Pakistan Economy - News & Updates - Archive

[Neo]

May 08, 2007

Lingering projects may be removed from PSDP

By Sajid Chaudhry

ISLAMABAD: The Planning Commission (PC), while expressing serious concern over the slow implementation of federal projects by the provincial governments, has warned that the federal government would be forced to remove such projects from the Public Sector Development Programme (PSDP), a senior official told Daily Times on Monday.

The PC issued this warning to the provinces during the third quarterly review meeting of the PSDP, which concluded recently. The meeting was chaired by Deputy Chairman of the Planning Commission Dr Akram Sheikh and participated by representatives from provincial governments, federal ministries and departments.

The federal government had approved Rs 435 billion for the PSDP at the time of the announcement of the federal budget 2006-07. The federal share in the PSDP was Rs 270 billion, and an amount of Rs 115 billion was to be spent by the provincial governments through their own Annual Development Programmes.

According to the official, the deputy chairman of the PC during the third quarterly review of PSDP expressed his concern over the slow implementation of federal projects by provincial governments, especially the water sector projects. He observed that the federal government is financing provincial projects to assist the provincial governments. Despite availability of financial resources, the projects are not moving fast and the federal government would be forced to remove such projects from the PSDP, the official added.

The deputy chairman of PC reiterated the earlier decision of the Central Development Working Party (CDWP) and Executive Committee of the National Economic Council (ECNEC) that on all such projects that are being financed on cost-sharing basis between the federal and provincial governments, any increase in cost would be borne by the respective provincial governments, the official disclosed.

The federal government had allocated Rs 47.749 billion for the water sector related projects for the fiscal year 2006-07, including water sector projects of the Water and Power Development Authority (WAPDA). The fund allocations made for important water sector projects were: Mirani Dam Rs 750 million, Sabakzai Dam Rs 300 million, Kurran Tangi Dam Rs 2.7 billion, Satpara Multipurpose Project Rs 500 million and Gomal Zam Dam Rs 3 billion. Fund allocations for projects relating to canals were: Greater Thal Canal Rs 1.5 billion, Kachhi Flood Canal Rs 5.5 billion and Rain Flood Canal Rs 300 million.

Fund allocations for drainage related projects were: Left Bank Outfall Drain Stage-1 Rs 300 million, Lower Indus Right Bank Irrigation and Drainage Project (RBOD-1) Rs 1.5 billion, National Drainage Program (NDP) Rs 3 billion and Extension of Right Bank Outfall Drain from Sehwan to Sea (RBOD-II) Rs 3 billion.

Fund allocations for projects related to upgradation of irrigation systems in the provinces were: Lining of Distributaries and Minors in Sindh Rs 800 million, Irrigation System Rehabilitation Punjab phase-1 Rs 2.787 billion, Lining of Irrigation Channels in Punjab Rs 1 billion, Punjab Barrages Rehabilitation Modernisation Project phase-1 Rs 150 million, Lining of Irrigation Channels in NWFP Rs 750 million and construction of 20 small dams in NWFP Rs 50 million.

Fund allocations for some 22 new projects were also made at the announcement of the PSDP for the fiscal year 2006-07.

http://www.dailytimes.com.pk/default.asp?page=2007\05\08\story_8-5-2007_pg5_1

 

[Neo]

Tuesday, May 08, 2007

Closure time for markets now 8:30pm

LAHORE: The Water and Power Development Authority (WAPDA), following the demand made by the Lahore Chamber of Commerce and Industry (LCCI), has extended the closure time for markets, shopping malls and departmental stores by half an hour, and now all markets would close by 8:30pm instead of 8pm. The LCCI had requested WAPDA Chairman Tariq Hameed to extend the markets’ closure time by at least an hour (up to 9pm), as during summer, the 8pm closure time is too early for commercial entities to close their businesses. However, WAPDA authorities, accepting the LCCI demand, have given half hour extension to all markets. Earlier, the federal minister for water and power had clarified that the orders regarding the closure time would not apply on Saturdays, as people generally prefer to stay out late on weekends. WAPDA is also launching an awareness campaign to educate people about conserving electricity.

http://www.dailytimes.com.pk/default.asp?page=2007\05\08\story_8-5-2007_pg5_3

 

[Neo]

Pakistan to Market Bonds as Economic Growth Speeds Up

By Denise Kee and Mike Firn

May 8 (Bloomberg) -- Pakistan will start marketing foreign-currency bonds for the fourth time in three years as accelerating economic growth spurs interest in the South Asian nation.

