Pakistan Economy - News & Updates - Archive

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ISLAMABAD (updated on: May 07, 2006, 19:11 PST): Pakistan faces a possible drought with no significant rain expected in the next two months, the country's top meteorologist warned on Sunday.

'There are all indications of emerging drought conditions in the country,' director general of the Meteorological Department, Qamaruz Zaman, told AFP.

He said a moderate drought had already developed in Balochistan and was likely to worsen during the coming months and possibly spread to other parts of the country.

Zaman said rainfall last winter was 40 percent less than average, and snowfall in catchment areas was 20-25 percent less.

"During the next two months no significant rains are expected which can improve the water situation in the country," Zaman said.

Pakistan was hit by a devastating drought several years ago that inflicted heavy losses in agriculture and livestock, particularly in Balochistan and the southern province of Sindh.

 

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Sunday, May 7th, 2006


Islamabad - Pakistan and Iran have agreed to work on a bilateral gas pipeline project regardless of whether India wants to join an eventual Iran-Pakistan-India (IPI) project.

Hasan Nawab, managing director of Inter State Gas (Pvt) Ltd, said the estimated cost of the project for Pakistan would be around $2.5 billion.

‘Whether India joins or not, Pakistan cannot delay the project. (But) if India joins, the project would be more feasible,’ Hasan told IANS.

The IPI project is estimated to fetch Pakistan 2.8 billion cubic feet gas per day at a cost of $2-3 billion per annum. Pakistan would focus on integrating the gas pipeline with the country’s energy system by 2011 as ‘after 2010 local production will start to decline’, he said.

On the security measures for the project, he said it was a natural, normal requirement and was under consideration. ‘There would be an element of cost related to the issue but it would not have any major impact on the overall project.

‘The royalty issue is also under consideration and it will be negotiated according to international norms,’ he said. ‘Nothing has been decided on this part.

‘The gas pricing formula is another area that needs to be finalised though gas prices are somehow linked with crude oil, which is not only volatile but also difficult to predict. The government motive is to design a system, which can limit price volatility,’ Hasan said.

Two companies, SSGC and SNGPL, cater to gas distribution in Pakistan. ‘The distribution of the new facility would be under them, even if they get privatised,’ he said.

The two companies are distributing 2.8 billion cubic feet gas and the new facility of 2.8 billion cubic feet would further increase their distribution capacity.

According to Hasan, the available gas reserves in the country are far less than the country’s requirement.

 

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KARACHI (May 08 2006): The trade deficit in the first nine months of FY 2006, according to Federal Bureau of Statistics, is $8.6 billion. No! says the State Bank of Pakistan. Its foreign exchange record shows it at $5.9 billion.

According to FBS, exports in July-March 2006 were $12.1 billion. SBP estimates these at $11.7 billion. The divergence in import figures is even sharper. FBS places imports for the same period at $20.7 billion. On the basis of the figures derived from the Balance of Payment position, SBP estimates them much lower--at $17.5 billion.

Why such huge variance in the two data sets? FBS gets its trade data from the Central Board of Revenue (CBR).

They work on data from different sources. The Board compiles the goods declaration forms filed with Pakistan Customs. SBP obtains its data from transmission of foreign currency undertaken on behalf of banks.

Imports reported by banks are a mixed 'Free on Board' (FOB) and Cost, Insurance & Freight (CIF) basis. SBP has the value of freight and insurance from the exchange record - FBS deducts a flat 9 percent as cost of freight and insurance.

The Minister of State for Finance, Omar Ayub, had held a meeting to rationalise these differences in FBS and SBP figures, and ordered that this problem be fixed in 15 days. But the minutes of that meeting were circulated after 45 days.

LSM: Prices and trade data are compiled on monthly basis. The third set of monthly compilation was large-scale manufacturing. However, this year there has been a complete breakdown in the compilation of LSM. FBS has not provided any figures since September 2005.

Agriculture sector data is compiled in three stages. The first estimate is of the area sown. The second set of data provides initial estimate of crop, and the final estimate comes after harvesting of major crops.

The FBS does not provide any quarterly or half-yearly details about the services sector. So, the real sector estimates are compiled only once--for the national income accounts committee.

It may be recalled, however, that two years ago, the government had announced that it would issue quarterly GDP estimates, as well as unemployment rate.

Monetary estimates, prices and revenue figures are being compiled with regularity in the country; expenditure data also comes, with a time lag, though. With so much divergence between trade data and a large portion of the real sector unassessed, economists wonder how a policy framework is to be designed.

The General Statistics Act 1975 provides the legal framework for collection of data at both the Federal and the Provincial levels. The law aims to create a National and a Provincial Statistical Council, and constitutes authorities for the collection and co-ordination of statistics to facilitate economic and other planning.

