Pakistan Economy - News & Updates - Archive

[Neo]

President for initiation of FTA talks with US

RAWALPINDI (April 08 2007): President General Pervez Musharraf on Saturday stressed the need for initiation of negotiations for a Free Trade Agreement (FTA) between Pakistan and the United States to strengthen the bilateral relations by boosting trade and investment links.

Talking to a seven-member bipartisan congressional delegation, led by Congresswoman Nita Lowey, the President underlined that the US Congress must continue to support initiatives to broaden and deepen Pakistan-US relations in diverse areas.

He said it was also essential to ensure that any legislation adopted by Congress should reinforce, and not undercut, the strategic co-operation between the two countries.

President Musharraf underlined the importance Pakistan attaches to a broad-based and long-term relationship with the United States. He noted with satisfaction that the multifaceted co-operation in various fields was increasing and underscored the significance of expanding bilateral trade and economic relations.

Congresswoman Lowey is a member of the House Committee on Appropriations and is Chairperson of the Subcommittee on Foreign Operations Appropriations. She is also a member of the House Committee on Homeland Security.

The Members of Congress underscored the strategic importance of Pakistan-US relations. They expressed appreciation for the efforts being made for the socio-economic development of Pakistan.

The Members of Congress recognised the value of expanded bilateral economic relationship and conveyed support for measures to create economic opportunities for the people. During the meeting Pakistan-US relations and matters of common interest, including Afghanistan, were discussed.

President Pervez Musharraf reaffirmed Pakistan's resolve to fight extremism and terrorism. He stressed that members of Congress should play an important role in fostering better understanding of Pakistan's strong efforts to fight extremism and terrorism and enhancing counter-terrorism co-operation between the two countries.

The members of Congress lauded Pakistan's contribution to countering terrorism and extremism. They appreciated the bilateral counter-terrorism co-operation and conveyed that the US would continue to support Pakistan in these endeavours.

The President apprised the congressional delegation of the comprehensive approach combining military, political, administrative, and socio-economic aspects being pursued by the government to effectively address the challenges of extremism and terrorism.

In this context, the President highlighted the importance of creating economic opportunities in the tribal areas and mentioned the Sustainable Development Plan for Fata. President Musharraf stressed the vital stake Pakistan has in a peaceful and stable Afghanistan. The President noted the measures taken by Pakistan to strengthen security along the Pakistan-Afghanistan border.

The Members of Congress appreciated Pakistan's efforts to promote peace and stability in Afghanistan. The President also apprised the congressional delegation of the steps taken to promote sustainable democracy in the country.

He said that the government was committed to holding free and fair elections. The President also outlined the government's actions to improve the access and quality of education at all levels as well as for the empowerment of women.

The other members of the congressional delegation included: Congressman Ed Royce member House Committee on Foreign Affairs, Committee on Financial Services; Congressman Adam Schiff member, House Committee on Appropriations, House Judiciary Committee; Congressman Steve Israel member House Committee on Appropriations, House Committee on Armed Services; Congressman Ben Chandler member House Committee on Appropriations, House Committee on Science and Technology; Congressman Tim Ryan member House Committee on Appropriations; and Congressman Cliff Steams member House Committee on Energy and Commerce, House Committee on Veterans' Affairs. During the meeting, Foreign Minister Khurshid M Kasuri and the US Embassy's Charge d' Affaires, Peter W Bodde were also present.

http://www.brecorder.com/index.php?id=547902&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

April 08, 2007
Pakistan may become wheat flour exporter

By Parvaiz Ishfaq Rana

KARACHI, April 7: Pakistan can become a new market leader in wheat flour exports on harvesting bumper wheat of around 22.5 million tons as per government estimates. After meeting the domestic demand of around 19 million tons, the country would still have a surplus of more than 3.5 million tons.

However, all this depends upon the government how it tailors its wheat export policy, or would it continue with the traditional way of disposing of surplus stocks in bulk which would not earn much foreign exchange or create consistency in export market of value-added wheat products.

Despite the fact that there is going to be lesser demand by five per cent of wheat flour during 2006-07 in the world market as forecast by the International Grains council (IGC), but still Pakistan could have its share provided the government encourages export of value-added wheat products, particularly wheat flour which has a world market of over 9.25 million tons.

Besides the bumper wheat crop of around 22.5 million tons, there is a sizable quantity of carry-over stocks from last year which would mean that the country will have to take full benefit from its surplus wheat stocks, particularly when there is a big demand of wheat flour even from neighbouring countries, like India and Australia, who are witnessing a short crop.

The IGC forecasts 2006-07 world flour trade at 9.25 million tons, wheat equivalent, down 5.4 per cent from the 2005-06 estimates of 9.78 million. The 2006-07 forecast also is down from the 9.724m tons shipped in 2004-05, but is higher than the recent low of 8.583 million in 2001-02.

Drop in Iraq’s wheat flour imports in 2006-07 are forecast at one million tons, compared with 1.5 million estimated in 2005-06. At one million tons, Iraq would be the world’s second-largest importer, falling from the top spot in the 2005-06 season, and Libya would regain the number one position it held in recent years. Libyan imports in 2006-07 are forecast at 1.15 million tons, the same as in 2005-06, as demand should remain strong, the IGC said.

Wheat exporters told Dawn that a lot of enquiries are daily dropping in their offices from these countries, including Indonesia, Malaysia and Sri Lanka, and world traders are presently focusing on Pakistan for meeting wheat and wheat flour demand in the world market.

Turkey, which became world leader in wheat flour exports in 2005-06 on exporting around 2.245 million tons, is being forecast by IGC to reel back to second position after European Union as its exports would drop to 1.9 million in 2006-07.

The EU is expected to recapture its position as the world’s largest exporter on exporting around two million tons of wheat flour in 2006-07.

Presently wheat flour exports from Pakistan are being quoted at $255 to $265 (fob) per ton and if the country even manages to export a modest quantity of 0.5 million tons, it would earn a huge foreign exchange of around $130 million. However, if the country manages to export around two million tons, it would earn around $520 million.

According to wheat flour exporters, the cost of processing wheat flour of export quality comes at Rs14,500 per tons and if Rs1,500 are added towards the incidental cost, the total estimated cost of wheat flour for export will come to Rs16,000 per ton or $253 per ton. There is a demand of grade one wheat flour (maida) in the world market which is a little higher in cost compared with plain wheat flour (atta) used in the country.

Though the government has fixed wheat procurement prices at Rs11,260 per ton, with the start of new crop harvesting in Sindh from late last month, prices in the open market came down to Rs11,150 to Rs11,200 per tons for Karachi delivery.

Market analysts feel that with the start of harvesting in Punjab in the middle of this month, wheat prices would further come down to Rs11,050 in the open market.

