Pakistan Economy - News & Updates - Archive

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Tuesday May 02, 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 All surcharges be withdrawn from fuel and electricity bills and direct taxes be levied.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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Tuesday, May 02, 2006


* PM says non-tariff barriers also impediment to trade
* Urges greater energy cooperation among SAARC states

ISLAMABAD: Prime Minister Shaukat Aziz said on Monday that free trade with India was not possible without resolving political disputes.

“Our trade relations with India are restricted due to the overall paradigm of our relations,” the prime minister said to a South Asia Free Media Association (SAFMA) delegation. He said non-tariff barriers were also a big impediment to trade between the two countries. “We cannot move towards free trade with India without resolving political issues”.

Aziz said that the Islamabad SAARC summit was a turning point in “our relations (with India) and we are moving forward to further improve these relations”. He said a dialogue process with India was underway, but it was currently too slow and needed to be speeded up.

He said both countries should now also move towards dispute resolution rather than dispute management. He said Kashmir was a core issue which should be resolved according to the aspirations of the Kashmiri people and with the acceptance of both India and Pakistan. The prime minister said Pakistan wanted a Kashmir resolution and that is why it had proposed demilitarisation and self-rule in Kashmir.

Energy cooperation between South Asian countries is of vital importance and could be a key driver of development, he said. Pakistan invited India to join the Pakistan-Iran gas pipeline project, which “we call a peace pipeline and we unbundled it from all other issues”. He said Pakistan was also exploring a gas pipeline from Turkmenistan and had invited India to join it. “We are also working with Kyrgyzstan and Tajikistan to build an energy grid for Pakistan,” he said. To a question, he said there was also a need to settle the water issue with India and stressed the need to abide by the Indus Waters Treaty. He said that anybody was free to invest in Pakistan.

He said a trust deficit and conflicts had prevented South Asia from exploiting its human capital. SAARC had the potential to resolve these issues but it was not working very well, he said.

Aziz said SAARC needed to be energised and its secretariat strengthened. SAARC could be an excellent platform to meet the challenges of globalisation, he added. The prime minister said Pakistan enjoyed close relations with Iran, Afghanistan, the Gulf states, Bangladesh and other SAARC member countries. “Our relations with China are multi-faceted and are expanding in all fields including economy, diplomacy, civil, political, defence and security. We are proud of our seamless relations with China.”

He said Pakistan had a vibrant economy that was growing fast. Due to “our reforms agenda a middle class is emerging and we are on our way to improving living standards by ensuring macro and micro economic stability”.

To a question, Aziz said Pakistan was not interested in an arms race but “we have a strategy to ensure minimum nuclear deterrence to deter any aggression”. He said sanctions after Pakistan tested nuclear weapons in 1998 had helped it become self-reliant in defence.

He said Pakistan was gradually decreasing its defence expenditure and enhancing allocations for social sector improvement and poverty reduction. He said Pakistan was committed to fighting terror and had done more than any country to curb terror. To a question, he said Islam was a religion of peace, harmony and tolerance. He said Islam abhorred terrorism and “we are proud of our faith”. He said there was a need to promote inter-faith harmony.

To another question, he said Pakistan had made successful efforts to improve its image by reforming its economy, transparent leadership and promoting the true image of Islam and still “we are making our best efforts to build inter-faith harmony”.He said the insurgency in Sri Lanka was an internal issue, “but if the Sri Lankan government seeks our assistance, we will think about it”. However, he said, Pakistan hoped that the issue would be resolved through dialogue.”

 

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Tuesday, May 02, 2006

ISLAMABAD: Pakistan and Uzbekistan will sign several agreements on increasing trade, investment and agriculture during the Uzbek President Islam Karimov’s visit to Pakistan, which is starting today (Tuesday), said the Foreign Office on Monday.

