Pakistan Economy - News & Updates - Archive

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Wednesday, May 03, 2006

By Hamid Waleed

LAHORE: Taufiq Hussain, Deputy Governor of the State Bank of Pakistan (SBP), has said Pakistan is not facing a Mexico-like financial crisis and emphasized that the SBP has capped banks’ exposure to the stock market and real estate to avoid any such situation.

Shahid Javed Burki, a former World Bank vice-president, had told State Bank of Pakistan Governor Shamshad Akhtar on April 22 at Washington Forum that Pakistan was facing symptoms that preceded the Mexican financial crisis more than 10 years back.

Talking to newsmen after speaking at the Second Annual Conference on The Management of the Pakistan Economy at Lahore School of Economics Tuesday, Mr Hussain said: “Mr Burki can reply better as to why he is carrying such an impression about Pakistan banking while sitting in Washington.”

“So far as the SBP is concerned, we have capped banks’ exposure to the stock market about two and a half years ago through a circular that no bank will allowed to invest more than 20 percent of their paid-up capital,” he added.

He said Mr Burki has commented on the situation after some two and a half years after this decision, especially when the SBP has resisted large hue and cry against the decision successfully.

Similarly, he said, banks have been restricted from lending on purchase of vacant land in order to control the element of speculation and banks are allowed to extend loans only for construction purposes. He further said that there is no need for devaluation owing to the unprecedented rise in oil prices.

“There is no need for devaluation,” he said.

Earlier, speaking at the conference, the SBP deputy governor said evidence clearly suggests that in recent years speculative hoarding and collusive price setting have been significant contributors to domestic inflationary pressures in markets for many key commodities. Such pressures, he argued, respond more to legal and administrative measures and are less sensitive to monetary tightening.

He said Pakistan needs to continue with sound macroeconomic policies, which are the lynchpin of restoring both domestic and foreign investor confidence.

He said macroeconomic management today is complicated by Pakistan’s need to continue growing which requires it to stretch its resource base and the country would have to carefully gauge its priorities to meet these challenges.

While welcoming decline in inflation, he said the external balance has deteriorated significantly in FY06. He said although remittances are expected to show reasonable growth and exports are likely to remain strong, the current account deficit is expected to increase to 4.7 percent of GDP by end-FY06.

“While this is not low, it is quite sustainable in the short run. In the longer run, however, larger current account deficits cannot be sustained, as these would create a vicious cycle of debt creation, exchange rate depreciation and inflation. He said the SBP would continue to retain the tight monetary policy. However, he added, it is important to note that monetary policy alone will not be able to contain the entire rise in inflationary pressures. In particular, there is urgent need for the government to supplement its praiseworthy supply-side measures with policies to address market structure problems.

Sartaj Aziz, former federal finance minister, Dr A R Kamal, Director of the Pakistan Institute of Development Economics, Islamabad, Dr M Tariq Siddiqi, former secretary, Sakib Sherani, chief economist ABN-AMRO Bank, Dr Rashid Amjad, ILO, Geneva, Prof F A Fareedy, of Lahore School of Economics, and Dr Shahid Amjad Chaudhary, LSE Rector also spoke.

 

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Wednesday, May 03, 2006

ISLAMABAD: The government will set up seismic centres in the country’s earthquake-prone areas for accurate monitoring of tectonic movements, said Dr Ishfaq Ahmed, special adviser to the prime minister, while inaugurating the two-day international workshop on the use of seismic and GPS technology for monitoring tectonic plates on Tuesday.

He said that the prime minister was evaluating all aspects of the October 8 earthquake and how to avoid similar catastrophes in the future, for which a seismic centre would be established at the Quaid-e-Azam University. He stressed the need to be aware of tectonic developments and gather seismic and geological data. “We need data on seismic zones and need to measure the earth’s resistance and the flow of underground water, as large areas of Pakistan fall within the Himalayan region, which has frequent movement of tectonic plates,” he said.

He said that in view of the recent occurrences of natural disasters, there was a need to address issues relating to natural disasters at both national and international levels, adding that the issue needed to be taken up globally so that strategies to cope with natural disasters could be evolved. He said that substantial research was needed in the subject of seismology and added that further research was required in inter-disciplinary subjects such as Geology, Physics, Engineering, Mathematics and Meteorology.

Pervaiz Butt, the secretary of the ministry of Science and Technology, said the government had established a number of seismic stations in the country to monitor the movements of tectonic plates, adding that the government had taken a number of steps including the provision of state-of-the-art equipment to help scientists and engineers.