However, trade circles have appreciated the State Bank of Pakistan’s decision to extend bank finances for wheat procurement up to Jan 31, 2008. This will help growers to get better prices as this will encourage higher involvement of private sector in wheat trade.

Similarly, the government has extended wheat export deadline from April to June 30, but exporters have demanded that there should be no deadline for wheat flour exports.

A leading wheat flour exporter, Johar Ali Kandhari, told Dawn that if the government comes out with a policy of encouraging export of value-added wheat products, it will enable the country to capture large export market, particularly of wheat flour, at a time when there is a short crop of wheat in many countries, including India and Australia, who had been net exporters of wheat and wheat flour.

He asked the government to give freight subsidy or support of $10 per ton on wheat flour exports and also ensure availability of wheat throughout the year for producing flour for exports. Once we managed to send message in the world market that Pakistan could be a reliable and permanent source of wheat flour, it will enable us to capture big chunk of world wheat flour market, he added.

Mr Kandhari also asked the Trade Development Authority of Pakistan (TDAP) to sponsor wheat flour delegations foreign visits and provide other assistance for promotion of export of wheat flour because the country can do better by exporting value-added products, such as Samolina (Sujee), wheat bran (chokker) and vermicelli (Pasta).

http://www.dawn.com/2007/04/08/ebr1.htm

 

[Neo]

April 08, 2007
US likely to delay BIT with Pakistan

ISLAMABAD, April 7: The United States is likely to further delay the Bilateral Investment Treaty (BIT) with Pakistan rather than softening its stance on certain clauses, as the two sides have failed to strike a deal on controversial clauses of the agreement, Dawn has learnt.

The two sides held several rounds since the year 2004 for reaching conclusion to ink the agreement, which was termed as a first step for the initiation of talks on a free trade agreement (FTA) between the two countries.

Well-placed sources told Dawn that the two sides seemed no where closer on the five clauses of the agreement - scope and coverage, transparency, claims on behalf of an enterprise, investment agreements and arbitration rules.

“Until we reach at some closer point, it is unlikely to move forward on singing the agreement,” the sources said, adding “the US is also now seemed less interested in fast tracking the agreement with Pakistan”.

The sources said that Islamabad lost its hope on early finalisation of the agreement as the USTR officials has yet to announce a date for further negotiation to be held in Washington on the remaining clauses.

The US President Trade Policy Agenda 2007 and 2006 annual report, released recently also mentioned that the USTR continued bilateral efforts to finalise BIT, which would provide US investors in Pakistan with significant legal protections. A small but significant number of differences have persisted on issues of considerable importance to the US.

“Discussions on the BIT are expected to continue in 2007,” the report added.

According to the sources, the draft agreement on the data protection is being under consideration of the cabinet, which will have a far reaching impact on the forwarding of negotiation on BIT.

According to the US report, Pakistan continued to take noticeable steps during 2006 to improve copyright enforcement, especially with respect to optical disc piracy. Nevertheless, Pakistan did not provide adequate protection of all intellectual property. Book piracy, weak trademark enforcement, lack of data protection for proprietary pharmaceutical and agricultural chemical test data, and problems with Pakistan’s pharmaceutical patent protection remain serious barriers to trade and investment, the report added.

When asked a senior government official about the possible impact of President George W. Bush special powers under fast-track trade promotion authority to be expired in three months, he said it would have a minimal impact on the finalization of the BIT agreement.

“It will be very difficult to predict exact date for the conclusion of the agreement. We will continue to work with US colleagues in future and try to conclude it in distinct future,” the official added.

http://www.dawn.com/2007/04/08/ebr3.htm

 

[Neo]

Pakistan's GDP growth is on track, SBP warns of emerging gray areas
By M. Aftab (Analysis)

8 April 2007

WHILE the GDP growth is on track, the central bank warns of emerging gray areas in the Pakistani economy. The exports are moving slowly, but spiraling imports are widening the trade deficit, State Bank of Pakistan (SBP) the central bank, also says in its report for the half year ended December 31, and projecting economy’s future course.

The report, mandated by the Parliament, warns the government of Pakistan of four gray areas—including (1) high inflation, (2) large current account deficit, (3) fiscal risks like low tax-to-GDP ratio, and low savings, and (4) the capacity to repay short-term foreign liabilities. These repayments, against debts rescheduled by foreign donors and international financial institutions (IFIs) in the wake of 9/11, are coming due within the next year.

The expected large fiscal and current account deficits (CAD) notwithstanding, Pakistan’s debt profile is forecast to improve during the current fiscal 2007 which will also see a continuing decline in the debt-to-GDP ratio. SBP project the CAD to widen during 2007 because, in spite of a decline in imported oil prices, "growth in imports at 10 per cent remains higher than exports increase at 4.0 per cent. But, exports growth is way down than last year’s 18.8 per cent and imports of 46.3 per cent. SBP projects 2007 exports at $ 17.2 billion against the actual of $ 16.5 billion in 2006. Imports will be $ 30.7 billion against the actual of $ 28.6 billion in 2006.

SPB, however, recommends a turnaround in export which are growing only at 4.0 per cent compared to fiscal 2006. Exports should be assisted in order to reduce the cost of doing business, improve competitiveness, raise productivity, upgrading quality, striving for economies of scale, product and geographical market diversification, cut unnecessary regulations and red tape, finish off multiple taxes, supply-chain improvements, and provision of flexible labour market. That’s a hell of a lot to ask for and implement— knowing the sluggishness of the government and most Pakistani entrepreneurs, who normally art not pro-active. But, usually they do deliver in their own interest when they face domestic and exogenous shocks. The case in point is their slow reaction to face up to massive Chinese, Indian, Bangladesh and even Vietnam textiles competition in the global market place. The industry invested $ 5.0 billion in up-gradation and product diversification, over the last three years as textiles, which contributes 67 per cent to overall export earning came under threat, with textile quotas gone.

On the forex front, the central bank reported, the real effective exchange rate (REER) of Pakistani rupee, during seven months ended February 2007, appreciated 2.5 per cent seen against a basket of currencies mainly because of a weak US dollar compared to other major currencies abroad. The REER index indicated a depreciation of 2.6 per cent in the same period. "This gain in the form of a nominal depreciation of the weighted index was offset due to relatively higher inflation in Pakistan, compared to its primary trading partners and competitors." As a result, the net outcome was the cumulative appreciation of REER index by 2.5 per cent in eight-month that ended February 2007. "It indicates the loss of external competitiveness of Pakistani rupee." The situation "reinforces the need to bring down the domestic inflation." The official forex reserves with SPB, at end-February were $ 13.4 billion better than $ 11.5 billion in the like period last year.

Home remittances sent by overseas Pakistanis, particularly those working in the UAE, Gulf, Saudi Arabia, UK and Northern America, up to February were $ 3.4 billion up from $ 2.8 billion in the like period of 2006. The central bank estimates 2007 will close with home remittances rising to a record $ 5.0-5.5 billion, up from the actual of $ 4.5 billion in fiscal 2006.

