Pakistan Economy - News & Updates - Archive

[Neo]

MOL to up production in Pakistan, Russia​

ISLAMABAD: Hungarian oil and gas company MOL expects significant production increases in Russia and Pakistan starting in 2009-2010 as part of its long-term strategy to realise additional growth and cash generation throughout its current operating base and portfolio.

In a statement, the company made the announcement based on its assessment of development options identified since 2005.

The MOL Group said in anticipation of the cash flow benefits of these developments, the company had revised its capital return policy.

The statement said the MOL’s upstream and downstream operations were the most efficient in Europe based on recognised independent analysts.

The MOL Group has the highest net cash refining margins among European refineries due to its state-of-the-art refining assets, enviable market position, efficient logistics and unique supply chain management practices.

“This excellence in its business operations is reflected in its share price performance which has consistently outperformed its European refining and marketing peers during the last five years,” it said.

Earlier, the Board of MOL considered a preliminary and conditional approach made by OMV to acquire MOL. It unanimously rejected this unsolicited and unwelcome proposal.

The Board does not believe that an approach to a corporate combination with OMV represents a compelling proposition for MOL, its shareholders and other key stakeholders.

The Board of MOL believes that the company has significant unrecognised organic upside potential. The company is targeting Group EBITDA, excluding any future M&A activity, to grow at an average of 6.5 per cent per annum between 2006 and 2011 (based on the 2006 macro environment) and reach US$2.9 billion in the year to December 31, 2011.

In the refining and marketing segment, the MOL is targeting a five per cent annual average EBITDA growth until 2011, to exceed US$1,420 million in 2011.

The hydro-cracker refinery project in Duna is expected to improve EBITDA by approximately US$150 million per year starting in 2011, raising diesel yields of MOL from 44 per cent in 2006 to 50 per cent in 2011 on an increased capacity of 15 million tonnes.

This will happen against the backdrop of a market environment that is characterised by seven to eight per cent annual average demand growth in diesel over the next four years.

http://www.thenews.com.pk/daily_detail.asp?id=64812

 

[Neo]

Trade Policy: Another failure in achieving export target?​

KARACHI: After failing to achieve the export targets for two successive financial years, eyes are set on current fiscal year’s trade policy to see ‘how realistic the export target would be?’

This year’s trade policy, to be announced today (Wednesday) by commerce minister in Islamabad would envisage around 10-12 percent growth in export target for financial year 2007-08. However it has to be seen what measures and incentives would be announced to boost the country’s export sector.

On the other hand, the imports have been surpassing their annual targets on the back of burgeoning petroleum imports and food items, resulting in a whooping trade deficit for the last few years.

The official figures of country’s foreign trade during 2006-07 indicate that export proceeds fell short of their target by 6.9 percent or by $1.284 billion in absolute terms to reach $17.316 billion as against $18.6 billion export target for the whole year.

In fact the exports grew just at the average of four percent whereas they should have been increased by 18 percent to meet the target. Imports grew at a greater pace and climbed up 8.1 percent to $30.86 billion during the year 2006-07 as against $28 billion for 2006-07.

The unimpressive export performance could be attributed to struggling export of textile products, which confronted stiff competition in recent months from its competitors. Although a number of incentives have been offered to enhance the textile exports, however exporters term it too short to steer this sector out of crisis.

Last year’s trade policy emphasised a lot and envisages a number of measures to support the non-traditional sectors especially marble, horticulture and few others, however nothing concrete was taken during the whole year, which is evident from the export performance of these sectors during this year.

Exporters said various incentives announced in last trade policy to boost the export of non-traditional items could not be implemented on one pretext or others. “Government incorporates our suggestions in trade policy, but when it comes to implementation of these policies, the red-tapism impedes the process,” exporters felt.

Analysts said failure of government to achieve the export targets in two consecutive years has created embarrassment, as they used to boast of increase in exports over the last few years.

They said that weaknesses have been identified in the export related policies so that trade balance could be brought under control, which is otherwise, fast eroding the precious foreign exchange of the country, however government instead of devising comprehensive planning to narrow down the gap has been bent upon financing the increasing trade deficit.

They said that though the category-wise export proceeds detail is yet to come, it is mainly because of slow growth in textile products exports, which made the export target impossible, as well the unimpressive performance of export of traditional and non-traditional items.

Analysts said that rising costs and energy prices during the last few years have made Pakistani products less attractive for buyers in the international market. “This can be one of the reasons for dwindling exports during the first nine months of the current fiscal year,” he added.

http://www.dailytimes.com.pk/default.asp?page=2007\07\18\story_18-7-2007_pg5_1

 

[Neo]

Oil production up 1.2% in July-May​

KARACHI: The exploratory and development wells maintained the average 1.2 percent growth in domestic production of oil and gas in Pakistan during the period of July-May, 2006-07.

