Pakistan Economy - News & Updates - Archive

[Neo]

Govt aims to achieve 10pc growth

LAHORE: Pakistan is likely to achieve a sustainable growth rate of 10 per cent after the completion of National Trade Corridor, building of dams and improvement in the private sector’s efficiency.

Adviser to the Prime Minister on Finance Dr Salman Shah stated this while addressing a pre-budget seminar on Monday. He said the economy had reached a stage where achieving seven per cent growth target would pose no problem. He said the government wanted the private sector to play its due role in accelerating the growth through higher productivity, which was only 37 per cent in textiles when compared with the productivity of China.

He said after globalisation the domestic producers would become efficient not only in the international but also local market. He said there was no room in the current global trading scenario for negligence or inefficiency.

He said neither exchange rate nor any other policy incentive was as important in lowering the cost of doing business as productivity. He said “water is a major competitive commodity available in Pakistan and there is a need to utilise this advantage by eliminating wastages in its use and building large reservoirs.”

He said the developed nations at the Pakistan Development Forum, held recently, had agreed to provide funds for developing water resources. Salman Shah said Pakistan was committed to reforms as it was the top South Asian and among top ten global reformers in 2006.

He said Pakistan had the advantage of a huge working age population that should be nourished to unleash the economic potential of the country. However, he admitted education and skill development needed more attention and said the government aimed to increase education spending to four per cent of the GDP.

He said the government had resources, but the institutions lacked capacity to use the amount. Speaking at the seminar, the Adviser to the Ministry of Finance Dr Ashfaq Hasan Khan wondered where the textiles’ competitive edge had gone.

He said the exports were increasing by 14-16 per cent till June 2006 and then the exports started declining. How the competitiveness could be eroded overnight, he questioned.

Former caretaker finance minister Shahid Javed Burki advised the government not to distort the statistics and rejected its claim that per capita income had doubled in the last five years. To achieve that growth, he said, the rate should have been 14.5 per cent.

He said the real GDP growth in the past five years averaged 6.7 per cent while per capita income increased by 4.4 per cent, which was commendable. Former finance minister Sartaj Aziz warned that sustainable growth of seven per cent would not be possible at current investment rates of 16 to 17 per cent of the GDP.

These could generate a growth of four to five per cent and for achieving sustainable growth of seven per cent the country would need investment rate of 28-30 per cent, he added. Textile tycoon Tariq Saigol called for increasing investment ratios in the productive sectors, particularly exports. He pleaded for a more active and result-oriented energy policy.

http://www.thenews.com.pk/daily_detail.asp?id=53694

 

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Uncertain economic outlook

THE presentations made at the annual Pakistan Development Forum meeting in Islamabad indicate that the government’s assessment of the economy’s performance during the fiscal year 2007 and its future outlook are not fully shared by the multilateral donors. They differ on the specifics as well as the macroeconomic trends that they represent. With a track record of nearly seven per cent growth over four years, the government perhaps suffers from an irrational exuberance while the lending institutions are trying to focus on changing realities. The daunting risks on which the donors tend to focus raise a question mark against the official target of 7.5 per cent GDP growth per annum over the next half a decade. But first the specifics for this year. The officially estimated economic growth at over seven per cent does not tally with the Asian Development Bank’s forecast of 6.8 per cent. The ADB sees inflation at seven per cent, higher than the targeted 6.5 per cent. It further says that government expenditure is likely to exceed the budgeted target because of an overrun in defence spending and high domestic interest rates, with the fiscal deficit surging to 4.5 per cent of GDP. The revenue-expenditure gap may further widen because of non-transparent government spending in an election year.

