Pakistan Economy - News & Updates - Archive

[Neo]

April 06, 2007
LSM growth target may not be achieved

By Khaleeq Kiani

ISLAMABAD, April 5: Large-scale manufacturing growth has slowed down in the last few months owing to capacity-constraints in some of the leading industries and slower demand in others, showing signs that 13 per cent LSM growth target for the current fiscal year may not be achieved.

According to the official data available with Dawn, the LSM has grown at a rate of 9.98 per cent in the first seven months (July-January) of the current fiscal year.

The statistics collected by the ministry of industries and production directly from industrial units are based on 37 leading industrial sectors, which account for 45 per cent of the overall manufacturing.

Traditionally, LSM data is compiled and made public by the Federal Bureau of Statistics on a monthly basis.

Therefore, the data has been used to determine trends, given the fact that firm data on manufacturing output is not available beyond first three months of the fiscal year.

According to the State Bank of Pakistan, the delay in the release of usual monthly data on LSM by the Federal Bureau of Statistics after September 2007, was making it impossible to make any assessment of the industrial performance.

“This failure to provide timely data is quite troubling, not only for the implications of macroeconomic decision-making, but also for the credibility of the institutions and official statistics.”

The ministry of industries data suggests that many industries showing substantial growth in the first quarter (July-September) performed dismally in the next four months, and it was resulting in a significant fall in the overall output.

For example, cotton cloth, cotton yarn, caustic soda, cars and jeeps and tractors grew at the rate of 14.3 per cent, 13.3 per cent, 12.4 per cent, 12.7 per cent and 7.4 per cent, respectively, in the first three months of the current fiscal,but their growth rate slowed down to 9.6, 11.5, 7.3, 5.32 and 2.81 per cent, respectively.

Overall, automobile sector grew by 6.8 per cent, which was significantly lower than 28.6 per cent growth of the same period last year and lowest in the last five years.

This slowdown, according to the central bank, was due to capacity-constraints, slowing demand growth and imports.

Moreover, growth of cares and jeeps in the first six months decelerated to 8.4 per cent as compared to 30.5 per cent of the same period last year.

Similarly, some industries which were growing slower than last year remained dull even at the end of seven months. These also included almost all petroleum products, fertilisers, electricity meters, fans, bulbs, television sets and bicycles.

The statistics indicate that the entire fertiliser sector was no more growing because of capacity-constraints and the situation would remain so even next year.

The fertiliser sector’s production declined by 3.1 per cent in the first seven months and stood at 3.598 million tons compared with 3.713 million tons of the same period last year.

Of this, urea production reduced nominally by 0.65 per cent, while ammonium nitrate dropped by 6.3 per cent. The nitrogen phosphate fell by a drastic 22 per cent to 169,000 tons in seven months of the current year compared with 216,000 tons last year.

Likewise, NPK production dropped by more than 46 per cent while nitrogenous and phosphatic fertilisers decreased by 2.2 per cent and 4.6 per cent, respectively.

Sugar production in seven months increased by more than 23 per cent to 1.66 million tons compared with 1.347 million tons last year. The production of cigarettes has increased by 1.35 per cent, while cotton yarn and cloth production grew by 11.5 per cent and 9.57 per cent, respectively.

The production of paper dropped by more than four per cent in the first seven months. A simultaneous reduction in output was also witnessed in printing, writing and packing to the extent of 4.4 per cent, 3.1 per cent and 5.7 per cent, respectively. Production of chip-board also declined by 4.7 per cent. On the other hand, production of paperboard increased by 7.47 per cent.

The production of soda-ash fell by 1.6 per cent, but that of caustic soda increased by 7.26, although its pace of growth declined from 12.4 per cent when compared with first three months of the current year.

According to an official summary, the items which have shown a decline even in first three months are high- speed diesel (15.6 per cent), furnace oil (12.7pc), phosphatic fertiliser (7.8pc), electricity meters (19.9 per cent), fans (9.1pc), bulbs (10.4pc), TV sets (31.3pc) and bicycles (1.4pc). By the end of seven months, the bicycle production reduced further to 24.5pc.

The government in the annul plan 2006-07 had based its economic growth forecast of seven per cent on the hope that “automobiles, petroleum products, chemicals, cement, cotton yarn and cloth, textile made-ups, engineering goods, ACs, motorcycles, fertilisers and electronic items… would be the main growing industries”. It has, however, emerged that the growth of these areas has been slower than last year, lower than the target.