According to oil and gas production data released by Pakistan Petroleum Information Service (PPIS), oil and gas production during 11-month of FY07 stood at 688 kboepd (thousand barrels of oil equivalent per day) as compared to the production in the corresponding period last year of 585.44 kboepd, posting a rise of 1.2 percent.

Major blocks, including Bobi, Chanda, Kunnar, Mela, Adhi and Tal have contributed significantly this year to the increase in oil production. Local gas production in Jul-May period has increased by 1 percent to 3.9 bcfpd (billion cubic feet per day) as against 3.8 bcfpd produced during the same period last year. This nominal growth in gas production is primarily due to decline in production from mature fields which somewhat offset the impact of production increase from new fields.

On the other hand, oil production stood at 66.9 kbpd (thousand barrels per day), as compared to 65.4 kbpd last year.

OGDC production of oil and gas reached to 195.9 kboepd during July to May of 2006-07 as compared to 190.5 kboepd in the corresponding period last year. But, the production of oil posted 7 percent growth, as it stood at 40.9 kbpd versus 38.2 kbpd in the same period last year. Gas production on the other hand, stood at 0.96 bcfd.

Pakistan Petroleum Limited production of oil remained flat and combined oil and gas production during 11 months (July-May) of FY07 posted a marginal growth of 0.6 percent to 163.9 kboepd from 163 kboepd produced during the same period last year. Gas production during the period remained flat at 1 bcfd.

The total oil production of the company registered a growth of 51 percent, raising the oil production to 2.7 kbpd for the period under review against 1.8 kbpd previously. However, oil accounts for just 3 percent of the top line of the company.

http://www.dailytimes.com.pk/default.asp?page=2007\07\18\story_18-7-2007_pg5_4

 

[Neo]

Cell phone subscribers swell to 63.15 million, up 45%​

* Experts see the number rising to 100 million by 2010

KARACHI: The cell phone subscriber base of the country has jumped to 63.15 million as of June 2007, showing a rise of 45.36 percent when compared with the figures for fiscal 2005-06 and experts see the addition of another six million subscribers by the end of the current fiscal year.

According to the latest figures released by the Pakistan Telecommunication Authority (PTA), the number of cellular service users stood at 63.15 million as of June 2007, which was 34.50 million at the end of FY 2005-06. Indicating that more than 28.65 million new connections were sold out last year as tariffs kept on coming down due to rising competition among cellular service providers that attracted more customers.

Mobilink and Ufone have managed to double their subscribers while Telenor and Warid have also achieved good results in terms of subscriber growth up to 50 percent. Surprisingly, in the last moth Paktel instead of gaining has lost around 30 thousand subscribers. Throughout the year Paktel has seen many ups and downs in terms of subscribers.

Sources close to the industry said that the total number of cellular subscribers will reach 80 million by June 2008 and the number of mobile phone subscribers is expected to reach 100 million by 2010. Sources said that the four major companies Mobilink, Ufone, Warid and Telenor have expanded their respective market shares during the last fiscal year.

These days cellular companies are spending huge amounts on new advertisement campaigns by introducing different packages for their customers with different tariff packages and incentives.

The cellular phone industry has reached the take-off level and has entered a new phase where investors are keen to invest and subscribers are happy to avail the quality services at reasonably competitive prices. Credit also goes to the regulator who has created a conductive, investor and user-friendly regime in Pakistan. Telecom industry in Pakistan has attracted $9 billion foreign investment in the last three years and another $4 billion are expected during the next 3 to 4 years. Around 1.5 million new subscribers are being added each month. To win this competition the battle of widest coverage, low tariffs and quality services among mobile phone operators is heading towards its fierceness, as all of them are eager to cover maximum cities and towns in the minimum span of time.

The figures gathered by the telecom watchdog PTA shows that Mobilink leads the market with 26.46 million subscribers followed by Ufone, which was serving 14.01 million people across the country. Telenor grabs the third position with 10.70 million subscribers and puts Warid at the fourth position with 10.62 million subscribers.

http://www.dailytimes.com.pk/default.asp?page=2007\07\18\story_18-7-2007_pg5_13

 

[Neo]

Trade policy envisages $19.2 billion exports, $32 billion imports: government moans about growing trade deficit, EPZ-like incentives for export oriented units ​

ISLAMABAD (July 19 2007): Commerce Minister Humayun Akhtar Khan on Wednesday unveiled the 'Trade Policy 2007-08' with exports projection of $19.2 billion to be backed by several export-driven measures to extend equal incentives to export-oriented units (EOUs), like Export Processing Zones (EPZs) and facilitation measures for domestic trade development.

