Pakistan Economy - News & Updates - Archive

[Neo]

KARACHI, April 27: The personal computer (PC) shipments to Pakistan grew 16.6 per cent in 2005 to reach just under half million mark with 494,000 units due to growing IT awareness and increased focus from multinational IT vendors.

Springboard Research vice-president Dane Anderson said that although the earthquake in October 2005 held shipments back marginally in the fourth quarter due to delayed government buying and general economic disruption, it was not expected to impact the market materially in 2006 and beyond.

Due to political and social disruptions as well as general perception challenges, he said that Pakistani market had traditionally been neglected by international IT vendors, says a press release.

 

[Neo]

Saturday, April 29, 2006

* Iranian minister says India is welcome to join project at any time

By Fida Hussain

ISLAMABAD: Iranian Deputy Oil Minister Mohammad Hadi Nejad Hosseinian said on Friday that Iran and Pakistan would implement the proposed Iran-Pakistan-India (IPI) gas pipeline project bilaterally if India failed to take a decision by the end of next month.

Talking to reporters on his arrival at the Islamabad airport, Hosseinian said that Iran was discussing the issue with Indian authorities. “India is keen to be part of the multi-billion dollar project. So far, we have not received any indication that India is stepping out of the project. We will implement it with Pakistan if India does not take any decision by May end,” Hosseinian said, as predicted by Daily Times in its April 28 edition that a gas pipeline paper deal between Iran and Pakistan was on the cards during Hosseinian’s visit to Pakistan. Hosseinian said that India would be welcomed whenever it wanted to join the project.

Senior Pakistani Petroleum Ministry officials and Iranian Ambassador Mohammad Ibrahim Taheryan received Hosseinian and his eight-member delegation at the Islamabad airport. The delegation later held technical talks with Petroleum Secretary Dr Ahmad Waqar and other officials. “We have discussed pricing formula in talks. The issue will be discussed in oil ministers’ meeting in Tehran most likely in June if we fail to reach an agreement here,” Waqar said. He said Pakistan had sent a draft pricing formula to Iran. “I am hopeful that Iran, Pakistan and India will finalise all aspects in two months,” Waqar told reporters after talks at the Ministry of Petroleum and Natural Resources. He said Pakistan would take the decision its national interest. The negotiations on price and pipeline structure will continue for another two days. Hosseinian’s visit comes a few days after a telephonic talk between President Musharraf and Mahmoud Ahmadinejad. Both leaders vowed to take the project forward.

NNI reported that next trilateral secretary-level talks on the project are likely to be held in Islamabad from May 22 to 24.

 

[Neo]

Saturday, April 29, 2006

ISLAMABAD: David Collin, the Canadian High Commissioner in Pakistan, has said FTA and PTA negotiations between the two countries are in an advance stage of planning and when the two countries will sign these trade agreements, bilateral trade will see further heights.

The Canadian high commissioner called on Abdul Rauf, president of the Islamabad Chamber Commerce and Industry (ICCI), on Friday and met traders and industrialists. The Canadian Commercial Attachee was also present.

Mr Collin said that Pakistan and Canada are partners in the war against terrorism and there is direct relation between the economies of the two countries. He said that Pakistan has achieved a good GDP growth rate and investment opportunities are also available amid better investment friendly circumstances. He informed that Free Trade Agreement (FTA) and Preferential Trade Agreement (PTA) are in the last stage of planning. He further said that there is no difficulty for traders to get Canadian business visa and related complaints should brought to his notice.

Abdul Rauf said that global trade paradigm has shifted and the trade barriers have shrunk due to WTO implementation. He said Canada is a partner of Pakistan in the war against terrorism and the Canadian government showed great enthusiasm after the 28th October earthquake catastrophe in Pakistan. He further said that Pak-Canada trade balance is in favour of Pakistan and Pakistan exports textile, bed linen, yarn, garments and towels to Canada which is 75% of the total export, but there is need to further enhance the bilateral trade in other sectors too. He also pointed out low investment activities of Canada in Pakistan and proposed the exchange of business delegations and organization of single country exhibitions to strengthen the trade relations. He stressed the need to ease the visa process for Pakistani traders.

 

[Owais]

President asks CAA to further improve ground, air travel facilities


RAWALPINDI (updated on: April 29, 2006, 21:48 PST): New airports at Islamabad and Gwadar will have state-of-the-art facilities while Pakistan International Airlines is to have a fleet of new aircraft as part of the government policy to promote tourism, trade and investment.