The State Bank’s second quarterly report 2007 sent to parliament on March 30 notes that “unidentified expenditure was very high, at Rs54.4 billion (0.6 per cent of GDP) which adds considerable uncertainty to the analysis of fiscal trends.” The tax-to-GDP ratio is not improving in any significant way despite an increase in absolute numbers. The multilateral donors have also identified a number of big challenges facing the economy. The World Bank vice-president, Praful Patel, says the country’s “rural poor are facing the worst kind of poverty.” The government has responded by claims that five million new jobs were created during 2003-06. The key question is whether high economic growth, important for reducing poverty, is out of the boom-and-bust cycle and on the path of sustainable growth. The Asian economies with sustainable high growth rates have been driven primarily by high domestic rates of savings financing robust levels of investment, unlike Pakistan which depends heavily on external capital and financial inflows.

While the six billion dollars in foreign investment expected this year may be good news for the policymakers, it includes an increasing volume of portfolio investments which disappear at the first sign of any economic downturn. And foreign direct investment is not export-oriented. The lack of a world-class infrastructure in critical areas makes export uncompetitive in the international market. Power shortage is a big problem. In spite of rising remittances, now at five billion dollars, the country’s own foreign exchange earnings are not enough to manage trade and current account deficits. It cannot be denied that Pakistan has the unrealised potential to achieve a high economic growth rate on a sustainable basis. But what makes it uncertain is the model of political economy being currently pursued. A paradigm shift is required to adjust to the changing realities. The first step the government needs to take is

to heed the advice of a representative of a Norwegian delegation attending the PDF meeting, that the Poverty Reduction Strategy Paper II (PRSPII) should be presented to the national and provincial assemblies for their “ownership”. The parliamentary oversight of the executive’s policymaking and performance needs to be made meaningful.

http://www.dawn.com/2007/05/01/ed.htm#1

 

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Tuesday, May 01, 2007

Govt plans expansion in micro finance network

By Hamid Waleed

LAHORE: Advisor to Prime Minister on Finance Dr Salman Shah has hinted at establishing an extensive network of micro finance institutions by next fiscal year.

“An extensive network of micro finance would be ensured in the country under a strategy that finance should reach to the area wherever it is needed,” he said.

Dr Shah was addressing a pre-budget seminar at a local club where Secretary General Finance Naveed Ahsan, Economic Advisor to the Ministry of Finance Dr Ashfaque Hasan and leading economic experts including Sartaj Aziz, Shahid Javed Burki and a good number of industrialists and parliamentarians also spoke.

“New Poverty Reduction Strategy Paper is under preparation, which takes financial sector as an important pillar of growth,” he said, adding: “The purpose is to reach out three million beneficiaries immediately.” Dr Shah said anyone could open micro finance bank at the district or provincial level and those who were interested should contact Ministry of Finance.

Dr Shah also made the point that textile was not the only representative of the industry in the country and the industrial base had expanded to the banking, telecom, power generation, information technology and many other areas.

He warned to the sitting entrepreneurs that there was no room for the inefficiency, bad management and poor business policies under the globalisation and the new business benchmarks had become very tough.

He said private sector had to play vital role under the new rules of game and government was fully ready to facilitate the industrial sectors for further growth and stability.

The Advisor said the privatisation and liberalisation policy of the government would reach to the logical conclusion and major reforms were required to stimulate further financial, telecom and agriculture sectors.

http://www.dailytimes.com.pk/default.asp?page=2007\05\01\story_1-5-2007_pg5_2

 

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Tuesday, May 01, 2007

First fibre link with India to start functioning on 3rd

By Nauman Tasleem

LAHORE: The first direct fibre optic link between Pakistan and India will start functioning on May 3, sources in the PTCL told Daily Times on Monday.

“The cable will join the two archrivals through Wagah. It will provide an additional link for faster data and voice communication. It will benefit the people of the two countries because it will help reduce call rates,” said the sources.

PTCL completed laying the fibre optic cable in April 2006 and only needed government’s approval to open the link with India. “PTCL senior officials and staff of Optical Fibre Network Solution Central will make the link operational at Wagah,” a PTCL official said.

