Pakistan Economy - News & Updates - Archive

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'China aims to double trade with Pakistan'

KARACHI (January 28 2007): "China considers Pakistan's interest and benefits very close to its heart and is committed to making Pakistan strong and prosperous. There is lot of potential in Pakistan and it is our aim to double bilateral trade on a fast track and therefore it is imperative that Pakistani businessmen take advantage of the Pak-China FTA to enter the Chinese market."

Zhang Chun Xiang, the outgoing ambassador of China declared during his meeting with Majyd Aziz, president and members of the Karachi Chamber of Commerce and Industry at KCCI on Saturday. The Chinese envoy, who had come to say good-bye after a long tenure of over 26 years, further stated that Pakistani companies should take up the challenge to make their products more competitive and this can be done by introducing high tech machinery, equipment, and processes in their industries.

He said that until 1985, Pakistani textile products were much better than Chinese products but after that the Chinese textile products have excelled and left Pakistani products far behind. Xiang disclosed that the FTA took two years to negotiate and this is the first FTA signed by China with any South Asian country.

He said that a well thought of step-by-step scenario has been agreed upon so as to protect the Pakistani industries otherwise Chinese goods would have flooded the local market.

The ambassador further added that Pakistan and China have agreed upon a five-year Economic Planning Programme that is also another first by China for any country. He said that Pakistani businessmen must try their utmost to target economic, investment, and trade activities especially now when globalisation is in full swing.

He added that the time for action is now and we should talk less and act more if bilateral trade has to double from the present $5.250 billion. The outgoing ambassador said that 40 Chinese motorcycle manufacturers are in Pakistan and the possibility of joint ventures in motorcycle is possible since there is already one in Lahore for the last eleven years.

Xiang also assured KCCI that Chinese businessmen would have a strong participation in the 'My Karachi' exhibition organised by KCCI this year and declared that he would ensure that one whole pavilion is reserved for Chinese exhibitors. He praised KCCI for organising such an event every year and termed it as a very pragmatic endeavour.

He also said that KCCI recommendations for visas are very important and considered with esteem. He said that there are no problems for granting visas as long as an invitation is sent by a Chinese enterprise or an organisation.

This is in the larger benefit of genuine businessmen. He also deplored the smuggling and under-invoicing of goods from China and stated that the trade figures from China are more accurate and represent the true state of affairs.

He said that Pakistan Customs should update its system of tabulating the figures of trade. Earlier, Majyd Aziz while welcoming the Chinese ambassador and officials recommended investment possibilities and reiterated the commitment of Pakistani businessmen to enhance trade with China. He said that the Indo-China trade should be made a model and emulated.

He called for large investments in infrastructure, textiles, fisheries, automotive, and chemical plants, among other projects that are viable for Chinese investors. He paid glowing tributes to the ambassador for his yeoman services to further develop Pak-China relationship. Siraj Kassam Teli also expressed his appreciation for the valuable assistance and co-operation given by the Chinese Commercial Office in Karachi. A Abdullah Zaki, senior vice president, Saqib Naseem, vice president, and members of the Managing Committee attended the farewell meeting.-PR

http://www.brecorder.com/index.php?id=522689&currPageNo=1&query=&search=&term=&supDate=

 

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Karachi accepts challenges of globalisation: Kamal

DAVOS (January 28 2007): City Nazim Syed Mustafa Kamal has said the citizens of Karachi have accepted the challenges of globalisation and also are fully co-operating with the government in the way of development. President Pervez Musharraf, Prime Minister Shaukat Aziz and Founder of Muttahida Qaumi Movement Altaf Hussain have a vital role in the development of Karachi.

He was expressing these views while addressing in the ongoing World Economic Forum on the subject of 'Management Rapid Urbanisation in Developing Economy' at Davos, Switzerland on Saturday. Earlier, the Chief Minister of New Delhi, India Shella Dickshat, Mayor of Tayjen, China Feung Long, General Secretary of International Transport Workers Federation Cock Rose, Chairman

Harvard School of Public Health America David Bloom, Director for International Development, John of Canady Institute, Ricardo Housmin, President Inter-American Development Bank Lios Morino and other international IT and investment companies presidents.

