Pakistan Economy - News & Updates - Archive

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Chinese firms given Neelum-Jhelum Hydroelectric project contract ​

LAHROE (July 10 2007): Water and Power Development Authority (Wapda) has awarded the contract for the construction of Neelum-Jhelum Hydroelectric project at a cost of Rs 90.9 billion to a consortium comprising China Gezhouba Group Company and China Machinery Export Corporation.

Neelum-Jhelum Hydroelectric project will be implemented over a period of eight years. The project, with capacity of 970 MW will generate 5.15 billion units of electricity on its completion.

It is pertinent to mention that Neelum-Jhelum Hydroelectric project is located near Muzaffarabad in Azad Jammu and Kashmir. The main features of the project include construction of a dam on river Neelum, 47-km long diversion tunnel and installation of four turbines each with a generation capacity of 242 MW.

http://www.brecorder.com/index.php?id=590003&currPageNo=1&query=&search=&term=&supDate=

 

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Pakistan may renew efforts to acquire nuclear power plants from China ​

ISLAMABAD (July 10 2007): Pakistan is likely to renew its efforts to acquire 1000 mw nuclear power plants from China for meeting future energy needs, sources told Business Recorder here on Monday. Beijing had, in principle, agreed to provide two more nuclear power plants, worth about $1.2 billion, to help meet Pakistan's growing electricity demand, and it was about to sign an agreement when the Chinese President visited Islamabad.

However, when the issue was magnified in the media, China shelved the project, arguing that it would not indulge in any controversy, sources said. Though the issue has been almost dead now, Islamabad is again endeavouring to streamline the negotiations to acquire the nuclear power plants as was evident from the visit of Joint Chiefs of Staff Committee (JCSC) Chairman to Beijing a couple of months ago, sources added.

"We must make renewed efforts for acquisition of 1000 mw nuclear power plants and indigenous fabrication of 300 mw nuclear power plants with Chinese assistance," sources quoted JCSC Chairman as recommending in his report on his China visit.

The Central Development Working Party (CDWP), headed by Planning Commission Deputy Chairman Dr Akram Sheikh, has approved setting up of Nuclear Fuel Enrichment Plant (NFEP) at a cost of Rs 13.708 billion, including Rs 8.136 billion foreign exchange component, so that necessary material could be made available easily for its on-going nuclear activities.

Earleir, China had promised to continue cooperation with Pakistan for building "some more nuclear power plants with the courage that it will not succumb to any pressure of West or the 45-member Nuclear Suppliers Group (NSG)". The 45-member NSG consists of nuclear supplier countries who seek to contribute to non-proliferation of nuclear weapons through the implementation of guidelines they set for nuclear and nuclear related exports.

China has provided two nuclear power plants--Chashma I and II--each capable of generating 300 mw electricity. The CDWP has already approved Rs 150 million to prepare feasibility studies of six sites for erecting new power plants.

The PAEC had selected these six sites to set up nuclear power plants (NPPs) to materialise a plan aimed at increasing the country's capacity to generate 8,800 megawatt nuclear power by 2030.

Pakistan Atomic Energy Commission (PAEC) had selected these sites to at Qadirabad-Balloki (QB) link canal near Qadirabad head works, Dera Ghazi Khan canal near Tuansa barrage, Taunsa-Punjnad (TP) canal near Multan, Nara canal near Sukkur, Pat Feeder canal near Guddu, and Kabul River near Nowshera.

http://www.brecorder.com/index.php?id=590020&currPageNo=1&query=&search=&term=&supDate=

 

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'Infrastructure, power and agriculture sectors need heavy investment' ​

KARACHI (July 10 2007): National Bank of Pakistan (NBP) President Syed Ali Raza has said that three critical sectors, including infrastructure, power and agriculture, badly need heavy investments to attract maximum foreign capital in the country.

Giving a lecture on the "Regional bilateral investment opportunities" at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday, he observed that during the last 10 years, the rapid globalisation had given new shape to capital market in the world.

He said that Pakistan had a major geo-political position in the region, terming this a source for strengthening economy, and stressed on the need to capitalise on the opportunities in the context of trade with neighbouring countries via trade corridors. "Policies are needed to encourage the flow of investment into the capital market of the country," he pointed out.

Broadening and deepening the capital market of the country, the BNP President stressed the need for huge investment in education sector, besides development of human resources on priority basis. He pointed out that galloping trend of globalisation had brought about the rapid growth of the multi-national companies (MNCs) around the world, which dominated the capital market with huge flow of capital.