In February 2006, the Information Technology Ministry had directed PTCL to carry out a survey for the project. OFNSC was tasked with completing the project.

From Wagah, the 12-fibre cable reaches the PTCL’s Egerton Road exchange through the Batapur exchange. A coaxial cable was already operating between the two countries. The fibre optic cable will improve the data and voice communication speed.

Pakistan will also get an additional link for its international communication. “Currently, Pakistan is linked through South East Asia, the Middle East and Western Europe-3 (SEAMEWE-3) and SEAMEWE-4. The new cable will provide an additional link with other countries,” the sources said, adding that the link would also reduce call rates for India.

“Currently, data traffic between the two countries is routed through landing stations in a third country, which drives up cost,” the sources added. Federal Information Technology Minister Awais Ahmed Khan Leghari said the delay was from the Indian side because “they were reluctant in starting the link because of pressure from their corporate sector”.

The minister said Pakistan’s corporate sector would also benefit from the link because it had only two submarine links now. “In case the two links are disturbed the third one will keep us in contact with the world. India has six submarine cable links. Pakistan will be able to use these links,” Leghari said. A couple of years ago, one of Pakistan’s submarine cables was cut and the corporate sector, including call centres, faced huge financial loses due to unavailability of data transfer.

http://www.dailytimes.com.pk/default.asp?page=2007\05\01\story_1-5-2007_pg7_6

 

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Tuesday May 1, 2007

Pakistan's Indus Motor Sells 144,072 Vehicles In 9 Months

KARACHI, May 1 Asia Pulse - Indus Motor Company (IMC), manufacturers of the Toyota and Daihatsu brands in Pakistan, convened their Board of Directors meeting on Friday (April 27) to review the company's performance for the quarter and nine months ending March 31, 2007.

The sale of locally assembled passenger cars and light commercial vehicles grew by 8 per cent to 144,072 units for nine months ended March 31, 2007. The sale during the quarter also stood at 51,740 units versus 47,814 units sold during the same period last year, a company handout said.

The combined sale and production of Toyota and Daihatsu brands for the nine months to March 2007 was 36,704 units, up 21 per cent, and 34,819 units, up 16 per cent, respectively.

The sales revenue for the year to date at Rs28.3 billion (US$466.2 million) is a new record and is up 11 per cent over Rs25.3 billion achieved for the same period last year.

The after-tax profit was Rs1.9 billion for the nine months ended March 2006 compared to Rs1.8 billion for the same period last year, primarily due to increase in sales volumes, optimization of cost and favorable exchange rate.

Indus Motor continues to make major investments to expand its plant facilities, including the acquisition of a co-generation facility, construction of a mini global production center for hands-on skill training of employees and extension of CBU yard to cater for increased production volume.

"As a good corporate citizen, the company also participates in various social causes under its slogan, Concern Beyond Cars. Apart from contributing in many health, education, environment and community development projects, Indus is at the forefront in several road safety initiatives," the press release said.

As a member of the United Nations Global Compact, during the UN Global Road Safety Week (April 23 29, 2007), the company recently organized the first National Road Safety Conference, bringing together different stakeholders related to Road Safety. This was in addition to initiatives like the Road Traffic Injury Research Project (with JPMC, AKUH, NED), Road Safety School Campaign organized for 20,000 children, Free Safety Checkup of Vehicles at Toyota authorized dealerships, etc.

http://au.news.yahoo.com/070501/3/13aye.html

 

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8.6 percent growth in major items exports to EU: TDAP

KARACHI (May 02 2007): The export of major exportable items ie textile and garments products posted growth in the first eight months of current financial year, the Trade Development Authority of Pakistan (TDAP) said. According to a presentation by CEO, TDAP, Tariq Ikram, to Ministry of Commerce.

The export to European Union (EU) grew by 8.6 percent to $2.8 billion in July-February period of 2006-07, over the corresponding month of previous year. The growth in terms of value registered an increase of $228 million during the said period to EU, a major trading partner of Pakistan.