In construction material, glass-sheet production dropped by 12.1 per cent, but cement production increased by 22.69 per cent in seven months to 12.74 million tons.

Similarly, production of coke, pig-iron, rolled billet and HR coils increased significantly by 47 per cent, 51 per cent, 122 per cent and 56 per cent, respectively, while production of inguts and billets, CR coils and galvanised products declined by seven per cent, two per cent, five per cent and 2.6 per cent, respectively.

http://www.dawn.com/2007/04/06/ebr1.htm

 

[Neo]

Friday, April 06, 2007

Weak judiciary, law & order, sleaze hurdles to investment: US report

ISLAMABAD: Businesses operating in Pakistan have repeatedly called for strengthening law and order. Corruption and a weak judicial system remain recurrent and substantial disincentives to investment and the contract enforcement can be difficult for the US and other foreign investors in Pakistan.

Market leaders in the cement and sugar industries are alleged to have formed cartels. In late 2004, the United States and Pakistan launched negotiations on a Bilateral Investment Treaty (BIT), which would provide US investors in Pakistan with significant legal protections. While negotiations continue, differences persist on issues of importance to the United States.

This has been highlighted in the National Trade Estimate 2007 report released by the United States Trade Representative office this week, which details significant barriers to US trade and investment and the broad array of US actions to reduce and eliminate those barriers.

The US report’s chapter on Pakistan has identified that on June 24, 2006 the Supreme Court of Pakistan declared the privatization of Pakistan Steel Mills Corporation, the country’s largest steel mill, unconstitutional and illegal. The Privatization Commission has filed a review petition ( that is, an appeal) in response to the Supreme Court action.

The US report said the court decision may adversely impact the privatization process by casting doubts on whether the government will be able to fully carry out its ambitious privatization agenda. Nonetheless, the government’s commitment to continued privatization of its holdings appears firm.

Businesses operating in Pakistan have repeatedly called for strengthening law and order. Corruption and a weak judicial system remain recurrent and substantial disincentives to investment, it mentioned. Pakistani laws targeting corruption include the 1947 Prevention of Corruption Act, the 1973 Efficiency and Discipline Rules, and most recently the 1999 National Accountability Bureau (NAB) Ordinance. Previously, NAB, the Federal Investigation Agency (FIA), and provincial Anti-Corruption Departments shared official responsibility for combating corruption. In October 2002, Pakistan’s cabinet approved a National Anti-Corruption Strategy (NACS) that identified areas of pervasive corruption and recommended time-barred measures and reforms to combat corruption. The NACS also named NAB the sole anticorruption agency at the federal level, says the US report.

The US report pointed out that contract enforcement can be difficult for the US and other foreign investors in Pakistan. Citing an example, a long- standing investment dispute between a major US multinational company and a local partner has raised concerns about the sanctity of international arbitration awards regarding contracts between private parties. In June 2005, the Lahore Civil Court ruled in favour of the US multinational company, upholding the original arbitration settlement. The local partner has exercised its right to file an appeal in the Lahore High Court, which is still pending, the report added.

In 2004, Pakistan’s Cabinet approved the country’s joining the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Pakistan’s Cabinet ratified the New York Convention on July 14, 2005 and conveyed the instrument of ratification to the United Nations Secretary-General, who is the depository of such instruments. To implement the convention, Pakistan issued an ordinance, valid for only 120 days, that has been re-promulgated three times. The government intends to continue renewing the ordinance until parliament approves implementing legislation. Legislation to implement the convention is currently with the National Assembly, the lower house of parliament. Pakistan’s ranking in the Transparency Internationals Corruption Perceptions Index dropped from 129th out of 145 countries in 2004, to 144th out of 158 countries listed in 2005. Pakistan scored 2.1 points (on a scale of 0-10) on Transparency Corruption Perception Index in 2005.

Foreign investors are generally free to establish and own business enterprises in Pakistan, with the exception of five restricted areas: arms and munitions, high explosives, currency/mint operations, radioactive substances, and new non-industrial alcohol plants. While foreign ownership of agricultural investments may not exceed 60 percent, there are no ownership limits in other sectors of the economy except Pakistan’s foreign equity limits in banking and insurance. There is no minimum investment requirement for manufacturing, a $150,000 minimum foreign investment requirement in non-financial services and a minimum investment requirement of $300,000 in agriculture, infrastructure projects, and social services such as education and health.