"Globalisation in last 10 years had changed the businesses, helped them grow with the advent of technology and media's impact on the capital market," said the NBP President.

Syed Ali Raza said that globalisation had freed the capital market from governments' influences and control, giving rise to the new challenges in the face of stiff competitions.

He said: "The era of market control has gone, and we as a country in this very world can compete," he added.

About the deteriorating global environment due to industrialisation, the NBP President hoped that capital market would not get disturbed of such changes, though they were rapid in pace, adding that the US had also backed the earlier opposed Kyoto Protocol on environment protection.

On regional scenario, he said the Middle East, China and South Asian countries were affecting Pakistan in a larger context, he said, adding that the Middle Eastern countries had huge reserves well beyond of their needs in surplus, which needed to be diverted to the country's local capital market.

"China's capital reserves are inflating further as it has presently 1.2 trillion dollars," he maintained.

About the Central Asian countries, the NBP President said that they had huge hydrocarbon resources, which had not yet been scratched out and could be a source for the power generation.

He observed that the post 9/11 era was the vibrant capital market and the need of the day for the country to compete with the emerging capital market challenges.

Regarding NBP's constraints, he pointed out that it also provided services with the three billion pensioners without any charges, which scaled down its commercial businesses. "Other banks charge on service provisions, whereas the NBP is still providing services to the government employees and pensioners free of cost," he pointed out. He demanded of the government to set up service branches for pensioners so that the NBP could concentrate on commercial businesses.

About the President's Rozgar Scheme, Syed Ali Raza said that it was boosting up, and hoped to provide maximum benefits to the poor of the society. Earlier, FPCCI President Tanvir Ahmed Sheikh said that the banks' high mark-up rates were badly hitting the industrial production and growth.

He pointed out that during the last three fiscal years, banks had provided massive credit of Rs 1.04 trillion to private sector.

He said that during the first 10 months of the 2006-07 fiscal year, the volume of bank credit to the same sector had gone down by 22 percent to Rs 266 billion against Rs 340 billion in the corresponding period of the 2005-06. He suggested moratorium to be provided to the textile industry for two years on repayment of the principal amount of loan to the industry.

http://www.brecorder.com/index.php?id=590046&currPageNo=1&query=&search=&term=&supDate=

 

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Italian firm to invest in Pakistan ​

LAHORE (July 10 2007): A top Italian company has shown its interest to invest in Pakistan by forming a joint venture with Pakistani counterparts. This was revealed by Antonio Bolite and Angelo Zacaroti, representatives of M/s ARKO while talking to President Lahore Chamber of Commerce and Industry (LCCI) Shahid Hassan Sheikh, here on Monday.

This Italian firm deals with furniture and wooden doors business. They said that Pakistan a land of opportunities and has huge potential for foreign investment. However, major bottleneck in the way of economic development is just lack of information about business opportunities available between the two countries, they added.

"We need to undertake frequent activities like exchange of business delegations, organising country exhibitions, participation in fairs & exhibitions, seminars and workshops etc, to ensure a continuous liaison," they maintained.

The LCCI President Shahid Hassan Sheikh informed the delegation that increasing volume of foreign direct investment is enough to make the point that the level of foreign investors' confidence in government economic policies is increasing.

He said that Pakistan is among the fastest growing economies in the region and the economic indicators in terms of gross domestic product, balance of payments.

He said the country had abundant natural resources and skilled cheap manpower but lacks technology. It is an important market of 155 million people apart from a gateway to the Central Asian Republics, South Asia and Gulf countries.

http://www.brecorder.com/index.php?id=590095&currPageNo=1&query=&search=&term=&supDate=

 

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Exploration of salt and iron ore reserves starts ​

LAHORE (July 10 2007): New exploration projects aimed at exploring the reserves of salt and iron ore in various areas of Punjab have been started for which funds have been allocated and these projects would be completed in current fiscal year.

Provincial Minister for Mines and Minerals, Muhammad Sibtain Khan stated this while presiding over a meeting of the project managers of Punjab Mineral Development Corporation (PUNJMIN), here on Monday. The Minister said that project to explore the rock salt reserves had been started in Mian Mitha Khushab, while project of iron ore exploration was started in Rajwah, Jhang.

http://www.brecorder.com/index.php?id=590037&currPageNo=1&query=&search=&term=&supDate=

 

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Record rise in cigarette production​

KARACHI, July 9: Cigarettes consumption is falling in most countries of the world but in Pakistan both production and consumption of this ‘silent killer’ is increasing at an alarming rate.

It must be surprising to note that while the whole world is fighting against smoking more and more Pakistanis are getting hooked, setting new records by manufacturing additional five billion cigarettes each year.