The 1975 Act envisages authority for FBS to call for returns and information; gives the right of access to record or documents from the private sector; and guarantees secrecy of answers, information and returns. The same Act empowers the FBS and provincial authorities to punish those delaying or falsifying answers, information and returns, and sanctions for prosecution for any act of omission or commission.

Both the law and the institutions that have been created for this purpose are in place. It is their activation that has been awaited these 30 years.

 

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LAHORE (May 08 2006): Dr Salman Shah, Advisor to Prime Minister on Finance, in a pre-budget seminar here on Sunday said that stalemate on dams had to be broken.

He said decision on future water reservoirs had to be made on economic basis and a decision in this regard would immensely help the country's development endeavours and would make productivity efforts competitive which was the vital need of the hour, he added.

He termed the coming 2006-07 Federal Budget as people-friendly and said that health, education and other important sectors would get due consideration in it.

Shah said it was the priority objective of the government to bring down poverty by half by 2015 from the existing level.

He said that the country has sufficient foreign exchange reserves for six months import, and added that future development needs level would be maintained.

He said that increased revenue collection by CBR would lead to speedy pace of development in the country. "We have fiscal space because of the revenue generation. So development drive is there," he pointed out.

He said Pakistan had shown improvement in its GDP over the last three to four years as compared to sustained growth level by China in last 30 years period. He hoped that with positive indicators showing, benefits in increase in GDP would be passed on to masses.

He termed the decrease in financial deficit and increase in GDP as an important achievement of the government. He lamented the elements who gave attention to recent false report indicating Pakistan as a failed state and said that country's economic indicators and respect shown by international investors in the national economy all belied this report.

He said that diversification of economy was vital for development and the government had embarked in this direction vociferously.

The Advisor said that with government giving importance on supply side of things, situation in food items prices had improved. He said that the government was very watchful on the aspect of inflation.

He said that Prime Minister Shaukat Aziz had approved to establish 'Independent Statistical Authority' in the country.

He said that healthy indicators were now visible in the stock market. Severely criticising Ahsan Iqbal of PML-N for comments against government economic policies, he said the previous government had ruined the banking sector and introduced crony capitalism in the country.

He said that the government had undertaken a number of steps to improve the standard of technical and other education in the country and in this direction persons in order to obtain doctorate degrees had been sent abroad.

He said that the Government was negotiating with Japan to impart vocational training here.

Sartaj Aziz asked the Government to give production-related subsidies. He said no step should be taken in planning of the Budget 2006-07 that would result in increasing cost of production. He said controlling inflation was a better measure than taking the decision of going for devaluation. He asked the government to eliminate sales tax on consumer items in the forthcoming budget.

Ahsan Iqbal rejected the notion that on October 12, 1999, the country was faced with any default in payments. He asked for debate on Defence Budget in the Parliament.

Punjab Finance Minister Hasnain Bahadur Dareshak said that introduction of medium term budgetary framework (MTBF) was one of its important achievements.

 

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LAHORE (May 08 2006): The European Union (EU) remains the largest trading partner of Pakistan receiving 27.4 percent of Pakistan's export providing 17 percent of its total imports as a result of sound economic policies of the present government, says an EU Journal.

"Overall volume of trade between the EU and Pakistan has grown substantially over the year from Euro 1.5 billion in 1980 to Euro 3.1 billion in 1990 and was worth Euro 5.06 billion, equivalent to Rs 303 billion in 2002 with a trade surplus of Euro 765 million (Rs 46 billion) in Pakistan's favour", it added

Pakistan's trade with EU is mainly composed of textiles, which account for over 60 percent of total Pakistani exports to the EU, followed by leather products, which account for 13 percent of Pakistani exports, it said.

EU imports to Pakistan mainly comprise finished products like mechanical and electrical machinery that accounts for over 35 percent followed by chemical and pharmaceutical 10 percent of the total EU imports to Pakistan.

A general trade increase with Pakistan's main partners, including the EU, is a part of Pakistan's economic revival agenda, which is a goal supported by the European Commission.

"In this regard, there is a scope for more mutually beneficial commercial activity between the EU and Pakistan. A further integration of Pakistan in the global economy is supported by the EU and is being articulated as a part of the EU overall strategy for the WTO Doha Development Agenda, where developing countries' needs and constraints need to be fully assessed", it added.

 

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By Engr Abdul Waheed Bhutto

PAKISTAN is experiencing a rising tide of violence against natural gas installations located in Balochistan where the majority of the energy-starved country’s natural gas facilities are located. The province derives its strategic importance mainly due to its large reserves of oil and gas.

