Pakistan Economy - News & Updates - Archive

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ISLAMABAD (May 01 2006): Pakistan and Iran have reached an agreement about the basic principles of pricing formula of the gas from Iran as the two countries have decided to work on bilateral (Iran-Pakistan) gas pipeline project, regardless whether India participates in it or not.

A joint statement issued here on Sunday on the conclusion of the Seventh meeting of the Joint Working Group of the two countries said that the JWG examined in detail various financial, commercial, technical and legal aspects of the $2.5 billion project.

"Major issues discussed included gas pricing formula, project structure, project feasibility, gas off-take volumes and gas sales and purchase agreement," the statement said.

The next JWG meeting will be held in Islamabad on May 25, 2006. Petroleum Ministers of both countries would meet in Tehran in June, 2006, on mutually agreed date to sign Joint Declaration of the Project.

Addressing a joint press conference, Secretary, Petroleum, Ahmad Waqar, and leader of Iranian delegation, deputy oil minister Mohammad Hadi Nejad Hosseinian, said that during the three-day talks Pakistan and Iran reached agreement on basic principles of pricing formula of the gas from Iran, as the two countries decided to work on bi-lateral Iran-Pakistan (IP) gas pipeline, regardless of the outcome of the trilateral project that also includes India.

Waqar said that the two sides reached a broad based agreement on pricing formula. However, Pakistan and Iran would further examine each other's proposal on pricing.

He said that Iran would provide 'Gas Sales/Purchase Agreement' (GSPA) to Pakistan in a week's time, "and we will reciprocate to it as early as possible."

He said that both sides agreed to a project structure wherein gas would be delivered at Iran-Pakistan border under a supply agreement, and the pipeline route would be Bhong area in Rahim Yar Khan district.

He said it was also agreed to enhance off-take volumes from 2.1 billion cubic feet per day (Bcfd) to 2.8 Bcfd in case the project was implemented bilaterally.

The two sides also agreed to develop a joint declaration document signifying the commitment of the two governments to the project for signature in the joint ministerial meeting in June at Tehran.

Pakistan and Iran will make immediate efforts for concluding the bilateral arrangements as the two sides resolved that contracts and agreements for the projects would be developed and finalised expeditiously.

The Iranian deputy oil minister, Mohammad Hadi Nejad Husseinian, dispelled the impression that its gas pipeline to Pakistan and India, and the country's oil and gas sector, would be affected by the 'possible' UN sanctions against Tehran due to its nuclear program.

He said: "Due to the sensitivity of the oil market, sanctions against Iran extending to its energy sector will push the oil prices further up in the international market," and added that "the world cannot afford such a hike in oil prices," when asked about the future of the project, if UN imposed sanctions on Iran. Waqar also played down the threat of sanctions, and said that Pakistan was dealing with the project in view of its energy requirements. "Pakistan is viewing this project keeping in view its national interests. We need energy for sustaining economic growth," he added.

He said that construction cost of Pakistan was likely to be between 2 and 2.5 billion dollars, but detailed study would be conducted. He said the gas would be received on Iran-Pakistan border and later the pipeline would be coming to the town of Bhong near Rahim Yar Khan.

Asked if China could benefit from the project, he said that the great vision of the President and Prime Minister was that Pakistan was going to become an energy corridor for China and, "obviously, it would be an important element in our future strategy".

He said there could also be a possibility of laying two parallel pipelines to meet India's and Pakistan's energy requirements. "Things still have to be sorted out at bilateral level," he added.

Hosseinian said that Iran gas reserved for IPI was enough to meet the energy requirements of Pakistan and India. If there was any shortage of gas, Iran could reserve gas for the project in other fields.

 

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WASHINGTON (May 01 2006): Pakistan Foreign Secretary Riaz Muhammad Khan concluded his visit on Saturday as leader of the six-member Foreign Office delegation at the two-day (April 26-27) inaugural session of Pakistan-US strategic dialogue which, he told newsmen, had specified co-ordinators in the four fields of co-operation.

Hoping that it would lead to "more intensified co-operation" in the identified areas.

The areas identified are energy, education, science and technology and economy.

He told newsmen that "this is basically a bilateral endeavour--structured, supposed to continue on regular basis--hopefully, in the years to come in which there would be regular review of bilateral co-operation in these four particular areas, and also there would be exchange of views on whatever the regional and global issues."

US Under Secretary Nicholas Burns led the American side at the strategic dialogue.

Riaz said: "We discussed, for example, the relations between Pakistan and India, and the issue of Kashmir."

In this context, he referred to the statement by Burns in which he said that the United States "would continue to encourage" the process for resolution of this dispute. He said this at a detailed briefing to Pakistani newsmen at the Embassy on Friday.

On energy, he said the American view was that "they want to help us in other areas of energy, and they would see as how to extend help. They have kept the nuclear area separate. Our stand is broad--it has a broad sweep access to nuclear power generation. That access should also be available to Pakistan."

He said: "We have energy needs; our economy is expanding; and, we have plans to expand energy in all sectors: thermal energy, hydro power; and also, nuclear energy."

The Foreign Secretary said: "We have plans for producing 8800 megawatts in the next 20 years. So, we are saying that the kind of access which would become available to India, the same access should be available to Pakistan for nuclear power generation. There are apprehensions, and experts are debating it."