Despite the fact that each packet carries warning that smoking is dangerous for health, the number of smokers is increasing.

In 2005-06 a total 64.14 billion cigarettes were manufactured in the country. This is an official figure, while a substantial number of cigarettes are manufactured in NWFP by unregistered firms. Moreover, every popular brand is imitated locally in small places without quality supervision.

The latest official figures showed that during 2003-06, additional 14.77 billion cigarettes, with a yearly average of 4.92 billion, were produced in the country.

In 2002-03, total number of cigarettes manufactured was 49.37 billion, it rose to 55.40 billion in 2003-04, again jumped to 60.10 billion in 2004-05 and finally reached 64.14 billion in 2005-06.

During July-September 2006-07, a total of 14,22 billion cigarettes were produced showing the rising trend of production of the popular brands of cigarettes.

The official data showed that the country was not a major exporter of cigarettes, which means that most of the cigarettes being produced are consumed locally.

The data recorded a total export of tobacco and its substitutes worth $7.210 million during July-May 2006-07. It was slightly more than previous year.

The fast rate of expansion in the cigarette market is highly attractive for the manufacturers and a recent huge investment by a foreign company is a clear indication of the trend.

Philip Morris International (PMI) on March 9, 2007 announced completion of the acquisition of a 50.21 per cent stake in Pakistan's Lakson Tobacco Co. Ltd. for about $340 million.

The PMI, which now holds around 97.62 per cent shares in Lakson, agreed in January 2007 to acquire the stake in Pakistani tobacco firm at Rs666.89 a share.

The Lakson Tobacco is Pakistan’s second largest tobacco company with an estimated 47 per cent cigarette market share in fiscal year 2006.

Further calculation shows that each Pakistani, including women and children smoke 400 cigarettes each year and if women and children are excluded the estimated 40 per cent Pakistanis smoke 1,066 cigarettes each year.

The advertisements for cigarettes have been stopped but the rise in demand is shockingly high. A number of seminars and workshops are organised each year to create awareness about the injurious role of cigarettes for human health but the result is almost negative.

The cigarette industry is adding 5 billion cigarettes each year to the huge total of 64 billion. The addition of 5 billion cigarettes showed that the market has enormous potential to grow while at the same time Pakistanis are willing to welcome more smokes despite deteriorating average health condition in the country.

http://www.dawn.com/2007/07/10/ebr1.htm

 

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Automobile sales grow by 6.3% to 165,268 units​

KARACHI: The local auto manufacturers rolled out 18,484 units during June 2007, breaking previous record of 15,994 units set in March 2006.

The car industry sales grew by 6.3 percent to 165,268 units as against 155,515 units in FY06. “This growth can be attributed to the lesser interest of investors in the imported vehicles as the import of completely built-up unit (CBU) cars registered a negative growth of 13.9 percent during the first eleven months of the current fiscal year over the same period of the last year,” said Hettish Karmani, head of research at Atlas Capital Markets.

According to figures released for first eleven months of 2006-07, only 26,802 units were imported in 11M/FY07 of which 18,680 were cars and jeeps of different engine powers. In the previous year over 55,000 units were imported into the country.

Cumulative production and sales volume of the four listed car assemblers jumped by 4 percent and 9 percent to 196,405 units and 201,421 units, respectively. Pak Suzuki led with a market share of 61 percent and unit sales of 122,426 in FY07 compared to market share of 54 percent and unit sales of 99,105 in FY06. Indus Motors followed with market share of 24 percent and sales volume of 48,590 locally assembled units. The rest was shared by the remaining two assemblers who managed to roll out 30,405 units as against 44,399 units in the last fiscal year. The car assemblers have raised their prices since July 1 following the imposition of one percent special excise duty. They will be raising their prices further when the 2.5 percent withholding tax imposed on locally manufactured vehicles comes into force from September 1, 2007. As per recent notification, the government has reduced withholding tax from 5 percent to 2.5 percent on locally manufactured cars. The levy would be applicable from September 1, 2007. This reduction was done with a view to promote and strengthen local industry. The industry had apprised the CBR of the problems arising from imposition of 5 percent withholding tax that was announced in the budget.

http://www.dailytimes.com.pk/default.asp?page=2007\07\10\story_10-7-2007_pg5_3

 

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IT exports surpass $108 million target ​

By Romail Kenneth

KARACHI: Country’s IT and IT-enabled Services exports have witnessed healthy growth during the outgoing fiscal year 2006-07 and have surpassed the target of $108 million, up by almost 50 percent when compared to exports worth $72.21 million for the fiscal year 2005-06.

