Pakistan Economy - News & Updates - Archive

[Neo]

Thursday, February 01, 2007

Foreign investments in Pakistan likely to grow

* PM’s foreign visits fruitful: minister

ISLAMABAD: Prime Minister Shaukat Aziz’s visit to the World Economic Forum (WEF) in Davos and the official visit to Brussels were remarkably successful, said Zahid Hamid Privatisation and Investment Minister and a member of the prime minister’s official entourage, on his return from Brussels, Belgium here Tuesday.

He said that foreign investors expressed great interest in Pakistan and appreciated the investment-friendly policies and outstanding economic performance of the country during last several years particularly rate of growth and record levels of foreign investment.

The recent mergers and acquisitions in the financial and telecom sectors in Pakistan in particular were frequent topics of conversation among the international business community. In a meeting with the prime minister, renowned Professor Michael Porter of Harvard Business School disclosed that according to a recent survey Pakistan was ranked much higher than its neighbours in so far as dynamism, competitiveness and ease of doing business are concerned.

Zahid Hamid said that Pakistan was now very prominent on the radar screen of international investors and they were closely monitoring its progress and development on the economic and investment front.

The chief executives of the a number of leading institutions such as Carlyle Group, Barclays, Metro Cash & Carry, Nestle, Nike, Unilever, Seimens and others appreciated the government’s economic reforms and expressed their intentions to either make fresh investment or further increase their investment through expansion in their operations in Pakistan, thereby taking advantage of the investment friendly, attractive and liberal economic policies, which provided remarkable incentives to the investors for growth of their businesses.

Carlyle Group of UK, which manages a major private equity fund, indicated that they would be earmarking funds for investment in Pakistan. Similarly, Chief Executive of Nestle informed the Prime Minister of their plans to substantially enhance their operation in Pakistan by increasing their investment. Metro Cash & Carry also plans to establish retail outlets all over the country. Unilever and Seimens also discussed future plans involving enhanced investments.

Elucidating details of the WEF held in Davos, Zahid Hamid said that the prime minister held 45 important meetings in three days with the heads of state and governments, chief executives of multinational companies and representatives of non-governmental organizations, civil society and print and electronic media.

The prime minister participated in panel discussions on terrorism, nuclear proliferation, women’s empowerment and inter-religion harmony. He also held meetings with the president of Switzerland and the prime ministers of Malaysia, Egypt, Vietnam and Ukraine apart from many other diplomats and political leaders.

Zahid Hamid further informed that the prime minister had a number of useful meetings in Brussels with overseas Pakistanis and foreign investors and delivered major policy addresses to European Union’s Committee on Foreign Affairs of the European Parliament and NATO Council and met with the European Union president, and EU high representatives on foreign and security policy, and commissioners on trade and external relations.

http://www.dailytimes.com.pk/default.asp?page=2007\02\01\story_1-2-2007_pg5_14

 

[Neo]

Serious efforts on in Pakistan to end poverty : Maleeha Lodhi

Thursday February 1

London, Feb.1 (ANI): Pakistan's envoy to Britain, Dr. Maleeha Lodhi, has said that strong economic growth and a people-centred development strategy have enabled the country to launch a serious attack on poverty.

Participating in a debate organized by Britain's Department for International Development (DFID) in Birmingham, Lodhi said that the combination of high growth, structural reforms, enhanced spending on the social sector and poverty alleviation programmes has begun to yield robust early results.

This, she said, is evidenced by the improvement in social indicators and poverty figures.

Dr. Lodhi flagged five areas of improvement. They included the decline in overall poverty from over a third of the population in 2001 to less than a quarter in 2005, rise in literacy rates, rise in per capita income, and improvements in overall access to sanitation and immunization coverage of women and children.

The DFID event was also addressed by Secretary of State for International Development, Hilary Benn who spoke about DFID's programme in Pakistan, as well as by Yusuf Samiullah who heads the office in Islamabad. The purpose of the meeting was to invite suggestions from a cross section of Birmingham's Pakistani community about what they would like to see the UK doing in Pakistan.

Benn told the audience that included NGOs and Councillors that Pakistan is set to become of the biggest recipients of direct UK aid, which will help to support the government in improving healthcare, getting 8 million children, mostly girls into school and make sure everyone has clean drinking water. He also said that "Pakistan is making great progress in tackling poverty and is becoming increasingly prosperous with a growing economy".

Dr. Lodhi described the consultations with the Pakistani diaspora as an excellent and timely initiative. She said that as the 60th anniversary of Pakistan's independence approaches this milestone will be marked both by celebrating what has been achieved and reflecting and debating on the challenges that still lie ahead.

