Pakistan Economy - News & Updates - Archive

[Neo]

Integrated industrial uplift plan for AJK evolved

MIRPUR (May 11 2007): The Industrial Investment Board would be reactivated in order to give an impetus to the business activities in Azad Jammu & Kashmir, official sources said.

The sources told APP here on Thursday that the AJK Council is taking necessary steps to provide quick and comfortable means of communication through construction of a dual carriageway from G.T. Road Dina to Mirpur to encourage and facilitate the intending private sector local and foreign investors including overseas Pakistanis and Kashmiris intending to invest in the industrial sector in the fast growing industrial district of Azad Kashmir.

Mirpur already have two major industrial estates furnished with required infrastructure including water and power and Sui gas network being laid under a phased programme. The AJK government has already chalked out an integrated plan for the speedy industrialisation and economic progress of Azad Jammu Kashmir in letter and spirit, official sources said.

In the inaugural phase of the plan a high level committee, headed by the chairman AJK board of investment, has already been constituted for the revival of over 70 percent of the existing total number of sick industrial units located in the industrial districts of Mirpur and Bhimbher, the sources said.

The AJK government, the sources revealed, has also started the implementation of the industrial development plan in AJK under the phased programme besides resolving the matters relating to the revival of sick industrial units in Mirpur, recent emergence of the Azad Jammu Kashmir Bank, installation of TOU/TOD electricity meters in the industrial concerns to assess the time of usage and registration of firms and constitution of a joint coordination committee for resolution of issues/problems related to the AJK council.

The AJK government is monitoring the ongoing pace of industrial progress in Azad Jammu & Kashmir coupled with the aim to remove the bottlenecks in way of the industrialisation of the liberated area.

The AJK government is providing required infrastructure, facilities to the existing and intending entrepreneurs for the promotion and establishment of maximum industrial units in AJK. According to the sources most of the already approved seven new grid stations have been established in various parts of Azad Jammu Kashmir under phased programme to ensure the smooth and stable supply of power to the consumers. The sources said that this gigantic development plan will also help to reduce the line losses of the electricity in AJK.

The government has also decided to furnish the existing and upcoming investors from the private sector with all necessary facilities for encouraging maximum local and foreign investment besides for the promotion of country's exports from this fast expanding business terrain of AJK, the sources added.

http://www.brecorder.com/index.php?id=562352&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

'Pakistan can import power from Tajikistan'

RAWALPINDI (May 11 2007): Pakistan can import electricity from Tajikistan to meet its energy requirements under the MoU signed by joint ministerial commission last year for power supply to Pakistan, said Saidov Saidbeg, Ambassador of Tajikistan on Thursday.

He was talking to Dr Hasan Sarosh Akram, President, Rawalpindi Chamber of Commerce and Industry (RCCI) and members of the chamber during his visit. Tajik Commercial counsellor Ahsan Shariatmatari and Secretary Yuliya Iskanova briefed the business leaders about trade and business opportunities in their country.

Tajik envoy invited Pakistani business community to explore the Central Asian market by investing in Tajikistan. "Our country is a gateway to Central Asian Republics and Russia where huge market would receive your products with appreciation," he said adding that people of Tajikistan have high regard and love for Pakistan hence they like Pakistani products.

Pakistani businessmen should set up joint ventures in mining, hydropower generation, health, agriculture and agri-products, textile and textile garments, food processing and tourism, he said that Tajik government has formulated business-friendly laws providing all facilities to the investors.

He admitted that due to lack of communication link the economic co-operation between the two countries could not flourish at a rapid pace. But after completion of the bridge on Wakhan strip, two countries would get an easy access for enhancing trade and cultural co-operation, he said.

He said Lahore Chamber has organised two exhibitions of Pakistani products in Tajikistan. Tajik people liked Pakistani products. At present Chinese products have captured the market and if Pakistani products reach there they could capture a good market chunk as well, he said.

Speaking on the occasion, RCCI President Dr Hasan Sarosh Akram said Pakistan and Tajikistan governments should take measures to establish air and road links to enhance trade and economic ties.

He called upon Tajik businessmen to invest in Pakistan, which would provide them access big markets of South Asia, Middle East, Far East, besides an opening to the rest of the world through its ports.

He said that as a result of prudent economic policies, deregulation and liberalisation of trade, Pakistan has emerged as a fast growing economy in the region. Tajik investors would find huge opportunities of trade besides setting up of joint ventures in different industrial and services sectors, he said. He invited the Tajik industrialists to take part in three-day industrial exhibition to be held in September.

http://www.brecorder.com/index.php?id=562287&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Thar coal: local power company to generate 1,000 megawatts in three years

KARACHI (May 11 2007): Country's national power grid to get 1,000 Mega-Watt electricity in three years from coal-fired power plants to be established by local company in the vicinity of Thar. Hassan Associates (Pvt) Limited will be able to provide 1,000 MW electricity in 38 months after depositing bank guarantee of $7 million in coming weeks.

