Pakistan Economy - News & Updates - Archive

[Neo]

'Big projects to be burden without modern infrastructure'

KARACHI (January 01 2007): All mega projects being carried out in big cities including Karachi would be burden if infrastructure was not developed and aligned with the modern technology.

This was stated by Ajaz Ahad, President Institute of Architects Pakistan on the occasion of GREEN ARCH 2006 organised by the Engro Asahi Polymers & Chemicals Limited (EAPCL) in collaboration with the Institute of Architects Pakistan held here at a local hotel.

He was also the chief guest at the occasion. While giving presentation on "Pakistan - Trends in Urban Development", he said that in order to develop the metropolis technical skill, education and health sector should be developed on war footing and mass migration of people from rural areas to the metropolis should be stopped.

He further elaborated that every year 0.35 million people from rural areas moved in the metropolis, which put enormous burden on the already limited resources of the city. To stop this trend, the government should develop cottage industry and such industries based on agriculture so that people of the rural areas could get batter opportunity in their own environment, he added.

Nasir Qureshi, Section Head Pipes, Market Development Department, EAPCL while presenting his presentation on "PVC pipe advantages and uses in households" said that the PVC industry in Pakistan is in its early stages of development. Being the pioneer of the PVC industry in the country, the company has undertaken an intensive market development program, which is expected to considerably boost the local demand for PVC.

PVC is a versatile plastic with a wide range of applications including pipes, fittings, doors and window profiles, artificial leather, packaging sheets, garden hose, electrical cable insulation, furniture and geomembrane applications.

EAPCL is helping the downstream industry through technical assistance and market development for the promotion of PVC products. The technical services provides after sales technical support to all the customers and includes guidance in cost effective recipes, providing technical training at the customers premises and trouble shooting.

EAPCL worked on the development of Pakistan plastic industry and with its proactive strategies the market size arose from 40,000 MT per year in 2000 to 85,000 MT per year in 2006.

This provided hundreds of direct and thousands of indirect jobs, saved foreign exchange being spent on import of PVC and also brought critical technological knowledge and know how to Pakistan.

Looking at the future prospects, EAPCL and its joint venture partners decided to further invest in Pakistan. The planned investment is to the tune of $250 million.

While giving details, Qureshi said that investment would be done for an immediate expansion in PVC manufacturing facility from existing 100,000 MT per year to 150,000 MT per year within next year. Further, expansion to 200,000 MT per year will be done by 2010.

An EDC and VCM manufacturing facility is planned to be installed with the capacity of 200,000 MT per year capacity. The plant is scheduled to be completed by 2008.

A cryogenic storage facility is being established for storage of ethylene.

The programme was followed by programme "Loose Talk" by the famous duo of Anwer Maqsood and Moin Akhtar, with the thunderous applause of the guests.

In the end Syed Ashar Hussain, Marketing and Sales Manager, EAPCL, distributed the mementoes to the participants.

http://www.brecorder.com/index.php?id=513380&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Billions of rupees uplift plans get under way in Sialkot

SIALKOT (January 01 2007): District Nazim Sialkot Muhammad Akmal Cheema has vowed to develop ignored and far-off areas of rural and urban parts of the district.

Talking reporters here, he said that special attention had been given to improve means of communication and provision of better health and education facilities to the masses in every union council of the district.

Cheema disclosed that the district government was spending more than Rs1.22 billion on the construction of 85 different roads in Sialkot district, adding that construction work on these roads was on different stages and efforts were being made for the completion within the stipulated period.

The steps had been taken for improving the means of communication and linking the far-off areas with their respective Tehsil headquarters in the district, he said.

Cheema revealed that Sialkot-Head Marala road was being converted into dual carriageway at a cost of Rs 350 million and development work on the project would be undertaken soon.

The district government had approved as many as 32 different projects costing Rs50 million under Citizen Community Board (CCB) and development work on these projects would be initiated shortly in various parts of the district, disclosed District Nazim Sialkot Muhammad Akmal Cheema.

