Pakistan Economy - News & Updates - Archive

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Thursday, August 24, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\08\24\story_24-8-2006_pg5_4

ISLAMABAD: The number of cellphone users has touched 38 million and 1.5 million users are being added each month, according to Planning Commission Deputy Chairman Akram Sheikh.

He was speaking at a briefing after a meeting of the Executive Committee of the National Economic Council. The planning commission deputy chairman said the Minister for Information Technology and Telecommunica-ion Awais Ahmad Khan Leghari informed the meeting that the telecommunication sector was growing at a very fast pace. "This is a good sign. More and more people are using cellphones," he added.

 

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Thursday, August 24, 2006http://javascript<b></b>:; http://www.dailytimes.com.pk/print.asp?page=2006\08\24\story_24-8-2006_pg5_5

LAHORE: Cement exports in the month of July this year were 45 percent higher than the 130,000 tonnes exported in July 2005.

Industry sources said cement exports stood at 188,000 tonnes in July 2006 and added that the industry had already matched exports for the month of Aug 2005 by the middle of Aug 2006. They said exports at Aug 22, 2006 stood at 156,000 tonnes and expected exports to further increase in the last few days of the month.

Cement manufacturers had asked the government to restore the rebate on cement exports that had been temporarily withdrawn in order to halt the unprecedented rise in prices. The government had also allowed the import of cement at a subsidised rate of Rs60 per bag. However, a reduction in prices to the desired level has resulted in an extension of demand. The government is likely to discuss the matter at the next economic coordination committee meeting.

According to information gathered by the Daily Times, Lucky Cement was the major cement exporter with about 100,000 tonnes of cement exports followed by other brands such as Bestway, Cahrat and Kohat. The leading destinations for Pakistani cement are Afghanistan and Dubai.

Sector experts are of the view that increasing production capacity and stagnant market demand in the cement industry point to lower cement prices and difficult times for manufacturers.

The industry’s total production capacity rose to 26 million tonnes against the 18 million tonnes produced in June 2005. However, market demand has failed to match the increase in production capacity. Consumption figures at the end of June 2006 show only a slight increase in demand in the domestic market to 18.4 million tonnes against the demand of 18 million tonnes in June 2005.

Competition among manufacturers has registered an increase putting downward pressure on prices and resulting in a fall in prices to Rs 250 per bag at wholesale level and Rs 260 per bag at retail level against a record price of Rs 435 per bag at the height of the crisis.

Market experts are of the view that restoration of rebate on cement exports will enable the industry to go for new markets in light of increasing production capacity.

 

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ISLAMABAD, Aug 23: Pakistan and the United States have decided to conduct a number of studies on global competitiveness of selected economic sectors and as a first step the motorcycle industry of Pakistan has been selected for carrying out a policy analysis.

The Competitiveness Support Fund (CSF) -- a joint venture of the government of Pakistan, the ministry of finance and the US Agency for International Development (USAID) -- will examine where competitiveness already exists within targeted sectors and where it can be improved.

The CSF will use the studies to forward recommendations to the government of Pakistan on policy interventions it should take to make certain sectors more internationally competitive.

The first sector selected by the CSF is the growing motorcycle industry in Pakistan. Other analyses will follow on automotive and food processing sectors. Motorcycle industry estimates show that last year a total of over 700,000 motorcycles were produced in the country. The industry has been experiencing a healthy growth rate of around 30 per cent per year for the past four to five years. It is estimated that production will cross the million units mark by 2008.

To identify the prospects and problems/obstacles of the motorcycle industry, a high-level delegation from the CSF recently visited Karachi and met key stakeholders. A follow-up visit is scheduled for the first week of September to Lahore for an interaction with the stakeholders there as well.

At present there are 43 motorcycle assemblers in the country that have been licensed by the Engineering Development Board (EDB). Out of these, there are three Japanese assemblers (Honda, Yamaha and Suzuki), while the remaining 40 assemble Chinese motorcycles. These assemblers buy parts, sub-assemblies and assemblies from over 200 large, medium and small vendors located in Karachi and Lahore. The motorcycle industry employs more than 200,000 people directly and indirectly.

There are a number of government agencies that are involved in regulating, controlling and monitoring the motorcycle industry. These include the Engineering Development Board, the Pakistan Standards and Quality Control Authority (PSQCA), the ministry of industries and production and the Central Board of Revenue.

