 7, stood much lower at Rs 2,941 billion on August 9, and at Rs 2,906 billion on August 10.

 

[Owais]

CBR to set up panel on edible oil industry

KARACHI (August 13 2006): The Central Board of Revenue (CBR) will form a committee which would help eliminating the intricacies and problems being faced by the edible oil industry, Abdullah Yusuf, Chairman, Central Board of Revenue (CBR) and Secretary-General Revenue Division, told reporters after a seminar on 'Value Addition in Edible Oil Refining' organised by Pakistan Edible Oil Refiners Association (Peora) at a hotel here on Saturday.

He said that the government had welcomed the idea of forming a 'committee' proposed by Peora, and added that the committee would start functioning soon. "We both (CBR and Peora) had agreed during a meeting that there was dire need of such a committee which would highlight the genuine problems and obstacles faced by the edible oil industry, besides exploring new avenues for investments," he said. He said that the committee would have representatives of stakeholders and government officials who would jointly formulate their recommendations and suggestions regarding the core issues of the industry besides ideas for attracting fresh local and foreign investment.

He, however, advised PEORA to keep itself updated with the recent modernisation and technologies being adopted by the industry of the developed and modern countries.

He said: "It is the duty of the government to look around and monitor what exactly is being done by others in this sector, and if there is any improvement requires, we must adopt it to become world class palm oil refiners."

Citing the old days, he said that gone were the days when the country was totally dependent on imported crude and refined palm oil. However, inception of new players in the industry shed the dependency level to some extent, he added. Yusuf said that the government "is committed" to ensure conducive investment climate for local and foreign investors in the country and due to the government's economic policies the confidence of investors had been restored. "If the government had not continued its policies in a consistent way, the investors could be reluctant to invest in the country because every investors first wants to have a look at the economic policies of any government and its continuity and consistency," the CBR Chairman remarked.

In his address, Peora Vice Chairman A Rasheed Janmohammad said that duty structure for crude oil and palm olien should be equal now, which should be differentiated and curtailed to some extent.

"Currently, at the import stage, the duty structure of crude palm oil and palm olien is equal, and the authorities must differentiate the two types of oil," he said.

He said that without any differentiation between these two types (crude oil and palm olien) of oil, the value-addition would be difficult for the refiners, and added that if the government provides duty differential on imported oil, the refineries would be able to add value into the imported oil in the shape of fractionation. Isa Bin Mansur, MPOB Regional Manager for Pakistan and West Asia, said that palm fruits in Malaysia were planted on approximately 4.1 million hectares, from which 14.9 million tons crude palm oil is obtained.

"Malaysia's domestic consumption of crude palm oil stands at around 1.5 million tons, while the remaining 13.4 million tons is exported to some 140 countries across the globe," he elaborated.

He said that China is the biggest consumer of Malaysian oil with around 2.50 million tons, followed by European Union (EU) countries which consume nearly 2.27 million tons. "Among other countries, India imports 0.6 million tons, Pakistan 0.92 million tons, Asean countries 0.94 million tons and African countries import 0.92 million tons," he said. He said that Malaysia's annual soybean production stands at 30.6 million tons, while the country produces 14.8 million tons rapeseed oil and 9.4 million tons of sunflower oil.

 

[Neo]

ISLAMABAD (August 13 2006): Prime Minister Shaukat Aziz has said the mega development projects initiated by the government in Balochistan province will lead to reduction in poverty, creation of jobs and improvement of living standard of the people of Balochistan.

The Prime Minister expressed these views while talking to Governor Balochistan, Owais Ahmed Ghani who called on him at the Prime Minister House this afternoon.

Shaukat said that the government is making special efforts to bring the province at par with the more developed parts of the country and in this regard special allocation of development funds have been made for the province in the current budget.

He said that the government is endeavouring to develop the coastal belt as this will provide enhanced economic opportunities to the people living in these areas. Serious efforts are being made to explore and exploit the relatively untapped potential of the province in fields like agriculture, fisheries, livestock and minerals, he said.

The Prime Minister said that government is determined to establish the writ of the government in Balochistan and bring peace and stability to the province to provide security to the people. He added that the government would ensure that conducive atmosphere exists for the implementation of development programmes and for both local and foreign investment.

Shaukat said the completion of Gwadar Port will usher in a new era of development and prosperity. The road links established between Central Asia and Gwadar would open up new vistas of prosperity and progress for the people of Balochistan, he said.