She said that the high growth trajectory and transformative reforms have set off a strong economic rebound in Pakistan, but there is no room for complacency. Sustaining growth and poverty reduction over the long run is tough. But, she stressed, it can be done. Explaining why Pakistan's development partnership with the UK is so important, she said that DFID's support for the reform process and the country's strategic priorities has been immensely valuable, especially the budgetary support provided for poverty reduction expenditures. But it is the fact that DFID's interventions are embedded in Pakistan's priorities that makes it a unique development partner.

Dr. Lodhi emphasized that DFID's strong engagement in health, education, population welfare, governance reforms and its role in capacity building especially to improve the efficiency of public service delivery to the poor, are all areas of high priority for the government of Pakistan.he also stressed that many challenges lie ahead and what has been attained so far is only a start, although it has been a strong start.

She said that the critical lesson learnt from recent experience is how critical holistic, home grown reforms are, designed and implemented by Pakistanis themselves.

She thanked Minister Benn and his department for the assistance being provided to Pakistan adding that the magnitude of the challenge of achieving the Millennium Development Goals (MDGs) requires sustained support from development partners.

The audience in Birmingham was also shown a short film about DFID's work and projects in Pakistan and a lively discussion followed, in which MP Khalid Mahmud also participated.

According to The Nation, Hilary Benn invited the audience to come forward with ideas on how best the UK can target its support to ensure that British aid is delivered in the right way and tackles the right issues.

Members of the community appreciated the process of consulting them on issues of development in Pakistan.

Secretary of State for International Development Hilary Benn in his speech kicked-off a series of nationwide debates on how the UK can best fight poverty in Pakistan. He asked Muslim leaders, NGOs, councillors and a cross section of Birmingham's Pakistani community about what they would like to see the UK doing in Pakistan.

"Pakistan is making great progress in tackling poverty and is becoming increasingly prosperous with a growing economy. But with nearly a quarter of the population living on less than 50 pence a day and 1 in 10 children dying before their fifth birthday, big challenges still remain," Benn said.

"Pakistan is set to become one of the biggest recipients of direct UK aid, which will help us support the Government in improving healthcare, getting 8 million children, mostly girls, into school and make sure everyone has clean drinking water. We want people's ideas on how best we can target our support to ensure UK aid is delivered in the right way and tackles the right issues," she added.

http://in.news.yahoo.com/070201/139/6bpe1.htmlhttp://in.news.yahoo.com/070201/139/6bpe1.html

 

[Janbaz]

State Bank mops up Rs70.35bn

By Our Staff Reporter

KARACHI, Jan 31: The State Bank on Wednesday sucked in huge liquidity through auction of treasury bills but the cut-off yields on all maturities remained unchanged.The realised amount was much higher than the target of Rs30 billion. Bids received were also on the higher side at Rs83 billion and the expected inflows were Rs60 billion while the SBP picked up Rs70.358 billion.

Market experts see shortage of liquidity and expected a slight increase in the money rates.

The SBP sold Rs98.05 million of three-month bills, Rs9.15 billion of 6-month and Rs61.11 billion of 12-month papers.

The cut-off yields were kept unchanged at 8.8142 per cent for six-month, 8.6417 per cent for three-month and 9.0046 per cent for 12-month papers.

Analysts said that the big participation of banks reflected their confidence over the tight monetary policy and stable interest rate.

The Dawn.
http://www.dawn.com/2007/02/01/ebr9.htm.

 

[Janbaz]

Revolutionary plan for dairy, livestock: CM

OUR STAFF REPORTER
LAHORE - Punjab Chief Minister Ch. Pervaiz Elahi has said that a revolutionary action plan is being implemented for the development of livestock and dairy sector and effective measures have been taken for livestock breeding, feeding, marketing and its protection from various diseases.
He was presiding over a high level meeting at Chief Minister’s Secretariat, here on Thursday, which reviewed the pace of progress on various development projects in livestock and dairy development sector.
He said that keeping in view the importance of livestock for national economy and poverty alleviation, a huge amount was being spent on the uplift of the sector. He said that livestock was an important source of income of poor cultivators, therefore government was providing loans worth Rs4.75 billion to cattle farmers for purchasing buffaloes.
Provincial Minister for Livestock, Haroon Sultan, Chief Secretary Punjab, Salman Siddique, Chairman Planning & Development, Suleman Ghani, Secretary Finance, Suhail Ahmed, Secretary Livestock, Babar Yaqoob Fateh Muhammad, President Bank of Punjab, Hamesh Khan, Vice Chancellor Agriculture University Faisalabad, Dr. Muhammad Bashir, Vice Chancellor, Veterinary University Lahore Manzoor Ahmed Qureshi and other senior officers were also present on this occasion.
Ch Pervaiz Elahi said that government was implementing a master plan for increasing milk and meat production and had decided to establish Punjab Meat Development Company for that purpose.
He said that livestock sector would be reorganised so that it could meet the challenges regarding livestock breeding, feeding and marketing through modern methods of management.
He said that dispensaries were being set up initially in 18 districts of Punjab including Okara, Sahiwal, Jhang, Muzaffargarh, Gujranwala, Gujrat, Chakwal, DG Khan, Bahawlapur, Bahawalnagar, Kasur, Pakpattan, Sheikhupura, Hafizabad, Sargodha, Layyah, Rawalpindi and Nankana Sahib at union council level where sufficient presence of veterinary doctors and other facilities would be ensured.
He said that mobile dispensaries and veterinary hospitals were also being established at tehsil headquarters in the above mentioned districts and a veterinary doctor would be available round the clock.
He said that effective measures had been adopted for provision of infrastructure and breeding of pedigree cows in Cholistan besides centres for milk collection are also being established in the area for ensuring due returns to the farmers for their milk production. The Chief Minister further said that milk processing plants and milk collection centres wre being set up in Layyah, Sialkot and other areas.