Foreign investment rose to $ 3.5 billion during seven months that ended January, up from $ 1.6 billion in the like period of 2006. The increase this year is attributable to among other fields, the booming telecom sector, particularly cellular phones. But some of it was one-time investment in telecom network. One of the reasons that SBP and the government are confident to meet the rising bill of imports and cover the widening CADS is this increased inflow of foreign investment and home remittances. The report also says, the present forex reserves are enough to foot the import bill for 26.3 weeks, up from 24.9 weeks in November, 2006.

There is an improvement in Pakistan’s capacity to repay its short-term liabilities—- that are due within a year. The overall amount is small. This is because a substantial amount of newly acquired loans have a long-term duration. But, there is a caveat. SBP says, if external flows fail to keep pace with the expected rise in short-term liabilities when the grace period on old rescheduled debt ends, there can be problems. The economy is transmitting positive signals, too. SPB says it "strongly" continues on a growth trajectory. "IT does not pose a macroeconomic risk over the short term, particularly due to availability of foreign debt on favourable terms and strong investment flows." It forecasts the GDP growth in 2007 at 6.6-7.2 per cent"close to the annual target of 7.0 per cent, and above the desired long-term growth for the economy. The large scale manufacturing (LSM) industry

recorded a 9.8 per cent growth, during the half year ended December 31, up from 8.7 per cent in the like period of fiscal 2006. The analysis, the bank said, is somewhat limited in scope as it mainly covers autos, sugar, cement, fertiliser, and petroleum products.

Auto production rose 6.8 per cent—down from 28.6 per cent in 2006. The slowdown is due to capacity constraints, slowing demand and imports of used autos. The government has allowed this facility on the persistent demand by overseas Pakistanis who wish to import cheaper cars for their own use or to gift to others. A mismatch in the production mix and the demand growth pattern resulted in an output decline of 6.6 per cent in petroleum products.

Cement production showed a remarkable growth mainly because of capacity expansion, and a rise in domestic and external demand. Sugar output rose 15.5 per cent, on the back of a 15.2 per cent increase in sugarcane production, compared to a decline of 40.5 per cent in the like period of fiscal 2006.

The year-on-year growth in private sector credit take off was 15.7 per cent on February 24, 2007. In order to speed up investment and to stimulate industrial sector, its up-gradation and diversification, SPB has asked the government to remove infra-structural gaps and bottlenecks. Shortage of electricity and outages is one such case. The government’s agricultural policy, it also said, should focus building large water reservoirs to increase supply irrigation water to farmers. Commodity future markets should also be established so that farmers receive market-based prices.

The report says, the average inflation has declined to 7.7 per cent, but is still higher than the official projection of 6.5 per cent for the year. Food inflation continues to be higher than this core inflation, over which the SBP has warned the government to take corrective measures, including increase in supplies of various food items, and putting an end to "collusive behaviour " of business and their price-fixing catels.

SBP has asked the government to take steps to implement capital market reforms. The reforms should aim at "encouraging investment rather than speculation, and improving risk management to ensure financial sector stability." The central bank lays great emphasis on gearing up savings — the mother of all financing and investment— to move the economy on a fast track.

Inflation should be contained to bring real and positive returns to savers. The present profit rates average 3.14 per cent, or below — mean a negative return. They man a negative return to savers, whose deposits are getting eroded, and discourage savings. SPB has, however, failed to push commercial banks to cut down their present 7.5 per cent spread and to offer higher profit rates to savers. The lending rates range 13-14 per cent. Higher profit rates to savers, SBP insists, will "encourage domestic savings to rise from the current low level, reducing Pakistan’s dependence on potentially fickle foreign investment."

http://www.khaleejtimes.com/Display...l/business_April160.xml&section=business&col=

 

[Neo]

Sunday, April 08, 2007

Pakistan’s exports to US increased by 17.5% in 2006: report

By Sajid Chaudhry

ISLAMABAD: Pakistan’s exports to the United States increased by 17.5% with total exports worth 3.8 billion dollars in 2006.

Pakistan’s imports from the US also witnessed an increase of 51.6% with total imports worth $1.9 billion as compared with last year. The US goods trade deficit with Pakistan amounted to $1.9 billion in 2006 against a deficit of $2 billion in the year 2005, showing a decrease of $78 million, according to the US National Trade Estimates (NTE) Report 2007.

Import policies: The report further analyzes that since 1998, Pakistan has progressively and substantially reduced tariffs and liberalized imports. This effort culminated in June 2002 with the establishment of four maximum import tariff bands of 5 percent, 10 percent, 20 percent and 25 percent. Generally, Pakistan’s applied tariffs are below World Trade Organization (WTO)-bound commitments, with its simple average applied tariff at 16.5 percent. In 2005, Pakistan further reduced duties on imported automobiles to between 50 and 75 percent from the previous range of 75 percent to 150 percent. It imposed a 55 percent duty on imported automotive parts that are also manufactured domestically and a 35 percent duty on those automotive parts that Pakistan does not manufacture domestically.

Pakistan also further reduced duties on instant print film and instant print cameras to 5 percent from the prior 30 percent to 200 percent range in order to eliminate incentives for smuggling. In its 2006-2007 budget, the government eliminated customs duties on agricultural tractors. US-made textile products may be imported into Pakistan, although the tariff on certain synthetic fibers (scheduled to expire in 2008) remains relatively high.

Pakistan continues to ban the import of 30 items, mostly on religious, environmental, security and health grounds. Pakistan also allows only 1,073 items to be imported from India, including 300 items that were added to the list in 2006. Pakistan says further opening up of trade with India is contingent upon progress on the status of Kashmir.

The government of Pakistan reserves the right to grant sector-specific duty exemptions, concessions, and protections under the Statutory Regulatory Orders (SROs). The government, in 2006, exempted all domestically produced and imported pharmaceutical-related inputs from its general sales tax. An SRO issued in August 2002 excepted the following items from the value-added tax: imported filled infusion solution bags; scrubs, detergents and washing preparations; soft soap or no-soap soap; adhesive plaster; surgical tapes; liquid paraffin; disinfectants; cosmetics and toilet preparations; and absorbent cotton wool. In recent years, the use of SROs has decreased.

In January 2000, the Pakistan government began implementing a transactional valuation system, under which 99 percent of import valuation is based on invoice value, in accordance with the WTO's Customs Valuation Agreement. Currently, about 90 percent to 95 percent of imports are assessed duties pursuant to the transactional valuation system, including Pakistan’s major imports such as industrial and power equipment, petroleum and petroleum products and chemicals. A number of traders in food and nonfood consumer products, however, report the system is not uniformly applied. These products account for close to 4-5 percent of Pakistan’s imports.