This was informed at two presentations made to President General Pervez Musharraf by Civil Aviation Authority and Pakistan International Airlines on Saturday.

Both the airports will have modern facilities at their terminals, runways, parking bays and other allied facilities and services like communication and other infrastructure.

In addition, the Multan Airport will also be modernised at a cost of Rs 2.5 billion with a new terminal and extensive cold storage and cargo facilities. The refurbished Multan airport would be able to handle large passenger aircraft.

"The design of new Islamabad airport will be finalised by mid-May while construction work is expected to get underway by the end of the year," Director General Air Marshal (Retd) Pervez Nawaz told media persons, after the presentations.

The new Islamabad international airport will be greenfield, having best international standards. It would be completed in three years time at the estimated cost of Rs 18 billion. The land for the project has already been acquired.

The CAA is expected to secure possession of the land for the new Rs three billion Gwadar airport by the middle of next month. The Authority has invited reputed international companies for the design of the new airport and project management.

According to the Director General CAA, Gwadar will have open sky policy in the beginning aimed at attracting foreign investors and bolstering tourism for rapid development of Gwadar city.

Chairman PIA Tariq Kirmani, in his presentation, informed that the national flag carrier has shown remarkable improvement in its performance and revenues in the last few years.

He pointed out that despite soaring international oil prices, the PIA has increased its revenues by 11 per cent.

The fuel cost has impacted the PIA to the tune of Rs 8 billion in the last one year, rocketing from Rs 18 to 26 billion.

On improvement in quality of service, the Chairman said the complaints have reduced significantly lately.

The PIA plans to induct 29 new aircraft to replace the ageing fleet.

These include 12 latest 777 Boeing aircraft. Five of these wide-bodied, fuel-efficient and long-distance, aircraft have already been inducted and seven more will be included in the fleet in the next three years.

Besides, seven ATR, an airbus subsidiary, will also be part of the PIA fleet for domestic routes.

In his remarks, President General Pervez Musharraf emphasised that all stakeholders including passengers, employees and shareholders should benefit from improvement in PIA's performance.

He directed the Pakistan International Airlines to further improve its efficiency and services of the national carrier to make it more competitive and profitable.

The President particularly urged the PIA management to raise the standard of services for passengers in order to capture greater market share in this era of intense international competition.

He also urged the national carrier and the Ministry of Religious Affairs to offer better facilities to pilgrims proceeding to Saudi Arabia for Haj and Umra.

Minister for Defence Rao Sikander Iqbal and Minister for Religious Affairs Muhammad Ejaz ul Haq attended the presentations.

About provision of facilities at the airports, the President said these must be of international standards for efficient handling of growing domestic and international traffic.

The President was briefed about the construction of a new international airport for the capital and plans for building Gwadar airport.

President Musharraf said the new airports should be constructed futuristically and equipped with the latest technology to bolster tourism and trade.

"Pakistan is set to see an upsurge in both investment and tourism fields upon completion of new Gwadar deep sea port-therefore, our efforts must be to extend best facilities to local and foreign investors," he said.

 

[Owais]

THE RUPEE: sharp fall against euro in open market
RECORDER REPORT KARACHI (April 29 2006): The rupee showed fell sharply versus the euro as the single European currency crossed an important mark of Rs 75 on the back of dollar's slide in the international markets, moneychangers at the open market said on Friday.

The local currency continued to be weak versus the euro for buying and selling at Rs 74.95 and Rs 75.05, they said.

The rupee gained three paisa against the dollar for buying at 60.20 and 60.25, they said.

According to the Reuters, the dollar was holding near a seven-month low against the euro after Fed chief Ben Bernanke gave the clearest sign yet the central bank's two-year campaign of raising interest rates may be coming to an end.

INTERBANK MARKET: Firmness prevailed as the rupee held its overnight levels versus the dollar for buying and selling at 60.05 and 60.06, respectively.

Steady supply of dollars helped the rupee to gain ground versus the greenback, they said.
================================Buying Rs 60.20Selling Rs 60.25================================

 

[Neo]

30 April 2006

ISLAMABAD — Several industries require big increases in capacity expansion and are attracting foreign and domestic investment.

This was is confirmed by the State Bank of Pakistan (SBP) in its Parliament-mandated second report, covering the first half of 2006 — July-December, 2005. It reviews the performance of all sectors of the economy, and projects future trends.