The primary objective of this study is to carry out a policy analysis of the competitive advantage of the local motorcycle industry, along with identification of the problems being faced by the sector. It will use its findings to recommend solutions at the policy and programme level on how to strengthen the supply chains and improve the value chains of this industry. The CSF is also facilitating the establishment of a policy expert group consisting of members from value chains of the motorcycle industry.

The Competitiveness Support Fund is based on international best practices (i.e. India, Thailand, Turkey, Ireland and Finland). It has been tailored to the current Pakistani economic environment to strengthen and make the private sector more competitive and improve the policy framework needed for innovation-based competitiveness. The fund is chaired by Omar Ayub Khan, Minister of State for Finance, and has a professional management team headed by Arthur Bayhan as CEO of the fund.

The CSF will support Pakistan's goal of a more competitive economy by providing input into policy decisions, working to improve regulatory and administrative frameworks and enhancing public-private partnerships within the country. The fund will also provide technical assistance and co-financing for initiatives related to entrepreneurship, business incubators and private sector led initiatives with research institutes and universities that contribute to creating a knowledge-driven economy.

The CSF activities will help all producers along the value chain that contribute to ultimate product quality. By obtaining better value and prices for quality products, and by improving cooperation throughout the Pakistani economy, the CSF will contribute to poverty alleviation by providing more income for producers and better employment prospects for employees.

 

[Neo]

Wednesday August 23, 2006 (1542 PST)

ISLAMABAD: Prime minister Shaukat Aziz has said Pakistan is gradually heading towards becoming a middle level income country having reached a per capita income of $ 850, which is among the highest in South Asia.


The prime minister made these remarks while addressing the first ECNEC meeting of the current financial year to consider 30 projects costing Rs 130.2 billion at the prime minister&#8217;s secretariat on Wednesday.

The prime minister said that fundamental economic indicators continue to be strong with growth rate expected to range between 6 to 8 percent despite devastating earthquake and an unprecedented hike in the oil prices. The growth rate in the year 2005-06 was 6.6 percent that positions Pakistan as one of the faster growing economies in Asia, he added.

The prime minister said that investment climate is continuously improving and as a result the total foreign investment in the country reached $3.8 billion last year- the highest in the country&#8217;s history.

The prime minister said that exports registered last year an increase by 14.4% to reach $16.5 billions and revenue collection was at an all time high at Rs 713 billions-some Rs 23 billion more than the target.

The prime minister said that it is heartening to note that the overall poverty figures have started showing significant decline to reach 23.99 % down from 34.46%, according to Pakistan Standard of Living Measurement Survey, 2004-05. in other words, we have succeeded in bringing 12.78 million out of poverty in the last four years.

Notwithstanding our success there are still approximately 24% people living below the poverty line and we are making every effort to reduce poverty further and will continue to focus on fighting poverty by increasing allocations in social sectors and providing income generation opportunities.

The prime minister emphasized the need for effective utilization of funds amounting to rs 130.2 billion for the 30 projects that relate to water, energy, housing, transport, food and agriculture, education, culture and mass media.

He said the planning commission is monitoring project implementation to ensure timely and judicious use of funds. He said development of being encouraged in all provinces and areas in an equitable manner with special emphasis on lesser developed areas. He appreciated the efforts of the Planning Commission in streamlining the approval and implementation of projects.

 

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KARACHI: August 24, 2006:

The Consul General of Japan Shoichi Nakano, on Thursday indicating that his country's investment would be tripled in 2007 as compared to that of 2004, said Pakistan was one of the best investment place with special opportunities available in Gwadar and Karachi.

In a meeting with the Diplomatic Affairs Sub-Committee of the Karachi Chamber of Commerce and Industry here, he said the opportunities being offered by Pakistani industry were quite attractive and assured that he would ask the Japanese investors to take the benefit of these opportunities.

"They should invest in Pakistan especially in Textile and enjoy the good returns in the steadily moving economy and flourishing industry", he remarked.

He said that the international media has a negative role in damaging the image of Pakistan and it should be effectively countered by projecting the ground realities and positive things about Pakistan and its investment friendly environment.

The consul general said that Japan has made high investments in the Textile and automobile sectors of Pakistan which is indicative of good friendly relations between the two countries.

 

[Neo]

PRIME MINISTER Shaukat Aziz has defined job creation and income generation as major objectives of his government. They are indeed imperative and urgent in a country with extensive unemployment where more than a fourth of the people live in absolute poverty.

