Pakistan Economy - News & Updates - Archive

[Owais]

'Pakistan to cooperate with China for poverty alleviation'

BEIJING (August 24 2006): Pakistan on Wednesday pledged to enhance its economic interaction with China and other regional countries for poverty alleviation. Addressing an international conference on anti-poverty and regional co-operation at Chengdu, Pakistan's representative Babar Amin assured his country's active support for tackling the issue on priority basis.

The conference was organised by Sichuan University, UNDP, World Bank and China State Council for Poverty Alleviation. Representatives from Bangladesh, India and Sri Lanka also spoke on the occasion.

Counsellor of Pakistan Embassy in Beijing Babar Amin said that Pakistan attached top priority to poverty alleviation and its ultimate eradication. The Government of Pakistan with the assistance of the World Bank and other leading donors has established Poverty Alleviation Fund (PPAF) with a resource base of US $633.17 million.

About regional co-operation for poverty alleviation, he asserted it should serve as the foundation for building a sound anti-poverty strategy at the global level.

He hoped the regional co-operation could create a "win-win" scenario for the rich and the poor in a region. For the poor it should offer a chance to grasp the opportunities and end the perpetual cycle of poverty while for the rich it may carry the possibilities of creating more markets for their products in their neighbourhood as a result of increased purchasing power of the erstwhile poor.

Babar Amin reiterated Pakistan's support to the aims and objectives of the Shanghai Co-operation Organisation including its efforts for regional economic co-operation. "We welcome China's Observer status of South Asian Association for Regional Co-operation," he added.

About Pakistan-China economic co-operation, he said there is enormous scope for further economic co-operation between two countries especially in the context of China's Western development strategy as Pakistan shares border with Western China.

Babar Amin lauded China's rapid economic progress and said being the world's fastest growing economy in the past two decades China has been able to alleviate poverty not only at home but has globally contributed to its mitigation.

China's sustained economic growth has served as a development engine for rest of the world, working both on supply and demand side of the economic spectrum. It was also instrumental in recovery of East Asia after economic crash of 1990s, he added.

 

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ISLAMABAD, Aug 24: The International Monetary Fund (IMF) review mission, now in Pakistan wants the government to undertake "the very difficult" second generation reforms in order to adequately address governance and transparency related issues.

It also seeks further de-regulation of the economy to protect property rights and to create investment friendly environment in the country.

"The government will have to give serious consideration to achieve the objectives of second generation reforms which are, of course, very difficult and need to be undertaken to further strengthen the overall economy," said IMF Director for Middle East and Central Asia Department Mohsin S Khan, who also covers South Asia.

Mr Khan told Dawn on Thursday that the first generation reforms, which included tax and trade issues, were easy but the second generation reforms were tough and will have to be undertaken very carefully.

"Pakistan also has to take institutional reforms, especially civil service reforms and judicial reforms, which require more attention of the government," he said.

Mr Khan, who is visiting Pakistan along with a six-member IMF review mission, said that local and foreign investors were facing constraints for establishing their businesses in the country.

One of the most important challenges facing the government was to achieve long-term seven per cent plus growth rate to alleviate poverty and to create new employment opportunities, he said.

Responding to a question, he said poverty had definitely declined in Pakistan over the last few years but needed to be further reduced by increasing social sector spending.

"There is no doubt in my mind that poverty has reduced in Pakistan but I cannot say whether this reduction is 10 percentage point as was being stated by the government," he said adding IMF did not have technical expertise to measure the extent of poverty reduction in Pakistan.

Growth was the central point, he said adding if the country achieved up to 8.3 per cent GDP growth during the last three years, then poverty has certainly reduced. "No one can disagree with the government's claim that poverty has reduced in Pakistan."

However, the IMF director noted that there was not an ideal distribution of wealth between the rich and the poor in Pakistan, while maximum number of people should benefit from the country's improved GDP growth rate.

