Pakistan Economy - News & Updates - Archive

[Owais]

Steps taken to increase tax-to-GDP ratio: Yusuf



KARACHI (September 02 2006): The private sector is the engine of growth and the government machinery is supposed to be a facilitator to provide an environment that is conducive for investment.

This was stated by Central Board of Revenue (CBR) chairman and Revenue Division secretary-general Abdullah Yusuf at the distribution ceremony of first Large Taxpayers Unit (LTU) Awards 2006 here, on Friday.

The CBR chairman said the government has realised that the private sector is the backbone of the economy and this realisation has given more confidence to local entrepreneurs and foreign investors, and now they are capitalising on it.

Yusuf said an understanding has been developed with the private sector and it is helping the CBR to overcome the historic issue of misdeclaration, which the CBR had tried to address but so far not able to sort it out.

The gap between taxpayers and tax collectors has harmed the CBR efforts and the economic growth of the country. The CBR has taken various measures to fill the gap and facilitate taxpayers, he said.

He said the Karachi LTU has become a viable unit and the model was adopted in other regions like Lahore. Tax units would also be started in Peshawar and Islamabad, soon.

He said in order to increase tax-to-GDP ratio, the board had raised the level of fiscal effort by broadening the base of income and sales tax. Bringing more people into the tax net would extend the base of direct taxation, the chairman added.

He hailed the award distribution ceremony and said the practice would continue on yearly basis to encourage taxpayers on the basis of their performance.

LTU director-general Syed Aqeel Zafarul Hassan on the occasion said this was the first such event to give awards to taxpayers since the establishment of the Karachi LTU in 2002, adding the idea was consented by the CBR chairman to appreciate taxpayers' contribution.

Aqeel said a meeting with leading taxpayers was held to discuss selection criteria and a list was prepared and sent to the CBR chairman for approval.

The selection was made purely on taxpayers' performance like tax compliance, transparency, growth and level of abiding by the laws.

The first ever LTU awards were distributed among leading taxpayers from 17 sectors, including National Bank of Pakistan, Pakistan Petroleum, Lackson Tobacco Limited, Pakistan Steel, Pak Suzuki, National Insurance Corporation Limited, Pakistan Beverages Limited, GlaxoSmithKline Pakistan Limited, Engro Chemical Pakistan Limited, Habib Oil Mills (Pvt) Limited, Unilever Pakistan Limited, Javedan Cement Group, Packages Limited, Siemens Engineering Pakistan Limited and Pakistan Services Limited.

 

[Owais]

Thar coal reserves enough for 100 years energy needs: study




ISLAMABAD (September 02 2006): A meeting on energy security plan on Friday was informed here that Thar coal reserves were enough to cater to the country's energy needs for 100 years, and the government has established a company to implement the plan to turn the potential into reality on fast track basis.

The meeting, presided over by Planning Commission Deputy Chairman Dr Akram Shaikh, was given a detailed presentation, which showed that Thar coal reserves could produce energy equal to 400 billion barrels of oil, or 850 TCF gas, which in real terms was greater than combined oil reserves of any two major oil producing countries--Saudi Arabia and Iraq, or Saudi Arabia and Iran.

Sources said the study, presented in favour of real potential of Thar coal, showed that Saudi Arabia and Iraq have reserves of 377 billion barrels of oil. Likewise, Saudi Arabia and Iran's reserves were around 390 billion barrels of oil.

A comparative study of oil producing countries showed that Saudi Arabia has oil reserves of 264 billion barrels, Canada 179 billion, Iran 138, Iraq 115, Kuwait 101 and UAE 98 billion barrels of oil. The study indicated that net potential of all major oil producing countries stood at 895 billion barrels, whereas Pakistan was blessed with huge reserves of coal in Thar which were in 12 seams and their mining could ensure potential equivalent to 400 billion barrels of oil.

It also gave comparison of other oil producing countries, which have less oil reserves. It indicated that United States has reserves of 247 billion barrels of oil, Russia 157, China 115, India 93, Australia 79, Germany 73, South Africa 49, Ukraine 34, and Kazakhstan 31 billion barrels of oil.

The meeting was told that USA announced to build 100 new coal plants of average nominal capacity of 500 MW during 2000-04.