He referred to Jimmy Carter's statement that India could turn it into 50 nuclear warheads, and that the US side says that there is no such threat. Experts say that since India will have access to nuclear fuel from outside, therefore, it may be possible for India to divert its own nuclear fuel, which is available to it domestically, for military purposes.

Pakistan, he said, was not interested in arms race. "In fact, we are against arms race. We do not want to destabilise the strategic balance that has been achieved. But, if there is any development which disturbs this strategic balance, like in 1974, when it was disturbed; 1998 was a different situation when we had to respond.

"But, if strategic balance is disturbed then, naturally, we will make sure that our deterrence--which is important--remains credible, remains viable. For that, whatever measures we will have to take we would take."

The strategic dialogue, which had been inaugurated, he said, would hopefully, "lead to more intensified co-operation in the four identified areas."

To a follow-up on establishment of Pakistan-US strategic dialogue, Riaz said, this relationship with Pakistan, and this description was not unique to Pakistan.

"And, I am sure, it is not unique to India. There are many other countries with which US has strategic partnership. And, maybe, the character of co-operation between United States and those countries is different from United States and India, or Pakistan and United States or, say, United States and Israel. But, I am sure, that is in a qualitative manner."

About gas pipeline, he said: "We have a clear position, and that is a very important project in the context of energy," and added: "Yes, of course, the United States has its own view about this kind of co-operation." In reply to a hypothetical question that if there would be sanctions against Iran, what would happen. "So, naturally, when there are sanctions, it would have to be taken into consideration. But, at present, there are none. Therefore, we are going ahead with the negotiations, with the talks on Iran-Pakistan-India gas pipeline."

 

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FAISALABAD (May 01 2006): The sixth Pakistan Development Forum 2006 will be held on 10-11 May at the Jinnah Convention Center, Islamabad. The title of conference is 'Drivers of Economic Growth- Unleashing the Potential of Private Sector'. Previous PDFs were used to outline to Pakistan's development partners the wide-ranging reform programme initiated by the government.

According to official sources, PDF-2006 specifically seeks to highlight the government's pro-growth, pro-investment and pro-poor policies.

In addition to the inaugural sessions, there will be nine sessions devoted to specific sectors: the private sector, the SME sector, second-generation reforms, environmental sustainability, social protection, infrastructure, MDGs, devolved services and aid effectiveness.

 

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LAHORE (May 01 2006): Railway Minister Sheikh Rashid Ahmed has said that Rs 2 billion will be spent on publicity of Pakistan Railways (PR), in order to improve its image.

"I have been given the task by the government to improve PR financial health and I am confident I will prove equal to the task," he told reporters at a news conference at a local hotel on Sunday.

No one had magic stick to change things overnight, but he vowed to improve the image of the railway and turn it into a profit-earning public entity in one year, he said. The minister said he had also given 30 days to the railway authorities to improve their performance, and after that they will be taken to task. After expiry of this deadline, the PR general manager and the divisional heads will be held responsible for any wrongdoing., he warned them.

To improve the financial health of the department and take it out of deficit, a number of projects will be undertaken, including offering four Down and Up railway tracks to well-reputed international parties to run trains, he said, adding: "We will welcome the parties from the private sector to run their fast trains on our tracks and offer them all necessary facilities for this purpose."

Expressing his dissatisfaction over the performance of Pakistan Railways, Sh. Rashid said it was ironical that its signal system was very outdated, but he will take all necessary steps to update the signals.

The minister said that he would chair a meeting at PR headquarters on May 4 to discuss this issue and take decisions in this respect. Before this, on May 2, he will take a briefing on all the affairs of Railways at the PR headquarters.

Sheikh Rashid Ahmed said that PR was a huge ministry, adding, "it was a state within the state, but its performance was very dismal." As many as 40 million people travel through railway annually and he will leave no stone unturned to make this most popular means of communication more comfortable for the general public.

The minister also said that special emphasis will also be laid on improving meal service in trains.

"I have also issued directives to the PR authorities that no equipment/machinery will be imported if it could be prepared/developed indigenously", he said, adding that he asked the PR authorities concerned to provide him details about the revenue generated through sale of assets and other income of the department.

Talking about other uplift initiatives, Sheikh Rashid said that laying of rail track up to Gwadar and from Quetta to Kandahar was also on agenda of the government. Moreover, he said President Musharraf had also approved linking Pakistan with China through rail track.

 

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By Engr Hussain Ahmad Siddiqui
The government has failed to give any convincing argument in support of the hasty decision it took to sell off the Pakistan Steel complex at such a low price. The Privatisation Commission (PC) had itself earlier indicated a price of $3 billion.

THE divestment of Pakistan Steel Mills Corporation, commonly known as Pakistan Steel Karachi, has exposed the government to sharp criticism. The giant integrated steel-making complex—now a profit making state enterprise—has been sold at a throw away price of $362 million compared to its assets worth about $5 billion.

And the government has failed to give any convincing argument in support of the hasty decision it took to sell off the complex at such a low price, which was earlier indicated by the Privatisation Commission (PC) itself to fetch Rs3 billion dollars.