``It will be a benchmark transaction,'' Ashfaque Hassan Khan, the government's economic adviser, said in an interview. The size of the borrowing hasn't yet been decided, he said.

The government, which expects the economy to expand by as much as 8 percent annually over the next five years, will use the money to build roads, ports, dams and other infrastructure. The nation's dollar-denominated debt returned 11.8 percent in the past year, the third-best performing in Asia after the Philippines and Indonesia, according to indexes compiled by JPMorgan Chase & Co.

``The growth prospect of the country is there,'' said Clifford Lau, a Singapore-based portfolio manager at Pramerica Fixed Income who helps manage $7.6 billion of emerging market assets. ``Pakistan will benefit from investors' hunger for yield.''

Junior Finance Minister Omar Ayub Khan said in his budget speech in June that the nation plans to sell as much as $500 million of foreign-currency bonds to overseas investors before the end of next month. The government this year hired Citigroup Inc., Deutsche Bank AG and HSBC Holdings Plc to manage the sale.

The nation's debt equals half the $129 billion economy.

Narrowing Spread

Pakistan raised $800 million in March 2006 selling bonds maturing in 10 and 30 years. The yield on the nation's 7.125 percent bonds due in March 2016 has narrowed to 1.83 percentage points more than U.S. Treasuries of similar maturity, from 2.4 percentage points when they were sold more than a year ago.

The country's debt ratings were raised one level to B1, four levels below investment grade, by Moody's Investors Service in November, helping reduce the government's borrowing costs as it signals lower risk of a default.

Government officials will meet investors in Singapore, Hong Kong, Dubai, Bahrain, London and the U.S. this month, Khan said in an interview in Kyoto, where he attended the Asian Development Bank's annual meeting which ended yesterday.

Pakistan may need to offer additional yield to compensate investors for the nation's political and security risks, Pramerica's Lau said.

Bombings

Interior Minister Aftab Sherpao was among 52 people injured in a suicide bombing that killed 28 people in April. Shiite and Sunni Muslim factions bombed each other in January. Assassination attempts on President Pervez Musharraf and Prime Minister Shaukat Aziz also highlight Pakistan's security risks, S&P said in February.

``Pakistan is located in a troubled region and headlines of political conflicts there bother investors,'' Lau said. ``Investors buying the bonds have to weigh in the risk.''

Pakistan's stocks dropped 3.5 percent yesterday, the most in eight months, after Aziz said the constitution gives the government the right to declare a state of emergency to quell protests against the removal of the nation's top judge.

Chief Justice Iftikhar Muhammed Chaudhry's removal by Musharraf on March 9 sparked nationwide protests by lawyers and opposition members that grew into anti-government rallies over the president's continued rule in Pakistan. Chaudhry was scheduled to hear a case to determine whether Musharraf can legally run for election for a second term, Pakistan's Dawn daily newspaper reported March 12.

Eliminating Poverty

Pakistan's stock index climbed to a record on May 4, closing at 12,512.08. Overseas investment in Pakistani equity stood at $720 million as of May 2, according to the data posted on the Web site of the country's central bank.

Aziz is targeting annual economic growth of as much as 8 percent for the next five years, up from 6.6 percent in the latest fiscal year. The government aims to eliminate poverty by 2015 in a country where about a quarter of the 160 million people now live on less than $1 a day.

Pakistan plans to reduce its budget deficit to 3.3 percent of gross domestic product by 2011, from a forecast 4.2 percent in the year ending June 30. Government revenue is estimated at 14.7 percent of gross domestic product in the current fiscal year, according to Standard & Poor's.

The government is planning a natural gas pipeline from Arabian Sea to China, the world's second-largest energy consumer. China is helping Pakistan build its third port at Gwadar in Baluchistan.