 

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Wednesday, May 03, 2006

KARACHI: Kodak Limited Pakistan, the country’s premier photographic company Tuesday announced to enhance its prolific role in the country by doubling the number of photographic labs.

According to a press release currently, Kodak operates more than 350 labs spread across the country. Kodak would enhance more than 700 labs in 150 cities by the middle of 2007.

Official Syed Awais Ahmed said Kodak also announced the appointment of EM-AEY as its non-exclusive distributor.

 

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Wednesday, May 03, 2006

ISLAMABAD: The Senate Standing Committee on Labour, Manpower and Overseas Pakistanis was informed on Tuesday that Pakistani labour was in great demand in the Middle East and Malaysia. “It is for the first time that the ministry will be sending 2,000 unskilled workers (labourers) to Malaysia through the Overseas Employment Corporation (OEC). The demand is expected to rise further and Pakistan has signed agreements with international organisations in this regard,” Malik Asif Hayat, the secretary for Labour and Manpower, told the committee in its meeting on Tuesday. The committee also urged the Labour and Manpower Division to chalk out viable policies to resolve the problems of expatriates and encourage them to sent remittances to Pakistan. He said that laws were being consolidated to and focus was being laid on the development of human resources.

 

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Wednesday, May 03, 2006

ISLAMABAD: Visiting Uzbek President Islam Karimov has said that his country will support Pakistan’s bid for full membership of the Shanghai Cooperation Organisation (SCO).

He said this while addressing a joint press conference with President Pervez Musharraf following talks between the two leaders. The Uzbekistan president arrived in Pakistan earlier in the day.

The two countries also signed agreements and memoranda of understanding (MoUs) on Tuesday evening for the promotion of cooperation in trade and economic relations. The agreements were signed at the Aiwan-e-Sadr following talks between the two leaders. Both countries also signed a joint statement expressing common resolve to “reinforce bilateral ties”.

Agreements were signed on cooperation in private entrepreneurship, plant quarantine and the ratification of the agreement to fight international terrorism. MoUs were signed between the two countries on cooperation in agriculture, exchange of information on custom statistics of bilateral trade, and the establishment of a Joint Business Council between the two states’ Chambers of Commerce and Industry. Both leaders said that the two countries had also agreed to coordinate their efforts to fight terror for the common goal of sustainable peace, security and development in the region.

Musharraf said that Pakistan will develop rail and road links with the Central Asian state as part of its efforts to “take bilateral trade to new levels” and provide the world access to Uzbekistan through its ports. “We expressed the mutual desire to develop links, and Pakistan has offered Uzbekistan the use of its seaports to develop trade with other regions of the world,” Musharraf said. The two leaders also expressed the desire for peace and stability in Afghanistan.

About cooperation in counter-terrorism, President Musharraf said that the two sides can share intelligence to “deal with the financial linkages of terrorists”.

Karimov said that Uzbekistan fully supports Musharraf’s vision of enlightened moderation “as a way out of international turmoil”. He also backed President Musharraf’s efforts to make the Organisation of Islamic Conference “a dynamic body”.

The Uzbekistan president hoped that the agreements between the two countries would help them “make the most of the vast existing trade potential”. He said that the development of communication links between Pakistan and Uzbekistan and stability in Afghanistan would enable his landlocked country to have access to other regions through the Gwadar and Karachi ports.

 

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May 2, 2006

The fuel that drives knowledge-based approach to economic development comprises elements derived from government and industry, as well as education. I myself held positions as a corporate manager, a university professor, a government official, and now, the university Vice Chancellor. My perspective, therefore, incorporates the roles of all three sectors - industry, government, and the academia formally known as the university; each one of them is vital to a dynamic, technology-driven economy.

The role of education obviously is of acute concern to me as the Vice Chancellor of BUITMS, a public sector university, which is striving to build its strength as an institution that not only educates, but also develops and examines ideas across disciplines, and, relates them to the world of practice.

A well-educated population is the sine qua non of economic development and there are three postulates upon which a university helps contribute to a successful technology-driven knowledge economy

· First, universities function to educate scientists, engineers, technologists, and technological leaders for industry, government, and education.

· Second, the basic scientific research conducted in the university is critical for innovation, emergence of new technologies, and economic development.

· Third, universities can and must foster entrepreneurship, the process not only of translating new knowledge to application, but commercializing those new applications as new business ventures.


I would like to elaborate these three postulates one by one. My first point was that the universities function to educate. The education phenomenon itself, further has three elements; the student, the academic environment and the faculty.