Interestingly, the highest bid received for Pak-American Fertilizer at Iskanderabad was of about Rs20 billion but the Pakistani investor withdrew his offer after learning that Pakistan Steel was being sold almost at the same price(Rs22 billion). The fertilizer factory, located in a remote area, was established in 1959 and revamped recently, and has no comparison whatsoever with Pakistan Steel. Likewise, Karachi Electric Supply Co (KESC) was divested at Rs20.24 billion.

The new buyers have already made 25 per cent payment and have signed the agreement, on April 24, for transfer of its strategic 75 per cent shares. In response to the expression of interest (EOI) issued by the PC, in all 19 foreign and domestic companies showed their interest in the proposal, by the due date October 8, 2005.

Out of these, only 13 submitted the request for statement of qualification (RSOD), which included investors from Kuwait, UAE, Switzerland, China and Czech, besides the winning consortium from Saudi Arabia and Russia. Finally, the PC pre-qualified six companies for bidding, which was re-scheduled many a times.

In a belated move however, these pre-qualified companies formed two consortia to participate in the bidding. This was against all ethics, norms, procedures and precedents, and should have not been allowed by the PC in the first instance. The rumours are that the two consortia manipulated the bidding. Thus the consortium of Tuwairqi Steel Mills of Saudi Arabia, Magnitogorsk Iron & Steel Works of Russia and Arif Habib Securities of Pakistan won the bid for Pakistan Steel.

The question is, why the PC allowed this arrangement that restricted competition and was in violation of rules and regulations? Furthermore, the PC had the option to offer 51 to 75 per cent shares, as indicated in the EoI notice. Why then did it offer optimum shares to the winning consortium?

It is reported that Pakistan Steel covers an area of 4,545 acres that would be transferred to the new owners, and not the total 18,660 acres owned by the government. It is not factual. The company documents reflect that the complex is, spread over an area of 10, 390 acres and the other 8,270 acres were reserved for future expansion.

The core plant facilities, consisting of sinter plant, iron-making plant, steel-making plant, billet mill, hot strip mill, cold rolling mill, galvanising unit, refractories plant and oxygen plant cover an area of 4,545 acres.

The non-core activities, like unloading facilities for imported bulk material, raw material handling facilities, coal handling plant, by-products plant and allied equipment, industrial water network and other services are located in the remaining area of 5,845 acres.

The water reservoir of 110 million-gallon capacity covers an area of 200 acres. What would be status of the remaining land, on which these auxiliary services and ancillary facilities exist, one may ask? Will the government manage and maintain the vast area at its own expense to providing services to Pakistan Steel, or will sell off later the additional land to the same group clandestinely?

Likewise, its leasehold rights of 7,520 acres for quarries of limestone and dolomite in District Thatta (Makli and Jhampir) are of great value and, apparently, have not accounted for.

Again, not many of us know that current assets of Pakistan Steel also include besides real estate in residential and commercial centres of Islamabad and Lahore, those of another estate enterprise namely Spinning Machinery Company at Lahore. The factory, which was a going concern when acquired by Pakistan Steel in 2002, is located at prime industrial area of Kot Lakhpat. What will be the status of this factory and who owns it?

It is said that Pakistan Steel technology being obsolete, its divestment to private sector was not attractive. If this was the situation, how as many as 13 companies, mostly foreign key players in steel business, could be interested in the deal? It may be recalled that the government, in January 1998, had decided to enter into a joint venture agreement with the Chinese for the up-gradation, expansion and management of Pakistan Steel.

A draft agreement was concluded between the two sides, according to which the Chinese had agreed to become joint venture partner in Pakistan Steel, with equity participation in the existing complex and also the 3-million ton production expansion scheme. The agreement however was not signed. The offer was repeatedly extended by the Chinese, again in March 2003, to the then Minister for Industries and Production Liaqat Jatoi.

The steel process technologies adopted the world over are (i) open-hearth furnace, (ii) blast furnace (BF)/basic oxygen furnace (BOF) and (iii) electric arc furnace based on steel scrap. Pakistan Steel employs the most common steel-making technology-BF/BOF, as the world’s maximum production of steel is through this process. The other technologies, such as of coke oven, raw material preparation, billet mill, hot strip mill and cold rolling mill are basically the same as being practised throughout the world. The fact is that Pakistan Steel is a well-maintained plant.

For the last four years or so Pakistan Steel had implemented, besides the capital repair work, the BMR programme, which included modifications, additions and revamping of different sections of hot strip mills and cold rolling mills, and adjustments at billet mill.

In order to get a complete picture of the deal. One may consider these additional facts:

Within a week of acceptance of the bid, Pakistan Steel increased prices of its various products, by about five per cent.

Employees of Pakistan Steel have been offered the most attractive Voluntary Separation Scheme (VSS) package ever, that is 1:4 salary for its 15,000 employees, which would cost the government Rs15.75 billion.

Pakistan Steel carried an inventory of finished goods, spares and stores valuing Rs12 billion, that of raw material Rs7 billion and cash balance in the bank was Rs7 billion.

The government has picked up the loan liabilities, including that of Rs 700 million annual interest, till the year 2013.

The Central Board of Revenue (CBR) has waived off outstanding tax liabilities of Pakistan Steel. In a nutshell, the government has presented the Pakistan Steel complex to its new owners practically as a gift.

