Pakistan Economy - News & Updates - Archive

[Neo]

State of the Art technology must for identifying new mineral deposits, says Jadoon
Tuesday October 10, 2006


ISLAMABAD: Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon on Monday said that application of state of the art-technology was must for identifying and exploring new mineral deposits in the country.
He expressed these views while addressing over a high level meeting to review the mineral sector?s goals here on Monday. Minister of State for Petroleum and Natural Resources Mir Muhammad Naseer Mangal and Secretary Petroleum Ahmad Waqar also attended the meeting.

The Minister said that the country was endowed with vast deposits of coal, copper, lead Zinc and other precious metallic and non-metallic potential.

He underlined the need to accelerate the pace of mineral exploration activities aimed at increasing its share in the growth of national economy.

Jadoon said that the Geological Survey of Pakistan (GSP) should gear up its activities for updating geological mapping and seismic data as early as possible that could provide geological information about new mineral deposits and its quality.

DG, GSP Talib Hussain Mirza in his detailed presentation informed the meeting that 50 per cent task of geological mapping had been carried out and 48,000 sq.km. areas for mapping and 18,000 sq.km. for geo-chemical exploration were to be covered under accelerated geological project.

He said that availability of geological maps and related data of mineral potential would attract investment in the country.

The DG said that evaluation of iron and associated base metals in Punjab and NWFP, exploration of massive sulphides in Uthal and Lasbella districts and tertiary coal in central salt range in Punjab were in progress.

He said that efforts were underway for airborne geo-physical survey for identification of mineral potential areas of Pakistan.

 

[Neo]

High speed train to be launched between Rawalpindi-Lahore: Rashid
Tuesday October 10, 2006

ISLAMABAD: Federal Minister for Railways Sheikh Rashid Ahmad on Monday said that Pakistan would introduce high speed train between Rawalpindi and Lahore in one year that will have a speed of 250-300 km/hour.
He said this while talking to Spanish Ambassador Jose Maria Robles who called on him in the ministry of railways.

The Minister invited Spanish firms to participate in the feasibility and later on construction of this high speed track, the first ever adventure in South Asia.

He said that Pakistan Railways would initiate metro service in 8 major cities of Pakistan having population over 2 million.

The process of feasibility studies in Karachi, Lahore and Islamabad/Rawalpindi has been initiated which is expected to be finalized within six months.

The Minster told that Spain having rich experience in metro service in encouraged to join Pakistan Railways in independent capacity or joint ventures in metro service.

Sheikh Rashid informed Robles that Pakistan Railways was keenly interested to avail the modern technology of Spain in terms of locomotives, signaling system, passenger and freight coaches and lying of rail track in order to bring over all improvement in Railway network and operators.

He said that execution of work on doubling of rail track on Khenewal-Lahore (270 Kms) section has been started, which will be completed in one year.

The completion of project would also bring a revolutionary change in the culture of Pakistan Railways not by improving train timings but also passengers dependency.

The minister said that special attention was being focused on freight service being major source of earning for Pakistan Railways.

"Presently 900 freight coaches are plying on tracks and we have fixed the target of increasing the number to 1000 while freight trains would be increased to 14 from 10," he added.

He asked for Spain cooperation in manufacturing of locomotives and passenger and freight coaches.

"Keeping in view the rising economy of Pakistan the load of freight movement has increased manifold and to cope with this emerging and projected situation in term of goods transportation, Pakistan Railway directly needed locomotives and freight coaches," he concluded.

 

[Owais]

CBR opposes new exemptions to aviation industry


ISLAMABAD (October 11 2006): The Central Board of Revenue (CBR) has opposed any new exemption/concession of duties and taxes to the aviation industry, particularly the flying schools, and chartered planes under the proposed National Aviation Policy (NAP) 2006.

Sources told Business Recorder on Tuesday that the tax officials have submitted their comments on NAP, keeping in view the exemptions given in the 2006-07 budget.