It is the first time the World Economic Forum has invited any mayor from Pakistan and also invited as a speaker. In his presentation, the City Nazim said the city of Karachi has started its journey of development in right direction to incorporate in the most developed cities of South Asia and in the region. Elaborating the ongoing development projects and strategy of City District Government Karachi, he said the development projects, during the last 14-months initiated in Karachi was exemplary as there is no any evidence not only in Pakistan but also in South Asian cities. "It is the first time that the city of Karachi has been included into the list of Mega Cities and acknowledge as international trade centre due to the development projects taken by the government in the last 14-months," he said.

He added that through the World Economic Forum he got the opportunity to build image of Pakistan, Karachi and Muttahida Qaumi Movement (MQM) and also get rid of the misconception against the Pakistan, Karachi and MQM. He also said after 9/11, the Pakistan had become allied with the world, which was exemplary.

He said the Karachi was also damaged by the international terrorism but the citizens of Karachi and the City District Government Karachi had faced all challenges as the Federal and Provincial governments also accompanied in this way.

http://www.brecorder.com/index.php?...69&currPageNo=1&query=&search=&term=&supDate=

 

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Government support sought to surpass export target

SIALKOT (January 28 2007): President Sialkot Chamber of Commerce and Industry (SCCI) Sheikh Abdul Waheed Sandal has said that local exporters were fully committed to achieve the export target set by the government.

Talking to Business Recorder here on Saturday he added that if government extend support and full backing, the exporter community would surpass the target. Without the support of government, industrial growth and economic progress is never possible for which he said that government must make determined efforts for weeding out the all obstacles and irritants in the way of business and provide necessary technical and financial support.

President SCCI said that commerce and trade activities in the city were growing at a stable pace and there is great prospective of rapid growth through investment in several potential sectors. With more foreign and local investment, boom in the business and trade could be expected and in this regard government's help in more direct foreign investment in Sialkot is sought. Waheed Sandal said that in order to cope with growing business activities in this export-oriented city "Sialkot Business and Commerce Centre" was being constructed at a cost of Rs 140 million, to showcase the Sialkot made products under one roof so that the visiting foreigner, diplomats and government officers may have a glimpse of the products.

The SCCI president said that we had planned this project to be a model in the public-private partnership adding that Sialkot Business and Commerce Centre project started but unfortunately shortage of funds was hindering the project. He seeks government support and co-operation for providing long-term interest-free loan for the completion the project of Sialkot Business and Commerce Centre in public-private partnership.

He said that in order to fulfil requirements and standards of foreign buyers, CE marking had become vital requirement for exporting products to the European Union. The SCCI president called upon the Punjab government to expedite the process of acquiring land for the testing laboratory adding that the business community of Sialkot was grateful to Punjab government for allocation of four million dollars for setting up international accredited laboratory in Sialkot.

The current route of Sialkot-Lahore Motorway on western side of Daska, near village Ranjhai is not suitable for the inhabitants of Sialkot he said. He suggested the realignment of the motorway on the Eastern side of Daska to pass through near village Jaisarwala and MR link canal that would benefit people of Sialkot, Pasrur and Daska evenly. He was of the opinion that with the establishment of projects of Engineering University Sialkot, Sialkot Business and Commerce Centre and Testing Laboratory, vertical export growth would become a reality and the export target of two billion dollars annually would be achieved in next few years.

http://www.brecorder.com/index.php?id=522679&currPageNo=2&query=&search=&term=&supDate=

 

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Pak-Korean firms to invest $500 million in construction sector

LAHORE (January 28 2007): Chosun Construction of South Korea and Shafsal Limited of Pakistan will jointly invest US $500 million to develop various commercial and residential projects in Pakistan. Addressing a joint news conference at Lahore Press Club on Saturday.

Myung Kim, chief executive of Chosun Construction, and Muhammad Saleem Bhatti, chief executive of Shafsal Limited, said both sides had agreed to jointly develop various projects, including residential complexes, shopping malls, country clubs, fitness centers in Lahore and Islamabad.

These projects worth about 500 million dollars will be of international standard and incorporate earthquake proof design constructions, they added. They said that the joint initiative augured well for the real estate sector in Pakistan, which had come under pressure in the recent months following an unprecedented boom. It will also encourage other South East Asian companies to explore the Pakistan real estate market, they viewed.

