Pakistan Economy - News & Updates - Archive

[Neo]

KARACHI (August 14 2006): The profit of the Oil and Gas Development Company in the year ended on June 30, 2006, is likely to show a growth of 45 percent over the preceding year due to higher gas and oil production and rising oil prices. OGDC is to announce financial results for 2005-06 on August 15 and, based on estimates, the company's EPS may reach Rs 11.09 for FY06.

The scrip trades at a price-to-earning multiple of 13.11x.

The cumulative earnings per share of OGDC during 9 months of FY06 was Rs 7.72 per share. The average crude oil prices surged at a level of $62.88 per barrel during April-June 2006, as compared to $58.105 per barrel in January-March 2006. However, the average annual price of crude oil, during FY'06 is calculated at a level of $57.98 per barrel from $41.58 per barrel in FY05.

Taimure Akhtar, research analyst at Alfalah Securities, said that the company had posted a cumulative earning of Rs 7.72 per share (translating in to net profit after tax of Rs 33.204 billion) as compared to Rs 5.68 per share in corresponding period of previous year. However, the cumulative earning of the company during 9 months was equal to full year earning of FY05 (EPS Rs 7.67).

He said that the production of crude oil during nine months of FY'06 reached the level of 14.385 million barrels (39,961 bopd) as compared to 14.162 million barrels (39,338 bopd). However, gas production reached the level of 354,600 mmcft (985 mmcfd) as compared to 336,600 (935 mmcfd). The comparative growth in between these two quarters was low due to no scheduled completion of any plan during that time frame.

"Our expected crude oil production level for FY'06 of 42,130 bopd (annual production of 15.166 million barrels) portrays the production per day growth of 7.67 percent over the production per day in FY'05.

However, the production of gas in FY'06 is expected to reach the level of 926.5 mmcfd (annual production of 333,523 mmcft). The expected growth in production is having the back of anticipated slight increase in utilisation ratio due to the pressure of government to increase exploration activities.

"Furthermore, we expect the top line to increase by 41.57 percent to Rs 121.828 billion in FY'06 from Rs 86.058 billion in FY'05.

THE EXPECTED GROWTH MAY BE ATTRIBUTED TO THREE MAIN FACTORS: expected increase in the rate utilization, hence increase in production; upward revision in the gas well-head price of Qadirpur gas field by 38.70 percent, which has a major role in the growth of top line; and rapid upsurge in the price of crude oil from $41.58 per barrel to $57.98 per barrel by the end of FY'06 (an increase of 39.44 percent).

"Though the earning of company is not much sensitive to crude oil prices, on the basis of above growth expectations for production, top line, and earning of the company our updated full year earning forecast is Rs 11.09 per share (translating into after tax profit of Rs 47.709 billion) for FY'06 and Rs 14.02 per share (translating in to after tax profit of Rs 60.294 billion). We expect the earning growth of 44.59 percent over the earnings of the company in FY'05.

"The company is likely to pay dividend of 3.25 to 3.50 rupees a share.

It has already paid a dividend of 5.25 rupees a share. In our view, OGDC is fast approaching a distinguished status among the E&P sector companies, where it possesses a large number of concessions, both in offshore and onshore areas.

The company has an exploration target of 50 wells for FY07, which has been rationalised due to realistic estimates of human resource challenges faced by the company in the area of geological and geophysical services.

"The recently adopted development plan of increasing drilling density in development fields has brought prudence to the decision making echelon, considering the fact that the company is a public sector entity controlled by the Government of Pakistan.

"The plan, as we have already mentioned elsewhere, comprises seven development fields, including Chanda, Qadirpur, Dhodak and Dakhni. These fields contain balance recoverable reserves of approximately 40.72 million barrels oil and 4.6 TCF (trillion cubic feet) gas in place.

Application of this plan means reduction of drilling dry holes to a considerable extent, due to the fact that such efforts would be expended in fields where oil/gas reserves have already been found. As per our estimates these fields will contribute to almost 90 percent of the revenues from this select portfolio of seven fields, and Qadirpur field would rank top, based on the prospects of increasing gas production from present 14,300 MMCFT to 22,464 MMCFT at the completion of an estimated project life of 2.25 years.

"We believe that OGDC will be able to raise its EPS in the next five years by approximately Rs 16.54, discounted at 10%. The fundamentals are largely skewed in favour of the company, and we believe that the development plan alone would build a potential upsurge for the bottom line."

 

[Neo]

‘Subsidy’ for research and development


By Arsalan Ghani
Research and development (R&D) is the main philosophy behind successful industries. From idea creation, developing product, marketing and enhancing operations, R&D plays important part in every step.

Without R&D, the industry becomes stagnant and looses its competitive advantage. That’s why it has become an important area of concern for developed countries. Although they have high cost of industrial operations and manufacturing, their industry still thrives because of the R&D culture.

Industrial R&D comprises following activities: development of new materials and products; increasing existing materials and products; development of new technologies; enhancing of the existing technologies; management and market research; industrial operations and supply chain research.