A US freight forwarding company reported in 2005 that Pakistan imposed a new SRO requiring that the commercial invoice and the packing list be included inside a container. The SRO is still legally valid but is not being enforced due to practical difficulties. The inclusion of invoice and packing lists is difficult in situations when shipments originate from a location that is different from where the invoice and packing list are created; when, for security, invoices are created after the shipment departs; or, when several companies are involved.

Export subsidies: Pakistan actively promotes the export of Pakistani goods with measures such as tariff concessions on imported inputs and income and sales tax concessions. Subsidies in FY 2006 were confined mostly to wheat and totalled roughly $15.9 million, according to government sources. The government also provides freight subsidies to some products and these subsidies totalled close to $18.3 million in FY 2006. Pakistan established its first Export Processing Zone (EPZ) in Karachi in 1989, with special fiscal and institutional incentives available to encourage the establishment of exclusively export-oriented industries. The government subsequently established additional EPZs in Risalpur, Gujranwala and Sialkot in Punjab, and Saindak and Duddar in Balochistan. Principal government incentives for EPZ investors include an exemption from all federal, provincial and municipal taxes for production dedicated to exports, exemption from all taxes and duties on equipment, machinery, and materials (including components, spare parts and packing material), indefinite loss carry forward and access to Export Processing Zone Authority “One-Window” services, including facilitated issuance of import permits and export authorizations.

http://www.dailytimes.com.pk/default.asp?page=2007\04\08\story_8-4-2007_pg5_2

 

[Neo]

Sunday, April 08, 2007

Hydropower projects in AJK: IT waiver in offing

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is expected to allow income tax exemption to hydropower projects located in Azad Jammu and Kashmir, initiated by companies registered in Pakistan, a government official told the Daily Times on Saturday.

In this regard a proposal to amend the second schedule of the Income Tax Ordinance of 2001 would be submitted to the ECC at its next meeting to save the local as well foreign investors from hardships caused by tax authorities to them, the official added.

The Central Board of Revenue’s (CBR) proposal relating to limiting or withdrawal of income tax exemption to the hydropower projects located in Azad Jammu and Kashmir initiated by companies registered in Pakistan had caused problems to the future of these multi-million-dollar important power projects.

The CBR was of the view that to avail of the income tax exemption on hydropower projects located in AJK, the investors should be asked to register their companies in AJK instead of Pakistan.

In response to this, the Private Power Infrastructure Board (PPIB) was of the opinion that many companies incorporated in Pakistan and developing projects in AJK may need to wind up and transfer all documents, title deeds of assets including land acquired, all financial arrangements, etc in the name of new company.

The process can substantially delay the financial close and construction start for such projects.

The PPIB, in a reference submitted to the federal government, had warned that withdrawal or limitation of exemption at this stage would send a wrong signal to the investors, which could adversely affect the much-needed private investment in the power sector. Secondly, the application of income tax was a pass-through item in the electricity tariff, and would ultimately result in higher tariff for power consumers, which could necessitate an increase in government’s subsidy to the power sector, the official added.

Companies located in AJK sign an Implementation Agreement (IA) with the government of AJK, and as per Power Policy 2002, and the government of Pakistan also signs an IA to guarantee the obligations of the government of AJK. In this scenario, if companies are not incorporated in Pakistan, there could be possible complications with regard to governing law, jurisdiction issues, etc relating to disputes within the government of AJK and the government of Pakistan guarantees, the PPIB said.

The Pakistan government has signed bilateral tax treaties with many countries that say that foreign investors from these countries are not likely to be eligible for relief on tax deducted from dividends paid by an AJK company, it added.

Foreign investors, relying on investment protection treaties between their respective governments and Pakistan, may lose such protection if the companies are incorporated in AJK.

The PPIB had highlighted that AJK companies may face impediments in the way of implementation of the commitments provided in the IA in relation to repatriation of funds, dividends, availability of foreign exchange for debt servicing, opening of foreign currency accounts outside Pakistan, etc. Concessions related to import duties are provided to companies incorporated in Pakistan, and AJK-registered companies may face problems.

In addition to all the above, it is clearly a perception issue for investors and lenders for making investments in Pakistani companies vis-à-vis AJK companies. As Pakistani companies would provide more comfort and confidence to foreign investors, as well as the benefit of bilateral and investment protection treaties between foreign countries and Pakistan, the proposed change to income tax law would facilitate the harnessing of AJK hydropower generation potential.

Furthermore, income tax exemption has already been granted under the 1994, 1995 and 2002 Power Policies. These policies have been widely advertised, and projects approved are currently being processed under them. The policies of both the governments of Pakistan and AJK clearly provide this income tax exemption, and now there is a need to set the legal framework right for successful implementation of these policies.

The law and justice division has rightly pointed out that amendments to the Income Tax Ordinance of 2001 for accommodating the aforementioned change will not be required; section 53(2) of the ordinance empowers the federal government to make amendments to the second schedule of the ordinance through issuance of a notification in the official gazette.

The PPIB had strongly supported the proposed changes to the income tax ordinance and was of the opinion that these changes are essential for successful and timely implementation of the government of Pakistan’s approved and announced power policies. The PPIB had also called for similar changes to the AJK income tax law to complete the process of income tax exemption. sajid chaudhry

http://www.dailytimes.com.pk/default.asp?page=2007\04\08\story_8-4-2007_pg5_11

 

[Owais]

World Bank not satisfied with power sector investment pace

ISLAMABAD (April 09 2007): The World Bank is not satisfied with Pakistan's pace of investment in the power sector and wants that the government should inject more funds to improve electricity generation, distribution and transmission systems. The Bank also desires effective implementation of reforms program for power sector to make it efficient and viable.

It has demanded acceleration of the key reforms in the energy sector to cut down line losses and power theft. The World Bank's report on Pakistan's power sector claims that access to electricity remains a major challenge in many rural villages and small towns, and even among enterprises with access, reliability of supply is uncertain.

The median number of days with power outages in a typical month was reported as being 20 days in villages and 15 days, while power outages in a typical month was reported as being 20 days in villages and 15 days in small towns.

It has called for provision of better infrastructure, particularly road, and reliable electricity, which in its view can reduce operating and marketing costs, making investment in enterprises in rural areas and small towns more profitable.

The report also paints very bleak picture of access and use of telecommunications among enterprises, terming it as surprisingly limited. It said that only 31 percent of entrepreneurs in small towns owned fixed line phones or cellular phones.

It suggests that the government should put all things in order to ensure better road maintenance and extension of basic motorable access. It also wants improved institutional arrangements for ownership, management and financing of the rural transport system in accordance with the realities of devolution.

The bank has demanded of the government for promoting community involvement in planning and managing transport infrastructure improvements to ensure that the infrastructure meets local needs.