"It is my first visit to Pakistan and I see good potential in construction sector here," Myung Kim said. He added that they would try their best to provide world standard facilities in all the projects to be undertaken for residential as well as commercial purposes.

Chosun Construction has been working in the areas of real estate development for the last 30 years and besides South Korea has undertaken various projects in China, Muhammad Saleem Bhatti said. "Initially we will start our projects in Islamabad and Lahore while the scope will extend to their cities, subsequently", he added.

To a question, he said residential facilities would comprise big and small apartments spreading over an area of 1250 square feet (5-marla) and above. The price of a five marla apartment will be around Rs 750,000. "We have acquired land to build some 42-storey buildings in the federal capital, he added. To a question about financing of these projects, he said all our projects will be self-financed without assistance from any bank or financial institution.

The chief executive of Shafsal announced that they would allocate 10-percent quota for journalists in the residential projects, which they will be provided at concessional rates.

http://www.brecorder.com/index.php?id=522658&currPageNo=2&query=&search=&term=&supDate=

 

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Karachi has become centre for trade activities

KARACHI: Sindh Minister for Industries, Commerce, Transport and Labour, Adil Siddiqui said that Karachi has become a centre for trade and industry related activities during the last four years on account of improved peace and order.

Addressing a press conference here in connection with the three-day World Health Updates conference, he said the country had received foreign investment as a result of the conferences and exhibitions held in Karachi.

He said a Family Health Festival will be the part of the event, which would create awareness among the public about health. He said Sindh Social Security Institution was joining, for the first time, an international labour conference. He said this conference would help create awareness about social security among the labourers.

He said the conference was the first of its kind in the country wherein local and foreign experts from Britain, US, Germany, Singapore, Sri Lanka, Bangladesh and other countries were participating. Experts of nursing and dentistry are also taking part in the conference and delivering their lectures and papers.

http://www.thenews.com.pk/daily_detail.asp?id=40660

 

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January 28, 2007

27 projects costing Rs31.3bn approved

ISLAMABAD, Jan 27: The Central Development Working Party (CDWP) on Saturday approved 27 projects costing Rs31.3 billion including a foreign aid component of Rs3 billion.

The CDWP meeting was held here under the chairmanship of State Minister and Deputy Chairman Planning Commission Dr Muhammad Akram Sheikh.

Later briefing the newsmen, a spokesman of the Planning Commission, Asif Sheikh, said that it was the 6th meeting of the CDWP in the current financial year and a total of 171 projects worth Rs175 billion were approved.

In today’s meeting apart from the 27 approved projects two more development projects were conceptually cleared and it means that these had been approved in principle, he added.

The projects, he said included the establishment of Pak-China Friendship Centre Islamabad at a cost of Rs1.5 billion and Capacity Building of the Emergency services of Government of Punjab at a cost of Rs5.3 billion.

The spokesman giving details of the projects said that 11 infrastructure projects worth Rs25.4 billion, 13 social sector projects at a cost of Rs5.3 billion and three projects in other sectors costing Rs0.6 billion were approved by the CDWP.

For Punjab province 10 projects at a cost of Rs3.1 billion, four projects in Sindh costing Rs1.1 billion, one project each in NWFP (Rs2.3bn), Balochistan (Rs1.5bn), FATA (Rs0.4bn), Azad Kashmir (Rs0.5bn) and nine other projects costing Rs22.3 billion were approved, he elaborated.

He said that four projects located in Punjab had been approved on 50:50 cost sharing basis. The federal government would meet Rs0.5 billion and the balance would be borne by the government of Punjab.

The spokesman said four projects located in Sindh would also be shared on 50:50 basis and the federal government would contribute Rs0.7 billion for these projects.

He said that four projects costing Rs24.1 billion would be placed before the Executive Committee of the National Economic Council (ECNEC) for approval.

Replying to a question the spokesman said that allocation for the Public Sector Development Programme (PSDP) would be increased to 6.3 per cent of GDP by the year of 2009-10.

Speaking on the occasion Lt Gen (Retd) Muhammad Zubair, Member Implementation and Monitoring, said that the technical committee on water reservoirs constituted by the government under the chairmanship of secretary water and power submitted its report to the CDWP in the meeting.

All the provinces have agreed that all five major dams announced by President Musharraf and approved by the federal cabinet would be built by the year 2016, he added.