The analysis of trade statistics indicates that exports of readymade garments, artificial silk and synthetic textile, bedwear, cotton yarn, yarn other than cotton, knitwear, raw cotton, tents and canvas and other textile products to EU posted growth in this period.

The amount of exports of readymade garments was $78 million during the period, artificial silk and synthetic textile at $445 million, bedwear at $32 million, cotton yarn at $26.8 million, knitwear at $9.8 million, raw cotton at $4.9 million, tents and canvas at $3 million and other textile products $6.3 million.

Export of towels, made-up textiles, knitted crocheted and cotton fabric decreased during the period to $11.1, $3.0, $1.6 and $1.0 million respectively.

The exports to major trading partners in EU block--United Kingdom (UK), Italy, Spain, Turkey, Belgium, Germany, and France--increased during this period whereas the exports to Netherlands recorded decrease during the period under review.

The exports to UK increased by $49.7 million, or 13 percent, during July-February 2006-07 over the same period of previous year. The export of bedwear rose to $19.5 million, readymade garments to $19.5 million, knitwear to $17.7 million, artificial silk and synthetic textile to $6.6 million, towels to $3.6 million, raw cotton to $1.2 million, tents and canvas to $0.9 million.

The exports of cotton fabrics to UK declined to $15 million, of made-ups of textile to $2.2 million and cotton yarn to $1.8 million. The exports to Italy increased by $34.9 million or 9.4percent with readymade garments increasing by $9 million, cotton yarn by $8 million, cotton fabrics by $6.8 million, artificial silk and synthetic textiles by $7.3 million, bedwear by $2.9 million, non-cotton yarn by $2.6 million etc.

Whereas the exports of knitwear decreased by $4.1 million and marginal decline in towels and others. The export to Spain grew by $30.6 million or 8.2 percent during the period with readymade garments, artificial silk and synthetic textiles, knitwear, bedwear registering growth and cotton fabric registering decline.

The exports to Belgium rose by $18.7 million or five percent with bedwear, readymade garments, cotton fabrics, cotton yarn and few other registering growth and towels recording registering decrease. The export to Germany registered growth of $17.4 million or 4.7 percent with readymade garments and few others registering growth knitwear and towels recording decrease. The export with France saw and increment of one million dollar.

http://www.brecorder.com/index.php?id=558675&currPageNo=1&query=&search=&term=&supDate=

 

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Gaddani ship-breaking industry a potential source of employment

QUETTA (May 02 2007): Pakistan's ship-breaking industry at Gaddani along Balochistan coast close to Karachi has a potential for gainful employment of one hundred thousand people. The industry also has huge potential to enhance more revenue to the national wealth in future, a spokesman of the Pakistan Ship-breakers Association (PSA) told PPI in an interview here on Tuesday.

He said ship-breaking industry of Gaddani could be improved if present government continued with no change in duty and tax structure on the industry. The spokesman also said that the association neither sought any tax relaxation nor undue incentives and facilities in the federal and Balochistan budgets for the financial year 2007-08.

He said that the association simply demanded 25 percent regulatory duty on the import of steel junk and illegal imports of substandard material and its easy access to Pakistan Steel Markets. The association said that the government should restrain the use of construction bars made from substandard material, which did not meet PSI standard.

He claimed that steel and other material available from the dismantled ships at Gaddani did not only meet PSI standard but were internationally acknowledged as quality steel scraps for the steel and building sectors.

Besides high quality steel, Gaddani dismantled ships also provided cheapest possible non-ferrous material such as copper, brass, aluminium, machinery, generators, boilers, wood and tools of international standard for country's ever growing sectors of industry and commerce.

The spokesman said that in 1970s Gaddani ship-breaking industry was second in the world after Taiwan. Gaddani beach handled 150 ships for dismantling at a time, meeting country's most demand for steel and steel related consuming sectors, he said.