Mr Khan favoured government's decision to continue extending subsidies to the power and agriculture sectors as the improved budgetary provisions could now allow offering some benefits to the people. He said subsidy on diesel and kerosene oil was meant to help the poor classes.

It was good to see that the government was not offering across the board subsidies and was only catering to the requirements of low income groups.

"Pakistan needs to invest more in human and physical capital and the long-term fixed investment will have to be on education," the IMF director for Middle East and Central Asia said.

He expressed the hope that inflation will come down, which he thought to be around 7.5 per cent. That was not an encouraging situation.

"Some attention will have to be paid on further reducing inflation in Pakistan," he said adding that although it was not in the double digit as was experienced during 2005-06 but was coming down very slowly.

He said that Pakistan's current account deficit at $5.5 billion, was likely to be $6-7 billion during the current financial year.

But he did not see any problem over the issue because of the ongoing privatisation programme, increased foreign direct investment (FDI) and the government's foreign borrowings.

"This current account deficit seems to be the same, which was seen last year and the government was in a position to finance it," he added.

Mr. Khan said the current account deficit should not pose any major risk to the government. "But our policy advice would be to the government to be watchful about current account deficit and inflation."

Asked about the monetary policy and fiscal stance, he said the government was looking after them very carefully and as such it should not be a matter of any serious concern.

He said fiscal deficit at 4.2 per cent, despite last year's devastating earthquake, was not at all a serious issue for the country's economy.

"The important thing is that this fiscal deficit should be consistent with Fiscal Responsible Law at 2.5 per cent of the debt to GDP ratio," Mr Khan said.

He said 2006-07 was going to be the third consecutive good year like two previous years as far as macro economic fundamentals were concerned.

He was of the view that the government will achieve 7 per cent GDP growth in 2006-07 after 8.3 per cent growth rate achieved in 2004-05 and 6.6 per cent in 2005-06.

Mr. Khan did not believe that any future government will undo or slow down the reform process in Pakistan as it was meant to improve the overall economy.

Asked about the privatisation programme, the IMF director said, it was moving in the right direction aimed at improving efficiency of the business enterprises as well as ensuring more spending on social sectors.

"For us privatisation is proceeding well but we do not know how the issue of steel mills will eventually be resolved after the verdict by the Supreme Court," he added.

In reply to a question, he said he had read in the newspapers that Standard and Poors' was likely to downgrade Pakistan's positive out look.

"We would be happy to talk to the officials of the credit rating agency over the issue. But I do not see any particular reason as to why should they downgrade Pakistan's credit rating. Also, I do not know what is causing them to re-think about Pakistan's rating."

 

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ISLAMABAD, Aug 24: The wind power projects to be set up in the Gharo and Keti Bandar corridor near Karachi would cost 9.5 US cents per unit levelised tariff to the consumers, compared with 4.7 cents per unit of hydel projects that currently face resistance.

Under directives from the government, the National Electric Power Regulatory Authority has given a deadline of December 31, 2006 to give their acceptance for an upfront tariff after making interconnection arrangements with Wapda. The tariff is, however, subject to an aggregated ceiling of 300mw, documents suggest.

The wind power projects have been allowed a tariff of 11.75 cents (about Rs7.05 per unit), for the first 10 years and 3.7 cents (Rs2.2) per unit for the next 10 years. As such the levelised tariff for 20 years of the project life comes to 9.5 cents (Rs5.7) per unit. The tariff has been assumed 97 per cent plant availability, about 12 per cent interest rate and debt-to-equity ratio of 80:20 per cent

Interestingly, the government is promoting much costly thermal power stations instead of much cheaper hydel projects despite the fact that the country has about 28,000mw of non-dam hydro power generation capacity that could be developed as run-of-the-river basis or minor storages. If the power from mega dams is also included, the total hydro power capacity surpasses 40,000mw.

On the other hand, the average power tariff for gas-based projects have now been offered a tariff of more than eight cents, 13 cents for furnace oil based plants and 15 cents for diesel based projects.