To contact the reporter on this story: Denise Kee in Kyoto at Dkee2@bloomberg.net

http://www.bloomberg.com/apps/news?pid=20601080&sid=azzUisgZ1aFk

 

[Introvert]

Pakistan’s Lucky Cement plans shipments to India

Karachi: Lucky Cement Ltd, Pakistan’s biggest maker of the building material plans to ship as much as 200,000 metric tons of cement to India in the next 12 months to take advantage of a supply shortage in South Asia’s biggest economy.
“A team from the Bureau of Indian Standards will visit our plant soon to conduct a quality control test required by the government before allowing imports,” Abdul Razzaq Thaplawala, executive director at Karachi-based Lucky Cement said in a phone interview from Karachi yesterday.
India, the world’s second-most-populous nation, plans to invest $320 billion (Rs13,10,727 crore) on roads, ports, dams and power stations by 2012. Cement makers are investing Rs450 billion ($10 billion) on adding almost 100 million tons of capacity, the government said on 6 March.
“Exports to the Middle East and Afghanistan account for most of Pakistan’s cement sales overseas but exports to India are likely to overtake soon,” said Haris Dagia, research analyst at JS Global Capital Ltd, in Karachi.
Pakistan’s cement exports doubled in the 10 months ended 30 April, because of higher demand from Afghanistan, India and the Middle East.
Pakistan sold 2.45 million metric tons of cement overseas in the July-to-April period, compared with 1.21 million metric tons a year earlier, according to the Lahore-based All-Pakistan Cement Manufacturers Association.
http://www.livemint.com/2007/05/09154614/Pakistans-Lucky-Cement-plans.html

 

[Neo]

LoI issued for setting up 1000 megawatts project

ISLAMABAD (May 09 2007): The Private Power Infrastructure Board (PPIB) on Tuesday approved issuance of Letter of Interest (LoI) to M/s Hassan Associates Ltd (HAL) for setting up 1000 MW power project based on Thar coal valuing approximately $1.5 billion.

The exploration licence for an area of 64-km at Thar coal field has been issued by the Sindh government to the sponsors of the project, who are local investors, and their proposal has been evaluated by PPIB. The decision was taken in the 69th meeting of the PPIB, which met under the chairmanship of Federal Minister for Water and Power Liaquat Ali Jatoi.

Hasan Associates Limited has already convinced Prime Minister Shaukat Aziz that the company is in a position to set up 1000 MW integrated power plant in Thar without having net worth laid down in the power policy.

According to the policy, the net worth of main sponsors is required as $30 million and main sponsors together with other sponsors (ie 51 percent of total equity) to have $114 million for executing the project, however, Hasan Associates net worth is lower than that given in the power policy.

Jatoi said that due to the booming economy of the country, power requirements are also growing at a fast pace. We have to handle the situation with a two-pronged approach; while we need to take measures to conserve energy, and avoid its wastage, sincere efforts are required to add affordable and reliable energy into the system.

It was appreciated that PPIB was making sincere efforts to tap the hydel resources of the country for power generation, and a total of 22 hydropower projects of around 5,700 MW are being processed.

Since most of the hydropower resources are concentrated in the province of NWFP, the sincere support of the Government of NWFP was highly appreciated for development of these projects.

Chief Secretary NWFP has said that the government would fully facilitate the project developers. This is not only vital for the power demands of the country but also beneficial to the local communities who will be provided with job opportunities, resulting in economic development.

The meeting also resolved the long-standing issues in gas sale agreements between Mari Gas and M/s Star Power and Fauji Foundation Power. This will help expedite the commissioning of additional 336 MW capacity based on natural gas.

Besides others, the meeting was attended by Irfanullah Khan Marwat, Sindh Minister for Mines and Mineral Development, Federal Secretary for Water and Power, Federal Secretary for Petroleum and Natural Resources, Chairman Wapda, Chief Secretary NWFP and Managing Director PPIB.

http://www.brecorder.com/index.php?id=561493&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

World Economic Forum: Pakistan urged to improve global competitiveness index

ISLAMABAD (May 09 2007): "Pakistan must capitalise on its strengths and improve on its weaknesses on the Global Competitiveness Index of the World Economic Forum", Arthur Bayhan, CEO of the Competitiveness Support Fund (CSF), stated this on Tuesday.

