Pakistan Economy - News & Updates - Archive

[Neo]

March 05, 2007
Diversifying items and destinations for export

By Mohiuddin Aazim

BETWEEN July 2006-January 2007, Pakistan’s exports increased to $9.63 billion from $9.28 billion a year ago, showing an increase of 3.8 per cent. The full fiscal year target is $18.6 billion. But the State Bank of Pakistan has forecast export earnings of $17.9 billion, up from $16.5 billion in the last fiscal year.

Destination-wise data for July-January 2006-07 is still awaited but July-December 2006 data shows an increase in exports to six out of the top 10 destinations.

Pakistan exported more to such top buyers as the USA and the UK, Hong Kong, Italy, China and Spain. But its exports to UAE, Afghanistan, Germany and France declined (See Table I).

Between July-December 2006, exports to China grew to $245 million from $190 million in July-December 2005, showing an increase of about 29 per cent. Exports to China more than doubled in the last four years as the dramatic surge in the Chinese economy led to additional demand for foreign goods (See Table II).

The items whose exports to China have increased include cotton yarn, leather and leather products, carpets, rice, fish and fish preparations, readymade garments, surgical instruments, cutlery, petroleum products and marble.

During this fiscal year, exports to China may fetch half a billion dollars but business leaders say this could be easily doubled in a few years. “If we seriously strive to meet quarantine and other standards of China we can easily double our exports there within a year or two,” says Chaudhry Muhammad Saeed, ex-president of the Federation of Pakistan Chambers of Commerce & Industry.

China offers a huge market for Pakistani rice, fruits and herbal medicines that remains untapped because “we cannot meet their standards,” says Saeed.

Pakistan exports eastern and herbal medicines to China in the raw form through its northern land route but the merchandise fetch very little foreign exchange. “Chinese process these raw medicines, value add, package and market them around the globe —and earn 20 times more.”

In November last year, Pakistan and China signed a free trade agreement during the visit of the Chinese President Hu Jintao. He told top business leaders that China imports half-a-billion dollars worth of citrus fruits from Thailand suggesting that Pakistan could also export more citrus fruits to China after meeting the quarantine standards.

During the first half of this fiscal year, exports to the US, the UK and Hong Kong have also shown a rising trend. For long the UK has been the second largest destination for Pakistani exports after the USA though now the UAE is set to snatch this position.

The items whose exports to the US and the UK have recorded increase include bed wear, knit wear, readymade garments, cotton fabrics, towels, rice, sports goods, surgical instruments, silk and synthetic textures and footwear etc.

Exports to the US during this fiscal year may cross four billion dollars whereas exports to the UK should be over $900 million. In fiscal year 2005 exports to the UK reached a billion dollars but fell to $900 million the following year.

As for Hong Kong, our exports to the island country have been on the rise for some years. And the trend continued in the first half of this fiscal year also.

The items whose exports to Hong Kong have increased include cotton yarn and fabrics, leather and leather clothing, fish and fish preparations, sports goods, bed wear, chemical and chemical products, readymade garments, precious stones, surgical instruments and metal manufactures etc.

Italy and Spain are the remaining two countries out of the top six where Pakistan’s exports have shown an increasing trend in the first half of this fiscal year. Exports to these two European countries have been showing consistent and substantial growth over the past few years.

The items whose exports to these countries have risen over the years are: cotton yarn and fabrics, rice, molasses, carpets, bed wear, hosiery, precious stones, fish and fish preparations, fruits, jewellery, engineering and sports goods, surgical instruments, cutlery and leather gloves.

The decline in exports, seen in the first half of this fiscal year, to the UAE, Afghanistan, Germany and France has not been consistent with the past trend. For the past four years, exports to each of these countries have rather witnessed a rise (See Table II).

It is encouraging that Pakistan’s exports to top 10 destinations have risen over the years.

But Pakistan has so far not fully exploited the potential export market in any Saarc country. Three countries in the South Asian Association for Regional Cooperation i.e. India, Bangladesh and Sri Lanka may easily become major buyers of Pakistani goods and services (the other three i.e. Nepal, Maldives and Bhutan are too small economies).

In the first half of this fiscal year, Pakistan’s exports to India fell to $121 million from $129 million a year ago.

Exports to Bangladesh and Sri Lanka, however, rose to $128 million and $79 million respectively in July-December 2006 from $105 million and $59 million in July-December 2005.