SBP said, "The economy remains on a high growth trajectory in fiscal 2006, but the real GDP growth rate for the year seems increasingly likely to be lower than 7.0 per cent." This can range between 6.3 to 6.8 per cent, compared to the government-claimed growth of 8.4 per cent in full fiscal 2005. It attributes part of the slowdown to below par farm production, especially of cotton and sugarcane. This will be partially offset by an anticipated above-target performance of the services sector. Its flags rising inflation, expanding monetary growth, widening trade deficit, large government borrowing from SBP which is inflationary, and the need to increase tax collection, as "the challenges to the economy".

Rising demand calls for capacity expansion and creation of new units in several sectors, including cement, chemicals, fertilisers, paper and board, and automobiles. A wide range of consumer goods, and industrial materials, for which other resources and skills already exist within the country, have a strong potential to attract foreign direct investment.

Despite the rising demand, there is evidence that large scale manufacturing (LSM) growth has decelerated in July-January period of fiscal 2006, compared to the corresponding period of 2005, the report says. But there are plus points, though.

Textiles, the largest group in LSM, recorded a 7.7 per cent growth year-on-year (Y0Y) during the first seven months of 2006, on the back of strong external demand.

The growth of the cement industry slowed down to 8.8 per cent because of capacity constraints, although the demand is soaring, mostly as a result of large scale reconstruction work in the areas hit by devastating Oct. 8 earthquake. "In the longer run, demand will be augmented by the government's decision to build a number of large water reservoirs," SBP said.

The chemical industry recorded a deceleration, posting only 4.4 per cent year-on-year growth in output during July-January, primarily due to capacity constraints. Capacity utilisation, for instance, in caustic soda units is 130 per cent. The Fertiliser industry is also facing capacity constraints and recorded only a 16.4 per cent growth year-on-year, as compared with 42.7 growth in the same period last year.

Large quantities of chemicals and fertilisers were imported to meet the growing demand — indicating that new units could have profitable business prospects. In order to meet the demand, 1.6 million metric tonnes of fertilisers were imported during the seven months that ended January, 2006.

Capacity has been hiked for some of the industries, but new units, established with FDI and domestic resources, are still needed to meet soaring demand. This is the case with for automobiles, consumer durables, household electronics and cellular phones, among other products.

Auto production showed a 28.2 per cent growth, over the 27.9 per cent year-on-year rise in 2005. Continued strong domestic demand, supported by credit availability and auto leasing contributed to this extraordinary growth.

 

[Neo]

By Khaleeq Kiani

ISLAMABAD, April 29: Pakistan requires $100 billion investment in power sector in the next decade for its current high economic growth rate and hence needs a careful balance between economic stability and growth.

This was stated by Dr A R Kemal, a renowned economist, planning commission’s advisor and a former chief economist who pointed out some repercussions of an uncontrolled GDP growth.

Speaking at a seminar organised by South Asia Free Media Association (SAFMA) on Saturday, he said the leading South Asian countries were registering high growth rates but said: “We have to be realistic whether there are sufficient resources to move into the capital intensive high-tech industries and infrastructure requirements which also require capital intensive energy needs.”

His word of caution was that “do not move faster than your capacity otherwise the balance of payment problems would automatically begin to slow down GDP growth in an undesirable fashion.”

For example, he said Pakistan would require about $100 billion investment in the power sector alone to maintain growth rates of seven-eight per cent. Hence, such growth rates could also create balance of payment problems like the one Pakistan has already started witnessing during the current year.

He said most of the Asian countries had similar stabilisation policies under the International Monetary Fund (IMF) programmes and hence they have a lot of common lessons to feed into the possibility of a regional cooperation in the next 10 years as they move towards regional economic integration.

He said there should be trade off between the high growth rates and economic stability, create exchange rate equilibrium and distribute incomes in an efficient and just manner.

Dr Kemal, who also led Pakistan Institute of Development Economics for many years, said since most of the South Asian nations were trying to maintain high growth rates, they should coordinate with each other and scale down growths.

He said that the regional countries looked into the question whether they should have a common strategy to attract foreign direct investments or compete for the FDI to the benefit of foreign investors.

He was also critical of some of the so-called prudential regulations which ensured credit only to the rich because these did not allow the poor, who were more efficient to save, invest and produce more, to access capital without collateral.

Dr Ponna Wignaraja from India said the availability of data in the south Asian region was inadequate as the governments underplayed poverty situation while multilateral agencies underplayed policy choices and hence there was a need for coherence for a policy change.