He did not give imports projections for 2007-08 in his speech on official electronic media, but sources in Commerce Ministry indicated that it would be about $32 billion, which would mean trade deficit of.

The new 'export policy' is based on enhanced competitiveness, productivity and export capacity which also includes 'Long Term Financing for Export Oriented Projects' (LTF-EOP), equity fund, brand acquisition, encouragement of SPS compliance, sectoral investment incentives, export credit risk management, and social, environmental and security compliance and skill development.

Assistance in meeting international standards, support for compliance certifications, assistance for opening exporters' offices abroad, support for marketing of branded products, retail sales outlets, overseas business support units and e-marketing are also among the main features of the policy.

The Minister announced that to facilitate investors changes had also been made in import policy, especially to encourage construction industry, import of heavy duty prime movers, facilitation of exhibitors, facilitation of disabled persons, facilitation for mountaineering expeditions and facilitation for overseas Pakistanis.

According to the new scheme, EOUs will have the same incentives as are available to units in the EPZs, and the existing units exporting at least 80 percent of their production would be eligible for registration with the FBR. However, the new units so registered would be required to export 100 percent of their production.

EQUITY FUND: Humayun said that it has been decided to establish equity fund through pooling resources of private and public organisations for brand acquisition, and encourage SPS compliance. This fund would be used to encourage Pakistani companies for acquisition of overseas brands or brands holding companies in the following manner:

-- If the acquirer is a wholly owned Pakistani company or a wholly owned subsidiary of a Pakistani company, up to 50 percent, or equity capital.

-- If the acquirer is a joint venture involving a Pakistani and a foreign company, up to 50 percent of the equity capital of the share of the Pakistani company.

Equity capital participation from the fund will not exceed $5 million per proposal. It has been decided to import silver and platinum for manufacturers and export of jewellery. To arrest decline in exports of carpets it has been decided to allow import of semi-finished carpets on temporary basis for processing for export under Customs SRO 1065.

The Minister said that it has also been decided that inland freight subsidy would be allowed for transportation of goods destined for export, and added that financial assistance would be provided to develop export quality slaughterhouses.

SECTORAL INVESTMENT INCENTIVES: To encourage new investments, particularly in hi-tech and core and developmental products, the government has decided to allow First Year Allowance (FYA) on investment in PME (Plant, Machinery and Equipment), to be set off against statutory income in the year of assessment. Unutilised allowance can be carried forward.

THE FYA WILL HAVE THE FOLLOWING RATES:

EXPORTING UNITS OR VALUE-ADDED OR HI-TECH INDUSTRIES: @ 90 percent of the cost of the plant, machinery and equipment.

PRIORITY/DEVELOPMENTAL CATEGORIES AND AGRO BASED INDUSTRY: @ 75 percent of the cost of the plant, machinery and equipment.

-- Other industries: @ 50 percent of the cost of the plant, machinery and equipment.

-- Re-investment allowance at the same rate as mentioned in para (i) above will be applicable on capital expenditures/investment in case of BMR & expansion.

-- Exporting units, value-added and hi-tech industries will be exempted from payment of customs duty and taxes on import of plant, machinery and equipment.

EXPORT CREDIT RISK MANAGEMENT: Twenty percent export transactions of goods and services are on terms of payments, other than secure transaction terms (ie without L/C or advance payment). This practice is growing.

Additionally, large buyers are eliminating middlemen and increasingly demand duty-paid, JIT deliveries. About all competing countries offer facility of Export Credit Agencies while Pakistani exporters face difficulty in obtaining risk covers for exports, especially SMEs.

Pakistan is increasingly losing contracts. In view of this it has been decided to restructure PEFGA to include insurance of the exporters' credit risk and restructure board.

The Commerce Minister said that development of women entrepreneurship in exports, facilitation for pharmaceutical product exports, support for enhanced production of Japonica rice, establishment of cold chain system for fruits, vegetable, floriculture and refrigerated containers would be facilitated.

He also announced regulatory measures regarding imports according to which it has been decided that import and export of goods for transit under the Agreement for traffic in transit among the Governments of People's Republic of China, the Kyrgyz Republic, the Republic of Kazakhstan and Pakistan shall be subject to all prohibitions and restrictions notified and reflected anywhere in the IPO.

IMPORT OF DRUGS: In order to prevent misuse of imported narcotic drugs and psychotropic substances, it has been decided that pharmaceutical units having valid drugs manufacturing licences would be allowed to import these substances on the authorisation of Health Ministry. Such imports would also be subject to the meeting of conditions prescribed for import of pharmaceutical raw materials.