The Nation.
http://www.nation.com.pk/daily/feb-2007/2/bnews10.php.

 

[Janbaz]

CBR nets Rs457bn revenue

ISLAMABAD: The Central Board of Revenue (CBR) has realised Rs457.5 billion in tax collection, surpassing the target for July to January 2006-07.

Provisional tax collection indicated a cumulative growth of 23.7 per cent, a CBR statement said. The net collection during the period has been Rs457.5 billion against Rs369.8 billion in the same period last year.

The revenue on account of direct taxes has shown a remarkable increase of 60.9pc at Rs184 billion against Rs114.4 billion. Sales tax collection reached Rs169.5 billion against Rs154.9 billion, indicating a growth of 9.4pc. The growth in sales tax collection at import stage has been 4.3pc while domestic sales tax increased by 17pc. Receipts on account of excise duties recorded an increase of 17.4pc. The collection reached Rs34.6 billion against Rs29.5 billion in the corresponding period last year.

Finally, revenue from customs duties decreased by 2.4pc over the corresponding period last year due to declining imports. The tax collection has been Rs69.3bn against Rs71bn last year.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=41060.

 

[Janbaz]

SBP sees 2006-07 inflation above target

GENEVA (February 02 2007): Higher food prices will likely push Pakistan's inflation rate above the country's 6.5 percent target for the 2006/07 fiscal year, State Bank of Pakistan Governor Shamshad Akhtar told journalists on Thursday.

"We are doing pretty well on the core inflation given the monetary tightening we have had, but it is quite possible because of the food prices being somewhat on the uppish that the average inflation rate could be above the inflation target rate," she said before giving a lecture on banking reform at a Geneva university.

In her speech, Akhtar said the increased presence of foreign banks in Pakistan and a recent spate of mergers were due to "high investor confidence and economic prospects".

"The current merger and acquisition (wave) is also being triggered by the need for banks to meet higher capital requirements and also growing competition which will make (it) increasing(ly) difficult for small banks to survive," her speech text read.

Business Recorder.
http://www.brecorder.com/index.php?id=524390&currPageNo=1&query=&search=&term=&supDate=.

 

[Neo]

February 02, 2007

Portfolio investment may touch $2bn this fiscal

By Shahid Iqbal

KARACHI, Feb 1: The rising foreign portfolio investment in the country is expected to break the earlier record of 1994 by a big margin, experts anticipate.

They said the portfolio investment could reach to record $2 billion mark by the end of the current fiscal mainly on account of huge inflows through the Global Depository Receipts (GDRs) of two Pakistani entities.

The half-yearly portfolio inflows have already reached $627 million while the addition of $150 million GDR of Muslim Commercial Bank and $800 million of Oil and Gas Development Company (OGDCL) would push the total to cross the early record of 1994.

In the fiscal 1994 the portfolio investment had reached around $1 billion and this was also because of GDR of Pakistan Telecommunication Company (PTCL).

“The listed companies’ GDRs are included in the portfolio inflows, which will certainly increase the shares of foreign investment into the market capitalisation,” said Mohammad Imran, head of research at First Capital Securities.

Market capitalisation of foreign portfolio investment has reached four per cent while it reached 16 per cent on the basis of free float.

“The market capitalisation on free float basis has significantly increased and it could reach up to 18 or 19 per cent by the end of the current fiscal,” said Imran.

He said India was the real beneficiary of the portfolio investment in the region and flows in the Indian capital markets were much higher than Pakistan.

The latest data issued by the State Bank on Thursday showed that during the month of January total portfolio investments were up to $103.6 million, indicating a rising trend for the Pakistani capital market. However, the United States alone invested $118 million, while the UK withdrew huge amount of $30.7 million. Hong Kong was another major country, which invested up to $12 million during the same month.

During July-December, the portfolio investment reached $627 million compared to $359 million during the corresponding period of last year.