He wants to achieve that through a rapid industrial expansion that is all-embracing and ranges from granite industries to silver jewellry making with textiles as the centrepiece. It is to cover large scale industry as well as large and medium enterprises in their full range.

A strategy is being drawn up for that purpose and it should be ready by October. It has taken a long time to formulate the strategy and let us hope the outcome will be worth the long wait. The strategy will promote the concept of “one village-one industry” which has been borrowed from Thailand where it has been a major success. The range of such industries is being expanded so that the talents and skills of each village can be promoted and full advantage taken of them.

The prime minister wants the ministry of industries and production to focus on the development of the small and medium enterprises, the engineering sector and on setting up of export processing zones. Port Qasim area is to have a textile city and an industrial park. He also wants the ministry to focus on horticulture, home appliances, sports goods and surgical goods and furniture-making. The export target for furniture last year was $22 million, but the performance fell short of the target by three million dollars.

The fact is that in the early years Pakistan was famous for its sports goods, surgical instruments and cutlery, but later there was more stress on the large-scale industry and these industries were neglected and suffered for want of adequate patronage, sufficient investment and modernisation. Now even Pakistanis prefer these items produced abroad and pay higher prices for them. So, the competitors of Pakistan in these areas improved their products and took over the markets.

The prime minister wants “one village-one industry” to specialise on a variety of items ranging from special textile, silver jewellry, ceramics and blue pottery depending on the talent available in each village and its tradition.

These industries can improve the non-farm income in the rural areas. But mere reliance on old talents and skills is not enough. There is need for greater research to develop new products; the workers in the rural areas are to be given training to acquire new skills and refine their talent. Having developed skills, the trained workers can become self-employed producers.

Meanwhile, the ministry of industries has come up with programmes to develop marble and granite industries, gems and jewellry making as well as to promote the diary industry. These industries can make a major contribution to the economy. The major focus should be on value addition. At a time when the exports are excessively dependent on imported inputs beginning with machinery, raw materials, energy and packaging materials, we have to make better and higher priced items even for domestic consumption.

Although domestic consumers prefer cheaper items, the fact remains that even such items are made by using imported raw materials. If such products have a brief life they will be discarded and we will have to import more and more raw materials to manufacture their substitutes. The best example is the water equipment made in Pakistan.

The ambitious plans for industrial expansion cannot be put into effect if adequate electric power is not available to run the industries, both small and large. Industrial production in Karachi has been disrupted in recent months by the failure of the KESC to ensure steady supply. The exports have suffered due to these setbacks. The government is now making extra efforts to increase the output of power, including production of more nuclear power as part of its Energy Security Plan 2005-2030.

It is also to have a few thermal units hired from the General Electric of the US and offer higher tax and other incentives to those who agree to produce nuclear power here under the supervision of the International Atomic Energy Commission, like the nuclear power plants at Chashma. The Chinese companies are interested in setting up such plants.

More and more funds are also being pledged by donors for the $6 billion national trade corridor which will take six years to complete. After the World Bank has committed $1.8 billion, the Asian development Bank has pledged dollar one billion. The NTC will provide transit facilities for trade with Central Asia, western China, Afghanistan and Iran. Initially it will connect Karachi-Gwadar and Kunjarab section which is estimated to cost $2.8 billion. It will develop the ports, rail and road systems and shipping facilities as well as the aviation system. Such infrastructural development is regarded essential to ensure a steady economic growth of 7-8 per cent.

Meanwhile, with Ramazan coming in a few weeks the usual apprehension that prices of essential goods particularly of those used more commonly in this month will rise. The government is arranging for easy availability through import of those items which are in short supply. The federal government has asked the provincial and local government to be very vigilant. Market committees are to be set up everywhere and price magistrates to be appointed with full powers.

The government is to ensure that the markets have enough supplies of items beginning with Atta. The Sindh government is releasing as much supplies of wheat as the flour mills need at Rs430 for 40 kilograms. Similarly adequate supply of sugar is to be ensured from the official stocks so that its price is brought down in Ramazan to around Rs30 from around Rs 40 at present.

The fact is that the shopkeepers procure enough stock well before the Ramazan begins and begin pushing up prices which reach their peak before eid. Thereafter, they do not really bring down prices to the pre-Ramazan level. The consumption of foodstuffs goes up in Ramazan by about 50 per cent.