 

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Islamabad, April 30: Pakistan and Iran on Sunday reached broad agreement on various financial and technical aspects of laying a Pakistan-specific bilateral gas pipeline with 33 per cent higher supplies to Islamabad, clearly indicating that India could not become part of it due to capacity constraints.

They, however, said a second parallel pipeline would be required for a trilateral project if India decided to join it that would further improve economics of the trans-national pipeline to the benefit of the three countries.

“It is a breakthrough”, Petroleum Secretary Ahmad Waqar told Dawn after the three-day talks with an Iranian oil ministry delegation. Tehran has agreed to enhance gas supplies to Islamabad through the Iran-Pakistan pipeline from the originally envisaged 2.1 BCFD (billion cubic feet per day) to 2.8 BCFD. “About 700 mmcfd of additional gas means a lot for Pakistan’s growing energy needs,” he said.

Asked where did India fit in the project having a total capacity of 3.2 BCFD of gas when Pakistan alone would be supplied 2.8 BCFD and another 400 mmcfd (million cubic feet per day) would utilised by Iran in its eastern provinces, the head of Iranian delegation said the three sides would discuss the possibility of a second pipeline to meet energy requirements of the two countries, including India.

For the first time, the two sides clearly used the term Iran-Pakistan (IP) for the project instead of IPI (Iran-Pakistan-India) when they jointly “decided to work on bilateral IP gas pipeline regardless of the outcome of the trilateral IPI project”.

“Both sides (also) agreed to make immediate efforts for concluding bilateral arrangements”, they said and added that it was resolved that the contracts and agreements for the project would be developed and finalised expeditiously.

At a joint news conference on the conclusion of the joint working group (JWG) talks, both the countries seemed defiant to the US opposition to the project although Islamabad was non-committal in its response to possible UN sanctions against Iran.

Islamabad is certain to implement the project because its needs energy for economic growth. “So we have decided to implement the project bilaterally,” said Mr Waqar, who led the Pakistani side to the JWG.

Asked about the prospects of the project in the light of Foreign Secretary Riaz Khan’s statement in Washington that Pakistan would honour any sanctions imposed on Iran, Mr Waqar said the two sides agreed on technical aspects of the pipeline and he could not comment on political issues.

Iranian Deputy Oil Minister Dr Hadi Nejad Hosseinian, however, said he did not believe the United Nations would impose sanctions against Iran because such a move would increase oil prices.

“Any action like that will increase oil prices very high and I believe that the UN or its bodies will not put any sanctions on oil or the oil industry,” he said. He said the world could not afford to put sanctions on these sectors as it will substantially increase oil prices. Iran is the second largest oil producer with a production of about four million barrels per day.

Mr Waqar said the two sides broadly agreed to the principles of gas price mechanism for the pipeline. Iran proposed a gas price formula and Pakistan presented its formula and the two sides agreed to examine each others’ position to reach an agreement during the bilateral JWG meeting in Islamabad on May 25. This JWG would be followed by a trilateral JWG meeting in Islamabad also involving India.

The two sides also agreed on a joint declaration to be signed by oil ministers of Pakistan and Iran in June in Tehran. They also broadly agreed on the project structure under which Iran would deliver gas to Pakistan at a border point to be disclosed later after working out details. However, the termination point of bilateral pipeline in Pakistan would be Bhong, near Rahimyar Khan. The gas pipeline segment from Pak-Iran border to Bhong would cost about $2.5 billion, Mr Waqar said.

Mr Waqar said the two sides agreed to finalise a gas sales and purchase agreement (GSPA) at the earliest. The Iranian side promised to send the draft GSPA within a week to Pakistan, which would be responded to before the next meeting of JWG on May 25.

The two sides also agreed to start a detailed feasibility study of the project. Iran will provide technical data for the study. It was also agreed that the petroleum ministers of both the countries would meet in Tehran in June 2006, on dates to be finalised later, to sign joint declaration for the project.

In response to a question about total reserves of South Pars field for supplies to India and Pakistan, Mr Hosseinian said Iran possessed about 500 TCF of gas.

A part of this would be dedicated to the Iran-Pakistan pipeline and in case India joined, Iran may divert reserves from North Pars gas field as well.

 

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Sunday, April 30, 2006

HANNOVER: It is difficult to distinguish between the Indian and Pakistani pavilions in adjacent halls at the Hannover Messe.

If India had SMEs showcasing products ranging from auto components to forgings, Pakistan too had similar stuff on offer.

However, for India, display of ISRO's prowess, Bhel's heavy engineering might, TVS bikes and investment options in states made the difference.

India had an edge partly because of being a partner country as also due to the longstanding relationship that firms had with the organisers of the fair.

The name of the game is the same — be it tax waivers in Pakistan's special economic zones or export parks or turning Lahore, Karachi and Faisalabad into textile cities with units ranging from weaving and spinning to large processing units.

It all sounds familiar. Pakistan is amongst the fastest growing economies, with 6.7% growth expected in '06-'07, Karachi Stock Exchange is booming and government will have a consistent economic policy.

But the officials selling Pakistan as an investment destination are facing one hurdle — law and order situation.

"There have been a lot of queries and our industry is also preparing to become a sourcing hub but law and order is one concern which we have to address,"a senior Pakistan government official said.