The R&D project starts with a precise description and includes enlisting resources, time, budget and milestones. After its completion, an audit is performed which evaluates the project. The outcome of a R&D project is a publication which details all the project activities, milestones and results. These publications are then used by peers (industry and academia) for critical analysis. By this a complete benefit of R&D activity is realised which, in turn, benefits the industry as a whole.

Pakistani government and its leaders have by now realised the importance of industrial R&D and the issue was on the agenda in economic policy making in last financial year and also in the current year of 2006 – 2007. Textile sector including garments and finished goods were included in the scheme and an export subsidy was given to these sub-sectors under the head of R&D subsidy.

However, for the implementation of a successful R&D process, necessary resources are required. Only one resource will not serve the purpose. Money in this case is available to companies for research through official subsidy. What about the other resources, i.e. researchers, machines, materials, previous research literature database, etc. which are important pre-requisites to start R&D activity.

As a matter of fact, no textile industrial unit would be willing to spare its machines and raw materials for R&D purpose. It is considered a huge loss to dedicate such resources for research as it decreases daily production efficiency and increases wastages. Attaining short-term goals is a top priority for managers, executives and share holders and they will not be confident to follow this line of action which requires long-term planning.

Researchers, who provide the intellectual content in the activity are few in numbers. There are hardly any managers in the industry dedicated to research and development. All of them devote their 100 per cent time to complete the core activity of the company i.e. production. Moreover, in existing textile institutes in the country, there is a huge shortage of professional researchers.

Under such circumstances, it is not clear how the government realises that the initiative for industrial R&D could be triggered through subsidising exports.

Besides, there are no details available as to how many R&D projects have been completed or are still in pipeline on the base of which the textile R&D subsidy is claimed in financial year 2005-2006 by exporters. Neither there are any details and publications on the R&D results to-date. In the absence of any R&D activity in the industry, this subsidy could only function as a normal export subsidy or industrial survival subsidy.

The way this subsidy is dragged to next financial year is also questionable. Despite of the absence of any industrial research policy, again millions of rupees are planned to disburse.

There should be a central controlling authority looking after industrial R&D and working in close partnership with research institutes. Close monitoring of R&D budget and it is spending in a proper way must be ensured. A pragmatic research is the core dogma, if applied can boost the value of textile products and industrial expansion.

 

[Neo]

Managing threshhold inflation for growth



THERE is considerable acceptance in the economic literature that some degree of inflation is inevitable for an economy to grow.

Traditional Philips Curve traces the inflation and unemployment nexus and proves that inflation has negative relationship with unemployment. Inflation is like a lubricant which is essential to sustains the momentum of economic growth and is harmful only when it rises beyond a certain threshold level that varies from economy to economy.

In Pakistan, inflation remained below the threshold level of five per cent during 2000 to 2004. In this period, the economic growth was also lower. The inflation data for fiscal year 2004-05 showed a weak response to monetary tightening whereas economy continued to grow strongly. Real GDP growth at 8.6 per cent was substantially higher in FY 2004-05 than the targeted 6.6 per cent, thereby, raising pressures on productive capacity of the economy and leading to a surge in imports.

The rising capacity utilization, high energy costs and shortages of foodstuff substantially added to inflationary pressures. All these factors originated from supply-side and thus CPI inflation averaged 9.3 per cent in FY2004-05, substantially above the five per cent target.

The gradual monetary tightening was warranted only to keep demand side pressure under control. However, a pro-active monetary tightening was least desirable option which could derail the growth momentum in the economy. The higher inflation of 2004-05 was only culmination of rise in support price of wheat and its sympathy effect.

In short, it was only petroleum and wheat and monetary tightening was not prescribed for containing prices of any one of them. It was smoothing of oil prices and better wheat supply management that brought inflation down by 1.4 percentage points. The evidence is sharp fall in food inflation.

The policy induced component of the inflation i.e core inflation remained stable in a narrow band of 6-8 per cent for the last three years. It means it is not monetary tightening but better supply management which brought inflation below target.

The government and the SBP have so far avoided heavy handed response to tame inflation that could derail the ongoing economic upturn. The SBP avoided a sledgehammer policy response in the wake of rising inflation during the last two years and preferred to strike a balance between sustaining the growth momentum and containing inflation.

Real GDP growth target of seven per cent for the current fiscal year 2006-07 demands investment rate of 20 per cent of GDP. The investment in capacity expansion and new capital spending would be discouraged by monetary tightening. This would be detrimental to growth.

At a time, when the government is providing fiscal stimulus for growth and investment, the monetary policy runs counter to fiscal policy targets. The government needs to finance its huge current account and fiscal deficits.

The worst affected by the interest rate hike would be the government. Inflation can only be controlled by administrative measures to curb extra market forces which exploit poor consumers. Competition law could take care of this problem.

The SBP itself admits that, “In contrast, the distinct feature of restraining inflation to 6.5 per cent during FY07 together with accelerating GDP growth to seven per cent makes the conduct of monetary policy difficult. Moreover, growth promoting fiscal stance render the monetary policy environment even more challenging going forward”.

On the fiscal policy side, the government has shown greater tolerance to fiscal deficit for the last two years because of its higher spending on social and physical infrastructural development.