Every year we are told that the government will not permit profiteering and exploitation of the faithful who fast. Initially there is some price check and a few arrests, and then they are let off after minor fines. Prices then go up and up as official intervention is seen ineffective. Even when there is no shortage and the supplies are adequate, the profiteers create a shortage through hoarding and manipulation.

Will it be any different this Ramazan? The prime minister wants to make a difference and so he is in touch with the businessmen to have the desired results. He is not relying on the sugar mill owners, also sitting in his cabinet, to bring down prices; instead he will import more and release the government stocks. He wants to succeed in this case as the general elections are due next year.

Meanwhile, the Utility stores are reported to be selling substandard Banaspati Ghee and oil repacked by it. The utility stores should not ruin their reputation. There were also reports that the Zakat fund continues to be misused. The auditor-general of Pakistan has reported irregularities to the extent of Rs165 million in the Zakat fund in his report to the National Assembly for 2004-05 . While more funds are being committed for poverty alleviation the funds collected from people in the name of Zakat should not be misused or wasted.

 

[Owais]

Motorcycle import: under-invoicing and sales tax evasion probe initiated


ISLAMABAD (August 25 2006): The Central Board of Revenue (CBR) has launched an investigation against the massive under-invoicing of motorcycles and their parts, and non-payment of sales tax on their registration. Sources told Business Recorder on Thursday that the board has issued instructions to the regional collectors to investigate the matter on top priority basis.

The investigation has been started on the complaint of Atlas Group, Karachi, which pointed towards the under-invoicing of motorcycles and their parts in the unorganised sector.

According to the CBR instructions, the collectors should ensure that the vehicle registration authorities duly demand documents in case of import and sales tax invoice in case of locally-assembled vehicles at the time of first registration. The collectors should promptly complete the investigation and report to the board, the directive added.

Under the sales tax rules 2006, each manufacturer or importer who sells any vehicle through a dealer would issue sales tax invoice in the name of the dealer mentioning full particulars of such dealer and the dealer would issue sales tax invoice in the name of the customer.

Expressing serious reservations over the ongoing under-invoicing of motorcycles in the unorganised sector, the Atlas Group stated that the rampant under-invoicing has affected sale of the organised sector.

In this connection, Director General Valuation, Karachi, spotted some models of motorcycles and 16 parts, which were being under-invoiced and intimated to the collectorates of customs for taking action against the violators. The CBR is required to issue the necessary order, as the collectorates are not under the direct control of the DG.

The DG Valuation has identified and verified the following parts of the 70CC motorcycles, which were being under-invoiced: Carburetor, origin China, $13 per piece; Crank Case, China, $36/pc; Crank Case Cover R/L, China, $11.29 per set; Crank Shaft, China, $11.62/pc; Cylinder Head, China, $11.07/pc; Drum Gear Shift, China, $1.99/pc; Fender FT/RR, China, $2.30/pc; Frame Body, China, $10.00/pc; Front Shock Absorber 2-piece set, China, $6.80/set; Fuel Tank, China, $10.00/pc; Magneto, China, $6.70/pc; Rear Shock Absorber 2 piece set, China, $3.70/set; Piston, China, $1.55/pc; RR Fork Complete, China, $6.88/pc and speedometer movement of Taiwan $3.05 per piece.

The Group has informed the board that out of 700,000 units of motorcycles produced, the unorganised sector claims about 30 percent share ie over 200,000 units, which are not paying sales tax and heavily under-invoicing. The total amount comes to nearly Rs 2 billion if these units are produced and sold by the organised sector paying full taxes.

It is necessary to pay sales tax for the registration of motorcycles, which is not being done causing huge loss by the unorganised sector, whereas the organised sector is paying these taxes duly. No Chinese (unorganised sector) has entered due to tariff and non-tariff barriers in India, Thailand and Malaysia. Perhaps similar discipline is needed in Pakistan to develop the industry, Atlas Group added.

 

[Owais]

US for resumption of rebate on cement export to Kabul


ISLAMABAD (August 25 2006): Pakistan is being pressurised by the United States for resumption of rebate on cement export to Afghanistan. The rebate was withdrawn by the federal government to stabilise prices in the local market a couple of months ago.

Sources in the federal government told Business Recorder on Thursday the US forces are planning to construct wall at some points along Durand Line to stop influx of al Qaeda terrorists from Pakistani-controlled tribal areas for which they need a huge quantity of cement.