There are also questions over the stability of government and continuity in its policies. But all this has not deterred Pakistan from wooing international investors. Officials claim that Porche is on its way to set up a manufacturing facility and BMW may follow soon.

Why are investors flocking Pakistan? "We are doing well and they want to reap the benefits of our growth,"quips the official.

 

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Monday May 01, 2006

LAHORE: Commerce Minister Humayun Akhtar Khan has said steps beneficial to common man will be visible from the next budget.
He was speaking at a pre-budget seminar held here Sunday under an Urdu daily. Chief editor of daily Pakistan, Mujib ur Rehman Shami, former speaker of NA, Syed Fakhar Imam, PML-N information secretary, Ehsan Iqbal, advisor to the Prime Minister on economic affairs, Dr Suleman Shah and others also addressed the seminar.

Humayun Akhtar underscored that some vital steps of public interest are being made part of the budget for the fiscal year 2006-07. These measures will help improve quality of life of people and provide relief to them. It will be elaborated in trade policy how to boost trade. The structural reforms and positive steps pursued by the incumbent government have led to alleviate poverty.

He noted that the whole world had supported the policies and reforms launched by the President General Pervez Musharraf. Our exports stood at $9.7 billion some years back and it was our ambition exports should reach the mark of $10 billion and now these have reached the level of $17 billion. Next year we with the grace of Almighty Allah will surpass the target of $20 billion.

He went on to say that prosperity has come to the country as compared to the past. Where telephone connection was not available and the people used to supplicate ministers to obtain this connection but now a street vendor is seen roaming with mobile phone glued to his ear, he added.

The poverty incidence was recorded 17 percent during the period from 1980 to 1990 and within few years it reached the level of 34 percent. The credit goes to incumbent government that it has not only contained poverty incidence but also reduced it. There should be legislation on conflicting interest. I am in support of it. Proposal in writing should be presented for law enactment. Indirect taxes should also be abolished. All surcharges be withdrawn from fuel and electricity bills and direct taxes be levied. If you impose half percent tax on agriculture sector you will then see what reaction comes in the assembly.

Speaking on the occasion, Dr Suleman Shah advisor to the Prime Minister on economic affairs said tax rate will be lowered in next budget. Improvement in education, health care and social sectors and development process is the top priority of government.

He informed that federal bureau of statistics was being abolished and an independent and autonomous institution for statistics would be set up. Monopoly control authority is being abolished and a competent authority is being established.

The entire world supported and admired the economic reforms of the country, he said adding earlier no one was ready to lend us money and now name of the country is held in high esteem. Launching of Euro bond provides excellent example in this regard. These bonds were issued for five years and it is now being considered to increase its period viewing the growing confidence of investors.

He stressed that economic restructuring is the need of hour, which is vital for economic development of the country.

 

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Monday, May 01, 2006

* FM says dispute resolution with India is stagnant
* SAFMA think-tank envisions South Asian Union
* Calls for conglomeration of regional resources

By Mohammad Kamran

ISLAMABAD: Pakistan is self-sufficient in the nuclear field and has ample nuclear resources, so it is not afraid of US nuclear cooperation with India, said Khurshid Mehmood Kasuri, the foreign minister, on Sunday.

“We have 50 years of experience in nuclear science. We do not need external nuclear cooperation but discrimination between India and Pakistan is not judicious,” he told reporters after the conclusion of a South Asian Journal Conference organised by the South Asian Free Media Association (SAFMA).

Over 55 delegates, including journalist, scholars and academicians from across the South Asia attended the conference. Pakistan believes it should get the same treatment as India, he added.

Kasuri said Pakistan would be the fourth largest nation in 2030 and the quantum of carbon dioxide emissions would be so high so as to change the world climate. “That is why we are pursuing our stance that the Pakistan factor should not be ignored while envisioning the future nuclear regime,” he said. Kasuri said Pakistan wanted a peaceful solution to the Iran issue, adding that moderate forces would receive a setback and extremist forces would be strengthened in case Iran were attacked. “An attack on Iran will be considered by many quarters an attack on an Islamic country and not on a proliferating state.”

Participants in the conference stressed the need for conglomeration of resources for the development of the region into a South Asian Union with a regional parliament and independent central bank.

The participants linked the social progress and establishment of peace in the region with concerted efforts for conflict resolution and confidence-building measures including free trade, an open visa regime and cooperation in the energy sector among South Asian states. The conference, with the help of its 14 research groups, formulated recommendations on various challenges facing the governments and people of the region.

The 60-page draft, to be made public on May 3, gives a number of recommendations and proposals on trade and tariff in South Asia, custom laws, poverty alleviation, economic cooperation, water and energy issues, nuclear stabilisation and security and conflict resolution mechanisms. Speaking at the concluding session, Kasuri said work was underway on exempting senior citizens, judges, parliamentarians and accredited journalists from obtaining visas to visit regional states. The minister was replying to a demand by the conference for free movement of journalists and scholars within South Asian Association for Regional Cooperation states.

Kasuri said he did not see any animosity, hate or hostility in the region, adding that two rounds of talks between Pakistan and India on confidence-building measures (CBMs) and dispute resolution had concluded and the upcoming third round would be successful and result-oriented. He said dispute resolution with India had been stagnant whereas much progress had been made on the implementation of CBMs.