A Foreign Ministry statement said that President Pervez Musharraf and his Uzbek counterpart would witness the signing ceremony after formal talks. “Karimov will also meet Prime Minister Shaukat Aziz,” it said, adding that the Uzbek president would be accompanied by ministers for foreign affairs, justice, finance and foreign trade and the head of the Central Bank of Uzbekistan. Karimov’s visit offers the opportunity to reinforce existing ties between Pakistan and Uzbekistan, said the ministry’s statement.

 

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Tuesday, May 02, 2006

LAHORE: President General Pervez Musharraf should stay in uniform till 2017 for the effective implementation of his water vision, said Tehrik-e-Istiqlal (TI) Central President Rehmat Khan Wardag at the Lahore Press Club on Sunday.

Wardag said the president had achieved a milestone by laying the foundation stone for the Basha Dam on April 26, also announcing the construction of five major dams including Kalabagh by 2016. He said Musharraf was right in saying that water reservoirs were imperative for Pakistan’s survival in addition to the elimination of unemployment and poverty.

The new dams would bring about an economic revolution and create employment opportunities, ensuring development in Pakistan, he said, adding that the new dams would help cultivate around 20 million acres of barren land.

The central president said that more agricultural land would guarantee high production and improve the country’s exports.

He said Pakistan was progressing in various sectors because of the president’s policies. Pakistan’s foreign exchange reserves were $12 billion, Stock Exchange Index points 12,000, inflation rate 8 percent, GDP growth rate7 percent, banks’ interest rate 12 per cent and the dollar rate Rs 60, he said while comparing the stats with the ones before October 12 (1999), when the country’s foreign reserves were only $680 million, Stock Exchange Index points 1,800, inflation rate 16 percent, GDP growth rate 2.75 percent, banks’ interest rate 25 percent and the dollar rate Rs 70.

 

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By Ahmed Hassan

ISLAMABAD, May 1: Prime Minister Shaukat Aziz said here on Monday that Pakistan neither had any aggressive designs against anyone nor its 160 million people were interested in the arms race, adding that its defence expenditures were gradually decreasing.

Speaking and responding to queries by visiting delegates of the South Asia Free Media Association (SAFMA) at the Prime Minister’s House, the premier said Pakistan believed and pursued policy of minimum credible deterrence necessary for defence of its sovereignty.

He said in our case social sector development expenditures were growing rapidly and we have passed a landmark fiscal responsibility law which guarantees increased spending on education, health and infrastructure sectors.

He said Pakistan was willing to open up its trade links with India as it was open to the world market but it desired resolution of disputes, especially the issue of Kashmir, go in tandem with the ongoing process of normalisation in other spheres.

To a query about export tariff barriers, Mr Aziz said Indian trade and industry was engaged in questing on a way out but everything was ultimately linked with overall conflict reduction. “We need to find a level playing field when it comes to bilateral trade between the two countries,” he said.

About Iran he said that Pakistan did not support nuclear proliferation nor favoured that Iran should go nuclear but it believed that Iran has all the right to use civil nuclear facility for development of its energy sector.

FOREIGN POLICY: Mr Aziz said Pakistan was pursuing a policy of peaceful co-existence with all its neighbours.

He said India and Pakistan had taken a number of confidence building measures.

He asserted that President Pervez Musharraf’s and former Indian premier Vajpayee’s initiative had greatly helped resolve their conflict as a result of which one million Indian troops deployed on the borders were withdrawn.

He stressed that Pakistan-India relations were central to the overall atmosphere of the entire South Asia region.

Mr Aziz said Pakistan was eager to involve India in the Iran-Pakistan-India (IPI) pipeline and also wanted to enter other energy procurement agreements with the Central Asian Republics.

When asked whether Pakistan could play a mediatory role in the ongoing LTTE-Sri Lanka government conflict, he said Pakistan had good relations with Sri Lanka but it could not interfere in its internal affairs.

He said Pakistan had highly cordial and close relations with China in areas of defence, construction, trade and economics which it was working to increase.

The prime minister called upon the leadership of Saarc to show courage and flexibility to make it a vibrant and energetic body which would be able to help turn South Asia into a region of peace, stability and prosperity.