It says that increased public expenditures are particularly important in health, education and population. It adds that in spite of improvements since 2001-02, Pakistan's expenditures and outcomes in health and education have remained low in comparison with other South Asian countries. It says that education and health areas also appear to be under-funded, relative to other public expenditures that are less pro-poor.

The report calls for substantial investments in education and health to increase human capital and income-earning potential in order to break the inter-generational poverty trap.
http://brecorder.com/index.php?id=548571&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Chinese firm to set up truck manufacturing plant in Pakistan
ISLAMABAD (April 09 2007): A Chinese firm would invest $100 million for setting up of first-ever heavy-duty truck, dumper and carrier manufacturing plant in Pakistan, said Ma Xiaoyan, representative of China National Heavy-Duty Truck Group Company (CNHDTGC).

"Seeing the market demand, our company is considering to invest $100 million for manufacturing of heavy-duty vehicular transport in Pakistan," he said while briefing newsmen at the launch of warehouse of the company here on Sunday.

He said Sino Pak Truck Private Limited had been established in Pakistan for the introduction of wide range of heavy-duty vehicles manufactured by CNHDTGC, meeting demand in oil, construction, food (cold storage), logistics, sundries, and military sectors.

"Our company manufactures 100 types of heavy-duty transport vehicles sufficing needs of almost every sector," he said.

The company, which has been manufacturing heavy-duty transport vehicles for the last five and a half decades, holds a number of international certifications like, ISO-9001 (Quality Assurance), American Bureau of Shipping Marine Container Certificate, Germany TVU Certificate and Chinese State Class High Technology Enterprise Certificate.

Xiaoyan said only during the last year the company had exported 10,000 trucks to Iran, and 30,000 containers to APL USA while a number of supply orders were in-hand with CNHDTGC, which he said manufactures highly cost effective dumpers, carriers and prime movers.

He said Pakistan had a vast scope for the use of such heavy transport vehicles as the country was showing progress by leaps and bounds in every sector. Due to this reason, he said, the company had been planning to make such a huge investment in the field of transport manufacturing.

He said the company was initially in the process of setting up of mechanism for supply of spares and certain consumable besides provision of after sales services.

In reply to a question, he said a number of deals for the supply of heavy-duty vehicles were being negotiated with certain firms and departments in Pakistan. He said the supplier had already won orders for provision of a considerable number of trucks and dumpers from various organisations working in logistics sector.
http://brecorder.com/index.php?id=548591&currPageNo=2&query=&search=&term=&supDate=

 

[Owais]

KSE market capitalization surge by over Rs100b
KARACHI: Karachi Stock Exchange (KSE) market capitalization this week soared by Rs111 billion.

KSE released figures showed market capitalization this week aggregating to Rs3176 billion as compared to Rs3065 billion in the previous week. In terms of dollar market capitalization worked out to $52.93 billion as against $50.49 billion.
http://www.geo.tv/geonews/details.asp?id=4424&param=3

 

[Janbaz]

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.

Population won't be controlled with ease, people tend to think backwards and poorer families have more kid's to sustain themselves. So, unless we adress the root causes we will have on going troubles. Investment should be increased especially in high tech industries, ensure growth in this sector the same way the Saudi's are doing it. One thing that bugs me though is that corruption is so widespred in the upper chambers of the society, which hurts the ordinary citizen. "Rishwat" is a comodity that should be checked and those with ill doings must be kept under check. that is way to prosper in these times of massive growth!

 

[Neo]

April 09, 2007

Trade with India rising despite hurdles

By Sabihuddin Ghausi

THE two-way trade between Pakistan and India continues to surge, showing a four-time growth in the last five years, despite manybarriers in movement of goods and people.

The bilateral trade swelled from $235.74 million in 01-02 to more than $1 billion last fiscal year. Trade analysts see further volume growth as Pakistan has expanded its positive list of import trade with India that now includes machinery/equipment, raw materials, chemicals and accessories of a number of manufactured items which are in great demand in local market.

Opening of banks in Pakistan and India, resumption of shipping services and an improvement in road and rails transport between the two countries is bound to give a further boost to their bilateral trade.

``Businessmen of India and Pakistan now trade almost 2,000 items in more than 25 categories'', Raees Ashraf Tar Mohammad, a leader of Pakistan Grocers Association said This has built mutual confidence and communication between businessmen of the two countries. We book orders on telephone or on fax and rest of the formalities follow. In the last ten years or so ``not a single dispute'' was reported.”

According to a trade analyst, the share of Pakistan's exports to India in overall exports increased from a mere 0.5 per cent in 01-02 to 1.8 per cent in 05-06. ``This is a six-time increase in Pakistan's exports to India during last five years, a leader of Karachi Chamber of Commerce and Industry said while pointing out that Pakistan's exports to India have increased from less than $50 million in 01-02 to about $300 million in 05-06.

Simultaneously, imports from India into Pakistan too surged from $186.52 million to $802 million, up from 1.8 per cent to 2.8 per cent Pakistan's global imports.

In all, these five years, the balance of bilateral trade remained in favour of India. In the year 2005-06, it rose up to more than $500 million.. This came a rude shock to the Ministry of Commerce in Islamabad.

In July 2006, when the federal commerce ministry issued a notification to implement concessional tariffs under South Asia Free Trade Agreement (SAFTA), India was omitted from the list of Saarc countries. The Indian Commerce Minister, Mr Kamal Nath raised this issue in the Inter Ministerial conference at Khatmandu, giving a veiled threat that India might review the tariff concessions being offered to Pakistan under SAFTA.

``We are not withdrawing these tariff concessions'', said the Indian High Commissioner in Pakistan while replying a query of a businessman at the Karachi Chamber of Commerce and Industry early March. But at the same time, he declared: ``India does have the option to take back all these tariff concessions if SAFTA was not implemented in letter and spirit''. ``We are not applying this option on Pakistan is another matter'', he added.

``Our trade relations with India are based on a positive list of about 1,078 items'', said the Federal Commerce Minister, Humayun Akhtar Khan. This has been well elaborated in Pakistan's Import Policy Order. India wants the most favoured nation (MFN) status which is in fact a WTO issue where India can agitate.

So far as implementation of SAFTA is concerned, the minister said that India can raise this issue bilaterally at the Committee of experts or at the Inter-Ministerial committee level. Pakistan is not happy with non- tariff barriers and overall Indian trade policy. Indian contention is that whatever the non-tariff barriers or other policy issues of their trade, `these are not Pakistan-specific and are meant for global imports''.

But Pakistan has taken a position saying that quite a few of NTBs hurt its imports-- mainly textiles into Indian market. In a detailed rejoinder, Pakistan has filed 26 objections on non-tariff barriers and has mentioned seven instances of para-tariffs that affect Pakistan's imports into India. For example, India has a set of restrictive rules on fabrics in which AZO dyes are used.