Governor Balochistan briefed the Prime Minister about the ongoing development projects and the law and order situation in the province and said that the completion of these mega development projects will bring improvement in the socio-economic condition of the people of the province. He appreciated the keen interest shown by the federal government in raising the standard of living of the people of Balochistan. He said there is visible improvement in the law and order situation in the province and the government will continue its efforts to maintain peace and security in the province

 

[Neo]

SIALKOT (August 13 2006): The airfield light system, costing over Rs 170 million, has been installed at Sialkot International Airport (SIA) to enable the Boeing 747 planes land at the airport. Talking to reporters at Sialkot International Airport on Friday, SAI Chief Executive Khawar Anwar Khwaja said the installation of lighting system would enhance the chances of starting cargo flights this year.

Khawar Khwaja said the country's longest runway, measuring 3.6 kilometres, had been completed, providing landing and take-off facilities to Boeing 747 and other aircraft in bad weather, while the construction work on passengers terminal would be executed shortly.

Khawar said that according to a rough estimate, over 10,000 exporters of Sialkot besides a large number of exporters and other passengers of Gujrat, Narowal, Hafizabad, Mandi Bahauddin, Wazirabad, Jehlum and Mirpur (Azad Kashmir) would be benefited with the completion of this mega project.

The regular functioning of the airport would not only accelerate the pace of trade and commerce activities, but would also help enhance the export volume to manifold and likely to generate wide employment opportunities in the area, he foresees.

The SIA chief executive said that the airport would, undoubtedly, bring a revolutionary change in the socio-economic development of the region. With the merging of dry port, export processing zone and now airport at Sialkot, the importance of the area would further enhance, which would ultimately help substantial increase in the exports from the area in future, he added.

According to a rough estimate, 60 percent of aircraft movement will be for domestic purpose, while 40 percent would be for the international carriers.

The potential traffic forecast for SIA is scaled down at the time of opening to 472,000 passengers a year, while estimated cargo tonnage at the time of opening is expected to be 24,000 tons. By the end of year 2012, about 53,000 tones of cargo will be lifted from Sialkot International Airport.

 

[Neo]

KARACHI, Aug 12: The outflow of foreign exchange in the wake of privatisation has started taking a painful twist for the country and may prove counterproductive if foreign investors buy more local units.

The government has been making efforts to attract foreign investors to buy units which are included in its privatisation list. So far the foreign investors who have no restrictions to remit their profits and dividend have purchased five major units.

The estimated outflow in the form of dividends of the four units would be around $102 million (Rs6.149bn) in 2006. Assuming no more privatisation and same profit earnings at the current rate, the estimated total outflow in 2007 would be around $110 million and the next year it would be $119 million.

The 51 per cent shares off-loading of Habib Bank paid the government a total $390 million. The outflow of HBL’s dividends at the estimated rate of Rs2 per share would be around Rs704 million in 2006 and Rs880 million and Rs1,056 million in the year 2007 and 2008.

The outflow of United Bank’s dividend at the estimated rate of Rs3.5 per share would be around Rs924 million, Rs1,188m and Rs1,452m in 2006, 2007 and 2008 respectively. UBL’s 51 per cent shares were sold.

In case of National Refinery, of which 51 per cent shares have been off-loaded, the outflow would be Rs542 million, Rs614 million and Rs674 million from 2006-08.

The biggest outflow will appear from the Pakistani Telecommunication Corporation (PTCL) of which only 26 per cent shares had been sold. PTCL’s 1,326 million shares were sold out and the estimated dividend is about Rs3 per share. The outflow is expected to be Rs3.978 billion in 2006 and would remain the same till 2008.

Karachi Electric Supply Corporation’s 73 per cent shares had been sold out but no dividend was expected in the next two years.

The simple calculation of a top research house said when all the shares of these four units would be sold out, the outflow would be double.

But the situation would not remain stagnant at this point as the government has been making effort to sell out Pakistan Steel, Sui Northern Gas and Sui Southern Gas companies. If the foreign investors also purchased these units, the outflow of foreign exchange in the form of profits would turn into a nightmare for the country.

The government wants more foreign exchange to finance its record trade and current account deficits and trying to manage the very high demand of foreign exchange through sale of local units.