“If we are serious in increasing our exports to India, we need to look beyond New Delhi and explore export potential in each city of India,” opines Chaudhry Saeed. “Both the private sector and our High Commission in India should do hectic networking with the Indian entrepreneurs spread across India.”

The signing of a shipping protocol with India last year is likely to help Pakistan boost its exports to India.

As for Bangladesh and Sri Lanka, exports to the two countries are picking up—thanks to a free trade agreement with Sri Lanka and the beginning of non-traditional and more value added exports to both countries. Pakistan needs to increase its export of non-traditional items and value-added traditional items to the two countries to compete with India and the Asian giant China.

Exports to Bangladesh and Sri Lanka mainly consist of raw cotton, cotton yarn, cotton fabric, surgical instruments, and sports goods. However, lately exports of non-traditional items like cement, engineering goods, chemicals and chemical products and cutlery has also started, which need to be boosted further. Exports can be broadly classified into two categories i.e. textiles and garments and non-traditional or developmental items. In seven months of this fiscal year i.e. between July-January 2006-07 exports of nine out of 13 items in textiles and garments category grew by 17 per cent to $3.7 billion whereas exports of the remaining four items declined by eight per cent to $2.5 billion.

The overall export earnings from all the 13 items of this category stood at $6.2 billion—or a staggering 65 per cent of the total exports of $9.6 billion.

Exports of seven out of 13 developmental items grew by 12 per cent to $363 million whereas exports of the remaining six items declined by 24 per cent to $301 million. The items whose exports increased included engineering goods, fish and fish preparations, cement, marble/granites and onyx, gems and jewellery, and meat preparations. And the items whose exports declined included chemical and chemical products, fruits, cutlery, furniture, vegetables and poultry.

Total export earnings from all the 13 development items stood at $664 million or seven per cent of the overall exports.

http://www.dawn.com/2007/03/05/ebr16.htm

 

[Neo]

March 05, 2007
Potential for development of dairy sector

By Dr Alamdar Hussain Malik

IN the global context, the performance of Pakistan dairy sector appears impressive in terms of livestock population and total milk production, but in terms of productivity it is extremely poor. The main reasons for low yield are shortage of feed and fodder, lack of timely and good animal health care and breeding services, and paucity of credit. The average annual milk production per animal in our country is far below the world average.

In 2003 over 32 million tons of milk was produced in our country, which amounted to six per cent of the world production. Over two-thirds of milk is produced by buffaloes. Pakistan has over three times as many ‘dairy animals’ as Germany, the vast majority (over 80 per cent) being kept in herds of one to three animals. Comparison of average milk yields across various countries shows that one New Zealand dairy animal produces as much milk as three ‘dairy animals’ in Pakistan; while one American cow produces as much as seven Pakistani cows. This vast difference in productivity is due to a variety of factors (genetics, management, technology, etc.) Fortunately, many of these factors have been identified, which means that there is vast potential for development of local dairy sector.

Only 40 per cent of surplus milk, left from calves suckling, home consumption and indigenous home processing, finds its way to urban markets. Up to 20 per cent milk is being wasted due to non-availability of proper cooling and storage facility. About three per cent of milk in urban markets flows through formal processing channels while the remaining 97 per cent is consumed raw and informally marketed through local milkmen (Gawallas).

Milk production here has increased by 17 percent from 1996 to 2002. This increase in production was achieved mainly by a growth in the number of dairy animals (15 per cent for the same period) with only slight gains in milk yield per animal with the use of artificial insemination techniques for improved breeding.

Agriculture and livestock in our country is controlled by the federal government, while provincial governments are responsible for the development of this sector. Despite the importance of dairying in our economy, especially for the livelihood of resource-poor farmers and landless labourers, government policy towards this sector has suffered for lack of a clear and strong thrust and focus.

The concerned government agencies should ensure a policy conducive to white revolution. Primary focus should be on enactment of legislations that should provide support to white revolution. Although, the dairy sector occupies a pivotal position, and its contribution to the agricultural sector is the highest, the investment plan made so far does not commensurate with its contribution and future potential for growth and development. However, in most cases, the bulk of budget allocation to this sector is consumed by wages and other administrative costs of the government departments.

Lack of proper monitoring, controlling and evaluation at various levels at timely intervals and inability to review the progress and give appropriate feedback are some of the factors contributing to the failure of the white revolution in our country. In choosing the project areas, the implementing agencies need to ascertain the suitability of the areas on the basis of project objectives and resources. There is no information on the economic and social cost-benefit of these projects. Consequences in terms of output, employment, consumption, savings, income distribution and other tangible benefits are to be estimated. The consequences brought out must be evaluated from all dimensions which are essential for making sound development policy.

