Pakistan Economy - News & Updates - Archive

[Janbaz]

Private sector expects stable growth: survey

By Mehtab Haider
ISLAMABAD: A survey conducted by state-owned Pakistan Institute of Development Economics (PIDE) reveals that private sector firms expect stable growth in the coming six months but feared inflationary pressures and growing wages to stay.

Vice Chancellor, PIDE, Dr Nadeem Ul Haq, released Business Barometer conducted on the basis of a sample survey during a press conference here on Thursday.

The questionnaire was sent to all the firms listed in the Securities and Exchange Commission of Pakistan (SECP). The respondents were from the banking sector, textile, sugar and allied industries, cement, oil and gas exploration companies, automobile, pharmaceuticals, chemicals, vanaspati, food and personal care products and glass and ceramics.

Answering a query regarding inflationary pressure, Dr Nadeem Ul Haq said monetary policy is directly linked with the prices and growth in money supply needs to be curbed for controlling inflation. On the other side, the government’s economic wizards believe that constraints in supply chains are fuelling food prices and core inflation has already brought down with the help of monetary policy.

Looking at last six months, the survey says that 59 per cent firms saw stable economic growth while 32 per cent reported slower growth than the previous year. Only 8 per cent of the respondents indicated a faster growth in economy during the survey period.

In terms of their perception regarding the economic growth in the next six months, 73 per cent reported that it will grow at the same pace while only four per cent expected to grow at a faster rate.

When asked their production level, the responses indicate that during July-Dec 2006, 43 per cent had a higher level of production as compared to first half of the same year. While 32 per cent indicated no change in the volume of production and production of 24 per cent firms remained lower than the first half of the year.

For next six months, 65 per cent responded that they expect their production to increase, 32 per cent expected a fall in their production.

In last six months, 45 per cent firms indicated that their sales in the domestic market were higher than the previous half of the year. There are 19 per cent firms which recorded decrease in their sales. However, there is no change in the sale of 33 per cent firms.

Majority of firms (68%) are expecting that their sales will grow in coming six months, 7% expected a fall and 24% expected to remain in the same range. In international market, 40% reported a decrease in their sale, 36% showed increase and 23% reported no change in it. These results are very much in line with the exports figures of the country in last six months.

The inflationary expectations remain robust in coming six months, according to the survey results. About 80% of the respondents indicated that during the last six months the general price level increased as compared to the first half of the current year. There are 12% which reported that it stayed the same while 7% indicated that it declined. For the first half of the year 2007, 75% are anticipating an increase in the general prices, 20% are expecting the same while only 5% are hoping a fall in general prices.

Firms are feeling the price pressure on the input side which is forcing them to raise their own final goods prices. None of the respondents reported a decrease in the prices of their input. 92% firms indicated that their input price increased in the last half of 2006 while 8% reported no change. For the coming six months, 78% expect a rise in the prices of their input, 22% expect to stay at the same. None of the firm expects a fall in the prices of their input.

In keeping up with the inflationary expectations, wage pressures appear to be building up. Neither any of the firms saw a wage decline in the last half of 2006 nor any of them are expecting wages to decline in the coming six months.

Regarding constraints on firm growth, 64% think that insufficient demand of their product is the most important constraint, 57% consider lack of capital as constraints, 54% in shape of skilled workforce, 43% access to credit and 25% access to imports which are hurting their businesses.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=48966

 

[Neo]

Two more ships to anchor at Gadani

ISLAMABAD (March 30 2007): Two more ships with 35,000 tonnes weight will anchor for breaking at Gadani beach next week. Chairman Gadani ship breaking industry Azam Malik while talking to a private channel said that the industry was suffering slump for last many years but now the bad patch seemed to be replaced by boom referring arrival of five ships for breaking at Gadani within past three months.

http://www.brecorder.com/index.php?id=544694&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

Pakistan committed to achieve MDGs: prime minister

ISLAMABAD: March 30, 2007: Prime Minister Shaukat Aziz Friday reiterating Pakistan's commitment to achieve the Millennium Development Goals (MDGs) said there has been tremendous success in different sectors especially reduction in poverty, improvement of health and educational facilities for the people in the last couple of years.

Addressing the launching ceremony of 3rd Pakistan Millennium Development Goals Report 2006 here at Prime Minister Secretariat, he said, the government is determined to improve social indicators in the shortest possible time.

He said with major achievement by reduction of poverty by ten percentage point from 34 to 24 while there has been progress on all other indicators included in the MDGs.

The prime minister said although the government has taken effective steps in various spheres to meet these goals but there is no room for complacency and more efforts would be made to achieve these goals according to schedule.

He said more funds would be allocated to achieve these goals through proper and effective implementation of resources.

The prime minister appreciating the indication of less developed districts and areas in the report stressed upon the provinces and district governments to play a major role in implementing all the programmes envisaged in the MDGS to improve the life of the people.