Pakistan has 26.8 trillion cubic feet (Tcf) of proven gas reserves, and currently produces around 2061 million cubic feet per day (mm cfpd). The share of gas in primary energy supply had increased from 37 to 41 per cent in the last five years.

The natural gas demand grew at an annual consumption growth rate (ACGR) of six per cent against a total energy demand growth at an ACGR of 4.8 per cent and is expected to grow at a similar rate upto 2010.

By the year 2015, country’s total gas demand would go up to 4,452 (mm cfpd) from the present level of 2061 mm cfpd with bulk of it going to power generation and fertilizer sector. Against this, the supply would stand at 2439 mm cfpd which will leave a huge gap of 2013 mm cfpd.

There would be a deficit of gas unless supplies are substantially raised from new discoveries. In case, the gap is not met through indigenous supply, it is necessary that requisite infrastructure is developed in a timely manner for import. Islamabad is working on plans to build a pipeline that spans from Iran’s massive reserves to Indian markets across Pakistani territory.

Balochistan’s natural gas production is critical to Pakistan’s economy. The Sui-Gas field in Bugti tribal area produces approximately 45 per cent of the country’s total gas production. Pakistan Petroleum Limited is producing 720-750 million cubic feet of gas daily from more than 80 wells in the field. Other natural gas fields in the province include Uch, Pirkoh, Loti, Gundran and Zarghoon near Quetta. Balochistan has 19 trillion cubic feet of natural gas reserves and six trillion barrels of oil reserves on- and off-shore.

But these riches did little for the local Baloch tribesmen. Despite the province’s wealth of natural resources, Balochistan is the poorest and a restive province; 45 per cent of its population live below the poverty line.

Local population lacks basic necessities like health, water, food and education. The wWhole of the Quetta city, the provincial capital of Balochistan, except cantonment area, is using brackish groundwater.

An ordinary Baloch in Quetta is of the view that he has been facing a step-motherly treatment from the Islamabad rulers ever since the formation of Pakistan. Baloch have been deprived of political, social, cultural and economic rights. They have little educational facilities and have been kept in a state of backwardness.

The present regime aggravated situation by sidelining the mainstream parties of Balochistan in favour of Islamists. There are no Baloch in the top bureaucracy.

The locals are also concerned over the settlement of Punjabi and Pashtun ex-servicemen in key areas of Balochistan to reduce the Balochs to a minority in their historic homeland.

Though Balochistan’s natural gas generates $1.4 billion in revenue annually, Islamabad remits only $116 million in royalties to the province. Over the years, Balochistan did not get a fair share of the oil and gas wealth. Balochistan is getting merely Rs22 per thousands cubic feet of gas extracted while Sindh is getting Rs126 and Punjab Rs180 for some of the wells.

The targeted attacks on the infrastructure is affecting the foreign investment. More than ten oil and gas exploration blocks had been awarded to over 20 local (both public and private) and international firms over the past 10 years but they could not start operations due to law and order problems.

A Chinese company BGP had stopped oil exploration work in Bugti tribal area in June 2001 for security reasons. In July 2004 a U.S. company involved in offshore drilling abandoned its two test wells between Gwadar and Pasni because of security concerns.

During a visit to Pakistan on March 13 and 14, 2006, Mr Samuel W. Bodman, the US Energy Secretary, told the Pakistani journalists that the security situation in Balochistan was an impediment to foreign investment in Pakistan.

In January, the corporate brokerage house Taurus Securities issued its “Key risks and challenges 2006” report observed that the ongoing violence in Balochistan will have “a detrimental impact on the reserves of natural resources and disrupt gas supplies,” adding that the military operations were worsening the situation.

On the other side, most powerful Sardar Nawab Akbar Bugti has said that” we own the natural resources, but these are being exploited for the benefit of others. We will not allow others to steal our wealth. Your sensitive installations will remain insecure, because you have pilfered, what belongs to our people.”

The government has opted the military solution at the time when there are efforts going on to materialize the proposed plans to build a $7 billion gas pipeline project from Iran to India, via Pakistan.

Pipeline that spans from Iran’s massive reserves to Indian markets across Pakistani territory. The 475 miles of the pipeline will pass through Balochistan. This would not only supply gas, guarantee a source of income, but also increase stability in the region, according to official point of view.

But the pipeline attacks with increasing intensity are unsettling. Despite the heavy patrolling by US forces, oil pipelines come under attack in Iraq. Pipelines run over hundred of miles and across some of the most difficult areas to access. Due to their length, they are very difficult to protect that makes pipelines potential targets. Instead of military operations, the situation should be defused through dialogue.