Economists and analysts have been criticising the government for financing the deficits instead of improving the situation. The source of concern is that only few attractive units have been left to privatise and it could help the government during the current year or next year.

“Just after two years, the inflows of privatisation proceeds would be ended and the outflow of dividends would severely hit the country’s shrinking ability to meet the trade and current account deficits,” said an analyst.

He said the balance sheet of the foreign exchange account will change in next two years as imports and exports have lost the equilibrium. The disproportionate growth of exports and imports has pushed the economic managers to find some other way to meet the rising trade gap. The country’s dependence on foreign direct investment and overseas workers remittances are not enough to meet the rising demand of foreign exchange.

 

[Neo]

ISLAMABAD, Aug 12: The average inflation measured through consumer price index (CPI) rose by 7.63 per cent year-on-year (YoY) during the first month of the fiscal year 2006-07 owing to high oil prices, transportation fares and food items.

Official figures released by Federal Bureau of Statistics (FBS) here on Saturday showed that the lowest income group recorded above average inflation in July 2006. Since the current wave of inflation was mainly due to the food group and food has a relatively higher weight in the consumption basket of the low income segment of population, the incidence of inflation was higher as compared to those of other income groups during the month.

The statistics also showed resurgence in other two measures of inflation--wholesale price index and sensitive price indicator. Although both food and non-food inflation increased during the month, the food group remained the key contributor to the overall inflation.

Food inflation increased to 7.44 per cent in July 2006. The reasons for this increase as pointed out were mainly due to a weak base along with significant increase in prices of a number of important items, including tomatoes, onions, chicken farm, vegetables, fruits, milk, meat, sugar, potatoes, cold drinks, and pulses.

The statistics showed that prices of tomatoes were up by (69.35pc), onions (19.34pc), chicken farm (13.80pc), vegetables (12.92pc), fresh fruits (8.27pc), beverages (2.36pc), besan (2.31pc), pulse moong (1.63pc), betel leaves and nuts (1.61pc), eggs (1.21pc), jam, tomato, pickles and vinegar(1.13pc), readymade food (1.02pc), potatoes and milk fresh (0.84pc), tea (0.62pc), milk products and gur (0.61pc), spices (0.60pc), wheat (0.57pc), sugar (0.56pc) and meat (0.54pc).

While the non-food inflation increased to over 6 per cent during the month of July 2006. The increase in this group during the month under review was mainly contributed by higher inflation in fuel and lighting, furniture and equipments, cleaning, laundry and personal appearance and education. Increase in fuel and lighting resulted primarily due to significant increase in gas cylinder prices; higher prices of air conditioners and fans caused rise in household furniture and equipment sub-group; record high gold and silver prices pushed up inflation in cleaning, laundering and personal appearance; and higher inflation in education was the result of an increase in university fees.

The statistics showed that the price of natural gas up 8.76pc, electric iron, fans and washing machine up (1.31pc), sewing machine, clock and needles (1.02pc), plastic products (0.85pc), utensils (0.72pc) and household servant (0.64pc), airfare (10.26pc), CNG filing charges (6.58pc) and tyre and tube (0.70pc), stationery (0.96pc), tuition fee (0.80 pc), jewellery (3.65pc), laundry charges (1.69pc), washing soap and detergent (0.75pc), and watches (0.65pc).

 

[Neo]