This would jeopardise the prudent public debt management of the government which received its first ever jerk on August 02 T-bill auction. In this auction, the commercial banks stayed away from the ring and the government was not able to mobilise desired level of resources.

Now, under the changed parameters, like higher financing requirement by the government, discount rate is adjusted upward by 50 basis points and CRR and SLR are also adjusted with the objective to provide relief to the depositors. However, this may adversely affect debt management objectives of the government.

The rising lending rates have yielded positive rate of return to the bankers but as they are rising after entry into double digit, it will impact negatively on access the credit.

On the other hand, the poor depositors are getting negative rate of return on their deposits. SBP should serve the interest, both of depositors and the banker because both stakeholders are important market players in the financial business. Being watch-dog of the banking sector, SBP has the responsibility of taking care of all stakeholders.

The current monetary stance would adversely affect the current growth momentum, prudence in public debt management and investment. This is definitely not the right time to check inflation when it is sliding downwards. The core inflation which is more relevant to the monetary policy is in the stable zone.

Monetary expansion is close to nominal GDP growth. It is not the right time to make impact of fiscal stimulus null and void. What the government wants to achieve through fiscal stimulus is likely to be lost by pro-active monetary stance. The SBP should make monetary policy supportive of growth and aligned with overall macroeconomic framework and fiscal expansionary context.

While the inflation is under control, credit to the private sector is slowing down, the economy badly needs investment in new capacity and public sector development programme is expansionary, the current monetary stance is likely to hurt the government finances more than any other sector.

 

[Neo]

Insurgency related development issues in Balochistan



OFFICIALS now claim that the fifth insurgency has been quelled by military operation launched by the government in December and its writ has been established in the tribal belt of Dera Bugti and Kohlu in Balochistan.

The military action has not been without its costs in terms of collateral damage, human sufferings and economic losses. The blowing up of railway, power and gas infrastructure or bombings carried out during last eight months were not without its economic costs. According to the Chief Minister Jam Yousuf, the province’s share in gas royalty has been reduced to Rs1.5 billion due to reduction in gas production hit by blasting of gas pipelines.

The current crisis embraces economics, social and political dimensions. The province has always been excluded from decision-making at the federal level, its pressing financial needs have always been ignored and its vast economic potentials have not been developed. The Sardari system has not been abolished but strengthened by successive regimes in Islamabad to keep its tight hold on Balochistan.

The prevailing socio-economic conditions in the province and the level of deprivation of masses negate any welfare planning by policy-makers.

In the post-military operation scenario, the sense of deprivation prevailing among the Baloch will continue to intensify( which may give rise to another insurgency in future) unless the local people get a fair treatment at the federal level and legitimate share in the various development schemes in the province.

At present, the people are reeling under extreme poverty. Over 50 per cent of the population lives below poverty line. The severe droughts in recent years have increased vulnerability of the poor. The province has the highest percentage of the highly deprived, both in terms of income and other indicators of poverty. Deprived of its legitimate resources, the provincial government is forced to run its affairs on loans. The federal government is getting Rs78 billion annually in revenue from gas fields in the province.

The ongoing development schemes are yet to make a dent in the prevailing poverty and fruits of development are yet to trickle down to local people. It is time to focus on restoration and improvement of law and order, abolition of sardari system and promotion of education with special emphasis on technical education.

The security environment is vitally linked to economic development. It is not merely the Dera Bugti and Kohlu that presents a challenging environment for maintenance of law and order, but the situation needs to be improved in whole of the province.

The incidents of waylaying and looting of vehicles on highways, daylight snatching of motor bikes and kidnapping of citizens for ransom have recorded an increase over the past five years. These incidents have become routine in many districts including the home district of former Prime Minister Zafarullah Jamali.

The tribal violence has not only destroyed peace but also hampered development works and projects in many districts. Armed tribal clashes between the rival tribes or between the sub-tribes have also contributed to backwardness and slow course of development.

A Sardar enjoys authoritarian position in tribal society. The hierarchy of tribe and sub-tribe is reflected in various forms of oppression within the society at various levels. A Sardar’s power in the tribal system has three elements which comprise the inherited, acquired or purchased land, privileged source of income and the authority over succession of lower ranks in the tribal hierarchy.

Sardari was formally abolished in the System of Sardari (Abolition) Act, 1976, which prescribed three years’ punishment to anyone exercising the right of Sardar. The Act says in its preamble: ’The system of Sardari, prevalent in certain parts of Pakistan, is the worst remnant of the oppressive feudal and tribal system which, being derogatory to human dignity and freedom, is repugnant to the spirit of democracy and equality as enunciated by Islam and enshrined in the Constitution of the Islamic Republic of Pakistan and opposed to the economic advancement of the people”. But the 1976 Act was never enforced in letter and spirit since its approval by the National assembly during Z.A Bhutto’s regime.

However, the local people need sardar’s verification to get local certificate for their children’s future. This notification has in fact legalised a Sardar’s position among the people who do not want to be a part of centuries old Sardari system. They are compelled to extend allegiance to a Sardar.