He said Pakistan was ready to work with member countries to re-energise Saarc which was working far below its potential, and added that its members even differed on holding regular meetings.

He called for upgrading the Saarc secretariat by appointing a secretary-general of the level of a cabinet member for which the World Bank and other international monitory bodies were ready to provide funds.

He said we need to strengthen Saarc in the larger interest of the peoples of its member countries, and added that for doing so their differences on certain matters should be kept aside.

PAKISTAN’S ECONOMY: He claimed that Pakistan had come out of the danger of being declared a failed state hovering over it seven years ago by introducing economic reforms which put it among the top 10 nations of Asia. He said latest surveys have revealed about reduction of poverty in Pakistan while its annual GDP growth remains between 6 and 8 per cent and per capita income is expected to reach $800.

He said economic reforms, including policy of deregulation, privatisation and transparency, had earned the country bigger foreign direct investment opportunities which have climbed to $3 billion this year.

PAKISTAN’S IMAGE ABROAD: Responding to a query, the prime minister said the image of Pakistan had improved as far as its economic, political and foreign policy was concerned.

However, he admitted that following 9/11 and 7/7 the linkage of Islam with acts of terrorism had somewhat created problems which the leadership was conscious of and efforts were being made to project the true face of Islam, which preached peace and inter-faith harmony.

AFGHANISTAN: Premier Aziz said Pakistan believed a strong and peaceful Afghanistan was in its own interest and had been extending all cooperation to achieve this objective.

He said that Pakistan had hosted the largest Afghan refugee population and hoped that the remaining refugees would also leave for their homes soon.

TERRORISM: He said Pakistan was in the frontline of the international war on terrorism and had a substantial role to play towards elimination of terrorism over the years.

 

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ISLAMABAD, May 1: The government has decided not to provide gas to the cement sector in future and divert additional gas supplies away from Wapda, KESC and independent power producers (IPPs) after 2011, owing to gas shortfalls.

This is part of the new fuel policy approved by Prime Minister Shaukat Aziz a few days ago. The policy will be formally announced soon to enable investors to make their plans accordingly, a senior official of the petroleum ministry told Dawn.

As a result, the government will now give top priority to develop power plants based on hydel, coal and nuclear resources to meet energy requirements of a growing economy.

Moreover, if the gas import plans cannot be implemented and gas supplies remain limited to LNG imports in the next five years, the new thermal power plants will be based on furnace oil with the provision that these could be switched over to gas at a later stage. This will, however, put additional foreign exchange burden on the import of fuel.

The policy has also clearly defined the order of priority for all sectors for additional gas supplies. The policy has been prepared on the basis of an integrated analysis of Wapda and KESC systems, scheduled development of hydel, coal and nuclear energy projects and expected low water availability during dry period.

The economic analysis of various competing fuels indicate that natural gas and LNG will cost $6 per mmbtu (million British thermal unit) against the current rate of about $3.5 per mmbtu, while fuel oil will cost $8.1 per mmbtu. The cost of Naptha and high-speed diesel has been estimated at $1.4 and $12.6 per mmbtu.

As such, domestic and commercial consumers will get top priority for gas supplies, followed by fertiliser and related industrial consumption.

Third priority has been given to IPPs and the power plants of Wapda and KESC already having firm gas supply commitments under the gas supply agreements while CNG-stations, captive power for export oriented textile units and general industrial sector have been placed at the fourth priority.

The 5th preference will be given to Wapda and KESC’s power plants other than those with existing firm commitments. The last priority has been given to the cement sector, which means that gas will not be provided to this sector in future.

The policy envisages that after meeting existing supply commitments and other priority sectors, natural gas for new IPPs will not be available after 2011.

This situation will remain intact even after materialisation of 500 MMCFD (Million cubic feet per day) liquefied natural gas (LNG) import by 2010 and hence additional supplies would be diverted to other priority sectors. Further, the gas supplies to Wapda and KESC plants above the existing commitments will also be diverted to other sectors after 2010.

Moreover, CNG stations, captive power and general industrial sector will start running short of gas from fiscal year 2015.