13 August 2006


ISLAMABAD — President of Pakistan General Pervez Musharraf is expected to chair a high level meeting next week to decide a port operator for newly developed Gwadar Deep Sea Port.
The inauguration of the port in Balochistan province was being delayed because of the government's "indecisiveness" over the issue. A high-level meeting was to decide the matter on August 8 under the chairmanship of President General Pervez Musharraf but was postponed at the last moment.
Three international companies including Dubai Port World (DPW) are competing to operate Gwadar Port. Hutchision Port Holding of Hong Kong and the PSA International of Singapore have also joined the race for the port.
Sources said if the next meeting goes ahead, the winner of the contract would be announced and the port would be inaugurated during this month.
When asked why the government was delaying the selection, a source said: "This has to be decided at the highest level and that is why it could not be decided so far."
The source conceded that the three leading competitors were being backed by their governments to help win the right to operate Gwadar port. However, the DPW was said to be the preferred bidder as it was being supported by Chief Minister Balochistan Jam Yousuf and some other senior federal government officials.
At one stage, he conceded, a decision had been taken to give DPW the operating rights but later the president intervened and said let there be a fair competition among all the three international companies.
Sources said some of the officials of the ministry of ports and shipping were of the view that the terms of reference of the three companies needed to be once again looked into to decide the issue.
Gwadar port located at Balochistan is being considered a future trading hub in the region because of being so close to Gulf. Initially, the port is expected to face competition from Port Salalah of Iran, however after the completion of phase-2 by 2010 at a cost of $840 million, it is likely to become one of the busiest ports in the region.
It will provide warehousing, transshipment and industrial facilities for trade with over 20 countries including Gulf countries, Iran, Central Asian States, India, China and East Africa.
Tax holiday: Sources also said that the government would soon be announcing a 15-year tax holiday in the proposed Export Processing Zone (EPZ) being planned near Gwadar port for local and foreign investors. There will be tax exemption on customs, sales tax and excise duty in the EPZ with a view to promote substantial investment in Gwadar, Balochistan.
A number of foreign investors have shown interest to establish mega refineries, building storage capacity and undertaking other businesses in Gwadar to help expedite the process of industrialisation in Balochistan province.
With the completion of both the phases of Gwadar port, a Special Industrial Development Zone (SIDZ) with an area of 4,000 hectare has also been proposed for setting up various industries. The SIDZ is located on the north of Gwadar town at a distance of about 30km from the port.

 

[Neo]

Friday August 11, 2006

ISLAMABAD: A venture meant to generate 137.5 mega watts electricity, Gabral-Kalam Hydropower Project is under great threat of shutdown after Swat Hydropower Limited (SHL) contractors were recently told by the local villagers to wind up their business and leave the area instantly.


Seeing at stake its $ 1.2 million investment made so far on the topographic survey and geotechnical investigation of the project, the company availed all the channels available to it to make villagers realise the significance of the project but to no avail.

Initially, the villagers came up with a five-point charter of demands and the SHL agreed in principle to accept their "genuine" demands.
But later on, the villagers made a u-turn and conveyed it to the company in categorical terms that they wanted immediate shelving of this project that they firmly believed did not serve well their interests.

In such unfavourable circumstances, the contractors were left with no option but to remove their costly machinery from the site to save them from possible physical damage. The work on the project has been closed since June 8. According to its senior officials, the SHL secured a Letter of Interest from the Pakistan Power Infrastructure Board (PPIB) for Gabral-Kalam Hydropower Project on June 9 last year. As it was required to complete project’s feasibility study in 22 months, the SHL hired the services of a German company - Fischer GmbH and Co KG for the purpose against the payment of $1.3 million.

On the advice of consultant, the SHL submitted a report about the project with an expected capacity of 137.5MW and 528Gwh energy per annum to the PPIB for approval. Soon after getting a go-ahead from the PPIB on February 15 this year, SHL awarded one contract worth $75,000 for topographic survey and the other worth $407,100 for geotechnical investigations for the project at Kalam site.

The contractors mobilized their resources and shifted their machines to the site within two weeks of the contract signing for drilling bore holes at power house site at Kalam on the right bank of Gabral, a tributary of River Swat as well as weir site at Kanai Dhamaka Jheel at Azafiaabadi Kanai of village Utror. Also, the SHL paid the compensation amounts to the project affectees for their crops and land. But, then there came a notice like a bolt out of the blue for the contractors from the Utror elders on June 8 who wanted no drilling at the site. Even, the very next day, a mob pelted the site with bricks and stones, to damage machinery.

This not only brought the work on the project to an immediate halt but also made the SHL to take up the matter with local elders. After five-day long talks, the elders agreed to form a 21-member committee to come up with a solution to the apprehensions of local tribesmen. A few days later during a visit to the area, Swat DCO Shahab Ali Shah agreed to convene a jirga on the matter at Mingora on June 25 but no jirga could be held on the stipulated day due to a dispute amongst Utror tribes.

The intervention of Swat DCO, MNA Fazle Subhani and MPA Ameerzada brought about a settlement to the dispute. On July 8, the due jirga had a session at DCO Office where elders came up with a charter of demands like change of the project name, guarantee payment of compensation for land, property at market rate, keeping the height of dam at 12 meters at maximum, jobs for locals and power supply to the area at concessional rates.