According to the Pakistan Software Export Board (PSEB), this year Pakistan’s IT and IT-enabled Services industry has witnessed tremendous growth as it surpassed its target of $108 million and have approximately touched $110 million at the close of the fiscal year. “Data reveals that the exports of computer software and information technology services has gone up,” said Ashraf Kapadia, President of the Pakistan Software Houses Association.

“The country is on track for a year-on-year growth of 50 percent,” he added. In recent years Pakistan’s software exports have gone up as Pakistan offers various competitive advantages over other outsourcing destinations, such as high quality software development, swift and easy establishment of business, lowest cost basis and emerging and state-of-the-art telecommunication and IT infrastructure. Our software houses are providing value added services to their clients, which makes us cater new markets in US and Europe. Ashraf said that apart from the rapid growth of the industry, the IT sector in the country is facing many challenges that are related to infrastructure and human resource.

Availability of office space in the urban centres of Karachi, Lahore, and Islamabad has become a major issue. Another issue is the availability of human resource as the IT sector relies heavily on trained human resource. With a growth rate of 50 percent year-on-year, trained human resource has started becoming a constraint and we need to address this issue immediately, otherwise it will become a major constraining factor to our growth, said Kapadia.

Talking about the software industry he said that there is a misconception that the value of the software industry stands at $50-100 million. Mr Ashraf added that the figure of $108 million is the amount of remittances received by the State Bank of Pakistan under the head of computer and information services. This represents a small fraction of the total IT industry of the country. He further said that if we look at the total IT and IT-enabled services industry in Pakistan, estimates put the total industry at $2,000 million of which $1,000 million is export related.

http://www.dailytimes.com.pk/default.asp?date=7/10/2007

 

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KSE crosses 14,000 points​

KARACHI: The Karachi stock market on Monday crossed the psychological barrier of 14,000 points due to continuous escalation of oil prices in international market, renewed foreign interest in the fertiliser sector and positive performance by second and third tier scrips, said analysts. Fertiliser and cement sectors were the major market players. The Karachi Stock Exchange (KSE) 100-share index gained 33.16 points or 0.24 percent to close at an all time high of 14,019.05 points as compared with 13,985.89 points of the previous session. The KSE 30-share index closed at 17,103.38 points with a gain of 67.89 points or 0.40 percent.

http://www.dailytimes.com.pk/default.asp?page=2007\07\10\story_10-7-2007_pg1_6

 

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Agriculture loan disbursement exceeds target ​

KARACHI (July 11 2007): Commercial and specialised banks have surpassed the target of credit disbursement to the agriculture sector in the 2006-07 fiscal year, as the total disbursements grew by 22.4 percent to Rs 168.3 billion against the target of Rs 160 billion.

This was revealed in the annual meeting of the Agriculture Credit Consultative Committee (ACCC), held at SBP head office here on Tuesday. The meeting was chaired by State Bank of Pakistan Governor Dr Shamshad Akhtar. The meeting also set a target of Rs 200 billion-credit disbursement to the agriculture sector for the current fiscal.

Dr Shamshad Akhtar informed the committee that the commercial and specialised banks had surpassed the target of credit disbursement to the agriculture sector by issuing Rs 8.3 billion more credit as against the target of Rs 160 billion during the 2006-07 fiscal year.

The meeting was informed that five big commercial banks, including Allied Bank Limited, Habib Bank Limited, MCB Bank, National Bank of Pakistan and United Bank Limited had disbursed a total of Rs 80.2 billion, against the full-year target of Rs 80 billion.

In addition, the Zarai Taraqiati Bank Limited (ZTBL), Punjab Provincial Co-operative Bank Limited (PPCBL) and domestic private banks (DPBs) disbursed Rs 56.3 billion, Rs 7.9 billion and Rs 23.8 billion, respectively against the target of Rs 48 billion, rupees nine billion and Rs 23 billion during the last fiscal.

During the meeting, the committee noted the significant rise in credit and its absorptive capacity in Punjab as its provincial government had created a good environment and developed proper institutional arrangement for promoting the credit delivery.

For the 2007-08 fiscal year, the committee recommended the target of Rs 200 billion for credit disbursement to farmers. This includes combined lending of Rs 132 billion from the commercial banks and Rs 68 billion from specialised institutions, ie ZTBL and PPCBL.

The committee also recommended province-wise allocations of disbursements, based on the cropped area and absorption capacity of each province, Azad Jammu and Kashmir and Federally Administered Tribal Areas (Fata). During the meeting, Dr Akhtar constituted a committee to concentrate on additional groundwork, supportive to the rural development of the country.