 

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LAHORE - Chief Minister Ch Pervaiz Elahi called on President General Pervez Musharraf at Army Guesthouse, Lahore here Monday, and discussed with him matters pertaining to development projects, reform process in various provincial departments and national issues. The meeting lasted around two hours.

An official handout issued here on Monday quoted President Musharraf as having said that results of public welfare-oriented projects had started becoming visible in Punjab as the reform process was being implemented expeditiously. “Construction of the Bhasha Dam will fetch investment of $6.5 billion. Moreover, the agriculture sector will be strengthened, and fulfill the energy requirements of the country,” he added.

The president said the government was implementing a number of programmes of public welfare. He appreciated the briefing given by Chief Minister Pervaiz Elahi to foreign ambassadors regarding development programmes in the province. Musharraf said that it would help create awareness about the development activities abroad, which would, in turn, attract foreign investment in the province resulting in beginning of a new era of prosperity in Punjab.

The chief minister gave a detailed briefing to the president regarding political situation, law and order and ongoing uplift programmes in the province. He said that due to economic policies of President Pervez Musharraf abundant resources have become available to the provinces and these funds are being used for development activities in Punjab without any discrimination.
He said that uplift schemes especially mega projects were being completed expeditiously in the province for raising the standard of living of the common man and available resources are being used in a transparent manner. He said that a comprehensive programme of infrastructure development was being given a practical shape while solid measures are being taken for the improvement of communication system and road network in the province. The CM said that mega project of construction of Ring Road and the link roads would be completed by 2007 for solving traffic problems and accelerating development process.

Pervaiz Elahi said that an industrial estate was being set up at Faisalabad, which will result in rapid industrialisation and generation of a large number of job opportunities. He said that huge resources are being spent for providing modem health facilities to the masses. He said that construction of a cardiac centre in Multan has been completed and services of heart specialists of international repute have also been acquired for this centre.

The CM said that cardiac centres were also being set up in Faisalabad and Wazirabad, and attractive salaries and residential facilities were being offered to doctors working at rural health centres. He said that development projects were being completed in accordance with international standard of management.

Pervaiz Elahi congratulated President Pervez Musharraf on laying the foundation stone of Bhasha-Diamir Dam and said that construction of water reservoirs will result in development of agriculture sector besides generation of cheap electricity, which will further strengthen national economy.

 

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M. ZAMAN MALIK

Pakistan’s economy is thriving at a rapid pace. The real GDP increased from 5.1 per cent in 2002-03 to 6.4 per cent in 2003-04 and was 8.4 per cent in 2004-05. Why is the disparity between rich and poor increasing in leaps and bounds, is a reality most puzzling.

Wealth is praiseworthy in the highest degree, if it is acquired by individual’s own efforts and the grace of God in commerce, agriculture, art and industry, and if it is expended for the welfare of the down trodden. The glaring absence of equilibrium between rich and impoverished, at times, tends to cause unrest in minds of the multitude.

One shudders to call it the harbinger of a revolution. On top of that, the harangue of the governors at all levels, adds fuel to the fire. How can a common man afford to pay Rs Eighty or ninety per kilogram, for ordinary pulses, and for how long?

Even if Pakistan, some time in future, happens to get the agreed quantity of natural gas from Iran, it will still be short of its requirement by 50 per cent. Qatar is not yet ready to lay the pipeline.

The pipeline, from CARs is resting only in minds. Pakistan’s economy is growing rapidly. Though, it has proved of no use to the 75 per cent of the population, which is crying for drinking water, basic health facilities, law and order and basic human rights. Agro-industries need urgent attention. Agriculture, however, is not capable of absorbing the large number of unemployed. Public sector will have to be set up.

Only a genuine representative of government, emerging after free and fare elections, having the confidence of the people can succeed. Those who enriched themselves by sucking the blood of their poor countrymen will automatically be discarded.