He said the definition of poverty as one dollar income per day was not true because this meant starvation while caloric definition was also faulty.

He called for decentralisation and devolution of political democracy and economic democracy to avoid violence in the region.

He believed that poverty could be reduced through sustained political process, a process that involves caring and sharing which already exist in the culture and not through micro-credits.

Another delegate Nephil Maskay called for integration of SAARC countries into an economic union as level of regional trade in these countries stood at just five per cent compared with 50pc of the European countries.

He said the finance ministers and central bank chiefs of the Saarc members should meet every year to promote economic cooperation for regional integration and there should be regional institutionalised arrangements as to what should be the economic priorities of the region.

A separate panel of experts recommended setting up of a regional power grid, a regional gas grid for import of gas and transmission to needing economies, exchange of hydropower and joint development of technology.

The group said all the countries of the region had introduced reforms in the energy and water sector and all had failed in some way to produce desired results and hence it was time that all should exchange their experiences for a common benefit.

http://www.dawn.com/2006/04/30/ebr6.htm

 

[Neo]

Sunday, April 30, 2006

RAWALPINDI: The new Islamabad and Gwadar airports will be equipped with state-of-the-art facilities and the Pakistan International Airlines (PIA) shall receive a fleet of new aircrafts as part of the government policy to promote tourism, trade and investment. These measures were announced during two presentations made to President General Pervez Musharraf by the Civil Aviation Authority (CAA) and PIA on Saturday.

Both airports will be fully equipped with the latest facilities at all terminals, runways and parking bays. Other allied facilities and services such as communication equipment and infrastructure shall also be up dated, APP reported.

Meanwhile, the Multan Airport will be modernised at an estimated cost of Rs 2.5 billion with a new terminal and cold storage and cargo facilities. The airport, once refurbished will be able to receive large passenger aircrafts. “The design of the new Islamabad airport will be finalised by mid-May while construction work is expected to commence by the end of the year,” Pervez Nawaz, director general of Civil Aviation Authority (CAA), told journalists after the presentations.

The new Islamabad international airport will be built according to international standards. The airport is expected to take three years for completion with an estimated cost of Rs 18 billion.

The CAA is expected to secure the possession of land for the new Rs 3 billion Gwadar airport by the middle of next month. The authority has invited international companies to submit designs for the new airport.

According to the CAA director general, the Gwadar airport will have an open sky policy in the beginning aimed at attracting foreign investors and tourists. PIA Chairman Tariq Kirmani, in his presentation, said that the national flag carrier had shown remarkable improvement in its performance and revenues in the last few years.

Staff report adds: Pervez Nawaz on Saturday informed President General Pervez Musharraf that the design of the new Islamabad airport would be finalised by mid-May, while construction work was expected to get underway by the end of this year.

“The new Islamabad international airport will have the best international standards. It will be completed within three years at the estimated cost of Rs 18 billion,” Nawaz said.

In his remarks, president General Pervez Musharraf emphasised that all stakeholders including passengers, employees and shareholders should benefit from the improvement in PIA’s performance. He directed the PIA to further improve its efficiency and services to make it more competitive and profitable. The president urged the PIA management to raise the standard of services offered to passengers in order to capture a greater market share.

He also urged PIA as well as the Ministry of Religious Affairs to offer better facilities to Haj pilgrims. The president said that facilities offered at the airports must be of international standards to ensure efficient handling of growing domestic and international traffic.

President Musharraf said the new airports should be based on futuristic designs and equipped with the latest technology to boost tourism and trade. Tariq Kirmani said PIA had increased its revenues by 11 percent.

 

[Neo]

ISLAMABAD (April 30 2006): The Central Board of Revenue (CBR) has so far collected Rs 536.4 billion in the July-April (2005-06) period, against Rs 451.1 billion collected in the same period of last fiscal year, reflecting an increase of 18.9 percent.

According to the provisional figures issued on Saturday, direct tax collection amounted to Rs 162.95 billion against Rs 132.95 billion, showing an increase of 22.6 percent. Indirect taxes collection stood at Rs 373.45 billion against Rs 318.17 billion, showing an increase of Rs 55.282 billion.

The CBR has to collect Rs 153.6 billion in the remaining two months-May and June--to achieve the target of Rs 690 billion, ie Rs 76.8 billion in each.

Sales tax collection amounted to Rs 226.01 billion during this period against Rs 186.81 billion of last year, showing a growth of 21 percent.