The importance of local/domicile certificate cannot be denied in seeking government employment or admission to some government institute or getting a national identity card. Such legal formalities that strengthen the Sardari need to be abolished. The Sardari Abolition Act,1976 remains unimplemented.

Social sector development is a prime need. Education achievement reflects the province’s overall low development indicators. Literacy level at 37 per cent lags far behind those of other provinces, and the national average of 53 per cent. According to an estimate, the rural literacy rate (23 per cent) is significantly lower than the urban rate (54 per cent), and literacy among rural females (10 per cent) is about one-third of rural males (37 per cent).

According to another estimate, there are a total of 15,000 settlements in the province. Out of these, 7,000 have schools giving formal education. In most of the districts in the province, the literacy rate among the female is even less than four per cent.

Balochistan government has a limited room to increase its social sector expenditures, partly because of its high debt-service burden. The expenditures mostly go to salaries, while non-salary expenditures are well below the norms for the effective functioning of the social sectors.

Of the budgeted revenue receipts for FY2005, close to 95 per cent had to come from federal government transfers. The provincial tax base is narrow and limited. The provincial government has a large stock of high-interest debt, and in FY2004, Rs2.6 billion, or 10.7 per cent of its total current expenditure, went to debt servicing.

The province is in dire need of both— financial and technical— support to improve primary enrolment and completion rates, reduce gender disparities, and encourage the non-governmental organizations and private sector to participate in the provision of education and health.

 

[Neo]

Increased focus on employment



THE government is working on a second five-year Poverty Reduction Strategy Paper(PRSP-II that places increased emphasis on employment and institutional-building. It is targeting an uplift programme requiring an investment of Rs1500 billion.

The strategy paper would draw upon the experience in implementing PRSP-1 which did not prove to be an unqualified success. It provided for a total expenditure of Rs1200 for a wide ranging projects and schemes aimed at reducing poverty.

Notwithstanding 10 percentage point poverty reduction - from 35 to 25 per cent - repeatedly being claimed by the government, concerned officials admit privately that “not much has been achieved during 2001-2005” (PRSP-1 period) in terms of significantly reducing poverty and generating new jobs.

The international financial institutions (IFIs) are believed to have agreed to fund the PRSP-2. They are expected to provide about $8 billion (WB $6 billion, ADB $1.8 billion and UNDP $200 million) over the next five years.

However, all the three donors are believed to have made it clear to the government that the PRSP-2 must be backed with strong monitoring as well as capacity development, including data collection and analysis to assess the full impact of the programmes.

The system should have new institutional mechanisms for regular/period monitoring and evaluation of poverty reduction expenditures and corresponding outcomes indicators at the federal, provincial and district levels.

These institutional arrangements are presently being evolved and will be finalised after consultations with provincial governments. Key outcome indicators have also been suggested while final benchmarks and targets will be set after having discussed with national and provincial statistical agencies, federal line departments and provincial governments.

The PRSP-2 is being formulated in the light of the United Nations Millennium Development Goals (MDGs) and its objectives will be achieved by strengthening the private sector particularly services and industry sectors. In this behalf, sectoral analysis are being conducted to make the PRSP-II a success.

The UNDP has hired the services of former director of Pakistan Institute of Development Economics (PIDE) Dr A.R. Kamal to help prepare recommendations for effective monitoring outcomes which will be incorporated in the final draft of the PRSP-2.

The UNDP is believed to have proposed that the government to improve the quality of living standard surveys, with the help of independent economists and financial experts. The UNDP has also called for “sustained reduction in poverty and inequality in the Pakistani society” by ensuring proper and adequate assets distribution among the less privileged.

The local officials of UNDP and Dr Kamal are currently meeting all the stakeholders including the four provincial governments to work out an improved strategy.

Since education plays an effective role in reducing poverty, the government has been advised by the lending agencies to earmark funds equal to four per cent of the GDP on education against 2.5 per cent currently being spent.

“We hope that developed countries would fulfill their promise of offering 0.7 per cent of their GDPs to help cut the world wide poverty considerably”, a concerned official said, hoping that the government would allocate matching funds to meet PRSP-2 targets.

MDGs seek to cut poverty by half, net enrolment in education by 100 per cent, reduction of infant mortality by 80 per cent by 2015. Similarly, these goals include targets for reduction in TB, HIV, malaria, hepatitis, and for extending clean drinking water and sanitation to the people.

How would the government generate its part of the funding for PRSP-2 is an important question especially keeping in view the fall in tax-to-GDP ratio from 11 per cent to 10.6 per cent and rising fiscal deficit.

The government has been advised by the donor agencies to complete the restructuring of the Central Board of Revenue (CBR) as early possible so that leakages could be removed and fresh funds collected for spending on uplift programmes. Currently, various economic indicators are weakening.

The PRSP-2 is expected to demonstrate the need to closely monitor the effectiveness of government policies and track outcomes of programme for poverty reduction.

 

[Neo]

Energy needs of a growing economy



PAKISTAN has vast natural resources of natural gas and recent discoveries are enough to meet the country’s growing needs for the next 25-30 years.