Analysts said the widening current account deficits would force the government to find more options to earn foreign exchange and the GDRs have been providing a decent way to help out the government to meet the gap.They said the government had found alternate way to get cheaper foreign exchange through issuance of GDRs. They said the response to MCB and OGDCL GDRs has encouraged the government to come out with more GDRs.

The trade gap might reach over $13 billion by the end of this fiscal as the growth in exports was much lower than the target, while the imports were on rise.

“There is a strong possibility for issuance of GDR of National Bank of Pakistan and it could happen during the current fiscal,” said sources in the banking sector. However, they said no size or time was decided.They further said the government had been analysing ways on how to yield maximum from the issuance of GDRs and a series of these should be expected in the coming two or three years.

http://www.dawn.com/2007/02/02/ebr6.htm

 

[Neo]

Friday, February 02, 2007

Cement exports expected to reach 2.5m tonnes

By Sajid Chaudhry

ISLAMABAD: Due to increasing demand in Afghanistan, UAE and Bangladesh, the cement exports of the country are expected to reach 2.5 million tonnes by end of the fiscal 2006-07.

With a total 3.2 million tonnes surplus wheat stocks, the export of wheat from Punjab has started with an export of 0.125 million tonnes, while Sindh and PASSCO are in a process to export surplus wheat.

This was informed to the Economic Coordination Committee of the Cabinet during a presentation on wheat stocks and cement industry here on Thursday. The ECC was informed that due to the encouraging government policy and a turnaround in the cement industry during the last seven years, the annual cement production, which was 15.72 million during year 2001-2002, has increased to 33 million tonnes during the current fiscal year.

The meeting was informed that the production has doubled during the last seven years. The local consumption of cement was 9.8 million tonnes, some seven years back, which has reached to 17 million tonnes in the last fiscal year 2005-06. The local cement consumption has increased to 9.9 million tonnes due to the earthquake reconstruction process and other construction activities across the country during the first 6 months of the current fiscal year 2006-07.

The meeting was also informed that Pakistan had exported 0.107 million tonnes cement in the fiscal year 2000-2001 and the country has exported some 1.5 million tonnes cement in the last fiscal year 2005-06. The exports of cement during the first six months (July-December) of the current fiscal year 2006-07 have witnessed good growth and have crossed 1 million tonnes. The meeting was informed that due to the demand in the said markets, the exports of cement could reach at 2.5 million tonnes by the end of this fiscal year. The price of 50kg cement bag was recorded at Rs 214 on average in the country against Rs 353 per bag in April 2006. The increase in the cement production has benefited the consumers as well as the industry.

The meeting was also informed that according to the stock position of Jan 31, the country has some 3.2 million tonnes wheat in its stocks against 3.1 million tonnes in the same period last fiscal year. Punjab is carrying a stock of 1.745 million tonnes, Sindh has 0.345 million tonnes, NWFP is carrying some 0.17 million tonnes, Balochistan has a wheat stock of 0.0547 million tonnes and 0.889 million tonnes wheat stock is available with PASSCO. Punjab has started export of wheat and the exports of wheat stands at 0.125 million tonnes at present. Sindh and PASSCO are in a process of exporting wheat from the country. The ECC had allowed the private sector to export wheat from country fixing an export target of 0.5 million tonnes in its last meeting.

The meeting was also informed that the sugar stocks in the country as of Jan 31 stands at 1.238 million tonnes and crushing season is on its peck in the country. The average per kilogram price of sugar in the country is Rs 31.

http://www.dailytimes.com.pk/default.asp?page=2007\02\02\story_2-2-2007_pg5_1

 

[Neo]

Friday, February 02, 2007

Pakistan sees globalisation as opportunity: PM

ISLAMABAD: Prime Minister Shaukat Aziz said on Thursday Pakistan considers globalization an opportunity and not a threat and offers a level playing field to local as well as foreign investors without any discrimination.

He was talking to a French media delegation that called on him here at the Prime Minister’s House. The prime minister said that as a result of the government's economic reforms based on the policies of liberalization, privatization and deregulation, the country expects to attract around $5 billion in foreign direct investment this year, which ranged between $250 and $350 million before 1999.

He said the size of the economy and per capita income has doubled in the last five years, with sustained 7-8 percent growth rate during the last four years.

The prime minister said due to increased economic activity that generated ample employment opportunities, the rate of unemployment in Pakistan has come down to 6.2% at present from 8.7% in fiscal year 2000, despite increase in population.

He further informed the delegation that five million new jobs were created during the last few years, with around 70% of them filled with women.

The prime minister said due to increased economic, development and construction activity, the country is facing a shortage of skilled manpower, which is a sign of high growth.

He said owing to increased construction activity in Pakistan, the growth of cement sector has doubled during the last five years.

The prime minister also mentioned reconstruction activities in the earthquake affected areas and said the fast pace reconstruction and recovery of the affected areas is a model for others.