GST collection at import stage was Rs 133.8 billion against Rs 118.5 billion, showing an increase of Rs 15.3 billion. Sales tax collection on domestic consumption was Rs 92.2 billion against Rs 68.3 billion with a growth of Rs 23.9 billion.

The collection of customs duty was Rs 104 billion in July-April 2005-2006 against Rs 89.75 billion collected in the same period of last year, indicating a growth of 15.9 percent.

The collection of Federal Excise Duty (FED) was Rs 43.4 billion against Rs 41.6 billion, showing an improvement of 4.3 percent.

Latest tax-wise details show that the CBR paid Rs 69.91 billion as refund/rebate to exporters during the period, against Rs 83.11 billion of last fiscal year, showing an increase of Rs 13.2 billion.

The Board paid Rs 29.04 billion as GST refund in July-April 2005-2006 against Rs 47.86 billion with a decrease of Rs 18.82 billion. The payment of sales tax refund at the import stage was Rs 85 million against Rs 46 million reflecting an increase of Rs 39 million. The domestic refund stood at Rs 28.96 billion against Rs 47.81 billion paid in the same period last fiscal year.

The customs department paid Rs 15.67 billion as rebate/duty drawback against Rs 13.14 billion showing an increase of Rs 2.53 billion.

Direct taxes refund totalled Rs 24.95 billion during the ten months of current fiscal year, against Rs 22.06 billion. The collection during April so far has been Rs 46.5 billion (excluding last day collection).

Following is the monthly break-up of individual taxes: Sales tax Rs 23.6 billion; customs duty Rs 9 billion; direct taxes Rs 10.2; and FED Rs 3.7 billion. During April, the CBR paid refund/rebates of Rs 4.5 billion including Rs 2.22 billion as sales tax refund.

 

[Neo]

Sunday, April 30, 2006


* Govt to spend Rs 20b on converting the Pakistan Maritime Academy into university with HEC
* 5,000 cadets to be produced each year

KARACHI: The University of Engineering, Science and Technology Pakistan (UESTP) was inaugurated on Saturday as part of the Higher Education Commission and the Pakistan Maritime Academy’s (PMA) efforts to set up an engineering university at the PMA campus.

UESTP’s first vice chancellor and professors will be French.

The government will spend Rs 20 billion on the PMA to convert it into the UESTP over 140 acres of land. Admission to this university will start from 2007 and it will produce 5,000 cadets.

Prime Minister Shaukat Aziz was present for the MoU signing ceremony where Minister for Ports & Shipping Babar Khan Ghauri said that the ministry had decided to revive earlier plans of upgrading the PMA to a maritime university. It was decided to dovetail it with the HEC project to establish an engineering varsity.

The needs of the maritime sector would be met through the faculty of Maritime Studies, which will be part of the engineering varsity. The university would be set up with local funding from the government and its recurring expenses would met with funds raised through its own resources. The admissions would be strictly on merit.

Pakistan has invited educationists and professors from Germany, France and Switzerland amongst other countries to help promote education, the PM said.

There is a big job market for merchant officers and cadets worldwide as countries are inducting large ships to their fleets. About 3,000 foreign nationals were working in telecommunications in Pakistan due to a shortage of trained manpower.

The government would spend Rs 160 billion in the next ten years to establish six world-class engineering and three technical universities in the country in collaboration with Germany, France, Switzerland, Malaysia in information system, electrical and mechanical engineering, electronics, marine sciences.

 

[Neo]

By Anwar Iqbal

WASHINGTON, April 29: As a UN member, Pakistan would have to honour any sanctions imposed on Iran but such restrictions could do more harm than good, Foreign Secretary Riaz Mohammed Khan told journalists in Washington.

Briefing the Pakistani media on the first round of the US-Pakistan strategic dialogue, Mr Khan said if the Security Council did impose sanctions, “they are binding on all members of the UN, so we’ll have to respect” them. But he also felt that it’s too early to take this kind of action against Iran because such sanctions could “do more harm than good.”

At the same time, he said Pakistan believes Iran must abide by international nuclear obligations, but the world also must “exhaust all (diplomatic) possibilities” before imposing sanctions that could provoke “undesirable consequences”.

“It is a grave issue, a source of concern for us as well,” he added. Mr Khan acknowledged that there were “international obligations” that Iran must meet but he also noted that “Tehran says its programme is not directed towards weaponisation.”