The main grievance of Balochistan is that the province’s minerals and other natural resources are being exploited without any benefit to the local population. To resolve the present situation the Parliamentary Committee on Balochistan has reportedly given two key proposals: 1) substantial increase in the royalty of the province on oil and gas, and 2) empowering the provinces to sign petroleum exploration and sale agreements with local and foreign firms.

These proposals were expected to encourage regional political leaders to open up their provinces to petroleum exploration and development activities to give the provinces a sense of ownership making them directly responsible for the security of vital installations.

However, an increase in the rate of royalty is being opposed by the establishment. They have also opposed proposal that allow the provincial governments to sign petroleum agreements with private firms, on the ground that petroleum is purely a federal subject under the Constitution and yields over Rs70 billion per year in taxes to the national exchequer.

Meanwhile, a number of economic incentives have been promised such as, increased job quota for the Baloch in the government service, preference for locals for recruitment in local development projects etc. However, it seems that the situation has not changed because in the past too, similar promises were made, but they remained unfulfilled.

The local Baloch demand abrogation of the plans for the construction of new army cantonments, the de-militarization of the province and restriction of land ownership in Gawadar for the Balochis only. They are also demanding the right to vote should also be restricted to locals only. They also want employment of locals in petroleum exploration and development companies.

Mr Baloch nationalists consider the issue of provincial autonomy as the core issue for the province.

The security in Baloch territory can be assured only by the Baloch tribes, who have to have their due share of the, royalty, transit fee and other benefits of their gas resources and the pipeline. The policy of creating local stakeholders by bringing the local people on board must be followed, as the local stakeholders can only ensure the steady and speedy development process.

At present, the bulk of natural gas is consumed by for power and fertilizer sector. On average the fertilizer sector has consumed 23.4 per cent of gas during the last 14 years from 1990-91 to 2003-04. Natural gas is being sold to the fertilizer industry at subsidized rate at a time when the demand for gas is quite competitive since it serves as a major input to electricity generation and provides the preferred fuel input to many other industrial processes. According to an estimation, government suffer losses of around Rs15 billion every year as subsidy to the fertilizer sector, which never reaches the farmer.

 

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By Muhammad Rehan Ghazi

AIDED by growing IT awareness in the country and increased focus from multinational IT vendors, the Pakistan’s PC shipments grew 16.6 per cent annually in 2005 to reach just under the half-million mark with the shipment of 494,000 units.

Additional market accelerators include strong economic growth, the government’s drive to privatize the economy and efforts to develop the ICT sector.

Although the earthquake in October held shipments back marginally in Q4 due to delayed government-buying and general economic disruption, it is not expected to impact the market materially in 2006 and beyond. Similarly, although social unrest and a degree of political instability are risks for the market, they are not expected to derail the market’s strong overall momentum over the next several years.

Due to political and social disruptions as well as general perception challenges, the Pakistani market has traditionally been neglected by the international IT vendors; however, the market’s explosive growth over the past several years has led it to a scale that is drawing increased attention. It is not an exaggeration to call Pakistan one of the most promising and dynamic PC markets in the world.

The Pakistan PC market continues to be highly price-conscious, and remains dominated by locally-assembled machines, which hold over 75 per cent of the total shipment market share. Local brands are also major players, and are increasingly offering formidable competition to international giants in Pakistan.

Desktops, which represent the largest portion of the market, registered shipments in excess of 469,200 in 2005. Amongst all the product sectors, the portable market-led growths in 2005 with 21.3 per cent expansion, followed by X86 servers and desktops. Portable PCs are expected to remain a particularly hot market segment throughout the forecast period as prices fall and the need for mobility rises. The position of notebook PCs as status symbols will also play a secondary role in driving sales.

From a usage perspective, the public sector and NGOs currently provide the dominant segment of the market. However, large corporations – particularly in the finance and telecommunications sectors – are also key customers driving market growth.

Although Small and Medium Businesses (SMBs) represent a large share of the country’s total number of companies, they do not represent a commensurate share of the PC market. In total, SMBs represented 21 per cent of total 2005 PC shipments in the country.

The SMB market represents a notable portion of shipments in Pakistan, but it is receiving secondary focus from IT vendors due to the substantial opportunities in the public and large enterprise sectors.

In spite of social and political risks, Springboard expects PC market growth to rebound to 24.7 per cent in 2006 driven by a release of pent-up demand from earthquake-related delays in Q4, strong economic growth and IT vendor investments in sales and marketing activities.

 

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KARACHI, May 7: The government has approved a Rs75 billion plan to connect Gwadar port by rail to streamline cargo movement, says federal Minister for Railways Shaikh Rashid.