The CSF presentation was a part of CSF's initiative to bring all the line-ministries on board to improve Pakistan's ranking on the Global Competitiveness Index (GCI) of the World Economic Forum. Pakistan is ranked 91 on the GCI in 2006, where Pakistan showed improvement of 3 rankings from 94 to 91 in 2005.

Speaking on the occasion, Abdur Rauf Chaudhry, Secretary of the Housing and Works Ministry, informed the CSF delegation that his Ministry launched the National Housing Policy in 2001 and it is now co-ordinating with CBR and the provincial governments on various issues concerning the housing sector. He also said that, "the ministry is undertaking initiatives to provide appropriate housing for the low income groups".

CEO of the CSF in his presentation briefed the ministry on the strengths and weaknesses of the global indicators related to the housing sector in the Global Competitiveness Report (GCR) of the World Economic Forum. He further elaborated the rational behind the indicators and pointed out that the data used for these indicators is not up-to-date. He said that the government made tremendous progress in the last four years and improved almost all the indicators.

Abdul Basit, Joint Secretary, Prime Minister's Special Programme Wing, Ministry of Finance informed the meeting that the Prime Minister's Special Programme Wing (PMSP) has been tasked to co-ordinate with all the ministries for a close interaction to work with the CSF on improving Pakistan's competitiveness ranking. He also pointed out that other countries in the region are improving their competitiveness by investing in their infrastructure and Pakistan should not be left behind.

CSF is a joint initiative of the Ministry of Finance Government of Pakistan and the United States Agency for International Development (USAID) CSF Supports Pakistan's goal to be of a more competitiveness economy by providing input into policy decisions, working to improve regulatory and administrative frameworks and enhancing public-private partnerships within the country.

CSF also provides technical assistance and co-financing for initiatives related to entrepreneurship, business incubators and private-sector-led initiatives with research institutes and universities that contribute to creating a knowledge-driven economy. Support for SCF is part of the $1.5 billion in aid that the US Government is providing to Pakistan over five years to improve economic growth, education, health, and governance.

http://www.brecorder.com/index.php?id=561582&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

May 09, 2007
Centre plans to launch Rs500bn uplift plan: Fiscal year 2007-08

By Sabihuddin Ghausi

KARACHI, May 8: The federal government is indicating to launch a huge development programme of about Rs500 billion during next fiscal 2007-08 which is an election year.

It will be almost one-third of about Rs1.5 trillion proposed budget of 2007-08, and about 45 per cent more than the public sector development programme of Rs270 billion of the current fiscal year 2006-07.

“The launching of this public sector development programme for next fiscal year, sometimes in the first or second week of June, will mark commencement of election campaign by the government,’’ a well-placed source in the Sindh government disclosed.

In this election campaign, the government will offer to public Rozgar scheme, being implemented by the National Bank of Pakistan, functioning of the Gawadar Port in Balochistan, improvement in government revenue collection to more than Rs835 billion in the current fiscal year which is expected to go beyond one trillion rupees in the next fiscal year, plus a few cosmetic development schemes in the election campaign.

Frequent power breakdowns and a virtual blackout in every city and village of the country after sunset at the end of a seven-year rule of the present government is something that haunts everyone, from top to low level functionary, in the present setup.The government faces a tough job to explain the yawning trade gap of more than $14 billion in the current fiscal year.

In last three years, the country suffered more than $35 billion trade imbalance or Rs1.2 trillion trade losses.

Unemployment, uncontrollable price-spiral, deteriorating hygienic conditions that have caused about two dozen deaths from cholera just in one week of summer and growing lawlessness that has made street crimes the most thriving and flourishing trade and industry in cities, like Karachi and Lahore, are the issues that government will face in the next election campaign.

Outlines of the Rs500 billion, plus public sector development programme being proposed for 2007-08, will be presented in the two days session of Annual Plan Coordination Committee (APCC) scheduled on May 21 and May 22 in Islamabad,’’ a well-placed source disclosed who indicated that the National Economic Council (NEC) may hold its annual session sometimes in last week of the current month as 2007-08 budget is due sometimes in second week of June.

The NEC was scheduled to hold a mid-term economic performance review of 2006-07 on March 27 initially which was later put off for first week of April and it was finally called off because the government was bogged down under the situation arising out from the massive public and legal community outcry against maltreatment to Chief Justice of the country and the Lal Masjid issue.