The foreign secretary, who was in Washington for the first round of US-Pakistan strategic dialogue, said the Bush administration again turned down Islamabad’s request for a nuclear energy deal like the one it signed with India but Pakistan would continue cooperating with China in this field.

“We have discussions … and cooperation with China in this area. We already have two projects and will continue to have this type of cooperation with China.”

Mr Khan recalled that in 1998, before Pakistan responded to India’s nuclear tests, New Delhi had adopted a very aggressive posture towards Islamabad, claiming that by testing its devices “India had called Pakistan’s bluff”.

“We do not wish to go back to that situation and that’s why we believe in maintaining the current nuclear deterrence,” he said. “It is a reality that now both India and Pakistan are nuclear weapon states.” Mr Khan said that the nuclear status also brought some responsibilities with it and that’s why it was necessary for both India and Pakistan to have an agreement to “avoid accidents”.

The foreign secretary said that during his meetings in Washington he urged the US to encourage India to resolve the Kashmir conflict because “it’s in the interest of both India and Pakistan to do so.”

Describing US, Pakistan cooperation in bilateral and international fields as “good, sound and robust,” the foreign secretary hoped that the strategic dialogue – which he described as “structured talks” aimed at providing a forum for regular consultations – would further strengthen bilateral ties.

Mr Khan said that both sides have identified four fields – economy, energy, education and science and technology – for bilateral cooperation.

Pakistan, he said, has already appointed four coordinators who will work with the US for identifying areas and means of cooperation in these fields. These included minister for science and technology, adviser for energy, secretary education and secretary finance.

“We agreed that these groups are going to meet in the next two months,” he said. “We have already given them papers- some preliminary ideas, what our side would like to discuss within the framework of these groups for bilateral cooperation.”

The groups will hold four meetings, two each in Washington and Islamabad while Undersecretary of State Nicholas Burns, who headed the US delegation in the strategic talks, will also visit Islamabad soon.

 

[Neo]

Sunday, April 30, 2006

PESHAWAR: Arshad Javed Gorwara, a member of the Pak-India Forum (PIF), has appealed to the government to repatriate Afghan refugees, because their investment in local markets was denying opportunities for Pakistani businessmen. Gorwara said that Afghan refugees had invested in all major markets including Peshawar, Bannu, Lahore, Karachi, Quetta and Chaman which had damaged the businesses of Pakistani businessmen. He has appealed to the federal interior minister and the foreign minister to expel “billionaire Afghans” who had captured the markets with their large investments.

 

[Neo]

April 28, 2006

By developing trade with Pakistan, we can gain more because we have a much bigger and much more competitive manufacturing base.

Historically, the most effective way of establishing peace between rival nations is that of trade and commerce. The worst enmity during the Second World War was between the Allied forces led by the UK and the US, on the one hand, and the Axis powers, led by Germany, on the other.

Bitter memories of the atrocities committed by Nazis were vivid among people, especially in countries like Holland, Poland and Russia.

Since France had surrendered and had a Nazi-tolerant puppet Vichy regime under Marshal Petain, the French did not suffer as much as the Dutch. The Germans were never able to occupy any part of Great Britain. Yet it took some decades after the war for the British to warm up to the Germans.

But all the prejudices and bitterness among European nations were diluted with the formation of the European Common Market, which benefited people in all countries.

With Germany emerging as the largest economy on the continent, it offered significant opportunities for manufacturers and service providers from other European countries to trade profitably with Germany.

As the next generation came of age by the 1970s, the enmities and atrocities of World War II gradually receded in the minds of most people, even in Holland.

In a similar manner, a real breakthrough in the peace process between India and Pakistan can come only through the establishment of trade and commerce between the two countries.

At the moment, the obstacles to bilateral trade are unbelievably severe - worse than between enemy nations. Since I am an Indian and addressing an Indian readership, let us start with the obstacles, which our country places in the way of a Pakistani businessman who wants to buy things from India.

I am basing my views on the experience of a company in Bangalore. This company has a rather sophisticated product for electrical energy management. Since India, as the country of origin, had some negative connotations in several countries, our company established a wholly-owned subsidiary in Dubai to service the market in West Asia, the Central Asian republics, North Africa, etc.

Since its products now originated from the UAE, the company could export its products to Pakistan. The customers in Pakistan were pleased with the products, as they were significantly less expensive than what they were importing from Europe.

Secondly, communication between the subsidiary in Dubai and the main dealers and customers in Pakistan was much easier, as we spoke the same language and the market dynamics, customer expectations, etc. were very similar.