Addressing a press conference here on Sunday, Shaikh Rashid said the government would invite private sector to participate in the mega project.

Referring to the revival of the Karachi Circular Railway, he said that the system would be revived and the government also wanted to run circular trains in eight other major cities.

TRAIN FARES: The minister said that there was a possibility of a reasonable increase in train fares in the wake of increases in diesel prices but it would be done in a way to ensure poor people were not affected, adding that it would also not affect people travelling on routes ranging between 50 and 100 miles.

Shaikh Rashid said: “We are examining (ways) to increase train fares in such a way that the burden is shifted to people travelling in air-conditioned and upper class compartments.”

He said the railways would be transformed into ‘Awami train’. He said he had started touring all seven divisions of railways to get first-hand information about areas needing immediate improvement

KHOKHRAPAR SERVICE: The minister announced the launching of a daily train service between Khokhrapar and Mirpurkhas to provide an additional facility to people of rural areas in Sindh.

“Pakistan Railways will be revolutionised at a rapid pace through optimum utilisation of available resources and creation of new ones by adopting a practical approach,” he said.

Shaikh Rashid said that the schedule of Sukkur Express had been revised according to people’s demands.

Referring to additional resource generation, he said that private companies would be allowed to run four new trains, adding that they would pay ‘track access charges’.

About railway commuters’ security, he said that a fibre optic line would be laid for a number of purposes, including installation of surveillance cameras, adding that it would provide additional protection to national assets.

Shaikh Rashid said railway signals would be upgraded while orders had been issued for computerising the domestic ticketing system.

He also said that the frequency of freight trains would be increased from eight to 10 in Karachi.

He said that talks were being held with all chambers of commerce on ways on maximising the use of freight trains.

“We are adopting a pragmatic approach to take the railways out of the red and to provide maximum facilities to passengers,” he said.

LOSS CONTROL: Effort would be made to overcome the huge losses incurred by the Pakistan Railways within a year, the minister said.

“The deficit is fairly huge and we can overcome this through cargo trains. (But) there is an acute shortage of freight wagons and locomotives,” he said.

Shaikh Rashid said that a study in this respect is being carried out.

 

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ISLAMABAD, May 7: The World Bank is persuading Pakistan to import electricity and gas from Central Asian states to attract international financial support as an alternative to a gas pipeline from Iran, it is learnt.

On the initiative of the World Bank, the energy ministers of Pakistan, Afghanistan, Tajikistan and Kyrgyzstan are meeting here on Monday to discuss electricity trade among them. Besides the energy ministers, deputy prime minister of Tajikistan Asadullo Gulmov is also attending the meeting.

The two-day conference of Central Asia-South Asia electricity trade would also be attended by the officials of the World Bank, its commercial investment arm International Finance Commission, Islamic Development Bank and the Asian Development Bank to brain-storm on technical and financial aspects of the regional power trade. Federal Minister Liaqat Ali Jatoi would preside over the two-day conference.

Informed sources told Dawn on Sunday that the World Bank has been promoting the idea of regional energy grid at the Economic Cooperation Organisation (ECO) level for a long time and has now reinvigorated the campaign to initially link energy resources of Tajikistan and Kyrgyzstan with Pakistan through Afghanistan and later to India.

Given the availability of vast hydel energy resources in the Central Asia particularly in the close proximity of Afghanistan and rising demand in Pakistan and India which may like to adopt the concept at a later stage, the possibility of international financial support would be forthcoming subject to improvement of security situation in Afghanistan where the United States would provide a lot of support, the sources said.

The United States had declined to provide any support to Pakistan for nuclear energy and opposed gas import from Iran but had promised to assist Islamabad in alternate sources of energy to meet its growing energy needs.

The sources said Pakistan had proposed to invite Iran to participate in the conference given its importance in the energy resources but a consensus could not be achieved on the subject.

The sources said the conference is expected to approve launching of feasibility studies for the transmission line from the Central Asia to Pakistan for importing 2000-3000 mw of electricity.

The presence of major multilateral financial institutions like the IFC, the ADB and the IDB has been ensured by the World Bank to get financial commitments to the project at the very beginning to cost estimation for fast track implementation, the sources said.

The World Bank, said the sources, was convincing Pakistan that it may attract western criticism for pursuing a major gas import project with Iran and lack financial support as the major multilateral would stay away from a risky and legally difficult investment owing to US opposition.

As an alternate energy supply chain from Central Asian region, on the other hand, would not only get financial and political support from the West and the US, it would also be seen as a positive move to encourage land-locked central Asian states to start trade through Pakistani ports.

