Pakistan Economy - News & Updates - Archive

[Neo]

'New Punjab budget to focus on poverty alleviation'

KASUR (May 10 2007): The new fiscal budget of Punjab (2007-08) will be people-friendly with special focus on poverty alleviation and employment opportunities. This was stated by Chairman of Punjab NA Standing Committee for Finance, Chaudhry Sibghatullah while talking to newsmen here in Pattoki on Wednesday.

He said the budget would extend benefit to all sections of the society, including farmers, traders as well as government servants. To ensure healthy participation of masses in the development process, he said, the government had already initiated various projects for addressing poverty issues and unemployment.

He said that more technical institutions would be set up to provide skill training to jobless persons so that they could get loans under "Khud Rozgar Scheme" for self-employment. He said that the government was also introducing different projects of women development to encourage their role in mainstream national development.

Talking about investment, he said that during the current year, foreign investment worth 500 million dollars was expected in the province, largely because of the Chief Minister's investor-friendly policies. The development budget for the current year is Rs 100 billion, the Chairman added.

http://www.brecorder.com/index.php?id=561979&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

'Pakistan needs to improve its ranking on GCI'

ISLAMABAD (May 10 2007): Pakistan needs to update and submit its data on economic indicators to the international sources to reflect country's progress in real term on the Global Competitiveness Index of the World Economic Forum. This was stated by Arthur Bayhan, Chief Executive Officer of the Competitiveness Support Fund during the presentation at the Statistics Division here on Wednesday.

The meeting with the Federal Bureau of Statistics was a part of CSF's initiative to bring all the ministries on board to improve Pakistan's ranking on the Global Competitiveness Index (GCI) of the World Economic Forum.

Speaking on the occasion, Asad Elahi, Secretary Statistics Division, informed the CSF delegation that with organisational restructuring his institution has adopted a pro-active strategy to make the Statistics Division more effective and efficient.

He said the Statistic Division is moving from an annual reporting structure to the quarterly reporting structure. This new approach will help the decision-makers to improving overall competitiveness of Pakistan.

Asad also informed the delegation that the Division is undertaking several initiatives to improve the level of professionalism in the organisation through training workshops and short courses.

In this regard the FBS has conducted more than 40 courses and has trained 800 people. Around 20 international experts from the US Statistic Bureau, GTZ of Germany and experts from Europe on energy and WTO have conducted these workshops.

He also indicated that the prime objective of his team is to make the timely availability of the data in a user friendly manner. Elaborating on the future plans for the Statistics Division, he informed the delegation on the establishment of 'Business Registers' in the private sector with the assistance of CSF. He said the biggest challenge for his team is to gather the reliable data from the private sector.

http://www.brecorder.com/index.php?id=561930&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Strategy prepared for private sector's development

FAISALABAD (May 10 2007): Federal government has prepared a new strategy for the development and enhancing role of the private sector and decided lowering the barriers to development of small and medium enterprises. According to official sources, the private sector will play an increasing role in driving growth and creating job opportunities.

A strong Private Sector Development (PSD) strategy will therefore be an important element in enhancing the competitiveness of the private sector. The features of the new strategy are:

1) lowering the barriers to development of small and medium enterprises; 2) developing a modern financial sector with a view to providing a wide range of financial services; 3) removing irritants and impediments to private sector growth; 4) strengthening the country's physical and social infrastructure 5) consistency and continuity of economic policies.

Official sources hoped that all these measures are expected to improve Pakistan's investment climate, reduce the cost of doing business for the private sector, thus contributing to enhancing the competitiveness of the private sector.

An Economic Reforms Unit (ERU) has been set up in the Ministry of Finance, which will perform two basic functions. Firstly to prepare a comprehensive PSD and secondly, to streamline and simplify processes, procedures and regulations at all levels of government. Both functions will be carried out in close partnership with the private sector and all stakeholders at the federal, provincial and local levels of government.