More than Rs50 million were being spent on the widening and reconstruction of BRB canal bridge near Daska city for streamlining the traffic on Sialkot-Gujranwala road while Rs20 million would be spent on the widening and improvement of Daska bypass road for reducing the traffic problems.

In addition to this Sialkot-Gujranwala road would be converted into dual carriageway at the estimated cost of Rs1.20 billion, he added.

Special attention, he said, had been accorded on the promotion of education and district government had allocated Rs1.84 billion for the completion of different projects.

Cheema said in order to provide better health cover to the masses at their doorstep Rs260 million were being spent of improvement of rural health centres and basic health units in the district.

He pledged the district government would play an instrumental role for the betterment of the common man and ensure maximum relief for the general public of the district. Cheema said that all available resources were being mobilised for converting Sialkot district into a model district of the Punjab.

http://www.brecorder.com/index.php?id=513390&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

2007 will be year of continuity of policies: PM

KARACHI: January 03, 2007: Prime Minister Shaukat Aziz said here on Wednesday that 2007 will be the year of continuity and consistency of the ongoing policies and reforms of the present government which would remain under implementation besides carrying out a huge agenda of legislation in the Parliament.

He said the economy will be kept on the track and objectives of foreign policy will be augmented with improved and better relations with all the neighbours and other countries of the world.

Replying to questions at a news conference at the Governor House in which he analysed the achievements of the present government during the year 2006 and its plans for 2007, the prime minister said that efforts will continue for solution of Kashmir issue.

Pointing out that the government will bring further improvement in the standard of living of people, Aziz said that 2007 will be the year of smooth political process, peace and harmony, augmentation of the democratic process and promotion of inter-faith harmony.

He pointed out that year 2007 will witness the completion of parliamentary calendar followed by start of election process during which the people will decide whether they would like to see the continuation of policies with further improvement in the system or some other system.

The PM dwelt at length at the government plans in the fields of education, health and infrastructure with great focus on skill training, a programme which has been launched on a vast scale.

He particularly referred to Rs 3.3 billion worth addition of most modern and state-of-the-art medical facilities at the Jinnah Postgraduate Medical Center, a project which has been approved by the Federal Government.

"Year 2007 will be an exciting and important year for Pakistan during which the outcome of the policy continuation will be carried forward," he declared.

Replying a question, the PM said that a number of steps have been taken to institutionalise the reforms and all targets in this regard have been defined in the fiscal responsibility which can also be seen on the web.

However, if any government wished to deviate from the laws, it will have to obtain approval from the Assembly as everything is covered by law, he explained.

He cited examples of organisations like NEPRA, PTA, OGRA etc., and said all these have come into existence through laws.

Aziz told a questioner that as a result of the government's economic and fiscal policies and measures taken thereunder the unemployment rate is coming down. He cited examples of sectors like telecom and electronic media and pointed out that lacs of people have got jobs in these sectors.

In the rural areas where country's two-third population is living, agriculture has been promoted and prices of DAP reduced by Rs 250 per bag, he said, adding that prosperity of farmers would mean strengthening of economy, which is the focus of present government's policy.

To question about prices, the PM pointed out that it is an issue of supply and demand. He said during the season, the prices of perishable items come down and go up in off-season period.

He said the government will pay attention and improve the retail and wholesale price system with establishment of more 'mundis' (markets).

Aziz said utility stores have played an important role in keeping the price structure under control. The prices offered at utility stores are not only appropriate but quality is also good. He said now utility stores are also being opened under franchise system.

The prime minister said that a democratic system has been firmly established in Pakistan and today every party had the liberty of giving their viewpoint while the press is free and constructive criticism has brought a positive change in the society.

He told a questioner that the Federal and provincial governments are working on a number of housing schemes for low income people. The Federal government is also bringing a scheme for low grade government employees.

To a question about composite examination, the PM said that a decision in this regard will be taken by the Sindh Cabinet.

Replying a question about Balochistan, he said it is a very important province where fast development is taking place and demands and needs of this part of Pakistan are being fulfilled.

The situation in Balochistan is gradually improving, he added.