The government is now working out details to allow import of coal to generate up to 1200mw of electricity, although Pakistan has one of the World’s largest coal reserves in Thar where all efforts to generate electricity have not materialised as yet.

The government announced the hydel power policy in 1998 and offered a tariff of 4.7 cents per unit to hydel power producers but later asked them to sign agreements at 3.3 cents per unit. This forced many investors to close their offices in the country.

Resultantly, no hydel project could make reasonable progress till such time the country once again plunged into darkness this year. This forced the government to allow a number of thermal projects at a tariff as high as 15 cents per unit and once again invited hydel producers for a maximum tariff of 4.7 cents per unit.

The hydel producers now claim that 4.7 cent tariff was not feasible and they could start projects at a tariff not less than 6.5 cents which was far below the thermal tariff of 14 cents since natural gas was not available.

 

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ISLAMABAD, Aug 24: Bahrain has shown its keen interest to make investment in power, housing and construction sectors of Pakistan. A three-member delegation of Strategic Acquisition and Investment and Kingdom Group of Bahrain led by Jasim Mohammad Al Malki, chairman Kingdom Group, held a meeting with Board of Investment (BoI) acting secretary Talat Miyan here on Thursday.

Mr Talat briefed the delegation about the investment opportunities available in the country. He said the shift in policies during the past five years had started yielding fruits.

He pointed out that Pakistan had great potential for investment and assured the delegation that their investment would be fully protected and they would enjoy unmatched facilities here as the country offered environment conducive to investment.

Mr Yusuf Abdullah Taqi, CEO of Strategic Acquisition and Investment, briefed about the functions and interests of his company. He said that they wished to expand their business here as Pakistan was fast emerging as a hub of investment in this region.

Meanwhile, another delegation of International Finance Corporation (IFC) led by vice-president of industries Declan Duff called on Adviser to Prime Minister on Finance Dr Salman Shah here on Thursday.

The delegation briefed the adviser about its investment in different sectors like banking oil and gas education, infrastructure and power generation.

The adviser informed the delegation that Pakistan had achieved considerable success in economic growth but still there was a huge potential to fully develop the manpower available in the country.

He said that Pakistan aimed to be a major manufacturing country so that it could create jobs for millions of young people.

The adviser said that there were vast opportunities of investment in education, communication and infrastructure. He informed the delegation about setting up of infrastructure fund by the government.

 

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Friday, August 25, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\08\25\story_25-8-2006_pg5_3

ISLAMABAD: The country has been able to considerably reduce the foreign debt servicing burden, economic adviser Dr Ashfaq H Khan said on Thursday, describing it a major success.

Addressing Pakistani press officers posted abroad, he underlined the importance of the reduction in foreign debt servicing and said there was a time when the country used 6.6 per cent of its gross domestic product (GDP) on loan repayment.

Giving an overview of the economic progress he said fiscal discipline, deregulation, pro-investment policies, consistency, debt limitation, and sound economic management had produced robust upward trends.

He said the ratio of tax, trade, investment and savings to the GDP showed that the economy was growing at a fast pace.

Dr Ashfaq said the economic reforms introduced by the government had stabilized the exchange rate and attracted over 3 billion dollar direct foreign investment in the last financial year.

He said strong domestic demand for goods not only helped sustain increased growth rate but also paved way for reducing unemployment, poverty, fiscal deficit and foreign debt.

He said Pakistan had re-entered the international debt capital markets by successfully launching new 10-year and 30-year 144A sovereign bonds, which reflected confidence of investors in the government’s economic policies.

To illustrate increased economic activities, he said the private sector had borrowed over 1,100 billion rupees from banks in less than 3 years to expand their operations across the country.

The adviser said the per capita income had gone up to 847 dollars showing an increase of 14.2 per cent in last three years.

Remittances at around 4.5 billion dollars continue to remain one of the largest sources of external finance for the country, he noted. Poverty has been reduced to 29.9 per cent from 34.46 percent and fiscal deficit brought down to 3.4 per cent from 7 per cent in the last 3 years, he said.