He said the provinces had also agreed to the fact the building of the five major dams were vital for the country and should be completed by the stipulated time.

He added the report would also be submitted to Ecnec.

Member Projects Planning and Development Commission Dr Asad, Chief Population Planning Jalil Minhas, Members Water and Power Mr Amanullah and Naseer Gillani were also present on the occasion.

http://www.dawn.com/2007/01/28/ebr1.htm

 

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Sunday, January 28, 2007

20 skill development companies planned: minister

LAHORE: Federal Minister for Industries, Production and Special Initiatives, Jahangir Khan Tareen Friday said the government is planning to set up 20 skill development companies to impart skills and training to the youth in different sectors of national economy.

"Funds ranging between Rs 5 to 10 billion will be allocated in the Public Sector Development Programme (PSDP) of the federal budget for the year 2007-08," he said while talking to newsmen after chairing a meeting with stakeholders at a local hotel under the newly launched Skills Development Initiative.

Federal Secretary for Industries, Production and Special Initiatives, Shahab Anwar Khawaja, former Federal Industries Minister, Abdul Razzak Dawood, Managing Director Technology Upgradation and Skill Development Company (TUSDEC), Suhael Ahmed, officials of German Technology Assistance Agency, GTZ and representatives from different industrial sectors were present on the occasion.

Jahangir Tareen said that the skill development companies would set up centres of excellence, technical training institutes and vocational training institutes for the respective sectors. "These companies will not only provide hands-on training to workers of different industries, but will also have placement bureaus to assist newly trained youth in getting jobs," he added.

He said that no fee will be charged from apprentices, rather, they will be provided stipend of Rs 1000 per month. The minister said that the operational cost of the companies being set up on public-private partnership basis, would be met by the Workers Welfare Fund (WWF) pool. In addition to these 20 entities, another company would be set up to train the trainers for the sectors identified for the project.

The sectors for which companies are being set up include chemical and fertiliser, textile, home textile, construction, furniture, engineering, auto-parts, dairy and oil and gas etc.

Tareen expressed hope that the initiative will help produce 700,000 skilled persons annually against the present level of 300,000. "NAVTEC will coordinate these efforts," he said.

About the management of the companies, Tareen said that the champions of the particular sector of the economy would run the companies. app

http://www.dailytimes.com.pk/default.asp?page=2007\01\28\story_28-1-2007_pg5_7

 

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Major crops share in GDP hits alarmingly low level: World Bank

ISLAMABAD (January 29 2007): The World Bank has cautioned that Pakistan's share of major crops in GDP was down to an alarming level and suggested the government that it needs to go for diversification into high value crops and livestock to increase the rural income for a quick U-turn in this key area.

The World Bank report on the Pakistan's agriculture sector output mentions a number of reasons of farms shrinking share in GDP and suggests various measures to face the challenge upfront.

It says agricultural growth in Pakistan throughout most of the last three decades has depended to a large extent on the major crops (wheat, rice, cotton and sugarcane).

It notes: "The share of major crops in total GDP in Pakistan has fallen dramatically (from 0.234 in 1970 to 0.091 in 2000) and direct effect of a 10 percent gain in major crop production is smaller: equivalent to 2.3 percent of GDP in 1970, but only 0.9 percent of GDP in 2000."

It says that assuming an unchanged value-added multiplier, total effects (including multiplier effects) on the rest of the economy are also smaller (4.6 percent of GDP in 1970 compared with 1.5 of GDP in 2000). The report mentions that for increases in production of major crops, future increases in agricultural productivity and rural incomes will need to rely more on diversification into high-valued crops and livestock.

The report adds that Pakistan needs to restructure research and extension services to meet the needs of a more diverse agriculture, including provision of region-specific information packages. It says facilitating the new contracting arrangements and investments by super markets will also facilitate marketing of highly valued fruits, vegetables and animal products.

It also recommended investment in irrigation and drainage, together with reforms in irrigation management are also crucial to arresting environmental degradation, especially in some major irrigated areas of Punjab and Sindh. Expanded use of water-conserving technology, such as drip irrigation, can increase the efficiency of use of scarce available water.