Management of human resources is very important in any organisation and it is a fundamental aspect in dairy development programmes. The white revolution can be achieved through modern knowledge and technologies. Therefore, one of the most important tasks of achieving excellence in our dairy development programme is to develop well-trained personnel of the proper size.

The white revolution is anchored on four development strategies:

(i) Increasing the volume of local milk production will hinge principally on the quantity and quality of dairy animals. This can be achieved through the development and implementation of a unified system of dairy herd upgrading, embryo transfer, gene pool, contract breeding and importation.

(ii) processing is the central component of dairy development. The required post-production infrastructure must be in place, capable of absorbing the local production within a specified timeframe. Public investment in providing milk plants, milk collection centres and packaging equipment will be needed

(iii) Milk feeding shall be institutionalised with a corresponding funding support. This will result in significant gains in efforts aimed at raising the nutritional well-being of millions of Pakistani children. It will also create a stable market for local milk producers. Corollary to this, commercial market niches for locally manufactured dairy products will be established.

(iv) Human resource development shall empower farmer-co-operators, local government units, non-government organisations, government personnel and other entities involved in propelling dairy industry development. A programme of trainings, technology transfer and immersion, as well as local and foreign exchanges shall be integrated into all activities of the programme.

One of the major lacunae is the neglect of buffaloes and failure to exercise the control over the implementation of breeding policy evolved which has led to the creation of crossbred with varying inheritance level and performance. Pakistan has seen a slight increase in milk yields, both in buffaloes and cows. This is due to limited impact of breading schemes through selection and artificial insemination, etc.

Little attention has been paid to the impermanent of local cattle, except for their use as a genetic resource pool for cross-breeding with exotic dairy breeds for the supply of crossed cows.

A local cattle breed of Sahiwal, Cholistani and Red Sindhi has practically disappeared in their pure form, which were quite adoptable to local conditions. Sahiwal cows have produced up to 5,000 kg of milk in on lactation. Crossbred is not a permanent solution to increase milk yield in the country as the exotic blood exceeds the level of 50 per cent then it starts declining in terms of productivity and greater susceptibility to disease and adaptability to climatic stress of heat and humidity.

Despite being the 5th largest milk producer in the world, Pakistan’s per capita availability of milk is around 230 kg per year which is lowest in the world, and still below the world average of 285 gm per day and the minimum nutritional requirement of 280 gm per day as recommended. There are also wide variations in per capita availability of milk in the country. The average per capita consumption of milk and dairy products is lower in rural areas than in urban areas, even though milk is produced in rural areas.

Milk production is considered a livestock enterprise, in which small-scale producers which currently from the backbone of the dairy sector can successfully engage to improve their livelihood. Given its high income elasticity, the demand for milk and dairy products is expected to grow rapidly. Further increases in per capita income and changing consumption patterns would lead to acceleration in demand for milk and other livestock products in Pakistan and thus would give a boost to this sector, as the white revolution shares the national efforts to address poverty and malnutrition and ensures a better quality of life for Pakistan.

http://www.dawn.com/2007/03/05/ebr6.htm

 

[Neo]

Musharraf discusses micro financing initiatives with Bangladesh's Mohammad Yunus
Karachi News.Net
Monday 5th March, 2007

Islamabad, Mar. 5 : Pakistan President Pervez Musharraf today directed the country's finance managers to develop innovative methods for extending micro-finance credits at the grassroots level to help enhance job opportunities and eradicate poverty.

The direction was given after a meeting with the Managing Director of the Grameen Bank of Bangladesh, Dr. Mohammad Yunus, who called on Musharraf at his Camp Office in Rawalpindi on Monday.

Advisor to PM on Finance Dr. Salman Shah, Minister of State for Finance Omer Ayub Khan, Secretary General Finance Naveed Ahsan and President Khushali Bank Ghalib Nishtar were also present during the meeting.

Musharraf directed the finance team to exchange ideas with the Grameen Bank so that its successes could be replicated in Pakistan.He said that the poorer sections should benefit sooner rather than later from the economic turn around in the country and must have the resources to stand ontheir own feet.

He said with the availability of financial resources people can beem powered to set up their small scale businesses, which on the one hand would bring a perceptible change in their living and on the other create greater employment opportunities.

Musharraf said the people of Pakistan and Bangladesh enjoy very close relations in all fields and these would be further strengthened in the years to come.