That was the consensus among major foreign oil and gas experts who met at the Pakistan Oil, Gas and Energy conference in Karachi convened by the Pegasus consultancy recently. The foreign experts also said the country was repositioned to take advantage of the growing demand for gas by using LNG.

They advised that because of this abundant natural resource over commitments to buy foreign gas in excess should be avoided. They cautioned that if the current unhelpful regulations continued these may result in the drying up of energy production.

They said, the LNG had a great role to play, but the current regulations and the pricing policy should be made more helpful to the industry. They also called for a liberal and realistic policy towards LNG to promote its optimum production.

It was said at the conference that after the deregulation of the LNG sector in the year 2000, an investment of $150 million was made in that area and with further encouragement from the government $200 million more will be invested. Experts were hopeful that despite the pricing and other problems, the LNG sector was about to take off.

Meanwhile, the government does not want to leave organised energy development to chance. It has come up with a Energy Security Plan for a 25-year period-2005-2030 at an investment cost of $150 billion. Its end will synchronise with the materialisation of Vision Pakistan-2030 which will get the country out of all major economic problems and set it on a high growth trajectory with absolute poverty abolished altogether.

But with political stability missing from the country, no one can foresee which government will complete that process and make vision Pakistan-2030 become real. We have not been lacking in long-term or prospective plans. The first perspective plan 1965-85 was for 20 years and right in the middle came a 15 year old perspective plan. Planning is one thing; making it a real success is a different story.

Out of $150 billion to be invested in the comprehensive energy development, $50 billion will be in the public sector and $100 billion will be in the private sector. On an average the investment will be $6 billion a year with $4 billion in the private sector and $2 billion in the public sector. The average investment will be the double of what is being made now. The money has to be found and productively invested.

The objective will be to ensure reliable, quality and environment-friendly energy as needed by the growing economy. And that will include hydro power from the five large new dams approved recently— oil, gas, coal, nuclear energy and renewable energy in many forms including wind and solar power.

Maximum use of the indigenous resources is to be made and the import of oil cut to the minimum. The world oil price which has already touched $78 a barrel, may peak to $100 a barrel in view of the Middle Eastern crisis. Hence the government has to hasten to accelerate its efforts to develop the energy sector fast. That also demands the government should have a liberal policy towards the private sector including the foreign investors and offer them enough incentives to attract them to make such large investments. The government has also to price the energy in all its forms in a realistic manner.

That is imperative as the energy demand is expected to rise during the planned period seven times-from 55 million oil equivalent to 360 million tones oil equivalent. And the need for electricity would rise eight fold-from 19540 million megawatt in 2005-to 162,590 megawatt in 2030. Along with that very efficient use of energy is to be promoted, with waste and over-use cut to the minimum. This has been the policy all along, but has seldom been practiced. Waste and theft of power have been excessive.

The number of oil wells drilled is to rise from 100 a year to 330 a year-almost one will be drilled everyday. There is to be a major move towards renewable energy including the use of ethanol mixed with petrol in cars.

There will be a striking shift towards a large use of coal which will rise from six per cent of the total energy used now to 19 per cent by 2030. Initially there will be some import of coal as well to mix with the local coal. Along with that, during the interregnum, Pakistan will try to get gas from Iran, Turkmenistan and Qatar. The first gas pipeline is to become operational in the year 2010.

At the moment, there is a gap in the price demanded by Iran and the price offered by Pakistan and India which is 2 to 1. Iran wants to raise the gas price to international levels. In view of the increasing gas resources which are becoming visible, foreign experts have cautioned the government against over commitment to buy gas from foreign countries.

Pakistan has also been negotiating the purchase of 1000 mw of electricity from Turkmenistan through Afghanistan. The negotiation started a long time ago- in the time of Nawaz Sharif as prime minister, but has made little headway because of the disturbed conditions in Afghanistan. India too is said to be interested in obtaining power through that grid.

Pakistan is now negotiating the purchase of 100 mw of power from Iran for use at the Gwadar Port. The deal has been struck at 6.25 cents per unit by the Wapda, but Nepra which has the exclusive authority to fix electricity rates in Pakistan, is objecting to that for not being consulted prior to fixing the rate. The Iranian side had wanted 6.9 cents per unit and Pakistan had initially offered 5.5 cents. Both were finally settled for 6.25 cents.

Iran is now offering electricity for the adjoining Pakistani districts at five cents per unit. But to provide 100 megawatts of power to Gwader, Iran has to build a transmission line of 70 km in its territories and Wapda will build a transmission line of a hundred kilometers in Pakistan. But conditions in Balochistan have to stabilise before work on the transmission line starts.

Establishment of petrochemical plants and refineries by the private sector is a part of the energy security plan. Clearly, while the government has to invest one third of the funds earmarked by the plan, it has to work very close with the private sector and be responsive to its genuine needs.

 

[Neo]

Expats 'making significant contribution to pakistan's economy'

PAKISTANIS in Bahrain and around the world sent over $4 billion (BD1.51.bn) home last year. This is a "significant" contribution to their country's economy, said Pakistani Ambassador to Bahrain Iftikhar Hussain Kazmi.
He paid tribute to the "hard work and productivity" of the Pakistani community in Bahrain, as Pakistan marks its Independence Day today.