Source: Brecorder.com

 

[Neo]

$277.9 million foreign investment in Pakistani bourses

ISLAMABAD: January 03, 2007: Foreign investments in the Pakistani stock exchanges during the first six months of the current fiscal year mounted to $277.9 million.

The US with $123.3 million investments in the Pakistan bourses topped the list among the foreign investors during the fist six months of the current fiscal year, while Singapore with $107.3 million investment was second major investor, Geo TV quoting State Bank figures reported.

Meanwhile, Switzerland withdrew $25.1 million from the stock exchanges, while the France with $2.219 million withdrawal remained second among the countries withdrawing investments.

Foreign investors on the last business day of the year 2006 withdrew $13.8 million from the stock exchanges.

Source: Brecorder.com

 

[Neo]

Pakistan's government plans to build fourth port

Dubai: The Pakistan government said it plans to build the country's fourth port to handle increased cargo volumes.

"We are looking to build our fourth port. In a few months we will make an announcement," Shipping Minister Babar Khan Ghauri told Gulf News in an interview recently.

"We will start construction in 2008. No site has yet been decided," he said.

According to Karachi Port Trust (KPT) chairman Ahmad Hayat, Pakistan's seaborne trade from July 2005 to June 2006 stood at 53 million tonnes, growing by 12 per cent in a year.

Container volume grew by 20 per cent to 1.75 million TEUs (twenty-foot equivalent units) during the same period.

Pakistan has two ports at Karachi and one at Gwadar in the province of Balochistan. The Port of Gwadar will become operational in March next year as the first phase work nears completion.

It has received $300 million investment from China and the Pakistan government has invested $50 million.

A new port with a handling capacity of some 4.5 million TEUs per year and a quay of 4.5 kilometres is also being developed in three phases at Karachi.

Ghauri said nine major companies, including DP World and a consortium that includes Sharjah's Gulftainer, have been shortlisted to manage Pakistan Deepwater Container Port.

Ghauri could not provide estimates of the financial investment Pakistan needs to develop its port infrastructure. "In the port sector, the sky is the limit," he said.

Meanwhile, Karachi Port Trust (KPT) chairman Ahmad Haya told Gulf News $2.5 billion worth of projects were underway in Karachi. These include the $1.2-billion deepwater port at Keamari near Karachi, set to open in 2009.

The project will be funded 60 per cent by KPT and the rest by three port operators that will manage the three container terminals.

Other projects include development of a cargo village and an industrial zone in Karachi and modernisation of several bulk cargo berths.

DP World, the world's third biggest port management firm, is investing $211 million in a new container terminal at Port Qasim. It already manages one terminal, acquired when it bought P&O earlier this year.
Courtesy GulfNews

http://www.pakistanlink.com/Headlines/Jan07/03/14.htm

 

[Neo]

5.2 per cent annual growth planned in Pakistan by 2010

Wednesday, January 03, 2007

Islamabad,-- SPA -- Efforts are underway to enhance Pakistan's agricultural growth rate up to 5.2 percent by the year 2010, according to an official statement.

This is part of a plan on which the government is working for rapid and sustainable agricultural yield to ensure food security.

The government will invest over 50 billion Pakistani rupees during the next three years on various research and development projects in agriculture and live-stock sectors.

The statement said that under the medium-term development program, the government has decided to expand agricultural credit loan at the rate of over 24 percent increase every year.

It would provide over Rs 1600 billion as agricultural credit to the growers through banks by 2010.

http://www.dailystar.com.lb/article....cle_id=78 146

 

[Neo]

Dollar could cost Rs 120 if reforms not done, 2006 achievements highlighted: Prime Minister

KARACHI (January 04 2007): Prime Minister Shaukat Aziz has said that had there been no economic reforms, the dollar would have cost Rs120 in the open market. He was addressing a press conference at the Governor House here on Wednesday to highlight the achievements of his government during the outgoing year 2006 and to make projections for the year 2007.

He said: "The economic reforms have brought about improvements in the national economy: the rupee remained strong, local and foreign direct investment improved, government borrowings remained under control, and growth rate, despite difficult times, remained at 6.6 percent. It is likely to achieve 7 percent GDP during 2007. The per capita income has already reached $850."