 

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KARACHI: The land of Pakistan is very profitable and fruitful for Japan, giving an opportunity to expand trade and investment, but bad image of the country being portrayed by western media restricts big traders from entering this trade corridor, Consul General of Japan Shoichi Nakano said.

Addressing the business community at the Karachi Chamber of Commerce and Industry here on Thursday, Shoichi Nakano hoped recent Japanese investment worth US$15 million in the Karachi Export Processing Zone would generate lucrative results, which would help remove all the misconceptions about Pakistan and attract more Japanese investors for business and investment.

“Japanese companies have about 70 per cent investment in the automobile sector which it seeks to enhance further, while its investors are seeking joint ventures and big investment in Pakistan’s textile sector,” he added.

“Both countries should enhance bilateral trade by assisting each other, which will also minimise trade imbalance between them.”

The Japanese diplomat lauded the progress made by Pakistan’s economy and stressed the business community to enhance bilateral trade in diversified sectors.

Earlier, President KCCI Haroon Farooki pointed out imports from Japan had touched $1.45 billion while Pakistan’s exports could not surpass $164 million.

He urged the business community to enhance trade and establish joint ventures with Japanese entrepreneurs, which would bring technology in the country.

 

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KARACHI: Increase in the interest rates shall not slow down the pace of economic growth during the current fiscal year and GDP growth would remain same as of the just ended financial year, economic experts believe.

However, if consumer financing -especially car financing by the banks - is not stopped immediately then it would adversely harm the economic growth in the years to come, they foresaw.

Economic experts expressed these views at a public dialogue on “Impact of Increase in Interest Rates,” held here on Thursday by Pakistan Press Foundation.

Dr Shahid Hasan Siddiqui, Chairman, Research Institute of Islamic Bank & Finance, argued that due to bold steps, the pace of economic growth would remain same as of the last fiscal year. First, State Bank of Pakistan has increased discount rates from 9 per cent to 9.5 per cent and secondly the central bank has revised export refinance rates from nine percentage points to 7.5 percentage points in Monetary Policy, he recalled and welcomed these steps as positive for economic growth of the country just for the ongoing fiscal year.

Dr Kaiser Bengali pointed out that SBP has increased interest rates as a measure to curtail inflation without affecting the economic growth.

Two years ago economic growth was not the objective of the present government and as a result of that unemployment increased unprecedented, seven million people fell below the poverty line, budget deficit, current account deficit increased to the historical levels whereas SBP maintained reserves artificially, he added.

Dr Bengali advised government to immediately stop the car financing that was adversely harming the economic growth and was need of the economy in contemporary.

Responding to a query, he maintained that preventing car financing would obviously minimise banks’ profits and would decline the auto sector, on the contrary, the suggested measure would positively impact on the overall economic growth, he added.

Experts warned that increase in investment should not be taken as being done presently by Privatisation Commission of Pakistan giving away profit making government own entities on through away prices. Moreover, the change of ownership under the name of privatisation should not be classified as Foreign Direct Investment (FDIS), they added.

MA Jabbar, representative of Federation of Pakistan Chambers of Commerce & Industry (FPCCI), said, “We have no fundaments to run the country economy. We need to shift our stance from short-term financing to the long-term to invest in the job creating and production sectors.”

He said that policy makers made economic policies against the growth orientation and give free hands to the manipulators.

Speakers believe that increased discount rate by SBP, and subsequently interest rates would affect cement and textile sectors in the country, as these two sectors are the biggest borrowers of the banks for their expansion projects.

 

[Owais]

'Less-efficient' plant: Wapda to pay $3.156 million rent per month


ISLAMABAD (August 26 2006): The Water and Power Development Authority (Wapda) will pay $3.156 million per month, as rent, for 150 MW thermal power plant, which, according to Planning Commission, is not only expensive but also runs on low efficiency, official sources told Business Recorder here on Friday.