It was informed that major use of Thar coal would be in power generation because it is not of metallurgical or coking grade. Its other applications could be production of oil, ground and underground gasification, in cement and fertiliser industries.

The meeting was informed that estimated investment of RMBY 300-350 (Approximately $40) per ton was required for coal mining and by using only 2 percent of coal reserves, Pakistan could generate around 20,000 MW power for almost 40 years.

It said that Pakistan needs an investment of $4 billion for mining of Thar coal reserves. Thar coal will give Pakistan a number of by-products. These include anhydrous ammonia fertiliser 5.14 million tonnes, dephenolized cresylic acid pesticides, wire, enamel, expoxy, resin, krypton/xenon gases, high intensity, lighting and lasers, liquid nitrogen, food processing and refrigeration naphtha gasoline blending.

 

[Owais]

Pakistan and China to hold talks on FTA soon


BEIJING (September 02 2006): Pakistan, China are scheduled to hold fourth round of negotiation on Free Trade Agreement (FTA) in Beijing later this month. A senior official of the Chinese Commerce Ministry told APP that they were looking forward to expedite the negotiation process in order to complete it by the end of this year.

The FTA will be a major step forward expanding the scope of import-export between the two countries. The two sides were holding the talks, keeping in view the complementarily advantages in their industrial and trade structure, ensuring equal benefits.

According to the sources, the 3rd Round China-Pakistan FTA Negotiation made substantial progress in consultations on tariff reduction, and the two sides talked deeply about market access, trade relief and juristic issues in terms of goods trade and reached consensus on the draft text of agreement.

Deputy Director-General of Department of International Trade and Economic Affairs, Zhu Hong, who led his team during the talks, hoped that the two sides would finalise an acceptable arrangement, promoting mutually beneficially co-operative partnership.

Over past few years, China-Pakistan economic and trading relations developed quickly. In 2005, bilateral trade reached $4,26 billion, up by 39 percent compared with 2004. Trade between China and Pakistan amounted to $1,018 billion in January through March this year, up by 42.3 percent compared with the same period last year.

By March 2006, contractual investment of China in Pakistan was $100 million, turnover of overseas projects was $6,9 billion. Pakistan invested $24,31 million in China in all.

 

[Owais]

UK traders team due in November

LAHORE (September 02 2006): India-Pakistan Trade Unit (IPTU), Director, Jonathan Webber has said that a sector-specific UK delegation is likely to visit Pakistan in November to initiate joint ventures with their Pakistani counterparts, as the present economic scenario is quite conducive for potential foreign investors.

He expressed these views while addressing the members of the Lahore Chamber of Commerce and Industry (LCCI), here on Friday. UK Deputy High Commissioner in Pakistan and Director UK Trade, Investment, Hamesh Daniel, LCCI Senior Vice President, Abdul Basit, Vice President, Aftab Ahmad Vohra, former Senior Vice President, Sohail Lashari and Executive Committee members, Shafqat Saeed Paracha and Faisal Iqbal Sheikh were also present on the occasion.

The IPTU official, who is also heading a seven-member delegation of Birmingham Chamber of Commerce and Industry, said that the UK government was taking all necessary steps, as it wants to multiply its investment in Pakistan. "The British SMEs were working in close co-ordination with SMEs in Pakistan and there are bright chances that positive developments would take place in near future in this regard," he added.

The UK Trade and Investment Director said that a number of projects were in the pipeline, as consistency in policies had impressed the potential British investors who had shown their desire to shift their operations to Pakistan, which was not only a corridor to Central Asian States but also fast getting the status of regional economic leader.

Speaking on the occasion, Abdul Basit said, although trade between Pakistan and UK was gradually growing from $1.1 billion in 2002-03 to $1.4 billion in 2004-5 showing an increase of 27 percent, but it still leaves much to be desired at.

"A lot of progress could be made on trade front by identifying new tradable items and this is possible only through active engagement of the Chambers of Commerce and Industry of the two countries, frequent exchange of economic and trade delegations to identify the areas of mutual interest and arranging of single country exhibitions and also by holding socio-cultural programs in each other's country," he added.

 

[Owais]

Pakistani traders invited to Bahrain fair

KARACHI (September 02 2006): Pakistani businessmen have been invited to participate in the Bahrain International Property Exhibition (BIPEX) 2006 to be held from November 21 to 24, 2006 in Bahrain.