These committees would focus on development of agricultural database in conformity with the international standards and development of methodology for proper estimation of the agriculture and rural credit requirements of the country in conformity with the overall agricultural production as set by the respective ministries.

The committee will also prepare a holistic development strategy for enhancing rural financing and to develop guidelines for lending technology and supportive credit enhancement mechanisms. The SBP Governor asked all stakeholders, including banks, relevant Federal ministries, and provincial government departments and farmers' associations to make co-ordinated efforts to increase agricultural credit absorption capacity as otherwise it would be difficult for the banks to meet future targets of agricultural credit.

The committee was informed that the State Bank had developed a multi-pronged approach to double the outreach in terms of the number of borrowers and increase aggregate disbursements by banks of agricultural loans to meet up to 75 percent of the credit requirements of the sector from the existing 45 percent during next three to four years.

Dr Akhtar asked the commercial banks to focus on non-farm credit, which would not only enhance their credit portfolio, but would also help to generate employment in the rural areas. She stressed that banks, in consultation with other stakeholders, should develop new and innovative loaning products to cater to the demand of the sector.

The meeting was attended, among others, by senior officials of the State Bank of Pakistan, presidents and representatives of commercial banks, ZTBL and PPCBL, officials of Federal and provincial governments, chambers of agriculture, farmers' associations and other stakeholders. Meanwhile, the SBP recommended a level playing field for all banks for the agriculture credit by bringing ZTBL and PPCBL on market-based systems.

Recommending some measures for further increasing the pace of growth of agricultural credit disbursement, the SBP Governor recommended periodic surveys and studies by the SBP, the Ministry of Food, Agriculture and Livestocks (Minfal) and the provincial agriculture departments to take stock of the implementation of ongoing initiatives to raise the agri credit.

Each bank, the SBP, Minfal, the provincial agriculture departments, extension services departments, revenue boards, Pakistan Agriculture Research Council (Parc) and other stakeholders should prepare individual activity plans (sub-strategies) along with timelines, duly approved at the highest level, and share the same with the SBP to ensure collaborative efforts, the SBP said.

The SBP stressed on the introduction of mandatory-crop loan insurance scheme and an effective implementation of the ADB agribusiness project for capacity building of banks in agribusiness lending. The SBP and Minfal should develop database-covering information on the basis of districts, farm or non-farm sector, agribusiness', export markets, number of households, the SBP recommended.

http://www.brecorder.com/index.php?id=590375&currPageNo=1&query=&search=&term=&supDate=

 

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Seafood export target may be missed ​

KARACHI (July 11 2007): The country is likely to miss the seafood fiscal year (2006-07) export target $210 million, falling short by almost $25 million due to decreasing fish availability in the sea besides export ban by the European Union (EU) since April 2007, said seafood exporters on Tuesday.

"This year a very low quantity of tuna fish was caught as compared to last year, which put a negative impact on seafood export," they added. It is expected that at the end of last fiscal year overall seafood export will reach $185 million against the target of $210 million for the fiscal year 2006-07, as the country is likely to fall short the fiscal seafood export target by $25 million.

According to official statistics, seafood export stood at $175.333 million at the end of (July-May) period of the fiscal year 2006-07, against the $176.92 million during the same period of fiscal year 2005-06.

They said that tuna was a migratory fish and it was caught through "long-lining', adding that the most of the fishermen did not have the required technology to exploit such fish in the sea at a great level.

"In order to boost seafood export, government should establish a separate board within the ministry of food, agriculture and livestock (Minfal) so that exporters and fishermen both could get maximum support" said Hanif Khan, chairman seafood industry association.

Fisheries with maximum $200 million export target has mostly failed to invite the attention of government, however its development could augment seafood export manifold in the next few years, he said.

"Lack of basic facilities in this industry has brought about its decline this fiscal year despite establishment of fish processing plants on world standards at the Karachi Fish Harbour," he added.

He said that local fishermen were using traditional tools and apparatus for catching fish in the deep water, whereas global standards did not allow them to do so, which caused severe problems not only for them but also for the seafood exporters.

Now fish consumers, world-wide, are more quality conscious, he said adding that consumption rate of seafood in the world was also increasing rapidly, whereas local seafood production was lower than the international demand.

The plight of the fishermen is the contributing factor in the decline of seafood export because they do not have modern technology to use for catching fish besides increasing fuel prices in the country, Hanif observed.

He demanded at least 5 percent subsidy for the fishermen on diesel, which could relieve their problems to some extent, besides helping increase seafood production.