To comply with its TRIMS obligations, Pakistan has eliminated all local content requirements, including those in the automobile sector. The automobile sector was the only sector that was subject to the so-called deletion program mandating the use of domestic inputs.

Competition Policy and Privatization: Although Pakistan has enacted a Monopolies and Restrictive Trade Practices Ordinance, and established the Monopoly Control Authority (MCA), regulatory oversight suffers from resource constraints. Moreover, state-owned firms are exempt from the provisions of this law. Thus, in Pakistan, where state-owned firms dominate several sectors, competition regulation remains underdeveloped. At present, the MCA is engaged in finalizing a competition law with technical assistance from the World Bank. This will entail capacity building and creation of a new Competition Authority. The state-owned Water and Power Development Authority (WAPDA) retains control of power transmission and distribution throughout much of the country outside of Karachi and continues to be highly subsidized. In the financial year ending June 2006, the Privatization Commission privatized eight entities, including the Pakistan Telecommunication Company (PTCL), Karachi Electric Supply Corporation (KESC) and United Bank Ltd (via an initial public offering). The sale of these major state assets has reduced the government’s role in power and telecommunications, the report said.

The report further identified that the state, however, continues to hold important equity stakes in the oil and gas, civil aviation, electric power and steel sectors. In FY2007, the government of Pakistan plans to privatize 26 companies, including: Sui Northern Gas Company (Pakistan’s largest gas company), Sui Southern Gas Company, Pakistan State Oil (PSO) (Pakistan’s largest gasoline retailer), and Pakistan Petroleum, Ltd. The government has offered global depository receipts of the Oil and Gas Development Company (Pakistan’s largest energy exploration company) in international securities markets.

In an effort to create market competition in former monopoly sectors, the government of Pakistan has already issued licences to long-distance and local telephone operators, as well as to cellular and wireless local loop operators, ending the PTCL’s monopolies. It has licensed three private airlines to compete with state-owned Pakistan International Airlines. In retail food sales, the government has used pricing in its chain of several hundred Utility Stores to create price competition in essential foodstuffs such as flour, rice and lentils. However, market leaders in the cement and sugar industries are alleged to have formed cartels.

http://www.dailytimes.com.pk/default.asp?page=2007\04\06\story_6-4-2007_pg5_3

 

[Neo]

Pakistan urged to improve IPR, dispute settlement mechanisms

6 April 2007

ISLAMABAD — Pakistan has been advised by its strategic planners to urgently improve Intellectual Property Rights (IPR) and dispute settlement mechanisms for attracting substantial Foreign Direct Investment (FDI) in the country.

Official sources said that the government was urged to take into account the approach of China who invited FDI manifold by improving IPR practices and by establishing commercial courts for timely dispute resolution.

Sources said that one of the main impediments that was blocking the signing of the much delayed Bilateral Investment Treaty (BIT) with the United States was the failure in improving intellectual property rights.

The government has already announced lucrative incentives for foreign investors. But the response of foreign investors remains lukewarm because of the concerns about business climate and security. It is, therefore, essential to create a business friendly environment that is conducive for both domestic and foreign investment particularly in the electronics sector, the planners further recommended.

The government was urged to help develop the electronic industry by attracting foreign investment in the field like many other South East Asian countries. Electronics is a highly innovative field where new developments are taking place at a very fast pace. In today's globally competitive business environment, electronics firms are under relentless pressure to provide innovative products in shorter time cycles at reduced costs, and with improved quality.

The electronics industry is driven by demands for products that are smaller, lighter, cheaper, and better than the ones they replace. In this scenario, countries like Pakistan that have yet to make their mark in the field of electronics have to go a long way before an electronics industry that is capable of attaining international competitiveness can be developed.