Shaukat Aziz said Pakistan is heading in all indicators set by the United Nations for human development in a positive way but there is still need to pay special attention to meet these objectives in the given time-frame with the help of civil society.

He said sharing of best practices with other countries can also be helpful to produce good results and Pakistan has the capability to adopt new ideas.

The prime minister said the country's economy has been doubled during the last five years, and expressed the confidence that this year Pakistan will again be in the top growing economies of Asia.

He said, "The government takes human development indicators seriously and is making all out efforts to ensure equitable distribution of resources with a view to accelerate and sustain the economic growth."

The prime minister said education and women development play vital role in national development therefore the government has taken different measures in this regard and concentrated on promoting education from primary to higher level besides empowering women to eliminate gender discrimination.

He said besides legislation to ensure empowerment of women and giving them equal status to prevent them from discrimination, the government has also increased the quota in the jobs for the women.

Referring to health sector improvements, the prime minister said special attention is being paid on reducing child and mother mortalities besides ensuring provision of best healthcare facilities to the people.

He said various awareness, prevention and treatment programmes have been launched successfully to control HIV AIDS, Malaria, Hepatitis, TB and other diseases.

Shaukat Aziz said clean environment is also imperative for sustained socio-economic development therefore the government has launched aggressive programme to ensure clean environment.

The prime minister said an aggressive population welfare programme has also been launched with an objective to bring down population growth rate and improve health services for the people.

He said devolution programme and empowering people at the grass roots level has proved to be instrumental in improving the access of basic services to the local communities and resolve their problems besides improving education and health services in the rural areas.

He said there is a need to prepare aggressive and pro-active policies to advance the social economic, political and cultural causes of people based on the promise of providing implementing and economic opportunities to the people irrespective of gender, cast, creed or region.

The prime minister expressed the hope that report of MDGs 2006 will act as a spring-board for localising MDGs at the district level by identifying progressive and lagging districts.

He said the progressive districts can act as good practice districts and serve as models for replicating social services in other districts.

Shaukat Aziz said, "I am confident that local level empowerment, rising awareness and financial autonomy will go a long way in helping us achieve the MDGs by 2015."

The prime minister said human development is the most important factor for any government, therefore, the government has been taking measures to improve living standard of the people.

He said the improvements in education, health, population welfare and water and sanitation sectors are essential for labour productivity and are the important indicators of MDGs.

Shaukat Aziz said the improvements in access to health, education and basic facilities by low-income households speaks of the government's unflinching commitment to improving the social indicators and living conditions of people across the social spectrum.

He said special emphasis was being given on other indicators of MDGs including universal primary education especially female education.

The prime minister said the success in attaining MDGs by 2015 will depend crucially upon following a set of consistent policies, which will continue to promote equitable growth and investment in human capital.

He said there is need to prepare aggressive and proactive policies to advance the social, economic, political and cultural cause of the people, based on the premise of providing employment and economic opportunities to the people, irrespective of gender, cast, creed or region.

The prime minister highlighting the co-operation between public and privates sector said, the government, the private sector, the civil society, the development partner should have to work together to steer the process of human development and achieve MDGs.

Referring to the implementation on the recommendations of UN Reforms Panel, in Pakistan, the prime minister said, UN family is major contribution in the improvement of living conditions of the people.

Deputy Chairman Planning Commission Dr. Muhammad Akram Sheikh in his speech highlighted the key objectives of the MDGS and future direction to achieve these goals.

He said out of 34 indicators, Pakistan is heading in seven, it is on the track in 15 and lagging behind in 12 indicators.

He expressed the confidence that with the implementation medium term development frame work and long term development plans, Pakistan will be able to achieve MDGs by 2015.

Secretary Planning Commission Zia ur Rehman speaking on the occasion it is third report being prepared by the Planning Commission to highlight the progress made towards MDGs 2015.

He said poverty reduction from 34 to 24 per cent is one of the salient feature of the achievements of MDGs by Pakistan while the government is also giving due consideration on education and health sectors.

Acting United Nations Resident Co-ordinator Dr. Khalif Bile speaking on the occasion appreciated the progress in MDGs in Pakistan.

http://www.brecorder.com/

 

[Neo]

March 30, 2007
Govt focusing on US, EU markets: PM: Expo Pakistan inaugurated

KARACHI, March 29: Prime Minister Shaukat Aziz said here on Thursday that the government was improving communication, infrastructure, reforming investment regulations and facilitating export industry to accelerate economic development in the country.

He said this while inaugurating the third Expo Pakistan 2007 at the Expo Centre on Thursday evening in Karachi, whose main objective is to promote Pakistan's exports and project the country's soft image in the international market.

Later talking to newsmen, the Prime Minister said it was “very encouraging” that standard of Pakistani products was improving and the country was gaining new markets all over the world.He also visited several stalls set up by the companies representing different sectors of economy and industry.A large number of national manufacturers and exhibitors from seventy countries of the world are participating in the mega event.