"The Pakistan community in Bahrain is about 45,000 people, including families and they belong to a variety of professions and businesses - there are professionals, doctors, engineers, skilled workers and semi-skilled workers also," said Mr Kazmi.

"They are very productive citizens and we are proud of them - they have done a lot of good work and they have contributed to the economic development of Bahrain and earned respect and goodwill for Pakistan in this country."
Key developments for Pakistani-Bahraini relations include an upcoming meeting of the Joint Economic Committee, an investment promotion and protection agreement between the two countries - and a Pakistan-GCC Free Trade Agreement.

Pakistan's economy and international trade is being fuelled by widespread political and economic reform, said Mr Kazmi.

"Pakistan has a vibrant, functioning democracy. We have a parliamentary system of government which is headed by Prime Minister Shaukat Aziz and a bicameral legislature and a multi-party political system," he said.

"Our last parliamentary elections were held in 2002 and the next parliamentary elections are scheduled to be held next year - and this will be the second parliamentary election under President Pervez Musharraf.
"In the field of economy the figures are very impressive - particularly in the last four or five years.

"Our workers' remittances, which they have been sending to Pakistan, totalled over $4bn (BD 1.51bn), which is quite significant," said Mr Kazmi.

"Between Bahrain and Pakistan, the volume of trade is around $125 million each year, and our exports to Bahrain range between $40m to $45m.

"We mostly import petroleum products and some aluminium related items.
"At public sector level, we have a Joint Economic Committee (JEC) - its next session will be held in the first quarter of next year in Islamabad.

"It's a good forum between our two countries that was established a long time ago and essentially it seeks economic, trading and investment co-operation between Pakistan and Bahrain.

"We're also going to shortly sign an agreement on the promotion and protection of investment between Pakistan and Bahrain - we're already negotiating that agreement.

"Pakistan and the GCC countries are shortly also going to sign a Free Trade Agreement, which is being negotiated by the government of Pakistan and the GCC secretariat in Riyadh.

"That will open up avenues and unleash forces of co-operation between Pakistan and the GCC countries in the fields of economy, trade and investment."

On regional matters, Mr Kazmi said Pakistan condemned the Israeli aggression against Lebanon and Palestinians.

Key internal issues for Pakistan are a continued strong economic performance as well as job creation and poverty alleviation, said Mr Kazmi.

"Pakistan has the highest per capita income in South Asia - our economy has done very well since the Prime Minister and President have brought about massive economic reforms, restructuring, opening up (the economy)," he said.
"With the result of these reforms the economy has taken a turn around and made remarkable progress in the last four to five years.

"Pakistan is now the highest performing Asian economy in the world after China - our exports registered 11.4 per cent increase, and they amounted to $16.5bn (BD 6.23bn).

"In the next year, they are expected to increase to as much as $18.6bn (BD 7.03bn) which is quite a significant improvement, and Foreign Direct Investment (FDI) in Pakistan from external sources reached the figure of $3.5bn

"To summarise, Pakistan has very stable economic fundamentals - low inflation and rising GDP.
"Our foreign exchange reserves stood at $13 billion (BD 4.91bn) for 2005 and 2006.
"But there are challenges.

"We are concerned that we have to address the issues of poverty and job creation in Pakistan.

"Although, the incidence of poverty has decreased - it used to be 33 per cent, and now it is down to 25pc - we know that still a lot of work has to be done and we are doing that."

Mr Kazmi said Pakistan's foreign policy was essentially aimed at social and economic development at home and to strengthen stability in the region.
"We are engaged in composite dialogue with India and it has made some progress in certain areas, like people-to-people contacts and in the field of trade and economy, drug trafficking, market access and transport and communications," he said.

"Unfortunately there is slow progress on fundamental issues such as the Kashmir dispute and we have said that confidence building measures will be of little value if purpose-oriented and meaningful discussion are not held on the Kashmir dispute, which is a core dispute between Pakistan and India.
"We have been telling our friends in India and terrorists should not hijack the agenda for talks and negotiations between India and Pakistan.

"Pakistan is a frontline state in the global campaign against terror - a case in point is the recent co-operation which we extended to the UK and US in busting this international ring of terrorists, which were perhaps planning to attack trans Atlantic flight operations."

 

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Monday, August 14, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\08\14\story_14-8-2006_pg12_1

* NGOs oppose project and privatization of beaches

By Aziz Sanghur

KARACHI: Construction on a controversial $1.5 billion private Waterfront Development Project is planned for mid-December but in the meanwhile, senior citizens and nearly a dozen NGOs are planning to oppose it and other similar projects.

The pressure group contends that this project and several others in the area will take over Karachi’s beachfront and prohibit the access to the general public. The multi-billion dollar Waterfront project comprising commercial complexes, a 600 foot high tower, amusement park, five-star hotel, amphitheatre complex and water sports facilities, is expected to take over about 14 kilometres of land from Sindbad (Old Casino) up to the Golf Course.