Asked for the catastrophic downturn in the performance of Pakistan ship-breaking industry at Gaddani, the spokesman said negative policy and programme pursued by former President General Ziaul Haq and former Prime Ministers Nawaz Sharif and Benazir Bhutto hard hit the rock bottom of industry.

There was a time, he said, when Gaddani ship-breaking industry had contributed to the national exchequer Rs 5.3 billion under head of tax revenue in one fiscal year but later annual revenue fell to Rs 160 million only because of federal government's flawed policy and programme mostly politically motivated move to harm Gaddani ship-breaking industry. The spokesman said that President General Pervez Musharraf's vision and Prime Minister Shaukat Aziz 's present government policy have set shipping industry on sound footing for forward looking move.

http://www.brecorder.com/index.php?id=558749&currPageNo=1&query=&search=&term=&supDate=

 

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Why exports slumped and remittances soared?

Commerce ministry to try and solve this enigma at a presentation tomorrow

By Khalid Mustafa

ISLAMABAD: The top officials of the Ministry of Commerce will be making a much-delayed presentation at the PM Secretariat on Thursday (tomorrow) to try and solve the enigma as to why exports witnessed a slump even as remittances soared.

It is pertinent to mention that the premier had given the assignment to the commerce ministry some time in September to fathom out reasons behind the slow growth in exports, but the ministry took about nine months in preparing its presentation which will now be tabled before Mr Shaukat Aziz on Thursday (tomorrow).

When contacted Asif Shah, the Commerce Secretary, said the prime minister would be given the presentation on exports strategy. However, he expressed his inability to share some of the salient features of the much-awaited presentation, saying it is confidential.

However, according to an official source, Pakistan has not been able to increase its production base and in case it gets orders even then it is a remote possibility that the businesspeople will be able to grasp the opportunity.

The ministry will brief the meeting that the textile sector has been given assistance to the tune of Rs15.4 billion and even then it failed to perform and increase exports up to the mark. The source said that the textile cartel wants more subsidies, which is why it is deliberately showing a slump in exports growth. “However, the ball is in the government’s court as to how to tackle the issue.”

The source quipped that the inefficient sector is accustomed to the opium of subsidy and this time it should be denied it. “The government has already asked the World Bank to carry out an in-depth study to solve the puzzle of slow growth in exports and steep increase in remittances,” a senior government official at the Ministry of Finance told The News.

“Since the government lacks the ability to resolve this issue, it has been decided that the World Bank should be entrusted with the task to conduct the study.” However, background interviews with senior officials of the finance ministry reveal that major textile exporters have parked their maximum dividends against their exports somewhere abroad this time and brought in profits in the shape of remittances, illegally saving billions of rupees. This may be mentioned that there is no income tax on remittances.

The government in the budget for 2006-07 announced to quash rebate system for 5 industries. “This has actually annoyed the exporters owing to which they have adopted a unique way of compensating themselves by inflicting injury to the national kitty,” they said. However, it is very difficult to establish it with facts and figures and punish the culprits, which is why World Bank has been asked to carry out the study on this particular issue.

http://www.thenews.com.pk/daily_detail.asp?id=53814

 

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Pakistan may join ‘BRICs’

LONDON: Mexico, Turkey, Indonesia and Pakistan are the next generation of emerging markets with the capacity to match or even overtake some of the “BRIC” power houses, accounting firm Grant Thornton said in a report on Tuesday. The report is a follow-up of Grant Thornton’s annual International Business Report (IBR) that is based on a survey of business leaders in 32 countries. The firm predicted the BRICs — Brazil, Russia, India and China — will account for almost half the world’s gross domestic product by 2050 but said some other emerging economies were progressing fast.

http://www.thenews.com.pk/daily_detail.asp?id=53833

 

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May 02, 2007
‘Trade deficit to reach $13.9bn by June-end’

By Mubarak Zeb Khan

ISLAMABAD, May 1: Exports would have touched $20 billion mark by the end of June 2007 and trade deficit reduced by $5 billion, had the government gradually depreciated rupee against dollar six months ago, said a report conducted by independent economists.