Musharraf congratulated Dr. Yunus on winning the prestigious Nobel Award in recognition of his services to humanity.

http://www.karachinews.net/story/232187

 

[Janbaz]

Expats urged to help country fight poverty, extremism

ISLAMABAD: President Pervez Musharraf on Monday wooed the Overseas Pakistanis Investors to contribute to the national economy, fight poverty and extremism by entering joint ventures in heavy engineering, energy, high-tech industry and food processing.

“Help us to alleviate poverty, improve economy, generate employment and bring a long-term change in Pakistan,” the president said while inaugurating the two-day moot of Overseas Pakistanis.

He urged them to go for the Small and Medium Enterprises to create more jobs, invest in value addition of food items, dairy products, building and construction, energy sector, IT and Telecom besides concentrating on the downstream industries. “With more factories, there will be more employment, lesser poverty and lesser the chances of extremism,” the president added.

He said Pakistan wanted to generate electricity through all means without involving oil use, and cited the example of one investor who was setting up electricity generation through wind mills in Badin to produce 100MW.

About growing construction activities he said, “We are going to build more dams, including the Kalabagh dam.” The president asked the Overseas Pakistanis to diversify and invest in heavy and high-tech industry. He said the past strategy of concentrating only on textiles that is only six per cent of the international trade, was flawed. “Pakistan provides an investor friendly environment, level playing field for all and all sectors were open for investment.”

He said the government was setting up more industrial estates along the Motorway at several interchanges like Chakri and Lilla and mentioned the Sundar and M-3 estates that were already operational. The president, acknowledging the role of Overseas Pakistanis, urged them to increase the remittances and investment into the country.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=45647

 

[Janbaz]

'Billions of rupees being spent to end backwardness, poverty'

RECORDER REPORT
SIALKOT (March 06 2007): The National Assembly Speaker Chaudhry Amir Hussain has said that all democratic institutions are functioning successfully, and the parliament will complete its constitutional tenure for the first time in the history of the country.

Addressing a big public meeting in the village of Korepure on Sunday evening, he added the government was serving the people with missionary zeal and making all out efforts to resolve the people's problems.

The speaker said the government was mobilising billions of rupees to banish backwardness and poverty and to provide basic facilities to the masses in far-flung areas of the country. The development work on big and medium projects was being carried out for bringing revolutionary changes in social set-up of the country, he asserted.

The facilities of telecommunication, Sui gas, electricity, health, education and communication had been provided to remote and ignored rural areas for the first time, he said. Chaudhry Amir Hussain further said that the government wanted to develop backward areas and to bring them at par with the developed areas of the country.

He underscored the need for making collective efforts for purging politics from corruption and nepotism and for promoting democracy and unity among different groups of the society. The speaker said the government had adopted numerous measures for curtailing the ratio of unemployment through the establishment of maximum industries aimed at generating the employment opportunities in the country.

He said that vocational training institutions were being set up at Tehsil and district headquarters produce skilled persons that would meet the requirements of the industrial sector.

Business Recorder.
http://www.brecorder.com/index.php?id=535583&currPageNo=1&query=&search=&term=&supDate=

 

[Janbaz]

$18 billion export target may not be achieved: KCCI

RECORDER REPORT
KARACHI (March 06 2007): Karachi Chamber of Commerce and Industry (KCCI) President Majyd Aziz has expressed the view that Pakistan may not achieve the $18 billion exports target this year. Addressing a delegation of the newly posted Pakistani commercial officers in different countries, led by Mohammed Irfan Tarar, Commercial Consular in Casablanca.

He noted that after passing so many years Pakistan, especially Karachi, does not have proper infrastructure, including power, water and gas, to run the industrial units properly, which is necessary to achieve the exports targets and value-addition.

He said that beside this the image of Pakistan was also playing a big role in keeping away the importers of Pakistani goods. The KCCI president advised the newly appointed commercial councillors to make efforts to improve the image of Pakistan in the eyes of foreign buyers and play their role in providing market access to Pakistani exporters.

He said that they should provide information related to trade, imports, and goods which can be exported from Pakistan, and other such information which may help boost Pakistan's exports. He said that in the present situation unless one is a top exporter one can not export goods. Medium and small exporters are facing lot of problems in export markets, he added.

He said that the officials have no national urge to boost exports. They only think of revenue generation. The KCCI chief said, "We have to change our mindset. We must concentrate on job creation, rather than revenue generation."