According to sources in Defence Housing Authority (DHA), more than five foreign investors from Malaysia, the UAE, Saudi Arabia etc. have submitted proposals to qualify for the project. The land falls in DHA jurisdiction. The DHA Executive Board has approved the proposals.

One of the arguments in favour of these project, according to sources in DHA, is that they will create around 120,000 jobs with around 80,000 direct employment opportunities with DHA and the rest indirect job openings related to the project. Furthermore, the project is expected to make a profit of nearly half a billion US dollars every year.

Its master plan divides the 14-kilometre waterfront stretch into seven distinct zones (A to G) in harmony with its terrain and beach. Fifty percent of the land is planned to be allocated for parking facilities for 2,000 to 3,000 vehicles and a tramway terminal.

The remaining land is to be used for a 50-storey high-rise commercial and residential building. A Monumental Tower, 600 feet high, will be erected with a revolving restaurant and observatory deck. The main structure will be supported by a low-rise complex with indoor games.

A Water Park with water sports, rides, swimming zones and a wave island is planned on 11 acres of land. An offshore amphitheatre with the capacity to accommodate 6,000 people at a time will be connected through a grand pier to the main land. A viewers deck, parks, a promenade and piazzas will be the main attractions. A performance deck has been planned for artists and public performances.

A food court complex, amusement park on 24 acres, board walk, expo center and sculpture court amphitheatre will be part of the project along with a private beach with a lagoon for a hotel and residential blocks. The project also includes an underwater world with a Dolphin Park and aquarium.

The pressure group has, however, decided to launch a campaign against the privatization of Karachi’s beaches and has urged the government to cancel all allotments to private parties.

The Urban Resource Center (URC), Pakistan Institution of Labour Education and Research (PILER), Human Rights Commission of Pakistan (HRCP), Aurat Foundation, SHEHRI, Shirkat Gah, Orangi Pilot Project etc. will hold a discussion forum on ‘Clifton Beach and Sea View: Proposed plans and their impact’ at the URC head office on Wednesday, August 16 with senior urban planner URC chairman Arif Hasan in chair.

In addition to the Waterfront Project, DHA has planned a Creek City Project and Floating Kitchen with private parties.

The pressure group points out that DHA established a number of clubs along Gizri beach and thus closed them off to the public. According to the Sindh Building Control Ordinance, beaches are reserved for recreational proposes and are not for sale or for housing schemes.

DHA spokesman Lt. Col. (retd) Rafat Naqvi took the stand that those who opposed these projects were against development and DHA has ordered that facilities will be provided to the public at these projects.

 

[Owais]

DPW to build Port Qasim's second phase: Babar Ghauri

KARACHI: Dubai Port World (DPW) will take up the development works of Port Qasim's second phase, Minister Ports and Shipping Babar Khan Ghauri told Geo news correspondent Ali Imran.

In this regard, a DPW delegation would sign the contract papers in Prime Minister House on August 17, he said. "The project costs 375 million dollar."

He said the new phase would consist of two berths, whose length would be 750metre each. While the depth was approximated to be 14metre, which would help harbour huge ships, he added.

 

[Owais]

Standard Chartered Bank decides to buy Union Bank KARACHI: In view of collective economic conditions and the bright prospects of banking sector in Pakistan, Standard Chartered Bank has decided to purchase Union Bank.

Standard Chartered Bank Group Executive Director Richard Meddings, talking to Geo News, said that his bank believed in organic growth and the same strategy was adopted at the purchase of Union Bank.

“The purchase of Union Bank was preferred as it could be organically merged with our bank,” he said.

Richard Meddings said the Pakistan was now on path regular economic growth, adding that in his reckoning, over five to six years, the collective economic growth in Pakistan would remain above six percent.

He said the GDP rate progress was quite satisfactory in the country.

 

[Owais]

$14.7m invested in national stock exchanges

KARACHI: In the stock exchanges of the country, the foreign financers have invested $14.7 million till the August 11, 2006.

According to the State Bank statistics, in the meantime Switzerland drew $11.3 million from the stock market and Singapore invested $32.2 million in the market.

Similarly, in August Hong Kong took its investment of $3.30 million from market, whereas Singapore invested $13.7 million in Pakistani Stock market

 

[Owais]

Trade development Authority of Pakistan act approved

Lahore: Federal Minister and Chairman Export Promotion Bureau (EPB), Tariq Akram on Tuesday said that the Trade Development Authority of Pakistan act has been approved, which will come into effect within a month.

He announced this here today in a meeting of Lahore Carpet Manufactures Association.

He said that under the trade development authority of Pakistan act, vision 2010 and vision 2015 would be chalked out to boost exports of surgical instruments, sports goods and carpet industries.

Tariq Akram informed that the consultation programme from local and foreign experts would be arranged regarding preparation of the vision.

 

[A.Rahman]

US Information Technology to make Pakistan its Hub of activity
Tuesday August 15, 2006

KARACHI : The US-based WYSE Technology Incorporation-a pioneer in Thin computing is considering to make Pakistan a hub of its commercial activities in the South Asian region due to its investor-friendly atmosphere.