The armed forces have done well, but their hands are already more than full. So far, so good, but it was time to see the government of the people, by the people and for the people. It is hoped that they have learnt from their mean indulgence at the cost of state’s exchequer. The most urgent task of the future government should be to some how get the civil servants on the right track.

According to SSGC calculations, Pakistan would face a short fall of 350-mmcfd from the year 2010 and up to 1,691 mmcfd in 2015 and 3,156 mmcfd in 2020. The demand for gas is increasing by 7-8 per cent per annum and further delay in completion of pipeline projects would create supply problems for Pakistan.

Pipeline from Iran will be 1638 kilometers in length; it will bring 1.6 billion cubic feet of gas from Assalyye in Iran to Gadani near Karachi. Pipeline from Qatar will be 1670 kilometers in length; it will be taken from Qatar North field and bring 1.6 billion cubic feet of natural gas through Oman following a sub-sea route to Karachi. Pipeline from Turkmenistan will be 1400 kilometers with 48-inch diameter; it will fetch 2 billion cubic meters of gas from Daulatabad gas field to Multan, in Pakistan.

Both large-scale hydel power projects and nuclear energy are inappropriate to meet future energy needs. The issues attached to it like Kalabagh Dam and other such massive projects have political implications. Any urgency on the part of GoP in this context can prove harmful to the federation of Pakistan. The President has done well in laying the foundation of another Dam. Natural gas will get us electricity at cheaper and affordable rates.

 

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Tuesday, May 02, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\05\02\story_2-5-2006_pg5_4

By Arshad Hussain

KARACHI: Two more European car manufacturers will introduce their latest model cars in Pakistan by the end of this calendar year.

The government of Pakistan has already allowed the two companies to import their complete build units (CBU) initially.

French company Renault will introduce to the Pakistanis its Logon models.

The government has also allowed a consortium of four investors, including an Arab and three Pakistani investors, to introduce European Black Cap car in Pakistan.

“The federal government is working on an auto policy that would be announced in the next few weeks,” an industry source told the Daily Times here on Monday. “The government is likely to announce a number of incentives for these two European carmakers.”

“The incentives to be announced by the federal government will help the carmakers to set up their plants anywhere in the country,” the source said.

French Renault carmakers had already introduced their vehicles in India and now they are looking towards the Pakistani auto market.

“The company has promised to the Pakistani government to initially invest Rs two billion in Pakistani auto industry and it would import 1000cc to 1300cc cars into the market,” the source said.

The company has demanded a further reduction in customs duty from 35 to 15 percent in the coming budget and exemption from all taxes for the next five year, the source said.

Similarly, a Pakistani consortium, SPL, has been allocated several acres of land in Dhabeji, a place close to Karachi.

The consortium with an initial investment of Rs 2.5 billion would set up a Black Cap car-manufacturing plant in Pakistan and it would introduce 800cc to 1300cc cars. The ministry of finance has allowed the consortium to import 300-400 CBU cars in Pakistan.

“Both the new investors are looking towards the government’s auto policy, which is to be announced,” the official said.

Two European cars, BMW and Mercedes, are already plying in Pakistan and considered prestigious despite being highly expensive.

“The new comers are introducing vehicles below 1300cc power engines and they should be so priced that they should compete with other vehicles like Suzuki, Toyota and Honda,” an analyst said. According to sources, the government has set up a committee, headed by Prime Minister Shaukat Aziz, to listen to complaints of the local auto industry.

The government has refused to give any new incentive to the local auto industry, an industry official said.

 

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Tuesday, May 02, 2006

ISLAMABAD: Minister of State for Finance Omar Ayub Monday said the prices of petroleum in Pakistan were still lower than India after the government paid Rs 2 billion from the exchequer to pass on the minimum increase in the international market to the general public.

In a statement here, he said the petroleum prices have registered unprecedented rise in the international market and the government has not passed on the full burden to the consumers.

"That is why the government gave a subsidy of Rs 2 billion and passed on only the 50 percent increase to the public," he said.

He said Pakistan imports 82 percent of its total petroleum needs from the international market and any rise in the prices there have a direct effect on country's domestic prices, Omar added.