Pakistan has banned AZO dyes but has complained that the Indian authorities subject import consignments from Karachi to all such tests which take seven days to three months to complete and the cost is 10 per cent of the value of consignment. ``The complex set of regulations discourage exporters, affect cost competitiveness of exports to India and delay clearance at the customs'', Pakistan’s commerce ministry maintains.

Indian administrative departments and divisions and its various states have an elaborate list of separate rules, regulations, restrictions, conditions, tariff rates for movement of goods which causes uncertainties and delays and discourage exporters and hence serve as non-tariff barriers.

Exchange of these notes between the commerce ministries of India and Pakistan has apparently not affected the bilateral trade so far. Though there have been some concerns in the official quarters in Islamabad on the `yawning trade gap'' with India, trade does not share this view.

It is argued that the imbalance in trade with India may widen further. “India is a close neighbour supply source of textile machinery and equipment'', a local leader of textile industry said. A few local textile industrialists imported Indian machinery via third country-Dubai, Hong Kong or Singapore. They consider these machineries relatively less expensive and more efficient than what they were buying from Japan or European countries.

Another advantage of buying Indian textile equipment and machinery is that engineers involved in installation and trial running do not cost as much as Japanese or European consultants. ``Indian engineers are just a telephone call away and their demand for fees and boarding is not as high as of others'', he said.

Two countries have been helping each other over the last few years to overcoming their shortages of agricultural products. Pakistan supplied chickpeas, pulses, grains and sugar when these were short in supply in India. India supplied onions, potatoes, pulses and other food items. Market report suggests that Indian experts are ready to work out a joint plan to exploit fisheries and export value added fish products.

Engineering sector is one area where Pakistan stands to gain a lot from India. Indian engineering goods exports now exceed $10 billion mark. Pakistan meets its 25-30 per cent requirements of engineering products from imports. India can be a good source of engineering products with freight advantage and relatively easy and quick delivery and after-sales service

In automobile India has emerged as a major component supplier to some of the world's largest auto players like General Motors, Volvo, Toyotas and Hondas and is reported to be manufacturing 275 auto parts, many of which are relevant to Pakistan.

In 1991, the intra-Saarc trade as a proportion of trade with rest of the world was three per cent. It increased to only 4.7 per cent by the year 2004. Intra- regional trade in South Asia is only 0.8 per cent of their GDP.

This slow growth is being attributed to unending tensions between the political leadership of India and Pakistan.

http://www.dawn.com/2007/04/09/ebr2.htm

 

[Neo]

April 09, 2007
Political economy model, instability

By Yousuf Nazar

THE lawyers’ community has shown a remarkable unity in rising against the unprecedented actions against the Chief Justice of Pakistan. The political parties are calling it an assault on the judiciary while the government has maintained that the opposition is politicising, what it calls, a ‘constitutional matter’. This characterisation is an oxymoron because politics, by definition, concerns all matters concerning governance and the three branches of government including the judiciary. The media has been outspoken in its coverage. Prominent former judges have termed this crisis as a defining moment in the history of Pakistan.

Some analysts have described it as a pre-emptive strike by General Musharraf to continue to don the uniform and tighten his grip on power in the backdrop of growing unease in the West over his failure to stop the Taliban insurgency but more importantly the perception that his support in Washington may be waning.

This article argues that military rule, by systematically damaging the rule of law, has imperilled Pakistan’s development prospects and the current crisis needs to be debated in that broader and fuller context. It is old news that the Pakistan’s military rulers have always operated above the law and have never been accountable to the courts despite pretensions to the contrary. The conquest of the judiciary will remove even that pretence and will destroy whatever is left of that institution.

The business community seems to be watching from the sidelines hoping that this crisis will somehow get resolved and it will be `business as usual’. Pakistan’s successive ruling establishments, business elites and many former World Bank trained economists have been admirers of the economic growth achieved during different military regimes and point to the higher levels of aid flows, in particular the aid from the United Stated, as an important element of “better” economic performance.

The role of economic aid has been exaggerated and is not supported by facts. From 1980 to 2007, remittances from Pakistanis abroad accounted for a much greater share of external financing requirement than foreign aid and borrowings from all sources combined. For example, while the US aid package for General Zia’s regime was $3.2 billion during 1982-1987, remittances were five times as high at $15.2 billion during this period. Further more, it must not be forgotten that the remittances during the five years post 9/11 reached an aggregate of $22 billion compared to just $5.3 billion during the five-year period before 9/11.

While it is true that since 9/11, US military aid alone totalled almost $4.75 billion from October 2001 to August 2006 in addition to the $3 billion five-year economic assistance package, one cannot build a model of political and economic development that involves a continuous state of external conflict be it the “jihad” against the Soviets in the 1980s or the “war on terror” since 2001.

It can be argued that costs of the conflict, that is, the breakdown of the rule of law, criminalisation of society due to drugs and arms trafficking, and the decline of the state power due to the rise of powerful non-state actors such as violent extremist groups, have far outweighed the economic benefits that may accrue from such ‘aid’. Equally importantly, the ‘aid addiction’ has encouraged the governments not to undertake critical economic reforms. For example, Pakistan will hardly need any external aid if it could increase its tax-to-GDP ratio from a lowly 10 to 15 per cent.

Going beyond the issue of aid, the question that has not received the level of in-depth attention it deserves is whether the model of the political economy of a security state that Pakistan has followed since the late 1950s, except through a brief interlude during 1972-1977, can survive in the 21st century?

The role of the government, super power or not, is shrinking and the private capital has emerged as a powerful driver of economic change in an increasingly globalised economy with international competitiveness emerging as a measure of a nation’s strength and not its military prowess. The net aid flows to the developing countries account for just 10 per cent of private capital flows.

The power of the World Bank and the IMF is on the decline, the future of multilateral institutions like the Asian Development Bank is being questioned, and the United States has resorted to the use of military power, in part, because its economic power has declined over the past two decades. The spectacular growth of China and India has been underpinned by stable political systems and skilled human resources and not by arbitrary governance, aid, or nuclear weapons.

For those who believe that Pakistan can progress under a military or quasi-military rule supported by the US, the supremacy of the Constitution and the rule of law have been largely academic questions. This school of thought believes that so long as the military can maintain law and order - a euphemism for an autocratic rule - and allow the private sector to do business and make money, Pakistan can do without the ‘luxuries’ like a sovereign parliament, an independent judiciary and the rule of law. Hence, it has never objected to the gradual and systematic emasculation of the judiciary. A top industrialist remarked that he is not concerned about this crisis and only thing that matters is that uncertainty is removed as soon as possible otherwise the economic growth may suffer. But GDP growth is not the most meaningful measure of progress and development.