Official sources disclosed that a better Business Advisory Council (BAC) will be set up to identify issues and then to formulated and implement remedial measures. In addition, the government is in the process of revamping the existing Monopoly Control Authority (MCA) into a Competition Commission, the draft law of which has already been finalised. At the heart of the Commission's work will be a competition policy that lays down a framework for enhancing competition in the economy.

A forward looking PSD strategy, official sources stated, supported by a vastly improved regulatory environment, processes and procedures will go a long way in freeing the private sector from constraints that impede its growth. This will create an enabling environment that will allow the private sector to focus on productivity, innovation and growth, responding to opportunities in the national and global markets.

According to official sources, Private Sector Competitiveness is also being enhanced by taking into account the recent findings on the State of Pakistan's Competitiveness Report by the Competitiveness Support Fund and released by the Prime Minister.

The Competitiveness Support Fund is a joint initiative of the Ministry of Finance, Government of Pakistan and the United State Agency for International Development. It has been established to support repositioning of Pakistan's economy on a more competitive global footing. The government is already providing support from the fund to gems and jewellery sector, pharmaceutical and agro-based industries to improve their competitiveness with a view to preparing them as export items of Pakistan, sources explained.

These are being used to implement an initiative to improve corporate governance, enhance transparency, protect minority shareholders rights, assist companies in being able to list shares on the stock market, raise capital and improve the use of Boards of Directors. An initiative to help companies invest in human resources and improve the motivation of employees and apply modern management will also be undertaken. Finally, companies will be assisted to register patents, acquire and license technology and improve their access to the latest technology.

According to official sources, the government is following a policy of intensifying deregulation, privatisation and liberalisation with a view to transforming Pakistan's economy into a truly private sector market economy which is highly competitive, fuelling growth, creating gainful employment, generating wealth and most importantly, reducing poverty. As part of overall liberalisation policy, the government is also pursuing trade liberalisation policy to encourage exports and provide consumers with access to imports from the global market at reasonable prices. Sustained export performance is a key priority. The government will also continue to liberalise its import regime while continuing its efforts on enhancing market access for its exports for both traditional and non-traditional items.

The government seeks to promote a globally competitive economy by reducing public and private barriers that hinder development. The present Government's reforms implemented in Pakistan are based on liberalisation, deregulation, privatisation, and good governance. Policies adopted include opening markets for imports and foreign investment, encouraging exports and linkages with multi-national enterprises, lowering administrative controls and reducing government ownership. The government understands that improved competitiveness derives from the introduction of best practices, a focus on human development, making up the value added chain and improved logistics.

About trade, official sources mentioned, Pakistan's access to global agricultural commodity markets is often restricted. Given the country's position as a major agricultural exporter and importer, the Government will strengthen every aspect of rules governing agricultural trade, eliminating distorting subsidies and significantly improving market access.

The focus on improved competitiveness has made it essential to improve the functioning of factor markets. The privatisation of large parts of the financial sector has strengthened Pakistan's banking and financial sector. The attention given to this area will be matched by reforms in the labour and land markets. Additional reforms will be undertaken to reform laws governing labour welfare and to rationalise the labour levies system. Health and safety at work regulations also need to be tackled. Another challenge is to ensure clear title for land transactions.

Competitiveness relies on ensuring that the population is healthy, secure (in both civil and criminal aspects of society) and capable of sustaining the basic requirements of life through improved education, infrastructure and a stable macro-economic climate. It is further enhanced by the provision of world-class tertiary education and vocational skills training and the development of a knowledge economy based on a fully developed Information and Communications Technology (ICT) infrastructure.

Improved competitiveness leads to sustained economic growth, which has proven to be effective in generating employment and reducing poverty. Therefore, the Government recognises improving competitiveness as a cornerstone of its economic growth strategy. The economy has responded well to the structural reforms carried out in the last 7 years and has emerged as one of the stronger growing economies of Asia.