Official documents reveal that the total development outlay for 2006-07 amounted to Rs385bn which included Rs115bn for the provincial annual development programme and Rs270bn federal development programme.

The federal PDSP showed an operational shortfall of Rs20 billion. From Rs250 billion, the government released Rs99 billion during July to December 2006.

From this released amount of Rs99 billion, various agencies are said to have utilised Rs87.4bn in first half of the current fiscal year.

The government’s claim is that it has steadily been increasing size of public sector development programme and also improving the utilisation capacities of government agencies every year.

http://www.dawn.com/2007/05/09/ebr1.htm

 

[Neo]

May 09, 2007
Pakistan may export 1m tons wheat to India

ISLAMABAD, May 8: With a bumper crop this year Pakistan is likely to export up to one million tons of wheat to India through rail and sea routes, Dawn has learnt.

“The government has already allowed the private sector to export up to 500,000 tons of wheat that India could import by sea or by rail,” Secretary Food and Agriculture Muhammad Ismail Qureshi told Dawn. He said the total wheat export could reach up to a million tons this year.

He said India had floated tenders for import of a million tons of wheat and that Pakistan’s private sector would be in a better position to compete with international wheat prices due to its lower transportation costs. Also, there is no tax or duties on export of wheat, he added.

Agricultural Development Commissioner Qadir Bakhsh Baloch told Dawn that this was the first time that Pakistan had allowed wheat export to India. Last week, Prime Minister Shaukat Aziz had formally approved the export of 500,000 tons of wheat to neighbouring countries, including India and Afghanistan.

The government is moving carefully with export projections so that domestic wheat and flour prices are not increased artificially by black marketers, another official said, adding that domestic prices could crash down to less than Rs425 per 40 kg if exports are delayed.

“We will announce a new plan for more wheat exports after finalisation of crop figures,” Minister for Food Sikandar Hayat Bosan said last week.

The government is expecting wheat production to convincingly exceed 23 million tons, surpassing the current 22.5 million-ton target. Last year, the country had produced 21.7 million tons of wheat. Domestic wheat consumption is little over 22 million tons. The country also has carry-over stocks of about 1.5-2 million tons from last year.

Mr Baloch said the private sector had been asked to procure 300,000 tons of wheat from the Pakistan Agricultural Storage and Supply Corporation (Passco) and 400,000 tons from the Punjab food department. He claimed that Pakistan had a confirmed demand of one million tons of wheat from India.

Sources said the State Trading Corporation of India had floated wheat import tenders of one million tons to meet its rising demands. Besides, transportation costs, India would also save on time by importing wheat from Pakistan via Lahore and Karachi to Delhi and Mumbai through the rail and sea routes.

http://www.dawn.com/2007/05/09/ebr2.htm

 

[Neo]

May 09, 2007
Sino-Pakistan group gets Jordan contract

AMMAN, May 8: A consortium of Chinese-Pakistani-Jordanian companies has won a contract to build a railway aimed at relieving congestion in Amman, according to Jordanian Tranport Minister Saud Nusseirat.

“The consortium will build a railway line between Amman and Zarqa within two-and-a-half years at a cost of between 170 and 180 million dinars (240-255 million dollars),” the official Petra agency quoted Nusseirat as saying on Tuesday.

About half of Jordan's population of 5.7 million lives in Amman and Zarqa, which is 27 kilometres North of the capital. The new trains are set to carry 100,000 people a day.

http://www.dawn.com/2007/05/09/top11.htm

 

[Neo]

Wednesday, May 09, 2007

‘Over 8pc economic growth required to achieve millennium development goals’

ISLAMABAD: Over eight percent growth in the economy would be required during the next five years for the improvement of social indicators of the country.

Out of the total 34 indicators, the government is ahead in seven, on-track on implementing 15 and behind in implementing 12 indicators set to achieve seven major Millennium Development Goals (MDGs).

Planning Commission Deputy Chairman Dr Akram Sheikh said this at a press conference after the conclusion of the first meeting of re-structured Social Sector Coordination Committee of the Cabinet. Prime Minister Shaukat Aziz chaired the meeting in which officials from all federal ministries and divisions presented details about the progress on implementation of social sector projects, especially the MDGs.