It claims that Pakistan needs to resources for the provision of research, extension and veterinary services for livestock, particularly for larger animals. The poultry sector is already expanding rapidly, including both substantial rise in maize production (a major feed) and in poultry and egg production. It says productivity gains in the livestock sector are especially important for pro-poor rural income growth since the distribution of livestock in rural Pakistan is more equitable than the distribution of land.

http://www.brecorder.com/index.php?id=523129&currPageNo=1&query=&search=&term=&supDate=

 

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Travel barriers: garment industry missing $600 million orders annually

KARACHI (January 29 2007): The export-oriented readymade garments industry of Pakistan is missing around worth $600 million orders annually, due to travel barriers mainly in the United States region, sources in trade told Business Recorder on Sunday.

Leading exporters said the local exporters often find difficulties during their visits, particularly to United States, as there was stiff immigration procedures on arrival, resulting in wasting of several precious hours of visitor.

"Besides high production costs, the ratio of textile exports has also scaled down by $ 600 million or 20 percent annually due to travel barriers," said Ijaz Khokhar, Chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) when contacted over telephone.

"Foreign buyers from United States and European Union are also advised by their respective travel advisory boards to avoid travelling to Pakistan, which also diverts fresh orders from local exporters to other regional countries, bringing the already declining textile exports further down," he remarked.

Gurus of readymade garment exports pointed out that travel barriers, since 9/11, had badly hit the flow of textile orders in value-added garments from the US-based interested parties. "We are now practising the least effective way of attracting foreign orders these days," exporters said, adding the local exporters mostly finalise orders from US buyers through phone and faxes, which were believed to be the least effective ways to attract foreign customers.

The Prgmea chairman was of the view that the rising textile export deficit could be stemmed by around 30 percent by exploring new avenues and markets in the world and the government should support and encourage readymade garments exporters by giving them incentives.

"African and South American regions are the potential markets of our textile products, which is thought to help augment domestic production and exports manifold, despite being faced with a continuous failure in the western markets," he added.

He also stressed on setting up of innovative trends in the production of readymade garments with a view to lure the buyers from across the globe, which would not only help augment their exports but also enable them to compete with the regional competitors in the world market.

Ijaz called upon the government to evolve a long-term plan for the increasing of textile exports, adding that consulates could play a vital role to help the country's exporters establish their domains in various EU and other Western countries, besides US.

Regarding the country's image building, he urged upon government and its consulates abroad to play their due role to dispel misconception about Pakistan as it was being depicted in the West through its electronic and print media, also called for an exhaustive plan to encourage foreign customers.

He said, "Setting up outlets in western markets is the expensive venture and requires capital in million of dollar, which is unaffordable for most of the exporters".

He also called for travelling support fund, and urged the government to evolve a serious plan to support textile exporters in the course of their travel to EU and US. The exporters also highlighted the issue of deteriorating law and order situation in the country, which restricts the foreign buyers from coming to country to place fresh orders.

http://www.brecorder.com/index.php?id=523126&currPageNo=1&query=&search=&term=&supDate=

 

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50 projects to generate 13,400 MW power by 2016

ISLAMABAD (January 29 2007): Around 50 projects of private sector are in the pipeline to generate 13,400 Megawatt of electricity by 2016 at an estimated cost of 12.847 billion dollars.

Giving year-wise details of the Independent Power Plant projects, sources at the Ministry of Water and Power Sunday said 10 projects with 2,255 MW capacity including six oil and four pipeline quality gas dual-fuel are expected to be completed by 2008 with an investment of $1.691 billion.

The sources said that out of the six oil projects during the year 2008, the main project is Capacity Expansion from Existing IPPs. This is near Lahore with 405 MW capacity. This project would cost $304 million dollar.

During the year 2009, eight projects have been planned to generate 1764 MW electricity with an investment of $1.323 billion. These include three oil and five dedicated gas field projects.

The sources said in year 2010, seven projects of 1,321 MW capacity including two hydel, one oil, three pipeline quality gas dual-fuel and one dedicated gas field would be completed with the cost of $1.096 billion.

Likewise, in year 2011, three hydel projects with generating capacity of 284 MW, costing $355 million would be completed.

The sources further said in year 2012, seven projects having capacity of 2,726 MW including three hydel and four coal projects would be completed with the cost of 2.320 billion dollars.

In year 2013, five projects including four hydel and one coal would be completed to generate 1,986 MW electricity. These projects will cost 2.233 billion dollars. The sources said three hydel projects having 1,443 MW capacity are likely to be completed in 2014 with the cost of $1.804 billion.