Although, as a result, Pakistan has significantly improved its position in the Global Competitiveness rankings of the World Economic Forum, much more needs to be done. The Government will therefore continue to implement its second generation reforms in addition to the private sector specific reforms listed above.

Poverty and in particular the nutrition of a large proportion of the population will continue to be focused upon by the government. It is a key element of government attention because it believes that poor nutrition adds to costs of healthcare and reduces labour productivity. Fundamental improvements in the access to education, nutrition, and health are key elements in the government's approach to enhancing competitiveness.

http://www.brecorder.com/index.php?id=561981&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

ABN Amro opens Islamic branch in Pakistan

KARACHI: May 10, 2007: Dutch bank ABN AMRO on Thursday opened its first Islamic banking branch in Pakistan, as the market for sharia-compliant assets hots up, the head of the bank's Asia operations said.

"We are now seeing demand for (Islamic) financial products and services among our core mid-market client base, and we are responding to that demand through dedicated branches," Jeroen Drost, ABN Chief Executive for Asia, told reporters here.

Islamic banks, with assets of about 100 billion rupees ($1.65 billion), have a nearly 3 percent share of the country's total banking industry.

Drost said his bank had selected Pakistan as the first country to launch a dedicated Islamic banking branch on the back of rising demand for sharia-compliant assets in the country.

"We are optimistic about the potential, and it will be a multitude of what you see today," he said.

Drost said ABN plans two more Islamic banking branches in the country this year.

"We intend to add two more exclusive Islamic banking branches to the network and Islamic banking windows in six to eight branches by the end of 2007," he added.

Islamic banking has gained in popularity in the Muslim country, because charging interest, the backbone of conventional banking, is forbidden.

Islamic law also forbids fixed-interest returns on investments, and account holders in Islamic banks reap profit from approved investments only.

At present, Pakistan has six fully fledged Islamic banks, of which four are fully operational. In addition, 13 conventional banks also operate Islamic banking branches.

There are about half a dozen Islamic mutual funds, while licences have been issued to two companies for takaful business -- the Islamic alternative to insurance.

ABN is the second-largest foreign bank in Pakistan, with 83 branches after the acquisition of Prime Bank in March.

ABN is also looking into setting up dedicated Islamic banking branches in Dubai, Indonesia, Malaysia and other parts of the Muslim world.

http://www.brecorder.com

 

[Neo]

Talks on Pak-Czech investment treaty under way

ISLAMABAD: Prime Minister of Czech Republic Mirek Topolanek has assured Pakistan that being the European Union member, Prague would play its role in strengthening Islamabad's relations and striking a Free Trade Agreement with the bloc.

The visiting premier said that negotiations on Bilateral Investment Treaty (BIT) and agreement for avoidance of double taxation between the two were also underway. The talks on this particular issue would soon end on a positive note.

Addressing a Pak-Czech investment conference here on Wednesday, organised by Board of Investment (BoI), Mirek Topolanek said that various issues including market access and EU anti-dumping duty on Pakistan's bedlinen were also being negotiated.

Praising Pakistan's economic performance, he said that the country's economic achievements were remarkable and it had the ability and potential to become an economic leader in the region.†

Topolanek hoped that trade, investment and business relations between the two countries would further grow and strengthen, which would make Pakistan a major Asian partner.

He pointed out that a favourable trend was evident from the three-fold increase in trade to over $70 million between Czech Republic and Pakistan since 2000. This increasing trend continued in the first two months of 2007 when Czech exports to Pakistan were worth $11.1 million and imports stood at $8.3 million. "An increase of 200 per cent in Czech exports to Pakistan is expected this year," he stated.

Federal Minister for Privatisation and Investment, Zahid Hamid, in his welcome address, underlined that there existed huge potential to strengthen economic ties between the two countries, especially bilateral trade.

Direct interaction between the business communities would enable them to better understand and realise the opportunities and prospects of cooperation in various fields.

He said that Pakistan would benefit from Czech's knowledge and expertise in the field of energy in view of its rapidly increasing need.