Mahesh S. Bhatia, Project Manager, Bahrain Convention & Exhibition Bureau and Ahmed Yusuf, Marketing Director, Dubai Shows Limited extended the invitation at a meeting with Azhar Saeed Butt, Acting President Federation of Pakistan Chambers of Commerce & Industries (FPCCI). Mahesh and Yusuf said that the BIPEX 2006 was an excellent opportunity for buyers and sellers to benefit from the latest property boom in the region.-PR

 

[Owais]

Japan to help explore NWFP's economic potentials




PESHAWAR (September 02 2006): Japanese Ambassador Seiji Kojima said on Wednesday that his country had sought the proposals of both Federal and provincial governments for exploration of the economic potentials of NWFP.

Speaking in Guest Hour programme of Peshawar Press Club (PPC), he said that members of the Sarhad Chamber of Commerce and Industry (SCCI) had briefed him on potential of textile, fruit, beverage, metallic, non-metallic, tourism and hydropower generation sectors.

He said the potential would materialise through encouraging domestic and Japanese investment. The Japanese Ambassador was accompanied by Embassy of Japan's First Secretary Masayuki Taga and Consular General of Japan in Peshawar Nawabzada Fazal Karim Afridi.

Seiji Kojima said Japan would provide assistance for the promotion of the potential sectors and also hinted at increase in the assistance of Japan in this regard.

He said that his country would extend assistance in vocational training and technical education adding that they would also provide assistance for development of infrastructure, tunnels, and roads, construction of bridges and initiation of agriculture related projects in NWFP. Furthermore, he said that Japan would also provide assistance in water supply schemes.

The ambassador of Japan said that he had crossed through Kohat Tunnel and appreciated the better management of the facility by Pakistani agencies, which were operating the tunnel-computerised system and were capable to meet any emergency.

He said that maintaining for physical construction, the government of Japan would provide safety technology for maintenance of the tunnel and would later extend it to other parts of the province for agricultural and industrial development of the province.In response to a question, Seiji Kojima said that during their meeting with Chief Minister Akram Khan Durrani and District Nazim Ghulam Ali, he came to know about difficulties in supply of clean drinking water to the people of Peshawar and constant fall in the water level.

He said the project of water supply from Warsak Dam was discussed in the meeting with District Nazim.

He said that before extension of financial assistance, they would go for conducting a feasibility study of the project. The ambassador said that they would also assist provincial government in promotion of education.

He said that he got an impression of the lack of education facilities and particularly for girls, who used to travel a long distance for attending schools. "The government of Japan would like to work for the development of education sector in tribal area," he added.

Regarding Pak-Japan relations, he said that his country considered Pakistan very important partner and was an important donor for later, saying till few years back Pakistan was the largest recipient of Japanese assistance in the world. "We are assisting Pakistan in water supply and development of infrastructure facilities," the ambassador maintained.

He said that Japan was the first country, which provided assistance in relief to the victims of devastated earthquake of October last year. The government of Japan has completed of project of US 66 million dollars in the earthquake-affected area through establishing 130 schools and restoration of 20 medical facilities including some basic health units in district Batagram. The assistance in reconstruction and rehabilitation work in earthquake-affected areas would continue till March 2008.

 

[Owais]

LNG-focused energy plan

EDITORIAL (September 02 2006): In an initiative that is meant to boost alternative energy sector in Pakistan, President Musharraf has okayed an LNG-specific energy plan which envisages import of LNG and the setting up of a countrywide network to ensure supply of this highly cost-effective fuel for both our industrial and domestic consumption.

According to a Recorder Report, the President approved the plan while presiding over a high-powered meeting held to review the progress made on the availability of cheaper sources of energy to industrial, commercial and other consumers. A Dubai-based group has reportedly committed an investment of $211 million for setting up a separate berth at Port Qasim in Karachi for handling specifically imported LNG and its countrywide distribution.

A study on cost-effectiveness of LNG and LPG has, meanwhile, demonstrated that these can become major resources in the future for supplementing the gas production to ensure its uninterrupted, speedy and inexpensive supply. Liquefied natural gas (LNG) is said to be a more cost-effective alternative to both oil and liquefied petroleum gas (LPG).