PAKISTAN STILL FACING TRADE DEFICIT CHALLENGE Commerce Minister Humayun Akhtar Khan admitted that Pakistan is still facing the challenge of trade deficit which grew significantly over the last few years due to slow growth of exports, macro policy, fiscal deficit and debt.

He was of the view that macro policy focus on growth, fiscal deficit and debt which make exports expensive and imports cheaper besides hurting industrial investment and trade competitiveness.

"It is important to have a balance in the macro policy so that exports could be encouraged and the current account deficit be reduced," he suggested. He further said that the government should address the issues of export competitiveness through upgradation of manufacturing, services and agriculture sectors.

He was also annoyed over increasing cost of doing business, saying that it should be brought down to international competitive levels. "Efficient utilities and infrastructure need to be provided and inputs should be available at internationally competitive prices," he concluded.

SALIENT FEATURES

-- 6 percent R&D for home textiles.

-- 6 percent R&D for garment and leather footwear to continue.

-- 50 percent financial help for pharma export.

-- 50 percent cost of certification for rice and food export to UK from exchequer.

-- 50 percent subsidy offered for rent and salaries for establishing offices abroad.

-- The LTF-EOP has been enlarged to cover core and developmental sectors, purchase of locally manufactured machinery and compact spinning.

-- 50 percent equity given for brand acquisition.

-- Inland freight subsidy for engineering goods export.

-- Semi-finished carpet import allowed for re-export.

-- Value-addition requirement for gold and jewellery export cut.

-- Import of silver and platinum for jewellery export allowed.

-- Imports of cars, buses in CBU condition decreased by 11.1 percent and 20.6 percent, respectively.

-- Import of mobile phones increased by 27.6 percent.

-- Authority to grant exemption from sales tax registration to be delegated to Collector of Customs to facilitate Overseas Pakistanis.

http://www.brecorder.com/index.php?id=594298&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

New scheme to facilitate SME exporters ​

ISLAMABAD (July 19 2007): The Federal Board of Revenue (FBR) will announce a new scheme for the temporary importation of raw materials, including fabrics to be used in exports products by the SME exporters. The Trade Policy (2007-2008) revealed on Wednesday that the FBR would issue a new scheme to facilitate SME exporters.

Under the scheme, temporary importation of raw materials, including fabrics would be allowed for consumption as inputs for export products. The FBR will also impose penalty on the imports of stolen and chassis tampered vehicles under the personal baggage, gift and transfer of residence (TR) schemes to check influx of stolen cars.

In addition to confiscation of these vehicles, the importers will also be liable to penalty as may be imposed by any other law for the time being in force. The re-export facility will also not be available for such vehicles. In a bid to facilitate the Overseas Pakistanis, the FBR would empower the Collector of Customs to exempt sales tax registration for release of goods sent by Pakistanis living abroad.

Presently, only FBR can allow release of goods sent by Overseas Pakistanis, to a consignee without sales tax registration. This causes undue delay in the release of goods. Now, it has been decided that the authority to grant exemption from sales tax registration will be delegated to the Collector of Customs concerned.

The government has also decided to allow duty drawback and federal excise duty (FED) refund against goods exported to ISAF and Defence Logistics Agency in Afghanistan.

According to the existing Export Policy Order, exports to Afghanistan in convertible currency is zero rated only on certification of arrival by Afghan authorities.

It has been decided that zero rating of sales tax or duty drawbacks as well as federal excise duty refund against goods exported to ISAF and Defence Logistics Agency will be allowed on production of receipt issued by the aforementioned agencies, endorsed by representatives of these agencies based in Pakistan confirming that they have received the goods.

To encourage export of ghee to Afghanistan, it has been decided that vegetable oils being exported to Afghanistan will have ingredients information printed in 'Dari' and 'Pushto' languages. Consumers desire information about the ingredients used in edible products. In case of Afghanistan it was observed that all foreign brands contained product information in local language except those imported from Pakistan. The government has also allowed the manufacturers in local footwear industry to import duty-free footwear samples.

Presently, exporters of footwear are allowed to import duty-free footwear samples to meet their export commitments. It has been decided that the facility will be extended to manufacturers as well. This will help local manufacturers to improve the quality of their products and keep abreast themselves of fashion and trends in vogue in the world market.

http://www.brecorder.com/index.php?id=594287&currPageNo=1&query=&search=&term=&supDate=

 

[solid snake]

Pakistan really needs to do something about it's worrying trade deficit.

Great thread, keep it up.