Since the decision has not been taken at that time, the trade deficit is now estimated to climb to $13.9 billion by end of June next with exports at $17.2 billion and import bill at $31.18 billion during the period under review.

The government, however, was reluctant to take such a step for obvious reasons as it would lose a handsome amount in the shape of revenue.

The Central Board of Revenue (CBR) raises more than 46 per cent of its total revenue from imports.

The study revealed that with the 10 per cent devaluation, it was estimated that export value would grow by $2.041 billion, import bill would reduce by $2.418 billion. The accumulative impact on trade deficit would be over $4.5 billion.

Hence the exchange rate of the rupee will rise to Rs67.1 to a dollar from Rs61. However, the external debt liability in rupee term would increase by Rs231.8 billion. The next increase in the budget expenditure would be around Rs30.739 billion after the devaluation, the study revealed.

The lack of pressure on rupee currently is anomalous. It is due to non-recurring foreign exchange flows in the inter-bank market, and, therefore, not sustainable.

When these flows are no longer there, rupee will be under pressure.

The rupee slide would also enhance the country’s external debt liability in rupee term. However, it would remain the same in dollar term.

An official source in the finance ministry told Dawn that the tussle on the extent of over-valuation of rupee was mainly on methodology, weights used and time period of comparison.

He said the results are also different according to the selection of these indicators.

The State Bank of Pakistan (SBP) considered the rupee over-valued by 2-4 per cent compared with July 2002 by end of June 2006, IMF considered the rupee overvalue by 10 per cent and the World Bank estimated the over-valuation at 17.5 per cent.

Based on a series of background interviews with some economists and insiders in the finance ministry, the rupee is over-valued in the range of eight to 10 per cent compared with inflation abroad — US 3-4 per cent and EU 2-2.5 per cent -- due to lack of timely adjustments in response to market forces, exchange rate of Pakistani rupee is biased against growth of exports making them expensive.

They said the large trade deficit is partly the result of macro policy focus on growth, fiscal deficit and debt, which makes export expensive and imports cheaper, hurt industrial investment and trade competitiveness.

Indirectly, the policy focus has led to inflation and over-valuation of rupee, reinforcing the foregoing phenomenon.

The slide in rupee would also result into pushing up inflation as prices of imported goods would witness upward trend besides an increase in the budgetary expenditure.

For controlling this, the SBP would have to further tighten the monetary policy besides government would have to mobilise their resources for meeting the rising expenditure.

Some analysts said it could also be achieved by cutting the questionable PSDP projects, unjustified subsidies and wasteful current expenditure.

Rupee slide could be achieved by SBP intervention in the market to buy dollars, which would result in the increase of SBP reserves and subsequently using such enhanced reserves to sell dollars in the market when increasing demand of foreign exchange puts pressure on the Pakistani rupee.

The seven to eight per cent per annum GDP growth can only be sustained through a 20 to 25 per cent per annum growth in exports.

Even if exports in textiles and clothing sector continue to grow more than the international average, a formidable challenge, such an export growth rate could not be achieved unless the export growth in non-textile sector is accelerated in

Pakistan.

The current account deficit is growing and reaching unsustainable levels and is being financed through inappropriately by using FDI in services sector, privatisation proceeds, portfolio investment and GDR issues.

This deficit will rise when Pakistan runs out of selling public assets.

In addition to maintaining high level of GDP growth, the management of trade deficit, which includes growth in exports and reduction in imports, is also required to provide a sustainable mechanism to reduce the current deficit.

The key element to achieve sustainable and rapid export growth would be to address the issues of export competitiveness.