He said there was some pressure in inflation, but the balance of payments and current account position were under control. "Things are now heading in the right directions," he added.

He said that reforms in the agriculture sector proved helpful and reduction in the prices of DAP/phosphate by Rs250 per bag was welcomed by the farming fraternity.

The Prime Minister did not quote from statistics, and avoided giving figures, confining himself to generalised statement. ".... In economy, during 2006, continuity of economic policy gave results and there was an overall improvement," he said.

He said that around $6 billion soft loans were received for the rehabilitation of earthquake-affected people. "New facilities have come up. New schools, hospitals and residential blocks are in place. The work is progressing, and it would be completed soon," he added.

Referring to people under distress, he said that the government was trying to create an environment where people could stand on their own feet. "They would be helped in establishing their own economic outlets so that the uprooted families are once again financially self-supporting. This activity would create jobs for others in the same area as well," he added.

He said that during 2006 Pakistan maintained its prudent foreign policy. Efforts to raise Pakistan's image as a progressing and peace loving country proved effective. The President and the Prime Minister visited a number of states. Similarly, a large number of the heads of state and other influential persons visited Pakistan. There were exchanges of delegations between Pakistan and other countries. During these exercises, Pakistan's image was projected and its interests were pursued, he added.

He said that Pakistan's foreign policy made it possible for international organisations to look towards it in times of need. "When it came to setting up a committee to look into the UN reforms proposals Pakistan's prime minister was taken on the committee along with Norway and Mozambique. When important issues are there, Pakistan is invited," he added.

He said that during the outgoing year Pakistan participated in all international conferences and, at home, hosted a number of conferences including that on World Islamic Forum. He said that this conference identified areas of weaknesses as well as co-operation among the Muslim countries. "Muslim Ummah needs solidarity and the OIC reorganisation," Aziz added.

He said Pakistan's relations with China remained on the right path. Pakistan would have co-operation in a number of economic areas with China. "China is our strategic partner in all sectors. China and Pakistan are source of strength for each other."

Regarding Afghanistan, he said that Pakistan wants a strong and stable Afghanistan. "We will take our relations forward," he added.

The Prime Minister said that with Iran Pakistan was moving ahead and soon there would be progress in respect of gas pipeline project. "A high powered Pakistani delegation will visit Iran this month to sort out hitches in the project."

He said that Pakistan was against nuclear proliferation. "We favour peaceful, civilian use of nuclear technology, and support its acquisition."

He said that India and Pakistan continued dialogues during 2006 and there was improvement in bilateral relations.

"However, Kashmir is a problem, which needs solution to make South Asia a peaceful region. Composite dialogues with India are in progress in respect of Kashmir, and I am hopeful of encouraging results."

Shaukat said that political process and the process of democratisation continued unabated at home. There were Senate elections, election in the local bodies and by-elections in the national and provincial assemblies. The provincial assemblies and the national assembly completed four years and had entered the fifth year with confidence to complete their tenure. "Assemblies would complete their term and fresh elections would be held in time. Pakistan Muslim League would contest elections along with its coalition partners."

He said that dialogues were part of political process and any contact with other political parties, such as PPP and others, should not create ripples in the political circles.

When asked about his constituency from where he would file nomination(s), he said, "Wait till the time comes."

He said that Pakistan would continue making its armed forces stronger than they were ever before. "F-16s would be procured; planes and frigates would come from China, and all measures would be taken to maintain maximum deterrent levels. The purpose is internal, as well external, security of the country and to provide an atmosphere to people to make economic progress."

He said that Rs 3.3 billion would be spent on Jinnah Postgraduate Medical Centre to add a state-of-the-art facility to this national institution.

He said that during the year under review all mega projects that were initiated were either completed or were reaching completion. "To name a few, Gwadar Port, Coastal Highway and Basha Dam have changed the lives of the people in their areas."

He said that 2007 would not be without challenges. "We will focus on smooth political process, continuity of economic policies and promotion of interfaith harmony."