Pakistan’s average GDP growth rate was 6.66 per cent during the five-year period from 1963 to 1968. The GDP growth rate was 9.79 per cent in the fiscal year 1969-70, the highest ever in the last 50 years. Within the next two and half years, neither the ‘record GDP growth’ nor the military or the famous tilt of President Richard Nixon towards Pakistan could save the country from dismemberment and a complete collapse.

Thirty seven years later, some of us do not appear to have learned that the military and the support of a super power cannot ensure the survival let alone success of a state. In the absence of a truly representative and sovereign parliament, an accountable executive, an independent judiciary and a genuinely free media there can be no hope of building a sustainable politico-economic system that can compete in today’s highly competitive global markets.

The Global Competitiveness Report (2006-2007) published by the World Economic Forum-- the elite club of World’s political and economic leaders-- states that while factors underlying competitiveness of nations are as diverse as they are numerous, the presence of macroeconomic stability is not enough. The report argues that equally important is “the institutional environment within which economic actors operate, including the protection of property rights, the quality of judicial system, even-handedness in the political process, and the reining in of corruption.”

The report lists the institutional environment as among the most basic and critical pillars of development for poor countries like Pakistan; even more important than business sophistication and innovation. Pakistan is ranked 93rd out of 122 countries on the basic requirements while the report lists government instability/coups, corruption and policy instability as the top three most problematic factors for doing business in Pakistan.

Why then Pakistan has received a record amount of foreign investments in the last few years? The answer is not that difficult. The period since 2000 has seen the highest ever level of global liquidity accompanied by an all time high global GDP growth since the 19th century industrial revolution. But even during this period of extraordinary benign global economic environment, foreign investment flows into Pakistan have remained concentrated in three sectors (telecommunications, financial sector, and oil and gas) and have largely come from oil-rich states.

These investment flows together with the US aid seem to have convinced the current establishment that Pakistan does not really need a real democracy and the rule of law. This is a short-sighted and dangerous view and suggests that those who so fondly remember Ayub Khan’s economic performance have not learned the lesson that growth without development of the people but more importantly growth without building strong democratic institutions and establishing the rule of law could not be sustained and failed to stop the precipitation of the crisis that had been brewing under the Field Marshall for a decade and ultimately led to Pakistan’s dismemberment soon after he left the stage.

http://www.dawn.com/2007/04/09/ebr1.htm

 

[Neo]

April 09, 2007
Rice ratooning: a technology to increase production

By Hafeez ur Rehman, Dr Muhammad Farooq and Dr Shahzad M.A. Basra

RICE occupies a conspicuous position in our agro-based economy. It has emerged as a major export commodity contributing about 13 per cent to the total foreign exchange earnings of the country, 6.1 per cent value-added in agriculture and 1.3 per cent in GDP in the country.

Rice is grown here on an area of over 2.5 million hectares with an average yield of 2,117kg per hectare. The country ranks 9th with respect to area and 14th for yield per hectare in the world. There is 50.42 per cent gap between the actual and potential yield. The reason for this gap in yield is the poor rice production practices adopted by farmers and rice-growers of the area.

Rice ratooning is one of the potential and attractive alternative technologies to increase rice production. Based on land and water management, rice ecosystem is mainly divided into lowland, upland and deep water or floating rice. Rice ratooning is mainly practiced on lowland rice ecosystem.

Rice ratooning is not a new practice with farmers. It has been successfully adopted in many countries including India, Japan, USA, Philippines Brazil, Thailand and Taiwan. In India, of the 40mha under rice, about 18.9mha constitute the ratooning under lowland.

Rice ratooning can be practised as an alternative to double cropping in areas of available water after the main crop season, particularly it is suited to hilly, tropical areas with heavy rainfall and under rain-fed conditions to tide over moisture stress because no other crops except rice can be grown under the climate and moisture limitations.

Advantages: The main advantage of rice ratooning is that in areas where rice is the main crop, double crop of rice can be grown for additional returns. The ratoon crop matures earlier, it has been reported that days to maturity of the ratoon crops are 65 per cent less than the main crop. It requires 50 to 60 per cent less labour. Require less water inputs, water use efficiency is high and crop uses 60 per cent less water than the main crop. The production cost is lower due savings in land preparation, transplanting or direct seeding and crop maintenance during early growth. This system requires short duration, creating possibility for growing another crop in the same cropping year and offers an opportunity to increase cropping intensity per unit of cultivated areas. The yield is up to 50 per cent of the main crop. Rice varieties differ in their ratooning ability. In case of Ratoon crops from early maturing varieties, better performance in temperate is reported.

However, intermediate to late maturing cultivars are required for raising a good crop. The general trend is that intermediate to late maturing varieties produce higher yields than early maturing varieties. Hence, there are no set rules with regard to choice of cultivar regarding ratooning. Good agronomist of the area can be a good ratooner. Many factors like variation in soil, water, light, and temperature greatly influences the ratooning ability. These interactions are needed to be studied properly for manipulating ratooning ability agronomically.

Rice ratooning depends on the ability of dormant buds on the stubbles of the crop to remain viable, the buds may be at different stages of development or similar in length. Auxiliary buds that developed at those bud nodes grew into ratoon tillers. Tillers regenerated from higher nodes formed more quickly, grew faster and mature earlier. The panicles from ratoon coming from lower nodes produced more grains per panicle than those from upper nodes, but their fertility percentage decreases. However panicles from upper nodes contribute more to ratoon yields than those from lower nodes.

The best time to harvest the main crop for raising a good ratoon crop is when its culms are still green; stalks should be cut before the main crop is fully matured. The better yield from ratoon crop is reported if main crop stubble is left with 2-3 nodes. Sowing time, temperature, day length and other factors have a profound influence on main crop duration, harvest date of the main crop and its effect on the rice ratooning also vary. Very little work has been done on this aspect. However, any delay in planting the main crop will delay the harvest and effects ratoon crop yield as well.

The success of a good ratoon crop depends on the care with which the main crop is cultivated in the growing season. Agronomic practices and the care with which the main crop is protected against insect pests and diseases determine the success of ratooning and crop yields in ratoonable cultivars. Reduction in tilling ability and yield of the ratoon significantly are reported by low temperature at post maturity, similarly, blast incidence on the main crop can carry over to the ratoon resulting in total failures. Ratooning provides higher resource use efficiency per unit time and per unit land area. However, better yield of ratoon crop is possible by adopting appropriate management practices for main crop as well as for ratoon crop.

These management practices include land preparation, adequate plant density and spacing, use of appropriate cultivars, water management, application of adequate rate of fertilisers, appropriate height of cutting, and control of diseases, insects and weeds.

Following strategies should be followed for improvement of rice ratooning crop:

The prospects of ratooning should be studied under rain-fed conditions to over moisture stress during later growing phases of the crop than irrigated rice.