We believe that higher education is fundamentally a public good and whoever is capable to acquire higher education must not be denied the access to education. It is as important for the state to provide education to its citizens as other basic necessities of life i.e. food, cloth and shelter and security. We as a public sector university are categorically against the concept of education for a fee. The concept that education is a commodity that can be purchased for a fee has given rise to the mushrooming of so called universities churning young people into graduates without any academic exit standards and which are largely good for nothing. The critical element here is “the provision of education to those who are capable to pursue”. As such, it is essential for the universities to very carefully develop their student population rather than every one who can pay a fee to enter the university. The students are the most fundamental and important assets of a university and certainly they are at the Balochistan University of Information Technology and Management Sciences

The second important element of educating is the academic environment which is a very inclusive term comprising the classrooms, the laboratories, the library, students and faculty interaction places, playgrounds, auditoriums, cafeterias, hostels, and other places of mental, physical and emotional development. I can very responsibly say that most of our public sector universities have those environmental elements. The only missing link is putting them to effective use. While in most of our private sector universities with few exceptions these environmental elements are missing. I am glad to state that we are in the process of creating state of the art facilities, which one can find at the finest institutions of the world.

The next important element of educating is the faculty. I would group two distinct aspects under the faculty i.e., the teacher and the curriculum/material he/she teaches. In information technology discipline globally, there is a shortage of faculty. The situation is not very different in Pakistan. In public as well as private institutions, both the availability and quality of faculty is questionable. Generally the institutions resort to part-time faculty. After 25 years of affiliation with the academic environment, I can say that a part time instructor is not a true substitute to a full time teacher. This part-time syndrome has given rise to yet another problem the deficiency or absence of research by the faculty. In emerging sciences a very small number of academicians posses some credible research on their credit. The result is a bookish knowledge passed on to young folks. On top of that most of public universities and so-called private universities are forced to teach what could be taught instead of what should be taught.

The education Working Group at MIT asserted “Computer Science remains a rapidly evolving discipline, which places considerable pressure on the CS&E curriculum. The emergence of new tools, techniques and paradigms forces a continued re-evaluation of the topics covered and the pedagogical approaches used. Often the CS&E curriculum and its faculty become out-dated as the core ideas in the discipline and its technology advances. The group continues to state that the issues include: the balance between research and teaching, faculty currency in the discipline, sufficient considerations for the needs of the industry, integration of topics in the theory of computing with the practical topics in the curriculum, the management of large classes, acceptance of professional education by the academy, the development of teaching methods, lab materials and technologies that appeal to a wide range of student interests and values and regular updating of service courses for the non-majors

In the Computer Science & Engineering discipline IEEE-ACM prepared curriculum in 1965 and revised in 1968, 1978, 1991 and now in the year 2001 and this exercise is still on. All our universities must carefully watch on these developments and adopt the world’s most acceptable body of knowledge defined for various levels of study. Apart from this body of knowledge, the university must keep an eye on the ABET accreditation guidelines. I am glade to say that at Balochistan University of Information Technology and Management Sciences we are exactly doing that – carefully watching the IEEE-ACM curriculum and compare and weigh ourselves on the ABET accreditation guidelines. Apart from this we always look at the curriculum in the finest institutions around the glob and its suitability to our programs and necessary adjustments accordingly.

At the Balochistan University of Information Technology and Management Sciences we are fully geared to educate, we have fully functional academic facility, competent faculty and the students. We have started our second admissions spree. During the month of January we are recruiting another undergraduate lot in Computer Science, Computer Engineering and Management Sciences, and our first graduate lot of students in Computer Science as well as in Management Science. We expect that INSHALLAH our student strength would reach 250-300 after the successful commissioning of admissions. I am sure you know our policy that the top students study free. The new development is that our university staff and faculty who want to improve their qualifications and are admitted in any program would also study free. We are also discussing Human Resource Development Initiative with the Government of Balochistan. Although the deliberations are at the initial stage, we are ready to GO for all practical purposes. We are continuously in search of world-class faculty.

Now I come to the second postulate, which is the research, conducted at the universities. Here, I remember the efforts of Dr. Usmani and the Dr. Mahboob Ul Haq. These two gentlemen (may Allah bless them in eternal peace) initiated schemes in early 60s and 80s respectively. The scientists prepared under Dr. Usmani’s initiatives were indeed behind our most impressive defense and energy programs. The people prepared by Dr. Haq’s program of S&T Scholarship are behind whatever works is being done in various scientific disciplines today; information technology is not an exception. I myself am the product of Dr. Haq’s HR development initiative under which I completed my Masters and Doctorate from the George Washington University. Had those schemes continued we would have been in much better shape than what we are today?