Similarly, in year 2015 and 2016 seven hydel projects are planned to generate 1620 MW electricity and would cost $2.025 billion. The sources further said to meet growing power needs of the country, recently five agreements have been concluded with different parties for generation of about 1,300 megawatt electricity.

The tariff for coal-based power plants in Thar has been determined and hoped the Chinese company would respond positively for setting-up of plants there.

Power projects with a total capacity of 6,000 MW are in different stages of approval. These include 550 megawatt of wind power projects.

http://www.brecorder.com/index.php?id=523095&currPageNo=2&query=&search=&term=&supDate=

 

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Pakistan fifth in GCI ranking: HBS

DAVOS (January 29 2007): Pakistan has been included in the top five countries of the world in terms of competitiveness by securing twenty positions ahead against the last year's General Competitive Index (GCI) ranking. Professor Michael Potter of Harvard Business School (HBS) informed who called on Prime Minister Shaukat Aziz on Sunday. He met Shaukat Aziz on the sidelines of the World Economic Forum.

Potter said that Pakistan was consistently doing well for the last three years and was also ahead of its neighbouring countries in terms of dynamism, and reduction in poverty and unemployment.

He said Pakistan was being viewed at the right track and the reform agenda are paying dividend.

Potter appreciated the economic reforms of Pakistan and said however, there was a need to improve the legal system that directly relates to a country's economic system.

Prime Minister Aziz said Pakistan will try to further improve its competitiveness and had launched an ambitious programme to impart skills to improve manpower and logistics throughout the country.

http://www.brecorder.com/index.php?id=523156&currPageNo=2&query=&search=&term=&supDate=

 

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January 29, 2007

Growing appetite for acquisitions

By Sabihuddin Ghausi

THE appetite of foreign investors for acquisition of running business is growing with three more deals under negotiations, involving more than $800 million reported last week in the media.

The stipulated acquisitions comprise:

* 50 per cent shares of a tobacco company by a US-based global tobacco giant with an indicated investment of about $339 million which will raise the buyers stake in the firm to 90 per cent. * about 89 per cent share of a cellular phone firm, being sought by a Chinese company for cash consideration of $284 million . * a local bank at a price which is just second to nearly $500 million offered by a British bank for another local bank.

A pronounced trend of acquisitions and mergers was set last year when as many as eight local banks were taken over by giant European banks and Saudi investors group in 2006.

Foreign investors were tempted to buy banks for two reasons. First is the phenomenal profits made by banks over last three years. Second, the State Bank’s condition for commercial banks to have a minimum of Rs8 billion capital base by next year which is inducing managements of smaller banks to look for a buyer.

While the Pakistan market is upbeat on these acquisitions, the SBP has another story to tell. In its recent quarterly report, the central bank cautions about “an unusual rise in the income account deficit arising from a higher direct investment income outflows.”

The outflow of profit and dividend on investments during July- November 2006 increased by $57 million to $$74 million. This figure is bound to go up manifold in coming months as banks and many companies with foreign investment will start declaring profits in the first and second quarters of 2007.

Private banks and firms have been acquired and mergers have taken place. The public sector monopolies like PTCL and KESC and big banks have been privatised. Never before, Pakistan's business landscape was swarmed by as many foreigners as a website report suggests. Out of 40,000 registered companies, 675 are foreign entities. Many local companies have foreign stakes. And as government continues to encourage foreign investment, the trend is set for further inflow of foreign companies in years to come.

How this influx of foreign companies is going to affect the external sector? Will these companies repatriate their profits and dividends back home or plough back in expansion and in new projects? Two sharp conflicting views are offered. ``Foreign investors earn in Pakistan in local currency and remit their profits and dividends in dollars,'' Taj Haider, a former PPP Senator said.

Dr Shahid Hasan Siddiqui, a former banker is convinced that as the outflow of profits and dividends from foreign investments swells, pressure on the rupee will increase and adversely affect its exchange value. Any dramatic fall in the rupee value can trigger a chain reaction that can put Pakistan in a tight spot. Another economist said ``the government will have no option but to approach the IMF.'' The IMF's balance of payment support for any country in distress has its own implications.