Major emphasis and systematic breeding efforts should be undertaken to synthesise cultivars especially for rationing. Cultivars suitable for different climate, altitude and purpose should be identified to optimise ratoon rice yields.

Efforts should be made to screen for rationing ability of rice resistance to insects, pests and diseases, tolerance for low temperature especially during early seedling stage and for drought during later stages of the crop.

Post harvest technologies including seed viability and milling quality should be studied. Development of low-cost technology in terms of bio-fertilisers, weed management to minimise cultivation cost is necessary to make ratoon rice a profitable enterprise.

http://www.dawn.com/2007/04/09/ebr4.htm

 

[Neo]

Pakistan and Russia to enhance economic cooperation: foreign office

ISLAMABAD (April 10 2007): Pakistan and Russia are expected to reactivate the inter governmental commission on trade, economic, scientific and technical cooperation during the Russian Prime Minister's visit this week, foreign office spokesperson Tasnim Aslam said here on Monday.

The Russian Prime Minister Mikhail E. Fradkov who will be visiting from 11 to 13 April, is the first Prime Minister of the Russian Federation to visit Pakistan. Earlier Premier Alexey Kosygin visited Pakistan in May 1969 as Prime Minister of the Soviet Union.

President Pervez Musharraf visited the Russian Federation in February 2003. Prime Minister Fradkov and Prime Minister Shaukat Aziz have met on two previous occasions during the Shanghai Cooperation Summits in October 2005 in Moscow and September 2006 in Dushanbe.

The spokesperson said that the Russian Prime Minister would hold in-depth discussions with Prime Minister Shaukat Aziz. He will also call on the President and address a gathering of businessmen. She said that the major focus of the visit would be on bilateral relations with particular emphasis on ways and means to enhance economic cooperation.

She said that the two countries are committed to establish a strong relationship based on solid foundations. There are a number of opportunities for Russian participation in various projects in Pakistan. The emphasis during the visit would be on establishing a substantive economic agenda to mutual benefit of both the countries.

She said that both sides are cognisant of each other's importance. Russia is a major international player. It is a permanent member of the United Nations Security Council and of the G-8. Russia's clout and influence has considerably been enhanced in the last few years. Today Russia is in the midst of remarkable economic recovery. There is a growing convergence of interests between the two countries on issues of regional and international importance.

Bilateral trade presently stands at $520 million, which is heavily in Russian favour. She said that good prospects exist of joint collaboration between Pakistan and Russia in sectors such as oil and gas, railways, construction of coal, thermal and hydel power generation.

A number of agreements are expected to be signed during the visit relating to Railways, Narcotics control and exchanges in cultural, educational, sports and scientific fields.

AFP adds: Foreign ministry on Monday denied reports that a Briton held over a plot to bomb transatlantic jets would be extradited to Britain in exchange for six separatist leaders.

The arrest of British national Rashid Rauf in August by Pakistan sparked a world-wide security alert and arrests in Britain amid fears of a conspiracy to blow up airliners flying from London to the United States. Rauf's family last week filed a legal petition alleging that Islamabad was negotiating with London to extradite him in return for six wanted Baluch nationalists who are based in Britain, and seeking to stop such a move.

"No," foreign ministry spokeswoman Tasnim Aslam replied when asked if Pakistan had any such plan, which was first reported by Britain's Guardian newspaper in March. Aslam said that currently Pakistan and Britain had no extradition treaty but that a draft accord was in its final stages. The 25-year-old Rauf faces charges including impersonation, carrying a fake identity card and fake documents, which he denies. He is still being held by security forces under special anti-terror legislation.

http://www.brecorder.com/index.php?id=548935&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

World Bank to launch $60 million for mine and mineral project

KARACHI (April 10 2007): The World Bank is planning to launch about $60 million mine and mineral developmental project in Pakistan. Sources told Business Recorder on Monday that the WB would start $60 million project to develop country's mine and mineral sector.

The core objective of the project is to assist the government to implement strategy to accelerate sustainable mineral sector development by strengthening governance, transparency, and capacity in the management of mineral resources. The emphasis on community development, environmental compliance, and equitable sharing of mineral resource benefits, sources said and added the aim was also at attracting private sector mining investment.

The provincial level reforms will be implemented in Balochistan as a pilot case, and will aim to provide a demonstrative effect so that other provinces follow with similar reforms. The project is expected to yield the outcomes ie increased private-sector investment in the mineral sector as a result of collection and dissemination of the basic geo-data, and improved investment-enabling climate through enhanced legal and fiscal frameworks in line with international practices.

The improved institutional capacity at the federal and the provincial levels to manage the mineral sector, increased taxes/royalties revenues at the federal and local levels and to formulate policies on mitigation of potential impacts of mining on associated communities and on increased benefit sharing at the community level.

This would also improve efficiency and transparency of licensing process through a harmonised mineral licensing system. About $50 million to be spent at provincial level for production and management of geo-data, includes establishment of a mineral resource information centre for the management and dissemination of mineral resource information.

The compilation of existing and collection of new basic geo-data and activities to support sector promotion. A Provincial Regulatory Framework and Institutional Strengthening to include restructuring of provincial regulatory and fiscal frameworks relating but not limited to licensing, cadastral services, environmental compliance, mine health and safety, inspection and training, and institutional modernisation and strengthening.

Mining and Community Development to include development and implementation of overarching policies for improved sharing of resource benefit streams, mining & community development programs, improved environmental and social performance, and community wellbeing pilot projects.

At the federal level approximately US $8-10 million to be spent for improvement of the Federal Legal/Regulatory Framework, Fiscal/Taxation Regimes, and Institutional Framework, which would include modernisation and strengthening legal and fiscal frameworks, monitoring of industry activities, enforcing regulatory and environmental compliance, and institutional modernisation and strengthening as well as technical and non-technical capacity building.

Development of a Template for Provincial Mineral Concession Rules and Regulations would include development of standardised rules and regulations for the award, renewal, cancellation and administration of mineral rights, and co-ordination of standardised mineral cadastre system at the provincial level.

Formulation of National Sector Policies for Sustainable Development to include modernisation and strengthening of existing policies using international best practice duly adjusted to local conditions and formulation of consultation and planning frameworks to ensure community well-being for both large and small-scale mining.

Co-ordination and Promotion of Mineral Sector Development and Dissemination of Basic Geo-Data to include establishment of a national mineral resource information centre and institutional strengthening and capacity building of the Geological Survey of Pakistan, sources said.

The project will be implemented in both urban and local areas. The federal level components will be implemented in Islamabad and at provincial level in Quetta and other locations in Balochistan, which will be selected during the project implementation based on criteria established for these purposes, sources said. The project will help prepare environmental frameworks, and formulate policies for community development, including on environmental impacts.

http://www.brecorder.com/index.php?id=548872&currPageNo=1&query=&search=&term=&supDate=