Irfanullah Khan Marwat, Sindh Minister for Mines and Mineral Development at a press conference on Thursday said that the company had shown commitment to materialise the coal-fired power project and the government after assessing the company issued the first Letter of Interest (LoI) for coal-fired power plants.

He said that issuance of LoI indicated that government had full confidence over the company and it had completed all required procedure to start the project. On May 8, 2007 the Private Power Infrastructure Board (PPIB) approved issuance of Letter of Interest (LoI) to Hassan Associates for setting up 1000 MW power project based on Thar coal worth $1.2 billion.

Earlier, Sindh government had awarded exploration licence for an area of 64-km at Thar coal field to the local investors and proposals had been evaluated by the PPIB. Sindh minister said that the company could enhance power generation capacity from 1,000 MW to 1,800 MW in future. He said that Sindh government had provided all required infrastructure at coalmines sites and ready to provide necessary requirements to any intended company to set-up coal mining and power generation.

About the tariff issue, he said that the Sindh Mines and Mineral Development had suggested the federal government to re-activate the committee, which had settled the tariff for China based company.

To another query, he rejected the use of imported coal on the project and said that the available coal at Thar is lignite quality, a soft coal, and boilers were being set up according to the quality while the imported coal known as hard coal. Therefore, it was impossible to use both qualities of coal at the same boiler, he added.

He said that proposed coal mining and power generation in the Sindh desert was environment friendly. Marwat said that other local and international companies were also engaged in various coal-fired projects. Power generations at Sonda-Jherruk, Thatta would be started soon, which is being carried out by a Chinese company.

http://www.brecorder.com/index.php?id=562262&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Auto sales and production growth declines

KARACHI (May 12 2007): Declining trend in the growth of production and sale of locally assembled cars has been observed during the ten-month period from July to April of the current fiscal year, as the production and sales stood at 130,841 units and 131,962 units respectively.

According to figures released by Pakistan Automotive Manufacturers Association (PAMA), the production was up by 2.4 percent and sale by 5.4 percent, which means that the growth in car sales has been there but the rate has declined. Industry sales depicted negative growth at 2 percent primarily due to decline in motorcycles and relatively lower growth in car sales.

Overall, industry sales figures during July-April (2006-07) dropped by 5 percent, to 588,731 units, against 618,395 units of last year. The overall performance of listed cars and LCV manufacturers (PSMC, INDUS, HCAR, DFML) remained somewhat unattractive with overall growth during the ten months at 8 percent to 160,358 units.

Pak Suzuki managed to increase its sales by 25 percent to 96,584 units while Indus Motors sold 39,608 units, up by 20 percent. "If we encompass overall unit sales by the listed car assemblers then we come to the conclusion that Pak Suzuki leads with a market share of 60 percent, followed by Indus Motors at 25 percent, and the rest being shared by Honda Atlas Cars and Dewan Motors," said Hettish Karmani at Atlas Capital Markets.

Talking particularly about the car segment then once again Pak Suzuki enjoyed a handsome lead over others with a market chunk of 57 percent, followed by Indus Motors at 30 percent, the rest being taken over by other two listed assemblers, he added.

However, the analysis of individual performances of companies showed that PSMC and INDUS had performed well during the period while the overall lacklustre growth was due to dismal performance of HCAR and DFML. After incorporating the latest available sales figures, PSMC remained the market leader in the combined cars and LCV segment of the automobile industry.

The manufacturers of Toyota Corolla, Indus Motors, seated second in the race with 25 percent of the total market share. The auto industry is well poised towards growth and would be undergoing expansion in the coming years as outlined and scheduled under Auto Industry Development Program (AIDP). However, influx of imported vehicles continues to be a major threat to the industry.

http://www.brecorder.com/index.php?id=562639&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

May 12, 2007
Inflation exceeds budgetary target: Up by 8.1pc in 10 months

ISLAMABAD, May 11: Inflation rose by 6.92 per cent during the month of April 2007 over the same month of the last year mainly because of stable oil prices in domestic market, Federal Bureau of Statistics (FBS) said on Friday.

This would be the second lowest increase in inflation so far recorded in any month of the current fiscal year because of the falling oil prices in international market. In January 2007, the growth in inflation was 6.6 per cent. The average increase in inflation during the last 10 months was 8.14 per cent.

The statistics showed that inflation measured through Consumer Price Index (CPI) was up by 0.31 per cent in April 2007 over the previous month of March 2007. The inflation was up by 7.89 per cent in the first 10 months of the current fiscal year as against the same period of the last year.

The government expected that the end year inflation would be around seven per cent this year as the government found it very difficult to keep inflation below six per cent - a target set in the last budget despite the tight monetary policy of the State Bank of Pakistan.

The slowdown in inflation during the month under review was mainly due to constant decrease in prices of POL products. It is clear from the fact that transport and communication prices witnessed a negative growth of 2.39 per cent during the month under review over the last year.

The food inflation witnessed a growth of 9.41 per cent during the month of April 2007 over the same month of last year. This showed that food prices are still higher as the supply of essential commodities like potato, onion etc might decrease in the market.