They said the US has conveyed its demand to the foreign affairs ministry, which consulted the public sector stakeholders concerned, adding the comments of the defence ministry have also been sought on the proposal, before placing it before the Economic Co-ordination Committee (ECC) of the Cabinet for formal approval.

First, this proposal would be approved at the prime minister level then it would be submitted to the ECC through any of the ministry and most probably it would be the commerce ministry, the sources added.

The government had allowed Rs 1,250 per ton subsidy on cement export, which includes Rs 750 central excise duty (CED), 15 percent general sales tax (GST) and Rs 25 per ton on packaging material. It was later withdrawn in the light of ECC decision to discourage export, they said.

However, the cement export to Afghanistan is in full swing despite withdrawal of concessions by the government as figures touched to 190,000 tonnes in July, the sources added.

"There is no let-up in cement export to Afghanistan and the export figures collected by the Central Board of Revenue (CBR) revealed that the manufacturers exported 190,000 tonnes of cement to Kabul during the first month of the current fiscal year," they maintained.

Sources were of the view that when the cement manufacturers were fully engaged in export, it means they were still making reasonable profit despite withdrawal of concessions. They said the All Pakistan Cement Manufacturers Association (APCMA) had raised serious concern over the withdrawal of rebate a few months ago, arguing that Pakistan would lose its hard-won export market in Afghanistan to India or Central Asian Republics, but the current export trend negates their apprehensions.

The average capacity utilisation of cement plants during the FY06 remained around 84 percent due to the government pressure especially from March, but in July, it was recorded at 77.3 percent, the sources added.

At present, the import of cement is allowed at zero percent customs duty and withholding tax from all the countries, including India. The ECC, sources said, was also informed that the retail price of locally manufactured cement of different brands in major cities has dropped to Rs 265-300 per bag except Quetta where the rate is static at Rs 335. The international price (FOB) of cement is $38-44 per ton.

The ministry has also submitted a month-wise price comparison to the ECC, according to which in January 2006, prices registered 15.6 percent increase against the same month last year, February 15.5 percent, March 27.5 percent, April 38 percent, May 22.9 percent, June 9 percent and July slightly above 4 percent.

Sources said in May last, the APCMA was of the view that by September there would be a glut in the market, but it also proved unfounded as there is no such situation and the cement manufacturers are earning a reasonable profit.

 

[Owais]

PC prepares checklist for privatisation

Islamabad (August 25 2006): The Privatisation Commission has prepared its checklist for future privatisation of the government-owned units in light of the Pakistan Steel Mills sell-off case, official sources told Business Recorder here on Thursday.

In its historic judgement of June 23, the Apex Court had directed that in accordance with the preamble of the Privatisation Commission Ordinance 2000, the Government/Privatisation Commission should adopt such ways and means which may fetch highest price of the privatised assets.

The sources said that for the purpose of evaluating the market share price of a public sector unit, the checklist includes a new "Terms of Reference (TOR) for the Valuer which shall include inter-alia a brief history of the entity, if any, the financial position, a description of produce line/services of the entity, a description of land, buildings, plant and machinery, the assets and liabilities and the current state of the industry."

It may be recalled that one of the grounds for cancellation of the PSM sell-off deal by the Supreme Court was that the PC had not included the price of the land while calculating the share price of the concern.

The court had pointed out that Section 2 of the PC Ordinance describes property as any right, title or interest in property, moveable or immovable in whole or in part or any means and instructions of production.

The court had further noted that historical value assets of a concern, ie according to the book value, which is always, based on depreciated price of the unit suits the buyer.

The sources said that the Apex Court has not held the Privatisation Commission Ordinance 2000 as ultra vires and the PC has got blanket approval of the units to be privatised in future from the revived Council of Common Interests (CCI)

They said that the checklist ensures transparent mechanism to get fair market price of the government-owned moveable and immovable property, natural resources and industrial assets. The sources added that shares of the units would also be offered to the public to ascertain their value.

 

[Owais]

MCB earns Rs 8.7 billion pre-tax profit

KARACHI (August 25 2006): MCB Bank has earned a record pre-tax profit of Rs 8.7 billion for half year ended June 2006, which is more than double of Rs 4.2 billion in the corresponding period of the last year. Profit after tax is Rs 5.7 billion compared to Rs 3.0 billion in the corresponding period of the last year.