He said the objective was to build better, so that housing, schooling, health and other vital facilities are better than as it were before the earthquake.

The prime minister said the government, with the help of army, NGOs and the international community, managed this tragedy and trauma so effectively that no single person died of hunger, cold or malnutrition.

He also mentioned the strong democratic system in Pakistan with full functioning parliament, free media and active opposition parties and said it augurs well for the country's future.

The prime minister gave an overview of his recent visit to Davos and Brussels and his hectic engagements there, including his interaction with the NATO secretary-general and the address to the NATO Council.

He said Pakistan wants a strong and stable Afghanistan, as it is not only in its own interest but is vital for peace and stability in the region.

The prime minister said with 80,000 troops deployed by Pakistan along the 1,700 miles of porous border, three million Afghan refugees still being hosted, and introducing the latest biometrics system at the Chaman crossing, the country is doing enough to check the illegal movement along the border with Afghanistan.

The prime minister also mentioned the recent statement of the NATO secretary-general at a joint press conference with him in Brussels, in which he agreed that all sides have to do more and that the blame-game should end.

He also briefed the delegation about Pakistan's relations with other neighbouring countries, including India and Iran, and said Pakistan wants a peaceful solution of the core Kashmir dispute that fulfils the wishes and aspirations of the Kashmiris.

Regarding Iran, the prime minister said Pakistan does not support nuclear proliferation by any country but, at the same time, it considers that every nation has the right to peaceful use of nuclear technology.

The prime minister also responded to queries of the French media delegation.

http://www.dailytimes.com.pk/default.asp?page=2007\02\02\story_2-2-2007_pg5_14

 

[Neo]

Friday, February 02, 2007

Annual car production to rise to 500,000:

Five-year auto policy okayed

* Investment in auto industry to increase to Rs 225 billion
* No cut in duty on cars of up to 1500cc in CBU condition

By Sajid Chaudhry

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Thursday approved a new five-year ‘Long Term Auto Policy 2007-2012’ that envisages taking the annual production of cars in Pakistan from 200,000 to 500,000 by 2012.

The ECC also approved corporate tax exemptions, import duty, and local and provincial taxes for 20 years for the three companies to be formed by the Port of Singapore Authority, which would invest $550 million in the next five to ten years to operate Gwadar port for the next 40 years as well as to develop the Gwadar Special Economic Zone.

After the ECC meeting, which was presided over by Prime Minister Shaukat Aziz here, Dr Ashfaque Hassan Khan, advisor to the Ministry of Finance, told reporters that the new policy would encourage existing auto manufacturers to increase production and expand their manufacturing capability and also encourage new entrants to invest in the auto industry in Pakistan.

He said the ECC had approved five years tariffs for cars and light carriage vehicles. The tariff on import of non-localised parts for cars in CKD (complete knocked down) condition, currently at 50%, would be brought down to 35% by 2012, and on localised parts from the existing 45% to 30%. Cars in (completely built up) CBU condition of up to 1500cc would continue to be importable at 50% duty for the next five years. Import duty on cars from 1500cc to 1800cc would be brought down five percent to 60% duty by 2012, and on cars above 1800cc from 75% to 70% by 2009-2010. The tariff structure approved for light carriage vehicles seeks their import in CKD condition, with localised parts to be importable at 45% duty by 2012 against the existing 50%, and duty on non-localised parts to be brought down from 70% to 60&% by 2012.

Dr Khan said the auto industry produced 30,000-32,000 cars in 1999-2000, 161,000 in 2005-06, and was expected to produce some 200,000 cars during current fiscal year 2006-07. The policy has set a target of producing 500,000 cars by 2012. Investment in the auto industry, which stands at Rs 98 billion today, would increase to Rs 225 billion by 2012. The auto industry’s share in GDP is projected to grown from the current 2.8% to around 5.6% by 2012, and its share in manufacturing from 16% to 25%. The industry, currently contributing Rs 63 billion in direct taxes, would give Rs Rs.190 billion by 2012. Jobs in the industry would increase from the existing 192,000 to 250,000 in five years.

The ECC also approved a sale price of Rs 7 million per acre for non-transferable plots in downstream industrial estates to be established on non-core land of the Pakistan Steel Mills.

The committee also approved the exploration and development of coal bed methane in Sindh. The Sindh government is to carry out due diligence with M/s Cathy for the purpose.

The ECC allowed Sui Southern Gas Company (SSGC) to establish a liquefied natural gas (LNG) plant at Port Qasim in collaboration with the private sector for import of 3.5 million tonnes of LNG annually by 2010-2011, with transportation and distribution to be taken care of by the private sector. This would be phase one of the LNG project and it would be extendable till 2012-2013 with an additional import limit of 3.5 million tonnes.