Among the food items the price of tomatoes was up by 22.65 per cent, vegetables 7.83 per cent, fresh fruits 6.43 per cent, vegetable ghee 5.98 per cent, cooking oil 4.97 per cent, chicken (farm) 4.39 per cent, mustard oil 2.10 per cent, beverages 1.46 per cent, milk powder 1.31 per cent, rice 1.29 per cent, dry fruit 1.21 per cent, wheat flour 1.01 per cent, milk fresh 0.72 per cent and meat 0.61 per cent.

The house rent was constantly on the rise during the last 10 months. It rose by 0.43 per cent in April as against March 2007. An average growth of 0.4 per cent was recorded in house rent during the last 10 months of the current fiscal year. The government remained silent about this phenomenal increase in the house rent, which would have serious implications on the monthly budget of the low income group and the middle class.

Similarly, the doctor's fees and medicines are also witnessing a steady upward increase during the last 10 months. It recorded the highest increase of 10.08 per cent in April 2007 over the same month of the last year.

Another important area from consumers’ point of view - education fee and textbooks - was also under tremendous inflation. The education sector recorded an average growth of over 6 per cent during the last 10 months of the current fiscal year.

http://www.dawn.com/2007/05/12/ebr3.htm

 

[Neo]

Private sector to establish 28 Thermal power stations: Jatoi
Saturday May 12, 2007

ISLAMABAD: Federal Minister for Water and Power Liaquat Ali Jatoi informed the National Assembly on Friday that private sector would establish 28 power thermal stations in the upcoming few years.
He said the Private Power Infrastructure Board (PPIB) was scrutinizing the entire process. The projects would generate 7679 mega watt electricity that would be sold to Water and Power Development Authority (WAPDA).

In question hour, the federal minister said that electricity was being purchased from Iran and other countries. National Electric Power Regulatory Authority (NEPRA), he said, would fix electricity tariff of every project.

Jatoi told the house that private sector would install solar energy street lights under the Alternate Energy Development Board (AEDB) for which tariff has been settled that would save electricity. Solar energy projects would be launched in the areas where transmission lines did not exist.

Responding to a question, the federal minister said that line losses were being reduced. He said the line losses of Hyderabad Electric Supply Company (HESC) remained 34.2 percent during 2005-06. He said the Wapda line losses have been reduced from 22.8 percent to 20 percent. He said the losses could be reduced if people do not use loose connection.

The federal minister said electricity in Pakistan was cheaper than India and Sri Lanka. Wapda, he said, purchases electricity with 5.2 rupees per unit and sell with 4.2 rupees.

To a question, he said, India was establishing Lower Jhelum Hydro Power project on Jhelum River and New Delhi had already informed Islamabad about the project. He said the project would have no effect on Pakistan, therefore, there was no need of any action against India.

Liaquat Ali Jatoi said Pakistan had won the case over Bhaglihar Dam. He said the verdict of neutral expert would be implemented. In this connection, he said, talks with India were underway and we would not withdraw from our right. India, he said, had started changing design of the Dam after the objection of Pakistan.

He said several dams including Bhasha would be constructed to increase power generation. At present, he said, the private sector was working on 16 power projects.

Minister of State for Information Tariq Azeem informed the House that TV boosters in Boni and Drosh areas of Chitral had been installed. He said more boosters would be installed throughout the country for clear transmission of PTV.

Minister incharge cabinet division, Sher Afgan Khan Niazi told the House that army officers were appointed in civil services through Federal Public Service Commission (FPSC).

http://www.paktribune.com/news/index.shtml?177935

 

[Neo]

Trade, industrial activities come to complete halt: Rs eight billion loss to national economy

KARACHI (May 13 2007): Trade activities in the financial hub of the country, Karachi, was completely paralysed, causing over rupees eight billion loss to the national economy due to violence on Saturday, it is learnt.

Two different rallies were organised by ruling coalition party Muttahida Qaumi Movement (MQM) and opposition parties, including Pakistan Peoples Party and Muttahida Majlis-i-Amal (MMA) to accord welcome to Chief Justice Iftikhar Muhammad Chaudhry to address the golden jubilee of Supreme Court of Pakistan on Saturday.

For the last three days, the situation in the city was tense and on Saturday people preferred to stay at home. As a result, the attendance in the offices and factories was thin due to non-availability of transport.

Meanwhile, the government of Sindh also announced a public holiday on May 12, which badly hit the business activities in the major commercial centres and industrial areas in the metropolitan.

Due to thin labour attendance and tense situation in the city, production process came to a complete halt in the five major industrial areas, including SITE, Korangi, Federal "B" Area, North Karachi and Landhi industrial area.

"We have faced losses of over Rs 20 billion during the last two days as on Friday, only 25 percent industries worked, while there was 100 percent halt on Saturday," said President of Karachi Chamber of Commerce and Industry (KCCI) Majyd Aziz, while talking to Business Recorder.