About 11 million dollars lesser export of the seafood was made during fiscal year 2006-07 against the fiscal year 2005-06, which stood at $196 million, they said. Adding that during fiscal year 2006-07 the fish availability was higher in quantity as compared to fiscal year 2005-06.

"Indian government provides 25 percent subsidy on processing plant machinery to investors, that boosted its seafood export manifold in the world as compared to export made by Pakistan," he added.

Any sector, which lacks availability of clean water, electricity and gas can not grow, he said and added that government should come forward seriously to resolve issues faced by this sector on a priority basis.

Chairman Seafood Industry Association said that government should also organise seminars for the awareness of fishermen about the seafood exploration according to modern day methodologies.

http://www.brecorder.com/index.php?id=590408&currPageNo=2&query=&search=&term=&supDate=

 

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'China to invest over $800 million in Pakistan': bilateral trade to touch $15 billion ​

KARACHI (July 11 2007): China will invest over 800 million dollars in different sectors in Pakistan during the current fiscal year. Dr Salman Shah, Advisor to the Prime Minister on Finance and Economic Affairs, said this in his keynote address at the preparatory seminar for the forthcoming Pak-China investment conference, organised by the Board of Investment (BoI) at a local hotel on Tuesday.

The Pak-China investment conference is scheduled to be held in Pakistan in August. Dr Salman Shah pointed out that Pak-China bilateral trade would reach 15 billion dollars under the five-year economic co-operation agreement. "This would be a balanced trade as the imports and exports from both the countries would be of the same worth", he added.

He said that the five-year economic co-operation agreement was a very important development as the relationship between the two brotherly countries would be more strengthened.

Regarding Pak-China free trade agreement (FTA), the advisor said that it was the first FTA signed by China with any country. He said Pakistan had a potential to become a hub for producing quality products globally, however, there was need of modern technology. "We have enough raw material, which can be value-added through modern technology", he said.

"We are the sixth biggest populated country in the world and, on the other hand, we are the sixth biggest economy of the world", he said, and added: "Over 100 million of our people are under 25 and 44 percent of our total population is under 19.

"We have a huge local consumption market as over two million mobile phones are being sold in the country per month and we are third biggest domestic consumer in the world after India and China", he observed.

He said that the country's economy was growing tremendously as the gross domestic product (GDP) growth rate would sustain over seven percent. "There are very good indicators regarding growing economy as the stock market has made new records and now it is at all time highest levels," he added. He said Pakistan had fourth largest labour force in the world after China, India and the US, which should be fully utilised to gain.

He said Pakistan had huge investment potential mainly in financial, telecom, services and manufacturing sectors. "We should initiate more export-oriented projects to minimise trade deficit", he said, and stressed the need for initiating joint ventures with the Chinese investors in the country.

He said that China was the biggest economy in the world. "We must learn from China, which achieved this status because of its consistent policies and making economic zones", he added. He asked the Pakistani business community to think about joint ventures with Chinese investors in Pakistan. "Our Chinese friends can find good trade partners in Pakistan", he said, adding: "We are fortunate to have a neighbour like China and we should take full advantage of this neighbourhood."

He said that many Chinese companies were working on different projects, including Gwadar and other heavy industry projects in Pakistan. China had planned to set up an economic zone in Pakistan. This huge economic zone would be spread over an area of 3500, he said.

Sindh Minister for Culture and Tourism, Rauf Siddiqui said that the government was committed to provide all necessary facilities to the business community so that they could continue their trade activities in peace and safety.

He pointed out that the government had planned two very important projects and Jinnah International Safari was one of them. This mega project was spread at 150 square miles in Sukkur.

He offered the investors from Pakistan as well from abroad to come and invest in this mega project, which was only 65 kilometres away from Moin-jo-Daro. He offered the investors to invest in this project on build, operate and transfer (BoT) basis, and assured them that they could recover their investment in just two years.

He also offered the Chinese investors to invest in this mega project, and said that they would be provided all facilities. Chinese Commercial Consular Wang Qihui said that China had invested 230 million dollars in Pakistan during the last fiscal year and would invest over 500 million dollars only in Sunder economic zone during the current fiscal year.

President of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Tanveer Ahmed Shaikh said that there was much potential for foreign investment mainly in energy, telecom, pharmaceutical and packaging and processing of fruits and vegetables sectors.

He invited the Chinese investors to invest in these sectors in Pakistan. BoI Director General Arif Elahi said that over 150 leading investors would attend the Pak-China investment conference, which would be held in August.