The CBR has drafted recommendations on the directive of Prime Minister Shaukat Aziz in a meeting in connection with the National Trade Corridor, which decided to discuss the draft National Aviation Policy with all stakeholders to create an environment conducive for the aviation industry.

The CBR is of the view that since adequate exemptions are already in place, any extension therein is not supported under the National Aviation Policy, sources said. According to the Board, presently, exemption from sales tax is available for aircraft (not helicopters) spare parts, if imported by domestic airline for maintenance of planes.

Exemption of customs duty and sales tax is also available on import of aircraft spares, parts, tyres, navigational equipment, accessories for maintenance and operations of aircraft, chemicals, lubricants and paints, air tickets, aircraft carpet, aircraft fabric, skydrol (brake fluid), laminated sheet, aluminum alloy sheets, aluminum alloy extrusions, aircraft seats, tools, test equipment, life jackets, spares of TGS vehicle, meals trolley, ball hand seal, standard units, exterior washing liquid, air head set electronics, air head set pneumatic and sealants. The items should also be imported by domestic airlines for maintenance of their aircraft.

Sources said that the said exemptions are linked with the commercial activity for general public. Therefore, extension of exemption for exclusive use eg flying schools, chartered planes is not supported by the Board.

They said that unconditional exemption has been granted to planes and other aircraft covered under the Sales Tax Act, 1990. However, helicopters, having only insignificant share in the local aviation sector, cannot be extended the same exemption.

Previously, exemption of sales tax under the Sixth Schedule of Sales Tax Act, 1990 was applicable on imported aircraft having un-laden weight of 8000 kg or more. Generally, commercial airlines hold aircraft above 8000 kg whereas General Aviation Operators use aircraft below 8000 kg. In order to promote the aviation industry, all types of aircraft have been exempted from levy of sales tax by including the same in the Sixth Schedule of Sales Tax Act, 1990.

According to CBR, flight simulator software is already exempt from sales tax levy, while publications and manuals, too, are exempted from sales tax. The Board said that elimination/reimbursement of taxes on secondary routes would be discriminatory and would cause distortion in the local air travel market.

All plants, machinery, equipment (whether or not locally manufactured) is already zero-rated from sales tax purpose and aviation related items are also exempted from sales tax. The Board has already given a number of exemptions to the aviation sector and further exemptions would not be appropriate in this regard.

 

[Owais]

Oil and gas sector reforms: World Bank assures continued assistance


ISLAMABAD (October 11 2006): The World Bank fully supports Pakistan government's petroleum sector reforms and would continue to provide assistance in realising the full benefits of oil and gas sector liberalisation and reforms, a spokesman of the WB said here on Tuesday.

He said that the government of Pakistan has undertaken a deregulation and reform programme in the past seven years and the World Bank has been an active partner in this endeavour and upon government request, it has provided technical assistance and advisory support in liberalising the sector.

He said that these reforms have helped in achieving:

(a) An enhanced level of Exploration and Production activity, resulting in a number of new gas discoveries which enabled domestic gas production to increase by about 50 percent from about 2.4 to 3.6 billion cubic feet per day.

(b) A transparent Gas pricing framework - linking producer prices with consumer tariffs - has been implemented. This has enabled gas companies to plan and undertake investments to transmit the increased volume of gas to consumers.

(c) Petroleum downstream market has been deregulated, with fuel oil, diesel and LPG prices determined entirely by the market. For other products, prices were pegged to international prices and adjusted periodically. Due to the unprecedented hike in international oil prices, this process has been interrupted in recent months.

(d) Oil and Gas Regulatory Authority (OGRA) has been established, which oversees the operation of the sector and arbiters the conflicting interests of different stakeholders (consumers, investors, government etc).

(e) Improved product specifications have been introduced in the market (lead-free petrol, low sulfur diesel, etc) and natural gas as cleaner fuel has replaced liquid fuels in the automotive and power generation sectors.