Further, natural gas has been rightly termed a fuel of choice of 21st century for being environmentally friendly. The current world-wide gas reserves are estimated at 4,900 trillion cubic feet. Pakistan too has huge gas reserves, which have fuelled its economy over decades. Starting with the Sui gas fields in the early 1950s, Pakistan has since developed an extensive transmission and distribution infrastructure.

Use of natural gas, which is cleaner and less carbon intensive than oil or coal, is growing faster than the use of any other fossil fuel. Technological innovation and economic and regulatory changes have resulted in gas becoming the preferred fuel. Natural gas is a highly desirable energy source also in that it burns cleanly with less pollution than other hydrocarbon fuels. Pipeline transportation, which has been the dominant mode over decades, has come to be regarded as not an economically feasible option for transporting gas across oceans.

Liquefied natural gas (LNG) has instead proved itself to be a commercially viable technology for transporting gas. And its consumption is increasing even faster than that of piped gas, making it likely that LNG's share of total gas consumption will substantially increase over the next 10 to 15 years.

In fact LNG markets seem to be already entering a new phase of expansion, with a more diversified range of customers and suppliers. LNG can be unloaded only at specialised terminals, which typically include a jetty and unloading facilities. Hence the need to build an LNG terminal at Port Qasim.

Pakistan's present energy mix has the highest share, ie 50 percent of gas. With the switchover to LNG, the ratio may go up still further. Secondly, with the rapid rise in the level of greenhouse gases in the atmosphere and large-scale depletion of the ozone belt, governments have started exploring environmentally friendly sources of energy. Serious efforts have already been mounted world-wide to harness solar and wind energy for its industrial and domestic use. However, it will take Pakistan considerable time before it can effectively tap these abundant, but cheap, sources of energy.

While the LNG-specific energy plan approved by the President is a step in the right direction, it seems that the initiative has been prompted by the Dubai-based group's offer to set up a separate berth at Port Qasim to handle imported LNG. As launching and operating "front companies" to reap huge profits through influence peddling is not an unknown phenomenon in this part of the world, it would serve the country's interest better if the government closely scrutinised the antecedents of the Dubai group before accepting its offer. Perhaps an open bidding mechanism should be adopted to secure better results.

 

[Neo]

ISLAMABAD, Sept 1: The export of non-textile products declined by 7.8 per cent to $783.053 million during July 2006 as against $849.345 million the same month last year.

Official figures compiled by the ministry of commerce showed that the decline in the export proceeds during the month under review was due to decrease in export of engineering, sports, carpets, leather, surgical and pharmaceutical products.

The only category which registered a nominal growth was primary commodities which include mostly agriculture produce and to some extent fish food.

Analysts attributed the decline in the non-textile export proceeds to ill-advised and un-proper policies of the government which was only focused on the promotion of textile products.

The government had announced a package of Rs25 billion for the textile sector, while the traditional sectors like sports, surgical and carpets were unable to compete with the similar products manufactured in China, India etc., in international market.

Official figures showed that the export of all sport goods (footballs and gloves) declined by 50.95pc; carpets, rugs and mats by 59.50pc; and leather goods (garments and gloves) by 34.41pc during July 2006 over last year.

The export of surgical goods and medicinal instruments declined by 78.47pc, followed by jewellery dipped by 94.45pc, furniture by 27.96pc, molasses by 731.66pc, footwear (leather and canvas) by 40.12pc during the month.

The export of engineering goods decreased by 31.98pc, auto parts 60.41pc; chemical and pharmaceutical products by 2.14pc, cutlery 72.75pc and onyx manufactured 56.15pc during the month under review.

Among the primary commodities, exports of fish and fish foods rose by 1.59pc, rice by 160.49pc and oilseeds by 142.15pc. However, exports of fruits declined by 58.24pc, vegetables dipped by 87.79pc, tobacco by 18.85pc and meat by 14.76pc during July 2006 over last year.

 

[Owais]

Best facilities available for oil and gas exploration: OGDCL


ISLAMABAD (September 02 2006): Executive Director, Oil and Gas Development Corporation Limited (OGDCL), Aftab Ahmad on Friday said that government was providing best facilities and incentives to companies for exploring oil and gas in the country.