The ECC approved guidelines for companies wanting to import and distribute LNG through mobile units in areas where laying gas distribution lines is impossible or unfeasible.

It also approved the transfer of two independent power producers, Foji Korangi Power and Western Electric Power Project, from Karachi Electricity Supply Company jurisdiction to WAPDA jurisdiction, after the former refused to purchase power from the two IPPs.

http://www.dailytimes.com.pk/default.asp?page=2007\02\02\story_2-2-2007_pg1_1

 

[Owais]

ECC approves long-term auto policy: Gwadar Port operators get tax relief

ISLAMABAD (February 02 2007): The Economic Coordination Committee (ECC) of the Cabinet on Thursday approved long-term auto policy and gave tax exemptions and incentives to operate Gwadar Port to be given to Singapore Port Authority (SPA).

Presided over by the Prime Minister Shaukat Aziz the ECC also approved First LNG project by SSGC and Exploration of Coal Bed Methane (CBM) gas by Sindh government.

After the meeting, Dr Ashfaque Hasan Khan, Economic Advisor to the Finance Ministry briefed the journalists that the five-year policy has been designed in way that it should not hurt local industry but attract new investment. However, the government has decided not to change current import policy so that consumers' interests could be protected.

"Cars import policy will continue in its existing shape and if premium becomes a public issue again, the government will take appropriate measures to protect the consumers interest," he added.

He said that with the implementation of five-year auto policy, 0.5 million new cars would be manufactured per year by 2011-12 against the current production of 0.2 million. He said total investment in car manufacturing would reach Rs 225 billion by 2011-12 as compared to Rs 98 billion in 2005-06 while this sector's share in GDP would touch 5.6 percent against the current share of 2.8 percent.

He said contribution of auto sector in the manufacturing sector would increase to 25 percent in five years from its existing share of 16 percent while its share in indirect tax would reach Rs 190 billion in 2011-12 against Rs 63 billion.

The sector is presently providing employment to 192,000 people and the number would increase to 2,50,000 by 2011-12, he added. The ECC has approved 50 percent tariff for localised parts of cars in 2006-07, followed by 50 percent in 2007-08, 50 percent in 2008-09, 47.5 percent in 2009-10, 45 percent in 1010-11 and 45 percent in 2011-12.

Tariff for non- localised parts has been proposed by 35 percent in 2006-07, followed by 35 percent in 2007-08, 32.5 percent in 2008-09, 32.5.5 percent in 2009-10, 30 percent in 2010-11 and 30 percent in 2011-12.

In CBU condition, the ECC approved 50 percent tariff for cars up to 1500cc till 2011-12. Cars of 1500 to 1800 cc would have 65 percent duty till 2008-09, followed by 60 percent till 2011-12 while 75 percent duty has been proposed for the cars exceeding 1800 cc till 2008-09 and 70 percent till 2011-12.

The ECC approved 50 percent duty on LCV (CKD kits localised parts) for three years ie up to 2008-09 followed by 47.5 percent in 2009-10, 45 percent in 2010-11 and 45 percent in 2011-12 while duty would remain 20 percent for non -localised parts till 2011-12.

According to the five-year plan tariff for CBU condition LCVs would be 60 percent till 2011-12. The ministry has also been asked to prepare action plan by March 31 in the light approved policy.

Dr Ashfaque Hassan Khan said the Gwadar Policy Board, chaired by the Prime Minister, has already approved in principle concession agreement for fifty years of operation of Gwadar Port proposed to be signed with the Port of Singapore Authority. The operator would initially make an investment of $550 million over the next ten years.

The incentives approved by the ECC for the port operator include tax holiday to corporate income for 20 years, exemption of import duties on materials and equipment for construction and operation of the port and development of Free Economic Zone for 40 years. It also envisages exemption of local and provincial taxes for 20 years, which has already been approved by the Balochistan government.

The ECC approved first LNG project of Sui Southern Gas Company (SSGC) as part of the long-term energy security plan. It envisages import of 3.5 million tons of LNG per annum up to 2010-11, he said adding 5.3 million tons by 2012-13, adding that 5.3 million tons LNG is equal to 500 mmcfd.

He said 53 companies had shown interest of which 36 submitted (EoI). However 14 companies submitted Statement of Qualification (SoQ). The ECC approved completely integrated option and rejected unbundled option given some of the companies.

Based on the proposed approach, the consultants ie ABN Amro and Poten and Partner would select the companies for issuance of licence. Persian LNG, British Petroleum would be entitled to supply LNG to Shell Limited, ENI, AES and Sojtiz and a few other companies, he said adding that the port expenses would be finalised in consultation with Ports and Shipping Ministry.

The ECC also approved relocation of two IPPs from the KESC areas to Wapda as the former refused to purchase power from both the projects. He said that the ECC has approved expansion in the land to be leased out for setting up new industries in the PIDC from 291 acres to 423 acres, which is partially developed.