With this background, the objectives of a development strategy for the electronics sector are to; Build on the existing capabilities in electronics; Attract FDI in electronics sector to facilitate the transfer of technology; Strengthen the capability in assembly and testing of electronic components; Develop and enhance value added in the industry by moving into activities such as research and design; Support the development of indigenous supply chain; Raise the share of electronics in the output of the manufacturing sector from under 3 per cent at present to 10 per cent in 2010 and to 20 per cent in 2020. It was also said that in order to achieve the broader objective of developing and sustaining an electronics sector that has the potential to emerge as one of the key drivers of economic growth, a coherent action plan is needed that assigns a leading role to the private sector while emphasizing the role of the public sector as a facilitator.

The first step is to foster the existing firms in the electronics sector through supportive public policies. The private sector often complains about the inconsistency of government policies regarding the electronics industry. While the government has taken steps to ensure policy consistency, the private sector remains skeptical. There is, therefore, a need to restore the confidence of the public sector in the continuity of public policies, the planners proposed.

The electronics activities in the country are mostly assembly and repair oriented. A few manufacturers are making a narrow range of electronics gadgetry such as security systems, payphones, electronic sign-hoards, stabilisers, uninterruptible power supplies, inverters, radio and cassette-players, and dish receivers etc. The government, the official planners believed, can encourage these businesses by removing the customs duty on the import of electronics components. There is no dual use of these components and their cheap import will enable the industry to increase its scale of operations.

Large scale smuggling of electronics products has hindered the growth of domestic electronics industry. Urgent steps were proposed to curb this practice in order to provide a level playing field to domestic producers.

The global electronics production is controlled by multinationals that possess the necessary product and process technologies. Their innovative capabilities allow them to develop new electronics products at a very fast pace, so that older product lines are becoming obsolete faster than ever before.

Southeast Asian economies developed their electronics industries first by attracting foreign direct investment in low cost assembly operations and then by developing their design and manufacturing capabilities through the transfer of technology. If Pakistan is to develop its electronics industry, it must attract foreign direct investment in the electronics sector.

Electronics is a knowledge intensive industry. The Southeast Asian economies supported their electronics industries through massive investment in human resource development.

http://www.khaleejtimes.com/Display...l/business_April131.xml&section=business&col=

 

[Neo]

U.S. may aid Pakistan on power

ISLAMABAD, Pakistan, April 6 (UPI) -- The United States has said it is prepared to offer financial and technical support to Pakistan to solve its energy problems.

"The next three years are going to be very difficult and challenging for Pakistan to resolve its energy crisis for which we are ready to offer our financial and technical support," said Gordon Weynand, an energy expert with the U.S. Agency for International Development.

The comments, made in Islamabad, were reported Friday by the Dawn newspaper.

Pakistan is looking at a number of options to meet its rapidly growing energy needs, including the controversial gas pipeline from Iran to India via its territory. The United States opposes that deal because of international scrutiny of Iran's nuclear program.

Pakistan is also looking to import gas and power from Central Asia. Weynand said Washington would help Pakistan import electricity from Tajikistan.

"Our mission is to put together economic growth strategy for Pakistan for the next five years and to see how energy fits into the Pakistani economy," he said.

http://www.upi.com/Energy/view.php?StoryID=20070406-115526-8366r

 

[Janbaz]

Plan okayed to explore new biofuel sources

By Aftab Maken
ISLAMABAD: To diversify the energy basket and lessen dependency on imported fuels, the Planning Commission has approved a project worth Rs295 million to explore new sources of biofuels.

Besides determining key parameters, the project with the collaboration of private and public sectors would also work on the production of ethanol and methane gas from lingocellulosic biomass over the next three years.

Four major labs of National Institute for Biotechnology and Genetic Engineering (NIBGE), Faisalabad; School of Biological Sciences, University of Punjab, Lahore; Institute of Industrial Biotechnology, GCU, Lahore; PCSIR laboratories, Lahore and Shakarganj Sugar Mills Ltd, Jhang would take part in the research process, reveals an official document available with The News on Friday.

The Economic Coordination Committee (ECC) of the cabinet had approved E10 fuel (90 per cent gasoline and 10 per cent ethanol) on experimental basis in Islamabad and Karachi a few months ago. A few sugar mills are already producing ethanol from molasses.

It is roughly estimated one tonne of biomass can produce 200 litres of bio-ethanol from the prevailing technology, but the yield could be enhanced to the level of 350-400 litres per tonne of biomass by doing research and developing new techniques.

The document foresees shortfall in the availability of ethanol when the existing system for production of ethanol runs on full capacity.