Talking to PTV, he said it always had been the concern of the government to make efforts regarding oil and gas in the country and to involve private and multinational companies in this regard.

He said, Pakistan was one of the countries where the efforts for exploring gas started a long time ago and success ratio of Pakistan was very good. The government policies had always been positive and balanced in this regard, he added.

He said, every upcoming policy in this regard was better than last policy, as the government knows that international situation was changing day by day regarding oil and gas and it wanted to stand with the world.

Present reservoirs of oil were 291 million barrels, he added. He said, consumers in Pakistan couldn't pay the international price so the government has to ensure that there was a balance between consumer and producer's price. He said, according to geologists, there were many opportunities of exploring gas in the country and government was working on it actively.

 

[Owais]

Pakistan cellular phone market advance at 94% annually

ISLAMABAD: Pakistan cellular phone market is advancing at a giant-pace of 94 percent per annum.

Finance advisor to prime minister, Dr. Salman Shah told this in a three-day Pakistan Investment Forum held at London under the aegis of Myrill Lynch and KASB Securities in collaboration.

Salman Shah said that 51.6 percent share of Pakistan’s gross market constituted of daily domestic use items.

 

[Neo]

Saturday, September 02, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\09\02\story_2-9-2006_pg5_12

SIALKOT: British Deputy High Commissioner Hamish Daniel called for narrowing the communication gap between the UK and Pakistan in order to increase the volume of bilateral trade and economic development.

He was speaking to members of the Sialkot Chamber of Commerce and Industry on Thursday. The deputy high commissioner spoke of the need to exchange information in order to bring the business communities of the two countries closer.

He added that several trade missions would visit Pakistan next November. The delegation will assess the possibilities of investment in different trade fields, he added.

He said there were many opportunities to establish joint ventures between the business communities of United Kingdom and Pakistan. He said the exchange of trade delegations would help create a better atmosphere to explore possibilities of collaboration between UK and Pakistan. He added that 32 delegations from Birmingham had visited Pakistan last year to promote trade between the two countries.

The business community of Birmingham had showed a keen interest in developing trade ties with Pakistani counterparts, he said. Hamish Daniel said that more efforts were needed to formulate a mechanism to enhance trade and commercial activities between the UK and Pakistan.

The deputy high commissioner said there were 80 British Companies operating in Pakistan and he added that further investment of 140 million dollars were in the pipeline.

SCCI President Nouman Idris Butt said the economic success of developing countries under the WTO regime depended on the cooperation of developed countries in the provision of technical, consultative and advisory support. This will minimise the disadvantages of developing countries trading under the WTO regime, he said.

 

[Neo]

Saturday, September 02, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\09\02\story_2-9-2006_pg11_6

ISLAMABAD: The Pakistan Post will launch five revolutionary services to facilitate customers in a proactive manner, and revamp the organisation to meet the challenges of the 21st century, Pakistan Post Director General Arshad Khan told Federal Minister for Communication Shamim Siddiqui at the Pakistan Post Headquarters in Islamabad.

In his presentation titled the ‘New Vision of Pakistan Post’, Khan shared his plans to launch five new services in the post offices of the country: instant money transfer, collection of utility bills from homes, top of the line courier services, tehsil headquarters level tele-centres and the disbursement of micro financing. Khan said the Pakistan Post’s vision is to transform itself into a self-sustaining, customer-friendly and dynamic organisation by utilising its nationwide infrastructure as the hub of commercial activity.

Siddiqui appreciated the presentation and praised the DG’s initiative. He advised him to make the organisation’s environment more customer-friendly and to equip it fully to compete with the private sector.

The meeting was also attended by State Minister for Communication Shahid Jamil Qureshi, Communication Secretary Tariq Mehmood and senior officials from the Ministry of Communication and Pakistan Post.

 

[Neo]

Saturday September 02, 2006

NORWAY: Prime Minister Shaukat Aziz has said country offers enormous opportunities to the expatriate Pakistanis for investment in several sectors adding government will extend full protection and assistance to them on this count.

"There are various sectors wherein the expatriate Pakistanis can invest. Government will provide security and assistance to them", he said this while talking to a delegation of Pakistan Muslim League Norway, which called on him in Oslo Friday.