A realistic exchange rate is also required to achieve export growth. Such policies have been followed by many East Asian tigers in their earlier years of export and even today by China.

http://www.dawn.com/2007/05/02/ebr6.htm

 

[Neo]

Wednesday, May 02, 2007

Higher yield of crops expected in 2007-08 season

KARACHI: The production of various crops will see a higher growth during 2007-08 sowing season on back of improved utilisation of outputs and better management, farmers said.

A representative of the farming industry Maroof Siddiqui said that the country has improved the production of various crops in 2006-07 such as wheat, gram, potato, lentil, sugarcane, cotton, maize and moong; as well as the livestock sector

Maize and moong production in 2006-07 is estimated at 3.3 million tonnes and 138,000 tonnes respectively. In this respect, maize and moong outputs indicate an improvement of 6.5 and 21 percent respectively, as compared with 2005-06. The livestock sector accounts for nearly half of the value-added agriculture. Growth targets for milk and meat production, as well as the productivity, have been aligned with the mid-term development framework, and are expected to yield a growth of 6-8 percent, he added.

He said 23 million tonnes wheat production is expected in 2006-07, which indicates a six percent improvement against last year’s production of 21.7 million tonnes. He said this is the highest-ever wheat production in Pakistan, as it has surpassed the set target of 22.5 million tonnes by two percent. Gram production during 2006-07 is recorded at 848,000 tonnes, which is an increase of 77 percent against last year’s 480,000 tonnes. This production is 20 percent above the set target of 707,000 tonnes.

The estimated production of potatoes in 2007-08 is around 2.56 million tonnes. In 2006-07, the production stood around 2.47 million tonnes, which is 57 percent more than the last year’s 1.57 million tonnes. The production of sugarcane in 2006-07 has improved by almost 23 percent at 54.9 million tonnes as against 44.7 million tonnes in 2005-06. A stakeholder Ghulam Rabbani said that cotton production is expected to increase around 3-4 percent in 2007-08 season.

http://www.dailytimes.com.pk/default.asp?page=2007\05\02\story_2-5-2007_pg5_8

 

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CBU imports up 83 percent: auto imports breach $1 billion

KARACHI (May 03 2007): The import of road motor vehicle surged by 23 percent (MoM) in March to reach $121.992 million taking the total imports during July-March 2006-07 to $1.037 billion. In February this year the road motor vehicle imports were registered at $99.157 million.

This growth may be attributed to the rising interest of buyers in the imported vehicles due to availability of spare parts and stable re-sale value. The data issued by the Federal Bureau of Statistics (FBS) proves this situation, as the import of Completely Built Units (CBUs) surged by 83 percent to reach $48.243 million in March 2007 as compared to $26.378 million in February.

According to the statistics, imports of completely build-up units, which include both new and used vehicles, were down three percent as compared to $49.608 million in March 2006.

Diminishing interest of buyers in the imported cars had been observed in past few months because of low resale value, problems in the availability of spare parts and rising rates of interest on leasing.

However, the buyers have now again started to opt for the imported and reconditioned cars, as the spare parts are now available. It was learnt that although the brand new spare parts are not easily available in the market, however, the parts taken out from the imported used vehicles are available in the market.

Another reason for this switch may also be attributed to the falling quality of locally assembled cars, as the quality complaints are going up. A car showroom owner dealing in both new and used cars said that the local assemblers were unable to meet the demand due to which the 'premium' factor existed.

He added that the Minister for Industries and Production, Jehangir Tareen had made it clear that unless and otherwise this menace ended the imports of cars would continue. Therefore the local assemblers were focussing more on quantity instead of quality.

The CBU import bill for the period under review includes units of trucks and buses, motorcars and motorcycles contributing $11.534 million, $36.66 million and $49,000 respectively. CKD/SKD imports during March went down by 18percent reaching $60.716 million against $51.143 million in February 2007. Under the parts and accessories head, the imports during the month of March were down by 41percent on MoM basis to reach $9.392 million as compared to $15.972 million.

http://www.brecorder.com/index.php?id=558973&currPageNo=2&query=&search=&term=&supDate=

 

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Saif Power inks 225 megawatts accord with NTDC

ISLAMABAD (May 03 2007): The Saif Power Ltd (SPL) has signed its power purchase agreement (PPA) with NTDC, for its 225 mw power project to be located at Sahiwal. The PPA document was signed and exchanged between SPL Director Omar Saifullah Khan, and Rana Muhammad Amjad, general manager, WPO in the presence of other senior officials.