The indicators that need to be improved relate to universal primary education, maternal health, reduction in mortality rate from 300 to 140 and environment stability.

Sheikh said the federal government’s new social protection strategy aimed at bringing into social safety nets some 6.2 million households in the next five years by extending the out reach of the government’s existing programmes.

He said the meeting decided to adopt coordinated and integrated approach for improvement of the social indicators so that the impact of the government initiatives is seen in the country.

He said the meeting decided to constitute an inter-ministerial committee for better coordination among ministries and divisions for uplift of the social sector, especially education, health and vocational training. He said the meeting was informed that draft of the Social Protection Strategy had been finalised and would be announced next month. He added that the meeting also decided to start the Tawana Pakistan and other nutrition programmes from the next fiscal year.

He said that efforts would be made to increase the vocational training facilities in the country so that skilled manpower was made available to meet the requirements of the growing economy.

Sheikh said the literacy rate in Pakistan had increased to 60 percent and the government wanted it to reach 80 percent by 2015. He said Vision 2030, which would be finalised by end of May, aimed at increasing the education budget from 4 percent of the GDP to 7 percent, and overall pro-poor expenditures from 7 percent of the GDP to 9 percent.

Addressing the meeting, Prime Minister Shaukat Aziz said high growth, decline in unemployment and higher allocations by the government on poverty-related projects have contributed to 10.6 percentage point decline in absolute poverty.

The ongoing reforms in social sector and social protection would further improve country’s social indicators and help reduce poverty, Aziz said.

http://www.dailytimes.com.pk/default.asp?page=2007\05\09\story_9-5-2007_pg7_2

 

[Neo]

Wednesday May 9, 2007
Pakistan plans first three 3G licenses this year

ISLAMABAD, May 9 (Reuters) - Pakistan plans to issue its first three licenses for third generation (3G) mobile telecoms service by the end of this year in a cellular market of more than 55 million users, a government official said on Wednesday.
High-speed 3G transmission would allow cell phones to better provide services such as photos and the Internet in Pakistan, one of the fastest growing cellular markets in Asia.

"We are working on the plan, and 3G spectrum would be allocated to three companies for launching 3G mobile phone services in Pakistan," said a PTA official, who declined to be identified.

"The 3G licenses are expected to be issued by the end of this year and will be offered only to existing mobile phone operators for a period of 15 years."

The official telecommunications watchdog, Pakistan Telecommunication Authority (PTA), recorded 55.61 million mobile phone users in the country by March 31, up from 12.77 million in 2005.

Pakistan's existing operators include Mobilink, a unit of Egpyt-based Orascom Telecom , Norway's Telenor and Warid Telecom of the United Arab Emirates.

Other operators are Ufone, a subsidiary of Pakistan Telecommunication Ltd. , Instaphone owned by a private Pakistani group, and CM PAK, previously known as Paktel that China Mobile Communication Corp. recently acquired from Sweden's Millicom.

The number of mobile phone users has gone up rapidly after the government gave licenses to Telenor and Warid in 2005, bringing the total number of operators to six.

The existing policy, introduced in 2004, provided for the government not to license any more operators for five years.

Mobile teledensity, or cellular phone users out of the total population, in Pakistan rose to 35.79 percent in March from 8.30 percent in 2005. Pakistan has a population of over 160 million.

http://asia.news.yahoo.com/070509/3/31js2.html

 

[Neo]

08/05/2007
Qatar likely to finance $1.5b plant in Pakistan

(MENAFN) An official at the Pakistani government said that several Middle Eastern countries are willing to finance a project for the country's Water and Power Development Authority (WAPDA) to build a $1.5 billion hydropower plant in Neelum-Jhelum, Khaleej Times reported.

The official pointed out that the Pakistan government is currently facing difficulties undertaking the huge project on its own, especially after failing to award contract for the construction of the dam to which Pakistan could loose its priority rights over Jhelum waters.