Prime Minister held government was striving hard to for the socio-economic development and prosperity of the country. The basic amenities are being provided to the people at their doorstep.

He went on to say PML has introduced politics of decency. He appreciated the efforts being employed by the Pakistani nationals in the development of Norway.

The participation of Norwegian prime minister in the ceremony of Pakistani community and Norwegian king in the Independence Day celebrations of Pakistan here reflect the unique position Pakistanis are enjoying in Norwegian society. He reiterated several foreign investors are making investment in Pakistan due to investment friendly policies, consistency in economic policy and level playing field being provided by the government. He made special reference to the investment made by Telenor company saying this Norwegian company has made investment to the tune of $600 million adding that international community has also acknowledged the prudent policies being pursued by the government.

 

[Owais]

Duty-free imports worth Rs 3.65 billion allowed in 2005-06


ISLAMABAD (September 03 2006): The Central Board of Revenue (CBR) had allowed duties- and taxes-free import of 490 different consignments worth Rs 3.65 billion by manufacturers-cum-exporters under the Duty and Tax Remission for Export (DTRE) scheme during 2005-06.

This remission of duties and taxes was granted with the condition of re-exporting finished products under the DTRE scheme. According to the latest data compiled on Saturday, the Large Taxpayer Units (LTUs) at Karachi and Lahore granted approval to 34 consignments involving remission of duties and taxes of Rs 445.48 million last fiscal year.

The Collectorate of Sales Tax and Federal Excise, Karachi, approved import of 241 consignments worth Rs 681.362 million in 2005-06.

According to break-up, Karachi LTU approved 16 consignments involving duties/taxes-free import of Rs 400.070 million; LTU, Lahore, 18 approvals worth Rs 45.410 million; Collectorate of Sales Tax and Federal Excise, Lahore, 75 approvals, Rs 704.590 million; Collectorate of Sales Tax and Federal Excise, Gujranwala, 78 approvals, Rs 309 million; Collectorate of Sales Tax and Federal Excise, Faisalabad, 13 approvals, Rs 608.217 million; Collectorate of Sales Tax and Federal Excise, Rawalpindi, six approvals, Rs 265.770 million; Collectorate of Sales Tax and Federal Excise, Peshawar, 23 approvals, Rs 382 million; Collectorate of Customs, Sales Tax and Federal Excise, Multan, 11 approvals, Rs 218.132 million; Collectorate of Customs, Sales Tax and Federal Excise, Hyderabad, 3 approvals, Rs 25.083 million and Collectorate of Customs, Sales Tax and Federal Excise, Quetta has granted six approvals involving duties/taxes free import of Rs 10.820 million under the DTRE scheme.

 

[Owais]

PSM needs Rs five billion for revamping


KARACHI (September 03 2006): Pakistan Steel Mills (PSM) has sought federal government consent to spend around Rs 5 billion on revamping and modernisation of its infrastructure and increasing its production capacity, sources told Business Recorder here on Saturday.

They said that PSM has sent its proposals to the Ministry of Industries, Production for the upgradation of major departments of the plant. "Pakistan Steel intends to replace old equipment and infrastructure of three of its major departments ie hot strip mill, coke oven battery plant and steel making plant. This is likely to cost around Rs 5 billion," they said.

"The production capacity of PSM would be increased by 0.4 million tons to around 1.5 million tons per year, if Rs 5 billion is injected into its existing plants," sources added. They said that PSM was waiting for 'go-ahead signal'.

The implementation of the plan would enable PSM to stand in line with any modern steel plant in the world, sources said.. "Soon after receiving the nod from the authorities concerned, revamping process would get started," they added. They said that if the government allowed the PSM management to commence revamping of its major departments, the process would take at least two-and-a-half years to complete it.

The amount would be spent from its savings. Nevertheless, prior permission has to be obtained to inject such a hefty amount, they added. They said that tenders would have to be floated the huge work and the revamping process would be carried out in at least three phases. Sources said that PSM intends to start revamping process on its own, and all development and modernisation work would be carried out indigenously.

Pakistan Steel has paid Rs 18.6 billion as taxes and duties to the national exchequer during the last three years, and the amount would increase significantly when the mill would produce more 0.4 million tons steel products annually.