Earlier, the Prime Minister inaugurated the show by cutting a ribbon. He was informed that more than 200 Pakistani companies were displaying a wide rang of products at the exhibition.Shaukat Aziz said that production will also be enhanced as country's exports would increase with the passage of time. “This will create more jobs and foster prosperity in the country,” he noted.

He said that the government was pursuing a policy of creating market access for Pakistani products in US, European Union and other country for boosting exports.“We are also negotiating free trade agreements (FTAs) with different countries. We have concluded FTA with China and other countries to open doors for our goods in these markets,” he opined.He said that the Trade Development Authority of Pakistan (TDAP), the host of Expo Pakistan, was trying to arrange meetings of Pakistani exporters with the foreign buyers so that more products are exported from Pakistan.

He said that private sector has an important role in boosting country's exports as they are the producers of exportable items. “We are trying to help them,” he added.

Talking of the various steps taken for improving competitiveness and productivity, Shaukat Aziz said that the government has also improved working at ports and simplified procedures to ensure smooth flow of exports to different destinations and exporters should not feel difficulties.

He pointed out that exports have played a vital role in the development of developed countries. Export will also play a key role in Pakistan's development as well, he added.

http://www.dawn.com/2007/03/30/ebr4.htm

 

[Neo]

Current account deficit, GDP growth depends

KARACHI (March 31 2007): The State Bank of Pakistan (SBP) has projected a current account deficit of 4.5 percent of GDP against the original target of 4.3 percent for the current fiscal year denoting more than $6.5 billion. The deficit for the July-January period was $4.81 billion.

"The current account deficit is projected to widen during FY07 as, despite a sharp fall, growth in imports remains higher than that of exports," SBP said. The second quarterly report 2006-07 issued by the SBP says that it appears that the current account deficit might have peaked, if exports improve even moderately, the declining trend in the current account would continue.

The declining trend in exports persisted through most of July-January FY07 with the exception of the month of November when YoY monthly exports growth jumped. The country's central bank has stressed the need to focus more strongly on strategies to promote exports.

As a direct consequence of the strong aggregate demand as well as some commodity price shocks. Average inflation for FY07 is forecast to remain in the 6.7-7.5 percent range, well above the annual target of 6.5 percent, although still substantially lower relative to the 7.9 percent in the preceding year. Inflation, as measured by the consumer price index, averaged 8.04 percent during July-February from the same period a year earlier. This compared with 8.42 percent in the year ago.

The SBP projections indicate that FY07 real GDP growth is likely to grow in the range of 6.6 - 7.2 percent, close to the annual target of 7.0 percent and above the desired 6.0 percent long-term growth for the economy.

The achievement of the upper bound of the forecast however, would be critically dependent on a strong performance by the large-scale manufacturing and the livestock sub-sector (where investments have increased).

Foreign direct investment (FDI) has risen more than 95 percent to $2.97 billion in the first eight months of 2006/07, led by inflows into the financial, communications and energy sectors, official figures show.

The SBP stressed the need for a focused policy to take advantage of growing investment flows to stimulate industrial growth and diversification, as well as to help remove infrastructure gaps and bottlenecks.

"In particular, agriculture policy will need to focus on encouraging investment for the implementation of large water resource projects as well as improvements in transportation and storage infrastructure," it said.

"Similarly, investment in industry has to be encouraged to support value-addition in textiles, increase agri-product processing and allow the country to diversify production into the medium- and high-end technology products."

While the fiscal deficit is expected to be contained within the annual target, it is significant that the aggregate expenditure growth has been much greater than budgeted, and the growth of the deficit has been contained only due to extraordinarily strong direct tax receipts.

Fortunately, the government is already seeking to explore options to widen the tax net to under taxed areas in to raise the tax-to-GDP ratio. The SBP has said that given the importance of long-term debt markets to support investment, particularly in infrastructure projects, to increase domestic savings, and to improve the risk profile of commercial banks (which currently face mismatches in lending and deposit profiles), Pakistan needs to foster the development of a long-term institutional savings industry (pension and provident funds, mutual funds etc).

Implementation of the capital market reforms, aiming to encourage investment rather than speculation and improving risk management would also improve financial sector stability, it added.

http://www.brecorder.com/index.php?id=544985&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Curtail inflation to boost exports

KARACHI (March 31 2007): The State Bank of Pakistan has once again emphasised the need for curtailing inflation as it is eroding the competitiveness of Pakistani exports. During last eight months, says SBP, Pakistani rupee versus the US dollar remained broadly stable and depreciated by nominal 0.80 percent.

The Real Effective Exchange Rate (REER), however, appreciated by 2.5 percent due to 5.2 percent growth in relative price index - despite a 2.6 percent depreciation in nominal effective exchange rate, said SBP report, issued on Friday.