The minister appreciated Czech participation through direct capital investment or provision of technical expertise and know-how in various upstream and downstream projects in the oil and gas, mining and power sectors and welcomed signing of a contract by SKODA for supplying machinery for a power project.

Pakistan's investment policy was one of the most liberal and attractive in the region and there was a level-playing field for both foreign and local investors, Zahid Hamid added.

All economic sectors were open to foreign investors, who could invest up to 100 per cent equity. No government sanctions or permissions were required and remittance of capital, profits and fees were allowed and foreign investment also had statutory protection.

That resulted in a dramatic improvement in the country's economic performance with a significant increase of more than 10 times in foreign investment from only $300 million in 2000-01 to $3.9 billion last year. This year, foreign investment would set a new record and surpass $6 billion, he said.

Highlighting the promising areas of investment, the minister said that there were opportunities for joint ventures in the information technology, automotive and precision engineering sectors, as well as in textiles, railways and infrastructure development.

http://www.thenews.com.pk/daily_detail.asp?id=55090

 

[Neo]

May 10, 2007
Current account deficit up by 43pc

By Shahid Iqbal

KARACHI, May 9: The current account deficit of nine months has gone up further to $6.015 billion making it more difficult to meet the gap as the government’s dependence on foreign inflows and borrowings is on the rise.

Despite high foreign flows in the form of remittances and foreign investment, the rising current account deficit poses a threat to the government’s ability to pay back its foreign bills and this may result in further borrowings from the market.The increased trade imbalance has sharply reduced the government’s ability to pay import bills for a longer period.

Just a couple of years ago, the government could pay import bills through its reserves for eight to nine months, but now State Bank’s reserves are hardly enough for five months.

The latest official data issued on Wednesday showed that the current account deficit during July-March 2007 was 43 per cent higher than the deficit during the same period last year.

Another data issued the same day showed that the trade deficit of 10 months has reached $11.083 billion, far from the government’s target of $9.4 billion for the whole year.

The real cause was the much below export growth and higher import growth despite decline in petroleum prices.

The import bill is rising on account of a number of products, which could be avoided, like huge import of luxury cars, vegetable and vegetable products, fruits and dry fruits, and a number of agricultural products.

Analysts said the 10-month trade deficit, which crossed $11 billion mark, would further increase the current account deficit. They said it was threatening the country’s ability to pay the rising import bill.

“We are obviously going to borrow more to meet the rising demand of dollar for import bills and debt-serving but the more we borrow, the more we need dollars to service the debt burden,” said Anees Alam, an economist.

He said the country’s exports have been facing serious challenges since the end of MFA (Multi Fiber Agreement) which eroded the boundaries for textile exports.

“It was known 10 years before the end of the MFA that China and India would pose a real threat to the only large textile sector of Pakistan, but the government failed to make any strategy for the times to come,” said Anees.

Pakistan is facing a cut-throat competition in the world textile market and Bangladesh has also emerged as the main competitor of Pakistan and has captured a sizeable place, replacing Pakistan from its traditional markets of Europe and America.

The data also showed that Pakistan has been paying more in services than it receives in this account. Pakistan paid $6.249bn for services and received only $2.780 billion in the same account.

http://www.dawn.com/2007/05/10/ebr1.htm

 

[Neo]

May 10, 2007
Plan for 7pc GDP growth finalised

By Ihtasham ul Haque

ISLAMABAD, May 9: The government has finalised a five-point plan to achieve 7 per cent GDP growth in the next budget, which is estimated to be of Rs1.5 trillion. “Our new budget strategy is to de-regulate the economy further by effectively promoting the private sector, creating special economic zones and industrial parks, offering more incentives to the Small and Medium Enterprises and creating special estates for developing the agriculture sector,” the Prime Minister's Adviser on Finance Dr Salman Shah told Dawn on Wednesday.

In fact, he said, the focus of the next five budgets will be on achieving the five point strategy for which substantial funding will be made available, including from external resources.