The Economic Co-ordination Committee (ECC) of the Cabinet had approved the proposal in its last meeting, subject to approval of tariff by National Electric Power Regulatory Authority (Nepra) and reprioritisation of gas allocation quota for the rented plant, sources said.

They said that 'G E Energy' has also offered another plant, of 100MW capacity, to be available in March/April 2007, and Wapda reserves the right for its acquisition, if required, at equal or lower rates, depending on the offered rates through competitive bidding.

According to details, Wapda had received two unsolicited proposals from Alstom Power Rental ('APR') through Associated Group and General Electric Energy (G E Energy) through bids invited in the press. The two unsolicited proposals were examined by Wapda and Northern Power Generation Company Limited (NPGCL), which approved the following, subject to ratification/approval of tariff by Nepra:

a) Arrangement of 150 MW Power Plant at NGPS, Multan, on rental basis from G E Energy at a tariff of 3.133 cents/kWh (excluding fuel cost) for 3 years at 92 percent availability [monthly rent of $3,156,111 inclusive of O & M charges] be finalised.

b) Wapda to reserve its right for acquisition of another plant of 100 MW offered by G E Energy, which can be available in March/April 2007, if required. This acquisition would be at equal or lower rates, depending on the offered rates through competitive bidding.

a. Proposal of Associated Group for deploying 100 MW plan, subject to matching its tariff with G E's tariff. Sources said that Wapda has informed that it had received no response on tendering process, and the Board of Directors of NPGCL advised the management to seek GoP's approval for allocating special gas quota for the rented plants.

Sources said that the rented plants are expensive. However, given the urgency to have additional power capacity before next summer as per Wapda's demand projections and the long gestation period, renting of plant/plants appears to be the only short-term solution if shortfalls are to be met. As regards the provision of natural gas, Wapda has been asked to reallocate natural gas quota from its existing plants. Further, as the commissioning of the new IPPs, for which gas has already been allocated, will take 2-3 years, practical arrangements be worked out with the Ministry of Petroleum and Natural Resources to utilise this gas for the rented plant in the intervening period. The gas requirement of these plants is about 30-35 MMCFD/150 MM plant at 60 percent load factor.

Sources said that the Ministry of Water and Power had recommended to ECC to allow renting of power plant/plants by Wapda/NPGCL as an emergency measure, subject to acceptance of tariff by Nepra, and added that Wapda should only rent as much power as is absolutely necessary and which would be utilised with high load factor for economic utilisation of capacity.

According to sources, Wapda would select the nearest possible location to the load centres of Gujranwala, Faisalabad or Lahore to install the plant. However, if it is necessary to locate the plant at Multan then it should be ensured that there are no transmission bottlenecks. The Planning Commission in its comments said that the proposed plant was expensive and had low efficiency. However, in view of anticipated high power shortages in the country, and to maintain economic momentum, the proposal may be agreed to.

The NPGCL has been directed to operate the plant factor so that overall cost per unit is reduced. Wapda has also been asked to increase liquidated damage (LD) from the proposed ratio of 1:1.25 to high factor to bind the bidder for highest availability, sources said.

 

[Owais]

IMF questions go-slow on privatisation


ISLAMABAD (August 26 2006): The International Monetary Fund (IMF) review mission has questioned the government's strategy of going slow for the sell-off of the public sector entities, and suggested to the Privatisation Commission to take the job more seriously.

A two-member IMF review team met the Privatisation Commission officials here to review the sell-off plan for the current fiscal year. Sources said that the IMF team raised several questions regarding privatisation of different public sector entities, including Wapsa power distribution companies, PPL, PSO. NIT, SNGPL SSGC, OGDC and banks IPOs and strategic sale.

The team also questioned the status of KESC and PTCL sell-off. The review mission was of view that the Privatisation Commission should complete formalities for sell-off of the entities short-listed for the current fiscal year.