He said that geopolitical situation with Iran and Afghanistan is very disturbing and this may hit Pakistan's economic and trade activities. "Our success lies in peace in the region", he added. Commenting on the coming general elections in the country, he said that economic activities should not be disturbed with the elections in progress.

Business Recorder.
http://www.brecorder.com/index.php?id=535511&currPageNo=1&query=&search=&term=&supDate=

 

[Janbaz]

Six firms keen to set up waste-to-energy plant

ANWAR KHAN
KARACHI (March 06 2007): As many as six foreign private firms, including US, UAE, Kuwait, Malaysian, Australian and Chinese have expressed keen interest in setting up a waste-to-energy plant in Karachi. A senior official of the City District Government Karachi (CDGK) said that many of the foreign firms had floated their ideas regarding the establishment of plant in the city.

They had contacted CDGK through their consultants, who apprised it about the project, however, they had been asked to finalise their project proposals with the final cost estimates, he added.

He said that firms had initiated their studies on the project and set different time period for the project implementation.

Some of them would complete the waste-to-energy plant in one year while others in two and three years, therefore, their cost would also vary with the extent of completion period of the project, he maintained.

He said waste-to-energy plant would require a huge sum of money, which was the primary concern for all the firms to overcome it during the plant establishment process.

They would have to meet their expenses on the project, as it was an expensive venture, he added.

He turned down any early agreement between the CDGK and these firms to take place on the installation of the proposed plant.

He said the CDGK had not decided yet to which firm it would assign the task. "It is quite premature to assess the project, as all of the firms are keenly interested in the project," he added.

He said that CDGK was not aware of the project, hence it would look into the project's viability whether or not it was feasible to be installed.

He said the CDGK had asked the interested firms to complete their homework on the project so that it could also be able to decide whose proposal was the best to be implemented. Waste-to-energy plant had been established in 1962 in the developed world. However, it was new for CDGK to set up in Karachi, therefore, it was needed to be studied thoroughly, he said.

Business Recorder.
http://www.brecorder.com/index.php?id=535524&currPageNo=1&query=&search=&term=&supDate=

 

[Janbaz]

Rs 3.94 billion being spent on uplift projects in Sialkot

RECORDER REPORT
SIALKOT (March 06 2007): Sialkot district government is spending about Rs 3.945 billion for different development projects in the district. This was stated by the District Nazim Muhammad Akmal Cheema while talking to newsmen here on Sunday.

The district Nazim said that more than Rs 1.75 billion is being spent for the promotion and expansion of education in its Tehsils - Sialkot, Daska, Pasrur and Sambrial.

He said that there are 2,400 primary school in the district and every union council had been provided Rs 20, 000 for undertaking the development work and other requirements of schools. Cheema said that Punjab government had catered Rs 650 million for furniture, additional classrooms, boundary walls and washrooms in existing schools.

The district government had evolved a strategy for improving the district road network costing Rs 2 billion for improving the means of communication in the district. He disclosed that funds amounting to Rs 100 million had been released for the up-gradation of Civil Hospital Daska while Rs 55 million allocated for widening BRB canal bridge near Daska City for ensuring smooth traffic flow on Daska-Gujranwala road.

The Nazim said that 67 watercourses - 17 in Barani and 50 in canal areas - would be completed costing Rs 40 million in the district. The completion of watercourses would play an instrumental role in the promotion of agriculture while sufficient water would be available to tail-end farmers, he added.

Business Recorder.
http://www.brecorder.com/index.php?id=535584&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Banking reforms start bringing fruits: Shaukat Aziz


LONDON (updated on: March 06, 2007, 10:54 PST): Confidence is strong in Pakistan's banking sector following reforms that have helped make the country a serious destination for investors, Prime Minister Shaukat Aziz told the Financial Times.

The reforms 'have repositioned Pakistan's banking sector and several banks are looking at Pakistan seriously,' Aziz said in an interview published on Tuesday.

"Our balance of payments are comfortable, exports are up and growth remains strong. Obviously, this is noticed by foreign investors," he said.

"Today, there is a lot of confidence in the banking system. In the coming years, there will be growing opportunities for trade and investment. Banks see promising prospects for the future."

Aziz, who previously worked for Citibank, has pushed through major banking reforms that have helped the economy's rehabilitation.

Dutch bank ABN Amro said on Monday it had agreed to buy a 93.4 percent stake in Pakistan's Prime Bank for 13.8 billion rupees ($227 million), the latest in a series of acquisitions by foreign banks in Pakistan.

brecorder.com

 

[Owais]

Pakistanis wasting lot of foreign exchange on imports of eatables

ISLAMABAD (March 06 2007): Pakistanis are wasting a lot of foreign exchange on import of edible items, as a huge amount of Rs 46.43 billion had been spent on sugar and sugar confectioneries in 2005-06, which exceeded by 413 percent previous year's imports amounting to Rs 9 billion.