The SHL forwarded the demands along with its response to them to PPIB for approval on July 11 and the Board referred the matter to the NWFP chief secretary. But the villagers, sending a shocking surprise to the SHL, retraced their course by asking the geotechnical contractors to pack up and remove their machines from the site. "We want no dam, no hydropower project in our area as they do not serve our interests", was their contention. Even 18 local tribesmen employed by the contractors left their jobs after receiving threats of "dire consequences" from elders. SHL officials claimed that in the jirga held at Kalam on August 1, the villagers stuck to their demand of project shutdown even though they were not opposed to the height of reservoir, population displacement etc.

Despite hectic efforts and continued talks with provincial and district governments, the work could not be started again. And the SHL sees the huge investment it had so far made in the project at risk and wants the federal government to ensure early restart of work on Gabral-Kalam Hydropower Project "by all means". If the reports coming from the area are to be believed, villagers are pressurized by local elders to oppose the project as they believe this would provide electricity to locals at cheaper rates, create better employment opportunities for youth and usher in a new era of development to imperil elders’ prevailing firm away over decision-making in the region.

 

[Neo]

Published: Sunday, 13 August, 2006

ISLAMABAD: Pakistan Parliamentary Secretary for Defence Tanveer Hussain has informed the National Assembly that the United States is not allowing direct flights from Pakistan due to security concerns.

Replying to a supplementary question in the National Assembly, the parliamentary secretary said the US had asked Pakistani authorities to improve security arrangements and it had also provided some equipment in this regard.

Federal Minister for Defence Rao Sikandar said the total income of Pakistan International Airlines, during the financial year 2005, from international routes, excluding flights for Haj and Umrah was Rs 47.3bn.

He said the total income (revenue) from Haj flights during the same year was Rs4.7bn and it was Rs1.7bn from Umrah flights.
He said the PIA did not generate any profit during the financial year 2005 from international Haj or Umrah flights due to the exorbitant increase in fuel price.

The minister said a proposal regarding revision of pay structures of the employees of the Airport Security Force and to bring at par with other well-paid federal government departments, including Motorway Police, was under consideration and on receipt of a well-conceived model, it would be taken up with the Finance Division.
He stated that the Civil Aviation Authority (CAA) was undertaking a project to expand the Multan airport at a cost of Rs2.66bn and the project would be completed in three years.

In response to a supplementary question, the parliamentary secretary for defence said the inquiry report of the last month Fokker crash at Multan airport would be presented before the parliament in three months.

 

[Owais]

$85 million ADB loan for Balochistan rural uplift soon

ISLAMABAD (August 14 2006): The Asian Development Bank (ADB) will shortly approve a loan of $85 million for 'Balochistan water resources and rural infrastructure development (formerly Balochistan Rural Dev and Drought Mitigation) to reduce rural poverty through investment in water resources infrastructure, command area development, catchment area conservation works and rural access roads.

Official sources told Business Recorder on Saturday that the loan aims at providing more sustainable and remunerative farming systems in 12 of the poorest districts of Balochistan--Awaran, Chaghai, Gwadar, Kharan, Khuzdar, Killa Saifullah, Lasbela, Loralai, Musakhel, Naushki, Washuk, and Zhob.

The project components include community development and support; community managed irrigation and water resources development; rural access roads; agricultural support services and project implementation support.

The executing agency of the project would be Irrigation and Power Department of Balochistan. The project would help in raising farm incomes and enhancing resilience during periods of drought through investments in irrigation infrastructure and rural access roads in the project area, sources said.

The project will also proactively assist rural communities in forming community organisations (COs) so that they are effectively operate and maintain the irrigation infrastructure.

According to sources, an estimated 120 irrigation sub-projects, comprising small storage dams, flood irrigation schemes, perennial irrigation schemes, and some rehabilitation of existing schemes would be developed under the project.

In rural communities that have received irrigation infrastructure, the project would also provide rural access roads linking them to the nearest main road, support to develop the command areas under their control and enhancing to improved agro-technologies and watershed conservation works to preserve the sustainability of the irrigation investments.

The project is targeted on the rural poor and seeks to elicit extensive community participation in subproject identification, implementation and operation and maintenance.

To achieve pro-poor economic growth, interventions in the areas of rural development, employment generation, and infrastructure are emphasised, as are support for sector-level policy reforms, particularly at the provincial level.

Crop agriculture, livestock, and wage employment (particularly in fruit orchards) are the main sources of rural income in Balochistan. Poor people, particularly tenants and the landless, lack wage employment opportunities.