The Privatisation Commission team briefed the IMF review mission about the status of various entities listed for privatisation during the current fiscal year. The mission was also apprised about Pakistan Steel Mills Corporation (PSMC) sell-off controversy. The mission was told that the Council of Common Interests (CCI) had approved sale of different public sector entities, including PSMC.

The mission was also informed that the government was working actively to offer OGDC's global depository receipts (GDRs) in the international market by the end of the current fiscal year. It was apprised that the government plans to offer NIT for strategic sale on priority basis.

The review mission held meetings with Prime Minister Shaukat Aziz, different Cabinet members and economic policy makers. It has suggested an aggressive strategy to increase exports and investment for key sectors to sustain current pace of economic growth.

Under article IV of the consultations, the Fund can review economic growth of its member countries including Pakistan and give suggestions for policy making. However, its suggestions are not binding for members who are not beneficiary of its financial assistance.

 

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Importers assure government: sugar prices not to go up in Ramazan

KARACHI (August 26 2006): The quantity of sugar in the country is more than the requirement. This was stated by Adviser to Prime Minister on Finance, Dr Salman Shah, while talking to APP after a meeting with a delegation of sugar importers at a local hotel on Friday.

The Adviser said that the meeting was held to review the situation and ensuring stable supply position in the country's markets and bringing about improvement in it besides maintaining the prices and supplies at reasonable level.

He said that the members of the delegation "have committed" that during Ramazan the prices would not be allowed to go up and that supply would be ensured.

Salman said that the government has inventories in sugar, and the importers and mill owners also have stocks of this commodity. He expressed hope that during Ramazan there would not be any problem, and sugar prices would remain quite reasonable for the consumers.

The Adviser to PM said that Trading Corporation of Pakistan (TCP) has also made arrangements for 800,000 tons sugar, while importers have 250,000 tons. Besides, mill owners also have sufficient stock.

He said that sugar available in the country is more than the requirement. He said that TCP would maintain a strategic reserve of sugar of 0.4 million tons sugar. He said that the prices of the commodity internationally are quite reasonable. The Adviser to PM said that there is no rising trend in sugar prices in the country, rather they were coming down gradually.

He said that with the arrival of the new crop, sugar prices were expected to remain stable and the consumers would benefit from it. Dr Salman said that wheat prices in the country were stable for the past two years and this was because of maintenance of good reserve. He said that for the next crop of the commodity the farmers would also have good incentive for wheat production.

The Adviser said that importers have been provided subsidy for importing gram pulse (dal chana) and because of this there were some imports of this commodity. He stated that prices of `dal chana' were quite stable.

 

[Owais]

Shippers start millions of cotton bales dumping at Chinese ports


KARACHI (August 26 2006): International shippers have started dumping millions of cotton bales at Chinese ports in anticipation of a tremendous demand that would be created in the days to come, sources told Business Recorder on Friday.

They said that international shippers, mainly from the United States, moved their stocks by July 31, as the subsidy of step-2 by US government to exporters was due to end.

Traders hinted sharp rise in world cotton prices as cotton crop the world over has been affected by uneven weather conditions. They said that cotton prices would start inching up in the next couple of weeks, especially during September.

Cotton trade gurus hinted that Pakistan would also have to import at least 2.5 million bales cotton to meet the domestic needs and traders might have procure cotton at comparatively higher rates.

"It is premature to predict the country's annual cotton crop production. However, it is being anticipated that torrential rains and floods in some areas of the country could hit the crop to a major extent and the country might witness a shortfall of 1.2 million bales," said Ghulam Rabbani, Chief Executive of Drachenberg Trading Company, Texas (USA).

Sources said that international shippers had been dumping huge cotton stocks at Chinese ports, mainly Daliyan port, for the last one-and-half year, but they have now expedited the process of transporting cotton stocks containing millions of bales to China, keeping in view the upcoming cotton demand from a number of countries.

"They (shippers) are expecting tremendous demand of cotton from almost every niche of the world in the coming days and definitely hoarding is being done for speculation and price spike," the exporter remarked. Traders are of the view that cotton price, currently at 54-55 cents/lbs, could reach upto 55-58 cents/lbs in the coming days, particularly during September.