The European Union is currently meeting four per cent of its energy needs from biomass and expects more than double its ethanol production from the existing level of 69 million tonnes of oil equivalent to 185 MT in 2010.

Pakistan has abundant available sources for biomass in the form of agriculture residue such as wheat straw, rice straw, cotton sticks, bagasse, corn stover, corn cobs and various other crops.

As the biogas plants have been installed in India, China and other countries in the region like Nepal, and Sri Lanka, Pakistan, which is producing more than one billion gallon of ethanol annually from the molasses, would also develop a process from laboratory to pilot-scale for the conversion of biomass to ethanol.

The use of biogas is helpful in improving the quality of household life further. It can partially replace the diesel to run IC (Internal Combustion) engines for water pumping, small industries like floor mills, saw mills, oil mills. It would reduce carbon pollutants as well.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=49913

 

[Janbaz]

Economy hits $135bn mark

LAHORE: State Minister for Finance, Omar Ayub Khan on Friday said the total size of Pakistan’s gross domestic product (GDP) has risen to the level of $135 billion from $62 billion over a period of seven years.

“The consistent growth of national economy is just due to the efforts made by the present government to put the country on the path of high growth,” he said while inaugurating a two-day seminar on ‘Value Addition through Internal Audit’ at a local hotel.

Omar Ayub Khan said country’s economy had been growing at a rate of 7 per cent over the last several years and hoped that it would post the same growth rate this year. He said there is great potential for growth in the agriculture sector especially in the milk production. He said Swiss milk processing firm, Nestle has set up Asia’s biggest plant in Pakistan to benefit from the business opportunities.

“More and more foreign companies are planning to invest in Pakistan due to the enabling environment and a big consumer base,” he said. Auditor General of Pakistan, Muhammad Younis Khan, Conference Chairman Iftikhar A Chaudhary, US Internal Audit expert, John White and Director General Works Audit, M Jamil Bhatti were present on the occasion.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=49924

 

[Janbaz]

Pakistan to have $2,250 per capita income in '20: report

SHAHBAZ RANA
ISLAMABAD - Pakistan would be having $ 2,250 per capita income per annum in 2020, projected a report by Eminent Persons Group which was presented to the Asian Development Bank.
"Towards a New Asian Development Bank in a New Asia", report painted a rosy picture as saying, " by 2020 we envision a dramatically transformed Asia. It will have conquered widespread absolute poverty in most countries, with more than 90 per cent of its people living in middle-income countries".
Pakistan's per capita income per year is around $ 850 and to achieve the milestone of over $ 2000 in next 12 years, the country has to take major initiatives that requires not only to maintain the pace of current economic growth but also to enhance it further in the coming years.
However, recently released Asian Development Outlook projected GDP growth in the year 2008 at 6.5 per cent against government's own target of 7.6 percent in Medium Term Development Goals.
The report says that by 2020 Asian per capita income would be comparable to Latin America's per capita income and its share of global GDP would reach 45 percent, whereas, its share of world trade would approach to 35 percent. Furthermore, the capital surplus in the region will remain a magnet for private capital flows and it will become a major factor in global issues.
However, the report highlights that the region would continue to face many decades of major development challenges, depending on developments in Bangladesh and Pakistan as between 200 to 400 million Asians would still be living in low-income countries.
The report says that Asia would become a larger user of natural resources including energy, other minerals and forest products, adding, this would continue to haunt the people around the world due to environmental issues.
The report also recommends ADB to be more focused by adapting three strategies in a new outlook including, moving from fighting extensive poverty to supporting faster and more inclusive growth, from economic growth to environmentally sustainable growth and from a primary national focus to a regional and ultimately global focus.