A severe drought has aggravated the already limited natural resource base, decimated livestock number, and has pushed poverty levels up to 47 percent in the province (from about 35 percent in the mid-1990s). Particularly vulnerable to the drought are the poor in remote settlements where wage employment opportunities are virtually non-existent and where communities depend on unreliable rains to cultivate lands.

 

[Owais]

Ban on hand luggage on foreign flights lifted

ISLAMABAD (August 14 2006): Pakistan has lifted a ban on hand baggage on international flights although passengers are still barred from carrying liquids, officials said on Sunday. "Passengers can carry only hand baggage but not any liquid," Hafiz Abbasi, a senior official of the Airport Security Force told AFP.

Extra armed police had been guarding major airports in Karachi, Islamabad and Lahore with passengers subject to baggage restrictions and extra screening.

 

[Owais]

Prime Minister announces Rs 50 million grant for NWFP: damages caused by torrential rains

MARDAN (August 14 2006): Prime Minister Shaukat Aziz on Sunday announced an immediate grant of Rs 50 million for construction of houses damaged in the recent torrential rains in NWFP besides, a matching allocation to the provincial government for rehabilitation of the affected people.

Shaukat Aziz, who flew into Mardan to personally assess the damages, also distributed compensation cheques of Rs 100,000 each to the families of those killed in the flood at a gathering of flood affected people.

He said the Cabinet's Emergency Relief Cell has already despatched relief goods of Rs 55 million for the rain affected areas of the province.

"We will stand by you in your hour of trial and together we can face all challenges," the prime minister said.

The heavy torrential rains in the past few weeks in 14 districts of NWFP caused 194 deaths, damaged crops over 40,000 acres, thousands of houses were damaged, the farming community lost around 2,500 farm animals, while the total losses run in millions.

The prime minister said amidst the colossal damages it was inappropriate to politicise the matter as it was a humanitarian issue.

"The government is duty-bound to reach out to the people in need, without any discrimination and that is what it is doing."

He said the entire nation strongly faced the difficult situation in the aftermath of the devastating earthquake of October 8 last year, and this time, too, it will meet the challenge.

He regretted that bad weather hampered his visit to the area twice, saying he constantly remained in touch with NWFP Chief Minister Mohammad Akram Khan Durrani to monitor the situation. He was appreciative of Chief Minister Durrani for efficiently handling the situation.

Shaukat Aziz said Pakistan was created through numerous sacrifices and it was time the nation pays rich tributes to founding father Quaid-e-Azam Mohammad Ali Jinnah, when it celebrates its 60th independence day on Monday.

He also saluted the people of NWFP for their sacrifices for the creation of the country, and said the entire nation needs to work with devotion, commitment and sincerity to make Pakistan prosperous and strong.

The prime minister prayed for those who had lost lives in the aftermath of the heavy rains, and asked their families to bear the loss with equanimity.

He was appreciative of the co-ordinated efforts of the people, the police, the civil administration, and the army for their rescue and relief operations.

Shaukat Aziz was briefed by the NWFP chief secretary of the detailed loss of life and property soon after his arrival.

The prime minister was also informed that infrastructure, including damage to 330-km roads, 59 bridges, 169 water supply schemes in the province was estimated to be around Rs 321 million, while the total loss was estimated to be around Rs 1 billion.

He was informed that the provincial government had allocated Rs 50 million for restoration and rehabilitation of irrigation schemes, another Rs 50 million for roads and Rs 50 million for water pumps and earth moving machinery.

He was also briefed about the losses in federally-administered tribal areas (Fata), where 24 people were killed, while another 40 were rescued by the army.

Shaukat Aziz accompanied by Minister for Information Muhammad Ali Durrani, Minister for Inter-Provincial Co-ordination Salim Saifullah Khan, Minister for Political Affairs Engr. Amir Muqam, Minister for Religious Affairs Muhammad Ijaz-ul-Haq, State Minister for Information Tariq Azeem were received at the helipad by NWFP Governor Ali Muhammad Jan Orakzai and Chief Minister Muhammad Akram Khan Durrani.

The prime minister had an aerial view of the flood affected areas.

Before leaving for Mardan, he dispatched 10 truckloads of essential food items for the flood-affected people of NWFP.

The prime minister said the federal government was also sending relief goods for the flood-affected people of Punjab.