"People are well aware of the fact that the increase in the petroleum prices is not the result of internal policies. Rather it is due to the circumstances beyond government's control."

He said since May 2004, whenever there has been an increase in the prices in international market, the government has given subsidy to the general public.

"The government has so far paid Rs 66 billion in subsidy. That is why the price of petrol in India today is Rs 65 per liter while in Pakistan it is Rs 57," Omar said. "In this era of globalisation, no country can save itself from the changes in economic fundamentals at the international level. Therefore the government sometimes is compelled to take hard decisions," he added.

 

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ASHKABAD (updated on: May 03, 2006, 18:49 PST): Turkmenistan on Wednesday reassured Pakistan of its total commitment towards the multi-billion gas pipeline project and said it has enough reserves to meet current and potential buyers in the region. The assurance came from Foreign Minister of Turkmenistan Rashid Meredov in a meeting at Ashkabad with Foreign Minister Khurshid Kasuri.

The Foreign Minister while on his way to Baku to participate in the 16th ECO Board of Foreign Ministers meeting made a technical stopover at Ashkabad.

Pakistan is seeking supply of natural gas from the Daulatabad fields to meet its growing energy needs and was working with Turkmenistan for construction of a pipeline, passing through Afghanistan. A series of meetings between the energy ministers of the three countries have been held to finalise details.

The Turkmen Foreign Minister citing a recent pre-feasibility study by the Asian Development Bank said his country has "more than enough reserves to meet the demands of current and potential buyers."

He said his country attaches highest importance to the Turkmenistan-Afghanistan-Pakistan gas pipeline project and would like to conclude it at the earliest.

Foreign Minister Kasuri reciprocated the views and said Pakistan attaches highest importance to TAP and sees it as of "a major strategic value. "He said the project will bring the three countries closer and strengthen their economies."

Pakistan has also offered India to join the project. It has also made a similar offer for the natural gas it plans to acquire from Iran. Kasuri said Pakistan will be happy for India, if it decides to join the project.

The Turkmen Foreign Minister said the energy ministers from India, Afghanistan and Pakistan have recently visited the Daultabad gas fields and independently verified the reserves, enough to meet their energy requirements.

Foreign Minsiter Kasuri also sought Turkmenistan's support for Pakistan for a seat on the Human Rights Commission. Rashid Meredov assured that his country's support in this regard.

About the Economic Cooperation Organisation (ECO), Meredov said his country was fully committed to the ten-member forum and has already built a road and railway infrastructure as its part of the ECO transport scheme.

He said progress was being made in bringing the ECO members together and his country was working to maximise the benefits of the member states meet their energy needs. He said Turkmenistan regards Pakistan as an important country and values its relationship.

Foreign Minister Kasuri invited his Turkmen counterpart to visit Pakistan, an offer which he accepted. The dates of the visit will be agreed upon through diplomatic channels. The Foreign Minister, also on behalf of President General Pervez Musharraf extended an invitation to President of Turkmenistan for an official visit.

Foreign Minister Kasuri thanked his counterpart for making his brief stopover significant, enabling them to discuss regional and international situation, the progress on the TAP project and bilateral affairs during their hour-long meeting at Ashkabad airport.

 

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ISLAMABAD (May 03 2006): Pakistan and Uzbekistan on Tuesday signed agreements and memorandums of understanding (MoUs) to promote co-operation and interaction in various fields to further enhance bilateral relations and strengthen trade and economic ties.

These agreements and MoUs were signed here at the Aiwan-e-Sadr following talks between President General Pervez Musharraf and Uzbekistan President Islam Karimov.

Both the presidents witnessed the signing of these agreements and MoUs on intensifying bilateral co-operation in a number of fields, including trade and economic relations and fighting international terrorism.

Both the countries also signed a joint statement, expressing the common resolve to reinforce bilateral ties.