Explaining, he said closure of industries for just an hour resulted in the loss of Rs 500 million to the gross domestic product (GDP). "So the last two days' losses are not less than Rs 20 billion," he said. "Our industries are closed for the last two days and now it would be closed for the next two days, ie on Sunday because of strike call by the opposition parties and on Monday," he added.

Majyd Aziz said though the industrialists had faced huge financial losses due to political activities in the city, the most disturbing thing was that the country's image was damaged, which higher than the financial losses.

"We have restored a good image of the country on the international front during the last three years, which was eclipsed in just a day," he said, and added this was a negative indicator and a wrong way, which might multiply the losses in future.

"We are expecting that law and order situation will be controlled within three or four days, but the impact of Saturday's will be felt till May end," he said.

Former Chairman of SITE Association of Industry Zubair Motiwala said that only on Saturday the government suffered a loss of Rs 1.5 billion in term of taxes, while other losses, including production and exports, are not less than rupees five billion.

He said political activities in the city had badly hit the export process and export consignments could not be shipped due to the tension in the city, he added.

Motiwala said that international exporters had always criticised our country's image and now the prevailing law and order situation would strengthen their views about the country.

Chairman of Korangi Association of Industry Masood Naqi claimed that Korangi industrial area had faces a loss of rupees two billion in the term of production, while the government exchequer lost Rs 250 million in the term of taxes.

He said that there was 100 percent shut down in the Korangi industrial area due to the tense situation in the city and local holiday announced by the Sindh government on Saturday.

"Over 2000 industrial units' production was zero and despite the last working day of shipment, not a single export cargo was shipped on Saturday," said Chairman of Federal "B" Area Association of Trade and Industry Masroor Alvi.

He said: "We don't have any figures, but losses are in billions, which could not be recovered even in few months."

http://www.brecorder.com/index.php?id=562983&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Moot on launch of solar map for Pakistan, Afghanistan from June 25

KARACHI (May 13 2007): A conference on the launching of wind and solar maps for Pakistan and Afghanistan will commence on June 25. The two-day moot is being organised by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in collaboration with the SAARC Chamber of Commerce and Industry (SCCI) and South Asia Regional Initiative for Energy.

Federal Minister for Water and Power, Liaquat Ali Jatoi, will chair the inaugural session of the moot to be held in Islamabad. The purpose of the conference on innovative issue in Pakistan is to introduce and distribute the wind and solar maps and Geographic Information System (GIS) data products for Pakistan and Afghanistan. It was further pointed out that the conference is expected to be attended by the representatives of companies to which the Government of Pakistan has given the letter of intent for installing projects of alternative energy resources in Pakistan.

http://www.brecorder.com/index.php?id=563018&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

May 13, 2007
Cellphone users jump to 52m from 1.2m in 2002

KARACHI: Deregulation of the telecom sector and intense competition between the PTCL and mobile phone operators have proved beneficial to the telephone users.

There has been a massive growth in subscribers of mobile phones with the arrival of Telenor and Warid after Mobilink, Ufone, Paktel (now CMPak Limted) and Instaphone.

Currently, the total cell phone subscribers stand at over 52 million, of which Mobilink has over 23 million users followed by Ufone 11 million, Warid’s eight million and Telenor’s nine million. In 2002, cell phone users were only 1.2 million.

Manager Public Relations Mobilink Omar Manzur said that till 2004 the industry was paying activation tax of Rs2,000 per new connection. But now “we are paying Rs500 as activation tax”. There is 9.09 per cent advance income tax being charged to every customer coupled with 15 per cent sales tax levied on all services used. For every Rs100 consumed by a subscriber only Rs79 is used for telecommunication service.

He said the prices of telecom services have been reduced significantly. For instance, the rate of a local call on the Mobilink network in 2004 was Rs5.75 per minute. Today a NWD on the same network costs as low as Rs1.80 per minute.

The cut in activation tax came as an encouragement from the government that increased the upfront cost of a mobile connection to the end user. The reduction of tax enabled a larger number of low income customer to join the network.

He said the tariff reduction was based on three factors. The telecommunication base increasingly started addressing the lower income segments of the society. For this it was important that the prices of telecommunication be reduced so as to increase the access to the service.

The liberalisation of the telecommunication market led to a more efficient back-end infrastructure and lowered input cost for the customers. Increased competition led to a reduction in prices as two new operators entered the market, he added.

However, he said that a further decrease in activation tax is important as it would allow even the lower segment to enter the market. The operators have taken up the case with the government on periodic basis.

Giving a history of activation tax, he said Rs2,000 tax imposed vide SRO. 390(I)/2001 dated June 18, 2001 and on June 12, 2004, it was reduced to Rs1,000 followed by another cut to Rs 500 on June 6, 2005.

Chief of Customer Operations Ufone Naved Butt said that the company now charged a unified call rate of 99 paisa per 30 seconds as compared to Rs five per minute (company to company) and Rs6.60 per minute on other operators’ network in 2002.

He said that the operators want elimination of activation charges in order to lure more customers.