The spokesman said that there is still an unfinished agenda and reform measures in a number of areas are still pending. "The government has adopted a step-by-step approach towards the implementation of these measures so as to make these sustainable", he added.

He said that the World Bank (WB) would continue to provide assistance to realise the full benefits of oil and gas liberalisation and reforms programme.

 

[Owais]

50 percent equity term waived for sugar mills loans


ISLAMABAD (October 10 2006): The government on Monday waived off the condition for the sugar industry of 50 percent equity for financing from banks, and agreed that a directive would be issued as a follow-up of Monday's meeting between the secretaries' committee and Pakistan Sugar Mills Association (PSMA) held in Lahore.

The official side told PSMA representatives that the government would issue a directive to the SBP to ensure that banks provide financing to the sugar industry without any undue condition. The 'waiver' was one of Pakistan Sugar Mills Association (PSMA) demands to start crushing operation 2006-07.

However, the government team turned down PSMA demand for barring Trading Corporation of Pakistan (TCP) from offloading its stocks in bulk and made it clear that TCP would stay in the market to ensure that sugar prices remain at a reasonable level.

Other decisions of the meetings were that PSMA would cooperate with the government to ensure smooth supply of sugar in the market so that prices do not cross a reasonable level. Secondly, the industry would make prompt payments of the produce to the growers, and thirdly, the government would safeguard the sugar industry through a tariff-based regime to check dumping of sugar in the market.

The crushing operation in Sindh will start from November 1, 2006, and in Punjab and NWFP from November 15. This was decided in a meeting held here on Monday between Secretaries Committee and representatives of Pakistan Sugar Mills Association (PSMA). Federal Secretary Food and Agriculture Ismael Qureshi, Secretary Industries Kamran Rasool, Secretary Minfal Haroon Akthar, Cane Commissioner, Punjab, Abdul Ghafoor Bhatti, and President, Pakistan Sugar Mills Association (PSMA) Zaka Ashraf attended the meeting.

Briefing media persons after the meeting, Ismael Qureshi said that sugarcane price has been fixed as Rs 60 per 40 kg for Punjab, Rs 67 for Sindh, and Rs 65 for NWFP.

He ruled out any possibility of increase in sugar prices. He said that the country has sufficient sugar stocks and at present, 0.6 to 0.7 million tons sugar is available with the Trading Corporation of Pakistan. The duty on sugar dumping would stay. However, TCP would play its due role to maintain sugar prices in the country, he added.

He said that last year the cane price in Punjab was Rs 45 per 40 kg, but now it has been increased to Rs 60, which would benefit the farmers. He said that draft amendment in 'Pesticides Act' aimed at checking adulteration in pesticides had been prepared and it would and be placed before the Cabinet soon. The Secretary said that 'Cotton Vision' policy was in its final stage of preparation and it would soon be announced.

 

[Owais]

AJK government to launch Rs 90 million uplift projects


MIRPUR (October 11 2006): Azad Jammu and Kashmir government has evolved an integrated plan launching a number of uplift schemes to ameliorate the life of common man, official sources said.

Sources told APP here on Tuesday that the schemes includes Rs 90 million projects of the construction and carpeting of about 80 km long roads in all three districts of Mirpur division by the end of current financial year. The construction work on over 24 kilometres of main and link roads has so far completed and work on 23 km of roads is near completion.

Under the social sector uplift programme, colossal funds have been allocated for uplift schemes for each of the four constituencies of Kotli, Bhimber and Mirpur district of Mirpur division. Similarly Rs 20 million has been earmarked in the Federal Presidential Fund for the areas falling in all the four electoral constituencies of the district. All the new projects will be completed by the end of ongoing financial year 2006-07, sources said.

The construction work on all these development projects will be completed in the stipulated period, the sources said. Sources further said that the AJK government has determined the priorities for the speedy progress of roads and electricity sectors in the division especially in Mirpur and the adjoining hamlets. Particular attention was being given to ensure the smooth and stable supply of electricity to the consumers in Mirpur and the adjoining hamlets - besides other parts of the division.