The sources said Pakistan has been discussing on bilateral basis with Central Asian republics for energy cooperation and it would be for the first time that a larger perspective of the regional energy import would get special importance.

Pakistan and Tajikistan had already signed a memorandum of understanding last year and had even launched a feasibility study through National Engineering Services of Pakistan (Nespak) to import 1000-mw of hydropower from Tajikistan. The electricity import from Tajikistan has initially been found technically feasible.

 

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ISLAMABAD, May 7: World’s renowned gold-mining company Barrick Gold Corp considers Pakistan an attractive place for investment because of the country’s fast-growing economy and investment-friendly policies, Canadian newspaper Toronto Star reported.

The Canada-based mining giant is already operating in Pakistan and plans further expansion of its enterprise in this country, the report published on Friday said.

“Pakistan, from a business point of view, is a better country to invest in,” founder and chairman Peter Munk told the company’s annual shareholders meeting.

Barrick had bought a stake in the Reko Dig copper-gold project in Pakistan for $100 million in February from Antofasta PLC, a Chilean mining group. The company will spend $20 million this year on exploration of new gold and copper deposits in Balochistan.

When its CEO Greg Wilkins came to Pakistan in connection with the said project, he was received by both President Pervez Musharraf and Prime Minister Shaukat Aziz.

“If a country has time to have its president, who’s in the middle of a politically charged region, sit down with Greg to encourage him to invest and invite a Canadian company to come in to develop the country’s resources, it shows you what a great country it is,” the report quoted Munk as saying. Greg Wilkins told the newspaper: “Barrick Gold Corp would rather do business in Pakistan than in some parts of South America, despite fears of Al Qaeda, because big miners don’t have to share their profits to operate there.”

At the shareholders meeting in Toronto on Thursday, he said the company was “eager to further invest in and explore Pakistan’s prospective geological belt along the Afghan border.”

Wilkins said the government of Pakistan was building roads and a shipping port (at Gwadar), besides bringing water and electricity to the area.

 

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Monday May 08, 2006

ISLAMABAD: Advisor to Prime Minister on Finance and Revenue Dr. Salman Shah has said that government has prepared a comprehensive plan to achieve the millennium development goals before 2015 that would result in reducing the poverty in the country.
"Poverty has been reduced due to government policies from 32 percent to 25.6 percent according to the survey 2005," he stated while addressing a workshop on "consultation on PRSP11" here on Friday.

He said that according to the survey conducted in 2001, as many as 32 percent people were living below the poverty line but in the survey held in 2005, 25.6 percent people are living below the poverty line.

"Pakistan has endorsed Millennium Development Goals and is bound to bring down to poverty to half level by 2015 and we have chalked out a comprehensive plan in this regard," he said adding that we will achieve the targets before 2015.

He said that it was not possible to escape from the globalization and we should make plan to benefit the globalization that would enable the access of Pakistani products to the world market.

"We shall equip the people with the skill to enhance the human resource development that will result in producing the competitive products," he said adding that we will utilize the water and energy resources to accelerate the economy in the country.

He said that we would incorporate the recommendations forwarded in the consultation workshop and chalked out a comprehensive plan to implement it so that the poverty could be reduced.

He informed that government had set the target of the GDP from 6-8 percent in the next twenty years and added that with the enhancement of economy in the country the employment would be generated for millions of people.

"Government is focusing on generating the income resources for the women and women can play their full role to accelerate the economy of the country," he added.

He observed that government had already started the development programmes in NWFP, Punjab, Balochistan, Sindh, and these programmes were moving ahead successfully.

"Government is focusing on the livestock sector and government as well as private sector can play important role," he said adding that the performance of all organizations pertaining to livestock will be enhanced.

Country director UNDP Holing said that we would continue the consultation process on the PRSP11 and it was the big challenge to achieve the set targets.

 

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ISLAMABAD (updated on: May 09, 2006, 18:24 PST): Pakistan is eyeing enhancement of co-operation with Kuwait in oil and petroleum sector during upcoming 'important' visit of Amir of Kuwait, Sheikh Sabah Al Ahmed Al Jaber Al Sabah, this month.

"It would be an honour for us to receive the Amir of Kuwait and we welcome him with open arms", Amanullah Khan Jadoon, Federal Petroleum Minister, told Kuwait news agency Kuna on Tuesday in Islamabad.

The Amir, heading a high-level delegation, is expected to arrive here on a three-day visit on May 19 for talks with President Pervez Musharraf and Prime Minister Shaukat Aziz, which would be followed by delegation level talks.

Amanullah Jadoon said co-operation in oil and petroleum sector would be focus in talks. Kuwait showed special interest in Pakistan's South-western Gawadar port city that links it to central and East Asian countries.