In telephone, there has been nine per cent decline in call rate to Rs2.3 per minute in 2007 as compared to Rs2.5 per minute in 2002. Currently, the government nets 0.47 paisa per minute in terms of taxes. -—ASK

http://www.dawn.com/2007/05/13/ebr13.htm

 

[Neo]

Sunday, May 13, 2007

‘Steel mill project to be operative in two years’

ISLAMABAD: A state-of-the-art modern steel mill project, to be established with an investment of $96 million, will be operative in the next two years and produce 220,000 tonnes of quality steel sheets, Japanese investors told PM Shaukat Aziz on Saturday.

A delegation of Japanese investors and Pakistani investment banks led by president of the Universal Metal Corporation of Japan and CEO of Aisha Steel Mills, Haseeb Rehman, called on the PM.

Prime Minister Shaukat Aziz said that Pakistan welcomes investment in the manufacturing sector and Pak-Japan joint ventures in steel manufacturing will be an excellent symbol of cooperation in expanding steel production in the country.

The PM said that as a result of increased economic activity in all sectors of the economy including construction, engineering and manufacturing, the demand and consumption of steel is rising in the country. The growth in steel demand is an indicator of the growth momentum of Pakistan’s economy, the PM added.

The PM said that the government is encouraging increase in steel production with special focus on plant modernisation and increasing efficiency.

He said that steel industry should upgrade and modernise its plants, as outdated plants cannot achieve the required efficiency needed for a highly competitive market.

The PM said that foreign investment of more than $6 billion is expected in the country in the current financial year which will create more job opportunities, increased production and overall growth of economy.

Terming economic growth to be the core of progress, prosperity, peace and security the PM said that economic strength is the key to Pakistan’s positive image to the world.

Briefing the PM on the details of the project, Haseeb Rehman said that the state-of-the-art modern project to be established with an investment of $ 96 million would be operative in the next two years producing 220,000 tonnes of quality steel sheets.

The delegation appreciated the investor friendly policies of the government and told the PM that all formalities for setting up the project have been completed. They said that this joint venture of the private sectors of Pakistan and Japan would lead to many more investments in the manufacturing sector from Japan.

http://www.dailytimes.com.pk/default.asp?page=2007\05\13\story_13-5-2007_pg5_3

 

[Neo]

220.000 ton per year? This has got to be the smallest steel mill in the world.
Why aren't we building larger mills since we import millions of tonnes of steel from abroad?

 

[Neo]

Sunday, May 13, 2007

Musharraf inaugurates 165MW power plant project

By Sajid Chaudhry

ISLAMABAD: President General Pervez Musharraf on Saturday performed ground breaking ceremony of $160 million 165 MW power plant of Attock Gen Limited, the first power sector venture of the Attock group of companies.

The president unveiled the plaque of the power plant at an impressive ceremony at Morgah, Rawalpindi, in the presence of governor Punjab, federal ministers, a large number of government officials and other dignitaries.

Addressing a select gathering, president Musharraf termed Attock Gen Limited’s power plant as a project of vital national importance at this critical point in time when Pakistan needs additional power supply to meet the continuously rising demand.

He paid glowing tributes to the leadership of Dr Ghaith R Pharaon, chairman, Attock group of companies, Shuaib A Malik, group regional chief executive, Attock group and appreciated Attock group’s contributions to the economy of Pakistan.

The economic performance of Pakistan, he said, had been very impressive over the past five years, and a healthy GDP of over seven percent was real confirmation of the same as also the confidence shown by the international investors in the country.

The president congratulated Attock group for coming up with the first power plant based on indigenously produced environment friendly fuel.

Minister for water and power, Liaqat Jatoi stated that the government was committed to meet the energy requirements, and that a sense of urgency prevailed in all their endeavors to take timely actions to avoid adverse impacts of the energy deficit. All efforts were being made to encourage the local as well as foreign investment in this sector because it was vital for the economic growth of Pakistan, he added.

He expressed hope that AGL’s power plant would be commissioned in time. Dr Gaith R Pharaon, Chairman, Attock group of companies, while giving vote of thanks, congratulated the president and his government for successfully implementing modern and visionary policies. Because of these policies, Dr Pharaon stated, investments in Pakistan were one of the safest and the best in the world.

Dr Pharaon expressed his intention to set up two more power plants of 200 MW at Karachi and Hub, Balochistan.

He cited the $200 million pipeline project from Machike near Lahore to Taru Jabba near Peshawar which awaits a few government approvals that he requested be expedited.

The group has come up with a 165 MW power plant which will be the first to be commissioned under the government of pakistan’s power policy-2002 and first ever IPP located north of Lahore, and 75 percent component of estimated $160 million for this project comprises foreign direct investment

Earlier, M Adil Khattak chief executive officer, Attock Gen limited and Attock Refinery, briefing on AGL’s project stated that the fast growing gap between supply and demand for electricity is perhaps the greatest threat and challenge faced by national economy.

http://www.dailytimes.com.pk/default.asp?page=2007\05\13\story_13-5-2007_pg5_6

 

[Neo]

Pakistan emerging as major cement exporter: Prime Minister

CHAKWAL: May 14, 2007: Prime Minister Shaukat Aziz on Monday said Pakistan was emerging as a major cement exporter for the neighbouring countries and the Middle East

He was speaking here at the inauguration of DG Khan Cement's Khairpur environment-friendly plant around 150 km south of capital Islamabad and having a production capacity of 7000 tons per day.