“In real terms, over 7 per cent GDP growth has been planned during the next financial year,” he said.

There will be a 4 per cent fiscal deficit target in the budget 2007-08 to be achieved by maintaining strict fiscal discipline, he said.

The CBR revenue will be Rs1 trillion while the Public Sector Development Programme (PSDP) has been estimated to be Rs535 billion, an increase of Rs100 billion over the current budget of Rs435 billion, the adviser said.

Mr Shah said that since the fiscal deficit target for the next financial year had been estimated at 4 per cent, Rs60 billion foreign borrowing will be required in the new budget. “Rest of the 96 per cent financial resources will be arranged by the government and I find no difficulty in this behalf,” he said.

The target for inflation in 2007-08 is 6 per cent. “But for the current year, 7 per cent inflation rate is being expected by June 30 this year against the target of 6.5 per cent.” For medium term, he said, the government was hoping for 5 per cent inflation during 2007-08, Mr Shah said.

http://www.dawn.com/2007/05/10/top12.htm

 

[Neo]

Thursday, May 10, 2007

‘Debt servicing, defence eat up big share of revenue’

LAHORE: Punjab Minister for Finance, Hasnain Bahadur Dareshak, said Wednesday that debt servicing and defence expenditure eat up a whopping share of revenues.

He was addressing a pre-budget seminar organised by the Institute of Cost and Management Accountants of Pakistan (ICMAP).

President, Lahore Chamber of Commerce and Industry (LCCI) Shahid Hassan Sheikh, was the chief guest. Naveed A Andrabi, President, All Pakistan Tax Bar Association, Prof Dr Khawaja Amjad Saeed, Principal, Hailey College of Banking and Finance and former President, ICMAP, Muhammad Azam Khan Shad, Honorary Treasurer, ICMAP and Mirza Munawar Hussain, Member National Council of ICMAP made presentations on the occasion.

The minister said inspite of the fact that a lot of funds are arranged through deficit financing, still a very little is left for development and revenue expenditures. “The government is alive to the state of the affairs and is in the process of taking a number of measures to put our financial and fiscal house in order,” he added.

He said, “the ground reality is that we usually find it difficult to generate enough revenue and increase exports whereas the expenditure position has all along been getting inflated due to inflationary trends. In short the economy has been virtually in shambles.”

Shahid Hassan Sheikh, speaking on the occasion, said there has been considerable improvement in the macroeconomic indicators due to concerted efforts by the present government.

Prof Dr Khawaja Amjad Saeed, the keynote speaker, said the results of the fiscal policy adopted by the present government have yielded positive results and national economy is now treading fast towards economic prosperity. Muhammad Azam Khan Shad, FCMA recommended that government should provide funds for Kalabagh dam, allocate sufficient funds and provide technical expertise for development of Lakhra/Thar coal fields on fast track basis.

http://www.dailytimes.com.pk/default.asp?page=2007\05\10\story_10-5-2007_pg5_4

 

[Neo]

Thursday, May 10, 2007

Punjab, Karachi allow 9pm closure

LAHORE/KARACHI: The Punjab cabinet and Sindh governor have allowed business centres and markets to open for an extra hour until 9pm under the new energy conservation programme. “We have taken this decision after consultation with the business community,” Punjab Chief Minister Chaudhry Pervaiz Elahi told the provincial cabinet at a meeting on Wednesday, APP reported. He said all government departments would not use power for one hour every day. He directed the chief secretary to ensure that air conditioners are used in offices for the minimum possible time. Sindh Governor Ishratul Ibad has allowed markets in Karachi to remain open until 9pm on weekdays and up to 11pm on Saturdays, said Majid Aziz, president of the Karachi Chamber of Commerce and Industry. Karachi markets would also be allowed to remain open on Sundays.

http://www.dailytimes.com.pk/default.asp?page=2007\05\10\story_10-5-2007_pg1_5

 

[Neo]

Pakistan's Federal Budget Due June 9 Says Government Official

ISLAMABAD -(Dow Jones)- Pakistan's government will present its 2007-08 federal budget, worth an estimated PKR2 trillion, to parliament June 9, said a government official Thursday.