These two gentlemen remind me of Dr. Vannevar Bush, the founder of National Science Foundation in USA, half a century ago. He noted in his report "Science — the Endless Frontier" "Scientific progress is one essential key to our security as a nation, to our better health, to more jobs, to a higher standard of living, and to our cultural progress." Further he said, "Basic scientific research is scientific capital."

An important ingredient and outcome of Dr. Bush`s work was the notion of the research university, which would partner with government and industry to ensure continued global preeminence of the United States — he asserts, "The publicly and privately supported colleges, universities, and research institutes are the centers of basic research. They are the wellsprings of knowledge and understanding. As long as they are vigorous and healthy and their scientists are free to pursue the truth wherever it may lead, there will be a flow of new scientific knowledge to those who can apply it to practical problems in government, in industry, or elsewhere."

 

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The result of that investment in S&T manpower is that today America is the de fecto leader in technology world. In economic terms, between 1995 and 1998, the "Internet economy" grew at a compounded rate of 174.5%. Despite having the largest pool of educated and trained human resources, even today, American technology-based industries cannot meet their employment needs. The shortage of 346,000 information technology workers in 1998 has grown to over half a million and is still growing. And, according to Department of Labor projections, 60 percent of American jobs in the coming years will require skills that only 20 percent of Americans have. We also created Pakistan Science Foundation almost during the same era and the difference is visible.

It is the "innovative ability, in addition to the technical ability that plays an ever-increasing role in economic success. An industry depends upon specialized expertise to design innovative products and processes. The capacity to translate knowledge into high-value, sometimes unique, products and services is imperative for a nation to become competitive in global economy. This capacity arises in numerous domains, including design, manufacturing, marketing, and management of products and services. The ability of a nation to develop individuals with such innovative abilities depends upon an educational system which provides a high quality cognitive skill base from which all enterprises can draw."

The universities will have to act as long-term visionary research and development resource places. In Information Technology, their portfolio of high tech products and concepts ranges from the more traditional microprocessor and memory type computer chip to the emerging areas of biochips, micro- and nano-systems, ultra-high frequency communication devices and associated equipment. There are dozens of research universities around the globe where nano-technology research centers are functional which are glaring examples of academia-industry collaboration.

Universities are conducting research on novel materials, which reveal properties different from the natural materials from which they are made. In the coming decades, the researchers plan to build microscopic nanomachines. These may include computers with a thousand-fold increase in power that draw only a millionth the amount of electricity, materials far stronger than steel but with only 10 percent the weight, and sensors that can detect tumors when they are only clusters of a few cells.

The advances in computational capabilities, with concomitant advances in communications technologies are simply phenomenal. Computer Assisted Tomography – CAT, Magnetic Resonance Imaging (MRI), The application of quantum science at the sub-microscopic level, Global Positioning System - an array of 24 satellites, orbiting the Earth every 12 hours, Deciphering DNA structure — also known as double helix, Robotic manipulation and multiple mobile robotics, Networking and pervasive computing, Multiscale computation, and Next generation computer chips to name the few.

At our universities we also have to understand the need for sharply defining a clear focus on areas of inquiry most vital for today`s global society. At BUITMS we have begun Institution-wide initiatives in management science and information technology. We have selected specific focal areas that build on our unique strengths. What we are doing is consistent with international trends. Apart from efforts for creating multidisciplinary research laboratories for electronics, telecom, and high power computing. We have already set-up Dr. Atta Ur Rehman Center for Information Technology and Telecommunications, under which we have submitted research proposals to donor agencies. We have initiated the process of establishing UNESCO Chair in Mechtronics, and another UNESCO Chair in Balochistan Development Studies. We have also requested to PTCL to sponsor a PTCL Chair in IT and Telecommunications Research.

The next important postulate in the education is fostering entrepreneurship. Technological entrepreneurship is the ability to translate discoveries made in the course of scientific research into practical application i.e. the process by which innovation is transformed into business ventures. For us entrepreneurship also means putting to use the unique resources bestowed to us in the shape of minerals, vast stretches of lands and 100s of miles of seashores. Understanding the principles, practices, and importance of entrepreneurship, therefore, is vital to the economic health and well being of ours. We believe that the spirit of entrepreneurship is absolutely critical for the university education in today`s knowledge-driven economy.

As such we have created BBI - Balochistan Business Incubator, where the university will pamper the student run entrepreneurial activities. And gentlemen, our hostel is not the hostel; we want to term it as entrepreneur’s dorm. We have students from across Balochistan and across the country from Turbat, Pangur, Gawader, Loralai, Zhob, and Lahore, Islamabad, Peshawar and Karachi. For the encouragement of student entrepreneurs, we also intend to create the Student Business Plan Competition and creating Student Venture Funding at appropriate times.