Earlier, M Ziauddin, the president of SAFMA’s Pakistan chapter, said it was a great achievement of the conference that over 55 research papers had been consolidated into a draft. The draft would help policy makers and other stakeholders in fulfilling the cherished dream of a prosperous South Asia, he added.

Imtiaz Alam, the SAFMA secretary general, regretted that the Pakistani government denied visas to many scholars from a religious background invited to the conference.

http://www.dailytimes.com.pk/defaul...1-5-2006_pg7_12

 

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RAWALPINDI (updated on: May 02, 2006, 21:37 PST): President General Pervez Musharraf on Tuesday said the ongoing development process in Balochistan was on track and directed that necessary steps be taken to ensure it gathers further momentum.

He was chairing a high level meeting here which reviewed the development projects in the province.

The President said a number of projects are being implemented in Balochistan for the prosperity of the people and to bring the province at par with other parts of the country.

He said these projects will also bring about an enormous change in the lives of the people resulting in their socio-economic uplift through creation of greater job opportunities.

The meeting also reviewed various measures for politico-economic empowerment of the people and resolution of their problems.

General Pervez Musharraf also directed the participants to take appropriate measures for the speedy resolution of the problems of the masses and facilitate them in every field of life including health and education.

 

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ISLAMABAD (May 02 2006):

Prime Minister Shaukat Aziz on Monday called for a "sense of openness" among the South Asian countries for sustainable peace and to swap the "trust deficit" with a sense of co-operation leading to the socio-economic development of the masses.

Addressing delegates from the Saarc member states attending the South Asian Free Media Association (Safma) moot here at a breakfast meeting at the Prime Minister House, he urged the leadership of the region to resolve disputes and work together for building a better future of the one-fifth of world's poorest.

He said sustainable peace in South Asia can only be achieved if the voice of the people was given due respect, there was no interference in the internal affairs of others and a sense of mutual respect prevailed."

He said "Pakistan believes in energy co-operation and the Iran-Pakistan-India (IPI) gas pipeline will be an acid test, leading to broader co-operation."

Shaukat said Pakistan wants good ties with all its neighbours. He said unlike the issue of trade with India, it "unbundled" the issue of sharing of gas, and offered an energy corridor for natural gas from Iran and Turkmenistan.

He said Pakistan has linked progress on trade with India to the progress on the issue of resolution of the Kashmir dispute.

Referring to the Baglihar and Krishanganga disputes with India over water distribution rights, the Prime Minister said Pakistan had to seek legal remedy, as it felt these projects violated the Indus Water Basin Treaty of 1960.

"As lower riparian, we have to protect our rights," he said and expressed the hope that the resolution of the water security aspect will help reduce the trust deficit with India.

The PM said resolution of the core dispute of Kashmir was vital for lasting peace in the region. He recalled the amassing of around one million troops along the Pakistan border in 2001-02 and said the two countries almost reached the flash point, but the issue was resolved by their leadership and "friends."

Shaukat stressed involvement of all the three stakeholders in the dispute and said without the involvement of governments of Pakistan, India and the people of Kashmir, the issue cannot be resolved.

He also pointed at the human rights violations in the Indian occupied Kashmir and said it was important that there was an end to such practices so as to take forward the peace process.

The Prime Minister said five points along the Line of Control have opened and hoped that trade through these openings will contribute to the overall improvement of atmospherics between the two countries.

The Prime Minister said Pakistan believed in open and free trade, however, with India it was restricted because of the overall disputes, on which progress has to be made.

He acknowledged that the private sectors of the two countries felt that the non-tariff barriers were a cause of concern, but said "lack of progress on the Kashmir dispute has kept this issue alive."

PM termed the 12th Saarc summit at Islamabad a turning point in the relations between the two countries and for the overall benefit of the entire region.

"Through a very interesting back channel diplomacy both the countries expressed the desire to carry forward the peace process."

He said both President Pervez Musharraf and the then Indian Prime Minister Atal Behari Vajpayee shared their passion to move forward the process. He pointed at the several confidence building measures that have so far been agreed upon.

"But we need to think about dispute resolution, instead of dispute management," he said.

Shaukat said Pakistan was also for a stronger and more effective Saarc as the region had tremendous potential. He called for a SWOT analysis to study the strengths and weaknesses of the member states and called for strengthening the secretariat of the organisation.

"The region today is mired in conflict and trust deficit and we all need to do a lot more to leverage the full potential of our people," he said.

He said the organisation must meet regularly and take advantage of the support of the Asian Development Bank and the United Nations to help under take projects for welfare of their people.

About Pakistan's defence, the Prime Minister said country's defence budget had decreased in terms of the GDP, as it did not believe in an arms race, had no aggressive designs and was strictly adhering to the policy of minimum credible deterrence.

"We have conventional and strategic capabilities, but these are only for our defence as we wish to live with peace with all our neighbours," he added.

On Pakistan's relations with its neighbours, Prime Minister said the country believed in non-interference in affairs of other countries. On Iran, he hoped that the situation on the nuclear issue, did not get out of hand.

"We believe Iran should not proliferate, but it has the right to pursue nuclear energy under the IAEA safeguards," he added. He also spoke of Pakistan's desire in a strong and stable Afghanistan and its "strategic and multi-faceted" ties with China. He said both the countries were co-operating on economic, political, social, defence and people to people level seamlessly.