He said though the flash floods caused losses in some areas, the overall flood situation was under control due to the effective strategy of the federal and provincial governments in co-ordination with army. He said the concerned authorities were monitoring the situation to tackle any emergency.

The prime minister said the rains have improved the water storage and would be beneficial to the agriculture sector and power generation.

 

[Owais]

CFS investment drops by Rs 2.2 billion


KARACHI (August 14 2006): The investment in CFS recorded a decline of Rs 2.2 billion at the close of the last week, following brisk selling from investors. The investment in CFS reached its peak during the last week, but selling pressure on account of numerous rumours covering political and corporate events, reduced the presence of weak hands, translating in decline in investment.

In a slightly unusual show of behaviour, open interest in the stock futures market at KSE increased significantly by 29 percent during the week to Rs 10.8 billion last Friday (August 11) from Rs 8.4 billion on the previous Friday (August 4). This seems a bit contradictory to the recent negative trend of the market, and may also be a slight cause of concern as the ban on short selling continues at the futures counter.

Weighted average futures spread remained slightly lower at around 10.4 percent, thus remaining pretty close to the level of 10.5 percent seen on the previous weekend.

CFS investment has declined to Rs 22.3 billion on the last Friday (August 11) compared to the cap of Rs 24.5 billion seen on the previous Friday (August 4), as some investors preferred to book profits at current levels to avoid further slump recently observed.

The weighted average CFS rate at KSE stood at 14.3 percent, lower than the previous Friday's 15.7 percent. CFS rates came down due to lower demand for funds and selling by the investors.

 

[Neo]

FAISALABAD (August 14 2006): The poverty line, after adjusting for inflation, has increased from Rs 723.4 per adult equivalent in 2000-01 to Rs 878.64 in 2004-05. According to an official review of Finance Division, the poverty estimate for the 2000-01 period has been revised from 32.1 percent to 34.5 percent, whereas the overall poverty level for 2004-05 has been estimated at 23.9 percent.

This indicates that percentage of population living below the poverty line has declined by 10.6 percentage points between 2000-01 and 2004-05 period.

In absolute numbers, the count of poor persons fell from 49.23 million in 2000-01 to 36.45 million in 2004-05.

The report has claimed that decline in poverty level has been witnessed in both urban and rural areas. However, this decline was more pronounced in rural areas than in urban areas, "which is very encouraging as poverty in Pakistan is considered primarily a rural phenomenon".

The poverty gap declined from 7.03 in 2000-01 to 4.76 in 2004-05, and severity of poverty declined from 2.13 in 2000-01 to 1.48 in 2004-05, indicating that most of the poor are bunched around the poverty line. Poverty gap and severity of poverty declined in urban as well as rural areas, the report said.

The percentage of population classified as extremely poor remained almost identical in the two periods. The proportion of 'ultra poor' and 'poor', and 'vulnerable poor' declined. At the higher end, the percentage of 'quasi non-poor' and 'non-poor' increased in 2004-05, relative to 2000-01. A strong growth in economy, rise in per capita income, a large inflow of remittances, increase in spending on poverty-related and social sector programmes were the factors behind reducing poverty between 2001 and 2005, claimed the report.

Commenting over the Inequality Trends, official sources stated that coefficient is commonly used to determine the inequality levels in a Gini society. This measure was applied on the household consumption data of PSLM 2004-05.

Results show that consumption inequality had increased marginally in Pakistan between 2000-01 and 2004-05. Consumption inequality increased in urban areas as well as rural areas during this period. However, the inequality in urban Pakistan is marginally higher than in rural areas, probably due to diversification of urban workforce in terms of skill and education, leading to differentials in household earnings and consumption.

Another measure of inequality is the ratio of highest to the lowest quintile, which measures the gap between the rich and the poor. This ratio also increased marginally from 3.76 in 2000-01 to 4.15 in 2004-05. In urban areas, gap between the rich and the poor widened relatively more from 10.40 in 2000-01 to 12.02 in 2004-05, compared to the rural areas where the gap between the rich and the poor remained more or less unchanged from 2.22 in 2000-01 and 2.19 in 2004-05.

Official sources said that the government is fully aware of this widening gap, and the PRSP aims to design policies to narrow this gap.