The agreements and MoUs signed between Pakistan and Uzbekistan included: agreement on co-operation in the sphere of support of small and private entrepreneurship, agreement on co-operation in the field of plant quarantine, protocol of exchange of instrument of ratification of the agreement between the two countries on co-operation in the fight against international terrorism, memorandum of understanding on trade, economic and investment co-operation, MoU between Ministry of Agriculture and Water Resources of Uzbekistan and Pakistan Agricultural Research Council, Ministry of Food, Agriculture and Livestock of Pakistan, MoU between State Customs Committee of Uzbekistan and Central Board of Revenue on methodological instruments for exchange of information on bilateral trade, MoU between National Bank of Uzbekistan and National Bank of Pakistan, MoU between National Bank of Uzbekistan and Habib Bank of Pakistan and MoU on establishing of Joint Business Council between the Chamber of Commerce and Industry of Uzbekistan and Federation of Pakistan Chambers of Commerce and Industry.

These agreements and MoUs were signed by the concerned ministers of both the countries.

Earlier, President General Pervez Musharraf and his Uzbek counterpart Islam Karimov vowed to expand bilateral commerce and economic relations with the visiting leader also voicing support for Pakistan's gaining full membership of the Shanghai Co-operation Organisation (SCO).

Both the leaders told newsmen in a post-talk interaction that Pakistan and Uzbekistan had also agreed to co-ordinate their efforts in fighting terror for the common goal of sustainable peace, security and development in the region.

President Musharraf said Pakistan would develop rail and road links with the Central Asian states as part of its efforts to take bilateral trade to new levels and also provide access to Uzbekistan to the world through its ports.

"We expressed the mutual desire to develop road and rail links and Pakistan has offered Uzbekistan to use our seaports for developing commerce with other regions and the world," he said at a joint press conference at the Aiwan-e-Sadr.

In the context of establishing durable peace in the region for promoting regional trade, both the sides shared the desire for peace and stability in Afghanistan.

To a question on co-operation in counter-terrorism, President Musharraf said the two sides could share intelligence "so that we can deal with the financial linkages of terrorists".

On fighting extremism, he said each country had to fight the malaise in accordance with its own peculiar environment, adding that Pakistan had adopted a holistic strategy to address it effectively on long-term basis. Musharraf thanked the Uzbek leader for expressing support to Pakistan in securing full SCO membership.

President Karimov said Uzbekistan fully supported President Musharraf's vision of enlightened moderation as a way out of international turmoil.

He also backed President Musharraf's efforts aimed at making the Organisation of Islamic Conference (OIC) a dynamic body.

He expressed the hope that the agreements and memorandums of understanding signed between the two sides would lend a new momentum and help them in making the most of the vast existing trade potential.

He particularly referred to Pakistan's key geo-strategic location and said development of communication links between them and stability in Afghanistan would enable that landlocked country to have access to other regions through Pakistani ports of Gwadar and Karachi.

Earlier, the two leaders also discussed regional and international issues of common concern. Later, the senior aides joined the two leaders at the delegation-level talks.

 

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ISLAMABAD (May 03 2006): The revenue collection target for 2006-07 would range between Rs 825 billion and Rs 850 billion, taking into account 20 percent estimated growth in revenue during the next financial year.

Official sources told Business Recorder on Tuesday that 20 percent growth in revenue collection would include taxation measures to be taken in the coming budget.

Every year, the growth in revenue collection is about 16-20 percent. It has been estimated that current fiscal year collection would exceed Rs 708 billion. Keeping in view the revenue growth, worked out on the basis of this figure, next year's target would be between Rs 825 billion and Rs 850 billion, they said.

However, the exact figure would be known on budget proposals finalisation.

Sources said that total positive revenue impact was Rs 18 billion, whereas the negative implications were Rs 14 billion, due to the taxation measures taken in the 2005-06 budget, showing a net positive impact of Rs 4 billion.

The taxation measures on the customs side have positive impact of Rs 1.2 billion, whereas its negative impact was Rs 7.3 billion. On the other hand, taxation measures on sales tax and federal excise will yield Rs 7.8 billion, while negative implications will be around Rs 2.1 billion. The changes on the income tax sides have positive revenue impact of Rs 9 billion, whereas negative impact was Rs 4.1 billion.