 

[Neo]

Pakistan really needs to do something about it's worrying trade deficit.

Great thread, keep it up.

I agree, drastic measures are needed to increase exports to friendly countries. Imho best move will be to invest in export oriented SME and and to provide tax examtions for foreign multinationals investing in this sector.

 

[Neo]

KSE records biggest fall of year ​

KARACHI: The Karachi Stock Exchange benchmark KSE-100 Index witnessed the biggest decline of the calendar year on Thursday falling 466.47 points or 3.41 percent to 13193.37 levels amid panic selling triggered by deteriorating law and order in the country and rumours of offloading by foreign investors.

The KSE 100 Index has lost 860.57 points in last two sessions. Index opened in with 19 points positive and at one points it was up by 48 points however the news of blasts in Balochistan and NWFP lead to offloading that pushed the index to intra day low of minus 545 points. KSE 30 index closed at 15768.48 with a loss of 645.90 points down 3.93 percent.

Ahsan Mehanti CEO of Shehzad Chamdia Securities said that uncertain law and order situation in the country and fresh blasts in NWFP and Balochistan were continuously imposing negative impact. Heavy selling pressure was witnessed on all the counters. On the other hand the widow of Daniel Pearl has sued Habib Bank, which was also one of the reason for the banking sector to be the major looser in trading.

Banking scrips remained under selling pressure. KSE 30’s loss of 645.90 points indicates that banking stocks have been severely affected by suit filed against HBL and crumbling law and order.

Atif Malik analyst of JS Global Capital said that panic selling was witnessed in all the major scrips and all the blue chips closed on their lower locks. The current geo political situation of the country is the major culprit of the negative market.

The 466.47 points dip of KSE 100 is fourth largest fall in the history of the Karachi stock market and the biggest in the present calendar year. Bearish sentiments prevailed in the market through out the day, Atif said.

He expressed hope that market will bounce back on expectation of positive upcoming corporate results provided the geo-political situation stabilises.

According to Husnain Asghar Ali of Aziz Fidahussien nervous opening pushed the value buyers on the back foot. Although discounts did invite renewed buying, foreign selling never allowed the index to stabilize and the index made an intra-day low of 13134 (-525).

Technically index failed to honour a major support of 13550-13557, thereby pushing the immediate support around 12977-13983 while overhead resistance stays at 13510-13517. It is however recommended to accumulate main stocks on dips while exit is recommended from the penny stocks on strength in order to reduce the trading portfolio he said.

The pre announcement season however indicates a healthy post announcement scenario as the main stocks are likely to stay at par or better in the June 30, 07 announcements, improvement in law and order situation and strong conviction by the authorities can however invite the local liquidity in the market, while foreign stance mainly on the strategic investments can re boost the confidence of the locals in the policy makers.

With CFS capped actual leverage amount is still unknown as those who are unable to get the privilege of using CFS funds have certainly opted for other official and unofficial channels of financing; it is therefore tough to decide as to where the leverage holdings come at manageable levels, stated Hasnain Asghar Ali.

The market performance was dull as compared to last trading session. Trading activity was dull as compared to the last trading session as the ready market volume stands at 321.661 million shares as compared to 461.560 million shares a day earlier, and the future market volume fell to 84.160 million shares as compared to volume 85.622 million shares a day earlier.

Market capitalization stood near Rs.3.885 trillion. Issues of only 34 companies advanced while 344 declined and 16 remained unchanged.

All the major scrips closed on their low locks and steep selling was seen in the all the scrips.

FFBL was the volume leader with 22 million shares down by 90 paisa closed at Rs44.90, followed by Pak PTA Ltd. with 18.939 million shares up by 15 paisa closed at Rs6.65, OGDC with 17.943 million shares down by Rs2.40 closed at Rs117.55, Fauji Cement with 17.894 million shares down by 90 paisa closed at Rs19.90, PTCL with 15.588 million shares down by Rs2.80 closed at Rs56.50, Arif Habib Sec. with 13 million shares fell Rs7 to Rs133.90, BOP with 12 million shares down by Rs.4.95 closed at Rs.94.55, Bank Al-Falah with 11.045million shares down by Rs.2.65 closed at Rs.52.30, Dewan Salman with 11.032million shares down by 80 paisa, National Bank with 10.939million shares down by Rs.12.65 closed at Rs.240.35.

http://www.thenews.com.pk/daily_detail.asp?id=65036

 

[Neo]

Govt focusing on narrowing fiscal deficit ​

ISLAMABAD: Commerce Minister Humayun Akhtar Khan at a post-trade policy press conference here on Thursday said the federal government and its monetary executing agency were focusing more on narrowing fiscal deficit, revenue collection and debt servicing than enhancing exports.