He also added that the contract could not be signed with the lowest bidder that quoted $1.3 billion price for the project because it failed to arrange required buyer's credit, which is a pre condition under the bidding.

http://www.menafn.com/qn_news_story_s.asp?StoryId=1093152334

 

[Neo]

July-April trade gap crosses $11 billion

KARACHI (May 10 2007): The widening gap between the imports and exports has dragged the country's trade deficit to $11.08 billion during the first 10 months (July-April) of the current fiscal year. According to official figures the deficit has widened by around 17 percent as compared to $9.48 billion during the corresponding period last year.

Although on MoM basis the deficit was marginally down by 1.2 percent, however if compared with the previous year, trade deficit went up by 32 percent to $1.076 billion in April. The figures show that the exports reached $13.90 billion mark in ten months (July-April) as against the whole year's target of $18.6 billion.

In April, export grew by 3.73 percent to $1.49 billion compared to $1.44 billion in the same month of the previous year. Therefore, the export target is $4.7 billion short to be accomplished in two months. The export decreased by 2.35percent to $4.49 billion in April compared to the preceding month of March, when export totalled at 1.53 billion.

Imports grew by 8.92 percent to $24.99 billion during these ten months compared to $22.94 billion over the same period of the last year. Whereas the import were up by 13.94 percent to $2.57 billion in April compared to $2.25 billion of the same month of previous year.

An analyst of the foreign trade said that although the imports showed declining growth trend, but if imports continue to grow the whole year trade deficit would not only be higher compared to last year, but would also exceed the projected trade deficit for the current financial year.

He said that if this trend continued in the coming months, it would have a serious impact on the country's balance of payment, as well as having a negative impact on the health of the rupee. However, he said that increase in foreign direct investment and growth in remittances would help in making up the losses caused by this burgeoning trade deficit.

"The marginal growth in export shows that the steps announced in the trade policy of this year either have not been implemented or have not worked out to register a quantum jump in the export", an other expert noted.

Since the beginning of the current financial year, the average growth in the export has hovered between three to four percent and if the exports continued to grow at the same pace, the full year's target for the export would hard to be achieved.

Based on the analysis of the trade deficit so far in this year, experts forecast that it would come around $14 billion at the end of the current year, which would be over the projected target of trade deficit.

Government projected import bill at $28 billion for the current financial year whereas the export target was set at $18.6 billion for the whole year. Although the category-wise data of the export would be released later in the month, however analyst said that figures indicate that the growth in export is not picking up and also worrisome is the fact, that it decreased by 2.35 percent in April compared to preceding month.

http://www.brecorder.com/index.php?id=561857&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Factors impeding 10 percent growth listed

ISLAMABAD (May 10 2007): Advisor to Prime Minister on Finance Salman Shah has said that crippled infrastructure, exorbitant utilities costs, unskilled human resource and governance issue are some of the major challenges being faced by Pakistan to achieve 10 percent growth for competing with the regional economies.

He said this while addressing a seminar on "Policy Framework for Public Utilities Management" jointly organised by the Centre of Research for Development and Policy Studies and International Islamic University, here on Wednesday.

Salman Shah, however, said that the government is working on a long-term strategy that includes good governance, improving competitiveness in all sectors of economy besides developing human resource and world class infrastructure to achieve high growth rate and improve living standards of the people. He said that 10 percent growth rate is important to move along the regional countries.

The government, he said has been bearing Rs 300 billion losses annually because of poor infrastructure besides giving Rs 200 billion subsidy to the power sector whereas exorbitant utilities rates have been affecting industry's competitiveness in the global market.

Salman Shah said that Pakistan, being sixth largest population in the world, could become sixth economy by developing infrastructure like motorways and construction of major dams with in next ten years. He said that construction of major water reservoirs was essential not only to meet future energy needs but also to maintain agriculture growth and ensure cheap power supply to the industrial sector to make it competitive in the world market.

He said that restructuring of power sector, initiated in 1992 to unbundle Wapda into different generation and distribution companies, is yet to be completed. He said the government is investing a huge amount in the health and education sectors and has allocated unprecedented amount for the promotion of higher education.

Salman Shah said that our social protection network is well instituted and most effective as compared to the neighbouring countries. He, in this regard, referred to the Civil and Military pension schemes, Employees Old Age Benefit Institutions, Workers Welfare Fund, Benevolent Fund, Group Insurance besides Bait-ul Mal, Zakat and Poverty Alleviation Fund and the President's Rozgar Scheme.