The Nation.
http://www.nation.com.pk/daily/apr-2007/7/index12.php

 

[Janbaz]

Pak suffers $1.72 billion deficit in trade with china

JAVED MAHMOOD
KARACHI - Pakistan sustained a huge deficit of $1.724 billion in bilateral trade with China in the calendar year 2006, The Nation learnt on Friday.
In 2006 Pakistan had imported 2.23 billion dollars worth various items from China while exports to the said country amounted to only 506 million dollars last year. Country’s annual imports from China have settled well above two billion dollars mark in 2006 because of free trade agreement enforced between the two friendly countries early last year.
Details show that the country’s imports from China were sharply growing during the last couple of years that was evident from 1.142 billion dollars imports in FY04 which now have surged to 2.23 billion dollars.
The quantum of trade deficit had also been growing in parallel with imports from China. For example in 2004-05 the two-way trade between the two countries caused 1.246 billion dollars deficit to Pakistan and this trade imbalance widened to 1.59 billion dollars in FY06.
China’s major exports to Pakistan are machinery, chemicals and auto parts and agricultural items. imilarly, Pakistan’s key exports to China are cotton yarn, fabrics, surgical equipment.
Foreign trade experts said that China was among five leading trade partners with whom Pakistan had been sustaining a huge trade deficit every year. The other deficit-oriented trade partners are Saudi Arabia, Kuwait, the United Arab Emirates and Japan.
They said that country’s more than half of the total trade deficit was the outcome of heavy imports from the said countries. Experts said that instead of signing a free trade agreement with those leading trade partners from where Pakistan’s had been earning a substantial trade surplus, the Ministry of Commerce had signed FTA with China that magnified growth in the trade deficit of the country.
Experts were of the opinion that before implementing a full-fledged free trade agreement with China the Pakistan government should review the list of trade-able items to reduce deficit and to promote exports from the country.
In last financial year the trade deficit of Pakistan had hit the record high point of 12.20 billion dollars while in FY07 once again the quantum of the trade deficit was being seen around 12 billion dollars or even beyond it. In Eight months of FY07 Pakistan had already suffered more than 8.6 billion dollars trade deficit.

The Nation.
http://www.nation.com.pk/daily/apr-2007/7/bnews2.php

 

[Neo]

Economy hits $135bn mark

LAHORE: State Minister for Finance, Omar Ayub Khan on Friday said the total size of Pakistan’s gross domestic product (GDP) has risen to the level of $135 billion from $62 billion over a period of seven years.

“The consistent growth of national economy is just due to the efforts made by the present government to put the country on the path of high growth,” he said while inaugurating a two-day seminar on ‘Value Addition through Internal Audit’ at a local hotel.

Omar Ayub Khan said country’s economy had been growing at a rate of 7 per cent over the last several years and hoped that it would post the same growth rate this year. He said there is great potential for growth in the agriculture sector especially in the milk production. He said Swiss milk processing firm, Nestle has set up Asia’s biggest plant in Pakistan to benefit from the business opportunities.

“More and more foreign companies are planning to invest in Pakistan due to the enabling environment and a big consumer base,” he said. Auditor General of Pakistan, Muhammad Younis Khan, Conference Chairman Iftikhar A Chaudhary, US Internal Audit expert, John White and Director General Works Audit, M Jamil Bhatti were present on the occasion.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=49924

Thats great news, but we'll still belong to low incomes group. What we need to do is control population growth, half it by 2020 and atleast try to reach a double digit economic growth thruout the next decade.

 

[Neo]

Prime Minister approves development of new port city in Balochistan

ISLAMABAD (April 07 2007): Prime Minister Shaukat Aziz has approved in principle the concept for the development of a new self-contained port city on the Balochistan coast, which will provide business, tourism, housing and industrial development opportunities to Pakistani and foreign investors.

The prime minister was chairing a presentation on the proposed port city called Alladin Cove at the PM's House on Friday. The actual city would be located at Miani Hor on the Balochistan coast.

He said that the decision to develop the new port city with world class infrastructure, including roads, airport, hotels, IT, banking, industrial parks and oil refineries had been taken in pursuance of the announcement made by President General Pervez Musharraf to develop a new city on March 20 during his visit to Gwadar to inaugurate the Deep Sea Port.

During his presentation, the Chairman Karachi Port Trust, Vice Admiral Ahmed Hayat told the meeting that Pakistan's fourth sea port of the country would be developed at Miani Hor a lagoon near Sonmiani, which is located 80-km North West of Karachi.

The prime minister said that the selected area should be clearly delineated and acquired and the services of a world-class developer should be sought through international tenders to prepare a master plan for the proposed city.

He said that in addition to being a port the new city would be a tourist resort and an industrial hub and would open new vistas of economic opportunities and create thousands of jobs, which would benefit not only Balochistan but the entire country.