The prime minister said the operationalisation of three cement plants in the area within two years spoke of the government's successful policies that have brought in an investment of around Rs 500 million.

He said owing to the consistency and continuity in policies, record investments had been brought in and hundreds of industrial units were rapidly coming up all over the country.

The prime minister, who laid the foundation stone of three cement plants near Chakwal two years ago, said commissioning of these modern plants generated numerous employment opportunities and created several associated industries.

The prime minister earlier unveiled plaques of the cement plant, a 33 MW power plant and a plant for production of over 350,000 paper bags per day for the cement industry.

Prime Minister Aziz appreciated the Nishat Group for its role in the country's development and progress and noted that around 70 per cent of the plant's machinery was locally manufactured.

He said the positive impact of the industrial growth will trickle down to lower tiers of the society and it will be a win-win for all.

The prime minister said though there were several challenges, efforts were underway to cut poverty. He said the growth this year was expected to be around 7 per cent this year, with per capita income of US 950 dollars.

The prime minister announced upgradation of Kallar Kahar - Choa Saidan Shah road and Khairpur - Bhaon road, as well as a development package for the Chakwal district.

He said the government was encouraging competitiveness and productivity of the private sector as it believed that use of cutting-edge technology and not tariff controls could help them in a world of growing competition.

The prime minister said the prices of cement will further stabilise with increased production and provide quality product not only to meet the increased demand within the country, but also for Afghanistan, India and Middle East.

He was also appreciative of the measures taken to meet environmental standards, to cut pollution and to use minimum possible energy in a most modern plant.

Governor Punjab Lt Gen (R) Khalid Maqbool described Nishat Group as a development partner in Pakistan's progress and said the plant will generate employment and business activity in the area.

He appealed to the people to work for political stability in the country and reject those who wanted to bring instability.

Head of EU delegation to Pakistan Jan De Kok, who was also representing the European Investment Bank, said the project will further cement relations between Pakistan and the EU.

He said the EU will continue to help Pakistan in its political, economic and social development. He said subject to negotiations the EU has decided last week to triple assistance to Pakistan and it was largest provider of grant assistance.

The Chief Executive Officer Raza Mansha of DG Khan Cement said the three plants run by different groups will jointly establish a campus of the University of Engineering and Technology at Taxila, besides providing health facilities for the locals.

He said the Nishat group will spend Rs. one billion in next three years by setting up a 400 MW power plant, a cement plant and port facilities for export in Balochistan and a five star hotel in Punjab.

He appreciated the assistance provided by District Nazim Sardar Ghulam Abbas in making a dream come true.

Brecorder.com

 

[Neo]

Rs 13.25 billion utilised on 5955 schemes in Sindh under ADP

HYDERABAD (May 14 2007): The executing authorities have utilised Rs 13.255 billion on 5955 ongoing development schemes under Annual Development Programme (ADP) 2006-2007 from July 1 to March 31, 2007 in all the 23 districts of Sindh province.

According to official statistics, under ADP 2006-2007, the provincial government allocated Rs32000 million for utilisation on 4832 ongoing development schemes of District governments and 1123 ongoing development schemes of the Provincial government. Out of this Rs22261.376 million were released in all 23 districts of the province and up to March 31, 2007, Rs13255.049 million were spent by the executing authorities on the ongoing development schemes.

The district-wise allocations, releases of grants and their utilisation shows that in Matiari district, Rs148.621 million were utilised against the released amount of Rs159.942 million on 65 ongoing development schemes in the district. In Tando Muhammad Khan District, the executing authorities utilised Rs92.326 million against the released amount of Rs99.657 million on 76 development schemes in the district.

In Dadu district, the executing authorities utilised Rs367.694 million against the released amount of Rs403.296 million on 110 development schemes in the district.

In Kambar-Shahdadkot district, the executing authorities utilised Rs117.799 million against the released amount of Rs134.569 million on 137 development schemes. In Sukkur district, the executing authorities utilised Rs140.310 million against the released amount of Rs165.116 million on 485 development schemes.

In Sanghar district, the executing authorities utilised Rs227.619 million against the released amount of Rs267.961 million on 346 development schemes.

In Ghotki district, the executing authorities utilised Rs265.034 million against the released amount of Rs316.451 million on 187 development schemes in the district.

In Jacobabad district, the executing authorities utilised Rs183.879 million against the released amount of Rs219.924 million on 170 development schemes.

In Thatta district, the executing authorities utilised Rs262.643 million against the released amount of Rs327.501 million on 547 development schemes. In Umerkot district, the executing authorities utilised Rs103.408 million against the released amount of Rs132.657 million on 120 development schemes.