``No doubt, the outflow of profits and dividends from foreign investment in the first five months of the current fiscal is unusual and high but absolutely not alarming'' says Qazi Sajid who heads the Pakistan-German Business Council said. Even this unusual outflow has largely been mitigated by capital and financial transfers that has not only offset but improved the overall external account position. According to the SBP report, the current account deficit increased from $3.1 billion to $4 billion during July-November, indicating a rise of 29.1 per cent, but the external account deficit shrank to $0.73 billion compared to $0.88 billion in 2005-06.

The bulk of the 35.4 per cent year to year increase in the aggregate surplus in the capital and financial accounts during first five months of 06-07 was contributed by foreign investment.

Qazi Sajid says that repatriation of profit and dividends by foreign investors is sending correct signals. It shows that Pakistan is a place to do business and earn profit and there is no restriction on remission of profits. Until five years ago, foreign companies were allowed to remit their profits with SBP permission After the year 2001, companies were allowed to remit profits directly through banks.

The liberal investment environment has led to a dramatic increase in the inflow of direct foreign investment. The Privatisation Minister, Zahid Hamid gave last week a figure of $3.3 billion foreign investment for first half of the current fiscal year.

The direct foreign investment increased by 69 per cent to $1.87 billion while the portfolio investment was recorded at $627 million. More than $880 million were mopped up by offering GDRs of Muslim Commercial Bank and OGDCL.

Foreign investors are showing interest in privatisation of big ticket entities like PSO, PPL, utilities and other public sector. They not only participate in privatisation process but also put money in infra structure projects. Only this week, the prime minister approved in principle the handing over of Gwadur port operations to a Singapore company under a multi- million dollar contract. An SBP director indicated total future financing requirement of about Rs3 trillion in the infra structure projects

The World Bank has already offered $6 billion investment in development of a National Trade Corridor that seeks to upgrade port operations, shipping, trucking, road transport, rails and other allied services. A comprehensive $10 billion plan for this purpose is to be finalised this year. The corridor will integrate Pakistan with Middle East via Iran and Gulf, Central Asia and West China and ultimately provide overland access to Europe.

As many as 150 international companies are reported to have shown willingness to join the effort in implementation of the trade corridor project. The multinationals expect a good response from those attending the World Economic Forum session in Davos where Prime Minister Shaukat Aziz is set to meet top executives of many global companies.

`”Pakistan faces three big challenges"", an executive of a multinational said. The first and foremost is the perception about lawlessness, corruption and bureaucratic delays. But the second generation of reforms the government plans to take up in near future will address police, judiciary and government functioning. ``Let's hope that government takes up job of improving law and order seriously'' and also addresses the problems in judiciary.

The second challenge is the scarcity of skilled manpower. The massive development job cannot be taken up without educated and skilled manpower. Foreign companies say that Germany, France and Australia are coming up with projects of higher learning and advanced technical training. Germans are said to be setting up an institution in Punjab and the French and Australians in Karachi. Simultaneously, crash programmes are also being planned for technicians in Gwadur and other areas.

The third challenge is from political disharmony which needs to be addressed. Political tension saps energy and so much time is wasted for nothing. Time has come that all those represented in the assemblies and Senate should sit together and chalk out a national agenda.

The recent consensus between the government and the opposition in the Senate to hold a pre-budget session has been noticed by the executives of many multinationals. ``It augurs well,'' said one of the business executives and added that political leadership should give some time to debate on hard economic issues.

The three trade bodies of the foreign investors-Overseas Investors Chamber of Commerce and Industry (OICCI), the Pakistan German Business Council and American Business Council (ABC) are carrying out a survey about their members’ perception on business environment in 2006 and their expectations for the current year. There is a lot of opportunities for these companies in various projects coming up,says a multinational executive.

http://www.dawn.com/2007/01/29/ebr1.htm

 

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Monday, January 29, 2007

New export plan likely before next budget

* Export target $43.3 billion by 2013

By Sajid Chaudhry

ISLAMABAD: A major incentive-based export plan for 2006 to 2013 to overcome trade imbalance and increase exports from $16.5 billion to $43.3 billion will be approved before the 2007-08 budget, Planning Commission Chairman Dr Akram Sheikh told Daily Times on Sunday.