This gain in nominal depreciation of the weighted index was offset due to higher inflation in Pakistan compared to its primary trading partners and competitor countries. During July-February FY07 the exchange rate stability was maintained despite SBP shouldering $305 million - up front oil bill per month.

Strong vigilance by the Central Bank prevented speculative attacks or volatility and appreciation that emerged during the course of the year, self corrected itself given the changing inflationary trends in domestic and trading countries, said SBP.

External current account deficit for July-February FY07 is 3.8 percent of GDP as against a target of 4.4 percent with trade deficit close to $6.9 billion. The current account deficit has narrowed from month to month due to facilitation from home remittances and forex inflows of $4.6 billion as against $1.9 billion in the corresponding period a year ago.

SBP expects the inflows to go up further with two commercial bank GDRs, sovereign bond issues and quick disbursing assistance that could cumulatively amount to $1.5 to 2.0 billion.

The fall in import growth, say SBP, is in line with expectations. Lower oil prices and absorption of one-off impact of structural changes such as opening the telecom and auto sectors, the slow down in import growth was expected.

As a result the trade deficit was expected shrink. But due to slower than expected growth in exports the trade deficit continued to widen, albeit at a much slower pace, SBP added.

http://www.brecorder.com/index.php?id=544983&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

'GDP growth from 2000-06 stands at 5.6 percent'

ISLAMABAD (March 31 2007): Pakistan's average GDP growth from 2000-2006 stands at 5.6 percent but to achieve constant economic growth and to bring stability in the growth pattern, governance would be a prime factor. This observation was made during a presentation in a seminar on "Growth Diagnostic in Pakistan" at PIDE on Friday.

The authors Idrees Khwaja, Dr Abdul Qayyum and Asma Hyder noted Pakistan experienced the highest growth of 6.77 percent in 60's. It was 6.45 percent in the 80's and the growth rate of 5.6 percent during 2000-2006 showed some decline. However the average growth from 2003 to 2005-06 is 6.8 percent.

However, to sustain this economic growth and to stabilise its growth pattern, governance is one of the prime factors. According to international competitiveness report, Pakistan is placed at 77th position among 102 countries, each in respect of judicial independence, irregular payments in tax collection and corruption.

In the presentation, M. Idrees Khwaja focused on various factors responsible for growth, and said that the cost of finance, savings, infrastructure, low human capital, macroeconomic environment are at their acceptable levels, while governance, institutions (financial, legal, and labour market) and innovations are below acceptable limits.

The paper written by Dr Abdul Qayyum, M Idrees Khawaja and Asma Hyder noted that the institutional scenario is not very encouraging, as Pakistan is placed at 78th position. Only 15 percent of the Pakistani firms sponsored training of their employees. Besides there exists lot of disparity in the educational systems observing O/A level, Public/Private English medium schools, Urdu medium schools and Madressas, which create social differences and hamper human capital growth.

Similarly, the Innovation criteria is another negative factor, where Pakistan is declared as 94th among 102 nations. Lack of innovation is due to rent seeking behaviour of the industries like seeking subsidies, tariff protection and erstwhile bank loan defaults. Lack of research worsens the situation.

Regarding infrastructure, an important factor of development and economic growth, the authors referred to the Global Competitiveness Report 2006-07. Here Pakistan is rated parallel to India and China with a score of 3.4. However, it is well behind Malaysia, Thailand, Korea, Taiwan and Hong Kong, which are quite ahead with scores of 5.7, 5, 5.1, 5.4, and 6.4 respectively.

It was noted during discussion that post 9/11 era produced high growth due to rapid rise in remittances by the Pakistanis abroad and US financial support (recorded and unrecorded) on account of terrorism and other related challenges.

The participants agreed this was a temporary arrangement, and in a volatile environment, future economic growth is unpredictable. To make it sustainable, a lot has to be done in governance, innovations, and institutionalisation of departments.

In response to a question by this scribe Dr Abdul Qayyum expressed the view that if governance had been good in Pakistan, Pakistan would have benefited much like China and India as the global trends had favoured robust economic growth in Asia. He added that the continuous focus and interest of the developed countries might as well benefit Pakistan, and sustain its growth. Though gross savings were 23.6 percent of GNI the net savings at 15.4 percent, is not a favourable indicator.

The authors referred to a recent study of World Bank, which sees great potential for growth in five major sectors of Pakistan's economy like fisheries, mining, readymade garments, light engineering and dairy. But these face several serious constraints due to high freight, electricity outages, delay in rebate collections, government's involvement in cotton seeds, bribes at the harbour and customs, ill-defined fishing policy, non-transparent leases of marble mines, and poor property rights and short-term leases.

http://www.brecorder.com/index.php?id=545088&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

LSM grows by 9.8 percent in first half

KARACHI (March 31 2007): Large Scale Manufacturing (LSM) sector growth has recorded 9.8 percent during the first half of the current fiscal year, which is 1.1 percentage point higher than the last year by breaking last year's growth rate of 8.7 percent.