The ECC has also added 1000 acres of undeveloped land to be sold to the industrialists at Rs 7 million per acre, which would be non-transferable without the permission of competent authority. Dr Ashfaque Hasan further said that National Industrial Park Development would make binding recommendations in this regard which would approve its Board of Directors.

Replying to a question, he said that the ECC allowed Sindh government to start exploration and development of Coal Bed Methane (CBM) to M/s Cathy Oil and Gas Company with the directions to the provincial government to undertake proper due diligence before granting license to the company.

Prime Minister Shaukat Aziz briefed the meeting about his visit to Davos to attend the World Economic Forum meeting. Chief Executives of top multi-national companies, who called on the Prime Minister there, showed their keen interest to make investment in Pakistan. Chief Executive Officer of Nestle would visit Pakistan soon to inaugurate the largest milk plant of the company in the country.

The ECC was informed that the tax collection by CBR increased by 23.7% in seven months of the current financial year. It collected 457.5 billion rupees in taxes as compared to 369.8 billion rupees in the corresponding period last year. The meeting was told that the sensitive price index showed that downward trend for five weeks and food inflation has substantially declined.

The meeting noted that despite 13% increase in the production of Moong pulse, its prices have not come down and warned that strict action would be taken against hoarders.

It also noted that the country has sufficient stocks of wheat that stood at 3.2 million tons on 30th of January as compared to 3.1 million tons on the same day last year. Punjab has exported 1,25000 tons of wheat.

The ECC observed that no head of the government took this much interest in improving performance of Utility Stores Corporation as is being evinced by the incumbent Prime Minister. The USC has played vital role in stabilising prices especially that of sugar and it sold 0.5 million tons of the commodities on subsidised rates since March 2005. The country has a stock of 1.238 million tons of sugar and its average price is 31 rupee a kilo.

It was observed that prices of 14 essential items in Pakistan was on the average 26 percent lower than India; prices of 10 items 26 percent lower than Bangladesh and prices of 15 items 34 percent lower as compared to Sri Lanka.

The meeting was informed that the installed capacity of cement that stood at 15.72 million tons in 2001-02 has more than doubled to 33 million tonnes in 2006-07. Its domestic consumption has increased from 9.8 to 17 million tons during the period and the existing prices compare with 2003.

Pakistan also exported 1.5 million tons of cement, mostly to Afghanistan, UAE and Bangladesh, during last year and this year the export is likely to touch 2.5 million tonnes

http://brecorder.com/index.php?id=524347&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Government preparing integrated package for textile sector

ISLAMABAD (February 02 2007): Minister for Textile Industry Mushtaq Ali Cheema has said that government is finalising an integrated package for reviving the textile sector.

He said this while presiding over a meeting with Vice President Werner International Gian Mario Borney, who gave presentation on the marketing plan here on Thursday, to expedite the exports of the textile industry which is facing sharp decline since expiry of quota regime on December 31, 2004.

Among the textile chain, Gian Borney said, garment sector is the most important, which need special attention on account of value-addition. He suggested that it should be treated on top priority and should be exempted from all kind of taxes like Export Processing Unit (EPU).

He also talked about various proactive measures to enhance productivity, coupled with emerging global marketing trends, supply chain models and market liberalisation dynamics amidst the highly competitive global arena. These phenomena underline the need for enhancing productivity, cost-effectiveness and enhancing exports to survive and thrive in the new export paradigm, he added.

He said that China and India are emerging as strong exporters of the textile sector and by 2010 China would capture 50 percent of textile share and India 25 percent, while Bangladesh is also coming up fast.

There is acute need for reviving this sector in Pakistan as the global trends foresee other countries boosting their textile growth like China, India and Bangladesh, where governments are facilitating the industry to the maximum. He insisted that government of Pakistan should also facilitate the sector to remain competitive.

Talking about the declining exports in the sector, he said that there is need to improve the image of the country, develop human resource and increase government support to get the desired results.

The minister for textile said that steps are being taken by the government to bridge the gap between existing productivity and emerging global trends, adding that the government was preparing an integrated package for the textile sector, which is near finalisation.

Advisor to Prime Minister for Finance Dr Salman Shah said that the government is making efforts to resolve the textile crisis and to provide a conducive environment that is globally competitive, so as to help textile sector maintain and achieve real growth in the long run.

It was learnt that sectoral wise analysis of the textile chain would resume from next month. It may be mentioned here that the Werner International is already carrying out benchmarking studies of each sector of textile individually. There are ten sectors in the chain and eight units would be analysed for each. Benchmarking study of the weaving and spinning has already been done.

The meeting was also attended by CEO Trade Development Authority (TDAP) Tariq Ikram, Secretary General CBR and Secretary Textile Ministry including major textile sector figureheads.