Referring to the upcoming Rs 62 billion Mangla Dam Raising Project, sources said that the gigantic project would usher in the new era of speedy progress and bringing about exceptional socio-economic uplift and prosperity in Azad Kashmir especially in Mirpur district. The AJK government has already chalked out a broad-based plan to electrify all the remaining parts of Azad Jammu Kashmir including remote and far flung areas by the end of year 2007.

 

[Owais]

Pakistan's team in Beijing to hold talks on FTA


BEIJING (October 10 2006): A nine-member high-level delegation from Pakistan arrived here on Monday morning to hold talks on Free Trade Agreement (FTA) with Chinese officials from October 10. The Secretary Commerce Syed Asif Shah is leading the delegation, while the other members comprise Joint Secretary, Ministry of Commerce Shahid Bashir.

He is also the chief negotiator, General Manager Board of Investment Riazul Haq, Teepu Mohabat Khan, Joint Secretary, Textile Ministry, Shujauddin, Additional Collector Customs, CBR, Naeem Anwer, Deputy Secretary Ministry of Commerce, besides representatives from Ministry of Food and Agriculture, Ministry of Industries and Special Initiatives.

The Vice Minister, Ministry of Commerce Yi Xiaozhun will lead the Chinese side. According to Dr Naeem Khan, Counsellor Commercial and Economic, Pakistan Embassy, this would be the fourth round of negotiations on FTA. He said that the talks on FTA would continue for next three-day.

Before, leaving for China, a senior official of the Commerce Ministry told APP in Islamabad that they were looking forward to expedite the negotiation process in order to complete it by the year end. The FTA will be a major step forward expanding the scope of import-export between the two friendly countries.

Both the countries enjoy most favourable environment to conclude a mutually beneficial agreement because of their excellent diplomatic relationship, the sources said, adding they are prepared to accommodate each other upholding their overall business interest.

FTA was raised at a time when such trade arrangements are becoming increasingly popular and the two countries have stepped up their efforts to strengthen their economic ties.

Pakistan pinned great hope on FTA, also for correcting its balance of trade position with China. Over past few years, China-Pakistan economic and trade relations have developed quickly. In 2005, bilateral trade reached US $4.26 billion, up by 39 percent as compared to 2004.

Trade between China and Pakistan amounted to US $1.018 billion in January to March this year, up by 42.3 percent as compared with the same period last year. By March 2006, contractual investment of China in Pakistan was US $100 million, turnover of overseas projects was US $6.9 billion.

Pakistan invested US $24.31 million in China in all. The enhancement of the bilateral ties reflects the political will of the two governments and also the aspiration of the two peoples, the sources said, adding that it serves the fundamental interests of two sides and is conducive to peace and prosperity in the region

 

[Owais]

'Pak-Bangladesh FTA to be signed soon'


KARACHI (October 10 2006): The outgoing Bangladesh Deputy High Commissioner, Muhammad Abdul Hanan, gave a clear call for more regional trade and hoped that Pak-BD FTA would be inked soon.

The Bangladesh deputy high commissioner, who paid a farewell visit to Karachi Chamber of Commerce and Industry (KCCI) President Majyd Aziz, said it should be understood that trade is not charity, but kit is in fact enlightened self-interest.

He said that Pakistani manufacturers should not consider their Bangladeshi counterparts as rivals but partners. This thinking would bring about a fundamental change and trust in them in the global world.

"Trade and bilateral relations between Karachi and Bangladesh business community grew considerably during my tenure as deputy high commissioner in Karachi and the credit goes primarily to the positive attitude of the Karachi Chamber", said Hannan.-PR

 

[Owais]

SBP gets Rs7b at 8.30 interest rate


KARACHI: State Bank of Pakistan today (Tuesday) got from the banks seven billion rupees for two days at 8.30 per cent interest rates through Open Market Operations.

The banks offered the central bank seven billion rupees for the purchase of treasury bills. Accepting all bids, State Bank absorbed all the money.