He was optimistic that the non-recurrent flows would replace the recurrent flows (exports and remittances) in the future because of the longer exports policy of the government.

Defending the economic policies of the government, Khan said both fiscal and current account deficits were not only close with each other but under the set target of 4.2 per cent.

Export measures and strategies like export facilitation and marketing support and sectoral initiatives would help to achieve the set target of exports, he added.

About exportable surpluses, the minister said high interest rate for large-scale manufacturing and low yield were major hurdles to the availability of exportable surpluses and the government was focusing on these issues as well.

Answering a question about results of trade diplomacy and FTAs, he said the government pursued both these initiatives vigorously to enhance exports and results would show after some time.

A Chinese delegation, now in Pakistan and comprising a number of importers both from the private and public sectors, was going to place import orders worth one billion US dollars, he added.

The Reconstruction Opportunities Zones would boost exports, Khan said. When asked about the decline in exports to Afghanistan, the minister said the decrease in exports to Afghanistan was noted in POL, adding: “A particular country is responsible for it.” He did not name the country.

Earlier, the visiting Chinese trade delegation, led by Chinese Assistant Trade Minister Wang Chao, met the commerce minister at his office. The delegation consisted of traders and importers. Secretary Commerce Syed Asif Shah also attended the meeting, says an official statement.

The minister told the delegation that steps had been taken for a roadmap for enhancing trade relationship. One of the important steps was the acquisition of Paktel.

http://www.thenews.com.pk/daily_detail.asp?id=65038

 

[Neo]

FDI jumps to $5.12 billion ​

ISLAMABAD: Foreign direct investment in Pakistan soared by 45.6 per cent year-on-year to $5.124 billion during 2006-07 while portfolio investment climbed by 417.9 per cent to $1.82 billion compared to the previous fiscal year, the State Bank of Pakistan (SBP) reported on Thursday.

During July-June 2006-07, FDI in absolute terms rose by $1.604 billion and portfolio investment by $1.468 billion over the corresponding period of 2005-06, when these stood at $3.521 billion and $351.50 million respectively.

Therefore, on balance, total foreign private investment in the 12-month period shot up by 79.3 per cent to $6.945 billion from $3.872 billion in the same period a year ago.

In 2004-05, total foreign private investment in the country stood at $1.676 billion.

According to break-up of the foreign investment figure, developed countries made a total investment of $4.7 billion - FDI $2.99 billion and portfolio investment $1.71 billion. The developing economies invested $1.805 billion (FDI $1.71 billion and portfolio investment $95.2 million).

Among developed countries, western Europe made a total investment (FDI and portfolio) of $2.78 billion and the European Union invested $2.71 billion compared to investments of $831.3 million and $396.5 million respectively in the previous fiscal. Besides, under unspecified head (investment by international financial institutions and others) $438.9 million was received, which included $423.8 million FDI and $15 million portfolio investment.

Among developing countries, Caribbean Islands made direct investment of $19.1 million and portfolio investment of $1.2 million. Africa, including Libya, Egypt, Mauritius, South Africa and other countries invested $98 million.

Asian countries (West Asia, South, East and South East Asia) made total investment of $1.684 billion, including $1.601 billion FDI and $82.1 million portfolio investment.

The break-up of investment further indicated that United Kingdom was the biggest investor in Pakistan as it invested $1.82 billion - $860.1 million FDI and $960.1 million portfolio investment.

The US was second with an investment of $1.766 billion, including FDI of $913.1 million and portfolio investment of $853.4 million.

The Netherlands was third, whose direct investment was $771.8 million while portfolio investment was $6.2 million. China invested $712 million in FDI.

The United Arab Emirates (UAE) invested $676.3 million comprising $661.5 million FDI and $14.9 million portfolio investment.

http://www.thenews.com.pk/daily_detail.asp?id=65044

 

[Neo]

Meat exports to Gulf ​

Importers agree to stop snap check of Pak abattoirs

KARACHI: The United Arab Emirates has agreed to avoid surprise visits to check deficiencies at Pakistani slaughter houses exporting meat to the Gulf region, instead the local authorities would be informed to arrange a trip to the approved facilities.

Trade sources said a delegation comprising meat exporters recently visited the UAE and held a series of meetings with the authorities concerned, facilitated by the Pakistani consulate, which ended with consensus that the two sides would sign an understanding to define fresh strategy of quality standard and satisfaction.

“The federal ministry of food, agriculture and livestock and the UAE’s general secretariat would sign an MoU soon,” said a source close to the talks between two sides.