Talks on building of an oil refinery in Gawadar is top of visit agenda, he added. Economic Co-ordination Committee of Cabinet last month approved setting up of US$2 billion mega oil refinery at Khalifa Point in Hub, Lasbela.

The refinery to be commissioned by 2010 would have a maximum refining capacity of 13 million tons of petroleum products which would be higher than the country's total existing capacity of 12.8 million tons.

Kuwaiti and Saudi companies will participate in bidding through international competitive bidding on Build On and Operate (BOO) basis.

The Minister hoped the visit will give impetus to co-operation between two countries in trade, economics, oil, and other sectors.

Kuwait and Pakistan share history of close and cordial relations that have seen steady growth over the years.

Pakistan's major suppliers are Kuwait, Saudi Arabia, & UAE and total oil imports amount to around $3 billion.

Two Kuwaiti companies, Bakri and Kuwait Petroleum Company (KPC), together provide around 90 percent of total oil imports.

Total oil imports range around 20 million tons, of which KPC meets 75 percent of high speed diesel and 25 percent of furnace oil. The remaining requirement is met through imports from Saudi Arabia, Kuna said.

 

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ISLAMABAD (May 09 2006): Pakistan, Afghanistan, Tajikistan and Kyrgyzstan have agreed to trade electricity, but Kabul insists for finalisation of diversification of power import and wheeling charges against transit facility before processing further.

At a two-day energy ministers' conference, the international lender community, including the World Bank, ADB and IFC, also supported the regional electricity connectivity through Afghanistan, while a couple of electric companies showed interest to take part in the project.

The World Bank and United States Energy Association (USEA) were apparently very active to materialise any such deal, but they did not favour inclusion of Iran in the group.

"Afghanistan is ready to allow the transit of power through its territory, if allowed to tap in it and is given the wheeling charges," Dr Mohammad Jalil Shams, Afghanistan's deputy minister for energy and water, told the opening session of the conference.

Tajikistan and Kyrgyzstan confirmed that they have surplus electricity during summer season, and Pakistan said it required higher amount of electricity in this season.

The participants agreed to prepare a project structure and set up an entity comprising officials of the four countries to speed up the project and negotiate other technical and financial arrangements of the project.

Central and South Asian countries also expressed interest in electricity trade and installation of transmission system from both Tajikistan and Kyrgyzstan to Pakistan through Afghanistan to meet the increasing demand of power in Pakistan and Afghanistan. They agreed to chalk out a mechanism to implement the MoU already signed between Pakistan and Tajikistan regarding import of 1000 MW electricity to Pakistan.

International donors like World Bank, Asian Development Bank, Islamic Development Bank and USAID also supported the electricity trade between these countries and extended their full support for funding the transmission line from CAR to Pakistan through Afghanistan.

The conference has been organised by the Ministry of Water and Power. Federal Minister for Water and Power, Liaquat Ali Jatoi, chaired the conference. Deputy Prime Minister, Tajikistan, Assadullo Ghulomov, Omarov, Advisor to Prime Minister, Kyrgyz Republic, and Deputy Minister Administration Mohammad Jalil Shams of Islamic Republic of Afghanistan and representatives of international donors participated in the conference.

In his inaugural speech, Jatoi said that Pakistan government was fully committed to make all-out efforts to meet its power requirements and to provide cheaper electricity to all consumers. The Government recognises the importance of economical and surplus electricity from Central Asian Republics (CAR) is a viable option to meet the growing demand of electricity, which is presently registering an annual demand growth of over 10 percent.

While welcoming the delegates, Jatoi said that besides the deep-rooted friendship between the four countries, "we are bound together with common religious, social and cultural ties. Now time has come to fuel this relationship further with inter-trade activities."

He said that Pakistan was aggressively developing indigenous power potential, especially the hydel, which is economical. He acknowledged that the interest of the power surplus Central Asian countries to export electricity to Pakistan through Afghanistan as a great opportunity, and said that the conference would yield positive results and further provide opportunity to enhance regional bilateral and trilateral relations among these countries.

He apprised the participants that under the dynamic leadership of President Pervez Musharraf and economic vision of Prime Minister Shaukat Aziz, "Pakistan is on the path of rapid and unprecedented economic growth".

The Minister said that in the present international scenario, where the donors and foreign investors were eagerly willing to fund the regional electricity market development, he optimistically expects the success of regional electricity trade efforts. He said that a number of on-going hydel projects, having estimated capacity of 826 MW, are scheduled to be completed in 2008-09. Likewise, a number of other proposed hydel projects of 1993 MW are also under active consideration for 'Vision-2005', he added.