Dr Sheikh, who is also the chairman of the committee that finalised the draft ‘Export Plan Pakistan’ (EPP), said the plan would now incorporate the views of the Ministry of Commerce, the Ministry of Industries, Production and Special Initiatives, and the Ministry of Textile Industry. The EPP would then be presented to Prime Minister Shaukat Aziz for approval, he said, before the budget for the next fiscal year. The plan had nothing to do with the budget, he said however.

According to officials, the Planning Commission has finalised the EPP draft to enhance the current exports from 13 percent of the GDP to 15 percent of the GDP by 2013.

The prime minister had formed the committee to prepare a plan for increasing exports, during a meeting for the preparation of Trade Policy 2006-07.

The draft plan reveals that the GDP, which currently stands at $128.9 billion with exports-to-GDP ratio of 13 percent, is expected to grow up to $288.70 billion with exports-to-GDP ratio of 15 percent by year 2013, they said. The exports are to be enhanced with Annual Compound Growth Rate (ACGR) percentages under the EPP.

The exports from textile and garment sectors are projected to be increased from $9.98 billion in the fiscal year 2006 to $24.36 billion by fiscal year 2013 with an ACGR of 14 percent per annum. Rice exports, which currently stand at $1.11 billion, would be enhanced to $2.5 billion by year 2013 with annual ACGR of 12 percent.

Leather and leather products exports had fetched $1.09 billion last fiscal year, which would be increased to $2.26 billion with annual ACGR of 11 percent. The current $0.21 billion exports of engineering sector would be enhanced to $2.40 billion with ACGR of 42 percent by year 2013.

Fruits and vegetables from $140 million to $370 million with an ACGR of 15 percent, meat and meat preparations from $20 million to $100 million with a 26 percent ACGR, fish and fish preparations from $200 million to $990 million with a 26 percent ACGR, carpets, rugs and tapestry from $250 million to $370 million with a 6 percent ACGR, sports goods from $350 million to $920 million with an ACGR of 15 percent, surgical instruments from $160 million to $420 million with a 15 percent ACGR, cutlery from $30 million to $110 million with a 20 percent ACGR, furniture from $10 million to $500 million with annual growth rate of 75 percent, pharmaceutical products from $80 million to $290 million with a growth rate of 20 percent, marble and granite from $20 million to $680 million with a growth rate of 66 percent and gems and jewellery from $20 million to $690 million with 12 percent ACGR, and other products, including services and defence exports, from $2.89 million to $6.32 million with a 12 percent ACGR.

The Planning Commission has identified factors, which are impeding the country’s exports and has suggested measures to remove the bottlenecks in the way of enhancing exports to the level envisaged in the EPP.

The country’s declining export share in the international trade has irked the economic managers to prepare a medium-term export development plan to bridge the increasing gap between exports and imports.

http://www.dailytimes.com.pk/default.asp?page=2007\01\29\story_29-1-2007_pg7_13

 

[salman77]

West Sumatra imports onion from Thailand and Pakistan​

PADANG, West Sumatra (Antara): West Sumatra has to import onion from Thailand and Pakistan because of unsmooth supply from Java.

"Over the past few days, red onion imported from Thailand and Pakistan has been flooding markets in Padang," Yanmul, an onion trader, was quoted by Antara news agency as saying.

Onion supplies from Java were halted two weeks ago. Imported onion was estimated to remain on offer in West Sumatra's markets for the next two or three months pending the time local farmers can harvest their own onion.

Padang has been importing red onion from Thailand, Pakistan, India, and China for certain periods over the past 10 years.

Normally, daily demand for red onion in Padang reaches around three tons while daily demand for garlic is around two tons.
http://www.thejakartapost.com/detaillbus.asp?fileid=20070127162204&irec=4

 

[salman77]

TDAP to take trade delegation to Saudi Arabia​

Sunday, January 28, 2007

KARACHI: The Trade Development Authority of Pakistan (TDAP) will take a trade delegation to Saudi Arabia to participate in Saudi Healthcare Exhibition at Jeddah from May 20 to 23.

A TDAP official said here Saturday that Saudi Arabia is an attractive market for medical equipment and pharmaceutical and meets 90 percent of its pharmaceutical requirements through imports.

The demand is growing for healthcare after the addition of new hospitals and introduction of healthcare insurance for expatriates in the Kingdom.
http://www.dailytimes.com.pk/default.asp?page=2007\01\28\story_28-1-2007_pg5_12