The SBP's quarterly report issued on Friday said that the LSM data of 100 items was not received by the Federal Bureau of Statistics (FBS) after September 2007 to make it possible to assess the industrial performance.

In the absence of any indicators of aggregate manufacturing the following analysis focuses essentially to production trends in individual large scale manufacturing industries, based on limited data received from various industrial associations and committees.

Therefore, this analysis may not be representative of developments in the overall LSM, and it may also not be consistent with the trends reported in the preceding SBP reports. The report said that the LSM data for quarter one and limited information for quarter two of the current fiscal 2007 suggests that the LSM growth is slightly higher the first half of the current fiscal as compared to the corresponding period of last fiscal.

Due to the unavailability of usual data, the analysis is limited to the sugar, automobile, cement, fertiliser, and petroleum products industries (that certainly is not representative of developments in the overall LSM, the report added.

According to the limited available information, the cement industry showed remarkable growth in production during July-December of fiscal year 2007. This was mainly attributed to enhance installed capacity during the last five years and rise in local as well as external demand.

Similarly, the sugar industry recorded 15.5 percent rise in production during the first half of fiscal year 2007 against a fall of 40.5 percent during the same period of the last fiscal. This rise mainly reflects the 15.2 percent increase in the sugarcane harvest during kharif of 2007.

The reports mentioned that the automobile sector recorded a growth of 6.8 percent during July-December, which is significantly lower than the 28.6 percent seen in the same period of the last fiscal and the lowest during the last five years.

This slowdown is largely a result of capacity constraints, slowing demand growth, and imports of used vehicles, the report added. Fertiliser industry is facing capacity constraints due to rapid growth in the production in recent years. The reasons were temporary shutdown of a plant for capacity expansion and revamping, and slowdown in urea demand due to sustained rise in the prices of urea amidst delay in the purchase of fertiliser during July-October 2006 in anticipation of subsidy on non-urea.

As in fertiliser, petroleum production also declined by 6.6 percent in the first six months of the current fiscal year as against a moderate growth of 2.5 percent in the corresponding period of the preceding year.

The slowdown was mainly attributed to the mismatch in production mix and the demand growth patterns. The refining operations produce various products in broadly fixed ratios, the demand growth has centered principally on diesel (as it is cheaper relative to petrol) and furnace oil (as demand for thermal electricity surged following a drop in hydro-electricity production).

The consumption growth of petrol is also weakened due to substitution with CNG. Thus in order to avoid surpluses in other products, refineries chose to operate at lower capacities.

The report said that electricity generation is not part of the LSM but this analysis is based on the information received from FBS. Electricity generation recorded a growth of 9.7 percent during first half as compared with 12.9 percent growth during the same period last year.

Despite high growth, country is facing acute energy shortages, which further augmented due to sustained high growth. In this background, the government of Pakistan has announced a "policy for development of renewable energy for power generation" to overcome the energy shortage in the economy.

Delay in release of usual monthly data set (of about 100 items) on large scale manufacturing by the Federal Bureau of Statistics after September 2007, makes it impossible to assess industrial performance.

The failure to provide timely data is quite troubling, not only for the implications for macroeconomic decision-making but also for the damage to the credibility of the institution and official statistics.

http://www.brecorder.com/index.php?id=545017&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

Pakistan should diversify exports to China: KCCI

KARACHI (March 31 2007): "Traditionally, throughout in its trade relations with China, Pakistan has had a chronic trade deficit. It is primarily because China is a competitor in most of the major sectors of Pakistan's potential export areas." This was stated by Danish Saeed, Chairman of the Special Committee on Regional Economic Affairs, while addressing the meeting of the sub-committee.

He added that after formal signing the Pakistan-China FTA, bilateral trade between the two countries surged by 44 percent over the previous fiscal year. He said that although the bilateral trade has increased but the balance remains overwhelming in China's favour, whose exports to Pakistan amounted to $2.7 billion, compared to Pakistan's exports $464 million in 2005-06, whilst was $525 million and $303 million respectively in 2000-01. This is a very critical situation, which depicts that Pakistan is increasingly becoming only an importing partner of China.

He said that enhancement and diversification of export items from Pakistan to China in the traditional and non-traditional items could lead to narrowing down the trade imbalance by utilising the border routs.

He also expressed grave concern that Pakistani business community is ignoring the exports potential to China and has remained content with their established export destinations ie, US and the Western Europe, and hardly made serious efforts either to diversify the export base or to explore other areas and regions for enhancing the exports volume. This fixed mind-set with the Western markets and non-innovative export approach has constantly been undermining country's export potential, he added.