In the second session of the seminar, Dr Junaid Iqbal, Investment Advisor, Ministry of Finance, in his presentation on "Pak-China investors conference - Concepts for spurring Pak-China investment" briefed the participants about the investment opportunities in different sectors in Pakistan.

http://www.brecorder.com/index.php?id=590415&currPageNo=1&query=&search=&term=&supDate=

 

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Plan to set up eight technology centres ​

LAHORE: Federal Minister for Industries, Production and Special Initiatives, Jahangir Khan Tareen on Tuesday said Rs485 million would be spent on eight technology centres being established all over the country to encourage the manufacturers to benefit from the latest CAD/CAM techniques.

The minister stressed the industrialists to keep themselves abreast with latest technologies in order to survive in the tough global competition.

According to a press note issued here, the minister appreciated the National Institute of Design Analysis (NIDA)’s efforts and said its centres would focus on designing rather than teaching commercial software.

He said the manufacturing industry should move towards product designing, rely less on assembling foreign-designed goods and promote self-reliance.

He said the manufacturing organisations should facilitate their employees to benefit from the latest techniques taught at these centres to bridge the digital divide. He assured that the government would provide full support to the industry in order to make it globally competitive.

Out of eight NIDA centres, three at Lahore, Quetta and Sialkot are operational. The remaining five centres at Karachi, Peshawar, Multan, Faisalabad and Hyderabad will start functioning soon.

http://www.thenews.com.pk/daily_detail.asp?id=63926

 

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Tax-free Pak-China zones soon: Salman Shah ​

KARACHI: Advisor to the Prime Minster on Finance Dr Salman Shah, has said that the recent Free Trade Agreement (FTA) and Five-year Economic Relation Agreement (ERA) with China would enable Pakistan’s economy boom and attain record export targets, adding the present political situation would not harm to the economic activities in the country.

Addressing the “Pak-China Investment Seminar”, organized by the Board of Investment Pakistan (BOI), here Tuesday, he said that “Pak-China Economic Zones” would be developed in each province soon where mutual projects, particularly in manufacturing and export-oriented sectors, would be launched.

“These Economic Zones would be granted full exemption from customs and excise duty on machinery imported, besides tax holiday for five years,” Salman Shah said and added that it would help increasing Chinese investment in the country to a record level.

He said that a high-level trade delegation from China would shortly visit Pakistan to discuss potential projects. He urged that the Pakistani entrepreneurs must follow the suite. He added that local investors and traders must explore Chinese markets for their products, as it was also a huge consumer market.

The Advisor said that Pakistan’s demographic profile (over 54 per cent population under the age of 19, over 100 million under the age of 25 and being the sixth largest labour force in the world) provided ideal ground for labour-intensive manufacturing ventures and becoming the 4th largest producer after China, India and the USA.

Salman Shah said that no doubt the present economic development was based on domestic consumer market but that was an added feature of the national economy that it did not had to rely on imports only. He added that similar boom like that of telecom and housing sector was forthcoming in the manufacturing sector. “GDRs of the United Bank of Pakistan in the international market are very appreciative and reflects solid and concrete economic base of national economy that would always attract large foreign investment in the country,” he said. Salman Shah assured local investors that land allocation and registration issues would be addressed, which were raised by many local investors in the seminar.

Dr Junaid Ahmad, Advisor Ministry of Finance presented details of the potential projects in manufacturing, agriculture, real estate, energy, mineral and other sectors for Pak-China investment in the proposed “Pak-China Economic Zones” at Sindh, Balochistan, the NWFP and Punjab. He mentioned that each province would to provide around one thousand acres of land preferably near to National Highways or Motorways, while the provinces would own 20% share in such zones.

Advisor Ministry of Finance proposed that these economic zones may also include projects of US$450 million Integrated Steel Mill of 2million tonne per year capacity at the Port Qasim, US$800 million Neptha Cracker Unit at Karachi, US$5 billion oil refinery of 6 million tonnes per year production at Gawadar, Bunji Dam and hydro power project, Thar Coal Gasification, Cargo Village at Karachi Port, besides different joint ventures ranging from gem stone lapidary, earth moving machinery, automotive transmission, cement-gypsum-granite plants, cattle and poultry farming, fruit and vegetable processing units and small hand tools, etc.

Earlier, Wang Qihui, Commercial Counsellor of China expressed deep interest in investment in different sectors in Pakistan and lauded the incentives provided by the Board of Investment (BoI) to Chinese investors in this regard.

Sindh Minster for Culture and Tourism Rauf Siddiqui said that Chinese were reliable friends and their assistance in many sectors was badly needed.