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[Owais]

Pakistani trade team to visit Kuwait and Saudi Arabia

LAHORE (February 02 2007): A 12-member trade delegation will visit Kuwait and Saudi Arabia from March 1. According to Trade Development Authority of Pakistan (TDAP) sources here on Thursday, members of the trade team representing different sectors of Pakistani industry including pharmaceuticals, surgical, rice and fruit & vegetables.

The members will have meetings with their Kuwaiti and Saudi counterparts with the objective to boost the country's exports to these oil rich Gulf states. Director TDAP Lahore, Ikramullah will lead the delegation during the eight-day visit.

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[Neo]

Thursday February 1, 2007

Pakistan set to tender for first LNG terminal

ISLAMABAD, Feb 1 (Reuters) - State-run Sui Southern Gas Co. Ltd. (SSGC) has gained government approval to seek bids to build and to supply Pakistan's first liquefied natural gas (LNG) terminal, a government official said on Thursday.
"The ECC has allowed Sui Southern to go ahead with the project and issue a tender," said Ashfaque Hasan Khan, an adviser at the Finance Ministry.

The ECC, or Economic Coordination Committee of the cabinet, is Pakistan's country's highest economic decision-making body.

"It will be an integrated project with one company building the plant as well as supplying LNG," Khan told Reuters.

Industry sources estimate the plant's development will cost $300 million to $400 million, while the project cost would be more than $15 billion, including a long-term LNG supply contract.

The plant is expected to have an initial import capacity of 3.5 million tonnes a year of LNG. It will turn frozen LNG back into gas for piping to consumers.

"The first phase of the project is expected to provide 3.5 million tonnes of LNG per annum in 2010 and 2011," Khan said.

He said SSGC will be allowed to expand the project in a second phase, under which it could bring in an additional 3.5 million tonnes of LNG a year by 2012 and 2013.

SSGC has already short-listed international companies, including Persian LNG, BP Plc , Royal Dutch Shell , ENI and several others for the project.

Dutch bank ABN AMRO is the financial adviser for the project.

http://asia.news.yahoo.com/070201/3/2wrbz.html

 

[Owais]

50 percent decline in fruit export feared

KARACHI (February 03 2007): The country may suffer considerable loss in the foreign exchange earnings this fiscal, as the fruits exports would be around 50percent lesser than the previous year. According to data provided by the Federal Bureau of Statistics, fruits exports registered a decline of 37.43 percent during July-December FY07 as compared to corresponding period last year.

Fruits exports stood at $48.155 million during the above-mentioned period against $62.056 million during the corresponding period last year. Chairman Fruit Exporters Association of Pakistan, Abdul Wahid giving reasons for this decline said that shortage of fruits, particularly mango and citrus due to lesser production were responsible for this slump in export.

He maintained that the prime reason was the alternate bearing, as the crops remained on higher and lower ends each alternate year. Previous year was on the higher end as far as production was concerned, as the country witnessed bumper mango and citrus crops.

Adding to the misfortune this year, the weather conditions, which remained unfavourable for the fruit crops. Although, the mango exports achieved the target of 80,000 tonnes, however, it was 20 percent less than the previous year's target of 100,000 tonnes, which was surpassed by around 10,000 tonnes.

Abdul Wahid categorically said that viruses that attacked the crops also caused serious production loss. He regretted that the government and the concerned ministries/departments launched no awareness campaigns against virus and pest attack, which were rigorously undertaken in the case of cotton and other cash crops.

"Fruits are equally important cash crops, as they contribute reasonable share in the foreign exchange earners and these should be given equal treatment like cotton," he said and added that the fruit crops monitoring centres and concerned agencies should be more proactive.

It is impossible to match previous year's fruit exports earnings this fiscal. The statistics for the first half already suggest a decline of over 22 percent in terms of dollars and citrus are the chief fruit exports of Pakistan coupled with very smaller quantity of apple, grape and pomegranate etc. Abdul Wahid said that mango exports had already remained around 30,000 tonnes lower while the citrus export target was impossible to achieve.

Pakistan Horticulture Development and Export Board has set a target of 220,000 tonnes for citrus export this year against a target of 200,000 tonnes last year, which was surpassed.

Wahid said that this was an unrealistic target as the citrus crops met a disaster this season. "Kinnow is presently available for Rs 750 per 40kg against Rs 180 per 40 kg last season, which shows the scarcity of the commodity," he remarked adding that so far some 55,000 tonnes kinnow had been exported and the shipments would continue for another month. "Hardly, we would be able to export 100,000 tonnes of the fruit," Wahid observed.

Chairman Fruit Exporters Association of Pakistan, Abdul Wahid urged the Chairman PIA to instruct relevant quarters that once a cargo quota was allowed to the fruit exporters, the cargo must not be off-loaded.

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