"The budget will be presented on June 9, which will focus on growth sustainability and poverty reduction measures", Salman Shah, financial advisor to the prime minister, told a television program.

Pakistan's fiscal year ends June 30 and each annual budget is presented to the parliament in June.

The budget will offer incentives for new investment through tax credits, new listings on the stock market and depreciation allowance on machinery imports, said Shah.

New rules for real-estate investment trusts will also be announced, Shah added.

Last year's budget was worth an estimated PKR1.315 trillion. The budget deficit was 4.2% of gross domestic product.

http://www.nasdaq.com/aspxcontent/N...CQDJON200705101329DOWJONESDJONLINE001118.htm&

 

[Neo]

Upcoming budget to further promote growth: PM

ISLAMABAD: May 10, 2007: The upcoming budget will further promote growth, industrial development, jobs creation and will reflect consistency and continuity of the policies, Prime Minister Shaukat Aziz has said.

Talking to several group of PML parliamentarians at his chamber in the Parliament House Thursday, the prime minister said we will contest the next general elections on the basis of our track record and the party is confident that the public will cast a vote of confidence in our favour.

The prime minister said we have done away with politics of confrontation and have promoted an atmosphere of congeniality to strength democracy in the country. The prime minister said PML government has set new traditions in the political arena as we believe in solving all national issues through negotiations and consultation.

The parliamentarians expressed their unflinching support to the Party, government and the prime minister. They said the development projects launched by the government have started impacting the lives of people in a positive way.

The prime minister said while during our initial years in office the government relatively focused more on achieving macro economic stability to take the country out of crisis, it gradually increased allocations for bringing improvement in the social sector. As a result the benefits of growth started trickling down to the grass roots level and people now have better facilities of education, health, drinking water and infrastructure.

The prime minister said during the period 2001-02 to 2005-06, the country has spent close to Rs. 1,480 billion on social sector and poverty-related programmes. The overall pro-poor expenditures, as percentage of GDP, increased from 4.0 percent in 2001-02 to 6.1 percent in 2005-06. In monetary terms these expenditures have increased from Rs. 180 billion in 2001-02 to Rs. 464 billion in 2005-06 showing an average annual growth of 27 percent, the prime minister added.

He said that the government increased expenditure on social sector i.e. education, health, population welfare and social welfare and safety net at an annual average rate of 22 percent during the period 2001-02 to 2005-06. These expenditures increased from Rs. 103.1 billion in 2001-02 to Rs. 227.7 billion in 2005-06, he added.

The prime minister said it is heartening to see that poverty has declined in both rural and urban areas. He said high growth, decline in unemployment and higher allocations by the government on poverty related projects have contributed in 10.6 percent point decline in absolute poverty. The poverty head count, which was 34.4 percent in 2001, came down to 23.9 percent in 2005, he added.

The prime minister said the bumper crop of wheat this year and the ongoing reforms in social sector and social protection would further improve social indicators and help reduce poverty in both urban and rural areas.

The prime minister said the government is proud of its achievements but we are not complacent. He said the challenge is to further reduce poverty eliminate inequalities in income and maintain the momentum of growth.

He said as part of its exit strategy for poor, the government is working to provide better opportunities for livelihood though more jobs and increasing the out reach of micro finance. It is also making targeted interventions for the poor through Pakistan Bait-ul-Mal, Zakat system among others, the prime minister added.

The parliamentarians discussed with the prime minister the development projects launched by the government in their constituencies and submitted proposals for the upcoming budge.

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[Introvert]

Pak-Uzbek joint venture in leather sector on cards
LAHORE: Punjab Minister for Industries, Muhammad Ajmal Cheema has said that the investors of Pakistan and Uzbekistan would soon enter into a joint venture in leather sector, hoping that the collaboration would help enhance the trade between the two nations in leather and other sectors of economy.