Large numbers of local and Chinese businessmen and entrepreneurs attended the seminar.

Local investors suggested that fisheries and cotton sectors should also be included in the proposed projects. They urged for proper management of industrial units already established in the country.

http://www.thenews.com.pk/daily_detail.asp?id=63928

 

[Neo]

Pakistan urged to get investment grade status: 6-8pc GDP for 10 years​

ISLAMABAD, July 10: The international financial institutions (IFIs) have asked Pakistan to “attain investment grade status” by the global rating agencies to qualify for increased foreign investment.

“Currently, Pakistan is three notch below the investment grade status and our policy objective for next ten year is to attain that status,” said Economic Adviser to the ministry of finance Dr. Ashfaque Hasan Khan.

He told Dawn on Tuesday that the government was targeting to move to investment grade level, which will enhance the overall stature of Pakistan.

“The benefit of getting that grade will reduce the cost of borrowing substantially. In other words, market will reward Pakistan handsomely if we attain investment grade status,” said Dr Khan, who is also the director general of Debt Coordination Office of the ministry of finance.

Asked how to attain the investment grade status, he said Pakistan would have to maintain an average 6-8 per cent GDP growth rate in next ten years in a stable micro-economic environment.

Further more, he said, the country's debt burden will have to be reduced further to qualify for investment grade status. “We have imposed on ourselves to achieve this status and if that is done the World Bank and the Asian Development Bank (ADB) will be very happy and could be more helpful in terms of extending their support in every respect,” Mr. Khan added.

He said by attaining that grade, the cost of capital will reduce, economic and political risk would minimise and Pakistan's current B-Plus B-I rating will be enhanced by improving the economic fundamentals.

Responding to a question, he said India had achieved investment grade status by the international rating agencies like many other counties.

Asked why it would take ten years to achieve that status, Dr Khan said that this was the target set by the government. “But we may achieve that target in 3-4 years and for that we will have to be very consistent and to continuously perform in terms of better growth rate, lower debt-to-GDP ratio and improving other economic indicators.In reply to a question, the economic adviser to the ministry of finance said that during the last eight years the country's debt burden had declined to one half. Public debt, which was one hundred per cent of the GDP in end July 1999, has come down to 53.4 per cent by end March 2007.

Likewise, external debt as percentage of foreign exchange earnings has declined from 347 per cent on end-June 1999 to 119 per cent by end March 2007.

But he said the debt in absolute terms would continue to rise because the size of GDP was also rising. “Debt is not bad but the burden of debt is bad,” he said adding that the government was maintaining a stable exchange environment because of getting the country's foreign exchange reserves increased to over $14.5 billion, which were sufficient to provide cover to more than six months of imports.

He said that Pakistan needed to invest in infrastructure development to achieve 6-8 per cent GDP growth rate. At the same time, he said the competitiveness of the industry was also needed to be improved by the private sector in next ten years.

The economic adviser also said that the new micro-economic policy framework was being prepared as various targets set during the last few years have over-performed. “We were anticipating that investment rate would reach to 22.2 per cent of the GDP by 2010-11 but we have surpassed this level in 2006-07,” he said.

Similarly, the government was expecting 4.5 per cent agriculture growth, which reached to 5 per cent in 2006-07. “But we have under-performed in large scale manufacturing. However, we are right on the target as far as real GDP growth is concerned,” he said.

“Then in terms of revenue collection we have over-performed and

accordingly we have to revise upward revenue projections for the next ten years,” he said adding that the Federal Board of Revenue (FBR) was expected to collect Rs980 billion in 2007-08 but it had set an ambitious target of Rs1.025 trillion for the next financial year. It managed more than Rs42 billion against its original target last year.

“The new micro-economic framework will be consistent of our growth projection and future policy thrust, which we have set for ourselves,” Dr Khan said.

Asked about the criticism being made by the government's opponents that poverty and unemployment had increased, he said that during the first half of the last fiscal employment rate had come dome from 6.2 per cent in 2005-06 to 5.3 per cent in the corresponding period of 2006-07.

He said that during the first half of the last fiscal 730,000 additional jobs were created. As a result of sustained economic recovery, unemployment has gone down substantially, he claimed.

As far poverty is concerned, it has declined by 10 percentage point and this is being recognised by the international donor agencies and other institutions.

The year 2006-07, he said, has been very good in terms of growth, balance of payment, foreign exchange reserves, debt-to-GDP ratio, job creation and investment. The last four years, he said, have brought Pakistan in the limelight in the international world.

http://www.dawn.com/2007/07/11/ebr1.htm