He appreciated the positive role of Chief Minster Balochistan, Jam Mohammad Yousaf and the provincial government in facilitating yet another mega project, which would benefit the people of Balochistan.

http://www.brecorder.com/index.php?id=547502&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

'UK keen to invest in AJK'

ISLAMABAD (April 07 2007): Andrew Wallace, Lord Mayor of Bradford, UK, said on Friday that they were interested in investing in Azad & Jammu Kashmir and wanted to build airport at Mirpur, which would be a mega project and to be established by overseas Pakistanis like Sialkot airport, which had been set up by the private sector.

Wallace said this during a meeting chaired by Talat Miyan, executive director general, Board of Investment here. Fazal Hussain, Member of Asian Business Forum also attended the meeting, says a press release.

He said, "There are enormous investment opportunities in power, financial, education, social and construction sector in Pakistan especially Azad Kashmir and Northern Areas and we would like to benefit from these by building strong economic relationship for investment."

Talat Miyan briefed the delegation about the friendly-investment environment in Pakistan. The investment policies of Pakistan were the most liberal in the whole region and there was unlimited potential in power, tourism and construction sectors, he said.

He told them about the investment in Kashmir like construction of tourist hotels, Neelam Jehlum Power Project, airport at Mirpur, and education & health centres.

He assured full support from Pakistan government to UK investors. A detailed presentation on Pakistan's investment climate was given by Azhar Hafeez, Project Co-ordinator/Desk Officer UK. Other senior and young executives of BOI also attended the meeting.

http://www.brecorder.com/index.php?id=547604&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

NTCHIP: World Bank and Asian Bank to provide $1910.5 million up to 2009

FAISALABAD (April 07 2007): World Bank and Asian Development Bank will provide $1910.5 million for "National Trade Corridor Highway Investment Programme (NTCHIP)" up to 2009, which will increase the trade competitiveness and regional cooperation.

According to official sources, NTCHIP Project will assist the Pakistan government in developing National Trade Corridor Highway Network. NTCHIP will also contribute to the economic growth by developing connectivity assets. This will increase the trade competitiveness and regional cooperation.

According to ADB sources, NTCHIP program will invest in over 800 km of the NTC network. This will also reduce the travel time from Karachi to Peshawar by half and provide faster access to the borders with Afghanistan, the People's Republic of China (PRC), and Central Asia.

NTCHIP will be contributed to the economic growth by developing connectivity assets. This will increase the trade competitiveness and regional cooperation. Sustainable development of the network will be enhanced through continued policy reform and private sector participation. The investments will lead to better road safety and application of safeguards. NTCHIP will further develop capacity at NHA.

At first stage, ADB will provide $890 million from Ordinary Capital Resources, while Asian Development Fund will provide $10 million for National Trade Corridor Highway Investment Program (NTCHIP) during 2007 along with Techhnical Assistance Special Fun $500,000 for NTC Logistics Strategy Programme.

ADB will provide $360 million for first phase of the project from its Ordinary Capital Resources. During 2008 and 2009, ADB will release $250 million and US $100 million from Ordinary Capital Resources.

Furthermore, International Bank for Reconstruction and Development will provide $300 million for National Trade Corridor Improvement Program (NTCIP) to reduce the cost of trade and transport logistics and bring services' quality to international standards in order to reduce the cost of doing business in Pakistan and ultimately enhance export competitiveness and accelerate industrialisation. The Pakistan government will achieve these objectives through a comprehensive multi-sector reform program aimed at streamlining procedures and improving services and physical infrastructure. The scope of the current program includes: railways, the road transport industry, ports, trade facilitation and air transport.

At the end of the reform program, the following outcomes are expected: Reduced share of domestic transport and cost of non-factor services in the total value of commodities; Overall reduction of transport and transit costs and times for goods using the National Trade Corridor; Increased rail share of long distance freight traffic; Reduction in the operating deficit of railways, with objectively determined and targeted subsidies; Better corridor user satisfaction; Improved safety and reliability of transport operations; and Improved procurement practices and enhanced accountability of the entities involved in NTCIP.