He informed the participants about Pakistan's success story on economic front and said it was in the top-ten reformers of the world. He said Pakistan has now a Fiscal Responsibility Bill to prevent over - borrowing and to restrict less spending on the social sector. He said the country was now spending a record high amount on development, while the poverty levels were on the decline and per capita income increased to over US $800.

 

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FAISALABAD (May 02 2006): The World Bank is currently preparing a new CAS to cover FY06-09, which is expected to be presented to the bank's board in June 2006, while IDA credit, in an amount equivalent to $300 million, will be disbursed in one tranche upon effectiveness for Poverty Reduction Support Credit (PRSC II).

In an update report, Ms Manuela Ferro, leading economist, The World Bank South Asia Poverty Reduction and Economic Management disclosed that the elements of the draft CAS focus on three pillars, aligned with the strategic priorities of the government's PRSP (Poverty Reduction Strategy Paper): (i) sustaining growth and improving competitiveness; (ii) improving government effectiveness and service delivery; and (iii) improving lives and protecting the vulnerable.

She said that the implementation of the PRSC's ambitious, multi-sectoral reform programme requires effective co-ordination between government ministries and agencies. The PRSP secretariat in the ministry of finance will remain the focal point for the PRSC and will oversee the implementation of reforms. Progress toward PRSP objectives is being supported by improvements in government systems to collect, analyse and disseminate data.

The secretariat also collates information from various sources, identifies information and data gaps, and produces progress reports, based on a set of indicators agreed upon by federal and provincial governments as well as the international donor and domestic community. Since PRSP's completion in December 2003, the government has regularly prepared annual and quarterly PRSP progress reports, which are available on the web site.

Progress reports track and analyse pro-poor public expenditures and their sectoral composition and provincial patterns within the context of the macroeconomic situation in the country, she added.

In addition, she mentioned that the reports also monitor PRSP intermediate indicators, PRSP and social sector performance, employment, non-budgetary expenditures, and special programmes for poverty reduction. Pakistan's economic and social performance is improving.

Macroeconomic balances have improved, economic growth has picked up, social indicators are starting to improve, and structural reforms are continuing to advance. However, poverty is widespread and sustaining growth in the context of macroeconomic stability has proved challenging in the past, she added.

Ms Manuela Ferro said that the proposed operation is the second Poverty Reduction Support Credit (PRSC II) to support the implementation of Pakistan's poverty reduction strategy.

This strategy is summarised in the government of Pakistan's 2003 Poverty Reduction Strategy Paper (PRSP), entitled "Accelerating Economic Growth and Reducing Poverty: The Road Ahead."

It emphasises sustained, rapid growth as the main vehicle for poverty reduction and is grounded on four pillars: (i) achieving sustained high and broad-based economic growth, while maintaining macroeconomic stability; (ii) improving governance and consolidating devolution, both as a means of delivering better development results and ensuring social and economic justice; (iii) investing in human capital, with a renewed emphasis on effective delivery of basic social services; and (iv) targeting the poor and vulnerable, to bring the marginalised sections of the population and backward regions into the mainstream of development, and to make marked progress in reducing existing inequalities. The government is currently in the process of preparing a second PRSP.

This strategy is expected to draw upon outcomes and data that have become available since the 2003 PRSP was prepared, and also take into account developments on the economic front that require an adjustment in the macroeconomic framework. A strategy for recovery of earthquake-affected areas is expected to be part of PRSP II, she explained.

Ms Manuela Ferro further stated that Pakistan's PRSCs are one-tranche programmatic operations to support the next phase of the government of Pakistan's medium-term reform programme, laid out in the PRSP. The PRSC programme would monitor the key areas of the PRSP, and each credit under the PRSC programme would be disbursed against a selected set of prior actions.

She disclosed that the PRSC II supports selective reforms by the government that will contribute to sustain rapid growth by: (i) maintaining macroeconomic stability; (ii) improving the management and effectiveness of public expenditures; (iii) implementing the government's power sector action plan; (iv) supporting the privatisation programme and improving the regulatory framework for competition; (v) enhancing female labour force participation and labour market flexibility; and (vi) improving the management of water resources. The PRSC II will also support improved governance through reforms to improve financial reporting and budget execution.

Service delivery of public health and education is largely a provincial and local government mandate. However, the proposed credit will support accelerated progress in human development by (i) creating additional public resources for education and health, (ii) strengthening the health and education national sector policies and (iii) piloting innovative education and health programmes, focusing on the poor, to enhance demand for these services.

The PRSC II also supports improved support to the poorest and most vulnerable segments of the population, through targeted programmes aimed at addressing poverty and vulnerability directly, she added.

Ms Manuela Ferro said that the World Bank supported the first phase of implementation of the PRSP with a first PRSC, which was approved by the bank's board and disbursed in September 2004. The first year of the PRSC programme overlapped with and complemented the last year of implementation of the macro stabilisation programme supported by the IMF with a PRGF, which ended in December 2004.

 

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ISLAMABAD: Iran and Pakistan yesterday vowed to work on a bilateral gas pipeline project if India fails to join them.