Yesterday, the central bank determined the target at Rs15 billion for the auction of three-month, six-month and twelve-month T-bills.

According to money market dealers, T-bills worth Rs33.2 billion are getting matured on Thursday. Accordingly, the auction target would be easily achieved.

 

[Neo]

OGDCL eyes $1 billion profit in 2007


ISLAMABAD: October 11, 2006: The country's biggest listed firm Oil and Gas Development Co. Ltd. (OGDCL) expects its net profit to rise to $1 billion in the financial year to June 2007, a top company official said on Wednesday.

OGDCL, which produces 59 percent of the country's oil and 25 percent of its natural gas, earned a net profit 45.8 billion rupees ($755.3 million) in fiscal 2006.

"We expect that our profit would rise to $1 billion this year, and so we do not require any borrowing or any loans for our future investments," said Arshad Nasar, chairman and chief executive officer of OGDCL.

"We would be looking at new areas of exploration and would try to expand our canvas to contribute towards our profitability," he said at a media briefing.

The company plans to spend around $2 billion on new exploration ventures over the next three years, he said.

Nasar said OGDCL has set targets for the exploration drilling of 41 wells in the current financial year and added that the company is also planning to go for offshore drilling as well as overseas ventures.

"OGDCL, for the first time, is also planning to venture outside the geography of Pakistan," he said, adding that the company was looking at joint venture possibilities in Oman, Libya and other countries.

OGDCL has a market capitalisation of $9.63 billion and the government plans to list it on the London Stock Exchange through an issue of global depository receipts by December.

 

[Neo]

MCB Bank raises $150 million through GDR

KARACHI: October 11, 2006: MCB Bank Ltd. said on Wednesday it raised $150 million by issuing global depositary receipts in London.

"We are pleased to confirm that MCB Bank Limited has successfully raised $150 million through the issue of 8,622,100 GDRs," MCB, which ranks behind National Bank of Pakistan on the Karachi Stock Exchange, said in a statement to the exchange.

"Each GDR represents four underlying equity shares and will be listed on the London Stock Exchange," it said.

The private sector MCB Bank Ltd, formerly known as Muslim Commercial Bank Ltd, has an asset base of about $5.0 billion and a deposit base of over $3.8 billion.

MCB will be the first Pakistani company to be listed on the London Stock Exchange for trading on the Professional Securities Market, the company said.

The bank first announced its GDR plan in July and Merrill Lynch was its sole bookrunner.

At 0720 GMT, MCB Bank shares were trading 1.00 rupees down at 270.80 rupees in a broader market, which was down 0.22 percent. Pakistan is considering four more firms, including three banks, for foreign listings through the issuance of GDRs in the current fiscal year ending on June 30, 2007.

The government has already announced plans to list the Oil and Gas Development Co. Ltd. (OGDCL) on the London Stock Exchange by December.

The new companies on the list were National Bank of Pakistan (NBP), Habib Bank Ltd (HBL), United Bank Ltd (UBL) and Kot Addu Power Co. (KAPCO).

Analysts say the government is trying to attract foreign institutional investors to Pakistan through such issues at a time when its economy has been performing well.

Pakistan's economy grew by 6.6 percent in the year that ended on June 30, while the government is expecting 7 percent growth this year.

 

[Neo]

Growth in car sales slowing down

KARACHI, Oct 10: Sales of locally-assembled cars surged by 10 per cent to 40,044 units during the first quarter of this fiscal year as compared to 36,242 units the same period last year, but market pundits say the sales are showing slow growth over previous year owing to rising car financing rates.

According to figures compiled by Pakistan Automotive Manufacturers Association (PAMA), sales of Indus Motors (makers of Toyota and Daihatsu cars) rose by 48 per cent to 12,314 units as compared to 8,328 units while sales of Pak Suzuki Motor Company posted an increase of 21 per cent to 27,765 units from 22,978 units.