The participants also noted that China offers huge market for Pakistani rice, fruits and herbal medicines that remain untapped because of inability to meet their standards. Pakistan exports eastern and herbal medicines to China in the raw form through northern land route but these fetch little foreign exchange while Chinese process these raw medicine, value add, package and market them around the world and earn 20 time more.

http://www.brecorder.com/index.php?id=545045&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

Doing business becomes easier in Pakistan: World Bank

31 March 2007

ISLAMABAD — Pakistan has been urged by the World Bank/IFC to direct its Security and Exchange Commission of Pakistan (SECP) to do more to increase compliance with respect to immediate disclosure of large party related transactions, beneficial ownership and control by shareholders and companies.

"More effective enforcement has helped improve compliance", the bank said in a "Doing Business in South Asia 2007" new report released yesterday. It said that access to information about specific transactions by minority shareholders prior to filing a lawsuit can also be strengthened. The burden of proof for holding directors liable is generally high.

"Pakistan needs to strengthen compliance with its rules governing annual general shareholder meetings. Some companies still do not hold them, or hold them in difficult to reach or obscure locations. This is particularly important because the law does not allow voting by mail or electronically".

Pakistan is runner-up reformer in region, Karachi has the country's most business-friendly regulations. Doing business became easier in Pakistan in 2005-06, the new report by the World Bank and its private sector arm — International Finance Corporation (IFC) said. Two reforms in Pakistan reduced the time, cost, and hassle for businesses to comply with legal and administrative requirements. Out of the six major Pakistani cities covered by the report, Karachi has the most business-friendly regulations as measured by the Doing Business reports, while Quetta imposes the most complex and costly administrative barriers. Faisalabad, Lahore, Peshawar, and Sialkot rank in between.

The report compares business regulations in the World Bank's South Asia region with 175 economies around the world. Pakistan, the runner-up reformer in South Asia, implemented reforms to simplify cross-border trade and reduce corporate tax rates. The top ranked countries in the region are the Maldives (53) and Pakistan (74), followed by Bangladesh (88), Sri Lanka (89), Nepal (100), India (134), Bhutan (138), and Afghanistan (162).

Doing Business in South Asia 2007 is the third report in a series of South Asia regional reports based on the methodology of the annual global Doing Business report. Doing Business tracks a set of regulatory indicators related to business start-up, operation, trade, payment of taxes, and closure by measuring the time and cost associated with various government requirements. It does not track variables such as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates. This year's report covers six Pakistani cities in four different provinces.

Recent reforms have resulted in a drop in the number of days required to import in Pakistan: from 39 to 19 days. Pakistan now ranks 51st worldwide in time to import, based on a concerted effort to complement trade liberalisation with improved trade logistics. Pakistan also reformed positively in the area of taxation by steadily reducing its corporate tax rate, from 39 per cent in 2004 to 37 per cent in 2005 and 35 per cent in 2006. Like most other countries in the region, Pakistan scores well on the indicators related to starting a business (54th out of 175) and protecting investors (19th out of 175).

"Despite these improvements and recent reforms, Pakistan can do better on the overall ease of doing business", the report said. It finds that the greatest remaining obstacles for the country include enforcing contracts through courts, labour regulations, and paying taxes. For example, it takes 880 days or about 2.5 years in Karachi to resolve a commercial dispute. Despite the reduced tax rate, businesses must still spend about two months per year or 560 hours to comply with all tax regulations. And an employer who is faced with less demand for the products he sells must pay an average of 90 weeks of salary to make a worker redundant.

Different provincial and municipal level regulatory requirements, as well as differences in the implementation of national-level regulations, either enhance or constrain local business activity. This explains, for example, why in Sindh, it only takes six procedures and 50 days to register property, whereas it takes 12 procedures and 96 days in Quetta, with the provinces of Punjab (Faisalabad, Lahore, Sialkot) and NWFP (Peshawar) falling in the middle.

"Provinces can learn from each other in the areas of business regulation where there are important regional variations", the report added. In Lahore, for example, starting a business is easiest; in Peshawar, resolving a commercial dispute through court is easiest; and in Karachi, registering property can serve as best practice.

One of the most interesting findings of the report is how Pakistan could improve significantly if it simply adopted the best practices in business regulation that already exist within the country.