Though, this enabled the exchequer earn revenue in sales tax of Rs 6.68 billion, against Rs 1.36 billion of previous year's--an increase of 391 percent--at the import stage, the trend cost huge foreign exchange to the exchequer. This also shows state of wealth with the affluent people and their rising dependence on imported products.

It may be pointed out that this amount is bigger than spent on import of many other items, like oilseeds (Rs 18.36 billion), coffee, tea & spices (Rs 16.7 billion), rubber & articles (Rs 19 billion), articles of iron & steel (Rs 21.76 billion), paper & paperboard (Rs 19.5 billion), and miscellaneous chemical products (Rs 22 billion).

Except for a few items, mentioned out of 15, all have seen a sharp increase in their percentage. Among those which remained unchanged were organic chemical increased by 1.2 percent, coffee, tea & spices by 5.1 percent, and miscellaneous chemical products 6.7 percent. POL products showed highest import value of Rs 380.863 billion in 2005-06 against Rs 223.095 billion in the previous year, an increase by 70.7 percent.

Similarly, vehicles, iron and steel also showed high percentage increase of about 50 percent each during 2005-06 from previous year's. Their imports valued Rs 105.84 billion and Rs 97.02 billion respectively for the year under discussion.

The Fiscal Policy Statement (2006-07), released by the Ministry of Finance, showed total import value of Rs 1715.7 billion for 2005-06 against Rs 1306.52 billion in 2004-05, showing an increase of 31.3 percent. Total sales tax collected CBR from imported items at the import stage was only 18.5 percent higher than previous year, which was Rs 171.76 billion.
http://brecorder.com/index.php?id=535527&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Pakistani products: Jordan can serve as gateway to Europe and Gulf

KARACHI (March 06 2007): Pakistan should improve trade relations with Jordan so that it could be used as an export window to Europe and the Gulf States. This was discussed at a meeting of Mohammad Akhtar Tufail, ambassador-designate to Jordan with Federation of Pakistan Chambers of Commerce and Industry (FPCCI) office bearers recently.

FPCCI emphasised on using Jordan as trade gateway for Europe and Gulf that would helpful increasing Pakistan's exports on several destinations, FPCCI officials said on Monday. Pakistan's exports to Jordan increasing in the last six years to $16.452 million in 2005-06 as compared with $14.391 million in 2004-05, which was stood at $9.201 million in 2000-01.

While, substantial growth registered in imports from Jordan in the last six years, which was currently $28.58 million in 2005-06 as compared with $20.59 million in 2004-05. Officials said that the diplomat had assured the country would take initiatives to improve trade balance with Jordan.

According to FPCCI statement the ambassador-designate to Jordan said, "Promotion of bilateral trade relations between Pakistan and Jordan will be my foremost priority during my tenure as ambassador of Pakistan." In the present era economic diplomacy determined the level of political relations between the countries, he said.

"My focus, therefore, would be on strengthening Pak-Jordan commercial relations by providing optimum facilitation to the business community of Pakistan," he said. Tanvir Ahmad Sheikh, president FPCCI hoped that the Embassy of Pakistan in Amman would be instrumental in promoting bilateral trade and help unleashing the potential of Jordanian market, which so far has not been tapped in true perspective.

Although Jordan was not a big market, it could be utilised as the gateway to Europe and the Gulf, he said. Asad Sajjad, Chairman Pak-Jordan Business Council said that EU and USA have already signed Free trade Agreement with Jordan under which 4,600 items were allowed to be exported to EU and USA. If Pakistani industrialists use Jordan as a base of production, they will have duty free access to EU and USA.

He said that many Iranian companies now have shifted their business to Jordan and with the start of rebuild Iraq project, there existed vast potential for Pakistan to export construction material, food stuff, fabrics and clothing, light engineering goods, furniture, tiles and ceramics, spices, rice, pulses, surgical equipment and leather products.

He added that FPCCI in conjunction with TDAP, arranged a single country exhibition "Made in Pakistan" in Jordan last November, which was a great success. He requested the ambassador to help in arranging this exhibition as a regular feature of Pakistan.

http://brecorder.com/index.php?id=535528&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Inactive loans soar by Rs43 billion
KARACHI: Inactive loans during the quarter ending September 30, 2006 mounted by Rs43 billion, which works out to 2 percent of the aggregate banking loans.