Another dimension of our entrepreneurship is the establishment of System Sciences/Management Sciences Expert Advisory Cell, which would be providing professional services to the government and industry. We are discussing possible ventures with different government agencies. A team of professionals has been assigned to produce model e-government applications targeted for Balochistan.

It is no accident, of course, that I have focused on BUITMS, We envision that our graduates & alumni are remembered in the decades to come as the persons who came up with new innovations, initiated and managed projects which would be still standing in the next century, founded the corporations which would be active around the globe and would be among the world leaders of tomorrow in their respective spheres of life. There are countless names in our history and in the history of others, where the creators are not there but their creations physical or conceptual are still alive and would remain so for the times to come.

Last but not the least, the universities have a key responsibility to play in the development of a general technological awareness and literacy in all citizens of a given nation, in order to create understanding and acceptance of technology, and to create a favorable climate for technological developments. Universities cannot do it alone. Academic institutions, corporate sector and government offices and labs play a vital role in this process. I can quote virtually 100s of examples of successful collaborations. I strongly urge the government, the industry and businesses to come forward for technological alliance; we are here to research the solutions to your problems.

Dr. Muhammad Abbas Choudhary

 

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THE government has traditionally adopted an ambiguous stance on its defence budget. While it has reaffirmed on different occasions that it will not enter into an arms race with India, it has also not been very categorical about committing itself to cutting down its defence expenditure. From this point of view, Prime Minister Shaukat Aziz’s statement to a visiting delegation of South Asian media persons that the country’s defence spending is gradually decreasing will be well received. Mr Aziz also pointed out that the government’s social sector development spending was growing rapidly. His statement is significant because it indicates that the national leadership is becoming aware of the heavy burden of defence that has been imposed on the country to provide security to the people of Pakistan. This has had a big impact on the national economy since nearly 27 per cent of the federal budget goes towards meeting the defence needs. It also seems that the government has come to see the wisdom of channelling more funds into the social sectors that address the need for developing human resources. Investment in health and education yields greater benefits than military hardware. An educated, skilled and healthy society ensures economic progress, political stability and the social development of the people, which guarantee security better than an oversized arsenal.

Given its limited resources, the government can raise its social sector spending only by diverting a sizeable part of the allocations from defence to other areas of national life. Spending on defence accounts for 4.4 per cent of GDP while education gets only 1.8 per cent and health even less at 1.1 per cent. One hopes that this ratio will change in the next few years as the balance shifts in favour of human resource development. While no one disputes the need to educate the people and give them a better life, it is also felt that the factors that had fuelled Pakistan’s defence drive are gradually melting away. With the national defence being India-centred, it was natural for the size of our arms budget being contingent on the state of relations with India. When the two countries were locked in a state of mutual hostility, they were inevitably drawn into an arms race. Now that the two countries are engaged in a composite dialogue and tensions between them have been abated, it is felt that they can lower the level of their military preparedness. Islamabad has said a number of times that its military strategy is founded on the doctrine of minimum deterrence. This is a sensible approach since a country does not need a big stock of nuclear weapons for defence purposes. Even a few of them give a country an overkill capacity that is not really needed.

It is also important that governments should develop their foreign policy strategy in such a way that they do not have to take recourse to war and military weapons for security. Through skilful diplomacy and economic and trade relations states are known to better protect their strategic and geopolitical interests. The main disadvantage of using force or adopting the technique of sabre-rattling and brinkmanship is that a government can lose control over events destabilising an entire region. This is a dangerous scenario especially if it is remembered that weapons of mass destruction are not the preserve of a handful of nations. That is why it is felt that there is no need to develop such weapons on a big scale except for deterring a potential enemy.

 

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BAKU (updated on: May 04, 2006, 15:25 PST): Prime Minister Shaukat Aziz on Thursday said Pakistan was set to make the Economic Cooperation Organisation (ECO) more effective.

Talking to newsmen here soon after his arrival the Prime Minister said the ECO has lot of potential, but pointed that it has to be made more effective, particularly in areas of energy, transport and trade.

When asked if he has brought some proposals to make ECO more effective, he replied in affirmative and said Pakistan was playing an effective role in strengthening the organisation and to make it more vibrant.

He said Pakistan provided the closest link to many of the member states to the sea providing the easiest route for increased trade.

The Prime Minister who is on a two-day official visit to Baku to represent Pakistan at the 9th ECO summit said "The ECO can build the necessary linkages and dependencies required for turning it into a more effective organisation."