He said that efforts would be made to create employment opportunity, augment income generation activity, minimise poverty and improve the social sector.

He said that labour survey had been completed and it would be released at a press conference in Islamabad. "According to the findings of this survey, poverty has reduced, and unemployment rate has gone down."

In his opening remarks, the Prime Minister said that he was pleased to see electronic media progressing and providing 'instant news' to its viewers.

He said that it was owing to government policy that print and electronic media had expanded and had provided jobs to many young people. But, when his attention was drawn to the fact that many electronic channels were not able to pay salaries to their employees, that many have not issued appointment letters to their staff members, and many employers were not paying the agreed amount of salary to their employees, he expressed astonishment.

He said, "I would look into the matter. I would also look into the delay in implementing the wage board award." In reply to a question about missing people and agitational protest by their families in Islamabad and elsewhere, he said that the families should file FIR to facilitate an inquiry into 'these reports'.

http://www.brecorder.com/index.php?id=513519&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

OGDCL LSE offering to earn $811 million


ISLAMABAD (updated on: January 05, 2007, 18:11 PST): Pakistan will realise $811 million through the successful international offering of OGDCL 10 percent shares on the London Stock Exchange through Global Depository Receipts (GDRs) and proposed retail offering.

IPO of Habib Bank Limited (HBL) and GDRs of United Bank Limited (UBL), National Bank of Pakistan (NBP) and Kot Addu Power Company (KAPCO) and later HBL will also be offered with proper sequencing during the next few months and efforts will be made to complete the same by the end of the current fiscal year.

Federal Minister for Privatisation & Investment Zahid Hamid stated this while chairing a meeting of the Board of Privatisation Commission here on Friday.

The PC Board constituted a `Future Portfolio Committee' headed by the minister/chairman PC with two other members of the PC Board to formulate recommendations for processing new transactions from the approved list of the Council of Common Interests (CCI).

The Board reviewed the NITL, PSO and Jamshoro Power Company transactions, which are at an advanced stage.

It was also informed of the progress regarding issue of EOIs for Pakistan Machine Tool Factory, Sindh Engineering Limited, SME Bank, PTDC Motels and Hotels and for appointment of Financial Advisor for PMDC's coal and salt mines.

The PC Board was also informed that 25 percent of the approved bid price of Lyallpur Chemical & Fertilisers Limited has been received within the specified time.

Lyallpur Chemical fetched Rs 280.2 million highest bid and the buyer has paid 25 percent of the total bid amount i. e Rs 70 million while Rs 40 million of the earnest money is also with PC. The buyer will deposit the remaining amount before February 20, 2007.

The Board also discussed the highest offer of Rs 850 million received for the sale of the land of Services International Hotel and recommended to the CCOP that after thorough review of all aspects of the transaction, fresh EOIs be invited from local and foreign investors.

http://brecorder.com/index.php?currMIndex=02&currPageNo=1

 

[Owais]

Pak-Iran joint investment company established
RECORDER REPORT
ISLAMABAD (January 05 2007): Pakistan and Iran on Thursday formed Pak-Iran Joint Investment Company. The representatives of the two sides signed the agreement. A 3-member delegation comprising Mehdireza Darvishzadeh, chairman and managing director; Syed Mansoor Mir Abedeni, deputy chairman; Dr Morteza Adel Gholamzadeh, consultant law is currently visiting Pakistan to formulate the memorandum of articles of the company.

The signing ceremony was held here in the presence of minister of state for finance Omar Ayub Khan. Pak-Iran Joint Investment Company is being established in pursuance of the agreement signed between the two governments in Tehran on February 23, in 2005.

The company shall carry out the business of investing in and financing enterprises and Projects, particularly export oriented enterprises in Pakistan and Iran on a commercial basis. The registered office of the company shall be situated in Karachi with a branch in Tehran, Iran.

The Minister of State for Finance and Revenue Omar Ayub Khan said that the registration of the Pak-Iran Joint Investment Company was a step forward to strengthen the brotherly relations between the two countries. This will give a boost to the economic ties by promoting investment and business in various fields like infrastructure, petroleum, banking, finance, commerce and information technology.