State Bank of Pakistan said that the net-inactive loans had increased by Rs480 during the quarter ending June 30, 2006, while the volume of actual inactive loans at the quarter ending September 2006 reached at Rs187 billion. Specialized banks’ inactive loans during the period under review calculated at 17.3 percent of their total loans, while those of DFIs at 8.8 percent, public sector commercial banks’ at 1.6 percent and the private banks total loans’ 1.5 percent as inactive loans.

Besides, the growth rate in inactive loans of the foreign banks remained at –0.7 percent. Banks in September quarter recovered Rs6.61 billion out of the inactive loans, while the local private banks made topmost recovery of Rs3.77 billion from their inactive loans.
http://geo.tv/geonews/details.asp?id=2898&param=3

 

[Neo]

March 06, 2007
Alcohol worth $100m exported in 2006

By Parvaiz Ishfaq Rana

KARACHI, March 5: The country earned over $112 million on export of around 190,585 tons of alcohol during 2006-07. The value-addition in molasses through its conversion into alcohol has enabled exporters to earn eight to ten times more foreign exchange.

The different grades of alcohol are being produced from molasses with a ratio of 1:5 meaning one ton of alcohol is being produced out of five tons of molasses. Presently, around 16 distilleries are operating in the country with a 60 per cent capacity of converting on average 1.8 million tons of molasses.

According to the details available, the country exported around 167,610 tons of alcohol during 2006 and about 22,975 tons during first two months of this year, thereby brining the total to around 190,585 tons. The average price fetched by exporters for different grades of alcohol ranged between $560 to $680 per ton.

As a result the country earned around $100.6 million on export of 167,610 tons in 2006 and $11.5 million on export of 22,975 tons in Jan- Feb this year

With the start of the sugarcane crushing season each year the country had been exporting millions of tons of molasses at a throw away price to European countries and Japan. However, for the last couple of years it is being converted into three grades of alcohol i.e. fuel or anhydrous, neutral or extra-neutral (ENA) and industrial or rectified ethanol (REN).

The fuel grade alcohol fetches highest price as it is being growingly used for mixing up to 10 per cent in petroleum products the world over to ease the pressure of increasing oil prices. The fuel grade alcohol needs 99.80 per cent purity on conversion from molasses while neutral (ENA) is purified up to 96.20 per cent and is used by pharmaceutical industry and in the making of wine. The industrial grade, also known REN, requires 94 per cent purification and is used by the industry.

Chairman Terminals Association of Pakistan (TAP) Mohammad Qasim told Dawn that the country would easily manage to export a little over two million tons of alcohol during current 2006-07 sugarcane crushing season on getting around 1.8 to 2 million tons of molasses. This would mean that a balance of around 0.5 to 0.6 million tons of molasses would be exported.

He said that after recent rains export of both molasses and alcohol slowed downing as crushing was affected on slow arrival of cane from the fields. However, he hoped the momentum will be regained soon as the cane harvest is better than last year.

Mr Qasim appreciated the Karachi Port for providing excellent facilities at the bulk oil piers for export of these two value-added commodities — alcohol and molasses. He said that in coming years export of alcohol would rise further as more distilleries were coming up, which will enable the country to convert entire molasses production into alcohol.

He suggested that legislation should be introduced for use of fuel grade alcohol in the country to give some relief to the common man by using it mostly in public transport system.

Responding to a question the TAP chief said that the country would produce sufficient sugar this season to meet the domestic demand particularly when sizable stocks are also lying with the Trading Corporation of Pakistan (TCP). He further said that India had also good sugarcane harvest and would have surplus sugar this year.

Referring to world sugar market Mohammad Qasim said that the prices had crashed because almost all the sugar producing countries have good cane harvest and there is going to be surplus sugar available. He said that about a fortnight ago sugar was being quoted at around $330 per ton (fob) against $515 per ton about 15 months back.

http://www.dawn.com/2007/03/06/ebr3.htm

 

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Strategy to raise exports up to $45 billion approved


ISLAMABAD (March 07 2007): Prime Minister Shaukat Aziz on Tuesday approved a strategy to increase the country's exports from $16.5 billion in 2006 to $40-45 billion by 2013. The strategy was approved at a high level meeting chaired by the Prime Minister in which Deputy Chairman Planning commission Dr Akram Shaikh presented a detailed strategy to enhance the country's export.