The Prime Minister was earlier warmly received by Deputy Prime Minister Ayub Yakoobov at Baku Heyder International.

The Prime Minister soon after arrival is scheduled to hold a meeting with Azerbaijani President Ilham Aliyev at the Presidential Palace. Bilateral matters and regional and international issues are likely to figure in the meeting, foreign office sources said.

Prime Minister Shaukat Aziz is also scheduled to meet Iranian President Mahmoud Ahmadinejad, where they are likely to discuss the Iran Pakistan India gas pipeline project, the Iranian nuclear issue, besides measures to boost economic and political ties.

He will attend the ECO summit on Friday and is scheduled to meet Turkish Prime Minister Recep Tayyip Erdogan, before leaving for Islamabad.

 

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KARACHI (May 04 2006): How wrong clubbing of data plays havoc with the balance sheet was a case of inquiry for the central bank when it found an abnormal bulge in the banking system's deposits and 'other assets' on 8th April.

The wrong clubbing occurred in the case of a huge chunk of foreign exchange, received by the PC from a strategic buyer and paid to a major domestic bank for credit to the government account.

The best position would have been to immediately transfer the foreign exchange received to the State Bank. In that case, the balance sheet of SBP would have reported it as its holdings of foreign exchange which in all probability would have raised the liquid foreign exchange reserves of the country to over $13 billion.

That would have been a landmark achievement by the country but could not be realised because of late receipt and placement in a wrong head of account instead. It also delayed the government debt repayment to the SBP of about Rs 40 billion also meaning loss to the exchequer of the amount of interest due on it for one week.

Let us see what happened to the balance sheets of the banking system for the relevant dates. On 1st April banks' deposits etc amounted to Rs 2,665 billion which rose to Rs 2692 billion on the 8th - indicating an increase of Rs 27 billion in a week apparently an abnormal increase during a normal week.

In all such abnormalities, whether these occur in the case of deposits, loans or other items, the central bank looks at the individual balance sheets of banks locating where the abnormality occurred and then seeks a plausible explanation from the bank concerned.

When the mistake was rectified next week, deposits came tumbling down to Rs 2654 billion on the 15th - a decline of about Rs 38 billion in a week. Visibly, if the State Bank had not caught the mistake at the very beginning, inquisitive analysts would have been asking what happened to the banks' deposits in just one week? This mishap distorted the money supply figures, pushing it up in one week without any genuine reason and then taking a nosedive the next week without any justification.

On the asset side of the banking system it propped up 'other assets' of the banking system from Rs 180 billion on 1st April to Rs 219 billion on the 8th- an increase of about Rs 39 billion which was roughly the rupee counterpart of the foreign exchange deposited by a government department. On rectification, the 'other assets' on 15th April stood reduced to Rs 181 billion a position that was roughly obtained on the 1st. (Report by research.dept@aaj.tv)

 

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PESHAWAR (May 04 2006): The visiting Netherlands Foreign Minister, Bernard Bot, called on NWFP Governor Khalil-ur-Rehman at the Governor House here on Wednesday. He was also accompanied by Dutch Ambassador in Pakistan W Andreae.

The Governor highlighted the geographical importance of the province and the adjoining Federally Administered Tribal Areas and the system of governance, with special reference to the prospects of economic uplift there.

He thanked the government and people of Netherlands for their help and co-operation in mitigating the miseries of the earthquake affected people of the province.

The Governor apprised the guests about the prospects of economic uplift in FATA and said that the area is highly rich in mineral resources and technical assistance and foreign investment towards its scientific exploitation would definitely be welcome.

Khalil said that some foreign entrepreneurs have already expressed intentions to invest in the mineral sector. He particularly mentioned the deposits of marbles and said that an Italian firm was already in touch with the respective quarters to establish a tiles manufacturing unit in the area which, on materialisation, would definitely prove a significant source of earning foreign exchange.

 

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LAHORE (May 04 2006): Punjab Planning and Development Board Chairman Salman Ghani has disclosed that Gross Domestic Product (GDP) growth rate was expected to be around 7 percent in the FY 2005-06.

While addressing a press conference held to brief the newsmen on the forthcoming Punjab Development Forum (PDF) 2006 here on Wednesday, Salman said the figures would be included in the Punjab Economic Report 2006. He added the Punjab Chief Minister Chaudhry Pervaiz Elahi would make the report public on the Punjab Budget day.

"Unfortunately this year we could not present the report in the PDF because it was still in the preparation stage," he added.