This translates into earning per share (EPS) of Rs 11.22 as compared to Rs 5.94 last year. The bank declared cash dividend at the rate of 20 percent. The Board of Directors meeting of the bank was held at Lahore on Thursday under the chairmanship of Mian Muhammad Mansha, Chairman of the board, and approved the financial statements of the first half-year ended June 30, 2006.

The loan to deposit ratio increased from 62 percent in the first half of 2005 to 73 percent during the half year ended June 2006. This improvement in ratio helped bank to increase its net markup income from Rs 6,046 million to Rs 10,103 million. The remarkable growth in earnings has been registered by leveraging the balance sheet focusing on increasing lending to different segments of the economy.

During the second half of 2006 MCB is proposing to increase its capital by issuing Global Depository Receipts (DGRs), which will be listed at the London Stock Exchange.

This listing would help the bank in growing further and bringing an international dimension to MCB's shareholder base. Taking benefit of strong capital base, continuing good credit metrics and firm cost control, the bank is well positioned in core business lines to seize opportunities to grow the balance sheet and further improve earnings.-PR

 

[Owais]

Pakistan's foreign exchange reserves fall by $115 million


KARACHI (August 25 2006): Foreign exchange reserves fell by 115 million dollar to 12.630 billion dollar in the week ending on August 19, the State Bank of Pakistan (SBP) said on Thursday.

Reserves held by the SBP fell to 10.255 billion dollar from 10.353 billion dollar a week earlier, while those held by commercial banks also dipped marginally to 2.375 billion dollar from 2.392 billion dollar.

 

[Owais]

Building a world class infrastructure

EDITORIAL (August 25 2006): Prime Minister Shaukat Aziz's speech at the groundbreaking ceremony of a five-star hotel in Islamabad on Monday was reflective both of the existing deficiencies and the promise of a better future when he observed that Pakistan requires a strong and world class infrastructure.

Pointing out that the country's location at the crossroads of Central Asia, South Asia and the Middle East offers a lot of attractions for tourists as well as investors, he talked of various up and coming connectivity projects. He claimed that with several technical companies and IT parks operating in Islamabad, the federal capital is fast turning into an IT capital as well.

The city, the Prime Minister went on, will soon have an international standard airport, which would be connected with the Motorway, and that more airlines would be allowed to operate in the country. However, all this is to happen sometime in the future.

Like provision of basic education healthcare facilities, the responsibility for infrastructure development falls squarely on the governmental shoulders. Connectivity whether via air, road or railway, telephone or internet, power lines or gas pipelines, as well as irrigation network is the key ingredient of any plan for socio-economic development.

There is a lot that remains to be done in this regard. To name but two examples, the railways and canal networks, on which depends so much of our agro-based economic activity, are much the same as they existed at the time of the country's independence 59 years ago.

Meanwhile, a place like Dubai, that possesses no worthwhile natural resources of its own, has come from far behind to emerge as a bustling hub of business and trade. Boasting the region's largest transport infrastructure, it has turned into a major re-export centre, supplying technical equipment, food stuffs and luxury items worth around $14 billion to its Middle Eastern neighbours as well as countries in South Asia and Central Asia and as far a field as South Africa.

More than 100 shipping lines call on its ports and an equal number of international airlines operate out of its airports. Small wonder then if it has become the envy of so many countries, including our own.

Pakistan has vibrant agriculture and manufacturing sectors, and is eager to serve as a business and commerce conduit between the land-locked, resource-rich Central Asian republics as well as China on one side and the Middle East, South Asia, and the region beyond on the other side.

China is also said to be interested in importing oil from Africa via Pakistan's proposed energy transportation channel, which is 20,000 km shorter than the alternative route, and can cut transportation expenses by 25 percent and time by more than one month.

Thus Pakistan can do even better than Dubai if it acts fast to back its ambitions with matching on-the-ground infrastructure facilities. Indeed, road, railway and sea port projects are afoot to link these regions via transport and energy corridors that this country is uniquely placed to offer.

Other infrastructure facilities such as uninterrupted power supplies, telephone and internet links, as well as airports must also qualify to be rated as world class. Only then can we hope to exploit the full potential of the opportunities that are there to be seized.

 

[Owais]

Japanese firm keen to invest $15 million

KARACHI (August 25 2006): Consul General of Japan, Shoichi Nakano has termed Pakistan's investment environment and economic policies as most attractive for foreign investors. Speaking at the fifth meeting of diplomatic affairs sub committee of Karachi Chamber of Commerce and Industry (KCCI) on Thursday.