He hoped for a concrete roadmap and a policy framework for electricity trade as a result of this conference. Deputy Prime Minister of Tajikistan thanked the Government of Pakistan for holding the conference and extended fullest support to Pakistan for supplying cheaper energy through Afghanistan.

He said that this would provide a great opportunity to materialise supply of electricity to Pakistan as his country has great potential for producing sufficient electricity and is capable to export surplus electricity to Pakistan, and that both countries would get benefit of this trade.

Omorov Janybek, Advisor to Kyrgyz Republic PM, said that his country had unique opportunity to generate cheaper energy and to get a chance of making more investment in providing electricity to Pakistan, which would indeed enhance trade relations between the two countries.

Dr Shams, Minister of Afghanistan, thanked Pakistan for extending its utmost support for rebuilding of Afghanistan.

He said that his country was in need of electricity from Central Asian Countries and supported the idea of supplying electricity from CAR through Afghanistan. He viewed that the conference would yield positive results to make it possible to import electricity to Pakistan through his country. He also hoped for continuous support from Pakistan.

The representatives of the donors also supported the project and assured all-out technical and financial assistance for electricity trade among the Central and South Asian countries.

 

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ISLAMABAD (May 09 2006): Prime Minister Shaukat Aziz on Monday said that the government is making focused efforts to encourage small and medium size industries in the rural and less developed areas of the country to provide economic opportunities and to improve the living standard of the people at the grassroots level.

Talking to Dr Senta Maria Anna Siller, who has been running a social welfare project in a Pakistani village, the Prime Minister said the government is promoting "one village one product" to encourage people to specialise in the production of goods most suitable to these areas. The Prime Minister said government has initiated a number of micro-finance facilities to help the people start small-scale ventures promoting handicraft, cottage industry and local skills.

He said such programmes are transforming the lives of people and added that women can particularly benefit from such schemes.

Dr Senta Maria Anna Biller informed the Prime Minister that she has been working at Thatta Ghulamka Dhiroka, District Okara since 1993 and has set up a small factory in the village to manufacture dolls and embroidered cards, which are sold domestically and exported to a number of European countries. She said the village has been completely transformed as a result of the income generated through the production and sale of these products.

Dr Senta Maria Anna Biller informed the Prime Minister that presently 120 women of Thatta Ghulamka Dhiroka District Okara and adjoining villages are employed in her factory. Shaukat Aziz appreciated Dr Senta Maria Anna Biller for her programme, assured her of government's support and said such programmes should be replicated in other villages also.

 

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LAHORE (May 09 2006): Mecan Selmon, US Economic Commercial Officer, said that here on Monday that the United States was giving special attention to the promotion of SMEs sector in Pakistan, as this would give the required boost to the overall economy of the country.

She said this while talking to LCCI President, Shafqat Ali, here, according to LCCI's spokesman. The LCCI President Shafqat Ali, Senior Vice President Abdul Basit, Executive Committee Member Majid Abdullah, Secretary LCCI Mohammad Younas and Director Research and Development Department Dr Ghalib Atta were also present on the occasion.

The US Economic Officer said that her country always accords high priority to its trade relations with Pakistan and is finalising the 'Bilateral Investment Treaty' (BIT) to provide institutional framework for comprehensive economic partnership. "The BIT would also open the door for Free Trade Agreement between the two countries. The finalisation of BIT would enhance the volume of two-way trade. Hence, more employment and business activities would be generated," she added.

The LCCI President said that Pakistan and United States enjoy impressive trade ties. "Pakistan's exports to United States for the fiscal year 2004-05 were $3.4 billion as against $2.9 billion in 2003-04. Similarly, Pakistan's imports from the US also registered an increase from $0.7 billion in 2003-04 to $1.6 billion in 2004-05. The increase in mutual trade is an encouraging sign," he added.

LUNCH: Meanwhile, Regional Commissioner of Income Tax, Haji Ahmad, hosted a lunch for LCCI office-bearers and Executive Committee. Member CBR (Legal) Mumtaz Ahmad, LCCI President Shafqat Ali, Senior Vice-President Abdul Basit and Vice- President Aftab Ahmad Vohra were present on the occasion.

The Regional Commissioner urged the LCCI to help identify non-filers and be a part of CBR's campaign for widening the tax net. He that the Universal Assessment Scheme has started yielding results, as there is a quantum jump in the revenue collection.

The LCCI President said that Lahore Chamber would leave no stone unturned for helping CBR in its drive for revenue collection. While appreciating the change in the mindset of tax collectors, he said that the liaison of CBR officials with the business community is matchless and with the same level of co-operation, the remaining issues would also be resolved soon.