The original plan called for a $7 billion pipeline to pump Iranian gas to India through Pakistani territory, and officials had said they aimed to sign a deal in June.

The cost and timing of a bilateral deal for a shorter pipeline has yet to determined.

Ahmed Waqar, permanent secretary at Pakistan's Petroleum Ministry, said Pakistan and Iran had agreed to go ahead with the bilateral pipeline regardless of the outcome of the trilateral project.

"Both sides agreed to make immediate efforts for concluding the bilateral arrangements," said a statement issued after three days of talks between senior petroleum officials of the two countries.

Iran's deputy oil minister, Mohammad Hadi Nejad-Hosseinian, on Friday urged Pakistan and India to press ahead with the project or face the prospect of buying 1 million barrels a day of imported oil.

The United States, which suspects Iran of trying to develop nuclear weapons, has been urging Pakistan and India not to do business with Tehran.

Instead Washington wants them to focus their efforts on another gas pipeline project that is planned to run from Turkmenistan through Afghanistan.

The US has offered to provide technical know-how for India's civil nuclear programme as part of a strategy to forge strong links with the fast-rising Indian economy. Officials of Pakistan, Iran and India next plan to meet in late May to discuss the project.

 

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IANS: Tuesday, MAY 02, 2006

ISLAMABAD: Pakistan's per capita income has reached $750 per annum, which is now next to Sri Lanka's in South Asia.

According to A R Kamal, former director of the Pakistan Institute of Development Economics (PIDE), the country has not progressed in this regard as compared to some fast developing nations in the region like Singapore and South Korea.

Kamal said that the low per capita income was triggered by Pakistan's high population growth rate. The per capita income could be raised by continuing with the economic policies, he added.

http://economictimes.indiatimes.com...how/1512134.cms

 

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Tuesday May 02, 2006

ISLAMABAD: Prime Minister Shaukat Aziz on Monday said Pakistan has never linked cooperation in energy sector with any issue including Kashmir and the country believes in energy cooperation sans frontiers.
He was talking to the participants of the South Asia General Conference organized by South Asia Free Media Association (SAFMA) and South Asian Free Trade Association (SAFTA) at breakfast here.

The Prime Minister said that Pakistan believed in cooperation in energy sector and would go beyond borders in this regard. " We do not want to link energy cooperation with any issue including Kashmir," he noted.

He said Pakistan would get electricity from Iran to meet its energy needs. He said Islamabad had also invited New Delhi to join trilateral peace gas line, which the latter had accepted. " Work on the proposed gas line is underway," he added. We are also engaged in talks with Turkmenistan pertaining to gas pipeline project via Afghanistan.

Shaukat Aziz said that Pakistan was a peace loving country and did not want to join arms race in the region; however, he made it clear that Islamabad would maintain minimum deterrence. Referring to Pakistan’s nuclear test he said, "Pakistan was forced to respond to Indian nuclear test otherwise Islamabad had no such intensions". We were left with no other option other than that, he added.

Pakistan, he said, was reducing its defence expenditures as compared to other regional countries while increasing its expenses in social sectors.

Pointing to the Indo-Pak relations, the Prime Minister said that both the countries were enjoying cordial ties. "In past, the two countries were striving to improve relations through backdoor diplomacy but President Musharraf and Vajpayee meeting during last SAARC conference played vital role in bringing situation to normality," he observed.

He said numerous Confidence Building Measures (CBMs) have so far been taken between the two countries and contacts at masses’ level have been increased.

The Prime Minister said that Kashmir was a core issue and talks on Siachen, Sir Creek and other fundamental issues were underway; however, he said resolution of all issues could be possible from SAARC platform. "Pakistan wants Kashmir resolution, which will be in line with the wishes of Kashmiri people and no major breakthrough between Indo-Pak relations is possible until Kashmir issue is resolved," he noted.

Shaukat Aziz said that the leadership in South Asia should show flexibility, courage and tolerance for resolution of various issues. He said we would have to shun interference in one another’s country. " Only by this way the peace process can go ahead," he added.

He regretted that SAARC had failed to cope with the expectations for which the body was formed. He said although the SAARC platform has been established in South Asia to link people with one another yet there is no coherence among the brains and hearts of the masses.

He suggested that SAARC conferences at ministers and governments level should be held annually to make the Association an effective body.

Mr. Aziz said that Pakistan wanted cordial ties with all neighbouring countries. Referring to Iran, he said, Pakistan wanted to improve its relations with Iran in energy, economy and other sectors. He said Pakistan wanted peaceful resolution of Iranian nuclear issue; however, getting energy resources for peaceful purposes was the right of Iran.

Pointing to another neighbouring country Afghanistan, the Prime Minister said that relations between Pakistan and Afghanistan were getting strength. He said trade between the two countries was increasing and it has so far reached 2.5 billions dollars.

He said China was reliable friend of Pakistan. " We have strategic ties with China and relations in trade, economy, security and defence are on rise," he asserted.

The Prime Minister said that there was conducive atmosphere in Pakistan for investors where equal investment opportunities to national and foreign investors were available. " Pakistan’s economy is increasing and annual income has reached eight hundreds billion dollars," Aziz added.

He said we jointly should work for interfaith harmony. He said Pakistan was sincerely fighting against terrorism to restore peace in the world.