“The MoU defines the fresh modalities of quality inspection and control under, which the UAE authorities would now inform the local authorities before planning any visit of the four slaughterhouses, approved for meat exports to the Gulf region.”

He said during the visit Dr Amin, a consultant to the UAE’s general secretariat made a convincing presentation, which was agreed by the UAE officials and importers to avoid surprise visits of the slaughterhouses.

“The Pakistani delegation comprised of Raja Muhammad Dawood, Chief Executive Pakistan Food Products; Asif Ghayas, Chairman Zenith Associates and Muhammad Khalid, Managing Director Catco,” added the source.

Pakistan allowed meat export in Trade Policy 1999 first time ever but the shipments of the products were hit snags several times on quality grounds. Saudi Arabia had banned meat imports from Pakistan due to low hygienic standards.

However, the recent meetings between the two sides have lifted hopes of Pakistani traders, who see the meat export figures going higher than previous years on boosted confidence of foreign buyers and increased confidence of local traders.

“Actually Pakistani consulate played the vital role in defining new strategy and convincing the UAE officials and importers,” Raja Muhammad Dawood of Pakistan Food Products, one of the delegates, who visited the UAE.

He said Bilal Khan Pasha, Commercial Attache for Pakistani Consulate in the UAE arranged the delegation meetings with the UAE municipality and concerned institutions and made a detailed proposal to control quality of the products and increase the Pakistani meat exports.

“The UAE consumers and other Middle East countries like the goat meat exported from Pakistan and there is also a demand of our beef and mutton products,” said Dawood. “We have been making some $2 billion export for the last few years, which is likely to increase significantly with recent initiative agreed between the two sides during our visit.”

The government couple of days ago announced the trade policy for 2007-8 eyeing 11 per cent growth in exports to $19.2 billion as against last year’s export proceeds of $17.3 billion.

The country suffered the highest ever trade deficit of $13.54 billion during 2006-07 up by 12.83 per cent from $12 billion recorded during 2005-06.

The government had projected a trade deficit of $9.4 billion for fiscal 2006-07 as against $12.13 billion deficit recorded during 2005-06.

http://www.thenews.com.pk/daily_detail.asp?id=65046

 

[Neo]

Work on land record automation begins ​

LAHORE: Descon Information Systems has started work for developing ‘Land Record Management Information System’ (LRMIS). The project has been undertaken by the Punjab government after studying problems faced in the current paper-based land record system.

Descon Information System’s is one of the four companies selected by PITB (Punjab Information Technology Board) for the development of Land Record Management Information System.

The current paper-based land record management is cumbersome and obsolete and due to this local as well as foreign investors have been reluctant to invest in businesses based in rural Punjab.

The electronic system will help automate the management of land record and will provide a central land data repository for monitoring and revenue collection. This automation system will streamline the land record processes and will gain the confidence of investors.

The pilot project of LRMIS will be initiated in district Kasur. All key components of LRMIS and business processes will be tested in Kasur before introduction in the entire Punjab involving 18 districts.

The key components include LRMIS software, hardware, networking, data entry, construction of booths, and business processes associated with land revenue administration.

http://www.thenews.com.pk/daily_detail.asp?id=65047

 

[Neo]

Industrialists mostly welcome new trade policy ​

KARACHI: A majority of industrialists, especially the textile sector, have welcomed the new trade policy 2007-08 announced by the Federal Minister for Commerce, Humayun Akhtar Khan on Wednesday.

However, representatives of some leading trade bodies remained detached and did not pay heed to the commerce minister’s speech; who announced new import and export incentives for the current fiscal year.

Pakistan Hosiery Manufacturers Association (PHMA), central chairman Naqi Bari welcomed and appreciated the trade policy, saying that it was one of their long standing demands that benefits being enjoyed by ‘Export Oriented Units’ in the trade processing zones be given to them as well, which have been heeded.

Pakistan Bed Wear Association, chairman, Shabir Ahmed hailed the policy and maintained that initiatives like establishing of ware houses was an excellent decision. However, he said that the private sector should also be involved in this programme.

He said that the announcement regarding assistance for opening of exporter’s offices abroad, support for marketing of branded products, besides enhancement of financing period from three years to four for opening of retail outlets were all positive steps which would help in enhancing exports.

Pakistan Readymade Garments Association of Pakistan (PRGMEA), chairman, Ejaz Khokhar expressed his satisfaction over the trade policy and said that the announcement of subsidy for promotion along with support for establishment of overseas business units would help in increasing exports.

He also appreciated dialogue with the US regarding duty free excess for Pakistani garments produced in ‘Reconstruction Zones’ (ROZs) in border areas.