The head of the visiting delegation was of the view that the joint-venture company will enhance bilateral investment between Iran and Pakistan besides giving new height to trade between them. He said Iran and Pakistan should take full advantage of each other's potential in grabbing more share in trade in the global market.

http://brecorder.com/index.php?id=513873&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Per capita income has risen to $850: Salman

ISLAMABAD (January 06 2007): The Advisor to the Prime Minister on Finance, Dr Salman Shah, has said that Pakistan's per capita income has risen from $425 to $850 over the last six years. In an interview here Friday, he said country's economy is seen a big expansion particularly in sale of consumer goods.

He said, similarly, rate of poverty has declined from thirty four to twenty five percent. Dr Salman Shah said, Pakistan has an all time high foreign investment of four billion dollars in the last fiscal year. He said international banks, the most conservative investors, are making long term investments in the country. He said that with the growth rate of seven percent, Pakistan is the fastest growing economy in the region.

The advisor said national saving schemes are market determined and their interest rates will remain connected to inflation and other market instruments like Pakistan Investment Board.

http://www.brecorder.com/index.php?id=514283&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

FDI to pass US $ 5 billion this year: privatization minister

ISLAMABAD: Federal Minister for Privatization & Investment Zahid Hamid said that the foreign direct investment in the country would cross record US $ 5 billion in current fiscal year.

Talking with visiting high level 4-member Iranian delegation the federal minister said the Pak-Iran Investment Company, a Joint Venture between the two governments will open a new era of further deepening economic bonds between the two countries.

The Minister assured Pakistan's full support to make the Investment Company an effective tool for investors of both the countries. It would generate economic activities for both by identifying new areas for investment and would benefit people of both the countries, he added.

Zahid Hamid said Pakistan has comprehensive and broad based Privatization Program, and the country has so far privatized 162 public sector units raising US $ 7 billion since 1991 while 87 % of the privatization was completed during the recent 7 years realizing around US $ 6 billion.

 

[Neo]

Friday, January 05, 2007

Gwadar deep seaport to generate two million jobs

ISLAMABAD: The Gwadar Deep Seaport, which will become operational in March, is likely to generate around two million new jobs in next eight to ten years.

This was stated by Secretary Planning & Development Balochistan Government Sohail Qadeer while speaking to the state television on Thursday.

He further said that the future business hub deep seaport would provide cheapest trade route to ships. The work on the development projects at cost of over Rs 25 billion has been expedited in Gwadar to transform it into a modern and developed city equipped with all amenities.

The construction of 350-bed hospital costing Rs 550 million, 250-acre sports complex, central park and small recreational parks will be completed in next five years, he said.

The water purification plant to provide 35 million gallon clean water to people will start functioning soon.

The 950km rail track will be built to link Gwadar port with rest of the country for which a survey is being done.

He said 950km motorway would also be constructed to facilitate port users. Of this 190km motorway will be completed by end current year, and remaining portion ready in stipulated period.

http://www.dailytimes.com.pk/default...5-1-2007_pg5_2

 

[Neo]

Friday, January 05, 2007

Landmark achievement: CBR revenue collection exceeded Rs 100b in Dec

ISLAMABAD: For the first time in history, the revenue collection by CBR has exceeded Rs 100 billion during the month of December 2006. The overall (provisional) collection for the first half of current fiscal year has reached Rs. 409.2 billion, touching a new growth height of 26.3%.

A CBR statement issued here on Thursday stated that the direct tax receipts for the month of December have reached 75.7 billion, recording a massive increase of 117.2%. The major contributory factor has been the improved corporate profitability, especially of the banking, oil and gas, and telecom sectors.

One of the most important developments during July-December 2006 compared to the corresponding period of last year has been the increasing reliance on domestic taxes rather than import related taxes, which are regressive and vulnerable to various fluctuations.

The share of direct taxes in total collection has increased from historical level of 30% to 42.2%. Two of the domestic taxes, namely the federal excise duties and domestic sales tax have also recorded a double-digit growth of 20.2% and 17.4%, respectively.