Unemployment level during July-December 2005-06 declined by 1.2 percentage points to 6.5 percent as compared to 2003-04, which can be attributed to high economic growth rates over the past four years. During July-December 2005-06, unemployed labour force stood at 3.32 million, of which 2 million unemployed were situated in rural areas and 1.32 million in urban areas.

Unemployment rates declined among both males and females during the period under consideration. Though the levels of unemployment were higher for females during both periods, decline of unemployment among females has been larger (3.1 percentage points) than males (0.9 percentage point). Larger decline in female unemployment rate can be partly the result of employment opportunities in private sector; for example, private schools, which have grown rapidly during the last decade, prefer females for teaching primary school children. It can be partly due to increased access to micro-credit for females to engage them in economic activities.

An analysis of unemployment rates by age group showed that unemployment levels increased and were high for the age group of 50 years and above during 2003-04 and July-December 2005-06, whereas unemployment rates declined for all other age groups (figure 3). Unemployment rates were low for 25 to 49 years old labour force. It showed the availability of employment opportunities for individuals in prime working age.

The highest level of unemployment, at 13.8 percent, stood for the age group of 60 years and above, of which a large proportion had never been previously employed. Poverty and high dependency burden on working age population has probably compelled the elderly population to struggle for family support and their higher proportion is still in the labour market.

FAMILY REMAINS THE MOST IMPORTANT SOURCE OF SUPPORT FOR ELDERLY, BUT TWO TYPES OF CHANGE ARE UNDERMINING THIS TRADITIONAL SUPPORT: first, the declining fertility and increasing life expectancy resulting in fewer family members to care for more elderly members and secondly, the shift from extended family system to a more nucleated system, which appears to have limited the decision making power of elderly persons regarding the use of household resources.

Unemployment rates were also high for the youth population, 10-24 years old, during the first half of 2005-06, as people of this age group are usually new entrants and lack skills to adjust in the labour market. To address the issue of educated unemployed 'Rozgar Scheme' has been announced in the budget 2006-07. It was planned to be launched in July 2006 by National Bank of Pakistan.

Educated persons in the age bracket of 18-40 years may get loans for self-employment under this scheme, which will create 400,000 jobs. The upper limit of the credit is fixed at Rs 100,000. Under the scheme, people can establish public call offices, mobile utility store, get franchise for utility stores and own transport (taxi etc).

Examining unemployment rate by gender shows that unemployment rate among males decreased considerably for the 10-34 age group. Again, this pattern indicated an increase in employment opportunities during the last three years.

Unemployment rates declined considerably among females of 10 to 49 years olds between the first half of 2005-06 and 2003-04. However, the highest unemployment rate exists for women of 60 years age and above. The unemployment level among elderly women is much higher than unemployment level found among males of the same age group.

It clearly indicates that unemployment problem of elderly population is primarily related to women. There is need to probe the causes of such high unemployment rate among females of this age group, the report said.

 

[Neo]

PESHAWAR (August 14 2006): Launching of mega Lowari Tunnel project reflects the vision of President Pervez Musharraf in bringing economic prosperity to the less developed areas of the country. This observation was made by Zia-ul-Haq Sarhadi, Member Executive Committee Sarhad Chamber of Commerce and Industry (SCCI).

In a press statement issued here on Sunday, Zia Sarhadi said that with completion of the project, the road link through Lowari Tunnel will serve as hub of trade activities between Pakistan, Tajikistan Uzbekistan and other Central Asian Republics via Wah Khan Corridor in Chitral.

The project, he said, was a demand of people of the district and would bring an economic revolution in the area.

Zia said Chitral has huge mineral resources and abundant production of delicious fruits. It has big deposits of Iron ore, lead, copper, gold, mica, orpiment, marble, granite and soapstone besides mines of Aquamarine gemstone.

The road links, he continued, will facilitate the large-scale production of these minerals. However the commercial production could not be carried out without the investment of Multinationals Corporation who will bring in sophisticated technology of mining and further processing of the available minerals.

The involvement of foreign companies will also ensure easy access for value added mineral products in the world market to earn foreign exchange.

Chitral produce different kinds of fruits, which includes apples, apricot, pear, grapes, pomegranate, fig and walnut. The non-availability of market outlets causes a 60 percent rot and waste of fresh fruits.

The Lowari Tunnel will enlarge the market and ensure better return to the fruit growers. The export of surplus production of fruits would need proper grading and packing. Moreover, the construction of cold storages will preserve the early varieties of fruits for export.