However he apprehended that if defence exports were not included in total exports of the country in fiscal 2006-07, then shortfall in export target would be further widened.

Ejaz further claimed that in the absence of a comprehensive and focused policy and without involvement of WAPDA and KESC measures announced would be dwarfed in achieving export target of $19.2 billion for fiscal 2007-08.

Former chairman Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA), Fawad Ejaz said that the leather garment industry has been completely ignored in the trade policy.

He said exports of the sector had already shrunk by 24 per cent in first eleven months of last fiscal year.

He said out of 17 proposals submitted by PLGMEA not one was approved by the finance ministry.

He said the trade policy should be formulated for a period of at least two or three years and that businessman should not expect much from a trade policy formulated each year.

He said that last year the government had announced R&D (research and development) support for leather footwear; whereas leather garment sector was denied this very same provision.

He also said there was absolutely nothing new in the trade policy for the leather industry as government was already providing the subsidies announced for establishing brands and skill development to various value added sectors.

Similarly, SITE Association of Trade and Industry, chairman, Imran Shaukat avoided committing on the new trade policy, stating that he did not give much weight to the new trade policy.

http://www.thenews.com.pk/daily_detail.asp?id=65048

 

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New procedures for export of goods​

ISLAMABAD, July 18: The commerce ministry has issued new procedures for regulating and facilitating export of goods. These procedures were announced through the trade policy here on Wednesday.

Under the new procedures, it has been decided that in case of export of defective goods where replacement has been received, the condition of indemnity bond will be done away with provided there is no revenue implication.

It was also decided that vegetable oils being exported to Afghanistan will have ingredients information printed in ‘Dari’ and ‘Pushto’ languages.

Exporters of footwear are allowed to import duty-free footwear samples to meet their export commitments. This facility will be extended to manufacturers as well.

The equity fund for acquisition of overseas brands and/or the brand holding companies will be available in the following manner:

-- If the acquirer is a wholly owned Pakistani company or a wholly owned subsidiary of a Pakistani company, up to 50 per cent of equity capital. If the acquirer is a joint venture involving a Pakistani and a foreign company, up to 50 per cent of the equity capital of the share of Pakistani company.

Equity capital participation from the fund will not exceed US$5 million per proposal.

It has been decided that the equity fund will also be used for participation in investment in such facilities.

The first year allowance (FYA) will have the following rates:

Exporting units or value-added or hi-tech industries at the rate of 90 per cent of the cost of the plant, machinery and equipment.

Priority/developmental categories and agro-based industry at the rate of 75 per cent of the cost of the plant, machinery and equipment. Other industries at the rate of 50 per cent of the cost of the plant, machinery and equipment.

To introduce best practices, it has been decided to hire international consultants for selected companies on cost sharing basis. The consultants would benchmark the firm characteristics, including production technology, skills, accounting procedures, marketing and business practices relative to international levels; identify the deficiencies and assist the firms in removing them.

The scheme will initially include textiles and apparels, surgical instruments, leather products and sports goods.

The companies, which do not follow the advice of the consultants, will be required to refund the money contributed by the government.

For each sector, there will a list of the approved consultants.

Criteria for selection of companies will be prescribed.

The agri-marketing integrated centres (AMIC) will be established.

It will establish close linkages with selected and enlightened farmers to obtain their produce for storage and sales on their behalf, provide common facilities, such as grading, packaging, fumigation, testing, certification, etc.

Export linkages will be established with international and local buyers. TDAP will establish a private limited company to be managed by specialists in this field.

Under the National Trade Corridor Improvement Programme (NTCIP), the ministry of commerce, in consultation with horticulture export board, prepare proposals for enhancing annual export of fruit and vegetables, and floriculture from existing $150 million to $400 million in the next five years.

For this purpose, it was envisaged to establish a cold chain system, including pack houses, cold stores, and refrigerated containers.

The following initiatives will be taken: 39 modern pack houses, completely automated and equipped with advanced electronic devices for packing/grading and storage plants will be set up at 31 fruits and vegetable growing areas throughout the country; 23 facilities for cold storage and controlled atmosphere storage will be established at the fruit production areas, airports and seaports in the country.

Two container yards in Karachi and Lahore with a pool of 200 refrigerated containers and 50 controlled atmosphere refrigerated containers at each location will be established.

Karachi pool will serve the requirements of Sindh and Balochistan while Lahore pool will serve the requirement of Punjab and NWFP.

Trade Competitiveness Institute of Pakistan will be established, initiatives to be taken as part of national trade corridor improvement programme for increasing share in international trade and increasing exports.

http://www.dawn.com/2007/07/19/ebr2.htm