On the other hand, on account of declining imports, especially dutiable imports, and continued tariff rationalization and reduction, the collection of customs duties has been lower than last year by about Rs. 700 million, which is an expected outcome.

Anticipating a continuity of this trend, CBR expects that the overall target of Rs. 835 billion would be achieved, notwithstanding the revenue loss due to shrinking imports.

http://www.dailytimes.com.pk/default.asp?page=2007\01\05\story_5-1-2007_pg5_7

 

[Owais]

July-December exports may touch $8.43 billion

ISLAMABAD (January 07 2007): Pakistan's exports are likely to touch $8.43 billion for the first six months (July-December) of current fiscal year against $8.073 billion in the corresponding period of last year, official sources told Business Recorder.

"Trade figures of first six months of current fiscal year, compiled by CBR, show that exports for December have reached $1.413 billion, which are expected to touch $1.5 billion mark after final figures are released by Federal Bureau of Statistics (FBS)," sources said.

There are contradictions in trade figures of November released by the FBS and submitted to the ECC in its meeting held on December 6, 2006. FBS says that exports stood at $6.93 billion in July-November, but statistics submitted to ECC in its meeting on December 6 showed exports of $6.876 billion in July-November.

Sources said that Commerce Ministry may not be able to achieve the exports target of $18.6 billion set for the current fiscal year but exports figures would at least save the jobs of some senior officials.

During December 2005, goods worth $1.470 billion were exported, recording an increase of 30.10 percent against exports of $1.129 billion in the same month of 2004-05, but the current trend is not encouraging. The huge import pressure and low pace of exports have compelled the government to project upward the trade deficit $12.2 billion.

According to the figures, exports during November 2006 increased to $1.38 billion against $1.28 billion in October 2006, showing a growth of 7.64 percent, while imports in the same period were up by 30.11 percent, to $2.77 billion, compared to $2.13 billion in October 2006.

Commerce Ministry is actively engaged in finalising sectoral exports targets but it also fears that the slow growth in exports could make it difficult to achieve the target of $18.6 billion, said an official. During 2005-06, the government had missed its exports target of $17 billion by a margin of $531 million.

Sources said that Prime Minister Shaukat Aziz had also criticised Commerce Ministry for not taking steps to complete the schemes announced in trade policies of last three years.

 

[Neo]

Bright 2007 ahead for Pakistan's business, industry
By M. Aftab (Analysis)

7 January 2007

"COMPETITION, Productivity and moving into new sectors" is the battle cry for Pakistani business and industry in 2007. Strong action in these areas will raise profitability. The choice is to prosper or perish.

These are serious thoughts in which Pakistani industry, business and government leaders are engrossed as 2007 ushers-in.

But, the good news for foreign exporters is that Pakistan will continue to import a great deal of capital goods, machinery, hi-tech plants and equipment, and a wide range of industrial inputs. Import of finished products ranging from big ticket autos, medium and small cars, expensive and moderately priced cellular phones, and home appliances is likely to continue unabated.

Import growth will continue, in spite of the widening trade deficit. The top financial mangers of the government and the central bank, though cautious of this gap, are not overly worried over external finances. Export growth will be good enough for fiscal 2007 and beyond. Larger home remittances from overseas Pakistanis and increased FDI inflows, particularly from the Gulf, US and EU, are projected to keep the country fairly comfortable to meet its external liabilities and to foot the foreign trade bill.

In case prices of imported oil decline or stabilise, it will be an additional help to external finances.

Prime Minister Shaukat Aziz has assured this week that economic policies will be further strengthened and fine-tuned to support the business, industry and exports. He has assured continuity of the existing policies, which, in fact, were initiated in 1991. The last nine governments, since then, have adhered to them in order to push the economy forward and to expand foreign trade. Aziz said: "There is a continuity and consistency in economic policies, reforms and good governance. The government efforts for improving the living standards of people have achieved fruitful results, ensuring reduction in unemployment and raise in salaries and wages of the fixed income groups." Such assurances are important to discount political uncertainty because Pakistan will be conducting its national parliamentary elections in 2007.