Pakistan could jump from its current position at 74th to 52nd on the Doing Business rankings, said Caralee McLiesh, one of the authors of the report.

http://www.khaleejtimes.com/Display...h/business_March833.xml&section=business&col=

 

[Janbaz]

Government to expand microfinance coverage

OUR STAFF REPORTER
ISLAMABAD - Prime Minister Shaukat Aziz on Saturday said that the government is making all out efforts to expand microfinance coverage and its out reach from the present 1 million to 3 million households by 2010.
“Microfinance is an important pillar and integral part of Pakistan’s poverty reduction strategy and the government is expanding its coverage,” the prime minister said while talking to Sam Daley Harris, Director Micro Credit Summit Campaign who called on him here.
Aziz maintained that micro-credit is the best way of reaching out the marginalized and the forgotten and can change the destinies of the people of developing and under-developed countries. He said the government is making multiple interventions to cause a dent in poverty.
As part of our lasting and sustainable poverty reduction strategy, the prime minister said, we are focusing on creating income-generating avenues for the poor and disenfranchised and specially the women through micro credit institutions.
Aziz said the government has adopted a holistic and all-inclusive strategy for the spread of micro-credit. The government, he said, is promoting public-private partnership and encouraging civil society organizations and enterprising philanthropists to come forward and involve themselves in organizing microfinance credits to the less privileged sections of the society.
The prime minister said the banks and entrepreneurs should also setup micro finance institutions to help the less privileged sections of society to improve their living standards.
He said in Pakistan microfinance is poised for growth, as the regulatory environment for Micro Finance Institutions (MFIs) in the country presents all the major features of a conducive and enabling policy environment for MFIs.
This includes sustained commitment and substantial investment by the government to help develop the sector, a responsive regulatory framework and an apex institution to extend on-lending and institutional building funds to NGO & MFIs.
He said there is a growing trust between policy makers and practitioners to work jointly to develop the sector.
Giving an overview of the economic situation, the prime minister said as a result of the efforts made during the last seven years, the economic landscape of the country has completely transformed. The size of economy and per capita income has doubled and poverty declined by 10 percentage points.
He said the government is acting on a policy of growth with equity. It has undergone a paradigm shift in its approach to planning and policy formulation. The shift is towards formulating people centric plans and policies that benefit the common at the grass roots level.
He said the thrust on Millennium Development Goals (MDGs) with emphasis on growth and enhanced pro-poor allocations is an important part of the vision 2030 adopted by the government. The government, the Prime Minister said is focusing on eradication of poverty and hunger, universal primary education, gender equality and women empowerment, reduction in child mortality, better maternal health and on ensuring environmental sustainability. He said during the last four years public expenditure on education and health has grown by 21 per cent and 19.5 per cent respectively.
Sam Daley Harris appreciated the efforts made by Pakistan to upscale the outreach of microfinance.
He said Pakistan is effectively using microfinance for income generation and employment creation opportunities for the deprived sections of the society.
The meeting was attended among others by Secretary General Finance Nawid Ahsan, Principal Secretary to the Prime Minister Khalid Saeed and senior officials.

The Nation.
http://www.nation.com.pk/daily/apr-2007/1/bnews2.php

 

[Janbaz]

FDI may touch $7 billion mark this year: Dr Shamshad

RECORDER REPORT
KARACHI (April 01 2007): State Bank of Pakistan Governor Dr Shamshad Akhtar has said that the influx of foreign direct investment (FDI) is likely to touch $7 billion by the end of the current fiscal year. Addressing a seminar, titled 'Economic Profile of Pakistan', at Karachi Expo Centre.

She said that foreign investors were taking interest in various sectors, particularly the banking and energy. She said that acquisitions of local banks by foreign banks, and GDRs would take the inflow of FDI to $7 billion by the end of this fiscal year and added that Samba group had recently remitted $100 million in connection with the acquisition of Crescent Commercial Bank.

She said that Pakistan was situated at a strategic geographical location in the region, and coupled with structured reforms and macro economic stability the country provided lucrative opportunities to investors. The country provides conducive and friendly environment for both local and foreign investors, she remarked.

The Governor of the central bank also mentioned the facilities and incentives the country is offering to exporters and foreign investors. Dr Shamshad in her keynote speech discussed several facets of Pakistan in its stride towards attracting more FDI. She said that that the government was implementing friendly and open policies to facilitate foreign trade and investment.

Commerce Minister Humayun Akhtar said that "having been only three years since it was implemented the first time, Expo Pakistan has become the leading brand of Pakistan's exports".

He said that he had instructed the newly formed TDAP to register the 'Expo Pakistan' name as a trademark. The conference was also addressed by Salim Raza, CEO of Pakistan Business Council. He spoke on 'Evaluation of Sectoral growth & Investment Opportunities in Pakistan with special reference to export promotion'.

Dr A.R Kemal, Consultant to SBP Governor (Academia Perspective) spoke at length on the potential of FDI in export-oriented manufacturing industries. The gathering was lso addressed by Nasir Vohra, Convenor Banking, APTMA (Business Community Perspective).

Business Recorder.
http://www.brecorder.com/index.php?id=545423&currPageNo=1&query=&search=&term=&supDate=

 

[Janbaz]

World Bank likely to assist in FATA development

ABDUL QADOOS
PESHAWAR (April 01 2007): The World Bank is likely to extend assistance in the development of the Federally Administered Tribal Area (FATA) for poverty reduction and bringing the backward parts at par with other developed areas of the country.