As part of the growing interaction between the company and the customers in Pakistan, they arranged to invite a few dealers from Pakistan to visit its facilities and R&D centre in Bangalore. The site in Bangalore, although not very large, is impressive and so are the R&D team members.

But the experience of the Pakistani visitors with our government bureaucracy was so horrendous that it was a real study in 'How to repulse visitors'- the opposite of marketing. Let me outline the bureaucratic hurdles:

A Pakistani citizen has to get a separate visa for each city that he is scheduled to visit in India. If he arrives in Delhi, he will need a separate visa for Delhi. If he wants to visit the Taj, he will need another visa for Agra, and of course a third visa for going to Bangalore. Without such city-specific visas he cannot go to any city in India. This is a big departure from all international visa procedures. If I as an Indian go to the US, I do not need separate visas for New York, Boston, San Francisco, etc. Similarly, visitors to India from any country other than Pakistan do not need separate visas for each Indian city.

The visitor from Pakistan has to report to the police station nearest to his hotel -within 24 hours of his arrival in each city. This can literally make the man run from one police station to another, as happened to our visitors in Bangalore. The hotel in which they stayed did not know which police station had jurisdiction over that hotel, as most hotels have very little to do with police stations. So our Pakistani visitors had to visit five police stations before they could establish which particular station had jurisdiction over their hotel! This itself took a couple of days, despite the best efforts of the host company. You can imagine the frustration of having to go from pillar to post, especially when the pillar and the post are uninviting police stations that are also citadels of suspicion and rudeness.

Each of these visitors had to get a residential permit from each police station on his arrival and again report to the station to obtain a departure certificate 24 hours before departure. And this procedure had to be repeated at each city. Every time copies of documents like passport, hotel declaration and residential permit had to be submitted to each police station.

Despite these humiliating procedures, our Pakistani visitors were impressed by the technological progress made by India and the company they visited. Our bureaucracy and politicians could explain by saying that Indians are subject to a similar set of humiliating procedures when they go to Pakistan! This is indeed true.

But we have to bear in mind that by facilitating and developing trade with Pakistan, we as a country have more to gain in terms of trade and commerce because we have a much bigger and much more competitive manufacturing base than they have. We will gain access to a market of 140 million people.

There are bonuses to such opening up of trade with Pakistan: (i) If we are able to route our trade through Pakistan, we will have easier access to countries further west of Pakistan, like Afghanistan and Iran; (ii) increased trading relations with Pakistan will add far greater security for the proposed Iran-Pakistan-India gas pipeline; (iii) as trading volumes grow and both parts of Kashmir become part of this seamless trade zone, the line of control (LoC) could become a mere legal border with no need for massive military protection.

The time has come for our government to take some bold steps to make this vision a reality. The combination of Manmohan Singh and Sonia Gandhi has the stature and wisdom to take the initiative. If they pluck enough courage to do so, it will be a glorious chapter in Indian history. Furthermore, it will enhance the prestige and standing of India in the comity of nations.

Today, we are not recognised as the dominant force in South Asia (which in fact we are) because of the combative relationship we have with Pakistan. Once that handicap is removed, India will be accorded by the world with the stature that we truly deserve.

 

[Neo]

Friday, April 28, 2006

MULTAN: Up to 11,000 graduate and post-graduate teachers will be hired on contract soon in the province, said Asif Saeed Manais, Punjab Public Accounts Committee chairman, on Thursday.

He said the government was planning to set up ‘education town’ for the welfare of teachers. He said this would be a joint project of public and private sector in which houses would be given to teachers on soft loans, adding that a handsome salary package would be offered to them.

He said a record number of 1.7 million students were enrolled in schools across the province last year and it had been acknowledged a landmark achievement by the donor organisations. He added that Rs 54 billion would be spent for increasing enrolment, literacy and up-gradation of education standard in the next three years under the Literate Punjab Programme. He said Rs 150 million had already been released to each district to provide water, electricity and furniture in 40,000 schools. To promote sports culture in the province, he said a two-percent quota for admission to colleges and universities had been reserved for sportsmen.