Sales of Honda Atlas Cars and Dewan Farooqui Motors Limited showed a negative growth which made an impact in the cumulative sales of all the assemblers. Honda sales fell by 43 per cent to 4,640 units from 8,184 units while sales of Dewan Motors dipped to 2,331 units from 3,102 units.

“The growth in car sales has started dampening down as it had been growing in the range of 25-30 per cent in the previous years,” observes Mohammad Suhail of Jehangir Siddiqui Research.

He attributed the slowdown in sales to rising car financing rates and the heavy import of used cars to fill up the demand and supply gap during the previous fiscal year.

The increase in interest rates had started making a negative impact on the sales of cars especially in higher engine capacity cars, he said, adding that it appeared penetration of cars in the Pakistani roads had reached a saturation point.

Also, there had been stability in the country’s economic growth as compared to boom period in the previous year. “I think that sales will remain in double digits in coming months but it may not maintain pace of previous years,” Sohail said.

Market analysts think that the bubble of imported used cars has burst as dealers are now offering these cars below the cost to clear the pile-up stocks of 30 per cent out of total import of over 45,000 units in 2005-06 that are still parked at showrooms.

Besides, poor re-sale value and problems in getting their parts have opened the eyes of the genuine buyers who had become wild for these cars without having any market knowledge.

In early months of last fiscal year, dealers had made windfall by selling used cars at higher rates in view of rising demand. Those dealers who had initially made quick money had sidelined themselves from this business now, while new entrants were facing problems and were suffering losses.

In locally-assembled cars only those cars bode well which enjoy good re-sale value, availability of parts at affordable rates and mostly available with factory fitted CNG in engine capacity of 800-1,000cc engines.

Honda cars are facing problems because of higher prices and it is not available in factory fitted CNG. Honda’s older models in the market have already lost both cash value and re-sale value.

Car market is abuzz with reports that Indus Motors is planning to launch Toyota Corolla XLI CNG in order to compete with Suzuki Liana CNG version.

However, Director Corporate Planning and Customer Relations of Indus Motors, Shah M. Saad Hussain said that the company currently did not have any plans to launch XLI CNG.

 

[Neo]

Pakistan gains economic stability

ISLAMABAD, Oct 10: With the successful implementation of first generation structural reforms and gaining economic stability, Pakistan entered international capital markets through the issuance of the debt instruments.

“Pakistan has so far floated three sovereign bonds, the last one was floated on March 23, 2006,” Dr Ashfaque Hassan Khan, Adviser Ministry of Finance told APP here on Tuesday.

He said that Pakistan successfully issued $500 million 10-year notes and $300 million 30-year bonds in the international debt capital market on March 23.

The adviser said that this transaction which represented the first international 144-A bond issued by Pakistan since 1999, raised significant interest among US institutional investors.

He further said that by issuing 10 and 30 years bonds Pakistan completed its primary objective of establishing a full Pakistani International yield curve in record time.

Dr Ashfaque said it was important to note that this offering was the largest ever funding exercise of the government.

He said the largest deal, prior to this transaction, had been the $600 million Sukuk or Islamic bond in 2005.

He said it was the longest ever tenor achieved by Pakistan.

He said that both the new 10-30 year offerings were debut offerings for Pakistan by dollar yield curve was extended out to 30 years in just two years time.

He said the most emerging markets sovereign issues had taken a longer time to extend their yield curve from five to 30 years .

The adviser said it took Philippines four years and Brazil and Turkey three years to extend their yields curve to 30 years.

Having established a relationship with global investors in the international capital markets, Pakistan has now decided to establish a relationship with Global Depository Receipts (GDR) offering for the best corporate assets namely OGDCL, NBP, UBL, HBL and Kapco with a listing on London Stock Exchange.

He added that this would be totally a new set of global investors who will be investing in the share of these scrips.

Dr Ashfaque said that many developed and developing countries had taken this route to showcase not only their country but also their best scrips.