Earlier, in January this year, the gas supply agreement (GSA) was signed between the SPL and the SNGPL, while the implementation agreement had already been initiated with the PPIB. The signing of the PPA concludes the package of agreements ie, IA, PPA and GSA, as per requirements of the 2002 power policy, after which the company will proceed with its financial closure and thereafter the construction of the power complex.

Targeted to start its commercial operations in 2009, the power plant is estimated to be established at a cost of $200 million. The power plant is based on combined cycle/gas turbine technology, and capable of operating on dual fuel, it will use gas as the primary fuel.

http://www.brecorder.com/index.php?id=558970&currPageNo=2&query=&search=&term=&supDate=

 

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'Pak-US FTA after striking investment deal'

ISLAMABAD (May 03 2007): The United States intended to go ahead to the free trade agreement (FTA) with Pakistan after striking a mutual investment deal. Acting US Ambassador to Pakistan Peter Bodde told a local private news channel that the headway in mutual investment agreement had been made, however, finalisation of its details would take time.

Negotiations regarding the FTA would be made afterwards. Peter Bodde said that after the installation of control system at Port Qasim, the scanning of a container would benefit Pakistani exporters as well as it would boost trade between the two countries.

http://www.brecorder.com/index.php?id=559016&currPageNo=1&query=&search=&term=&supDate=

 

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Doing business in Pakistan: CSF points out problem areas

ISLAMABAD (May 03 2007): In a presentation to the ministry of Labour and Manpower, the Competitiveness Support Fund (CSF) termed Illiterate workforce, poor work ethics and labour restrictions as problematic factors in doing business in Pakistan. It has suggested that the government should take the private sector on board to sustain the current pace of economic growth.

The CSF delegation comprising CEO Arthur Bayhan and Abdul Basit, a senior official of the Prime Minister's Special Programme Wing, Ministry of Finance identified different areas in the presentation where Pakistan was not performing satisfactorily.

Secretary Labour and Manpower, Malik Asif Hayat chaired the meeting Hayat informed CSF delegation about a number of new initiatives that the ministry is undertaking to improve the labour productivity in Pakistan. These included a joint initiative with the International Labour Organisation (ILO) on Women Empowerment, developing a mechanism to create more co-ordinated efforts at the federal and provincial levels to address the labour issues.

The meeting was informed that the ministry is also launching "Labour Market Information System" to disseminate detailed information about the labour market. Asif Hayat, also informed the delegation that, the government's emphasis was on actively involving the private sector in increasing the labour productivity in the country.

CSF CEO briefed the government officials on strength and weaknesses of Pakistan's market. He told the meeting that Pakistan needs to create more synergies through public-private partnerships to enhance productivity and efficiency. Should be co-operating closely on the new initiatives of the ministry of labour and manpower in improving Pakistan 's ranking on the market efficiency and labour productivity indicators.

The presentation highlighted the competitiveness aspects of the labour and manpower issues in Pakistan with respect to the Global Competitiveness Report (GCR) of the World Economic Forum and the State of Pakistan's Competitiveness Report of CSF.

CSF delegation was also told that under the apprenticeship law, all firms having more then 50 employees are required to provide internship opportunities. CSF CEO said the private sector lack willingness to comply with improvement in labour laws.

Bayhan emphasised the importance of strengthening the public-private partnerships to promote vocational schools. He said that Pakistan needs quality business and management schools CSF is a part of $1.5 billion five years programme meant to improve economic growth, education, health, and governance in Pakistan.

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