Officials said that the 20 percent estimated growth in revenue collection showed that next year's revenue collection target would be substantially high as compared to this year's target of Rs 690 billion.

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

 

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ISLAMABAD (May 03 2006): Finance Ministry is not expecting immediate returns from the equity-based investment made by resident Pakistanis abroad. "Investment made by resident Pakistanis abroad is unlikely to generate major profit repatriation to Pakistan as the sponsors may retain their earnings in the concerned countries for business requirements," official sources quoted Finance Ministry as saying in a recent report submitted to the government.

The government had allowed resident Pakistanis to invest abroad in May 2001, subject to fulfilment of specific conditions. The State Bank of Pakistan (SBP) approves investment proposals of up to $5 million, while higher amounts are referred to the ECC.

Sources said that from May 2001 to December 2005, SBP and ECC approved investment transactions amounting to $307 million, of which the ECC and the central bank cleared proposals of $186 and $121 million, respectively.

Investment worth $90 million were later abandoned, which included Engro Chemicals investment in Oman ($77 million), which was shelved because the project turned out to be financially unfeasible, and Lakson Tobacco Company's project of $5 million, among others, which did not materialise.

The major sectors in which investment was made were manufacturing ventures (29 percent), information technology (22.3 percent), chemicals and pharmaceutical (16.2 percent), financial services (14.2 percent) and services sector (12.4 percent).

One-fourth of total investment was made in Oman; another 15.6 percent in Morocco, and 14 percent in Bermuda, whereas other important destinations were US, Bangladesh, UAE and Sudan. Remaining investments were dispersed across the globe.

The Finance Ministry, in its report, said that investments (deducting the projects shelved) were low, close to $217 million, and given the leads and lags in setting up establishments so far, only $155 million have been actually disbursed.

The investments by and large were in a number of sectors driven by the niche and industry-specific interests. Also, geographical coverage was across the board, the ministry said, adding that it seemed that small investments abroad had been made by Pakistani businessmen to largely set foot in new markets and extend their market reach, cross boundaries, internationalise Pakistan brand (like Hotel PC) brand or investments of Packages Limited and to explore opportunities to attract investment inflows in Pakistan.

In some cases, like Fauji Fertiliser, the strategic decision for investment was driven mainly by the need to secure supplies (phosphoric acid) for local fertiliser plants. In the financial sector, some investments were driven by needs of overall branch network and minimum regulatory requirements of host countries.

"Payback of the projects is likely to take some time, after the opertionalisation and after the initial phases," the ministry added.

 

[Neo]

ISLAMABAD (May 03 2006): Prime Minister Shaukat Aziz has said that Pakistan attaches great importance to relations with the Netherlands, which is not only one of our important trade partners but also the 7th largest foreign investor in Pakistan, and a major partner in the area of development co-operation.

Talking to Bernard Bot, Foreign Minister of Netherlands, at the Prime Minister's House Tuesday, the Prime Minister said Pakistan has a strong interest in further strengthening relations with Netherlands, a press release said.

Matters relating to bilateral co-operation, national and international issues, Pakistan's role for peace in the region, defence and security matters and investment friendly climate in Pakistan came under discussion. On the Iranian nuclear issue, the Prime Minister said Pakistan is opposed to nuclear proliferation. However, Iran has a right to use nuclear energy for peaceful purposes under the IAEA safeguards.

He said Pakistan is in favour of a peaceful resolution of the issue through dialogue and is opposed to any coercive measures against Iran. The use of force against Iran will be catastrophic, the Prime Minister added.

The Prime Minister reiterated Pakistan's commitment to peace process with India through a process of composite dialogue. He said Pakistan's suggestions of demilitarisation and self-governance in Kashmir can form the basis of a meaningful dialogue and concrete progress on the Kashmir issue. About defence and security issues, the Prime Minister said Pakistan wants to have minimum credible deterrence to maintain balance of power in the region.