PPP to set up protest camps: The Pakistan People’s Party has planned to observe May Day with fervour and set up camps to protest against unemployment, poverty, exploitation, corruption and injustice from May 1st to 7th in Punjab. Addressing a press conference on Thursday, Khurshid Ahmed Khan, PPP city president, Salimur Rehman Mayo, Asif Zardari Committee chief organiser, M Salim Raja and Tariq Raza Khan said the PPP would also launch its membership drive from May 1st in addition to making preparations for the reception of Benazir Bhutto. They said workers’ convention would be held today (April 28) in zone 1, May 12 in zone 2, May 21 in zone 3 and June 2nd in zone 4. They said the meeting between Nawaz Sharif and Benazir Bhutto had shaken the ruling party.

FPCCI candidate: Khawaja Muhammad Abdullah, Multan Chamber of Commerce and Industry president, said the Alliance of Recognised Chambers and Associations of Southern Punjab (ARCA) has unanimously nominated Mian Tanveer Ahmed Shaikh for the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) president slot and formed a committee to monitor the election campaign.

Khawaja Abdullah said Mian Tanveer Ahmed Shaikh had served in the past as FPCCI senior vice president and MCCI president. He appealed to industrialists and traders to elect a young industrialist for the office, who helps promote businesses, exports and industry in southern Punjab.

PIA transported 48,000 tonnes exports: Pakistan International Airlines (PIA) is providing facilities to exporters particularly for perishable goods and exported 48,000 tonnes of goods during last year, said Shahid Rafiq, PIA general manager cargo. Addressing exporters at the Multan Chamber of Commerce and Industry on Thursday, he said the government had promised to give compensation to the airline for charging low freight rates. He said PIA did not increase cargo freight rates on the assurance of the government, but it did not fulfil its commitment and the national carrier incurred a loss. He said the airline was negotiating with the Export Development Bureau for the resettlement of freight.

Shahid Rafiq said freight for mangos and citrus fruit might be increased, which was unavoidable. He said PIA had introduced Pakistani fruits abroad and explored new markets. Commenting on the complains regarding off-loading goods from Multan in Karachi and Lahore and not providing sufficient space, Shahid Rafiq assured that PIA would try to provide maximum facilities. Multan exporters demanded that maximum space should be provided to them in Lahore, as they would have to pay more transpiration cost if they send goods to Karachi. Khawaja Muhammad Yousaf, Pakistan Tanners Association (PTA) central chairman, drew the attention of PIA general manager towards the rude attitude of PIA cargo staff at foreign airports. staff report

 

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ISLAMABAD (AFP) - A proposed gas pipeline from Iran to Pakistan and India will not be affected if the United Nations imposes sanctions on Tehran over its controversial nuclear programme, an Iranian minister has said.


"I don't think anybody could put sanctions on the oil industry and gas industry," Deputy Oil Minister Mohammad-Hadi Nejad-Hosseinian told a press conference in Islamabad after three days of talks on the project.

"Due to the sensitivity of the oil market any action like that will increase oil prices very high and I believe that the UN and any other body will not put any sanctions on oil or the oil industry," Nejad-Hosseinian said Sunday, when asked about the future of the project if sanctions were imposed.

The International Atomic Energy Agency Friday confirmed that Iran had not complied with a UN Security Council demand to freeze uranium enrichment, which can be used to make the explosive core of nuclear bombs.

The United States and European powers are now poised to seek a Security Council resolution legally obliging it to meet IAEA and Council demands.

If Iran still refuses, such a resolution could pave the way for economic sanctions or even military action, although Tehran's major trading partners, Russia and China -- which have a veto on the Council -- oppose any such move.

Iran insists its nuclear programme is a peaceful effort to generate electricity and therefore entirely legal.

The 2,600-kilometre (1,600-mile) pipeline from Iran's southern Pars field is estimated to cost more than seven billion dollars. Talks between India, Iran and Pakistan on the project ended in March in Tehran without any agreement

The United States objects to the project and is pushing for another pipeline to South Asian countries from Turkmenistan via Afghanistan. Washington accuses Tehran of supporting terrorism and attempting to make a nuclear bomb.

Pakistan, despite being a key US ally in its global "war on terror", has said it would go ahead with the Iranian pipeline project as it needs energy to fuel its economic growth.

"Pakistan is viewing this project keeping in view its energy requirements," petroleum secretary Ahmad Waqar told reporters.

Pakistani and Iranian officials discussed gas pricing and agreed to enhance off-take volumes of gas from 2.1 billion cubic feet per day (bcfd) to 2.8 bcfd in case India does not join the project, Waqar said.

The officials would meet again on May 25 in Islamabad and the petroleum ministers of the two countries would sign a joint declaration on the project in Tehran in June, he said.