In Kashmore district, the executing authorities utilised Rs218.246 million against the released amount of Rs300 million on 97 development schemes in the district. In Shikarpur district, the executing authorities utilised Rs178.392 million against the released amount of Rs247.731 million on 158 development schemes. In Khairpur district, the executing authorities utilised Rs179.667 million against the released amount of Rs261.521 million on 475 development schemes in the district.

In Jamshoro district, the executing authorities utilised Rs63.079 million against the released amount of Rs91.944 million on 137 development schemes.

In Hyderabad district, the executing authorities utilised Rs97.219 million against the released amount of Rs142.994 million on 129 development schemes. In Mirpurkhas district, the executing authorities utilised Rs75.299 million against the released amount of Rs144.745 million on 225 development schemes.

In Tharparkar district, the executing authorities utilised Rs166.114 million against the released amount of Rs393.779 million on 136 development schemes.

In Naushero Feroz district, the executing authorities utilised Rs163.762 million against the released amount of Rs262.310 million on 217 development schemes.

In Badin district, the executing authorities utilised Rs134.170 million against the released amount of Rs215.720 million on 88 development schemes.

In Larkana district, the executing authorities utilised Rs90.854 million against the released amount of Rs152.594 million on 170 development schemes in the district.

In Nawabshah district, the executing authorities utilised Rs153.996 million against the released amount of Rs273.759 million on 286 development schemes.

In Tando Allahyar district, the executing authorities utilised Rs55.143 million against the released amount of Rs102.541 million on 108 development schemes.

Under Annual Development Programme 2006-2007, the executing authorities have so far utilised Rs1041.355 millions against Rs1643.690 million, which were released by Sindh government.

http://www.brecorder.com/index.php?id=563963&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

May 14, 2007
Major structural imbalances

By S. M. Naseem

Pakistan’s economic growth continues to be celebrated among official circles, despite increasing concerns about its sustainability. The marked rise in the stock market index is once again the main cause of the euphoria, not unlike the one two years ago, whose sudden collapse remains an unresolved mystery, despite the investigation by a parliamentary task force.

While the stock market collapse of 2005 was triggered by the manipulations of a few brokers and bankers, the current stock market surge seems to be caused more by the inflow of portfolio capital particularly from neighbouring Gulf states flushed with current account surpluses following the boost in oil prices.

It has continued to feed on snowballing expectations about the future * based on the assumption that General Musharraf¹s regime will continue well-beyond its current ³mandate², with the continued US support and substantial progress in its relations with India. Some of these assumptions are already being undermined by developing events, both at home and abroad. The public protests over the removal of the Chief Justice continue to gather momentum and could possibly take a sudden turn for the worse if an amicable solution of the crisis does not emerge soon.

Similarly, the pressure from the US Congress to tie future US financial assistance to Pakistan to the restoration of democracy, combating religious extremism and ensuring nuclear non-proliferation could result in a serious setback to the inflow of capital and overall economic performance, notwithstanding the best efforts of a former state bank governor and a world bank mandarin to allay these fears.

The lack of any significant progress on economic and trade issues in our negotiations with India could also serve to send negative vibes about the long-run prospects of development in the South Asian region. All these factors, individually and together, could put a brake on the current surge in investment inflows.

The economic prospects for this fiscal year are already indicating a deceleration in the rate of GDP growth, which had spurted to over eight per cent blip two years ago, is forecast to grow by 6.8 per cent this year, slower than an earlier estimate of seven per cent. That compares with an 8.4 per cent pace for Asia's developing nations and well below that of China and India, the leading dynamos of the Asian region. Thus, Pakistan¹s growth sustainability can’t be ensured by mere reforms in macroeconomic management but also structural changes in the economy, which are much more difficult to undertake.

At a time when the economy is experiencing the worst trade, current account and rising budgetary deficits, such long-term issues need to be addressed less cavalierly than by the present regime.

The forthcoming budget is likely to focus more on short-term palliative measures to attract votes from its favourite constituencies than to address the need for investment in physical and social sector for sustaining these high growth rates.

Much is being made of the large increase in the amount of foreign direct investments (FDI)s in the last two years, just as the euphoria often spun around remittances, portfolio capital and foreign exchange reserves. However, a close look at the sources, magnitude and composition of these flows do not necessarily indicate the health of the economy or the sanguineness of their impact on the sustainability of growth. Although the FDI flows have recently taken a large jump, it is not yet certain whether this is indicative of a stable trend.

Rising from a modest $1 billion in fiscal 2001, they are expected to have reached over $3 billion in fiscal year 2005-2006. The 2006-2007 estimates are likely to increase to over $5 billion as FDI flows from Qatar and Kuwait in the power, hotel, insurance and oil refinery sectors.

The factors that have propelled the growth of FDI flows in the last two years have both domestic and external origins. On the domestic side, the main attraction of FDI has been the privatisation of a large array of public enterprises.