One trader commented, "Actually, they (shippers) are storing huge cotton stocks at the Chinese ports because warehousing is comparatively cheaper there and China is the biggest cotton consumer and its crop has also affected this year."

He said that the hoarders were confident that China could alone procure such big stocks if any country does not show buying interest. "China's annual cotton production stands at around 6 million tons against the annual consumption of 10 million tons, while its crop has been affected by uneven weather conditions and the remaining gap is to be filled through imports," he added

 

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China to dig 150 petroleum exploratory wells in Pakistan

ISLAMABAD: China Petroleum’s vice-president, Liu Xi Hui has said that his company would be assisting in drilling of 150 petroleum exploratory wells in Pakistan next year.

In a meeting with the Federal Minister for Petroleum and Natural Resources, Amanullah Jadoon here, Liu Xi Hui told that a huge potential for investment in Pakistan’s petroleum sector existed and China Petroleum wanted to avail of this opportunity by making investment. He also briefed about the details of China Petroleum’s different projects in Pakistan.

Federal Minister for Petroleum and Natural Resources, Amanullah Jadoon on this occasion welcomed the China Petroleum’s participation in the construction of PARCO’s Karachi-Mahmood Kot 850 kilometre long white oil pipeline project. He also briefed the Chinese delegation about LNG, coastal refinery and other petroleum projects.

 

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SBP siphons off Rs9.80 billion liquidity KARACHI: State Bank of Pakistan (SBP) has obtained Rs9.80 billion from the banks for six days at an interest of 8.40 per percent.

The Central Bank under its stringent monetary policy accepted offers from the banks for the purchase of treasury bills worth Rs9.80 billion only at an interest of 8.40 percent as against the total offers of Rs11.10 billion received.

Short-term loans’ interest rate today closed at the highest of 9.4 percent.

 

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Trade pact with US to be finalised: Shamshad

KARACHI: Governor State Bank of Pakistan Dr. Shamshad Akhtar said Friday that Pakistani textile products worth $2 billion could be exported to the USA in the wake of a special commercial agreement with the United Stats.

During a ceremony here, the governor told Geo News that negotiations about finalization of the agreement were under way and soon it would be finalized.

“Agriculture is vital to Pakistani economy and in past, loans continued to be provided on political basis; however, this misuse is no longer in place owing to reforms in the banking system as well as the investment in the field from private sector,” Dr. Shamshad said.

She said the government was providing loans to small cultivators on priority basis.

 

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ISLAMABAD, Aug 25: Prime Minister Shaukat Aziz said on Friday as the agriculture sector was the backbone of country's economy the government had adopted a holistic approach to improve farm productivity, introduce value addition and augment income of farmers.

He was presiding over a meeting at the PM House on to review the agricultural growth in Pakistan.

The prime minister said agriculture had a 22 pet cent contribution to the GDP and was a major employer in the rural areas where 67 per cent of the population lives.

He said as a result of the government's initiatives total size of agriculture sector now was about $30 billion. Rural poverty has declined from 39.26 per cent in 2000-01 to 28.1 per cent in 2004-05 thereby showing a decline of 11.16 percentage points.

The prime minister said the steps taken by the government for better water management, lining of water courses, supply of better seeds, fertilisers and

pesticides will further accelerate agricultural growth and will

help improve the living standards of the people in the rural areas.

He emphasised the need to facilitate the use of innovative technologies, demand driven research, market infrastructure development and compliance with international quality standards to improve competitiveness in the agricultural sector.

Secretary ministry of food, agriculture and livestock made a presentation about reforming Pakistan Agricultural Research Council (Parc), and restructuring of the Agricultural Price Commission (Apcom).

Fisheries policy and action plan and poultry development policy and action plan were also presented to the prime minister.

He reviewed the performance of each sector and said new challenges required innovative and demand-driven research and knowledge-based development system.—