Two years into the full-blooded operation of the WTO regime, that sent several shocks into the industry, saw many of the business leaders unhappy. Most of them had, in the past, been nourished on sizeable incentives, tax breaks, and assured global markets under quotas and special arrangements. Textiles, the country’s biggest industry, exporter, forex earner, and employer is the case in point.

It started loosing markets to those it was exporting under Multi Fibre Agreement (MFA). Textile exports in six months to end December, are down 9 per cent.

In other areas, business analysts have noticed private sector entrepreneurs now busy drawing up plans to move into new fields — high dividend, high-yield areas — which hold promise on the basis of the growing domestic market and better export prospects. Some of these sectors include competitively-priced home appliances, retail chain stores, telecom, food processing and agro-based products.

High-growth auto sector is expected to do still more business, but, imported cars will take away some of its lustre, though good profits are still forecast. In fact, more new plants for trucks, buses, other commercial vehicles and motorbikes are in the offing. Some of these companies are eyeing the Central Asian and South Asian markets as a future potential. But, they have to strive hard to keep their cost of production down and offer attractive prices to buyers at home and abroad. In a wide range of consumer goods, domestic industry is also facing sever competition from low-priced, though low-quality, Chinese products.

The real estate sector is still very upbeat and a large number of big commercial, office space and residential projects are being floated by foreign firms, including the UAE and Malaysia-based companies, in major cities like Karachi, Lahore, Rawalpindi, Islamabad and Peshawar.

"Pakistani businessmen are going through a transformation. They now know,they will have to gear up to compete. Otherwise, the onslaught of Indian products, after those from China, will wipe them out," warns Mohammad Saeed, a veteran industrialist and former chairman of Pakistan International Airlines and president of Federation of Pakistan Chambers of Commerce and Industry.

The entrepreneurs increasingly seem to realise the significance of growing challenges, the opportunities these offer, the need to improve quality of export goods, expand variety, ensure price competitiveness and to be more innovative.

The fact that business and industry can gear themselves up in the evolving global market situation is also endorsed by the fact that FDI inflows into Pakistan are improving. The government and the central bank expect a $5 billion FDI during 2007, up from $3.6 billion in 2006.

Except for an inflationary push, Dr Shaamshad Akhtar, governor State Bank of Pakistan (SBP), is upbeat over the economic prospects for 2007. SBP, she says, is providing more subsidised funds for exports under its Export Finance Facility (EFF). It provided Rs140.83 billion to exporters under the facility during July 1-November 25, 2006 compared to Rs123.06 billion during the like period of 2005.

"Debt-to-GDP ratio and high economic growth will stabilise the external current account," which rose to $5 billion in 2006, up from $1.5 billion in 2005. But, she estimates inflation rate will be higher, between 6.8 to 7.5 per cent in fiscal 2007 compared to the government projection of 6.5 per cent. She attributes it to higher than expected food inflation which impacts consumers, especially those in the lower-income groups. High prices of oil have been bugging the economy too, and raising cost of production.

As domestic and Pakistan-based foreign banks enjoy a high rate of profitability, Islamic banking is emerging fast. Dr Akhtar expects it will "emerge as a parallel to conventional banking and capture more than 10 per cent of the market share over the next three years." Its market share was merely 0.5 per cent in 2003 that rose to 3 per cent in 2006. It now has Rs100 billion plus assets. Both conventional and Islamic banks saw their total deposits rise to Rs 2,920 billion at end-2006 from Rs 2,520 billion at end-2005. Close to 75 per cent of this amount was disbursed as advances in 2006.

As SBP projects, on the back of a 6.8 to 7.2 per cent GDP growth in 2007, the private sector credit take off will also rise 18 to 19 per cent. It estimates 2007 exports to rise to $ 17.2 billion from $16.5 billion and imports to reach $30.7 billion from $28.5 billion. SBP projects home remittances from overseas Pakistanis working in the Gulf, Saudi Arabia, Western Europe and USA to rise to $4.8–5.4 billion from the present $4.6 billion. These positive factors will help manage the external finance as businesses at home and foreign trade are expected to keep a faster pace.

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