The major foreign factor contributing to the growth of FDIs has been the sharp rise in oil prices since 2003, which caused an unprecedented rise in the current account surpluses of the neighbouring Middle Eastern oil producing countries, especially UAE, Kuwait and Qatar, who are looking for investment opportunities in the region, primarily in the real estate sector. The oil price increase has also attracted FDIs from large oil exploration companies in the United States and Europe.

In terms of sectoral composition, the FDIs are mainly concentrated in the oil and gas exploration, financial services (including the acquisition of a domestic private bank) and communication (including telecommunications). Very little identifiable industrial investment, which is the main source of technology transfer, seems to have taken place through the FDIs.

Much of the FDIs are in the nature of addition to old capacity (³brownfield) FDI to privatised or acquisitioned enterprises, rather than investment in new enterprises (greenfield FDI) which have a greater developmental impact through technology transfer. The FDI inflows primarily target the domestic rather than the export market (e.g. telecommunications and real estate) and thus have a low potential for improving the balance of payments.

The outflows of profit repatriation have steadily increased over time and reduced the net flow by more than half a billion dollars. The euphoria about the increased FDI inflows needs to be tempered by these basic characteristics. Besides, continued large FDI inflows, such as those from China and other East and Southeast Asian countries are crucially dependent on three factors: an improvement in the domestic political and law and order situation, an improvement in the political and economic relations with India and, last but not least, the human development base.

A major downside of the current spurt in FDI inflows has been the complacency that seems to have crept into policy circles about the trade balance which has deteriorated sharply in the last few years. Despite its much more permissive trade and regulatory policies and a more open economy, Pakistan¹s export/GDP ratio lags behind those of the much larger and previously much less open economies of India and China, because of its inability to diversify its exports in the last decade or so.

While exports doubled from a little over $4 billion in 1989 to over $8 billion in 1999, they are currently hovering a little over $16 billion. Despite various cosmetic measures and grandiose plans, economic managers have been unable to make any significant breakthroughs in diversifying exports, which remains heavily dominated by cotton and cotton-based manufactures.

The textiles continue to receive ever-increasing fiscal and monetary concessions * while the share of higher and medium technology products in all exports of manufactures remains well below those of most dynamic economies of our region. These are symptoms of the Dutch disease which economic managers have been unable to combat, preferring the increasing dependence on capital inflows to greater competitiveness and diversification of exports.

The external economic imbalances, in the pursuit of high growth rates which are now under threat from a likely reduction or withdrawal of large inflows of US aid are the focal point of current economic concerns. However, the central problem of the economy are the increased domestic imbalances being created by the non-inclusive growth pattern. While poverty alleviation has been the pet theme of most donor agencies and government plans in recent years, without having made much dent into poverty incidence, the real problem facing the economy is the increasing economic inequality and polarisation in the society.

Although it is a cliché to say that growth is a necessary condition for alleviating poverty, the high rates of growth being attempted to achieve, is creating conditions for widening the chasm between those privileged with the fruits of growth and those being crushed with poverty.

While data on economic growth, poverty incidence and income inequality are often doctored by the official agencies in an effort to show high growth rates and low levels of poverty and inequality, this attempt to achieve better economic performance and reduce poverty by edict is seldom successful and continues to be exposed by analytical studies.

A recent study by Dr Talat Anwar, analysing the data from household surveys held in fiscal 2001-2002 and 2004-04 shows that inequality worsened during the period.

While the richest 20 per cent of the population gained their share in total income, the poorest 70 per cent lost their share during the period. An interesting conclusion of the study on the long-term relationship of growth and inequality is that the degree of inequality has increased, regardless of the changes in economic growth.

The increasing income inequality in recent years reflects that one of its major sources is the enormous capital gains due to rising property values. The stock market has quadrupled in less than half a decade and a small number of investors have benefited from the often manipulated gyrations of the stock market.

There is a need to tap the windfall gains from both the real estate and stock market sectors, which are lightly taxed. Taxation of agricultural incomes, along with land reforms, have been put on hold, because of their assumed infeasibility on political grounds. Apart from raising questions of equity, it has also frozen the power structure in the rural areas.

An urgent need for effective reduction in poverty is of the initiation of employment guarantee schemes in rural areas. The main hindrance to the adoption of such a programme is the political capture of development funds by those allied to incumbent regimes. The basic prerequisites for the success of such a scheme are the existence of local level participatory institutions and the right to information legislation for ensuring the transparency and equity of the employment guarantee scheme

Another serious issue is the provision of public goods, especially education and health, without discrimination and differentiation relating to their economic or social situation or location. There has been a steady incursion of the private sector in the field of social services which has largely benefited the middle classes and has marginalised the poor, who have access only to the degraded public sector facilities.

Pakistan¹s record in meeting most of the MDGs and especially in meeting the goal of primary education for all has been one of the worst among developing countries. The MDGs do not include the goal of reducing economic equality and ensuring a common public educational system, with equal access to all, although in Pakistan¹s context they are among the most urgent social needs and should receive high priority.

http://www.dawn.com/2007/05/14/ebr3.htm