The president and Chief Executive Officer (CEO) of the WYSE Technology Inc, Dr John Kish, is likely to visit Pakistan in the third week of August, 2006.


Founded in 1981, the WYSE Technology Inc is a technology manufacturing company headquartered in San Jose, California, USA, with offices world-wide.


The company introduced economical, ergonomic, and attractively designed terminal products of high quality and reliability. The WYSE, world-wide customers include FedEx, AT&T, Abbott, Citibank, Xerox, DHL, Lockheed Martin, Bayer, UPS, Pfizer, Exxon and Marriott etc. Despite aggressive competitors entering the marketplace as early as the following year, the WYSE has continually maintained its Thin-client leadership.


Thin client is a simple programme or hardware device, which relies on most of the function of the system being in the server.


By the mid-1990s, the model of decentralised computing where each user has his own full-featured and independent microcomputer, seemed to have displaced a centralised model in which multiple users use thin clients (eg **** terminals) to work on a shared minicomputer or mainframe server, but the scenario is changing again.


The main objective is to provide better services to its customers. Especially, those who are suffering from the poor networking support of some operating systems.


Thin computing is a computing architecture that shifts complexity from the edge to the centre of the network. This architecture enables new ways to access information and eliminates the most frustrating corporate desktop issues faced by a company's Information Technology (IT) department, specifically security, manageability, reliability, and cost.


Thin computing is a model that can be used successfully by companies and institutions of all sizes to increase productivity and security while reducing IT costs.


Thin Computing delivers the access people need, at a much lower cost than traditional methods, all without compromising security or manageability. It makes it easier for the IT to manage systems and improve the reliability and security of information, which dramatically lowers IT costs.


Thin Computing still provides the access to applications and data that people need in order to move the business forward. All the while improving on the security, reliability, and availability of PCs. Problems that run up the cost to deploy PCs enterprise-wide.


It includes hardware services and software that work with the Thin Clients and PCs, as well as the wireless devices and other systems.


It gives everybody in an organisation secure access to the information and the applications they need, without requiring the desktop systems to store them.


Besides, the increased availability of high-bandwidth network connections allows Thin Computing solutions to run at near desktop speeds.


Which makes it easier and more acceptable for business professionals to use Thin Clients in mission-critical applications.


The WYSE software makes it easy to manage, update, and even service any Thin Client from one central location. After all, it's much easier and more cost-effective to manage several servers than thousands of individual desktop PCs.


And with no moving parts thanks to solid-state technology, the WYSE Thin Clients deliver greater reliability, availability, and lower cost of ownership than other solutions.


The WYSE® Winterm™ line of thin clients has led the industry for the seven years it has been tracked. When integrated with additional hardware, software, and services they become part of a complete solution to a business problem.


To stay productive in an environment of emerging protocols and standards, hardware-like terminals and other embedded operating system-based devices must be managed. WYSE™ Rapport® device management software is one of few products in the industry designed to support global enterprise installations of tens or hundreds of thousands of connected devices.


On June 14, 2006 WYSE announced its second wave of exclusive enhancements to Microsoft® Windows® CE 5.0 for its thin client customers. WYSE Feature Release 2 (WFR2) is the latest release of the WYSE-enhanced Windows CE and will be offered in new devices and as an upgrade for current WYSE customers.


"Driving forward on WYSE's promise of providing the latest thin client functionality, including support for performance-enhanced Citrix ICA 9, this new release brings an unprecedented level of functionality and flexibility to WYSE's Windows CE 5.0 based thin clients," said Ricardo Antuna, Vice-President of Business Line Management at WYSE.


The WYSE and its technology partners enable the largest companies in the world to achieve competitive advantage and deliver better service to their customers and employees by allowing them to utilise precious IT resources that many organisations expend on traditional distributed desktop environments.

paktribune

 

[Owais]

Tractors production in the country rise ISLAMABAD: In the first month of the current fiscal year, 4071 tractors were manufactured exceeding last year’s output during this period by 1328 units.

Engineering Development Board’s chief executive officer, Imtiaz Rastgar told that 3743 tractors were manufactured in the first month of the previous fiscal year. He told that the local production of tractors by the end of the current fiscal year would mount to 50000 tractors, while 48887 tractors were manufactured in the previous fiscal year.

Imtiaz Rastgar told that the government has permitted import of tractors in the backdrop of the rising demand of our agriculture sector. However, this would not be affecting the local manufacturers, he asserted.

 

[Owais]

Asian countries for more oil refineries

KARACHI: All key Asian countries including Pakistan are now focusing to increase refining capabilities of crude oil in order to cope up with future energy requirements.

According to details issued by some companies working in the region, several new oil refineries are being established in Asia.

China and India particularly focusing to increase number of oil refineries whereas Pakistan and other under developing countries enhancing current productivity level of their existing oil refineries.

Interim details unveiled that work on Karachi Indus new plant and Baluchistan new plant underway although some details of Baluchistan new plant project yet to be finalized.

Karachi Indus new plant would boost the production up to 84,000 barrels and it would expectedly be completed till next year.