This, he said, is a form of privatisation and there exists a strong relation between privatisation, economic success and Foreign Direct Investment (FDI).

Pakistan, he said has already on the radar screen of international capital market and with the GDR offering, it will also be on the radar screen of the international equity market.

He said that many international bonds had already started publishing research on Pakistan’s economy and the most recent once include research from Union Bank of Switzerland (UBS), J.P Morgan and Deutsche Bank.—APP

 

[Neo]

More exports to Germany stressed

KARACHI, Oct 10: There is a need to diversify Pakistani exports to Germany since 80 per cent of the trade is restricted to textile and leather.

“The present trade regime of both Pakistan and Germany does not reflect the desired potential that is achievable,” Hans-Joachim Kiderlen, Consul General of Germany, said this during his meeting with Majyd Aziz, President, and members of the Karachi Chamber of Commerce and Industry.

He said: “Individual German businessmen are very satisfied with their business partners here and prefer to do business with those who have developed long-term relationships because of high quality and reliability of Pakistani entrepreneurs.”

The German consul general was agreeable to the idea of a business-friendly visa system in the consulate as in his opinion genuine businessmen and their technical people should be given due consideration.

The German diplomat, who has been in Karachi for about a month, pointed out that there was a need to remove the `fixed’ mindset and perception that foreigners have of Karachi and said that it was very difficult to change overnight.

Majyd Aziz said efforts should be initiated to make trade and joint ventures more meaningful and profitable.

 

[Neo]

Wednesday, October 11, 2006

US help sought to improve industrial infrastructure

By Sajid Chaudhry

ISLAMABAD: Pakistan has sought United States technical as well as financial support for broad based industrial development in Pakistan.

In this regard the government of Pakistan has requested the US side to designate a team of experts for upgrading Pakistan’s industrial infrastructure, a senior government official told Daily Times on Tuesday.

Pakistan side also proposed to designate the year 2008 as the year for Economic Relations with United States of America to promote business-to-business contact of private sector of both countries.

This request was placed before the US side during the second meeting of Trade and Investment Framework Agreement (TIFA) Council held at Islamabad last week. TIFA Council deliberated upon the steps for making environment more conducive to increase in trade and investment between the two countries.

The official further informed that during the meeting, the Pakistan side informed the US team that following the successful example of work done by CEOs for earthquake relief, US President may designate a team of CEOs for upgrading Pakistan’s industrial infrastructure.

Pakistan has proposed in this regard that the team of US CEOs can meet Pakistani counterparts and officials of government of Pakistan to discuss the regulatory environment and infrastructure constraints to generate interest among large number of US companies in Pakistan’s economy and to promote Pakistan as investment destination all over United States.

United States may support broad based industrial development in Pakistan. This would help meet long standing United States request for Pakistan to reduce its overwhelming reliance on textile and apparels in its export. US support for broad based industrial development will address issues at three levels: (a) across the industries (b) at individual industry or sector level and (c) at individual company level.

Pakistan has also proposed that this may not be a USAID programme, but government of Pakistan and individual beneficiary companies in Pakistan may meet all or part of expenses.

The official said that Pakistan side said that Pakistan wishes to designate the year 2008 as the year for Economic Relation with United States of America. During the year, Pakistan and USA may launch a large number of activities for promoting private sector contacts and alliances.

The official was of the view that an inadequate industrial infrastructure is the main reason behind the slow progress in the industrialization of the country. Although the government of Pakistan has declared many areas as Export Processing Zones but majority of these EPZs are lacking even basic facilities like utilities and road network. Due to this state of affairs the country is facing difficulties in attracting direct foreign investment in manufacturing sector from the last many years.

The US support, if made available, would play a vital role in meeting the deficiency of infrastructure in industrial sector and would enable the country to accommodate more investment in industrial sector. This would also help achieving rapid industrial development in Pakistan and create a good amount of employment opportunities in the manufacturing sector. United States is also negotiating establishment of Reconstruction Opportunities Zones in specific areas to reduce the poverty.