According to him, for rural areas, in particular of southern Punjab, they were investing in education and health, and building infrastructure so that on farm jobs could be created. The government has also invested Rs 11 billion in irrigation to facilitate the farmers.

He admitted that development fund and non-development funds ratio was not at a reasonable level that stood at 25:75, however they were planning to change the ratio to 40:60 by 2008. He said the government thrust would now be on urban development, and in that connection an urban desk had been established in the P&D office. He revealed that government was also planning to conduct a service sector survey for the first time.

On PDF, he said that third Punjab Development Forum 2006 was scheduled for May 5 and 6 at the Chief Minister's Secretariat. He further said the main objective of the Forum was to provide an opportunity to policy makers, stakeholders from international development partners in Pakistan, representatives of business community, academia and members of the civil society, amongst others, to engage in wide ranging dialogue and discussion on the development priorities of the Punjab government.

It also aims to help the provincial government in evolving more participatory development strategy for the medium term.

According to him, the Punjab Chief Minister would inaugurate the Forum on Friday (May 5) while Punjab Governor Lieutenant General Khalid Maqbool (Retd) would preside over the closing session. Prominent among invited are State Minister for Economic Affairs Hina Rabbani Khar, Advisor to PM on Finance Dr Salman Shah, State Bank of Pakistan Governor Shamshad Akhtar, National Commission of Governance Reforms Chairman Dr Ishrat Hussain, Robert L Floyd Country Programme Co-ordinator World Bank (Pakistan and Bangladesh), John Wall head of the World Bank Mission in Pakistan, Peter Fedon Country Director Asian Development Bank, Yousuf Samiullah of DfID and head of other donor agencies in Pakistan.

"Moreover, a large number of invitee from academia, private sector and the civil society are expected to attend in addition to policy makers and representatives of government. Each of the five technical sessions would be chaired by the leading experts," he added.

For the first time a panel discussion of leading NGO's and members of civil society on 'Role of Government on Pro-poor Development' has also been scheduled in PDF. He also said that in the Forum exclusive session (Technical Session-I) for international development partners had been planned wherein focused discussions would be held on development priorities of the province.

Representatives of Asian Development Bank, World Bank and DfID would make presentations to share the views of international development partners. Special invitations have been issued to leading industrialists and investors in Punjab to encourage private sector investment in the province.

On the occasion, the Chairman presented two reports, 'District Wise Socio-Economic Indicators Coverage and MDGs (MICS 2003-04) and Poverty Focused Investment Strategy for the Punjab', which would also be tabled in the PDF in addition to Punjab Planning Manual for the local governments that serves as a guide on local governance.

 

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ISLAMABAD (May 04 2006): The Minister for Industries and Production, Jahangir Khan Tareen, said on Wednesday that South Asian Free Trade Agreement (Safta) would act as a binding force for mutual growth and economic co-operation in the region.

"If Safta, which is a binding force for regional economic cooperation, is successfully implemented, it will transform South Asia into an engine of economic growth for the World," he said while addressing the inaugural session of a two-day 'Regional Roundtable' on trade liberalisation in Saarc. ' The conference is being organised jointly by Saarc Chamber of Commerce and Industry (SCCI) and Commonwealth Business Council (CBC).

The themes of the roundtable are: Safta challenges and opportunities; regional market synergies; tariffs and non-tariff barriers liberalisation; impact of regional and bilateral FTAs on Safta; how multinational companies view Safta services and investment; and Safta as pathway to economic union.

The roundtable is being attended by public and private sector representatives from all over the region, including Sri Lankan Commerce Minister.

Tareen said that the intra-regional trade in South Asia was still only about five percent of the region's combined trade with the rest of the world, whereas Foreign Direct Investment (FDI) accounts for a mere one percent of the globe.

"South Asia needs to accelerate its growth process, with emphasis on human development and strengthening economic competitiveness to deal with daunting challenges," he said.

The Industries Minister described poverty as one of the major challenges being faced by the region, but expressed hope that Safta would be instrumental in economic progress, prosperity and overcoming poverty, which is so endemic in the region.

He said that it could prove to be the herald of sustainable growth by synergising the complementary economic strengths of member countries, expanding market availability to entrepreneurs, and making local industry more competitive in the global context.

SCCI President Dasho Ugen Tsechup Dorji in his address said that SCCI has drawn up a regional framework on arbitration, besides preparing a draft agreement on movement of goods and services.

He complimented Pakistan and India for making Safta possible, but added that a lot more was needed to be done to create mutually beneficial economic ties among member states.