This was hinted in a meeting between Paul Wade, Senior Country Economist for poverty reduction and economic management, South Asia, and the officials of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) here at the zonal office of the apex trade body.

Those present on the occasion were FPCCI vice president Fazal Elahi, president of Industrialists Association, Peshawar (IAP) Nauman Wazir, senior vice president of Tribal Area Chamber of Commerce & Industry (FPCCI) Abdul Hakeem Shinwari, Convenor of Women Chamber of Commerce & Industry (WCCI) NWFP Farah Naz, Faiz Rasool Khan and Riaz Arshad. Regional Chief of Small & Medium Enterprise Development Authority (Smeda) Javid Khattak also attended the meeting.

The trade bodies' officials briefed the World Bank officials about the potential and problems of trade and industry in the province and of the tribal belt. Paul Wade told the businessmen that he would take up the matter with senior World Bank officials in Islamabad as well as in headquarters. "I would talk to World Bank officials and will try to mobilise the management," he said.

However, he added that the Bank would require comprehensive data and survey on the potential sectors and situation in the tribal belt. He said that he was working with NWFP government and Sarhad Chamber of Commerce & Industry (SCCI) for the last six years, and would also work with Tribal Area Chamber for the preparation of a strategy which would be completed within two years.

He said that Tribal Chamber, in collaboration with FPCCI and Smeda, would work out what should be done for the development of tribal area. The World Bank, he said, would analyse the economic growth of NWFP and would hold negotiations with different stakeholders from both public and private sectors to seek their opinion on the improvement of business environment in the province.

He said that the bank would also conduct a survey of different sectors of the province to look into their contributions towards economic development. He said that the bank was also looking to form a working group comprising key sectors, stakeholders from private sector and concerned government organisation.

The World Bank official was appreciative of the measures taken by the provincial government for economic development and giving more space for private sector.

Business Recorder.
http://www.brecorder.com/index.php?id=545464&currPageNo=1&query=&search=&term=&supDate=

 

[Janbaz]

'Rs 200 million biotechnology project being launched'

RECORDER REPORT
LAHORE (April 01 2007): Punjab Minister for Agriculture Arshad Khan Lodhi has disclosed that a biotechnology project worth of Rs 200 million has been launched to develop new varieties of crops having maximum per acre yield. These varieties would be free from disease also, he added.

The minister was talking to a four-member delegation of agri-scientists of Ayub Research Institute at his office on Friday, said a departmental spokesman. The minister said that with active utilisation of biotechnology the new varieties, earlier took 10 to 15 years time to develop, could now be brought out in a short time.

The minister disclosed that two new improved variety of cotton and three new varieties of wheat were soon going to be developed and the formal approval would be granted in a meeting of Punjab Seed Council in near future.

The Punjab government is striving hard to feed the rapidly increasing population through the introduction of newest agro-based technology and help increasing per acre yield so that the farmers can get more profits. He expressed his satisfaction over that the progressive farmers for producing the wheat yield of 60 to 70 maunds per acre. He said that we were proud of those farmers who were getting maximum yield of every crop. He advised the farmers to get benefit from the expertise of the agriculture department for increasing yield.

Business Recorder.
http://www.brecorder.com/index.php?id=545527&currPageNo=1&query=&search=&term=&supDate=

 

[Janbaz]

Rs 15 billion gas projects being completed in Punjab, NWFP: Jadoon

ISLAMABAD (April 01 2007): Minister for Petroleum and Natural Resources, Amanullah Khan Jadoon said on Saturday that gas projects worth Rs 15 billion were being completed by Sui Northern Gas Pipelines Limited (SNGPL) in Punjab and NWFP.

Presiding over a high level meeting here to review goals and targets set by the government in the gas sector, he said these projects, when completed, would usher in an era of rapid economic development in the country.

The minister said on the directives of President General Pervez Musharraf and Prime Minister Shaukat Aziz, the government was taking concrete steps to provide gas facility to every nook and corner of the country.

He said provision of gas facility in difficult and high mountain areas was a dream for the people of Murree which had come true by the strenuous efforts of the government which completed the gigantic task at a cost of Rs 800 million.

Amanullah Jadoon said all out efforts were being made to provide gas facility to quake affected areas at a cost of Rs 3.5 billion in shortest possible time. Managing Director, SNGPL Rashid Lone briefed the meeting about gas development projects being undertaken by the company.

He informed that work on 703 gas projects in the province of Punjab and NWFP was in progress. He said that 16 inches diameter gas pipeline had been laid from Hattar to Abbottabad costing to Rs 8 billion. The meeting was also attended by the Additional Secretary Petroleum, Shaukat Hayat Durrani, Director General (Gas), Saeedullah Shah and senior officials of the Ministry and Sui Northern Gas Company.

Business Recorder.
http://www.brecorder.com/index.php?id=545534&currPageNo=1&query=&search=&term=&supDate=