He expressed these views while talking to a 7-member delegation headed by Obek Arif Usman, Ambassador of Uzbekistan in Pakiatan, and Iskandar Attanof, Chairman, Leather Association of Uzbekistan who called on him here on Wednesday. The minister said that Pakistan and Uzbekistan are enjoying very cordial relations and these ties would further be cemented in the coming days. He said investors of Uzbikstan should come forward and avail the opportunities being given to foreign investors by Pakistan especially Punjab government.

He said there would soon be exchange of delegations between both the sides which would hold single country exhibitions. He said Leather Association of Pakistan would soon visit Uzbekistan.
http://www.thenews.com.pk/daily_detail.asp?id=55094

 

[Neo]

ECC allows gas firms to set up power plants

ISLAMABAD (May 11 2007): The Economic Co-ordination Committee (ECC) of the cabinet on Thursday allowed gas companies to set up power plants by using their own low BTU gas as part of the government's strategy to generate more power from where it is available.

Presided over by Prime Minister Shaukat Aziz, the ECC also approved 8.842 cents tariff for setting up 450 MW thermal power station at Chichoki Malian (Sheikhupura) besides allowing phase-wise import of cotton through land route and as a first step only import of long staple cotton.

After the meeting Dr Ashfaque Hasan Khan, Economic Advisor to the Finance Ministry briefed the journalists that the first priority would be given to gas companies to set up thermal power stations using available low BTU gas.

"If gas companies are unable to give go ahead signal within three months' prescribed time, then other parties will be considered," he added. The ECC gave go ahead to phase-wise cotton import through land route for which Ministry of Food, Agriculture and Livestock (Minfal) has been asked to set quarantine facility at Wagha border.

In the first phase only long staple cotton could be imported after which the government would conduct study that import of short staple cotton is not harmful for the local farmers and then establish quarantine facility at Chaman and Turkham.

He said after a record cotton production of 14.4 million bales of cotton in 2004-05 it decreased to 12.8 million bales in 2005-06 and further reduced to 12.5 million bales this year. On the other hand spinning capacity over the last few years has developed up to 16 million bales.

ECC also decided to extend R&D support to dyed/printed fabrics, white home textiles and dyed/printed home textiles from eight countries of Central America. These countries are Nicaragua, Costa Rica, Belieze, Guatemala Al-Salvador and Honduras. The proposal had been submitted by the Commerce Ministry.

He said, ECC also approved Wapda's proposal for setting up a combined cycle thermal power plant of 450 MW at Chichoki Malian as the proposal PPIB's for setting up three power plants of 200 MW each has been shelved because of higher tariff ranging from 11.1 to 11.1 cents.

In response to Wapda's international bid, Alstom, a US-based company and Merubeni of Japan offered lowest bid of 8.842 cents per unit but at a later stage Qatar government showed interest to become part of this consortium.

He further said, ECC also decided to continue ban on export of pulses after reports that some of the parties procured gram at higher rates as part of their strategy to export it, as prices its price in the international market is higher than Pakistan.

"Gram crop is very good but export of pulses will not be allowed," he continued. He further said that the ECC also directed the Security and Exchanges Commission of Pakistan (SECP) to resolve all issues relating to equity and Real Estate Investment Trust (REIT) before budget with the consultation of SBP or any financial institution.

He said that the purpose of REIT is to provide cheap housing facilities to low income groups. Dr Ashfaque Hasan further said that the ECC has allowed foreign insurance companies to arrange equity of $4 million from where they want and erased the condition of equity from local market.

He said the ECC has allowed the Central Board of Revenue (CBR) to approve the names of investors who intends to import accessories for the services industry like hotels and chain stores. Dr Ashfaque said that inflation during the first 10 months (July-April) stood at 7.9 percent.

Earlier, ECC had directed CBR to bring the names of those investors before the ECC who are being allowed to import accessories at 5 per cent duty for one time exemption.