According to World Bank sources, the proposed NTCIP's objectives are consistent with the CAS for FY'06-09, which reflects the high priority assigned to sustaining growth and improving competitiveness. The CAS estimates that modernisation of the National Trade Corridor alone will require investment of about $1 billion per year over the next 5 to 6 years. In addition, the repair of critical road links, destroyed or damaged in the October 2005 earthquake, is an urgent priority. There is strong demand for increased lending in the transport sector during the coming CAS period. The CAS proposes follow-on investment lending for highways and trade facilitation is expected along the National Trade Corridor with an increasing emphasis on private sector participation in operation and management. In railways, the CAS envisages a combination of development policy lending and investment projects should the government commit to a medium term reform program to commercialise Pakistan Railways.

In the port sector the CAS proposes Bank support for the move towards landlord ports and professional management, combined with a modern institutional and legal framework for port operations that would open the way for investment lending to upgrade port infrastructure. Commenting over the collaboration with other development partners, sources mentioned that NTCIP as medium-term transport master plan for the country provides the basis for donor engagement in the sector and is supported by the donor community. The Asian Development Bank (ADB) will be a strong partner for the implementation of NTCIP. The financing plan for the highway component of NTCIP envisages that ADB's contribution will amount to $1.1 billion, about 30 percent of the total cost of the component.

http://www.brecorder.com/index.php?id=547560&currPageNo=3&query=&search=&term=&supDate=

 

[Neo]

Pakistan to purchase 1,000MW of Iran's electricity

TEHRAN, April 7 (Mehr News Agency) – Iran's Energy Minister Parviz Fattah and Pakistan's Federal Minister for Water and Power Liaquat Ali Jatoi here Saturday reached an agreement on exports of 1,000MW of Iran's electricity.

With a 162 million people population, Pakistan is in dire need of electricity to develop its industries.

Pakistan's current nominal power production is 18,000MW, of which 13,000MW is exploitable.

Giving 12 to 15 percent of consumption growth rate into the consideration, Pakistan plans to put 20 of its dam building projects to national and international tenders.

http://www.payvand.com/news/07/apr/1082.html

 

[Neo]

Gold import comes to a halt

KARACHI (April 08 2007): Gold import has almost halted, declining by 99 percent against last year, as only 12 kgs gold was imported in February 2007, due to its rising prices in the international market.

Importers say that during last few months gold prices in the international market have been moving upward and now its price in the international market has become higher than local market, which brought its import down.

According to official figures, during February 2007 Pakistan imported gold worth $ 0.231 million as compared to $ 40.665 million in February 2006, registering a decrease of $ 40.434 million.

Just 12-kg gold was imported in February 2007 against 3,011-kg in February 2006.

During July-February of the current fiscal year, Pakistan's gold imports declined by 50 percent, to $ 151.482 million against $ 305.119 million of the same period of last fiscal year, witnessing shrinkage of $ 153.637 million. During July-February of the current fiscal year 8704-kg gold was imported against 305,119-kg in the same period of last year.

After rise in the prices of gold in the international market importers shunned from placing huge orders, which brought gold import to the lowest level, a leading gold trader, Haroon Chand, said.

He said that gold import had almost halted, as it has become impossible to import it on such high price, and added that locally gold prices are lower than world markets. "There is no shortage of gold in the local market. So, importers are reluctant to import gold at high rates," he said.

He said that gold prices in the local market are also going up gradually and have reached Rs 13,100 per ten gram. Statistics showed that gold import has also declined by 89 percent during the February 2007 as compared to January 2007 and some 117-kg gold worth of $ 2.168 million gold has imported during January 2007.

Haroon Chand said that current tussle between USA and Iran is a major reason in raising the gold prices in the international market.

Although, at present, marriage season is going but there is no any demand is seen in the local market, which have created an other crisis in the local market, Haroon Chand maintained. He said that huge taxes on the import of gold are another factor of declining import of the gold during last few months.

"We are paying Rs 150 per tola withholding tax and Rs 80 per tola as federal tax on the import of the commodity, which have further raised the imported gold price" he added.

He said after the paying tax the imported gold price is Rs 380 per tola is higher than local gold. Gold prices in the international market are still in upward trend. The gold price has reached $ 675 per ounce by rising $ 3 per ounce during last one week in the international market.

http://www.brecorder.com/index.php?id=547856&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Why are we still importing gold? There are proven reserves and productive mines in Pakistan.

Last year new discovery was made worth $72 billion in copper and gold, we should be exporting it by 2010 when the field is developped.