Representative of Friedrich Naumann Foundation Islamabad Peter Adreas Bochmann also addressed the seminar while some scholars also presented their papers on different subjects. Speakers were of the view that the country may face serious water, food and power shortages after 2010 and recommended construction of storage reservoirs at least three big reservoirs on the Indus.

http://www.brecorder.com/index.php?id=561860&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

1000 megawatts additional power to be generated by year-end

ISLAMABAD (May 10 2007): The government will generate 1000 MW of additional electricity by the end of the current year through its energy conservation plan and completion of ongoing power projects in the public and private sector. The additional power generation will help overcome the present shortage of 1000 MW and the load-shedding problem.

An unprecedented growth in purchasing power of the people and rapid industrial growth has led to an additional load on the country's power system. The government has taken a number of steps to produce electricity, which is necessary for sustaining the country's economic growth. Simultaneously a plan for improvement and extension of transmission and distribution network is also being implemented to ensure smooth power supply to consumers.

The short and medium term steps are designed to bridge the gap between demand and supply in the power sector. The demand for electricity is growing by 10% per annum and the government is focusing both on additional electricity generation as well as on better load management to maintain the growth momentum.

As a result of the various initiatives taken by the government a number of power projects are at various stages of completion in the public and private sectors. The government is working with 'demand management option' to overcome the situation. A balanced approach is needed for sustainability besides medium and long term plans, said an official of the Ministry of Water and Power.

To cater to the energy needs of the developing economy, power generation resources have to be developed to keep pace with the rapid economic development, he added. Collaboration among all stakeholders will enable mutual consultation on issues and challenges for improving power generation infrastructure, he said.

The Ministry of Water and Power has initiated several plans to meet the growing electricity demand in the country by expediting work on mega power projects. The government has assigned high priority to the development of water resources of the country and decided to construct five large dams, by the year 2016.

According to the Ministry of Water and Power about 1200MW to 1400MW more will be generated up to 2008 which will help reduce power shortage problem in the country.

The ministry has already directed WAPDA to speed up work on mega water projects including Neelum-Jhelum Hydro Power Projects, Diamir-Bhasha Dam, Kurram Tangi Dam, Sabakzai Dam and Kachi Canal Project. The ministry has stressed the need to quickly complete the formalities and start construction work as soon as possible.

The work on Kachi Canal project is on schedule and it would be completed in the target time by December 2008 while the work on Subak-Zai Dam in Balochistan would be completed this year at a cost of Rs 1.576 billion. In order to overcome power shortage problem, new power plants will be installed in the country, besides other mega projects to produce more electricity.

Around 50 projects of private sector are in the pipeline to generate 13,400 megawatt of electricity by 2016 at an estimated cost of 12.847 billion dollars. Ten projects with 2255 MW capacity including six oil and four pipeline quality gas dual-fuel are expected to be completed by year 2008 with an investment of 1.691 billion dollars.

Out of six projects during the year 2008, the main project is for capacity expansion of existing IPPs near Lahore with 405 MW capacity. This project would cost 304 million dollars. Similarly, during the year 2009, eight projects have been planned to generate 1764 MW electricity with an investment of 1.323 billion dollar. These include three oil and five dedicated gas field projects.

In year 2010, seven projects of 1321 MW capacity including two hydel, one oil, three pipeline quality gas dual-fuel and one dedicated gas field would be completed at a cost of 1.096 billion dollars. Similarly, in year 2011, three hydel projects with generating capacity of 284 MW, costing 355 million dollars would be completed.

In year 2012, seven projects having capacity of 2726 MW including three hydel and four coal projects would be completed with the cost of 2.320 billion dollars.

In year 2013, five projects including four hydel and one coal would be completed to generate 1986 MW electricity. These projects will cost 2.233 billion dollars.

Three hydel projects having 1443 MW capacity are likely to be completed in 2014 with the cost of 1.804 billion dollars while in year 2015 and 2016 seven hydel projects are planned to generate 1620 MW electricity and would cost 2.025 million dollars.

To meet growing power needs of the country, recently five agreements have been concluded with different parties for generation of about 1300 megawatt electricity. Power projects with a total capacity of 6000 MW are in different stages of approval, including 550 megawatt of wind power projects.

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