The prime minister said the government was pursuing a demand-driven strategy to enhance exports, which have become the lifeline and a major mechanism to drive the economy, earn foreign exchange and generate employment.

He said that exports had become more than double in the last seven years from $7.8 billion to about $16.5 billion and further steps needed to be taken to increase exports from the present 13 percent to 15 percent of the GDP.

Shaukat Aziz said with globalisation the entire economic paradigm had shifted and with quotas gone there was an urgent need to find new markets, diversify them and export value-added goods.

He said that improved competitiveness and productivity were critical to increase exports and with this view the government had embarked upon an ambitious programme to imparting skills and improving the logistics chain within the country and with the adjoining regions of Central Asia, West Asia and Western China.

He said the government had launched a comprehensive economic diplomacy and has recently signed an FTA with China, which is a landmark as it gives the country access to a huge market. The government was also making efforts to conclude FTAs with the US and the European Union, he added.

The prime minister said the government was in the process of finalising the Reconstruction Opportunity Zones (ROZs) to gain access for the goods produced in the less developed areas to the United States on preferential basis. He said the government's job was to open market access as exports were done by the private sector.

He said the private sector needed to increase its competitiveness and productivity and ensure quality and standardisation of products without which a quantum leap in exports is not possible.

Deputy Chairman Planning Commission presented a detailed strategy and action plan to increase exports, made a detailed review of all major sectors of the economy, highlighted constraints impending further growth and presented a strategic framework to achieved a quantum jump in exports.

He said to achieve the export target the government needs to focus on creating enabling policy environment, human capital development, strengthening of physical and technological infrastructure, improvement in logistics chain, investment and trade facilitation, production of high quality products and marketing of products.

He emphasised the need of consistency, stability and continuity of economic policies, higher investment in manufacturing and agriculture, setting up of state-of-the-art infrastructure and technology support centers, simplification of labour laws and building of strong confidence between government, private sector and academia.

The prime minister complimented the deputy chairman and the Planning Commission on presenting a well-thought out export strategy based on inputs from the relevant government agencies and the private sector organisations.

The meeting was attended among others by Federal Minister for Commerce Humayun Akhtar Khan, Minister for Industries and Production Jahangir Kahn Tareen, Minister for Textile Mushtaq Ali Cheema, Adviser to the Prime Minister on Finance Dr Salman Shah, TDAP chief Executive Tariq Ikram and senior officials.

http://www.brecorder.com/index.php?id=535817&currPageNo=1&query=&search=&term=&supDate=

 

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Investment moot ends with doubts over attracting $3 billion

ISLAMABAD (March 07 2007): The two-day overseas Pakistanis investment conference concluded here on Tuesday with doubts over government's expectations of attracting $3 billion investment from the expatriates. The conference, hosted by Labour, Manpower and Overseas Pakistanis Ministry, was attended by over 400 prospective investors, including 250 expatriates.

The government's expectations of fetching $3 billion investment was based on figures provided by the participants in the registration forms they had to fill for attending the conference. However, talking to Business Recorder here, a number of expatriates said that they had filled the registration forms, including details about the size of the amount they intended to invest, as a formality.

They said that they would invest, in actual terms, only following the incentives the government would offer to them at the conference. However, talking to a cross-section of participants this reporter gathered that the investors were still concerned about certain issues, including law and order situation and the taxation system.

Shamshad Ali Siddique, from Saudi Arabia, said he had expressed intention to invest $300 million in the construction sector here in the registration forms. However, he added that it was not confirmation, but "just an intention". He would make the actual investment only when his concerns were addressed, he said.

Highlighting his issues, Siddique said that law and order situation and taxation system were the major hurdles in Pakistan for investors. "There are so many agencies involved here, at least 22 of them at federal, provincial and district levels, that catch the new investors before even they settle their businesses," he added.

"We have been hearing of one-window operation for some time, but I have not yet seen that window," he said. Khalid Mehmood Chaudhry, President of Investment Forum, Saudi Arabia, said he did pledge some investment in textile sector in Pakistan but it would materialise only when he felt his capital was safe.

Chaudhry Ghulam Haider, who recently launched his construction company in Pakistan while winding up his fashion design business in UK, complained about lack of skilled manpower in the country. "I brought earthmoving machinery here in Pakistan, but unfortunately I have not yet found persons to operate it," he said.

He said that the government would have to think beyond the major cities and must also concentrate on rural areas where communication had been the cause of concern.

http://www.brecorder.com/index.php?id=535866&currPageNo=2&query=&search=&term=&supDate=