He informed the participants that a Japanese company was investing 15 million dollars to establish a unit at Export Processing Zone (EPZ) of Pakistan. He advised the business community to make efforts to improve Pakistan's image abroad in general and in Japan in particular to attract more and more foreign investment.

He said that the electronic media had played a negative role to portray Pakistan's image wrongly in the minds of foreigners.

He said that Pakistan's image could be improved but it would take long time and constant efforts. Chairman, Diplomatic Affairs Sub-Committee of KCCI, Mian Abrar Ahmed said that despite facing headwinds from rising energy prices at $70-75 per barrel and the catastrophe damage caused by the October earthquake, Pakistan economy had grown at an average rate of almost 7.0 percent per annum during the last four years and over 7.5 percent in the last three years, thus enabling it to maintain solid pace of expansion in the fiscal year 2005-06 with economic growth at 6.6 percent and foreign direct investment went to 3.5 billion dollars.

Welcoming the guests, KCCI President Haroon Farooki said Japan should take advantage of Gwadar Port to establish production base in Pakistan and tap the huge, largely untapped market of South Asian, Central Asia and Middle East. He said that Pakistan offers vast opportunities for entering into joint ventures with Japan in counter parts and transfer of technology.

Major sectors of investment of Japanese joint venture projects are automobiles, leasing, investment bank and power projects.

 

[Owais]

NLC keen to build terminal for ATT cargo at Port Qasim


KARACHI (August 25 2006): The National Logistic Cell (NLC) has shown interest in building a terminal from its own resources to exclusively handle Afghan Transit Trade (ATT) cargo in the proximity of Port Qasim Authority (PQA).

The project would help facilitate the ATT cargoes and save demurrage and storage charges in case of non-clearance of cargo for long time

Sources told Business Recorder that the federal government is striving hard to grab the maximum transit cargo through country's (Pakistan) land route as compared with Iranian option for ATT. "The ATT cargoes would be given maximum facilities through the country," the source said, adding "It has been observed that shortage of railway wagons or any emergency-like situation could cause of delay in cargo transit."

"In such conditions the ATT handlers are seeking a different mechanism for waiver of demurrage, storage charges of ports and terminals on such consignments which are lying unclear." In a recent meeting officials of Planning Commission's Afghan Cell discussed the issues related to the ATT from ports, transport to bordering cities with all concerned stakeholders.

Sources said that the officials in ministry of ports and shipping, NLC and other concerned department would discuss the proposal regarding the mechanism, operation and construction of ATT terminal at PQA. In August 2005, both the country ports witnessed a sharp decline in their ATT cargo handling, which at present is only 30 percent from its peak of 80 percent.

From November 2005, 70 percent ATT cargo has been diverted to Iranian port of Bandar Abbas due to unavailability of adequate transportation facility at the ports in Karachi, causing huge losses to the national exchequer. Sensing the gravity of the situation, the federal government in November 2005 allowed transporting the ATT cargo through NLC trucks that ended a four-decade old monopoly of the Pakistan Railways.

 

[Owais]

Bike manufacturers asked to raise exports to Africa, Bangladesh and Nepal


LAHORE (August 25 2006): Motorcycle industry should concentrate on increasing motorcycle export by penetrating in African, South African, Bangladeshi and Nepalese markets. Engineering Development Board (EDB) Chief Executive Officer Imtiaz Rastgar stated this while addressing senior officers of leading motorcycle-manufacturing company at their Sheikupura plant on Wednesday.

He also briefed them about restructuring of EDB, its performance and future plans. A briefing about activities of the group especially motorcycles manufacturing was also given to him.

He was told that the company had introduced the concept of 5S in which sale, spare parts, service, re-sale, financing and leasing services were provided under one roof through the network of the dealers. The company was in export business for the last seven years but the number was nominal, he was informed.

Imtiaz appreciated its vendor improvement programme (VIP), in which services of more than 300 vendors were evaluated and technical services provided to remove weaknesses. He also expressed satisfaction on achieving 92-percent deletion by the company.

Rastgar was informed that the company's CEO was currently in Japan to study the possibility of using world-wide network of the main company for providing services to the African countries. He was also informed that motorcycle industry had the capacity of manufacturing 1.5 million units annually, out of which its share was 700,000. Only 50 percent capacity of the industry was being used currently.