He stressed for harmonising of standards, simplification of customs clearance procedures, simplification of banking procedures for import financing, transit facilities for intra-Saarc trade, removal of barriers to intra-Saarc investment, development of communication systems and transport infrastructure and simplification of procedures for business visas.

Saeed Ahmed, President of the Federation of Chambers of Commerce and Industry, said that Saarc member countries should evolve a comprehensive strategy to meet energy requirements and establish a system for inter-connectivity.

He said that there should be no political influence on trade, and the member countries should not only prepare common standards for their goods but should also establish a Saarc bank to facilitate trade.

He said that Saarc members countries should also prepare 'social charter' and give priority to education, health, environment, empowerment of women and poverty alleviation.

Peter Wilson, Political Counsellor, British High Commission, said that the world community was closely watching progress on Safta, and added that political governments should not create hurdles in forging economic relations.

"It will be the government's mistake to hold the economy hostage on political reasons," he added.

He lauded the efforts of President Pervez Musharraf and Indian leadership which they made to improve relations.

He asked the participants to send a strong message to their politicians that they should not interfere in economic links.

Naseem Saigal, representing Commonwealth Business Council, said that Safta was a great achievement of the member states and the region would become an economic tiger. He added that observer status to China and Japan was evidence of Saarc's importance.

In the technical sessions, challenges and opportunities of Safta were discussed in detail.

In a presentation, Dr Zafar Moin Nasir, of PIDE, said that South Asia region has great potential to diversify its industrial and agricultural production and take benefit of mutual trade.

He, however, said that unlike other regional treaties, such as Asean or European Union, which have 90 percent of their trade within the region, South Asia has very meagre intra-region trade.

He showed that cost of non-co-operation in the region had been almost $266 billion, and India and Pakistan had been the main losers.

He said that due to less investments the region lacked diversification in tradable products and trade supporting infrastructure. "If trade is liberalised under the Safta," he said, smaller economies in the region may get more benefit."

Amir Khusro Chowdhury, Advisor, Ministry of Commerce, Bangladesh, highlighted the importance of Safta for less developed countries of the region. He emphasised that issues such as rules of origin and compensation against revenue losses must be resolved as soon as possible. He said that the Negative List should not include most competitive products of member countries, otherwise there would be no tangible trade.

The participants expressed fears that recent enhanced FDI figures of member countries also included assets of privatised units and because of similar comparative advantage, member countries would only be able to trade between deficits and surpluses.

 

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ISLAMABAD (May 04 2006): Uzbekistan has shown interest in exporting sugar and cotton to Pakistan, in addition to further cementing relations in the fields of science, technology, telecommunication, trade and water sector. These offers were made by the visiting Uzbekistan President Islam Karimove at a meeting with Minister for Water and Power Liaquat Ali Jatoi.

Jatoi, who is also co-chairman of Joint Ministerial Commission (JMC) of the two countries, welcoming the Uzbek President said that Pakistan's economy has made significant progress over the past few years. He told the Uzbek President about Pakistan's massive upsurge in economic activity not witnessed here before in many decades.

He said that confidence of domestic as well foreign investors was gaining new heights on the back of a stable macroeconomic environment.

The Uzbek President appreciated the dynamic leadership and economic vision of President Pervez Musharraf, which has resulted in achieving phenomenal economic growth.

He also emphasised for restoration of peace in the region, particularly in Afghanistan, that could facilitate the trade between the two countries. He emphasised the need for joint ventures in various fields to boost trade and economic relations between the two countries.

Both sides appreciated the need to organise mutual visits of business delegations, co-operation between the chambers of commerce and industry, co-operation in the fields of food and agriculture, tourism, culture, information technology and telecommunication. With a view to creating favourable conditions for bilateral trade, both sides recognised the need to develop co-operation between banking and financial institutions of the two states.

Jatoi stressed the need for direct air links between Tashkent-Karachi-Islamabad to facilitate business activities and tourism between the two countries.

 

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ISLAMABAD (May 04 2006): The government wants accelerated work on the ongoing development projects in Balochistan, Senator Mir Mohabat Khan Marri said while talking to PTV on Tuesday. He said that in a high level meeting on Tuesday, Balochistan's development projects were evaluated and discussed.

He further said that the senators belonging to Balochistan and the members of provincial assembly also attended the meeting. Detailed discussion was held in the meeting and focus was towards the development of the province, he added.

Mir Mohabat Khan said special directives were given that work on ongoing projects would be accelerated in the province so that within short span of time, prosperity could be brought in to the province, he added. Senator Mir Mohabat said it was also decided in the meeting that more funds would be allocated for the development of the province.