He said, a proposal of Defence Ministry has been deferred regarding exemption from sales tax on electrical power generated by the Pakistan Ordinance Factories (POFs). In this regard CBR has been asked to examine the proposal and submit report to the ECC in the next meeting.

The Ministry of Ports and Shipping withdrew a summary regarding establishment of Single Point Moording (SPM) facility at Khalifa point Hub (Balochistan). Dr Ashfaque said that 2.595 million tons wheat has been procured so far against the target of 5 million tons, which is 52 per cent of the total target set for the current year.

The Punjab procured 1.325 million tons of wheat against the target of 3 million tons followed by Sindh, 0.51 million tons against 0.7 million tons and Passco 0.76 million tons against 1.3 million tonnes targets.

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[Neo]

Rs 505 billion PSDP for 2007-08 likely

ISLAMABAD (May 11 2007): The government is going to increase Public Sector Development Programme (PSDP) by 35 percent over the last year to take its size to around Rs 505 billion for 2007-08. The Planning Commission and other government ministries/divisions and provincial concerned departments have been working on the enhanced PSDP for the next fiscal year to ensure adequate funding for the ongoing and new development projects.

According to a senior official engaged in budgetary work, the federal PSDP for 2007-08 will increase by Rs 75 billion to take its size from last year's Rs 270 billion to Rs 345 billion and the provincial share from divisible pool with 35 percent increase to Rs 160 billion. The provinces share in last year's PSDP was Rs 115 billion.

The corporations' allocations for development programme for the next fiscal year is also likely to go up proportionately. Sources said the major share of PSDP 2007-08 will go for development of infrastructure such as roads, railway linkages as the government intends to undertake several new mega infrastructure-related projects.

Besides completing the ongoing projects on top priority basis to build up a countrywide linkage for better transportation facilities and quick handling and supply of shipments from ports to different parts of the country, they added.

Pakistan's ambitious plan to become a corridor for energy, transportation, and regional business also demand a strong network. The federal and provincial PSDP with project-wise detail will be presented before the Annual Plan Coordination Committee (APCC) meeting here on May 21-22.

Sources said the Planning Commission has already issued directions to the federal and the provincial governments to come up with details of the projects for the APCC meeting they want to fund from the PSDP. The APCC will also review the progress of the ongoing projects and make it a criterion for allocation of funds from the next year's PSDP.

The Planning Commission will also make sure that the federal as well as the provincial governments accord priority to complete the ongoing projects rather than leaving them incomplete and embarking upon the new ones for the same sector. APCC's recommendations will be presented to the National Economic Council (NEC) for approval and making an approved PSDP a part of the next year's budget.

The government has undertaken a number of mega projects particularly for water sector besides allocating a sizeable portion of the PSDP for Pakistan Khushhali Programme (PKP) and their share in the next PSDP will be increased to expedite work on these projects.

The government is also going to increase funding for health, education, and other social sector programmes by increasing their allocation in next year's PSDP. Sources said allocation of funds from the PSDP for initial work on identified dams will also be increased to ensure that such projects complete in time.

http://www.brecorder.com/index.php?id=562248&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

MoU signed for 225 megawatts plant at SIE

LAHORE (May 11 2007): Punjab Industrial Estates (PIE) and a Kuwaiti investment group working with the US energy company have signed a Memorandum of Understanding (MoU) to develop a 225 mega watt combined power plant at a cost of $200 million at Sundar Industrial Estate (SIE), Lahore.

Sabir Chohan inked MoU on behalf of PIE while Grayson P Wolf represented American Energy Company and Amwal international Investment Company of Kuwait. In case of further requirements, the company would set up another 225 MW power plant in the second phase.

A company in the name of PIE-AmPower would also be set up in this regard. The investing company would mobilise about $50 million in equity through Amwal and approximately $150 million in debt finance from a combination of commercial banks and multilateral financial institutions. Construction work is likely to be completed in two and a half years while commercial operations are expected to start by the end of 2009.

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